Stephen F. Smith v. Foegley Landscape, Inc.

Apr 20 2015, 9:53 am
APPELLANT, PRO SE ATTORNEYS FOR APPELLEE
Stephen F. Smith William G. Murphey
South Bend, Indiana Kopka Pinkus Dolin PC
Crown Point, Indiana
A. Robert Masters
Nemeth Feeney Masters & Campiti PC
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Stephen F. Smith, April 20, 2015
Appellant-Defendant/Counter-Plaintiff, Court of Appeals Cause No.
71A03-1405-SC-169
v. Appeal from the St. Joseph Superior
Court
Foegley Landscape, Inc., Lower Court Cause No.
71D01-1307-SC-5420
Appellee-Plaintiff/Counter-Defendant.
The Honorable Michael P.
Scopelitis, Judge
Pyle, Judge.
Statement of the Case
[1] Appellant-Defendant/Counter-Plaintiff, Stephen F. Smith (“Smith”), appeals
the small claims court’s judgments in favor of Appellee-Plaintiff/Counter-
Defendant, Foegley Landscape, Inc. (“Foegley Landscape”), on its breach of
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contract claim and on Smith’s tort and promissory estoppel counterclaim.1 He
also appeals the small claims court’s award of attorney fees to Foegley
Landscape. Foegley Landscape brought a claim against Smith in small claims
court alleging that he had breached a contract for landscaping services by failing
to pay the money he owed on the contract. Smith filed an answer and
counterclaim arguing that Foegley Landscape, instead, had breached the
contract because it had damaged the drainage system on Smith’s house in the
process of completing the landscaping project. In his counterclaim, Smith
requested damages for the broken drainage system. After a bench trial, the
small claims court found in favor of Foegley Landscape on both the claim and
counterclaim, entered judgment for the amount owed under the contract, and
also awarded Foegley Landscape attorney fees and costs.
On appeal, Smith argues that the small claims court erred in finding in favor of
Foegley Landscape on both the claim and counterclaim because the company
did not present any evidence contradicting his argument that it had damaged
his drainage system. Accordingly, Smith asserts, the company breached its
contractual promise to fulfill the contract in a “workmanlike manner” and was
liable for damages for the drainage system. Alternately, Smith argues that the
small claims court abused its discretion in awarding Foegley Landscape
attorney fees because its insurer actually paid for one of the attorneys and
1
In his counterclaim, Smith also argued that Foegley Landscape was liable under theories of fraud and
breach of contract, but he does not raise those arguments on appeal.
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because there was insufficient evidence to determine the reasonableness of the
fees. We conclude that, contrary to Smith’s arguments, Foegley Landscape
presented evidence that it did not damage Smith’s drainage system, and we
therefore affirm the small claims court’s judgments on the claim and
counterclaim. However, we also conclude that there was not sufficient
evidence for the small claims court to determine the reasonableness of Foegley
Landscape’s attorney fees. Accordingly, we reverse the small claims court’s
award of attorney fees and remand to the court so it can hold a hearing and
determine reasonable attorney fees.
We affirm in part, reverse in part, and remand.
Issues
[2] 1. Whether the small claims court erred when it entered judgment in favor of
Foegley Landscape on its breach of contract claim and on Smith’s tort and
promissory estoppel counterclaims.
2. Whether the small claims court abused its discretion in awarding Foegley
Landscape attorney fees.
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Facts2
[3] In early June 2012, Smith and his wife (“Mrs. Smith”) (collectively, “the
Smiths”) contacted Foegley Landscape about landscaping their yard. They had
developed a good opinion of Foegley Landscape because they had seen the
company complete work on their neighbors’ yard and thought the company had
done a “beautiful job.” (Tr. 72).
[4] Shortly thereafter, Aaron Laskowski (“Laskowski”), who works in sales and
management at Foegley Landscape, met with Smith to discuss the potential
landscaping project. He and Smith walked around Smith’s yard together so
that he could get an idea of the landscaping changes Smith wanted to make and
could formulate a landscape plan.
