QUESTION

Do they have the right to make me pay for the legal fees considering that I never sued the landlord and I was never sued?

Asked on Aug 30th, 2013 on Litigation - Wisconsin
More details to this question:
I signed a franchising agreement and paid $2500 down payment to the franchisor for the agreed location. Right after that I signed the lease for the location (now I have that franchise name). A couple of months after that when I was about to get the permits from the city of Phoenix to start the build out another franchisee contacted me letting me know that the franchisor has violated the agreement about the distance between the franchisees and my store and his are too close to one another. Because I had already signed the lease I immediately changed the name of my store and completely separated from that franchise company to be able to open my own business. At this time the other franchisee started a law suit against the franchisor and against my landlord because I had signed the lease as a franchisee of that company. Now the landlord is trying to make me pay for the legal fees they've paid. According to them this is why: Section 10.4 Indemnification (ii) refers to the Tenant agreeing to indemnify and hold harmless the Landlord against claims arising from a Tenant’s party’s occupancy of the premises or conduct of its business. Section 17.8 Attorneys’ Fees refers to the Tenant obligation to pay for the legal costs incurred by the Landlord by litigation which Tenant causes Landlord, without Landlord’s fault, to become involved or concerned. As soon as I changed my business's name I wrote to the landlord and let them know about the name change and they agreed.
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1 ANSWER

Based on the contract language you quote, it would seem the landlord has a contractual indemnification claim. Whether or not a court will strictly enforce it is going to depend upon the interaction of the law and the facts. Depending upon the scope of the litigation, you'll need to analyze the cost/benefit considerations involved in fighting on two fronts versus cooperating with the landlord on the defense of the case against you both. Contract litigation can be complex, and you cannot make a decision like this based upon information received from a free general information website.
Answered on Sep 03rd, 2013 at 9:46 AM

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