I.A.E., Inc. and William Lazarus
2015 Ind. App. LEXIS 765
| Ind. Ct. App. | 2015Background
- IAE (client) retained Attorney Bishop in 2000 on a 25% contingent-fee retainer; Bishop filed suit but summary judgment was entered for Lake Station and Bishop later sought higher appellate fees which Talluri/IAE declined.
- Attorney Hall was retained in 2003 on a 33 1/3% contingent-fee for the appeal; Hall secured a reversal and later (2005) a new 40% agreement was signed but later held unenforceable by a declaratory-judgment court.
- After a 2010 jury verdict for IAE ($965,300, later reduced by stipulation to $776,440), Lake Station appealed; Attorney Lazarus was retained in 2010 on a contract calling for 10% (8% + possible 2%) of recovery and a higher contingent fee if litigation continued, plus hourly work on fee disputes.
- Judge Dywan (2012) held the 2003 Hall agreement valid and the 2005 agreement unenforceable and directed Judge Svetanoff to determine fee amounts per Galanis; Judge Svetanoff (2013) awarded Hall 33 1/3% and stated Lazarus’s 10% was to be paid in addition to Hall’s fee and set a deadline for other fee claims.
- Bishop separately sought fees; proceedings were consolidated and Judge Hawkins (2015) recalculated fee apportionment under quantum meruit/Galanis (awarding Hall, Bishop, Lazarus various amounts) and granted Hall summary judgment on abuse of process; this appeal followed.
Issues
| Issue | Plaintiff's Argument (IAE or moving party) | Defendant's Argument (Attorney(s)) | Held |
|---|---|---|---|
| Whether trial court properly applied Galanis (quantum meruit) vs. enforcing written fee agreements | IAE: fees should be allocated strictly per written contracts (enforce agreements as written) | Hall/Lazarus: Galanis applies to discharged/predecessor counsel; but Hall argued his 2003 contract was satisfied and enforceable | Court: Reverse in part — Hall and Lazarus fee amounts had been finally decided by Judge Svetanoff (res judicata); Hawkins erred recalculating them under Galanis for Hall and Lazarus; affirmed Galanis-based award to Bishop |
| Whether Hall has valid abuse of process claim against IAE | IAE: Hall failed to designate evidence showing ulterior purpose or willful misuse of process | Hall: IAE repeatedly re-litigated issues already decided (res judicata), pursued baseless claims to avoid paying fees — causing Hall to spend time defending | Court: Affirmed award to Hall ($86,250); IAE’s continued litigation after final orders supported abuse-of-process finding |
| Whether trial court abused its discretion by striking IAE’s expert (Lundberg) and related filings | IAE: Striking was overbroad and akin to a default sanction; prejudiced IAE’s defense | Bishop/Hall: Lundberg was untimely disclosed; his report relied on issues already res judicata or otherwise irrelevant | Court: Affirmed strike (or affirmed without needing to reach abuse-of-discretion because no prejudice shown); Lundberg’s opinions were irrelevant as to res judicata issues |
| Whether appellate attorney fees should be awarded under App. R. 66(E) | Hall/Bishop (cross-appellants): IAE’s appeal is frivolous/bad faith and should be sanctioned with appellate fees | IAE: appeal raises nonfrivolous issues (respondent) | Court: Denied appellate fees to Hall & Bishop — all briefs were procedurally deficient and vitriolic but did not justify the extreme sanction of appellate fees |
Key Cases Cited
- Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999) (quantum meruit framework for compensating discharged contingent-fee counsel versus enforcing valid written fee agreements)
- MicroVote General Corp. v. Ind. Election Comm’n, 924 N.E.2d 184 (Ind. Ct. App. 2010) (elements and effect of res judicata)
- Filip v. Block, 879 N.E.2d 1076 (Ind. 2008) (summary-judgment evidence-designation requirements under Trial Rule 56)
- Shortridge (Nat’l City Bank of Ind. v. Shortridge), 689 N.E.2d 1248 (Ind. 1997) (standards for evaluating attorney-initiated litigation for abuse of process; objective reasonableness test)
- Estate of Mayer v. Lax, Inc., 998 N.E.2d 238 (Ind. Ct. App. 2013) (elements of abuse of process: ulterior purpose and willful misuse of process)
- Wong v. Tabor, 422 N.E.2d 1279 (Ind. Ct. App. 1981) (discusses intent requirement and improper purpose standard relevant to malicious-prosecution/abuse-of-process analyses)