[5] Subsequently, on June 25, Laskowski returned to the Smith house with a
completed landscape proposal. It provided that, for $5,966, Foegley Landscape
would remove the plants, debris, and weeds along the front of the foundation of
the Smiths’ house; level out a “hump” that the previous owner had left in the
2
Smith’s Statement of Facts includes argument, which is inappropriate in that part of an appellate brief.
Elliot v. Sterling Mgmt. Ltd., Inc., 744 N.E.2d 560, 562, n.1 (Ind. Ct. App. 2001). Although Smith is pro se in
this proceeding, he is also an attorney and a professor at the University of Notre Dame, and we hold him to
the same standards as other attorneys. (Tr. 65, 66, 90). Accordingly, we remind Smith that a Statement of
the Facts should be a concise narrative of the facts stated in a light most favorable to the judgment and should
not be argumentative. Elliot, 744 N.E.2d at 562, n1. See Ind. Appellate Rule 46. Smith also attempts to
inappropriately discredit the small claims court by writing, (1) “[s]adly, the trial judge was not interested in
doing justice”, and (2) “In his zeal to help a landscaping company collect a contract price it clearly had not
earned—and that even counsel for appellee feared it might be held not to have earned—the trial judge
committed several legal errors.” (Smith’s Br. 1, 2). We refer Smith to Indiana Appellate Rule 46 for the
proper format and placement of arguments in an appellate brief.
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planting bed; edge the yard; install bark mulch; and install several plants. (Tr.
17). The Smiths would have to pay fifty percent of the total price upon signing
the proposal and the rest upon completion of the project. They would also be
liable for “[a]ny cost including reasonable attorney fees, incurred in the
collection of this contract[,]” and a “2% service charge per month – 24%
Annual percentage rate on all accounts past 30 days.” (Foegley Landscape’s
Ex. 1). The Smiths agreed to these terms and endorsed the contract. They paid
the down payment of $3,000, fifty percent of the project price, and a crew from
Foegley Landscape began the landscaping project two to three weeks later.
[6] Around the end of July, Foegley Landscape completed the first stage of the
work, which involved removing the plants, debris, and “hump” in the Smiths’
yard. (Tr. 17). By the end of August, the crew members had installed the
mulch and plants and completed the landscaping. However, before the crew
left the property, Laskowski conducted a final inspection to confirm that they
had completed all of the landscaping required under the contract.
[7] During the inspection, Laskowski noticed that only one of the downspouts on
the house was connected to a drain tile, and the tile looked “like it was installed
incorrectly.” (Tr. 22). A drain tile is a pipe that attaches to a gutter’s
downspout and directs water away from a house. The other end of the tile is
usually buried underground and prevents water from collecting around the
house and causing water damage. The drain tile that Laskowski thought was
installed incorrectly ran parallel to, rather than away from, Smith’s house.
However, because the Smiths had not contracted with Foegley Landscape to fix
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their drainage system, Laskowski determined that the company had fulfilled its
obligations under the contract.
[8] As a result, on August 31, 2012, Foegley Landscape sent Smith an invoice for
$2,996, which was the remaining amount the Smiths still owed under the
contract. The invoice included a note recommending that the Smiths take the
next step of adding underground drain tiles to all of the downspouts on the
house.
[9] Over the following months, the Smiths failed to pay the amount they owed. On
December 6, 2012, the President and Owner of Foegley Landscape, John
Foegley (“Foegley”), sent Smith a letter telling him that he owed $3,242.97 as a
result of service charges for non-payment and requesting that Smith call him if
he wished to discuss the matter. Smith did not call or otherwise respond to
Foegley’s letter.
[10] During that same period, the company also tried to contact Smith through his
work e-mail address and by mailing him letters. Laskowski attempted to
contact Smith by telephone several times and left a voicemail each time. He
only heard back from Smith once in April 2013 when Smith called saying that
something in the landscaping project was still incomplete, but “[he] had to get
with [his] wife to find out what that was.” (Tr. 42). He told Laskowski that he
would get back with him, but he never did.
