                                                                                FILED
                                                                        Aug 10 2017, 8:24 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court




ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEES
Bradley Kim Thomas                                         Michael H. Michmerhuizen
Aaron Westlake                                             Barrett McNagny, LLP
Thomas Law Firm, PC                                        Fort Wayne, Indiana
Auburn, Indiana                                            Paul S. Sauerteig
                                                           Snow & Sauerteig, LLP
                                                           Fort Wayne, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Landmark Legacy, LP and                                    August 10, 2017
Dennis W. Fahlsing,                                        Court of Appeals Case No.
Appellants-                                                02A04-1702-PL-347
Plaintiffs/Counter Defendants,                             Appeal from the Allen Superior
        v.                                                 Court
                                                           The Honorable Craig J. Bobay,
Dennis Runkle, D.R. Financial,                             Judge
Inc., and D.R. Financial Group,                            Trial Court Cause No.
Inc.,                                                      02D02-1411-PL-431
Appellees-Defendants/Counter-
Plaintiffs.



Riley, Judge.




Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017                           Page 1 of 21
                                 STATEMENT OF THE CASE
[1]   Appellants-Plaintiffs/Counter-Defendants, Landmark Legacy, L.P. (Landmark)

      and Dennis W. Fahlsing (Fahlsing) (collectively, Appellants), appeal the trial

      court’s grant of attorney fees to Appellees-Defendants/Counter-Plaintiffs,

      Dennis Runkle (Runkle), D.R. Financial, Inc. (Financial) and D.R. Financial

      Group (Financial Group) (collectively, Appellees).


[2]   We affirm and remand.


                                                    ISSUES
[3]   Appellants present us with four issues, which we consolidate and restate as the

      following single issue: Whether the trial court erred by awarding attorney fees

      to Appellees pursuant to Indiana Code section 34-52-1-1(b).


[4]   In their Appellate Brief, Appellees request this court to award appellate attorney

      fees pursuant to Indiana Appellate Rule 66(E).


                       FACTS AND PROCEDURAL HISTORY
[5]   Around 2002, Fahlsing engaged the financial planning and asset protection

      services of Runkle, the owner of Financial. Runkle had worked as a financial

      planner since 1986 and created Financial in 2001, offering a “combined team”

      of CPAs and attorneys to “agree on a best solution” for his clients. (Transcript

      p. 12). Fahlsing especially inquired about limited partnerships and Runkle

      assisted Fahlsing and his then-wife, Linda Jackson (Jackson), in setting up a

      family limited partnership, named Shangela, L.P. Runkle advised Fahlsing and

      Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 2 of 21
      Jackson about the duties and responsibilities of a general partner versus a

      limited partner and specifically informed them that they could not use

      partnership assets for their own personal use. However, during the bench trial,

      Fahlsing denied ever having received this advice, and instead maintained that

      Runkle had told him that he could freely dispose of the partnership assets.

      Although Attorney John Wray (Attorney Wray) prepared the documentation

      for Shangela, he did not consult with Fahlsing as to the purpose of the

      partnership, nor did he advise Fahlsing about his rights and responsibilities.


[6]   In 2003, Runkle retired and moved to Florida. He ceased to have any

      ownership in Financial, which was taken over by Jim Miller (Miller) and Kris

      Hannah (Hannah), who had both previously worked with Runkle. In 2006,

      Miller and Hannah split, after which Hannah created Financial Group and

      moved the company to a new location. Runkle continued to work as a

      consultant for Financial Group.


[7]   In late 2004 or early 2005, Fahlsing sought Runkle’s assistance in setting up an

      additional limited partnership, known as Landmark. At the time, Runkle

      advised Fahlsing of his rights and responsibilities with regard to the partnerhip.

      At the bench trial, the parties disputed the substance of the advice rendered by

      Runkle. Again, Attorney Wray prepared the documentation for the creation of

      Landmark, but did not consult with Fahlsing as to the purpose of the

      partnership or as to Fahlsing’s rights and responsibilities. Landmark was

      formed on February 8, 2005, with Fahlsing as 1% General Partner and 99%

      Limited Partner. On February 15, 2005, Fahlsing’s interests in Landmark were

      Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 3 of 21
      assigned to the 2005 Dennis Wayne Fahlsing Revocable Living Trust. The

      following day, Fahlsing’s daughters, Angela Taylor (Angela) and Shannon

      Fahlsing (Shannon), were each given 44% limited partnership interests in

      Landmark.


