Christian Methodist Episcopal Church and Second Episcopal District of the Christian Methodist Episcopal Church, Inc. v. Kevin P. Grimes, Sr. (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
FILED
this Memorandum Decision shall not be
regarded as precedent or cited before any Aug 26 2019, 5:34 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
Kimberly A. Jackson Kevin S. Smith
Indianapolis, Indiana Brent R. Borg
Church, Church, Hittle & Antrim
Mark R. Waterfill
Fishers, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Christian Methodist Episcopal August 26, 2019
Church and Second Episcopal Court of Appeals Case No.
District of the Christian 18A-PL-2346
Methodist Episcopal Church, Appeal from the
Inc., Marion Superior Court
Appellants-Defendants, The Honorable
John M.T. Chavis II, Judge
v. Trial Court Cause No.
49D05-1211-PL-43306
Kevin P. Grimes, Sr.,
Appellee-Plaintiff.
Kirsch, Judge.
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[1] Christian Methodist Episcopal Church (“CME”) and Second Episcopal District
of the Christian Methodist Episcopal Church, Inc. (“Second District”)
(together, “the Church”) appeal the trial court’s order granting a motion filed by
Kevin P. Grimes, Sr. (“Grimes”) requesting enforcement of a settlement
agreement and entering judgment against the Church in the amount of
$80,000.00. The Church raises the following restated issues on appeal:
I. Whether the trial court lacked subject matter jurisdiction
over Grimes’s claims against the Church;
II. Whether the trial court abused its discretion when it
denied CME and Second District’s motion to vacate the
trial court’s previous order enforcing the alleged settlement
agreement between the parties; and
III. Whether the trial court abused its discretion when it
awarded $6,456.71 in appellate attorney fees to Grimes.
[2] We affirm.
Facts and Procedural History
[3] Between June 2007 through June 2012, CME and Second District appointed
Grimes to five consecutive one-year terms as pastor of Stewart Memorial CME
Corporation (“Stewart Memorial”). Appellants’ App. Vol. II at 132. CME is a
not-for-profit religious corporation organized into eleven districts in the United
States and Africa including Second District, which is a separate corporation.
Appellants’ App. Vol. III at 5; Appellants’ App. Vol. IV at 22. Stewart Memorial is
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an Indianapolis church within the Second District. Appellants’ App. Vol. IV at
22.
[4] Under CME’s structure, a pastor’s salary is established by the local church’s
steward board and approved by the Quarterly Conference of Second District,
which is presided over by a CME Elder. Appellants’ App. Vol. II at 212;
Appellants’ App. Vol. III at 83. For each year of Grimes’s employment, financial
accountings and pastoral reports contained information stating that Grimes’s
salary was $600.00 per week and that Grimes was entitled to 12% of his salary
as a pension. Appellants’ App. Vol. II at 142-51, 230-47. This information was
also indicated in the minutes of the Quarterly Conference. Id. at 152-53.
[5] When Grimes accepted his appointment, Stewart Memorial was in significant
financial trouble. Id. at 132, 140, 185. Stewart Memorial paid one of its
previous pastors $600.00 per week before she left to organize her own church
and took much of Stewart Memorial’s membership with her, which is when
Stewart Memorial’s downward financial spiral began. Appellants’ App. Vol. IV at
133, 139-40, 236. The $600.00 per week salary figure remained in place for the
pastor who served after her and before Grimes; however, that pastor never was
paid due to Stewart Memorial’s poor financial situation. Id. at 205-06. On
August 6, 2007, Grimes reportedly wrote a letter to Second District Bishop E.
Lynn Brown in which Grimes stated: “[D]ue to the extreme and severe
financial conditions[,] I[,] as the Sr. Pastor[,] have made the temporary decision
to defer the church pastoral salary obligations, until at such time I determine we
can recover from this desperate financial situation.” Appellants’ App. Vol. II at
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80. Grimes and Stewart Memorial’s Board of Stewards understood Grimes was
not working for free and would eventually be paid his deferred salary. Id. at
132-33, 140, 188, 192-93. Although Grimes claimed years later that he entered
into a single oral agreement with Stewart Memorial’s Board of Stewards in
2007 to pay him $600.00 weekly, church officials with CME and Second
District denied any such agreement ever existed. Appellants’ App. Vol. IV at 42,
44-45; Appellants’ App. Vol. V at 5.
