Court Opinion

ID: 4236790
Source: CourtListenerOpinion
Date Created: 2018-01-16 16:11:26.895859+00
Date Added: 2024-06-11T14:15:48.670153
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before                                          FILED
any court except for the purpose of                                       Jan 16 2018, 9:33 am

establishing the defense of res judicata,                                      CLERK
                                                                           Indiana Supreme Court
collateral estoppel, or the law of the                                        Court of Appeals
                                                                                and Tax Court
case.

ATTORNEY FOR APPELLANT                                ATTORNEY FOR APPELLEES
Gregory Bowes                                         Cody P. Cogswell
Greg Bowes Legal Services, P.C.                       Cogswell & Associates
Indianapolis, Indiana                                 Fishers, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Jerry Thomas Mele, Jr.,                                January 16, 2018
Appellant-Defendant,                                   Court of Appeals Case No.
                                                       48A05-1707-PL-1560
        v.
                                                       Appeal from the Madison Circuit
Gary Joehlin,                                          Court
Appellee-Plaintiff.                                    The Honorable Thomas L. Clem,
                                                       Special Judge
                                                       Trial Court Cause No.
                                                       48C05-1502-PL-34

Brown, Judge.

Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018            Page 1 of 15
[1]   Jerry Thomas Mele, Jr., appeals the trial court’s awarding of attorney fees in the

      amount of $2,000 in favor of Gary Joehlin. Mele raises one issue which we

      restate as whether the court erred in awarding attorney fees to Joehlin based

      upon Mele litigating in bad faith. We reverse.

                                      Facts and Procedural History

[2]   Mele and Joehlin were involved in a sixteen-year relationship that ended in

      2014. On February 18, 2015, Joehlin filed a petition for replevin in the

      Madison Circuit Court to recover “financial, legal and tax documents”

      allegedly being held by Mele. Appellant’s Corrected Appendix Volume 2 at 15.

      At about the same time, the parties became involved in litigation in Colorado

      related to property, accounts, and trusts they owned. A September 15, 2015

      chronological case summary (“CCS”) entry in the Indiana case dealing with

      discovery matters reads:

              The Court further finds and the parties agree that the remaining
              eighteen (18) boxes of documents in the possession of [Mele]
              shall be made available for inspection and copying on Saturday,
              September 19, 2015, at the [Fisher’s public library]. . . . The
              Court reserves ruling on [Joehlin’s] request for attorney fees at
              this time, pending the further exchange of documentation.

      Id. at 4. Over the course of discovery, Mele delivered more than seven boxes of

      documents to Joehlin or his attorney.

[3]   On May 13, 2016, Mele filed a motion for summary judgment, arguing that

      neither abandoned property nor joint property were properly subject to replevin

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 2 of 15
and that, to the extent he had already delivered property to Joehlin, the replevin

action was moot. On the same day, Mele filed a motion for sanctions, arguing

that Joehlin’s failure to respond to discovery requests warranted sanctions

under Ind. Trial Rule 37(A)(4). Joehlin responded to the motion for summary

judgment and argued that material facts were left in dispute and that Joehlin

“has incurred attorney fees that were entirely unnecessary had [Mele] only

complied with Ind. Trial Rule 26(f).” Id. at 52. Before the court ruled on the

pending motions, Mele asked the trial court to continue indefinitely the hearing

scheduled for October 19, 2016, in an Agreed Motion for Continuance, which

stated:

          1. The parties are involved in related litigation in the State of
          Colorado.

          2. On September 22, 2016, the parties participated in court-
          ordered mediation in Colorado, and appear to have reached an
          agreement that includes a resolution of this cause.

          3. Under the Colorado agreement, certain actions must be
          performed in the future and subsequent to October 19, 2016.

          4. The parties anticipate filing a Stipulation of Dismissal in this
          cause as soon as the obligations under the Colorado agreement
          are met.

          5. The undersigned contacted counsel for [Joehlin] by email. In
          a response, [Joehlin’s] counsel stated he has no objection to this
          continuance.

Id. at 77. On October 13, 2016, the trial court ordered that the scheduled

hearing be continued indefinitely and that either party be “permitted to request

Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 3 of 15
      further proceedings if a Stipulation of Dismissal is not filed by January 20,

      2017.” Id. at 79.

