Thomas Baker v. Health Management Systems, Inc., Phillip Siegel

Summary

The New York Court of Appeals answered the certified question negatively, holding that New York Business Corporation Law § 722(a) does not authorize a corporate officer to recover attorneys' fees incurred in seeking indemnification (fees on fees). The Court based its decision on a textual reading requiring a substantial nexus to the underlying action, legislative history, and the American rule. Chief Judge Kaye dissented, arguing that the statute should be read to allow such recovery.