FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
PETER S. KOVACS ELIZABETH I. VAN TASSEL
SONIA S. CHEN
Coots, Henke & Wheeler, P.C.
Stewart & Irwin, P.C. Carmel, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
DEBORAH M. WALTON, )
)
Appellant, )
)
vs. ) No. 29A02-0408-CV-661
)
CLAYBRIDGE HOMEOWNERS )
ASSOCIATION, INC., )
)
Appellee. )
APPEAL FROM THE HAMILTON SUPERIOR COURT
The Honorable William J. Hughes, Judge
Cause No. 29D03-0303-CT-200
April 12, 2005
OPINION - FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellant-Defendant, Deborah M. Walton (Walton), appeals the trial courts Order awarding Appellee-Plaintiff, Claybridge
Homeowners Association, Inc. (HOA) attorney fees and costs incurred in defending an appeal
and filing and defending its fee petition.
We affirm.
ISSUES
Walton raises several issues on appeal, which we restate as follows:
whether the trial court erred by awarding the HOA attorney fees and costs
incurred in defending Waltons appeal of the trial courts order granting an injunction;
and
whether the trial court erred by awarding the HOA attorney fees and costs
incurred in preparing and defending its fee petition.
FACTS AND PROCEDURAL HISTORY
In 2000, Walton purchased a lot in a subdivision known as Claybridge at
Springmill, in Hamilton County. At that time, the developer had already constructed
an entryway wall and wood fence on Waltons lot and landscaped around them
as permitted by certain easements. Pursuant to a declaration of covenants and
restrictions (DCR), to which Waltons lot was subject, the HOA was required to
maintain the easements and any plantings on them and maintain and replace fences
within any landscape easement on an owners lot. Walton, however, prevented the
HOA from performing its obligations.
As a result, the HOA sought a permanent injunction against Walton. The
trial court, finding that Walton had interfered with the HOAs obligation to maintain
the easements, granted the HOAs request. Having concluded that the HOA was
entitled to injunctive relief, the trial court then concluded that, pursuant to Section
17 of the DCR, the HOA was a prevailing party entitled to recover
all costs of enforcement and attorney[] fees incurred . . . .
(Appellants App. p. 270). The trial court further concluded that the HOA
was permitted to request a hearing on its costs, attorney[] fees and other
damages, if any. Id.
Walton appealed the trial courts decision to issue an injunction against her.
The essence of her contention on appeal was that the HOA did not
have authority to maintain the easements on her residential lot because it was
not subject to the DCR. Walton further argued that because the HOA
was not entitled to the injunction, the trial court improperly awarded the HOA
attorney fees. On July 15, 2003, a panel of this court handed
down a memorandum decision in which it concluded that Waltons lot was subject
to the DCR, and therefore, the injunction was properly granted. Walton v.
Claybridge Homeowners Assn, Inc., No. 29A04-0207-CV-348, slip. op. (Ind. Ct. App. July 15,
2003), trans. denied. This court further concluded that because the trial court
properly issued the injunction, it did not abuse its discretion when it ordered
Walton to pay the Associations attorney fees. Id. at 13, n.4.
While the case was on appeal, the HOA requested a hearing to determine
the amount of attorney fees, costs and other damages to which it was
entitled under the DCR. (Appellees App. p. 1). Eventually a hearing
was held on April 26, 2004. At the hearing, the attorneys for
the HOA maintained that the HOA was entitled to a total of $64,600.99
in attorney fees and costs incurred by them in the following three areas:
(1) obtaining the injunction against Walton; (2) defending Waltons appeal of the
trial courts decision; and (3) filing and defending its fee petition. Walton
conceded that the HOA was entitled to reasonable attorney fees and costs expended
in obtaining the permanent injunction, but disputed the HOAs claim for attorney fees
and costs associated with defending the appeal and pursuing its fees. On
July 15, 2004, the trial court issued an order awarding the HOA $64,600.00
in attorney fees and court costs and $248.00 in damages. Walton now
appeals.
