Inner Circle Properties, LLC v. Jeffrey Beeks

• Court: Indiana Court of Appeals
• Decided: April 24, 2013
• Docket: 35A02-1210-SC-885
• Status: Unpublished

Opinion

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT: Apr 24 2013, 8:47 am

JUSTIN R. WALL Wall Legal Services Huntington, Indiana

IN THE COURT OF APPEALS OF INDIANA

INNER CIRCLE PROPERTIES, LLC, ) ) Appellant-Plaintiff, ) ) vs. ) No. 35A02-1210-SC-885 ) JEFFREY BEEKS, ) ) Appellee-Defendant. )

APPEAL FROM THE HUNTINGTON SUPERIOR COURT The Honorable Jeffrey R. Heffelfinger, Judge The Honorable Jennifer E. Newton, Magistrate Cause No. 35D01-1208-SC-699

April 24, 2013

MEMORANDUM DECISION - NOT FOR PUBLICATION

CRONE, Judge Case Summary

Inner Circle Properties, LLC (“Inner Circle”), appeals the small claims court’s

judgment which, in effect, denied Inner Circle’s claim for $250 in attorney’s or collection

fees. Inner Circle was the assignee of the rights to a contract to provide legal services

between attorney Justin R.Wall, d/b/a Wall Legal Services, and client Jeffrey Beeks. In that

contract, Beeks agreed that a $250 flat collection fee would be assessed against him in the

event that counsel would need to pursue court action to recover any unpaid legal fees. The

sole issue presented for our review is whether the small claims court clearly erred in denying

Inner Circle’s claim for $250 in attorney’s or collection fees. Finding prima facie error, we

reverse and remand.

Facts and Procedural History

Attorney Justin R. Wall of Justin R. Wall, P.C., d/b/a Wall Legal Services, provided

legal services to Beeks pursuant to a contract for legal services. That contract provided in

relevant part that “[c]lient understands that counsel will assess a $250.00 collection fee if

Counsel pursues Court action to recover fees.” Appellant’s App. at 15. Beeks failed to pay

Wall Legal Services for services provided and has an outstanding balance of $595. On

August 1, 2012, Wall Legal Services assigned its rights to its contract for legal services with

Beeks to Inner Circle. Wall is the managing member and sole owner of Inner Circle. That

same date, Wall, as counsel for Inner Circle, filed a small claims notice against Beeks. Inner

Circle sought damages in the sum of $595, plus attorney’s or collection fees of $250, and $92

in court costs, for a total amount of $937.

2 On August 31, 2012, prior to the scheduled small claims hearing, Inner Circle filed a

“Stipulated Agreement” signed by both parties wherein Beeks admitted liability and agreed

to pay the total requested amount of $937 in monthly installments. On October 10, 2012, the

small claims court held a hearing regarding the stipulated agreement. Beeks failed to appear

at the hearing. Following the hearing, the trial court rejected the stipulated agreement.

Specifically, the court denied Inner Circle’s request for $250 in attorney’s or collection fees.

Instead, the trial court entered judgment in favor of Inner Circle in the sum of $595 plus $92

in court costs plus interest. The court also issued a stayed garnishment order in the event that

Beeks fails to make monthly payments toward the judgment. This appeal followed.

Discussion and Decision

At the outset, we note that Beeks has not filed an appellee’s brief. When the appellee

fails to submit a brief, we will not undertake the burden of developing arguments for that

party. Tisdial v. Young, 925 N.E.2d 783, 784 (Ind. Ct. App. 2010). Instead, we will reverse

the trial court’s judgment if the appellant presents a case of prima facie error. Id. at 784-85.

In this context, prima facie error is error at first sight, on first appearance, or on the face of it.

Id. The appellee’s failure to file a brief does not relieve us of our obligation to correctly

apply the law to the facts in the record in order to determine whether reversal is required.

Vandenburgh v. Vandenburgh, 916 N.E.2d 723, 725 (Ind. Ct. App. 2009).

Inner Circle contends that the small claims court erred in denying Inner Circle’s claim

for $250 in attorney’s or collection fees. Our standard of review in small claims cases is well

settled. Small claims judgments are “subject to review as prescribed by relevant Indiana

3 rules and statutes.” Ind. Small Claims Rule 11(A). “We review facts from a bench trial

under a clearly erroneous standard with due deference paid to the trial court’s opportunity to

assess witness credibility.” Branham v. Varble, 952 N.E.2d 744, 746 (Ind. 2011). This

deferential standard of review is particularly important in small claims actions, where trials

are designed to speedily dispense justice by applying substantive law between the parties in

an informal setting. Berryhill v. Parkview Hosp., 962 N.E.2d 685, 689 (Ind. Ct. App. 2012).

However, this deferential standard does not apply to the substantive rules of law, which are

reviewed de novo just as they are in appeals from a court of general jurisdiction. Vance v.

Lozano, 981 N.E.2d 554, 557-58 (Ind. Ct. App. 2012).

In the instant case, the small claims court and Inner Circle use the terms collection fee

and attorney’s fee interchangeably when referring to the $250 fee. Regardless of the label,

the $250 fee here is essentially an attorney’s fee assessed for the collection of a debt.

“Generally, Indiana follows the American Rule, which requires each party to pay his or her

own attorney’s fees.” Stewart v. TT Commercial One, LLC, 911 N.E.2d 51, 58 (Ind. Ct. App.

2009), trans. denied. However, parties may shift the obligation to pay such fees through

contract or agreement, and we will enforce those agreements as long as they are not contrary

to law or public policy. Id. Even pursuant to a contract, an award of attorney’s fees must be

reasonable and the determination of reasonableness necessitates consideration of all relevant

circumstances. Id.

4 The parties here clearly shifted the obligation to pay attorney’s fees for the collection

of a debt in their contract for legal services.1 There is nothing about the contract for legal

services between Wall Legal Services and Beeks, which included an agreement by Beeks to

pay a $250 flat fee in the event collection proceedings were necessary, to indicate that it is

contrary to law or public policy. Beeks failed to appear at the small claims hearing and at no

time has he challenged the contract for legal services or the reasonableness of the $250 flat

fee. Indeed, in addition to his original agreement to pay the $250 fee, Beeks subsequently

signed a stipulated agreement admitting his liability for the $250 fee in addition to the unpaid

fees for legal services rendered and court costs.

Under all relevant circumstances, we conclude that the contract between the parties

which shifted the obligation to pay attorney’s fees for the collection of a debt is not contrary

to law or public policy. Further, we cannot say that the $250 fee is unreasonable. Thus,

Inner Circle has presented a case of prima facie error. Accordingly, we reverse and remand

with instructions for the small claims court to amend its judgment to include the $250 fee.

Reversed and remanded.

ROBB, C.J., and FRIEDLANDER, J., concur.

1 As an assignee of the contract for legal services, Inner Circle stands in the shoes of Wall Legal Services in seeking to recover the $250 fee. See Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 813 (Ind. 2012) (“[t]he assignee of rights under a contract stands in the shoes of the assignor and can assert any rights that the assignor could have asserted”).