FOR PUBLICATION
ATTORNEYS FOR APPELLEE: ATTORNEYS FOR APPELLANT:
SHEILA CORCORAN KATHRYN L. KORNBLUM
Evansville, Indiana ERIN L. BERGER
Attorney for Greg W. Gaw VanStone & Kornblum
Evansville, Indiana
S. ANTHONY LONG
Long & Mathies Law Firm, P.C.
Boonville, Indiana
Attorney for Candy S. Gaw
IN THE
COURT OF APPEALS OF INDIANA
CANDY S. GAW, )
)
Appellee-Petitioner, )
)
vs. ) No. 87A05-0403-CV-147
)
GREGG W. GAW, )
)
Appellee-Respondent. )
)
STERLING UNITED FEDERAL CREDIT UNION, )
)
Appellant-Third Party Defendant. )
APPEAL FROM THE WARRICK SUPERIOR COURT
The Honorable Robert R. Aylsworth, Judge
Cause No. 87D02-0204-DR-117
February 8, 2005
OPINION FOR PUBLICATION
MATHIAS, Judge
Sterling United Federal Credit Union (Sterling) appeals from the denial of its petition
for attorneys fees in Warrick Superior Court Number Two. Sterling raises the
following issues:
Whether the trial court abused its discretion when it joined Sterling to a
dissolution proceeding, and then upon dismissing Sterling, when it failed to find the
joinder wrongful; and,
Whether the trial court abused its discretion when it denied Sterlings petition for
attorneys fees.
We conclude that the trial court abused its discretion when it joined Sterling
to the dissolution proceeding. However, because the trial court dismissed Sterling from
the proceeding, this issue is now moot. In addition, we conclude that
the trial court did not abuse its discretion when it denied Sterlings petition
for attorneys fees. Therefore, we affirm.
Facts and Procedural History
Candy Gaw (Candy) filed a petition for dissolution of her marriage to Gregg
Gaw (Gregg) in Warrick Superior Court Number 2 on April 18, 2002.
During their marriage, the couple took out several loans at Sterling, including a
joint second mortgage on their home, a joint loan on a 1999 Ford
Expedition, and a loan on another vehicle in Greggs name only. By
April 2003, the couple had fallen behind on payments on both the Ford
Expedition loan and the second mortgage.
During the pendency of the dissolution proceeding, Candy continued to make payments on
the couples joint loan on the Ford Expedition and on their second mortgage.
Although Sterling had a general policy of tying an individuals loans together
(meaning that if one loan became delinquent, all of that individuals loans could
be called due), Sterling permitted Gregg to apply payments just to the vehicle
loan in his name. In July 2003, Candy made three payments via
Sterlings night deposit box, one of which was credited to an account other
than the account she specified. Candy did not immediately learn of this
because Sterling mailed the receipts for these transactions to Gregg and not to
her.
On August 15, 2003, Candy made a payment in person which was incorrectly
applied to Greggs vehicle loan. Candy noticed that the account number listed
on her receipt was incorrect and brought the mistake to the tellers attention.
The payment was then immediately credited to the proper account. Candy
made several more payments, but as of October 23, 2003, both the Ford
Expedition loan and second mortgage were in default.
On October 28, 2003, Candy filed a motion to join Sterling as a
party to the marriage dissolution proceeding, alleging that she had been [o]rdered to
pay the car payments and the second mortgage payments on the accounts due
at Sterling and that she had been making every effort to make said
payment but that the payments she makes are being applied by [Sterling] to
accounts other than the ones that she has been [o]rdered to pay by
this [c]ourt. Appellants App. p. 13. Two days later, without conducting
a hearing on the matter, the trial court issued an order joining Sterling
as a party to the Gaws dissolution proceeding. On December 5, 2003,
Sterling filed an objection to Candys motion to join.