See footnote
DISCUSSION AND DECISION
Initially we note that the controversy in this appeal is based upon Section
17 of the DCR, which allows a party who has substantially prevail[ed] in
an action to enforce the restrictions and conditions imposed by the DCR, to
recover all costs of enforcement, including attorney[] fees . . . .
(Appellants App. p. 246). Having successfully obtained an injunction in the trial
court and defended the trial courts decision on appeal, the HOA then sought
to recover its costs of enforcement. The HOA maintains that those costs
include attorney fees and costs for the following actions: (1) obtaining the
injunction in the trial court; (2) defending the trial courts judgment on appeal;
and (3) preparing and defending its fee petition. On appeal, Walton challenges
the trial courts award of fees and costs associated with the latter two
actions. We discuss each in turn, beginning with the award for fees
and costs incurred in defending the judgment on appeal.
I. Attorney Fees and Costs Incurred on Appeal
Appellate Attorney Fees
First, Walton contends that the trial court erred when it awarded the HOA
approximately $24,000.00 in appellate attorney fees. In particular, Walton maintains that the
issue of appellate attorney fees had been considered and decided against the HOA
in this courts memorandum decision upholding the trial courts grant of injunctive relief.
Consequently, Walton contends that the HOA is barred from relitigating the issue
in the instant case under the doctrine of res judicata.
To support her contention, Walton directs this courts attention to a statement contained
in the HOAs appellate brief defending the trial courts decision to issue the
injunction. The statement, which is the last line of the HOAs brief,
reads as follows: The injunction should be affirmed and the Association permitted
to collect its costs and attorney fees, including appellate attorney fees. (Appellees
App. p. 98). According to Walton, this statement was a specific request
for appellate attorney fees, which she claims was denied by this court when
we made the following statement in our memorandum decision: Because we conclude
that the trial court properly entered a permanent injunction and restraining order against
Walton, the trial court did not abuse its discretion when it ordered Walton
to pay the Associations attorney fees. Walton, No. 29A04-0207-CV348, slip. op. at
13, n.4. According to Walton, because this court did not specifically address
appellate attorney fees, it must have denied them. We disagree.
Initially, we note that the doctrine of res judicata does not apply under
these circumstances. While the doctrine bars a party from relitigating an issue
previously decided on the merits, there must have been a judgment entered in
a prior action. See Hood v. G.D.H., 599 N.E.2d 237, 239 (Ind.
Ct. App. 1992) (recognizing that doctrine of res judicata bars litigation of issues
and claims litigated and decided in prior cause of action). Because Walton
is attempting to establish that the issue of appellate attorney fees was decided
in a prior appellate opinion in this case, and not a prior cause
of action, her claims fails.
Moreover, even were we to consider the closely related doctrine of law of
the case, which more appropriately describes Waltons claim, Waltons contention still fails.
Under the doctrine of the law of the case, appellate courts will not
reexamine issues already decided in the same case. Rosby Corp. v. Townsend,
Yosha, Cline & Price, 800 N.E.2d 661, 664 (Ind. Ct. App. 2003), trans.
denied. However, to invoke the law of the case doctrine, the matters
decided in the prior appeal clearly must appear to be the only possible
construction of an opinion, and questions not conclusively decided in the prior appeal
do not become the law of the case. Id. Here, considering
the manner in which attorney fees were addressed in the trial courts order
granting the injunction and the parties contentions on appeal, we cannot say that
the trial courts refusal to award the HOA appellate attorney fees is the
only possible construction of this courts statement.
In its order, granting the HOAs request for a permanent injunction against Walton,
the trial court focused on whether Waltons lot was subject to the DCR.
After concluding that it was, and that the HOA had lawfully entered
her property to maintain the easements, the trial court generally concluded that the
HOA had substantially prevailed . . . and [wa]s entitled to recover its
costs of enforcement including attorney[] fees pursuant to Section 17 of the Claybridge
DCR. (Appellants App. p. 268). Consequently, on appeal, a substantial portion
of Waltons brief was devoted to explaining why the HOA did not have
authority to enforce the DCR against her. (See Appellees App. p. 22-36).
