Robert E. Lehman v. Michele Lehman (mem. dec.) ( 2017 )

MEMORANDUM DECISION FILED
Apr 06 2017, 9:50 am
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be CLERK
Indiana Supreme Court
Court of Appeals
regarded as precedent or cited before any and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Brad A. Catlin Steven F. Fillenwarth
Price Waicukauski Joven & Catlin, LLC Christine M. Stolle
Indianapolis, Indiana Fillenwarth & Associates
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Robert Lehman, April 6, 2017
Appellant-Petitioner, Court of Appeals Case No.
49A02-1512-DR-2225
v. Appeal from the Marion Superior
Court
Michele Lehman, The Honorable Michael D. Keele,
Appellee-Respondent Judge
The Honorable Victoria M.
Ransberger, Magistrate
Trial Court Cause No.
S784-1598
Crone, Judge.
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Case Summary
[1] In this consolidated appeal, we address the narrow issue of the appropriateness
of attorney’s fee awards under the frivolous action statute and the marital
dissolution statute. The parties, Robert Lehman (“Husband”) and Michele
Lehman (“Wife”), divorced in 1985 and, since 2012, have been in and out of
court numerous times on various motions, causes, and appeals. This time,
Husband challenges (1) the denial of his request for attorney’s fees in defending
Wife’s allegedly frivolous action seeking to vacate a twenty-seven-year-old
dissolution decree; and (2) an order granting Wife’s motion for preliminary
appellate attorney’s fees pursuant to the marital dissolution statute. We affirm.
Facts and Procedural History
[2] Husband and Wife married in 1981 and had one daughter during the marriage.
In 1984, Husband filed a petition to dissolve the marriage. In 1985, the trial
court issued a decree of dissolution and settlement agreement signed by both
parties (collectively “the 1985 decree”). Wife was a homemaker, and at that
time, Husband was an attorney.1 The couple continued to live together in their
home for the next two decades, raised their daughter together, and held
themselves out to the public as married. In 1995, Wife found some dissolution
documents in their home.
1
Husband was subsequently disbarred. See In re Lehman, 901 N.E.2d 1097, 1098 (Ind. 2009).
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[3] In 2012, Wife filed a motion under Indiana Trial Rule 60(B) to set aside the
1985 decree, claiming that she never knew that she and Husband were
divorced. She questioned the authenticity of her purported signatures on the
dissolution documents and claimed that Husband had forced her to sign some
documents under coercion. In her Trial Rule 60(B) motion, she specified the
following grounds for relief: fraud on the court, rescission based on
reconciliation of the parties, and lack of jurisdiction based on her assertion that
she neither received a summons nor was ever served with the 1985 decree. In
conjunction with her motion, she filed a new petition for dissolution of
marriage. Husband filed a motion to dismiss Wife’s motion to set aside,
claiming lack of jurisdiction and failure to state a claim upon which relief can
be granted. The trial court denied the motion, finding that it had jurisdiction
and that Wife had sufficiently stated a legal claim as required by Indiana Trial
Rule 12(B)(6). Wife filed two requests to amend her motion to set aside. The
trial court granted the first and denied the second, in which she sought to add a
cohabitation claim.
[4] The trial court held a hearing in September 2013, during which Husband
claimed that Wife’s motion to set aside was not a domestic relations matter and
that he therefore was not required to pay Wife’s attorney’s and expert witness
fees. The trial court ordered him to pay the fees, and he appealed. He later
moved to dismiss his appeal, and the motions panel of this Court dismissed the
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appeal with prejudice on January 27, 2014.2 Appellee’s Corrected App. Vol. II
at 13.
[5] In June 2014, the trial court heard Wife’s evidence on her motion to set aside
the 1985 decree. At the end of her case-in-chief, Husband moved for
involuntary dismissal pursuant to Indiana Trial Rule 41(B). The trial court took
the matter under advisement and eventually granted Husband’s motion, finding
Wife’s evidence insufficient to support her claims of lack of jurisdiction, fraud
on the court, and rescission by reconciliation. Wife filed a motion to correct
error, which was denied.
