                                                                                      FILED
                                                                                  Apr 21 2016, 8:23 am

                                                                                      CLERK
                                                                                  Indiana Supreme Court
                                                                                     Court of Appeals
                                                                                       and Tax Court




      ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
      Nelson D. Alexander                                      Ralph E. Sipes
      Darren A. Craig                                          Anderson, Indiana
      Jenai M. Bracket
      Frost Brown Todd LLC
      Indianapolis, Indiana



                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Alexin, LLC,                                             April 21, 2016
      Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                               90A02-1510-CT-1608
              v.                                               Appeal from the Wells Circuit
                                                               Court
      Olympic Metals, LLC,                                     The Honorable Kenton W.
      Appellee-Defendant.                                      Kiracofe, Judge
                                                               Trial Court Cause No.
                                                               90C01-1307-CT-9



      Najam, Judge.


                                       Statement of the Case
[1]   Alexin, LLC (“Alexin”) appeals the trial court’s judgment in favor of Olympic

      Metals, LLC (“Olympic”) on Olympic’s counterclaim seeking attorney’s fees

      under Indiana Code Section 34-52-1-1(b). Alexin presents a single issue for our

      review, namely, whether the trial court abused its discretion when it awarded
      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                           Page 1 of 24
      Olympic attorney’s fees. Olympic cross-appeals and requests appellate

      attorney’s fees. We conclude that the trial court did not abuse its discretion

      when it awarded Olympic attorney’s fees, and we deny Olympic’s request for

      appellate attorney’s fees.


[2]   We affirm.


                                      Facts and Procedural History
[3]   Alexin is a manufacturer of aluminum extrusion ingots in Bluffton. Olympic is

      an aluminum scrap broker located in Florida. In March 2013, Anita Eads, an

      Alexin employee, communicated with Cecil Shiver, a sales representative for

      Olympic, regarding Alexin’s desire to purchase a shipment of aluminum scrap.

      On April 15, Alexin issued Purchase Order No. 16208 (“the purchase order”) to

      Olympic requesting delivery of 40,000 pounds of “2XXX Series Aluminum

      Scrap”1 for $33,800. Appellant’s App. at 292. Alexin specified in the purchase

      order that the “[m]aterial will be 2024 sheets with thin paper in between.” Id.


[4]   On April 25, Olympic delivered 40,643 pounds2 of aluminum sheets and

      extrusions to Alexin to fill the purchase order. The shipment consisted of the

      following: 26,478 pounds of 2024 aluminum sheets; 5,155 pounds of 2024

      extruded aluminum; and 8,060 pounds of 2090 aluminum sheets. Each of the

      three types of aluminum included in the shipment was clearly stamped as 2024



      1
          Series 2XXX aluminum scrap comes in different alloys, including 2024 and 2090.
      2
          This total weight included the weight of the pallets.


      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016            Page 2 of 24
      or 2090, and the various types of aluminum scrap were segregated onto separate

      pallets. The purchase order and bill of lading stated that only 2024 aluminum

      was being delivered, but a handwritten note provided to the Alexin clerk who

      received the shipment, Remington Steele, stated that part of the shipment was

      2090 aluminum. Steele stamped “Received” on the purchase order, bill of

      lading, and handwritten note, and he signed his name to each stamp under the

      word “Received.” Id. at 229-31.


[5]   On May 29, Alexin melted down some of the aluminum scrap that Olympic

      had shipped on April 25.3 The resulting batch of aluminum ingots had to be

      “scrapped” because of poor quality. Id. at 243. On May 30, Tom Horter,

      Alexin’s CEO, sent an email to other Alexin employees, including Kevin

      Ferguson, that stated the following:

                We had to scrap another cast last night for high Li[thium]. We
                have found the culprit which is alloy 2090 sheet that is in the
                2XXX series bin. We have segregated this bin for now until it
                can be sorted. The scrap is a unique sheet that is very brittle (2%




      3
          Alexin explains its ingot manufacturing process as follows:

                Alexin’s recycling process consists of essentially two stages. First, scrap aluminum is
                melted down in Alexin’s primary furnace to create a molten state. Second, alloying
                elements are added to the molten aluminum scrap in a separate furnace to produce a
                given alloy for customer use. The chemical formulation involved varies depending on the
                type of scrap (i.e., the particular alloy) and the end customer’s specifications. It is
                essential that the scrap alloy meet specifications, as the proper metallurgy for the end
                product depends on the integrity of the melted scrap.

      Appellant’s App. at 38-39.




      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                       Page 3 of 24
              or so Li[thium]) and has a shiny “aluminum-like” side and a
              darker gray side.

