July 16, 2024

HOLDINGS: [1]-Construing the contract as a whole pursuant to Civ. Code, § 1641, an attorney fees provision in escrow instructions did not provide indemnity rights among the principals and the escrow holder, but included attorney fees only as an item of recoverable loss in accordance with Civ. Code, § 2778, subd. 3, in a third party claim indemnity provision authorizing an award of attorney fees to the escrow holder if it acted properly and prevailed in litigation arising out of claims or conflicting demands made upon it, such as litigation arising out of disputes or controversies about the terms of the escrow; [2]-Accordingly, when the principals prevailed on a claim against the escrow holder for breach of the escrow instructions, they could not recover attorney fees based on reciprocity under Civ. Code, § 1717, because there was no action to enforce the indemnity agreement.

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Order and judgment affirmed.