When Appeals Go Bad: Attorney’s Fees for Frivolous Appeals in Indiana

by: Colin E. Flora

      Any attorney who has practiced appellate law has encountered occasions in which he or she thinks the opposing side’s posture is so utterly absurd as to merit sanctions as frivolous. Despite the inevitable desire, it is an extremely rare case in which an appellate court agrees. This week, the Court of Appeals of Indiana handed down a decision in one of those rare cases: Wagler v. Western Boggs Sewer District, Inc.

      The background of the case is important to understand why the appeal was held to be frivolous and sanctions meritorious.

In February 2009, West Boggs Sewer District, Inc. (“West Boggs”), filed complaints against Norman Wagler and Nathan and Janet Wagler (collectively “the Waglers”), seeking to require them to connect their respective properties to its sewer system pursuant to Indiana Code Section 8–1–2–125. The statute provides that a not-for-profit public sewer utility, such as West Boggs, may require a property owner to connect to its sewer system if there is an available sanitary sewer within three hundred feet of the property line. Norman entered into an agreed judgment with West Boggs, pursuant to which he agreed to connect to the sewer system. The trial court issued a judgment against Nathan and Janet ordering them to connect to the sewer system. Norman filed a motion to set aside the agreed judgment, which the trial court denied, and he appealed. Nathan and Janet also appealed the judgment against them. The Waglers unsuccessfully litigated their appeals all the way to the U.S. Supreme Court, which denied certiorari in 2014.

The trial court issued two contempt orders against Norman and two contempt orders against Nathan and Janet based on their failure to comply with the judgments requiring them to connect to the sewer system. Norman appealed the second contempt order against him, and Nathan and Janet appealed the second contempt order against them. These appeals have been consolidated.

      The problem arises from the arguments advanced on appeal. As you can see, the only issues appealed–likely, the only issues that could still be appealed–were the contempt orders for failure to comply with judgments. Instead of using the appeal to provide argument against the contempt orders, the parties once more argued the merits of the case as a whole. As the court stated:

The Waglers are appealing from the trial court’s orders finding them in contempt, or willful disobedience, of the original judgments requiring them to connect to West Boggs’s sewer system. But, as West Boggs points out, “one would not know this by reading their Appellants’ Brief. Instead, one would get the impression that this was a direct appeal of the Judgments.”

Thus, instead of arguing a defense to the contempt order, the appellants–the Waglers–sought a collateral attack on the judgments themselves. But, of course, Indiana law does not permit this: “Even an erroneous order must be obeyed unless and until reversed on appeal. A party’s remedy for an erroneous order is appeal; disobedience of the order is contempt.” In this case, the Waglers had already lost their merits appeal in their first foray into the appellate courts.

      Indiana Appellate Rule 66(E) sets forth the authority of the court to sanction frivolous appeals: “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 attorneys’ fees. The Court shall remand the case for execution.” Although it is subject to the court’s discretion, it is not unfettered discretion. Instead, “discretion to award attorney fees under Indiana Appellate Rule 66(E) is limited . . . to instances when an appeal is permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of delay.” Further, the court has previously recognized that the court must act with “extreme restraint when exercising this power because of the potential chilling effect upon the exercise of the right to appeal.”

      Even with the court’s reticence to utilize Rule 66(E) sanctions, the court concluded that this was an appropriate case for such sanctions, “because, as West Boggs observes, they ‘do not even address the Contempt Orders’ and ‘simply seek to re-litigate the Judgments,’ which they may not do.” I suspect if this had been the totality of the appellants’ offenses, the court would likely not have awarded attorney’s fees. It is not uncommon for inexperienced appellate advocates to get lost in the procedural weeds and overlook the confined nature of the appeal. Instead, however, an appeal of the merits had already gone through the system, and the Waglers had lost. Instead of accepting that loss, they still refused to comply with the various courts, resulting in multiple contempt orders. Lastly, there was this appeal. The Court of Appeals read into these tactics and agreed with West Boggs that “this appeal ‘appears to be part of a strategy to simply draw this matter out with the hope that West Boggs will quit.’ This strategy is the very definition of vexatiousness and delay.”

      Because of this apparent abuse of the appellate process, the Waglers will have more than just their own attorney to pay.

      Join us again next time for further discussion of developments in the law.

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*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.