              Kevin, this may have been purchased simply as a 2XXX series
              package or part of one and if so can very well be in compliance
              with our [purchase order], but nonetheless we should try to find
              out from whom we bought it. Also, for all future 2XXX series
              scrap purchases, we will need to add a note that alloy 2090
              cannot be included in the package. There may be others too and
              I will get you that list. For now, we will just have to fight
              through the next few charges to get it down.


      Appellant’s App. at 243-44.


[6]   On June 4, Shiver emailed Eads and requested payment for the April 25

      shipment. In response, Eads replied as follows:


              I was out of the office due to an illness since we last spoke. The
              material we discussed last week, 2024 sheet material purchase
              order, also included 2090 sheet. Please see attached pictures of
              the 2090 sheets that were sorted from the shipment. It is stamped
              directly on the sheets “2090.” This material has High Li[thium] and
              is not usable by Alexin. We have what material we sorted out placed
              on pallets. The Alexin management team would like Olympic Metals to
              pick up the remaining material. Please review the pictures and let’s
              discuss. I am waiting [for] someone to weigh the material sorted.
              Once I have that information, I will provided [sic] that to you as
              well.


      Id. at 236 (emphases added). At some point, “[s]omeone at Alexin” told Shiver

      that Alexin had melted some of the 2090 aluminum in its furnace, which had

      “caused damage to its furnace by contaminating it[] and resulted in charges and

      fees associated with its furnace.” Id. at 224. But Alexin’s maintenance

      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 4 of 24
manager, Scott Evans, told Shiver that Alexin’s furnaces “were not damaged

during [the relevant] period” of time. Id. Accordingly, on June 12, Shiver sent

the following email to Ferguson:

        With all due respect, the commercial agreement in Alexin’s terms
        and conditions does not address the issue of Alexin’s
        responsibility with regards to quality control, segregation[,] and
        prior acceptance of material received.

        Regrettably, Alexin placed material in the furnace that resulted in
        a loss to conformity. We are not disputing that we did not ship
        [sic] 2090 material and in fact we are stating that Alexin signed
        for and issued a settlement confirmation based on a clearly
        marked packing slip that all the material was acceptable. There
        was no attempt to ever mislead Alexin or hide the material. If the
        material was not acceptable, then the first course of action should have
        been to reject the undesirable material and contact Olympic Metals. The
        burden lies with Alexin and its employees to inspect and approve
        all shipments into Alexin’s facility. To this point, Olympic
        Metals is in position [sic] of all the supporting documents that the
        load was accepted. To complicate this issue further, the material
        was not even segregated by load and was mixed and/or blended
        with other material from multiple Alexin vendors making it more
        difficult to determine the actual source of nonconforming
        material.

        In addition, Olympic Metals continues to seek compensation for
        the past due amount owed on the load delivered.

        However, Olympic Metals will accept rejection of the 8,060 lbs. of the
        2090 material if Alexin so chooses. Olympic Metals would then
        revert to the supplier for reconciliation which is standard practice
        in the industry.


Id. at 241-42 (emphases added).

Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016     Page 5 of 24
[7]   On July 1, 2013, Alexin filed a complaint against Olympic in the United States

      District Court for the Northern District of Indiana alleging breach of express

      warranty, breach of implied warranty of fitness for a particular purpose, and

      breach of implied warranty of merchantability and seeking damages of $91,518.

      The next day, American Metal Market (“AMM”), an industry publication,

      reported on Alexin’s lawsuit as follows:


              A dispute between an aluminum billet producer and a scrap
              broker over a truckload of scrap has escalated to the legal system,
              much to the surprise of the broker.

              Bluffton, Ind.-based Alexin LLC filed a lawsuit July 1 in [the]
              U.S. District Court in Indiana against Miami-based Olympic
              Metals LLC alleging breach of contract—a claim that Olympic
              Metals said it strongly denies.

              Alexin said in court documents that it ordered 40,000 pounds of
              2024 aluminum scrap in April, but claimed that the 37,195
              pounds delivered by Olympic Metals also included some lithium-
              containing 2090 alloy scrap.

              “Alexin melted down the 2024 aluminum that Olympic Metals
              had supplied. After adding pure aluminum and otherwise
              finished the product, Alexin noted that the finished aluminum
              ingots had an unacceptable and unsalable surface condition,”
              Alexin alleged in the lawsuit. “Emergency investigation and
              analysis revealed that the unsalable ingots contained excessive
              levels of the element lithium. As a result of the lithium
              contamination, the ingots were worthless and were scrapped.”
              Alexin estimated its total damages at $91,518.

