Madison County Board of Commissioners and Madison County Highway Department v. American Federation of State County and Municipal Employees Local 3609 (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), this
FILED
Memorandum Decision shall not be regarded as Apr 19 2017, 8:35 am
precedent or cited before any court except for the
CLERK
purpose of establishing the defense of res judicata, Indiana Supreme Court
Court of Appeals
collateral estoppel, or the law of the case. and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
Jeffrey K. Graham William R. Groth
Micha R. Buffington David T. Vink
Graham, Regnier, Farrar & Wilson, P.C. Indianapolis, Indiana
Elwood, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Madison County Board of April 19, 2017
Commissioners and Madison Court of Appeals Case No.
County Highway Department, 33A01-1609-PL-2136
Appeal from the Henry Circuit
Appellants-Defendants,
Court.
The Honorable Jack Tandy, Senior
v. Judge.
Cause No. 33C01-1502-PL-8
American Federation of State
County and Municipal
Employees Local 3609,
Appellee-Plaintiff.
Friedlander, Senior Judge
[1] Madison County appeals the trial court’s award of attorney’s fees. To place the
present appeal and our decision in proper context, the following is a summary
of the underlying facts and procedural history of this case derived from our
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opinion in the first appeal involving these parties, reported in Madison County
Board of Commissioners v. American Federation of State County and Municipal
Employees Local 3609, 45 N.E.3d 868 (Ind. Ct. App. 2015), trans. denied, and
from the material presented here on appeal.
[2] Scott Amos, president of the American Federation of State County and
Municipal Employees Local 3609 (the Union), and Travis Benfield, vice-
president of the Union, were employed by the Madison County Highway
Department (the Department) as truck drivers. On June 23 through June 25 of
2014, they were assigned to the same truck to repair potholes and broken
pavement.
[3] On June 23rd and 24th, a county commissioner observed the truck to which
Amos and Benfield were assigned idling for some time on the road near his
house. The commissioner observed that some, but not all, of the road had been
repaired before the employees left the location at the end of both days. Each
day the county commissioner reported his observations to the Department
superintendent; however, neither Amos nor Benfield were notified or warned of
the complaints/allegations. On June 25th, the GPS tracking device on the truck
used by Amos and Benfield indicated, and another Department employee
observed, that the truck used by the two was parked near two restaurants for
over an hour. Under the Collective Bargaining Agreement (CBA) entered into
by the County and the Union, Department employees are allowed a half hour
at mid-day without pay to eat lunch. Appellants’ App. Vol. II, p. 52.
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[4] When Amos and Benfield returned the truck to the Department garage on June
25th, they were given “Disciplinary Notice Written Warnings dated Monday,
June 23, 2014,” stating that they were being disciplined for a Class B 5 minor
infraction occurring on June 23, 2014 for sleeping on the job or loafing, or
spending excessive time at lunch. 45 N.E.3d at 871; Appellants’ App. Vol. II,
p. 59 (defining Class B minor infractions and discipline), and p. 67. On June
26, 2014, Amos and Benfield were suspended without pay pending an
investigation into their alleged violations of the CBA, county personnel policies,
and Indiana employment statutes. The allegations supporting their suspension
contended Amos and Benfield were guilty of ghost employment for failure to
perform their duties while on the job. Appellants’ App. Vol. II, p. 67.
[5] The CBA between the Union and the County recognized the County’s
authority to take appropriate disciplinary action for just cause. Id. at 69-70.
Under the CBA, employees may be disciplined for class A minor infractions,
class B minor infractions, or major infractions of work rules. A class B
infraction includes sleeping on the job, loafing or spending excessive time at
lunch periods, and other actions deemed class B infractions by the Department
superintendent. Id. p. 59. In unusual situations, class B infractions may be
elevated to a major infraction. Major infractions include: theft or dishonesty of
any kind; using County property or equipment for personal matters not required
by job duties; falsification, tampering with, removing, or misusing any County
records, documents, or reports; leaving the job during working hours without
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prior authorization; and, other actions of similar consequences deemed so by
the Department superintendent. Id. at 60.
[6] A first violation classified as a class B infraction offense results in a written
warning, the second offense results in a five-day layoff without pay, and the
third offense results in the employee being subject to discharge. Id. at 59. On
the other hand, the commission of a single major infraction results in the
employee being subject to discharge. Id. at 60-61. Disciplinary action, if any,
shall take place within three working days from the time the incident was
reported to the Department superintendent or the designee. Id. at 58-59.
