This article was originally written for the DTCI 3/24/2010.
By: Belinda Rose Johnson-Hurtado
“The problem with the ‘frivolous claim’ is simply that there are too many of them. It is like a disease that is pervasive as well as malignant.”
Although many courts have tried to define “frivolous,” a precise definition that leaves no doubt as to what “frivolous” is has proven to be illusive, due, no doubt, in large part to the fact sensitiveness of such an inquiry.  It appears to be as Justice Steward wrote regarding a definition of obscenity, “…perhaps I could never succeed in intelligibly doing so [defining “hard core pornography”]. But I know it when I see it.” Further compounding the problem of conclusively defining “frivolous” is the fact that there is a broad spectrum of facts and law upon which any particular case may fall. Therefore, what may seem frivolous in one case may, in fact, not be so in another.
While a rule that “if an argument is required to show that the pleading is bad or frivolous, then the pleading is not frivolous,” can find support in many instances, a review of Indiana case law regarding whether certain actions were frivolous suggest this is not so. Examples of claims brought where most may agree no argument was necessary to show them frivolous include:
- Plaintiff admitted she was depressed and, in an attempt to commit suicide, locked herself in the trunk of her Ford car, where she remained for nine (9) days. She then sued Ford for her physical and psychological injuries contending that the car had a design defect because the trunk lock did not have an internal release mechanism which would have permitted her to escape, if she had wanted to. She further claimed that Ford had not warned her of the dangerous condition if she stowed away in her own car trunk. 
- An attorney’s suit against Jimmy the Groundhog for mistakenly forecasting an early spring.
- A fan’s suit against the Chicago Bears for misrepresenting itself as a professional football team.
- A suitor’s action against a young woman for the price of flowers and a theatre ticket after she cancelled her promise to date him.
- An inmate’s nuisance suit on the grounds that a newly installed toilet seat was too cold.
- Another inmate’s suit that he had lost friends because his brand of deodorant was no longer carried by the prison commissary.
Surely these must fall into the “I know it when I see it” category, except for maybe the suit brought against the Chicago Bears. (Kidding – Go Colts!!).
Frivolous positions and nonfrivolous positions have been distinguished as follows:
A frivolous position is one that a lawyer of ordinary competence would recognize as so lacking in merit that there is no substantial possibility that the tribunal would accept it. A nonfrivolous argument includes a good-faith argument for an extension, modification, or reversal of existing law. Whether good faith exists depends on such factors as whether the lawyer in question or another lawyer established a precedent adverse to the position being argued (and, if so, whether the lawyer disclosed that precedent), whether new legal grounds of plausible weight can be advanced, whether new or additional authority supports the lawyer’s position, or whether for other reasons, such as a change in the composition of a multi-member court, arguments can be advanced that have a substantially greater chance of success.
Indiana follows the “American Rule,” whereby parties are required to pay their own attorney fees absent an agreement between the parties, statutory authority, or other rule to the contrary. Indiana Code § 34-52-1-1 authorizes an award of attorney’s fees for litigating in bad faith or for pursuing frivolous, unreasonable or groundless claims. The award of attorney’s fees under this statute is “designed to reimburse a prevailing party who has been dragged into baseless litigation and thereby subjected to great expense.” This statute is in derogation of the American rule, and the probability of an award of attorney’s fees would “likely deter the bringing of suits and have a chilling effect on a party’s access to the courts.” However, the very purpose of the statute is to deter frivolous, unreasonable, groundless and bad faith litigation. Therefore, courts must “balance the attorney’s duty to zealously represent his clients within the bounds of the law against the important policy of discouraging unnecessary and unwarranted litigation.”
In addition to statutory reimbursement of attorneys fees at the trial court level for frivolous litigation and defenses, attorney’s fees are also available for frivolous appeals as well. Further, both the Indiana Trial Rules and the Indiana Rules of Professional Conduct provide mechanisms for sanctions and disciplinary action against attorneys who violate the standards of conduct.
Indiana Statutory Authority for Recovery of Attorney’s Fees
“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.
I.C. § 34-52-1-1(b). A statutory award of attorney’s fees can be made upon a finding of any one of the statutory bases. The statute vests discretion in the trial court to award fees on finding one or more of the acts described in subsection (b). A trial court has broad discretion in awarding attorney fees, and will be reversed only if it is clearly against the logic and effect of the facts and circumstances. In its evaluation, the trial court may look at the responsibility of the parties in incurring the attorney’s fees.
Subsections (b)(1) and (b)(2) of the statute focus on the legal and factual basis of the claim or defense and the arguments supporting the claim or defense. In contrast, subsection (b)(3) — “litigated the action in bad faith” — by its terms requires scrutiny of the motive or purpose of the non-prevailing party. More precisely, bad faith is not simply bad judgment or negligence. Id. Rather, it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity. It is different from the negative idea of negligence in that it contemplates a state of mind affirmatively operating with furtive design or ill will.
The legal process:
“must invite, not inhibit, the presentation of new and creative argument” to enable the law to grow and evolve. Orr v. Turco Mfg. Co., 512 N.E.2d 151, 153 (Ind. 1987) (setting forth standard for punitive sanctions for frivolous appellate claims). To be sure, application of the statutory authorization for recovery of attorney’s fees under Indiana Code § [34-52-1-1] must leave breathing room for zealous advocacy and access to the courts to vindicate rights. Kahn, 533 N.E.2d at 170. Courts must be sensitive to these considerations and view claims of “frivolous, unreasonable, or groundless” claims or defenses with suspicion.
Commencing an action against a particular party will less often be frivolous, unreasonable, or groundless than continuing to litigate the same action. Due to the system of notice pleading and pre-trial discovery, commencement of an action may often be justified on relatively insubstantial grounds. Thorough representation will sometimes require a lawyer to proceed against some parties solely for the purpose of investigation through pre-trial discovery. In such cases, counsel is expected to determine expeditiously the propriety of continuing such action and to dismiss promptly claims found to be frivolous, unreasonable, or groundless.
The amount of attorney’s fees awarded be frivolous litigation or defense can be determined by taking judicial notice of reasonable attorney fees; however, this is limited to routine cases involving relatively small amounts.
