                                                                                 FILED
                                                                             Jul 15 2019, 5:52 am

                                                                                 CLERK
                                                                             Indiana Supreme Court
                                                                                Court of Appeals
                                                                                  and Tax Court




ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEES:
Anne K. Ricchiuto                                           OUTFRONT MEDIA, LLC AND
Brian J. Paul                                               DAVID WATKINS
Matthew C. Olsen                                            Alan S. Townsend
Indianapolis, Indiana                                       Bradley M. Dick
David A. Lewis                                              Indianapolis, Indiana
Jeffersonville, Indiana                                     ATTORNEY FOR APPELLEES:
                                                            NO MOORE, INC. AND THE
                                                            SCHLOSSER FAMILY LIMITED
                                                            PARTNERSHIP
                                                            Michael M. Maschmeyer
                                                            Jeffersonville, Indiana



                                             IN THE
     COURT OF APPEALS OF INDIANA

River Ridge Development                                     July 15, 2019
Authority,                                                  Court of Appeals Case No.
Appellant-Plaintiff,                                        18A-PL-2347
                                                            Appeal from the Clark Circuit
        v.                                                  Court
                                                            The Honorable Richard Striegel,
Outfront Media, LLC, David                                  Senior Judge
Watkins, No Moore, Inc., The                                Trial Court Cause No.
Schlosser Family Limited                                    10C02-1709-PL-99
Partnership, The Town of Utica,
and the Utica Board of Zoning
Appeals,
Appellees-Defendants.




Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                              Page 1 of 22
      Tavitas, Judge.


                                               Case Summary
[1]   River Ridge Development Authority (“River Ridge”) appeals the trial court’s

      order granting attorney fees to Outfront Media, LLC (“Outfront”), David

      Watkins, No Moore, Inc. (“No Moore”), the Schlosser Family Limited

      Partnership (“the Schlosser Family”), the Town of Utica, and the Utica Board

      of Zoning Appeals (“Utica BZA”) (collectively, “Appellees”). We reverse.


                                                        Issue
[2]   River Ridge raises numerous issues, which we revise and restate as whether the

      trial court’s award of attorney fees to Appellees is clearly erroneous.




                                                       Facts
[3]   River Ridge is “a military reuse authority and governmental authority duly

      formed and existing under Indiana Code sections 36-7-30-1, et seq.”

      Appellant’s App. Vol. IV p. 14. River Ridge “oversees construction and

      development of the River Ridge Commerce Center,” a business and

      manufacturing park near the Ohio River and State Road 265 in Clark County,

      Indiana. Id. at 15.


[4]   Outfront is a company that conducts an outdoor advertising business. In

      December 2015, Outfront sought to construct seven billboards on property

      owned by No Moore and the Schlosser Family near the property owned by

      Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019         Page 2 of 22
      River Ridge. At some point, the Utica Town Council President, Steve Long,

      approved Outfront’s permit applications in an undated memo. On October 11,

      2016, the Utica Town Council’s attorney informed the Council that they

      needed to “ratify” Long’s signature on the permits, which it did. Appellant’s

      App. Vol. IV p. 164. In March 2017, Watkins, an employee of Outfront, filed

      outdoor advertising sign permit applications with the Indiana Department of

      Transportation (“INDOT”). In April 2017, INDOT approved the applications

      for the seven permits filed by Watkins.


[5]   During the Fall of 2016 and again in the Fall of 2017, River Ridge contacted

      Outfront to discuss the possibility of Outfront constructing signage at the

      entrance to River Ridge’s facility. Appellees claim that River Ridge was

      interested in a billboard, while River Ridge claims it was interested in a

      “monument sign, some type of signage strictly for River Ridge.” Tr. Vol. II p.

      84.


[6]   In August 2017, the Kentuckiana Regional Planning and Development Agency 1

      sent information to INDOT to nominate a portion of State Road 265 as a scenic

      byway. River Ridge, along with several other groups and governmental

      agencies, supported the nomination.




      1
       The Kentuckiana Regional Planning & Development Agency is “an association of local governments in a
      nine-county region of southern Indiana and north central Kentucky.” http://www.kipda.org/ (last visited
      June 27, 2019). It provides “regional planning, review and technical services in the areas of public
      administration, social services and transportation as well as community ridesharing programs.”
      http://www.kipda.org/About_KIPDA.aspx (last visited June 27, 2019).

      Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                            Page 3 of 22
[7]   In September 2017, River Ridge filed a petition with the Utica BZA and

      challenged the validity of the permit issued by the Utica Town Council for the

      construction of the seven billboards (“BZA Petition”). River Ridge alleged that

      the permits violated the Utica Zoning Ordinance and that the Town Council

      President lacked authority to issue the permits. At a November 14, 2017

      hearing before the Utica BZA, the BZA refused to hear the petition because the

      BZA was “not in the position to make or review or modify any determination

      made by the executive of this town.” Appellant’s App. Vol. V p. 97.


[8]   Also in September 2017, River Ridge filed a complaint with the Clark County

      Circuit Court against Outfront, Watkins, No Moore, the Schlosser Family, the

      Town of Utica, and INDOT regarding the billboards. The complaint contained

      four counts: (1) a claim for declaratory judgment that neither the billboards nor

      the INDOT permits were allowed; (2) a claim for public nuisance caused by the

      billboards; (3) a claim for private nuisance caused by the billboards; and (4) a

      request for a permanent injunction. Appellees filed multiple motions to

      dismiss, and River Ridge subsequently raised an issue regarding a conflict of

      interest for the Town of Utica’s counsel.


[9]   Before the trial court ruled on the motions to dismiss and after the Utica BZA

      refused to hear the BZA Petition, River Ridge filed a motion to amend its

      complaint to add certain claims and dismiss other claims, which the trial court

      granted. In its December 11, 2017 order, the trial court stated:


              (a) River Ridge’s First Amended Complaint and Verified Petition
              for Judicial Review (the “Amended Complaint”), attached to

      Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019        Page 4 of 22
               Plaintiff’s Motion as Exhibit 1, is hereby deemed filed as of the
               date of this Order; (b) Plaintiff’s prior claims of public and private
               nuisance (Counts II and III of Plaintiff’s initial Complaint) are
               hereby dismissed, with each party to bear its own attorneys’ fees
               and costs related to such voluntarily dismissed claims; (c)
               Defendants the Indiana Department of Transportation
               (“INDOT”) and Joe McGuinness, as Commissioner of INDOT,
               are hereby dismissed from this litigation without prejudice, with
               each party to bear its own attorneys’ fees and costs; and (d) all
               remaining Defendants shall respond to the Amended Complaint
               within thirty (30) days after conducting a mediation of this
               matter, which mediation is currently being scheduled by the
               parties.


       Appellant’s App. Vol. V pp. 98-99.


[10]   The amended complaint included claims against Outfront, Watkins, No Moore,

       the Schlosser Family, the Town of Utica, and the Utica BZA for: (1)

       declaratory judgment that the billboards were not allowed; (2) a request for a

       permanent injunction; (3) a verified petition for judicial review of the BZA; and

       (4) a verified action for mandate against the Utica BZA. The Appellees then

       filed motions to dismiss the amended complaint.


[11]   On April 30, 2018, the Indiana Scenic Byway Committee approved an

       application for S.R. 265 to become a scenic byway. A scenic byway

       designation would apparently prevent additional billboards from being

       constructed. On the same day, River Ridge filed a notice of voluntary dismissal

       of the amended complaint with prejudice pursuant to Indiana Trial Rule

       41(A)(1)(a).


       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019           Page 5 of 22
[12]   Outfront, Watkins, No Moore, the Schlosser Family, and the Town of Utica

       then filed motions for attorney fees. Outfront requested $149,918.01 in attorney

       fees; the Town of Utica requested $51,824.52; and No Moore/the Schlosser

       Family requested $35,698.10, for a total of $237,440.63 in attorney fees. 2 After

       additional briefing on the matter, the trial court held a hearing at which

       evidence was presented on the motion for attorney fees. The parties then

       submitted proposed orders, with the Appellees filing one joint proposed order.

       The trial court then entered findings of fact and conclusions of law granting

       Appellees’ motions for attorney fees and ordered River Ridge to pay

       $237,440.63 in Appellees’ attorney fees. River Ridge now appeals.


                                                       Analysis
[13]   The trial court here entered findings of fact and conclusions of law pursuant to

       Indiana Trial Rule 52(A). In reviewing findings made pursuant to Trial Rule

       52, we first determine whether the evidence supports the findings and then

       whether findings support the judgment. K.I. ex rel. J.I. v. J.H., 903 N.E.2d 453,

       457 (Ind. 2009). On appeal, we “shall not set aside the findings or judgment

       unless clearly erroneous, and due regard shall be given to the opportunity of the

       trial court to judge the credibility of the witnesses.” Id.; Ind. Trial Rule 52(A).

