In the Matter of Mandate of Funds for the Lake Superior Court Lake County Council and Lake County Auditor v. The Hon. John R. Pera

FILED
May 16 2019, 12:18 pm
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
IN THE
Indiana Supreme Court
Supreme Court Case No. 18S-CB-442
In the Matter of Mandate of Funds for the
Lake Superior Court;
Lake County Council and Lake County Auditor,
Appellants/Cross-Appellees,
–v–
The Hon. John R. Pera, et al.,
Appellees/Cross-Appellants.
Decided: May 16, 2019
Review from the Lake Superior Court, No. 45D10-1702-CB-3
The Honorable W. Tobin McClamroch, Special Judge
On Automatic Review under Trial Rule 60.5(B) and Appellate Rule 61
Per Curiam Opinion
All Justices concur.
Per curiam
In this mandate-of-funds action, the parties’ only remaining dispute is
over what attorney’s fees and expenses the Judges of the Lake Superior
Court should recover. The parties put this question to the Special Judge,
who ruled that the Judges are entitled to recover $176,467.17. Having
reviewed each side’s challenge to that award, we affirm.
Facts and Procedural History
Early in 2017, fourteen Judges of the Lake Superior Court issued an
Order for Mandate of Funds under Indiana Trial Rule 60.5. The order found
that valuable court employees are underpaid, endangering the court’s
ability to continue operating in an efficient manner. The order required the
Lake County Council and the Lake County Auditor (collectively, “the
Council”) to provide funding, including scheduled raises, for court
employees. The order covered over 170 court employees in twelve job
classifications. According to the Council, complying with the order would
cost the County between $1.5 and $2.3 million.
We appointed attorney W. Tobin McClamroch as Special Judge to hear
the case. Each side retained counsel. Discovery ensued: multiple requests
for production and interrogatories were used, and two dozen depositions
were taken. Salary information was compiled. Mediation occurred but was
unsuccessful in resolving the case. The parties prepared for trial and filed
pretrial briefs and multi-page lists of witnesses and exhibits.
A few days before the three-day bench trial was set to start, the parties
announced they agreed to settle the dispute. At the parties’ request, the trial
was vacated. The parties then negotiated the specifics of their settlement.
Their Settlement Agreement and Release is not in the record, but the parties
agree it includes the following paragraph:
The County will pay the reasonable legal fees and expenses
incurred by the Superior Court in prosecuting the Mandate
Action prior to the dismissal of the Mandate Action. In the
event the parties are unable to agree to this amount, the parties
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agree to submit the issue to the Special Judge for a decision.
Either party may seek review of that decision before the
Indiana Supreme Court. The Superior Court[ ] agree[s] that the
Council has no further obligation for attorney fees in this
matter.
Appellants’ App. Vol. II at 17.
The Judges requested $223,234.17 in legal fees and expenses. That
amount consisted of 237.2 billed hours of attorney Jeffrey C. McDermott at
$430/hr.; 309.4 billed hours of attorney William J. Barkimer at $245/hr.; 30.4
billed hours of attorney Matthew C. Branic at $245/hr.; 133.6 billed hours of
a paralegal at $195/hr.; and expenses totaling $11,935.17. The Council
opposed the Judges’ request as excessive.
The parties submitted their dispute over fees and expenses to the Special
Judge by filing briefs and documentary evidence. In his Findings of Fact,
Conclusions of Law, and Order, the Special Judge concluded the Judges’
expenses and attorneys’ time entries were all reasonable in light of the
case’s complexity. He found, however, that the Judges should recover no
more than the reasonable and customary hourly rate for an attorney in Lake
County, and so he limited the hourly rate to $240/hr. for each of the Judges’
attorneys. Id. at 18-19. He accordingly ordered the Council to pay the Judges
$176,467.17 for their fees and expenses.
Review has not been waived under T.R. 60.5(B). Therefore, we address
the Council’s appeal and the Judges’ cross-appeal.
Discussion and Decision
We recognize the necessity of proper compensation for attorneys who
represent courts in mandate cases. Montgomery Cty. Council v. Milligan, 873
N.E.2d 1043, 1049 (Ind. 2007). The “principal considerations in determining
the appropriate amount of attorney fees in T.R. 60.5 proceedings” are “the
logistics problems faced by attorneys who have the burden of proof as to
the number of employees involved in court processes, the salaries paid
therefor, the volume of work required to be done by those personnel, and
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the necessity for the increase in salaries in order to facilitate the work of the
court.” Id.The factors listed in Indiana Professional Conduct Rule 1.5(a) also
provide general guidance for determining reasonableness of attorney’s fees.
Id. Those factors include, among others, “(1) the time and labor required,
the novelty and difficulty of the questions involved, and the skill requisite
to perform the legal service properly; … (3) the fee customarily charged in
the locality for similar legal services; [and] (4) the amount involved and the
results obtained[.]” Id. (quoting Prof. Cond. R. 1.5(a)). In any event, a trial
court’s order in a mandate action shall not “direct that attorney fees be paid
at a rate greater than the reasonable and customary hourly rate for an
attorney in the county.” T.R. 60.5(B).
Generally, we will affirm the action of the special judge in a mandate
action if there is substantial evidence of probative value to sustain it.
Schiralli v. Lake Cty. Council, 504 N.E.2d 1020, 1021-22 (Ind. 1987). Where
reasonableness of attorney’s fees is at issue, we have affirmed absent an
abuse of discretion. In re Mandate of Funds in the Harrison Super. Ct., 674
N.E.2d 555, 558 (Ind. 1996). Also, we recognize that a trial judge “possesses
personal expertise that he or she may use when determining reasonable
attorney’s fees.” Masters v. Masters, 43 N.E.3d 570, 576 (Ind. 2015).
