FILED
Jul 03 2018, 9:15 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
Larry L. Barnard Nathaniel Lee
Grant A. Liston Jennifer Lee
Carson Boxberger LLP Lee Cossell & Crowley, LLP
Fort Wayne, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
William R. Harr and July 3, 2018
Finster Courier, Inc. d/b/a Court of Appeals Case No.
Elite Express, 49A02-1711-CT-2595
Appellants-Defendants/Cross-Appellees, Appeal from the Marion Superior
Court
v. The Honorable John F. Hanley,
Judge
Julian Hayes and Tracey Hayes, Trial Court Cause No.
Appellees-Plaintiffs/Cross-Appellants. 49D11-1510-CT-35449
Robb, Judge.
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Case Summary and Issues
[1] Following an accident between two semi-tractor trailers, a lawsuit commenced
between the two drivers, Julian Hayes (“Hayes”) and William R. Harr, and
Harr’s employer, Finster Courier, Inc., d/b/a/ Elite Express (collectively,
“Defendants”). The Defendants attempted to remove the case to federal court
contending the parties were citizens of different states and that the amount in
controversy exceeded $75,000. Hayes objected to removal, arguing such action
was premature and that the amount in controversy did not exceed $75,000.
The district court determined it lacked subject matter jurisdiction and remanded
the case to state court. Following a jury verdict in state court of $187,500 in
favor of Hayes, the Defendants filed a motion to correct error and asked the
trial court to modify the judgment to $75,000 based on the doctrines of judicial
estoppel, waiver, and judicial admission. The trial court denied the
Defendants’ motion and the Defendants now appeal, raising the sole issue of
whether the trial court erred in denying their motion to correct error. Hayes
cross-appeals, arguing the appeal is frivolous and requesting attorneys’ fees.
Concluding the trial court did not err in denying the Defendants’ motion to
correct error and that Hayes is not entitled to attorneys’ fees, we affirm.
Facts and Procedural History
[2] On July 23, 2015, two semi-tractor trailers collided on Interstate 465 causing
injury to one of the drivers, Julian Hayes. On October 26, 2015, Hayes filed
suit in the Marion Superior Court against the other driver, William Harr, and
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Harr’s employer, Finster Courier, Inc., d/b/a/ Elite Express.1 Almost
immediately, Defendants filed a notice of removal alleging diversity of
citizenship under 28 U.S.C. § 1332. 28 U.S.C. § 1332 provides, in relevant part:
(a) The district courts shall have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value
of $75,000, exclusive of interest and costs, and is between--
(1) citizens of different States . . . .
[3] The Defendants alleged that the district court possessed diversity jurisdiction
because “the amount in controversy exceeds the sum or value of Seventy-Five
Thousand Dollars ($75,000), exclusive of interest and costs,” and that Harr is a
citizen of Pennsylvania, Finster is incorporated in New Jersey, and Hayes is a
citizen of Indiana. Appellees’ Appendix, Volume II at 5-6. Upon the
Defendants’ motion, the case was removed to the United States District Court
for the Southern District of Indiana, Indianapolis Division. On December 16,
2015, Hayes filed a motion to remand, arguing removal was “pre-mature in not
having conducted discovery to investigate the amount of this claim or even
inquire as to Plaintiff’s demand.” Appellants’ Corrected Appendix, Volume II
at 52. Hayes alleged that the district court lacked subject matter jurisdiction:
1
The complaint was subsequently amended to add Tracy Hayes, Hayes’ wife, as a plaintiff.
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3. Plaintiff further provides that diversity jurisdiction is not met
in this matter because the amount in controversy does not exceed
Seventy-Five Thousand Dollars ($75,000.00).
***
6. On December 16, 2015, Plaintiff submitted his first demand to
Defendants in the amount of Seventy-Two Thousand, Five
Hundred Dollars ($72,500.00). [Exhibit "I"].
7. Therefore, even if the citizenship of the parties is diverse, the
requirements of diversity jurisdiction under 28 U.S.C. §1441 are
not met because the amount in controversy does not exceed
Seventy-Five Thousand Dollars ($75,000.00).
Id. at 52-53.
[4] At the time of removal, Hayes had been released to return to work full time but
was receiving ongoing medical treatment and had accumulated around $3,500
in medical bills. His workers compensation claim was still being processed.
