INDIANA LAW UPDATE
by Ronald J. Waicukauski and Brad A. Catlin
ISSUE 5: 2015 SERIES – October 29, 2015
Available online at: www.IndianaLawUpdate.com
301 Massachusetts Avenue
Indianapolis, Indiana 46204
T: 317-633-8787
bcatlin@price-law.com
rwaicukauski@price-law.com
IN THE NEWS: Supreme Court Plans to Highlight Revisions in Its Opinions and to
Address “Link Rot”....................................................................................................................... 2
1. Bystander Rule For Negligent Infliction Of Emotional Distress Is Strictly Applied; Clifton
v. McCammack, __ N.E.3d ___ (Ind. 9/21/15) (Rush) .......................................................... 3
2.
Standing To Sue Retailer After Hackers Steal Credit Card Numbers; Remijas v Neiman
Marcus Group, LLC, 794 F.3d 688 (7th Cir. 7/20/15) (Wood) ............................................. 5
3. Bar Must Ensure That Employees Do Not Become Intoxicated At Work; BGC
Entertainment, Inc. v. Buchanan, ___ N.E.3d ___ (Ind. Ct. App. 8/5/15) (Riley) ................ 6
4. Compulsory Counterclaims: A Primer; Pace v. Timmermann’s Ranch & Saddle Shop, Inc.,
795 F.3d 748 (7th Cir. 8/4/15) (Ripple) ................................................................................. 8
5. Corporation’s Failure To Notify Counsel Of Summons In Time to Timely Answer Is Not
Excusable Neglect; The Huntington Nat’l Bank v Car-X Assoc. Corp., __ N.E.3d ___ (Ind.
3/25/15) (David) .................................................................................................................. 10
6. Kentucky Lawyer’s Contacts Too Minimal To Exercise Personal Jurisdiction; Boyer v.
Smith, __ N.E.3d ___ (Ind. 9/9/15) (Rush) .......................................................................... 12
7. Exclusion Of An Expert As A Discovery Sanction Is “Draconian” If The Movant Doesn’t
Demonstrate Prejudice; O’Banion v. Ford Motor Co., __ N.E.3d ___ (Ind. Ct. App. 9/9/15)
(Barnes) ................................................................................................................................ 14
8. No Need For Summary Judgment Movant To Produce Evidence In Federal Court; Spierer
v. Rossman, 798 F.3d 502 (7th Cir. 8/14/15) (Manion) ....................................................... 17
9. Rejection Of A Complete Offer Of Judgment Is Not A Basis For Dismissal; Chapman v.
First Index, Inc., 796 F.3d 783 (7th Cir. 8/6/15) (Easterbrook) .......................................... 18
10. If A Party Raises New Arguments And Evidence In A Reply, A Court Must Strike It Or
Give Leave To File A Surreply; Meinders v. UnitedHealthcare, Inc., 800 F.3d 853 (7th Cir.
9/1/15) (Bauer) ..................................................................................................................... 19
11. Surviving Spouse Or Dependents Cannot Recover Attorney’s Fees Under The General
Wrongful Death Statute; SCI Propane LLC v. Frederick, __ N.E.3d ___ (Ind. 8/27/15)
(Massa)................................................................................................................................. 21
12. No Right To A Jury Trial On The Reasonableness Of Attorney’s Fees; Cavallo v. Allied
Physicians of Michiana, LLC, __ N.E.3d __ (Ind. Ct. App. 8/20/15) (Pyle)....................... 22
13. The Issue Of Attorney’s Fees Need Not Be Raised Before Final Judgment; Boyer Constr.
Group Corp. v. Walker Constr. Co., Inc., ___ N.E.3d ___ (Ind. Ct. App. 9/24/15) (Riley) 24
14. The Worst Appellate Brief Ever; Brazier v. Maple Lane Apartments I, LLC, __ N.E.3d ___
(Ind. Ct. App. 10/22/15) (Robb) .......................................................................................... 26
ADVOCACY TIP OF THE MONTH: Lessons Learned While Winning a $31 Million Verdict
....................................................................................................................................................... 30
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IN THE NEWS: Supreme Court Plans to Highlight Revisions in Its Opinions
and to Address “Link Rot”
From: Adam Liptak, The New York Times, October 5, 2015
The Supreme Court announced earlier this month that it would disclose after-the-fact
changes to its opinions, a common practice that had garnered little attention until a law
professor at Harvard wrote about it last year.
The move on editing is a major development. Though changes in the court’s opinions
after they are issued are common, the court has only very seldom acknowledged them.
Many of the changes fix spelling or factual errors. Others are more substantial,
amending or withdrawing legal conclusions.
Starting this term, a court statement said, “post-release edits to slip opinions on the
court’s website will be highlighted and the date they occur will be noted.” The court’s
unorthodox after-the-fact editing was the subject of an article in The Harvard Law
Review by Richard J. Lazarus. He said Monday’s announcement was good news.
“This is a welcome step by the court to correct a problem that has persisted for more
than a century, and which was exacerbated in recent years by modern technology,”
Professor Lazarus said. It is not clear, Professor Lazarus said, whether the court would
take additional steps later in the editing process, which can last five years before
authoritative hardcover books are produced, to make all changes public.
The court said it would also address what it called “the problem of ‘link rot,’ where
Internet material cited in court opinions may change or cease to exist.” The court will
now collect and post the materials it links to on a dedicated page on its site.
The move seemed to have been prompted by news media coverage of a study showing
that about half of 555 links in Supreme Court opinions did not work. A second study
called the situation dire.
“It is disturbing that even at the Supreme Court, where creating and citing precedent is
of the utmost importance, citations often fail to point the researcher to the authority on
which the court based its decision,” Raizel Liebler and June Liebert, librarians at the
John Marshall Law School in Chicago, wrote in the second study, “Something Rotten in
the State of Legal Citation.”
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1.
Bystander Rule For Negligent Infliction Of Emotional Distress Is
Strictly Applied; Clifton v. McCammack, __ N.E.3d ___ (Ind.
9/21/15) (Rush)
Sometimes, a person can suffer tremendous grief and shock because of the conduct
of another, yet have no remedy for that injury. While this is the type of injury that
the tort of negligent infliction of emotional distress was meant to deal with, courts
have limited the scope of that tort. This case is an example.
Ray Clifton lived with his son, Darryl. Darryl helped care for his father and the two
were very close. At approximately 11:15 a.m., Darryl left home on his moped.
McCammack negligently turned left in front of Darryl about 13 minutes later,
fatally injuring Darryl.
Clifton was watching television at home. When the noon news aired, he saw that a
fatal accident involving a moped had occurred near his home. Clifton feared that the
person involved in the collision was Darryl. He had a “very bad feeling” and
“definitely was upset.” Clifton got into his vehicle and drove to the scene, which was
about four miles from his home.
When he arrived, Clifton saw Darryl’s moped near the front wheel of McCammack’s
car and a body on the ground covered with a white sheet. Clifton never approached
the body and could not see any blood or physical signs of injury, but he recognized
Darryl’s shoes sticking out from under the sheet. Clifton spoke with a police officer
and was taken home by his minister. Clifton did not see the removal of Darryl’s
body, and when Clifton left, the scene had been completely cleaned.
Clifton sued McCammack for negligent infliction of emotional distress. McCammack
admitted that she negligently caused Darryl’s death, but moved for summary
judgment on the basis that Clifton could not prevail on his claim for emotional
distress. The trial court granted that motion, but the Court of Appeals reversed.
On transfer, the Court noted that while there are two rules under which a person
can recover for negligent infliction of emotional distress, only one of those applied to
this case—the bystander rule. This rule “allows recovery for negligent infliction of
emotional distress if a claimant can establish sufficient ‘direct involvement’ with the
incident.” This rule applies only when 1) the plaintiff actually witnessed or came on
the scene 2) soon after the death or severe injury 3) of a loved one with a
relationship to the plaintiff analogous to a spouse, parent, child, grandparent,
grandchild, or sibling caused by the defendant's negligent or otherwise tortious
conduct. The Court noted that this rule was designed to limit recovery for negligent
infliction of emotional distress, to discourage “spurious claims and open-ended
liability.”
Given these concerns, the Court felt it unwise to “change or further expand our
precedent.”
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Bystander claims often present fact patterns involving close relatives
and horrific injuries, and we recognize that under certain
circumstances, bright-line rules may disallow recovery for genuine
emotional trauma. Thus, employing a less restrictive foreseeability
approach that would expand recovery for those who suffer such
distress would initially appear desirable. But we believe this approach
is fraught with problems. ….
In our view, the requirements we have crafted to pursue a successful
bystander claim—and making those requirements questions of law—
appropriately address the various public policy concerns this particular
tort implicates. In other words, we believe that Indiana’s bystander
rule strikes the appropriate balance between allowing authentic claims
to proceed while also curbing the real issues of open-ended liability,
fraudulent claims, and the ubiquity of this type of injury.
