Searles Valley Minerals Operations Inc. v. Ralph M. Parsons Service Co.

In this contract indemnity action, plaintiff and appellant Searles Valley Minerals Operations Inc. (Searles) appeals the judgment of dismissal entered in favor of defendants and respondents Ralph M. Parsons Service Company and Parsons Infrastructure & Technology Group, Inc. (Parsons), following an order sustaining Parsons’s demurrer, without leave to amend, to Searles’s cause of action for express indemnity.

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…