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holding that a petitioner failed to establish a meritorious claim when "[n]one of the newly discovered evidence attached to the motion for relief from judgment" demonstrated that the petitioner suffered any damage
Summary of this case from Black v. BlackOpinion
Court of Appeals Case No. 20A-PL-1683
08-24-2021
COUNTY MATERIALS CORP. and Central Processing Corp., Appellants/Cross-Appellees/Plaintiffs, v. INDIANA PRECAST, INC., Ryan S. Gookins, and Richard A. Rectenwal, III, Appellees/Cross-Appellants/Defendants.
Attorneys for Appellants/Cross-Appellees: Thomas S. Reynolds II, Jessica C. Mederson, John P. Shanahan, Danielle M. Nardick, Hansen Reynolds LLC, Milwaukee, Wisconsin, John R. Maley, Barnes & Thornburg LLP, Indianapolis, Indiana Attorneys for Amicus Curiae Attorneys for Open Courts: Kathleen A. DeLaney, DeLaney & DeLaney LLC, Indianapolis, Indiana, Paul L. Jefferson, McNeely Law, Indianapolis, Indiana Attorneys for Appellees/Cross-Appellants: Robert L. Burkart, Clifford R. Whitehead, L. Katherine Boren, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, Indiana
Attorneys for Appellants/Cross-Appellees: Thomas S. Reynolds II, Jessica C. Mederson, John P. Shanahan, Danielle M. Nardick, Hansen Reynolds LLC, Milwaukee, Wisconsin, John R. Maley, Barnes & Thornburg LLP, Indianapolis, Indiana
Attorneys for Amicus Curiae Attorneys for Open Courts: Kathleen A. DeLaney, DeLaney & DeLaney LLC, Indianapolis, Indiana, Paul L. Jefferson, McNeely Law, Indianapolis, Indiana
Attorneys for Appellees/Cross-Appellants: Robert L. Burkart, Clifford R. Whitehead, L. Katherine Boren, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, Indiana
Friedlander, Senior Judge.
[1] In this latest stage of a bitter dispute, County Materials Corp. ("County") and Central Processing Corp. ("Central") (collectively, "the Purchasers") appeal the trial court's denial of their motion to correct error and motion for relief from judgment. Indiana Precast, Inc. ("Precast"), Ryan S. Gookins ("Gookins"), and Richard A. Rectenwal, III ("Rectenwal") (collectively, "the Precast parties") present several claims on cross-appeal. We affirm the trial court's judgment.
Issues
[2] The Purchasers raise two issues, which we restate as:
I. Whether the trial court erred in denying the Purchasers’ request to set aside the final judgment and order a new trial.
II. Whether the trial court erred in denying the Purchasers’ request to set aside its award of attorney's fees to the Precast parties.
[3] On cross-appeal, the Precast parties raise two issues:
I. Whether the Purchasers’ appeal is timely.
II. Whether the Precast parties should receive an award of appellate attorney's fees.
Facts and Procedural History
[4] County is a Wisconsin corporation, and Central is incorporated in Florida. County produces precast concrete structures, such as manholes, for construction projects. Central is a "management services corporation" that provides workers for several businesses, including County, under contract. Appellees’ App. Vol. 6, p. 103. All of County's workers, including its executive officers, are in fact employees of Central who have been assigned to County. The Purchasers are owned by members of the same family and share office space in Wisconsin.
[5] Independent Concrete Pipe Company ("ICPC") made precast concrete structures, along with concrete pipes and related equipment. It owned plants in Indianapolis and Maxwell, Indiana. Gookins and Rectenwal were both long-time ICPC employees. Gookins was a salesperson, and Rectenwal drafted diagrams that ICPC's production teams used to make the concrete structures.
[6] In December 2014, County purchased ICPC's assets, including tangible property (such as inventory) and intangible assets (such as customer lists). County became the operator of ICPC's Indianapolis and Maxwell plants.
[7] At the time of the purchase, ICPC terminated its employees, and Central hired many of them. On December 10, 2014, Gookins, Rectenwal, and Central's other new employees appeared at the Maxwell plant for an employee onboarding process. On that day, Gookins and Rectenwal executed confidentiality agreements with Central. The agreements identified County as the company for whom Gookins and Rectenwal were assigned to work by Central and further stated that they would be County's agents. In addition, the agreements provided that during their employment and for a twenty-four-month period afterwards, Gookins and Rectenwal would not disclose to others confidential information that would be detrimental to County's business interests. Finally, the agreements stated that when Gookins’ and Rectenwal's employment at Central came to an end, they would be barred for twenty-four months from soliciting Central's employees to quit working for Central.
