Mutual Contractual Indemnification for First-Party Breach Claims

Introduction

Trade Links, LLC v. BI-QEM SA de CV, decided May 15, 2025 by the Second Circuit, addresses two central issues: (1) the timeliness of an appeal based on a district court’s minute entry denying a post-trial motion, and (2) the scope of a contract’s indemnification clause for attorneys’ fees. Plaintiff-Appellee Trade Links obtained a jury verdict for breach of contract and then sought attorneys’ fees under its Sales Representative Agreement (SRA). Defendants-Appellants BI-QEM SA de CV and BI-QEM, Inc. challenged both the appeal’s timeliness and the award of fees. The Court dismissed the untimely portion of the appeal and affirmed the fee award, holding that (a) a docketed minute entry can constitute a final appealable order, and (b) the SRA’s broad indemnity provision covers first-party actions.

Summary of the Judgment

The Second Circuit ordered:

Dismissal of BI-QEM’s appeal of the June 13, 2022 judgment on the merits and the February 27, 2023 Rule 50(b) denial for lack of jurisdiction due to untimeliness.
Affirmance of the district court’s March 27, 2023 order awarding Trade Links $775,844.29 in attorneys’ fees and costs under Section 7(b) of the SRA.

Analysis

1. Precedents Cited

Federal Rules of Appellate Procedure – FRAP 4(a)(1)(A): 30-day deadline to file a civil appeal. – FRAP 4(a)(4)(A): Tolling period runs from entry of the last post-trial motion denial.
Federal Rules of Civil Procedure – Rule 50(b): Judgment as a matter of law post-verdict motion. – Rule 54(d)(2): Motion for attorneys’ fees and costs. – Rule 58 & 79(a)(3): Requirements for entry of orders and judgments on the docket.
Amara v. Cigna Corp., 53 F.4th 241 (2d Cir. 2022) – No equitable exceptions to the 30-day appeal rule.
Redhead v. Conference of Seventh-Day Adventists, 360 F. App’x 232 (2d Cir. 2010) – A minute entry can qualify as an appealable order when it states the disposition and refers to a transcript containing reasons.
Norton v. Sam’s Club, 145 F.3d 114 (2d Cir. 1998) – Issues insufficiently briefed are deemed waived.
24 Leggett St. Ltd. P’ship v. Beacon Indus., Inc., 239 Conn. 284 (1996) – Under the American Rule, attorney’s fees are not recoverable absent contractual or statutory authorization.
Heyman Assocs. No. 5, L.P. v. FelCor TRS Guar., L.P., 153 Conn. App. 387 (2014) – Broad indemnity language (“all claims”) not limited to third-party actions.
Rand-Whitney Containerboard Ltd. P’ship v. Town of Montville, 290 F. App’x 430 (2d Cir. 2008) – Typical indemnity provisions apply to third-party claims but do not preclude first-party indemnity if contract language so provides.
Amoco Oil Co. v. Liberty Auto & Elec. Co., 262 Conn. 142 (2002) – “Indemnify” and “hold harmless” often construed to apply to third-party claims absent contrary language.
Total Recycling Servs. of Conn., Inc. v. Conn. Oil Recycling Servs., LLC, 308 Conn. 312 (2013) – Contracts must be construed to effectuate the parties’ intent as discerned from their language.

2. Legal Reasoning

(a) Timeliness and Jurisdiction
BI-QEM’s notice of appeal was filed February 16, 2024. Under FRAP 4(a)(1)(A), appeals must be filed within 30 days of the order’s entry. BI-QEM had filed a timely Rule 50(b) motion, which tolled the appeal period until the denial of that motion. The district court’s February 27, 2023 minute entry expressly denied the motion and thus constituted an “entry” under FRCP 58/79(a)(3). BI-QEM’s failure to appeal within 30 days of that entry deprived the Second Circuit of jurisdiction over the merits. (b) Contractual Indemnification
The SRA’s Section 7(b) provides that any breaching party “shall indemnify and hold the other party harmless against all claims ... of any nature ... arising directly or indirectly from such breach,” including attorneys’ fees. Connecticut law follows the American Rule, but allows contractual fee-shifting where clearly agreed. The Court held that the SRA’s unqualified, reciprocal indemnity language covers first-party suits between the contracting parties. A contrary holding would undermine the parties’ clear intent and the broad scope of “all claims.”

3. Impact

This decision clarifies two important points for practitioners:

A docketed minute entry that recites the court’s disposition of a motion, without needing the word “order,” can trigger the 30-day appeal period under FRCP 58/79 and FRAP 4. Parties should monitor minute entries closely and consider seeking formal written orders if any ambiguity arises.
Broad contractual indemnity clauses using the terms “indemnify” and “hold harmless,” covering “all claims,” will be enforced under Connecticut law to include first-party breach actions, not merely third-party claims. Drafters and negotiators should be mindful of the full cost-shifting implications of indemnification language.

Complex Concepts Simplified

Rule 50(b) Motion: A request made after a jury verdict asking the court to enter judgment as a matter of law because no reasonable jury could find for the other side.
Minute Entry vs. Written Order: Courts record actions in the “docket” either by formal written orders or minute entries. Under Federal Rules, a minute entry that clearly shows the ruling’s substance and entry date can suffice as the “order” for appeal timing.
American Rule: Each party bears its own attorneys’ fees unless a statute or contract explicitly provides otherwise.
Indemnification Clause: A contract provision obligating one party to compensate the other for certain losses, including litigation costs and attorneys’ fees.

Conclusion

Trade Links, LLC v. BI-QEM SA de CV establishes two key precedents: First, a clear-minute-entry denial of a post-trial motion counts as a final appealable order for purposes of the 30-day deadline. Second, a broadly worded contractual indemnity clause will be enforced to shift fees and costs in first-party breach disputes under Connecticut law. These principles will guide future appellate jurisdiction questions and contract drafters negotiating fee-shifting provisions.