                                                                                FILED
                                                                            Apr 12 2018, 5:22 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court




ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Michael A. Setlak                                           Michael H. Michmerhuizen
Perry D. Shilts                                             Barrett McNagny, LLP
Shilts & Setlak, LLC                                        Fort Wayne, Indiana
Fort Wayne, Indiana
                                                            Cornelius B. Hayes
                                                            Hayes & Hayes
                                                            Fort Wayne, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Robert A. Masters,                                         April 12, 2018

Appellant-Petitioner,                                      Court of Appeals Cause No.
                                                           02A05-1706-DR-1317
        v.                                                 Appeal from the Allen Superior
                                                           Court
Leah Masters,                                              The Honorable Charles F. Pratt,
                                                           Judge
Appellee-Respondent.
                                                           The Honorable Lori K. Morgan,
                                                           Magistrate
                                                           Trial Court Cause No. 02D07-1204-
                                                           DR-261




Riley, Judge.




Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018                           Page 1 of 24
                                 STATEMENT OF THE CASE
[1]   Appellant-Petitioner, Robert Masters (Husband), appeals the trial court’s order

      awarding attorney fees in favor of Appellee-Respondent, Leah Masters (Wife),

      pursuant to an indemnification clause in the parties’ divorce decree.


[2]   We affirm.


                                                      ISSUE
[3]   Husband presents one issue on appeal, which we restate as: Whether the

      indemnification clause incorporated in the parties’ dissolution decree (Decree)

      permitted the reimbursement of Wife’s appellate attorney fees and costs

      expended by Wife in her defense to Husband’s appeal.


                       FACTS AND PROCEDURAL HISTORY
[4]   This is Husband’s second appeal to this court, and his prior appeal was heard

      by the supreme court. See Masters v. Masters, 20 N.E.3d 158 (Ind. Ct. App.

      2014), trans. granted and opinion vacated by Masters v. Masters, 43 N.E.3d 570 (Ind.

      2015) (respectively, Masters I and Masters II). The underlying facts, as

      previously described in Masters II, are as follows:


              The parties were married in 1993 and are the parents of one
              child, a daughter, born in January 2007. Dissolution proceedings
              began in 2012, and a year later, the parties signed an agreement
              to arbitrate under the Family Law Arbitration Act (FLAA). See
              Ind. Code § 34-57-5-1 et seq. The FLAA permits parties in a
              dissolution of marriage action to resolve their disputes through
              arbitration rather than in a trial before a trial judge. The FLAA


      Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 2 of 24
              details the role and duties of the family law arbitrator in such
              arbitration.


              The family law arbitrator’s findings of fact in this case are
              undisputed. Noting that this had “been a very contentious
              divorce,” . . . the family law arbitrator entered extensive findings
              of fact regarding the legal and primary physical custody of the
              parties’ daughter, parenting time, child support, parochial school
              expenses, healthcare expenses for their daughter, dependency
              exemptions for tax purposes of the husband and the wife, spousal
              maintenance for the wife, rehabilitative maintenance for the wife,
              division of marital property, and the allocation of attorney’s fees
              and litigation expenses. The family law arbitrator then entered
              conclusions of law that in summary provided for: the marriage to
              be dissolved, sole legal and primary physical custody to be
              granted to the wife, parenting time to be granted to the husband,
              the husband to pay certain child support obligations, the wife to
              receive 60% of the assets and the husband to receive 40% of the
              assets, the husband to replenish $51,000 in the parties’ bank
              accounts, the wife to be awarded an equalization judgment
              against the husband for $23,965.05 with an interest rate of 8%
              until paid in full, the husband to pay certain spousal maintenance
              costs, the husband to pay $95,000 of the wife’s attorney’s fees,
              and the wife to be denied rehabilitative maintenance. The family
              law arbitrator’s decision was submitted to the trial court, which
              entered judgment thereon in accordance with Indiana Code
              section 34-57-5-7(d)(1).


      Masters II, 43 N.E.3d 571-72 (footnotes omitted). Instead of paying Wife’s

      attorney fees and costs as ordered in the Decree, Husband pursued an appeal.

      See Masters I, 20 N.E.3d at 158.


[5]   The post-decree activity in this case covers the period between May 2014 and

      December 2016, whereby the parties filed a total of twenty-nine motions,

      Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 3 of 24
      petitions, or citations. Following the trial court’s entry of the parties’ Decree in

      March of 2014, Wife filed a motion for attachment, seeking to attach

      Husband’s 40% share of assets (including Husband’s share of gold, silver and

      ancient coins) so as to satisfy the $95,000 attorney fees and costs award.

      Husband thereafter objected to Wife’s motion, and he requested that Wife’s

      motion be stayed until his appeal in Masters I was resolved. On October 3,

      2014, the trial court issued an order providing that “both the [status quo]

      concerning the coins shall be maintained and the Motion to Attach Money

      Judgment filed by [Wife], shall pend and shall be stayed until such time as the

      Court of Appeals renders its opinion on the issues presented before it.”

