Highland Realty, Inc. v. Indianapolis Airport Authority

Citations: 551 N.E.2d 1176; 1990 Ind. App. LEXIS 366; 1990 WL 34844Docket: No. 12A02-8811-CV-410

Court: Indiana Court of Appeals; March 26, 1990; Indiana; State Appellate Court

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Highland Realty, Inc. appeals the trial court's decision to condition the voluntary dismissal of its lawsuit against the Indianapolis Airport Authority on the payment of the Authority's attorneys' fees. The lawsuit, filed on January 4, 1983, involved six counts including inverse condemnation, nuisance, and civil rights, but only the inverse condemnation claim remained viable after various summary judgments. Following the striking of several expert witnesses and the denial of a motion to amend the complaint, Highland sought a voluntary dismissal without prejudice on May 19, 1988. The trial court granted this request but ordered Highland to pay $148,586.06 in attorneys' fees to the Authority to properly effectuate the dismissal under Trial Rule 41(A)(2), later modified to $140,989.81. Highland's subsequent motion to file a deposition was denied because the case had been dismissed. A superse-deas bond was filed to stay execution of the judgment during the appeal. The key issue on appeal is whether the trial court erred in ordering Highland to pay the Authority's attorneys' fees as a condition of the dismissal.

Highland contends that the trial court overstepped its authority by conditioning the dismissal without prejudice of its action on the payment of attorney's fees, arguing that TR. 41(A)(2) does not permit such an award. The Authority counters that federal courts interpret the federal version of TR. 41(A)(2) to allow for attorney's fees as a dismissal condition and suggests Indiana adopt this interpretation. The Authority also argues that the attorney's fees could be justified under the "obdurate behavior" theory. 

The court concludes that the trial court erred, emphasizing that TR. 41(A)(2) does not authorize conditioning dismissals on attorney's fees, aligning with Indiana's general rule that each party pays its own attorney's fees, with limited exceptions. The court refers to the case City of Indianapolis v. Central Railroad Co. to support this position, noting that while exceptions exist for statutory provisions or bad faith actions, TR. 41(A)(2) does not create a new exception for attorney's fees.

The Authority's attempt to invoke the "obdurate behavior" exception lacks merit, as the trial court did not explicitly determine whether Highland's conduct met this standard. While the Authority cites the trial court's reasoning about Highland's intentions to refile the case, the court references Kikkert v. Krumm to clarify that the "obdurate behavior" exception is meant to protect the judicial process and applies only when a party files or maintains a knowingly baseless claim.

Obdurate behavior is defined as vexatious and oppressive conduct that constitutes a blatant abuse of the judicial process, primarily characterized by baseless litigation and bad faith. In this case, the Authority did not assert that Highland's actions lacked merit; rather, Highland's claims seemed to be made in good faith regarding damages, and its request for dismissal without prejudice was not deemed vexatious or oppressive. The Authority's argument for obdurate behavior is invalid based on the precedent established in Kikkert. The trial court's decision to condition Highland's dismissal on the payment of the Authority's attorney's fees necessitates remand for further consideration of Highland's request to dismiss its action voluntarily without prejudice. 

Highland also contests the trial court's summary judgment on four of five issues, the striking of its expert witnesses, denial of its motion to amend the complaint, and denial of its motion to file and publish a deposition. However, these issues are rendered moot due to the voluntary dismissal of the action, which effectively nullifies any interlocutory orders. Citing City of Garrett v. Terry, the court notes that while attorney's fees can be recoverable as 'litigation expenses' under amended Indiana Code 32-11-1-10, this is limited to circumstances where the condemnee receives a damage judgment exceeding the government's last settlement offer, making the ruling less relevant to the current case.