The same day Hayes filed the motion to remand, he also submitted a settlement
demand for $72,500. In response, the Defendants sent a letter stating that they
would agree to remand the case if Hayes would “provide[] assurance that he
would not execute on any potential judgment over $75,000,” and included a
proposed covenant not to execute. Id. at 77. Hayes responded that “WE [sic]
cannot agree to any agreement without payment. Are you offering the $75,000?
If so, send a check.” Id.
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[5] On December 29, Defendants objected to remanding the case, arguing the
amount in controversy was clearly over $75,000 because Hayes refused to sign
the proposed covenant. Id. at 78. On January 20, 2016, the district court
granted Hayes’ motion to remand, determining that it lacked subject matter
jurisdiction because it is the removing party’s burden to establish by a
preponderance of the evidence that each requirement of 28 U.S.C. § 1332 has
been met and “Defendants have made no effort whatsoever to explain why they
had a good faith belief, at the time of removal, that the amount in controversy
exceeded $75,000.” Id. at 78-79.
[6] With the case back in Marion Superior Court, Defendants filed a motion to
limit entry of judgment. The basis of the Defendants’ motion was the district
court’s grant of Hayes’ motion to remand in which Hayes asserted the district
court lacked subject matter jurisdiction “because the amount in controversy
does not exceed $75,000.” Id. at 46. Defendants therefore argued that, “Under
the doctrine of judicial estoppel, any judgment entered in favor of the Plaintiffs
in this case must be limited to $75,000.00.” Id. at 47. Defendants included in
their motion to limit entry of judgment what they purported to be a “true and
exact copy of the [district] Court’s Order . . . marked as Exhibit ‘C.’” Id.
However, Defendants’ Exhibit C omitted page 5 of the district court’s order in
which the district court discussed the Defendants’ failure to meet their burden
of proof regarding each requirement of 28 U.S.C. § 1332.
[7] On July 31, 2017, Hayes moved to strike the Defendants’ motion to limit
damages. Hayes cited the omitted page of the district court’s order and argued
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“the [district] Court order clearly demonstrates that the Defendants failed to
meet their burden to demonstrate all of the elements necessary for federal court
jurisdiction.” Id. at 64. In a supplemental response to the Defendants’ motion
to limit entry of judgment, Hayes stated that since the removal action, a
physician had determined that Hayes had an 8% permanent impairment and
that his medical expenses totaled over $21,000. These facts, coupled with
Hayes’ “ongoing and incomplete” treatment, Hayes argued, caused the current
value of the case to be “substantially higher today than at the time this lawsuit
was filed.” Id. at 87. Therefore, while Hayes “would have gladly accepted
$72,500.00” at the time of removal, “the value has increased and the
Defendant[s] owe more than the original amount in controversy.” Id. at 88.
[8] A jury trial was conducted on August 8 and 9, 2017. The jury returned a
verdict for Hayes in the amount of $187,500 and the trial court subsequently
denied Defendants’ motion to limit entry of judgment to $75,000 and
Defendants’ motion to correct error regarding the same. In so doing, the trial
court explained:
This Court remains troubled by the notion that a party may
represent to the U.S. District Court that the amount in
controversy in a case is less than the jurisdictional requirement,
and then, once remanded, that it exceeds that amount. However,
neither party has pointed to any precedent which expressly
prohibits such a practice. The parties submitted this matter to a
jury in this Court for determination. The jury, as the trier of fact,
determined that the Plaintiffs’ damages totaled One Hundred
Eight-Seven [sic] Thousand Five Hundred and 00/100 Dollars
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($187,500.00). The Court finds that the jury’s verdict should not
be disturbed.
Order at 4.
[9] Defendants now appeal and Hayes cross-appeals for an award of attorneys’
fees, costs, and post-judgment interest, alleging that Defendants filed the
underlying “frivolous appeal, which is meritless and . . . filed in bad faith, for
purposes of harassment, and delay.” Response Brief of Appellee at 25.
Discussion and Decision
I. Defendants’ Appeal: Jury Award
[10] Defendants allege the trial court erred in denying their motion to correct error
and refusing to modify the verdict entered by the jury to $75,000 under the
doctrines of judicial estoppel, waiver, and/or judicial admission.
