Case ID: ad2d_251/html/0111-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Mehlman, Respondent-Appellant, v Matthew Dollinger et al., Appellants-Respondents.
    [674 NYS2d 37]
   —Judgment, Supreme Court, New York County (Ira Gammerman, J.), entered July 7, 1997, which, after a nonjury trial, awarded plaintiff the sum of $196,378.17, unanimously affirmed, without costs.

We agree with the trial court that it is unambiguously clear from the parties’ agreement that the escrow fund established pursuant thereto was not to be used for the payment of legal fees incurred by defendants in the underlying action other than Lexington-56th Associates. The evident purpose of the agreement was to provide Lexington with coverage and a relatively economical defense by the title company already covering and defending the other defendants in the underlying action. The agreement did not purport to afford any party but Lexington a defense. It would not have been consistent with this limited purpose for the trial court to have read the agreement as allowing the use of the monies escrowed thereunder for the payment of defense costs incurred by parties other than Lexington.

Although we agree with plaintiff that he is entitled to reimbursement of funds escrowed by him pursuant to the agreement used to provide a defense to parties other than Lexington, we do not agree with plaintiff that he is, in addition, entitled to reimbursement for the costs of Lexington’s defense. It is plain that the title company’s agreement to defend and indemnify Lexington was premised upon plaintiff’s agreement to reduce the title company’s exposure to the extent of the $250,000 he was required by the agreement to place in escrow. We note in this connection that the escrowed funds came from plaintiff and not from Lexington and, accordingly, that the use of those funds to reimburse the title company is not violative of the indemnity afforded Lexington.

We have considered the parties’ other arguments for affirmative relief and find that they lack merit. Concur — Milonas, J. P., Ellerin, Williams, Tom and Mazzarelli, JJ.