Jerry Thomas Mele, Jr. v. Gary Joehlin (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before FILED
any court except for the purpose of Jan 16 2018, 9:33 am
establishing the defense of res judicata, CLERK
Indiana Supreme Court
collateral estoppel, or the law of the Court of Appeals
and Tax Court
case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEES
Gregory Bowes Cody P. Cogswell
Greg Bowes Legal Services, P.C. Cogswell & Associates
Indianapolis, Indiana Fishers, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Jerry Thomas Mele, Jr., January 16, 2018
Appellant-Defendant, Court of Appeals Case No.
48A05-1707-PL-1560
v.
Appeal from the Madison Circuit
Gary Joehlin, Court
Appellee-Plaintiff. The Honorable Thomas L. Clem,
Special Judge
Trial Court Cause No.
48C05-1502-PL-34
Brown, Judge.
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[1] Jerry Thomas Mele, Jr., appeals the trial court’s awarding of attorney fees in the
amount of $2,000 in favor of Gary Joehlin. Mele raises one issue which we
restate as whether the court erred in awarding attorney fees to Joehlin based
upon Mele litigating in bad faith. We reverse.
Facts and Procedural History
[2] Mele and Joehlin were involved in a sixteen-year relationship that ended in
2014. On February 18, 2015, Joehlin filed a petition for replevin in the
Madison Circuit Court to recover “financial, legal and tax documents”
allegedly being held by Mele. Appellant’s Corrected Appendix Volume 2 at 15.
At about the same time, the parties became involved in litigation in Colorado
related to property, accounts, and trusts they owned. A September 15, 2015
chronological case summary (“CCS”) entry in the Indiana case dealing with
discovery matters reads:
The Court further finds and the parties agree that the remaining
eighteen (18) boxes of documents in the possession of [Mele]
shall be made available for inspection and copying on Saturday,
September 19, 2015, at the [Fisher’s public library]. . . . The
Court reserves ruling on [Joehlin’s] request for attorney fees at
this time, pending the further exchange of documentation.
Id. at 4. Over the course of discovery, Mele delivered more than seven boxes of
documents to Joehlin or his attorney.
[3] On May 13, 2016, Mele filed a motion for summary judgment, arguing that
neither abandoned property nor joint property were properly subject to replevin
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and that, to the extent he had already delivered property to Joehlin, the replevin
action was moot. On the same day, Mele filed a motion for sanctions, arguing
that Joehlin’s failure to respond to discovery requests warranted sanctions
under Ind. Trial Rule 37(A)(4). Joehlin responded to the motion for summary
judgment and argued that material facts were left in dispute and that Joehlin
“has incurred attorney fees that were entirely unnecessary had [Mele] only
complied with Ind. Trial Rule 26(f).” Id. at 52. Before the court ruled on the
pending motions, Mele asked the trial court to continue indefinitely the hearing
scheduled for October 19, 2016, in an Agreed Motion for Continuance, which
stated:
1. The parties are involved in related litigation in the State of
Colorado.
2. On September 22, 2016, the parties participated in court-
ordered mediation in Colorado, and appear to have reached an
agreement that includes a resolution of this cause.
3. Under the Colorado agreement, certain actions must be
performed in the future and subsequent to October 19, 2016.
4. The parties anticipate filing a Stipulation of Dismissal in this
cause as soon as the obligations under the Colorado agreement
are met.
5. The undersigned contacted counsel for [Joehlin] by email. In
a response, [Joehlin’s] counsel stated he has no objection to this
continuance.
Id. at 77. On October 13, 2016, the trial court ordered that the scheduled
hearing be continued indefinitely and that either party be “permitted to request
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further proceedings if a Stipulation of Dismissal is not filed by January 20,
2017.” Id. at 79.
[4] On January 20, 2017, Mele filed a request for a hearing, which stated that,
“[u]nder the Colorado agreement, certain actions were to be completed by
January 20, 2017. [Joehlin] failed to meet all of the obligations of that
agreement,” and the trial court ordered the parties to appear for a hearing on all
pending motions on March 3, 2017. Id. at 80. On February 28, 2017, Joehlin
filed a motion for a continuance of the scheduled hearing, which stated that
“the parties came to an agreement in Colorado settling the issues in Indiana,”
that “since the time that agreement was reached, another issue in Colorado
arose wherein [Mele] was unjustly enriched,” that “prior to that, the parties
signed a Stipulation of Dismissal,” and that “resolution of the Colorado matters
need resolved before the instant cause can proceed.” 1 Id. at 83.
