Nationwide Retirement Solutions, Inc. v. PEBCO, Inc., 161 So. 3d 1141

PEBCO and ASEA received sponsorship payments under an Administrative Services Agreement with Nationwide Retirement Solutions (NRS).
Participants in the Alabama Public Employees Deferred Compensation Plan sued NRS, Nationwide Life Insurance Company, PEBCO, and ASEA for fiduciary breach, conversion, and contract claims; NL and NRS settled for $15.5M to participants and $2.9M in class-fee costs.
A stipulation of settlement approved in 2011 left indemnification claims (for PEBCO and ASEA) intact, and severed those claims into a separate cross-claim against NL and NRS.
PEBCO sought indemnification for attorney fees and costs incurred defending the class action and litigating the severed cross-claim; NL was later dismissed from the cross-claim.
The trial court found indemnification due to PEBCO, awarding substantial fees and expenses, which the trial court’s final action subsequently appealed.
The Supreme Court reversed, holding that PEBCO did not incur a defense arising from NRS’s failure to perform duties under the agreement, and thus indemnification was improper; the case was remanded for judgment consistent with the opinion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether indemnification applies when the class action arises from NRS’s payments under the agreement.	PEBCO argues indemnity covers defense fees.	NRS contends class action arose from PEBCO’s own wrongful acts, not NRS’s failure.	Indemnification not applicable; action arose from NRS’s fulfillment of duties.
Whether NRS failed to perform duties under the agreement to trigger indemnification.	NRS breached its duty to assist PEBCO.	NRS used best efforts to assist; no breach shown.	No breach of duties; indemnity not triggered.
Whether PEBCO may recover attorney fees incurred defending the indemnification cross-claim.	PEBCO seeks fees for establishing indemnity rights.	Fees incurred in establishing indemnity are not recoverable.	No fees for establishing indemnity; not recoverable.

Jack Smith Enterprises v. Northside Packing Co., 569 So.2d 745 (Ala.Civ.App.1990) (indemnity bars fees when defending for own wrongful acts)
Stone Bldg. Co. v. Star Elec. Contractors, Inc., 796 So.2d 1076 (Ala.2000) (indemnification not allowed for defending own wrongful acts; no fee-for-fees on right to indemnity)
Hinkle v. Railway Express Agency, 242 Ala. 374, 6 So.2d 417 (Ala.1942) (general rule barring indemnity for defending own wrongdoing)
Oden v. Pepsi Cola Bottling Co., 621 So.2d 953 (Ala.1993) (quoting expansion of indemnity limitations on wrongful acts)
Southeast Envtl. Infrastructure, L.L.C. v. Rivers, 12 So.3d 32 (Ala.2008) (denying fees for establishing indemnity where not recoverable)
Brown Mech. Contractors, Inc. v. Centennial Ins. Co., 431 So.2d 932 (Ala.1983) (contractual indemnity scope limits on wrongful acts)