                                                      ***



      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 6 of 24
              When contacted July 2, Christos Gorgias, managing director of
              Olympic Metals, said the company was unaware of Alexin’s legal
              filing. “We filed a demand letter for payment after Alexin went
              past the payment date. Following that, we even requested
              mediation, which they did not accept. We had no idea they sued
              us and we will fight these allegations with documents that prove
              we are not in breach,” he told AMM.

              Gorgias said that Olympic Metals delivered about 29,000 pounds
              of 2024 alloy scrap and 8,000 pounds of 2090 scrap in segregated
              lots. “If they didn’t want the 2090 scrap, they could have let us
              know and we would’ve taken it back. In any case, I don’t know
              how it could cause damage when the scrap was segregated,” he
              said.

              Olympic Metals’ June 20 letter to Alexin demanding payment—
              sent by a Miami law firm—included a shipping order detailing
              the different loads of 2024 and 2090 scrap, and noted that “the
              scrap was inspected, accepted and, to our understanding,
              consumed by Alexin.”

              Alexin’s counsel did not respond to a request for comment, while
              a company spokesman said July 2 that Alexin had no further
              comment other than to say Olympic Metals “just didn’t ship
              what was ordered and they need to come clean about it as most
              people usually do.”


      Id. at 72.


[8]   After the federal court issued an order “rais[ing] doubt about” the court’s

      jurisdiction, Alexin filed a complaint in the Wells Circuit Court and voluntarily

      dismissed the federal lawsuit. Appellant’s Br. at 4. Olympic filed an answer

      and asserted affirmative defenses, including failure to state a claim upon which

      relief can be granted. In a counterclaim, Olympic sought attorney’s fees under

      Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 7 of 24
       Indiana Code Section 34-52-1-1(b) on the grounds that Alexin had brought a

       frivolous lawsuit or, in the alternative, had continued to litigate the lawsuit after

       its claim had become frivolous, unreasonable, or groundless. After the parties

       participated in an unsuccessful court-ordered mediation, the trial court set the

       matter for trial for October 27, 2014. After Olympic moved to continue that

       trial date, the trial court set the trial for February 3, 2015.


[9]    On January 26, 2015, one week before trial, Alexin moved to voluntarily

       dismiss its complaint “without any explanation.” Id. at 15. In addition, Alexin

       “reported to the Court that it had submitted payment to Olympic for the

       amount of Olympic’s Invoice No. 004339 of $31,477.94 and prejudgment

       interest at 8%, for a total of $35,943.94.” Id. The trial court granted Alexin’s

       motion to dismiss its complaint, with prejudice, and the parties submitted briefs

       on Olympic’s counterclaim for attorney’s fees.


[10]   Thereafter, the trial court entered judgment for Olympic on its counterclaim,

       finding and concluding in relevant part as follows:

                                          FINDINGS OF FACT

                                                       ***

               4.     On March 19, 2013, Alexin sent an email to its suppliers
               regarding its current aluminum scrap needs with real-time
               pricing, which included 2024 aluminum scrap along with various
               other types of scrap aluminum.




       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 8 of 24
        5.    Beside the list of various aluminum needs and the price per
        pound, the email provides that “All items must be clearly
        segregated by type” and “3 items per load.”

                                                ***

        14. On April 25, 2013, Alexin issued a Receipt #RCT013504
        to Olympic for Purchase Order No. 16208 for “2XXX AL
        SCRAP” showing Alexin received 40,643 pounds, of which
        37,252 pounds comprised the weight Alexin was willing to pay
        after deducting the weight of the shipping pallets. The receipt
        also shows “Contaminate Deductions” of 3,448 pounds.

        15. The receipt further states “Note: This load was received
        per Alexin’s Terms and Conditions and applicable receiving
        procedures.”

        16. Alexin’s employees took both the Series 2024 and Series
        2090 aluminum Alexin received on April 25, 2013[,] to the same
        2024 alloy bin: “The goods were received in Alexin’s scrap yard
        via a fork lift, and taken to the 2024 alloy bin.” (Plaintiff Alexin,
        LLC’s Responses to Defendant’s Interrogatories served March
        20, 2014, Answer to Interrogatory No. 2).

                                                ***

        34. Olympic has incurred the following expenses and fees in
        defending against Alexin’s complaint and in prosecuting its claim
        against Alexin:

        a.       Attorney fees                                              $29,480.00

        b.       The Mediation Group                                         $1,386.26

        c.       Filing fees . . . and mileage expenses                       $581.29

        d.       Other expenses for travel and lodging . . . .               $5,000.00

Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                Page 9 of 24
        Total:                                                              $36,447.55

                                CONCLUSIONS OF LAW

        1.       Indiana Code [Section] 34-52-1-1 provides:

                                                ***

                 b.     In any civil action, the court may award
                 attorney’s fees as part of the costs 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.