[11] Sometime during the spring of 2013, Foegley asked the company’s Vice
President, Brian Hominiuk (“Hominiuk”), to visit Smith’s house and find out if
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there was a reason that Smith had not paid.3 When Hominiuk did so, Smith
answered the door and told him that “he [had] to talk to [his] wife but [he]
believe[d] there were some downspouts that were taken[.]” (Tr. 115).
Hominiuk told Smith that the house’s drainage was not a part of the contract,
but he agreed to bring a crew back out to work on the drain system to “make
[Smith] happy.” (Tr. 118). He specified, though, that the crew members would
not do any further work until he received payment for the work that they had
already completed. Smith agreed, and the two set an appointment for
Hominiuk to return with a crew.
[12] Two weeks later, Hominiuk returned to the Smith house on the day they had
designated to meet. He did not have a crew with him because he intended to
meet with Smith to receive payment and set up for the two crew members, who
were delayed. When he arrived, Hominiuk knocked on Smith’s door, but
Smith did not answer. Smith was home but did not answer because he did not
see a crew with Hominiuk and thought he was just trying to collect payment.
However, when Smith did not answer the door, Hominiuk told the crew
members not to come to the house as they had planned. After lunch, he tried to
see if Smith was home, but, again, there was no answer at the door.
[13] In May or early June of 2013, Foegley sent Smith a letter reiterating that
Foegley Landscape had completed the work the contract had required, that
3
Hominiuk testified that he thought this occurred in the summer of 2013, but it is apparent from the record
that it occurred in late spring 2013.
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Smith had not responded to the company’s attempts to contact him, and that
Smith had failed to meet with Hominiuk to pay as they had agreed. Foegley
wrote that the balance on the account had reached $3,580.51 with service
charges and told Smith that if Foegley Landscape did not receive payment
before June 7, 2013, it would turn the matter over to the company’s attorneys
for collection. He sent the letter by certified mail, but the post office sent it back
with writing on the envelope stating “return to sender, moved, left[] no
address.” (Tr. 91).
[14] On July 9, 2013, Foegley Landscape filed a breach of contract claim against
Smith in small claims court, requesting “up to $6,000[,]” including $3,580.51
for the unpaid contract balance and service charges, additional amounts for
accruing service charges and interest, reasonable attorney fees, and court costs.
(App. 10). On August 8, 2013, Smith filed an answer and counterclaim in
which he denied the charges against him and claimed that Foegley Landscape
had destroyed his water drainage system and had not replaced it. He argued
that the company was liable to him under legal theories of breach of contract,
promissory estoppel, fraud, and tort, and he argued for compensatory damages
in the amount of his $3,000 deposit, plus the amount necessary to repair the
drainage system.
[15] On November 12, 2013, Foegley Landscape filed two affidavits with the trial
court. In the affidavits, two of the company’s employees stated that they
performed the landscaping work on Smith’s yard and had not removed or
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damaged any drain tiles on the house. Although the company filed these
affidavits with the court, it did not attempt to admit either of them at trial.
[16] The next day, November 13, 2013, the small claims court held a bench trial on
the claim and counterclaim. At trial, Laskowski and Foegley detailed the
attempts they had made to contact Smith about payment. 4 With respect to the
drain tiles, Laskowski testified that he “was in daily communication with the
crews that were [at the Smith house] and they said they never ran into any
tiles.” (Tr. 23). He explained that drain tiles are “extremely” difficult to
remove because when they have been in the ground for a while, they have a lot
of debris in them, and tree and shrub roots anchor them into the ground. (Tr.
37). Due to this difficulty, he said that Foegley Landscape would typically cap
a drain tile off and leave it underground before it would remove one.
[17] Smith and Mrs. Smith also testified at the trial. Mrs. Smith said that one day
when the crew members were working on the landscaping, she walked through
the yard and saw one of the drain tiles “ripped off” and “off to the side.” (Tr.
78). She claimed that one of the workers saw her reaction to the sight and said
“don’t worry, Mrs. Smith[.] [A]nything we take out we will replace[.]” (Tr.
