I.A.E., Inc. and William Lazarus

Dec 22 2015, 8:28 am
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
John P. Reed Edward R. Hall
Jonathan Halm Merrillville, Indiana
Abrahamson Reed & Bilse
Gerald M. Bishop
Hammond, Indiana
Merrillville, Indiana
William Lazarus
Oakland, California
IN THE
COURT OF APPEALS OF INDIANA
I.A.E., Inc. and William Lazarus, December 22, 2015
Appellants-Defendants/Cross-Appellees, Court of Appeals Case No.
45A05-1503-PL-100
v. Appeal from the Lake Superior
Court
Edward R. Hall and Gerald M. The Honorable Calvin D. Hawkins,
Special Judge
Bishop,
Cause No. 45D02-1308-PL-32
Appellees-Plaintiffs/Cross-Appellants.
Riley, Judge.
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 1 of 39
STATEMENT OF THE CASE
[1] Appellants-Defendants/Cross-Appellees, I.A.E., Inc. (IAE) and William
Lazarus (Attorney Lazarus) appeal the trial court’s summary judgment in favor
of Appellees-Plaintiffs/Cross-Appellants, Edward R. Hall (Attorney Hall) and
Gerald M. Bishop (Attorney Bishop), awarding them attorney fees and
expenses arising from their representation of IAE in the underlying cause
against the Board of Works of the City of Lake Station (Lake Station). 1
[2] We reverse in part, affirm in part, and remand.
ISSUES
[3] IAE raises three issues on appeal, which we restate as follows:
(1) Whether the trial court properly awarded attorney fees pursuant to the
guidelines in Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999);
(2) Whether Attorney Hall is entitled to an abuse of process claim; and
(3) Whether the trial court abused its discretion when it excluded the
testimony of IAE’s expert witness.
Attorney Lazarus raises one issue on appeal, which we restate as: Whether the
trial court erred in denying his motion for partial summary judgment, seeking
fees of 10% of IAE’s recovery in the underlying cause.
1
We hereby deny, with the same date as this opinion, Appellants’ motion for oral argument, Attorney
Bishop’s motion to strike, and Attorney Hall’s motion to file amended cross-appellant’s appendix.
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 2 of 39
On Cross-Appeal, Attorney Hall and Attorney Bishop raise one issue, which we
restate as: Whether they are entitled to appellate attorney fees in accordance
with Indiana Appellate Rule 66(E).
FACTS AND PROCEDURAL HISTORY
[4] This is a saga of unremunerated attorneys, a disgruntled client, and the grant of
a sizeable damage award. Although the factual and procedural history of this
case is labyrinthine, a full recitation of the events leading to this third appeal is
necessary to appreciate the tortured and convoluted road this case has travelled.
[5] On May 18, 2000, Ramamurty Talluri (Talluri), the president of IAE, retained
the services of Attorney Bishop to represent IAE in a lawsuit against “Lake
State [sic], Indiana, for breach of contract, entered into on June 19, 1990.”
(Appellant’s App. p. 575). The retainer contract provided for a contingent fee
of “25% of the amount recovered.” (Appellant’s App. p. 575). Attorney Bishop
filed the Complaint, which was assigned to Judge Svetanoff at the superior
court of Lake County, sitting in Gary, Indiana. On August 11, 2003, the trial
court granted summary judgement to Lake Station. In the letter to his client,
Attorney Bishop warned Talluri about the importance of timely appealing the
decision and informed Talluri that he did “not intend to automatically appeal
the ruling under our current fee arrangement.” (Appellant’s App. p. 1269). On
September 4, 2003, Attorney Bishop proposed a new fee agreement by which he
would pursue an appeal “on a contingent fee basis of 50% of any amount
recovered.” (Appellant’s App. p. 1270). After verbally agreeing and after
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Attorney Bishop had filed the notice of appeal, Talluri rejected the proposal and
contacted Attorney Edward Hall (Attorney Hall) to pursue the appeal on IAE’s
behalf.
[6] On September 29, 2003, Attorney Hall and Talluri entered into an attorney fee
agreement by which Attorney Hall would pursue the “appeal [in] IAE v. City of
Lake Station” for a “fee to be 33 1/3% of any recovery,” in addition to an
hourly fee of $150 (2003 Agreement). (Appellant’s App. p. 371). Attorney
Bishop withdrew from the case on October 2, 2003, and on October 17, 2003,
he filed a notice of attorney lien, requesting payment pursuant to the retainer
contract.
[7] On November 3, 2004, after fully briefing the case on appeal and an oral
argument before the appellate bench, Attorney Hall secured a reversal of the
trial court’s grant of summary judgment in favor of Lake Station. See IAE Inc.
Consulting Engineers v. Bd of Works of the City of Lake Station et al., No. 45A03-
0310-CV-418 (Ind. Ct. App. Nov. 3, 2004). Finding issues of material fact that
required resolution by a trier of fact, this court remanded the cause for trial. See
id. at 2. Our supreme court denied transfer. In preparation for a jury trial,
Attorney Hall and Talluri entered into a new contingency fee agreement in
August 2005 (2005 Agreement), calling for a fee of 40% of any recovery and
asserting that the lien filed by Attorney Bishop was solely IAE’s responsibility.
On June 16, 2010, after a two-week trial, the jury returned a verdict of $965,300
in favor of IAE. On July 13, 2010, after the jury verdict, Lake Station filed a
notice of appeal.
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[8] Wanting to review his responsibility with respect to this post-trial appeal,
Attorney Hall attempted to locate the 2005 Agreement. However, the banker’s
box that should have contained both the 2003 and 2005 Agreements was empty
and Attorney Hall did not keep a signed copy of either Agreement. During the
first week of July 2010, Attorney Hall met with Talluri to negotiate a new fee
agreement to pursue the second appeal, seeking a contingency fee of 45%.
Talluri refused to sign the proposed agreement and over the next several weeks,
Attorney Hall and Talluri exchanged numerous emails, discussing the terms of
the new fee proposal. On July 27, 2010, the attorney for Lake Station contacted
Attorney Hall, advising him that Talluri was discussing settlement terms by
calling the mayor directly. Upon learning of Talluri’s attempt to settle the case,
Attorney Hall filed a notice of attorney’s lien on July 30, 2010, which was
subsequently amended on September 23, 2011. When the email exchange
between Attorney Hall and Talluri failed to reach a compromise on a new fee
agreement, Attorney Hall filed a complaint for declaratory judgment in small
claims court, presided by Judge Michael Pagano (Judge Pagano), requesting a
declaration
A. That the scope of work contemplated by the 2003 [Agreement] has
been completed.
B. The parties’ action since the Court of Appeals’ decision in 2004
have merged the 2005 [A]greement into the 2003 [A]greement and
that [A]ttorney Hall is entitled to the 40% for handling the trial
when and if recovery is made. Attorney Hall has completed all of
his respective duties under the 2005 [A]greement and until the
matter is disposed of by the Court of Appeals in this second appeal,
he has no further obligation of representation of the defendant
absent a new agreement to do so.
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C. As the defendant has refused the offer by [A]ttorney Hall for
representation in the newest appeal, [Attorney] Hall is not bound
to supply further representation without remuneration and has no
obligation to pay IAE for its newest lawyer.
D. In the alternative, if this court determines that there was no 2005
[Agreement], plaintiff is entitled to the agreed 33 1/3%
contingency fee for handling the first appeal AND a quantum meruit
claim for his time expended beyond the first appeal at the 2003
contract rate of $150.00/hr.
(Appellant’s App. p. 139).