      (Appellant’s App. Vol. II, p. 155).


[6]   Husband’s sole challenge in Masters I was that the arbitrator’s finding and

      conclusion requiring him to pay $95,000 of Wife’s attorney fees and costs was

      unsupported by the evidence. Masters I, 20 N.E.3d at 159. Each party also

      requested appellate attorney fees pursuant to Appellate Rule 66(E). Id. at 160.

      As stated, the arbitrator in this case had distributed all of the parties’ marital

      assets at 60%/40% in Wife’s favor. Id. at 163. In challenging Husband’s claim

      in Masters I, Wife argued that the valuation of Husband’s 40% share of certain

      gold, silver, and ancient coins demonstrated Husband’s ability to pay the

      $95,000 attorney fees and costs award. Id. at 164. Notwithstanding Wife’s

      argument that the valuation of Husband’s 40% share of coins would

      demonstrate Husband’s ability to pay her attorney fees, we found the arbitrator




      Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 4 of 24
      had rejected Wife’s valuation, and had concluded that the value of coins

      remained “unknown.” Id. Thus, we held that


              we are in no position either to speculate on a value for the coins
              or to say that the arbitrator meant for Husband to sell or
              otherwise collateralize them. And, at best, Wife’s evidence
              regarding the value of the coins would make the arbitrator’s
              findings irrational in that the arbitrator would have found that
              the coins had an unknown value and then relied on that
              unknown value to assess fees against Husband.


      Id. In addition, we noted that although the arbitrator had expressly found that

      Husband’s annual income is $80,000, we determined that the arbitrator’s

      findings raised serious doubts as to Husband’s ability to pay Wife’s attorney

      fees. Id. Specifically, we noted that the arbitrator had directed Husband to

      immediately pay $17,735 in child support arrearage; pay Wife a cash payment

      of $23,965.05 within 100 days of the arbitration award in order to equalize the

      parties’ marital assets; and replenish the parties’ bank account with $51,000. Id.

      Accordingly, we found that the $95,000 attorney fees and costs award was more

      than Husband’s 40% valued share of the marital estate. Id. Thus, finding that

      the arbitrator’s findings of fact raised grave concerns on Husband’s ability to

      pay Wife’s attorney fees, we concluded that the judgment was erroneous and

      reversed the trial court. Id. at 165. Also, we summarily rejected each side’s

      request for appellate attorney fees pursuant to Appellate Rule 66(E). Id.


[7]   On April 2, 2015, our supreme court granted transfer and ultimately reached a

      different result by affirming the trial court’s award of attorney fees in favor of


      Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018    Page 5 of 24
Wife. See Masters II, 43 N.E.3d at 570. The supreme court stated, in pertinent

part:


        The arbitrator’s conclusions, findings, and award comprised
        twenty-seven pages of single-spaced paragraphs extensively
        addressing various factors. The arbitrator determined the value
        of the marital estate, its division, and the economic
        circumstances of each of the parties; the relative education of
        each of the parties, their job opportunities, and their actual
        incomes as well as their potential incomes; the behavior of the
        parties, their level of cooperation in this case, and how attorney’s
        fees were incurred and funded by each of the parties; and various
        aspects of the education and support of the parties’ daughter.


        The husband does not argue that the family law arbitrator made
        improper findings of fact. Rather, his challenge is directed to the
        amount of the award as compared to his ability to pay. He also
        contends that the arbitration award contradicts the arbitrator’s
        own findings, specifically that the arbitrator failed to
        appropriately consider the wife’s potential income and the
        resulting ratio of the parties’ relative incomes; that the wife
        received $50,000 more than the husband in the property division;
        that the wife's attorney’s fees were paid by the wife’s parents and
        the potential forgiveness of the resulting promissory notes from
        the wife to her parents; and that the wife’s attorney’s fees were
        triple his own and were “undeserved given the results of the
        case.”


        The crux of the husband’s argument compares his $95,000
        attorney’s fee award obligation against his share of the marital
        estate, “approximately $94,000 . . . plus forty percent of some
        unvalued coins.” In making this claim, the husband relies on the
        fact that the family law arbitrator did not expressly assign a
        particular value to the parties’ extensive coin collection. To the
        contrary, we find that the sizeable coin collection and its

Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 6 of 24
        disposition is highly relevant to our review. The family law
        arbitrator recognized the coins in her findings and stated that
        “[t]hroughout the marriage, Husband invested income earned
        during the marriage in numismatic and ancient coins . . .
        believ[ing] that the investment was a good retirement investment
        strategy.” The arbitrator then noted that the wife had hired an
        appraiser who valued the gold and silver coins at $242,954.55
        and that husband had hired an appraiser who valued the ancient
        coins at $60,635.00. Based on those findings, the family law
        arbitrator then ordered “that the gold and silver coins be divided
        by [wife’s appraiser] and the [ancient] coins be divided by
        [husband’s appraiser]. . . . Husband shall receive forty percent
        (40%) of the divided coins and Wife shall receive the remaining
        sixty percent (60%) thereof.” These findings clearly imply that
        the aggregate value of the gold and silver coins, and the ancient
        coins, totaled $303,589.55, of which the husband’s 40% share
        would be worth $121,435.82. Combining his coin collection
        share with the additional admitted $94,000 share of the marital
        estate, the husband received more than $215,000.