[5] At the March 3, 2017 hearing, the trial court asked where the case stood and
counsel for Joehlin answered:
Um, - Judge this uh, - this complex litigation Your Honor um, -
the case at hand, and additionally there’s a case pending in
Colorado between the parties um, - it’d be my assertion at this
point my request for attorney’s fees as well that this case needs to
1
We observe that the appendices before us do not appear to include a copy of the Stipulated Dismissal. We
also observe that Mele’s counsel sent a message on February 28, 2017, to an agent for Joehlin’s counsel,
which stated in relevant part, “In light of developments in the Colorado litigation, you no longer have my
permission to use that stipulation to close out the Madison County case. . . . We consider Mr. Joehlin to be
in breach of the Colorado settlement, and therefore bear no responsibility to cease litigation in Madison
County. I hope this can be straightened out before Friday’s hearing, but I am preparing for the hearing in the
event it isn’t.” Appellant’s Corrected Appendix Volume 2 at 90.
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be dismissed pursuant to a prior Settlement Agreement between
the parties on September 25, 2016, in Colorado, the parties
stipulated to resolve any issues which are part and partial [sic] to
here, that they had reached a settlement and part of that
Settlement Agreement was that all cases were to be dismissed.
Transcript at 5. The trial court asked, “you’re making the argument that on
September 25, 2016 something occurred, some stipulation, some agreement,
something happened in Colorado that essentially resolved the matter and that
this is a vexatious litigation at this point here in Indiana,” and Joehlin’s counsel
answered affirmatively. Id. at 6. Counsel for Mele later argued:
The Settlement Agreement clearly said, we resolve all of our
problems with regard to both the Indiana and Colorado
litigation, including anything having to do with these trust[s] that
manage these rental properties. In spite of having that agreement
for Mr. Joehlin he asserts a claim against the property manager
saying that [Mele] had not paid up enough or - or - you know not
transferred enough rent uh, - at any rate they assert a seven
thousand dollar claim.
Id. at 9-10. At the hearing’s conclusion, the trial court summarized:
You’ve got this situation where you’ve gone to Colorado the case
has taken on this tone, I believe under that Doctrine that I just set
forward it’s my job to take the back seat and let this litigation
take place in Colorado and uh, - if Colorado Court says that the
stipulation uh, - among other things but if the stipulation in the
Indiana case is - is binding then this case goes. . . . Now
[Joehlin’s counsel] as far as - as - your uh, - Motion today there’s
no way I could come to this conclusion without this hearing so I
don’t consider that necessarily to be vexatious conduct, on the
other hand it might be close I - but I had to get it and I had to get
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it on this forum anyway, this is something that you can’t get by
paperless filing.
Id. at 14-15. A CCS entry, dated March 3, 2017, stated:
Ct finds the Indiana litigation will be continued pending the
outcome of the Colorado litigation. If the Colorado Ct finds the
mediation order Binding[,] the Indiana case will be dismissed.
However, if the Colorado Ct revokes the mediation order and
returns the case to the status quo the Indiana case will return to
the active docket -- Attys [sic] for [Joehlin and Mele] to advise Ct
as to the conclusion of the Colorado case.
Appellant’s Corrected Appendix Volume 2 at 121.
[6] On March 7, 2017, Joehlin filed a motion for attorney fees and to dismiss the
case, stating in relevant part:
1) That [Mele] made material misrepresentations to the Court in
refusing to execute the Stipulated Dismissal and continuing to
move to hearing on March 3, 2017.
2) This Court ruled that the jurisdiction of the case was with the
State of Colorado.
3) On March 6, 2017, the Colorado Court issued its Order
against [Mele], the Defendant in this cause. See Attached Exhibit
A.[2]
2
The order of dismissal with prejudice from the Colorado Court, which was attached to Joehlin’s motion for
attorney fees and was dated March 6, 2017, reads:
THIS MATTER COMES before the Court on the Motion for Final Entry of
Judgment, Contempt of Court Citation, and Sanctions, the response thereto, and the
Motion to Dismiss with Prejudice. The Court finds that Respondent Joehlin was not at
fault for making the $40,000.00 payment after January 20, 2017, because Petitioner Mele
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4) On September 22, 2016, the parties entered into a settlement
agreement which included a dismissal of all claims in both
Colorado and Indiana. See Attached Exhibit B[.]