[9] On September 1, 2010, Attorney Lazarus and Talluri entered into a fee
agreement to represent IAE in the appeal against Lake Station. The terms of
the agreement provided for a contingency fee of “8 percent of Talluri’s recovery
and an additional 2 percent [] if briefs on the appeal are also filed in the Indiana
Supreme Court.” (Appellant’s App. p. 1349). The agreement also provided
that in event of reversal by the Indiana Court of Appeals, Attorney Lazarus
would receive 45% if litigation continued. In addition, Attorney Lazarus would
receive an hourly rate of $350 to represent Talluri in any proceedings regarding
attorney fees to either Attorneys Hall or Bishop.
[10] On December 18, 2010, Judge Pagano conducted a hearing on Attorney Hall’s
complaint for declaratory judgement. During the hearing, Judge Pagano
disclosed that, at an Inns of Court meeting, he and Attorney Hall had discussed
the underlying case of IAE against Lake Station prior to the trial before Judge
Svetanoff. Clarifying his comment, Judge Pagano noted that he “get[s] calls []
on a regular basis about questions on cases that do not pend before” him.
(Appellant’s App. p. 1419). After Judge Pagano affirmed that he did not get
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paid for this advice, Attorney Lazarus requested a change of judge. Attorney
Hall’s complaint for declaratory judgment was subsequently assigned to Judge
William Davis (Judge Davis). Again, Attorney Lazarus sought a change of
judge and the case was assigned to Judge Jeffrey Dywan (Judge Dywan).
[11] On April 4, 2012, Judge Dywan issued his judgment on Attorney Hall’s
complaint, declaring that
Counsel advised the [c]ourt that they were in agreement that the only
issue for determination by the [c]ourt was whether there was a 2005
contingent fee contract entered into between Attorney Hall and [IAE]
and whether that contingent fee agreement is valid and enforceable.
The amount of fees to be recovered by Mr. Hall from [IAE] is a matter
left for the decision before Honorable Gerald Svetanoff in the
underlying litigation in Case No. 45D04-0009-CP-308. It is essential
that Judge Svetanoff resolve that issue because there are other
attorneys who have claims for attorney fees due from [IAE] arising out
of other contingent fee agreements in the underlying litigation.
Having considered the evidence, the [c]ourt now finds that Mr. Hall
and [IAE] entered into an Attorney-Client Fee Agreement on
September 29, 2003. After the successful appeal in that matter,
[Attorney] Hall presented a new contingent fee agreement to Mr.
Talluri for [IAE]. Mr. Talluri, on behalf of [IAE], signed that second
contingent fee agreement regarding the same matter on August 4,
2005. The second contingent fee agreement substantially changed the
terms of the attorney-client relationship regarding fees to be paid the
attorney for work in the case.
Because the attorney-client relationship already existed at the time
[Attorney] Hall presented the second fee agreement to [IAE], that
agreement is presumptively invalid. [Attorney] Hall has not sustained
his burden to demonstrate that the second fee agreement was fair and
reasonable, that Mr. Talluri was advised of his right to seek the advice
of independent counsel, and that Mr. Talluri’s execution of that
agreement was free of the undue influence of [Attorney] Hall. As a
result, the second fee agreement is not enforceable.
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 7 of 39
IT IS NOW THEREFORE ORDERED, ADJUDGED AND
DECREED by the [c]ourt as follows:
1. [Attorney Hall] and [IAE] entered into an Attorney-Client Fee
Agreement on September 29, 2003. The agreement is valid and
enforceable.
2. The contingent fee agreement of August 4, 2005, prepared by
[Attorney] Hall and signed by Mr. Talluri is not enforceable.
3. The amount of fees due Mr. Hall under the September 29, 2003 fee
agreement, and the amounts due any of the other attorneys who
were employed by Mr. Talluri in connection with the underlying
matter in Lake Superior Court, Civil Division Room Four, is left to
the determination of the Judge of Civil Division Room Four
[Judge Svetanoff].
(Appellant’s App. pp. 151-52).
[12] Following Attorney Lazarus’ motion to correct error on behalf of IAE on April
30, 2012, Judge Dywan entered an order in the declaratory judgment action on
May 17, 2012, denying the motion and clarifying as follows:
[IAE] entered into two contingent fee agreements with [Attorney]
Hall, a contingent fee agreement with [Attorney] Bishop, and a final
contingent fee agreement with [Attorney] Lazarus. As stated in
Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999), [IAE] should
only be required to pay one contingent fee. The amount of fees
payable to either Attorneys Bishop or Hall in this case, and the effect
of those fees due to [Attorney] Lazarus are all to be determined by the
Lake Superior Court, Civil Division Room Number Four, applying the
rules as set forth in Galanis. Civil Division Room Four has the
authority and will weigh the efforts expended by the various attorneys
in this case in determining what amounts are due to each attorney.
[Attorney] Lazarus’ arguments regarding set-off and/or [Attorney]
Hall’s alleged breach of the agreements should be made to the Judge in
Civil Division Room Number Four.
(Appellant’s App. p. 935).
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[13] In compliance with Judge Dywan’s directive that the amount of attorney fees
needed to be decided by Judge Svetanoff, Attorney Lazarus, on behalf of IAE,
filed a motion to decide attorneys’ liens based on contract on August, 17, 2012.
In its motion, IAE moved to “allocate attorney’s fees in this case based upon
the express written fee agreements between the parties” and to “award its
former [Attorney] Hall a one-third fee out of its recovery from Lake Station,
minus the 10 percent fee it owes its current counsel for defending Lake Station’s
appeal of the judgement entered in IAE’s favor in June 2010.” (Appellant’s
App. pp. 77, 78). On September 13, 2012, IAE requested a summary ruling on
its motion and on October 9, 2012, Attorney Hall filed a motion to intervene as
of right.
[14] On October 24, 2012, Judge Svetanoff conducted a hearing on IAE’s motion.
During the hearing, Attorney Lazarus, on behalf of IAE, argued that Attorney
Bishop’s claim for attorney fees was a separate issue which should be filed as a
separate cause. IAE and Lake Station also submitted an agreed order, in which
both parties stipulated to reduce the jury verdict from $965,300 to $776,400.
Attorney Hall objected to this agreed order as he perceived a violation of
Indiana Code section 24-4.6-1-104.
[15] On January 14, 2013, as amended by order on February 4, 2013, Judge
Svetanoff issued his Order, holding, in pertinent part:
7. This dispute between IAE and [Attorney] Hall boils down to one
essential issue: whether [Attorney] Hall breached his agreement with
IAE by refusing to represent IAE in Lake Station’s appeal of the jury
verdict, thereby permitting IAE to pay to [Attorney] Hall fees in the
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amount of 33 1/3% of the recovery, less the amount of fees it is
required to pay [Attorney] Lazarus for representing it in Lake Station’s
appeal after [Attorney] Hall refused to do so.
8. IAE has filed its Motion to Decide Attorneys’ Liens Based on
Contract requesting that this [c]ourt “allocate attorney’s fees in this
case based upon the express written fee agreements between the
parties.” This [c]ourt concurs with IAE that this case can be decided
on the 2003 Fee Agreement between IAE and [Attorney] Hall without
further hearing.
[]
The language of the 2003 Fee Agreement is straightforward and
unambiguous: [Attorney] Hall was to be paid 33 1/3% of any
recovery. The timing of the 2003 Fee Agreement—that is, after the
entry of the Order entering summary judgment in this case—leads this
[c]ourt to the inescapable conclusion that [Attorney] Hall was retained
to represent IAE in that appeal of the summary judgment entered
against it and in the subsequent prosecution of IAE’s claim against
Lake Station, as well.