       A judgment is clearly erroneous when there is no evidence supporting the

       findings or the findings fail to support the judgment. K.I., 903 N.E.2d at 457.




       2
           River Ridge’s attorney fees were more than $400,000.00.


       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019          Page 6 of 22
       A judgment is also clearly erroneous when the trial court applies the wrong

       legal standard to properly found facts. Id.


[14]   We note that the trial court adopted Appellees’ proposed findings of fact and

       conclusions of law verbatim. “This practice weakens our confidence as an

       appellate court that the findings are the result of considered judgment by the

       trial court.” Cook v. Whitsell-Sherman, 796 N.E.2d 271, 274 n.1 (Ind. 2003). It is

       not uncommon or per se improper for a trial court to enter findings that are

       verbatim reproductions of submissions by the prevailing party. Cty. of Lake v.

       Pahl, 28 N.E.3d 1092, 1100 (Ind. Ct. App. 2015), trans. denied. “Although we

       by no means encourage the wholesale adoption of a party’s proposed findings

       and conclusions, the critical inquiry is whether such findings, as adopted by the

       court, are clearly erroneous.” Id.


[15]   We have significant concerns about some of the trial court’s findings. There

       was no weighing of the evidence demonstrated in the findings. Rather, many of

       the findings are merely unsupported accusations, argumentative, and

       inappropriate. Although the trial court has wide discretion in weighing

       evidence and entering findings, the completely one-sided nature of the findings

       of fact and conclusions of law in this case gives us pause. 3




       3
         We recognize that the parties and attorneys involved here appear to have significant personal animosity.
       See, e.g., Tr. Vol. II p. 111 (arguing that a letter from River Ridge’s attorney was “an attempt to harass Utica.
       Probably an attempt to crush them . . . .”); Id. at 121 (arguing that the “bad faith ranking” was “a 10”); Id. at
       140 (“Now we know from the time that we’ve spent here today that the Defendants are really irritated with
       River Ridge and they’re even emotional about having gone through this process . . . .”); Id. at 169 (“We’re
       filing pleadings in what has to be the worst bad faith in the last ten years by an appointed group of people

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                                    Page 7 of 22
[16]   For example, the trial court found:


               The timing of RRDA’s voluntary dismissal confirms that the
               purpose of this lawsuit was to buy time for the approval of the
               scenic byway designation and cause Outfront, No
               Moore/Schlosser, and the Town to incur substantial expense in
               defending and protecting their rights and interests. The timing of
               the dismissal, with prejudice, is more than coincidental. It is
               disconcerting.


       Appellant’s App. Vol. II p. 28. This finding implies that River Ridge knew the

       scenic byway designation (which it did not request) would be approved by the

       Indiana Scenic Byway Commission before the litigation was concluded. There

       is no evidence in the record, however, that River Ridge had any way of

       knowing the designation would be approved or when it would be approved.


[17]   The trial court also found: “The fact that [River Ridge] dismissed its lawsuit

       with prejudice the very same day the scenic byway commission recommended

       approval of the byway designation, despite the motions to dismiss being fully

       briefed, demonstrates that [River Ridge] knew its lawsuit was without merit.”

       Id. It seems clear that River Ridge dismissed its amended complaint on the

       same day as the Scenic Byway Commission recommended approval of the

       designation because such a designation would prevent further billboards from

       being constructed along the highway. Why would River Ridge continue




       against elected officials.”); Id. at 173 (“I’m gonna forgive Mr. Maschmeyer and unhear him to the extent
       maybe he might have called me a liar in open court.”).

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                               Page 8 of 22
       litigation to prevent the billboards from being constructed when a scenic byway

       designation would accomplish the same result? The trial court’s finding that the

       dismissal demonstrates that River Ridge knew its lawsuit was without merit is

       simply unsupported by any evidence.


[18]   In another example, the trial court found:


                It also is clear that [River Ridge] knew that Watkins was acting
                solely as an employee of Outfront. Watkins’ email with [River
                Ridge] identified him as an employee of Outfront. (Outfront
                Hearing Ex. 1-3.) [River Ridge] met with Watkins to discuss
                advertising on Outfront’s Billboards. This Court finds that [River
                Ridge] naming Watkins personally as Defendant, despite
                knowing that he acted solely as an employee of Outfront, was
                obdurate and for the purpose of harassment.


       Id. at 23. The finding fails to mention that the INDOT permits were issued to

       Watkins (not Outfront). We find that the trial court’s findings of fact are clearly

       erroneous.