[8] Rectenwal also executed a non-competition agreement with Central that barred him from selling or marketing a product in competition with County's products for up to twelve months after his employment ended. In addition, the non-competition agreement contained a provision stating that after Rectenwal's employment came to an end, he would be barred for a twenty-four-month period from soliciting Central's employees to quit their jobs. Central also directed Gookins to sign a non-competition agreement, but he ultimately did not sign one.
[9] Rectenwal was a "Tech Admin 2" for County, continuing to draft diagrams for production teams just as he had done for ICPC. Appellants’ App. Vol. III, p. 22. Central paid him a salary that was lower than ICPC's salary. Rectenwal resigned from Central in early February 2015, after less than two months of work. He went to work for Underground Pipe and Valve in South Bend, Indiana, where he worked in sales and sold products to numerous companies, including County. In addition, Rectenwal did drafting work for County as an independent contractor for several months after he quit.
[10] Central hired Gookins to be County's head of sales for Indiana. He complained to his supervisor and others about County's production processes, claiming that they were inefficient and alienated ICPC's former customers. Gookins quit Central in April 2015 and took a sales job with Utility Pipe Sales of Indiana ("Utility Pipe"). In that capacity, Gookins occasionally purchased products from County for resale.
[11] Subsequently, Gookins approached Bill Zausch, a co-owner of Utility Pipe, about entering the precast concrete structures industry. In the summer of 2015, Zausch joined Gookins and Rectenwal on a site visit to the Columbus, Indiana property of Horn Precast, a precast concrete structure manufacturer that was in bankruptcy. Zausch and others later purchased Horn Precast's assets. In January 2016, Zausch, Gookins, and Rectenwal, among others, incorporated Indiana Precast, a business that would make and sell precast concrete structures for construction projects. Zausch became Precast's president. Gookins became Precast's vice-president and owned a small amount of stock in the company. Rectenwal began working at Precast on February 8, 2016. He was Precast's general manager and also owned a small amount of stock in the company.
[12] In 2016, the Purchasers’ managers noted that several key employees, including production supervisors, had quit working at the Maxwell facility and were working at Precast. County's productivity suffered during this time, and the Purchasers attributed this slowdown in part to the loss of these employees. The Purchasers also became concerned that Precast may have unfairly poached County's customers. In February 2017, the Purchasers sued the Precast parties, beginning this case. The Purchasers raised the following claims against each party:
Gookins: breach of confidentiality agreement (by soliciting employees and disclosing trade secrets); breach of fiduciary duty of loyalty; tortious interference with contractual relationships (Central employees); tortious interference with business relationships (Central employees and County customers).
Rectenwal: breach of confidentiality agreement and breach of non-competition agreement (by soliciting employees, competing with County, and disclosing trade secrets); tortious interference with contractual relationships (Central employees); tortious interference with business relationships (Central employees and County customers).
Precast: tortious interference with contractual relationships (Central employees); tortious interference with business relationships (Central employees and County customers).
Tr. Ex. Vol. I, pp. 34-40. The Purchasers further alleged the Precast parties had joined in a civil conspiracy to improperly solicit the Purchasers’ employees and customers. Finally, the Purchasers requested an award of punitive damages against each of the Precast parties and an injunction prohibiting future solicitation of Central's employees.
[13] In April 2017, the Precast parties filed a motion to dismiss the Purchasers’ complaint. The trial court denied the motion after a hearing.
[14] The parties exchanged discovery requests and repeatedly accused each other of violating discovery rules. They filed cross-motions to compel discovery and for sanctions. In December 2017, the Purchasers served nonparty discovery requests on Utility Pipe. On January 10, 2018, one of the Precast parties’ attorneys notified the Purchasers that he also represented Utility Pipe. The attorney asked for a thirty-day extension to respond to the nonparty discovery requests, and the Purchasers agreed.
Judge Terry K. Snow, while presiding over a June 20, 2018 discovery dispute hearing, described the parties’ conduct as follows:
My overall is [sic] impression is that both sides have done a great job of trying to slow things down, get in the way, not produce, not cooperate. Which the rules are based on the idea that there is going to be cooperation and professionalism between counsel. I'm not seeing that. I'm seeing a ton of documentation being filed, responses being filed very quickly. Disparaging comments being made about the other side. That's not professional, that's not how you get things done.
Tr. Vol. 2, p. 94.
[15] On January 29, 2018, the Precast parties filed motions for summary judgment. Next, on February 16, the Precast parties moved to stay the Purchasers’ nonparty discovery requests until after the trial court ruled on their motions for summary judgment. In turn, the Purchasers filed a cross-motion for partial summary judgment. The trial court ultimately granted the Precast parties’ motion to stay nonparty discovery.
