House renters who argued their landlord who sued them should be held responsible for all attorney fees have secured a reversal from the Court of Appeals of Indiana and will walk away with nearly $4,000 more in fees.
Clarence White, Folabi Oshinubi and Denzel Lewis entered into a residential lease agreement with Krys Szalasny for a house in West Lafayette from August 2018 to July 2019.
Szalasny sued the tenants in Feburary 2020 for breach of contract, alleging they caused more than $30,000 in damage to the property.
The tenants subsequently countersued Szalasny for failing to keep the property in good and safe working condition, alleging he violated the Indiana Security Deposit Statute for not returning their $1,850 security deposit and breaching their contract for not returning the security deposit.
Szalasny voluntarily dismissed his breach of contract claim against the tenants in March 2021. Later that month, the parties came to an agreement in which the landlord stipulated to “judgment in favor of the Tenants” on their ISDS and breach of contract claims, and the tenants dismissed their remaining claim. The parties also agreed that a hearing would be held on the issue of the tenants’ attorney fees.
The Tippecanoe Circuit Court accepted the agreement and the tenants submitted fee petitions that included work from two attorneys — Duran Keller, who billed at $400 an hour, and Alexander Burns, who billed $200 an hour. The petition stated the attorneys had collectively logged 60.28 hours, including 45.29 hours on the claims and 14.99 hours on the fee petition, which with other costs totaled $21,467.56.
Both parties submitted briefs on the fee issue, with Szalasny arguing in part that the trial court should follow “precedent” and “preclud[e] [Tenants’ attorneys] from recovering fees on time spent to recover [their own] fees.”
A hearing was held on the fee issue, during which Tippecanoe Circuit Court Judge Sean Persin stated, “I think we’re trying to get away from massive trials on the issue of fees. I do think that these cases will get easier the more we do. I mean at some point we’re going to have a court of appeals on this giving us some guidance about what’s appropriate.”
After the hearing, the trial court issued an order on attorney fees, referencing “many of the reasonableness factors enumerated in Indiana Professional Conduct Rule 1.5, including that the case was not ‘factually complex,’ was resolved quickly, and did not prevent the attorneys from accepting other cases, and that the attorneys were experienced, in ‘high demand,’ and won substantial relief for the tenants.”
The trial court ultimately awarded the tenants fees for 45.29 hours, at rates of $300 an hour for Keller and $200 an hour for Burns, which along with paralegal services and other costs totaled $13,666.31. The trial court denied fees for the 14.99 hours incurred calculating the attorney fees, briefing the fee issue and attending the contested fee hearing, stating in its order it was “den[ying] the request to award attorney’s fees for time spent collecting attorney’s fees.”
On appeal, the tenants argued the trial court erred in denying them full attorney fees under the fee-shifting provision in the ISDS.
The Court of Appeals agreed, reversing in Clarence L. White, Folabi E. Oshinubi, and Denzel Lewis v. Krys Szalasny, 21A-CC-2063.
“Given this record, we believe fees for time spent on the fee petition are reasonable,” Judge Nancy Vaidik wrote for the COA. “The fee issue alone demanded briefing and a hearing. And as the trial court noted, Attorneys Keller and Burns won substantial relief for their clients in this case — within months of being hired Landlord dismissed his $30,000 claim for damages and stipulated to liability on Tenants’ claims.
“Besides being experienced and in high demand, the record shows the attorney services were exceptionally valuable here, given that Tenants had a difficult time finding counsel willing to represent them,” Vaidik continued. “For these reasons, we conclude attorney’s fees for time spent on fee recovery are warranted here. We therefore reverse the denial of those fees and remand this matter to the trial court with instructions to award Tenants an additional $3,937 in attorney’s fees to compensate for their time on the fee claim.”