A claim or defense is frivolous if:
a) it is taken primarily for the purpose of harassing or maliciously injuring a person, or
b) if the lawyer is unable to make a good faith and rational argument on the merits of the action, or
c) 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.
A claim or defense is unreasonable if, based on the totality of the circumstances, including the law and facts known at the time of the filing, no reasonable attorney would consider that the claim or defense was worthy of litigation or unjustified. In examining the circumstances surrounding an attorney’s conduct the court should consider:
a) the amount of time the attorney had to investigate the facts, research the law, and prepare the document;
b) the extent to which the attorney had to rely upon the client for the factual foundation;
c) the complexity of the factual basis and legal questions involved;
d) the ability to conduct a prefiling investigation, and the extent to which discovery was necessary and beneficial to the development of the factual basis; and,
e) the plausibility of the arguments forwarded, including good faith efforts to extend or modify the law.
A claim or defense is groundless if no facts exist which support the legal claim relied on and presented by the losing party.
A trial court is not required to find an improper motive to award attorney fees under subsections (b)(1) or (b)(2) of I.C. § 34-52-1-1, rather an award may be based solely on lack of a good faith and rational argument in support of the claim.
What is “Frivolous” in Indiana?
The standard by which conduct is measured when considering an award under IC § 34-52-1-1 is extremely fact sensitive. Therefore, there is no bright line test to determine whether certain conduct falls within or outside this standard. Rather, the litigation and the conduct, taken in context and as a whole, must be considered. The cases described below are a guide on what may or may not be conduct befitting an award of attorney’s fees; however, do not forget to consider as well T.R. 11 and Prof. Cond. R. 3.3 concerning an attorney’s duties and responsibilities, both of which are briefly discussed below.
- A. Attorney’s Fees Awarded
Kahn v. Cundiff
Attorney Kahn filed a tort action on behalf of clients who were injured when the car in which they were passengers was sideswiped by a vehicle driven by Rachel Cundiff. Kahn sued both Rachel Cundiff and her husband Larry Cundiff, in whose name the car was titled. Kahn resisted Larry’s motion to dismiss for failure to state a claim and his motion for a judgment on the pleadings. The trial court then found that the claim against Larry was frivolous, unreasonable, and groundless and awarded Larry attorney’s fees from Kahn. The Court of Appeals defined the statutory terms and standards to be applied, which were approvingly affirmed by the Indiana Supreme Court in Kahn v. Cundiff, 543 N.E.2d 627 (Ind. 1989).
The Court found that Kahn did not have a basis for either the negligent entrustment or the vicarious liability claim against Larry as no evidence was submitted to show that Rachel was incompetent to drive and that Larry knew it. Further, the State Trooper who took Rachel home after the accident did not testify that Rachel was incompetent to drive. And, no evidence showed that Larry knew of any incompetence. Further, no agency relationship to support a vicarious liability claim was shown. Therefore, there was no factual basis to support the claims.
Garza v. Lorch
Garza, a licensed real estate salesperson, entered into an agreement with Morgan to purchase 30 acres of real estate. The two entered into an Agreement whereby Morgan acknowledged a $60,000 debt to Garza and delivered a quitclaim deed for the real estate. Morgan’s attorney, Abbott, had drafted the papers, but did not include a legal description of the property at that time as Morgan was going to have a survey performed. When the survey was completed, Morgan forwarded the legal description to Garza. Garza put the description with the Agreement and quitclaim deed, but never attempted to record the deed as he felt repayment of the loan was “right around the corner.” Months later, Morgan executed and delivered a quitclaim deed for 28 of the 30 acres to Lorch. Lorch performed a title search, got a title insurance policy, and paid off all recorded liens. He also recorded his deed.
Garza sued Lorch, Morgan, and Abbott. He alleged Lorch had constructive notice of the unrecorded deed and fraudulent conveyance of transfer. He alleged attorney negligence in preparation of the deed and agreement against Abbot as there was no legal description so it could not be recorded. Abbott and Lorch both received summary judgment and then both sued Garza for attorney’s fees claiming Garza’s claims were frivolous, unreasonable, and groundless.
As for Abbott, Garza stated that his claim was not groundless as he was simply requesting the trial court extend the third party beneficiary doctrine. However, the Court stated that even if this were a rational argument, Garza still could not justify that the lack of legal description did not damage him. The cause was Garza’s failure to ever attempt to record the deed. The lack of causation of damage became evident in Garza’s deposition as he specifically admitted that he never tried to record the deed. Further, immediately after the deposition, Abbott’s attorney sent a letter to Garza’s attorney stating that if the suit wasn’t dropped immediately, Abbott would seek an award for attorney’s fees for frivolous litigation. Garza, however continued the action going through summary judgment and then appealed the summary judgment ruling.
As for Lorch’s request for attorney’s fees, Garza argued that his claim was justifiable because he set forth facts that raised a reasonable inference that Lorch had actual or constructive notice of Garza’s prior unrecorded deed and that the transfer was fraudulent. However, the Court found that the only thing Garza did was assert a claim. He designated no evidence nor did he even make an argument to show how the transaction between Morgan and Lorch was a fraudulent transfer. The Court further found that all Garza relied on was “his counsel’s or his own unsupported assertions.” It further found that the maintenance of the lawsuit became frivolous at the point of discovery when it was evident that Garza chose not to record his deed and that Lorch ran the proper title search.
Breining v. Harkness
Raymond and Juanita Breining, husband and wife, were in a nursing home together. In May 2004, Juanita gave her son, Harkness, four checks drawn from her joint checking account with her husband, and Harkness used the funds, in large part, to pay his mother and stepfather’s bills at the nursing home. However, Walter Breining, Raymond’s son, filed suit as his father’s attorney-in-fact against Harkness under the Indiana Crime Victim’s Act for conversion and theft of these funds. To prove the elements of his claims, Walter, among other things, was required to show that Harkness exerted unauthorized control over the funds. After considering arguments regarding a request for summary judgment, the court found that Harkness had established his entitlement to judgment as a matter of law because he showed that his control over the funds was authorized by Juanita, a co-owner of the checking account. Thus, Harkness has negated an element of the theft and conversion statutes.