[16] On September 7, 2018, the trial court denied the parties’ cross-motions for summary judgment. The jury trial was scheduled to begin on October 8, 2018. The Purchasers requested leave to serve nonparty discovery, and the court granted that request.
[17] On October 3, 2018, the Purchasers filed a motion to continue the trial and for sanctions, claiming they had just received documents from Utility Pipe that the Precast parties should have disclosed in discovery months ago. The Purchasers further claimed the newly disclosed documents strongly supported their claims. The Precast parties objected to the motion. The trial court denied the Purchasers’ request to continue the trial.
[18] The jury trial began on October 8, 2018. On that same day, the Purchasers filed a motion for sanctions and a request to instruct the jury to draw adverse inferences against the Precast parties arising from their alleged discovery misconduct. Later in the trial, the trial court denied the Purchasers’ motion for sanctions and request for a jury instruction, concluding the Precast parties’ delay in producing discoverable information was not intentional.
[19] After the Purchasers ended their case-in-chief, the Precast parties moved for judgment on the evidence. The trial court granted the motion as to all of Central's claims. The trial court further granted the Precast parties’ motion as to County's claim for punitive damages, but otherwise denied the motion. Subsequently, the jury returned a verdict in favor of the Precast parties on County's remaining claims.
[20] Next, the Purchasers filed a motion to correct error. The trial court denied the Purchasers’ motion to correct error, and they filed a Notice of Appeal, beginning an appeal under Cause Number 19A-PL-268.
[21] In the meantime, each of the Precast parties filed separate motions for attorney's fees, claiming that almost all of the Purchasers’ claims were frivolous, groundless, unreasonable, and litigated in bad faith. The Purchasers moved to dismiss or stay the motions for attorney's fees, claiming this Court had jurisdiction over the case due to the pending appeal. The trial court denied the Purchasers’ motion, held a hearing on the Precast parties’ attorney's fees requests, and later granted the requests in three separate orders. In each of the fee award orders, the court determined that the Purchasers had presented claims that were frivolous, unreasonable, and groundless, and had continued to litigate those claims after they were identifiable as frivolous, unreasonable, and groundless. The court subsequently vacated its orders due to the pending appeal.
Gookins’ motion for attorney's fees did not include the Purchasers’ claim that he had breached the employee non-solicitation clause of his confidentiality agreement.
[22] On May 31, 2019, this Court dismissed the appeal in Cause Number 19A-PL-268. Next, the Precast parties moved the trial court to reinstate the prior fee orders. The trial court granted the Precast parties’ request after a hearing, once again determining that all of the Purchasers’ claims (except the one for which Gookins had not requested attorney's fees) were frivolous, unreasonable, and groundless. The court ordered the parties to agree upon the amount of fees owed within fourteen days or, if the parties were unable to agree, to request an evidentiary hearing. The parties failed to reach an agreement. The court held an evidentiary hearing, and on December 23, 2019, issued a final judgment in favor of the Precast parties, determining that the Purchasers were jointly and severally liable to the Precast parties for $655,642.66 in attorney's fees.
[23] On January 22, 2020, the Purchasers filed a motion to correct error and motion for relief from judgment, basing their request for relief on documents they had received from the Precast parties in January 2020 in connection with a pending federal lawsuit. The Purchasers later supplemented their motion, adding an additional ground in support of their motion for relief from judgment. On June 23, 2020, the court held a hearing on the Purchasers’ motions. On September 10, 2020, the court issued an order denying the Purchasers’ motion to correct error and motion for relief from judgment. The Purchasers filed a Notice of Appeal on September 15, 2020.
With respect to the federal lawsuit, we know from the record in this case only that the Purchasers are suing the Precast parties for abuse of process related to alleged misconduct in this case.
Discussion and Decision
I. Cross-Appeal - Timeliness of Appeal
[24] We begin by addressing the Precast parties’ first cross-appeal issue because their argument, if correct, would dispose of the case. The Precast parties argue the Purchasers’ appeal is untimely because their motion to correct error was deemed denied, and the Purchasers failed to file a notice of appeal before the prescribed deadline. In response, the Purchasers claim their appeal is not defaulted because: (1) the appellate deadline was tolled under authority granted by the Indiana Supreme Court to address the COVID-19 pandemic; and (2) alternatively, the Purchasers also filed a motion for relief from judgment, thus preserving their claims for review.
