Utah Supreme Court

Susie Strohm and Dorsey & Whitney, LLP, Plaintiffs and Appellees v. Clearone Communications, Inc., Defendant And…

April 9, 2013732 Utah Adv. Rep. 34

Summary

The Utah Supreme Court affirmed ClearOne's statutory and contractual duty to indemnify former CFO Susie Strohm for all criminal defense costs, rejected the district court's limitation of fees after her perjury conviction, upheld the engagement letters' indemnification provisions, held that ClearOne could not unilaterally terminate its payment obligation to Dorsey, found the criminal‑case fee award reasonable, enforced an 18% interest provision, and invalidated Dorsey’s collection‑fee provision on public‑policy grounds, remanding for a revised fee award.

Holding

  • Whether Utah Code §§16‑102‑903 and ‑907 require indemnification of an officer for all criminal‑defense costs, including costs related to a conviction.. ClearOne must indemnify Strohm for all reasonable criminal‑defense expenses; the district court’s limitation to fees incurred before the perjury conviction is reversed.
  • Whether the engagement letters between ClearOne and Strohm/Dorsey obligate ClearOne to indemnify Strohm for criminal‑defense costs.. The engagement letters unambiguously require ClearOne to indemnify Strohm for criminal‑defense costs; no limitation based on success of the defense is supported.
  • Whether ClearOne may unilaterally terminate its payment obligation under the Dorsey engagement agreement.. ClearOne lacks the right to unilaterally end its payment obligation; termination requires a joint request by both ClearOne and Strohm.
  • Whether the district court’s attorney‑fee award in the criminal case was reasonable.. The district court’s fee award is reasonable and is affirmed.
  • Whether the 18% interest provision in the engagement agreements is enforceable.. The 18% interest provision is enforceable and is affirmed.
  • Whether the collection‑fee provision allowing Dorsey to recover fees in the collection action is enforceable.. The collection‑fee provision is invalid on public‑policy grounds; Dorsey may not recover its collection fees.

Docket 20110569

Cited authorities

  • rule 1.5(a)
  • rule 1.5(c)
  • rule 1.8(a)
  • rule 1.5(b)
  • rule 1.5(a)
  • Utah R. Civ. P. 30(b)(6)
  • rule 1.5(b)

Cited by

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