Walton maintained that if the HOA did not have authority to maintain
the easements under the DCR, it should not have been granted the injunction.
Walton further maintained that if the HOA was not entitled to an
injunction, it had not established that it was a prevailing party entitled to
costs, including attorney fees. (See Appellees App. p. 39). In response,
the HOA attempted to refute Waltons claims. (See Appellees App. p. 64-84).
Thus, on appeal, this court, in upholding the trial courts decision, focused
on whether the HOA had authority to enforce the DCR against Walton.
In a single statement contained in the final footnote of the opinion, this
court concluded that because the injunction had been properly granted, the award of
attorney fees was proper.
While this court did not specifically address appellate attorney fees, we find that
it did not deny them. First we note that, contrary to Waltons
assertion, the HOAs statement was not a specific request for appellate attorney fees.
It was merely a general request asking this court to affirm the
trial courts grant of injunctive relief so that in a future proceeding it
could petition for attorney fees, including those incurred on appeal. In addition,
given that the primary issue addressed by the trial court and the parties
on appeal involved the HOAs authority to enforce the DCR, it appears that
this court was merely stating its approval of the trial courts conclusion that
the HOA, as a prevailing party, was entitled to seek any attorney fees
permitted by the DCR. Therefore, the trial court did not err when
it awarded the HOA appellate attorney fees.
B. Appellate Costs
Walton also contends that the HOA was not entitled to $1,248.03 in costs
incurred during the appellate process. Specifically, Walton contends that pursuant to Appellate
Rule 67, the HOA was required to file a motion for appellate costs
within 60 days of this courts decision.
Appellate Rule 67 provides in relevant part as follows:
Rule 67. Costs
A. Time for Filing Motion for Costs. Upon a motion
by any party within sixty (60) days after the final decision of the
Court of Appeals or Supreme Court, the Clerk shall tax costs under this
Rule.
B. Components. Costs shall include:
(1) the filing fee, including any fee paid to seek transfer or review;
(2) the cost of preparing the Record on Appeal, including the Transcript, and
appendices; and
(3) postage expenses for service of all documents filed with the Clerk.
The Court, in its discretion, may include additional items as permitted by law.
Each party shall bear the cost of preparing its own briefs.
C. Party Entitled to Costs. When a judgment or order is
affirmed in whole, the appellee shall recover costs. When a judgment has
been reversed in whole, the appellant shall recover costs in the Court on
Appeal and in the trial court or Administrative Agency as provided by law.
In other cases, the recovery of costs shall be decided in the
Courts discretion. Costs against any governmental organization, its officers and agencies, shall
be imposed only to the extent permitted by law.
D. Supreme Court Equally Divided. When the Supreme Court justices participating
in an appeal are equally divided, neither party shall be awarded costs.
See Rule 58(C).
However, we need not consider the requirements of Appellate Rule 67 as the
costs in this case were sought under a provision of the DCR, which
has been recognized as a form of contract. King v. Ebrens, 804
N.E.2d 821, 826 (Ind. Ct. App. 2004). Thus, the DCR, not the
appellate rule, governed the HOAs right to recover costs. See Weiss v.
Harper, 803 N.E.2d 201, 207 (Ind. Ct. App. 2003) (concluding contract provision, providing
recovery for costs of litigation, controlled costs prevailing party could recover and not
statute which limited recovery of costs to filing fees and statutory witness fees).
As Walton does not otherwise challenge the HOAs right to recover appellate
costs, we find no error.
II. Attorney Fees and Costs for Preparing and Defending the Fee Petition
Finally, Walton contends that the trial court erroneously awarded the HOA $11,413.35 in
attorney fees and costs incurred in preparing and defending its fee petition.
To support her contention, Walton relies upon this courts holding in Estate of
Inlow, 735 N.E.2d 240 (Ind. Ct. App. 2000). There, the trial court
awarded the law firm representing the personal representative of an estate a $750,000.00
interim fee. Id. at 248-49. On appeal, the deceaseds children challenged
the portion of the fee awarded for time spent preparing and defending the
fee petition. Id. at 250.
