CRYSTAL RIVER ENTERPRISES, INC., A FLORIDA CORPORATION, APPELLANT,
v.
NASI, INC., A FLORIDA CORPORATION, APPELLEE
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Crystal River Enterprises appealed a judgment in favor of NASI regarding an indemnity agreement over brokerage commissions. The court reversed and remanded, holding that NASI was not entitled to assert Crystal River's alleged negligence as a defense to the indemnity claim, and that the prior default judgment against Crystal River was not binding on NASI.
The court held that absent a specific provision in the indemnity agreement, there is no requirement to notify the indemnitor as a condition precedent to recovery. The indemnitee must prove all actionable facts, but the indemnitor is free to contest the validity of the judgment and liability. Crystal River's alleged negligence in defending the suit and allowing a default judgment cannot bar recovery because the indemnification is unrelated to any negligent act or failure to act by Crystal River.
[1] In the absence of a specific provision in an indemnity agreement, there is generally no requirement to notify the indemnitor to defend as a condition precedent to recover…
[2] An indemnitor is not bound by a prior judgment against the indemnitee when the indemnitor had no opportunity to defend the underlying action.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Generally, in the absence of a specific provision in the indemnity agreement, there is no requirement to notify the indemnitor to come in and defend as a condition precedent to recovery.”
Establishes the general rule that indemnity agreements do not require notice of pending claims without express contractual language.
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Join FLexlaw to unlock all legal intelligenceCrystal River agreed to sell its motel for $1,600,000 plus a $50,000 broker commission through International Motel Brokers. NASI's president met priva…
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FRANK D. UPCHURCH, Jr., Judge.
Crystal River Enterprises, Inc. appeals a judgment obtained by appellee, NASI, Inc. Crystal River agreed with International Motel Brokers to sell its motel for $1,600,-000 plus a $50,000 commission. The broker brought the president of NASI to see the motel. A few days later NASI’s president and the president of Crystal River met privately and arranged the purchase and sale of the motel for the $1,600,000 providing NASI would indemnify Crystal River for any brokerage commission arising from the transaction.
International Brokers sued Crystal River for the commission. A default judgment was entered against Crystal River. Crystal River then sued NASI on the indemnity agreement. NASI pleaded several affirmative defenses including Crystal River’s negligence in failing .to notify NASI of the pending suit thus depriving it of an opportunity to defend, and Crystal River’s negligence in defending the action and moving to obtain relief from the default judgment. During the trial, the court refused to admit evidence concerning the merits of the suit filed by International Brokers. This appeal was taken from the judgment in favor of NASI. We REVERSE and REMAND for new trial.
The indemnity agreement did not require notice to NASI of any pending claim or suit for brokerage fees. Generally, in the absence of a specific provision in the indemnity agreement, there is no requirement to notify the indemnitor to come in and defend as a condition precedent to recovery. Boston & Maine Railroad v. Bethlehem Steel Co., 311 F. 2d 847 (1st Cir. 1963). See also 42 C.J.S. Indemnity § 15 (1944). Because Crystal River had no duty to notify NASI, the failure to notify did not constitute negligence which would bar recovery. However, NASI, not having an opportunity to defend, is not bound by the judgment in the suit by the broker against Crystal River. The prior judgment is, at most, prima facie evidence, and the burden of proof is on the indemnitee to establish all actionable facts. The indemnitor is free to contest the validity of the judgment and the liability of the indemnitee. 42 C.J.S. Indemnity §§ 26, 32(2) (1944); MacArthur v. Gaines, 286 So. 2d 608 (Fla.3d DCA 1973). Accord, United New York Sandy Hook Pilots Ass’n v. Rodermond, Ind., 394 F. 2d 65 (3rd Cir. 1968).
NASI also argues that Crystal River was negligent in allowing a default judgment to be entered and that an indemnitee should not be allowed to recover for its own negligence. Here, the intent to indemnify Crystal River for any brokerage fees was clear and unequivocal and the indemnification is unrelated to any act or failure to act on the part of Crystal River. Crystal River is required to prove all actionable facts to recover on the indemnity agreement. If Crystal River fails to carry its burden of proof, NASI is not required to indemnify Crystal River despite the judgment against it. Liability is based on the agreement and not on the prior judgment against Crystal River. The same result would have occurred even if Crystal River had been negligent in failing to defend the prior suit, because that negligence could not be the proximate cause of NASI’s loss and would not preclude recovery on the indemnity agreement.
We therefore REVERSE and REMAND for new trial.
SHARP and COWART, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
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Scott & Jobalia Constr. Co., Inc. v. Halifax Paving, Inc., 538 So. 2d 76 (Fla. 5th DCA 1989)…ear and defend, proofs and findings on the issue of fairness and reasonableness may not have been necessary. Atlantic Coast; Cf. Hall & Company, Inc. v. McGetrick, 414 So. 2d 243 (Fla. 3d DCA 1982); Crystal River Enterprises, Inc. v. N.A.S.I., Inc., 399 So. 2d 77 (Fla. 5th DCA 1981). The third issue in this case is more complex. What is the effect of Florida’s worker’s compensation law on a statutory employer’s immunity rights in an indemnity suit brought by a nonactive tortfeasor for injuries suffered by a…
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Crystal River Enters., Inc. v. Nasi, Inc., 418 So. 2d 1038 (Fla. 5th DCA 1982)…rystal River then filed suit against NASI to recover under the indemnity agreement. Judgment was entered in favor of NASI. This court subsequently reversed the judgment and remanded the cause for trial. Crystal River Enterprises, Inc. v. NASI, Inc., 399 So. 2d 77 (Fla. 5th DCA 1981). At the trial, NASI moved for involuntary dismissal and summary judgment at the close of Crystal River’s case. The trial court granted the motions on the basis that Crystal River had failed to prove that International or Sulliva…
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Westinghouse Elec. Corp. v. Dade Cnty., 472 So. 2d 866 (Fla. 3d DCA 1985)…said contract of indemnity — that it defended the prior action and incurred attorney’s fees herein although it was not negligent in the incident sued upon. Jones v. Holiday Inns, Inc., supra at 1034; see also Crystal River Enterprises v. NASI, Inc., 399 So. 2d 77, 79 (Fla. 5th DCA 1981) (indemnitee required to prove all actionable facts leading to recovery); Walter Taft Bradshaw & Associates v. Bedsole, 374 So. 2d 644, 647 (Fla. 4th DCA 1979) (indemnitee required to state cause of action for contractual inde…
Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- MacARTHUR v. Gaines, 286 So. 2d 608 (Fla. 3d DCA 1973)
- United NEW York Sandy Hook Pilots Ass'n v. Rodermond Indus., Inc., 394 F.2d 65 (3d Cir. 1968)
- Boston AND Maine Railroad v. Bethlehem Steel Co., 311 F.2d 847 (1st Cir. 1963)