[Attorney] Hall complied with his obligations under the 2003 Fee
Agreement—he represented IAE in the appeal of the summary
judgment Order and in the jury trial held in this cause. There is no
mention in the 2003 Fee Agreement of [Attorney] Hall representing
IAE in the appeal of a jury verdict. Accordingly, this [c]ourt finds that
[Attorney] Hall did not breach the 2003 Fee Agreement by insisting
that it pertained only to the appeal of the summary judgment entered
against IAE and to the subsequent jury trial, but not to Lake Station’s
appeal of the jury verdict entered at that trial. [Attorney] Hall is
therefore entitled to be paid 33 1/3% of IAE’s recovery, and
[Attorney] Lazarus’ fees should be paid in addition to, and not from,
[Attorney] Hall’s fee.
9. In addition to the issue of the attorney’s fee to be paid to Hall, Lake
Station has filed its request that this [c]ourt enter judgment in the
amount of $776,440.00, which sum includes simple interest in the
amount of 8% that has accrued since June 18, 1999. IAE and Lake
Station entered into a written agreement providing for this calculation
which is dated October 25, 2012.
This [c]ourt has reviewed Lake Station’s request and finds that it is
consistent with the instructions provided to this [c]ourt by our Court of
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Appeals when it remanded this matter back to this [c]ourt for the
purpose of recalculating the pre-judgment interest award using simple
interest. [] Accordingly, this [c]ourt finds that Lake Station’s request
should be granted that that judgment should be entered in the amount
of $776,440.00
Judgment
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED
as follows:
[]
2. The Motion to Decide Attorneys’ Liens Based on Contract filed by
[IAE] is granted, in part, as it pertains to the allegation that no further
hearing is necessary to decide the issue of attorney’s fees in this case
with respect to the contractual fees discussed in paragraph 3 below.
3. Pursuant to the September 29, 2003, Attorney-Client Fee
Agreement entered into between [Attorney Hall] and [IAE], [Attorney
Hall] is entitled to receive from [IAE] an attorney’s fee in the sum of
33 1/3% of its recovery in this case. The fee of [Attorney Hall] shall
not be reduced by the 10% fee out of IAE’s recovery which is due and
owing from [IAE] to [Attorney Lazarus], and the fee to [Attorney
Lazarus] shall be paid in addition to, and not from, the fee paid to
[Attorney Hall].
4. The request by [Lake Station] to enter judgment in the amount of
$776,440.00 is granted and this [c]ourt enters judgment in favor of
[IAE] and against [Lake Station], in the sum of $776,440.00 in lieu of
the prior judgment in this case which is hereby vacated. Post
judgement interest of 8% per annum shall accrue from June 16, 2010,
which is the date of the prior judgment, to the date of the payment by
[Lake Station] of the amended judgment as provided herein.
[]
6. Any other attorney fee issue which remain[s] unresolved by this
judgment shall be identified and requested to be determined either in
this case or through separate litigation. Such request for the
determination herein of other fees claimed by counsel must be filed on
or before February 19, 2013, or the same will be denied as untimely. If
no timely request is made, then this judgment shall be deemed to be
final, since there would be no just cause for delay in entering the same
as a final determination of all pending issues before this [c]ourt.
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(Appellant’s App. pp. 55-58) (internal footnotes omitted). In a separate
footnote, Judge Svetanoff indicated that “[b]efore IAE retained [Attorney Hall]
it was represented by Attorney [Bishop]. IAE alleges that Attorney Bishop is
claiming a right to a portion of [Attorney Hall’s] fee. However, the issue of
Attorney Bishop’s fee, which will ultimately require a factual determination,
Galanis v. Lyons & Truitt, 715 N.E.2d 858, 862 (Ind. 1999), is not presently
before this [c]ourt.” (Appellant’s App. p. 56).
[16] On February 13, 2013, Attorney Lazarus petitioned the trial court to “award his
fees based on his lien arising from his contract with IAE and out of the recovery
IAE expects to obtain in this action.” (Appellant’s App. p. 206). Attorney
Bishop complied with Judge Svetanoff’s order and filed a separate action for his
attorney fees on February 21, 2013, which was assigned to Judge Calvin D.
Hawkins (Judge Hawkins). When Judge Svetanoff failed to timely rule on
IAE’s motion to consolidate Attorney Bishop’s separate cause for attorney’s
fees with the case before him, IAE filed a Trial Rule 53.1 motion with the
supreme court, which was granted on August 5, 2013. Our supreme court
consolidated both causes and assigned them to Judge Hawkins.
[17] On May 16, 2014, IAE filed its motion for summary judgment, memorandum
in support thereof, and designation of evidence, contending that Attorneys Hall
and Bishop are not entitled to attorney fees because they abandoned the case
“years before it was completed,” nor do they have a “cognizable contract
claim” or “can they assert a valid equitable claim based on quantum meruit.”
(Appellant’s App. p. 329). On June 18, 2014, Attorney Bishop filed his
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memorandum in opposition to IAE’s motion for summary judgment, as well as
a designation of evidence. IAE replied on June 30, 2014.
[18] That same day—June 30, 2014—Attorney Hall filed his response to IAE’s
motion for summary judgment, as well as his cross-motion for summary
judgment as to attorney fees and partial summary judgment as to abuse of
process against IAE. Together with his motion, Attorney Hall filed a
memorandum in support and designation of evidence. In his cross-motion,
Attorney Hall alleged that no genuine issue of material facts exist that the
attorney fees can be calculated pursuant to the Galanis case. Additionally, in
his motion for partial summary judgment on his abuse of process claim,
Attorney Hall asserts that during these prolonged proceedings, “IAE embarked
on a scorched earth policy of defamatory claims of abuse, mean spiritedness
and other equally fallacious claims in an effort to try to get out of paying
[Attorney] Hall for his efforts.” (Appellant’s App. p. 627). As a result,
Attorney Hall sought “an award of $86,250 to compensate him for the time
spent defending these ridiculous claims.” (Appellant’s App. p. 627). Within
ten days, on July 9, 2014, IAE responded to Attorney Hall’s motion and, on
December 22, 2014, moved for summary judgment on Attorney Hall’s cross-
claim for abuse of process against IAE. IAE filed a memorandum in support
thereof and a designation of evidence.
[19] On January 14, 2015, Attorney Bishop moved to bar the testimony of IAE’s
expert witness, Donald Lundberg (Lundberg), because of IAE’s untimely expert
witness disclosure. Two days later, Attorney Bishop filed his motion for
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summary judgment on IAE’s counterclaim for breach of contract, together with
his memorandum in support and designation of evidence.
[20] On January 22, 2015, Attorney Hall filed his response to IAE’s motion for
summary judgment and his cross-motion for summary judgment as to all issues,
with a memorandum in support thereof and designation of evidence relied
upon. The following day, Attorney Lazarus filed his motion for partial
summary judgment concerning his right to collect attorney fees on the
underlying judgment, with a memorandum in support and designation of
evidence, to which Attorney Bishop responded on January 30, 2015.
[21] The following month, on February 6, 2015, numerous filings were recorded.
Attorney Bishop responded to Attorney Hall’s cross-motion for summary
judgment as to all issues; Attorney Lazarus filed a reply to Bishop’s response as
to Attorney Lazarus’ motion for partial summary judgment. IAE filed a
response to Attorney Bishop’s motion to disqualify Lundberg as its expert
witness and a response to Attorney Bishop’s motion to disqualify Attorney
Lazarus as IAE’s attorney. IAE also filed a response to Attorney Hall’s cross-
motion for summary judgment as to all issues, as well as a reply in support of its
motion for summary judgment as to Attorney Hall’s abuse of process claim
against IAE.
[22] On February 11, 2015, Judge Hawkins conducted a hearing on all pending
motions and issued his Order on February 18, as amended on March 2, 2015,
concluding, in pertinent part,
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(a) That [IAE’s] Motion for Summary Judgment is hereby denied.