5) The Settlement Agreement was recorded and entered into the
Colorado Case (2015CV466) on October 26, 2016.
6) [Mele] has engaged in vexatious litigation after the execution
of the Settlement Agreement both here in Indiana and in
Colorado.
Id. at 122. Three days later, on March 10, 2017, the trial court entered an order
dismissing the cause and found that “[Mele] refused to dismiss the Indiana
cause in spite of the terms of the settlement agreement having been satisfied,”
“[o]n March 6, 2017, the Colorado Court issued its Order against [Mele],”
Mele “engaged in vexatious litigation after the execution of the Settlement
Agreement both here in Indiana [sic],” and “[d]ue to [Mele’s] bad faith action
to continue to pursue litigation, [Joehlin] is entitled to attorney fees in the
amount of $1,000.” Id. at 130.
did not timely release the deeds of trust as required by the Settlement Agreement, which
resulted in a late closing on the refinancing. Respondent Joehlin has performed in
accordance with the Settlement Agreement. The Court also finds that, while it does not
have personal jurisdiction over Respondent Joehlin regarding Petitioner Mele’s Motions
for contempt, the Settlement Agreement is not an order of the Court, but is a stipulated
agreement between the parties. Therefore, no order could be violated.
The Court, [sic] therefore grants Respondent Joehlin’s Motion to dismiss and
orders that these proceedings are dismissed with prejudice.
Appellant’s Corrected Appendix 2 at 125. The first page of the order also appears to state, “THE
SETTLEMENT AGREEMENT WAS APPARENTLY NEVER ADOPTED AS AN ORDER OF THE
COURT.” Id. at 124.
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[7] Mele filed a motion to correct error, or in the alternative, a motion for relief
from judgment, stating in relevant part:
5. On March 10, 2017, before [Mele] was able to respond to the
motion, the Court entered its order.
6. [Mele] does not challenge the part of the order that dismisses
the case. He does challenge that part of the order that imposes a
sanction of $1,000 in attorney fees to be paid to [Joehlin].
7. The Court already decided the attorney fee request during its
March 3, 2017, hearing, and stated it would not impose
sanctions. It is likely the March 10 order was entered in error.
8. In the event the order was not issued in error, [Mele] asserts
his right to challenge the motion for sanctions. He should be
given an opportunity to make factual and legal arguments in
opposition, and should be allowed to challenge the evidence
presented by [Joehlin] to establish the amount of any reasonable
attorney fee.
Id. at 132. At a May 24, 2017 hearing on the motion to correct error, the
following exchange occurred between Mele’s counsel and the trial court:
[Mele’s counsel]: Nothing changed after [the March 3rd] hearing
accept [sic] that we learned the outcome of the Colorado decision
and then [Joehlin’s counsel] files his Motion to Dismiss, which
we are in agreement with, but in addition he asked for uh, - the
attorney fees.
*****
[Mele’s counsel]: I want to start out with, I think were [sic] not -
if we’re gonna go down the road for attorney fees we’re not
getting a full hearing on that. What [Joehlin’s counsel] just
reported to the Court, - .
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THE COURT: STOP for a minute! You keep saying that, and
maybe there’s never ever a way to give you guys full satisfaction,
cause maybe you’ll never accept whatever happens, that’s kind of
what this is soundin like, and I’ll tell you why. What I did was
basically said look let’s see what happens in Colorado that stuff
was pre-existing.
[Mele’s counsel]: Mm-hmm - .
THE COURT: I’m just not going to determine, okay? When in
fact Colorado says yes, we did have binding uh, - uh, -
mediation here and then you continue to litigate after that and
then the Plaintiff says by definition that’s vexatious, because they
knew and then Colorado backs that up uh, - it’s not just like you
should be shocked, I mean you’re just like, - .
*****
[Mele’s counsel]: I don’t know that Colorado said it was vexation
they ruled, - .
THE COURT: Well - but that’s - .
[Mele’s counsel]: - they - they - ruled against him - .
THE COURT: - not the point. Colorado will never say Indiana
litigation was vexatious, that’s not their job, that’s the Indiana
Court[’]s job .
[Mele’s counsel]: I understand, - .
THE COURT: By definition that is my job! There’s no court in
Colorado that would say, I don’t know if I’m trying to claim if
that’s vexatious or not, why would that ever happen? EVER!
[Mele’s counsel]: The defendants [sic] did nothing after March
3rd, when you said we’re gonna wait for Colorado, until we
received the Court’s order.
