Storch v. Provision Living, LLC
47 N.E.3d 1270
Ind. Ct. App.2015Background
- In 2006 Charles Sindledecker (resident) signed a residence agreement with Greentree assisted living that included an attorney-fee clause: the prevailing party in “any controversy, claim, or dispute…arising out of or relating to this Agreement or the breach thereof” is entitled to reasonable fees.
- Sindledecker, suffering from Alzheimer’s, was injured by burns after an incident near a fireplace at Greentree; he later suffered serious complications and died in 2012.
- His daughter, Carol Storch, sued on his behalf asserting negligence and breach of contract; she voluntarily dismissed the breach-of-contract claim shortly before trial, and the negligence claim proceeded to a jury verdict in her favor (approximately $1,000,020).
- After judgment, Storch sought attorney fees under the residence agreement; Greentree argued fees were unavailable because Storch had not prevailed on a breach-of-contract claim and the contract was not at issue before the jury.
- The trial court denied the fee petition; the Court of Appeals reversed, holding the fee clause’s plain language covers tort claims that arise out of or relate to the agreement and remanded to determine reasonable fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract’s attorney-fee clause applies when the plaintiff prevailed on a tort (negligence) claim but dismissed the breach-of-contract claim | Storch: the fee clause covers “any controversy, claim, or dispute…arising out of or relating to this Agreement,” so it applies to the negligence claim | Greentree: clause applies only to contract enforcement/breach claims; because breach was dismissed the agreement wasn’t at issue and no fees are available | Court: Fee clause’s plain, broad language covers claims that arise out of or relate to the agreement, including torts connected to residency; award of fees required |
| Whether the negligence claim “arises out of or relates to” the residence agreement | Storch: injuries occurred because of his residency at Greentree—the agreement’s subject matter—so the tort relates to the agreement | Greentree: negligence was unrelated to contract terms (not eviction, fraud, or contract-specific tort) | Court: “relate” is broad; because the underlying subject matter was residency covered by the contract, the negligence claim related to the agreement |
| Whether the jury’s lack of the written residence agreement precludes a contractual fee award | Storch: fee petitions are separate post-judgment equitable requests; contract interpretation is a legal issue for the court | Greentree: jury didn’t consider breach; thus contract-based fees are inappropriate | Court: irrelevant that jury didn’t see the contract; contract interpretation is a legal matter for the court and fee petitions are post-judgment matters |
| Who determines the reasonableness/amount of fees | Storch: court should calculate reasonable fees on remand | Greentree: (did not argue jury determination) | Court: absent agreement to let jury decide, trial judge determines reasonable attorney fees and should do so on remand |
Key Cases Cited
- R.L. Turner Corp. v. Town of Brownsburg, 963 N.E.2d 453 (Ind. 2012) (American Rule and timing/nature of fee petitions)
- Precision Homes of Indiana, Inc. v. Pickford, 844 N.E.2d 126 (Ind. Ct. App. 2006) (tort claims can fall within broad contract-related arbitration language)
- National Wine & Spirits, Inc. v. Ernst & Young, LLP, 976 N.E.2d 699 (Ind. 2012) (broad “arising out of or relating to” language construed expansively)
- ISP.com LLC v. Theising, 805 N.E.2d 767 (Ind. 2004) (tort claim “related to” contract for arbitration purposes)
- E. Trading Co. v. Refco, Inc., 229 F.3d 617 (7th Cir. 2000) (absent agreement, jury does not determine reasonableness of attorney fees)
- White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445 (U.S. 1982) (fee petitions are separate from the merits and typically follow final judgment)