ON CIVIL PETITION TO TRANSFER
DICKSON, Justice.With this case we must address and balance the relationship between two countervailing considerations; a) the need to discourage abuse of appellate review which wastes limited judicial resources, and b) the chilling effect of sanctions upon legitimate and desirable appellate advocacy.
Appellant Paula K. Orr (Orr) originally filed a products liability suit on behalf of her minor daughter, seeking damages for injuries sustained while playing on a swing-set manufactured by defendant-appellee Turco Manufacturing Company, Inc. (Tur-co). The trial court granted summary judgment, strictly applying the two year products liability statute of limitations, Ind. Code § 88-1-1.5-5. In its original opinion, which appears at 484 N.E.2d 1800, the Court of Appeals affirmed the trial court, but failed to address Turco's motion for attorney fees. This Court denied appellant's petition to transfer, whereupon the Court of Appeals issued an additional opinion, which appears at 496 N.E.2d 115, finding Orr's appeal to be "frivolous because wholly without merit, and thus presumptively taken in bad faith," 496 N.E.2d at 118, and imposed damages against the appellant pursuant to Appellate Rule 15(G) of the Indiana Rules of Procedure. Appellant's petition to transfer seeks our review of this decision.
The Rules of Appellate Procedure do not express any standard to determine whether appellate damages are appropriate.1 AR 15(G) simply provides:
If the court on appeal affirms the judgment, damages may be assessed in favor of the appellee not exceeding ten percent (10%) upon the judgment, in money judgments, and in other cases in the discretion of the court; and the court shall remand such cause for execution.
In general, a discretionary award of damages has been recognized as proper when an appeal is permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of delay,. Briggs v. Clinton County Bank & Trust Co. (1983), Ind.App., 452 N.E.2d 989, 1014. See also In re Guardianship of Posey v. Lafayette Bank & Trust Co. (1987), Ind., 512 N.E.2d 155; Marshall v. Reeves (1974), 262 Ind. 403, 316 N.E.2d 828; Annee v. State (1971), 256 Ind. 686, 274 N.E.2d 260 (on rehearing); Matter of Watson (1983), Ind.App., 449 N.E.2d 1156; Sandock v. Taylor Const. Co. (1981), Ind.App., 416 N.E.2d 882; Vandalia Railroad Co. v. Walsh (1909), 44 Ind.App. 297, 89 N.E. 320.
However, in exercising its discretionary power to award damages on appeal, an appellate tribunal must use extreme restraint. Notwithstanding the harmful delay occasioned by crowded judicial dockets and limited resources, we cannot fail to recognize that the imposition of punitive sanctions does have significant negative consequences. -It may punish, and will deter, the proper exercise of a lawyer's professional responsibility to argue for modification or reversal of existing law. It will have a chilling effect upon the exercise of the right to appeal. It will discourage innovation and inhibit the opportunity for periodic reevaluation of controlling precedent.
At the time of this appeal, the actions of appellate counsel fell within the Code of *153Professional Responsibility.2 Canon 7 demanded that "A Lawyer Should Represent a Client Zealously Within the Bounds of the Law." Under Disciplinary Rule 7-102(A)(2), a lawyer was prohibited from advancing a claim or defense "that is unwarranted under existing law, except that he may advance such claim or defense if it can be supported by good faith argument for an extension, modification, or reversal of existing law."
The vitality of the law as a living institution rests largely upon its capacity to embrace and promote the opposing concepts of stability and growth. We are mindful of Dean Pound's aphorism: "Law must be stable and yet it cannot stand still," Pound, Interpretations of Legal History, p. 1, (1923).
To facilitate these objectives, we must invite, not inhibit, the presentation of new and creative argument. We therefore hold that punitive sanctions may not be imposed to punish lack of merit unless an appellant's contentions and argument are utterly devoid of all plausibility.3
Orr had presented three issues in her original appeal: 1) the interpretation of the products liability statute of limitations; 2) the trial court's ruling excluding the legislative history of the product liability statute; and 3) the, constitutionality of the products liability statute of limitations in excluding a minor's claim.
In ruling on the AR 15(G) issue, the Court of Appeals viewed appellant's first contention as "totally and absolutely merit-less." The second issue was not discussed. As to the third issue, the Court emphasized that prior decisions had expressly upheld the Product Liability Act as constitutional, Dague v. Piper Aircraft Corp. (1981), 275 Ind. 520, 418 N.E.2d 207, and had held that the legislature is not constitutionally prohibited from suspending the obligation of statutes of limitations in the case of infancy or incapacity, Rohrabaugh v. Wagoner (1980), 274 Ind. 661, 664, 413 N.E.2d 891, 893. The Court of Appeals concluded that Orr made no attempt to distinguish these precedents. The court found that the arguments raised by Orr had not a "seintilla of merit" and that the appeal was "wholly meritless from the outset." Orr, 496 N.E.2d at 118.
We disagree. In her brief and reply brief, appellant provides concise and cogent argument in her attempts to distinguish both Dague and Rohrabaugh. She further presents authority supporting her argument that evidence of legislative intent may be considered, and points out the authority and responsibility of the appellate courts to interpret the intentions of the legislature in determining application of a statute of limitations. Barnes v. A.H. Robins Co. (1985), Ind., 476 N.E.2d 84, 86.
There is no indication of bad faith, frivolity, harassment, vexatiousness, or purpose of delay. While the Court below found appellant's contentions insufficient to prevail on appeal, we hold that appellant presented plausible argument for clarification, modification or reversal of existing law. Punitive sanctions are not justified in this case.
Transfer is granted, the supplemental opinion of the Court of Appeals which appears at 496 N.E.2d 115 is vacated, and appellee's motion for attorney's fees is denied.
GIVAN and PIVARNIK, JJ., concur. SHEPARD, C.J., concurs in result with opinion. *154DeBRULER, J., concurs in result with opinion in which SHEPARD, C.J., concurs.. While not raised on this appeal, we note that in 1986 the legislature enacted the following provision, Ind.Code § 34-1-32-1(b):
In any civil action, the court may award attorney's fees as part of the cost to the prevailing party, if it 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.
. Effective January 1, 1987, the Code of Professional Responsibility was replaced by the Rules of Professional Conduct. Present Rule 1.2(d) permits a lawyer to "counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law." Rule 3.1 prohibits a lawyer from bringing or defending a proceeding "unless there is a basis for doing so that is not frivolous, which includes a good faith argument for an extention, modification or reversal of existing law."
. We use the term "plausibility" in its positive sense, meaning the quality or state of apparent validity, reasonableness, or credibility; and without any connotation of deceptiveness, speciousness, or underlying fallaciousness.