[6] On October 30, 2011, the Quarterly Conference was chaired by Reverend
Charles King (“Reverend King”), a presiding elder of CME and Second
District. Appellants’ App. Vol. II at 92. At that Quarterly Conference, Reverend
King stated it was Stewart Memorial’s duty to pay Grimes his salary and
pension. Id. at 93, 167-70, 221. Reverend King was aware of Stewart
Memorial’s financial condition but stated that Stewart Memorial should set a
salary and keep a record of the amounts owed to Grimes. Id. at 221; Appellants’
App. Vol. III at 14. After the Quarterly Conference, Grimes instructed Stewart
Memorial staff to draft checks to Grimes in amounts Grimes specified for his
services dating back to his first appointment. Appellants’ App. Vol. III at 120-21;
Appellants’ App. Vol. V at 9-10. Grimes and his brother-in-law, who was a
steward of Stewart Memorial, maintain that, at the October 2011 Quarterly
Conference, Reverend King directed Stewart Memorial to write checks to
Grimes for his services as a promise to pay, and their position was supported by
purported minutes of the Quarterly Conference drafted by Grimes. Appellants’
App. Vol. II at 92, 133-34, 167-68. Reverend King challenged the accuracy of
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the minutes and reported receiving the minutes only after Grimes’s departure
from Stewart Memorial. Appellants’ App. Vol. IV at 41-42.
[7] Stewart Memorial drafted checks to Grimes totaling $165,276.00. Appellants’
App. Vol. II at 134, 157-66. Grimes knew Stewart Memorial’s accounts did not
contain sufficient funds to cover the checks at the time they were issued.
Appellants’ App. Vol. V at 14-16. Stewart Memorial did not intend for the checks
to be cashed, and the recording steward kept the checks in her desk until
Grimes requested that she give them to him. Appellants’ App. Vol. III at 121;
Appellants’ App. Vol. IV at 141-42.
[8] In July 2012, prior to the expiration of Grimes’s fifth term as pastor of Stewart
Memorial, Reverend King offered Grimes pastor positions at two different
churches, another Indianapolis church and a Cincinnati church. Appellants’
App. Vol. V at 2,17. Grimes rejected those positions, was not reappointed as
pastor of Stewart Memorial, and left his employment at Stewart Memorial on
July 27, 2012. Appellants’ App. Vol. IV at 44, 249; Appellants’ App. Vol. V at 17.
On July 20, 2012, Grimes cashed one of the checks written to him by Stewart
Memorial for $600.00, and on July 30, 2012, he cashed another for $600.00.
Appellants’ App. Vol. IV at 238. An overdraft occurred as a result of the
processing of those checks, and Stewart Memorial stopped payment on the
other checks issued to Grimes. Id. at 161, 222.
[9] On November 2, 2012, Grimes filed a complaint against CME, Second District,
and Stewart Memorial, alleging breach of contract and violation of Indiana’s
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Wage Payment Statute and Wage Claims Statute. Appellants’ App. Vol. II at 36-
39. CME and Second District filed separate motions to dismiss Grimes’s
complaint, alleging that the Wage Payment Statute and Wage Claims Statute
did not apply because Indiana’s minimum wage laws do not apply to pastors
and the trial court lacked subject matter jurisdiction over Grimes’s claims
because if the trial court adjudicated those claims, it would infringe the First
Amendment rights of CME and Second District to adjudicate matters
concerning ecclesiastical law. Id. at 47-54. The trial court denied the motions
to dismiss. On April 23, 2013, Grimes filed an amended complaint to add an
unjust enrichment claim. Id. at 71-75.
[10] In September 2014, Grimes filed a motion for partial summary judgment on all
claims except unjust enrichment. Id. at 115-16. Grimes argued, among other
things, that his claims were not barred by the First Amendment. Id. at 126-28.
On November 21, 2014, CME and Second District filed separate cross motions
for summary judgment, again arguing that Grimes’s claims were barred by the
First Amendment. Appellants’ App. Vol. III at 4-10. On June 8, 2015, the trial
court denied all of the motions for summary judgment, specifically stating that
“the Court can apply neutral principles of law without becoming excessively
entangled in religious affairs in violation of the First Amendment.” Appellants’
App. Vol. V at 52-54. Grimes, CME, and Second District each filed motions for
permissive interlocutory appeal of the trial court’s order, and this court denied
the motions. Appellants’ App. Vol. II at 21-23.
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[11] The trial court set a jury trial for May 23, 2017. Id. at 24. Three weeks before
the trial date, counsel for the Church and Grimes met in a settlement
conference with their clients available by phone. Appellants’ App. Vol. V at 55-
56. On June 9, 2017, Grimes filed a motion to enforce settlement agreement
and a motion to set the matter for a hearing. In the motion, Grimes alleged the
following occurred at the settlement conference. After initial discussion,
Grimes offered to settle his claims against the Church for $90,000.00. Id. at 56.
The Church counteroffered for $40,000.00 and a confidentiality provision. Id.
Grimes agreed to the confidentiality provision and counteroffered for
$80,000.00 paid via an initial reasonable lump-sum payment followed by a
reasonable payoff of the balance over time, and an attorney fee provision
should the Church fail to pay. Id. The Church agreed to the $80,000.00
settlement payment and the attorney fee provision and proposed that the initial
payment be $15,000.00 with semi-annual payments of the balance over four
years. Id. Grimes’s counsel then called Grimes to convey the parties’
agreement and confirm his approval of the payment terms the Church had
recommended. Id. As Grimes’s counsel was preparing to return to the
conference room to convey Grimes’s approval of their proposed payment terms,
the Church’s counsel attempted to rescind the parties’ agreement, stating that
he only had authority to offer $50,000.00. Id.