A. Standard of Review
[11] We review rulings on motions to correct error for an abuse of discretion.
Walker v. Kelley, 819 N.E.2d 832, 836 (Ind. Ct. App. 2004). An abuse of
discretion occurs if the trial court’s decision was against the logic and effect of
the facts and circumstances before the court or if the court misapplied the law.
Id. However, to the extent a motion to correct error presents purely questions
of law, we review such questions de novo. Indiana BMV v. Charles, 919 N.E.2d
114, 116 (Ind. Ct. App. 2009).
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B. Judicial Estoppel
[12] Defendants allege that trial court erred in denying their motion to correct error
and failing to modify the verdict entered by the jury to $75,000 under the
doctrine of judicial estoppel.
[13] This court has previously explained,
Judicial estoppel is a judicially created doctrine that seeks to
prevent a litigant from asserting a position that is inconsistent
with one asserted in the same or a previous proceeding. Judicial
estoppel is not intended to eliminate all inconsistencies; rather, it
is designed to prevent litigants from playing “fast and loose” with
the courts. The primary purpose of judicial estoppel is not to
protect litigants but to protect the integrity of the judiciary. The
basic principle of judicial estoppel is that, absent a good
explanation, a party should not be permitted to gain an
advantage by litigating on one theory and then pursue an
incompatible theory in subsequent litigation. Judicial estoppel
only applies to intentional misrepresentation, so the dispositive
issue supporting the application of judicial estoppel is the bad-
faith intent of the litigant subject to estoppel.
Price v. Kuchaes, 950 N.E.2d 1218, 1227-28 (Ind. Ct. App. 2011) (citation
omitted), trans. denied.
[14] In turn, Hayes argues judicial estoppel is inapplicable for four reasons: (1)
Hayes’ motion to remand in federal court was not a pleading; (2) Hayes did not
repudiate an earlier position; (3) the removal action was not part of the
proceeding before the state trial court; and, (4) that at the time of removal,
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Hayes’ statement of the amount in controversy was not a material
misrepresentation.
[15] First, Hayes asserts that judicial estoppel is “completely inapplicable here
because Hayes’ motion to remand is not a pleading under the state or federal
rules.” Br. of Appellees at 19. Although our supreme court has described
judicial estoppel as precluding “a party from repudiating assertions in the
party’s own pleadings,” PSI Energy, Inc. v. Roberts, 829 N.E.2d 943, 957 (Ind.
2005), aff’d on reh’g, 834 N.E.2d 665, we are unaware of—and Hayes has failed
to provide us with—authority limiting the doctrine of judicial estoppel to
pleadings. To the contrary, we have consistently applied the doctrine of judicial
estoppel to matters outside of pleadings. See Hay v. Baumgartner, 903 N.E.2d
1044, 1049 (Ind. Ct. App. 2009) (holding party was judicially estopped from
stipulating to issuance of preliminary injunction and then complaining such
injunction was wrongfully entered); Robson v. Texas E. Corp., 833 N.E.2d 461,
466 (Ind. Ct. App. 2005) (“Judicial estoppel is applicable when a bankrupt
debtor fails to disclose a cause of action as an asset in bankruptcy proceedings
and then pursues the omitted cause of action in a subsequent proceeding.”),
trans. denied; Lumbard v. Farmers State Bank, 812 N.E.2d 196, 201 (Ind. Ct. App.
2004) (holding party was judicially estopped from complaining of defects with
one piece of evidence while repeatedly referencing document containing the
same defect).
[16] Second, Hayes contends that he “never repudiated his assertion to the District
Court that the removal is premature.” Br. of Appellees at 19. The Defendants’
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argument regarding judicial estoppel, however, involves Hayes’ claim that the
amount in controversy did not exceed $75,000, not Hayes’ claim that removal
was premature. Indeed, at least at first glance, Hayes’ motion to remand is
seemingly inconsistent. On one hand, Hayes stated that the Defendants’
motion for removal was “pre-mature in not having conducted discovery to
investigate the amount of this claim or even inquire as to [Hayes’] demand,”
while on the other hand, Hayes stated that “the amount in controversy does not
exceed $75,000, [and] as such the requirements of diversity jurisdiction are not
met.” Appellants’ Corrected App., Vol. II at 52. Twice more in the motion to
remand, Hayes asserted:
3. Plaintiff further provides that diversity jurisdiction is not
met in this matter because the amount in controversy does not
exceed Seventy-Five Thousand Dollars ($75,000.00).