[4]   On January 20, 2017, Mele filed a request for a hearing, which stated that,

      “[u]nder the Colorado agreement, certain actions were to be completed by

      January 20, 2017. [Joehlin] failed to meet all of the obligations of that

      agreement,” and the trial court ordered the parties to appear for a hearing on all

      pending motions on March 3, 2017. Id. at 80. On February 28, 2017, Joehlin

      filed a motion for a continuance of the scheduled hearing, which stated that

      “the parties came to an agreement in Colorado settling the issues in Indiana,”

      that “since the time that agreement was reached, another issue in Colorado

      arose wherein [Mele] was unjustly enriched,” that “prior to that, the parties

      signed a Stipulation of Dismissal,” and that “resolution of the Colorado matters

      need resolved before the instant cause can proceed.” 1 Id. at 83.

[5]   At the March 3, 2017 hearing, the trial court asked where the case stood and

      counsel for Joehlin answered:

               Um, - Judge this uh, - this complex litigation Your Honor um, -
               the case at hand, and additionally there’s a case pending in
               Colorado between the parties um, - it’d be my assertion at this
               point my request for attorney’s fees as well that this case needs to

      1
       We observe that the appendices before us do not appear to include a copy of the Stipulated Dismissal. We
      also observe that Mele’s counsel sent a message on February 28, 2017, to an agent for Joehlin’s counsel,
      which stated in relevant part, “In light of developments in the Colorado litigation, you no longer have my
      permission to use that stipulation to close out the Madison County case. . . . We consider Mr. Joehlin to be
      in breach of the Colorado settlement, and therefore bear no responsibility to cease litigation in Madison
      County. I hope this can be straightened out before Friday’s hearing, but I am preparing for the hearing in the
      event it isn’t.” Appellant’s Corrected Appendix Volume 2 at 90.

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018           Page 4 of 15
        be dismissed pursuant to a prior Settlement Agreement between
        the parties on September 25, 2016, in Colorado, the parties
        stipulated to resolve any issues which are part and partial [sic] to
        here, that they had reached a settlement and part of that
        Settlement Agreement was that all cases were to be dismissed.

Transcript at 5. The trial court asked, “you’re making the argument that on

September 25, 2016 something occurred, some stipulation, some agreement,

something happened in Colorado that essentially resolved the matter and that

this is a vexatious litigation at this point here in Indiana,” and Joehlin’s counsel

answered affirmatively. Id. at 6. Counsel for Mele later argued:

        The Settlement Agreement clearly said, we resolve all of our
        problems with regard to both the Indiana and Colorado
        litigation, including anything having to do with these trust[s] that
        manage these rental properties. In spite of having that agreement
        for Mr. Joehlin he asserts a claim against the property manager
        saying that [Mele] had not paid up enough or - or - you know not
        transferred enough rent uh, - at any rate they assert a seven
        thousand dollar claim.

Id. at 9-10. At the hearing’s conclusion, the trial court summarized:

        You’ve got this situation where you’ve gone to Colorado the case
        has taken on this tone, I believe under that Doctrine that I just set
        forward it’s my job to take the back seat and let this litigation
        take place in Colorado and uh, - if Colorado Court says that the
        stipulation uh, - among other things but if the stipulation in the
        Indiana case is - is binding then this case goes. . . . Now
        [Joehlin’s counsel] as far as - as - your uh, - Motion today there’s
        no way I could come to this conclusion without this hearing so I
        don’t consider that necessarily to be vexatious conduct, on the
        other hand it might be close I - but I had to get it and I had to get

Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 5 of 15
              it on this forum anyway, this is something that you can’t get by
              paperless filing.

      Id. at 14-15. A CCS entry, dated March 3, 2017, stated:

              Ct finds the Indiana litigation will be continued pending the
              outcome of the Colorado litigation. If the Colorado Ct finds the
              mediation order Binding[,] the Indiana case will be dismissed.
              However, if the Colorado Ct revokes the mediation order and
              returns the case to the status quo the Indiana case will return to
              the active docket -- Attys [sic] for [Joehlin and Mele] to advise Ct
              as to the conclusion of the Colorado case.

      Appellant’s Corrected Appendix Volume 2 at 121.

[6]   On March 7, 2017, Joehlin filed a motion for attorney fees and to dismiss the

      case, stating in relevant part:

              1) That [Mele] made material misrepresentations to the Court in
              refusing to execute the Stipulated Dismissal and continuing to
              move to hearing on March 3, 2017.

              2) This Court ruled that the jurisdiction of the case was with the
              State of Colorado.