[6] Also in 2014, Husband filed a motion for attorney’s fees pursuant to Indiana
Code Section 34-52-1-1(b), claiming that Wife’s motion to set aside the 1985
decree was a frivolous, unreasonable, or groundless action. Meanwhile, he
filed an independent action against Wife for abuse of process and malicious
prosecution. Citing his filing of the independent action, Husband subsequently
requested dismissal without prejudice of his request for attorney’s fees in the
original action pursuant to Indiana Trial Rule 41(C). The trial court granted his
motion.
[7] In September 2015, Husband moved to reinstate his request for attorney’s fees
in the original action. The trial court denied his fee request, observing that “in
filing the separate action for abuse of process [Husband] has deliberately created
2
There is nothing in the record to indicate that Husband did not pay those fees as ordered.
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additional attorney[’s] fees for his former wife, while simultaneously seeking
attorney[’s] fees and costs from her.” Appellant’s App. Vol. II at 177. Husband
filed a motion to correct error, and Wife filed a motion to strike certain portions
of Husband’s affidavit attached to his motion to correct error. The trial court
granted Wife’s motion to strike and denied Husband’s motion to correct error.
Husband requested leave to amend his motion to correct error. The trial court
granted his request but ultimately denied his amended motion to correct error.
Husband initiated an appeal.
[8] Meanwhile, Wife filed a motion for preliminary appellate attorney’s fees
pursuant to the dissolution statute. Husband sought a protective order to
prevent Wife from accessing certain financial information for purposes of her
petition for appellate attorney’s fees. The trial court conducted a hearing,
during which Husband stipulated to the appropriateness of appellate fees on the
condition that the trial court had the legal authority to impose appellate
attorney’s fees. Wife’s counsel indicated that the reasonable fee amount would
be $7500, and the trial court concluded that the revelation of this fee
information rendered Husband’s requested protective order unnecessary. In
December 2015, the trial court granted Wife’s motion for preliminary appellate
attorney’s fees, and Husband now appeals, claiming that the trial court lacked
the legal authority to impose appellate attorney’s fees. This appeal was
consolidated with Husband’s appeal of the trial court’s denial of his motion to
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correct error on his own request for attorney’s fees.3 Additional facts will be
provided as necessary.
Discussion and Decision
[9] Husband asserts that the trial court erred in denying his petition for attorney’s
fees pursuant to the frivolous action statute and by granting Wife’s petition for
preliminary appellate attorney’s fees under the marital dissolution statute. We
review a trial court’s ruling on a petition for attorney’s fees for an abuse of
discretion. R.L. Turner v. Town of Brownsburg, 963 N.E.2d 453, 457 (Ind. 2012).
An abuse of discretion occurs if the trial court’s decision clearly contravenes the
logic and effect of the facts and circumstances before it or it has misinterpreted
the law. Id. Where, as here, the trial court enters special findings and
conclusions thereon, we apply a two-tiered standard of review. Stonger v. Sorrell,
776 N.E.2d 353, 358 (Ind. 2002). We determine first whether the evidence
supports the findings and then whether the findings support the judgment. Id.When reviewing the findings, we neither reweigh evidence nor reassess witness
credibility. Id. We reverse only on a showing of clear error. Id.[10] “The general rule regarding attorney fees – known as the American Rule – is
that each party bears its own attorney fees.” Cavello v. Allied Physicians of
Michiana, LLC, 42 N.E.3d 995, 1006 (Ind. Ct. App. 2015). Among the
exceptions to the American Rule are attorney’s fee awards for frivolous,
3
Wife filed a motion to strike certain statements included in Husband’s reply brief, which we deny in an
order to be issued contemporaneously with this decision.
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unreasonable, or groundless actions and attorney’s fee awards in domestic
relations matters. See Ind. Code §§ 34-52-1-1, 31-15-10-1.
Section 1 – The trial court acted within its discretion in
denying Husband’s petition for attorney’s fees pursuant to the
frivolous action statute.