                                                ***

        8.     Based upon the fact Olympic recovered of [sic] the entire
        amount requested in its Counterclaim 8 days prior to the
        scheduled jury trial, after all discovery had closed and consistent
        with other Indiana decisions, this Court determines that Olympic
        is a “prevailing party” for purposes of I.C. [§] 34-52-1-1.

        9.     The next issue to resolve is whether Alexin litigated the
        action in bad faith or brought and/or continued to litigate an
        action that was frivolous, groundless, or unreasonable.

        10. Indiana law provides that a claim is “frivolous” (a) if it is
        taken primarily for the purpose of harassing or maliciously

Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                Page 10 of 24
        injuring a person, or (b) if the lawyer is unable to make a good
        faith and rational argument on the merits of the action, or (c) if
        the lawyer is unable to support the action taken by a good faith
        and rational argument for an extension, modification, or reversal
        of existing law. A claim is “unreasonable” if, based on the
        totality of the circumstances, including the law and the facts
        known at the time of the filing, no reasonable attorney would
        consider that the claim was worthy of litigation or justified. See
        Kahn v. Cundiff, 533 N.E.2d 164 (Ind. Ct. App. 1989).

                                                ***

        12. “The trial court is not required to find an improper motive
        to support an award of attorney’s fees; rather, an award may be
        based solely on a lack of good faith and rational argument in
        support of the claim.”

        13. Here, the records exist that[,] while Alexin may have
        intended to purchase and receive 2024 aluminum scrap, it
        nonetheless ordered 2xxx aluminum scrap which can be both
        2024 and 2090 aluminum. The shipment was segregated by type;
        2024 sheets, 2090 sheets[,] and 2024 extruded aluminum. The
        attached paper to the bill of lading, which were marked
        “received” by Alexin’s employee, clearly identifies the specific
        type of aluminum contained in the shipment. Finally, both the
        series 2024 aluminum and 2090 series aluminum were marked
        with the respective series number.

        14. Alexin issued Receipt #RCT013504 to Olympic for
        Purchase Order No. 16208 for “2XXX AL SCRAP” showing
        Alexin received 40,643 pounds, of which 37,252 pounds
        comprised the weight Alexin was willing to pay after deducting
        the weight of the shipping pallets. The receipt also shows
        “Contaminate Deductions” of 3,448 pounds[, which is the
        weight of the shipping pallets]. Clearly, Alexin had the
        opportunity and did inspect the shipment in order to determine
        the actual amount of aluminum it had purchased. Alexin could
Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 11 of 24
        have deducted the 2090 series aluminum as a contaminate if [it]
        had [chosen] to.

        15. Alexin’s own terms and conditions in its “Purchased Scrap
        Specifications” provide that incoming material will be inspected
        in regard to material type and chemistry and rejected or
        downgraded. Alexin apparently failed to follow its own
        procedure.

        16. Alexin’s employees comingled the series 2024 and series
        2090 aluminum once they received the shipment of aluminum.

        17. Alexin argues that because it purchases 19 million pounds
        of aluminum scrap and aluminum each month, it must rely on its
        suppliers to strictly comply with its purchase orders. Further,
        they argue the volume of aluminum purchased prohibits
        inspection of each and every piece of aluminum scrap.
        Therefore, because of the sheer volume of purchasing and the
        consequences of receiving nonconforming material, it would be
        incumbent on Alexin to insure its purchase orders are clear and
        unambiguous. Apparently, in the industry, 2XXX can be
        interpreted as both 2024 Series and 2090 Series aluminum. In
        fact[,] when Alexin discovered the source of the problem with the
        product they were producing[,] . . . its CEO notified some
        employees, including Anita Eads[,] and its purchasing agent,
        Kevin Ferguson, that they should be very specific when
        purchasing 2024 aluminum in the future.

        18. Clearly, based upon the email of CEO, Tom Horter, (prior
        to the litigation) Alexin realized they may have in fact received
        exactly what they ordered, despite what they intended.[4]




4
  This finding, based on Horter’s statement in the email, that “Alexin realized they [sic] may have in fact
received exactly what they ordered,” is insignificant. (Emphasis added). When Horter sent his email, he was
speculating and did not yet know that the Alexin purchase order specifically called for 2024 sheets and that

Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                     Page 12 of 24
        19. Despite knowing they may have ordered incorrect
        material, they not only initiated a lawsuit against Olympic, they
        discussed the incident with an industry trade magazine. While
        possible, the Court doubts very much that a reporter from the
        trade publisher, American Metal Market, just happened to be
        combing through filings of the Wells Circuit Court on the very
        day the lawsuit was initiated. Clearly, based upon the timing,
        Alexin notified American Metal Market sufficiently in advance
        of its lawsuit such that an article appeared on American Metal
        Market’s website concurrently with the filing.