        The husband’s resulting property share dramatically alters the
        husband’s basic argument. Instead of comparing his obligation
        to pay $95,000 toward the wife’s attorney’s fees to a net marital
        share of $94,000, the fee award must be compared to the
        husband’s receipt of over $215,000 in marital property. This fact
        renders unavailing all of the husband’s arguments. Seen in this
        light, the arbitrator’s attorney fee award is not against the logic
        and effect of the facts and circumstances of the case. “We do not
        reweigh the evidence; rather we consider the evidence most
        favorable to the judgment with all reasonable inferences drawn in
        favor of the judgment.” Our recalculation of the husband’s share
        of the marital property provides a legal theory supported by the
        findings, thus warranting our affirmance of the trial court
        judgment. We conclude that the award of attorney’s fees in this
        case is supported by the findings, and that the husband has failed



Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 7 of 24
              to show clear error that leaves us with a definite and firm
              conviction that a mistake has been made.


      Masters II, 43 N.E.3d at 576-77 (internal citations omitted).


[8]   On November 13, 2015, twenty-nine days after our supreme court issued its

      opinion in Masters II, Wife filed a motion for indemnification pursuant to the

      Decree, seeking an assessment of attorney fees and costs that she incurred while

      defending herself in Husband’s appeal. Relying on the indemnity clause which

      stipulated, in part, that “each party is ORDERED to indemnify the other party

      from any violation of the terms and conditions of this Decree, including costs and

      reasonable attorney fees,” Wife argued that Husband had “violated the terms

      and conditions of the Decree . . . by choosing not to pay” her attorney fees and

      costs in the amount $95,000. (Appellant’s App. Vol. II, pp.156-57). As such,

      Wife contended that all her appellate attorney fees and costs that she expended

      while defending herself in Husband’s appeal in Masters I, should be recovered

      from Husband.


[9]   The chronological case summary shows that between December of 2016 and

      January of 2017, the parties appeared three times in person and by counsel to

      present evidence on their numerous pending post-dissolution pleadings. On

      February 23, 2017, while awaiting the trial court’s determination of the parties’

      pending pleadings, Husband filed a verified petition, seeking an order on the

      distribution of the parties’ gold, silver, and ancient coins. Husband also

      claimed that he had already paid “$107,638.89 via a cashier’s check to satisfy


      Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018    Page 8 of 24
       the outstanding attorney fee judgment, which was subject to the Motion for

       Attachment filed by [Wife] in 2014.” (Appellees’ App. Vol. II, p. 6).


[10]   On May 17, 2017, the trial court issued a seventy-one-page Order, addressing

       all of the parties’ outstanding pleadings. With regards to Wife’s motion for

       indemnification, the trial court entered the following pertinent findings:


               91. The [divorce decree] . . . ordered the parties to indemnify
               each other, including from attorney fees, for violations of the
               [d]ecree. The [c]ourt finds that the clear intent and purpose of
               the provision was to ensure that one party was not aggrieved by
               the other party’s efforts to avoid or delay compliance with the
               orders of the [c]ourt.


               92. [Wife] has incurred substantial attorney fees and thus has
               been aggrieved by the [a]ppeal pursued by [Husband].


               93. This Court has the “inherent authority to compensate an
               aggrieved party.” Crowl v. Berryhill, 678 N.E.2d 828, 832 (Ind.
               Ct. App. 1997).


               94. [Wife] is requesting that the [c]ourt award her attorney fees
               incurred defending the [a]ppeal initiated by [Husband] and
               alleges that [Husband] misled the [c]ourt of [a]ppeals regarding
               the amount of the marital estate that he was awarded thereby
               alleging that he was incapable of paying the attorney fee award.


               95. The [c]ourt finds and concludes that the indemnity provision
               contained in the [d]ecree of [d]issolution of [m]arriage was
               included in the Decree so as to ensure that any relief provided by
               the [c]ourt was gross relief and not net relief.



       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 9 of 24
        96. [Wife] incurred attorney fees in the sum of Thirty Thousand
        Eight Hundred Ninety-Six Dollars ($30,896.00) in her defense of
        the [a]ppeal leaving her net recovery in the sum of Sixty-Four
        Thousand One Hundred Four Dollars ($64,104.00).