Harkness sought attorney’s fees from Walter on the basis that Walter continued to pursue his groundless action after it became apparent that Harkness had not committed conversion. Id. The trial court, however, denied this request. The Court of Appeals, however, found that it was uncontroverted that Juanita transferred funds to Harkness from her joint checking account with her husband and that Harkness thus did not convert the funds because he never exerted unauthorized control. Id. Unfortunately, the Court of Appeals never stated exactly when it should have become clear to Walter that Harkness did not exert unauthorized control. One can speculate Walter never advanced any argument at the summary judgment hearing that the facts were disputed, nor did he support an argument for modification or extension of existing law. Perhaps Walter should have been aware of the frivolousness of his claim, at least right before the summary judgment hearing.
Chapo v. Magrath
In a very recent Indiana Court of Appeals opinion, a complaint containing clerical errors as to important aspects of the case, errors that could conceivably happen to anyone, combined with the utter failure to correct such errors was recently held to constitute a frivolous and groundless claim warranting an award of attorney’s fees. In August 2004, Jefferson County filed a Notice of Zoning Violation against Sherry Chapo and Jessie Chapo-Stitsworth for failure to obtain a zoning permit for property located in Jefferson County, Indiana. Despite filing the Notice, the County did nothing further for almost three years when on June 12, 2007 it filed a Verified Complaint for Permanent Injunction and Penalties. The Complaint alleged that Chapo had built a dwelling at 10214 West Deputy Pike Road without a permit. Chapo promptly answered the Complaint and amended the Answer two days later indicating that she never built a residence at that address. In September 2007, the County acknowledged that the Complaint incorrectly listed the address and indicated that it would be filing an amended complaint within the week to list the proper property.
However, despite this representation, Jefferson County did nothing. Therefore, on December 16, 2008, Chapo filed a motion to dismiss for failure to prosecute under Ind. T.R. 41(E). The Court subsequently granted the motion and Chapo then requested costs under T.R. 41(E) and attorney’s fees pursuant to I.C. § 34-52-1-1(b). The Court reversed the trial court’s denial of attorney’s fees. The Court noted that Jefferson County first notified Chapo of the ordinance violation in August 2004 and that it did not file a complaint until three years later. The Complaint filed listed the wrong address and “threatened” Chapo with penalties of $2,500.00. Although the County knew of its error, it failed to acknowledge its mistake until September 7, 2007 when it, via facsimile, told Chapo’s counsel that it would file an amended complaint in the coming week. No amended complaint followed.
During the motion to dismiss hearing, Chapo’s attorney testified that the County had totally failed to contact him during the preceding four months, after the motion to dismiss was filed, until the day before the hearing. At that time, the County stated that it would file a motion to amend and request for jury trial. However, no such pleadings were filed. Further, the Court stated “…at the hearing, it became clear that Jefferson County had not taken any action to move this case along and was unable to make a good faith argument to support continuing the instant cause.” Thus, Chap was “forced to defend against a frivolous and groundless claim.” Therefore, the case was remanded for the trial court to determine the appropriate amount of the award. Chapo had requested an amount of $4,680.00.
Obviously, we do not yet know what the trial court will find as an appropriate award. Further, we do not know whether the fees requested, or those ultimately awarded, will be inclusive of all the fees expended since the Complaint was filed in 2007, or only those associated with the motion to dismiss and subsequent hearing. The Court of Appeals found that at the hearing the County could not make a good faith argument “to support continuing the instant cause.” This statement could lead one to believe that the County’s failure to correct its error (the wrong address in the Complaint) as well as its failure to take any action, led the Court to conclude further prosecution of the matter at the time of the motion to dismiss, not the initial filing of the suit, was frivolous. If such is an accurate interpretation, then fees from the time it should have known the case to be frivolous should be properly awardable rather than all of the attorney’s fees Chapo expended from the original date of filing.
Attorney’s Fees Denied
Fields v. Conforti
Marlow and Conforti entered into a residential lease with an option to purchase and a Permission to Sublet, in which Conforti granted Marlow the right to sublet the residence to the Fieldses. At that time, Conforti knew Marlow wanted to buy the residence on land contract for his parents, the Fieldses. One month before the 2-year lease was to expire, the Fieldses sent Conforti a notice stating they wanted to exercise the option to purchase. Although the Fieldses scheduled a closing, Conforti did not appear as the Fieldses did not show they could financially close on the property. The Fieldses then sued Conforti for specific performance. Conforti counterclaimed for breach of the lease.
The majority found that the award of Conforti’s attorney’s fees from the Fieldses was erroneous and reversed. The trial court found that because the Fieldses continued to litigate their action for specific performance although they were not parties to the lease and had no written assignment from Marlow to enforce the provision, their suit was frivolous. The Court of Appeals, however, pointed out that the trial court did not identify at what point it should have become clear to the Fieldses that they had no right to exercise the option to purchase. It also pointed out that the matter was decided by a 2-day trial on the merits and it was not until after the trial that this became clear. “If it had been clear earlier, this matter could have been terminated much less expensively by a motion to dismiss, a motion for summary judgment or, at the least, a motion for judgment on the evidence at trial.” However, even after the trial, it took the trial court six (6) weeks to decide the case. Further, the Court of Appeals noted that the trial court did not find the parties to the contract (Marlow and Conforti) did not have the intent that the Fieldses would have an option to purchase, but rather concluded that any such option was unenforceable due to the Indiana Statute of Frauds. Therefore, the Court found that, “[t]he vagaries of the statute and its numerous exceptions do not provide fertile ground for concluding that a lawsuit seeking to give effect to the parties’ intent is frivolous.” The award for attorney’s fees was reversed.
However, Judge Sharpnack dissented. He noted that the Fieldses contended that the argument that they were Marlow’s assignees rather than sublessees was reasonable (and therefore they would have had the right to exercise the option to purchase). However, because the parties did not submit the trial transcript for review on appeal, he was unable to say that the trial court’s conclusion regarding whether the Fieldses were assignees or sublessees, the deciding factor in whether the Fieldses had the right to exercise the option, was clearly erroneous. Therefore, he would have affirmed the granting of attorney’s fees.