[8]   Between 2005 and 2009, after the creation of Landmark, Fahlsing executed

      twenty-one promissory notes whereby he personally agreed to repay Landmark

      for loans he had taken from Landmark which were collateralized by titles of

      certain motor vehicles. Runkle did not assist Fahlsing with the preparation of

      the promissory notes, nor did he recommend that Fahlsing execute these notes.


[9]   On June 7, 2011, Angela and Shannon filed a lawsuit against Fahlsing and

      Landmark in the Dekalb Superior Court, alleging that Fahlsing had committed

      wrongful acts in his capacity as general partner of Landmark, including breach

      of fiduciary duties, failure to provide accounting, use of partnership assets for

      personal obligations, accepting an unreasonable salary, and failure to provide

      financial records. Shortly after receiving the complaint, Fahlsing met with

      Attorney Wray who represented him in the suit. At the time, Attorney Wray

      and Fahlsing discussed the rights and responsibilities of a general partner in a

      limited partnership. On June 29, 2011, Fahlsing filed a complaint against

      Angela and Shannon in the Noble Circuit Court seeking payment of the 44%

      limited partnership shares held by each of his daughters. In connection with

      this proceeding, Fahlsing filed an affidavit with the Noble Circuit Court

      wherein he affirmed under oath that he had assigned the limited partnership

      shares to his daughters in exchange for a loan. The Noble Circuit Court stayed

      Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 4 of 21
       the case and ordered the parties to arbitration. Fahlsing was eventually able to

       settle the issue by granting Angela and Shannon each a $480,000 mortgage,

       secured by four real estate parcels owned by Landmark, in exchange for

       Angela’s and Shannon’s transfer of their respective 44% limited partnership

       shares to Fahlsing.


[10]   On November 21, 2014, Fahlsing and Landmark filed their Complaint in the

       underlying matter, contending that Runkle, Attorney Wray, Financial, and

       Financial Group had breached their fiduciary duty, and had committed

       negligence and malpractice. On October 16, 2015, Runkle, Financial, and

       Financial Group filed a motion for summary judgment, as well as a motion for

       leave to file a counterclaim, alleging that Fahlsing’s contentions were disputed

       by Jackson and his daughter and that the statute of limitations barred

       Appellants’ claim. In addition, Runkle, Financial, and Financial Group

       requested an award of attorney fees for Appellants’ groundless and frivolous

       litigation, pursuant to Ind. Code § 34-52-1-1. At the same time, Attorney Wray

       also filed a motion for summary judgment. On December 2, 2015, Appellants

       filed their answer and affirmative defenses to the counterclaim, and on

       December 18, 2015, they filed their memorandum in opposition to the

       respective motions for summary judgment.


[11]   On January 12, 2016, the trial court conducted a hearing on the motions for

       summary judgment. On February 12, 2016, the trial court issued its summary

       judgment, finding that Financial Group was not liable for the actions of

       Financial based on the alter ego doctrine, and the statute of limitations barred

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 5 of 21
       the claims against Runkle, Financial, and Financial Group. However, the trial

       court also concluded that because the continuous representation doctrine

       applied with respect to Attorney Wray, the statute of limitations did not bar

       Appellants’ contentions against him. After Runkle, Financial, and Financial

       Group received summary judgment—which Appellants did not appeal—the

       trial court bifurcated the matter and allowed the counterclaim for attorney fees

       to proceed formally to trial. The trial court conducted a bench trial on the

       request for attorney fees on November 2, 2016. On January 20, 2017, the trial

       court issued its Order, concluding that Appellants’ claims were frivolous,

       unreasonable, and groundless, and entered a judgment in favor of Appellees in

       the amount of $55,003.17.


[12]   Appellants now appeal. Additional facts will be provided as necessary.


                                DISCUSSION AND DECISION
                                      I. Indiana Code section 34-52-1-1(b)


[13]   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. Smyth v. Hester, 901 N.E.2d 25, 32 (Ind. Ct. App.

       2009), reh’g denied, trans. denied. Here, the trial court awarded fees pursuant to

       Indiana Code section 34-52-1-1. Specifically, subsection (b) of Indiana Code

       section 34-52-1-1, also known as the General Recovery Rule, provides:

               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:

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017     Page 6 of 21
               (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.