        97. [Wife] contends that Indiana law supports a claim for
        indemnity. [Husband] disagrees with said contention and-
        maintains that the indemnity provision does not apply.
        Additionally, he maintains that he was simply pursuing an
        [a]ppeal which he had a right to do.


        98. Indiana law supports a claim for indemnity. In Fackler v.
        Powell, 891 N.E.2d 1091 (Ind. Ct. App. 2008), the dissolution
        court approved a mediated settlement agreement that became an
        order of the Court on March 22, 2002. Id. [at] 1095. The
        agreement required Powell to make a payment to Fackler
        pursuant to that agreement/order. Id. [at] 1097. Powell did not
        do so and Fackler sought enforcement of the [c]ourt’s Order as
        well as attorney fees on appeal pursuant to an indemnification
        provision. The [c]ourt of [a]ppeals held that because the
        agreement which became an order of the dissolution court
        contained an indemnification clause, Fackler was entitled to
        attorney fees. [Id.]


        99. In L.H. Controls, Inc. v. Custom Conveyor, Inc., 974 N.E.2d
        1031, 1048 (Ind. Ct. App. 2012), the [c]ourt of [a]ppeals held that
        “it is clear that a divorce decree indemnity provision such as the
        one in [Fackler] would cover a first-party indemnity claim, [i.e.]
        where one party successfully sues the other for breach of contract
        and requests attorney’s fees.”


        100. The [c]ourt finds that the Fackler and L.H. Controls cases
        referenced herein above make it clear that the indemnity
        provision in a divorce decree covers a first party indemnity claim
        and permits recovery of attorney fees.

Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 10 of 24
        101. The [c]ourt finds that although [Husband] did not violate
        the indemnity provision of the [d]ecree by pursuing his appellate
        rights, he did violate the terms of the Decree . . . . by failing to
        pay the Ninety-Five Thousand Dollar ($95,000.00) attorney fee
        award as ordered by the [c]ourt.


        102. In the Fackler case, the [c]ourt of [a]ppeals found that the
        terms of the Order were violated when a party failed to comply
        with its provisions. In this case, payment of the attorney fee
        award was due immediately and payment was not made until
        after the appeals process was completed and ultimately the [t]rial
        [c]ourt’s award of attorney fees was affirmed. As a result, [Wife]
        incurred a substantial amount of attorney fees effectively
        reducing the amount of her attorney fee award. The [c]ourt finds
        that the purpose of the indemnity provision is to make a party
        whole.


        103. [Husband] maintained during the [evidentiary hearing] that
        permitting [Wife] to recover [a]ppellate attorney fees under the
        indemnity provision in the Decree . . . creates a road block to a
        person’s right to seek appellate relief.


        104. The Indiana Court of Appeal[s] has held that when a
        contract that is [the] subject of litigation contains a fee shifting
        provision, appellate attorney fees are available pursuant to such a
        provision. Cavallo v. Allied Physicians of Michiana, LLC, 42 N.E.3d
        995, 1010 (Ind. Ct. App. 2015) (“We have previously held that
        when a contract provision provided [that] the attorney fees are
        recoverable, appellate attorney fees may also be awarded.”);
        Radio Distributing v. National Bank and Trust, 489 N.E.2d 642, 649
        (Ind. Ct. App. 1986). This [c]ourt does not find that an award of
        appellate attorney fees to a party prevailing on an appeal is a road
        block to a person’s right to appeal.




Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 11 of 24
        105. [Husband] argued at [the evidentiary hearing] that [Wife]
        waived her right to pursue collection on the judgment pre-appeal
        and that he obtained a stay permitting him to pursue his
        collection rights. [Wife] acknowledges that she filed a Motion
        and Affidavit to Attach Property to Money Judgment on April
        11, 2014, seeking to attach the coins owned by [Husband] and
        that the Motion and attempt to attach the coins was stayed, but
        argues that her agreement to stay the attachment on the coins
        pending an appeal did not mean that she waived all collection
        remedies pre-appeal or that she could not recover attorney fees
        pursuant to the indemnification provision consistent with
        Indiana case law.


        106. The [c]ourt finds that [Wife] did not waive any collection
        proceedings or her right to enforce the judgment other than as
        was set forth in the very specific order regarding the coins.
        However, the [c]ourt finds that even if she had, the fact that
        collection efforts were stayed does not mean that the judgment
        itself was stayed, that the judgment did not continue to draw
        interest or that [Wife] is not entitled to recover attorney fees
        under the indemnity provisions of the [divorce decree].