Turning to the facts of this case, the Court held that Clifton failed to meet the
bystander rule’s three prongs.
Here, the facts reveal that both the scene and Darryl’s body were
materially changed before Clifton arrived. Witnesses moved Darryl’s
body, which was upright on his motorbike after the collision, and laid
him flat on the pavement. And, after resuscitation efforts failed,
emergency personnel covered the body so that no signs of trauma were
visible. Although Clifton may have arrived to the scene in a fairly short
amount of time after Darryl’s death, Clifton did not experience the
“uninterrupted flow of events” following the collision, i.e., before there
were significant changes to both the scene and Darryl’s body. Or, to
state it another way, Clifton did not have the sudden sensory
experience necessary to establish direct involvement. Accordingly, in
line with our precedent, as a matter of law, Clifton did not view the
“gruesome aftermath” of the incident.
Moreover, the fact that Clifton learned of the accident before arriving at the scene
prevented him from recovering under the bystander rule.
The trigger for the emotional distress must not be some prior
knowledge of the incident before arriving to the scene, but rather the
happenstance contemporaneous or near-contemporaneous sensory
experience of the incident itself. To put it another way, the
compensable emotional trauma must be unmediated, and there should
be no period of time during which a bystander can brace himself or
herself.
This decision will likely be a touchstone for cases involving the bystander rule going
forward.
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Lessons:
1. The Indiana Supreme Court does not wish to further expand the bystander
rule.
2. If a body is moved and covered after an accident and a relative arrives shortly
thereafter, it is unlikely that the relative will be able to claim negligent
infliction of emotional distress.
3. A person claiming negligent infliction of emotional distress cannot know of
the accident before arriving at the scene.
2.
Standing To Sue Retailer After Hackers Steal Credit Card
Numbers; Remijas v Neiman Marcus Group, LLC, 794 F.3d 688
(7th Cir. 7/20/15) (Wood)
Data breaches are in the news all the time, from Target to Home Depot to Ashley
Madison. But what can a consumer do about it? In many cases, they may not even
know that their data has been taken. But it can cause serious problems if your
personal identifiers, like your social security number, is available at a price on the
black market, and those problems may not arise until years after the original
breach. In this case, the Court found that consumers passed at least one hurdle to a
recovery: the argument that they do not have standing to sue.
In December 2013, Neiman Marcus learned that fraudulent charges had shown up
on the credit cards of some of its customers. Neiman Marcus kept this information
confidential until January 2014 when it discovered malware in its computer
systems. The company notified its customers of the breach and offered to provide
one year of free credit monitoring and identity-theft protection.
This prompted a number of class-action complaints, all of which were consolidated
into a single complaint that relied on a number of theories for relief: negligence,
breach of implied contract, unjust enrichment, unfair and deceptive business
practices, invasion of privacy, and violation of multiple state data breach laws.
Some of the named plaintiffs had fraudulent charges on their credit card accounts.
Others did not. Neiman Marcus moved to dismiss the complaint for lack of
standing, and the trial court granted that motion.
On appeal, the Court looked favorably on the plaintiffs’ arguments concerning the
harm they suffered or may suffer.
The plaintiffs point to several kinds of injury they have suffered: 1) lost
time and money resolving the fraudulent charges, 2) lost time and
money protecting themselves against future identity theft, 3) the
financial loss of buying items at Neiman Marcus that they would not
have purchased had they known of the store’s careless approach to
cybersecurity, and 4) lost control over the value of their personal
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information. … The plaintiffs also allege that they have standing based
on two imminent injuries: an increased risk of future fraudulent
charges and greater susceptibility to identity theft.
The Court agreed that there are “identifiable costs associated with the process of
sorting things out” after one’s credit card information has been stolen. And the
Court agreed with the proposition that the risk that hackers would misuse the
credit card information that they stole was “immediate and very real.”
At this stage in the litigation, it is plausible to infer that the plaintiffs
have shown a substantial risk of harm from the Neiman Marcus data
breach. Why else would hackers break into a store’s database and steal
consumers’ private information? Presumably, the purpose of the hack
is, sooner or later, to make fraudulent charges or assume those
consumers’ identities.
However, the Court was quick to point out the limits of its holding. This case was
decided on a Rule 12(b)(1) motion at the outset of the case. Thus, the Court noted
that “the plaintiffs may eventually not be able to provide an adequate factual basis
for the inference, [even though] they had no such burden at the pleading stage.”
Moreover, the Court was “dubious” of the claim that the loss of private information
alone was a concrete injury that provided standing.
This case will surely embolden plaintiffs to file more data-breach class-action suits.
But it will be interesting to see whether those plaintiffs will be able to prove that
they have standing at some point later than the pleadings stage.
Lessons:
A customer whose credit card information has been stolen by hackers from a
retailer has standing to sue the retailer for allowing the data breach to take
place.
3.
Bar Must Ensure That Employees Do Not Become Intoxicated At
Work; BGC Entertainment, Inc. v. Buchanan, ___ N.E.3d ___ (Ind.
Ct. App. 8/5/15) (Riley)
“Adult entertainment clubs” aren’t just a place for bachelor parties and Brickyard
400 celebrations. They can also lead to a wonderful fact pattern. In this case, a
night at Brad’s Gold Club led to a discussion of the Dram Shop Act and the burdens
of proof on summary judgment. I trust that you will find the legal issues titillating.
Candice Vowell and her mother, Shannon, were employed as cocktail waitresses at
Brad’s Gold Club. They both worked the 9:00 p.m. – 3:00 a.m. shift on the evening of
July 29, 2007. Although the club has a policy prohibiting its waitresses from
6
consuming alcohol on the job, the whole staff was treated to a beginning-of-the-shift
shot to celebrate the next day’s Brickyard 400.
After the club closed, the staff was apparently entitled to a complimentary end-ofshift drink. The bartender poured Candice a double shot of vodka, which she drank.
After that drink, Candice and Shannon left the club.
Although both Candice and Shannon lived at the same apartment complex, they
drove separately to work. Shannon followed Candice home from work, speaking to
Candice the entire time by cell phone.
At some point, Candice’s vehicle struck Buchanan, a black male wearing no shirt
and dark pants. She told Shannon that she hit something and that she could no
longer see through her windshield. Shannon pulled to the front, so that Candice
could follow her home. Neither stopped to see what Candice struck. A witness
testified “that upon impact with the front of Candice’s vehicle, Buchanan bounced
up and smashed into the windshield before flipping two times in the air and falling
to the ground.” He sustained severe brain trauma, a broken nose, and fractures to
both lower bones in his right leg.
When she arrived home, Candice woke her husband and told him she had hit
something with her vehicle. He went out, saw a shattered windshield in which there
was blood, pieces of flesh and hair,” saw and substantial front-end damage, and
went to see if he could find what she hit. He found an ambulance and police vehicles
at the scene of the accident. After he returned home, Candice called the police.
When police arrived at her home, they could smell alcohol on Candice and she
admitted drinking the two shots of vodka. Three hours after the accident, her blood
was tested and found to have a BAC of 0.06%. Two expert toxicologists concluded
that Candice’s BAC at the time of the accident would have been approximately
0.10% to 0.128%. Both experts agreed that she must have had more to drink than
she admitted. There was also evidence that Candice had previously violated the
club’s policy against drinking on the job. Candice was arrested and eventually plead
guilty to operating a motor vehicle while intoxicated.
Buchanan filed a complaint against the club, alleging violations of both the Dram
Shop Act and common law duties. Cross-motions for summary judgment were filed;
Buchanan argued that Candice’s knowledge of her intoxication should be imputed to
the club as her employer, and the club argued that there was no evidence that it
had actual knowledge that Candice was visibly intoxicated when she was served.
The trial court denied both parties’ motions, and both parties appealed.
On appeal, the Court first addressed the club’s argument that it was entitled to
summary judgment on Buchanan’s Dram Shop Act claim. And the Court conceded
that there was no admission or testimony by any witnesses that Candice was visibly
intoxicated at any point during her shift. But the Court found that the expert
testimony described above created a genuine issue of fact on whether a bartender
subjectively knew that Candice was intoxicated when he served her. The Court
7
found that so long as the evidence showed that Candice consumed alcohol sufficient
to register a 0.10%, then the club had to show that the alcohol did not come from it.
Although Vowell did not fail any sobriety tests or exhibit any other
indicia of visible intoxication, we find that whether it may be inferred
from the BAC and the odor of alcohol that BGC had actual knowledge
that Vowell was visibly intoxicated at the time she was furnished
alcoholic beverages is a matter best left for the trier of fact.
The Court then addressed Buchanan’s cross-appeal, arguing that Candice’s
knowledge of her intoxication should be imputed to the club. The Court noted that
the expert reports indicate that Candice had violated the club’s policy against
drinking on the job, as she had done in the past without reprimand.