       Such a statutory award may be made “upon a finding” of any of the statutory

       bases. Smyth, 901 N.E.2d at 33.


[14]   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.

       Dunno v. Rasmussen, 980 N.E.2d 846, 850-51 (Ind. Ct. App. 2012). 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. at 851. A claim or defense is

       “groundless” if no facts exist which support the legal claim relied on and

       presented by the losing party. Id. However, an action is not groundless merely

       because a party loses on the merits. Id. Bad faith is demonstrated where the

       party presenting the claim is affirmatively operating with furtive design or ill

       will. Id.




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017    Page 7 of 21
[15]   The trial court’s decision to award attorney fees under I.C. § 34-52-1-1 is subject

       to a multi-level review: the trial court’s findings of fact are reviewed under the

       clearly erroneous standard, and legal conclusions regarding whether the

       litigant’s claim was frivolous, unreasonable, or groundless are reviewed de novo.

       Purcell v. Old Nat’l. Bank, 972 N.E.2d 835, 843 (Ind. 2012). In reviewing the

       findings of fact, we neither reweigh the evidence nor judge witness credibility,

       but rather we review only the evidence and reasonable inferences drawn

       therefrom that support the trial court’s findings and decision. Smyth, 910

       N.E.2d at 33. In reviewing under the clearly erroneous standard, we will not

       reverse unless we are left with a definite and firm conviction that a mistake has

       been made. Id. Finally, the trial court’s decision to award attorney fees and

       any amount thereof is reviewed for an abuse of discretion. Purcell, 972 N.E.2d

       at 843. A trial court abuses its discretion if its decision clearly contravenes the

       logic and effect of the facts and circumstances or if the trial court has

       misinterpreted the law. Id.


[16]   Addressing the individual contentions raised in Appellants’ Complaint, the trial

       court concluded that (1) Appellants’ claim that Appellees’ had provided

       negligent advice was groundless and unreasonable; (2) Fahlsing’s claim that

       Runkle’s purported negligent advice had damaged his relationship with his

       daughters was groundless and unreasonable; (3) Appellants’ contention that

       under the alter ego theory, Financial Group was liable for the actions of

       Financial was frivolous, unreasonable, and groundless; and (4) the statute of




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 8 of 21
       limitations barred Appellees’ claims and the pursuit thereof amounted to

       frivolous conduct by Appellants. We will review each finding in turn.


                                                1. Negligent Advice


[17]   Appellants first allege that Appellees provided negligent advice by failing to

       inform Fahlsing about the obligations and responsibilities of a general partner

       in a limited partnership. In support of these contentions, Appellants rely on the

       testimony of Fahlsing, who categorically stated that Runkle told him that he

       was “like a god on this because this is his creation, and he could do anything he

       wanted to with it.” (Tr. p. 125). Fahlsing denied ever being informed not to

       use the assets of the partnership for his own personal use.


[18]   On the other hand, both Runkle and Attorney Wray testified to having

       educated Fahlsing on the rights and obligations of a general partner in a limited

       partnership. Specifically, Runkle stated that he told Fahlsing that “a general

       partner controls the entity, makes the investments, is responsible for managing

       it for the limited partners[.]” (Tr. p. 19). Until the filing of the current lawsuit,

       Fahlsing never complained that Runkle had inadequately described the

       differences between a general and limited partner. Likewise, Attorney Wray

       testified that Runkle had explained correctly “how the limited partnership

       functions, how it works, what you can have in a limited partnership, what a

       limited partnership can do, how it can be treated for tax purposes” to Fahlsing

       because [Fahlsing] “knew all that in 2009 when he came to me for his divorce

       and brought all the record books.” (Tr. p. 104).


       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 9 of 21
[19]   When faced with this contradictory evidence, the trial court unequivocally

       concluded that the “[c]ourt does not find Fahlsing to be a credible witness at all,

       as the inconsistencies and content of Fahlsing’s testimony only served to

       establish his propensity for untruthfulness.” (Appellants’ App. Vol. II, p. 24).

       Specifically, the trial court noted:


               For example: At the bench trial, Fahlsing freely admitted that
               the June 29, 2011 Complaint he filed against his daughters
               knowingly contained untrue statements; . . . .Fahlsing’s
               testimony contradicted his sworn discovery responses; and upon
               examination by opposing counsel, . . . regarding the admittedly
               untrue statements contained in the Complaint and Affidavit,
               Fahlsing astonishingly testified: “My attorney can lie, cheat,
               and steal, and I can’t?”


