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 By this time, Allen had withdrawn from representing the couple in the medical malpractice suit.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

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

ADVERTISEMENT