Opinion ID: 550651
Heading Depth: 2
Heading Rank: 2

Heading: Indemnification of Lassen

Text: 12 The district court ruled that Emery, as the primary wrongdoer, must indemnify Lassen. Proceeding from the premise that the Warsaw Convention governed, the district court determined that indemnification was available under the Convention and awarded Lassen $87,929.58 in attorney's fees and costs as part of Emery's indemnity obligation. Emery does not challenge the reasonableness of the amount of fees and costs awarded. 13 As discussed supra, the Warsaw Convention does not govern this case. Lassen contends that the indemnification award may nonetheless be upheld under either federal or New York common law principles. It argues that because the loss of Victoria's cargo was entirely the fault of Emery, Lassen could only be held vicariously liable for the loss. Under the circumstances, Lassen maintains that Emery should indemnify Lassen for any loss it sustains, including attorney's fees and costs expended in this litigation. 14 Emery counters by arguing that the district court erred, in the absence of coverage by the Warsaw Convention, by not enforcing the liability limits set forth in Emery's waybill and relevant tariffs. The waybill provided for a $20 per kilogram limitation on Emery's liability for destroyed, lost, damaged or delayed cargo. Emery contends that it should not be liable for any amount to any party above this limitation and that therefore Lassen's indemnification award should be subject to the waybill's liability limits. 15 We find Emery's position unconvincing. The waybill's liability limitation refers only to Emery's liability for damaged, lost or delayed cargo. It does not address the rights and liabilities between Emery and a party in Lassen's status. Absent an explicit contractual provision to the contrary, we see no reason to extend the waybill's liability limitations to Lassen's indemnity claim and to abrogate the principle that a primary wrongdoer must indemnify a party whose liability is secondary or vicarious. See Ingersoll Milling Machine Co. v. M/V BODENA, 829 F.2d 293, 305 (2d Cir.1987) (Indemnity rests upon the principle that the true wrongdoer should bear the ultimate burden of payment.), cert. denied sub nom. J.E. Bernard and Co. v. Ingersoll Milling Machine Co., 484 U.S. 1042, 108 S.Ct. 774, 98 L.Ed.2d 860 (1988); McDermott v. City of New York, 50 N.Y.2d 211, 216-17, 406 N.E.2d 460, 462, 428 N.Y.S.2d 643, 646 (1980). 16 Although the district court granted indemnification under the Warsaw Convention, we nevertheless view the award as sustainable on these common law principles of indemnification. There is no dispute that the cargo was lost at Emery's warehouse, and Emery does not contend that the loss was the result of any fault on the part of Lassen. Lassen's liability for the loss, therefore, could be based only on its contractual obligation to ship the cargo to New York. Between Emery and Lassen, the former, as the party primarily liable for the lost cargo, must bear the loss, and Lassen consequently is entitled to indemnification. Furthermore, the district court properly awarded Lassen attorney's fees and costs incurred in defending this action as part of its successful indemnity claim. See Peter Fabrics, Inc. v. S.S. HERMES, 765 F.2d 306, 315 (2d Cir.1985); Owens v. Palm Tree Nursing Home, Inc., 89 A.D.2d 619, 620-21, 452 N.Y.S.2d 670, 673 (2d Dep't 1982).