Such a history of drinking on the job could create an inference that
BGC had reason to know that Vowell would consume alcohol during
her shift so as to give rise to liability under the imputed knowledge
doctrine.
But the Court felt it unnecessary to resolve this question, as there was a genuine
issue of fact regarding whether Candice recognized that she was intoxicated when
she was furnished her last drink.
Finally, the Court held that Buchanan was entitled to proceed against the club on
his claim for negligent supervision. In other words, the club had a duty to supervise
Candice and prevent her from becoming intoxicated while working. As the parties
“heavily disputed” the extent to which the club enforced its “no drinking” policy,
summary judgment was inappropriate.
Lessons:
1. A defendant in a Dram Shop Act case is not entitled to summary
judgment if the tortfeasor’s BAC was above the legal limit and the
defendant cannot prove that the alcohol in a tortfeasor’s blood did not
come from it.
2. A bar’s shoddy history of enforcing a “no drinking on the job” policy can
create a genuine issue on whether an employee’s knowledge that she is
intoxicated should be imputed to the bar.
3. A bar has a duty to ensure that its employees do not become intoxicated
while at work.
4.
Compulsory Counterclaims: A Primer; Pace v. Timmermann’s
Ranch & Saddle Shop, Inc., 795 F.3d 748 (7th Cir. 8/4/15) (Ripple)
We all have some vague idea of what constitutes a compulsory counterclaim; it’s a
claim for a defendant that arises out of the same transaction or occurrence
8
described in the plaintiff’s complaint. But, as with many things in the law, the devil
is in the details. This general understanding isn’t enough. However, this case gives
a great fact-pattern to highlight why claims are, or are not, compulsory
counterclaims.
Pace worked as a bookkeeper for a family owned saddle shop, Timmermann’s. At
some point, Timmermann’s began to suspect that Pace was embezzling funds and
called the local sheriff’s office. Pace was arrested and charged with theft, forgery,
and unlawful use of a credit card. Pace argued that all of the financial transactions
at issue were consistent with Timmermann’s usual course of business.
In 2011, Timmermann’s filed a complaint against Pace. Pace did not file any
counterclaims to this complaint. Rather, she filed her own complaint in 2013
against Timmermann’s, its owners, and two other employees. Pace’s complaint
stated many claims against both Timmermann’s and the individual defendants.
Meanwhile, Timmermann’s and the individual defendants moved to dismiss Pace’s
claims, arguing that they should have been filed as compulsory counterclaims. The
district court agreed and dismissed Pace’s complaint. Pace appealed.
The first question the Court addressed on appeal was whether Pace’s claims against
the individual defendants were compulsory counterclaims to Timmermann’s 2011
complaint, as the individual defendants were not parties to that complaint.
Timmermann’s argued that Pace’s claims were compulsory counterclaims because
the district court in that case could have acquired jurisdiction over those
defendants and joined them under Rule 20. The Court disagreed.
Although Rule 13(a)(1)(B), like Rule 19, encourages that all claims be
resolved in one action with all the interested parties before the court,
Rule 13 fulfils this objective by allowing, not mandating, that a
defendant bring counterclaims that require additional parties.
Whether a party must be joined in an action continues to be governed
only by Rule 19. Rule 13(a)(1)(B) does not transform Rule 20 into a
mandatory joinder rule.
In justifying this conclusion, the Court relied heavily on legislative history, and held
that “the threat of duplicative litigation generally is insufficient to override a
plaintiff’s interest” in deciding who to join to an action. While there are exceptions
to this rule (such as if there is privity between the plaintiff and counterclaim
defendant), Timmermann’s did not argue that they applied in this case. Therefore,
the dismissal of Pace’s claims against the individual defendants was error.
The same did not hold true for Pace’s claims against Timmermann’s. The Court
found that those claims did exist when Pace answered Timmermann’s complaint.
Therefore, those claims were properly dismissed.
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Lesson:
A claim is not a compulsory counterclaim if the defendant to that claim is not
an opposing party in the lawsuit.
5.
Corporation’s Failure To Notify Counsel Of Summons In Time to
Timely Answer Is Not Excusable Neglect; The Huntington Nat’l
Bank v Car-X Assoc. Corp., __ N.E.3d ___ (Ind. 3/25/15) (David)
As a litigator, it can be frustrating when your client doesn’t tell you that it was
served with a complaint and summons until after the deadline for timely filing an
answer has expired. And it is even more frustrating when your client’s delay
resulted in a default judgment against your client. As you prepare a motion to set
aside that default judgment, you may think about whether you can claim excusable
neglect. If so, then this is a case you need to consider.
Huntington held a recorded mortgage on a family home. Car-X obtained a judgment
against that family and recorded a notice of judgment lien against the property.
Car-X later sued to foreclose on the judgment lien, naming Huntington as the senior
creditor.
The Huntington employee who typically received service of process for the bank was
away on maternity leave when the summons came in, so it went to her supervisor.
Her supervisor did not refer the service to counsel until six days after Huntington’s
deadline to respond. He blamed his failure to attend to the matter more diligently
on “the volume of [his] regular duties.”
Car-X moved for and obtained a default judgment. Huntington moved to set that
judgment aside a few weeks later, arguing that, pursuant to Rule 60(B)(1), its
untimely response was the result of excusable neglect and, in the alternative, that it
was entitled to relief under Rule 60(B)(8), the catch-all provision that authorizes
relief from a default for “any reason justifying relief.” The trial court denied
Huntington’s motion, but a divided panel of the Court of Appeals reversed this
decision. The Supreme Court then granted transfer.
On transfer, the Court found that Huntington’s actions were neglect, but not
excusable neglect. What prevented Huntington’s neglect from being excusable was
its failure to provide adequate cover for the employee on maternity leave. This
“preventable oversight” was even more egregious, given that Huntington was a
“savvy, sophisticated bank exceedingly familiar with foreclosure actions.”
Huntington’s
untimely response to service is wholly attributable to the defaulted
party’s inattentiveness. There was no true breakdown in
communication between agents of the party that caused the party’s
failure to appear; rather, the party was subjected to a default judgment
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because, in the absence of the employee typically responsible for
handling legal mail, another employee let the notice sit on his desk
until the time to respond had past.
When an organization like this “fails to respond to a complaint and summons for no
reason other than an employee’s disregard of the mail,” then it cannot claim
excusable neglect.
When reaching this result, the Court distinguished this case from those in which
“the defendants did all that they were required to do but subsequent
misunderstandings as to the assignments given to agents of the defendants resulted
in the failure to appear.” Unlike those cases, Huntington did not do “everything that
apparently needed to be done” to secure representation in a timely manner.
But the Court reached a different result when analyzing Huntington’s claim under
Rule 60(b)’s catch-all provision. Given the abbreviated manner in which the trial
court addressed the issue, the Court thought “it best to remand to the trial court to
reevaluate Huntington’s motion upon consideration of … all relevant
circumstances.” But when doing so, the Court took the time to urge us all to act
with civility and professionalism.
Lastly, we caution that the important and even essential policies
necessitating the use of default judgments—maintaining an orderly
and efficient judicial system, facilitating the speedy determination of
justice, and enforcing compliance with procedural rules—should not
come at the expense of professionalism, civility, and common courtesy.
“An extreme remedy,” a default judgment “is not a trap to be set by
counsel to catch unsuspecting litigants” and should not be used as a
“gotcha” devise when an email or even a phone call to the opposing
party inquiring about the receipt of service would prevent a windfall
recovery and enable fulfillment of our strong preference to resolve
cases on their merits.
This is especially true where, as here, it is easy to locate the opposing
party or counsel, and just as simple to pick up a phone and remind
counsel of an imminent deadline—a courtesy every attorney would like
(and may very well need) extended to him or her at some point in his
or her career. Such a moment of professionalism and civility can reap
significant dividends, both in the resolution of the case itself and the
legal community in general. By fostering a spirit of fair competition
and collegiality, courteous attorneys better serve their clients and
greatly improve the quality of our profession. After all, the practice of
law is a marathon, not a sprint, and attorneys would be well advised to
remember that procedural rules are not intended to be used as swords
to obtain judgments. Our profession deserves better. Though trial
courts may continue to grant default judgments where a party
undoubtedly fails to defend or prosecute a lawsuit, we strongly urge
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attorneys not to resort to seeking such a measure unless and until no
other method would move the case forward.
Lesson:
A defendant who is inattentive to its need to timely respond to a properly
served complaint cannot claim that its inattentiveness is the result of
excusable neglect, but may find relief under the catch-all provision of Rule
60(B).
6.
Kentucky Lawyer’s Contacts Too Minimal To Exercise Personal
Jurisdiction; Boyer v. Smith, __ N.E.3d ___ (Ind. 9/9/15) (Rush)
One of the first law school classes for almost any lawyer is Civil Procedure, and one
of the first topics you learn in that class is personal jurisdiction. But after law
school, personal jurisdiction isn’t an issue we often dive deeply into. Consider this
case your re-education on the topic.