[19]   We now address the trial court’s conclusions of law. River Ridge challenges

       the trial court’s authority to order an award of attorney fees to Appellees and,

       alternatively, the amount of attorney fees awarded by the trial court. 4 “[T]here




       4
         “In determining a reasonable amount of attorney's fees, consideration should be given to the nature and
       difficulty of the litigation; the time, skill, and effort involved; the fee customarily charged for similar legal
       services; the amount involved; the time limitations imposed by the circumstances; and the result achieved in
       the litigation.” R.L. Turner Corp. v. Wressell, 44 N.E.3d 26, 39 (Ind. Ct. App. 2015). Because we conclude
       that the trial court erred by awarding attorney fees here, we do not reach the issue of whether the amount of
       attorney fees awarded was reasonable.

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                                    Page 9 of 22
       are two basic attorney fee schemes: the English rule (‘loser pays’) and the

       American rule (‘every man for himself’).” State Bd. of Tax Comm’rs v. Town of St.

       John, 751 N.E.2d 657, 658 (Ind. 2001). Advocates of the American Rule note:


               [S]ince litigation is at best uncertain one should not be penalized
               for merely defending or prosecuting a lawsuit, and [ ] the poor
               might be unjustly discouraged from instituting actions to
               vindicate their rights if the penalty for losing included the fees of
               their opponents’ counsel. Also, the time, expense, and
               difficulties of proof inherent in litigating the question of what
               constitutes reasonable attorney’s fees would pose substantial
               burdens for judicial administration.


       Town of St. John, 751 N.E.2d at 658 (quoting Fleischmann Distilling Corp. v. Maier

       Brewing Co., 386 U.S. 714, 718, 87 S. Ct. 1404 (1967)). Indiana has consistently

       followed the American Rule. Loparex, LLC v. MPI Release Techs., LLC, 964

       N.E.2d 806, 816 (Ind. 2012). “Thus, in the absence of statutory authority or an

       agreement between the parties to the contrary—or an equitable exception—a

       prevailing party has no right to recover attorney fees from the opposition.” Id.

       (footnote omitted) (emphasis added).


[20]   The most common equitable exceptions to the American Rule are:


               1) The “obdurate behavior” exception, in which courts impose
               costs upon defendants as a punishment for bringing frivolous
               actions or otherwise acting in bad faith.


               2) The “common fund” exception, in which an award benefits
               members of an ascertainable class, and the court reimburses the
               prevailing litigant’s attorney fees out of that pool of money to
               prevent the unjust enrichment of free riders.
       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019           Page 10 of 22
               3) The “private attorney general” exception, where courts award
               fees to litigants who bring actions to protect important social
               policies or rights.


       Town of St. John, 751 N.E.2d at 658-59 (internal citations omitted). Indiana,

       however, has rejected the private attorney general exception, and the common

       fund exception is inapplicable here. Id. at 664.


[21]   The trial court concluded it had authority to award attorney fees to Appellees as

       follows:


               2. RRDA also contends that this Court does not have authority
               to assess costs and attorneys’ fees. This Court disagrees and
               concludes that it has three (3) independent bases for assessing
               costs and attorneys’ fees against RRDA, and each supports
               sanctioning RRDA.


               3. First, this Court has statutory authority to award costs and
               attorneys’ fees. See Ind. Code § 34-52-1-1; D.S.I. v. Natare Corp.,
               742 N.E.2d 15, 24 (Ind. Ct. App. 2000) (concluding that party
               was prevailing party when “the litigation culminated successfully
               for Natare in a judicial order that altered the litigants’ legal
               relationship in a way favorable to Natare”); Ilagan v. McAbee, 634
               N.E.2d 827, 829 (Ind. Ct. App. 1994) (“A dismissal with
               prejudice is a dismissal on the merits. A dismissal with prejudice
               is conclusive of the rights of the parties and is res judicata as to
               any questions which might have been litigated.”) (internal
               citation omitted).


               4. Second, this Court has inherent authority to fashion an
               equitable remedy that is complete and fair to all parties,
               especially those parties forced to unnecessarily incur substantial
               expense to protect their rights and interests in response to

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019            Page 11 of 22
        meritless litigation. The Indiana Supreme Court has long held
        that Indiana courts have the equitable power “to prevent
        vexatious litigation, multiplicities of suits, or circuit of actions.
        Equity will not suffer a wrong without a remedy.” King v. City of
        Bloomington, 159 N.E.2d 563, 571 (Ind. 1959). “A court’s power
        to award attorneys’ fees to a party has long been established.” In
        re Estate of Kroslack, 570 N.E.2d 117, 120 (Ind. Ct. App. 1991).