[and]
7. Therefore, even if the citizenship of the parties is diverse,
the requirements of diversity jurisdiction under 28 U.S.C. §1441
are not met because the amount in controversy does not exceed
Seventy-Five Thousand Dollars ($75,000.00).
Id. at 52-53. However, when viewed in the context of Hayes’ argument that
removal was “pre-mature in not having conducted discovery,” id. at 52, and
that Defendants had failed to meet their burden, Hayes’ statements could
reasonably be read to mean that the amount in controversy did not presently
exceed $75,000—not that it would never exceed $75,000.
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[17] Later, Hayes argued that additional evidence and further medical treatment had
caused the current case valuation to be “substantially higher today than at the
time this lawsuit was filed” and that although he “would have gladly accepted
$72,500.00” at the time of removal, “the value has increased and the
Defendant[s] owe more than the original amount in controversy.” Id. at 87-88.
Hayes did, therefore, at least partially repudiate his statement that the amount
in controversy did not exceed $75,000.
[18] Third, Hayes appears to argue that judicial estoppel does not apply because the
“removal action before the District Court was not part of the proceeding before
the state trial court.” Br. of Appellee at 19. This is of no matter. As noted,
judicial estoppel is designed to prevent litigants from playing “fast and loose”
with the courts and is designed to protect the judiciary, not individual litigants.
Price, 950 N.E.2d at 1227. We see no logical reason that judicial estoppel
should be limited to representations made in the same litigation or to the same
tribunal and we are unaware of precedent so limiting the doctrine. See, e.g.,
Walton v. Bayer Corp., 643 F.3d 994, 1003 (7th Cir. 2011) (noting that because
judicial estoppel’s purpose is to deter fraud in litigation, judicial estoppel should
prevent a party from taking a position in state court counter to the position it
used to obtain remand in federal court); Alaska Seaboard Partners Ltd. P’ship v.
Hood, 949 N.E.2d 1247, 1255 (Ind. Ct. App. 2011) (holding judicial estoppel
barred company from taking a position in a state action counter to the position
of a related company in a California state action); Robson, 833 N.E.2d at 473
(concluding genuine issues of material fact remain regarding judicial estoppel
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where plaintiffs omitted a cause of action in previous bankruptcy proceedings
and later pursued the action in state court).
[19] Fourth and finally, Hayes contends that because his statement regarding the
amount in controversy was not a material misrepresentation at the time of
removal, judicial estoppel is inapplicable. On this point, we agree.
[20] As we have previously explained, “[j]udicial estoppel only applies to intentional
misrepresentation, so the dispositive issue supporting the application of judicial
estoppel is the bad-faith intent of the litigant subject to estoppel.” Robson, 833
N.E.2d at 466. And, we have noted that the “basic principle of judicial estoppel
is that, absent a good explanation, a party should not be permitted to gain an
advantage by litigating on one theory and then pursue an incompatible theory
in subsequent litigation.” Id. (emphasis added).
[21] At the time of Hayes’ representations regarding the amount in controversy,
Hayes’ medical bills totaled only $3,500 and Hayes submitted his first demand
to the Defendants in the amount of $72,500. See Grinnell Mut. Reinsurance Co. v.
Haight, 697 F.3d 582, 585 (7th Cir. 2012) (noting that although settlement
negotiations are not admissible at trial, they can be considered “to show the
stakes” when determining the amount in controversy). Although Hayes was
receiving ongoing medical treatment, it was not until after the case was
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remanded that Hayes added his wife’s claim and he learned that he suffered an
8% permanent impairment. 2
[22] Defendants removed this action without filing interrogatories as to the specific
monetary damages claimed, or otherwise investigating the specific monetary
amount. Therefore, in conjunction with his representations regarding the
amount in controversy, Hayes argued that removal “was pre-mature in not
having conducted discovery to investigate the amount of this claim or even
inquire as to Plaintiff’s demand.” Appellants’ Corrected App., Vol. II at 52.
Accordingly, we have no reason to believe that Hayes intentionally
misrepresented the amount in controversy or that Hayes acted in bad faith.