Although Smith worked for his employers for 15 years in their former company,
APS, they did not hire him at their new business, In-Plas. Both of these companies
were based in Kentucky. Smith, who lived in Indiana, filed a claim with the EEOC
and hired Cassidy, a Kentucky attorney, to represent him. In August 2010, Cassidy
filed a complaint on Smith’s behalf in a Kentucky federal district court, alleging
age, race, and disability discrimination, against APS, In-Plas, and the two
individual owners of those businesses.
During discovery, Smith disclosed that he applied for Social Security Disability
Insurance benefits in 2009 after APS closed, and that he was found to be disabled
retroactive to March 13, 2009—his last day of employment with APS—six months
before he filed the lawsuit. Cassidy then dismissed the individual defendants, and
the district court granted summary judgment for APS and In-Plas.
In 2012, the individual defendants sued Smith and Cassidy in Indiana state court,
arguing that the Kentucky suit was frivolous and constituted malicious prosecution,
abuse of process, fraud, constructive fraud, and intentional infliction of emotional
distress. Cassidy moved for summary judgment, arguing that the Indiana state
court did not have personal jurisdiction over her. The trial court granted Cassidy’s
motion and the plaintiffs appealed. The Court of Appeals reversed the trial court’s
decision, and Cassidy was granted transfer.
On transfer, the Court first dealt with the plaintiffs’ argument that Cassidy waived
the personal jurisdiction defense by sitting idly on the issue, participating in
discovery, and then only raising it on summary judgment. But the Court found that
Cassidy acted properly. She raised lack of personal jurisdiction as a defense in her
answer, and that was sufficient.
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Defendants who challenge personal jurisdiction in an answer may still
defend themselves and participate in discovery until the court rules on
that challenge. Here, Attorney Cassidy properly asserted the personal
jurisdiction defense in her answer and therefore preserved the issue for
appeal.
The Court then moved onto the substance of the appeal.
Indiana allows the exercise of personal jurisdiction to the extent that it is allowed
under the Due Process Clause of the 14th Amendment. The 14th Amendment
requires that a defendant have “certain minimum contacts with the state such that
the maintenance of the suit does not offend traditional notions of fair play and
substantial justice.” Moreover, personal jurisdiction has two flavors: general
jurisdiction (a defendant has “continuous and systematic” contacts with the forum
state), and specific jurisdiction (the lawsuit “arises from or is closely related to” a
defendant’s minimum contacts with or substantial connection to the forum state).
The kind of personal jurisdiction at issue here was specific jurisdiction.
When describing what kind of contacts can be a part of the specific jurisdiction
inquiry, the Court rejected the proposition that all contacts are the same. Rather,
the Court held that specific jurisdiction only applied if the defendant initiated the
contact with the forum state.
Incorporating federal clarifications into Indiana law, personal
jurisdiction over Attorney Cassidy requires that she have minimum
contacts and connections within Indiana that create or contribute to
the controversy at hand. But personal jurisdiction also requires that
those contacts or connections arise from her own conduct within or
directed into Indiana. Only then will we find specific personal
jurisdiction—based on sufficient minimum contacts within and
substantial connection to Indiana. We must therefore consider whether
her own “suit-related conduct” established minimum contacts within
Indiana.
Here, the plaintiffs argued that Cassidy met this standard by corresponding with
plaintiffs’ attorney (including sending documents) about the Kentucky lawsuit,
communicating with the Indianapolis EEOC office (to which Smith’s EEOC claim
was transferred from Cincinnati), and representing Smith at a deposition in
Indiana. But the Court held that these did not qualify because Cassidy did not
initiate these contacts.
Attorney Cassidy’s contacts with Indiana are merely products of her
relationship to plaintiffs (Boyer and Richard) and a third party (her
then client and now co-defendant Ernest)—and not products of her own
intentional conduct. This distinction is significant because “a
defendant’s relationship with a plaintiff or third party, standing alone,
is an insufficient basis for jurisdiction.” And that is all we have here. …
13
Indeed, if we took away Cassidy’s relationship with Boyer, Richard,
and Ernest, she would have absolutely no relevant contacts within
Indiana. ... Simply put, Attorney Cassidy herself neither created nor
invoked sufficient minimum contacts within Indiana to warrant
specific personal jurisdiction in this case.
Therefore, the trial court’s decision granting summary judgment to Cassidy on this
issue was affirmed.
Lessons:
1. When analyzing a party’s contacts for the purpose of specific personal
jurisdiction, a court should only consider those contacts that the party
initiated with the forum state.
2. An out-of-state lawyer who represents an Indiana resident in out-of-state
litigation will generally, without more, not be subject to specific personal
jurisdiction related to that representation in Indiana.
7.
Exclusion Of An Expert As A Discovery Sanction Is “Draconian”
If The Movant Doesn’t Demonstrate Prejudice; O’Banion v. Ford
Motor Co., __ N.E.3d ___ (Ind. Ct. App. 9/9/15) (Barnes)
The key to many trials is expert testimony. Exclude the opposing party’s expert, and
you win the case. But it can be difficult to exclude a fully qualified expert in
Indiana, as this case makes clear.
Karen was driving a Ford vehicle in 2009, when she accelerated through a red light,
struck another car, left the roadway, and struck a light pole. Karen died, and the
people in the other vehicle, the O’Banions, were severely injured.
Farm Bureau, as Karen’s subrogee, Karen’s estate, and the O’Banions each filed
suit against Ford. Their complaints alleged that the accident was caused by a
defective throttle assembly that caused the vehicle to accelerate uncontrollably
through the intersection. The three cases were consolidated together.
The case management plan required the plaintiffs to disclose any expert witnesses
to Ford no later than September 1, 2013. All expert-related discovery was to be
completed by December 31, 2013.
In June 2012, Farm Bureau disclosed that it intended to rely upon the testimony of
mechanical engineer David Zedonis. In January 2013, the Estate disclosed that it
intended to rely upon both Zedonis and William Berg, Ph.D., another mechanical
engineer. Berg’s opinions incorporated Zedonis’s conclusion that the accident was
caused by a stuck throttle cable. And on September 3, 2013, Farm Bureau and the
Estate filed a joint disclosure that they both intended to rely upon the expert
testimony of Zedonis and Berg. The O’Banions did not file a separate expert witness
14
disclosure list; on August 7, 2014, they filed a final witness list indicating that they
would rely upon witnesses called by either Ford or the Estate.
Ford moved both for summary judgment and to have the testimony of Zedonis and
Berg excluded. In response, Zedonis filed an affidavit. Ford moved to strike this
affidavit, claiming it stated new opinions and facts not related in his earlier reports
and deposition. The trial court denied each of these motions.
Ford then re-deposed Zedonis, at which time he revealed that he had performed
additional testing. Ford supplemented its earlier motion to exclude the experts’
testimony because Zedonis continued to conduct tests. The trial court granted that
motion, excluded both Zedonis and Berg, and granted summary judgment to Ford.
The plaintiffs appealed.
On appeal, Ford argued that the O’Banions could not challenge the trial court’s
ruling excluding the testimony of Zedonis and Berg because they did not disclose
them as experts in accordance with the case management plan. The Court rejected
this argument because there was no reason to allow some, but not all, of the
plaintiffs to rely on the experts’ opinions.
Ford is making no argument that the trial court should have excluded
the O’Banions from relying on Zedonis and Berg at trial, aside from the
general reasons applicable to all of the Appellants. Ford fails to explain
how it would be unfairly prejudiced by the O’Banions relying on the
experts, where it has been fully aware of the existence of Zedonis and
Berg and their opinions for some time and the O’Banions’ case has
been fully consolidated with those of Farm Bureau and the Estate.
And, although it is true that the O’Banions must separately prove
their case against Ford, the evidence related to whether the crash
resulted from a manufacturing defect would be identical to the
evidence presented by Farm Bureau and the Estate.
The Court then turned to the admissibility of Zedonis’s testimony under Evid. R.
702 (noting that Berg’s exclusion was contingent on that issue). It noted that there
was no question concerning Zedonis’s qualifications.
Instead, Ford takes issue with various particulars of Zedonis’s analysis
and his ultimate opinion that the throttle cable inside the vehicle had
excessive wear, leading to some of the strands that made up the cable
binding inside of the cable assembly and preventing the throttle from
returning to idle—thus leading to the crash when Karen drove through
an intersection at high speed.
But the Court found that arguments over these kinds of details should not form the
basis for excluding an expert’s opinion.
This case is a quintessential example of a situation in which a trier of
fact must be asked to sort out the evidence and any purported
15
weaknesses in Zedonis’s testimony. He did not make bald assertions
based upon no evidence; he examined the evidence in great detail and
reached certain conclusions after application of engineering principles.
Ford contests whether those conclusions are in fact adequately
supported by the evidence and whether Zedonis properly applied
standard engineering principles. This is why trials are held. That an
expert’s opinion may ultimately be unaccepted by a fact finder is not a
basis for rendering it inadmissible.