              3) On March 6, 2017, the Colorado Court issued its Order
              against [Mele], the Defendant in this cause. See Attached Exhibit
              A.[2]

      2
       The order of dismissal with prejudice from the Colorado Court, which was attached to Joehlin’s motion for
      attorney fees and was dated March 6, 2017, reads:

                        THIS MATTER COMES before the Court on the Motion for Final Entry of
              Judgment, Contempt of Court Citation, and Sanctions, the response thereto, and the
              Motion to Dismiss with Prejudice. The Court finds that Respondent Joehlin was not at
              fault for making the $40,000.00 payment after January 20, 2017, because Petitioner Mele

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018        Page 6 of 15
        4) On September 22, 2016, the parties entered into a settlement
        agreement which included a dismissal of all claims in both
        Colorado and Indiana. See Attached Exhibit B[.]

        5) The Settlement Agreement was recorded and entered into the
        Colorado Case (2015CV466) on October 26, 2016.

        6) [Mele] has engaged in vexatious litigation after the execution
        of the Settlement Agreement both here in Indiana and in
        Colorado.

Id. at 122. Three days later, on March 10, 2017, the trial court entered an order

dismissing the cause and found that “[Mele] refused to dismiss the Indiana

cause in spite of the terms of the settlement agreement having been satisfied,”

“[o]n March 6, 2017, the Colorado Court issued its Order against [Mele],”

Mele “engaged in vexatious litigation after the execution of the Settlement

Agreement both here in Indiana [sic],” and “[d]ue to [Mele’s] bad faith action

to continue to pursue litigation, [Joehlin] is entitled to attorney fees in the

amount of $1,000.” Id. at 130.

        did not timely release the deeds of trust as required by the Settlement Agreement, which
        resulted in a late closing on the refinancing. Respondent Joehlin has performed in
        accordance with the Settlement Agreement. The Court also finds that, while it does not
        have personal jurisdiction over Respondent Joehlin regarding Petitioner Mele’s Motions
        for contempt, the Settlement Agreement is not an order of the Court, but is a stipulated
        agreement between the parties. Therefore, no order could be violated.
                 The Court, [sic] therefore grants Respondent Joehlin’s Motion to dismiss and
        orders that these proceedings are dismissed with prejudice.

Appellant’s Corrected Appendix 2 at 125. The first page of the order also appears to state, “THE
SETTLEMENT AGREEMENT WAS APPARENTLY NEVER ADOPTED AS AN ORDER OF THE
COURT.” Id. at 124.

Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018            Page 7 of 15
[7]   Mele filed a motion to correct error, or in the alternative, a motion for relief

      from judgment, stating in relevant part:

              5. On March 10, 2017, before [Mele] was able to respond to the
              motion, the Court entered its order.

              6. [Mele] does not challenge the part of the order that dismisses
              the case. He does challenge that part of the order that imposes a
              sanction of $1,000 in attorney fees to be paid to [Joehlin].

              7. The Court already decided the attorney fee request during its
              March 3, 2017, hearing, and stated it would not impose
              sanctions. It is likely the March 10 order was entered in error.

              8. In the event the order was not issued in error, [Mele] asserts
              his right to challenge the motion for sanctions. He should be
              given an opportunity to make factual and legal arguments in
              opposition, and should be allowed to challenge the evidence
              presented by [Joehlin] to establish the amount of any reasonable
              attorney fee.

      Id. at 132. At a May 24, 2017 hearing on the motion to correct error, the

      following exchange occurred between Mele’s counsel and the trial court:

              [Mele’s counsel]: Nothing changed after [the March 3rd] hearing
              accept [sic] that we learned the outcome of the Colorado decision
              and then [Joehlin’s counsel] files his Motion to Dismiss, which
              we are in agreement with, but in addition he asked for uh, - the
              attorney fees.

                                                    *****

              [Mele’s counsel]: I want to start out with, I think were [sic] not -
              if we’re gonna go down the road for attorney fees we’re not
              getting a full hearing on that. What [Joehlin’s counsel] just
              reported to the Court, - .

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 8 of 15
        THE COURT: STOP for a minute! You keep saying that, and
        maybe there’s never ever a way to give you guys full satisfaction,
        cause maybe you’ll never accept whatever happens, that’s kind of
        what this is soundin like, and I’ll tell you why. What I did was
        basically said look let’s see what happens in Colorado that stuff
        was pre-existing.

        [Mele’s counsel]: Mm-hmm - .

        THE COURT: I’m just not going to determine, okay? When in
        fact Colorado says yes, we did have binding uh, - uh, -
        mediation here and then you continue to litigate after that and
        then the Plaintiff says by definition that’s vexatious, because they
        knew and then Colorado backs that up uh, - it’s not just like you
        should be shocked, I mean you’re just like, - .

                                         *****

        [Mele’s counsel]: I don’t know that Colorado said it was vexation
        they ruled, - .

        THE COURT: Well - but that’s - .

        [Mele’s counsel]: - they - they - ruled against him - .