        20. Clearly, the lawsuit and accompanying publicity were
        taken primarily for the purpose of harassing or maliciously
        injuring Olympic and, therefore, was done frivolously.

        21. Furthermore, Alexin continued to litigate the matter once
        it became clearly frivolous. Extensive discovery was performed
        by the parties and the information provided to the Court, which
        it has relied upon for its decision, was available to Alexin at some
        point during the litigation. Alexin makes no claim that the
        information only became available 8 days prior to the trial.

        22. The Court finds that Olympic incurred attorney fees in the
        sum of $29,480.00. The fees were incurred from the 147.40
        hours of service its attorney performed and are reasonable.

        23. The Court further finds that Olympic incurred expenses in
        the sum of $1,967.55 defending Alexin’s complaint and preparing
        for the scheduled jury trial.




the shipment was nonconforming. Of course, neither did Horter know at the time that the shipment was
segregated by type and that Alexin could have easily sorted the 2024 from the 2090 aluminum.

Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                   Page 13 of 24
       Appellant’s App. at 12-18 (some citations omitted). Alexin filed a motion to

       correct error, which the trial court denied. This appeal ensued.


                                      Discussion and Decision
[11]   Alexin contends that the trial court abused its discretion when it awarded

       attorney’s fees to Olympic under Indiana Code Section 34-52-1-1(b). We

       review a trial court’s decision to award attorney’s fees and any amount thereof

       for an abuse of discretion. Purcell v. Old Nat’l Bank, 972 N.E.2d 835, 843 (Ind.

       2012). 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. Further, we note that, because the trial court’s

       factual findings were based on a paper record, we conduct a de novo review of

       the record. See Equicor Dev., Inc. v. Westfield-Washington Twp. Plan Comm’n, 758

       N.E.2d 34, 37 (Ind. 2001). Thus, our review here is akin to review of a

       summary judgment order, where a trial court’s findings are not binding on this

       court on appeal. See Nagel v. Northern Ind. Pub. Serv. Co., 26 N.E.3d 30, 42 (Ind.

       Ct. App. 2015), trans. denied.


[12]   Indiana Code Section 34-52-1-1, the General Recovery Rule, provides in

       relevant part as follows:


               (a) In all civil actions, the party recovering judgment shall
               recover costs, except in those cases in which a different provision
               is made by law.




       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 14 of 24
                (b) 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.


[13]   Here, the trial court concluded that Alexin brought the action on a claim that

       was frivolous or, at the very least, continued to litigate the action after it

       became frivolous. A claim or defense is “frivolous” (a) if it is taken primarily

       for the purpose of harassing or maliciously injuring a person; (b) if the lawyer is

       unable to make a good faith and rational argument on the merits of the action;

       or (c) if the lawyer is unable to support the action taken by a good faith and

       rational argument for an extension, modification, or reversal of existing law.

       Kahn v. Cundiff, 533 N.E.2d 164, 170 (Ind. Ct. App.), adopted, 543 N.E.2d 627

       (Ind. 1989).


[14]   On appeal, Alexin contends that two of the trial court’s findings 5 are not

       supported by the evidence. First, Alexin challenges the trial court’s

       “Conclusion No. 13” that, “while Alexin may have intended to purchase and



       5
         Both findings challenged by Alexin on appeal are listed as “Conclusions” in the trial court’s order. For
       ease of discussion, we refer to them as “findings.”

       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                        Page 15 of 24
       receive 2024 aluminum scrap, it nonetheless ordered 2[XXX] aluminum

       scrap[,] which can be both 2024 and 2090 aluminum.” Appellant’s App. at 17.

       While it is true that 2XXX aluminum scrap includes both 2024 and 2090 alloys,

       and while the purchase order states that Alexin is seeking 2XXX aluminum

       scrap, the purchase order also unambiguously states that Alexin purchased only

       “2024 sheets with thin paper in between.” Id. at 292. Thus, we agree with

       Alexin that this finding is erroneous.


[15]   Second, the trial court found as follows in “Conclusion No. 19”: “Clearly,

       based upon the timing, Alexin notified American Metal Market sufficiently in

       advance of its lawsuit such that an article appeared on American Metal

       Market’s website concurrently with the filing.” Id. at 18. We agree with Alexin

       that there is no actual evidence or reasonable inference from the evidence to

       support that finding.6 Regardless, given the remainder of the trial court’s

       findings, which are supported by the evidence, and given our standard of

       review, we cannot say that these two erroneous findings require reversal.


