Court of Appeals of Indiana | Opinion 19A-PL-1569 | March 13, 2020 Page 1 of 29

ATTORNEY FOR APPELLANT

Steven P. Lammers

Mandel Horn & Rauch, P.C.

Carmel, Indiana

ATTORNEYS FOR APPELLEES

Benjamen W. Murphy

Griffith, Indiana

C. Anthony Ashford

Ashford Law Group

Valparaiso, Indiana

IN THE

COURT OF APPEALS OF INDIANA

Staff Source, LLC,

Appellant-Plaintiff,

v. 

Christine A. Wallace, Milan 

Kesic, Slobodan Kesic, The 

Resolve Group, LLC, and 

Resolve HR, LLC,

Appellees-Defendants. 

March 13, 2020 

Court of Appeals Case No.

19A-PL-1569 

Appeal from the Lake Superior 

Court

The Honorable Calvin D. 

Hawkins, Judge

Trial Court Cause No. 

45D02-1804-PL-32 

Brown, Judge. 
Court of Appeals of Indiana | Opinion 19A-PL-1569 | March 13, 2020 Page 2 of 29

[1] Staff Source, LLC (“Staff Source”), appeals the trial court’s order granting the 

motion for attorney fees filed by Milan Kesic, Slobodan Kesic, the Resolve 

Group, LLC, Resolve HR, LLC, and Christine Wallace (collectively, 

“Defendants”), and the order finding that Defendants were entitled to a certain 

amount of fees. Defendants request appellate attorney fees. We affirm the 

orders of the trial court, grant Defendants’ request for appellate attorney fees, 

and remand.

Facts and Procedural History

[2] In a letter dated June 20, 2005, Mirko Marich of Staff Source wrote to Christine 

Wallace, referenced Wallace’s vast industry experience and proposed an 

“Independent Contractor working relationship whereby [she] essentially will 

work without any Supervision from the Staff Source office.” Exhibits Volume 

II at 83. 

[3] In a memo dated June 2, 2006, Christian Flores of Staff Source wrote Wallace, 

thanked her for her hard work, and outlined a compensation package including 

a base salary and commission. Wallace worked as an employee for about a 

year or less until Staff Source moved an internal person into that role. 

[4] On June 19, 2007, Staff Source and Wallace signed a document titled 

“Employment Agreement” which provided in part:

1. EMPLOYER hereby employs EMPLOYEE in the capacity of 

SALES or such other capacity as EMPLOYER shall direct; and 

EMPLOYEE hereby accepts such employment upon the terms 

and conditions hereinafter set forth.
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2. The parties jointly acknowledge their relationship as one of 

employment-at-will, and that this Agreement does not confer or 

infer any rights to continued employment. EMPLOYER or 

EMPLOYEE may terminate this relationship at any time with or 

without cause.

* * * * *

9. In consideration of the services to be rendered by 

EMPLOYEE, EMPLOYER shall pay EMPLOYEE 

compensation as set forth in Exhibit A “EMPLOYEE 

Compensation” attached hereto and forming a part hereof.[ 1]

 

This compensation may change or be modified, at the sole 

discretion of EMPLOYER, whenever EMPLOYER deems 

necessary.

* * * * *

15. The nature of the system and methods in EMPLOYER’s 

business is such that EMPLOYEE will be placed in a close 

business and personal relationship with the customers of 

EMPLOYER and be privy to confidential customer usage and 

rate information. Accordingly, during the term of this 

Agreement and for a period of one (1) year immediately 

following the termination of EMPLOYEE’s employment, for 

any cause whatsoever, so long as EMPLOYER continues to 

carry on the same business, said EMPLOYEE shall not, for any 

reason whatsoever, directly or indirectly, for himself or on behalf 

of, or in conjunction with, any other person, persons, company, 

partnership, corporation or business entity:

(i) Call upon, divert, influence or solicit or attempt to call 

upon, divert, influence or solicit any employee, customer 

or customers of EMPLOYER;

1 Wallace testified that Exhibit A was never attached to the Employment Agreement.
Court of Appeals of Indiana | Opinion 19A-PL-1569 | March 13, 2020 Page 4 of 29

(ii) Divulge the names and addresses of any information 

concerning any customer of EMPLOYER; 

(iii) Disclose any information or knowledge relating to 

EMPLOYER, including but not limited to, 

EMPLOYER’s system or method of conducting business 

to any person, persons, firms, corporations or other entities 

unaffiliated with EMPLOYER, for any reason or purpose 

whatsoever;

(iv) Own, manage, control, be employed by, participate in 

or be connected in any manner with the ownership, 

management, operation or control of the same, similar or 

related line of business as that carried on by EMPLOYER 

within a radius of twenty-five (25) miles from 

EMPLOYEE’s home office or within a radius equivalent 

to EMPLOYEE’s defined territory, whichever is greater.

The time period covered by the covenants contained herein shall 

not include any period(s) of violation of any covenant or any 

period(s) of time required for litigation to enforce any covenant.

If the provisions set forth in Paragraph 15 are determined by a 

court of competent jurisdiction to be too broad to be enforceable, 

then the parties agree the area and/or length of time shall be 

reduced to such areas and times as the court shall deem 

enforceable.

The covenants as set forth in this Paragraph 15 shall be construed 

as an agreement independent of any other provision in this 

Agreement and the existence of any potential or alleged claim or 

cause of action of EMPLOYEE against EMPLOYER, whether 

predicted [sic] on this Agreement or otherwise, shall not 

constitute a defense to the enforcement by EMPLOYER of the 

covenants contained herein. An alleged or actual breach of the 

Agreement by EMPLOYER shall not be a defense to 

enforcement of the provisions of Paragraph 15.
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Exhibits Volume II at 12-13 (some capitalization omitted).