        THE COURT: - not the point. Colorado will never say Indiana
        litigation was vexatious, that’s not their job, that’s the Indiana
        Court[’]s job .

        [Mele’s counsel]: I understand, - .

        THE COURT: By definition that is my job! There’s no court in
        Colorado that would say, I don’t know if I’m trying to claim if
        that’s vexatious or not, why would that ever happen? EVER!

        [Mele’s counsel]: The defendants [sic] did nothing after March
        3rd, when you said we’re gonna wait for Colorado, until we
        received the Court’s order.

        THE COURT: Yeah, but what you did had already occurred.

Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 9 of 15
              [Mele’s counsel]: Right – but, - .

              THE COURT: Whether or not it was vexatious or not depended
              upon what in my mind; and by the way my decision is the one
              that counts here.

              [Mele’s counsel]: Right.

              THE COURT: RIGHT!

                                               *****

              [Mele’s counsel]: And we have not been given an opportunity to
              answer that question today or on March 3rd.

              THE COURT: Well, what - what could you possibly answer? If
              what you did was inappropriate because you had a binding order
              back there, which the Colorado Court says you did, how are you
              gonna order what you did here wasn’t inappropriate?

              [Mele’s counsel]: There’s a difference between making a
              challenge to something and making a challenge that’s vexatious
              or frivolous. Okay, the challenge that was made in Colorado had
              to do with the seven thousand dollar issue that [Mele] reasonably
              believed had been resolved.

      Transcript at 26-30. At the end of the hearing, the trial court ordered Mele’s

      counsel “to get a quick brief together to say why you shouldn’t have to pay

      attorney fees get it to him, you respond to it.” Id. at 30.

[8]   Mele filed a brief in support of his motion to correct error consistent with the

      court’s instructions. In the brief in objection to the motion to correct error,

      Joehlin stated that “due to the continued protracted litigation and the necessity

      to brief the Court in Response to [Mele’s] brief in Support of the Motion to

      Correct Errors, Plaintiff would request an additional One-Thousand Dollars

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 10 of 15
      ($1000.00) in addition to the previous award of One-Thousand Dollars

      ($1,000).” Appellant’s Corrected Appendix Volume 2 at 144. On June 20,

      2017, the trial court found that Mele “brought his Motion to Correct Errors

      with unclean hands and having the matters either resolved by the Colorado

      Court, or having already stipulated to the dismissal of those claims,” and that

      “[d]ue to [Mele’s] bad faith action to continue to pursue litigation, [Joehlin] is

      entitled to attorney fees in the amount of $1,000.” Id. at 13. Additionally, it

      ordered Mele to pay “an additional $1,000 for a sum total of $2,000 which is

      hereby reduced to judgment” due to “further litigation in [Joehlin’s] need to

      Defend against the Motion to Correct Errors, attending a hearing, and

      submitting their own brief to the Court.” Id. at 14.

                                                   Discussion

[9]   The issue is whether the trial court erred in awarding attorney fees to Joehlin

      based upon Mele litigating in bad faith. Ind. Code § 34-52-1-1(b), also known

      as the General Recovery Rule, provides:

              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;

                               (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.

      Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 11 of 15
[10]   The trial court here awarded attorney fees under Ind. Code § 34-52-1-1(b)(3),

       finding that Mele litigated the action in bad faith. Bad faith is demonstrated

       where the party presenting the claim is affirmatively operating with furtive

       design or ill will. GEICO General Ins. Co. v. Coyne, 7 N.E.3d 300, 305 (Ind. Ct.

       App. 2014) (citing Dunno v. Rasmussen, 980 N.E.2d 846, 851 (Ind. Ct. App.

       2012); Auto-Owners Ins. Co. v. C & J Real Estate, Inc., 996 N.E.2d 803, 805-806

       (Ind. Ct. App. 2013) (“[P]roving bad faith amounts to showing more than bad

       judgment or negligence: ‘it implies the conscious doing of wrong because of

       dishonest purpose or moral obliquity. . . . [I]t contemplates a state of mind

       affirmatively operating with furtive design or ill will.’” (quoting Oxendine v. Pub.

       Serv. Co., 423 N.E.2d 612, 620 (Ind. Ct. App. 1980)))), trans. denied.

[11]   The trial court’s decision to award attorney fees under Ind. Code § 34-52-1-1 is

       subject to a multi-level review: the trial court’s findings of fact 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. Id. at 305 (citing Purcell v. Old Nat’l Bank, 972 N.E.2d 835, 843 (Ind.

       2012)). Finally, the trial court’s decision to award attorney fees and any

       amount thereof is reviewed for an abuse of 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.

