Richard C. Gallops and Patricia A. Gallops v. Shambaugh Kast Beck & Williams, LLP , 56 N.E.3d 59 ( 2016 )

FILED
Jun 17 2016, 8:51 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Travis W. Montgomery Benjamin D. Ice
Parr Richey Obremskey Frandsen & William A. Ramsey
Patterson LLP Barrett McNagny, LLP
Indianapolis, Indiana Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Richard C. Gallops and Patricia June 17, 2016
A. Gallops, Court of Appeals Case No.
02A03-1509-CT-1401
Appellants-Plaintiffs,
Appeal from the Allen Superior
v. Court.
The Honorable Nancy Eshcoff
Boyer, Judge.
Shambaugh Kast Beck & Cause No. 02D01-1206-CT-312
Williams, LLP,
Appellee-Defendant.
Sharpnack, Senior Judge
Statement of the Case
[1] Richard C. Gallops and Patricia A. Gallops seek to appeal an agreed judgment
claiming error in interlocutory orders entered by the trial court prior to the
parties submitting the agreed judgment to the trial court who consented to it.
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Because Indiana has long held that no appeal can be taken from an agreed
judgment, we dismiss this appeal.
Facts and Procedural History
[2] The Gallopses filed a legal malpractice action against the law firm Shambaugh
Kast Beck & Williams, LLP. Shambaugh attorney Nathan Williams had
defended the Gallopses against claims that they had breached various fiduciary
duties while housing and caring for an elderly relative in her final years.
Shambaugh filed an answer, affirmative defenses, and counterclaim (for unpaid
attorney fees) in response to the Gallopses’ complaint.
[3] Shambaugh filed a motion for summary judgment including an alternative
motion for partial summary judgment on Shambaugh’s comparative fault
defense and counterclaim in addition to the Gallopses’ claim for attorney fees
(as damages for the alleged malpractice). After multiple extensions of time in
which to respond to Shambaugh’s motion, a dispute arose as to whether the
Gallopses’ response was timely filed.
[4] The trial court held oral argument on Shambaugh’s motion to strike the
Gallopses’ response, on the Gallopses’ motion to strike portions of an expert
affidavit, and on the motion for summary judgment. The trial court struck the
entirety of the Gallopses’ response to Shambaugh’s motion for summary
judgment. The Gallopses’ motion to strike portions of Shambaugh’s expert’s
affidavit was granted in part and denied in part. The trial court then entered
individual rulings on the motion for summary judgment as to each of the five
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instances of malpractice alleged by the Gallopses. The trial court granted
summary judgment in favor of Shambaugh on three of the five claims. Each of
those determinations was based on the unrebutted testimony in the affidavit of
Shambaugh’s expert. The trial court found that genuine issues of material fact
existed as to the remaining two claims even in the absence of materials in
opposition. The trial court also denied summary judgment on Shambaugh’s
counterclaim and the Gallopses’ inclusion of attorney fees as damages.
[5] The case proceeded on the remaining claims with each side filing motions to
exclude certain expert testimony offered by the other. After a hearing on the
motions, the trial court granted Shambaugh’s motion and denied the
Gallopses’. The Gallopses asked the court to certify its order for interlocutory
appeal, but the trial court declined it. The Gallopses then sought relief from the
court’s order striking their response in opposition to summary judgment,
including newly discovered evidence, but the trial court denied that request as
well. The trial court denied the Gallopses’ further request to certify its order for
interlocutory appeal.
[6] The procedural posture of the case left the Gallopses with the belief that there
was little chance of success at trial on their remaining claims. The parties
entered into an agreed judgment, which the trial court accepted and entered as
follows:
Agreed Judgment
Defendant Shambaugh, Kast, Beck & Williams, LLP
(“Shambaugh Kast”), by counsel, and Plaintiffs Richard and
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Patricia Gallops (“the Gallopses”), by counsel, submit their
Agreed Judgment.
I.
Nature of an Agreed Judgment
“Absent a claim of fraud or lack of consent, a trial court must
approve an agreed judgment.” City of New Haven v. Allen Cnty.
Bd. of Zoning Appeals, 694 N.E.2d 306, 310 (Ind. Ct. App. 1998)
(citing State v. Huebner, 230 Ind. 461, 467, 104 N.E.2d 385, 387-
388 (1952); State ex rel. Prosser v. Ind. Waste Sys., 603 N.E.2d 181,
186 (Ind. Ct. App. 1992)). Here, the parties are submitting this
Agreed Judgment, which has been reviewed and approved of by
counsel for both parties. The parties acknowledge their consent
to this agreement and state that no fraud has occurred.
Therefore, as the Court of Appeals has explained, this Court “has
only the ministerial duty of approving the agreed judgment and
entering it in the record.” Id. (citing Mercantile Nat. Bank v.
Teamsters Union, 668 N.E.2d 1269, 1271 (Ind. Ct. App. 1996)).
