786 F. Supp. 2d 789
S.D.N.Y.2011Background
- Amusement sued Safrin and others for a $13 million loss in a Colonial Realty transaction; Safrin’s third-party complaint against Bankers Capital and BIR includes cross-claims for indemnification.
- Bankers Capital and Steven Alevy allege against BIR that Bankers Capital is entitled to implied indemnification for Safrin’s claims and that BIR’s actions caused damages.
- Safrin alleges that Bankers Capital and BIR misrepresented Safrin’s participation in the Colonial Transaction and forged documents.
- Bankers Capital contends they did not participate in loan documents or forge Safrin’s signature; any liability would be caused by Friedman and BIR.
- The court addresses whether Bankers Capital’s cross-claim for implied indemnification against BIR can survive, given New York law prohibits indemnity where the indemnitee is at fault, and whether a special-agent relationship supports indemnity.
- The district court had previously recommended dismissal of the implied indemnification cross-claim, and the ruling here grants Friedman and BIR’s motions to dismiss that cross-claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether implied indemnification is available where the indemnitee is at fault | Bankers Capital argues fault should not bar indemnity due to solely primary liability by BIR | BIR argues NY law bars indemnity when the indemnitee is at fault | Indemnity not available; cross-claim dismissed |
| Whether a special relationship or apparent authority supports implied indemnification | Bankers Capital relies on an agent-principal relationship between Friedman/BIR and Bankers Capital | No allegations that Friedman acted as Bankers Capital’s agent or that such authority existed | No implied indemnity based on agency; claims fail |
| Choice of law and governing standard for implied indemnity | NY law governs the indemnity issue | - | New York law governs; standard requires indemnitee be free from fault to recover |
Key Cases Cited
- Mas v. Two Bridges Assocs. by Nat'l Kinney Corp., 75 N.Y.2d 680 (N.Y. 1990) (indemnity grounded in unjust enrichment principles; general rule on indemnity)
- Amusement Indus., Inc. v. Stern, 693 F.Supp.2d 301 (S.D.N.Y. 2010) (discusses evolution of implied indemnity; partial fault barred)
- Monaghan v. SZS 33 Assoc., L.P., 73 F.3d 1276 (2d Cir. 1996) (indemnity barred when indemnitee is at fault)
- Johnson City Cent. School Dist. v. Fidelity & Deposit Co. of Md., 272 A.D.2d 818 (3d Dep’t 2000) (allocation via contribution when joint tortfeasors share injury)
- Trs. of Columbia Univ. v. Mitchell/Giurgola Assocs., 109 A.D.2d 449 (1st Dep’t 1985) (indemnity doctrine requires lack of fault by indemnitee)