               With regards to Fahlsing’s testimony that Runkle allegedly
               rendered negligent advice to Fahlsing as to the general
               partnership duties, the [c]ourt finds such testimony to also be
               without credibility for the following reasons: Fahlsing executed
               twenty-one (21) promissory notes between himself, as the
               borrower, and Landmark, as the lender, evidencing his attempt
               to dissociate his personal affairs from the affairs of Landmark. If
               Runkle had indeed advised Fahlsing that the partnership assets
               could be used for Fahlsing’s own personal use, logically, there
               would be no need for Fahlsing to draft and execute the
               promissory notes, nor attempt to separate his personal affairs
               from Landmark[.]


       (Appellants’ App. Vol. II, pp. 24-25) (emphasis in original).


[20]   As we are not allowed to reweigh the credibility of the witnesses as established

       by the trial court and Appellants have presented us with no credible evidence


       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 10 of 21
       supporting their contention of negligence, we affirm the trial court’s conclusion

       that Appellants’ claim is groundless.


                                  2. Fahlsing’s Relationship with Daughters


[21]   Again, solely relying on Fahlsing’s own testimony, Appellants assert that

       Runkle’s advice severely damaged Fahlsing’s relationship with his daughters.

       On the other hand, Jackson testified at trial that Fahlsing’s claim was

       “absurd[;]” whereas Shannon informed the court that she had “never met

       [Runkle] until today.” (Tr. pp. 54, 76). Again, the trial court concluded that

       “no credible facts exist to substantiate such a claim, and the only evidence

       offered was Fahlsing’s own self-serving testimony, which, for the same reasons

       set forth above, the [c]ourt does not consider to be remotely credible.”

       (Appellant’s App. Vol. II, p. 25). Mindful of the trial court’s credibility

       determination and the absence of any evidence supporting Appellants’ claim,

       we affirm the trial court’s conclusion that Appellants’ contention is groundless.


                                               3. Alter Ego Doctrine


[22]   Maintaining that there was no meaningful separation between the names,

       purpose, ownership, and business activities of Financial and Financial Group,

       Appellants assert that Financial Group was a mere continuation of Financial

       and, as such, can be held liable for the acts of Financial.


[23]   The corporate alter ego doctrine is a device by which a plaintiff tries to show

       that two corporations are so closely connected that the plaintiff should be able


       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 11 of 21
       to sue one for the actions of the other. Konrad Motor and Welder Service, Inc. v.

       Magnetech Industrial Services, Inc., 973 N.E.2d 1158, 1165 (Ind. Ct. App. 2012).

       “The purpose of the doctrine is to avoid the inequity that results when one

       corporation uses another corporation as a shield from liability.” Id. When a

       plaintiff seeks to pierce the corporate veil using this doctrine, we consider

       additional factors, including whether: (1) similar corporate names were used;

       (2) the corporations shared common principal corporate officers, directors, and

       employees; (3) the business purpose of the corporations were similar; and (4)

       the corporations were located in the same offices and used the same telephone

       numbers and business cards. Id. Corporate identity may be disregarded under

       the alter ego doctrine where multiple corporations are operated as a single

       entity; where they are “manipulated or controlled as a single enterprise through

       their interrelationship to cause illegality, fraud, or injustice or to enable one

       economic entity to escape liability arising out of an operation conducted by one

       corporation for the benefit of the whole enterprise.” Id. Factors indicating that

       a corporation is the alter ego of another may include the intermingling of

       business transactions, functions, property, employees, funds, records, and

       corporate names in dealing with the public. Id.


[24]   The trial court concluded that Appellants’ alter ego claim was frivolous,

       unreasonable, and groundless because

               a simple investigation by Fahlsing and Landmark, early on,
               would have undoubtedly revealed that: Runkle closed down
               [Financial] in 2006; Hannah subsequently formed and opened
               [Financial Group] in January 2007, an entirely separate entity;

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 12 of 21
               [Financial] and [Financial Group] are not the same entity;
               [Financial] and [Financial Group] did not merge together; and
               Runkle had no ownership nor control over [Financial Group].


       (Appellants’ App. Vol. III, p. 26).


