Title: Shepherd Props. Co. v. Int'l Union of Painters & Allied Trades

State: indiana

Issuer: Indiana Supreme Court

Document:

ATTORNEYS FOR APPELLANT 
 
 
 
 
ATTORNEY FOR APPELLEE 
Michael L. Einterz 
 
 
 
 
 
William R. Groth 
Michael L. Einterz, Jr. 
 
 
 
 
 
Indianapolis, Indiana 
Zionsville, Indiana 
______________________________________________________________________________ 
 
In the 
Indiana Supreme Court  
_________________________________ 
 
No. 49S04-1112-PL-697 
 
SHEPHERD PROPERTIES CO., D/B/A 
SHEPCO COMMERCIAL FINISHES,  
Appellant (Intervening Defendant 
below), 
 
v. 
 
INTERNATIONAL UNION OF PAINTERS 
AND ALLIED TRADES, DISTRICT  
COUNCIL 91, 
 
 
 
 
 
 
 
 
Appellee (Plaintiff below). 
_________________________________ 
 
Appeal from the Marion Circuit Court, No. 49C01-0810-PL-48145 
The Honorable Louis Rosenberg, Judge 
_________________________________ 
 
On Petition to Transfer from the Indiana Court of Appeals, No. 49A04-1010-PL-676  
_________________________________ 
 
July 31, 2012 
 
David, Justice. 
 
In this case, a plaintiff prevailed on its Access to Public Records Act claim against a 
public agency and an intervening private party.  As required by statute, the trial court awarded 
the plaintiff attorney’s fees. 
 
The fees were awarded against both the public agency and intervening private party, 
jointly and severally.  The private party argued that the Access to Public Records Act does not 
FILED
CLERK
of the supreme court,
court of appeals and
tax court
Jul 31 2012, 10:00 am
 
2 
contemplate the award of attorney’s fees against an intervening private party and that only the 
public agency should be liable for the fees. 
 
We hold that the Access to Public Records Act, in light of the legislature’s liberal-
construction mandate and the statute’s underlying policy, permits the award of attorney’s fees 
against an intervening private party.  We further hold that, in this case, the trial court did not 
abuse its discretion in its apportionment of liability. 
Facts and Procedural History 
 
The International Union of Painters and Allied Trades (Union) requested to inspect and 
copy payroll records in the possession of the Metropolitan School District of Warren Township 
(Township).  The payroll records were submitted by ShepCo Commercial Finishes, a 
subcontractor on a public-works project. 
 
Union claimed that the payroll records were “public records” subject to disclosure under 
the Access to Public Records Act (APRA).1  ShepCo and Township, on the other hand, 
contended that the payroll records were trade secrets and confidential financial information that 
fell under exceptions within the APRA.  
 
Pursuant to the APRA, ShepCo made an informal inquiry of the Public Access Counselor 
(PAC) regarding disclosure of the records.  Later, Union requested a formal advisory opinion 
from the PAC.  Both times, the PAC concluded that the records did not need to be disclosed.  
Specifically, the PAC’s formal advisory opinion concluded that the records were “trade secrets” 
and “confidential financial information” that were exempt from disclosure under the APRA. 
 
In October 2008, Union filed a complaint with the trial court, seeking to compel 
disclosure under the APRA and naming Township as the sole defendant.  Township moved to 
add ShepCo as a necessary party.  The trial court denied that motion, but it granted ShepCo’s 
subsequent motion to intervene. 
                                                 
1 Ind. Code §§ 5-14-3-1 to 10 (2010 & Supp. 2011), amended by 2012 Ind. Legis. Serv. P.L. 134-2012 
(West). 
 
3 
 
Union, Township, and ShepCo all moved for summary judgment.  In its motion, Union 
requested attorney’s fees pursuant to a provision in the APRA.  After a hearing, the trial court 
entered summary judgment for Union and ordered Township to disclose the records.  The trial 
court later held a separate hearing on Union’s request for attorney’s fees and awarded $20,234 in 
attorney’s fees against Township and ShepCo, jointly and severally. 
 
