Feed Mgmt. Sys., Inc. v. Comco Sys., Inc., No. 15-1739 (8th Cir. 2016)
Annotate this CaseFMS and Comco entered into a Management Agreement obligating Comco to broadly indemnify FMS as well as reimburse FMS for reasonable costs and expenses, including attorneys' fees. After Comco refused to indemnify FMS in the underlying lawsuit (the Brill litigation), FMS filed suit for reimbursement of attorneys' fees and other expenses. The court concluded that the district court correctly interpreted the indemnity provision as covering the Brill–FMS Litigation where the record does not support a finding that FMS committed any of the misconduct alleged by Brill. Even under a strict construction of the agreement, the court's decision in Harleysville Ins. Co. v. Physical Distribution Servs., Inc. forecloses Comco's argument where Harleysville held that a broad indemnity provision gave the indemnitor clear notice of an obligation to indemnify the indemnitee for future personal injury claims arising from the indemnitee's negligence. The court also concluded that the district court correctly limited FMS's recovery from Comco to the $87,350 FMS paid out of pocket. Accordingly, the court affirmed the judgment.
Court Description: Smith, Author, with Bye and Benton, Circuit Judges] Civil case - Contracts. The indemnity provision of the parties' management agreement encompassed the litigation between Feed Management and a third party; the district court correctly limited Feed Management's recovery to the sum Feed Management paid out of pocket.
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