78). Then, according to Mrs. Smith, the workers left without repairing the
drain tiles. She said they removed all of the tiles, except for one, which was
positioned parallel to the house and did not work properly. On cross-
4
Laskowski testified that by the date of trial, the total amount Smith owed on the contract was $3,875.68 due
to continued accrual of interest after Foegley Landscape filed its complaint.
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examination, however, Mrs. Smith changed her story slightly and stated that
the drain tile that she claimed had been “ripped off” and “off to the side” had
actually still been in the ground when she saw it, only exposed. (Tr. 78).
[18] In regards to the Smiths’ failure to pay Foegley Landscape’s invoice, the Smiths
both testified that they believed the work was incomplete—and therefore their
payment was not due—because Foegley Landscape had not replaced the drain
tiles. Mrs. Smith said that when the crew members left the Smiths’ house for
the last time, she kept expecting them to return to repair the drainage system.
[19] Finally, in regard to Foegley Landscape’s attempts to contact the Smiths, Mrs.
Smith denied that either she or Smith had received Foegley’s May or June 2013
letter that the post office had returned with the writing “return to sender,
moved, left[] no address.” (Tr. 91). Smith stated that he did not get the letters
from Foegley Landscape because he did not get the mail very often.
[20] At the conclusion of the trial, Foegley Landscape introduced fee affidavits from
its two attorneys, A. Robert Masters (“Attorney Masters”) and William G.
Murphey (“Attorney Murphey”). Attorney Masters, the attorney-of-record,
averred that his firm had billed Foegley Landscape $500 for its preparation of
the complaint and representation of Foegley Landscape in court, as well as $81
for the filing fee and $13 for the sheriff’s filing fee. Attorney Murphey averred
that his fees totaled $4,045.90, although he did not include an hourly rate or
any other explanation of his fee. Attorney Masters explained to the court that
there were two affidavits because he had been retained to prepare the arguments
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related to the complaint, and Attorney Murphey had been retained when Smith
filed his counterclaim. Attorney Masters implied, but did not explicitly state,
that Foegley Landscape’s insurer had retained Attorney Murphey to help with
Foegley Landscape’s defense.
[21] The small claims court took the matter under advisement to allow Smith time
to submit pictures he had taken of the house’s downspouts.5 Smith filed the
pictures, and on January 9, 2014, the small claims court entered judgment of
$5,410.55 in favor of Foegley Landscape on its complaint. This amount
included the principal amount of the claim, interest through the date of
judgment, and “reasonable” attorney fees of $1,500. (App. 5). In addition, the
small claims court awarded Foegley Landscape costs of the action in the
amount of $94 and entered judgment in favor of Foegley Landscape on Smith’s
counterclaim.
[22] On February 7, 2014, Smith filed a motion to correct error. Although his
motion is not a part of the record, it is apparent that he argued that the small
claims court’s award of attorney fees was excessive because the contract
allowed Foegley to recover only “reasonable attorney fees incurred in the
collection of this contract,” rather than fees incurred defending against a
counterclaim. (App. 7). The small claims court held a hearing on the motion
on April 9, 2014, and denied it on April 22, 2014, holding that Smith’s
5
Smith had brought his camera to court with the pictures on it, but he had not printed them off in order to
admit as exhibits.
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interpretation of the contract language was too narrow. The small claims court
also found that its $1,500 award of attorney fees was reasonable “in light of the
time and effort expended to pursue [Foegley Landscape’s] claim through the
court system” and in light of “the amount of the remaining balance owed by
Smith on the contract.” (App. 7). Smith now appeals.
