ILNews

Lawyer entitled to $1.05 million default judgment

Back to TopE-mailPrintBookmark and Share

The Indiana Court of Appeals affirmed a default judgment in favor of an Indiana attorney because an Illinois attorney demonstrated "contumacious disregard" for a trial court's orders.

In David J. Fitzpatrick d/b/a David J. Fitzpatrick and Associates v. Kenneth J. Allen and Associates, P.C., No. 64A03-0811-CV-545, Illinois attorney David Fitzpatrick challenged the trial court's decision to enter default judgment in Indiana attorney Kenneth J. Allen's favor for $1.35 million in attorney fees. Allen, Fitzpatrick and attorney Mitchell Iseberg entered into a fee-sharing contract in which Fitzpatrick would handle a couple's products liability claim in an Illinois court and Allen would handle the medical malpractice suit filed by the couple. The agreement stipulated the attorneys would be paid 33 1/3 percent of any judgments or settlements in the couple's favor - Allen would receive 50 percent and Fitzpatrick and Iseberg would split the remaining 50 percent.

At some point during the litigation, Fitzpatrick proposed a different fee-sharing agreement and Allen rejected it. The next day, the couple terminated Allen's representation regarding the products liability case but retained him for the medical malpractice suit. The products liability case settled, but Fitzpatrick refused to disclose the amount. In August 2004, the trial court ordered disclosure of the settlement amount; Fitzpatrick refused and eventually the trial court entered a default judgment in favor of Allen. By this time, Allen had withdrawn from representing the couple in the medical malpractice suit.

Fitzpatrick eventually disclosed the products liability suit settled for $8.1 million, and the trial court entered judgment in favor of Allen, basing the award on 50 percent of the $2.7 million, which is 33 1/3 percent of the settlement amount.

Fitzpatrick argued that Indiana law prefers to give parties their day in court, but Indiana Trial Rule 37 doesn't require a trial court to impose a lesser sanction before dismissing an action or entering default judgment when a disobedient party has displayed contumacious disregard for a court's orders, wrote Judge Nancy Vaidik. Fitzpatrick had plenty of opportunities to disclose the settlement amount, but did not, despite the 2004 order that the information was discoverable.

The trial court was also correct in ordering a judgment in favor of Allen based on the fee agreement contract and not quantum meruit damages. Fitzpatrick's argument that the Indiana Rules of Professional Conduct 1.5(e) prohibits Allen from collecting more than quantum meruit damages is misplaced, the appellate court ruled.

"The flaw in Fitzpatrick's argument is that he focuses upon Allen's level of participation in the products liability suit alone," the judge wrote.

Instead of examining what Allen did under the products liability case, one should examine the broad agreement encompassing both suits. Allen performed the work required of him under the parties' contract.

The trial court did err in awarding Allen $1.35 million by failing to take into account $600,000 that had been awarded to an attorney who worked on the couple's case and was dismissed after the couple hired Fitzpatrick. The Court of Appeals remanded for the trial court to enter a new judgment ordering Fitzpatrick to pay $1.05 million in damages, plus costs and interest, to Allen.

ADVERTISEMENT

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

ADVERTISEMENT