[11] Husband submits that the trial court abused its discretion in denying his petition
for attorney’s fees based on what he characterizes as a frivolous, unreasonable,
or groundless action filed by Wife to set aside the 1985 decree. Indiana Code
Section 34-52-1-1 reads in pertinent part,
(b) In any civil action, the court may award attorney’s fees as
part of the cost to the prevailing party, if the court finds that
either party:
(1) brought the action or defense on a claim or defense that is
frivolous, unreasonable, or groundless;
(2) continued to litigate the action or defense after the party’s
claim or defense clearly became frivolous, unreasonable, or
groundless; or
(3) litigated the action in bad faith.
(c) The award of fees under subsection (b) does not prevent a
prevailing party from bringing an action against another party for
abuse of process arising in any part on the same facts. However,
the prevailing party may not recover the same attorney’s fees
twice.
[12] Our supreme court has observed that the legal process “must invite, not inhibit,
the presentation of new and creative argument” and, as such, statutes
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authorizing the recovery of attorney’s fees “must leave breathing room for
zealous advocacy and access to the courts to vindicate rights.” Mitchell v.
Mitchell, 695 N.E.2d 920, 925 (Ind. 1998). Being sensitive to such
considerations, a trial court must view “with suspicion” a party’s assertions that
his opponent has raised a frivolous, unreasonable, or groundless claim or
defense. Id. Broadly stated, the statute authorizing an award of attorney’s fees
for frivolous lawsuits “strikes a balance between respect for an attorney’s duty
of zealous advocacy and the important policy of discouraging unnecessary and
unwarranted litigation.” Id. at 924 (citation and internal quotation marks
omitted).
[13] A claim or defense is “frivolous” if it is taken primarily for the
purpose of harassment, if the attorney is unable to make a good
faith and rational argument on the merits of the action, or if the
lawyer is unable to support the action taken by a good faith and
rational argument for an extension, modification, or reversal of
existing law. A claim or defense is unreasonable if, based on the
totality of the circumstances, including the law and the facts
known at the time of filing, no reasonable attorney would
consider that claim or defense was worthy of litigation. A claim
or defense is “groundless” if no facts exist which support the legal
claim presented by the losing party. A trial court is not required
to find an improper motive to support an award of attorney fees;
rather, an award may be based solely upon the lack of a good
faith and rational argument in support of the claim.
Waterfield v. Waterfield, 61 N.E.3d 314, 335-36 (Ind. Ct. App. 2016) (citations
omitted), trans. denied (2017). “A claim or defense is not groundless or frivolous
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merely because the party loses on the merits.” Estate of Kappel v. Kappel, 979
N.E.2d 642, 655 (Ind. Ct. App. 2012).
[14] Here, Husband asserts that Wife’s motion to set aside a twenty-seven-year-old
decree was frivolous, unreasonable, or groundless. Although the trial court
eventually granted Husband’s motion for involuntary dismissal under Trial
Rule 41(B), Husband first sought and was denied dismissal under Trial Rule
12(B)(6) for failure to state a claim. While we acknowledge that the showing
required to survive a Rule 12(B)(6) motion4 is less stringent than the showing
required to survive dismissal under Rule 41(B),5 we believe that the trial court’s
findings in its order denying dismissal under Rule 12(B)(6) are helpful in
framing Wife’s counterarguments:
3. Wife’s facts assert that Husband was formerly an attorney and
Wife was a homemaker and primary caretaker of their minor
child, at the time that Husband obtained a Decree of Dissolution
on April 15, 1985, 27 years ago. Husband’s submission of a
settlement agreement provided that Husband received the
majority of the marital estate; Husband gave himself “complete
ownership of all the marital real estate, whether individually or
jointly owned”; Husband only assumed debt personally incurred
4
A motion to dismiss under Indiana Trial Rule 12(B)(6) tests the legal sufficiency of the plaintiff’s
complaint, and the trial court must consider the pleadings in the light most favorable to the plaintiff and draw
every reasonable inference in favor of the nonmoving party, here Wife. Trail v. Boys & Girls Clubs of Nw. Ind.,
845 N.E.2d 130, 134 (Ind. 2006)
5
After the plaintiff or party with the burden of proof has completed her presentation of evidence, the trial
court may, on the opposing party’s motion, determine that upon the weight of the evidence and the law, the
plaintiff has shown no right to relief and enter dismissal. Ind. Trial Rule 41(B). See also Barger v. Pate, 831
N.E.2d 758, 761 (Ind. Ct. App. 2005) (under Rule 41(B)), trial court may weigh evidence, assess witness
credibility, and determine whether party with burden of proof has established right to relief during case-in-
chief).