[25] The Indiana Rules of Appellate Procedure and the Indiana Rules of Trial Procedure establish the deadline to appeal the denial of a motion to correct error. A statute or rule is not open to construction where there is no ambiguity in the language employed and its meaning is plain. Figg & Muller Eng'rs, Inc. v. Petruska , 477 N.E.2d 968 (Ind. Ct. App. 1985), trans. denied. If a party wishes to appeal the denial of a motion to correct error, that party must file a Notice of Appeal within thirty days of the date the trial court's order is entered on the Chronological Case Summary or within thirty days of the date the motion is deemed denied. Ind Appellate Rule 9(A)(1). A motion is deemed denied when, among other scenarios, the trial court does not rule on the motion within thirty days of holding a hearing. Ind. Trial Rule 53.3.
[26] The trial court held a hearing on the Purchasers’ motion to correct error on June 23, 2020 and did not issue an order within thirty days. The Precast parties argue the thirty-day deadline for the Purchasers to file a notice of appeal began to run on July 23 and expired on August 24, and as a result the Purchasers’ September 15 Notice of Appeal was untimely.
[27] The Purchasers disagree, pointing to orders from the Indiana Supreme Court and the trial court that tolled appellate filing deadlines while the motion to correct error was pending. On May 29, 2020, the Indiana Supreme Court issued an order addressing the COVID-19 pandemic, authorizing trial courts to toll "all laws, rules, and procedures setting time limits ... in all other civil and criminal matters before Indiana trial courts" through August 14, 2020. Matter of Admin. Rule 17 Emergency Relief for Ind. Trial Cts. Relating to the 2019 Novel Coronavirus (COVID-19) , 145 N.E.3d 787, 787 (Ind. 2020). [28] Subsequently, the Hancock County Courts submitted to the Indiana Supreme Court a transition plan to resume regular court services. In the plan, the Hancock County Courts exercised the authority granted by the Indiana Supreme Court, stating that the tolling of all time limits in civil and criminal cases "shall be allowed to expire as of August 14, 2020." In the Matter of Emergency Petition for Admin. Orders of Hancock Cnty. , Case No. 20S-CB-183, https://www.in.gov/courts/files/covid19-2020-0528-hancock-transition.pdf (last visited Aug. 16, 2021). The Indiana Supreme Court approved the Hancock County Courts’ plan on June 9, 2020, taking effect as of May 28, 2020.
[29] Under the plain language of the Hancock County Courts’ order, the tolling of the Purchasers’ thirty-day period under Trial Rule 53.3 to appeal the denial of their motion to correct error ended on, or "as of," August 14. They did not file their Notice of Appeal until September 15, the thirty-first day after August 14. Thus, their appeal was untimely as to their Trial Rule 59 motion to correct error.
On September 10, the trial court issued its order denying the Purchasers’ motion to correct error and motion for relief from judgment, but the issuance of the order did not alter the Purchasers’ deadline to appeal the deemed denial of their motion to correct error. It is well established that once a motion to correct error is deemed denied, a later trial court order denying the motion is a nullity and does not extend the deadline to appeal. See Johnson v. Johnson Cnty. Bd. of Zoning Appeals , 732 N.E.2d 865 (Ind. Ct. App. 2000) (trial court's belated denial of motion to correct error did not extend Johnson's deadline to file appeal).
In their response to the Precast parties’ argument that this appeal is untimely, the Purchasers acknowledge that the thirty-day period within which to file their Notice of Appeal expired on September 14, but they then assert that "the Notice of Appeal was filed within 30 days as it was filed on September 14." Appellants’ Reply Br. at 44. The Purchasers provide no citation to the voluminous record in support of that assertion. See Ind. Appellate Rule 46(A)(8)(a). And the CCS plainly contradicts it, showing a filing date of September 15 for the Notice of Appeal. Appellants’ App. Vol. II, p. 90.
[30] Our analysis does not end there, because the Purchasers filed a motion for relief from judgment under Indiana Trial Rule 60(B)(3) (based on allegations of fraud or other misconduct) jointly with their motion to correct error. They later supplemented their motion for relief from judgment by adding a claim under Indiana Trial Rule 60(B)(2) (based on newly discovered evidence). Indiana Trial Rule 53.3 does not include any deemed denied provisions for a Trial Rule 60 motion for relief from judgment, and there is no dispute that the Purchasers filed their Notice of Appeal within thirty days of the trial court's denial of their motion for relief from judgment.