[12] The trial court set the motion for a hearing on August 9, 2017. On June 29,
2017, after nineteen days had passed without the Church filing a response to the
motion to enforce the settlement agreement, Grimes filed a motion to vacate
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the hearing, contending that no hearing was needed because the Church’s lack
of response demonstrated the facts alleged in Grimes’s motion were undisputed
and the trial court could rule on the motion based on the evidence Grimes had
submitted. Id. at 71-72. After fifteen days passed without the Church filing any
response or objection to Grimes’s motion to vacate hearing, the clerk filed an
order from the court granting Grimes’s motion and vacating the August 9
hearing. Appellants’ App. Vol. II at 26; Appellants’ App. Vol. V at 79. The Church
did not file an objection or response to this ruling. See Appellants’ App. Vol. II at
26. On August 10, 2017, the trial court granted Grimes’s motion to enforce
settlement agreement and entered judgment against the Church in the amount
of $80,000.00 and ordered reasonable attorney fees in enforcing the judgment.
Appellants’ App. Vol. V at 80. Grimes’s claims against Stewart Memorial
remained pending in the trial court.
[13] On September 9, 2017, the Church filed a motion to correct error, arguing the
trial court’s August 10 order entering judgment “for a set amount does not
properly include the terms that were part of the settlement conference and does
not accurately set the terms of the deal.” Id. at 123-24. On September 15, 2017,
Grimes filed a “Statement in Opposition to Motion to Correct Error,” in which
he argued that the motion to correct error did not satisfy Trial Rule 59(D)
because it did not state the alleged error in specific terms. Id. at 126-27. Grimes
also argued that the Church had waived any challenge to the motion to enforce
settlement agreement because “‘[w]hen a [party] does not properly bring an
objection to the court’s attention so that the court may rule on it at the
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appropriate time, he is deemed to have waived that possible error.’” Id. at 127
(quoting Ingram v. State, 547 N.E.2d 823, 829 (Ind.1989)). Grimes continued:
If [the Church] disputed the Motion to Enforce, [it] had no fewer
than three opportunities to object: first, when the undersigned
sent a letter demanding [it] honor the terms of the agreement;
second, via standard motion practice by filing an objection to the
Motion to Enforce; and third, when Grimes moved to vacate the
hearing. [The Church has] had many bites at the apple and
declined each opportunity.
Id. On September 19, 2017, the Church’s motion to correct error was denied.
Appellee’s App. Vol. II at 53.
[14] On October 31, 2017, the Master Commissioner conducted proceedings
supplemental, at which the Church argued that the trial court’s judgment for the
entire $80,000.00 was inconsistent with the terms of the parties’ settlement
agreement and asked the matter be sent “back to the trial court for
clarification.” Tr. Vol. 2 at 32-36. The Master Commissioner granted their
request and continued the hearing. Id. at 37-38. On November 13, 2017, the
trial court issued an order, stating in pertinent part, “[T]here is no legitimate
dispute regarding the terms of the settlement agreement or the Court’s order
enforcing said settlement agreement. The Court stands by and reaffirms its
order denying [the Church’s] Motion to Correct Error.” Appellants’ App. Vol. V
at 135. The order scheduled another proceedings supplemental for December
15, 2017 and ordered the Church to appear in person. Id. The Church failed to
appear at the proceedings supplemental. Appellants’ App. Vol. II at 29-30. The
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trial court issued “Final Orders in Garnishment” to two garnishee/defendant
banks, and from those orders, Grimes collected $56,693.20, which is being held
in his attorney’s trust account. Appellants’ App. Vol. V at 137-41; Appellee’s App.
Vol. II at 57, 61.
[15] On January 25, 2018, the Church appealed the trial court’s “Final Orders in
Garnishment” and stated in their notice of appeal that this court had
jurisdiction because the “Final Orders in Garnishment” were final judgments.
Appellee’s App. Vol. II at 30. A month later, through its new appellate counsel,
the Church filed an amended notice of appeal that again stated our court had
jurisdiction because the court’s “Final Orders in Garnishment” were final
judgments. Id. at 38. On May 11, 2018, the Church filed a motion seeking to
dismiss its appeal because, it asserted that the trial court’s “Final Orders in
Garnishment” were not “final judgments” and argued the garnishment orders
were improper because the trial court’s order enforcing the parties’ settlement
agreement did not constitute a final judgment and proceedings supplemental
“necessarily require a final judgment to execute.” Appellants’ App. Vol. V at 148-
50.
[16] Grimes objected to the motion to dismiss the appeal based on his contentions
that, under Indiana law, an order issued as a result of proceedings supplemental
is a “final judgment” for purposes of appellate jurisdiction and a “final
judgment” against all parties is not required for a plaintiff to seek proceedings
supplemental on a judgment entered against some of the parties. Appellants’
App. Vol. VI at 7-19. Alternatively, Grimes requested that this court award
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appellate attorney fees because it would be unfair for Grimes to bear the
financial costs of the Church’s tactical mistake in filing an appeal, especially
when Grimes was prepared to defend the garnishment orders on appeal and
because the trial court’s order allowed for reasonable attorney fees in enforcing
the judgment. Id. at 20. On June 6, 2018, this court issued an order granting
the Church’s motion to dismiss and granting Grimes’s request for appellate
attorney fees, ordering the trial court to determine the amount to be awarded.