Decision
[23] On appeal, Smith challenges the small claims court’s judgments in favor of
Foegley Landscape on both the claim and counterclaim. With respect to the
claim, he argues that Foegley Landscape failed to fulfill its contractual
requirements in a “workmanlike manner,” as required by the contract, because
the company broke his drainage system and failed to replace it. Accordingly,
he argues that Foegley Landscape breached the contract, and he was not liable
for payment. With regards to the counterclaim, Smith asserts that the trial
court erred in entering judgment against him because Foegley Landscape
should have been liable to him for removing the drainage system under a theory
of either tort or promissory estoppel. Finally, Smith argues that even if the trial
court did not err in entering judgment under either the claim or counterclaim,
the attorney fees it awarded Foegley Landscape were unreasonable. Because
Smith’s arguments concerning the claim and counterclaim are dependent on the
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evidence regarding the drainage system, we will address that issue first and then
turn to the issue of attorney fees.6
1. Judgments on the Claim and Counterclaim
[24] First, Smith asserts that the trial court erred in deciding in favor of Foegley
Landscape on both the claim and counterclaim because there was no evidence
in the record disputing his claim that the crew members damaged his drainage
system. He argues that the only evidence Foegley Landscape presented on the
issue were its employees’ two affidavits that it filed with the small claims court
but did not seek to admit at trial. As the affidavits were not admitted at trial, he
contends that the only evidence presented at trial was that the crew damaged
the system. We disagree.
[25] First, we must note that, as we expressed in Herren v. Dishman, 1 N.E.3d 697,
702 (Ind. Ct. App. 2013),
Judgments in small claims actions are subject to review as
prescribed by relevant Indiana rules and statutes. Indiana has
specific rules for small claims cases, but the Indiana Rules of
Trial Procedure will generally apply unless the particular rule in
question is inconsistent with something in the small claims rules.
In accordance with Trial Rule 52(A), the findings or judgments
rendered in a bench trial must be upheld unless clearly erroneous.
Deference to the small claims court is essential as the trials are
6
Foegley Landscape argues that Smith waived his claims by failing to file a timely appeal. We disagree as
the small claims court denied his motion to correct error on April 22, 2014, and he filed his notice of appeal
with this Court on May 21, 2014. See App. R. 9 (stating that a party has thirty days after a trial court rules on
a motion to correct error to file a notice of appeal with the Clerk of the Court of Appeals).
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designed to speedily dispense justice by applying substantive law
between the parties in an informal setting. This court considers
the evidence and related inferences in a light most favorable to
the judgment, presuming that the small claims court applied the
law correctly and giving due regard to the trial court’s
opportunity to judge the credibility of the witnesses. However,
this deferential standard does not apply to the substantive rules of
law, which are reviewed de novo just as they are in appeals from
a court of general jurisdiction. The burden of proof in a small
claims civil suit is the same as it would be had the case been filed
in a general trial court.
(internal citations and quotations omitted).
[26] Here, the small claims court did not make findings about whether Foegley
Landscape damaged Smith’s drainage system. When the trial court makes no
findings of fact, we presume the judgment is based on findings supported by the
evidence. Rueth v. Quinn, 659 N.E.2d 684, 687 (Ind. Ct. App. 1996), trans.
denied. We must affirm the trial court’s judgment if it can be sustained on any
legal theory supported by the evidence. Id. When making this determination,
we do not reweigh the evidence or assess the credibility of witnesses. Id.
Instead, we consider only the evidence most favorable to the judgment, together
with all reasonable inferences drawn therefrom. Id.
[27] While we acknowledge that Foegley Landscape did not attempt to admit its
employees’ affidavits at trial, there was other evidence in the record disputing
Smith’s claim that Foegley Landscape’s crew had damaged the Smiths’
drainage system. Laskowski testified that he “was in daily communication with
the crews that were [at the Smith house] and [that] they said they never ran into
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any tiles.” (Tr. 23). He also explained that drain tiles are “extremely” difficult
to remove because when they have been in the ground for a while, they have a
lot of debris in them, and tree and shrub roots anchor them into the ground.
(Tr. 37). Due to this difficulty, he said that Foegley Landscape would typically
cap a drain tile and leave it underground before the company would remove
one.
[28] Based on these details, we conclude that there was evidence in the record that
Foegley Landscape did not damage the drainage system. Because all of Smith’s
claims, in regards to both the claim and counterclaim, are based on his assertion
that Foegley Landscape damaged his drainage system, and, because we have
found that there was evidence that it did not damage the system, we need not
address the remainder of his arguments. We may affirm a trial court’s general
judgment on any legal theory supported by the evidence. See Rueth, 659 N.E.2d
at 687. Accordingly, we conclude that the small claims court’s judgments in
favor of Foegley Landscape were not erroneous.