(Appellant’s App. Vol. II, pp. 63-66). In its conclusion, the trial court granted

Wife’s motion for indemnification, and ordered “an attorney fee award against

[Husband] in favor of [Wife]. [Husband] shall pay attorney fees to [Wife] in the




Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 12 of 24
       sum of Seventy-Five Thousand Dollars ($75,000).” 1 (Appellant’s App. Vol. II,

       p. 70).


[11]   Husband now appeals. Additional facts will be provided as necessary.


                                DISCUSSION AND DECISION
                                               I. Standard of Review

[12]   When a trial court enters findings of fact and conclusions of law pursuant to

       Indiana Trial Rule 52(A), we apply a two-tiered standard of review. In re

       Visitation of M.L.B., 983 N.E.2d 583, 585 (Ind. 2013). We must first determine

       whether the evidence supports the findings, and second, whether the findings

       support the judgment. K.I. ex rel J.I. v. J.H., 903 N.E.2d 453, 457 (Ind. 2009).

       We will set aside findings of fact and conclusions of law only if they are clearly

       erroneous, and “‘due regard shall be given to the opportunity of the trial court

       to judge the credibility of witnesses.’” M.S. v. C.S., 938 N.E.2d 278, 281-82

       (Ind. Ct. App. 2010) (quoting K.I. ex rel. J.I. v. J.H., 903 N.E.2d 453, 457 (Ind.

       2009)). A judgment is clearly erroneous when the record contains no evidence




       1
         From the trial court’s order, it appears that Wife expended $30,896.00 in her defense to Husband’s appeal,
       however, the record is unclear how the trial court came up with the $75,000.00 attorney fee award.

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018                      Page 13 of 24
       supporting the findings, the findings fail to support the judgment, or when the

       trial court applies an incorrect legal standard to properly found facts. Id. at 282.


                                                 A. Indemnity Clause

[13]   The seemingly never-ending post-dissolution litigation in this case has resulted

       in this second appeal. Today we decide whether the indemnification clause in

       the parties’ Decree permitted Wife to recover attorney fees expended in her

       defense to Husband’s first appeal.


[14]   The indemnity clause in this case was worded in a way that violations to any of

       the orders stipulated in the Decree would allow an aggrieved party to recover

       reasonable attorney fees and costs expended as a consequence of post-

       dissolution litigation. Specifically, clause 46 directed:


               46. In accordance with the findings and conclusions set forth
               above and herein, each party is ORDERED to indemnify the other
               party from any violation of the terms and conditions of this Decree,
               including costs and reasonable attorney fees.


       (Appellant’s App. Vol. II, p. 141) (emphasis added).


[15]   Indemnity has been defined as “[t]he right of an injured party to claim

       reimbursement for its loss, damage or liability from a person who has such a

       duty.” Black’s Law Dictionary 784 (8th ed. 2004). The general legal

       understanding of indemnity clauses is that they cover “‘the risk of harm

       sustained by third persons that might be caused by either the indemnitor or the

       indemnitee. It shifts the financial burden for the ultimate payment of damages


       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018      Page 14 of 24
       from the indemnitee to the indemnitor.’” L.H. Controls, Inc. v. Custom Conveyor,

       Inc., 974 N.E.2d 1031, 1047 (Ind. Ct. App. 2012) (quoting Indianapolis City

       Market Corp. v. MAV, Inc., 915 N.E.2d 1013, 1023 (Ind. Ct. App. 2009)). As we

       noted in L.H. Controls, other authorities recognize this general understanding.

       L.H. Controls, Inc.,974 N.E.2d at 1047-48 (citing Am.Jur.2d 415, Indemnity § 1

       (2005) (“In general, indemnity is a form of compensation in which a first party

       is liable to pay a second party for a loss or damage the second party incurs to a

       third party.”); C.J.S. 94, Indemnity § 1 (2007) (“In a contract of indemnity, the

       indemnitor, for a consideration, promises to indemnify and save harmless

       indemnitee against liability of indemnitee to a third person or against loss

       resulting from such liability.”)). That said, we note that there is no absolute

       prohibition against one party agreeing to indemnify the other party for first-

       party claims arising between those parties. Id. Where the plain language of the

       provision requires first-party indemnification, then such indemnification is

       permitted. Sequa Coatings Corp. v. N. Ind. Commuter Transp. Dist., 796 N.E.2d

       1216, 1229 (Ind. Ct. App. 2003). Further, we note that an “obligation to

       indemnify does not arise until the party seeking indemnity suffers loss or incurs

       damages. This may occur when the party seeking indemnity 1) pays the

       underlying claim; 2) pays judgment on the underlying claim; or 3) tenders

       payment in settlement of the underlying claim.” Essex Group, Inc. v. Nill, 594

       N.E.2d 503, 507 (Ind. Ct. App. 1992).


