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REFORMATION OF CONTRACT TO CORRECT THE NAMING OF THE WRONG PARTY TO BE INDEMNIFIED, A MUTUAL MISTAKE, SHOULD HAVE BEEN ALLOWED.

The First Department, reversing Supreme Court, determined an indemnification agreement could be reformed on the grounds of mutual mistake. The wrong party was named as the “owner” and, therefore, the true owner was not named in the hold harmless clause of the indemnification agreement:

“A claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake” … . To succeed, the party asserting mutual mistake must establish by “clear, positive and convincing evidence” that the agreement does not accurately express the parties' intentions or previous oral agreement … .

Parol evidence may be used … , and reformation is an appropriate remedy where the wrong party was named in the contract … . On the record before us, plaintiffs clearly and convincingly established that K & K intended to indemnify the true owner, 313 West, and that, as a result of mutual mistake, the agreement misidentified Solil, the managing agent, rather than 313 West itself, as the “Owner” of the property where the work was to be performed. 313-315 W. 125th St. L.L.C. v Arch Specialty Ins. Co., 2016 NY Slip Op 03105, 1st Dept 4-26-16


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