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RE: Indemnity and Duty to Defend. My corporation executed a…

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RE: Indemnity and Duty to...
RE: Indemnity and Duty to Defend. My corporation executed a consignment agreement with an auctioneer in Louisiana. Through a duty to defend/indemnification provision in the consignment agreement, my corporation promised to defend and indemnify the auctioneer against any claims made or expenses incurred related to the consigned property. Unfortunately, there was a lawsuit that was filed by a third party against my corporation and the auctioneer, with a claim of ownership of the consigned property, even though they had no rights whatsoever and the case was granted summary judgment. The original lawsuit was a petition for a preliminary injunction that effectively did not seek to harm or disturb the auctioneer or auction at all but only sought to have the auctioneer place the proceeds from the sale of the consigned property in the registry of the court until ownership of that property could be decided by the court. Against my wishes, the auctioneer conspired with the plaintiff and agreed to withhold the sale proceeds from the corporation (even though the auctioneer had a fiduciary duty to work only in the corporation's interest). I didn't want to file a cross-claim against the auctioneer in the same case as the petition for an injunction, as I previously read a case that ruled doing so would violate the terms of my corporation's duty to defend the auctioneer. So, instead, I filed a separate lawsuit against both the auctioneer and the original plaintiffs. I can't seem to find that case now. I'd like to find that case or something similar, which basically states that the party with the duty to defend would breach its duty to defend if it filed a cross claim against the covered party in the original action. (I'm not sure if I've written that all in a way that makes sense. Let me know if it's confusing.)
Submitted: 6 months ago.Category: Business Law
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Answered in 6 hours by:
1/10/2018
Business Lawyer: Asad Rahman, Attorney replied 6 months ago
Asad Rahman
Asad Rahman, Attorney
Category: Business Law
Satisfied Customers: 2,527
Experience: Practicing Attorney with 10 years experience
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There are several indemnity cases listed here regarding Louisiana indemnity law. One of these may be what you are looking for...

https://www.acc.com/chapters/louis/upload/Contractual%20Indemnities.pdf

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Customer reply replied 6 months ago
Thanks for the effort. Nothing in there addresses the scope of what I need. I was hoping that someone would know a way to do a tailored search. The goal to to find a ruling which shares that when an indemnitor has a duty to defend an indemnitee against third-party claims and a third party files suit that includes the indemnitee (and/or the indemnitor), the indemnitor would violate his/her duty to defend the indemnitee if he/she filed any sort of cross claim as part of the action by the third party. (Hence, the proper course for the indemnitor would be to file a separate action.) I've read a case with that in it but just can't find it. Any thoughts on how to proceed?
Business Lawyer: Asad Rahman, Attorney replied 6 months ago

I wanted to do some additional research and the only case law i keep finding is that indemnifying an indemnitee against his/her own acts or omissions must be explicit in the contract.

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