[16]   Alexin also contends that the trial court erroneously concluded that Alexin

       “lacked a legal basis for its claims” against Olympic. Appellant’s Br. at 17. In




       6
         The trial court was incredulous that a reporter “just happened to be combing through filings of the Wells
       Circuit Court on the very day the lawsuit was initiated.” Appellant’s App. at 18. But the story came out one
       day after the federal lawsuit was filed, not one day after suit was filed in state court. Given that there is no
       evidence that Alexin alerted AMM to the lawsuit, and given that the AMM reporter is just as likely to have
       learned of the federal lawsuit by other means, we cannot agree with the trial court that “clearly” Alexin had
       notified AMM about the lawsuit.



       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                         Page 16 of 24
particular, Alexin maintains that, contrary to Olympic’s contention that Alexin

could not recover damages because Alexin had accepted the nonconforming

2090 sheets, its claims against Olympic “were well supported under the

Uniform Commercial Code and the parties’ agreement.” Id. In support of that

argument, Alexin maintains that

        [t]he Uniform Commercial Code (“UCC”), which governs the
        parties’ agreement for the sale of goods, . . . “requires that the
        seller put and hold conforming goods at the buyer’s disposition.”
        Ind. Code § 26-1-2-503(1). The UCC gives buyers who, like
        Alexin, receive non-conforming goods, the authority to accept or
        to reject those goods. [Ind. Code] § 26-1-2-601. A buyer who
        accepts goods and notifies a seller that the goods do not conform
        to the parties’ agreement “may recover as damages for any
        nonconformity of tender the loss resulting in the ordinary course
        of events from the seller’s breach as determined in any manner
        which is reasonable.” [Ind. Code] § 26-1-2-714(1). A buyer may
        also seek to recover incidental and consequential damages. [Ind.
        Code] § 26-1-2-714(3). Consistent with the UCC, Alexin’s
        Standard Terms and Conditions of Purchase also provide that
        “[f]ailure to inspect, accept, reject[,] or detect defects by
        inspection shall neither relieve [Olympic Metals] from its
        responsibilities for such materials as are not in accordance with
        the [Purchase] Order requirements nor impose liabilities on
        Alexin.”


Id. at 17-18 (some citations omitted). Further, Alexin contends, in effect, that,

because it did not discover the nonconforming aluminum until after it had

comingled the 2024 and 2090 aluminum, Alexin’s acceptance of the

nonconforming aluminum was reasonably induced by the difficulty of

discovery before the acceptance. In particular, Alexin states as follows:


Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 17 of 24
                The UCC and Alexin’s Standard Terms and Conditions of
                Purchase reflect the business reality that manufacturers must rely
                upon their suppliers to provide conforming goods because it is
                impractical for a manufacturer to inspect every item it receives.
                Alexin buys nineteen million pounds of aluminum every month.
                Accordingly, Alexin must rely on rigid purchasing specifications
                and its suppliers’ quality systems to ensure the aluminum
                received conforms to the applicable purchase order, and Alexin’s
                Purchased Scrap Specification.


       Appellant’s Br. at 18. Alexin further contends that it rightfully relied on

       Olympic’s assurances upon delivery, as indicated in the purchase order and bill

       of lading, both of which stated that only 2024 sheets were included in the

       delivery.7


[17]   We agree with Alexin that the undisputed evidence shows that Olympic

       delivered 8,060 pounds of 2090 sheets in contravention of the purchase order.

       But that evidence does not end our inquiry as it does not resolve the issue of

       whether, on these facts, Alexin was entitled to revoke acceptance of the

       delivery. Indiana Code Section 26-1-2-608 provides in relevant part as follows:

                (1) The buyer may revoke his acceptance of a lot or commercial
                unit whose non-conformity substantially impairs its value to him
                if he has accepted it

                                                           ***




       7
         Comment 3 to Indiana Code Section 26-1-2-608 states in relevant part that assurances by the seller “can
       rest as well in the circumstances or in the contract as in explicit language used at the time of delivery.”

       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                        Page 18 of 24
                        (b) without discovery of such non-conformity if his
                        acceptance was reasonably induced either by the difficulty of
                        discovery before acceptance or by the seller’s assurances.


       (Emphasis added).


[18]   In Trisler v. Carter, 996 N.E.2d 354 (Ind. Ct. App. 2013), Carter bought a chest

       of drawers for his sister-in-law. After he got home and cleaned out the drawers,

       Carter noticed that nails were sticking out through the backs of the drawers.

