Mark Abrell v. Delaware County Regional Wastewater District

FILED
Aug 27 2019, 8:42 am

CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Mark L. Abrell Danyel N. Struble
Muncie, Indiana Beasley & Gilkison, LLP
Muncie, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Mark Abrell, August 27, 2019
Appellant-Defendant/Counterclaim- Court of Appeals Case No.
Plaintiff, 19A-PL-585
Appeal from the Delaware Circuit
v. Court
The Honorable Linda Ralu Wolf,
Delaware County Regional Judge
Wastewater District, Trial Court Cause No.
Appellee-Plaintiff/Counterclaim- 18C03-1809-PL-72
Defendant.

Bailey, Judge.

Case Summary
[1] Mark Abrell (“Abrell”) appeals an order denying him compensation for legal

work he performed pursuant to a contract with the Delaware County Regional

Wastewater District (“the District”) and ordering that he pay all attorney’s fees

incurred by the District in pursuing a replevin claim against Abrell and
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 defending against Abrell’s counterclaim. We reverse and remand with

instructions to the trial court to determine the contractual fees Abrell is owed by

the District.

Issues
[2] Abrell presents two issues for review:

I. Whether the trial court clearly erred in denying his claim
for contractual attorney’s fees; and

II. Whether the District was entitled to an award of attorney’s
fees from Abrell as damages in the replevin action or as a
sanction for engaging in meritless litigation.

Facts and Procedural History
[3] On January 2, 2006, Abrell, who is an attorney, and the District entered into an

Agreement for Professional Services whereby Abrell would provide legal

services for the District. The District agreed to pay Abrell: (1) a retainer of

$600.00 per month, which included time spent at two regular monthly meetings

and unlimited telephone calls; (2) $175.00 per hour for legal work “in excess of

the time covered by the monthly retainer”; and (3) contingency fees collected

from debtors in collection matters. (Exhibit D.)

[4] Abrell presented his bills for legal services performed through February 24, 2017

and the District paid the bills submitted. Abrell prepared for and appeared at

the District meeting on March 1, 2017. At that meeting, Abrell was discharged

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 as the attorney for the District. Abrell sent a final bill for $880.00, but the

District’s board members decided “not to pay the bill.” (Tr. Vol. II, pg. 26.)

[5] In June of 2017, the District’s new counsel took the active collections files from

Abrell. On August 14, 2017, the District counsel sent a demand letter to Abrell

regarding other files. Counsel issued a “final request” for the return of files and

advised Abrell that “the District has voted to not pay the final bill you

submitted.” (Exhibit A.) Counsel explained the District’s position that Abrell

had collected “unreasonable” fees in the past because the monthly meetings had

been reduced from two to one as of June 2015, without reduction in the retainer

amount. Id.

[6] In response, Abrell advised the District that he was retaining a statutory

attorney’s lien on his former client’s files. He asserted that his final bill

included several hours of preparation work and, as to past billings that had been

paid, he expressed his position that “the District business was condensed into

one meeting instead of two which meant more work preparing for the one

meeting.” (Exhibit C.)

[7] In March of 2018, the District filed with the Indiana Supreme Court

Disciplinary Commission a complaint against Abrell, alleging among other

things that he had wrongfully retained the District’s files. The complaint was

dismissed for failure to raise a substantial question of misconduct warranting

attorney discipline. On September 6, 2018, the District filed a complaint for

replevin, to recover files in Abrell’s possession.

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[8] Abrell filed a counterclaim, seeking payment of his final bill of $880.00 and his

portion of contingency fees related to collection matters. On December 3,

2018, the District agreed to post a security bond of $880.00 and Abrell tendered

the requested files to the District. The District also put $1,700.00 into escrow to

cover contingency fees due Abrell on collections matters.

[9] On January 29, 2019, the parties appeared for a bench trial, with Abrell

appearing pro se. At the outset, the District’s counsel advised “I don’t think

there is anything left in regards to obtaining the files” and requested that the

trial court adjudicate Abrell’s counterclaim and the District’s request for

attorney’s fees. (Tr. Vol. II, pg. 8.) Abrell testified in narrative form and the

District’s counsel affirmatively agreed with Abrell’s summarization of the facts.1

The District then presented its sole witness, District Board President Ray

Maynard (“Maynard”), “to explain why the board chose not to pay that [final

bill].” Id. at 23. Maynard testified that the final bill included an itemization for

services that should have been covered by the retainer but also he “had issues

with the monthly retainer” because the agreement contemplated two monthly

meetings and the meetings had been reduced to one due to “lack of business.”

