Hooper Associates v. AGS Computers

In Hooper Associates v. AGS Computers, 74 NY2d 487, 548 N.E.2d 903, 549 N.Y.S.2d 365 (1989), the Court of Appeals concluded that the indemnification provision contained within the parties' agreement only applied to claims or actions involving third parties, and did not apply to a suit against the defendant for claims under the contract. The Court stated that, "When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed", and "the court should not infer a party's intention to waive the benefit of the rule [that each party pays its own attorney's fees in litigation between them] unless the intention to do so is unmistakably clear from the language of the promise." (Hooper, 74 NY2d at 492.) The Hooper Court concluded that all of these actions were subject to third-party claims, and that none "are exclusively or unequivocally referable to claims between the parties themselves or support an inference that defendant promised to indemnify plaintiff for counsel fees in an action on the contract." Id. at 492. The Hooper Court also found support for this interpretation in other provisions in the parties' agreement, relating to third-party claims, which would have been rendered meaningless by an extension of the indemnification provision to intra-party claims. Id. at 492-93.