[5] Staff Source provided Wallace a 1099 Form listing her nonemployee 

compensation for years 2014, 2015, 2016, and 2017. 

[6] In April 2017, Wallace became the subject of an IRS audit related to 2015 and 

2016 and an issue arose regarding her status as an independent contractor of 

Staff Source. 

[7] At some point, Staff Source and Wallace signed a document titled “Working 

Agreement” which provided in part:

In an effort to formally define the terms of our working 

relationship, we submit the following:

Position: Independent Sales Contractor

Regardless of the title used to define your association with Staff 

Source, your position will be as an independently contracted 

Sales Representative. As such, Staff Source will not be 

responsible for payroll deductions, unemployment liability, 

workman’s compensation insurance, nor contribute to social 

security or Medicare.

Commission:

In consideration of any contracts Staff Source secures as a result 

of your sales efforts, Staff Source will pay as a commission the 

following . . . .

* * * * *

The relationship hereby established is that of an Independent 

Sales Representative. The Representative is neither an employee 

of Staff Source nor a legal representative and may not assume 
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any obligation of any kind (without prior approval of Staff 

Source), implied or expressed on behalf of Staff Source.

Staff Source will reimburse for pre-approved marketing related 

expenses. Also, an auto allowance of $350.00/month and a 

$50.00/month mobile phone reimbursement will be paid 

monthly for the prior month’s expenses.

Either party may terminate this agreement at any time without 

notice.

Id. at 15 (italics omitted). The document listed a handwritten date of June 19, 

2007, after the signatures of Kari Marich of Staff Source and Wallace. 

According to Wallace, the IRS auditor asked Staff Source to provide 

documentation, she signed the document without dating it in 2017 during the 

course of the audit, and the dates were subsequently added by Kari. 2

 

[8] Beginning in December 2016, Wallace began to have issues in her arrangement 

with Staff Source under the new ownership of Mirko. In an email from Kari to 

Wallace on November 30, 2017, Kari wrote in part: “You’re an independent 

contractor and I cannot dictate to you how much time you should spend at the 

office.” Id. at 169. 

[9] In a letter dated January 5, 2018, Wallace informed Mirko and Kari that day 

would be her last as an independent sales contractor for Staff Source. On 

2 When Mirko was asked if the testimony that the document was backdated was correct, he answered: “Was 

that it was dated, but it was part of the original agreement, but it was dated.” June 6, 2019 Transcript 156. 
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January 23, 2018, Mirko sent Wallace an email which stated she was in breach 

of Paragraph 15. Wallace replied stating “per legal counsel consulted prior to 

resignation,” the signed contract containing Paragraph 15 was null and void 

because she was an independent contractor and not an employee and she would 

“not ‘go after’ accounts of Staff Source.” Id. at 187. Mirko responded and 

stated he was “well aware of the Independent Contractor status and well aware 

of the terms of the Employment Agreement which specifically states you are 

‘referred’ to as an ‘EMPLOYEE’.” Id. at 188. He also stated that “neither 

document exudes [sic] the terms of the other, rather they collectively address all 

the terms.” Id.

[10] On April 9, 2018, Staff Source filed a Complaint for Preliminary and 

Permanent Injunction and Damages against Wallace, Milan, Slobodan, and the 

Resolve Group, LLC and alleged: Count I, breach of contract; Count II, 

violation of the Indiana Uniform Trade Secrets Act; Count III, tortious 

interference with a contract; Count IV, tortious interference with business 

relationships; Count V, damages arising from civil conspiracy; Count VI, unjust 

enrichment; and Count VII, preliminary and permanent injunction.

[11] A letter dated April 13, 2018, from Staff Source’s counsel to Wallace, Milan, 

Slobodan, and the Resolve Group, LLC, referred to the June 19, 2007 

document titled “Employment Agreement,” Id. at 11, as the “Non-Compete, 
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Non-Solicitation and Confidentiality Agreement.” 3

 Id. at 79. The letter stated

in part: “We understand Ms. Wallace will attempt to claim that the Agreement 

is unenforceable because she is referred to as ‘employee’ in the Agreement, 

however, Ms. Wallace signed the Agreement and agreed to its terms.” Id. It 

also asserted that “the fact that Ms. Wallace was an independent sales 

contractor for Staff Source does not make the covenants in the Agreement 

unenforceable.” Id. 

[12] On May 30, 2018, Milan, Slobodan, and the Resolve Group, LLC filed an 

answer and requested that Staff Source “be liable for paying said defendants’ 

attorney fees and costs.” Appellant’s Appendix Volume II at 97. On June 11, 

2018, Wallace filed her answer and requested that Staff Source be liable for 

paying her attorney fees.

[13] On June 14, 2018, the court granted Staff Source’s motion for leave to file an 

amended complaint. On June 15, 2018, Staff Source filed a Motion for 

Clarification and to Further Amend Complaint by Interlineation. That same 

day, Staff Source filed a Motion to Inspect Wallace’s Laptop Computer and 

Smart Phone. On June 19, 2018, the court granted Staff Source’s motion to 

further amend the complaint by interlineation. Specifically, the court ordered 

that “Plaintiff’s Amended Complaint for Preliminary and Permanent 

3 During the direct examination of Wallace, Staff Source’s counsel referred to Paragraph 15 of the 

Employment Agreement as the “non-compete, non-solicitation, confidentiality agreement.” July 23, 2018 

Transcript at 30. 
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Injunctions and Damages filed June 13, 2018 is hereby AMENDED BY 

INTERLINEATION such that Count I of the Amended Complaint includes 

the allegation that Defendant, Christine A. Wallace, breached the terms of the 

subject Non-Compete, Non-Solicitation and Confidentiality Agreement with 

Plaintiff due to her actions with the Resolve Group, LLC and/or Resolve HR, 

LLC.” Id. at 180. That same day, the court granted Staff Source’s motion to 

inspect Wallace’s computer and phone.