Id. at 27. He acknowledged that the March 2017 bill had not been paid and the

prior bills had been paid without protest.

1
Counsel later clarified: “We may have a sharing situation on some of those [bills] for contingent cases. But
everything else that he stated I think we agree with.” (Tr. Vol. II, pg. 23.)

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[10] At the conclusion of the hearing, the trial court directed the parties to attempt to

settle the claim for contingency fees, with the following guidance. If Abrell

alone had worked on a collection case, the entire contingency fee would be his

and if both counsel had performed legal services on a District case, Abrell’s

share would be calculated on a quantum meruit basis. Thereafter, the parties

advised the trial court that they had reached an agreement and the District paid

Abrell $1,341.50 from the escrow funds. The District also submitted to the trial

court a revised attorney’s fees request including the hours expended to examine

files and reach settlement.

[11] On March 7, 2019, the trial court issued a judgment against Abrell for

$4,973.50 (comprised of the entirety of the District’s attorney’s fees of $4,816.50

and a filing fee of $157.00). Abrell’s counterclaim for his final bill in the

amount of $880.00 was denied. Abrell now appeals.

Discussion and Decision
Standard of Review
[12] When, as here, issues are tried upon the facts by the court without a jury, and

the trial court enters specific findings sua sponte, we apply a two-tiered

standard: whether the evidence supports the findings, and whether the findings

support the judgment. Trust No. 6011, Lake Cty. Trust Co. v. Heil’s Haven Condos.

Homeowners Ass’n, 967 N.E.2d 6, 14 (Ind. Ct. App. 2012). Findings and

conclusions will be set aside only if they are clearly erroneous, that is, when the

record contains no facts or inferences to support them. Id. A judgment is
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 clearly erroneous when our review of the record leaves us with a firm

conviction that a mistake has been made. Id. We defer substantially to findings

of fact but not to conclusions of law. Id.

Counterclaim for Final Billing
[13] The trial court disposed of Abrell’s counterclaim as follows:

As to the issue of the contested attorney fees payable to
Defendant, Mark Abrell, Court finds that the Plaintiff does not
owe this contested fee and the Counterclaim filed [by] Defendant
should be denied. The original contract between the parties
provided for a retainer fee of $600.00 per month for two monthly
meetings of Plaintiff. In 2015, Plaintiff reduced the frequency of
board meetings to once per month, due to the reduction in the
amount of business that needed to be conducted. Early in 2017,
there was a discrepancy and disagreement as to what activities
were considered a part of Defendant’s monthly retainer. As a
result of this disagreement, the Board had a vote on whether or
not to pay the final bill of $880.00 to Defendant and, by a
majority vote, payment was denied.

Rule 1.5 of the Professional Rules of Conduct states that an
attorney cannot charge an unreasonable fee.

Appealed Order at 2.

[14] To the extent that the language suggests Abrell was discharged due to a billing

dispute or a bill was disputed prior to his discharge, it lacks evidentiary support.

The parties agreed upon the salient facts; the evidentiary record disclosed:

Abrell and the District were parties to a contract for legal services for more than

eleven years; District meetings were reduced from two per month to one per
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 month in 2015; the District paid Abrell’s bills inclusive of February 2017

services, without protest; Abrell prepared for and appeared at the March 1,

2017 meeting where he was discharged upon an allegation unrelated to billing;

subsequently, new counsel sent Abrell a letter taking the position that Abrell

had been overpaid in the past.

[15] The interpretation and construction of a contract is a function for the courts.

Stenger v. LLC Corp., 819 N.E.2d 480, 484 (Ind. Ct. App. 2004), trans. denied.

When contract terms are clear and unambiguous, the terms are conclusive and

we do not construe the contract or look to extrinsic evidence, but will merely

apply the contractual provisions. Id. The District unilaterally terminated the

Agreement for Professional Services but had not done so when Abrell prepared

for and appeared at the March 1, 2017 meeting. He has received no payment

for those services. Although the District came to believe that they had overpaid

in the past, and the trial court found this argument persuasive, it is irrelevant to

the counterclaim before the trial court. The District did not pursue a claim for

disgorgement of attorney’s fees it had paid, nor was this an attorney disciplinary

action. Indeed, Abrell prevailed upon the collateral disciplinary complaint.