THE COURT: Yeah, but what you did had already occurred.
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[Mele’s counsel]: Right – but, - .
THE COURT: Whether or not it was vexatious or not depended
upon what in my mind; and by the way my decision is the one
that counts here.
[Mele’s counsel]: Right.
THE COURT: RIGHT!
*****
[Mele’s counsel]: And we have not been given an opportunity to
answer that question today or on March 3rd.
THE COURT: Well, what - what could you possibly answer? If
what you did was inappropriate because you had a binding order
back there, which the Colorado Court says you did, how are you
gonna order what you did here wasn’t inappropriate?
[Mele’s counsel]: There’s a difference between making a
challenge to something and making a challenge that’s vexatious
or frivolous. Okay, the challenge that was made in Colorado had
to do with the seven thousand dollar issue that [Mele] reasonably
believed had been resolved.
Transcript at 26-30. At the end of the hearing, the trial court ordered Mele’s
counsel “to get a quick brief together to say why you shouldn’t have to pay
attorney fees get it to him, you respond to it.” Id. at 30.
[8] Mele filed a brief in support of his motion to correct error consistent with the
court’s instructions. In the brief in objection to the motion to correct error,
Joehlin stated that “due to the continued protracted litigation and the necessity
to brief the Court in Response to [Mele’s] brief in Support of the Motion to
Correct Errors, Plaintiff would request an additional One-Thousand Dollars
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($1000.00) in addition to the previous award of One-Thousand Dollars
($1,000).” Appellant’s Corrected Appendix Volume 2 at 144. On June 20,
2017, the trial court found that Mele “brought his Motion to Correct Errors
with unclean hands and having the matters either resolved by the Colorado
Court, or having already stipulated to the dismissal of those claims,” and that
“[d]ue to [Mele’s] bad faith action to continue to pursue litigation, [Joehlin] is
entitled to attorney fees in the amount of $1,000.” Id. at 13. Additionally, it
ordered Mele to pay “an additional $1,000 for a sum total of $2,000 which is
hereby reduced to judgment” due to “further litigation in [Joehlin’s] need to
Defend against the Motion to Correct Errors, attending a hearing, and
submitting their own brief to the Court.” Id. at 14.
Discussion
[9] The issue is whether the trial court erred in awarding attorney fees to Joehlin
based upon Mele litigating in bad faith. Ind. Code § 34-52-1-1(b), also known
as the General Recovery Rule, provides:
In any civil action, the court may award attorney’s fees as part of
the cost to the prevailing party, if the court finds that either party:
(1) brought the action or defense on a claim or
defense that is frivolous, unreasonable, or
groundless;
(2) continued to litigate the action or defense after
the party’s claim or defense clearly became
frivolous, unreasonable, or groundless; or
(3) litigated the action in bad faith.
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[10] The trial court here awarded attorney fees under Ind. Code § 34-52-1-1(b)(3),
finding that Mele litigated the action in bad faith. Bad faith is demonstrated
where the party presenting the claim is affirmatively operating with furtive
design or ill will. GEICO General Ins. Co. v. Coyne, 7 N.E.3d 300, 305 (Ind. Ct.
App. 2014) (citing Dunno v. Rasmussen, 980 N.E.2d 846, 851 (Ind. Ct. App.
2012); Auto-Owners Ins. Co. v. C & J Real Estate, Inc., 996 N.E.2d 803, 805-806
(Ind. Ct. App. 2013) (“[P]roving bad faith amounts to showing more than bad
judgment or negligence: ‘it implies the conscious doing of wrong because of
dishonest purpose or moral obliquity. . . . [I]t contemplates a state of mind
affirmatively operating with furtive design or ill will.’” (quoting Oxendine v. Pub.
Serv. Co., 423 N.E.2d 612, 620 (Ind. Ct. App. 1980)))), trans. denied.
[11] The trial court’s decision to award attorney fees under Ind. Code § 34-52-1-1 is
subject to a multi-level review: the trial court’s findings of fact are reviewed
under the clearly erroneous standard, and legal conclusions regarding whether
the litigant’s claim was frivolous, unreasonable, or groundless are reviewed de
novo. Id. at 305 (citing Purcell v. Old Nat’l Bank, 972 N.E.2d 835, 843 (Ind.