[14] On June 27, 2018, Wallace filed a Motion for Emergency Hearing on Plaintiff’s 

Request for Preliminary Injunctive Relief and asserted “Staff Source’s baseless 

claims are effectively doing what the alleged Employment Agreement cannot 

do: restraining [her] ability to earn a livelihood via frivolous litigation based 

upon an alleged Employment Agreement governing an admittedly non-existent 

employment relationship.” Id. at 183. That same day, the court granted 

Wallace’s motion and scheduled a hearing for July 2, 2018. On June 28, 2018, 

Staff Source filed an Emergency Motion to Continue July 2, 2018 Hearing and 

to Compel Discovery Responses and to Compel Defendant Wallace’s 

Cooperation with Inspection and Copying of her Smart Phone and Laptop 

Computer. On July 2, 2018, the court entered an order continuing the July 2, 

2018 hearing and compelling Wallace’s cooperation with the June 19, 2018 

order.

[15] Meanwhile, on June 29, 2018, Milan, Slobodan, and the Resolve Group filed 

an answer to Staff Source’s amended complaint. They requested that Staff 

Source “be liable for paying said defendants’ attorney fees and costs.” Id. at 
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222. On July 10, 2018, Wallace filed an answer to Staff Source’s amended 

complaint for preliminary and permanent injunction and damages and 

requested that Staff Source be ordered to pay her attorney fees.

[16] On July 11, 2018, the court entered an agreed scheduling order which set a 

hearing on Staff Source’s claims for injunctive relief for July 23, 2018. On July 

16, 2018, Staff Source filed an Injunction Hearing Brief. That same day, Milan, 

Slobodan, the Resolve Group, LLC, and Resolve HR, LLC, filed a Pre-Hearing 

Brief Respecting Plaintiff’s Requests for Injunctive Relief.

[17] On July 23, 2018, the court held a hearing. Wallace indicated she had twentyfive years of experience in the staffing business before becoming an independent 

contractor with Staff Source in 2005, she began a partial salaried employment

position with Staff Source in June 2006 that involved managing employees, she 

returned to being an independent contractor, and she did not receive additional 

compensation with respect to entering into the Employment Agreement. She 

stated she began having issues in her contractor arrangement with Staff Source

in 2016. When asked if she took any property from Staff Source from the time 

she decided she was leaving until the time she left, she answered, “Absolutely 

not.” July 23, 2018 Transcript at 84. When asked about Exhibit EE, a prospect 

list, she stated she obtained the information for the prospect list by phone or by 

research or possibly by the leads that may have been given to her by the 

recruiters. With respect to Exhibit FF, a prospect list, she ensured she had not 

received a commission for any of the prospects listed before sending the 

prospect email. She testified that when she began working with Resolve HR, 
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she, Milan, and Dan4 worked together to ensure she was not “going after actual 

clients that [she] worked with Staff Source” as a matter of professional courtesy. 

Id. at 86.

[18] The court admitted her non-employee compensation 1099 forms for years 2014 

through 2017. Wallace testified that she never received a W-2 as an employee 

at any point from 2014 through 2017. With respect to the June 19, 2007 

Employment Agreement, Wallace testified that she did not become an 

employee following the agreement, she never received an Exhibit A referenced 

in the agreement, she was not an employee in 2017, 2016, 2015, or 2014, and 

had not been an employee since 2006. 

[19] At the end of the hearing, Staff Source’s counsel stated that Staff Source agreed 

to dismiss Count VII with prejudice and intended to proceed to a jury trial on 

the remaining counts. That same day, the court granted the dismissal of Count 

VII of Staff Source’s complaint with prejudice. 

[20] On July 30, 2018, the court entered a case management order providing that all 

discovery be completed by January 8, 2019, all dispositive motions be filed by 

February 8, 2019, and scheduling a jury trial for May 20, 2019 as the primary 

date and April 8, 2019 as the secondary date. 5

4 On appeal, Staff Source refers to Slobodan as Dan.

5 The court’s order states: “This matter is set for JURY trial as follows: 2nd – APRIL 8, 2019; PRIMARY –

MAY 20, 2019 at 8:30 a.m.” Appellant’s Appendix Volume III at 48.
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[21] In February 2019, Staff Source’s counsel emailed Defendants’ counsel a 

proposed stipulation and order of dismissal. Defendants’ counsel returned the 

stipulation after deleting a sentence that stated each party would bear their own 

attorney fees. 

[22] On March 4, 2019, Staff Source filed a “Trial Rule 41(A) Stipulation to 

Voluntary Dismissal of Plaintiffs’ Claims, With Prejudice” asserting that all 

parties “stipulate and agree to the Plaintiff’s voluntary DISMISSAL of ALL of 

its claims against all Defendants, WITH PREJUDICE.” Appellant’s Appendix 

Volume III at 49 (some capitalization omitted). On March 5, 2019, the court 

entered an order dismissing Staff Source’s claims against Defendants with 

prejudice. 

[23] On May 6, 2019, Defendants filed a joint motion for attorney fees pursuant to 

Ind. Code § 34-52-1-1. On May 8, 2019, Staff Source filed a response. On May 

30, 2019, Defendants filed a reply which was struck as untimely. 

