Shen v. New Century Escrow
This appeal involves the interpretation of very broad indemnity provisions found in escrow instructions signed by parties to the escrow. The parties agreed to indemnify the escrow company for any costs (including attorney fees) it incurred in good faith as a result of litigation arising out of the escrow. After the escrow closed, one of the buyers who had signed the escrow instructions (appellant Su-Chin Lin Shen) sued the escrow company (respondent New Century Escrow, Inc.), raising multiple tort claims based upon its handling of the escrow. The escrow company repeatedly explained to the buyer that all of her causes of action lacked merit. It offered to waive any claim for costs if the matter were immediately dismissed, but stated that if buyer continued to prosecute her action, it would hold her liable for its attorney fees and costs under the escrow indemnification provisions. Buyer maintained the action for five months before dismissing her claims against the escrow company without prejudice. Thereafter, the escrow company, citing the indemnification provisions in the escrow instructions, moved for an award of costs, including attorney fees, that it had incurred in defending against the buyers lawsuit. After conducting two hearings, the trial court granted the motion.
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