[16]   Following our holding in Masters I that each party should bear their own

       appellate attorney fees, Wife paid her fees. In her motion for indemnification,

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 15 of 24
       Wife contended that Husband’s appeal in Masters I was an attempt by Husband

       “to avoid paying” Wife’s attorney fees and costs in the amount of $95,000 as

       ordered in the Decree. (Appellant’s App. Vol. II, p. 157). Wife therefore

       claimed that Husband had “violated the terms and conditions of the Decree” by

       failing to immediately pay her attorney fees and costs. (Appellant’s App. Vol.

       II, p. 157). Accordingly, Wife maintained that all of her appellate attorney fees

       and costs incurred while defending herself in Masters I, should be recovered

       from Husband pursuant to the indemnity clause.


[17]   In granting Wife’s motion for indemnification, the trial court found that the

       Decree ordered the parties to indemnify each other, including reasonable

       attorney fees and costs, for any violations of the terms and conditions of the

       Decree. The trial court also found that the indemnity clause had a clear intent

       and the purpose of the provision was to ensure that one party was not aggrieved

       by the other party’s efforts to avoid or delay compliance with the orders of the

       Decree. The trial court ultimately found that Wife had incurred substantial

       attorney fees during her defense in Husband’s appeal and thus had been

       aggrieved with Husband’s non-compliance with the Decree.


[18]   Husband claims that the when we denied each of the parties’ request for

       appellate attorney fees in Masters I, which the supreme court summarily

       affirmed in Master II, both parties were barred from the recovery of any

       appellate attorney fees. In his brief, Husband now argues that the Wife’s

       motion for indemnification is a “blatant backdoor effort to obtain relief already

       addressed and denied by our Appellate Court.” (Appellant’s Br. p. 10).

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 16 of 24
       Accordingly, Husband argues that given the clear language in the holdings in

       Masters I and Masters II, we should vacate the trial court’s award of appellate

       attorney fees in favor of Wife’s motion for indemnification. We disagree. The

       reimbursement of attorney fees pursuant to Appellate Rule 66(E), and recovery

       of attorney fees pursuant to an indemnity clause follow two separate legal

       channels.


[19]   Appellate Rule 66(E) provides in pertinent part that this court “may assess

       damages if an appeal . . . is frivolous or in bad faith. Damages shall be in the

       Court’s discretion and may include attorneys’ fees.” Our discretion to impose

       damages is limited to instances when “an appeal is permeated with

       meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of

       delay.” Thacker v. Wentzel, 797 N.E.2d 342, 346 (Ind. Ct. App. 2003).


[20]   Indiana courts have recognized that indemnity agreements are a form of

       contract and, as such, are construed according to the rules and principles of the

       law of contracts. See TLB Plastics Corp. v. Procter & Gamble Paper Prods. Co., 542

       N.E.2d 1373, 1377 (Ind. Ct. App. 1989); Kruse Classic Auction v. Aetna Cas. and

       Sur., 511 N.E.2d 326, 328 (Ind. Ct. App. 1987); Bell v. Commonwealth Land Title

       Ins. Co., Inc., 494 N.E.2d 997, 999 (Ind. Ct. App. 1986). If the words of the

       indemnity agreement are clear and unambiguous, they are to be given their

       plain and ordinary meaning. See Bell, 494 N.E.2d at 999.


[21]   In this case, the parties contracted to arbitrate their divorce. The arbitrator

       consequently included an indemnity clause that would make an aggrieved party


       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 17 of 24
       whole with regard to attorney fees and costs incurred as a result of post-

       dissolution litigation arising from violations relating to the Decree. Because the

       recovery of appellate attorney fees under the indemnification clause follows a

       separate legal route from attorney fees recoverable under Rule 66(E), the denial

       of attorney fees in Masters I, and II, is irrelevant in discussing whether it was

       proper for the trial court to grant Wife’s motion for indemnification.


[22]   Turning to Husband’s main argument, he maintains that the order in the

       parties’ Decree requiring him to pay $95,000 in attorney fees and litigation costs

       in favor of Wife cannot be interpreted as a term or condition; therefore, he argues

       that he did not violate the Decree by pursuing an appeal and failing to

       immediately pay the judgment debt. On the contrary, Wife argues that “any

       enforceable provision or obligation” in the Decree was “a term.” (Appellees’

       Br. p. 27) (internal citations omitted). Wife contends that because the directive

       requiring Husband to pay attorney fees was effective immediately after it was

       issued, Husband violated a term and condition of the Decree, thereby triggering

       the enforcement of the indemnity clause.


[23]   “Term” is defined as a “an expression that has a fixed meaning in some field.”

       Black’s Law Dictionary 1509 (8th ed. 2004). “Condition” is defined as “[a]

       future and uncertain event on which the existence or extent of an obligation or

       liability depends; an uncertain act or event that triggers or negates a duty to

       render a promised performance.” Black’s Law Dictionary 313 (8th ed. 2004).