Appellee’s App. Vol. II at 51-52.
[17] On July 5, 2018, Grimes filed a motion with the trial court for reasonable
attorney fees, requesting $6,456.71. Appellants’ App. Vol. VI at 2-4. The Church
filed a motion in opposition, arguing that the attorney fees should be reduced to
$2,594.95. Id. at 43-44. The trial court granted attorney fees in the full amount
requested by Grimes, stating “Court finds that the amount of appellate attorney
fees is reasonable for the services provided and made necessary by [the
Church’s] initiating an appeal that they later sought and were granted dismissal
without prejudice by the Indiana Court of Appeals.” Id. at 99.
[18] On July 24, 2018, the Church filed a motion to vacate, requesting that the trial
court vacate the August 10, 2017 order enforcing the settlement agreement. Id.
at 45-49. In its motion, the Church contended the trial court’s judgment should
be vacated because the trial court lacked subject matter jurisdiction, the alleged
settlement agreement never occurred, the alleged settlement agreement was
unenforceable, and the judgment was erroneously entered without hearing and
was inconsistent with Grimes’s allegations of an agreement. Id. at 45-75. On
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August 29, 2018, the trial court denied the Church’s motion to vacate and
entered final judgment against the Church. Id. at 100-01. The Church now
appeals.
Discussion and Decision
I. Subject Matter Jurisdiction
[19] The Church initially argues that the trial court lacked subject matter jurisdiction
over Grimes’s claims. The Church contends that the First Amendment
precluded Grimes’s claims against it because the determination of such issues
would require inquiry into ecclesiastical law, doctrine, or polity. The Church
claims that Grimes’s claims cannot be resolved without interpretation of
religious, doctrinal, and ecclesiastical principles, specifically contained in the
Book of Discipline of the Christian Methodist Episcopal Church (“the
Discipline”). As support for its claim, the Church notes that the Discipline
provides the procedures under which pastors receive wages and benefits and
how salary disputes are resolved.
[20] It has long been held that the First Amendment to the United States
Constitution requires civil courts to refrain from interfering in matters of church
discipline, faith, practice, and religious law. Stewart v. Kingsley Terrace Church of
Christ, Inc., 767 N.E.2d 542, 546 (Ind. Ct. App. 2002) (citing Watson v. Jones, 80
U.S. 679, 727 (1871)). “Thus, civil courts are precluded from resolving disputes
involving churches if ‘resolution of the disputes cannot be made without
extensive inquiry . . . into religious law and polity . . . .’” Id. (quoting Serbian E.
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Orthodox Diocese v. Milivojevich, 426 U.S. 696, 709 (1976)). However, the First
Amendment does not entirely prohibit courts from deciding issues related to
religious organizations. Id. (citing Konkle v. Henson, 672 N.E.2d 450, 455 (Ind.
Ct. App. 1996)). Instead, courts can apply neutral principles of law to churches
without violating the First Amendment. Id. (citing Konkle, 672 N.E.2d at 455).
The First Amendment only prohibits the court from determining underlying
questions of religious doctrine and practice. Brazauskas v. Fort Wayne-South Bend
Diocese, Inc., 714 N.E.2d 253, 262 (Ind. Ct. App. 1999), trans. denied.
[21] In Brazauskas v. Fort Wayne-South Bend Diocese, Inc., 796 N.E.2d 286 (Ind. 2003),
our Supreme Court held that a court with general authority to hear matters like
employment disputes is not deprived of subject matter jurisdiction because the
defendant pleads a religious defense. Id. at 290. Here, Indiana courts,
including the Marion Superior Court and this court, have the general authority
to hear matters such as Grimes’s claims regarding breach of contract and unjust
enrichment in an employment dispute. The First Amendment claims of the
Church did not deprive the trial court of its subject matter jurisdiction over
Grimes’s claims.
[22] The Church asserts that determination of whether Grimes was an employee
and, therefore, the resolution of his claims, would require a prohibited inquiry
into the Discipline because the Discipline contains procedures regarding a
pastor’s compensation. However, the Discipline’s provisions that the Church
point to as support for their arguments are procedural and administrative and
do not concern church doctrine or religious law. Grimes’s claims did not hinge
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on a review of his performance as a pastor or an interpretation of ecclesiastical
law and polity, but only on whether a contract existed that required CME,
Second District, and Stewart Memorial to pay Grimes wages or whether unjust
enrichment occurred when Grimes was not paid for his services as a pastor.
