Community State Bank Royal Center v. O'Neill

553 N.E.2d 174, 1990 Ind. App. LEXIS 477, 1990 WL 54251
CourtIndiana Court of Appeals
DecidedApril 25, 1990
Docket09A02-8907-CV-370
StatusPublished
Cited by18 cases

This text of 553 N.E.2d 174 (Community State Bank Royal Center v. O'Neill) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Community State Bank Royal Center v. O'Neill, 553 N.E.2d 174, 1990 Ind. App. LEXIS 477, 1990 WL 54251 (Ind. Ct. App. 1990).

Opinions

BUCHANAN, Judge.

CASE SUMMARY

Plaintiff-counter defendant-appellant Community State Bank of Royal Center (Bank) appeals a judgment in favor of defendant-counter plaintiff-appellee John O’Neill (O’Neill), claiming the trial court erred when it determined the statute of limitations had not run on O’Neill’s breach of contract claim, that the trial court improperly awarded O’Neill prejudgment interest, and that the trial court erred when it struck the Bank’s counterclaim in reply to O’Neill’s counterclaim..

We affirm.

FACTS

The facts most favorable to the trial court’s judgment reveal that in May of 1978, the Bank appointed O’Neill as its attorney and as a director. O’Neill handled the Bank’s litigation and was paid a small annual retainer, and was paid separately for the litigation he handled. This practice was followed throughout O’Neill’s tenure as the Bank’s attorney.

[176]*176In September of 1979, the Bank was named as a defendant in a suit by Paul Streets (Streets) which sought damages amounting to $2 million for an alleged violation of an escrow agreement. O’Neill appeared in this litigation on the Bank’s behalf. The litigation continued for five and one half years and was resolved in the Bank’s favor when the suit was dismissed with prejudice in February, 1985. During the litigation, O’Neill had attended six court sessions, four days of depositions, and filed five pleadings. O’Neill’s time spent on the Streets litigation totalled approximately 288 hours. O’Neill submitted a bill for $45,000 to the Bank in February, 1986.

On April 16, 1986, O’Neill resigned his position as a director and as the Bank’s attorney. On December 26,1986, the Bank filed suit against O’Neill to recover loans made to him secured by real estate mortgages. The Bank moved for summary judgment and default judgment against O’Neill because he failed to answer the complaint. The trial court initially granted both motions, but reversed its default judgment and allowed O’Neill to answer the Bank’s complaint.

O'Neill’s answer, filed on May 1, 1987, included four counterclaims against the Bank, including claims for the Streets litigation fees, director fees, general counsel fees, and for failure to pay stock dividends. The Bank replied to O’Neill’s counterclaim, asserted six affirmative defenses, and included a separate counterclaim against O’Neill for legal malpractice in connection with O’Neill's representation of the Bank in the handling of an estate unrelated to the other matters at issue. O’Neill moved to strike the Bank’s “counterclaim in reply” and the trial court withheld ruling on O’Neill’s objection until after the trial.

O’Neill paid the notes and satisfied the mortgages the Bank sought to foreclose, so the Bank’s original claim against O’Neill was not further litigated. Also, the Bank paid the disputed stock dividend and that issue did not go to trial. A bench trial was held on December 16, 1988, and the trial court issued its judgment on March 2,1989. The trial court awarded O’Neill $25,235 for his services in the Streets litigation, as well as prejudgment interest. The trial court also awarded O’Neill $1,200 in directors fees and sustained O’Neill’s objection to the Bank’s counterclaim in reply (alleged malpractice in an unrelated estate matter).

ISSUES

1. Whether the trial court erred when it concluded O'Neill’s claim for attorneys fees was not barred by the statute of limitations?

2. Whether the trial court erred when it awarded O’Neill prejudgment interest?

3. Whether the trial court erred when it sustained O’Neill’s objection to the Bank’s counterclaim in reply?

DECISION

ISSUE ONE—Was O’Neill’s claim for attorneys fees barred by the statute of limitations?

PARTIES’ CONTENTIONS—The Bank asserts that the applicable statute of limitations, Ind.Code 34-1-2-1.5 (1988), requires that a suit on an oral employment contract be brought within two years of the date of the act or omission which is the subject of the suit, and, because O’Neill’s counterclaim was not filed until two years after the conclusion of the Streets litigation, his claim was not timely filed. O’Neill responds that his contract with the Bank was not breached until the Bank refused to pay him for the Streets litigation, which did not occur until after he had submitted his first bill to the Bank, a year after the conclusion of the Streets litigation.

CONCLUSION—O’Neill’s claim was not barred.

The trial court did not err when it determined O’Neill’s claim was not barred by the statute of limitations. IC 34-1-2-1.5 provides:

“All actions relating to the terms, conditions, and privileges of employment except actions based upon a written contract (including, but not limited to, hiring or the failure to hire, suspension, dis[177]*177charge, discipline, promotion, demotion, retirement, wages, or salary) shall be brought within two (2) years of the date of the act or omission complained of”

(Emphasis supplied.)

It is the Bank’s position that because a claim for attorneys fees accrues when a judgment is rendered in the action for which the attorney was employed, the limitation period should have begun to run from February of 1985, when the Streets litigation was dismissed. A plain reading of the statute, however, militates otherwise.

The statute requires that an action “be brought within two (2) years of the date of the act or omission complained of” Id. (emphasis supplied). The act of which O’Neill complains is the Bank’s failure to pay him for the Streets litigation. Logically, this failure could not have occurred until after O’Neill submitted a bill for payment. O’Neill was not due payment until he made his demand upon the Bank, and until the Bank refused payment, no breach of O’Neill’s oral contract occurred. O’Neill did not submit a bill to the Bank until February 26, 1986 and brought his claim for fees in May of 1987, less than two years after submitting his bill.

While the Bank objects to O’Neill being given unfettered discretion to trigger the running of the limitation period by delaying presentation of a bill, no authority is cited in support of this position.

The law does imply that a contract will be performed within a reasonable time if the time for performance is not specified in the contract, Brown v. Brown (1885), 103 Ind. 23, 2 N.E. 233; Jay Clutter Custom Digging v. English (1979), 181 Ind.App. 603, 393 N.E.2d 230. The record reflects that due to the complexity and protracted nature of the Streets litigation, O’Neill was not able to close the file until June of 1985, although he did not send a bill until February of 1986. Record at 360, 405.

We cannot conclude under these circumstances a delay of one year in rendering a bill for legal services is unreasonable as a matter of law, and therefore the statute of limitations began to run from February of 1986 and the two year period had not expired when he filed his claim for fees in May of 1987.

ISSUE TWO—Was the award of prejudgment interest proper?

PARTIES’ CONTENTIONS—The Bank contends that because the court had to exercise its judgment to determine the amount of the damages O’Neill received, prejudgment interest was improper.

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Community State Bank Royal Center v. O'Neill
553 N.E.2d 174 (Indiana Court of Appeals, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
553 N.E.2d 174, 1990 Ind. App. LEXIS 477, 1990 WL 54251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/community-state-bank-royal-center-v-oneill-indctapp-1990.