[12]   Mele does not challenge the dismissal of this case, but only the trial court’s

       award of attorney fees. Mele argues the trial court improperly considered that

       Mele lost on his rental income issue in the Colorado court, a party does not

       Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 12 of 15
       present a frivolous claim merely because he is unsuccessful on that claim, and

       the trial court wrongly imposed sanctions on him. He contends that “Joehlin,

       however, also asserted a $7,016 claim in Colorado that [Mele] believed was in

       violation of the Colorado settlement agreement,” that “[o]nce [Mele] saw that

       the final $40,000 had been paid, and that the Colorado court had resolved the

       $7,016 claim against him, he agreed the Indiana case should be dismissed,” and

       that “[a]ny effort [Mele] made after the two Colorado issues were resolved was

       to challenge the attorney fee sanction against him.” Appellant’s Corrected Brief

       at 11.

[13]   Joehlin argues the trial court did not abuse its discretion in imposing attorney

       fees and this Court should award additional attorney fees for costs of defending

       himself on appeal as Mele’s brief was frivolous and brought in bad faith.

       Specifically, he maintains that “the issue solely resolves [sic] around the

       mediated settlement agreement entered into in Colorado which resolved all

       pending action in Indiana” and that “despite having sought relief in the

       Colorado court and executing the Stipulated Dismissal with the scrivener’s

       error, Mele refused to execute a corrected Stipulated dismissal.” Appellee’s

       Brief at 7, 12.

[14]   Our review of the record reveals that three days prior to the March 3, 2017

       hearing on outstanding motions, Joehlin argued for a continuance of the

       Indiana case because “resolution of the Colorado matters need resolved before

       the instance [sic] cause can proceed.” Appellant’s Corrected Appendix Volume

       2 at 83. Upon hearing Mele’s argument that Joehlin asserted a seven thousand

       Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 13 of 15
       dollar claim in Colorado, the trial court stated on March 3, 2017, that there was

       no way it could have come to the conclusion it had regarding the current status

       of the litigation without a hearing, that it did not “consider that necessarily to

       be vexatious conduct,” and that it was taking “the back seat” and letting “this

       litigation take place in Colorado.” Transcript at 15. We observe that the

       Colorado court issued the ruling in question on March 6, 2017. We also

       observe that a day later, Joehlin filed a motion for attorney fees and to dismiss

       the case, that the trial court ordered the cause dismissed and awarded Joehlin

       attorney fees before Mele was given a chance to respond, and that Mele agreed

       once given an opportunity to present before the trial court that the Indiana case

       should be dismissed in light of the Colorado court’s ruling. Appellant’s

       Corrected Appendix Volume 2 at 130.

[15]   As discussed, a finding of bad faith requires not mere negligence or bad

       judgment, but rather the conscious doing of wrong because of dishonest

       purpose or moral obliquity, or affirmatively operating with furtive design or ill

       will. See Auto-Owners Ins. Co., 996 N.E.2d at 805-806. Under these

       circumstances, in which a Colorado settlement agreement was still being

       litigated upon in Colorado, we conclude that Mele did not engage in vexatious

       litigation here in Indiana. See Emergency Physicians of Indianapolis v. Pettit, 714

       N.E.2d 1111, 1116 (Ind. Ct. App. 1999) (“An award of attorney fees is not

       justified merely because a party loses on the merits.”), adopted in part by and

       incorporated by Emergency Physicians of Indianapolis v. Pettit, 718 N.E.2d 753, 757

       Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018   Page 14 of 15
       (Ind. 1999). Accordingly, we reverse the trial court’s attorney fee award under

       Ind. Code § 34-52-1-1(b)(3).3

                                                       Conclusion

[16]   For the foregoing reasons, we reverse the trial court’s award of attorney fees

       under Ind. Code § 34-52-1-1 and deny Joehlin’s request for appellate attorney

       fees.

[17]   Reversed.

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

       .

       3
        Joehlin requests an award of appellate attorney fees pursuant to Ind. Appellate Rule 66(E) or, alternatively,
       “remand the matter of additional attorney fees for appellate costs be reserved for the trial court to determine
       after the submission of evidence outside the record to expose [Mele’s] ulterior motivations” if this court
       “were to return an opinion that insufficient evidence of motivation has been provided.” Appellee’s Br. at 19.
       Ind. Appellate Rule 66(E) provides in part 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
       attorney’s fees.” Having concluded the Mele did not litigate in bad faith below, we decline Joehlin’s
       requests.

       Court of Appeals of Indiana | Memorandum Decision 48A05-1707-PL-1560 | January 16, 2018           Page 15 of 15