The District was contractually bound to pay Abrell for his legal services

performed but uncompensated as of March 1, 2017 and we therefore remand

for a determination of a reasonable fee.

Attorney’s Fees Award to the District
[16] The trial court awarded the District the entirety of its attorney’s fees, stating:

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 As a result of Defendant’s unwillingness to return files to Plaintiff
prior to December 13, 2018, Plaintiff is entitled to damages for
failing to return files in a timely manner. Plaintiff was forced to
engage its current legal counsel to initiate this case and proceed
with an evidentiary hearing against the Defendant. The filing fee
for this case is $157.00.

Further I.C. 34-52-1-1 provides for attorney fees to be awarded to
the party recovering judgment. Plaintiff should be awarded
attorney fees to be paid by Defendant in this case. It is
unreasonable that it took twenty-two (22) months for the
Defendant to return the files to Plaintiff.

(Appealed Order at 2.)

[17] Indiana adheres to the “American Rule” with respect to the payment of

attorney’s fees, which requires each party to pay his or her own attorney’s fees

absent an agreement between the parties, statutory authority, or rule to the

contrary. Fackler v. Powell, 891 N.E.2d 1091, 1098 (Ind. Ct. App. 2008), trans.

denied.

[18] The District brought a replevin complaint against Abrell, pursuant to Indiana

Code Section 32-35-2-1, which provides in relevant part:

If any personal goods, including tangible personal property
constituting or representing choses in action, are:

(1) wrongfully taken or unlawfully detained from the owner or
person claiming possession of the property …

the owner or claimant may bring an action for the possession of
the property.
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[19] Indiana Code Section 32-35-2-33 provides that judgment for the plaintiff upon a

replevin action may be for (1) delivery or the value of the property and (2)

damages for the detention of the property. It includes no statutory provision for

the payment of attorney’s fees. See also Associates Inv. Co. v. Shelton, 122 Ind.

App. 384, 390, 105 N.E.2d 354, 356 (1952); Reimer v. Sheets, 128 Ind. App. 400,

402, 149 N.E.2d 554, 555 (1958) (prevailing parties in replevin actions are not

entitled to attorney’s fees as damages). The trial court’s award of attorney’s fees

to the District is not supportable on this basis.

[20] Additionally, the trial court referenced Indiana Code Section 34-52-1-1, which

provides for the payment of attorney’s fees when a litigant has pursued a claim

or defense that is frivolous, unreasonable, or groundless. Although factual

findings are reviewed under a clearly erroneous standard, we review de novo a

trial court’s conclusion that a party engaged in meritless litigation. Kahn v.

Cundiff, 533 N.E.2d 164, 167 (Ind. Ct. App. 1989), aff’d 543 N.E.2d 627 (Ind.

1989). A claim or defense is “frivolous” if it is taken primarily for the purpose

of harassment, if the attorney is unable to make a good faith and rational

argument on the merits of the action, or if the lawyer is unable to support the

action taken by a good faith and rational argument for an extension,

modification, or reversal of existing law. Id. at 170. A claim or defense is

“unreasonable” if, based on the totality of the circumstances, including the law

and the facts known at the time of filing, no reasonable attorney would consider

that the claim or defense was worthy of litigation. Id. at 170-71. A claim or

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 defense is “groundless” if no facts exist which support the legal claim presented

by the losing party. Id. at 171.

[21] Here, the factual determination made by the trial court that the length of time

Abrell retained certain files was “unreasonable” is not equivalent to presenting

an “unreasonable” claim or defense. Moreover, Abrell substantially prevailed

upon his counterclaim when he recovered significant contingency fees. Indeed,

the District did not deny that Abrell was entitled to some recovery of fees and

set aside an escrow fund for that purpose. Notably, in argument before the trial

court, the District’s attorney clarified: “I am not saying Mr. Abrell’s claim is

frivolous[.]” (Tr. Vol. II, pg. 44.) The award of attorney’s fees to the District is

not supportable on grounds that Abrell engaged in meritless litigation.

Conclusion
[22] Pursuant to the Agreement for Professional Services, Abrell is entitled to

reasonable fees for his uncompensated legal work prior to his discharge as the

District’s attorney. The District did not demonstrate its entitlement to an award

of attorney’s fees.

[23] Reversed and remanded for further proceedings consistent with this opinion.

Najam, J., and May, J., concur.

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