Smyth v. Hester
The trial court’s award of attorney’s fees was appealed by the intervenor, the Plaintiff’s former attorneys. While reviewing the facts of this case, it is important to remember that although the Court of Appeals remanded the matter back to the trial court as its finding of facts did not provide sufficient insight as to the award of attorney’s fees, i.e., what the trial court found to be frivolous, unreasonable, and bad faith conduct, the Court of Appeals still acknowledged that the record may indeed include some questionable litigation tactics which might support the award.
Plaintiff Smyth and two other attorneys, Brazill and Hester, practiced law together as Smyth Brazill Hester LLP (“SBH”). In January 2006, Smyth advised Brazill and Hester that their partnership was over (he sent an e-mail that said it should be accepted as “formal notice that [the SBH] partnership is over.”). A month later, Brazill died and Smyth and Hester were unable to agree on the winding up of the partnership. Smyth then hired PSRB to represent him. In March 2006, Smyth filed a complaint for, among other things, alleged breach of fiduciary duty by Hester and Brazill. Brazill’s Estate and Hester filed respective counterclaims alleging breach of fiduciary duty, conversion, and other things. Later, PSRB filed Smyth’s notice of claim against Brazill’s Estate and the estate responded by filing a motion to dismiss and requesting attorneys fees for needlessly having to expend Estate assets. The two matters were later consolidated.
Smyth then filed answers to the counterclaims and alleged that Brazill and Hester had been contract attorneys, not his partners, but admitted that he terminated SBH. In October 2006, the trial court reset an evidentiary hearing on the terms of the agreement between the three, and established a cutoff deadline for any motion to enlarge the scope of the hearing. After the deadline, PSRB filed Smyth’s motion for partial summary judgment regarding the terms of the SBH partnership. Subsequently, the Court granted the Estate’s motion to strike the motion for partial summary judgment as untimely and rest the hearing “on the terms of the partnership” for July 2, 2007.
At the July 2 evidentiary hearing, a Memorandum of Understanding (“MOU”) was admitted as a stipulated exhibit. During the hearing, the Estate and Hester moved for judgment on the evidence, and the Court granted their requests. The Estate was to prepare findings of fact and conclusions of law, submit them to the other parties, then to the Court. It did so. Two (2) days after these proposed findings were due to the Court, Smyth filed an objection to them and requested modified findings as to what evidence was present. The trial court subsequently so modified them after Smyth filed a motion to correct errors. However, the Estate asserted that PSRB’s failure to express the objection prior to the deadline it knew the trial court set for submitting the proposed findings, required the Estate to incur additional attorney’s fees.
Thereafter, the Estate submitted a motion for attorney’s fees against Smyth and PSRB for continuing the frivolous litigation and cited four specific references: (i) Smyth’s “inconsistent sworn representations in his pleadings,” (ii) Smyth’s “unwarranted and untimely” motion for summary judgment, (iii) alleged misrepresentations by PSRB at the hearing, and (iv) Smyth’s continued rescheduling of depositions. PSRB then filed a brief in support of Smyth’s previous request for constructive trust with over 250 pages of exhibits. The Estate responded and argued the previous history and the brief demonstrated “Smyth’s and his attorney’s frivolous, unreasonable, and bad faith prosecution of this matter.” Thereafter, the Court issued its findings of fact and conclusions of law regarding the July 2 hearing. The Court found that SBH had operated under the terms of the MOU, and that fact was “judicially admitted by Smyth in his answer to the Estate’s counterclaim.” The Court also concluded that Smyth, in violation of the terms of the MOU, terminated SBH.
In January 2008, the trial court then held an evidentiary hearing as to whether the partnership was improperly terminated. Thereafter, on January 24, 2008, the trial court issued its findings of fact and conclusions of law. It found, among other things, that Smyth dissolved SBH without complying with the requirement of giving others 30 days written notice and that Smyth’s dissolution of SBH was wrongful. The trial court’s order also stated that Smyth and his attorney’s actions at the January 2008 hearing illustrated their frivolous, unreasonable, and bad faith conduct in the case, and the Estate was entitled to present evidence of the reasonable attorney’s fees. After this order was issued, PSRB withdrew its representation of Smyth and other counsel took over.
However, two days later, PSRB was present during a pretrial conference, when the Estate, Hester, and Smyth’s new counsel sought “to conduct negotiations and/or mediation to settle all pending matters.” Therefore, the trial court stayed the provisions of its January 24, 2008 order regarding attorney’s fees and costs until advised as to the outcome of the settlement attempts. However, six (6) days prior to the mediation, the trial court held a telephone conference and was informed that PSRB did not intend to attend the mediation, which the trial court confirmed with PSRB. Therefore, the trial court rescinded its stay as to the attorney’s fees and costs provisions of its January 24, 2008 order and made such final with respect to PSRB. Thereafter PSRB appealed.
The Court of Appeals agreed with PSRB that none of the trial court’s findings of fact supported the judgment that PSRB’s representation of Smyth was frivolous, unreasonable, and in bad faith. Specifically, the Court of Appeals stated that “none of the findings of fact contain a specific reference to problematic litigation action, and none of the conclusions of law reflect the legal authority and standard of an award of attorney fees.” Hester, however, argued that at least three of the findings could support the judgment when taken in context with all reasonable inferences from the evidence. However, although perhaps these specific findings, when taken in context with the course of the litigation and the record, could have supported the judgment, the Court of Appeals only reviews whether the specific findings can support the judgment, not whether the specific findings and the evidence can support the judgment. Notwithstanding this argument, because the trial court’s findings of fact and conclusions of law did not address the attorney’s fee award, the Court of Appeals could consider that portion of the judgment to be a general judgment, and it could affirm on any theory supported by the evidence. But, given the Indiana Supreme Court’s observation that the “legal process must invite, not inhibit, the presentation of new and creative argument” and that when reviewing an award of attorney’s fee, the Court “must leave breathing room for zealous advocacy and access to the court to vindicate rights,” the Court of Appeals found that the trial court’s findings did not give supportive insight into the reason for the award for attorney’s fees and reversed and remanded.