This Agreed Judgment “does not represent the judgment of the
court,” but is “an agreement between the parties, consented to by
the court.” Id.II.
Agreed Judgment
Shambaugh Kast and the Gallopses hereby enter into an Agreed
Judgment in favor of Shambaugh Kast and against the Gallopses
under the following terms and conditions:
1. The Trial Court in this matter has entered interlocutory
orders that have made judgment in favor of Shambaugh
Kast following a jury trial inevitable.
2. The Gallopses have expressed the desire to conserve their
resources, the resources of this Court, and the resources of
Allen County jurors and avoid a trial that will result in a
directed verdict following the Gallopses’ presentation of
evidence.
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3. Shambaugh Kast agrees that a defense verdict or directed
verdict in Shambaugh Kast’s favor would result were the
parties to try this case as scheduled. Shambaugh Kast,
therefore, consents to the Gallopses’ preference of
avoiding a jury trial and to the entry of judgment in
Shambaugh Kast’s favor without a jury trial.
4. The parties, therefore, agree to the entry of judgment in
Shambaugh Kast’s favor under the following conditions:
a. A judgment in favor of Defendant
Shambaugh Kast will be entered on the
Court’s docket as a final judgment.
b. This judgment will have the same effect as if
the case had proceeded to trial as it is
presently postured, a verdict had been arrived
at by a jury on all presently pending claims,
and the Court had then entered judgment in
favor of Shambaugh Kast.
....
ORDER OR JUDGMENT OF THE COURT
Parties have tendered an Agreed Judgment to the Court, along
with a request that the Court consent to the Judgment. The
Court signs and “consents” to the Agreed Judgment.
Appellants’ App. pp. 8-10.
[7] The Gallopses have now initiated this appeal seeking to reverse the preliminary
orders that preceded the agreed judgment.
Discussion and Decision
[8] Although there are several issues presented in this appeal, we sua sponte raised
an issue that is dispositive of this appeal; namely can a party appeal from an
agreed judgment? After conducting our own research and considering the
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additional briefing of the issue by the parties, we conclude that long standing
precedent answers that question in the negative.
[9] In State v. Huebner, 230 Ind. 461, 467, 104 N.E.2d 385, 387 (1952), our Supreme
Court held as follows:
When, as in the instant case, the parties plaintiffs and defendants
stipulate the finding of facts and the conclusions of law and hand
these stipulations to the judge in open court, bearing the approval
of each of the parties, evidenced by the written O.K. of their
attorneys of record, the court is not called upon to perform a
judicial act. The writing is in fact a consent finding and
judgment, and the duty of the court is ministerial-to have the
writing entered as agreed upon. State ex rel. Harp v. Vanderburgh
Circuit Court, 1949, 227 Ind. 353, 360, 85 N.E.2d 254, 11
A.L.R.2d 1108; McNelis v. Wheeler, 1947, 225 Ind. 148, 153, 73
N.E.2d 339 and authorities there cited, supra.
In the absence of fraud, parties who are competent to contract
and not standing in confidential relations to each other may
agree to the rendition of a judgment or decree respecting any
right which may be the subject of litigation. When such a decree
is entered it is a decree by consent. A consent decree is not a
judicial determination of the rights of the parties. It does not
purport to represent the judgment of the court, but merely records the
agreement of the parties with respect to the matters in litigation. Such
decree cannot be reviewed by appeal.
(emphasis added).
[10] This decision finds support in precedent. See Indianapolis, D. & W. Ry. Co. v.
Sands, 133 Ind. 433, 32 N.E. 722, 724-25 (1892).
In this case a trial was in progress, and, when the evidence was
concluded, an endeavor was made between the counsel in the
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case, acting for their respective clients, to enter into an agreement
in regard to the final judgment that should be entered by the
court, and an agreement was drafted, together with a final decree
to be entered. It was signed by some of the parties, and the
attorneys for these appellees indorsed it “O. K.,” and signed their
names, and it was handed to the judge. As it seems to us, but one
inference could be drawn, and that is that the decree as drafted to be
entered was all right, and they were giving their consent to the entry of
the decree as prepared, and the court had the right to so regard it, and
order the decree entered at the date agreed upon, which it did. Taking
the view of the case which we do, the judgment must be affirmed, without
considering the merits of the case. If the judgment entered by such
agreement was entirely extrajudicial, and beyond the jurisdiction
of the court entering it, so that it would be absolutely void, it is
possible this court should intervene and set it aside; and yet it
would seem that, even in such a case, when a court had
acquiesced and rendered a void judgment on the agreement of
parties, a party to the agreement is in no position to reverse it on
appeal, and have the act of the court which he instigated set aside
as erroneous.
(emphasis added).
[11] We have followed this precedent in various appeals since then. See Pond v.