We, therefore, conclude that the trial court had subject matter jurisdiction over
Grimes’s claims, and it properly rejected the Church’s challenges to the
contrary.1
II. Enforcement of Settlement Agreement
[23] The Church next argues that the trial court erred when it entered judgment on
Grimes’s motion to enforce settlement agreement without having first held an
evidentiary hearing. It contends that Grimes’s motion was erroneously granted
based on a flawed interpretation of Marion County Local Rule LR49-TR5-203.
The Church asserts that LR49-TR5-203 does not expressly require a written
response, but merely established a deadline for filing a written response if the
opposing party decides to file one. It further claims that, because the rule did
not require a written response to Grimes’s motion, LR49-TR5-203 did not
1
Grimes also raised claims under the Indiana Wage Claims Statute and Wage Payment Statute. Grimes
concedes that, had his case gone to trial rather than being settled, his claim under the Wage Claims Statute
would have failed because he did not first file a claim with the Indiana Department of Labor and exhaust his
administrative remedies as required. See Alexander v. Linkmeyer Dev. II, LLC, 119 N.E.3d 603, 620 (Ind. Ct.
App. 2019). As to his claim under the Wage Payment Statute, the Church argues that the trial court did not
have subject matter jurisdiction because the Wage Payment Statute only applies to current employees and
those who have voluntarily left employment, see Indiana Code § 22-2-5-1, and Grimes was not a current
employee at the time he filed his complaint, and he claimed that he was terminated, not that he voluntarily
left his employment. Rather than showing a lack of subject matter jurisdiction, the Church’s arguments are a
challenge to the legal sufficiency of Grimes’s claims. Therefore, the trial court had subject matter jurisdiction
over Grimes’s claim under the Wage Payment Statute.
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provide any basis for the trial court’s entry of judgment against it, and the trial
court’s entry of judgment without allowing the Church to present arguments at
a hearing amounted to the functional equivalent of a default judgment, for
which the local rule does not provide a basis. Because the trial court erred in
granting Grimes’s motion to enforce the alleged settlement agreement, the
Church maintains that it was an abuse of discretion for the trial court to deny
their motion to vacate that judgment.
[24] The Church is actually appealing from a denial of its motion to vacate the order
enforcing the settlement agreement, not the previously entered judgment on
Grimes’s motion to enforce settlement agreement. When reviewing a trial
court’s denial of a motion to vacate its judgment, we review for an abuse of
discretion. Kolbet v. Kolbet, 760 N.E.2d 1146, 1153 (Ind. Ct. App. 2002) (citing
In re Marriage of Bates, 474 N.E.2d 140, 142 (Ind. Ct. App. 1985)). An abuse of
discretion occurs where the trial court’s ruling is clearly against the logic and
effect of the facts and inferences supporting the judgment. Id.[25] Here, Grimes filed a motion to enforce settlement agreement, which detailed
what transpired during the parties’ settlement conference and evidence of the
parties’ agreement and requested a hearing. Appellants’ App. Vol. V at 55-68.
The trial court set it for a hearing. Id. at 70. The Church filed no written
response. Appellants’ App. Vol. II at 26. After the deadline to file a response had
passed, see generally Marion County Circuit and Superior Court Civil Rule
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LR49-TR5-203,2 Grimes filed a motion to vacate the hearing date, contending
that there was no need to conduct a hearing because the Church’s lack of
response showed that Grimes’s evidence was undisputed and the trial court
could rule on his motion to enforce the settlement agreement based on the
evidence Grimes submitted. Appellants’ App. Vol. V at 71-72. The Church did
not object to this motion and again filed no response. Appellants’ App. Vol. II at
26. Fifteen days later, the clerk filed an order from the trial court granting
Grimes’s motion to vacate the hearing. Id.; Appellee’s App. Vol. II at 55. The
Church did not file any objection to this order vacating the hearing, nor did it
file anything requesting that the hearing be rescheduled so that it could present
evidence and argument. Appellants’ App. Vol. II at 26. On August 10, 2017,
several weeks later, the clerk filed an order from the court granting Grimes’s
motion to enforce settlement agreement and entering judgment against the
Church for $80,000.00. Appellants’ App. Vol. V at 74.
[26] Thirty days later, the Church filed a motion to correct error, requesting that the
August 10 order be set aside and requesting that a hearing be set because the
trial court’s order enforcing the parties’ settlement agreement entered judgment
“for a set amount” and “[did] not properly include the terms that were part of
the settlement conference and [did] not accurately set the terms of the deal.” Id.
2
LR49-TR5-203 states in pertinent part: “If the statement regarding the position of the opposing party(ies)
required under subsection A herein indicated that objection to the granting of said motion may ensue, said
objecting party shall have 15 days from the date of filing to file a response to said motion.” LR49-TR5-
203(B).
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at 123-24. No other errors were alleged in the motion. Id. The trial court
denied the motion to correct error on September 19, 2017. Appellants’ App. Vol.
