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COA affirms attorney fee order

October 15, 2015

The Indiana Court of Appeals upheld the decision by a trial court that in order for proceedings supplemental to be withdrawn without prejudice, the moving party must pay attorney fees as ordered by the lower court.

The issue arose in The Branham Corporation v. Newland Resources, LLC and John E. Bator, et al., 06A01-1409-PL-399, which involves litigation between the parties stemming from a contract for assistance in negotiating for the provision of water and sewer utility services in Boone County. The Branham Corp. would provide the assistance to Newland Resources LLC, which wholly owned Boone County Utilities LLC, and was owned by four other entities. BCU later filed for Chapter 11 bankruptcy.

Branham filed a complaint against Newland and others alleging breach of contract regarding the calculation and payment of a success fee, and Branham was awarded nearly $400,000 by a jury. Newland never paid the judgment, so Branham filed a verified motion for proceedings supplement to execution and garnishment, which also threatened to seek the remedy of contempt, alleging Newland concealed property and engaged in fraudulent conveyances.

Branham later sought to have the proceedings supplemental dismissed without prejudice against the garnishee defendants. The trial court stated it would allow the dismissal conditioned on the payment of attorney fees to be determined by the court.

Branham raised several arguments on appeal, including that it was denied procedural and substantive due process and that the court erred by applying Indiana Trial Rule 41(a)(2).

“Branham seeks to have the proceedings supplemental dismissed without prejudice against these garnishee defendants. Understandably, the garnishee defendants are concerned about incurring additional attorney fees in the event that Branham refiles proceedings supplemental against them,” Senior Judge John Sharpnack wrote. “The trial court correctly concluded that as a condition of withdrawing the proceedings supplemental without prejudice, Branham must pay a portion of the reasonable attorney fees incurred by the garnishee defendants. We find no error in the trial court’s use of Indiana Trial Rule 41(A)(2)to effect this equitable remedy.”

John E. Bator, a garnishee defendant, cross-appealed, arguing the court erred by limiting its award of attorney fees only to those fees incurred up to the filing of Branham’s motion to dismiss.

“The trial court chose to limit the amount of legal work to be reimbursed to the effort to defend against the proceedings supplemental. This award was a condition imposed upon Branham by the trial court if it chose to seek a voluntary withdrawal of the proceedings supplemental without prejudice. The legal work applied to objecting to the voluntary withdrawal, was a different enterprise altogether. The garnishee defendants were no longer in the position of defending against the proceedings supplemental, but were vigorously attempting to prevent the filing of subsequent proceedings supplemental in the matter if the withdrawal was without prejudice,” Sharpnack wrote in affirming the trial court.

The trial court decision was affirmed in all other respects.
 

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