[25]   The undisputed evidence reflects that Runkle created Financial in 2001. He

       scaled down his involvement with Financial in 2003 by moving to Florida and

       “hoping to retire.” (Tr. p. 13). He left the corporation in the hands of Miller

       and Hannah. In 2006, Miller and Hannah “kind of split apart” and Financial

       stopped doing business. (Tr. p. 13). At that point, Hannah formed Financial

       Group, which started doing business in 2007, at a different address from

       Financial and under a different FEIN number. However, Runkle allowed

       Financial to remain in good standing with the Secretary of State to receive

       trailing commissions from previously sold health care policies and used

       Financial Group’s address to do so. Nonetheless, Runkle has no ownership

       interest or control in Financial Group. Although some employees remained the

       same between the two corporations and the corporate names are similar, there

       was no intermingling of business transactions and functions, nor were the

       corporations manipulated or controlled as a single entity. See Konrad Motor and

       Welder Service, Inc., 973 N.E.2d at 1165. Both Runkle and Hannah viewed the

       corporations as separate entities, without any reincarnation of one company

       into the other. Although the claim might have been plausible at the initiation of

       the lawsuit, all these facts could have been discovered upon some simple

       research and were definitely known by Appellants at the moment they filed


       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 13 of 21
       their motion for summary judgment. The General Recovery Rule “places an

       obligation on litigants to investigate the legal and factual basis of the claim

       when filing and to continuously evaluate the merits of claims and defenses

       asserted throughout litigation.” General Collections, Inc. v. Decker, 545 N.E.2d 18,

       20 (Ind. Ct. App. 1989). Accordingly, we cannot say that the trial court erred

       by concluding that Appellants’ claim based on the alter ego doctrine was

       groundless and frivolous.


                                             4. Statute of Limitations


[26]   In an attempt to circumvent the two-year statute of limitations, Appellants

       construct a novel theory that the continuous representation rule, which tolls the

       statute of limitations in cases of purported attorney malpractice, should be

       extended to the financial services realm. “The theory was that

       Runkle/[Financial] and Wray were engaged in a joint enterprise whereby

       Runkle/[Financial] provided legal services and advice with regard to things

       such as limited partnerships and trusts purported to be drafted by Wray when

       Wray financially benefitted from this arrangement.” (Appellants’ Br. p. 25).


[27]   Under Indiana’s discovery rule, a cause of action accrues, and the statute of

       limitations begins to run, when the plaintiff knew or, in the exercise of ordinary

       diligence, could have discovered that an injury has been sustained as a result of

       the tortious act of another. Doe v. United Methodist Church, 673 N.E.2d 839, 842

       (Ind. Ct. App. 1996), trans. denied. For a cause of action to accrue, it is not




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 14 of 21
       necessary that the full extent of the damage be known or even ascertainable but

       only that some ascertainable damage has occurred. Id.


[28]   Appellants do not dispute that, pursuant to the discovery rule, Fahlsing was put

       on notice that he had sustained an injury by acting on Runkle’s purported

       negligent advice that a general partner could use partnership assets for his

       personal use when he received the complaint filed against him by his daughters

       on June 7, 2011, and which alleged, as follows:

               Upon further information and belief, [Fahlsing] has been using
               Landmark assets to pay non-partnership liabilities and/or his
               personal obligations.


               [Fahlsing’s] actions in using Landmark assets to pay non-
               partnership liabilities and/or individual obligations, as well as his
               failure to provide an accounting of the assets and affairs of
               Landmark, in accordance with the Partnership Agreement, and
               his threat of dissipation of Landmark assets all constitute a
               breach of the Partnership Agreement.


               [Fahlsing’s] actions in using Landmark assets to pay non-
               partnership liabilities and/or his individual obligations, as well as
               his failure to provide an accounting of the assets and affairs of
               Landmark, constitute a breach of the Partnership Agreement.


       (Tr. Exh. Vol. I, Exh. 4). As such, Appellants had until June 7, 2013, to file

       their Complaint, which they failed to file until November 21, 2014, more than

       three years after Fahlsing could have discovered his injury.