[23] Ongoing medical treatment and growing medical expenses, however, are not
uncommon in personal injury actions. For this reason alone, plaintiffs should
be cautious of proclaiming that the amount in controversy does not exceed
$75,000—lest they be held to their word. In this regard, we share the trial
court’s concern “that a party may represent to the U.S. District Court that the
amount in controversy in a case is less than the jurisdictional requirement, and
then, once remanded, that it exceeds that amount.” Order at 4. Under certain
circumstances, judicial estoppel would serve to prevent a plaintiff from making
2
Although we have no reason to believe that Hayes’ subsequent addition of his wife’s claim was due to
broader litigation strategy to keep his claim out of federal court, we place little significance on this fact due to
its potential for abuse.
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representations to defeat diversity jurisdiction and then claiming otherwise in
subsequent litigation. Such facts, however, are not presently before us.
[24] We have explained that judicial estoppel is not meant to be a technical defense
to “derail potentially meritorious claims” and that we must give “due
consideration to all of the circumstances of a particular case.” Morgan Cty.
Hosp. v. Upham, 884 N.E.2d 275, 280 (Ind. Ct. App. 2008), trans. denied. Here,
the Defendants filed a motion to remove the case to federal court based on
diversity jurisdiction. As such, it was the Defendants who bore the burden to
demonstrate by a preponderance of the evidence that the amount in controversy
exceeded $75,000. Walker v. Trailer Transit, Inc., 727 F.3d 819, 824-25 (7th Cir.
2013). But, as the district court concluded, the Defendants utterly failed to
meet their burden of proof:
. . . Here, Defendants have made no effort whatsoever to explain
why they had a good faith belief, at the time of removal, that the
amount in controversy exceeded $75,000, exclusive of interest
and costs. Indeed, their only statement in the Amended Petition
for Removal regarding the amount in controversy is that “the
amount in controversy exceeds the sum or value of Seventy-Five
Thousand Dollars ($75,000.00), exclusive of interest and costs.”
Defendants do not point to any evidence to support their
statement.
Further, Mr. Hayes specifically argues in the Motion to Remand
that Defendants did not complete any pre-lawsuit discovery, and
that removal was premature without such discovery. But
Defendants do not respond to Mr. Hayes’ argument at all, and
still do not present any evidence in their response brief to support
their belief that the amount in controversy exceeded $75,000,
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exclusive of interest and costs, at the time of removal. Instead,
Defendants rely solely on post-removal events which, as
discussed above, are irrelevant to the Court’s analysis regarding
whether removal was proper in the first place. Mr. Hayes has
challenged Defendants’ assertion that the amount in controversy
exceeds $75,000, exclusive of interest and costs, and Defendants
have failed to meet their burden of showing by a preponderance
of evidence — evidence existing at the time of removal — that
the amount in controversy requirement is met.
***
. . . Defendants had every opportunity to explain why they
believed at the time of removal that the amount of controversy
exceeded $75,000, exclusive of interest and costs, but chose not
to do so. Accordingly, the Court finds that the removal was
improper and that remand to the Marion Superior Court is
necessary.
Appellants’ Corrected App., Vol. II at 69-71 (citations to record omitted).
[25] Interestingly, Defendants omitted the page containing the vast majority of the
foregoing text from their motion to limit judgment to $75,000.3 Nevertheless, as
3
In Defendants’ motion to limit judgment to $75,000, Defendants state that “A true and exact copy of the
[district] Court’s Order is attached hereto and marked as Exhibit ‘C.’” Appellants’ Corrected App., Vol. II at
47. Exhibit C, however, contained only pages 1-4 and 6 of the district court’s order, omitting page 5 with the
discussion regarding the Defendants’ failure to meet their burden of proof. Id. at 54-58. The exhibit therefore
misrepresented to the trial court the reasoning of the district court’s order by incorrectly suggesting that the
case was remanded because of Hayes’ statement of the amount in controversy, not the Defendants’ failure to
meet their burden. We note also that Hayes brought this omission to the Defendants’ attention in an email
prior to filing his response, id. at 72, and yet the Defendants did not amend their motion to include the order
in its entirety.