[24] On June 6, 2019, the court held a hearing on the motion for attorney fees. After 

some discussion, the court stated that “[i]t was obvious that Ms. Wallace was 

not an employee.” June 6, 2019 Transcript at 122. The court went on to hear

testimony. 

[25] On June 10, 2019, the court entered an order granting the motion for attorney 

fees. Specifically, the court stated:

As a preliminary matter, the Court finds that because all of 

Plaintiff’s claims were dismissed with prejudice, Defendants were 
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the prevailing parties pursuant to I.C. 34-52-1-1(b). See Northlake 

Nursing & Rehab. Ctr., L.L.C. v. Ind. Dep’t of Health, 34 N.E.3d 268, 

274 (Ind. Ct. App. 2015) (a dismissal with prejudice is a dismissal 

and judgment on the merits); See also Ilagan v. McAbee, 634 

N.E.2d 827, 829 (Ind. Ct. App. 1994) (a voluntary dismissal with 

prejudice operates as a common law retraxit, wherein the plaintiff 

openly and voluntarily renounces its suit court; such a dismissal 

is “on the merits”, is conclusive of the rights of the parties; and 

operates as res judicata to all issues that could have been litigated); 

See also D.S.I. v. Natare Corp., 742 N.E.2d 15[] (Ind. Ct. App. 

2000) (A party may be construed as prevailing for purposes of 

I.C. 34-52-1-1(b), under an agreed entry or stipulation, so long as 

it resolved the dispute generally in the favor of the one requesting

attorney fees and altered the litigants’ legal relationship in a way 

favorable to the requesting party)[, reh’g denied, trans. denied].

This Court further finds that Defendants’ Joint Motion was 

timely made, as a claim for attorney fees under I.C. 34-52-1-1 

does not accrue until the party “prevails”, and Indiana Courts 

have consistently held that the “standard procedure” for seeking 

attorney fees is to petition the court after the case is resolved on 

its merits. Storch v. Provision Living, LLC, 47 N.E.3d 1270, 1275 

(Ind. Ct. App. 2015[]) Furthermore, the Supreme Court has held 

that there is no strict time limit for filing a request for fees after 

judgment, although it is “in some sense an equitable petition, and 

it might be that an extremely tardy request should fall on deaf 

ears due to lack of notice or staleness.” R.L. Turner Corp. v. Town 

of Brownsburg, 963 N.E.2d 453 (Ind. 2012). Notably, Plaintiff has 

offered no explanation of any prejudice incurred by Defendants’ 

filing the Joint Motion 60 days after Dismissal opposed to say 45

days after Dismissal.

Plaintiff suggests that perhaps it would not have dismissed its 

case at all had it realized Defendants intended to seek attorney 

fees following dismissal. However, Defendants’ response to such 

suggestion is well-taken. Plaintiff sought to dismiss all of its 

claims on the eve of the jury trial setting, with prejudice. 
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Assuming that the claims were groundless and/or frivolous, 

which is required for an award of attorney fees, should the 

Defendants have refused the offer and demanded that the jury 

trial over such claims be had? Here, the Defendants were in a 

position to mitigate the damages caused by a purported 

groundless and/or frivolous lawsuit by stipulating to the 

dismissal with prejudice of all claims, while refusing to agree that 

the parties would pay their own attorney fees. It is undisputed 

that Plaintiff originally requested the stipulation provide that the 

parties would pay their own attorney fees, and that Defendants 

refused to agree to that provision, and it was removed. 

Furthermore, there were no settlement agreements or releases 

requested or negotiated prior to dismissal. Moreover, the 

suggestion that Plaintiff was prejudiced because it may have 

persisted with its purportedly groundless and/or frivolous claims 

to trial is equally unavailing. Accordingly, Joint Motion was 

timely and properly made.

Defendants’ Entitlement to Attorney Fees Based Upon a 

Groundless and Frivolous Complaint

Defendants presented evidence and testimony to support its 

claim for attorney fees. By stipulation of the parties, certain 

exhibits from the Injunction Hearing were again admitted into 

evidence on Defendants’ Joint Motion. The testimony, as well as 

documentary evidence established the following facts:

* * * * *

15. Accordingly, all of Plaintiff[’]s claims based upon the 

purported breach of the Employment were groundless as “no 

facts exist which support the legal claim relied on and presented 

by the losing party”, Plaintiff. See Kahn v. Cundiff, 533 N.E.2d

164, 170 (Ind. Ct. App. 1989), summarily aff’d by 543 N.E.2d 627 

(Ind. 1989).

16. Furthermore, Plaintiff attempted to breath[e] life into its 

groundless claims by making material misrepresentations of fact 
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and fabricating an exhibit to the Complaint. Although the 

“Working Agreement” was admittingly signed by Wallace in 

2017 after an audit, Plaintiff admittingly backdated the document 

ten years earlier to June of 2007, for the sole purpose of claiming 

that the Employment Agreement and the independent contractor 

“Working Agreement” were part of the same contract. Plaintiff’s 

counsel continued to argue the same at the Injunction Hearing 

and even at the hearing on Defendants’ Joint Motion. 

Accordingly, Plaintiff[’]s Complaint was not only groundless, but 

also fraudulent.