To resolve the claim, the Inlow court first looked to the section of
the probate code governing attorney compensation in an estate proceeding. Id.
The statute at issue allowed for reasonable compensation to [a]n attorney performing services
for the estate. Id. (citing Ind. Code § 29-1-10-13). Thus, the
Inlow court had to determine, as a matter of statutory construction, whether services
for the estate included preparing and defending a fee petition. Id. at
251. After considering relevant case law from other jurisdictions, the Inlow court
determined that preparing and defending a fee petition in an estate proceeding were
service[s] performed for the attorney seeking to be paid, rather than . .
. service[s] performed for the estate. Id. at 253. The court
explained that preparing and defending a fee petition are routine cost[s] of doing
business that must be factored into an attorneys hourly rate . . .
. Id.
Walton acknowledges that the recovery of attorney fees in Inlow was based upon
a particular section of the probate code, while recovery of attorney fees in
this case is based upon the DCR. However, she maintains that the
holding in Inlow should be extended to non-probate cases such as this because
filing and preparing a fee petition are always routine costs of business.
To support her contention, Walton refers to the following statement made by the
Inlow court:
To be paid, an attorney must first tell a client what he owes.
Requiring a client to pay an additional amount for being told what
he owes in the first instance is neither good business nor good law.
The preparation of a fee petition, as of any billing statement, is
clearly a service performed for the attorney seeking to be paid, rather than
a service performed for the estate. Thus, time spent preparing the fee
petition is a routine cost of doing business that must be factored into
an attorneys hourly rate, as is universally done with non-probate clients . .
. .
Id. at 253 (emphasis supplied).
While the Inlow court recognized that time spent preparing a billing statement generally
is not charged to non-probate clients, we believe the court was referring to
clients paying for an attorneys services and not parties seeking attorney fees under
a contract. It is well established that parties are permitted to enter
into agreements containing fee-shifting provisions as long as the provision does not violate
public policy. Willies Const. Co., Inc. v. Baker, 596 N.E.2d 958,
963 (Ind. Ct. App. 1992), trans. denied. As Walton does not suggest
that the contract provision does not allow recovery for such fees, the only
question before us is whether the provision violates public policy. This is
a question of law to be determined under the particular facts of the
case. See Mutual Sec. Life Ins. Co. v. Fidelity and Deposit Co.,
659 N.E.2d 1096, 1098 (Ind. Ct. App. 1995), trans. denied. We find
that it does not.
The purpose of a fee-shifting provision is to make the prevailing party to
a contract whole. See Rauch v. Circle Theatre, 176 Ind.App.130, 374 N.E.2d
546, 554 (1978) (The purpose of allowing an award of attorneys fees in
a civil action is to more fully compensate a party who has successfully
enforced his legal rights in court . . . .); Parrish v. Terre
Haute Sav. Bank, 438 N.E.2d 1, 3 (Ind. Ct. App. 1982) (The purpose
of attorney fee clauses . . . is to make the holder
[] whole in the event court action is necessary to vindicate [its] rights.).
Thus, in general, fee-shifting provisions will be upheld if enforcement does not
contravene this policy. Compare Rogers Group, Inc. v. Diamond Builders, LLC, 816
N.E.2d 415, 420 (Ind. Ct. App. 2004) (concluding prevailing party was entitled to
attorney fees under contract where plaintiffs recovery under contract exceeded defendants recovery on
counterclaim), trans. denied, with Willies Const. Co., 596 N.E.2d at 964 (refusing to
uphold award of attorney fees to prevailing party, whose claim was diminished by
opposing partys counterclaim, when enforcement would not further the purpose of compensating the
successful party).