The Court then held that the trial court erred when it excluded the experts as a
discovery violation.
We conclude it was too draconian a punishment in relation to the
Appellants’ alleged wrongdoing to entirely preclude Zedonis from
testifying. Ford complains that Zedonis conducted additional testing
following his October 9, 2013 deposition, after the case management
order’s discovery deadline, in response to questions from Ford’s
attorney regarding the validity of his testing and conclusions. Ford has
failed to adequately demonstrate how it was prejudiced by these
actions; the mere fact that they occurred does not automatically
translate into prejudice.
…
We further observe that Zedonis has been listed as an expert witness
since June 2012, and the general nature of his opinions and expected
testimony were long known. This was not a situation in which an
expert was disclosed for the first time shortly before trial, or where an
expert devised entirely new theories or opinions shortly before trial.
Even if Zedonis’s additional testing had led him to develop new
theories, a more appropriate remedy for these late disclosures would be
to exclude testimony related to such testing and theories, not complete
exclusion of all of his testimony.
As the plaintiffs themselves did not commit misconduct, the exclusion of their
experts, which “is fatal to their case” was not an appropriate sanction.
Lessons:
1. A party does not waive the ability to challenge the exclusion of an expert if a
co-party did object to that exclusion and there is no apparent reason to think
that the movant would be unfairly prejudiced by allowing the challenge.
2. Questions over the particulars of the manner in which a qualified expert who
examined the evidence reached his opinions should not form a basis for
excluding that expert’s testimony.
16
3. A trial court abuses its discretion if it excludes a party’s expert as a discovery
sanction if the movant does not demonstrate how it is prejudiced by the
discovery violation.
8.
No Need For Summary Judgment Movant To Produce Evidence
In Federal Court; Spierer v. Rossman, 798 F.3d 502 (7th Cir.
8/14/15) (Manion)
A party who is moving for summary judgment has different burdens in federal court
than they do in state court. Forgetting this can have grave consequences, as this
case shows.
Lauren Spierer was a 20-year-old student at Indiana University. After a night of
heavy drinking with friends, she went missing while walking to her apartment.
Despite four years of searching, there is no credible information about what
happened to Lauren.
Lauren’s parents sued three of Lauren’s friends, alleging negligence and violations
of the Dram Shop Act. The defendants moved to dismiss, arguing that persons are
presumed alive in Indiana for seven years after their disappearance. The trial court
denied that motion, as the complaint alleged Lauren had died.
Almost immediately after the Court denied their motion to dismiss, the defendants
moved for summary judgment. That motion relied solely on facts alleged in the
complaint and argued that the plaintiffs were unable to offer proof that the
defendants were the proximate cause of any verifiable injury to Lauren. Although
the plaintiffs “cast a wide net on discovery,” they informed the court that they did
not need this discovery to respond to the pending motion for summary judgment.
Rather, they argued that the defendants did not meet their burden of production
when moving for summary judgment. The trial court granted the defendants’
motion for summary judgment and the plaintiffs appealed.
On appeal, the plaintiffs continued to argue “that summary judgment is impossible
unless the moving party first submits evidence to meet their burden of production.”
But the Court said that this is an incorrect understanding of federal summary
judgment procedure.
In their briefs, the plaintiffs refer repeatedly to the “burden of
production” borne by the moving party and we suspect this phrase lies
at the heart of their confusion. This phrase is used to signify the
respective allocations of evidence that parties must present at a given
stage of litigation.
In Celotex, the Court surveyed Rule 56 and found nothing in that rule
requiring the moving party to produce evidence. Of course, there can
be no “burden of production” absent a mandate to produce evidence.
17
The actual requirement in Rule 56 is less specific: the moving party
need only inform the court of the basis for the motion and identify
supporting materials. That the moving party need not produce
evidence does not give them an easy path to summary judgment, it
only means that their burden is one of demonstration rather than
production.
So while the plaintiffs could survive a motion to dismiss by alleging that Lauren
was dead, they had to do more to counter a motion for summary judgment.
Once the pleadings phase ended, the plaintiffs’ facts are no longer
taken as true but must be substantiated by evidence if challenged. The
pleadings in this case are clear enough—Lauren has been missing
since leaving Rosenbaum’s apartment that night. The defendants had
to do little more than cite to the pleadings to establish this fact. At that
point, the burden shifted to the plaintiffs to provide some evidence that
Lauren sustained a distinct injury and that the defendants’ actions
were the cause of this injury.
As the plaintiffs did not submit any evidence, the trial court properly granted
summary judgment to the defendants.
Lesson:
In federal court, a moving party need not produce evidence in support of a
motion for summary judgment; theirs is a burden of demonstration, rather
than production.
9.
Rejection Of A Complete Offer Of Judgment Is Not A Basis For
Dismissal; Chapman v. First Index, Inc., 796 F.3d 783 (7th Cir.
8/6/15) (Easterbrook)
The Seventh Circuit has developed a fairly robust line of cases standing for the
proposition that a lawsuit must be dismissed if a defendant makes an offer of
judgment covering everything a plaintiff wants in the lawsuit (damages, injunction,
attorney’s fees, etc.). The first of those cases the Court cited in its opinion was from
1991 The most recent of those cases was decided last year in Smith v. Greystone
Alliance, LLC, 772 F.3d 448 (7th Cir. 2014). Such an offer was made in this case,
and the matter was dismissed.
However, in a dissenting opinion in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct.
1523 (2013), Justice Kagan showed that an expired (and unaccepted) offer of a
judgment does not satisfy the Court’s definition of mootness, because relief remains
possible. Moreover, the issue is currently before the Supreme Court in Campbell‑
Ewald Co. v. Gomez, Cause No. 14-857.
18
Noting 1) that none of the justices disagreed with Justice Kagan in Genesis
Healthcare, and 2) that courts have uniformly agreed with Justice Kagan since
Genesis Healthcare, the Seventh Circuit decided that it was “best to clean up the
law of this circuit promptly, rather than require Chapman and others in his position
to wait another year for the Supreme Court’s decision.” Thus, although it held that
there can be consequences to rejecting a complete offer of judgment, those
consequences did not include “outright dismissal on the basis of mootness.”
This issue comes up most often in the context of class actions, and the Court noted
that there may be good reasons to allow such a case to continue, even if the
defendant makes a complete offer of judgment to the class representative. But those
concerns do not necessarily apply when there is a single plaintiff.
If there is only one plaintiff, however, why should a court supply a
subsidized dispute ‑ resolution service when the defendant’s offer
means that there’s no need for judicial assistance, and when other
litigants, who do need the court’s aid, are waiting in a queue? Ordering
a defendant to do what it is willing to do has no legitimate claim on
judicial time. Why should a judge do legal research and write an
opinion on what may be a complex issue when the plaintiff can have
relief for the asking? Opinions are supposed to be the by-products of
real disputes. But defendants do not make an argument along these
lines. Nor did their offer remain open, so a court could not say (as may
well be true) that there is no sum currently in dispute. A fleeting offer
could not reasonably be equated to full compensation. Is 14 days long
enough for an offer’s consideration? How a court should deal with these
situations can be left for another day, when the parties have addressed
them.
This is a pretty substantial reversal of a robust line of precedent going back at least
25 years. Therefore, we can expect a lot of litigation over what the consequences of
rejecting a complete offer of judgment will be going forward.
Lessons:
A plaintiff’s rejection of a complete offer of judgment under Fed. R. Civ. P. 68
no longer requires dismissal of the case as moot, at least when the offer is
“fleeting.”
10. If A Party Raises New Arguments And Evidence In A Reply, A
Court Must Strike It Or Give Leave To File A Surreply; Meinders
v. UnitedHealthcare, Inc. 800 F.3d 853 (7th Cir. 9/1/15) (Bauer)
19
Lawyers always like to get the last word, and that honor generally goes to the
person who is requesting relief. For example, the movant generally gets to file a
reply. But this case highlights a situation in which a surreply is called for and,
indeed, must be allowed: when the reply uses new legal arguments and evidence to
support the motion.
Meinders filed a putative class action lawsuit in Illinois against United in April
2014, asserting that United sent him and others unsolicited junk faxes. United
moved to dismiss for improper venue, citing an agreement that Meinders had
signed which bound him to arbitrate his junk fax claims in Minnesota.
In response, Meinders argued that his agreement containing the arbitration clause
was not with United, as only he and a company called ACN Group were parties to
the contract. Moreover, even if United owned ACN Group, corporate ownership does
not itself confer a right upon the parent corporation to enforce an arbitration
agreement where only the subsidiary is a party to the agreement.
United filed a reply, indicating “surprise” that Meinders raised and focused on the
fact that United was not a signatory to the arbitration agreement. It then argued
and presented facts for the first time that 1) ACN Group was a wholly owned
subsidiary of United and 2) United had assumed obligations under the agreement
that allowed it to enforce that agreement.
