COA rules in contentious attorney fees case

December 22, 2015

The Indiana Court of Appeals had harsh words for the three lawyers involved in a protracted, unprofessional legal battle over attorney fees owed in a breach of contract lawsuit against Lake Station, Indiana.

“The cavalier indifference exhibited by the attorneys of record as to res judicata, the trial rules, and rules of appellate procedure is astounding, and the parties involved have no one but themselves to blame for the flood of litigation that swallowed all civility and legal professionalism,” Judge Patricia Riley wrote in I.A.E., Inc. and William Lazarus v. Edward R. Hall and Gerald M. Bishop, 45A05-1503-PL-100.

IAE Inc. retained Gerald Bishop on a contingency fee basis to sue Lake Station in 2000. After Lake Station was awarded summary judgment, IAE rejected Bishop’s new contingency fee contract and hired Edward Hall to represent its appeal. Hall and IAE entered into a contingency fee agreement under which Hall would receive for 33.33 percent of any recovery. Summary judgment was reversed on appeal, and a jury later awarded IAE nearly $1 million, although the parties later stipulated to reduce that amount to just under $800,000.

When IAE couldn’t reach a new agreement with Hall, it hired William Lazarus to represent the company in its appeal against Lake Station.

In the midst of this, Hall filed a complaint for declaratory judgment seeking to be paid by IAE. Judge Jeffrey Dywan held the 2003 agreement between Hall and IAE to be enforceable and the amount of fees due to Hall will be left to the determination of Judge Gerald Svetanoff, who was handling the underlying litigation. The amount of fees payable to Bishop, Hall or their effect on the fees due to Lazarus would be determined by Svetanoff.

That judge held Hall is entitled to 33.33 percent, which will not be reduced by the 10 percent fee out of IAE’s recovery which is owed to Lazarus. Bishop’s fee was not before the judge, so Bishop filed a separate action for attorney fees, which was heard by Judge Calvin Hawkins. Hawkins then awarded Hall nearly $450,000 in fees and expenses, Bishop nearly $28,000 in fees and expenses, and Lazarus $13,825 in attorney fees.

The attorneys and IAE appealed, and the COA reversed with respect to Hall and Lazarus’ attorney fees based on res judicata grounds since Svetanoff had already ruled on the matter. They affirmed the calculation of Bishop’s attorney fees pursuant to the guidelines in Galanis v. Lyons & Truitt, 715 N.E.2d 858 (Ind. 1999), as well as the trial court’s grant of expenses. The COA remanded for further proceedings.

“Although this appeal reflects a degree of bitterness among the parties and counsel, incoherent and illogical tirades of accusations are out of place before an appellate tribunal. At times, the appellate briefs even read like an incoherent stream of consciousness without any proper legal foundation,” Riley noted.

“Indignation – whether righteous or not – is no substitute for a well-reasoned argument. We remind counsel that ‘an advocate can present his cause, protect the record for subsequent review and preserve professional integrity by patient firmness no less effectively than by belligerence or theatrics,’” she continued. “Here, all parties presented us with briefs and arguments woefully unbefitting an appellate advocate; none should be awarded appellate attorney fees.”


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