As theses cases illustrate, the overriding concern in determining whether a fee-shifting provision
should be upheld is whether enforcement makes the prevailing party whole. Here,
Walton appears to argue that enforcing the fee-shifting provision in this case does
not because preparing and defending a fee petition are services performed for the
attorneys seeking to be paid, not the prevailing party. However, when the
attorneys for the HOA prepared and defended the fee petition, they were acting
on behalf of the prevailing party, just as they had done in obtaining
the injunction and defending the trial courts judgment on appeal. Specifically, the
attorneys were taking steps necessary to establish the attorney fees to which the
HOA was entitled under the DCR. Requiring the HOA to absorb any
fees or costs its attorneys incurred in establishing the fees would not fully
compensate it for enforcing its rights.
See footnote
Therefore, we conclude that the holding in
Inlow should not be extended to
cases in which parties have entered into contracts with fee-shifting provisions. We
further hold that because allowing fee awards for time spent pursuing fee requests
fully compensates the prevailing party under the contract, such provisions do not violate
public policy. Therefore, the trial court did not err when it awarded
the HOA attorney fees and costs associated with preparing and defending the fee
petition.
Still, Walton claims that the trial courts award is unreasonable. According to
Walton, the courts $11,413.35 award constitutes approximately eighteen percent of the courts total
award of $64,600.00.
Attorney fees awarded under a contract must be reasonable. Seibert v. Mock,
510 N.E.2d 1373, 1378 (Ind. Ct. App. 1987). However, trial courts are
afforded discretion in determining a reasonable fee. Dempsey v. Carter, 797 N.E.2d
268, 275 (Ind. Ct. App. 2003), trans. denied. On appeal, Walton bears
the burden of establishing that the trial court abused its discretion. Seibert,
510 N.E.2d at 1378. We will find the trial courts award in
error if it is clearly against the logic and effect of the facts
and circumstances . . . . Dempsey, 797 N.E.2d at 275.
Apart from characterizing the HOAs fee petition as run-of-the-mill and generally claiming that
the tasks performed by the HOAs attorneys did not amount to nearly $12,000
worth of work, Walton does not otherwise explain why the award is unreasonable.
(Appellants Br. p. 13). In fact, Walton concedes that the HOAs
fee petition was well documented. Under these circumstances, we cannot say that
the trial court abused its discretion. See Parrish, 438 N.E.2d at 3-4
(finding an award of appellate attorney fees proper, under contract permitting recovery of
attorney fees, where fee petition was documented with detailed time sheets and affidavit
and party opposing fee petition failed to explain why fee was unreasonable).
CONCLUSION
Based on the foregoing, we find that the trial court did not err
when it awarded appellate attorney fees and costs. Because the issue of
appellate attorney fees was not considered by this court in its prior appellate
opinion, it is not the law of the case. With regard to
costs incurred on appeal, the provision of the DCR awarding a prevailing party
all costs of enforcement, and not Appellate Rule 67, governed the HOAs recovery.
The trial courts award of attorney fees and costs to the HOA
for preparing and defending the fee petition was also not erroneous. The
provision of the DCR awarding the HOA attorney fees did not violate public
policy and Walton has failed to show that the amount awarded was unreasonable.
Affirmed.
CRONE, J., and ROBB, J., concur.
Footnote:
In response to Waltons appeal, the HOA filed a motion to
dismiss, claiming that the trial courts order was not a final appealable order.
This court denied the HOAs motion after concluding that the trial courts
order was appealable by right under Appellate Rule 14(A)(1).
Footnote:
In addition, we note that awards for fees of this nature
have been permitted by federal statute. See, e.g., Uphoff v. Elegant Bath,
LTD, 176 F.3d 399, 411 (7th Cir. 1999) (upholding district courts award of
fees for preparation of fee request under Fair Labor Standards Act); Kurowski v.
Krajewski, 848 F.2d 767, 777 (7th Cir. 1988) (affirming award for time spent
pursuing requests for fees in claim for attorney fees under 42 U.S.C. §
1988), cert. denied, 488 U.S. 926. If such fee awards are permitted
under federal statute, we fail to see how permitting parties to contract for
them violates public policy
.