[31] The Precast parties argue that the Purchasers’ filing of a motion for relief from judgment should not render their appeal timely, noting that a motion for relief from judgment " ‘is not a substitute for a direct appeal.’ " Cross-Appeal Reply Br. pp. 6-7 (quoting In re Paternity of P.S.S. , 934 N.E.2d 737, 740 (Ind. 2010) ). We agree in part. Indiana Trial Rule 60(B)(2) provides that a party may seek relief from judgment based on "any ground for a motion to correct error, including without limitation newly discovered evidence, which by due diligence could not have been discovered in time to move for a motion to correct errors under Rule 59 " (emphasis added). Trial Rule 59(A)(1), which governs motions to correct error raising claims of newly discovered evidence, provides that such a motion is a prerequisite to an appeal when a party presents "Newly discovered material evidence ... capable of production within thirty (30) days of final judgment which, with reasonable diligence, could not have been discovered and produced at trial."
[32] We conclude from reading these two rules that with respect to a request for relief based on newly discovered material evidence, Trial Rule 59 controls within the first thirty days of a final judgment, and Trial Rule 60(B)(2) controls after the first thirty days. See Faulkinbury v. Broshears , 28 N.E.3d 1115, 1121-1122 (Ind. Ct. App. 2015) (describing the process governed by Trial Rule 60(B)(2) as applying to evidence "which by due diligence could not have been discovered in time to move for a motion to correct errors").
[33] Here, there is no dispute that the Purchasers had both actual knowledge and possession of all the alleged newly discovered material evidence within thirty days of the trial court's final judgment. That evidence was disclosed to County Materials on three occasions: shortly before the trial; on January 6, 2020, just a few weeks after the December 23, 2019, final judgment; and on January 22, 2020, twenty-nine days after the final judgment. On the thirtieth day after the final judgment, the Purchasers filed a document, which they styled, properly, as a motion to correct error under Trial Rule 59 based on newly discovered evidence. In that motion, the Purchasers identified the evidence received shortly before the trial and the evidence received on January 6. The Purchasers further stated that they were in receipt of the evidence received on January 22, that they had not yet reviewed that evidence, and, that once they had reviewed it, they would supplement their Rule 59 motion to correct error if necessary. Then, on January 30, the Purchasers did supplement their motion to correct error based on the January 22 documents. In that supplement, they also sought, for the first time and in the alternative to relief under Rule 59, relief from the judgment under Rule 60(B)(2).
[34] The January 30 supplemental motion was exactly what it claims to be: a Trial Rule 59 motion to correct error with Rule 60(B)(2) alleged in the alternative. The Purchasers were not merely aware of evidence "capable of production within thirty days" of the final judgment, as provided under Trial Rule 59, but they had the evidence in hand, and they filed their Trial Rule 59 motion within thirty days of the final judgment. In that motion, they identified the evidence at issue. They informed the court of this in their motion that they reserved the right to supplement the motion as necessary, and they did in fact supplement the motion in a prompt manner.
[35] County Materials never suggested to the trial court that any of the alleged newly discovered material evidence "could not have been discovered in time to move for a motion to correct error[ ] under Rule 59." See Ind. Trial Rule 60(B)(2) (emphasis added.) They did not suggest this because, in fact, they had the evidence in hand and had correctly filed a Trial Rule 59 motion to correct error.
[36] We conclude that although the Purchasers’ appeal is timely as to their motion for relief from judgment, their claims of newly discovered material evidence under Trial Rule 60(B)(2) are not subject to appellate review because they had already raised those claims in the context of their Trial Rule 59 motion to correct error. Reviewing those claims in the context of a motion for relief from judgment would allow the Purchasers to in effect revive their forfeited direct appeal. We will instead limit our review to the Purchasers’ claims under Indiana Trial Rule 60(B)(3). II. Purchasers’ Appeal – Standard of Review
[37] Indiana Trial Rule 60(B) provides, in relevant part:
On motion and upon such terms as are just the court may relieve a party or his legal representative from a judgment, including a judgment by default, for the following reasons:
....
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party ....
A party requesting relief from judgment based on fraud or other misconduct must also allege a meritorious claim or defense. Id.
[38] A Trial Rule 60(B) motion for relief from judgment addresses only the procedural, equitable grounds for justifying relief from the legal finality of a final judgment, not the legal merits of the judgment. Barton v. Barton , 47 N.E.3d 368 (Ind. Ct. App. 2015), trans. denied. The burden is on the movant to demonstrate that relief under Trial Rule 60(B) is both necessary and just. In re Rueth Dev. Co. , 976 N.E.2d 42 (Ind. Ct. App. 2012), trans. denied. A trial court must balance the alleged injustice suffered by the moving party against the interests of the party who prevailed and society's interest in the finality of judgment. Kretschmer v. Bank of Am., N.A. , 15 N.E.3d 595 (Ind. Ct. App. 2014), trans. denied.