We are deeply troubled by the Defendants’ all too convenient omission and we remind counsel of Indiana
Professional Conduct Rule 3.3(a)(3) requiring candor to the tribunal and precluding a lawyer from knowingly
providing evidence the lawyer knows to be false. “[T]he accuracy of documents and instruments utilized by
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the order makes clear, the district court remanded the case because of the
Defendants’ failure to satisfy their burden—not Hayes’ statement regarding the
amount in controversy. After all, federal courts determine the amount in
controversy on the date the suit was filed in state court and at the time of
removal. See, e.g., Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7th Cir. 1993). Thus,
even if “the plaintiff after removal, by stipulation, by affidavit, or by
amendment of his pleadings, reduces the claim below the requisite amount, this
does not deprive the district court of jurisdiction.” St. Paul Mercury Indem. Co. v.
Red Cab Co., 303 U.S. 283, 292 (1938).
[26] Judicial estoppel is limited to instances where “the allegations or admissions
must have been acted on by the court.” Tobin v. McClellan, 225 Ind. 335, 347,
73 N.E.2d 679, 684 (1947). We addressed this element in Allstate Ins. Co. v.
Dana Corp., emphasizing that “[a]n essential part of the doctrine [of judicial
estoppel] is that it prohibits a party from presenting a position contrary to one
upon which it previously prevailed.” 737 N.E.2d 1177, 1193 (Ind. Ct. App.
2000), vacated in part on other grounds and summarily aff’d, 759 N.E.2d 1049 (Ind.
2001). Here, although Hayes’ position was technically successful, that success
was due to the Defendants’ failure—not Hayes’ post-removal representations.
After conducting further discovery or issuing interrogatories as to Hayes’
a tribunal in a proceeding is of the utmost importance to the administration of justice and . . . fraudulent
alteration of such documents by an officer of the court is therefore severe misconduct.” Matter of Fisher, 684
N.E.2d 197, 200 (Ind. 1997).
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specific monetary damages, Defendants could have removed the case again.4
They chose, however, not to do so.
[27] To the extent Defendants rely on federal courts applying judicial estoppel in
similar contexts, we find such cases distinguishable. Two of the cases involve
pre-removal limitations of damages, as opposed to post-removal representations
regarding the amount in controversy. Ratliff v. Merck & Co., Inc., 359 F.Supp.2d
571, 576 (E.D. Ky. 2005); Adoff v. Protus IP Solutions, Inc., 2009 WL 3380328
(D. Md. 2009). In the third case, the district court considered a stipulation by
affidavit attached to the plaintiff’s motion to remand that “total damages
claimed in this action are $54,000.” Fenger v. Idexx Labs., Inc., 194 F.Supp.2d
601, 604 (E.D. Ky. 2002). The district court concluded that the doctrine of
judicial estoppel would apply to prevent the plaintiff from later claiming a
different amount of damages because it had adopted “the position urged by the
plaintiff.” Id. at 605. Here, the district court did not adopt Hayes’ argument
and Hayes’ representations regarding the amount in controversy are dissimilar
to an express limitation of damages by a stipulation in an affidavit.5
4
28 U.S.C. §1446(b)(3) allows a defendant to file a notice of removal within thirty days after the receipt of “a
copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the
case is one which is or has become removable.” Removal is subject to the one-year limitation of 28 U.S.C.
§1446(c).
5
Moreover, although the Sixth Circuit has apparently permitted such consideration, the Seventh Circuit has
repeatedly rejected such practice. See Matter of Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992); see also Back
Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir. 2011) (“[E]vents after the date of
removal do not affect federal jurisdiction, and this means in particular that a declaration by the plaintiff
following removal does not permit remand.”)
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[28] Concluding Hayes did not intentionally misrepresent the amount in controversy
and that the district court did not act upon such representation, we therefore
decline to apply the doctrine of judicial estoppel to the facts before us.
C. Waiver
[29] Next, Defendants argue the trial court erred in denying their motion to correct
error to modify the judgment to $75,000 under the doctrine of waiver. We
disagree.
[30] Waiver is an intentional relinquishment of a known right. T-3 Martinsville LLC
v. U.S. Holding, LLC, 911 N.E.2d 100, 116 (Ind. Ct. App. 2009), trans. denied.