(b) That [Attorney Hall’s] Cross-Motion for Summary Judgment as to
all issues is hereby granted;
(c) That [Attorney Lazarus’] Motion for Partial Summary Judgment is
hereby denied;
(d) [Attorney Hall’s] Motion for Summary Judgment on the abuse of
process is granted and [Attorney Hall] is awarded judgment on said
claims in the amount of $86,250.
(e) That [Attorney Hall’s] Motion for Summary Judgment for
Apportionment of Attorney Fees and Expenses is hereby granted,
and that apportionment of attorney fees and expenses shall be
delineated pursuant to the theory of quantum meruit and the Indiana
Supreme Court case Galanis v. Lyons & Truit, as follows:
1. [Attorney Hall] (attorney fees - $406,707.68; expenses -
$40,167.74);
2. [Attorney Bishop] (attorney fees - $25, 812.00; expenses –
[$]2,009.15);
3. [Attorney Lazarus] (attorney fees – [$]13,825.00).
(f) Pursuant to Trial Rule 54(B) the [c]ourt determined there is no just
reason for delay and directs the entry of judgment which shall be
deemed a final appealable Order.
(Appellant’s App. pp. 63-64).
[23] On March 20, 2015, Judge Hawkins issued a second Order, holding
(a) [IAE] and [Attorney Lazarus’] Motion to Stay Proceedings
Pending Appeal is GRANTED.
(b) [Attorney Hall’s] Motion, joined by [Attorney Bishop], to require
[IAE] to post an appeal bond and for immediate payout of funds
on deposit [is] DENIED.
...
(e) The [c]ourt finds that the Motion of [Attorney Hall] and [Attorney
Bishop] to strike the report of [Lundberg] and documents utilizing or
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citing to said report is GRANTED. The Clerk is hereby directed to
Strike from the record the following documents:
(1) [IAE’s] response to [Attorney Hall’s] Motion for Summary
Judgment as to all issues;
(2) [IAE’s] response to [Attorney Hall’s] Motion for Summary
Judgment as to Abuse of Process; and
(3) The report and affidavit of [Lundberg], filed as an Exhibit to
[IAE’s] designation in Support of [IAE] and any other
documents filed by [IAE] that cite to or refer to the stricken
report of [Lundberg].
(f) The [c]ourt GRANTS [Attorney Hall’s] Motion to Strike the two
(2) trial briefs filed by [IAE] as to the expenses of [Attorney Hall] and
[Attorney Bishop]. The Clerk is directed to strike these documents
from the record.
(g) The Clerk of the [c]ourt is hereby ordered to certify the record of
proceedings to the [c]ourt of [a]ppeals in this cause upon completion of
the striking as ordered herein.
(Appellant’s App. pp. 66-67).
[24] IAE and Attorney Lazarus appeal; Attorneys Hall and Bishop cross-appeal.
Additional facts will be provided as necessary.
DISCUSSION AND DECISION
[25] The cavalier indifference exhibited by the attorneys of record as to res judicata,
the trial rules, and rules of appellate procedure is astounding, and the parties
involved have no one but themselves to blame for the flood of litigation that
swallowed all civility and legal professionalism. Because of the enormous
amount of filings and motions in this case, and the parties’ attitude of seemingly
appealing all orders, even going back to Judge Dywan’s declaratory judgment
of April 4, 2012, we first need to determine which orders were timely appealed
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and which orders have become final. In other words, we need to delineate the
scope of this appeal and the boundaries set by the doctrine of res judicata.
[26] The doctrine of res judicata bars litigation of a claim after a final judgment has
been rendered in a prior action involving the same claim between the same
parties or their privies. MicroVote General Corp. v. Ind. Election Comm’n, 924
N.E.2d 184, 191 (Ind. Ct. App. 2010). The principle behind this doctrine, as
well as the doctrine of collateral estoppel, is the prevention of repetitive
litigation of the same dispute. Id. The following four requirements must be
satisfied for a claim to be precluded under the doctrine of res judicata: (1) the
former judgment must have been rendered by a court of competent jurisdiction;
(2) the former judgment must have been rendered on the merits; (3) the matter
now in issue was, or could have been determined in the prior action; and (4) the
controversy adjudicated in the former action must have been between the
parties to the present suit or their privies. Id.[27] In his declaratory judgment of April 4, 2012, Judge Dywan decided in an action
brought by Attorney Hall against IAE, that the 2003 Agreement entered into
between Attorney Hall and IAE was valid and enforceable whereas the 2005
Agreement is not enforceable. Judge Dywan also held that the amount of fees
due under the 2003 Agreement and “the amounts due any of the other attorneys
who were employed by [Talluri] in connection with the underlying matter” is
left to the determination of Judge Svetanoff. (Appellant’s App. p. 152).
Following IAE’s motion to correct error, Judge Dywan clarified his ruling on
May 17, 2012, that the amount of fees payable to Attorney Hall and Attorney
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Bishop and the effect of those fees on Attorney Lazarus were to be determined
by Judge Svetanoff applying the rules as set forth in Galanis.
[28] On January 14, 2013, as amended on February 4, 2013, Judge Svetanoff
rendered his judgment on the attorney fees determination, concluding that
Attorney Hall “did not breach the 2003 fee agreement by insisting that it
pertained only to the [first appeal] and to the subsequent jury trial, but not to
Lake Station’s appeal of the jury verdict entered at that trial.” (Appellant’s
App. p. 56). Accordingly, Judge Svetanoff ruled that Attorney Hall was
entitled to be paid pursuant to the 2003 Agreement, i.e., 33 1/3% of IAE’s
recovery, with Attorney Lazarus’ fees paid in addition to Attorney Hall’s fees. 2
In the same Order, Judge Svetanoff entered judgement in the amount of $776,
440 pursuant to the settlement between IAE and Lake Station. The judgment
declared that requests for “the determination of other fees claimed by counsel
must be filed on or before February 19, 2013, or the same will be denied as
untimely. If no timely request is made, then this judgment shall be deemed to
2
Although at first glance, Judge Svetanoff’s determination of attorney fees in accordance with the written
2003 Agreement entered between Attorney Hall and IAE appears to conflict with Judge Dywan’s order that
the fees should be calculated pursuant to our supreme court’s opinion in Galanis, upon further evaluation, the
two orders are not contradictory. In Galanis v. Lyons & Truitt, 715 N.E.2d 858, 860 (Ind. 1999), our supreme
court made the distinction between an attorney who satisfied his obligations under a written fee agreement
versus the attorney who is discharged prior to the finality of the cause and whose fee agreement did not
provide for the eventuality of payment in case of discharge. Whereas the former is entitled to payment
pursuant to the contractual terms, the latter’s fees are calculated in accordance with quantum meruit or its
reasonable value. See id. at 861-62. Therefore, as Judge Svetanoff held that Attorney Hall had satisfied his
obligations under the 2003 Agreement, he was entitled to 33 1/3% of the recovery, as provided in the fee
agreement.
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be final[.]” (Appellant’s App. p. 58). In a footnote, Judge Svetanoff noted that
Attorney Bishop’s attorney fee determination was not before its court.
[29] No timely requests were made, and Judge Svetanoff’s judgment became final.
The parties did not appeal this final judgment. However, we acknowledge that
within the deadline imposed by Judge Svetanoff, on February 13, 2013,
Attorney Lazarus petitioned the trial court to award him fees based on his lien
arising from his contract with IAE and out of the recovery IAE expected to
obtain in the underlying suit. Nonetheless, this petition merely represents a
request for fees by Attorney Lazarus, a right already recognized in Judge
Svetanoff’s judgment by declaring that Attorney Lazarus’ fees “should be paid”
in addition to Attorney Hall’s fees. (Appellant’s App. p. 56). Accordingly, as
this petition did not represent a “determination of other fees,” it did not bar
Judge Svetanoff’s judgment from becoming final on February 19, 2013.