IHSAA v. Schafer
The trial court determined that Schafer, a then high school student, could recover attorney’s fees for his declaratory action against the IHSAA and for defending that judgment on appeal because the association continued to litigate a defense that was frivolous, unreasonable, and groundless. The Court of Appeals, as in Smyth, remanded for further explanation as to the attorney’s fees award.
Schaefer played basketball on his high school’s (Andrean) team, but became very sick from a serious sinus infection in the fall of 1990 and ended up withdrawing from school in the spring of 1991. When his condition improved, Andrean allowed him to repeat his junior year the following year. That spring, Schaefer wrote to the IHSAA and requested that the previous year when he was sick not count against his eligibility for interscholastic athletics. This request was denied. Andrean then appealed and lost. The IHSAA then said Schaefer was ineligible under a different rule. Schafer appealed and lost. Thereafter, Schafer filed a complaint requesting a preliminary injunction against the IHSAA. At the preliminary injunction hearing, the IHSAA then argued that Schafer was ineligible under yet a different regulation. Schaefer then amended his complaint asking for a declaratory judgment on the constitutionality of the rules IHSAA applied to him. His motion for declaratory judgment was granted and that order was affirmed.
Schaefer then brought an action against IHSAA for attorney fees. The trial court described IHSAA’s conduct in very unflattering terms, in part, that the matter “degenerated to a goal to determine who would own the ship and who would paddle the oars,” and stated that although the initial objective of the suit was “the best interest of students,” it became “superfluous and irrelevant fodder early in the process.” The trial court also found that IHSAA’s application of its rules to Schafer was “arbitrary and capricious” and described it as “absurdity.”
The trial court made two (2) findings with respect to its award of attorney’s fees: (i) IHSAA did in fact continue to litigate a defense which was frivolous, unreasonable and groundless during the Declaratory Judgment Period and, (ii) IHSAA did bring a defense which was frivolous, unreasonable and groundless during the Appeal Period except insofar as it sought to limit the period of injunctive relief. The Court of Appeals was unable to affirm the award as the findings were not enough to support the judgment. (That being said, the Court’s opinion went on for a couple of pages on the concerns it shared with the trial court regarding the possible motivation of the IHSAA association in the course of the litigation to run up fees and expenses in an attempt to send a message to parents and students about the great risk and expense involved in challenging its rulings.)
Northern Elec. Co., Inc. v. Torma
Northern Electric brought an action against its former employee (Torma) and his new employer alleging violation of the Indiana Trade Secret Act, statutory conversion, and breach of fiduciary duty arising from former employee’s use of Northern Electric’s records that he had collected while working for them. Judgment was entered for Torma, and Northern Electric was ordered to pay his fees as the trial court found it wholly failed to reasonably protect its claimed trade secrets; therefore, it should have concluded that proceeding to trial on its claim was not justified.
The Court of Appeals pointed out that prior to hearing the case on its merits, the trial court ordered a temporary injunction in Northern Electric’s favor and ordered Torma to return various items. The Court of Appeals found that the trial court’s statement that Northern Electric should have known that its failure to protect would render its prosecution of its claim frivolous contradicted its earlier grant of a preliminary injunction. Further, the Court of appeals found that Northern Electric engaged in zealous advocacy. The Court of Appeals specifically found that the party’s briefs revealed a well-argued and supported argument on the merits. “Even though some issues are new to this jurisdiction, this alone, should not preclude a party’s unbridled access to the courts and expose it to sanctions; instead, it should be lauded by the courts as a way for Indiana’s case law to evolve.”
Attorney Fee Award Against Whom
An analysis of the preceding cases shows that a request for attorney fees can be made against a party or his attorney. Further, these fees and costs can be assessed under I.C. § 34-52-1-1 or in the discretion of the court. The more egregious the conduct, the higher the penalty. The United States Supreme Court addressed the issue of when a party or his attorney abuses the judicial process by conducting litigation in bad faith in Roadway Express, Inc. v. Piper.
Roadway was a civil rights class action alleging that a corporation’s employment policies discriminated on the basis of race. Roadway moved to dismiss and requested an attorney’s fee award under Rule 27 for plaintiffs’ failure to comply with discovery and other orders. The court ended up dismissing the action with prejudice and ordering plaintiffs’ attorneys to pay Roadway’s costs and attorney’s fees for the entire lawsuit under 28 USC § 1927 and 42 USC §§ 1988, 2000. The US Supreme Court, however, held that the assessment of attorney’s fees against counsel for abusing processes of court, was not authorized under 28 USC § 1927, but was within the court’s inherent power.  Plaintiffs’ counsel’s behavior was noted to be “uncooperative,” requiring, among other things, an order compelling answers to interrogatories.
Apparently, plaintiffs’ counsel had shown up late for the hearing which had to be rescheduled, and then failed to comply with the USDC’s order to respond to interrogatories. Further one of the plaintiffs, despite being noticed for deposition in April, failed to show for the deposition scheduled for early May. Further, plaintiffs’ attorneys, at least twice, failed to meet court imposed deadlines for filing briefs. The USDC, in its order dismissing the action and ordering plaintiffs’ attorneys to pay Roadway’s fees (exceeding $17,000.00), “sharply criticized” them for their “’deliberate inaction’ in handling the case,” and concluded “that the three lawyers ‘improvidently enlarged and inadequately prosecuted’ the action.”
While the USC did not find the USDC’s order on fees proper under 28 USC § 1927 or 42 USC §§ 1988, 2000, it did find that federal courts have “inherent power to assess attorney’s fees against counsel.” It further recognized “the ‘well-acknowledged’ inherent power of a court to levy sanctions in response to abusive litigation practices.” The USC further acknowledged that the general rule that in federal courts litigants cannot recover their counsel fees does not apply when the opposing party has acted in bad faith. Further, “[t]he bad-faith exception for the award of attorney’s fees is not restricted to cases where the action is filed in bad faith. ‘[Bad] faith’ may be found, not only in action that led to the lawsuit, but also in the conduct of the litigation.” “The power of a court over members of its bar is at least as great as its authority over litigants. If a court may tax counsel fees against a party who has litigated in bad faith, it certainly may assess those expenses against counsel who willfully abused judicial processes.”
