Court Opinion

ID: 9897292
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:09:46.244774+00
Date Added: 2024-06-11T09:15:42.051594
License: Public Domain

FILED
                                                                           Sep 07 2023, 8:52 am

                                                                               CLERK
                                                                           Indiana Supreme Court
                                                                              Court of Appeals
                                                                                and Tax Court

ATTORNEY FOR APPELLANTS                                    ATTORNEY FOR APPELLEES
Amy L. Cueller                                             James N. Scahill
Striebeck Law P.C.                                         Indianapolis, Indiana
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

David Yount and                                            September 7, 2023
Susan Yount,                                               Court of Appeals Case No.
Appellants-Plaintiffs,                                     23A-PL-116
                                                           Appeal from the
        v.                                                 Brown Circuit Court
                                                           The Honorable
Carpenter Co. Inc. d/b/a                                   Mary Wertz, Judge
Carpenter Realtors,                                        Trial Court Cause No.
Janet Stitt, and                                           07C01-2004-PL-108
Patsy L. Coffey,
Appellees-Defendants

                                  Opinion by Judge Vaidik
                               Judges Mathias and Pyle concur.

Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023                           Page 1 of 12
      Vaidik, Judge.

      Case Summary
[1]   Indiana Trial Rule 37(A)(4) provides, in part, that when a court grants a motion

      to compel discovery responses, it must order the party that opposed the motion

      to pay the moving party’s expenses unless the opposition was “substantially

      justified.” Here, the trial court ordered David and Susan Yount (“Plaintiffs”) to

      pay $900 to Carpenter Co., Inc. d/b/a Carpenter Realtors and two of its

      realtors, Janet Stitt and Patsy L. Coffey, (collectively, “Defendants”) after

      Plaintiffs objected to numerous discovery requests, including requests for

      admission that asked them to admit or deny that other people made certain

      statements, knew certain facts, and relied on certain information. We reverse.

      In objecting, Plaintiffs explained that they could not truthfully admit or deny

      the matters at issue because they would have to speculate about the statements,

      knowledge, or reliance of other people. Those objections were not just

      substantially justified but entirely appropriate.

      Facts and Procedural History
[2]   In 2019, Plaintiffs bought property in Brown County from Carrel Moore

      (“Seller”). Defendants were the realtors in the transaction. Plaintiffs later sued

      Defendants for fraud, deception, and breach of contract, claiming they made

      misrepresentations about dock access, water access, the property boundary, and

      a Surveyor Location Report. Plaintiffs’ complaint included claims for attorney’s

      Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023      Page 2 of 12
      fees under both the purchase agreement and Indiana’s Crime Victims Relief

      Act, Indiana Code section 34-24-3-1.

[3]   Defendants sent Plaintiffs thirty-nine requests for admission and seventeen

      requests for production. Plaintiffs answered eight of the requests for admission

      and objected to the other thirty-one. They responded to eleven of the requests

      for production and objected to the other six. Through letters and a

      teleconference, the parties’ attorneys resolved some of the contested items, but

      not all.

[4]   As a result, Defendants moved to compel answers to eighteen of the requests for

      admission (1-5, 8-16, and 21-24) and responses to three of the requests for

      production (7, 8, and 9).1 Request for admission 1 asked Plaintiffs to admit or

      deny that Seller “told” Defendants certain information. Appellants’ App. Vol.

      II pp. 111, 121. Requests 2, 4, and 9 asked Plaintiffs to admit or deny that

      Defendants had “independent knowledge” of certain facts. Id. at 111-12, 121-

      22. Requests 3, 5, 8, and 10 asked Plaintiffs to admit or deny the “knowledge”

      of Defendants regarding certain facts. Id. Requests 11 and 12 asked Plaintiffs to

      admit or deny that Defendants “relied” on certain statements by Seller. Id. at

      113, 123. Plaintiffs objected to these requests (“the Factual Requests”) on the

      basis that they called for “speculation” about the statements, knowledge, and

      1
        The motion to compel also mistakenly referenced request for admission 6, to which Plaintiffs had already
      responded.

      Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023                            Page 3 of 12
      reliance of others and therefore Plaintiffs “cannot truthfully admit or deny the

      matter.” Id. at 137-39, 149-51.

[5]   Requests for admission 13-16 and 21-24 asked Plaintiffs to admit or deny that

      Defendants had certain rights and duties under Indiana Code section 25-34.1-

      10-10, which sets forth the “duties and obligations” of “[a] licensee representing

      a seller or landlord.” Plaintiffs objected to these requests (“the Legal Theory

      Requests”) on the basis that they, as non-lawyers, are “not qualified” to opine

      on the meaning and applicability of a statute. Id. at 139-42, 151-54.

[6]   Requests for production 7-9 asked Plaintiffs to produce invoices, payment

      records, and time and billing records for their attorney’s fees relating to this

      litigation. Plaintiffs objected to these requests on the basis that they are

      “premature since the reasonableness and amount of attorney’s fees [Plaintiffs]

      will be entitled to recover from the Defendants will be determined by the Court

      after and only to the extent a jury returns a verdict against the Defendants on

      [Plaintiffs’] fraud and/or deception claims.” Id. at 178-79, 195-96.

[7]   After a hearing, the trial court granted Defendants’ motion to compel in large

      part, ordering Plaintiffs to respond to all the requests except the three requests

      for admission about Defendants’ “independent knowledge” of certain facts. The

      court found that the term “independent knowledge” is vague and would require

      Plaintiffs “to guess regarding its meaning.” Id. at 238. Plaintiffs complied with

      the court’s order to respond to the other requests.

      Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023           Page 4 of 12
[8]    Defendants then moved for sanctions under Trial Rule 37(A)(4), arguing that

       Plaintiffs’ objections to the discovery requests on which the motion to compel

       was granted had not been “substantially justified.” Appellants’ App. Vol. III pp.

       32-36. The motion stated that Defendants’ attorney had spent 6.2 hours on the

       discovery dispute at a rate of $175 per hour. The trial court ordered Plaintiffs to

       pay Defendants $900.

[9]    Plaintiffs now bring this interlocutory appeal as a matter of right under Indiana

       Appellate Rule 14(A)(1).

       Discussion and Decision
[10]   Plaintiffs contend the trial court erred by granting Defendants’ motion for

       sanctions. Trial courts have broad discretion when ruling on discovery issues,

       and we will reverse only for an abuse of that discretion. Huber v. Montgomery

       Cnty. Sheriff, 940 N.E.2d 1182, 1185-86 (Ind. Ct. App. 2010).

[11]   Under Trial Rule 37(A)(4), when a court grants a motion to compel discovery,

       it “shall” require the resisting party “to pay to the moving party the reasonable

       expenses incurred in obtaining the order, including attorney’s fees, unless the

       court finds that the opposition to the motion was substantially justified or that

       other circumstances make an award of expenses unjust.” A party is

       “substantially justified” in resisting discovery “if reasonable persons could

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023      Page 5 of 12
       conclude that a genuine issue existed as to whether a person was bound to

       comply with the requested discovery.” Huber, 940 N.E.2d at 1186.2

       I. Requests for Admission
[12]   Plaintiffs argue they were substantially justified in objecting to both the Factual

       Requests and the Legal Theory Requests. Requests for admission are governed

       by Trial Rule 36, which provides, in relevant part, that “[a] party may serve

       upon any other party a written request for the admission, for purposes of the

       pending action only, of the truth of any matters within the scope of Rule 26(B)

       set forth in the request[.]” In turn, Trial Rule 26(B) provides that “[p]arties may

       obtain discovery regarding any matter, not privileged, which is relevant to the

       subject-matter involved in the pending action, whether it relates to the claim or

       defense of the party seeking discovery or the claim or defense of any other

       party[.]” As our Supreme Court has explained:

                Requests for admission perform a vital role in permitting the
                parties to identify those legal contentions and issues for which
                evidentiary proof will not be necessary. Properly used, requests
                for admissions simplify pre-trial investigation and discovery,
                facilitate elimination of unnecessary evidence at trial, and reduce