(Appellant’s App. p. 58) (emphasis added).
[30] Lastly, on February 11, 2015, as amended on March 2, 2015, Judge Hawkins
issued his order, from which IAE and Attorney Lazarus now appeal. In the
order, Judge Hawkins calculated the apportionment of attorney fees and
expenses pursuant to the theory of quantum meruit and Galanis. In addition,
Judge Hawkins awarded Attorney Hall a judgment on his abuse of process
claim.
[31] Accordingly, based on these orders, we will not address IAE’s claims that
Attorney Hall is not entitled to attorney fees because he abandoned his
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obligations toward Talluri under the 2003 Agreement. In his order of January
14, 2013, as amended on February 4, 2013, Judge Svetanoff conclusively held
that Attorney “Hall complied with his obligations under the 2003 Fee
Agreement.” (Appellant’s App. p. 56). As we noted, this judgment became
final on February 19, 2013, and became subject to the thirty-day period in
which to appeal. See Ind. Appellate Rule 9(A). Even though the abandonment
argument was not thoroughly developed before Judge Svetanoff, and instead
was analyzed before Judge Hawkins, under res judicata, a party is not allowed to
split a cause of action, pursuing it in a piecemeal fashion and subjecting a
defendant to needless multiple suits. Ind. State Highway Comm’n v. Speidel, 392
N.E.2d 1172, 1175 (Ind. Ct. App. 1979). As the present claim was within the
issues raised before Judge Svetanoff, the claim is now barred by res judicata.
[32] Also, we will not address Attorney Hall’s cross-appeal of “the February 3, 2013
order of Judge Svetanoff wherein he accepted the stipulation of [Attorney]
Lazarus and [Lake Station] to reduce the jury verdict from $965,300 to
$776,400.” (Hall’s Br. p. 24). As the time to appeal this order was within thirty
days of February 19, 2013, Attorney Hall’s claim is now time-barred. See Ind.
Appellate Rule 9(A). Similarly, we will not analyze Attorney Hall’s allegation
that the stipulation to reduce the jury verdict constitutes a fraud on himself and
Attorney Bishop, raised for the first time in Attorney Hall’s reply brief. See also
Kelly v. Levandoski, 825 N.E.2d 850, 857 n.2 (Ind. Ct. App. 2005) (“Appellants
are not permitted to present new arguments in their reply briefs”), trans. denied.
[33] We will now turn to the issues which are properly before us.
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I. Summary Judgment
[34] First, we will address whether the trial court properly denied IAE’s motion for
summary judgment, in which IAE argued for an attorney fees distribution in
accordance with the provisions of the fee agreements, but instead the trial court
calculated the apportionment of attorney fees and expenses pursuant to the
theory of quantum meruit and Galanis. Additionally, we will review the trial
court’s denial of Attorney Lazarus’ motion for partial summary judgment
seeking fees of 10% of the underlying recovery, as provided in his contract with
IAE.
A. Standard of Review
[35] Summary judgment is appropriate only when there are no genuine issues of
material fact and the moving party is entitled to a judgment as a matter of law.
Ind. Trial Rule 56(C). “A fact is material if its resolution would affect the
outcome of the case, and an issue is genuine if a trier of fact is required to
resolve the parties’ differing accounts of the truth . . . , or if the undisputed facts
support conflicting reasonable inferences.” Williams v. Tharp, 914 N.E.2d 756,
761 (Ind. 2009).
[36] In reviewing a trial court’s ruling on summary judgment, this court stands in the
shoes of the trial court, applying the same standards in deciding whether to
affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,
891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we
must determine whether there is a genuine issue of material fact and whether
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the trial court has correctly applied the law. Id. at 607-08. In doing so, we
consider all of the designated evidence in the light most favorable to the non-
moving party. Id. at 608. The party appealing the grant of summary judgment
has the burden of persuading this court that the trial court’s ruling was
improper. Id. When the defendant is the moving party, the defendant must
show that the undisputed facts negate at least one element of the plaintiff’s
cause of action or that the defendant has a factually unchallenged affirmative
defense that bars the plaintiff’s claim. Id. Accordingly, the grant of summary
judgment must be reversed if the record discloses an incorrect application of the
law to the facts. Id.B. Designated Evidence
[37] Before turning to the merits of this argument, we need to address Attorneys
Bishop’s and Hall’s contention that IAE’s entire claim is waived as IAE failed
to properly designate evidence supporting its contention on summary
judgement. Specifically, Attorney Bishop, with whom Attorney Hall agrees,
argues that besides designating documents in their entirety without specific
references, IAE also designated affidavits which did not conform to the
prerequisite of Indiana Trial Rule 56.
[38] Our supreme court clarified the requirements of Indiana Trial Rule 56(C) for
designating evidence in summary judgment proceedings in Filip v. Block, 879
N.E.2d 1076, 1080 (Ind. 2008), reh’g denied. In Filip, the supreme court held:
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 22 of 39
Trial Rule 56(C) does compel parties to identify the “parts” of any
document upon which they rely. The Rule thus requires sufficient
specificity to identify the relevant portions of a document, and so, for
example, the designation of an entire deposition is inadequate.
Although page numbers are usually sufficient, a more detailed
specification, such as supplying line numbers, is preferred.
Id. at 1081 (internal quotations omitted). Trial Rule Rule 56(C) does not
mandate either the form of designation, i.e., the degree of specificity required, or
its placement, i.e., the filing in which the designation is to be made. Id. Parties
may choose the placement of evidence designation. Id. The only requirement
as to placement is that the designation clearly identify listed materials as
designated evidence in support of or in opposition to the motion for summary
judgment. Id. If the designation is not in the motion itself, it must be in a paper
filed with the motion, and the motion should recite where the designation of
evidence is to be found in the accompanying papers. Id.
[39] IAE’s motion for summary judgment included a memorandum of law in
support of the motion, as well as a separate designation of evidence. In its
designation, IAE generally listed the documents submitted and relied upon,
whereas, the memorandum limits the submitted documents to more specific
lines or texts. “If a party designates both specific lines or text and also more
general identification of the document containing the specified lines, the court
may limit that party to the more specific designation.” Id. Accordingly, IAE
followed the guidelines of Filip in submitting evidence in support of its motion
for summary judgment.
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[40] Attorney Bishop also disputes the admissibility of Talluri’s affidavit, designated
as Exhibit 1 by IAE, because it “lacks the requisite statement by the affiant that
he has personal knowledge of the matters stated therein, as well as the required
statement that he is competent to testify as to the matters recited therein.”
(Bishop’s Br. p. 9). Indiana Trial Rule 56(E) contemplates the submission of
supporting and opposing affidavits made on personal knowledge and setting
forth facts that would be admissible in evidence and that show the affiant is
competent to testify thereon.
[41] Talluri’s affidavit affirms that, upon being “duly sworn on oath,” he is “the
President of [IAE] and was its president at all times discussed herein.”
(Appellant’s App. p. 365). This statement—albeit very sparse—meets the
requirement of 56(E) as it demonstrated that the paragraphs that followed were
made based upon Talluri’s position as president of the company. An inference
can be made that as president, he would be competent to testify as to the
matters that took place during his tenure. Therefore, we conclude that Talluri’s
affidavit was in compliance with the T.R. 56(E).
C. Analysis
1. Attorneys Hall and Bishop
[42] IAE contends that Judge Hawkins erred in denying its motion for summary
judgment to award attorney fees according to the attorney fee agreements and
instead calculated fees pursuant to the quantum meruit doctrine of Galanis.