Waiver involves “both knowledge of the existence of the right and the intent to
relinquish it.” Westfield Nat. Ins. Co. v. Nakoa, 963 N.E.2d 1126, 1132 (Ind. Ct.
App. 2012), trans. denied.
[31] For this argument, Defendants rely exclusively on Jeffery v. Cross Country Bank,
131 F.Supp.2d 1067 (E.D. Wis. 2001). There, one day before the defendant
removed the case to federal court, the plaintiff filed an amended complaint
expressly stating that the amount in controversy did not exceed $75,000. Upon
a motion to remand, the district court concluded that the plaintiff had waived
her right to recover an amount greater than $75,000 because her statement was
both timely and a “clear and unequivocal relinquishment of her right to seek
more than $75,000 in damages.” Id. at 1070. Here, Hayes’ representations
were neither timely, nor “clear and unequivocal.” Id.
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[32] As discussed in the context of judicial estoppel, it is a defendant’s burden to
establish the amount in controversy at the time of removal. Gould, 1 F.3d at
547. Although we have no doubt that a plaintiff is entitled to waive his or her
right to recover more than the minimum amount in controversy, In Re Brand
Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997), such
waiver must occur prior to removal, In Re Shell Oil Co., 970 F.2d 355, 356 (7th
Cir. 1992). Here, Hayes’ representations were made after the Defendants had
removed the case and due to the context of Hayes’ argument regarding the
Defendants’ failure to meet their burden and removal being premature, we are
not convinced that Hayes intended to relinquish a known right.
D. Judicial Admission
[33] Finally, Defendants argue the trial court erred in denying their motion to
correct error to modify the judgment to $75,000 under the doctrine of judicial
admission. Again, we disagree.
[34] Judicial admissions are voluntary and knowing concessions of fact by a party or
a party’s attorney occurring at any point in a judicial proceeding. Stewart v.
Alunday, 53 N.E.3d 562, 568 (Ind. Ct. App. 2016). “The party must testify
clearly and unequivocally to a fact peculiarly within his knowledge in order for
it to be considered a judicial admission.” Id. Judicial admissions may be
contained in stipulations, pleadings in the case being tried, admissions made in
open court, and admissions made pursuant to a request for admissions. Id.
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[35] Defendants allege Hayes made a judicial admission where he repeatedly stated
the amount in controversy did not exceed $75,000, while Hayes contends his
argument was in the context of “then-existing facts” and that he never admitted
that the “value of the case could never exceed $75,000.” Br. of Appellees at 24.
As we explained in Heyser v. Noble Roman’s Inc., “A statement which contains
ambiguities or doubt is not to be regarded as a binding admission.” 933 N.E.2d
16, 19 (Ind. Ct. App. 2010), trans. denied. Due to the context of Hayes’
argument regarding the Defendants’ failure to meet their burden and removal
being premature, we conclude Hayes’ statement contains an ambiguity and
cannot therefore be regarded as a binding judicial admission.
[36] Quite simply, the Defendants failed to meet their burden of proof before the
district court and then attempted to cap Hayes’ damages because of it. We
therefore conclude the trial court did not err in denying the Defendants’ motion
to correct error.
II. Plaintiffs’ Cross-Appeal: Attorneys’ Fees
[37] Hayes cross-appeals for an award of attorneys’ fees, costs, and post-judgment
interest, alleging that Defendants filed the underlying “frivolous appeal, which
is meritless and . . . filed in bad faith, for purposes of harassment, and delay.”
Br. of Appellees at 25.
[38] We 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 attorneys’ fees.” Ind. Appellate Rule 66(E). Our discretion to award
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attorneys’ fees is limited to instances when “an appeal is permeated with
meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of
delay.” Ballaban v. Bloomington Jewish Cmty., Inc., 982 N.E.2d 329, 339-40 (Ind.
Ct. App. 2013). Due to the potential chilling effect upon the right to appeal, we
must use “extreme restraint” when exercising this power. Id. at 340. And, “[a]
strong showing is required to justify an award of appellate damages and the
sanction is not imposed to punish mere lack of merit but something more
egregious.” Id.
[39] Claims for appellate attorneys’ fees are classified into substantive and
procedural bad faith claims. Id.
