ILNews

Appeal moot, but attorney fees allowed

Jennifer Nelson
January 1, 2008
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The Indiana Court of Appeals dismissed an appeal as moot but awarded the defendant appellate attorney fees and costs because the plaintiff engaged in procedural and substantive bad faith during the appeals process.

In Samuel Lesjak v. New England Financial, No. 29A02-0706-CV-499, Lesjak appealed the trial court's order that he arbitrate a claim filed against him by New England Financial in a forum other than the National Association of Securities Dealers. Lesjak worked for New England Securities as a broker/dealer. He registered with NASD to be able to buy and sell securities to the public. The agreement he signed when he was hired stated Lesjak would agree to arbitrate through NASD any dispute or claim that may arise between himself and New England Securities.

Lesjak had an assistant, whose salary was reimbursed by New England Securities. After Lesjak quit, the company sought the return of past payments to Lesjak for his assistant's salary in the sum of more than $24,000.

New England Financial filed a complaint against Lesjak to recoup the money. A letter attached to the complaint stated New England Financial is not a legal entity and is the service mark for New England Life Insurance Co. The complaint never stated which company was suing Lesjak.

Lesjak tried to arbitrate the claim through NASD, but New England Financial opposed it. The trial court ordered the parties to submit the matter to NASD arbitration, but eventually granted New England Financial's motion for a stay of proceedings because New England Financial is not a member of NASD and cannot arbitrate through them. The court ordered Lesjak to arbitrate the matter through another forum besides NASD. Lesjak appealed, and New England Financial was granted a motion to hold the appeal in abeyance. New England Financial explained that NASD, now the Financial Industry Regulatory Authority, agreed to arbitrate the claim and this appeal should not move forward.

Lesjak filed a motion in opposition to holding the appeal in abeyance and sought a request for damages. He contended that because New England Financial acted with both procedural and substantive bad faith he should be awarded damages.

New England Financial missed the date on which to file a brief and was not granted an extension. The company filed its brief a week later and filed a motion to include documents outside of the clerk's record in its appendix.

The core issue of the appeal - whether the trial court properly ordered the matter be arbitrated, but not before NASD - is moot because arbitration is under way, wrote Chief Judge John Baker. However, the appellate court denied New England Financial's motions for extension of time to file its brief and to include documents outside of the clerk's record in its appendix. New England Financial was told it was required to file its brief by Nov. 13, 2007, and no extensions would be granted.

Chief Judge Baker wrote that based on New England Financial's actions during litigation of this case and the appeal, New England Financial clearly engaged in both procedural and substantive bad faith during the appeal, if not the entire litigation. The company fought for months to not arbitrate the claim and claimed arbitration with NASD would be impossible because New England Financial was not an NASD member, but the company then suddenly said arbitration would be accepted.

Lesjak has spent more than $19,000 in attorney fees seeking arbitration. He has established he is entitled to appellate attorney fees and costs pursuant to Appellate Rule 66(E) because of New England's bad faith during this appeal.

The case is remanded to the trial court for a calculation of the amount of attorney fees and costs Lesjak is entitled to and for the trial court to consider if Lesjak is entitled to attorney fees for New England Financial's conduct prior to this appeal.
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  1. This is easily remedied, and in a fashion that every church sacrificing incense for its 501c3 status and/or graveling for government grants should have no problem with ..... just add this statue, http://commons.wikimedia.org/wiki/File:Capitoline_she-wolf_Musei_Capitolini_MC1181.jpg entitled, "Jesus and Cousin John learn to suckle sustenance from the beloved Nanny State." Heckfire, the ACLU might even help move the statue in place then. And the art will certainly reflect our modern life, given the clergy's full-bellied willingness to accede to every whim of the new caesars. If any balk, just threaten to take away their government milk … they will quiet down straightaway, I assure you. Few, if any of them, are willing to cross the ruling elite as did the real J&J

  2. Tina has left the building.

  3. Is JLAP and its bevy of social "scientists" the cure to every ailment of the modern practitioner? I see no allegations as to substance abuse, but I sure see a judge who has seemingly let power go to her head and who lacks any appreciation for the rule of law. Seems that she needs help in her legal philosophy and judicial restraint, not some group encounter session to affirm she is OK, we are OK. Can’t we lawyers just engage in peer professionalism and even peer pressure anymore? Need we social workers to tell us it is wrong to violate due process? And if we conduct ourselves with the basic respect for the law shown by most social workers .... it that good enough in Indiana? If not, then how is JLAP to help this 2003 law school grad get what her law school evidently failed to teach her? (In addition .... rhetorical question … I have a theory that the LAP model serves as a conduit for governmental grace when the same strict application of the law visited upon the poor and the powerless just will not do. See in the records of this paper ... can the argument be made that many who save their licenses, reputations, salaries by calling upon that font of grace are receiving special treatment? Who tracks the application of said grace to assure that EP and DP standards are fully realized? Does the higher one climbs inside the Beltway bring greater showers of grace? Should such grace be the providence of the government, or the churches and NGO's? Why, we would not want to be found mixing the remnants of our abandoned faith with the highest loyalty to the secularist state, now would we?)

  4. Is JLAP and its bevy of social "scientists" the cure to every ailment of the modern practitioner? I see no allegations as to substance abuse, but I sure see a judge who has seemingly let power go to her head and who lacks any appreciation for the rule of law. Seems that she needs help in her legal philosophy and judicial restraint, not some group encounter session to affirm she is OK, we are OK. Cannot we lawyers not engage in peer professionalism and even pressure anymore? Need we social workers to tell us it is wrong to violate due process? And if we conduct ourselves with the basis respect for the law shown by most social workers .... it that good enough in Indiana?

  5. Judge Baker nails it: "Russell was in a place he did not have a right to be, to take an action he did not have a right to take. Russell neglected to leave that property even after engaging in a heated argument with and being struck with a broom handle by the property owner." AS is noted below ... sad to think that the next shoe to drop will be the thief suing the car owner. That is justice?

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