       Carter then tried to return the chest of drawers to Trisler, but Trisler refused to

       issue a refund. Carter sued, and the trial court entered judgment in favor of

       Carter. On appeal, we held that, even though the chest of drawers was

       nonconforming to Carter’s needs, Carter was not entitled to revoke his

       acceptance under Indiana Code Section 26-1-2-608(1)(b). Specifically, we

       stated as follows:


               The fact that Carter was able to discover the defect upon opening
               the drawers of the chest while cleaning it belies the difficulty of
               discovering the non-conformity, and there is no allegation that
               Trisler in any way kept Carter from inspecting the chest of
               drawers prior to his purchase of it. Therefore, I.C. § 26–1–2–
               608(1)(b) . . . does not apply to allow Carter to revoke his
               acceptance of the chest of drawers. . . . Therefore, we conclude
               that the trial court erred in entering judgment for Trisler and we
               reverse its decision.


       Id. at 358 (emphasis added).


[19]   Here, again, the undisputed evidence shows that there were three types of

       aluminum scrap included in the April 25 shipment: 2024 aluminum sheets;

       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016        Page 19 of 24
       2024 extruded aluminum; and 2090 aluminum sheets. All three were clearly

       stamped as 2024 or 2090 alloys,8 and all three were segregated on separate

       pallets. While the bill of lading and purchase order stated that only 2024 sheets

       had been delivered, a handwritten note accompanying those documents upon

       delivery clearly indicated that 8,060 pounds of 2090 aluminum was included in

       the delivery,9 and Steele, an Alexin employee, stamped all three documents

       “Received” and signed his name to them. As the trial court concluded, Alexin

       “had the opportunity and did inspect the shipment in order to determine the

       actual amount of aluminum it had purchased.” Appellant’s App. at 17. It

       follows then, that Alexin also had the opportunity to identify the alloys

       included in the delivery. A reasonable inspection would have alerted Alexin to

       the nonconforming 2090 sheets immediately upon delivery. Alexin does not

       allege any latent defects in the aluminum shipment.


[20]   The trial court further concluded that “Alexin’s own terms and conditions in its

       ‘Purchased Scrap Specifications’ provide that incoming material will be

       inspected in regard to material type and chemistry and rejected or downgraded.

       Alexin apparently failed to follow its own procedure.” Id. at 18. Alexin does




       8
         We note that Eads took photographs of the stamps on the sheets and attached those photos to her June 4
       email to Shiver. We also note that, after the batch of ingots had to be scrapped, Alexin was able to identify
       the 2090 sheets remaining in the 2024 bin and remove the 2090 sheets. At no time has Alexin alleged that it
       had difficulty differentiating between the 2024 and 2090 sheets.
       9
         The handwritten note indicates that the order originated with a company called “BSCM, Inc.” Appellant’s
       App. at 231. As Alexin points out in its brief on appeal, Olympic is a broker and, therefore, it “does not take
       possession of, sort, load, or ship scrap metals to its customers but, instead, relies on other sellers of aluminum
       and transportation companies to fill the orders it accepts.” Appellant’s Br. at 7. Thus, that Olympic
       contracted with a third party to fill the purchase order was consistent with its business model, which was
       known to Alexin at the time of delivery.

       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                           Page 20 of 24
       not dispute that fact on appeal. Accordingly, the evidence shows that Alexin’s

       acceptance of the nonconforming goods was not reasonably induced either by

       the difficulty of discovering the nonconformity or by any assurances from

       Olympic, and Alexin did not rightfully revoke its acceptance of the 2090 sheets

       under Indiana Code Section 26-1-2-608. See Trisler, 996 N.E.2d at 358; see also

       Scotco Inc. v. Dormeyer Indus., 402 F.2d 336, 338 (7th Cir. 1968) (interpreting

       similar prior statute under Uniform Sales Act to prohibit revocation of

       acceptance where buyer did not allege latent defects in product accepted).


[21]   Further, it is well settled that the UCC limits a nonbreaching party’s damages to

       those that are proximately caused by the breach, and,


                [w]here the injury involved follows the use of goods without
                discovery of the defect causing the damage, the question of
                “proximate” cause turns on whether it was reasonable for the buyer
                to use the goods without such inspection as would have revealed the
                defects. If it was not reasonable for him to do so, or if he did in fact
                discover the defect prior to his use, the injury would not proximately
                result from the breach of warranty.


