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Lawyer entitled to $1.05 million default judgment

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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 By this time, Allen had withdrawn from representing the couple in the medical malpractice suit.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.

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  1. "So we broke with England for the right to "off" our preborn progeny at will, and allow the processing plant doing the dirty deeds (dirt cheap) to profit on the marketing of those "products of conception." I was completely maleducated on our nation's founding, it would seem. (But I know the ACLU is hard at work to remedy that, too.)" Well, you know, we're just following in the footsteps of our founders who raped women, raped slaves, raped children, maimed immigrants, sold children, stole property, broke promises, broke apart families, killed natives... You know, good God fearing down home Christian folk! :/

  2. Who gives a rats behind about all the fluffy ranking nonsense. What students having to pay off debt need to know is that all schools aren't created equal and students from many schools don't have a snowball's chance of getting a decent paying job straight out of law school. Their lowly ranked lawschool won't tell them that though. When schools start honestly (accurately) reporting *those numbers, things will get interesting real quick, and the looks on student's faces will be priceless!

  3. Whilst it may be true that Judges and Justices enjoy such freedom of time and effort, it certainly does not hold true for the average working person. To say that one must 1) take a day or a half day off work every 3 months, 2) gather a list of information including recent photographs, and 3) set up a time that is convenient for the local sheriff or other such office to complete the registry is more than a bit near-sighted. This may be procedural, and hence, in the near-sighted minds of the court, not 'punishment,' but it is in fact 'punishment.' The local sheriffs probably feel a little punished too by the overwork. Registries serve to punish the offender whilst simultaneously providing the public at large with a false sense of security. The false sense of security is dangerous to the public who may not exercise due diligence by thinking there are no offenders in their locale. In fact, the registry only informs them of those who have been convicted.

  4. Unfortunately, the court doesn't understand the difference between ebidta and adjusted ebidta as they clearly got the ruling wrong based on their misunderstanding

  5. A common refrain in the comments on this website comes from people who cannot locate attorneys willing put justice over retainers. At the same time the judiciary threatens to make pro bono work mandatory, seemingly noting the same concern. But what happens to attorneys who have the chumptzah to threatened the legal status quo in Indiana? Ask Gary Welch, ask Paul Ogden, ask me. Speak truth to power, suffer horrendously accordingly. No wonder Hoosier attorneys who want to keep in good graces merely chase the dollars ... the powers that be have no concerns as to those who are ever for sale to the highest bidder ... for those even willing to compromise for $$$ never allow either justice or constitutionality to cause them to stand up to injustice or unconstitutionality. And the bad apples in the Hoosier barrel, like this one, just keep rotting.

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