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 15 of 21
[29]   However, Appellants now contend that the statute of limitations was tolled by

       the continuous representation theory. Under the continuous representation

       doctrine, the statute of limitations does not commence until the end of an

       attorney’s representation of a client in the same matter in which the alleged

       malpractice occurred. Biomet, Inc. v. Barnes & Thornburg, 791 N.E.2d 760, 765

       (Ind. Ct. App. 2003), trans. denied. In Bambi’s Roofing Inc. v. Moriarty, 859

       N.E.2d 347, 357 (Ind. Ct. App. 2006), we applied the continuous representation

       rule to the accounting profession, limiting the rule to the accountant’s

       representation in the same, specific matter. The purpose of the rule is to give

       accountants an opportunity to remedy their errors, establish that there was no

       error, or attempt to mitigate the damage caused by their errors, while still

       allowing the aggrieved client the right to later bring a malpractice action, and

       not to circumvent the statute altogether by continuously representing the client.

       Id. at 358. Applying the rule to the current situation, Appellants contend—

       without citing any supporting precedents—that due to the joint enterprise

       between Runkle and Attorney Wray for which one can be held liable for the

       negligent actions of another, the continuous representation applicable to

       Attorney Wray should be applied to Runkle as well.


[30]   However, Appellants’ novel theory fails right out of the gate. There was never

       any joint enterprise between Runkle and Attorney Wray that led to the

       culmination of mutually dependent services, whereby both “should be held

       jointly liable to the extent [Fahlsing] is damaged by deficient advice;” rather, at




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 16 of 21
       most there was a loose collaboration between the two persons. 1 (Appellants’

       Br. p. 25). At trial, Runkle testified that Attorney Wray was never an employee

       of Financial, nor did he ever possess any ownership interest in Financial.

       Instead, depending on the needs of Financial’s clients, Runkle would bring in

       specialists, one of which could be Attorney Wray, and “collaborate with the

       appropriate people.” (Tr. p. 17). “Every client that comes in is given a choice

       whether they would like to seek personal counsel or use somebody that we’re

       comfortable working with.” (Tr. p. 40). Attorney Wray was not the only

       attorney referred to by Runkle to develop or produce limited partnership and

       trust agreements. If a client was unhappy with the representation, Runkle could

       offer names of other trustworthy professionals. “This was routinely offered.”

       (Tr. p. 42). In his testimony, Attorney Wray confirmed that he was not

       employed by either company, nor did he possess an ownership interest. He

       explained that he had a separate office but also could use an office at Financial

       if the clients requested personal meetings with him at the company.


[31]   Furthermore, assuming arguendo that if a joint enterprise existed, the continuous

       representation theory is not applicable to the relationship between Runkle and

       Attorney Wray. Analyzing Appellants’ claims, they assert that

       “Runkle/[Financial] provided legal service and advice with regard to things




       1
        Because we determine that there is no joint enterprise between Runkle and Attorney Wray, we will not
       address Appellants’ argument that when members of an unincorporated association are engaged in a joint
       enterprise, the negligence of each member in support of that enterprise is imputable to each and every other
       member.

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017                       Page 17 of 21
       such as limited partnerships and trusts purported to be drafted by [Attorney

       Wray] when [Attorney Wray] had no meaningful involvement and that both

       Runkle/[Financial] and [Attorney Wray] financially benefitted from this

       arrangement.” (Appellants’ Br. p. 25). As such, Appellants reason that the

       wrong occurred during the general course of an ongoing professional

       relationship, not in a continued representation with respect to a particular

       undertaking or specific transaction in which they had committed a professional

       error. See Bambi’s Roofing, Inc., 859 N.E.2d at 357 (“Essentially, the case law

       has established that the continuous representation must be in connection with

       the specific matter directly in dispute, and not merely the continuation of a

       general professional relationship.”)


[32]   Most importantly, Runkle is neither an attorney nor a certified public

       accountant. Appellants cannot point to any precedents that would suggest the

       continuous representation doctrine applies to the provision of financial services,

       nor can they proffer a rational argument for extending the continuous

       representation theory to include financial advisors. Although “commencement

       of an action may often be justified on relatively insubstantial grounds,” even the

       most cursory review of the law would have revealed ample reason not to pursue

       this claim. Kahn v. Cundiff, 543 N.E.2d 627, 629 (Ind. 1989). While in some

       situations a running of the statute of limitations will be dependent upon

       information derived from the discovery process or even at trial, here we find




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 18 of 21
       that Appellants’ assumptions with respect to the validity of this claim were

       completely groundless and pursuing the claim nevertheless was frivolous. 2


                                             II. Appellate Attorney Fees


[33]   In their appellate brief, Appellees request an award of appellate attorney fees

       pursuant to Appellate Rule 66(E), which provides, in pertinent part, “[t]he

       [c]ourt may assess damages if an appeal . . . is frivolous or in bad faith.