       2
         In their motion for sanctions, Defendants mistakenly wrote that “reasonable people cannot conclude that
       the facts requested were relevant to the present litigation and were subject to discovery.” Appellants’ App.
       Vol. III p. 34. For the first time on appeal, Plaintiffs suggest this was a concession by Defendants that
       Plaintiffs acted reasonably in objecting to the discovery requests. Appellants’ Br. pp. 8, 10, 11, 14. But surely
       Plaintiffs’ attorney knows that the quoted language was a wording error by Defendants’ attorney. The whole
       point of the motion for sanctions was that Defendants believed Plaintiffs acted unreasonably by resisting the
       discovery requests. Arguments made based on obvious typographical errors undermine the credibility of
       counsel and are ineffective.

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023                                 Page 6 of 12
               the time and expense demands upon the parties, their counsel
               and the courts.

       Gen. Motors Corp., Chevrolet Motor Div. v. Aetna Cas. & Sur. Co., 573 N.E.2d 885,

       888 (Ind. 1991), reh’g denied.

       A. Factual Requests
[13]   We begin with the Factual Requests. Those requests asked Plaintiffs to admit or

       deny that Seller “told” Defendants certain information, that Defendants had

       “knowledge” of certain facts, and that Defendants “relied” on certain

       statements by Seller. Plaintiffs again assert they were not required to answer

       these requests because they could not know definitively, as an opposing party,

       what Seller told Defendants, what facts Defendants knew, or whether

       Defendants relied on statements by Seller. We agree. “The essential function of

       a T.R. 36 request for admission is to establish known facts. If a party wishes to

       discover unknown facts, he should not resort to T.R. 36. Instead, the party

       should use other discovery techniques.” Ind. Constr. Serv., Inc. v. Amoco Oil Co.,

       533 N.E.2d 1300, 1301 (Ind. Ct. App. 1989). Defendants could have used

       alternative discovery tools, such as depositions (Trial Rules 30 and 31) or

       interrogatories (Trial Rule 33), to discover what Plaintiffs knew or didn’t know

       about the statements, knowledge, and actions of other people.

[14]   We also note that while Plaintiffs framed their responses to the Factual

       Requests as objections, they could just as easily be characterized as answers.

       Trial Rule 36(A) provides, in part, that a responding party must serve “a written

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023       Page 7 of 12
       answer or objection” to a request for admission and that the party can “answer”

       by “set[ting] forth in detail the reasons why the answering party cannot

       truthfully admit or deny the matter.” That is essentially what Plaintiffs did. In

       fact, they ended each “objection” by stating that they “cannot truthfully admit

       or deny the matter.”

[15]   It is true that Trial Rule 36(A) also includes the following closely related

       provision:

               An answering party may not give lack of information or
               knowledge as a reason for failure to admit or deny unless he
               states that he has made reasonable inquiry and that the
               information known or readily obtainable by him is insufficient to
               enable him to admit or deny or that the inquiry would be
               unreasonably burdensome.

       Here, Plaintiffs’ responses did not state that they “made reasonable inquiry and

       that the information known or readily obtainable by [them] is insufficient to

       enable [them] to admit or deny or that the inquiry would be unreasonably

       burdensome.” But Defendants do not cite this part of the rule, and we do not

       believe it applies to this situation. Even with “reasonable inquiry,” Plaintiffs

       could not know with certainty what Seller told Defendants, what knowledge

       Defendants had about particular facts, or whether Defendants relied on Seller’s

       statements. The “reasonable inquiry” requirement is necessarily limited to facts

       that parties are personally capable of discovering (e.g., information about

       themselves or their property, statements they themselves have made or heard,

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023       Page 8 of 12
       or actions they have taken) and doesn’t extend to statements between others or

       the knowledge or reliance of others.

[16]   For these reasons, we conclude that Plaintiffs’ responses to the Factual

       Requests were not just substantially justified but entirely appropriate.

