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Hofheins v. Bajio Mt. W., LLC, 2017 UT App 238 (Dec. 29, 2017).

Dec 29, 2017

Bajio was required to indemnify Hofheins for lease payments pursuant to their asset purchase agreement. Bajio failed to make the lease payments, and the property owner sued Hofheins. Hofheins then brought a third party action against Bajio for indemnification. Bajio argued that the Hofheins’ failure to tender the defense precluded Bajio from being required to indemnify the Hofheins, and the third party action should have been dismissed under Rule 41(b). The court of appeals disagreed, holding that the failure to tender a defense imposes on the indemnitee the necessity of establishing that it is entitled to indemnity from the indemnitor, but it does not release the indemnitor from its obligation.