[7] After a pre-deprivation hearing, held per the terms of the CBA, Amos and
Benfield were notified that their employment was terminated immediately due
to findings that they had committed ghost employment by submitting timecards
representing that they were working, where the evidence showed they were not.
Id. at 67-68. The notice further stated that they had committed major
infractions, which subjected them to discharge and that the matter was being
referred to the prosecutor’s office. Id. at 68. The major infractions found were
those examples mentioned above.
[8] Amos and Benfield utilized the CBA’s grievance procedures and the matter was
submitted to arbitration. According to the CBA, “[t]he arbitrator shall have no
authority to add to, change, delete, or otherwise modify any part of this
agreement. Any decision of the arbitrator shall be final and binding on all
parties.” 45 N.E.3d at 872. The question that was stipulated to by the parties
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and presented to the arbitrator was, “Were the discharges of [the Employees]
for just cause? If not, what is the proper remedy?” Id.; Appellants’ App. Vol.
II, p. 68.
[9] The arbitrator issued an award finding that the County had failed to prove that
Amos and Benfield had engaged in ghost employment. The arbitrator also
found that Amos’ and Benfield’s actions did not fall within the categories of
major infractions. Instead, the arbitrator found that the employees had
committed the misconduct set forth in the initial written warnings—sleeping or
loafing on the job and taking an excessively long lunch break—which were
identified as class B minor infractions in the written warning delivered to Amos
and Benfield. The arbitrator adjusted the sanction of immediate termination,
reinstating Amos’ and Benfield’s employment, and imposed a five-day layoff
without pay as the sanction for the misconduct found by the evidence
presented.
[10] Next, even though the CBA provided that the decision of the arbitrator was
final and binding on all of the parties, the County filed an application to correct
or vacate the arbitrator’s award. Under Indiana Code section 34-57-2-14
(1998), a provision of Indiana’s Uniform Arbitration Act, a trial court within
the appropriate time period, “shall modify or correct the [arbitrator’s] award
where: (1) there was an evident miscalculation of figures or an evident mistake
in the description of any person, thing, or property referred to in the award; (2)
the arbitrators have awarded upon a matter not submitted to them and the
award may be corrected without affecting the merits of the decision upon the
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issues submitted; or (3) the award is imperfect in a matter of form, not affecting
the merits of the controversy. The County contended that the arbitrator had
exceeded his authority by basing his decision on due process concerns and by
reducing Amos’ and Benfield’s punishment. The Union, which represented
and continues to represent Amos and Benfield throughout this matter, filed an
answer and counterclaim, which included a request for attorney’s fees. Both
parties filed cross-motions for summary judgment.
[11] The trial court summarily granted the Union’s motion, denied the County’s
motion, and confirmed the arbitrator’s award in all respects. More specifically,
the trial court ordered that “[a]ny disputes regarding the calculation of back-pay
and attorney fees are remanded to the Arbitrator.” Appellants’ App. Vol. II, p.
86.
[12] The County appealed and a panel of this Court affirmed the trial court’s
judgment. We found that the trial court appropriately followed the standard of
review in declining to review the merits of the decision of the arbitrator de
novo, and found that the arbitrator did not modify the conditions of the CBA,
but appropriately exercised his authority to modify the sanction imposed based
upon the question presented to him. The Court found that the County had
“established no basis for correcting or vacating the arbitrator’s award.” Madison
Cty Bd. of Com’rs, 45 N.E.3d at 876.
[13] Undeterred, the County sought transfer of the matter to the Indiana Supreme
Court. Transfer was unanimously denied on February 17, 2016. See Madison
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Cty Bd. of Com’rs v. Am. Fed’n of State Cty and Mun. Emp’s. Local 3609, 45 N.E.3d
1211 (Ind. 2016).
[14] Both parties appeared before the arbitrator for a calculation of back-pay and
attorney’s fees. Appellants’ App. Vol. II, p. 10. The parties had stipulated that
the Union’s attorney’s fees were $23,992.50, which included trial and appellate
fees. In his supplemental award of April 27, 2016, the arbitrator concluded that
he lacked statutory or contractual authority to order the County to pay the
Union’s attorney’s fees in successfully defending the County’s attempt to vacate
his award. Id. The arbitrator did explicitly find that “the County’s obstinate
and repeated efforts to secure a vacatur order from all three levels of the Indiana
judiciary can accurately be labeled as frivolous, groundless, and unreasonable.” Id. at
11. The arbitrator further expressed that a court of competent jurisdiction,
making the same finding, might well determine that the payment of attorney’s
fees from the County to the Union would be justified. Id. He concluded by
stating, “because the Arbitrator has been shown no legal authority for such an
arbitral remedy, the Union’s request for attorney’s fee[s] must be denied in this
forum. Id. at 146.