Union then filed a motion to amend the final judgment, seeking additional attorney’s fees 
expended by its counsel in litigating the original request for attorney’s fees.  ShepCo filed a 
motion to correct error, raising, for the first time, an argument on the appropriate weight to be 
given to the PAC’s advisory opinion and an argument challenging the constitutionality of the 
attorney’s fees award.  The trial court denied the motion to correct error and entered an amended 
judgment awarding Union an additional $2,425 in attorney’s fees. 
 
ShepCo appealed.  The Court of Appeals held that a private entity like ShepCo is not 
liable for attorney’s fees under the APRA and that Township, the public agency, was solely 
liable.  Shepherd Props. Co. v. Int’l Union of Painters, 950 N.E.2d 321, 325 (Ind. Ct. App. 2011).  
On rehearing, the Court of Appeals acknowledged two prior Court of Appeals cases that stated 
that a private party may be liable for the attorney’s fees of a party prevailing in an action to 
compel disclosure under the APRA.  Shepherd Props. Co. v. Int’l Union of Painters & Allied 
Trades, Dist. Council 91, 955 N.E.2d 208, 209 (Ind. Ct. App. 2011).  But the Court of Appeals 
noted that the “APRA does not include language providing for payment of attorney’s fees by an 
intervenor, and will not write into the statute such a provision.” Id. (emphasis omitted).  We 
granted transfer.   
Standard of Review 
 
The issue today is whether an intervening private entity can be held liable for attorney’s 
fees under the APRA.2  Because this is a matter of statutory interpretation, it is a pure question of 
law that we review de novo.  State v. Int’l Bus. Machs. Corp., 964 N.E.2d 206, 209 (Ind. 2012). 
 
                                                 
2 Portions of the APRA were amended effective July 1, 2012.  See 2012 Ind. Legis. Serv. P.L. 134-2012 
(West).  Our analysis would remain the same under both the previous and current versions of the APRA, 
as the wording of the relevant provisions remains unchanged. 
 
4 
Access to Public Records Act 
 
The public policy underlying the APRA is “that all persons are entitled to full and 
complete information regarding the affairs of government and the official acts of those who 
represent them as public officials and employees.” Ind. Code § 5-14-3-1.  Accordingly, the 
APRA requires a “public agency” to disclose its “public records” upon the request of any person.  
Id. § 5-14-3-3(a), (b).   
 
Certain types of public records are excepted from the APRA’s disclosure requirement, 
and a public agency may not disclose those records unless specifically required by statute or 
court order.  Id. § 5-14-3-4.  A public agency or a member of the public may file an informal 
inquiry request or a request for a formal advisory opinion with the PAC regarding whether a 
document is subject to disclosure under the APRA.  Id. § 5-14-4-10(5), (6) (2010). 
 
A person denied access to a public record may file an action in court “to compel the 
public agency to permit the person to inspect and copy the public record.”  Id. § 5-14-3-9(e).  
When such an action is filed, the public agency must notify each person who supplied any part of 
the public record at issue (1) that a request for release of the record was denied and (2) whether 
the denial was in compliance with an informal inquiry response or formal advisory opinion of the 
PAC.  Id.  Any person who supplied part of the disputed record is entitled to “intervene” in 
litigation resulting from the denial.  Id. 
 
If the plaintiff seeking disclosure prevails in the court action, the court “shall” award 
reasonable attorney’s fees, court costs, and expenses if the plaintiff first sought and received an 
informal inquiry response or formal advisory opinion from the PAC.  Id. § 5-14-3-9(i).   
 