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in his name only and would “pay any other marital obligation
but only up to a total amount of $1,500.00;” Wife was required
to hold Husband harmless for any debts she was responsible for
yet it had no similar clause for Husband to hold Wife harmless
for payment of his outstanding obligations; Husband was to pay
Wife $280 per month in child support, which was never paid for
their only child; Husband also agreed to purchase and finance a
condominium unit in Lakes at the Crossing in Indianapolis,
however, he never purchased and/or financed said condominium
on behalf of Wife.
4. Wife has sufficiently stated a legal claim for relief against
Petitioner for fraud upon the court. Wife’s complaint to set aside
and vacate the final settlement agreement, decree of dissolution
of marriage and wavier [sic] of final hearing (Motion) also sets
forth facts to support her claim that Husband schemed to
influence the Court to enter the Decree of Dissolution of
Marriage and Final Settlement Agreement. Wife states that she
did not sign the Waiver of Service and Consent to Jurisdiction[;]
rather Husband fraudulently had this Waiver executed prior to
submitting it to the Court. Wife also states that Husband
physically threatened her to sign the settlement.
5. Wife has sufficiently stated a claim that the parties intended to
rescind the Final Settlement Agreement. Brinkmann v.
Brinkmann, 772 N.E.2d 441, 448 (Ind. Ct. App. 2002)
(underlining altered) requires clear proof that parties intend a
property settlement agreement to be terminated where the parties
later reconcile. Husband and Wife continually shared a marital
residence together for the past twenty-seven (27) years; the parties
held themselves out to the public as Husband and Wife for the
past twenty-seven (27) years; the parties filed tax returns as
married filing jointly. (Underlining altered.) Husband had
previously represented to an Internal Revenue Service Auditor
that Husband and Wife were legally married during questioning
for a tax audit some years after the date of the Decree of
Dissolution. After the date of the Decree of Dissolution,
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Husband did not follow the terms of the Final Settlement
Agreement, failing to pay child support to Wife, failing to
purchase and finance a condominium unit in Lakes at the
Crossing in Indianapolis, Indiana, on behalf of Wife for which
“he would not have consummated said purchase and major
financial commitment” but for the Final Settlement Agreement.
Appellee’s Corrected App. Vol. II at 10-11.
[15] In its order granting Husband’s motion for involuntary dismissal of Wife’s
claims pursuant to Rule 41(B), the trial court found that Wife waived her claim
of lack of personal jurisdiction by submitting to the court’s jurisdiction and that,
waiver notwithstanding, “The Court has carefully considered the testimony of
Wife as well as Wife’s hand-writing expert. Wife does not remember signing
the [waiver of service and consent to jurisdiction] and her expert’s testimony
was not persuasive. The evidence, in the determination of the Court is simply
deficient.” Appellant’s App. Vol. II at 125. As for Wife’s claim of fraud upon
the court, the trial court found in pertinent part,
22. Wife failed to present sufficient evidence to meet her burden
of proof in demonstrating any of her allegations. The totality of
Wife’s evidence does not support a finding of fraud. Even
assuming arguendo, that Wife felt that she had to sign the
documents that Husband placed before her, she had ample
opportunity to show the documents to her friend … on the same
night. She had time to destroy the documents. Wife is an
educated person and could have checked the Court records at
any time following the evening that she admittedly signed at least
one of the documents.
