Implied Indemnity Claims in Nevada

Posted by: on Wed, Nov 05, 2014

Share this post

Does an innocent defendant in a lawsuit have the right to try to compel its (wrongdoing)
co-defendant to provide it with a defense (or pay defense costs) and indemnity
prior to trial in the case. In other words, can a summary judgment be utilized to force an early defense or indemnity in the abscenceof an agreement? This does not appear to be a viable path procedurally in the abscence of a written indemnity and/or defense agreement.

Perhaps sone of the best theories for receiving any monies from a co-defendant include
claims for apportionment, contribution and equitable indemnity.  Assuming there was no contractual provision in a contract between the two defendants requiring that one to provide
the other with a defense or indemnity, a defendant must rely on an equitable indemnity
theory (as opposed to an express, contractual indemnity provision, which would
be more ideal, if one had existed).

An equitable indemnity theory is a judicially created
doctrine (not based on an express contractual provision the parties have agreed
upon), which is an equitable doctrine allowing a party to seek indemnity from
another party that actually, primarily caused the injured party’s damages.

The theory is that an innocent defendant who is in privity with the plaintiff
should be able to seek redress for damages it is required
to pay because of the actions of the wrongdoing co-defendant.
However, in order to invoke this equitable theory, the claimant first
must plead and prove that:

(1)    It has discharged a legal obligation owed to a third party;

 

(2)    The party from whom it seeks liability also was liable to
the third party; and

 

(3)    As between the claimant and the party from whom it seeks indemnity, the obligation ought to be discharged by the latter.

 

See,  Rodriguez v. Primadonna Co. LLC, 125 Nev. 578, 590 (2009).

 

Hence, it is a fundamental requirement that the claimant must
first discharge a legal obligation to the plaintiff before it can claim a right to
equitable indemnity from its co-defendant.  That typically will not
happen until a judgment has been entered in the case and a finding of liability
has been made against the defendant and discharged by it.

At that point, the defendant may be able to make a claim to be
indemnified for damages paid out, as well as potentially some or all of its legal fees
and costs, but those matters are not guaranteed.   For
example, if a jury finds that the claimant is not liable to the plaintiff for a judgment, then it will never discharge a legal obligation, and, as a
result, would never be in a position to seek indemnity, including for its legal
fees and costs, from the co-defendant.

The bottom line is that the applicable case law appears to
require a defendant/claimant to continue to defend the case through trial and then
litigate its indemnity, contribution and apportionment theories later on, after
a judgment has been issued.

Further, the claimant should always make a demand early on for a defense
and indemnity against the co-defendant or third party defendant, in order to better preserve the right to subsequently argue that it is entitled to be indemnified for those fees and costs incurred after the demand was tendered to the co-defendant.

 

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah.  Our firm’s practice includes a strong emphasis on construction law, contracts and litigation in the jurisdictions where we are licensed.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services.  Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation.  Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated Nevada-based full-service law firm having attorneys licensed in Nevada, California and Utah. Our firm’s practice includes a strong emphasis on personal injury accidents. Call us at 702-384-7111.

Note: This article, and any other information you obtain at this website, is not offered as legal advice, nor should it be relied upon as such, nor is it a solicitation for legal services. Only a licensed attorney can advise you with respect to your specific legal needs. We welcome your contacting our firm to discuss such representation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.