On December 31, 2003, Sterlings collections manager Beatrice Glaser (Glaser) was served at
her home with a subpoena duces tecum for a hearing on January 5,
2004. Thereafter, on January 5, 2004, Sterling filed a series of motions,
including a motion to quash the subpoena duces tecum, a motion to dismiss,
a motion for summary judgment, and a motion to correct error and to
reconsider joinder. Sterling included with these motions requests for attorneys fees.
On February 10, 2004, the trial court conducted a hearing on the motions
and dismissed Sterling as a party, but declined to find that the joinder
had been wrongful. The trial court then denied Sterlings petition for attorneys
fees. Sterling now appeals.
Standard of Review
The determination of whether joinder should be granted rests within the trial courts
discretion. McCoy v. Like, 511 N.E.2d 501, 504 (Ind. Ct. App. 1987),
trans. denied. Therefore, we will reverse only for an abuse of discretion.
Id. Likewise, a trial courts decision to grant or to deny
attorneys fees will not be disturbed absent an abuse of discretion. Dunson
v. Dunson, 769 N.E.2d 1120, 1127 (Ind. 2002). An abuse of discretion
occurs when the trial courts decision is clearly against the logic and effect
of the facts and circumstances before the court, or if the court has
misinterpreted the law. Brademas v. South Bend Cmty. Sch. Corp., 783 N.E.2d
745, 750 (Ind. Ct. App. 2003), trans. denied.
Discussion and Decision
I. Joinder
First, Sterling argues that the trial court abused its discretion when it joined
Sterling as a party to the Gaws dissolution proceeding. The trial court
later dismissed Sterling, but found that the joinder had not been wrongful at
the time under the facts and circumstance of this case. Tr. p.
103. Thus, the issue of Sterlings joinder is now moot. However,
we would be remiss if we failed to address the impropriety of joining
a third-party creditor to a dissolution proceeding.
The Indiana Trial Rules permit joinder of parties under Trial Rules 19 and
20. Trial Rule 19 governs mandatory joinder and provides, in pertinent part:
A person who is subject to service of process shall be joined as
a party in the action if:
(1) in his absence complete relief cannot be accorded among those already parties;
or
(2) he claims an interest relating to the subject of the action and
is so situated that the disposition of the action in his absence may:
(a) as a practical matter impair or impede his ability to protect that
interest, or
(b) leave any of the persons already parties subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed
interest.
If he has not been so joined, the court shall order that he
be made a party. If he should join as a plaintiff but
refuses to do so, he may be made a defendant.
Ind. Trial Rule 19(A) (2004).
Here, there is no indication that Candy could not be afforded complete relief,
that is, the dissolution of her marriage, without joining Sterling as a party.
Nor did Sterling claim any interest in the Gaws marriage or its
dissolution. Moreover, Candy did not face a substantial risk of incurring double,
multiple, or inconsistent obligations in the absence of Sterlings joinder. Thus, Sterling
was not a necessary party and could not properly be joined as a
party to the dissolution proceeding under Trial Rule 19.
Trial Rule 20 governs the permissive joinder of parties and provides in pertinent
part:
All persons may be joined in one [1] action as defendants if there
is asserted against them jointly, severally, or in the alternative, any right to
relief in respect of, or arising out of, the same transaction, occurrence, or
series of transactions or occurrences and if any question of law or fact
common to all defendants will arise in the action.
Ind. Trial Rule 20(A)(2) (2004).
Importantly, Candy asserted no right to relief against Sterling. After the trial
court joined Sterling to the proceeding, Candy filed no complaint against Sterling.
Rather, she only made requests for various loan documents and payment records.
See footnote
Thus, Candy failed to establish even the first requisite for permissive joinder.
See McCoy, 511 N.E.2d at 504. Therefore, Sterling could not properly
be joined to the proceeding under Trial Rule 20.
As our supreme court has observed:
The [dissolution of marriage] act contemplates that the parties thereto are the parties
to the marriage. The issues to be litigated are the grounds, child
custody and support, the disposition of the property of the parties and, pending
litigation, the matters necessary to an orderly determination of those issues. . .