23. The Settlement Agreement contains numerous hand-written
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changes, initialed by the parties, which only served to benefit
Wife. Those initialed changes demonstrate that Wife reviewed
the terms of the Settlement Agreement and understood those
terms well enough to make agreed changes to the document.
24. Wife had been married and divorced prior to the marriage to
[Husband]. She was represented by counsel in her prior divorce.
Wife was certainly aware of her rights to follow up with
contacting a lawyer.
25. Wife’s claim that Husband concealed the dissolution action
from her for over 27 years is simply not credible. The parties
have filed separate tax returns (single, not married) since 1995;
Wife filed for Social Security Benefits indicating she was
divorced and was never married for more than 10 years; Wife
testified, under oath, in a trial in Hamilton County that she was
no longer married; and … Wife executed a promissory note to
Husband indicating her understanding that the parties divorced
in 1985. Wife has told a number of friends and family members
about the divorce, including the parties’ daughter and [Wife’s]
brother. Some of those friends were made aware of the divorce
by Wife as early as 1995. Wife, by her own admission, found the
signed and file-marked copies of the dissolution papers in 1995.
She saw … a dissolution attorney, around the time she found
those documents. Wife sat on any rights that she may have had
by not acting upon the divorce for 18 years.
26. Wife has failed to present sufficient evidence to meet her
burden of proof in demonstrating Husband has committed fraud
upon the Court. Husband’s Motion for Involuntary Dismissal of
Respondent’s Motion to Set Aside on the basis of fraud upon the
court is granted.
Id. at 126-27.
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[16] With respect to Wife’s claim for rescission by reconciliation, the trial court
found,
30. While it is true that Husband did not provide a condo for
Wife or pay the support figure detailed in their settlement, the
parties clearly severed themselves financially at the time of the
dissolution. The parties did not maintain joint bank accounts,
debts or own property jointly. The fact that both parties
“pretended” to be married for many years or chose to keep the
details of their divorce private, simply does not prove rescission
of the Settlement Agreement. Wife has failed to present
sufficient evidence to meet her burden of proof in demonstrating
that Husband has rescinded the Settlement Agreement.
Id. at 128.
[17] In short, the trial court initially found the Wife’s assertions sufficient to clear
the hurdle of stating a claim upon which relief may be granted. The evidence
that she and Husband continued to live together and held themselves out as a
married couple to friends and even to the IRS, at least for the first decade,
suggested that Wife, a homemaker, was not fully aware of the effect of the
documents she had signed, potentially under duress. However, after affording
Wife the opportunity to present her case fully and present witnesses on her own
behalf, the trial court simply found that Wife’s claims lacked sufficient
evidentiary support. In other words, Wife lost on the merits, but her loss did
not render her claims frivolous, unreasonable, or groundless. See Estate of
Kappel, 979 N.E.2d at 655. The trial court, having traversed the arduous maze
of motions, amendments, and responses and managed the tensions and
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conflicting stories of the parties, determined that Husband was not entitled to
attorney’s fees under the frivolous action statute. We find no abuse of
discretion here.
Section 2 – The trial court acted within its discretion in
granting Wife’s request for preliminary appellate attorney’s
fees pursuant to the dissolution statute.
[18] Husband also maintains that the trial court lacked authority to award Wife
preliminary appellate attorney’s fees and therefore abused its discretion in
granting Wife’s petition. Indiana Code Section 31-15-10-1 allows a trial court
to order a party to a marital dissolution to pay a reasonable amount for the cost
to the other party of maintaining or defending any proceeding connected with
the dissolution. Ehle v. Ehle, 737 N.E.2d 429, 437 (Ind. Ct. App. 2000). This
includes amounts for legal services provided and costs incurred before the
proceedings commenced or after entry of judgment. Ind. Code § 31-15-10-1(a).