[15] On May 2, 2016, the Union filed a “Submission of Arbitrator’s Supplemental
Award on Remand, Motion for Attorneys’ Fees Pursuant to Ind. Code § 34-52-
1-1(b), and Motion for Entry of Final Judgment,” along with a supporting
memorandum of law and later filed a motion for special findings. Id. On May
27, 2016, the County filed its memorandum in support of its own motion for
attorney’s fees for defending the Union’s request along with a brief in support of
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the request. The Union also filed a response in opposition to the County’s
motion for attorney’s fees.
[16] The trial court held a hearing on the motions for attorney’s fees and back
wages. With respect to attorney’s fees, the Union argued that the trial court
should find as the arbitrator did that the County’s decision to pursue complete
judicial review of the arbitrator’s decision was frivolous, groundless, and
unreasonable in light of the finality of the arbitrator’s decision per the terms of
the CBA.
[17] The County contended that the Union’s claim for attorney’s fees was barred by
res judicata, arguing that since the arbitrator concluded he was without
jurisdiction to issue an award of attorney’s fees, he had effectively denied the
request on the merits. The County also argued that the time to have appealed
this denial of the Union’s request for attorney’s fees had passed pursuant to the
time limitations of the appellate rules. Additionally, the County claimed that a
request for appellate fees was waived because the Union did not seek appellate
attorney fees under Indiana Appellate Rule 66(E) as the matter proceeded
through the appellate process. The County also argued that the trial court had
no authority to award a prevailing party appellate attorney’s fees for defending
against a groundless appeal.
[18] On August 17, 2016, the trial court issued its findings of fact, conclusions
thereon and judgment, finding that the County’s litigation was frivolous,
groundless, and unreasonable. The court granted the Union’s motion for
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attorney’s fees, entering a final judgment against the County in the stipulated
amount of $23,992.50—the Union’s attorney’s fees expended in the trial court
and on all appellate levels defending the County’s attempt to vacate the
arbitrator’s award.
[19] The County appeals raising the following issues: (1) whether the trial court
could grant appellate attorney fees without a mandate from the appellate court;
(2) whether a trial court may grant trial attorney fees where they were not
requested, not authorized by contract or statute, and were specifically denied by
the arbitrator; and, (3) whether the County’s act of seeking vacatur on the
ground that the arbitrator exceeded its authority is frivolous, groundless, or
unreasonable. The Union contends that the trial court’s award of trial and
appellate attorney’s fees was correct and seeks attorney’s fees under Indiana
Appellate Rule 66(E) for the present appeal.
[20] First, we consider the County’s argument that the trial court could not issue an
award of appellate attorney fees without being directed to do so by this Court.
Indiana’s general rule, also known as the American Rule, is that each party to
the litigation must pay his or her own attorney’s fees. City of Jeffersonville v.
Envtl. Mgmt. Corp., 954 N.E.2d 1000 (Ind. Ct. App. 2011). An award of
attorney’s fees may be authorized by contract, rule, statute, or agreement,
nonetheless. Id. The Union sought attorney’s fees under Indiana’s Attorney
Fee Statute, which provides in pertinent part as follows:
In any civil action, the court may award attorney’s fees as part of
the cost to the prevailing party, if the court finds that either party:
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(1) brought the action or defense on a claim or defense that is
frivolous, unreasonable, or groundless;
(2) continued to litigate the action or defense after the party’s
claim or defense clearly became frivolous, unreasonable, or
groundless; or
(3) litigated the action in bad faith.
Ind. Code § 34-52-1-1(b) (1998).
[21] The County’s contention presents a question of statutory interpretation.
“When faced with a question of statutory interpretation, we first examine
whether the language of the statute is clear and unambiguous . . . . The statute
itself is the best evidence of legislative intent . . . . We construe statutes only
where there is some ambiguity which requires construction.” Smith v. Champion
Trucking Co., Inc., 925 N.E.2d 362, 365 (Ind. 2010) (quoting State v. American
Family Voices, Inc., 898 N.E.2d 293, 297 (Ind. 2008)).
[22] The County argues that the statute should be construed to read as solely
providing for an award of attorney’s fees at the trial level. We believe that this
reading of the statute is too narrow. The express language of the statute is clear
and provides no such limitations. If the legislature had intended a narrower
reading, it would have drafted the statute to reflect that intention.