[39] To obtain relief under Trial Rule 60(B)(3) for fraud or other misconduct, the movant must show: (1) fraud, misrepresentation or other misconduct occurred; (2) such misconduct prevented the movant from fully and fairly presenting its case at trial; and (3) the movant has a meritorious claim or defense. In re Rueth , 976 N.E.2d 42. A showing that the movant was prevented from fully and fairly presenting its case requires a demonstration that the trial court's decision was actually influenced by the opposing party's misconduct. Stonger v. Sorrell , 776 N.E.2d 353 (Ind. 2002). In the context of discovery violations, misconduct "can cover accidental omissions where there is no intent to deceive." Outback Steakhouse of Florida, Inc. v. Markley , 856 N.E.2d 65, 73 (Ind. 2006).
[40] We review the denial of a motion for relief from judgment for an abuse of discretion. Fitzpatrick v. Kenneth J. Allen & Assoc., P.C. , 913 N.E.2d 255 (Ind. Ct. App. 2009). An abuse of discretion occurs if the trial court's decision is against the logic and effects of the facts and circumstances before the court or reasonable inferences therefrom. Id. We may neither reweigh the evidence nor substitute our judgment for that of the trial court. Centex Home Equity Corp. v. Robinson , 776 N.E.2d 935 (Ind. Ct. App. 2002), trans. denied.
III. Trial Court's Denial of the Purchasers’ Request for a New Trial
[41] The Purchasers argue the trial court should have set aside the jury's verdict against County, and the trial court's grant of a directed verdict against Central, because they proved the Precast parties wrongfully withheld discovery, thus committing fraud or other misconduct that undermined the validity of the final judgment on the Purchasers’ claims.
[42] Before we turn to the merits of the Purchasers’ claims, we focus on Central's request to set aside the directed verdict against it. The Purchasers have emphasized throughout this litigation that Central and County are separate corporate entities. County manufactures precast concrete structures, and Central provides workers to County and other companies under contract. As such, the Purchasers each bore the burden of separately proving the elements of their claims against the Precast parties. See Ind. Trial Rule 20(A)(2) (plaintiffs may join in one action, but they may only obtain judgment "according to their respective rights to relief").
[43] Proof of damages is an element of each of Central's claims. See Fowler v. Campbell , 612 N.E.2d 596 (Ind. Ct. App. 1993) (discussing elements of breach of contract); SJS Refractory Co., LLC v. Empire Refractory Sales, Inc. , 952 N.E.2d 758 (Ind. Ct. App. 2011) (discussing damages calculation for breach of fiduciary duty of loyalty); Levee v. Beeching , 729 N.E.2d 215 (Ind. Ct. App. 2000) (discussing elements of tortious interference with contractual relationship); McCollough v. Noblesville Schs. , 63 N.E.3d 334 (Ind. Ct. App. 2016) (discussing elements of tortious interference with business relationship), trans. denied.
[44] None of the newly discovered evidence attached to the motion for relief from judgment demonstrates Central suffered any damages as a result of the Precast parties’ alleged wrongdoing. Thus, Central failed to establish a meritorious claim, as required by Trial Rule 60(B)(3), and the trial court did not abuse its discretion in refusing to set aside the final judgment as to Central. We now turn to County's request to set aside the jury's verdict against it under Trial Rule 60(B)(3).
At trial, Central argued, along with County, that it was entitled to repayment by Gookins of his wages due to his alleged breach of his fiduciary duty. The jury rejected that argument, and we may not directly review the jury's decision in this appeal from the denial of the Purchasers’ motion for relief from judgment.
[45] County claims the Precast parties unfairly hid evidence, in the form of over one hundred pages of emails and attachments sent and received by Gookins, Rectenwal, other Precast personnel, and outside parties, until forced to disclose them in the federal case. See Appellants’ App. Vol. III, pp. 35-142. County further claims this deception prevented it from fully and fairly presenting its claims at trial.
[46] Gookins, Rectenwal, and other Precast owners were the senders or recipients of the emails in question, and those emails were generated around the same time as other emails that the Precast parties provided in discovery earlier in this case. The Precast parties failed to explain to the trial court why those documents were not discovered and turned over prior to trial in this case. But the Purchasers point to no evidence arising after the trial demonstrating that the Precast parties withheld the emails and related documents with fraudulent intent. To the contrary, Rectenwal testified at trial that he was asked in this case to collect documents to respond to the Purchasers’ discovery requests, and he searched his emails, both by looking for keywords and reviewing every document, to find responsive documents. In addition, Gookins, who responded to discovery requests for himself and on behalf of Precast, testified at trial that he searched his emails one by one for responsive documents, in good faith but admittedly with a "narrow search," and turned them over to his attorney. Tr. Vol. IV, p. 249; Tr. Vol. V, p. 10. He acknowledged that he may not have found or turned over every email that was responsive to the Purchasers’ discovery requests, but he further explained that he and the other Precast parties had objected to producing some discoverable information. Under these circumstances, the trial court did not err in rejecting County's claims of fraud. See Barton , 47 N.E.3d 368 (trial court did not err in rejecting motion for relief from judgment; movant's allegations of fraud were not supported by the evidence most favorable to the judgment).