                                                *****


        6. Third, this Court has authority to award fees under the
        common-law obdurate behavior exception: “[t]he obdurate
        behavior exception only comes into play at the time a party files
        a knowingly baseless claim or at the time a party discovers that
        the claim is baseless and fails to dismiss it. Such conduct will
        constitute obdurate behavior if the trial court determines that it
        was vexatious and oppressive in the extreme and a blatant abuse
        of the judicial process.” Kikkert v. Krumm, 474 N.E.2d 503, 505
        (Ind. 1985).


        7. This Court also concludes that the frivolous lawsuit statute,
        Ind. Code § 34-52-1-1, did not abrogate the common-law
        obdurate behavior exception because the Indiana Supreme Court
        continued to recognize its validity long after enactment of the
        frivolous lawsuit statute. Mitchell v. Mitchell, 695 N.E.2d 920, 924
        (Ind. 1998). As a result, this Court concludes that the common-
        law obdurate behavior exception is of continuing validity.
        Demming v. Underwood, 943 N.E.2d 878, 888 (Ind. Ct. App. 2011)
        (concluding that “in cases of doubt, we construe [a] statute as not
        changing the common law”).


Appellant’s App. Vol. II pp. 13-14. River Ridge appeals the trial court’s grant

of attorney fees under these three grounds. We will address each separately.



Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019          Page 12 of 22
                         A. Recovery under Indiana Code Section 34-52-1-1

[22]   The trial court first awarded attorney fees pursuant to a statutory exception to

       the American Rule. Indiana Code Section 34-52-1-1(b) 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:


               (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.


       (emphasis added).


[23]   “This court has repeatedly stated that ‘prevailing party’ in the context of

       attorney fees denotes a party who successfully prosecutes his claim or asserts his

       defense.” Delgado v. Boyles, 922 N.E.2d 1267, 1270 (Ind. Ct. App. 2010), trans.

       denied. Citing D.S.I. v. Natare Corp., 742 N.E.2d 15, 24 (Ind. Ct. App. 2000),

       trans. denied, and Ilagan v. McAbee, 634 N.E.2d 827, 829 (Ind. Ct. App. 1994),

       the trial court concluded that it had statutory authority to award attorney fees

       under Indiana Code Section 34-52-1-1(b). In D.S.I., the parties reached a

       settlement agreement whereby the plaintiff/counterclaim defendant agreed to

       withdraw its lawsuit against the defendant/counterclaim plaintiff and agreed to

       a permanent injunction. We concluded that “the litigation culminated

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019            Page 13 of 22
       successfully for Natare in a judicial order that altered the litigants’ legal

       relationship in a way favorable to Natare.” D.S.I., 742 N.E.2d at 25. In Ilagan,

       we noted that “[a] dismissal with prejudice is conclusive of the rights of the

       parties and is res judicata as to any questions which might have been litigated.”

       Ilagan, 634 N.E.2d at 829.


[24]   Following D.S.I. and Ilagan, our Supreme Court, however, addressed the

       definition of “prevailing party” in Reuille v. E.E. Brandenberger Const., Inc., 888

       N.E.2d 770, 771 (Ind. 2008). There, the parties entered into an agreement for

       the construction of a home, and their contract included a provision for

       attorneys fees to a “prevailing party.” Reuille, 888 N.E.2d at 771. Reuille filed

       a complaint against Brandenberger, alleging breach of contract, breach of

       warranty, and negligence. Following mediation, “the parties reached a

       settlement on all issues with the exception of fees, which was explicitly reserved

       for judicial resolution.” Id. The trial court then denied Reuille’s request for

       attorney fees.


[25]   On appeal, our Supreme Court agreed and held that the term “prevailing party”

       appeared “to contemplate a trial on the merits and entry of a favorable

       judgment in order to obtain prevailing party status.” Id. at 771-72. The Court

       noted that several other Indiana decisions “corroborate this approach.” Id. at

       772 (citing Heritage House of Salem, Inc. v. Bailey, 652 N.E.2d 69, 79-80 (Ind. Ct.