       B. Legal Theory Requests
[17]   We reach the opposite conclusion as to the Legal Theory Requests. Those

       requests asked Plaintiffs to admit or deny that Defendants had certain rights

       and duties under Indiana Code section 25-34.1-10-10, the statute establishing

       the duties and obligations of a seller’s realtor. Plaintiffs argue they were not

       required to answer these requests because determining what the statute does or

       does not demand of a realtor would require them to “engage in statutory

       construction—an exercise strictly reserved for the courts.” Appellants’ Br. p. 18.

       They cite no authority in support of this objection. And as the trial court noted

       in its order on Defendants’ motion to compel, our courts have held that Trial

       Rule 36 “permits a request for admission regarding an opinion, a contention, or

       a legal conclusion, if the request is related to the facts of the case.” Gen. Motors

       Corp., 573 N.E.2d at 888 (citing Ind. Constr. Serv., 533 N.E.2d 1300). Plaintiffs

       do not attempt to distinguish this caselaw and do not dispute that Defendants’

       requests addressing Section 25-34.1-10-10 relate to the facts of this case.

       Plaintiffs’ objections to the Legal Theory Requests were not substantially

       justified.

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023        Page 9 of 12
       II. Requests for Production
[18]   Plaintiffs also contend their objections to the requests for attorney-fee

       documents were proper. We disagree. The requests asked Plaintiffs to produce

       invoices, payment records, and time and billing records for their attorney’s fees

       relating to this litigation. Requests for production are governed by Trial Rule

       34, which provides, in relevant part, that a party can request any documents

       “which constitute or contain matters within the scope of [Trial] Rule 26(B) and

       which are in the possession, custody or control of the party upon whom the

       request is served[.]” Again, Trial Rule 26(B) authorizes discovery on “any

       matter, not privileged, which is relevant to the subject-matter involved in the

       pending action[.]” Plaintiffs renew their argument that they were not required

       to produce information about their attorney’s fees because their request for a fee

       award “was contingent on a jury returning a favorable verdict on [Plaintiffs’]

       fraud and deception claims against [Defendants]” and therefore “was not yet

       ripe.” Appellants’ Br. p. 19. The trial court correctly rejected this argument.

       Because Plaintiffs expressly sought an award of attorney’s fees in their

       complaint, the documents sought in these requests are unquestionably relevant

       to the subject matter of this case. As Defendants note, having this information

       before trial would allow them to evaluate their potential liability and establish a

       settlement position. Plaintiffs’ objections to these requests were not

       substantially justified.

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023        Page 10 of 12
       III. Sanctions
[19]   Now that we have ruled in Plaintiffs’ favor on some issues and Defendants’

       favor on others, we must decide whether to disturb the trial court’s $900

       sanction award to Defendants. As noted above, Trial Rule 37(A)(4) provides

       that when a motion to compel is granted, an award of expenses to the moving

       party is generally appropriate. But the rule also provides that when a motion to

       compel is denied, an award of expenses to the opposing party is generally

       appropriate. Ind. Trial Rule 37(A)(4). And when a motion to compel is granted

       in part and denied in part, “the court may apportion the reasonable expenses

       incurred in relation to the motion among the parties and persons in a just

       manner.” Id.

[20]   Here, Defendants were largely successful on their motion to compel, but not

       completely. The trial court ruled that Plaintiffs were not required to answer

       three of the requests for admission. And now, we have determined that

       Plaintiffs properly objected to seven additional requests for admission. This

       means that, ultimately, out of the twenty-one discovery requests addressed in

       Defendants’ motion to compel (eighteen requests for admission and three

       requests for production), Defendants prevailed on eleven and Plaintiffs

       prevailed on ten. That is close enough to a wash that an award of expenses to

       Defendants is unwarranted. We therefore reverse the trial court’s sanction

       order.

[21]   Reversed.

       Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023    Page 11 of 12
Mathias, J., and Pyle, J., concur.

Court of Appeals of Indiana | Opinion 23A-PL-116 | September 7, 2023   Page 12 of 12