       Damages shall be in the [c]ourt’s discretion and may include attorney’s fees.”

       Our discretion to award attorney fees under Indiana Appellate Rule 66(E) is

       limited, however, to instances when an appeal is permeated with meritlessness,

       bad faith, frivolity, harassment, vexatiousness, or purpose of delay. Thacker v.

       Wentzel, 797 N.E.2d 342, 346 (Ind. Ct. App. 2003). Additionally, while Indiana

       Appellate Rule 66(E) provides this court with discretionary authority to award

       damages on appeal, we must use extreme restraint when exercising this power

       because of the potential chilling effect upon the exercise of the right to appeal.

       Id.


[34]   Indiana appellate courts have formally categorized claims for appellate attorney

       fees into substantive and procedural bad faith claims. Boczar v. Meridian Street

       Found., 749 N.E.2d 87, 95 (Ind. Ct. App. 2001). To prevail on a substantive




       2
         Appellants contend for the first time in their appellate brief that Indiana Code section 34-52-1-1(b) does “not
       support a standalone counterclaim.” (Appellant’s Br. p. 30). As “parties cannot raise an argument for the
       first time on appeal,” we find that Appellants waived our review of the issue. Welty Bldg. Co., Ltd. v. Indy
       Fedreau Co., LLC, 985 N.E.2d 792, 799 (Ind. Ct. App. 2013).

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017                          Page 19 of 21
       bad faith claim, the party must show that the appellant’s contentions and

       arguments are utterly devoid of all plausibility. Id. Procedural bad faith, on the

       other hand, occurs when a party flagrantly disregards the form and content

       requirements of the rules of appellate procedure, omits and misstates relevant

       fact appearing in the record, and files briefs written in a manner calculated to

       require the maximum expenditure of time both by the opposing party and the

       reviewing court. Id. Even if the appellant’s conduct falls short of that which is

       “deliberate by design,” procedural bad faith can still be found. Id.


[35]   Appellees first argue that Appellants’ complete disregard for Fahlsing’s

       credibility issue amounted to procedural bad faith which entitled them to an

       award of appellate attorney fees. We disagree. While Appellants failed to

       explicitly mention Fahlsing’s lack of credibility in their statement of facts, they

       did advise this court that certain evidence was disputed. Furthermore,

       Appellants did point out in their argument section that Fahlsing’s credibility

       had been called into doubt and therefore they would refer to other evidence to

       support their claims. Albeit that the admission of Fahlsing’s credibility issue is

       downplayed to an almost cursory reference, this flaw does not rise to the level

       of egregiousness punishable under Appellate Rule 66(E).


[36]   Turning to the substantive bad faith, Appellees advance that “Fahlsing’s

       arguments on appeal are utterly devoid of all merit [and] warrant[] an award of

       fees.” (Appellees’ Br. p. 39). Relying on the same substantive arguments that

       the trial court denied on summary judgment and pursuant to which the trial

       court awarded attorney fees, Appellants nevertheless ignored these unfavorable

       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 20 of 21
       determinations and rulings by the trial court and instituted these appellate

       proceedings. As noted by the trial court, a simple investigation could have

       revealed that Appellants’ arguments were utterly devoid of all plausibility and

       Appellants’ position was not consistent with reasonable advocacy grounded in

       established legal principles. Therefore, we conclude that this appeal was merely

       another attempt to harass the parties involved. Accordingly, we remand this

       cause to the trial court for a determination of reasonable appellate attorney fees

       to be awarded to Appellees.


                                              CONCLUSION
[37]   Based on the foregoing, we hold that the trial court did not commit error by

       awarding attorney fees to Appellees pursuant to Indiana Code section 34-52-1-

       1(b). Furthermore, we grant Appellees’ request to award appellate attorney fees

       pursuant to Indiana Appellate Rule 66(E) and remand to the trial court for

       determination of reasonable appellate attorney fees.


[38]   Affirmed and remanded.


[39]   Najam, J. and Bradford, J. concur




       Court of Appeals of Indiana | Opinion 02A04-1702-PL-347 | August 10, 2017   Page 21 of 21