17. Moreover, Plaintiff’s claims were frivolous as it appears that 

they were made “primarily for the purpose of harassing or 

maliciously injuring” Wallace, as follows:

a. Plaintiff is in the staffing business, and despite their 

attempts to muddy the same, its principals were wellaware of the difference between an employment and 

independent contractor relationship. In fact, their industry

is based upon that difference.

b. Prior to her resignation, the principals of Plaintiff 

readily acknowledged Wallace status as independent 

contractor.

c. Several [m]onths prior to filing its lawsuit, Wallace 

made clear to Plaintiff’s principals that the Employment 

Contract was “null and void” because she was an 

independent contractor, however, she would avoid 

personally “going after” Plaintiff’s customers as a 

courtesy.

d. Despite the same, and even after acknowledging his 

understanding that Wallace was an independent 

contractor, Mirko Marich threatened “severe financial 

consequences” if she continued to do business with his 

former business partners.
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e. Plaintiff filed a seven-count Complaint against 

defendants on April 12, 2018, and thereafter, sent 

defendants a “Cease and Desist” letter, essentially 

demanding that Wallace immediately be removed from 

her position with Resolve Group. However, the “Cease 

and Desist Letter” also conspicuously includes a footnote 

stating “We understand that Ms. Wallace will attempt to 

claim that the Agreement is unenforceable because she is

referred to as an [‘]employee[’] in the Agreement, 

however, Ms. Wallace signed the Agreement and agreed 

to its terms”.

f. In response to the “Cease and Desist Letter”, counsel for 

Defendants advised counsel for Plaintiff, in writing, that 

all defendants disputed the enforceability of the terms of 

the Employment Agreement, as Wallace had been 

removed from her employment position with Plaintiff 

prior to 2008, and remained an independent contractor for 

Plaintiff for ten years prior to moving on with her career.

g. During the Injunction Hearing, this Court made clear 

that Employment Agreement was conditioned upon an 

employment relationship, and therefore the Covenants 

could not extend more than one year following the end of 

the employment relationship between Plaintiff and 

Wallace.

h. Accordingly, Plaintiff dismissed the claim for injunctive 

relief but refused the request of Wallace’s attorney to 

dismiss the claim for breach of contract, and the case was 

set for a jury trial.

i. On February 19, 2019, less than two months prior to the 

trial setting, Plaintiff’s counsel sent an email finally 

offering to dismiss all claims with prejudice.

j. Only after Defendants filed their Joint Motion did 

Plaintiff finally identify what it claimed to be “protected 
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trade secrets” that were purportedly misappropriated by 

Wallace. At [the] hearing, the evidence showed that there

was no factual basis for the misappropriation of trade 

secret claim, either, The “Prospect List” was nothing more 

than a list of potential customers, compiled and prepared 

by Wallace as an independent contractor of Plaintiff on 

her home computer and thereafter emailed to Plaintiff in 

order to invite those “prospects” to an open house. Not 

only was there no basis to the claim that this was a 

“protected trade secret”, the document was

unquestionably Wallace’s own work product for which she 

was never paid by Plaintiff.

18. In the interim, all Defendants were forced to retain counsel to 

defend against a groundless seven-count, seventeen page 

Complaint; to cooperate with intrusive discovery that included 

turning over and forensically copying the contents of Wallace’s 

private laptop and cell phone; and to appear for hearing and 

defend against Plaintiff[’]s groundless claims for injunctive relief.

19. Furthermore, this Court has been compelled to waste 

valuable judicial time and resources dealing with Plaintiff[’]s 

claims, which were clearly groundless and frivolous at their 

filing.

20. While this Court is hesitant to award attorney fees pursuant 

to 34-52-1-1(b), this is precisely the type of situation that calls for 

an award of attorney fees, as Defendants were forced to defend 

against a seven-count Complaint that was entirely groundless,

frivolous and even fraudulent at its inception. See Charles Downey 

Family Ltd. P’ship v. S & V Liquor, Inc., 880 N.E.2d 322, 328-329 

(Ind. Ct. App. 2008)[, trans. denied].

Conclusions of Law and Order

After weighing the evidence presented to this Court at hearing, 

Defendants have established their burden of proof that 

Plaintiff[’]s Complaint and all of its corresponding claims were 
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both groundless and frivolous, and this Court hereby Orders that 

Defendants shall be entitled to an award of reasonable attorney 

fees. Defendants shall have up to and including July 1, 2019 to 

provide this Court with a factual basis for the amount of attorney 

fees and costs claimed.

Appellant’s Appendix Volume III at 158-165 (some bold and underlining

omitted).

[26] On August 21, 2019, the court held a hearing. That same day, the court entered 

an order finding that Milan, Slobodan, the Resolve Group, LLC, and Resolve 

HR, LLC were entitled to an award of attorney fees and costs in the amount of 

$51,135, and Wallace was entitled to an award of attorney fees and costs in the 

amount of $25,128.38. 

Discussion

I.

[27] The first issue is whether the trial court abused its discretion in ordering Staff 

Source to pay Defendants’ attorney fees. Ind. Code § 34-52-1-1 provides:

(a) In all civil actions, the party recovering judgment shall 

recover costs, except in those cases in which a different provision 

is made by law.

(b) In any civil action, the court may award attorney’s fees as part 

of the cost to the prevailing party, if the court finds that either 

party:

(1) brought the action or defense on a claim or defense that 

is frivolous, unreasonable, or groundless;
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(2) continued to litigate the action or defense after the 

party’s claim or defense clearly became frivolous, 

unreasonable, or groundless; or

(3) litigated the action in bad faith.

(c) The award of fees under subsection (b) does not prevent a 

prevailing party from bringing an action against another party for 

abuse of process arising in any part on the same facts. However, 

the prevailing party may not recover the same attorney’s fees 

twice.