[23] Additional support for this interpretation can be found in cases deciding
whether an award under other statutes can include an award of appellate
attorney fees. In Benge v. Miller, 855 N.E.2d 716 (Ind. Ct. App. 2006), we held
that an award under Indiana Code section 34-24-3-1 (1998) (Crime Victim’s
Relief Act), and Indiana Code section 24-5-0.5-4 (1995) (damages for deceptive
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consumer sales), included appellate attorney’s fees where both statutes
contained language about awarding a reasonable attorney’s fee. We followed
this holding in Heartland Resources, Incorporated v. Bedel, 903 N.E.2d 1004 (Ind.
Ct. App. 2009), with respect to the Crime Victim’s Relief Act.
[24] The language of Indiana’s Attorney Fee Statute is similar in that it authorizes
an award of attorney’s fees. The trial court had the authority pursuant to
statute to award appellate attorney’s fees and did not abuse its discretion when
it did.
[25] The County argues that the Union’s request for appellate fees is waived because
the Union did not request them during the original appeal. The County argues
that it had no opportunity to defend against the Union’s request. Indiana
Appellate Rule 66 (E) provides, “The Court may assess damages if an appeal,
petition, or motion, or response, is frivolous or in bad faith. Damages shall be
in the Court’s discretion and may include attorneys’ fees. The Court shall
remand the case for execution.” By the plain language of the rule, it is not the
exclusive means by which a party can recover appellate attorney’s fees. Indeed,
attorney’s fees may be recovered by contract, rule, statute, or agreement. City of
Jeffersonville, 954 N.E.2d 1000.
[26] With respect to the County’s argument that it had no opportunity to defend
against the Union’s request, we observe that the County stipulated to the
amount of the Union’s attorney’s fees, which included appellate attorney’s fees.
Additionally, the County had the opportunity to challenge the Union’s request
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when the matter was presented to the arbitrator, who declined to rule on the
merits of the request for jurisdictional reasons, and the trial court, which
entered the order deciding the issue.
[27] Also, the County asserts that the arbitrator denied the Union’s request for
attorney’s fees on the merits, and as such, the trial court abused its discretion by
granting the Union’s request for fees. The language used in the arbitrator’s
award clearly expressed that if the arbitrator had the authority to rule on the
Union’s request for fees, it would have granted that request. Because the
arbitrator lacked contractual or statutory authority, and the Union presented no
evidence to suggest that the arbitrator had such, the arbitrator concluded that
“the Union’s request for attorney’s fee[s] must be denied in this forum.”
Appellants’ App. Vol. II, p. 146.
[28] The principle behind the doctrine of res judicata is the prevention of repetitive
litigation of the same dispute. MicroVote Gen. Corp. v. Ind. Election Com’n, 924
N.E.2d 184 (Ind. Ct. App. 2010). For a claim to be precluded under this
doctrine, four requirements must be satisfied, of which the following one is
dispositive in this action: the former judgment must have been rendered on the
merits. Id. The arbitrator’s decision plainly limits his denial of the Union’s
request to his lack of authority to decide the issue on the merits.
[29] The County further argues that the Union was required to file an action for
vacatur of the arbitrator’s decision on the issue of attorney’s fees instead of
making its application to the trial court. We disagree. The Union sought
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enforcement of the arbitrator’s award after the County’s efforts on appellate
review had been exhausted. After the arbitrator concluded that he was without
authority to determine the issue of attorney’s fees on the merits, the Union
proceeded under a statute authorizing a trial court to decide the issue. We find
no abuse of discretion.
[30] Next, the County argues that a trial court may not grant trial attorney fees
where they were not requested, not authorized by contract or statute, and were
specifically denied by the arbitrator. The same analysis, used with respect to
appellate attorney’s fees, applies with respect to this issue. The trial court was
authorized by statute to determine this issue on the merits. We find no abuse of
discretion here.
[31] The County also argues that the trial court abused its discretion by awarding
trial and appellate attorney’s fees because its pursuit of appellate review of the
arbitrator’s award was not groundless, frivolous, or unreasonable.
[32] Appellate review of the decision to award attorney’s fees under the statute
involves multi-level review. Purcell v. Old Nat. Bank, 972 N.E.2d 835 (Ind.
