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Nassif v. Sunrise Homes6/29/1999
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIFTH CIRCUIT, PARISH OF JEFFERSON
Shirley Nassif purchased a house in Woodmere South Subdivision from Sunrise Homes, Inc., on May 31, 1984. Two months later, Ms. Nassif sold the house to her cousin, Toufic Nassif (Nassif). When Nassif noticed that the foundation of the house was experiencing differential settlement problems, he filed suit in redhibition against Sunrise Homes, Inc., Shirley Nassif and Coast Quality Construction Company (Coast), the real estate developer who built the house. Coast filed a third-party demand against J.J. Krebs & Sons, Inc. (Krebs), the engineering firm that designed the foundation of the house, for full indemnity for any and all sums for which Coast might be held liable to Nassif in the main demand.
After trial on the merits, judgment was rendered in favor of Nassif and against Coast ordering recission of the sale, and awarding Nassif damages in the amount of $55,240.00, plus interest, costs and attorney fees pursuant to La. Civ. Code art. 2545. Judgment was further rendered in favor of Coast, by way of indemnity, against Krebs for $55,240.00, plus interest, costs and reasonable attorney fees. The trial Judge specifically found that the house contained a redhibitory defect; that Krebs negligently performed the engineering services it had agreed to perform; and that all of the damages suffered by Nassif and Coast were caused by Krebs' failure to perform as intended. After a hearing to determine the proper assessment of attorney fees, judgment was rendered in favor of Nassif's attorneys, Lowe, Stein, Hoffman, Allweiss and Hauver, L.L.P., and against Coast for $141,646.31.
The trial Judge further ordered that there be judgment granting
"full indemnity" in favor of Coast and against Krebs for the same amount. All parties appealed. The court of appeal amended the trial court judgment by increasing Nassif's damage award to $72,587.43 and by reducing the award of attorney fees to $135,928.31. In all other respects, the judgment was affirmed, "except for order requiring J.J. Krebs to indemnify Coast for the attorney's fees and costs, which it was ordered to pay Lowe, Stein." The court of appeal reasoned that attorney fees are allowed only where authorized by statute or contract. Because there was no statutory authority or contract of indemnification providing for an award of attorney fees against Krebs, the court of appeal concluded that the trial Judge erred in holding Krebs ultimately liable for Nassif's attorney fees. Upon application of Coast, we granted certiorari to review the correctness of that decision. Kreb's application to this court contesting its fault was denied.
The sole issue before us for review is whether a defendant, whose liability to a plaintiff for the plaintiff's attorney fees resulted from the actual fault of another, may recover, by way of indemnity, the amount of such attorney fees from the party actually at fault.
As a general rule, attorney fees are not allowed except where authorized by statute or contract. Maloney v. Oak Builders, Inc., 235 So. 2d 386, 390 (La. 1970). Because Coast is seeking indemnity for the attorney fees it was compelled to pay Nassif, rather than reimbursement for its own attorney fees, we must begin by examining the basic law of indemnity, and the distinction between an action
for indemnity and an action for attorney fees.
Indemnity in its most basic sense means reimbursement, and may lie when one party discharges a liability which another rightfully should have assumed. Black's Law Dictionary 769 (6 ed. 1990); 42 th C.J.S Indemnity ยง 2 (1991). It is based on the principle that ev
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