II at 29. On July 24, 2018, the Church filed a motion to vacate the trial court’s
order enforcing the parties’ settlement agreement, raising ten arguments, none
of which had been presented in response to Grimes’s motion to enforce
settlement agreement, and only two of which had been presented in the motion
to correct error, specifically, that the judgment should have awarded payment
in installments rather than a lump-sum, and the trial court should have held a
hearing. Appellants’ App. Vol. VI at 45-75.
[27] We conclude that it was proper for the trial court to issue an order on Grimes’s
motion to enforce the settlement agreement without holding a hearing.
Initially, the trial court was not required to conduct a hearing on Grimes’s
motion to enforce the settlement agreement. Under LR49-TR5-203(C), “any
oral argument requested may be heard at the discretion of the Court.”
Therefore, the trial court was within its discretion to make a ruling on Grimes’s
motion without first conducting oral argument or a hearing on the motion.
[28] Secondly, the Church’s lack of action regarding the motions filed by Grimes
and the actions taken by the trial court weaken its arguments. The Church
failed to file a response in opposition to Grimes’s motion, and then again failed
to file a response or objection when Grimes filed a motion to vacate the hearing
set for the initial motion to enforce the settlement agreement. These failures to
respond or object to Grimes’s motions created an inference that the Church did
not oppose those motions, particularly considering the statements in the motion
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to vacate the hearing, which contended that there was no need to conduct a
hearing because the Church’s lack of response showed that Grimes’s evidence
was undisputed and the trial court could rule on his motion to enforce the
settlement agreement based on the evidence Grimes submitted. Appellants’ App.
Vol. V at 71-72. Fifteen days passed before the trial court granted Grimes’s
motion to vacate the hearing,3 and then several weeks passed before the trial
court issued its order granting Grimes’s motion to enforce the settlement
agreement. At no time from June 9, 2017, when Grimes filed his motion to
enforce the settlement agreement, until August 10, 2017, when the trial court
granted the motion and entered judgment against the Church, did the Church
file any responses or objections to the motions filed. Although the Church’s
contentions appear to indicate that they did not believe it was necessary to file a
response to Grimes’s motions because it planned to argue its position at the
scheduled hearing, if this were true, the trial court’s order vacating the hearing
should have prompted them to file an objection. The Church did not file any
sort of objection to the enforcement of the settlement agreement or vacation of
the hearing until it filed a motion to correct error on September 8, 2017. Id. at
123-24. The Church failed to raise its contentions before the trial court until
after a ruling on the motion for enforcement of the settlement agreement had
been made. A party may not raise an issue for the first time in a motion to
3
Although the Church argues that the trial court did not comply with LR49-TR5-203 because it granted
Grimes’s motion to vacate hearing on the same date that the motion was filed, the order granting the motion
was not actually filed by the clerk until July 14, 2017, fifteen days after the motion was filed. Appellants’ App.
Vol. II at 26.
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correct error or on appeal. Christmas v. Kindred Nursing Ctrs. Ltd. P’ship, 952
N.E.2d 872, 878 (Ind. Ct. App. 2011) (citing Troxel v. Troxel, 737 N.E.2d 745,
752 (Ind. 2000)). We conclude that the trial court did not abuse its discretion
when it ruled on Grimes’s motion to enforce the settlement agreement without
conducting a hearing.
[29] The Church also argues that the trial court abused its discretion when it granted
Grimes’s motion to enforce the settlement agreement because no settlement
agreement existed. Specifically, the Church contends that (1) the purported oral
settlement agreement is unenforceable because it violates the Statute of Frauds,
(2) the evidence of the settlement agreement presented by Grimes’s counsel was
inadmissible because the statements of counsel are not evidence, and counsel
should have withdrawn under Indiana Rules of Professional Conduct 3.7,
which states that a lawyer shall not act as an advocate at a trial where the
lawyer is likely to be a necessary witness, (3) no settlement agreement existed
because there was no evidence that the required meeting of the minds occurred
or evidence to demonstrate agreement on the essential terms of the purported
settlement agreement, and (4) the trial court’s judgment contravened the terms
of the alleged settlement agreement. We note that all of these issues, except for
(4), were raised for the first time by the Church in its motion to vacate on July
24, 2018. Appellants’ App. Vol. VI at 45-49.
[30] In its order enforcing the settlement agreement, the trial court found that the
parties had reached an agreement and entered judgment in favor of Grimes and
against the Church in the amount of $80,000.00. Appellants’ App. Vol. V at 80.
Court of Appeals of Indiana | Memorandum Decision 18A-PL-2346 | August 26, 2019 Page 19 of 26
The Church asserts that the allegations by Grimes’s counsel showed that it had,
in fact, rejected Grimes’s last counteroffer and had presented a new
counteroffer to Grimes, and before Grimes could accept such counteroffer, the
Church revoked the counteroffer, leaving no offer accepted and no settlement
terms still pending. The Church thus maintains that no offer and acceptance
occurred, and no enforceable settlement agreement existed. We disagree and,
as we explain below, conclude that the evidence presented by Grimes in his
motion for enforcement of the settlement agreement was sufficient to support
the judgment by the trial court.