Meinders moved to strike United’s reply or, in the alternative, for leave to file a surreply addressing United’s assumption theory and evidence. The district court denied
both motions and granted the motion to dismiss for improper venue. Meinders
appealed.
On appeal, the Court held that the district court erred by not giving Meinders the
opportunity to respond to “a novel legal theory and new evidence submitted in
reply.” A local rule stating that no surreply briefs would be accepted was not a
sufficient reason to deny Meinders’ request.
[O]nce the district court permitted United to file its reply brief, the
court should have granted Meinders leave to file a sur-reply
responding to United’s novel assumption theory and Van Ham’s
declaration. Due process, we have cautioned, requires that a plaintiff
be given an opportunity to respond to an argument or evidence raised
as a basis to dismiss his or her claims. When strict adherence to local
rules, such as S.D. Ill. L.R. 7.1(c)’s proscription on sur-reply briefs,
threatens to deprive a litigant of the opportunity to respond, the local
rules must give way to considerations of due process and fundamental
fairness.
In the end, the Court felt it best to remand the matter for further discovery on the
issue of whether United assumed ACN Group’s arbitration agreement with
Meinders, rather than deciding the issue on the basis of the “bare-bones
declaration” United submitted with its reply.
20
Lesson:
If a movant cites new evidence or legal theories in a reply brief, then due
process requires either that the reply be stricken or that the non-movant be
given an opportunity to respond.
11. Surviving Spouse Or Dependents Cannot Recover Attorney’s
Fees Under The General Wrongful Death Statute; SCI Propane
LLC v. Frederick, __ N.E.3d ___ (Ind. 8/27/15) (Massa)
In a decision that would be hard to justify to a non-legal audience, the Indiana
Supreme Court held that wrongful death actions filed for decedents who are not
survived by a spouse or dependents are entitled to attorney’s fees, while those who
are survived by a spouse or dependents cannot. The key to this decision was the
language of the applicable statute.
SCI provided propane services to the Kindles. A gas leak occurred at the Kindles’
home, causing an explosion and fire. One of the Kindles’ family members, Stephan
Frederick, died in the explosion. He was survived by his wife and minor son.
Stephan’s estate filed a wrongful death action against SCI and others. The case
went to trial, and the parties agreed to bifurcate the issues of damages and liability.
At the liability trial, the jury apportioned 65% of the fault to SCI, and 35% to the
Kindles.
After this verdict, but before the damages trial took place, the Estate moved for
partial summary judgment, arguing that it could seek attorneys’ fees under the
Indiana General Wrongful Death Statute (GWDS). SCI cross-moved for the opposite
summary judgment determination. The trial court granted the Estate’s motion and
the parties’ appealed. The Court of Appeals affirmed, and the Supreme Court
granted transfer.
On transfer, the Court examined the language of the GWDS and found that it
“delineates two separate categories of decedents:” 1) all decedents, and 2) all
decedents who are not survived by a spouse or dependents. The first group is only
entitled to recover death-related expenses, such as “medical, hospital, funeral and
burial expenses.” The second category “expressly” includes the ability for the estate
“to recover reasonable attorneys’ fees.”
After recognizing these separate categories, the Court compared the GWDS to the
Adult Wrongful Death Statute and the Child Wrongful Death Statute. Each of those
statutes required that “the decedent be unmarried and have no dependents.”
Thus, when combined, their scope perfectly matches the second
category of GWDS decedents; in other words, every decedent in the
21
second GWDS category also satisfies the conditions to bring suit under
either the AWDS or the CWDS.
And attorney’s fees are recoverable under both the AWDS and the CWDS.
Turning to the question at hand, the Court found that the language of the GWDS
applicable to the first category of decedents was ambiguous. And as neither the
AWDS nor the CWDS applied to this category of decedents, the law regarding the
availability of attorney’s fees under those statutes did not inform the outcome of
this case. Rather, the Court held that the GWDS should be “construed narrowly.” In
other words, as the statute did not explicitly contain a fee-shifting provision, the
Court would not interpret the ambiguous language to include one.
The Court took pains to justify this decision from a policy perspective by focusing on
the incentives involved in bringing a wrongful death claim.
This outcome is neither absurd nor contrary to public policy. The
existence of a surviving spouse or dependent of a decedent creates a
significant incentive for the personal representative of the estate to
pursue a wrongful death claim for the benefit of the survivors, who
were perhaps financially dependent upon the decedent and could face
significant hardship without his or her income. In the absence of such
survivors, however, the only “party” arguably damaged as a matter of
law is the decedent, and thus the estate itself. It is therefore logical
that our General Assembly would provide extra incentive—in the form
of statutory fee awards—to personal representatives prosecuting such
actions, in order to ensure that those who commit acts resulting in a
wrongful death are held liable, which further encourages such actors to
avoid that wrongful conduct in the future.
Therefore, decedents without a spouse or dependents can obtain attorney’s fees in a
wrongful death action, while those who are survived by a spouse or dependents
cannot. As the Court said in a footnote, if the legislature determines that this is bad
policy, then it can correct it.
Lessons:
Attorney’s fees are not available under the General Wrongful Death Statute
to decedent who are survived by a spouse or dependents.
12. No Right To A Jury Trial On The Reasonableness Of Attorney’s
Fees; Cavallo v. Allied Physicians of Michiana, LLC, __ N.E.3d __
(Ind. Ct. App. 8/20/15) (Pyle)
Many contracts incorporate fee-shifting provisions. So when litigation arises from
one of these contracts, should the fee-shifting issue be tried to the jury as just
22
another form of damages? In this case, the Court held that it should not. That issue
should be resolved after trial by a judge.
Cavallo is a doctor who was employed by Allied. The contract between them
contained a covenant not to compete, which itself contained a fee-shifting provision.
Eventually, Allied sued Cavallo, claiming that he violated the covenant not to
compete. Allied asked for damages, including costs and attorney’s fees. Cavallo filed
a counterclaim and the matter proceeded to a jury trial.
At trial, the jury found in favor of Allied and awarded it $174,916.80. This did not
include an amount for attorney’s fees, as Allied did not introduced any evidence or
argument regarding its attorney fees at trial. Subsequently, Allied petitioned for
attorney’s fees. Cavallo objected to the petition, arguing that the fee amount was
unreasonable and that the request was untimely because Allied should have tried
the issue of attorney fees before the jury. The trial court found that the issue was
timely raised, and that Cavallo was not entitled to a jury trial on the
reasonableness of attorney fees under Trial Rule 38. It entered an order awarding
Allied the full amount of attorney’s fees it requested, and Cavallo appealed.
On appeal, Cavallo first argued that Allied was barred from seeking attorney’s fees
post-trial because Allied should have sought those fees at trial. But the Court
disagreed, finding that “the issue was not necessarily ripe for adjudication.”
We conclude that, logically, an attorney may not know how much time
and labor a matter will require until the matter has reached its
conclusion. Therefore, we are unwilling to hold that a party must
request attorney fees before a matter has reached its conclusion.
It was “virtually the norm” to entertain these kinds of petitions post-judgment, and
this case was no exception.
Next, Cavallo argued that he had the right to have a jury determine reasonable
attorney’s fees. The Court found that the key to resolving this issue was deciding
whether the determination of a reasonable amount of attorney fees is equitable in
nature, and that this was an issue of first impression in Indiana.
In answering this question, the Court looked to federal precedent on the issue of a
right to a jury trial under the Seventh Amendment of the United States
Constitution. In those cases, federal courts had held that attorney fees awarded as
an element of “costs” to a prevailing party in a breach of contract claim are not legal
in nature.
In part, this difference is based on the nature of an attorney fee award.
The general rule regarding attorney fees—known as the “American
Rule”—is that each party bears its own attorney fees. … [B]ecause
there is no common law right to recover attorney fees, … the Seventh
Amendment does not guarantee a trial by jury to determine the
amount of reasonable attorney fees.
23
In this case, Cavallo did not dispute that Allied may recover attorney fees under the
contract; he just challenged the reasonableness of the fees requested. “In light of
this precedent, we conclude that Cavallo did not have a right to a jury trial to
determine a reasonable amount of attorney fees.”
Finally, Cavallo argued that the trial court erred by awarding attorney’s fees based
solely on a fee petition supported by affidavits and detailed billing statements. He
argued that a hearing was required. Again, the Court disagreed, noting that such a
hearing may be “advisable,” but that it was not required. “[T]he detailed billing
statements Allied provided the court here, combined with the trial court’s
knowledge of the proceedings, were sufficient for the trial court to determine
reasonable attorney fees.”
Lessons:
1. If the breach of a contract containing a fee-shifting provision is tried, a party
does not need to put on evidence or argument regarding the fees to which it is
entitled during that trial.
2. There is no right to have a jury determine the reasonableness of an attorney’s
fee award.
3. A trial court is not required to hold a hearing on a petition for attorney’s fees
if the petition is supported by affidavits and detailed billing records.
