SEARLES VALLEY MINERALS OPERATIONS INC v. RALPH M. PARSON SERVICE COMPANY
Searles contends it adequately alleged a cause of action for express indemnity by alleging that Parsons was required, under an indemnity contract between Parsons and Kerr-McGee Chemical Corporation (KM), to provide KM with a defense and indemnify KM for losses arising from a wrongful death action against KM, Parsons, and Parsons's subcontractor. Searles argues that, as an assignee of KM's indemnity rights, it was entitled to reimbursement for paying KM's defense costs.
While there appears to be no case law directly on point, we conclude that an assignee of contract indemnification rights stands in the shoes of the indemnitee. Therefore, if the indemnitor refuses to pay an indemnitee's defense costs, the indemnitee, and in turn the assignee, can pay the costs and seek reimbursement from the indemnitor. Searles, as KM's assignee, was entitled under the indemnity agreement to recover defense costs it paid on KM's behalf. The trial court thus erred in sustaining, without leave to amend, Parsons's demurrer to Searles's cause of action for express indemnity, and Court reverse the judgment of dismissal.
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