Additionally, a civil defendant who was the subject of a contempt order and whose attorneys were ordered to pay the plaintiff’s attorney’s fees (albeit pursuant to the Tort Claims Act), brought an action against the judge for false imprisonment as a result of the contempt order. The court noted that “as early as 1853 attorneys were held financially liable for their acts, even as non-parties, in connection with suits before the court.” However, the court found that the American Rule had been subjected to several exceptions, including the “obdurate behavior exception,” where the prevailing party has been dragged into baseless litigation by the bad faith of the losing party.
Sanctions for Bringing Frivolous Claims
Appellate Attorney Fees
Ind. T.R. 66(E) states that a 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 attorneys’ fees.” As stated above, the trial court in Garza awarded attorney’s fees to Defendants from Garza for bringing an action for fraudulent conveyance and attorney negligence regarding a deed he received but failed to record. The court found that Garza continued to litigate even though his deposition showed that he had no cause of action against the defendants as he had chosen not to record his deed. After the award, Garza then appealed. The Court of Appeals upheld the trial court’s decision and additionally awarded the Defendants appellate attorney’s fees as Garza “offered nothing of substance…in support of his claim and his appeal is meritless and frivolous.
Appellate Review of Award of Attorney’s Fees
The 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 attorneys’ fees. In Orr v. Turco Manufacturing Co., Inc., the Indiana Supreme Court explained the standard used when determining whether an award of appellate attorney’s fees is appropriate.
Paula Orr had originally brought a product liability suit on behalf of her minor daughter seeking compensation for damages the child sustained while playing on a swing set manufactured by Turco Manufacturing Co., Inc. (“Turco”). The trial court granted summary judgment for Turco applying the two year products liability statute of limitations. The Indiana Supreme Court held that because, among other things, Orr’s appellant brief provided “concise and cogent” arguments in attempts to distinguish previous precedent regarding the statute of limitations, her appeal presented plausible argument for clarification, modification, or reversal of existing law and was, therefore, not subject to an award of attorney’s fees.
In its opinion, the Court “address[ed] and balance[d]” the need to discourage appellate review abuse and the effect sanctions would have upon appellate advocacy. It found that 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 purposes of delay.” However, the court also acknowledged “[t]he vitality of the law as a living institution” resting largely “upon its capacity to embrace and promote the opposing concepts of stability and growth.” Therefore, the court held 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.” It further defined plausibility as “the quality or state of apparent validity, reasonableness, or credibility; and without any connotation of deceptiveness, speciousness, or underlying fallaciousness.” Although Justice DeBruler concurred with the result, he was “less than enthusiastic” about the court’s use of “utterly devoid of all plausibility” enunciation. Instead, Justice DeBruler preferred to enunciate the test as “arguable.” He stated that “[a]n arguable point is one which is subject to rational dispute and debate.” However, the court also noted that when exercising its discretionary power to award damages on appeal, “an appellate tribunal must use extreme restraint.”
In the same year, the Indiana Supreme Court addressed the issue of an award of appellate attorney’s fees. In Matter of Guardianship of Posey v. Lafayette Bank and Trust Co., the Court wanted to “provide guidance to the bench and bar as to the circumstances when such fees are appropriate…” The Court noted that the appellate court had found that the appellant’s case was without merit and was taken in bad faith. This bad faith was due to “appellant’s disregard of the form and content of the requirements” of various appellate rules: failure to disclose his previous appeal raising many of the same issues, omission and misstatement of facts established in the record, and because the appellant’s brief appeared to have been written in a manner calculated to require the maximum expenditure of time both by the appellee and by the court.” Therefore, the Court felt that such “circumstances [were] significantly more grave than mere lack of merit. Gross abuse of the right to appellate review ‘crowds our court to the detriment of meritorious actions, and should not go unrebuked.’”
In Lesher v. The Baltimore Football Club, the appellate court found that the appellant brought a meritless appeal and stated “[q]uite frankly, we are annoyed at having to devote our time and energy to an absolutely meritless claim for un-negotiated interest.” The Indiana Supreme Court, with Justice Shepard dissenting, found that there was no indication that the court found bad faith, frivolity, harassment, vexatiousness or purpose of delay. Therefore, the appellate court had abused its discretion.
A discretionary award of attorney fees appears to be inappropriate where there is no evidence that the appeal was taken in bad faith to harass the appellee, where there are no misstatements of the record, and when the appellant presents a cogent legal argument with citation to relevant legal authorities.
Procedure for Reviewing Attorney’s Fee Award
Not all awards of trial attorney fees will automatically give rise to an award of appellate attorney fees. However, if such an award is appealed, appellate review of a trial court’s award of attorney’s fees pursuant to I.C. § 34-52-1-1 proceeds in three steps. First the trial court’s findings of fact are reviewed under the clearly erroneous standard. To determine whether the findings or judgment are clearly erroneous, the appellate court neither reweighs the evidence nor judges witness credibility, but rather it reviews only the evidence favorable to the judgment and reasonable inferences drawn therefrom. In reviewing under the clearly erroneous standard, the appellate court will not reverse unless it is left with a definite and firm conviction that a mistake has been made. Further, in its review of whether findings support the judgment, the Court of Appeals may not add anything to the findings of fact by way of presumption, inference, or intendment (it cannot draw any inferences from the record with respect to the facts found).
The second step is to review the trial court’s legal conclusions de novo. The third step is to review the trial court’s decision to award fees and the amount thereof under an abuse of discretion standard.
Indiana Trial Rule 11
Ind. Trial Rule 11 requires that every pleading or motion of a party represented by an attorney be signed by at least one (1) attorney of record. Further, the attorney’s signature on a pleading or motion indicates she has read the pleading and that to the best of her knowledge, information, and belief, there is good ground to support it. For willful violations of T.R. 11, an attorney may be subjected to appropriate disciplinary action. And, if scandalous or indecent matters are inserted, appropriate disciplinary action may be taken as well. The rule requires only that an attorney have no knowledge a claim is groundless; it does not impose a duty upon an attorney to conduct an investigation to supplement his knowledge.