13. The Issue Of Attorney’s Fees Need Not Be Raised Before Final
Judgment; Boyer Constr. Group Corp. v. Walker Constr. Co., Inc.,
___ N.E.3d ___ (Ind. Ct. App. 9/24/15) (Riley)
Prevailing parties always like fee-shifting statutes or contracts. But when should a
party first assert that they are entitled to attorney’s fees? In this case, the Court
said that you don’t need to do it prior to judgment.
Muller and Boyer entered into a contract to design and build a car dealership. Boyer
subcontracted the work to Walker. Boyer’s contracts with Walker contained a feeshifting provision “in the event of any litigation between the parties” for the benefit
of “the substantially prevailing party.”
Eventually, there was a dispute between Boyer and Walker, and Walker filed a
complaint against Boyer and Muller. Walker sought judgment against both Muller
and Boyer in the amount of $31,884.40, plus pre-judgment interest, reasonable
attorney’s fees, and lien costs. After a bench trial, the trial court entered judgment
in Walker’s favor, but for substantially less than Walker sought in the case.
After trial, Boyer argued that it substantially prevailed in the lawsuit, as the
judgment was much less than the amount Walker sought, and requested attorney’s
fees under the fee-shifting provision. Walker maintained 1) that Boyer had waived
any right to recover attorney’s fees by failing to counterclaim or otherwise plead the
24
issue prior to the trial court’s judgment, and 2) that it was actually the
substantially prevailing party. The trial court found that Boyer had waived its
ability to request fees, and that it “should have entered a judgment for attorney
fees” against Boyer earlier. The parties appealed.
On appeal, Boyer argued that he could not have waived his right to request
attorney’s fees, as it would not have that right until after the trial court entered
judgment on the underlying claims. Walker argued that a request for attorney’s fees
is a compulsory counterclaim under Trial Rule 13(A). The Court agreed with Boyer.
[N]othing in the Subcontract Agreements specifies that the parties
must make an affirmative demand for the attorney’s fees prior to final
adjudication. Rather, once prevailing party status is established,
attorney’s fees are axiomatic.
…
[T]he right to attorney’s fees was contingent upon the trial court’s
determination of the prevailing party, which was not established until
the trial court issued its Order.
The Court next turned to Boyer’s claim that it was the substantially prevailing
party. In doing so, the Court looked to authority dealing with the definition of
“prevailing party,” which held that this applies to the party in whose favor a
judgment is rendered, regardless of the amount of damages awarded. The Court
found no reason to interpret “substantially prevailing party” any differently than
“prevailing party.”
Regardless of the trial court’s allocation of damages between Boyer and
Muller, the trial court entered judgment entirely in Walker’s favor and
did not find that Boyer had succeeded on the merits as to a single
issue. Therefore, the trial court acted within its discretion in denying
Boyer’s petition for attorney’s fees because it is Walker—not Boyer—
that is the substantially prevailing party for purposes of the
Subcontract Agreements and is entitled to the award of attorney’s fees
thereunder.
Therefore, Boyer ended up paying not only the attorney’s fees associated with the
pre-trial and trial stages, but also fees associated with Walker’s defense against
Boyer’s fee petition and that appeal.
Lessons:
1. A party is not generally required to raise its right to attorney’s fees until
after a court has rendered a judgment.
2. Unless a contract specifically states otherwise, a defendant which does not
state a counterclaim and has a judgment rendered against it is not a
substantially prevailing party.
25
14. The Worst Appellate Brief Ever; Brazier v. Maple Lane
Apartments I, LLC, __ N.E.3d ___ (Ind. Ct. App. 10/22/15) (Robb)
Sometimes, we choose to speak about cases because they contain novel or
interesting legal issues, even when the facts are a bit dry. Other times, we choose a
case based on the facts involved, even if the legal issues are prosaic. This case is
different. It is Jerry Springer, not the McLaughlin Group.
Brazier was hired by Maple Lane to do some painting and other odd jobs from timeto-time at an apartment complex. After completing a job, he would give a
handwritten invoice to the property manager, who would send it on for payment.
Brazier did not keep copies of those invoices.
Eventually, Maple Lane stopped using Brazier’s services. The property manager
asked Brazier to bring her any unpaid invoices. He then proceeded to provide over
$63,000 in invoices, all of which covered work that he was not asked to perform and
that he did not actually do.
Brazier sued Maple Lane, seeking payment on all of the unpaid invoices. Attached
to the complaint were 114 allegedly unpaid invoices. The complaint stated that
these invoices were “copies” of the invoices provided to Maple Lane. 99 of those
invoices were for a “Bay Window Project.” Of those 99 invoices, one was reproduced
75 times, differing only by the apartment building or unit on which the services
were performed. The other 24 were also the exact same handwritten invoice,
differentiated again only by the apartment building or unit.
Litigation proceeded and many motions were filed. In all of the motions and
hearings, Brazier’s counsel referred to the invoices she submitted as “copies.” But at
trial, it became clear that this was false, and that the invoices that Brazier was
relying upon were created by Brazier after consulting with counsel for the purpose
of the litigation. The trial court entered judgment for Maple Lane and awarded
sanctions. It imposed a sanction on Brazier’s counsel of $5,000 to offset some of
Maple Lane’s attorney’s fees.
Brazier appealed, and his counsel filed what can only be described as one of the
worst appellate briefs ever written. The Court took 6 pages to “note several
significant deficiencies” in the brief.
Brazier’s original appellate brief “contained a one-page Table of Contents—showing
three headings under the Argument section all beginning on page 18—and a fourpage Table of Authorities.” Brazier moved to file a corrected brief, so that counsel
could “provide the correct page numbers and correct authorities in alphabetical
order.” Counsel promised to make no changes to other parts of the brief. The Court
granted the motion, noting that no substantive changes were allowed.
26
What was filed is almost indescribable. The Table of Contents in Brazier’s corrected
brief was 37 pages long, followed by an 11-page Table of Authorities. The Court
chose one entry in the Table of Contents to illustrate how this was even possible:
I. The trial Ct. improperly relied on Papaj’s and Cory’s mere “belief”
(improper hearsay under Ind. Evidence Rule 801 and 802) that Brazier
had already been paid for the invoices and the balance of the Account
Stated as neither Papaj nor Corey had personal knowledge or any
documentary evidence that the subject invoices making up the account
stated were actually paid as, pursuant to Ind. Trial Rule 8(C), [Maple
Lane] had the “burden of proving . . . payment” to Brazier of each of
the unpaid invoices of Brazier’s Account Stated and [Maple Lane’s]
required burden of proof of payment “is subject to the rules of evidence”
[appearing on pages] 8-16, 24-6, 27, 28, 29, 31, 35, 37, 39
All punctuation errors in this passage are exactly as they were reproduced in the
Court’s opinion. The Court did not like this “heading” at all.
This is neither a proper heading, nor is it a heading appearing on any
of the pages listed. In fact, the Argument section of the brief, which
does not even begin until page 16, includes no headings or
subheadings at all, despite the corrected Table of Contents listing
headings A through ZZ, with multiple subheadings (and some sub-
subheadings) under most headings. To the extent the Table of
Contents makes sense at all, it represents, at best, an abject failure to
understand the most basic requirements of appellate briefing.
The Table of Authorities was not immune from criticism. 60 of the cases listed in
the corrected brief did not appear in the Table of Authorities in the original brief.
And when the corrected Table of Authorities listed a case, it included argument
with it, such as the following entry highlighted by the Court:
Hirsch v. Merchants Nat’l Bank & Trust Co. of Indiana, 336 N.E.2d
833 (Ind. Ct. App. 1975) (providing eight percent interest in action for
breach of lease). When the parties’ contract does not provide an
interest rate; therefore, the statutory interest rate of eight percent is
applicable. (cited in App. 75-76) [appearing on page] 12
Again, the punctuation errors in this passage are exactly as they were reproduced
in the Court’s opinion. And again, the Court did not mince words when it described
this deficiency:
First of all, a Table of Authorities should simply be a list of cases,
statutes and other authorities relied on in the brief, presented without
further comment. … Moreover, no case citations let alone Hirsch,
appear on page 12 of the brief (which is, in fact, appropriate because
page 12 is part of the Statement of the Facts, which should not include
argument), nor is any reference to interest made on that page. …
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Thus, the Table of Authorities fails at its basic and only purpose of
informing us of the cases cited in the brief and directing us to where
in the brief a particular case is discussed.
The Court then addressed the deficiencies in the Brazier’s argument:
[D]espite the numerous “headings and subheadings” shown in the
Table of Contents, Brazier’s Argument section … contains no headings
or subheadings. Not only are headings required by the rule, but they
may have helped to focus Brazier’s argument, which lacks the cogent
reasoning also required by the rule. For instance, on two consecutive
pages of the brief, essentially the same sentence appears four times.