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[43] As we noted before, in his order of January 14, 2013, as amended on February
4, 2013, Judge Svetanoff held that Attorney Hall was entitled to receive an
attorney’s fee of 33 1/3% of the recovery in the underlying case, pursuant to the
2003 Agreement entered into between Attorney Hall and Talluri. The
judgment became final on February 19, 2013, and was not appealed by the
parties. Accordingly, as the claim for Attorney Hall’s attorney fees had already
been litigated by the same parties and decided by Judge Svetanoff, Judge
Hawkins was barred from revisiting the claim pursuant to the directives of res
judicata. See MicroVote General Corp., 924 N.E.2d at 191. Accordingly, as Judge
Hawkins recalculated Attorney Halls’ attorney fees pursuant to the quantum
meruit provisions of Galanis, we reverse Judge Hawkins’ decision denying IAE’s
motion for summary judgment in that respect and his corresponding grant of
Attorney Hall’s motion for summary apportionment of attorney fees pursuant
to Galanis.
[44] However, with respect to Attorney Bishop’s fees, Judge Svetanoff’s order only
proscribed in a footnote that “Attorney Bishop’s fee, which will ultimately
require a factual determination [] is not presently before this [c]ourt.”
(Appellant’s App. p. 56). Accordingly, Attorney Bishop’s fees were properly
before Judge Hawkins, who awarded and calculated these fees in accordance
with the pronouncements of Galanis. IAE now disputes that Attorney Bishop is
entitled to attorney fees because he abandoned the case. We disagree.
[45] The undisputed designated evidence reflects that Attorney Bishop and Talluri
agreed to “representation at a contingent fee of 25% of the amount recovered
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whether by settlement o[r] after commencement of trial.” (Appellant’s App. p.
571). Attorney Bishop affirmed that Talluri “acknowledged that an upward
revision of the percentage fee would be expected and appropriate should an
appeal become necessary, but refused to commit to a number or discuss the
issue further insisting that discussion should take place if an[d] when an appeal
became necessary. It was then agreed that the retainer contract would not
include my representation on appeal.” (Appellant’s App. p. 571). Attorney
Bishop filed the complaint in the underlying cause and after a summary
judgement in favor of Lake Station was rendered, Attorney Bishop contacted
Talluri to enter into fee negotiations in case Talluri decided to appeal the
negative decision. After the notice of appeal was filed, Talluri rejected Attorney
Bishop’s fee proposal and contracted with Attorney Hall to pursue the appeal
on IAE’s behalf. Accordingly, Attorney Bishop did not abandon Talluri;
instead, Talluri discharged him.
[46] “A client has a right to discharge a lawyer at any time, with or without cause,
subject to liability for payment for the lawyer’s services.” Ind. Professional
Conduct Rule 1.16 cmt. Here, Attorney Bishop was discharged before a result
was known. As noted by our supreme court in Galanis, “[t]he conventional rule
is that ‘[a]n attorney who is employed under a contingent fee contract and
discharged prior to the occurrence of the contingency is limited to quantum
meruit recovery for the reasonable value of the services rendered to the client,
and may not recover the full amount of the agreed contingent fee.’” Galanis,
715 N.E.2d at 861 (quoting 7 AM.JUR.2D Attorneys at Law § 181 (1997)).
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 26 of 39
“This rule strikes the proper balance by providing clients freedom in
substituting counsel, prohibiting clients from being held responsible for
attorney’s fees not previously agreed to, and protecting an attorney’s right to be
compensated for services rendered.” Id. Quantum meruit is an equitable
doctrine that prevents unjust enrichment by permitting one to recover the value
of the work performed or material furnished if used by another and if valuable.
Id. (quoting 17A C.J.S. Contracts § 440 at 553 (1963)). Arriving at the proper
number to place on the predecessor’s services is ultimately a factual
determination for the trial court. Id. at 862.
[47] Attorney Bishop designated evidence establishing the tasks performed on behalf
of IAE under his fee agreement, the time expended, and the regular hourly rate
for his professional services. Although IAE presents arguments contesting the
award of any fees to Attorney Bishop, it did not present any evidence refuting
Attorney Bishop’s numbers. In his Order, Judge Hawkins awarded him
attorney fees of $25,812.00 based on the Galanis guidelines, to be paid from
Attorney Hall’s remuneration. Therefore, we affirm the trial court’s grant of
summary judgment on Attorney Hall’s motion for summary judgment for
apportionment of attorney fees with respect to Attorney Bishop’s fees.
2. Expenses
[48] Next, IAE contends that the trial court erred in awarding expenses to Attorneys
Hall and Bishop. Although IAE disputed the award of attorney fees to either
Attorney, and even though Attorney Hall included his expenses as a line item
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in his motion for summary judgment, IAE never disputed the amount or
character of these expenses before the trial court, nor did it designate any
evidence to that effect. 3 As IAE now contests the expenses for the first time on
appeal, the argument is waived for our review. Showalter v. Town of Thorntown,
902 N.E.2d 338, 342 (Ind. Ct. App. 2009) (“A party generally waives appellate
review of an issue or argument unless that party presented that issue or
argument before the trial court.”), trans. denied.
3. Attorney Lazarus
[49] Lastly, Attorney Lazarus asserts that the trial court erred when it denied his
motion for partial summary judgment seeking attorney fees in the amount of
10% of the recovery in the underlying cause pursuant to his contract with IAE.
Instead, in his Order, Judge Hawkins awarded Attorney Lazarus attorney fees
pursuant to the guidelines in Galanis for an amount of $13,825.00.
[50] However, as with Attorney Hall’s fees, the calculation of Attorney Lazarus’
remuneration was already decided in Judge Svetanoff’s order of January 14,
2013, as amended on February 4, 2013. Specifically, Judge Svetanoff held that
Attorney Lazarus was entitled to receive a “10% fee out of IAE’s recovery” and
this fee “shall be paid in addition to, and not from, the fee paid to” Attorney
Hall. (Appellant’s App. p. 57). Judge Svetanoff’s order became final on
3
While IAE refers to IAE Trial Brief as to Hall’s Expense Claims, filed on January 20, 2015, in support for
its argument that the trial court erred in awarding expenses, this Trial Brief was struck by the trial court by
order of March 20, 2015.
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February 19, 2013, and was not appealed by the parties. Thus, as the claim for
Attorney Lazarus’ attorney fees had already been litigated by the same parties
and decided by Judge Svetanoff, Judge Hawkins was barred from revisiting the
issue pursuant to the directives of res judicata. See MicroVote General Corp., 924
N.E.2d at 191. Accordingly, as Judge Hawkins recalculated Attorney Lazarus’
attorney fees pursuant to the quantum meruit provisions of Galanis, we reverse
Judge Hawkins’ decision denying Attorney Lazarus’ motion for partial
summary judgment.
II. Abuse of Process Award
[51] In his Order, Judge Hawkins granted summary judgment on Attorney Hall’s
abuse of process claim and awarded him $86,250. IAE now contends that the
trial court erred in its award of summary judgment because Attorney Hall failed
to designate sufficient evidence that could satisfy the elements of the claim.
[52] A plaintiff claiming abuse of process must show a misuse or misapplication of
process for an end other than that which it was designed to accomplish. Estate
of Mayer v. Lax, Inc., 998 N.E.2d 238, 256 (Ind. Ct. App. 2013), trans. denied.
The two elements of abuse of process are: (1) ulterior purpose or motives; and
(2) a willful use of process not proper in the regular conduct of the proceedings.
Id. “If a party’s acts are procedurally and substantively proper under the
circumstances then his intent is irrelevant.” Id. (quoting Watson v. Auto Advisors,
Inc., 822 N.E.2d 1017, 1029 (Ind. Ct. App. 2005), trans. denied). There is no
basis for an abuse of process claim if legal process is used to accomplish an
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outcome that the process was designated to accomplish. Id. “The purpose for
which the process is used is the only thing of importance.” Nat’l City Bank of
Ind. v. Shortridge , 689 N.E.2d 1248, 1252 (Ind. 1997), supplemented at 691
N.E.2d 1210 (Ind. 1998).