       App. 1995) (plaintiff is not a prevailing party where it obtained a preliminary

       injunction but where judgment ultimately was rendered for the defendant),

       trans. denied; State Wide Aluminum, Inc. v. Postle Distribs., Inc., 626 N.E.2d 511,

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019           Page 14 of 22
       516-17 (Ind. Ct. App. 1993) (State Wide is not a prevailing party under § 34-1-

       32-1(b) (now § 34-52-1-1) because it did not receive a judgment), trans. denied;

       State ex rel. Prosser v. Ind. Waste Sys., Inc., 603 N.E.2d 181, 189 (Ind. Ct. App.

       1992) (a favorable ruling on a motion is not a judgment allowing the recovery

       of costs as a prevailing party)). The Court observed that an approach where the

       term “prevailing party” is “treated with ambiguity or discretion” would provoke

       “litigation about who won the litigation, in addition to litigation over the

       appropriate amount of fees.” Id.


[26]   Without mentioning or addressing Reuille, Appellees make a convoluted

       argument that they were prevailing parties, 5 and we find that their argument is

       not cogent. See Ind. Appellate Rule 46(A)(8)(a). Given our Supreme Court’s

       holding in Reuille, we conclude that none of the Appellees were prevailing

       parties because the complaint was dismissed with prejudice on the motion of

       River Ridge. As River Ridge argues: (1) the dismissal did not resolve any issues

       of law or fact; (2) the dismissal occurred before any hearing on a dispositive

       motion, before meaningful discovery, and before any hearing on the merits; and




       5
         Appellees rely in part on Indiana State Bd. of Pub. Welfare v. Tioga Pines Living Ctr., Inc., 622 N.E.2d 935, 946
       (Ind. 1993), cert. denied, 510 U.S. 1195, 114 S. Ct. 1302 (1994), which preceded Reuille and held “plaintiffs
       may be considered prevailing parties without obtaining a favorable final judgment following a full trial on the
       merits. Plaintiffs may prevail, for example, by consent decree or settlement which grants them the relief
       sought in bringing suit.” Reuille distinguished Tioga Pines, noting that Tioga Pines involved “federal statutory
       provisions.” Reuille, 888 N.E.2d at 772 n.2. Regardless, however, there was no consent decree or settlement
       that granted Appellees relief here, and thus, Tioga Pines is inapplicable.




       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                                    Page 15 of 22
       (3) no judicial order was required to effectuate the dismissal under Indiana Trial

       Rule 41(A)(1)(a). River Ridge properly points out, “[t]here can be lots of

       reasons to voluntarily dismiss a lawsuit, oftentimes having nothing to do with

       the suit’s validity, yet those reasons nearly never warrant a fees award.”

       Appellant’s Reply Br. p. 22. Under these circumstances, none of the Appellees

       were prevailing parties, and accordingly, Indiana Code Section 34-52-1-1(b) is

       inapplicable. The trial court’s finding on this issue is clearly erroneous.


                                      B. Obdurate Behavior Exception

[27]   River Ridge also argues that the trial court erred by awarding attorney fees to

       Appellees under the obdurate behavior equitable exception. The “obdurate

       behavior” exception to the American Rule applies when “courts impose costs

       upon defendants as a punishment for bringing frivolous actions or otherwise

       acting in bad faith.” Town of St. John, 751 N.E.2d at 658 (internal citations

       omitted).


[28]   River Ridge argues that the obdurate behavior exception no longer exists

       because it has been codified in Indiana Code Section 34-52-1-1(b). We agree.

       Indiana Code Section 34-52-1-1 was enacted in 1998. The prior version of the

       statute, Indiana Code Section 34-1-32-1, added the language at issue here in

       1986. In 2001, in Town of St. John, our Supreme Court noted:


               In Kikkert v. Krumm, 474 N.E.2d 503, 505 (Ind. 1985), we
               discussed the obdurate behavior exception to the American rule,
               but found it inapplicable under the facts presented. The
               following year, the Indiana legislature codified this exception in
               what is now Ind. Code Ann. § 34-52-1-1 (West 2001). The
       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019        Page 16 of 22
               “General Recovery Rule” allows prevailing parties to recover
               attorney fees if the court finds the other party brought or pursued
               a frivolous, unreasonable or groundless claim or defense, or acted
               in bad faith. Id. at § 34-52-1-1(b).


       Town of St. John, 751 N.E.2d at 659 (emphasis added). More recently, in 2012,

       in Loparex, our Supreme Court again noted that the “obdurate behavior”

       exception is now codified at Indiana Code Section 34-52-1-1. Loparex, 964

       N.E.2d at 816 n.5.