[47] As noted above, even accidental violations of the discovery rules can amount to misconduct for purposes of Indiana Trial Rule 60(B)(3), and it appears that, at the least, the Precast parties failed to timely locate and produce the newly discovered emails. We are not convinced, however, that the Precast parties’ failure to produce the evidence prior to trial prevented the Purchasers from fully and fairly trying their case. Many of the emails are cumulative of other evidence that was admitted at trial. For example, some emails include discussions by Rectenwal and Gookins about soliciting Central's workers to join Precast, but the Purchasers submitted a similar email to the jury at trial. Other emails show that Gookins was considering starting up a new precast concrete manufacturing company by the time he quit working for Central, but the Purchasers presented at trial an email that also made that point. Still other emails demonstrate there was a closer relationship between Utility Pipe and Precast than had previously been disclosed in discovery, but Zausch testified at trial that Utility Pipe's owners also owned a majority of shares in Precast.
[48] In addition, other newly discovered emails would have merely impeached the Precast parties’ witnesses. For example, County points to an October 22, 2015, email from Gookins to Zausch indicating that Rectenwal was already working on an inventory system for Precast, whereas Rectenwal testified at trial that he began working at Precast on February 8, 2016, and denied doing any work before then. That email serves only to impeach Rectenwal's credibility. Similarly, Gookins expressed extreme hostility toward County and its executives in several of the newly discovered emails, going so far as to state that he would love to see County put out of business. But those emails would also be merely impeaching of his trial testimony, in which he admitted only that he is competitive and was elated to potentially take a customer from County. See Q.J. v. Ind. Dep't of Child Servs. , 92 N.E.3d 1092 (Ind. Ct. App. 2018) (appellant's newly discovered evidence would not have prevailed, had a motion for relief from judgment been filed; the previously unavailable document would have been used only to impeach an adversarial witness), trans. denied. Further, the Purchasers had argued to the jury, based on witness testimony, that Gookins "hated" County, so the jury had already heard this information. Tr. Vol. V, p. 76.
[49] County further claims that one email exchange from January 2018 shows Gookins instructing an officer of Horn Precast to ignore the Purchasers’ nonparty discovery requests as the case progressed, and that this evidence of wrongdoing would have changed the jury's verdict. We disagree. The emails in fact reveal that Harry Horn asked Gookins if he should have his attorney contact Precast's attorney, and Gookins responded that he believed his attorney "did not want anything to be done at this time" on discovery. Appellants’ App. Vol. III, p. 71. But Gookins further stated he would check with his attorney for further guidance. Thus, the email exchange does not indicate that Gookins was unilaterally instructing a nonparty to avoid discovery but rather was relaying the advice of his counsel as he understood it. Under these facts and circumstances, the trial court did not abuse its discretion in denying County's request under Trial Rule 60(B)(3) to set aside the jury's verdict and schedule a new trial. IV. Trial Court's Denial of the Purchasers’ Request to Set Aside Attorney's Fees Award
[50] As an alternative ground for relief under Indiana Trial Rule 60(B)(3), the Purchasers claim that the trial court should have set aside its award of attorney's fees to the Precast parties. They reason that the Precast parties’ failure to timely disclose the newly discovered emails and attachments amounted to misconduct that hindered their ability to present their claims at trial, leading the trial court to erroneously conclude that their claims were frivolous, unreasonable, or groundless and thus justifying an award of attorney's fees.
[51] Indiana follows "the American Rule," whereby parties are required to pay their own attorney's fees absent an agreement between the parties, statutory authority, or other rule to the contrary. Lockett v. Hoskins , 960 N.E.2d 850, 852 (Ind. Ct. App. 2012). Indiana Code section 34-52-1-1 (1998) allows the trial court to award attorney's fees to a prevailing party in a civil case if the losing 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.
[52] Subsections (b)(1) and (b)(2) of Indiana Code section 34-52-1-1 focus on the legal and factual basis of the claim or defense and the arguments supporting the claim or defense. Mitchell v. Mitchell , 695 N.E.2d 920 (Ind. 1998). In contrast, subsection (b)(3)—"litigated the action in bad faith"—by its terms requires scrutiny of the motive or purpose of the non-prevailing party. Id.