. Neither the rules of trial procedure nor the dissolution of marriage
statutes are so broad as to require third parties to be dragged into
marriage dissolution proceedings by their heels and there compelled to litigate issues that
are but tangential to that cause of action.
State ex rel. Stanton v. Super. Ct. of Lake County, 265 Ind. 414,
416-17, 355 N.E.2d
406, 407-08 (1976).
Candy acknowledges that it would not be common practice to join a financial
institution in such an action, but claims [in] this case, there was no
other alternative. Br. of Appellee at 6. We strongly disagree.
Candy also cites
In re Marriage of Dall, 681 N.E.2d 718 (Ind. Ct.
App. 1997), in support of her argument that [t]here is no question that
the proper application of monies paid on marital indebtedness make that issue relevant
to the disposition of the marital assets and therefore to the dissolution proceedings.
Br. of Appellee at 11. However, the holding in Dall speaks
only to the propriety of joining a nonparty to a divorce proceeding when
a party claims that the marital estate includes an equitable interest in real
property titled in that nonparty. See Dall, 681 N.E.2d at 723.
The holding in Dall does not support the joinder of a third-party creditor
like Sterling to a dissolution proceeding. Finally, we also note that the
trial court granted Candys motion to join Sterling two days after it was
filed, without a hearing, and likely before Sterling had even received its notice
by mail. Under these facts and circumstances, the trial court abused its
discretion when it joined Sterling as a party to the Gaws dissolution proceeding.
II. Attorneys Fees
Next, Sterling maintains that the trial court abused its discretion when it denied
Sterlings petition for attorneys fees. Indiana Code section 34-52-1-1 governs the award
of attorneys fees for litigating in bad faith or for pursuing frivolous, unreasonable,
or groundless actions. It provides in relevant part:
(b) In any civil action, the court may award attorneys 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 partys claim or
defense clearly became frivolous, unreasonable, or groundless; or
(3) litigated the action in bad faith.
Ind. Code § 34-52-1-1 (1999).
A claim is frivolous if it is made primarily to harass or maliciously
injure another; if counsel is unable to make a good faith and rational
argument on the merits of the action; or if counsel is unable to
support the action by a good faith and rational argument for extension, modification,
or reversal of existing law.
Commercial Coin Laundry Sys. v. Enneking, 766
N.E.2d 433, 441 (Ind. Ct. App. 2002). A claim is unreasonable if,
based upon the totality of the circumstances, including the law and facts known
at the time, no reasonable attorney would consider the claim justified or worthy
of litigation. Id. A claim is groundless if no facts exist
which support the claim relied upon and supported by the losing party.
Id.
Sterling claims that Candys motion to join them was frivolous, unreasonable, and groundless.
The trial court ultimately agreed that Sterling should be dismissed as a
party. However, while ultimately unsuccessful, we cannot conclude that Candys argument to
join Sterling was completely unsupportable. In addition, Sterling argues that Candy filed
the motion to join in bad faith for the purpose of harassment.
Bad faith implies the conscious doing of a wrong because of dishonest purpose
or moral obliquity.
Kovenock v. Mallus, 660 N.E.2d 638, 643 (Ind. Ct.
App. 1996), trans. denied (internal citations omitted). Sterling points to no evidence
indicating that Candys motion to join was motivated by any dishonest purpose.
Candy and her attorney were clearly frustrated by Sterlings heavy-handed attitude. Although
Candys joinder of Sterling borders on being unreasonable and groundless, we cannot conclude
that the trial court abused its discretion when it denied Sterling attorneys fees.
Conclusion
The trial court abused its discretion when it joined Sterling as a party
to the Gaws dissolution proceeding; however, the trial courts dismissal of Sterling renders
this issue moot. The trial court did not abuse its discretion when
it denied Sterlings petition for attorneys fees.
Affirmed.
DARDEN, J., and FRIEDLANDER, J., concur.
Footnote:
The production of such documents can be, and often is, required of
nonparties without joining them to the proceeding.
See Ind. Trial Rule 34(C)
(2004).