McNellis, 845 N.E.2d 1043 (Ind. Ct. App. 2006), trans. denied; City of New Haven
v. Allen Cnty Bd. of Zoning Appeals, 694 N.E.2d 306 (Ind. Ct. App. 1998);
Mercantile Nat’l Bank of Indiana v. Teamsters Union Local #142 Pension Fund, 668
N.E.2d 1269 (Ind. Ct. App. 1996); State el rel. Prosser v. Indiana Waste Sys., Inc.,
(Ind. Ct. App. 1992).
[12] We have held that agreed judgments are not binding as to a nonparty. See GKN
Co. v. Starnes Trucking, Inc., 798 N.E.2d 548 (Ind. Ct. App. 2003). However,
absent fraud or lack of consent, a trial court must approve or consent to an
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agreed judgment submitted by the parties. Pond v. McNellis, 845 N.E.2d 1043,
1061 (Ind. Ct. App. 2006); cf, Citizens For A Better Env’t v. Gorsuch (1983), D.C.
Cir., 718 F.2d 1117, cert. denied, Union Carbide Corp. v. Nat’l Res. Def. Council, Inc.
(1984), 467 U.S. 1219, 104 S. Ct. 2668, 81 L. Ed. 2d 373; United States v.
Outboard Marine Corp. (1991), N.D. Ill., 764 F. Supp. 1315; United States v.
Seymour Recycling Corp. (1982), S.D. Ind., 554 F. Supp. 1334 (federal courts
appear to have discretion in certain circumstances to review and evaluate
substance of agreed judgment prior to approval).
[13] The Gallopses appear to acknowledge this long standing precedent in Indiana,
but in support of their equitable argument that we accept the appeal, cite to
Bemenderfer v. Williams, 745 N.E.2d 212 (Ind. 2001). Bemenderfer and Polk v.
State, 683 N.E.2d 567 (Ind. 1997), a case cited in the Bemenderfer opinion, are
quite different than this case, however.
[14] In Bemenderfer, the Supreme Court in footnote 2 wrote:
In order to appeal from a denial of a motion for partial summary
judgment, the trial court is required to certify its order for
interlocutory review and the Court of Appeals must accept
jurisdiction pursuant to Appellate Rule 4(B) (now App. R. 5).
Here, the parties provided and the trial court signed an “Agreed
Final Judgment and Agreement Preserving the Issue of the
Appropriate Measure of Damages” in an attempt to create a final
appealable judgment pursuant to 54(B). An “Agreed Judgment”
represents an agreement of the parties, not a judgment of the
court. Thus, absent fraud, it is not appealable. See, e.g., State v.
Huebner, 230 Ind. 461, 467–68, 104 N.E.2d 385, 387-88 (1952).
But because it is clear that the trial court intended for its order to
be appealable and the Court of Appeals, by issuing an opinion,
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has accepted appellate review of the trial court’s order, we
exercise our discretion to ignore this procedural irregularity
because only further delay in the disposition of this matter would
be generated by sending it back to the trial court for proper
certification. Cf. Polk v. State, 683 N.E.2d 567, 569 n.3 (Ind.
1997) (exercising inherent authority and addressing merits of case
even though jurisdiction as direct appeal was lacking because
sentence was not greater than fifty years).
Thus, the Supreme Court acknowledged and reaffirmed the long standing
precedent disallowing appeals from agreed judgments. However, the Supreme
Court found that the trial court had intended its order to be reviewable on
appeal, and that this court had accepted appellate review of and decided the
issues presented after the entry of the agreed judgment, without considering the
ability to take an appeal from an agreed judgment.
[15] In footnote 3 of Polk, cited in the footnote in Bemenderfer, the Supreme Court
wrote:
We lack jurisdiction over this case as a direct appeal because the
fifty-year sentence was not “greater than” fifty years
imprisonment for a single offense. IND. CONST. art. VII, § 4;
Huff v. State, 440 N.E.2d 465 (Ind. 1982), transferred to Huff v.
State, 443 N.E.2d 1234 (Ind. Ct. App. 1983). However, rather
than further delaying its resolution by transferring the case back
to the Court of Appeals, we exercise our inherent authority to
issue a ruling on the merits. Wiseman v. State, 521 N.E.2d 942,
943 (Ind. 1988), reh’g denied.
[16] In the present case, there is nothing explicit in the agreed judgment concerning
an appeal of any issues after entry of the agreed judgment. Indeed, the only
language referring to the effect of the entry of the agreed judgment is that it
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would be entered on the trial court’s docket “as a final judgment” and that the
“judgment will have the same effect as if the case had proceeded to trial, as it is
presently postured, a verdict had been arrived at by a jury on all presently
pending claims, and the Court had then entered judgment in favor of
Shambaugh Kast.” Appellants’ App. p. 10. Furthermore, there is no evidence
that the trial court intended for the agreed judgment to be appealable. Finally,
unlike the panel in Bemenderfer, we decline to accept appellate review, and
instead follow our Supreme Court’s precedent that agreed judgments are not
appealable.
Conclusion
[17] In light of the foregoing, and in recognition of long standing precedent, we
dismiss this appeal.
Kirsch, J., and Crone, J., concur.
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