[53] “The gravamen of [abuse of process] is not the wrongfulness of the prosecution,
but some extortionate perversion of lawfully initiated process to illegitimate
ends.” Id. (quoting Heck v. Humphrey, 512 U.S. 477, 486 n.5, 114 S.Ct. 2364,
2372 n.5, 129 L.Ed.2d 383 (1994)). Unlike a malicious prosecution action, an
action for abuse of process does not necessarily require proof that the action
was brought without probable cause or that the action terminated in favor of the
party alleging abuse of process. Lindsay v. Jenkins, 574 N.E.2d 324, 326 (Ind.
Ct. App. 1991), trans. denied. It does appear, however, that an action’s lack of
validity can be highly relevant in examining an abuse of process claim. Our
supreme court has held that the reasonableness of an attorney’s action
instituting litigation should be judged by an objective standard and whether
“‘no competent and reasonable attorney familiar with the law of the forum
would consider that the claim was worthy of litigation on the basis of the facts
known by the attorney who instituted suit.’” Shortridge, 689 N.E.2d at 1253
(quoting Wong v. Tabor, 422 N.E.2d 1279, 1288 (Ind. Ct. App. 1981)). 4 There
must be evidence that an attorney filed a claim for a purpose other than aiding
4
Wong solely addressed a claim of malicious prosecution, while Shortridge solely addressed a claim of abuse
of process. Still, the Shortridge court clearly deemed it appropriate to rely heavily upon Wong in establishing
the parameters of an abuse of process claim.
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 30 of 39
his or her client in adjudicating his or her claim. Id. Additionally, there must
be evidence that the attorney “‘knowingly initiated proceedings for a clearly
improper purpose,’” which requires more than evidence of a questionable belief
as to the merits of a case, or the failure to fully investigate all facts before filing
suit. Id. (quoting Wong, 422 N.E.2d at 1287).
[54] Applying these principles to the present case, Attorney Hall states:
It is difficult to imagine a clearer example of abuse of process than that
of IAE in this case. After suggesting that the 2010 dispute over
whether or not either the 2003 or 2005 fee agreement required
[Attorney Hall] to handle the second appeal in 2011 under the
agreements of 2003 or 2005, it was IAE who then delayed those
proceedings for 2 years, so as to allow for [Attorney Lazarus] to
handle the second appeal under the guise that he could do so at
virtually no costs to IAE, as he claimed that he would be paid by
[Attorneys] Hall and or Bishop. If IAE truly believed that the 2003 or
2005 [A]greements required [Attorney Hall] to handle the second
appeal, why wouldn’t they simply want a judge to decide that issue?
After all, [Attorney Hall] stated on the record in both Magistrate
Pagano’s courtroom and Judge Davis’ courtroom that if the judge
decided that [Attorney Hall] was required to handle the second appeal
for free, that [Attorney Hall] would do so. Yet instead, IAE embarked
on a scorched earth policy of defamatory claims of abuse, mean
spiritedness and other equally fallacious claims in an effort to try to get
out of paying [Attorney Hall] for his efforts. This abuse of process
continues even today, with this so called motion for summary
judgment on issues that have already been decided, and for which the
Indiana Supreme court called unquestionably inappropriate[ 5]. As
5
In its Order of May 20, 2014, our supreme court stated that “[b]ecause [IAE] seeks an unquestionably
inappropriate remedy under the rules and law governing writs of mandamus and prohibition, this original
action is DISMISSED.” (Appellant’s App. p. 880). Seizing upon the “unquestionably inappropriate”
language of the supreme court’s order, Attorney Hall inserts this language seemingly to support every
argument in his brief, in blatant disregard of the proper context in which this statement was issued.
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evidenced by [Attorney Hall’s] affidavit, [Attorney Hall] has spent 345
hours on these duplicate and spurious claims over the past four years.
At his current hourly rate of $250, this totals $86,250.00 in time spent
on this witch hunt . . . time which [Attorney Hall] could not spend on
income producing cases. Accordingly [Attorney Hall] seeks summary
judgment against IAE on the abuse of process claim and seeks an
award of $86,250 to compensate him for the time spent defending
these ridiculous claims.
(Appellant’s App. pp. 626-27). Accordingly, Attorney Hall was required to
establish that IAE had an illegitimate purpose in continuing the proceedings
after he had sought a declaratory judgment as to whether his attorney fees were
governed by either the 2003 or 2005 Agreement. In this regard, Attorney Hall
claims that the illegitimate purpose centers on Attorney Lazarus’ motivation to
forego paying Attorney Hall for his professional services and instead to reap a
high fee with minimal work expended.
[55] Besides making generalized statements, Attorney Hall’s appellate brief and his
motion for summary judgment on this issue fail to direct us to any specifically
designated evidence supporting his allegations. The only allegation that is
supported with references to the evidence is the amount of his hourly rate and
the number of hours spent on “duplicative and spurious claims.” (Hall’s Br. p.
22). Regardless of these shortcomings, we must affirm the trial court’s award of
abuse of process claim.
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[56] Our own review of the designated evidence indicates that on August 12, 2012,
IAE filed a motion before Judge Svetanoff to allocate attorney fees based on the
express written fees agreement between the parties. To that end, and despite
IAE’s abandonment claim, “[f]or the sake of efficiency,” IAE requested to
award Attorney Hall “one-third fee out of its recovery from Lake Station,
minus the 10 percent fee it owes” to Attorney Lazarus. (Appellant’s App. pp.
77-78). Following Judge Svetanoff’s ruling of January 14, 2013, as amended on
February 4, 2013, the attorney fees for Attorney Hall and Attorney Lazarus
were conclusively determined in line with IAE’s request, as well as the issue
that Attorney Hall had satisfied his obligations under the 2003 Agreement.
Despite this clear and final pronouncement, IAE, through its attorney,
continued to litigate Attorney Hall’s attorney fees by now alleging, in a new
filing before Judge Hawkins, that Attorney Hall was not entitled to any attorney
fees because he had abandoned the case. IAE never sought to have Judge
Svetanoff’s decision set aside through proper procedural channels.
[57] Judged by an objective standard, “no competent and reasonable attorney
familiar with the law of the forum” would re-litigate a claim which had been
conclusively decided between the parties in line with the attorney’s suggestion.
See Shortridge, 689 N.E.2d at 1253. Although Attorney Hall points us to no
direct evidence that IAE had an improper motive in this continued litigation
besides Attorney Hall’s own uncited generalizations, “[a]n examination of the
motivation behind the decision of the . . . attorney to file its [summary
judgement proceeding before Judge Hawkins] is a question of fact that is subject
Court of Appeals of Indiana | Opinion 45A05-1503-PL-100 | December 22, 2015 Page 33 of 39
to conflicting inferences.” Id. Here, however, IAE’s persistent litigation despite
Judge Svetanoff’s order granting it what it had requested is particularly
troubling and indicative of an ulterior motive. More importantly, we cannot
ignore that the doctrine of res judicata is firmly embedded in our legal tradition,
and IAE’s blatant disregard of its principles in the case before us must lead to
the conclusion that there is no genuine issue of material fact that Attorney
Lazarus misused our legal “process for an end other than that which it was
designed to accomplish.” Estate of Mayer, 998 N.E.2d at 256. We affirm the
trial court’s grant of summary judgment in favor of Attorney Hall on his abuse
of process claim.