In this case, the parties agree that Township is a “public agency” as defined in the APRA 
and that ShepCo is not a “public agency.”  See id. § 5-14-3-2(m).  The parties also agree that 
ShepCo appeared as an intervenor as permitted by the APRA and that Township is liable for 
Union’s attorney’s fees under the APRA.  The parties’ disagreement rests on whether ShepCo is 
also liable to Union for its attorney’s fees under the APRA.3 
                                                 
3 In its appellate brief, ShepCo reasserted two arguments from its motion to correct error: (1) the trial 
court erred when it failed to give appropriate weight to the opinion of the PAC and (2) the trial court’s 
 
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A. Prior Decisions 
 
Third-party liability for attorney’s fees under the APRA is an issue of first impression for 
this Court.  However, before its decision in this case, the Court of Appeals had addressed the 
subject on two prior occasions.  See Indianapolis Newspapers v. Indiana State Lottery Comm’r, 
739 N.E.2d 144 (Ind. Ct. App. 2000), trans. denied; Knightstown Banner, LLC v. Town of 
Knightstown, 882 N.E.2d 270 (Ind. Ct. App. 2008), clarified on reh’g, 889 N.E.2d 317 (Ind. Ct. 
App. 2008).  In both opinions, described below, the Court of Appeals stated that third parties 
may be liable for the attorney’s fees of a party prevailing in an action to compel disclosure under 
the APRA. 
 
In Indianapolis Newspapers, a newspaper requested that the Lottery Commission, a 
public agency, disclose documents containing information generated by lottery retailers.  739 
N.E.2d at 146–47.  Upon request by the newspaper, the PAC rendered an advisory opinion, 
stating that the documents requested must be disclosed under the APRA.  Id. at 147. 
 
The retailers sued the Lottery Commission to enjoin disclosure, and the newspaper 
intervened.  Id. at 148.  The Lottery Commission then tendered the disputed documents to the 
court under seal.  Id. at 148–49.  The trial court found that the Lottery Commission’s surrender 
of the documents obviated the need for it as a party and discharged it from liability, including 
liability for the newspaper’s attorney’s fees.  Id. at 149–50.  The newspaper appealed. 
 
The Court of Appeals found the trial court erred in discharging the Lottery Commission 
because the Lottery Commission was still potentially liable to the newspaper for attorney’s fees 
under the APRA, depending on the outcome of the litigation.  Id. at 155–56.  But the Court of 
Appeals also discussed the retailers’ potential liability for attorney’s fees.  First, the Court of 
Appeals generally stated that the APRA “does not require that the attorney fees be awarded to or 
                                                                                                                                                             
award of attorney’s fees under the APRA infringed on its rights to open access to the courts and to 
substantive due process in violation of Article 1, Section 12 of the Indiana Constitution.  ShepCo argues 
that because the Court of Appeals never reached these issues, we must address them on transfer.  Union 
contends that both arguments “have been waived because they were never addressed to the trial court 
until ShepCo filed its Motion to Correct Errors.”  We agree with Union.  ShepCo failed to raise these two 
issues in any of its pleadings and motions, including its motion for summary judgment, that were filed 
before the trial court entered its judgment.  It is well established that a party may not raise issues for the 
first time in a motion to correct error.  Troxel v. Troxel, 737 N.E.2d 745, 752 (Ind. 2000).    
 
6 
from the public agency when it is clear that the statute contemplates the involvement of third 
parties.”  Id. at 156.  The Court of Appeals then explained how it would apportion liability for 
attorney’s fees if the newspaper prevailed in the litigation: 
[W]e interpret the attorney fee provision to mean that, if the [newspaper] 
substantially prevails in this action, the Lottery is liable for the [newspaper’s] 
attorney fees from the time the PAC rendered her advisory opinion until the 
Lottery has made complete tender of the disputed documents to the trial court.  
After complete tender has been made, the Retailers become liable for the fees, 
unless there is later litigation concerning whether or not complete tender was in 
fact made, in which case the Lottery may again become liable for the 
[newspaper’s] fees in litigating that issue. 
Id. 
 