[29]   Our Supreme Court addressed a similar circumstance in Kosarko v. Padula, 979

       N.E.2d 144, 145 (Ind. 2012), where the Court held that the “Tort Prejudgment

       Interest Statute [“TPIS”] abrogates and supplants the common law

       prejudgment interest rules in cases covered by the statute.” The Court noted:


               The plain language of the TPIS makes no reference to the
               common law rules governing prejudgment interest, including the
               common law requirement that prejudgment interest can be
               awarded only where the damages are complete and ascertainable.
               But the comprehensive nature of the TPIS and the codification of
               two common law rules convince us that the legislature intended
               the statute to be the exclusive source governing the award of
               prejudgment interest in cases falling within its ambit. Not only
               does the statute establish preconditions for an award of
               prejudgment interest, Ind. Code §§ 34-51-4-5, -6, it also
               affirmatively authorizes the court to award prejudgment interest
               as part of a judgment, id. § 35-51-4-7, specifies the types of
               actions to which the statute applies and does not apply, id. §§ 34-
               51-4-1 to -4, and limits the time period and rate of any
               prejudgment interest awarded under the statute, id. §§ 34-51-4-8, -
               9. The statute spans the entire subject of prejudgment interest
               and is capable of being implemented without reference to the

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019        Page 17 of 22
               common law. Further, both Indiana Code Section 35-51-4-7
               (authorizing the court to award prejudgment interest as part of a
               judgment) and Section 34-51-4-3 (exempting punitive damages
               from prejudgment interest) codify rules that already existed at
               common law for more than one hundred years. See [New York, C.
               & St. L. Ry. Co. v. Roper], 176 Ind. [497,] 509-510, 96 N.E. [468,]
               473 [(1911)]. Were the TPIS merely supplemental in nature, as
               the defendant and amicus curiae DTCI contend, then these
               provisions would be unnecessary since any matters not addressed
               by the statute would be subject to the common law rules. In light
               of the wide-ranging treatment of the subject matter, considered in
               conjunction with the fact that the TPIS expressly adopts only
               selected portions of the common law, we conclude that the TPIS
               unmistakably implies the legislature’s intent to substitute the
               statute for the common law with respect to cases falling within
               the scope of the TPIS.


       Kosarko, 979 N.E.2d at 149-50.


[30]   Given our Supreme Court’s statements in Town of St. John and Loparex, we

       cannot say that the obdurate behavior exception to the American Rule survived

       the codification of Indiana Code Section 34-52-1-1 and its predecessor. See, e.g.,

       Kosarko, 979 N.E.2d at 149-50. We note, as our Supreme Court did in Kosarko,

       that “[t]o hold otherwise would be to render the statute and its requirements

       virtually meaningless—a party who failed to fulfill the statute’s requirements

       could merely turn to the common law for relief.” Id. at 149. Accordingly, the

       trial court’s use of the obdurate behavior exception to award attorney fees to

       Appellees is clearly erroneous.




       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019        Page 18 of 22
                                              C. Inherent Authority

[31]   In general, “[i]n the absence of statutory authority or an agreement between the

       parties to the contrary—or an equitable exception—a prevailing party has no

       right to recover attorney fees from the opposition.” C.H. v. A.R., 72 N.E.3d

       996, 1003 (Ind. Ct. App. 2017). Appellees, however, argue that the trial court

       had the inherent authority to award them attorney fees as a result of River

       Ridge’s alleged abuses.


[32]   Our courts have recognized that a trial court has inherent authority to award

       attorney fees to a party under certain circumstances. For example, our courts

       have repeatedly recognized that a trial court has inherent authority to award

       attorney fees to ensure compliance with court orders. See, e.g., In re Paternity of

       Pickett, 44 N.E.3d 756, 770 (Ind. Ct. App. 2015) (“The trial court has inherent

       authority to award attorney fees for civil contempt. . . . No statutory sanction is

       needed as a court’s power to enforce compliance with its orders and decrees

       duly entered is inherent.”) (internal citations omitted); Kahn v. Baker, 36 N.E.3d

       1103, 1116 (Ind. Ct. App. 2015) (affirming the award of attorney fees for

       contempt because, “apart from any statutory authority, a court has the inherent

       authority to enforce its orders and to compensate the aggrieved party for losses

       and damages resulting from another’s contemptuous actions”), trans. denied;

       Allied Prop. & Cas. Ins. Co. v. Good, 919 N.E.2d 144, 154 (Ind. Ct. App. 2009)

       (recognizing a trial court’s inherent ability to “sanction parties and attorneys for

       violating orders in limine and causing mistrials . . . to protect the integrity of the



       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019          Page 19 of 22
       judicial system and to secure compliance with the court’s rules and orders”),

       trans. denied.