[28] In discussing a prior version of the statute, the Indiana Supreme Court stated 

that the statute “strikes a balance between respect for an attorney’s duty of 

zealous advocacy and ‘the important policy of discouraging unnecessary and 

unwarranted litigation.’” 6

 Mitchell v. Mitchell, 695 N.E.2d 920, 924 (Ind. 1998) 

(quoting Kahn v. Cundiff, 533 N.E.2d 164, 170 (Ind. Ct. App. 1989), adopted by

543 N.E.2d 627, 629 (Ind. 1989)). “Subsections (b)(1) and (b)(2) of the statute 

focus on the legal and factual basis of the claim or defense and the arguments 

supporting the claim or defense.” Id. “In contrast, subsection (b)(3) – ‘litigated 

the action in bad faith’ – by its terms requires scrutiny of the motive or purpose 

of the non-prevailing party.” Id. The Indiana Supreme Court held:

6 The Court was examining Ind. Code § 34-1-32-1, which similarly provided: 

(b) In any civil action, the court may award attorney’s fees as part of the cost to the 

prevailing party, if it finds that either party:

(1) brought the action or defense on a claim or defense that is frivolous, 

unreasonable, or groundless;

(2) continued to litigate the action or defense after the party’s claim or 

defense clearly became frivolous, unreasonable, or groundless; or

(3) litigated the action in bad faith.
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More precisely,

bad faith is not simply bad judgment or negligence. 

Rather, it implies the conscious doing of a wrong because 

of dishonest purpose or moral obliquity. It is different 

from the negative idea of negligence in that it contemplates 

a state of mind affirmatively operating with furtive design 

or ill will.

Id. (quoting Watson v. Thibodeau, 559 N.E.2d 1205, 1211 (Ind. Ct. App. 1990) 

(quoting Young v. Williamson, 497 N.E.2d 612, 617 (Ind. Ct. App. 1986), reh’g 

denied, trans. denied)). The Court also explained:

This Court has observed in related contexts that the legal process 

“must invite, not inhibit, the presentation of new and creative 

argument” to enable the law to grow and evolve. Orr v. Turco 

Mfg. Co., 512 N.E.2d 151, 153 (Ind. 1987) (setting forth standard 

for punitive sanctions for frivolous appellate claims). To be sure, 

application of the statutory authorization for recovery of 

attorney’s fees . . . must leave breathing room for zealous 

advocacy and access to the courts to vindicate rights. Kahn, 533 

N.E.2d at 170. Courts must be sensitive to these considerations 

and view claims of “frivolous, unreasonable, or groundless” 

claims or defenses with suspicion. 

Id. at 925. 

[29] Ind. Code § 34-52-1-1(b) “places an obligation on litigants to investigate the 

legal and factual basis of the claim when filing and to continuously evaluate the 

merits of claims and defenses asserted throughout litigation.” Landmark Legacy, 

LP v. Runkle, 81 N.E.3d 1107, 1116-1117 (Ind. Ct. App. 2017) (quoting Gen. 

Collections, Inc. v. Decker, 545 N.E.2d 18, 20 (Ind. Ct. App. 1989)). “A claim is 
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‘frivolous’ if it is made primarily to harass or maliciously injure another; if 

counsel is unable to make a good faith and rational argument on the merits of 

the action; or if counsel is unable to support the action by a good faith and 

rational argument for extension, modification, or reversal of existing law.” 

Kitchell v. Franklin, 26 N.E.3d 1050, 1057 (Ind. Ct. App. 2015) (citing Wagler v. 

W. Boggs Sewer Dist., Inc., 980 N.E.2d 363, 383 (Ind. Ct. App. 2012), reh’g denied, 

trans. denied, cert. denied, 571 U.S. 1131, 134 S. Ct. 952 (2014)), trans. denied. “A 

claim is ‘unreasonable’ if, based on the totality of the circumstances, including 

the law and facts known at the time, no reasonable attorney would consider the 

claim justified or worthy of litigation.” Id. “A claim is groundless if no facts 

exist which support the legal claim relied on and presented by the losing party.” 

Purcell v. Old Nat. Bank, 972 N.E.2d 835, 843 (Ind. 2012). “However, the law is 

settled that a claim is neither groundless nor frivolous merely because a party 

loses on the merits.” Kitchell, 26 N.E.3d at 1057. “Bad faith is demonstrated 

where the party presenting the claim is affirmatively operating with furtive 

design or ill will.” Id.

[30] “The trial court’s decision to award attorney’s fees under § 34-52-1-1 is subject 

to a multi-level review: the trial court’s findings of facts are reviewed under the 

clearly erroneous standard and legal conclusions regarding whether the 

litigant’s claim was frivolous, unreasonable, or groundless are reviewed de 

novo.” Purcell, 972 N.E.2d at 843 (citing R.L. Turner Corp. v. Town of 

Brownsburg, 963 N.E.2d 453, 457 (Ind. 2012)). “[T]he trial court’s decision to 

award attorney’s fees and any amount thereof is reviewed for an abuse of 
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discretion.” Id. “A trial court abuses its discretion if its decision clearly 

contravenes the logic and effect of the facts and circumstances or if the trial 

court has misinterpreted the law.” Id. “Covenants not to compete are in 

restraint of trade and are not favored by the law.” Harvest Ins. Agency, Inc. v. 

Inter-Ocean Ins. Co., 492 N.E.2d 686, 688 (Ind. 1986). “They are strictly 

construed against the covenantee and enforced only if reasonable.” Id. 