 
The Court of Appeals also found that because the Lottery Commission took the position 
that it was not liable for the newspaper’s attorney’s fees, the newspaper was required to appeal 
the issue.  Id.  And because the newspaper prevailed on that issue on appeal, the Court of 
Appeals determined that the newspaper was entitled to an award of appellate attorney fees under 
the statute.  Id.  The Court of Appeals further noted that had the retailers been involved in the 
appeal, it “might have been appropriate to apportion the [newspaper’s] appellate attorney fees 
between the Lottery and the Retailers.”  Id. at 156 n.10. 
 
The Court of Appeals also addressed the issue of whether allowing third-party liability 
for attorney’s fees under the APRA would have a “chilling effect” on seeking intervention.  Id. at 
156 n.9.  The Court of Appeals determined that in the event a third party did not intervene, that 
did not mean the third party’s interests were without representation: “the public agency would 
have already independently determined that disclosure was improper prior to denying access, and 
would be compelled by the statute to litigate the issue if the private person did not intervene.”  
Id.     
 
In a later case, Knightstown Banner, 889 N.E.2d 317, the Court of Appeals again 
confronted the issue of attorney’s fees under the APRA.  The underlying lawsuit had already 
proceeded through two appeals, and on rehearing from the second appeal, the sole issue was 
whether third parties should share joint and several liability with a town for attorney’s fees and 
costs.  889 N.E.2d at 319.   
 
7 
 
The case had involved a newspaper’s request to inspect an agreement settling a civil 
rights action against the town.  Id. at 319.  The town was insured by Government Insurance 
Exchange (GIE) under a policy that made Government Insurance Managers (GIM) the town’s 
attorney-in-fact with the power to settle claims.  Id. at 320 nn.1–2.  After the town and GIE 
denied the newspaper’s requests to inspect the settlement agreement, the newspaper filed an 
APRA action against the town, GIE, and GIM.  Id. at 319–320.  The newspaper was ultimately 
successful, and the trial court determined that the town, GIE, and GIM were jointly and severally 
liable for the newspaper’s attorney’s fees, costs, and expenses.  Id. at 319.   
 
GIE and GIM argued, among other things, that they should not share liability with the 
town for the newspaper’s attorney’s fees because they are not public agencies within the 
meaning of the APRA.  Id. at 320.  The Court of Appeals cited Indianapolis Newspapers for the 
proposition that the APRA “‘does not require that the attorney fees be awarded to or from the 
public agency when it is clear that the statute contemplates the involvement of third parties.’”  Id. 
at 320 (quoting Indianapolis Newspapers, 739 N.E.2d at 156).  The Court of Appeals found that 
GIE and GIM were “necessary parties” to the action because of the close relationship between 
the town, GIE, and GIM.  Id. at 320.  And it also found that GIE and GIM were very involved 
and active in the litigation: they negotiated and drafted the settlement agreement, had possession 
of the agreement when the newspaper sought disclosure, and strongly resisted the newspaper’s 
efforts to inspect the settlement agreement.  Id.  Because of those reasons, the Court of Appeals 
held that the trial court did not err in imposing joint and several liability on GIE and GIM for the 
newspaper’s attorney’s fees.  Id. at 321. 
B. Current Case 
 
In its first opinion in this case, the Court of Appeals concluded that ShepCo was not 
liable for attorney’s fees because it was not a “public agency” that denied access to public 
records.  It reasoned, “The attorney’s fees provisions of APRA are directed toward public 
agencies.  There is no corollary provision for assessment of attorney’s fees against a private party 
in the event of improper nondisclosure.”  Shepherd Props. Co., 950 N.E.2d at 325.  The Court of 
Appeals added a footnote acknowledging the existence of Indianapolis Newspapers but did not 
explain whether that case had an effect on the present one.  Id. at 325 n.6. 
 