The content of two pages of the brief are replicated in whole several
pages later. … What has most hindered our review, however, is that
there is no rhyme or reason to the manner in which Brazier has
presented his argument. Rather than clearly stating an issue and
discussing it to conclusion, discussion of all the issues is intermixed
throughout.
Despite putting this all in a published opinion, the Court made it clear that it was
actually being much gentler than it could.
Counsel’s failures to follow even the simplest rules regarding the
content of an appellate brief have made our review of this case
unnecessarily difficult. We commend Maple Lane for largely refraining
from comment on the quality of the brief and endeavoring to respond to
the legal arguments. Were it within our purview to do so, we would
order Brazier’s counsel to verify to this court her attendance at a
continuing legal education program regarding appellate practice
before submitting any further briefs to this court. Although it would
be within our purview to order counsel to show cause why she should
not be held in contempt for willful violation of this court’s order
granting leave to amend the brief to correct technical errors only and
specifically prohibiting any substantive changes, counsel does not
appear to frequently represent clients on appeal nor has she been
previously cited for poor briefing practices. Therefore, we have chosen
not to take such extreme measures at this juncture. Nonetheless, we
admonish counsel in the strongest possible terms to carefully review
the appellate rules and fully conform her briefs to their requirements
in the future.
You will not be surprised to learn that the Court affirmed the trial court’s
judgment, including the sanctions imposed against Brazier’s counsel. And when
doing that, the criticism of Brazier’s counsel continued. For example, the Court
noted that Brazier’s complaint and the “belabored, disorganized presentation of his
case” at trial, “leaves us without a clear understanding of the theory under which he
was seeking recovery.” And when arguing against the sanction imposed on counsel,
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Brazier failed to “present a reasoned argument for why such sanctions were
inappropriate.”
If we are to take a lesson away from this case, other than follow the Appellate Rules
when filing a brief, it comes from the portion of the Court’s opinion affirming the
sanction. The Court affirmed the sanction under Trial Rule 11, noting the following:
In fact, the invoices were created out of whole cloth after Brazier met
with his attorney in preparation for filing this lawsuit; the reliability of
those invoices as proof of anything is therefore suspect. Brazier’s
counsel signed numerous pleadings and motions asserting the
authenticity of the invoices as copies, and we conclude the evidence
demonstrates Brazier’s counsel knowingly mispresented and/or failed
to correct any misrepresentation regarding the nature of those invoices
from the day this litigation was initiated.
Even if Brazier’s counsel was not complicit in creating those documents, she should
not have continually called them copies and hid their true nature from the trial
court and opposing counsel. A “recreation” is not a “copy.”
Lesson:
Plan on being sanctioned if you repeatedly tell a court and opposing counsel
that a recreation of a document is actually a copy of that document.
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ADVOCACY TIP OF THE MONTH: Lessons Learned While Winning a
$31 Million Verdict
Most lessons are learned the hard way, that is, when you lose. Sometimes lessons
can be learned when you win. Here are three lessons I took away from a recent
federal jury trial where I'm happy to report we won a $31 million verdict.
1. Limit the defendants and the claims to the ones that matter most. We had 5
plaintiffs, 7 individual defendants, and 8 different claims. We had a 22-page
verdict form that required the jury to answer 122 questions on liability before
determining damages. It took the judge an hour to read 62 pages of
instructions. The jury was not allowed to take notes during the three-week
trial. The jury did a remarkable job in sorting it all out. They found two
individual defendants not liable and found no liability on three claims. With
the benefit of hindsight, we probably should have done more to pare down the
case ourselves.
NOTE: A recent four-month trial in New York ended with a mistrial because
the jury was unable to come to agreement involving 151 criminal charges
against the top three executives of the Dewey and LeBoeuf law firm. After 22
days of deliberations, some members of the jury were confused and
overwhelmed.
2. Have a back-up plan if technology fails. I planned to use Trial Director:
software that, among other things, allows you to pull up an exhibit on the
computer, show a full page, and then quickly "call out" in large print
particular language from the page so that it can be easily read by the jury on
their screens. I was planning to do that with my legal assistant running the
computer. The judge, however, said that I could not give oral directions to
my legal assistant about what to "call out". This made the use of trial
director impractical for most purposes. Fortunately, the court had a quality
visual presenter (an "ELMO") which proved to be a good substitute.
3. Use clips of the opposing party’s video deposition as an alternative to calling
the party as an adverse witness. In the past, I have sometimes called the
opposing party as an adverse witness in order to get in certain evidence I
needed in my case-in-chief. There are, however, some costs when calling
adverse witnesses: the witness may be able to start spinning the facts during
my case; and opposing counsel may be able to ask leading questions on crossexamination. In this trial, we used clips from video depositions of the
defendants instead of calling them as adverse witnesses. Although, in
compliance with the rule of completeness, we were required to include some
clips designated by the defendants, overall I thought the result was better
than is often achieved through the “adverse witness” route.
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Accessing The Indiana Law Update Electronically
For your convenience, a podcast of today’s presentation and a PDF version of this
document will be available online at www.indianalawupdate.com.
PDF:
Simply click on the dated item of interest, and with the proper
Adobe Acrobat software installed on your computer you will be
able to view, save or print.
PODCAST: To listen to an audio recording of the October 29, 2015
Indianapolis Law Club presentation simply click on the podcast
link. Upon following the link, you will be asked if you want to
save or open the file.
• To listen to the podcast, select the “open” button.
• To download through iTunes, select the “save” button.
• To download via your iPod, select the “save button”. After
signing in, select the “import” button found under the file
menu. Import the saved file from your computer. Select the
“Sync iPod/mp3” button and enjoy.
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Ronald J. Waicukauski
P RICE W AICUKAUSKI J OVEN & C ATLIN , LLC
301 Massachusetts Avenue
Indianapolis, IN 46204
317/633-8787 Phone
E-mail: rwaicukauski@price-law.com
Ron Waicukauski is a trial lawyer whose practice focuses on plaintiffs’ complex
litigation including matters involving business disputes, property rights,
professional malpractice, and class actions. He has tried more than seventy jury
cases to verdict as lead counsel in both state and federal courts. Ron has been
recognized in Best Lawyers in America (2006-2015) and Indiana Super Lawyers
(2004-2015) and with an AV Rating from Martindale-Hubbell.
Ron received his bachelor degree with Distinction from Northwestern University,
his J.D. degree from Harvard University where he was named Best Oralist in the
Ames Moot Court Competition, and an LL.M. degree, with Highest Honors, from
George Washington University. Ron has taught trial and appellate advocacy at the
Indiana University Schools of Law in Bloomington and Indianapolis, and has served
on the faculties of the National Institute of Trial Advocacy and the Defense Counsel
Trial Academy.
Ron has also served as President of the Indianapolis American Inn of Court, as
Chair of the Continuing Legal Education Board of the International Association of
Defense Counsel, and as Co-chair of the Training the Advocate Committee,
Litigation Section, American Bar Association. He formerly was a JAG and Captain
in the U.S. Marine Corps and served as the elected Prosecuting Attorney in Monroe
County, Indiana.
Ron co-authored The Twelve Secrets of Persuasive Argument (2009 ABA), The
Winning Argument (2001 ABA), Classical Rhetoric and the Modern Trial Lawyer,
Litigation (Winter 2010); and Ethos and the Art of Argument, Litigation (Fall 1999).
Ron also wrote Learning the Craft, Litigation (Spring 1998) and was the editor and
a contributing author of Law and Amateur Sports (Ind. Univ. Press 1982).
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Brad A. Catlin
P RICE W AICUKAUSKI J OVEN & C ATLIN , LLC
301 Massachusetts Avenue
Indianapolis, IN 46204
317/633-8787 Phone
E-mail: bcatlin@price-law.com
Brad is a member of Price Waicukauski Joven & Catlin, LLC, an Indianapolis based
plaintiffs’ litigation firm. His practice focuses on complex and class litigation,
including legal malpractice, commercial litigation, and consumer fraud. In 2012,
Brad was recognized as a "Rising Star" by the Super Lawyers publication in the
practice area of legal malpractice. Brad is admitted to practice in the States of
Indiana and Ohio.
Brad is a native of Westfield, Indiana and attended Wabash College as an Honor
Scholar. He graduated from Wabash cum laude with an A.B. in Political Science
and obtained his law degree from the University of Notre Dame School of Law.
While in law school, Brad worked for Jones Obenchain, LLP, in South Bend,
Indiana.
Brad also served as a law clerk to Hon. Mary DeGenaro of Ohio’s Seventh District
Court of Appeals, where, in addition to his regular clerkship responsibilities, he
helped prepare material for the Ohio exam governing certification as a specialist in
Appellate Law.
Brad is frequently asked to speak to lawyers on a variety of subjects, including the
use of technology in a legal practice and recent developments in Indiana law. Brad
authors Technolawgical, a column on the use of technology in a legal practice, in the
Verdict, the quarterly publication of the Indiana Trial Lawyers Association.
33