Court Opinion

ID: 4433562
Source: CourtListenerOpinion
Date Created: 2019-08-27 15:04:00.079208+00
Date Added: 2024-06-11T14:53:06.183289
License: Public Domain

FILED
                                                                            Aug 27 2019, 8:42 am

                                                                                 CLERK
                                                                             Indiana Supreme Court
                                                                                Court of Appeals
                                                                                  and Tax Court

      ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
      Mark L. Abrell                                             Danyel N. Struble
      Muncie, Indiana                                            Beasley & Gilkison, LLP
                                                                 Muncie, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Mark Abrell,                                               August 27, 2019
      Appellant-Defendant/Counterclaim-                          Court of Appeals Case No.
      Plaintiff,                                                 19A-PL-585
                                                                 Appeal from the Delaware Circuit
              v.                                                 Court
                                                                 The Honorable Linda Ralu Wolf,
      Delaware County Regional                                   Judge
      Wastewater District,                                       Trial Court Cause No.
      Appellee-Plaintiff/Counterclaim-                           18C03-1809-PL-72
      Defendant.

      Bailey, Judge.

                                            Case Summary
[1]   Mark Abrell (“Abrell”) appeals an order denying him compensation for legal

      work he performed pursuant to a contract with the Delaware County Regional

      Wastewater District (“the District”) and ordering that he pay all attorney’s fees

      incurred by the District in pursuing a replevin claim against Abrell and
      Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019                             Page 1 of 10
      defending against Abrell’s counterclaim. We reverse and remand with

      instructions to the trial court to determine the contractual fees Abrell is owed by

      the District.

                                                     Issues
[2]   Abrell presents two issues for review:

              I.       Whether the trial court clearly erred in denying his claim
                       for contractual attorney’s fees; and

              II.      Whether the District was entitled to an award of attorney’s
                       fees from Abrell as damages in the replevin action or as a
                       sanction for engaging in meritless litigation.

                             Facts and Procedural History
[3]   On January 2, 2006, Abrell, who is an attorney, and the District entered into an

      Agreement for Professional Services whereby Abrell would provide legal

      services for the District. The District agreed to pay Abrell: (1) a retainer of

      $600.00 per month, which included time spent at two regular monthly meetings

      and unlimited telephone calls; (2) $175.00 per hour for legal work “in excess of

      the time covered by the monthly retainer”; and (3) contingency fees collected

      from debtors in collection matters. (Exhibit D.)

[4]   Abrell presented his bills for legal services performed through February 24, 2017

      and the District paid the bills submitted. Abrell prepared for and appeared at

      the District meeting on March 1, 2017. At that meeting, Abrell was discharged

      Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019            Page 2 of 10
      as the attorney for the District. Abrell sent a final bill for $880.00, but the

      District’s board members decided “not to pay the bill.” (Tr. Vol. II, pg. 26.)

[5]   In June of 2017, the District’s new counsel took the active collections files from

      Abrell. On August 14, 2017, the District counsel sent a demand letter to Abrell

      regarding other files. Counsel issued a “final request” for the return of files and

      advised Abrell that “the District has voted to not pay the final bill you

      submitted.” (Exhibit A.) Counsel explained the District’s position that Abrell

      had collected “unreasonable” fees in the past because the monthly meetings had

      been reduced from two to one as of June 2015, without reduction in the retainer

      amount. Id.

[6]   In response, Abrell advised the District that he was retaining a statutory

      attorney’s lien on his former client’s files. He asserted that his final bill

      included several hours of preparation work and, as to past billings that had been

      paid, he expressed his position that “the District business was condensed into

      one meeting instead of two which meant more work preparing for the one

      meeting.” (Exhibit C.)

[7]   In March of 2018, the District filed with the Indiana Supreme Court

      Disciplinary Commission a complaint against Abrell, alleging among other

      things that he had wrongfully retained the District’s files. The complaint was

      dismissed for failure to raise a substantial question of misconduct warranting

      attorney discipline. On September 6, 2018, the District filed a complaint for

      replevin, to recover files in Abrell’s possession.

      Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019              Page 3 of 10
[8]   Abrell filed a counterclaim, seeking payment of his final bill of $880.00 and his

      portion of contingency fees related to collection matters. On December 3,

      2018, the District agreed to post a security bond of $880.00 and Abrell tendered

      the requested files to the District. The District also put $1,700.00 into escrow to

      cover contingency fees due Abrell on collections matters.