2012). First, we review the trial court’s findings of fact under the clearly
erroneous standard, and legal conclusions about whether the litigant’s claim
was frivolous, unreasonable, or groundless are reviewed de novo. Id. The trial
court’s decision to award attorney’s fees and any amount thereof is reviewed for
an abuse of discretion. Id. A trial court abuses its discretion if its decision is
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clearly against the logic and effect of the facts and circumstances or if the trial
court has misinterpreted the law. Id.[33] A claim is groundless where no facts exist to support the legal claim relied on
and presented by the losing party. Id. Claims or defenses are frivolous (a) if
made primarily for the purpose of harassing or maliciously injuring a person, or
(b) if the lawyer does not make a good faith and rational argument on the
merits of the action, or (c) if the lawyer does not support the action taken by a
good faith and rational argument for an extension, modification, or reversal of
existing law. Wolfe v. Eagle Ridge Holding Co., LLC., 889 N.E.2d 521 (Ind. Ct.
App. 2007). Claims or defenses are unreasonable if, based on a totality of the
circumstances, including the law and facts known at the time of the filing, no
reasonable attorney would consider that the claim or defense was worthy of
litigation or justified. Lockett v. Hoskins, 960 N.E.2d 850 (Ind. Ct. App. 2012).
[34] By statute, the County, in its request for vacatur, had to establish that: (1) there
was an evident miscalculation of figures or an evident mistake in the description
of any person, thing, or property referred to in the award; (2) the arbitrators had
awarded upon a matter not submitted to them and the award may be corrected
without affecting the merits of the decision upon the issues submitted; or (3) the
award is imperfect in a matter of form, not affecting the merits of the
controversy. Ind. Code § 34-57-2-14. The parties, by entering into the CBA,
agreed that the arbitrator’s decision was final. During the appeal process, the
County consistently argued that the arbitrator exceeded his authority by basing
his decision to reinstate Amos’ and Benfield’s employment and impose a five-
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day suspension, in part, on due process concerns. The County also challenged
the new sanction as being in excess of authority. The question presented to the
arbitrator was “Were the discharges of [the Employees] for just cause? If not,
what is the proper remedy?” Appellants’ App. Vol. II, p. 68. The arbitrator’s
decision squarely addressed the questions placed before him. The County’s
claim at trial and on appeal was groundless. Further, the County did not
establish any of the conditions for vacatur.
[35] The trial court’s findings of fact and conclusions thereon reveal its own
rationale for finding that the County’s actions in seeking vacatur of the
arbitrator’s award were frivolous, groundless, and unreasonable. While doing
so, the court noted that a panel of this Court had concluded that “the County
has established no basis for correcting or vacating the arbitrator’s award.”
Madison Cty Bd. of Com’rs, 45 N.E.3d at 876. The court also observed that the
arbitrator opined, without deciding, that the County’s actions could be
characterized by a court of competent jurisdiction to be frivolous, groundless,
and unreasonable. At some point during the County’s efforts, after losing
before the arbitrator, the trial court, the Indiana Court of Appeals, and the
Indiana Supreme Court, the County should have realized that it was continuing
to litigate after its claim had clearly become frivolous, unreasonable, or
groundless.
[36] The Union has asked for appellate attorney fees for the present appeal under
Indiana Appellate Rule 66(E). We first observe that our discretion to award
attorney fees under Indiana Appellate Rule 66(E) is limited to instances when
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an appeal is permeated with meritlessness, bad faith, frivolity, harassment,
vexatiousness, or purpose of delay. Thacker v. Wentzel, 797 N.E.2d 342 (Ind. Ct.
App. 2003). We strive to use extreme restraint when exercising this power
because of the potential chilling effect upon the exercise of the right to appeal.
Id.[37] In this present appeal the County raised the following issues: (1) whether the
trial court could grant appellate attorney fees without a mandate from the
appellate court; (2) whether a trial court may grant trial attorney fees where
they were not requested, not authorized by contract or statute, and were
specifically denied by the arbitrator; and, (3) whether the County’s act of
seeking vacatur on the ground that the arbitrator exceeded its authority is
frivolous, groundless, or unreasonable.
[38] The County stipulated to the amount of the Union’s attorney’s fees at trial and
on appeal. The Union’s request for attorney’s fees was made pursuant to
statute. The award of appellate attorney’s fees by a trial court has been allowed
under other statutes without an order from this Court. The award of trial
attorney’s fees is authorized by the statute under which the Union proceeded.
Additionally, the County’s conduct in its quest for vacatur has been rejected at
every step of this litigation. Consequently, we award the Union attorney’s fees
for defending this present appeal and remand to the trial court for a calculation
of the same.
Judgment affirmed and remanded.
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[39] Bailey, J., and Robb, J., concur.
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