I. The Council’s Appeal
We disagree with the Council’s first argument that $176,467.17 is
excessive due to the lack of results obtained by the Judges. “Entitlement to
attorney fees is not contingent on success on the merits.” St. Joseph Cty.
Comm’rs v. Nemeth, 929 N.E.2d 703, 721 (Ind. 2010). And even if we consider
the “results obtained” under Prof. Cond. R. 1.5(a)(4), the Council’s
argument fails because it has not included in the record a copy of the entire
Settlement Agreement and Release clearly showing what promises,
arrangements, and concessions each side made in the agreement. Without
the text of the agreement or an agreed statement of its contents, the Council
fails to demonstrate that the Judges obtained no results.
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Moreover, the Council acknowledges the agreement provided for
employee pay increases in 2018 and included a promise by the Council to
fund a “supplemental pay” arrangement. Appellants’ Br. at 13-14. For their
part, the Judges report the agreement also guaranteed that the court’s
employees would not be evaluated by an outside consultant hired by the
Council; the Council does not deny it made such a promise. See Appellants’
Br. at 22; Appellees’ Br. at 15-16 n.6. As it appears the agreement required
salary increases for 2018, a “supplemental pay” arrangement, and a promise
not to use an outside evaluator to review employees, we conclude the
Judges achieved substantial employee-related results, even if those results
do not match the precise relief sought when the mandate order was issued.
Likewise, we find no merit in the Council’s argument that the award
should be reduced because the case was not complex and the Judges’
attorneys overstaffed it and incurred unnecessary expenses. The Council’s
own submission of approximately sixty pages of appellate briefing indicates
the case was complex. And while the Special Judge acknowledged the
Council’s objections, he found “the Judges’ counsel’s time entries and
expenses are reasonable in light of the complexity of the Mandate Matter.”
App. Vol. II at 18.
The record supports the Special Judge’s findings. This case involved over
170 employees in twelve employment positions, two experts retained by the
Council, two dozen depositions, multiple witnesses and exhibits, the
parties’ preparation for both mediation and trial, negotiation of an
agreement, and briefing of the fees and expenses issue. The evidence
included the affidavit of McDermott, who stated he has practiced law in
Indiana since 1986 and served on Krieg DeVault LLP’s Executive
Committee for twelve years, as the Executive Partner of Krieg DeVault’s
Hamilton County office for fifteen years, and as chair of Krieg DeVault’s
litigation practice group for five years. App. Vol. II at 103. The affidavit
shows McDermott reviewed the billing records and concluded the fees
reflected in those records were “necessary to properly represent the Judges
in this matter and are reasonable in light of the time and labor involved, the
complexity and novelty of the questions presented, the significant
challenges encountered by this particular case, and the skills required.” Id.
at 105. McDermott’s affidavit, alone or in conjunction with the Special
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Judge’s own personal expertise, supports the Special Judge’s finding of
reasonableness in the Judges’ attorneys’ time entries and expenses.
II. The Judges’ Cross-Appeal
The record also supports the Special Judge’s decision that the Judges are
entitled to recover only $240/hr. for the legal services of McDermott. In
awarding $240/hr. for McDermott’s services, the Special Judge found “that
the evidence presented and cases the Council cited are more compelling for
determining the standard hourly rates in Lake County.” App. Vol. II at 18.
The Special Judge cited two decisions from the Hammond Division of the
United States District Court for the Northern Division of Indiana finding
$240/hr. to be a reasonable hourly fee for an attorney based in Merrillville,
which is in Lake County. See id. (citing Shabaz v. Senior Care Ins. Servs., No.
2:16-CV-222-JEM, 2017 U.S. Dist. LEXIS 121151 (N.D. Ind. Aug. 2, 2017);
McNamee v. Family Focus, Inc., No. 2:14-CV-260, 2017 U.S. Dist. LEXIS 119606(N.D. Ind. July 31, 2017)).
In their cross-appeal, the Judges note that neither federal decision
involved a mandate. The Judges also point to an affidavit of attorney Robert
A. Anderson, which they offered to support their request for $430/hr. for
McDermott’s services. But the Special Judge did not rely solely on the
federal decisions. And the Council’s evidence included an affidavit of John
S. Dull, attorney for the Lake County Commissioners. Dull’s affidavit states
that for decades he has hired attorneys to provide legal services on behalf of
the Commissioners. It states that the hourly rates for attorneys hired to
provide “litigation work,” including some attorneys with decades of
experience, range from $150/hr. to $200/hr. App. Vol. III at 118. Thus, a
finding that the Judges should recover $240/hr. for McDermott’s services
was within the range of the evidence presented.
Finally, we deny the Judges’ request for an opportunity to submit
evidence of their appellate legal fees and expenses. The agreement does not
explicitly provide for payment of appellate fees and expenses. And, in any
event, we conclude that an additional award for such expenses is
unwarranted here. The amount already awarded—$176,467.17—is
substantial. The Judges have not incurred any appellate filing fee or costs
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for a transcript. Their appellate briefs largely repackaged the written
arguments made to the Special Judge, and those briefs contain a cross-
appeal that lacks merit. And the case has been pending for two years;
further litigation over fees and expenses would increase the case’s costs to
taxpayers and delay final resolution.
Conclusion
We affirm, concluding that substantial evidence supports the $176,467.17
award to the Judges and that the Special Judge did not abuse his discretion.
All Justices concur.
ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES
Anthony W. Overholt
Maggie L. Smith
Frost Brown Todd LLC
Indianapolis, Indiana
ATTORNEYS FOR APPELLEES/CROSS-APPELLANTS
Jeffrey C. McDermott
William J. Barkimer
Krieg DeVault LLP
Carmel, Indiana
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