2012)). Finally, the trial court’s decision to award attorney fees and any
amount thereof is reviewed for an abuse of discretion. Id. A trial court abuses
its discretion if its decision clearly contravenes the logic and effect of the facts
and circumstances or if the trial court has misinterpreted the law. Id.[12] Mele does not challenge the dismissal of this case, but only the trial court’s
award of attorney fees. Mele argues the trial court improperly considered that
Mele lost on his rental income issue in the Colorado court, a party does not
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present a frivolous claim merely because he is unsuccessful on that claim, and
the trial court wrongly imposed sanctions on him. He contends that “Joehlin,
however, also asserted a $7,016 claim in Colorado that [Mele] believed was in
violation of the Colorado settlement agreement,” that “[o]nce [Mele] saw that
the final $40,000 had been paid, and that the Colorado court had resolved the
$7,016 claim against him, he agreed the Indiana case should be dismissed,” and
that “[a]ny effort [Mele] made after the two Colorado issues were resolved was
to challenge the attorney fee sanction against him.” Appellant’s Corrected Brief
at 11.
[13] Joehlin argues the trial court did not abuse its discretion in imposing attorney
fees and this Court should award additional attorney fees for costs of defending
himself on appeal as Mele’s brief was frivolous and brought in bad faith.
Specifically, he maintains that “the issue solely resolves [sic] around the
mediated settlement agreement entered into in Colorado which resolved all
pending action in Indiana” and that “despite having sought relief in the
Colorado court and executing the Stipulated Dismissal with the scrivener’s
error, Mele refused to execute a corrected Stipulated dismissal.” Appellee’s
Brief at 7, 12.
[14] Our review of the record reveals that three days prior to the March 3, 2017
hearing on outstanding motions, Joehlin argued for a continuance of the
Indiana case because “resolution of the Colorado matters need resolved before
the instance [sic] cause can proceed.” Appellant’s Corrected Appendix Volume
2 at 83. Upon hearing Mele’s argument that Joehlin asserted a seven thousand
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dollar claim in Colorado, the trial court stated on March 3, 2017, that there was
no way it could have come to the conclusion it had regarding the current status
of the litigation without a hearing, that it did not “consider that necessarily to
be vexatious conduct,” and that it was taking “the back seat” and letting “this
litigation take place in Colorado.” Transcript at 15. We observe that the
Colorado court issued the ruling in question on March 6, 2017. We also
observe that a day later, Joehlin filed a motion for attorney fees and to dismiss
the case, that the trial court ordered the cause dismissed and awarded Joehlin
attorney fees before Mele was given a chance to respond, and that Mele agreed
once given an opportunity to present before the trial court that the Indiana case
should be dismissed in light of the Colorado court’s ruling. Appellant’s
Corrected Appendix Volume 2 at 130.
[15] As discussed, a finding of bad faith requires not mere negligence or bad
judgment, but rather the conscious doing of wrong because of dishonest
purpose or moral obliquity, or affirmatively operating with furtive design or ill
will. See Auto-Owners Ins. Co., 996 N.E.2d at 805-806. Under these
circumstances, in which a Colorado settlement agreement was still being
litigated upon in Colorado, we conclude that Mele did not engage in vexatious
litigation here in Indiana. See Emergency Physicians of Indianapolis v. Pettit, 714
N.E.2d 1111, 1116 (Ind. Ct. App. 1999) (“An award of attorney fees is not
justified merely because a party loses on the merits.”), adopted in part by and
incorporated by Emergency Physicians of Indianapolis v. Pettit, 718 N.E.2d 753, 757
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(Ind. 1999). Accordingly, we reverse the trial court’s attorney fee award under
Ind. Code § 34-52-1-1(b)(3).3
Conclusion
[16] For the foregoing reasons, we reverse the trial court’s award of attorney fees
under Ind. Code § 34-52-1-1 and deny Joehlin’s request for appellate attorney
fees.
[17] Reversed.
Baker, J., and Riley, J., concur.
.
3
Joehlin requests an award of appellate attorney fees pursuant to Ind. Appellate Rule 66(E) or, alternatively,
“remand the matter of additional attorney fees for appellate costs be reserved for the trial court to determine
after the submission of evidence outside the record to expose [Mele’s] ulterior motivations” if this court
“were to return an opinion that insufficient evidence of motivation has been provided.” Appellee’s Br. at 19.
Ind. Appellate Rule 66(E) provides in part that this Court “may assess damages if an appeal, petition, or
motion, or response, is frivolous or in bad faith. Damages shall be in the Court’s discretion and may include
attorney’s fees.” Having concluded the Mele did not litigate in bad faith below, we decline Joehlin’s
requests.
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