       Our supreme court has held that “‘indemnification clauses are strictly construed

       and the intent to indemnify must be stated in clear and unequivocal terms.’”

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 18 of 24
       L.H., 974 N.E.2d at 1047 (quoting Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1132

       (Ind. 1995)). Indemnity agreements are subject to the standard rules and

       principles of contract construction. L.H. Controls, 974 N.E.2d at 1047.

       Interpretation of a written contract, including an indemnity provision, is a

       question of law. Id. We review questions of law de novo and owe no deference

       to the trial court’s legal conclusions.” Koppin v. Strode, 761 N.E.2d 455, 461

       (Ind. Ct. App. 2002).


[24]   The arbitration award refers to the orders it issued to the parties as “terms and

       conditions.” (Appellant’s App. Vol. II, p. 157). As such, we determine that the

       order requiring Husband to pay Wife’s attorney fees and costs in the amount of

       $95,000, was a specific term and condition of the Decree. Contrary to

       Husband’s arguments, non-compliance with that directive was a violation.


[25]   Husband additionally argues that the indemnity clause at issue here was

       imposed by the arbitrator and was not an agreed upon clause that the parties

       intended to be included in the Decree. We note that arbitration arises through

       contract, and the parties are essentially free to define for themselves what

       questions may be arbitrated, remedies the arbitrator may afford, and the extent

       to which a decision must conform to the general principles of law. School City of

       East Chicago v. East Chicago Fed'n of Teachers, Local No. 511, 422 N.E.2d 656, 662

       (Ind. Ct. App. 1981). The facts in Masters II reveal that via agreement, the

       parties agreed to arbitrate, however, that agreement was not included in this

       appeal. Accordingly, Husband’s waives his argument that the arbitrator

       imposed the indemnity clause rather than it being a mutual clause. See Dickes v.

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 19 of 24
       Felger, 981 N.E.2d 559, 562 (Ind. Ct. App. 2012) (“A party waives an issue

       where the party fails to develop a cogent argument or provide adequate citation

       to authority and portions of the record.”); Ind. Appellate Rule 46(A)(8)(a).

       Notwithstanding Husband’s omission to include the arbitration agreement, our

       reading of the Decree reveals that through a series of six hearings, the parties

       arbitrated, and the arbitrator resolved, issues including legal and primary

       physical custody, parenting time, child support, parochial school expenses,

       health care, tax exemption, spousal maintenance, rehabilitative maintenance,

       division of marital estate, attorney fees, and litigation costs. The arbitrator also

       included an indemnity clause to vindicate collection rights of attorney fees and

       costs exhausted by an aggrieved party in the event the other party failed to

       adhere with the directives of the Decree. Husband was ordered to pay Wife’s

       attorney fees and costs relating to the arbitration.


[26]   Husband then posits that the issue of whether an indemnity provision may

       permit recovery of appellate attorney fees expended by judgment creditor

       (Wife) while defending an appeal initiated by a judgment debtor (Husband) has

       never been addressed by this court and is an issue of first impression. Wife

       refutes that this is not a case of first impression and she claims that we

       addressed a similar issue in Fackler v. Powell, 891 N.E.2d 1091 (Ind. Ct. App.

       2008).


[27]   In Fackler, the parties took part in a mediation in the final settlement of their

       divorce action, resulting in an agreement. Id. at 1094. The dissolution court

       approved the agreement and entered it as part of the final decree. Id. The

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018    Page 20 of 24
agreement assigned to the ex-wife a promissory note in the amount of $23,000

plus other costs up to $80,000. Id. Ex-husband was required to guarantee

payment of the note from the conveyance of “Lot 22.” Id. Prior to the sale of

Lot 22, ex-husband then notified his ex-wife that upon sale of the lot, he would

only pay ex-wife $23,000 plus accrued interest at 8%. Id. Displeased with ex-

husband’s intentions, ex-wife brought an action seeking legal and equitable title

to the note and she sought the remaining balance on the note upon the sale of

the lot. Id. Lot 22 was subsequently conveyed for a gross selling price of

$114,900. Id. at 1095. On the same day the lot was sold, ex-husband paid ex-

wife $23,000 plus accrued interest in the amount of $179.40. Id. The balance,

$83,785.44, was thereafter placed in an escrow account. Id. Ex-wife

subsequently filed a motion for summary judgment alleging that she was

entitled to judgment as a matter of law because the settlement agreement clearly

and unambiguously awarded full ownership of the promissory note to her. Id.