Federal Rules of Civil Procedure 11 also provides for sanctions for violations of the pleading signing rule as well. However, the rule was significantly amended in December 1993 to add a safe harbor provision which provides for a continuing duty of certification. The Federal Rules provide further that the attorney’s signature certifies that to the best of the attorney’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, that the “claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” Fed. R. Civ. P. 11(b)(2). Further, 28 U.S.C.A. section 1927 authorizes assessment of costs and attorney’s fees against lawyers who unreasonably and vexatiously multiply proceedings in any case. However, this statute is only applicable to attorneys, not parties.
Professional Rule of Conduct 3.1
Rule of Professional Conduct 3.1 states that: “A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification, or reversal of existing law.” Comments to the Rule explain that an attorney has a duty not to abuse legal procedure, either procedural or substantive, as they set the limits within which the attorney may proceed. However, it is also acknowledged that the law is not always clear and is never static. Therefore, “in determining the proper scope of advocacy, account must be taken of the law’s ambiguities and potential for change. As for factual bases, the comments indicate that the filing of an action or defense is not frivolous “merely because the facts have not first been substantiated or because the lawyer expects to develop vital evidence only by discovery.” Lawyers are required to inform themselves about the facts of the cases and applicable law and determine whether they can make a good faith argument in support of their client’s position, even if such position does not ultimately prevail. Id. However, if a lawyer is unable to either make a good faith argument on the merits of the action or support the action by a good faith argument for an extension, modification, or reversal of existing law, the action is frivolous. Id.
An attorney was suspended from the practice of law for nine (9) months for, among other things, filing an administrative claim against a Veteran’s Administration hospital for malpractice without first having evidence or expert testimony to support the claim.
By filing the same or substantially similar complaints after client’s first complaint was dismissed for failure to perfect service, attorney violated professional conduct rule 3.1 barring lawyers from initiating frivolous proceedings or issues in proceedings.
Attorney violated professional conduct rule 3.1 against bringing frivolous lawsuits when, after his clients were unsuccessful in trial court in suit against lienholder, the attorney chose to file another suit against lienholder in an attempt to relitigate previously decided case rather than pursue formal appeal. The same attorney also failed to appear for a hearing where he could have argued in support of his claims. The trial court found the attorney had brought a frivolous and groundless suit.
Matters to Consider Relative to Indiana Frivolous Litigation
- Can one party be said to have the lion’s share of the responsibility for increased fees and/or costs? If so, do not let it be you.
- Don’t ignore the “case killing” defenses such as statute of limitations, etc.
- Have something to base your claim on; more than just unsupported statements from yourself or your client.
- The more a controlling statute or doctrine of law is vague, the more you will be able to sustain arguments without worrying about frivolousness.
- Give the appellate court everything it needs, including transcripts, etc., in order to properly review the trial court’s order.
- Draft proposed findings of fact and conclusions of law very carefully making sure the findings reference specific factual instances of frivolousness, problematic litigation, etc., and that the conclusions reflect the legal authority and standard of an award of attorney fees.
- It should go without saying, adhere to Court’s deadline dates and do not engage in dilatory litigation tactics.
- Be careful not to assert inconsistent judicial admissions or misrepresentations.
- Be consistent when you assert new and unrelated theories regarding the same issue, and stay consistent throughout the case.
- Argue well and support your arguments, and be sure to actually make supporting arguments.
- Be sensitive during all stages of litigation as to the facts uncovered, or lack thereof, and whether your claim or defense is supported or negated.
- Obviously, subject to particular litigation strategies and goals, if you feel a claim or defense is frivolous, try to dispose of it sooner rather than later with a motion to dismiss, summary judgment, or other appropriate devise. Allowing a frivolous litigation claim or defense to linger unnecessarily may later provide some basis for a denial of a claim for frivolousness.
- Although it does not appear mandatory, it is good practice within the bounds of civility Indiana lawyers try to achieve, to communicate with the opposing side in some manner regarding your concerns as to frivolous litigation or defenses before you file a claim for frivolous litigation. This small effort may alert you to any opposing arguments you may not be aware of or may have failed to consider, thereby avoiding frivolously bringing a frivolous litigation claim yourself.
 Belinda R. Johnson-Hurtado graduated cum laude from Indiana University Maurer School of Law, in Bloomington, and received her Bachelor of Science Degree in Legal Studies, cum laude, from the University of Evansville. She is a 2002 Fellow, Indiana Conference for Legal Education Opportunity (ICLEO). In addition to her work as an Associate Attorney at Mallor Clendening Grodner & Bohrer LLP in Bloomington, Belinda is involved in various ways with the Latino community in Bloomington including writing a monthly column for the Boletin Comunitario, a monthly newsletter written in Spanish and published by the City of Bloomington’s Community & Family Resources Department to assist Spanish-speaking families and individuals obtain information about community services, programs, and events in which they may be interested or wish to participate.
 Warren Freedman, Frivolous Lawsuits and Frivolous Defenses: Unjustifiable Litigation 3 (Richard L. Ender and John Choon Kim eds., Quorum Books) 1987.
 This article addresses frivolous claims and briefly frivolous appeals. It does not address frivolous defenses or other types of frivolous litigation tactics.
 Jacobellis v. Ohio, 378 U.S. 184, 197 (1964).
 Maccarone v. Hayes, 85 A.D. 41, 46 (NY Ct. App. 1903).
 Freedman, supra, pp. 2-5.
 Id., p. 4 (quoting Professor Dan Hurley in his “Much Ado About Nothing: An Epidemic of Frivolous Law Suits is Turning Our Legal System into the Courtroom of the Absurd” (17 Docket Call 14-17, 1982)).
 Freedman, supra, pp. 2-5.
 Restatement (Third) of the Law Governing Lawyers, § 110, comment d (2000).
 Smyth v. Hester, 901 N.E.2d 25, 32 (Ind. Ct. App. 2009).
 Id. at 33 (citing Davidson v. Boone Co., 745 N.E.2d 895, 898 (Ind. Ct. App. 2001)
 Kikkert v. Krumm, 474 N.E.2d 503, 505 (Ind. 1985) (emphasis in original).
 Kahn v. Cundiff, 533 N.E.2d 164, 170 (Ind. Ct. App. 1989).
 Indiana Code § [34-52-1-1] strikes a balance between respect for an attorney’s duty of zealous advocacy and “the important policy of discouraging unnecessary and unwarranted litigation. Mitchell v. Mitchell, 695 N.E.2d 920, 924 (Ind. 1998).