[9]   On January 29, 2019, the parties appeared for a bench trial, with Abrell

      appearing pro se. At the outset, the District’s counsel advised “I don’t think

      there is anything left in regards to obtaining the files” and requested that the

      trial court adjudicate Abrell’s counterclaim and the District’s request for

      attorney’s fees. (Tr. Vol. II, pg. 8.) Abrell testified in narrative form and the

      District’s counsel affirmatively agreed with Abrell’s summarization of the facts.1

      The District then presented its sole witness, District Board President Ray

      Maynard (“Maynard”), “to explain why the board chose not to pay that [final

      bill].” Id. at 23. Maynard testified that the final bill included an itemization for

      services that should have been covered by the retainer but also he “had issues

      with the monthly retainer” because the agreement contemplated two monthly

      meetings and the meetings had been reduced to one due to “lack of business.”

      Id. at 27. He acknowledged that the March 2017 bill had not been paid and the

      prior bills had been paid without protest.

      1
       Counsel later clarified: “We may have a sharing situation on some of those [bills] for contingent cases. But
      everything else that he stated I think we agree with.” (Tr. Vol. II, pg. 23.)

      Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019                               Page 4 of 10
[10]   At the conclusion of the hearing, the trial court directed the parties to attempt to

       settle the claim for contingency fees, with the following guidance. If Abrell

       alone had worked on a collection case, the entire contingency fee would be his

       and if both counsel had performed legal services on a District case, Abrell’s

       share would be calculated on a quantum meruit basis. Thereafter, the parties

       advised the trial court that they had reached an agreement and the District paid

       Abrell $1,341.50 from the escrow funds. The District also submitted to the trial

       court a revised attorney’s fees request including the hours expended to examine

       files and reach settlement.

[11]   On March 7, 2019, the trial court issued a judgment against Abrell for

       $4,973.50 (comprised of the entirety of the District’s attorney’s fees of $4,816.50

       and a filing fee of $157.00). Abrell’s counterclaim for his final bill in the

       amount of $880.00 was denied. Abrell now appeals.

                                   Discussion and Decision
                                          Standard of Review
[12]   When, as here, issues are tried upon the facts by the court without a jury, and

       the trial court enters specific findings sua sponte, we apply a two-tiered

       standard: whether the evidence supports the findings, and whether the findings

       support the judgment. Trust No. 6011, Lake Cty. Trust Co. v. Heil’s Haven Condos.

       Homeowners Ass’n, 967 N.E.2d 6, 14 (Ind. Ct. App. 2012). Findings and

       conclusions will be set aside only if they are clearly erroneous, that is, when the

       record contains no facts or inferences to support them. Id. A judgment is
       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019           Page 5 of 10
       clearly erroneous when our review of the record leaves us with a firm

       conviction that a mistake has been made. Id. We defer substantially to findings

       of fact but not to conclusions of law. Id.

                                Counterclaim for Final Billing
[13]   The trial court disposed of Abrell’s counterclaim as follows:

               As to the issue of the contested attorney fees payable to
               Defendant, Mark Abrell, Court finds that the Plaintiff does not
               owe this contested fee and the Counterclaim filed [by] Defendant
               should be denied. The original contract between the parties
               provided for a retainer fee of $600.00 per month for two monthly
               meetings of Plaintiff. In 2015, Plaintiff reduced the frequency of
               board meetings to once per month, due to the reduction in the
               amount of business that needed to be conducted. Early in 2017,
               there was a discrepancy and disagreement as to what activities
               were considered a part of Defendant’s monthly retainer. As a
               result of this disagreement, the Board had a vote on whether or
               not to pay the final bill of $880.00 to Defendant and, by a
               majority vote, payment was denied.

               Rule 1.5 of the Professional Rules of Conduct states that an
               attorney cannot charge an unreasonable fee.

       Appealed Order at 2.

[14]   To the extent that the language suggests Abrell was discharged due to a billing

       dispute or a bill was disputed prior to his discharge, it lacks evidentiary support.

       The parties agreed upon the salient facts; the evidentiary record disclosed:

       Abrell and the District were parties to a contract for legal services for more than

       eleven years; District meetings were reduced from two per month to one per
       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019         Page 6 of 10
       month in 2015; the District paid Abrell’s bills inclusive of February 2017

       services, without protest; Abrell prepared for and appeared at the March 1,

       2017 meeting where he was discharged upon an allegation unrelated to billing;

       subsequently, new counsel sent Abrell a letter taking the position that Abrell

       had been overpaid in the past.

[15]   The interpretation and construction of a contract is a function for the courts.

       Stenger v. LLC Corp., 819 N.E.2d 480, 484 (Ind. Ct. App. 2004), trans. denied.

       When contract terms are clear and unambiguous, the terms are conclusive and

       we do not construe the contract or look to extrinsic evidence, but will merely

       apply the contractual provisions. Id. The District unilaterally terminated the

       Agreement for Professional Services but had not done so when Abrell prepared

       for and appeared at the March 1, 2017 meeting. He has received no payment

       for those services. Although the District came to believe that they had overpaid

       in the past, and the trial court found this argument persuasive, it is irrelevant to

       the counterclaim before the trial court. The District did not pursue a claim for

       disgorgement of attorney’s fees it had paid, nor was this an attorney disciplinary

       action. Indeed, Abrell prevailed upon the collateral disciplinary complaint.