[33]   In fact, our Supreme Court has held in Noble Cty. v. Rogers, 745 N.E.2d 194

       (Ind. 2001), that:


                        To deny a court the power to enforce obedience to its
                        lawful orders against parties who have been subjected
                        properly to its jurisdiction in the first instance, is to nullify
                        its effectiveness as an independent branch of our
                        government. The power of a court to enforce compliance
                        with its orders and decrees duly entered is inherent. No
                        statutory sanction is needed. In both equity and law a
                        court would be powerless to give effective relief were its
                        arms tied by such requirements as relator asserts are
                        necessary.


               State ex rel. Brubaker v. Pritchard, 236 Ind. 222, 226-27, 138 N.E.2d
               233, 235 (1956). See also O’Conner v. State, 178 Ind. App. 415, 382
               N.E.2d 994, 998 (1978) (“In protecting this discovery process, the
               trial court has the inherent power to impose sanctions. . . .”),
               aff’d, 272 Ind. 460, 399 N.E.2d 364 (1980). To protect the proper
               functioning of judicial proceedings, we also have imbedded this
               power in numerous court rules. See, e.g., Ind. Trial Rule 11, Ind.
               Trial Rule 37, Zwiebel v. Zwiebel, 689 N.E.2d 746, 750 (Ind. Ct.
               App. 1997) (“[Under Trial Rule 11], the trial court has the
               discretion to impose sanctions where it determines that the
               verified motion contains information that the attorney knows to
               be false.”), transfer denied. Similarly, the judicial power
               encompasses the ability to hold a litigant in contempt. See, e.g.,
               Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind. Ct. App. 1999)
               (“We have recognized the inherent judicial power to deal with
               contempt. No statutory sanction is needed as a court’s power to
               enforce compliance with its orders and decrees duly entered is
               inherent.”), transfer denied; Crowl v. Berryhill, 678 N.E.2d 828, 831
       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                Page 20 of 22
                (Ind. Ct. App. 1997) (“Time and time again, Indiana appellate
                courts have recognized the inherent judicial power to deal with
                contempt.”).


       Noble Cty., 745 N.E.2d at 198-99.


[34]   Here, we are not dealing with a party in contempt, violations of the discovery

       process, or violations of other court orders. Rather, the trial court here awarded

       attorney fees to Appellees based on a “pattern of obdurate behavior.” See

       Appellant’s App. Vol. II pp. 29, 31, 36 (“This Court concludes that [River

       Ridge’s] conduct was in bad faith, obdurate, harassing . . . .”); (“litigation was

       in bad faith, harassing, obdurate, and the lawsuit was groundless”) (“baseless

       litigation”) (“advanced meritless claims”); (“negative tactics”). These

       complaints are grounds for an award of attorney fees under Indiana Code

       Section 34-52-1-1(b), which we have found inapplicable here. 6 An award of

       attorney fees under these circumstances would merely circumvent Indiana

       Code Section 34-52-1-1(b), which we cannot allow. For these reasons, we find

       that the trial court’s findings of fact and conclusions of law are clearly

       erroneous.




       6
         Appellees rely, in part, upon Matter of Estate of Kroslack, 570 N.E.2d 117, 121 (Ind. Ct. App. 1991). There,
       Indiana Code Section 34-52-1-1(b) (then Indiana Code Section 34-1-32-1) was inapplicable because the
       attorney fees were incurred prior to the effective date of the relevant statutory provisions. Moreover, the
       obdurate behavior exception was inapplicable because it only applied to “situations in which the defendant
       has been forced to defend a baseless claim.” Kroslack, 570 N.E.2d at 120. This court, however, affirmed the
       award of attorney fees based on the party’s bad faith and conduct, which was “vexatious and oppressive in
       the extreme.” Id. at 121. Here, Indiana Code Section 34-52-1-1(b) was in effect, and an award of attorney
       fees would circumvent the express language of the statute. Moreover, we do not find that River Ridge acted
       in bad faith.

       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019                                Page 21 of 22
                                                   Conclusion
[35]   The trial court improperly ordered River Ridge to pay Appellees’ attorney fees.

       We reverse.


[36]   Reversed.


       Crone, J., and Bradford, J., concur.




       Court of Appeals of Indiana | Opinion 18A-PL-2347 | July 15, 2019     Page 22 of 22