[31] To the extent Staff Source argues that the court adopted Defendants’ proposed 

findings and conclusions wholesale, we observe that “[w]hen a trial court 

accepts verbatim a party’s proposed findings of fact and conclusions thereon, 

that practice ‘weakens our confidence as an appellate court that the findings are 

the result of considered judgment by the trial court.’” Cty. of Lake v. Pahl, 28 

N.E.3d 1092, 1100 (Ind. Ct. App. 2015) (quoting In re Marriage of Nickels, 834 

N.E.2d 1091, 1096 (Ind. Ct. App. 2005) (quoting Cook v. Whitsell-Sherman, 796 

N.E.2d 271, 273 n.1 (Ind. 2003))), reh’g denied, trans. denied. It is not 

uncommon or per se improper for a trial court to enter findings that are 

verbatim reproductions of submissions by the prevailing party. Id. Although 

we by no means encourage the wholesale adoption of a party’s proposed 

findings and conclusions, the critical inquiry is whether such findings, as 

adopted by the court, are clearly erroneous. Id. We also note, while Staff 

Source asserts that the trial court entered its August 21, 2019 order verbatim 

from Defendants’ counsel, the two documents are not identical. The proposed 

order in the Appellant’s Appendix differs from the court’s order in some 

respects including that the proposed order requested fees of $52,560 and 
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$27,103.38 and the court’s order awarded fees in the amount of $51,135 and 

$25,128.38. See Appellant’s Appendix Volume III at 204-208.

[32] Staff Source argues that: (A) Defendants were not prevailing parties; (B) it was 

unfairly prejudiced by Defendants’ motion for attorney fees filed sixty-two days 

after dismissal; (C) its claims were not frivolous, unreasonable, or groundless; 

and (D) Defendants presented insufficient evidence regarding their fees. 7

A. Prevailing Parties 

[33] In D.S.I. v. Natare Corp., 742 N.E.2d 15, 24 (Ind. Ct. App. 2000), reh’g denied, 

trans. denied, the Court held that “a party is a ‘prevailing party’ within the 

meaning of IC § 34-52-1-1, if that party successfully prosecutes its claim or 

asserts its defense,” “the requisite successful litigation must culminate in a 

judgment,” and “the judgment . . . may take the form of an agreed entry or 

stipulation, so long as it resolved the dispute generally in the favor of the one 

requesting attorney fees and altered the litigants’ legal relationship in a way 

favorable to the requesting party.” 

[34] The record reveals the parties’ attorneys filed a stipulation to dismiss Staff 

Source’s claims with prejudice, and the court entered an order approving the 

dismissal and dismissing the claims with prejudice. “We have held that ‘a 

7 Staff Source argues that the trial court improperly considered caselaw cited in Defendants’ May 30, 2019 

Reply that was struck by the court for being untimely. Staff Source cites McGill v. Ling, 801 N.E.2d 678, 683 

(Ind. Ct. App. 2004), reh’g denied, trans. denied, which stated that “practitioners of the law know the effect of a 

trial court’s decision to grant [a motion to strike]: any materials stricken, whether arguments or evidence, will 

not be considered by either the trial court or this court on appeal.” We cannot say McGill precludes a trial 

court from considering caselaw merely because it was included in a brief which was struck by the court.
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dismissal with prejudice constitutes a dismissal on the merits and is therefore 

conclusive of the rights of the parties and res judicata as to the questions that 

might have been litigated.’” Northlake Nursing & Rehab. Ctr., L.L.C. v. State Dep’t 

of Health, 34 N.E.3d 268, 274 (Ind. Ct. App. 2015) (quoting Baker & Daniels, LLP 

v. Coachmen Indus., Inc., 924 N.E.2d 130, 135 n.5 (Ind. Ct. App. 2010), trans. 

denied; and citing Ilagan v. McAbee, 634 N.E.2d 827, 829 (Ind. Ct. App. 1994)). 

The dismissal with prejudice in this case was a judgment on the merits and 

resolved the dispute generally in favor of Defendants and altered the litigants’ 

legal relationship in a way favorable to Defendants. We conclude under the 

circumstances of this case that Defendants are prevailing parties. 8

 See id. 

(“Consequently, the dismissal with prejudice was a judgment rendered on the 

merits.”); Kahn v. Cundiff, 543 N.E.2d 627, 629 (Ind. 1989) (affirming the grant 

of attorney fees under Ind. Code § 34-1-32-1 after the plaintiff moved to dismiss 

the case).

B. Prejudice

[35] Staff Source argues it was unfairly prejudiced by Defendants’ petition for 

attorney fees filed sixty-two days after dismissal because there was not sufficient

notice by Defendants to seek fees.

8 To the extent Staff Source cites Reuille v. E.E. Brandenberger Const., Inc., 888 N.E.2d 770 (Ind. 2008), we note 

that Reuille did not address Ind. Code § 34-52-1-1, but addressed an issue of contract interpretation.
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[36] “[T]rial courts must use their discretion to prevent unfairness to parties facing 

petitions for fees.” R.L. Turner Corp., 963 N.E.2d at 460. “A request for 

attorneys’ fees almost by definition is not ripe for consideration until after the 

main event reaches an end.” Id. “Entertaining such petitions post-judgment is 

virtually the norm.” Id. “To be sure, a request for fees is in some sense an 

equitable petition, and it might be that an extremely tardy request should fall on 

deaf ears due to lack of notice or staleness.” Id.