Ex-husband, in turn, filed a motion for summary judgment of his own, asserting

that he was entitled to judgment because the trial court did not have subject

matter jurisdiction or, in the alterative, because the settlement agreement clearly

and unambiguously awarded only $23,000 to ex-wife, leaving him the owner of

the promissory note. Id. Following a hearing, the trial court denied both of the

parties’ summary judgment motions. Id. Ex-wife filed a motion for

certification of interlocutory appeal; it was ultimately granted by the trial court,

and we accepted jurisdiction thereafter. Id. We vacated on jurisdiction

grounds, and on transfer, the supreme court determined that ex-wife should

have filed her claim in the dissolution court which retained jurisdiction to
Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 21 of 24
       interpret and enforce their marital settlement agreement. Id. Ex-wife then

       refiled her claim in the dissolution court. Id. A hearing was conducted, and the

       trial court entered its findings of fact and conclusions of law determining that

       ex-wife’s only contractual right was $23,000 from the promissory note, and it

       further ordered ex-wife to pay ex-husband’s attorney fees. Id. Ex-wife

       appealed. Id.


[28]   In her second appeal, ex-wife raised two issues. In her first claim, ex-wife

       argued that the settlement agreement unambiguously awarded her full

       ownership of the promissory note. Id. On this issue, we determined that ex-

       husband had breached the provisions of settlement agreement requiring him to

       pay $23,000 plus other costs up to $80,000, upon sale of Lot 22. Id.

       Accordingly, we found that ex-husband was obligated to pay Wife $103, 000—

       i.e., $23,000 plus other costs up to $80,000. Id. at 1097. Ex-wife’s second

       argument was that trial court’s order requiring her to pay ex-husband’s attorney

       fees was contrary to the law. Id. While initially noting that Indiana adheres to

       the “American Rule” with respect to the payment of attorney’s fees, i.e., each

       party is required to pay their own attorney fees, we found that the rule was

       inapplicable because the parties’ settlement agreement contained an

       indemnification clause relating to payment of attorney fees. Id. The indemnity

       clause specifically provided:


               Each party agrees to indemnify and save and hold the other
               harmless from all damages, losses, expenses (including attorney’s
               fees), costs and other fees incurred by reason of the indemnitor's
               violation or breach of any of the terms and conditions hereof.

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 22 of 24
       Id. at 1098. Because we determined that ex-husband had breached the

       settlement agreement in ex-wife’s first issue, i.e., Husband was required to pay

       Wife $103,000 from the proceeds from the sale of Lot 22, and considering the

       indemnity clause, we reversed and remanded to the trial court for a

       determination of attorney fees in favor of Wife. Id.


[29]   Arguing that Fackler is inapplicable and inapposite to the facts of this case,

       Husband claims that the ex-wife in Fackler sued her ex-husband for breaching

       the settlement agreement and for the non-payment of a fixed money judgment.

       Specifically, Husband argues that, in the instant case, “Wife did not

       successfully sue Husband for breach of contract, Wife merely defended

       Husband’s appellate effort to have this Court review whether the Ninety-Five

       Thousand Dollars ($95,000.00) attorney fee award was clearly erroneous or

       not.” (Appellant’s Br. p. 21) (internal quotation marks omitted). In response,

       Wife argues that the Fackler holding “could not be more clear [sic] that it was a

       breach that provided the right to recover attorney[] fees under the

       indemnification provision.” (Appellees’ Br. p. 30). As such, Wife maintains

       that Husband’s refusal to immediately pay her attorney fees and costs when

       ordered, was a breach to the terms and conditions of the Decree.


[30]   Considering the holding in Fackler, we hold that no new ground is being broken

       with respect to the application of an indemnity clause requiring a party to pay

       attorney fees expended by another party. In our view, the rationale espoused in

       Fackler controls our outcome. In Fackler, we held that the ex-husband was

       required to pay his ex-wife’s attorney fees after his breach of a dissolution

       Court of Appeals of Indiana | Opinion 02A05-1706-DR-1317 | April 12, 2018   Page 23 of 24
       property settlement agreement, which agreement stated that each party agreed

       “to indemnify and save and hold the other harmless from all . . . expenses

       (including attorney’s fees) . . . incurred by reason of the indemnitor’s violation

       or breach of any of the terms and conditions hereof.” Fackler, 891 N.E.2d at

       1098. In this case, the triggering event requiring Husband to indemnify Wife’s

       post-dissolution attorney fees and costs was when Husband failed to

       immediately pay Wife’s attorney fees and costs as directed in the Decree.

       Based on our determination that Husband in this case violated the Decree by

       failing to immediately pay Wife’s attorney fees and costs in the amount of

       $95,000, the indemnity clause was triggered when Wife defended herself in

       Husband’s appeal, thereby incurring post-dissolution attorney fees and costs.

       As such, we conclude that the trial court did not err in granting Wife’s motion

       for indemnification.


                                                CONCLUSION

[31]   In light of the foregoing, we conclude that the trial court did not err in granting

       Wife’s post-dissolution attorney fees and costs pursuant to an indemnification

       clause in the parties’ divorce Decree.


[32]   Affirmed


[33]   Robb, J. and Pyle, J. concur




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