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 Appeals Court Rules Again on Banner Case

March 19, 2008 - The Indiana Court of Appeals issued its second ruling in two years last Friday in a public access case involving The Banner, the town of Knightstown and the town's insurer.

The Banner filed the appeal last summer. At issue was whether a Henry County judge had erred in calculating the amount of attorney fees and court costs the town of Knightstown and its insurer owed as the result of the newspaper winning an earlier appeal.

In the first appeal, decided in late 2005, the Court of Appeals reversed a trial court ruling and held that The Banner was entitled to a copy of the settlement that ended a former Knightstown police dispatcher's civil rights lawsuit against the town and its police department. The Court of Appeals denied requests for a rehearing filed by the town and its insurer, and the Indiana Supreme Court denied requests for transfer, which left standing the ruling in favor of The Banner.

Because it won its underlying public access lawsuit, Indiana's Access to Public Records Act required the trial court to award The Banner reasonable attorney fees, court costs and other expenses of litigation. In March 2007, Henry Circuit Court Judge Mary Willis ordered the town and its insurer to pay The Banner $67,612.46 in attorney fees and court costs, 36 percent of the total amount requested by the newspaper.

Four weeks went by after Willis made her ruling and the town and its insurer had made no effort to pay the judgment against them. Facing a 30-day deadline to appeal, The Banner went ahead and filed its appeal challenging the amount of attorney fees Willis had awarded and other non-monetary issues.

The Banner argued that Willis had erred by only awarding the newspaper's attorney $40,000 in fees for the first appeal. Judge Ezra Friedlander, writing for a unanimous three-judge Court of Appeals panel that also included judges Paul Mathias and Margaret Robb, said Willis had clearly erred in determining that an expert witness for the newspaper had testified that $35,000 to $40,000 would be a reasonable attorney fee in a case like this.

"In point of fact," Friedlander wrote, The Banner's expert witness had "testified that reasonable attorney fees for a typical appeal would be $35,000-$40,000." Characterizing the first appeal in this case as "very unusual" due to the amount of work and issues involved, Friedlander said the witness had testified that reasonable appellate attorney fees “would be in the range of $55,000-$72,500, and perhaps even twice that much."

Attorneys for the town of Knightstown had argued that any error Willis made in calculating attorney fees had been harmless. Friedlander said the Court of Appeals had been "unable to determine whether this is true … because of an internal inconsistency in the trial court's award of attorney fees."

In her March 2007 ruling, Willis had included two "findings" that purported to demonstrate how she calculated the attorney fees and costs she awarded. The problem, Friedlander said in last week's Court of Appeals ruling, is that the two methods of calculation yield two different totals.

In the first method of calculation, Willis started with the total amount of actual fees requested by The Banner, $125,327.09, and subtracted specific items she said should not be charged against the town and its insurer. Although her ruling did not list a total for this calculation, it works out to be $55,212.46, $12,400 less than the amount she ordered the town and its insurer to pay.

The second method of calculation used by Willis in the 2007 ruling was to identify the amount of fees The Banner's attorney, Kurt Webber, was entitled to for trial court and appellate work, then add the two figures. Saying Webber was entitled to $40,000 in attorney fees for work on the first appeal and $27,612.46 for trial court fees, Willis ruled that the town and its insurer were jointly and severally liable to The Banner for $67,612.46 in total fees and costs.

"How can the inconsistencies between Finding Nos. 11 and 12, and between Finding No. 11 and the amount of the award be reconciled?" Friedlander asked. "Put simply, they cannot."

The Court of Appeals said it was unable to determine which method the trial court intended to use in calculating the amount of the award. The court remanded the matter to Willis and instructed her to to clarify which method of calculation she intended to use.

In the event Willis had meant to use the second method, the Court of Appeals said she must correct her erroneous finding that said the expert witness testified that $35,000-$40,000 was a reasonable fee for the first appeal. Additionally, the Court of Appeals said Willis would need to correct her ruling to show that The Banner's attorney should have only been paid $15,212.46 in trial court fees instead of $27,612.46.

In other matters, the Court of Appeals ruled that The Banner had not been entitled to a different judge after it won the first appeal. While Willis had initially granted the newspaper's request for a different judge, the Court of Appeals said she had not erred when she later vacated that ruling.

The Court of Appeals also ruled that Willis had not erred in allowing the town to voluntarily dismiss a counterclaim it had filed against The Banner seeking attorney fees. Concluding that dismissal of the town's counterclaim had been "with prejudice," meaning it could not be re-filed at a later time, the Court of Appeals said that The Banner had not been substantially prejudiced when Willis allowed the counterclaim to be dismissed instead of ruling on the counterclaim's merits.

 

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