To prevail on a substantive bad faith claim, the party must show
that “the appellant’s contentions and arguments are utterly
devoid of all plausibility.” Procedural bad faith, on the other
hand, occurs when a party flagrantly disregards the form and
content requirements of the rules of appellate procedure, omits
and misstates relevant facts appearing in the record, and files
briefs written in a manner calculated to require the maximum
expenditure of time both by the opposing party and the reviewing
court. Even if the appellant’s conduct falls short of that which is
“deliberate or by design,” procedural bad faith can still be found.
Id. (citations omitted).
[40] Hayes first claims that the Defendants’ appeal is frivolous because the “nub of
this appeal is the District Court’s removal/remand,” and it is “exceedingly
frivolous for [the Defendants] to ask the Indiana Court of Appeals to essentially
overrule the District Court’s remand order.” Br. of Appellees at 26. The
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Defendants’ appeal, however, clearly asks that we review the trial court’s denial
of their motion to correct error—not the district court’s order. The Defendants
then provided a cogent argument and cited relevant authority in their attempt to
apply the doctrines of judicial estoppel, waiver, and/or judicial admission to
limit the entry of judgment.
[41] Hayes next claims that the district court retained jurisdiction to rule on whether
Hayes’ argument before the federal court was binding on the eventual jury
verdict in state court. Although the district court retained the authority to rule
on “collateral matters,” Wisconsin v. Hotline Indus., Inc., 236 F.3d 363, 365 (7th
Cir. 2000), the issue presented here was whether Indiana law served to limit the
entry of judgment under the doctrines of judicial estoppel, waiver, and/or
judicial admission. This, of course, is a matter well within our purview. See
e.g., League of Women Voters of Indiana, Inc. v. Rokita, 929 N.E.2d 758, 763 (Ind.
2010) (“A federal court’s interpretation of Indiana law is not binding on Indiana
state courts.”). Although we concluded that the Defendants’ arguments
ultimately failed, such arguments were plausible and therefore do not justify
punitive sanctions. See Orr v. Turco Mfg. Co., Inc., 512 N.E.2d 151, 153 (Ind.
1987) (holding “plausible argument for clarification, modification or reversal of
existing law” does not justify punitive sanctions).
[42] Hayes also alleges the Defendants committed procedural bad faith throughout
this litigation. Scattered throughout several pages of broad assertions and
hyperbole, it appears Hayes alleges the Defendants committed procedural bad
faith by: (1) waiting to admit fault on the eve of trial; (2) “constant teetering on
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the value of the case”; (3) taking “immediate and premature removal, followed
by a bargain for remand in exchange for a cap on damages”; (4) attempting to
place a cap on Hayes’ damages; (5) failing to assert a damages cap as an
affirmative defense; (6) concealing facts and a misleading use of the law; (7)
utilizing an improper basis for appeal; (8) initiating this appeal to delay the
payment of the portion of the judgment over $75,000; and (9) being
intentionally “extremely uncooperative.” Br. of Appellees at 29-32.
[43] To the extent Hayes alleges the Defendants utilize an improper basis for appeal,
for reasons discussed above, see supra ¶ 40-41, we disagree. Similarly, we are
unpersuaded by Hayes’ perfunctory assertion that “[a]t minimum, this appeal
was filed to delay payment of the portion of the judgment over $75,000.” Br. of
Appellees at 29. The rest of Hayes’ claims regarding procedural bad faith
involve instances occurring before the trial court. Our discretion to award
attorneys’ fees under Appellate Rule 66(E) is limited to instances when an
appeal is permeated with meritlessness, bad faith, frivolity, harassment,
vexastiousness, or purpose of delay. These claims would be properly
considered through an appeal of the trial court’s denial of Hayes’ motion for
costs, not a cross-appeal for attorneys’ fees pursuant to Appellate Rule 66(E).
Hayes did not appeal such denial. Accordingly, Hayes has failed to
demonstrate procedural bad faith and although this case has been particularly
litigious, the Defendants do not bear such responsibility alone. We therefore
deny Hayes’ request for attorneys’ fees.
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Conclusion
[44] For the reasons set forth above, we conclude the doctrines of judicial estoppel,
waiver, and/or judicial admission are inapplicable on the facts before us. We
therefore affirm the judgment of the trial court and deny Hayes’ request for
appellate attorneys’ fees.
[45] Affirmed.
Najam, J., and Altice, J., concur.
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