On June 2, 2026, the First Department issued a decision in Board of Mgrs. of the 432 Park Condominium v. 56th & Park (NY) Owner, LLC, 2026 NY Slip Op. 03381, holding that an agreement did not require indemnification in intraparty disputes because the right to such indemnification was not unmistakably clear, explaining:
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. The intention to indemnify in the context of an intraparty dispute must be unmistakably clear from the language of the promise and exclusively or unequivocally referable to claims between the parties themselves. The Court of Appeals has applied this strict construction without deviation, counseling parties that inclusion of clear language stating that the prevailing party is entitled to recover attorney’s fees in an action between the parties would avoid potential litigation on the issue.
Here, defendant’s reliance on the carve out for self-dealing under section Q(5) of the offering plan and bylaws section 2.11.1(d) is misplaced. Neither provision evinces the clarity required by Hooper and Sage to mandate that plaintiffs indemnify defendant for the breach of fiduciary claims here. Those sections allow plaintiffs to contract or effect any other transaction with any Board Member without incurring any liability for self-dealing and to ensure that bad faith or misconduct was not deemed presumed by the relationship. While these provisions narrow the scope of what may constitute self-dealing by a board member, they do not advance defendant’s position that the governing documents require plaintiffs to indemnify him for breach of fiduciary duty claims.
The rest of the language in those sections also lacks the clarity mandated by Hooper and Sage to require plaintiffs to insulate defendant from intraparty claims. The balance of offering plan section Q(5) provides that board members shall have no liability to the Unit Owners, except for his or her own bad faith, gross negligence or willful misconduct, and bylaws section 2.11.1(c) provides for indemnification of board members — bad faith, gross negligence, and willful misconduct excepted — arising out of such Board Member’s serving in such capacity. This language does not evince an intent by the parties to waive the American rule in an action between the parties on the contract. As we explained in declining to apply an indemnification provision to an intraparty dispute in Gotham Partners, L.P. v High Riv. Ltd. Partnership (76 AD3d 203 [1st Dept 2010], lv denied 17 NY3d 713 [2011]), here, the problem with defendant’s position is not that his interpretation is irrational, it is that the strict standard imposed by Hooper requires more than that. Contrary to defendant’s contention, this lack of specificity does not render the indemnity provisions ambiguous; the indemnification provisions here unambiguously do not refer to intraparty claims.
In the context of the claims for breach of fiduciary asserted by plaintiffs, it would violate the strict construction required by Hooper if this Court were to infer, where no express language demands it, that the governing documents insulate defendant from liability for his alleged breach of fiduciary duty as against plaintiffs. Had that been the parties’ intention, they should have said so.
(Internal quotations and citations omitted).
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