In a case involving the indemnification obligations between two title insurance companies pursuant to a Mutual Indemnification Agreement (“MIA”), the Second Department reversed a lower court dismissal of a declaratory judgment action brought by DDWW&W’s client. The Firm’s client, a major national title insurance company, had sought a declaration that the Defendant had indemnification obligations to it under the MIA regardless of how certain title issues are determined in the underlying Article 15 case because the Firm’s client is suffering losses in the form of legal fees incurred while defending its insureds. The lower court initially dismissed the case as unripe and premature. The Second Department reversed the lower court and agreed with DDWW&W, finding that the Firm’s Client had stated a claim for a declaratory judgment by demonstrating a justiciable controversy as to the rights and obligations of the parties under the MIA and losses in the form of legal fees incurred to defend the insureds. The decision may be useful precedent in other situations that implicate the liability of indemnitors under indemnification or agency agreements where legal fees have been incurred but the underlying claim has not yet been decided. Peter S. Dawson and Lee S. Wiederkehr handled the briefing and Peter S. Dawson argued the matter at the Second Department for the Firm’s Client. Read the Decision Here.