       The District was contractually bound to pay Abrell for his legal services

       performed but uncompensated as of March 1, 2017 and we therefore remand

       for a determination of a reasonable fee.

                         Attorney’s Fees Award to the District
[16]   The trial court awarded the District the entirety of its attorney’s fees, stating:

       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019          Page 7 of 10
                 As a result of Defendant’s unwillingness to return files to Plaintiff
                 prior to December 13, 2018, Plaintiff is entitled to damages for
                 failing to return files in a timely manner. Plaintiff was forced to
                 engage its current legal counsel to initiate this case and proceed
                 with an evidentiary hearing against the Defendant. The filing fee
                 for this case is $157.00.

                 Further I.C. 34-52-1-1 provides for attorney fees to be awarded to
                 the party recovering judgment. Plaintiff should be awarded
                 attorney fees to be paid by Defendant in this case. It is
                 unreasonable that it took twenty-two (22) months for the
                 Defendant to return the files to Plaintiff.

       (Appealed Order at 2.)

[17]   Indiana adheres to the “American Rule” with respect to the payment of

       attorney’s fees, which requires each party to pay his or her own attorney’s fees

       absent an agreement between the parties, statutory authority, or rule to the

       contrary. Fackler v. Powell, 891 N.E.2d 1091, 1098 (Ind. Ct. App. 2008), trans.

       denied.

[18]   The District brought a replevin complaint against Abrell, pursuant to Indiana

       Code Section 32-35-2-1, which provides in relevant part:

                 If any personal goods, including tangible personal property
                 constituting or representing choses in action, are:

                 (1) wrongfully taken or unlawfully detained from the owner or
                     person claiming possession of the property …

                 the owner or claimant may bring an action for the possession of
                 the property.
       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019            Page 8 of 10
[19]   Indiana Code Section 32-35-2-33 provides that judgment for the plaintiff upon a

       replevin action may be for (1) delivery or the value of the property and (2)

       damages for the detention of the property. It includes no statutory provision for

       the payment of attorney’s fees. See also Associates Inv. Co. v. Shelton, 122 Ind.

       App. 384, 390, 105 N.E.2d 354, 356 (1952); Reimer v. Sheets, 128 Ind. App. 400,

       402, 149 N.E.2d 554, 555 (1958) (prevailing parties in replevin actions are not

       entitled to attorney’s fees as damages). The trial court’s award of attorney’s fees

       to the District is not supportable on this basis.

[20]   Additionally, the trial court referenced Indiana Code Section 34-52-1-1, which

       provides for the payment of attorney’s fees when a litigant has pursued a claim

       or defense that is frivolous, unreasonable, or groundless. Although factual

       findings are reviewed under a clearly erroneous standard, we review de novo a

       trial court’s conclusion that a party engaged in meritless litigation. Kahn v.

       Cundiff, 533 N.E.2d 164, 167 (Ind. Ct. App. 1989), aff’d 543 N.E.2d 627 (Ind.

       1989). A claim or defense is “frivolous” if it is taken primarily for the purpose

       of harassment, if the attorney is unable to make a good faith and rational

       argument on the merits of the action, or if the lawyer is unable to support the

       action taken by a good faith and rational argument for an extension,

       modification, or reversal of existing law. Id. at 170. A claim or defense is

       “unreasonable” if, based on the totality of the circumstances, including the law

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

       that the claim or defense was worthy of litigation. Id. at 170-71. A claim or

       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019          Page 9 of 10
       defense is “groundless” if no facts exist which support the legal claim presented

       by the losing party. Id. at 171.

[21]   Here, the factual determination made by the trial court that the length of time

       Abrell retained certain files was “unreasonable” is not equivalent to presenting

       an “unreasonable” claim or defense. Moreover, Abrell substantially prevailed

       upon his counterclaim when he recovered significant contingency fees. Indeed,

       the District did not deny that Abrell was entitled to some recovery of fees and

       set aside an escrow fund for that purpose. Notably, in argument before the trial

       court, the District’s attorney clarified: “I am not saying Mr. Abrell’s claim is

       frivolous[.]” (Tr. Vol. II, pg. 44.) The award of attorney’s fees to the District is

       not supportable on grounds that Abrell engaged in meritless litigation.

                                                 Conclusion
[22]   Pursuant to the Agreement for Professional Services, Abrell is entitled to

       reasonable fees for his uncompensated legal work prior to his discharge as the

       District’s attorney. The District did not demonstrate its entitlement to an award

       of attorney’s fees.

[23]   Reversed and remanded for further proceedings consistent with this opinion.

       Najam, J., and May, J., concur.

       Court of Appeals of Indiana | Opinion 19A-PL-585 | August 27, 2019        Page 10 of 10