Synonymy of “Hold Harmless” and “Indemnify” in Contractual Interpretation

Introduction

In Adams v. Atkinson, 381 So. 3d 1133 (Ala. 2025), the Supreme Court of Alabama addressed whether the terms “hold harmless” and “indemnify” are synonymous when each appears alone in a contract. Joy Goodwin Adams sued her children, Tiffany Rudd Atkinson and Katherine M. Rudd, along with Goodwin Capital Partners, Ltd., and KATISAM, Inc., seeking reimbursement of attorneys’ fees she paid to a third-party trustee under a settlement agreement. The Jefferson Circuit Court dismissed her suit with prejudice. On appeal, the key question was whether a “hold harmless” clause obligates the defendants to reimburse Adams in the same way an “indemnify” clause would.

Summary of the Judgment

The Supreme Court of Alabama unanimously held that “hold harmless” is synonymous with “indemnify,” even when separated from the traditional doublet form. Because Adams plausibly alleged that the defendants agreed to indemnify her against fees paid to the trustee for successfully defending a suit, the circuit court erred in dismissing her complaint. The Supreme Court reversed and remanded for further proceedings.

Analysis

1. Precedents Cited

Nance v. Matthews, 622 So. 2d 297 (Ala. 1993): On a motion to dismiss, facts are construed in the plaintiff’s favor.
Mobile Infirmary Ass’n v. Quest Diagnostics, 381 So. 3d 1133 (Ala. 2023): Example of “indemnify, defend and hold harmless” as an integrated clause.
Holcim (US), Inc. v. Ohio Casualty Ins. Co., 38 So. 3d 722 (Ala. 2009): Treats “indemnify and hold harmless” as a unitary concept.
Numerous Alabama treatises and cases equate “indemnify” and “hold harmless” in the context of trusts, leases, and commercial contracts.

2. Legal Reasoning

The Court began by examining the historical use of the “indemnify and hold harmless” doublet, noting that both terms are legal synonyms meant to reinforce each other. It rejected the minority approach that distinguishes “indemnify” (an offensive right) from “hold harmless” (a defensive release). Instead, the Court applied the ordinary-meaning rule: absent a clear indication of technical usage, legal terms of art should be given their common legal sense.

Parsing the settlement agreement’s hold-harmless clause demonstrated that the defendants agreed to reimburse Adams for attorneys’ fees the trustee incurred when successfully defending trust-related claims. The phrase “hold Joy … harmless against any claim … by [the trustee]” naturally performs the same function as an indemnity. The existence of a separate indemnity clause did not suggest a different meaning for the hold-harmless clause, as both provisions obligated the respective parties to reimburse losses arising from third-party claims.

3. Impact

This decision confirms that courts should treat “hold harmless” and “indemnify” as interchangeable in indemnification provisions, regardless of whether they appear together. Contract drafters can rely on the ordinary meaning of legal doublets and need not fear that separating the terms will alter their effect. Litigants should also understand that hold-harmless clauses can create reimbursement obligations for third-party claims, not merely first-party releases.

Complex Concepts Simplified

Legal Doublet: A pair of synonymous legal terms (e.g., “indemnify and hold harmless”) used to reinforce a contractual promise.
Indemnify: To reimburse a party for losses or liabilities incurred, often due to a third-party claim.
Hold Harmless: To protect or exempt a party from liability; here, equivalent to indemnification.
Rule 12(b)(6) Motion: A challenge to the sufficiency of a complaint—facts are viewed in the plaintiff’s favor, and dismissal is proper only if no plausible claim exists.

Conclusion

Adams v. Atkinson marks a clear precedent in Alabama contract law: “hold harmless” and “indemnify” are synonymous, even when separated within an agreement. This ruling reverses the circuit court’s dismissal of Joy Adams’s reimbursement claim and remands for further proceedings. It provides vital guidance for interpreting indemnification and hold-harmless provisions, underscoring the importance of ordinary legal meaning and careful drafting.