Jul 22, 2010
Prevailing Party’s Bid for Fees Fails ‘Exacting’ Test, N.Y. Court Finds
The prevailing plaintiff in a contract dispute cannot invoke an indemnification clause to recover more than $700,000 in attorney fees under an “exacting” test set by the New York Court of Appeals in 1989, a state appellate panel has ruled. Even though a lower court’s interpretation of the indemnification clause was not “irrational,” the court reversed the fee award, characterizing New York law as “distinctly inhospitable” to the use of indemnification claims as a mechanism for claiming fees in a contract dispute.