III. Motion to Strike
[58] On January 14, 2015, Attorney Bishop moved to bar the testimony of Lundberg
as expert witness for IAE because Lundberg had not been timely disclosed as an
expert. Despite Attorney Bishop’s motion, IAE included Lundberg’s opinion
as an exhibit in its response to Attorney Hall’s January 22, 2015 motion for
summary judgement as to all issues. In its order of March 20, 2015, Judge
Hawkins directed the clerk of the court to strike the Lundberg report,
documents utilizing or citing to said report, and IAE’s two trial briefs that
included IAE’s offer to settle Attorney Hall’s expenses for a certain amount.
IAE now contends that the trial court abused its discretion when it issued its
order to strike as it was “overbroad, [and] comparable to imposing default as a
discovery sanction[.]” (IAE’s Br. p. 44).
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[59] A trial court has broad discretion in ruling on a motion to strike. Norfolk S. Ry.
Co. v. Estate v. Wagers, 833 N.E.2d 93, 100 (Ind. Ct. App. 2005), trans. denied.
Generally, we review a trial court’s decision to admit or exclude evidence for an
abuse of discretion. Id. This standard also applies to decisions to admit or
exclude expert testimony. Id. We reverse a trial court’s decision to admit or
exclude evidence only if that decision is clearly against the logic and effect of
the facts and circumstances before the court, or the reasonable, probable, and
actual deductions to be drawn therefrom. Id at 101. Further, the trial court’s
decision will not be reversed unless prejudicial error is clearly shown. Devereux
v. Love, 30 N.E.3d 754, 766 (Ind. Ct. App. 2015), reh’g denied.
[60] Without having to decide whether the trial court abused its discretion, we can
affirm the trial court’s ruling as IAE failed to establish it was prejudiced by the
trial court’s order. In his letter, Lundberg expressed his opinion on whether
Attorneys Hall and Bishop had satisfied the obligations of their respective fee
agreements. With respect to Attorney Hall, this issue had been conclusively
decided by Judge Svetanoff’s order and was res judicata in Judge Hawkins’
court. In this respect, Lundberg’s opinion had become irrelevant. With respect
to Attorney Bishop and the documents including settlement offers, IAE omits
any allegation of prejudicial error. Accordingly, we decline to reverse the trial
court’s order to strike.
IV. Request for Appellate Attorney Fees
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[61] Lastly, both Attorney Hall and Attorney Bishop request to be awarded
appellate attorney fees in accordance with Indiana Appellate Rule 66(E). They
posit an entitlement to appellate attorney fees because of IAE’s “baseless
claims” indicating that it “seeks some form of retaliation against its prior
counsel.” (Hall’s Br. p. 29 & Bishop’s Br. p. 15).
[62] Indiana Appellate Rule 66(E) provides, in pertinent part, “[t]he Court may
assess damages if an appeal . . . is frivolous or in bad faith. Damages shall be in
the Court’s discretion and may include attorney’s fees.” Our discretion to
award attorney fees under Indiana Appellate Rule 66(E) is limited, however, to
instances where an appeal is permeated with meritlessness, bad faith, frivolity,
harassment, vexatiousness, or purpose of delay. Thacker v. Wentzel, 797 N.E.2d
342, 346 (Ind. Ct. App. 2003). A strong showing is required to justify an award
of appellate damages, and the sanction is not imposed to punish mere lack of
merit, but something more egregious. Helmuth v. Distance Learning Systems, Ind.,
Inc., 837 N.E.2d 1085, 1094 (Ind. Ct. App. 2005). Additionally, while Indiana
Appellate Rule 66(E) provides this court with discretionary authority to award
damages on appeal, we must use extreme restraint when exercising this power
because of the potential chilling effect upon the exercise of the right to appeal.
Thacker, 797 N.E.2d at 346.
[63] We have formally categorized claims for appellate attorney fees into
“substantive” and “procedural” bad faith claims. In re Estate of Carnes, 866
N.E.2d 260, 267 (Ind. Ct. App. 2007). To prevail on a substantive bad faith
claim, the party must show that the appellant’s contentions and arguments are
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utterly devoid of all plausibility. Id. In other words, substantive bad faith
“implies the conscious doing of a wrong because of dishonest purpose or moral
obliquity.” Wallace v. Rosen, 765 N.E.2d 192, 201 (Ind. Ct. App. 2002). On the
other hand, procedural bad faith occurs when a party flagrantly disregards the
form and content requirements of the rules of appellate procedure, omits and
misstates relevant facts appearing in the record, and files briefs written in a
manner calculated to require the maximum expenditure of time both by the
opposing party and the reviewing court. Potter v. Houston, 847 N.E.241, 249
(Ind. Ct. App. 2006).
[64] IAE’s brief suffers from numerous procedural deficiencies predominantly in its
argument section. Although each contention in the argument section “must be
supported by citations to the authorities, statutes, and the Appendix or parts of
the Record on Appeal relied upon,” references are either completely omitted or
woefully inadequate. See Ind. Appellate Rule 46(A)(8)(a). Furthermore, the
arguments we deemed reviewable are only summarily supported with case law.
On the other hand, it should be pointed out that Attorney Hall’s appellate brief
suffered from identical deficiencies.
[65] Substantively, all appellate briefs include arguments “utterly devoid of all
plausibility.” Estate of Carnes, 866 N.E.2d at 267. While we agree with certain
contentions, we have rejected others. The parties before us continued to re-
litigate issues and judgments already conclusively decided. While presenting us
with several baseless claims, the parties did not shy away from unfounded
accusations and deliberate exaggerations, such as:
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The arguments are, without merit in that they are generally predicated
upon fabricated or improperly characterized facts. [Attorney Bishop]
has resisted the temptation to once again respond to each, only to fill
the pages of his brief with inconsequential argument.
(Hall’s Br. p. 13). Although this appeal reflects a degree of bitterness among the
parties and counsel, incoherent and illogical tirades of accusations are out of
place before an appellate tribunal. At times, the appellate briefs even read like
an incoherent stream of consciousness without any proper legal foundation.
[66] Indignation—whether righteous or not—is no substitute for a well-reasoned
argument. We remind counsel that “an advocate can present his cause, protect
the record for subsequent review and preserve professional integrity by patient
firmness no less effectively than by belligerence or theatrics.” WorldCom
Network Serv. Inc. v. Thompson, 698 N.E.2d 1233, 1237 (Ind. Ct. App. 1998),
trans. denied. Here, all parties presented us with briefs and arguments woefully
unbefitting an appellate advocate; none should be awarded appellate attorney
fees. 6
CONCLUSION
6
Even though we are only deciding appellate attorney fees, we note that the unnecessary hyperbole already
commenced before the trial court:
After IAE hired its current counsel, it was too late for [Attorney Hall] to insist upon what
[Talluri] had previously repeatedly requested of him, and complete the job of obtaining
recovery from Lake Station. It’s like the old nursery rhyme. Only in this case, Humpty
Dumpty threw himself off the wall and shattered his own egg. Now he seeks to blame his
elderly client for not putting his shell back together again.
(Appellant’s App. p. 1746). We caution counsel that overheated rhetoric is unpersuasive and ill-advised.
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[67] Based on the foregoing, we reverse the trial court’s grant of summary judgment
with respect to Attorney Hall’s and Attorney Lazarus’ attorney fees based on res
judicata grounds but affirm the trial court’s calculation of Attorney Bishop’s
attorney fees pursuant to the guidelines in Galanis and the trial court’s grant of
expenses. We affirm the trial court’s grant of abuse of process claim; and also
conclude that the trial court did not abuse its discretion granting the motion to
strike. On Cross-Appeal, we deny appellate attorney fees to Attorney Bishop
and Attorney Hall
[68] Affirmed in part, reversed in part, and remanded for further proceedings in light
of this opinion.
[69] Brown, J. and Altice, J. concur
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