[53] The terms "frivolous," "unreasonable," and "groundless" are defined as follows:
A claim is ‘frivolous’ if it is made primarily to harass or maliciously injure another; if counsel is unable to make a good faith and rational argument on the merits of the action; or if counsel is unable to support the action by a good faith and rational argument for extension, modification, or reversal of existing law. A claim is ‘unreasonable’ if, based upon the totality of the circumstances, including the law and facts known at the time, no reasonable attorney would consider the claim justified or worthy of litigation. A claim or defense is groundless if no facts exist which support the legal claim relied on and presented by the losing party. However, an action is not groundless merely because a party loses on the merits.
Dunno v. Rasmussen , 980 N.E.2d 846, 850-51 (Ind. Ct. App. 2012) (citations omitted). Further, "bad faith" is demonstrated "where the party presenting the claim is affirmatively operating with furtive design or ill will." Kitchell v. Franklin , 26 N.E.3d 1050, 1057 (Ind. Ct. App. 2015), trans. denied.
[54] With regards to Central, we reach the same conclusion on the attorney's fees issue as we did with Central's request for a new trial. As a separate company, Central could not graft County's claimed damages onto its own claims, but rather was obligated to provide evidence that it was harmed. Central failed to present any evidence with the motion for relief from judgment to show that it was individually damaged by the Precast parties’ conduct. The trial court had no reason to set aside its determination that Central's claims were both unreasonable and groundless, at least by the time the trial began. See America's Directories, Inc. v. Stellhorn One Hour Photo, Inc. , 833 N.E.2d 1059 (Ind. Ct. App. 2005) (affirming award of attorney's fees against company; company's claim for breach of contract was no longer justified or worthy of litigation by the time of trial; in part, company claimed client failed to pay for ads in a publication that never actually went to print), trans. denied. We affirm the trial court's denial of Central's request for relief from the attorney's fees award.
[55] As for County's request for relief from the attorney's fees award, we again conclude that, viewing the evidence in the light most favorable to the trial court's judgment, there is no evidence that the Precast parties withheld the newly discovered emails and attachments with fraudulent intent. Further, even if the Precast parties’ failure to timely disclose the documents was nonetheless misconduct for purposes of Trial Rule 60(B)(3), we cannot conclude that County was prevented from fully and fairly defending itself against the attorneys’ fees requests. As is discussed above, most of the emails were cumulative of other evidence that was already before the trial court when it decided the attorney's fees requests or were merely impeaching of the Precast parties’ witnesses and other evidence. The trial court did not abuse its discretion in denying County's request for relief from judgment on this point.
V. Cross Appeal – Appellate Attorney's Fees
[56] The Precast parties argue that they are entitled to attorney's fees on appeal because the Purchasers’ Appellants’ Brief casts aspersions at them and the trial court, fails to properly cite to the record on appeal, fails to state the facts in accordance with the standard of review, and presents implausible, unsupported claims. The Precast parties further state the Court should impose a "multiplier of three (3) to the lodestar calculation" because the Purchasers are abusing the justice system. Appellees’/Cross-Appellants’ Brief p. 39.
[57] The Court may assess damages on appeal, including attorney's fees, "if an appeal, petition, motion, or response is frivolous or in bad faith." Ind. Appellate Rule 66(E). Our discretion to award attorney's fees under Rule 66(E) 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 (Ind. Ct. App. 2003). We must use extreme restraint when exercising this power because of the potential chilling effect upon the exercise of the right to appeal. Id.
[58] None of the Purchasers’ arguments have prevailed in this appeal, but we cannot conclude that they are so lacking in merit as to justify an award of appellate attorney's fees to the Precast parties. The Purchasers’ claims were reasonable, if unsuccessful, in light of the Precast parties’ failure to timely produce the emails and attachments at issue prior to trial. Similarly, any shortcomings in the Purchasers’ briefs on appeal are insufficient to support a fee award. We deny the Precast parties’ request for appellate attorney's fees. See Blackman v. Gholson , 46 N.E.3d 975 (Ind. Ct. App. 2015) (denying request for appellate attorney's fees; although appellant did not present successful claims, appellant's claims were not litigated in bad faith, and appellant's violations of appellate rules in briefs were at best minor deviations).
The Precast parties claim in the alternative that they are entitled to appellate attorney's fees under Indiana Code section 34-52-1-1. To the extent that the statute applies to appellate proceedings, we deny this alternative claim for appellate attorney's fees as well.
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Conclusion
[59] For the foregoing reasons, we affirm the judgment of the trial court.
Bradford, C.J., and Najam, J., concur.