[31] “Indiana strongly favors settlement agreements and if a party agrees to settle a
pending action, but then refuses to consummate his settlement agreement, the
opposing party may obtain a judgment enforcing the agreement.” MH Equity
Managing Member, LLC v. Sands, 938 N.E.2d 750, 757 (Ind. Ct. App. 2010)
(citing Georgos v. Jackson, 790 N.E.2d 448, 453 (Ind. 2003)), trans. denied.
Settlement agreements are governed by the same general principles of contract
law as other agreements. Id. Generally, a settlement agreement is not required
to be in writing. Id. (citing Estate of Skalka v. Skalka, 751 N.E.2d 769, 771 (Ind.
Ct. App. 2001)). The existence of a contract is a question of law, and the basic
requirements are “offer, acceptance, consideration, and ‘a meeting of the minds
of the contracting parties.’” Id. (quoting Batchelor v. Batchelor, 853 N.E.2d 162,
165 (Ind. Ct. App. 2006)). The intention of the parties to a contract is a factual
matter that must be determined from all the circumstances. Zimmerman v.
McColley, 826 N.E.2d 71, 76 (Ind. Ct. App. 2005). To be valid and enforceable,
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a contract must be reasonably certain and definite. Zukerman v. Montgomery,
945 N.E.2d 813, 819 (Ind. Ct. App. 2011). “All that is required to render a
contract enforceable is reasonable certainty in the terms and conditions of the
promises made, including by whom and to whom; absolute certainty in all
terms is not required.” Id. Only essential terms are necessary for a contract to
be enforceable. Id.[32] Here, the evidence4 in Grimes’s motion to enforce the settlement agreement
established that after initial discussion, Grimes offered to settle his claims
against the Church for $90,000.00. Id. at 66. The Church counteroffered for
$40,000.00 and a confidentiality provision. Id. Grimes agreed to the
confidentiality provision and counteroffered for $80,000.00 paid via an initial
reasonable lump-sum payment followed by a reasonable payoff of the balance
over time, and an attorney fee provision should the Church fail to pay. Id. The
Church agreed to the $80,000.00 settlement payment and the attorney fee
provision and proposed that the initial payment be $15,000.00 with semi-annual
payments of the balance over four years. Id. Grimes’s counsel then called
4
As to the Church’s arguments that there was no admissible evidence presented to establish that an
agreement has occurred, we disagree. When Grimes filed his motion to enforce the settlement agreement, he
included two exhibits, a letter that he had sent to counsel for the Church, outlining what had transpired
during the settlement conference and emails between counsel discussing whether the Church would honor
the agreement. Appellants’ App. Vol. V at 62-67. Additionally, we disagree with its contention that Grimes’s
counsel was required to withdraw under Indiana Professional Conduct Rule 3.7(a), which states that a
lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness. If the
Church believed that Grimes’s counsel was prohibited from acting as both an advocate and a witness as to
what transpired at the settlement conference, it should have moved to disqualify him at the time the motion
to enforce the settlement agreement was filed. If the Church had done so, then a hearing could have been
held to determine if the attorney should have been disqualified from arguing the motion.
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Grimes to convey the parties’ agreement and confirm his approval of the
payment terms the Church had recommended. Id. As Grimes’s counsel was
preparing to return to the conference room to convey Grimes’s approval of its
proposed payment terms, the Church’s counsel attempted to rescind the parties’
agreement, stating that he only had authority to offer $50,000.00. Id. A follow-
up conversation between the parties occurred, during which Grimes’s counsel
reserved the right to enforce the settlement agreement reached at $80,000.00,
and counsel for the Church acknowledged Grimes’s right to do so. Id. From
this evidence, the parties had reached a reasonable certainty on the essential
terms of the settlement agreement, $80,000.00 in a reasonable initial lump sum
and reasonable installments thereafter, a confidentiality clause, and an attorney
fee provision in favor of Grimes should the Church fail to pay. We conclude
that, from the undisputed evidence, the trial court was within its discretion to
determine that the parties had agreed to settle the case for $80,000.00 and,
therefore, did not abuse its discretion in granting Grimes’s motion to enforce
the settlement agreement.5
[33] The Church also argues that there was no enforceable agreement under the
Statute of Frauds because the agreement could not be performed within one
5
The Church also contends that the trial court’s judgment contravened the terms of the settlement
agreement. However, as we have concluded that the parties had reached a reasonable certainty on the
essential terms of the settlement agreement, $80,000.00, in a reasonable initial lump sum, and reasonable
installments thereafter, a confidentiality clause, and an attorney fee provision in favor of Grimes should the
Church fail to pay, the trial court was within its discretion to enter judgement in favor of Grimes in the
amount of $80,000.00.
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year of the agreement. Indiana Code section 32-21-1-1 provides in pertinent
part:
(b) A person may not bring any of the following actions unless
the promise, contract, or agreement on which the action is based,
or a memorandum or note describing the promise, contract, or
agreement on which the action is based, is in writing and signed
by the party against whom the action is brought or by the party's
authorized agent:
....
