Attorney fees and Frivolous/Bad Faith Litigation

I try not to discuss Not-For-Publication cases. We cannot cite them as law and that tends to confuse the non-lawyers who stop by here. They can be handy for locating cases that we can use for precedent. Also, I think they can be useful in and of themselves. Fred Pfenninger and Cummins Michigan, Inc. v. Great Lakes Drilling, Inc., et al. (NFP) (PDF format) has that kind of value. I am still left wondering why there was this behavior by the attorney. For those who think lawyers get away with bad behavior, you definitely need to read this opinion.

Finally, Pfenninger contends that the trial court erred in trebling the sanction award without authority to do so. As discussed below, the trial court had the authority to impose the underlying award of attorney’s fees pursuant to either Indiana Trial Rule 37 (B) or Indiana Code Section 34-52-1-1(b).

Opinion at 11, with footnote omitted.

IC 34-52-1-1 is our frivolous claims statute:

IC 34-52-1-1 General recovery rule
Sec. 1. (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.
(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.

(c) The award of fees under subsection (b) does not prevent a prevailing party from bringing an action against another party for abuse of process arising in any part on the same facts. However, the prevailing party may not recover the same attorney's fees twice.

The opinion goes to discuss the basis for the sanction against the lawyer:

Although the order is otherwise detailed, it does not denote which statute or trial rule upon which the trial court bases the award. Only certain language in the order assists in determining under which authority the trial court intended to make the award. The order includes findings that “Pfenninger has filed numerous, unsupported and frivolous pleadings and discovery in bad faith” and “has continued to litigate this action after Cummins claims and/or defenses clearly became frivolous, unreasonable and groundless, as well as in bad faith.” Appellant’s App. at 22, 23. The order concludes that “[a]s a result of Pfenninger’s deceit as set forth herein, Diversified is entitled to triple damages.” Appellant’s App. at 23. These three passages indicate the following authority, respectively: Indiana Trial Rule 37(B) (Discovery Sanctions),6 Indiana Code Section 34-52-1-1(b) (Exception to General Costs Recovery Rule),7 and Indiana Code Section 33-43-1-8 (Deceit or Collusion by an Attorney).

I do not recall having seen IC 33-43-1-8 and I hope never to see it:

IC 33-43-1-8
Deceit or collusion of attorney; penalty
Sec. 8. (a) An attorney who is guilty of deceit or collusion, or consents to deceit or collusion, with intent to deceive a court, judge, or party to an action or judicial proceeding commits a Class B misdemeanor.
(b) A person who is injured by a violation of subsection (a) may bring a civil action for treble damages.
As added by P.L.98-2004, SEC.22.

The Pfenninger opinion gives a good description of how IC 34-52-1-1 operates at pages 13 - 14 of the opinion.