Crystal River Enterprises, Inc. v. Nasi, Inc., 80-1214
| Decision Date | 27 May 1981 |
| Docket Number | No. 80-1214,80-1214 |
| Citation | 399 So.2d 77 |
| Parties | CRYSTAL RIVER ENTERPRISES, INC., a Florida Corporation, Appellant, v. NASI, INC., a Florida Corporation, Appellee. |
| Court | Florida District Court of Appeals |
Peter Langley, III, Yankeetown, for appellant.
John Russell, P.A., Homosassa Springs, for appellee.
Crystal River Enterprises, Inc. appeals a judgment obtained by appellee, NASI, Inc. Crystal River agreed with International Motel Brokers to sell its motel for $1,600,000 plus a $50,000 commission. The broker brought the president of NASI to see the motel. A few days later NASI's president and the president of Crystal River met privately and arranged the purchase and sale of the motel for the $1,600,000 providing NASI would indemnify Crystal River for any brokerage commission arising from the transaction.
International Brokers sued Crystal River for the commission. A default judgment was entered against Crystal River. Crystal River then sued NASI on the indemnity agreement. NASI pleaded several affirmative defenses including Crystal River's negligence in failing to notify NASI of the pending suit thus depriving it of an opportunity to defend, and Crystal River's negligence in defending the action and moving to obtain relief from the default judgment. During the trial, the court refused to admit evidence concerning the merits of the suit filed by International Brokers. This appeal was taken from the judgment in favor of NASI. We REVERSE and REMAND for new trial.
The indemnity agreement did not require notice to NASI of any pending claim or suit for brokerage fees. Generally, in the absence of a specific provision in the indemnity agreement, there is no requirement to notify the indemnitor to come in and defend as a condition precedent to recovery. Boston & Maine Railroad v. Bethlehem Steel Co., 311 F.2d 847 (1st Cir. 1963). See also 42 C.J.S. Indemnity § 15 (1944). Because Crystal River had no duty to notify NASI, the failure to notify did not constitute negligence which would bar recovery.
However, NASI, not having an opportunity to defend, is not bound by the judgment in the suit by the broker against Crystal River. The prior judgment is, at most, prima facie evidence, and the burden of proof is on the indemnitee to establish all actionable facts. The indemnitor is free to contest the validity of the judgment and the liability of the indemnitee. 42 C.J.S. Indemnity §§ 26, 32(2) (1944); MacArthur v....
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