2. Attorney Fees
[29] Next, Smith argues that even if we affirm the small claims court’s judgments,
we should still reverse its award of attorney fees because the amount the small
claims court awarded was unreasonable. He has two grounds for this
argument—first, that it was unreasonable to award Foegley Landscape an
amount for Attorney Murphey’s fees because Attorney Murphey was hired by
the company’s insurer and, therefore, Foegley Landscape did not incur
Attorney Murphey’s fees; and, second, the small claims court’s award of
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Attorney Murphey’s fees was unreasonable because he did not submit any
documentation for the work he did to justify the fees.7
[30] When reviewing an award of attorney fees, we apply the clearly erroneous
standard to factual determinations, review legal conclusions de novo, and
determine whether the decision to award fees and the amount of the award
constituted an abuse of the trial court’s discretion. Storm Damage Specialists of
America v. Johnson, 984 N.E.2d 660, 667 (Ind. Ct. App. 2013). An abuse of
discretion occurs when the trial court’s decision is clearly against the logic and
effect of the facts and circumstances before it. Id.
[31] Generally, Indiana follows the American Rule, which requires each party to
pay his or her own attorney fees. Stewart v. TT Commercial One, LLC, 911
N.E.2d 51, 58 (Ind. Ct. App. 2009), trans. denied. However, parties may shift
the obligation to pay such fees through contract or agreement, and courts will
enforce the agreements as long as they are not contrary to law or public policy.
Id.
[32] As for Smith’s first argument—that Foegley Landscape’s insurer actually paid
for Attorney Murphey’s fees—we note that Attorney Masters never explicitly
stated that Foegley Landscape’s insurer had retained Attorney Murphey or paid
Attorney Murphey’s fees. Instead, Attorney Murphey averred in his affidavit
that he represented Foegley Landscape, and he also entered his appearance in
7
Notably, Smith does not challenge the reasonableness of Attorney Masters’ fees.
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the case on behalf of Foegley Landscape. Nevertheless, we need not resolve
any factual inconsistencies because Smith’s argument does not have merit even
if Foegley Landscape’s insurer did retain and pay Attorney Murphey.
[33] Indiana courts have repeatedly held that a party is not required to personally
pay the bills for his representation in order to be eligible for an award of
attorney fees. Rand v. City of Gary, 834 N.E.2d 721, 722 (Ind. Ct. App. 2005)
(awarding a fiscal officer of the City of Gary, Indiana attorney fees even though
the City of Gary was paying the fees). In Harco, Inc. of Indianapolis v. Plainfield
Interstate Family Dining Assoc., 758 N.E.2d 931, 944 (Ind. Ct. App. 2001), we
held that “the trial court is not constrained to award attorney fees only when
those fees have been directly billed to and paid by a party.” Instead, “the
relevant inquiry is whether a party has incurred attorney fees.” (Emphasis in
original) (implying that “incurring fees” is not equivalent to incurring the
obligation to pay those fees). Based on this precedent, we conclude that the
small claims court did not abuse its discretion in awarding Foegley Landscape
an amount for Attorney Murphey’s fees, regardless of whether Attorney
Murphey’s fees were paid by Foegley Landscape’s insurer.
[34] Second, Smith argues that the small claims court abused its discretion in
awarding Foegley Landscape attorney fees for Attorney Murphey’s
representation. Specifically, he claims that Attorney Murphey’s fee was
speculative, and therefore unreasonable, as Attorney Murphey did not submit
any documentation clarifying what work he did on the case or how he
calculated his fee. We agree with Smith.
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[35] Even when a contract provides for a recovery of attorney fees, the attorney fees
recovered must be reasonable.8 Id. The determination of reasonableness of
attorney fees necessitates consideration of all relevant circumstances. Id.
