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. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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