[19] The purpose of the award of attorney’s fees is to ensure legal representation for
a party in a dissolution proceeding who might not otherwise be able to afford an
attorney. Hartley v. Hartley, 862 N.E.2d 274, 286-87 (Ind. Ct. App. 2007). In
contrast to the frivolous action statute, Indiana Code Section 31-15-10-1 is
written more broadly. Among the factors that the trial court must consider
when evaluating a request for attorney’s fees are the parties’ relative resources,
economic condition, employability, and earning potential. Id. at 286. Where,
as here, one party is “in a superior position to pay fees,” an award of attorney’s
fees is proper. Id. at 287. See also Bertholet v. Bertholet, 725 N.E.2d 487, 501
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(Ind. Ct. App. 2000) (statute includes awards for reasonable appellate attorney’s
fees where applicable).
[20] Here, Husband was not present at the hearing on Wife’s request for preliminary
appellate attorney’s fees. However, at the outset, his counsel stated,
[Husband] is willing to stipulate or consent to an order finding
that preliminary appellate attorney’s fees are appropriate in this
case. Should this Court conclude that it has the authority to
enter such an order …. so we’re not disputing the factual issue
about that, we’re only disputing the legal issue.
Tr. at 6. Later in the hearing, Husband’s counsel reiterated,
I suppose my client would probably want me to do a response to
the factual allegations, but frankly, like I said, we’re willing to
stipulate this is an appropriate case for appellate attorney’s fees. What I
don’t know from the facts or record that this Court has – is you
know, what the expected fee – a reasonable fee would be in this
case.
Id. at 16 (emphasis added). Wife’s counsel submitted figures of twenty-five to
thirty hours multiplied by an hourly rate of $275, for a reasonable appellate
attorney’s fee of $7500. Id. at 21. He does not challenge the reasonableness of
this amount on appeal.
[21] Husband characterizes Wife’s action to set aside the 1985 decree as an
independent action rather than a domestic relations matter and submits that the
trial court therefore lacked authority to award her preliminary appellate
attorney’s fees under the marital dissolution statute. We disagree. The trial
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court specifically found Husband’s claim for attorney’s fees to be “derivative”
of Wife’s action to set aside a decree issued in a domestic relations matter.
Appellee’s Corrected App. Vol. II at 18. The court also observed that the issue
had already been addressed and decided:
[Husband] raised this same issue (that [Wife’s] Motion to Set
Aside is not a domestic relations matter) at the hearing in this
Court on September 5, 2013. This Court disagreed with
[Husband’s] argument then and ordered him to pay a portion of
[Wife’s] attorney’s and expert’s fees. [Husband] initiated an
appeal on this Court’s decision ordering him to pay [Wife’s] fees.
[Husband] later moved to dismiss his own appeal and it was
dismissed with prejudice.
Id. at 18 n.1. Interestingly, while claiming that Wife’s Rule 60(B) motion was
an independent cause and not a domestic relations matter, Husband made use
of the domestic relations cause number to file his appeal as well as his own
initial request for fees under the frivolous action statute.
[22] The issue of whether Wife’s action is a domestic relations matter for purposes
of attorney’s fees has been litigated, appealed, and dismissed with prejudice by
this Court.6 In its order, the trial court considered the pleadings, affidavits, and
exhibits filed since 2015 and reiterated its earlier finding that “there is no good
cause shown to allow [Husband] to continue to use the Courts for his litigation
6
Even so, a party’s motion to set aside a divorce decree has been held to constitute a domestic relations
matter. See Glover v. Torrence, 723 N.E.2d 924, 939-40 (Ind. Ct. App. 2000) (affirming award of attorney’s fee
under marital dissolution statute in mother’s action to set aside three-year-old custody modification order on
grounds of fraud).
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agenda which appears to this Court to be solely for the purpose of causing
[Wife] additional attorney’s fees.” Id. at 19.
[23] In short, Wife’s action was a domestic relations matter, making her eligible for
attorney’s fees under Indiana Code Section 31-15-10-1. Thus, the trial court
had the authority to award her a reasonable preliminary appellate attorney’s
fee. We find no abuse of discretion here. Accordingly, we affirm.
[24] Affirmed.
Riley, J., and Altice, J., concur.
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