[37] In their May 30, 2018 answer and June 29, 2018 answer to the amended 

complaint, Milan, Slobodan, and the Resolve Group requested that Staff Source 

be liable for paying their attorney fees. In Wallace’s June 11, 2018 answer, she

requested that Staff Source be liable for paying her attorney fees. In her July 10, 

2018 answer to the amended complaint, Wallace again requested that Staff 

Source be ordered to pay her attorney fees. In Wallace’s June 27, 2018 motion 

for emergency hearing, she asserted “Staff Source’s baseless claims are 

effectively doing what the alleged Employment Agreement cannot do: 

restraining [her] ability to earn a livelihood via frivolous litigation based upon 

an alleged Employment Agreement governing an admittedly non-existent 

employment relationship.” Appellant’s Appendix Volume II at 183. Staff 

Source states Defendants’ counsel returned the stipulation dismissing the case 

and deleted a sentence stating that each party would bear the party’s own 

attorneys’ fees. Under these circumstances, we cannot say Defendants’ petition 

for attorney fees came as a shock to Staff Source. See R.L. Turner Corp., 963 
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N.E.2d at 460 (holding that, in light of the record, “the Town’s renewed 

petition for attorneys’ fees could hardly have come as a shock to Turner”).

C. Claims Frivolous, Unreasonable, or Groundless

[38] Staff Source asserts its claims were not frivolous or groundless. Without 

citation to the record, it asserts there was a factual dispute of whether Wallace 

was an employee when she signed the applicable agreement and whether her 

compensation as an independent contractor was attached to the applicable 

agreement. Defendants argue all of Staff Source’s claims except for Count II, 

violation of the Indiana Uniform Trade Secrets Act, were based upon a 

purported breach of the Employment Agreement.

[39] Even assuming that the “Employment Agreement” was effective in 2007, 

Paragraph 15 limited the time of the agreement by providing that “during the 

term of this Agreement and for a period of one (1) year immediately following 

the termination of EMPLOYEE’s employment . . . .” Exhibits Volume II at 12.

Wallace testified that her employment relationship with Staff Source ended 

many years prior to 2018. The record contains 1099 forms for 2014, 2015, 

2016, and 2017, which indicate Staff Source listed her compensation as 

nonemployee. Wallace testified she was exclusively a 1099 independent 

contractor for at least nine tax years prior to leaving Staff Source as an 

independent contractor. She also testified that the Working Agreement she 

signed in 2017 had nothing to do with the Employment Agreement she signed 

in 2007. Mirko testified that he could not find the Working Agreement in Staff 
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Source’s records and that Wallace asked somebody from Staff Source to sign it 

during her IRS audit, which indicates that the Working Agreement was 

backdated by Staff Source.

[40] The record and the court’s findings support that the Employment Agreement 

had expired years prior to Wallace’s termination of her relationship with Staff 

Source and that Staff Source backdated the Working Agreement. We conclude 

that Staff Source’s claims regarding breach of the Employment Agreement and

tortious interference by Milan, Slobodan, and the Resolve Group with Staff 

Source’s contractual relationship and business relationship with Wallace were 

frivolous, unreasonable, or groundless. The trial court did not abuse its 

discretion by ordering Staff Source to pay Defendants’ attorney fees.

D. Sufficient Evidence of Fees

[41] Staff Source argues that Defendants did not submit the required evidence of the 

nature of legal services and reasonableness of the fee. It asserts the Defendants 

provided no third-party objective evidence of the nature of legal services and the 

reasonableness of the fee requested. It also asserts the court erred in awarding 

fees incurred after the March 5, 2019 dismissal. 

[42] In support of their claim for attorney fees, Defendants submitted the Attorney 

Fee Request for Milan, Slobodan, the Resolve Group, LLC, and Resolve HR, 

LLC, which contained the affidavits of two attorneys including the amounts of 

billable time and a description of the work, and the Attorney Fee Request for 

Wallace containing the affidavits of two attorneys and billing sheets. This 
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evidence was sufficient to support the trial court’s determination of the amount 

of the attorney fees award. We note that the awarded fees are equal to the 

amounts requested in the Attorney Fee Request for Defendants Milan, 

Slobodan, the Resolve Group, LLC, and Resolve HR, LLC, and the Attorney 

Fee Request for Wallace, and do not include the supplemental fees mentioned 

in the supplemental affidavits of Defendants’ counsel. We cannot say the court 

abused its discretion.

II.

[43] With respect to Defendants’ request for appellate attorney fees, Ind. Appellate 

Rule 66(E) provides that this Court “may assess damages if an appeal, petition, 

or motion, or response, is frivolous or in bad faith. Damages shall be in the 

Court’s discretion and may include attorneys’ fees.” Our discretion to award 

attorney fees under Ind. Appellate Rule 66(E) is limited to instances when “an 

appeal is permeated with meritlessness, bad faith, frivolity, harassment, 

vexatiousness, or purpose of delay.” Thacker v. Wentzel, 797 N.E.2d 342, 346 

(Ind. Ct. App. 2003). To prevail on a substantive bad faith claim, a party must 

show that the appellant’s contentions and arguments are utterly devoid of all 

plausibility. Id. Procedural bad faith occurs when a party flagrantly disregards 

the form and content requirements of the rules of appellate procedure, omits 

and misstates relevant facts appearing in the record, and files briefs written in a 

manner calculated to require the maximum expenditure of time both by the 

opposing party and the reviewing court. Id. at 346-347. In light of Staff 

Source’s appellate briefs and arguments, we conclude that Defendants are 
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entitled to appellate attorney fees, and we remand to the trial court to determine 

the proper amount of the attorney fees. 

[44] For the foregoing reasons, we affirm the trial court’s orders, grant Defendants’ 

request for appellate attorney fees, and remand for a determination of their 

reasonable appellate attorney fees.

[45] Affirmed and remanded.

Baker, J., and Riley, J., concur.