 Smyth, 901 N.E.2d at 33.
 Weiss v. Harper, 803 N.E.2d 201, 208 (Ind. Ct. App. 2003).
 IHSAA v. Schafer, 913 N.E.2d 789, 794 (Ind. Ct. App. 2009).
 Mitchell, 695 N.E.2d at 924.
 Id. at 925.
 Kahn v. Cundiff, 543 N.E.2d 627, 628 (Ind. 1989).
 Kahn, 533 N.E.2d at 172; IHSAA, 913 N.E.2d at 794.
 Kahn, 533 N.E.2d at 170.
 Kahn, 533 N.E.2d at 171; IHSAA, 913 N.E.2d at 794.
 533 N.E.2d 164 (Ind. Ct. App. 1989).
 704 N.E.2d 468 (Ind. Ct. App. 1998).
 Garza, 705, N.E.3d at 475.
 872 N.E.2d 155 (Ind. Ct. App. 2007).
 Breining v. Harkness, 872 N.E.2d 155, 159 (Ind. Ct. App. 2007).
 Id. at 160.
 No. 39A01-0908-CV-408 (Ind. Ct. App. May 5, 2010).
 Although this article does not address costs under T.R. 41(E), it is interesting to note that the Court found that as there was no reason to interpret 41(E) differently than T.R. 54(D) or T.R. 68, that “costs” under 41(E) include only filing fees and statutory witness fees.
 868 N.E.2d 507 (Ind. Ct. App. 2007).
 Id. at 517.
 Id. at 516.
 901 N.E.2d 25 (Ind. Ct. App. 2009)
 Smyth, 901 N.E.2d at 34.
 Special findings, pursuant to Ind. T.R. 52(A), are those that contain all facts necessary for recovery by a party in whose favor conclusions of law are found. IHSAA, 913 N.E.2d at 794. The purpose of special findings of fact is to provide a reviewing court with the theory on which the judge decided the case, so they should contain a statement of the ultimate facts from which the trial court determined the legal rights of the parties. Id. On appeal, the Court of Appeals construes the findings together liberally in support of the judgment. Id. But, in its review of whether findings support the judgment, it may not add anything to the findings of fact by way of presumption, inference, or intendment. Id. at 795. When the trial court makes special findings, they must be sufficient to disclose a valid basis for the legal result reached in the judgment. Id. The trial court’s findings control only the issues they cover, and the Court of Appeals will apply a general judgment standard to any issues about which the court did not make findings. Id.
 Id. at 36.
 Id. (citing Mitchell, 695 N.E.2d at 925).
 913 N.E.2d 789 (Ind. Ct. App. 2009)
 Id., 913 N.E.2d at 793
 819 N.E.2d 417 (Ind. Ct. App. 2005).
 Id. at 432.
 447 US 752 (1980)
 In this case, the Supreme Court held that attorneys’ fees could not be assessed against a litigant’s attorney pursuant to 28 U.S.C. § 1927. Congress, however, amended the statute in 1980 expressly to allow such an award. Pub.L. 96-349, 94 Stat. 1156 (codified as amended at 28 U.S.C. § 1927 (1982)). See Lewis v. Brown & Root, Inc., 711 F.2d 1287, 1292 n. 7 (5th Cir. 1983).
 Roadway Express, Inc. v. Piper, 447 US 752, 754 (1980).
 Id. at 755-56.
 Id. at 765.
 Id. at 766.
 Owen v. Vaughn, 479 N.E.2d 83 (Ind. Ct. App. 1985).
 Id. at 88.
 Of course, it is also important to remember, although not addressed in this article, that another “sanction” that can be sought for frivolous claims is the remedy of legal malpractice.
 Garza, 705 N.E.2d at 475.
 Ind. Appellate Rule 66(E).
 At that time, the rule was located at AR 15(G). However, the rule is now located at AR 66(E).
 Orr v. Turco Manufacturing Co., Inc., 512 N.E.2d 151, 152 (Ind. 1987).
 Id. at 153.
 Id. at 152.
 Id. n. 3.
 Id. at 154.
 Id. at 152.
 Matter of Guardianship of Posey v. Lafayette Bank and Trust Co., 512 N.E.2d 155 (Ind. 1987).
 Lesher v. The Baltimore Football Club, 512 N.E.2d 156 (Ind. 1987).
 Id.; Lawson v. Haven Hubbard Homes, Inc., 551 N.E.2d 855 (Ind. Ct. App. 1990).
 General Collections, Inc. v. Decker, 545 N.E.2d 18 (Ind. Ct. App. 1989).
 Smyth, 901 N.E.2d at 33.
 Kahn, 533 N.E.2d at 167; Smyth, 901 N.E.2d at 33.
 Smyth, 901 N.E.2d at 33; Mitchell, 685 N.E.2d at 1086.
 Weiss, 803 N.E.2d at 205.
 Kahn, 533 N.E.2d at 167; Smyth, 901 N.E.2d at 33.
 Yater v. Coy, 681 N.E.2d 232 (Ind. Ct. App. 1997).
 Ind. Professional Conduct Rule 3.1., Cmt. 1.
 Id., Cmt. 2.
 In the Matter of Dwight Antonio Cosby, 844 N.E.2d 478 (Ind. 2006).
 Except for rare circumstances, in Indiana, a plaintiff must have an expert opinion to support claims of both medical and legal malpractice. Indianapolis Podiatry, P.C. v. Efroymson, 720 N.E.2d 376, 383 (Ind. Ct. App. 1999) (to prove legal malpractice, expert testimony is normally required to demonstrate the standard of care by which an attorney’s conduct is measured); Bethke v. Gammon, 590 N.E.2d 573, 574-75 (Ind. Ct. App. 1991) (the claim of medical malpractice requires the plaintiff to provide expert testimony, which shows that the health care provider’s conduct was below the applicable standard of care and that the health care provider’s negligence was a proximate cause of the plaintiff’s injuries.)
 In re Humphrey, 725 N.E.2d 70 (Ind. 2000).
 In re Oliver, 729 N.E.2d 582 (Ind. 2000).