Factors to consider include:
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skills requisite to perform the legal
service properly;
(2) the likelihood, if apparent to the client, that the acceptance of
the particular employment will preclude other employment by
the lawyer;
(3) the fee customarily charged in the locality for similar services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the
circumstances;
(6) the nature and length of the professional relationship with the
client;
(7) the experience, reputation, and ability of the lawyer or
lawyers performing the services; and
(8) whether the fee is fixed or contingent.
Weiss v. Harper, 803 N.E.2d 201, 208 (Ind. Ct. App. 2003).
8
This contract also explicitly provides that the fees must be “reasonable.” (Foegley’s Ex. 1).
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[36] Judicial notice of the reasonableness of attorney fees is permitted in certain
routine actions, such as dissolutions of marriage, in which modest fees are
sought. Loudermilk v. Casey, 441 N.E.2d 1379, 1387 (Ind. Ct. App. 1982).
However, where the amount of the fee is not inconsequential, there must be
objective evidence of the nature of the legal services and the reasonableness of
the fee. Stewart, 911 N.E.2d at 58.
[37] In Fortner v. Farm Valley-Applewood Apartments, 898 N.E.2d 393, 400 (Ind. Ct.
App. 2008), this Court held that an attorney fee award of $1,335.04 in a small
claims action—which is an award approximately equivalent to the instant
case—was consequential enough that it required objective evidence of the
nature of the legal services and reasonableness of the fee. We held that the trial
court had abused its discretion in awarding the fee because there was nothing in
the record establishing the number of hours that the counsel had spent on the
case or the counsel’s hourly rate. Id. Likewise, in Loudermilk we held that a
trial court had abused its discretion in awarding attorney fees because there was
no evidence of the value of the lawyer’s services, the nature of his services, or
the time the lawyer had spent on the case. Loudermilk, 441 N.E.2d at 1387. We
noted that a lawyer was required to provide evidence of the value of his service
even when the lawyer’s fees equaled only six percent of the total damages
awarded. Id. (discussing Parrish v. Terre Haute Sav. Bank, 431 N.E.2d 132 (Ind.
Ct. App. 1982), reh’g denied, trans. denied).
[38] Here, the small claims court awarded attorney fees in the amount of $1,500,
which is a significant portion of the total damages of $5,410.55. Because
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Attorney Masters provided documented evidence that his services were worth
$500 in attorney fees, we attribute the remaining $1,000 to Attorney Murphey.
Yet, there is no evidence in the record concerning the nature of Murphey’s
representation, the hours he spent on the case, or his hourly charge. He merely
submitted an affidavit to the small claims court stating that, as a result of his
representation, Foegley Landscape had incurred costs and legal expenses of
$4,045.90 related to the litigation. Absent information concerning the nature of
Attorney Murphey’s services, the small claims court could not have properly
evaluated the reasonableness of his fees and therefore abused its discretion in
awarding attorney fees. Accordingly, we reverse the small claims court’s award
of attorney fees with respect to Attorney Murphey and remand to the small
claims court to hold a hearing and determine reasonable attorney fees for
Attorney Murphey.9 See Fortner, 898 N.E.2d at 400 (remanding to the trial
court to hold a hearing and determine reasonable attorney fees when there was
insufficient evidence to support the trial court’s award of attorney fees);
Loudermilk, 441 N.E.2d at 1388 (remanding for further proceedings when there
was insufficient evidence to support the reasonableness of the trial court’s
award of attorney fees).
9
Significantly, we note that, by filing an action in the small claims court, Foegley Landscape waived its right
to recover more than the $6,000 jurisdictional limit of the small claims court. Hoang v. Jamestown Homes, Inc.,
768 N.E.2d 1029, 1035 (Ind. Ct. App. 2002), reh’g denied, trans. denied. We are affirming the trial court’s
judgment of $3,910.55 for the amount owed under the contract, plus interest; $94 in court costs; and $500 for
Attorney Masters’ attorney fees, so those amounts contribute to the $6,000 jurisdictional limit. Therefore,
the maximum amount Foegley Landscape may recover for Attorney Murphey’s fee on remand is $1,495.45.
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[39] Affirmed in part, reversed in part, and remanded.
Barnes, J., and May, J., concur.
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