       I.C. § 26-1-2-715 cmt. 5 (emphases added).10


[22]   Here, again, the evidence supports the conclusion that Alexin’s failure to

       identify the 2090 sheets prior to using them was not reasonable, and, therefore,




       10
          Alexin cites to Indiana Code Section 26-1-2-714 in support of its contention that it is entitled to damages
       for Olympic’s breach despite Alexin’s acceptance of the goods. Comment 4 of that statute states that
       incidental and consequential damages in that circumstance are explained in the comment to Section 26-1-2-
       715.

       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                         Page 21 of 24
       that Olympic’s breach did not proximately cause Alexin’s claimed damages. In

       particular, Alexin accepted the shipment containing both 2024 and 2090 sheets;

       each type of aluminum was clearly stamped as 2024 or 2090; each type was

       segregated from the other on separate pallets; and Steele, on Alexin’s behalf,

       signed his name to the handwritten note, which clearly stated that the shipment

       contained both 2024 and 2090 sheets. The evidence supports the trial court’s

       finding that, prior to notifying Olympic that part of the shipment was

       nonconforming, Alexin comingled the 2024 and 2090 sheets. And Alexin used

       the comingled aluminum scrap to produce a batch of ingots.11


[23]   In sum, we review the trial court’s attorney’s fee award for an abuse of

       discretion. The evidence shows that Alexin’s acceptance of the 2090 sheets was

       not reasonably induced either by the difficulty of discovery before acceptance or

       by Olympic’s assurances. The evidence also shows that, had Alexin not

       accepted the nonconforming aluminum or had not comingled the 2090 sheets

       with the 2024 sheets, Alexin would not have sustained the damages alleged in

       its complaint. Olympic erred in delivering the 2090 sheets along with the 2024

       sheets, but that created only a storage problem for Alexin until Olympic could

       retrieve the nonconforming goods.12 Alexin would not have suffered any




       11
          After Alexin discovered the problem with the high lithium, it was able to “sort[] out” the 2090 sheets from
       the 2024 sheets, and it placed the remaining 2090 sheets on a pallet for Olympic to retrieve. Appellant’s App.
       at 236. Then, despite Olympic’s offer to pick up the remaining 2090 sheets and accept payment only for the
       2024 sheets under the purchase order, Alexin filed this lawsuit.
       12
            Of course, Steele could have rejected the 2090 portion of the shipment as nonconforming upon delivery.


       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016                       Page 22 of 24
       damages beyond that inconvenience but for Alexin’s own conduct in

       comingling the two alloys.


[24]   Alexin knew, or reasonably should have known, that its damages were self-

       inflicted when it filed its complaint against Olympic. Notwithstanding

       Olympic’s breach of warranty, the evidence supports the conclusion that, for

       lack of proximate cause, Alexin did not have a good faith or rational argument

       to support its claim for damages under the UCC. Given our standard of review,

       we cannot say that the trial court’s judgment is clearly against the logic and

       effect of the facts and circumstances or that the court misinterpreted the law.

       Thus, we hold that the trial court did not abuse its discretion when it awarded

       Olympic attorney’s fees under Indiana Code Section 34-52-1-1(b).


                                               Cross-Appeal
[25]   Olympic cross-appeals and requests appellate attorney’s fees under Indiana

       Appellate Rule 66(E), which provides: “The Court may assess damages if an

       appeal, petition, or motion, or response, is frivolous or in bad faith. Damages

       shall be in the Court’s discretion and may include attorney’s fees.” Our

       discretion to award attorney’s fees under 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. Helmuth v.

       Distance Learning Systems Ind., Inc., 837 N.E.2d 1085, 1094 (Ind. Ct. App. 2005).

       Additionally, while 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
       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 23 of 24
       the right to appeal. Id. A strong showing is required to justify an award of

       appellate damages, and the sanction is not imposed to punish mere lack of

       merit, but something more egregious. Id.


[26]   Olympic contends that, on appeal, “Alexin has omitted or misstated many of

       the facts in the record and should be required to pay Olympic Metals’ appellate

       attorney fees.” Appellee’s Br. at 46. Olympic then lists seven examples of

       alleged omissions and misstatements by Alexin in its brief. But four of the

       alleged misstatements are not misstatements at all, and the others are not gross

       misstatements of the facts. We cannot say that Alexin’s brief on appeal is

       “permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness,

       or purpose of delay.” See Helmuth, 837 N.E.2d at 1094. Rather, Alexin makes

       cogent argument based on relevant case law and citations to the record.

       Indeed, we agree with Alexin that two of the trial court’s findings are not

       supported by the evidence. We deny Olympic’s request for appellate attorney’s

       fees.


[27]   Affirmed.


       Riley, J., and May, J., concur.




       Court of Appeals of Indiana | Opinion 90A02-1510-CT-1608 | April 21, 2016   Page 24 of 24