8 
 
The Court of Appeals then granted rehearing to expand upon the issue of “the propriety 
of an award of attorney’s fees under the Indiana Access to Public Records Act.”  Shepherd 
Props. Co., 955 N.E.2d at 209.  The Court of Appeals recognized the observation from 
Indianapolis Newspapers that the APRA “‘contemplates the involvement of third parties.’”  Id. 
(quoting Indianapolis Newspapers, 739 N.E.2d at 156).  It also acknowledged that Knightstown 
Banner held that “private parties ‘aligned with the Town of Knightstown’ upon having been 
named as defendants in a lawsuit, should share joint and several liability with the Town for 
attorney’s fees and costs.”  Id. (quoting Knightstown Banner, 889 N.E.2d at 319).  But the Court 
of Appeals distinguished this case on the grounds that ShepCo was an “intervenor” in the 
litigation: 
We do not disagree with . . . prior observations from this Court, that APRA does 
not include language explicitly precluding attorney’s fees from a third party.  
Conversely, APRA does not include language providing for payment of attorney’s 
fees by an intervenor, and we will not write into the statute such a provision. 
Id. 
 
On transfer, ShepCo urges us to adopt the logic of the Court of Appeals, arguing that its 
status as an intervenor sets it apart from the private-party defendants in Indianapolis Newspapers 
and Knightstown Banner.  ShepCo maintains that this is a “critical distinction” that shields it 
from liability for attorney’s fees under the APRA.  Union contends that ShepCo’s participation 
in this action as an intervenor is not distinguishable from the participation of GIE and GIM in 
Knightstown Banner because ShepCo is likewise aligned with the public agency and actively 
opposed disclosure of the public records. 
 
We agree with Union that there is no meaningful distinction between ShepCo as an 
intervenor in the APRA litigation and other private-party defendants who also oppose disclosure.  
“An intervenor is treated as if it was an original party and has equal standing with the parties.”  
Mercantile Nat’l Bank of Indiana v. Teamsters Union Local #142 Pension Fund, 668 N.E.2d 
1269, 1271 (Ind. Ct. App. 1996).  And because we agree with the reasoning behind Indianapolis 
Newspapers and Knightstown Banner, we hold that it was permissible for the trial court to hold 
ShepCo jointly and severally liable for Union’s attorney’s fees.  The text of the APRA and 
public policy support this conclusion. 
 
9 
 
As stated earlier, the APRA’s purpose is to ensure that the public is provided “full and 
complete information” about government affairs.  I.C. § 5-14-3-1.  Importantly, the Act 
mandates that it “shall be liberally construed to implement this policy.”  Id. 
 
Indiana public agencies are the gateways for public-record requests.  But the APRA 
expressly permits private entities, like ShepCo, to intervene in any action to compel disclosure.  
Id. § 5-14-3-9(e).  Specifically, whenever an action is filed under the APRA, the “public agency 
must notify each person who supplied any part of the public record at issue” and “[s]uch persons 
are entitled to intervene in any litigation.”  Id.  Thus, the legislature, in inserting this language, 
was aware that any action brought under the APRA could implicate the interests of both public 
agencies and private entities and that both could actively oppose disclosure of the public records 
at issue. 
 
The APRA mandates an award of attorney’s fees to a plaintiff who “substantially 
prevails” if that party has first sought an advisory opinion from the public access counselor.  Id. 
§ 5-14-3-9(i).  That subsection, however, is silent as to who is liable for the attorney’s fees.  As 
evidenced by the parties’ arguments on the issue, this silence leaves the statute open to at least 
two different interpretations—that only public agencies are liable for prevailing plaintiffs’ 
attorney’s fees or that both public agencies and private parties involved in the litigation may be 
liable.  Because the provision is susceptible to more than one interpretation, it is ambiguous and 
open to statutory construction.  City of North Vernon v. Jennings Nw. Reg’l Utils., 829 N.E.2d 1, 
4 (Ind. 2005). 
 
In construing the APRA’s attorney’s fees provision, this Court’s primary task is to give 
effect to the intent of the legislature.  Id.  We presume that the legislature intended the language 
used in the statute to be applied logically and consistently with the APRA’s underlying policy 
and goals.  See Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274, 1283 (Ind. 2009). 
 