(5) An action involving any agreement that is not to be
performed within one (1) year from the making of the agreement.
Ind. Code § 32-21-1-1(b)(5). The one-year clause of the Statute of Frauds
applies “only to contracts which, by the express stipulations of the parties, were
not to be performed within a year, and not to those which might or might not
upon a contingency, be performed within a year.” Tobin v. Ruman, 819 N.E.2d
78, 85 (Ind. Ct. App. 2004) (quoting Wallem v. CLS Indus., Inc., 725 N.E.2d 880,
887 (Ind. Ct. App. 2000)), trans. denied. In other words, “it is apparent that only
if it is impossible for an oral contract to be completed within one year does it fall
within the Statute of Frauds.” Id. (emphasis in original).
[34] Here, the essential terms of the settlement agreement between the parties was
for $80,000.00, in a reasonable initial lump sum, and reasonable installments
thereafter, a confidentiality clause, and an attorney fee provision in favor of
Grimes should the Church fail to pay. Appellants’ App. Vol. V at 66. Although
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the attorneys thereafter discussed what the “reasonable lump-sum payment”
and “reasonable payoff of the balance over time” would be, those specifics were
not material terms, which is clear from the trial court’s judgment, which only
ordered a judgment in favor of Grimes in the amount of $80,000.00. Id. at 80.
While the Church did not expect to pay the settlement amount in less than one
year, such an expectation is not sufficient to cause the agreement to be
unenforceable under the Statute of Frauds. See Tobin, 819 N.E.2d at 85. We,
therefore, conclude that the trial court did not abuse its discretion when it
denied the Church’s motion to vacate the order enforcing the settlement
agreement.
III. Attorney Fees
[35] The Church lastly argues that the trial court abused its discretion when it
awarded attorney fees. It initially claims that the attorney fee award was an
abuse of discretion because the award was based on a provision in the order
enforcing the settlement agreement that authorized attorney fees expended in
Grimes’s enforcement of the judgment, and it maintains that the judgment was
void. However, if we find that the judgment was not void, as we have in this
opinion, the Church further contends that the trial court abused its discretion
because the attorney fee award was unreasonable for the services provided, and
the appellate attorney fees requested by Grimes were not made necessary by the
Church’s initiation of the previous premature appeal. Therefore, the Church
requests that we reduce the attorney fee amount to $2,594.98.
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[36] We review a trial court’s award of attorney fees, and the amount of any such
award, for an abuse of discretion. R.L. Turner Corp. v. Wressell, 44 N.E.3d 26, 38
(Ind. Ct. App. 2015) (citing Daimler Chrysler Corp. v. Franklin, 814 N.E.2d 281,
286 (Ind. Ct. App. 2004)), trans. denied. An abuse of discretion occurs when the
trial court’s award is clearly against the logic and effect of the facts and
circumstances before the court. Id. “‘An award of attorney’s fees will be
reversed on appeal as excessive only where an abuse of the trial court’s
discretion is apparent on the face of the record.’” Id. (quoting Daimler Chrysler,
814 N.E.2d at 287. We do not reweigh the evidence, but instead, we determine
whether the evidence before the trial court can serve as a rational basis for its
decision. Id. (citing DePuy Orthopaedics, Inc. v. Brown, 29 N.E.3d 729, 732 (Ind.
2015)).
[37] In the present case, although the trial court included in its order enforcing the
settlement agreement an order that Grimes “shall be entitled to recover his
reasonable attorney fees in enforcing said judgment,” Appellants’ App. Vol. V at
80, the attorney fees at issue in this appeal were ordered pursuant to this court’s
order dismissing the appeal filed by the Church in January 2018 and dismissed
in June 2018. Appellee’s App. Vol. II at 51. Thereafter, Grimes submitted his
request for reasonable appellate attorney fees to the trial court, asking for
$6,456.71. Appellants’ App. Vol. VI at 2-5. His request set out the work done in
association with the appeal filed by the Church, including conducting research
and preparation in anticipation of responding to arguments on appeal,
responding to and researching the motion to dismiss their own appeal filed by
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the Church, preparing a motion to strike filed by Grimes, and preparing the
motion for attorney fees, totaling 26.25 hours at $245.97 per hour. Id.[38] Grimes contends that the attorney fee award was reasonable because in the
previous appeal, his counsel not only opposed the motion to dismiss the appeal
based on a contention that the Church’s legal arguments were wrong, but that
his counsel also expended time preparing a defense of the garnishment orders
that he argues were ripe for appeal. Appellee’s Br. at 42 (citing Appellants’ App.
Vol. VI at 17). He also asserts that it was reasonable to spend time preparing the
motion to strike a reply that the Church had no right to file and that raised a
new argument and that such a motion was not frivolous just because it was not
granted. Id. at 42-43. We agree and conclude that the trial court did not abuse
its discretion when it awarded appellate attorney fees in the amount of
$6,456.71.
[39] Affirmed.
Vaidik, C.J., and Najam, J., concur.
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