To shield private entities from liability for attorney’s fees would thwart, rather than 
further, the public policy underlying the APRA.  Here, the legislature has made it clear that the 
APRA must be “liberally construed to implement” the policy of full access to public records and 
transparency of government affairs.  I.C. § 5-14-3-1.  And the legislature clearly contemplated 
the involvement of private parties in APRA litigation.  Removing from private entities any fear 
 
10 
of liability for attorney’s fees would deter persons seeking to inspect public records from filing 
APRA actions, as the private entities could assert non-meritorious defenses to avoid disclosure 
and drive up litigation costs.  In light of the “liberal” construction mandate and the underlying 
policy of the APRA, we construe Indiana Code section 5-14-3-9(i) as permitting private-party 
liability for a prevailing plaintiff’s attorney’s fees.4 
 
Now that we have determined that private parties may be liable for attorney’s fees under 
the APRA, the question remains of how courts should apportion liability.  When determining the 
allocation of attorney’s fees liability between a public agency and a private entity, courts should 
consider various factors, such as whether a party acted in good or bad faith; whether a party 
played a nominal or active role; and whether a party was partisan or neutral in the cause of 
action.  This is precisely what the trial court did in this case when evaluating the respective roles 
                                                 
4 As Union points out in its transfer brief, the “American Rule” is not applicable to this case.  “Indiana 
common law generally follows the ‘American Rule,’ under which each party bears its own legal fees and 
expenses unless otherwise provided by statute.”  Porter Dev., LLC v. First Nat. Bank of Valparaiso, 866 
N.E.2d 775, 779 (Ind. 2007).  But the APRA “explicitly provides for a variation from this general rule 
and thus modifies the common law as to attorney fees incurred in . . . actions that fall within the statute.”  
Id. 
 
11 
of ShepCo and Township in the litigation.5  Accordingly, the trial court did not abuse its 
discretion in the apportionment of attorney’s fees.6 
Conclusion 
 
We hold that private parties may be held liable for a substantially prevailing plaintiff’s 
attorney’s fees under the APRA.  We also hold that the trial court did not abuse its discretion in 
awarding the fees against the public agency and intervening private entity, jointly and severally. 
 
We affirm the trial court’s award of attorney’s fees to Union and remand to the trial court 
to determine what additional attorney’s fees the Union incurred under the APRA as a result of 
ShepCo’s appeal. 
Sullivan and Rucker, JJ., concur. 
Dickson, C.J., and Massa, J., dissent without opinion. 
                                                 
5 The portion of the trial court’s ruling related to the apportionment of attorney’s fees is as follows: 
The Court agrees with the defendant that neither defendant has displayed bad faith.  
ShepCo’s and Warren’s opposition to the release of the records was reasonably based on 
PAC opinions.  Moreover, in response to this Court’s ruling on the Motion for Summary 
Judgment, ShepCo has stated that it fully cooperated with the release of the certified 
payrolls.  The Court has no reason to doubt that statement and notes that Warren has 
expressed a similar intent to comply with this Court’s Ruling of May 27. 
Nor are the defendants distinguishable in terms of the nature of their participation in the 
instant controversy.  While Warren, as public agency, officially refused IUPAT’s request 
for certified payroll records, it was prodded to do so by ShepCo, which warned that it 
would sue the school corporation if IUPAT was given access to the records.  ShepCo was 
initially not named as a party.  Instead, it was joined as a result of its own Petition to 
Intervene. 
Unlike the Lottery Commission in Indianapolis Newspapers . . . , Warren took a partisan 
position in this litigation.  It did not deposit the disputed records with the Court and 
explicitly supported ShepCo’s legal positions on the Motion for Judgment on the 
Pleadings and Motion for Summary Judgment.  Having taken up the cause of ShepCo, it 
is equitable that Warren now share ShepCo’s liability for attorney fees.  In sum, the facts 
of this case justify that the defendants be treated the same. 
6 ShepCo does not challenge the amount of attorney’s fees the trial court awarded.  Regardless, we do not 
see any error in the trial court’s computations.