City of Indianapolis, Through Dept. of Transp. v. Central R. Co. of Indianapolis
| Decision Date | 13 December 1977 |
| Docket Number | No. 2-1175A352,2-1175A352 |
| Parties | CITY OF INDIANAPOLIS, Through the DEPARTMENT OF TRANSPORTATION, Appellant (Plaintiff below), v. CENTRAL RAILROAD COMPANY OF INDIANAPOLIS, Indiana and Penn Central Transportation Company, Appellees (Defendants below). |
| Court | Indiana Appellate Court |
Jerry W. Newman, Asst. Corp. Counsel, Indianapolis, for appellant.
Elizabeth M. Daily, Edward B. Raub, Jr., Indianapolis, for appellees.
Appellant-Plaintiff City of Indianapolis (City) appeals the award of attorneys' fees to Appellees-Defendants Central Railroad Company and Penn Central Transportation Company (the Railroads), claiming there is no legal basis for such an award.
We reverse.
The facts and evidence most favorable to the trial court's judgment are:
On September 7, 1973, the City filed a complaint seeking to condemn certain rail spurs owned by the Railroads as part of a street improvement project. The rail spurs, located on South Capitol Avenue in Indianapolis, were sought in order to widen the street as an access route to the "inner-belt" highway then under construction. The railroads filed objections to this suit on September 20, and further objections a few days later.
On September 26, the trial court appointed independent appraisers to value the spurs and ordered a report to the court of their findings by October 16. The Railroads filed a motion for change of venue from the county, which they later withdrew.
On September 28, the City filed an amended complaint which was objected to by the railroads who sought dismissal. All parties then submitted instructions to the court to be read to the appraisers before they made their final reports.
The appraisers submitted their report on October 16 and assessed damages in the amount of Two Hundred Three Thousand Seven Hundred Fifty ($203,750.00) Dollars to Central Railroad and Two Hundred Fifteen Thousand ($215,000.00) Dollars to Penn Central. The following day the City filed exceptions to the appraisers' report, and on October 17 the Railroads again filed a motion for dismissal, which was overruled. The Railroads praeciped for the record on October 22, 1973, and filed their own exceptions to the report of the appraisers. A change of venue from the judge was also requested and granted.
On March 8, 1974, the City filed a Motion to Dismiss which read as follows:
MOTION TO DISMISS
Comes now the Plaintiff and moves that the court dismiss this cause of action without prejudice for the reason that the said Plaintiff has modified its improvement plans pertaining to D.O.T. Project ST-32-039, known as the improvement of South Capitol Avenue in Indianapolis, Indiana, Marion County. The said project has been modified to the extent that the said railroad spur identified in the Plaintiff's complaint as Exhibit A shall no longer be needed for removal in the said project.
Further, in pursuance of this said motion the Plaintiff would show to the court that the Plaintiff has not taken possession of the said property sought to be appropriated and described as Exhibit A in the said complaint, nor has the Plaintiff paid into the Clerk of Marion County's custody the amount of the court appraiser's award.
WHEREFORE, the Plaintiff prays that the court grant its Motion to Dismiss and dismiss this cause of action without prejudice.
No other reason was given for dismissal of the amended complaint other than the railroad spurs were no longer needed.
On May 15, 1974, a hearing was held in which the sole witness was Billy W. Jones, Chief Engineer of the Indianapolis Department of Transportation (D.O.T.), who testified:
Later, on cross-examination:
Still later, on re-direct:
The Railroads opposed dismissal of the action, unless their attorneys fees and expenses were paid. Both sides submitted briefs on the issue and on December 13, 1974, the trial court entered judgment (in pertinent part):
1. The Defendant, CENTRAL RAILROAD COMPANY OF INDIANAPOLIS, INDIANA, recover of and from the Plaintiff, CITY OF INDIANAPOLIS, the sum of $5,265.20, with interest thereon at the rate of 8% per annum from the date hereof until such sum is paid.
2. The Defendant, PENN CENTRAL TRANSPORTATION COMPANY, recover of and from the Plaintiff, CITY OF INDIANAPOLIS, the sum of $7,100.05, with interest thereon at the rate of 8% per annum from the date hereof until such sum is paid.
3. The above entitled cause of action is now hereby dismissed, costs to be taxed against the Plaintiff.
City appeals.
One issue is raised by the City:
(1) Did the trial court properly award attorneys fees on dismissal of the City's complaint for appropriation of the railroad spurs?
Initially, the Railroads contend that provisions of the Eminent Domain Statute 1 are broad enough to allow for the award of attorneys' fees. They argue that Ind. Code § 32-11-1-10 2 which allows for "costs" to be paid by the plaintiff can include attorneys' fees. Further, they argue Ind. Code § 32-11-1-8 (§ 8) 3 which authorizes the trial judge to make findings as may seem just includes the power to assess attorneys' fees.
The City replies that the case law of this State specifically rejects this argument.
The Railroads further suggest that attorneys' fees are justified under Trial Rule 41(A)(2). 4 They argue such an award is permissible as one of the conditions the court may impose in order to dismiss the case without prejudice. Such an allowance, they suggest, could be used to discourage a plaintiff from re-instituting frivolous litigation.
The City responds that there is no authority in this State to support such an argument. Although the Indiana Supreme Court was earlier presented such a theory in an eminent domain case such as this, no definitive position was taken. Therefore, we should not adopt such a rule at this time.
Next, the Railroads argue that because the City dismissed the action prior to its conclusion, it exhibited bad faith. Thus, under an exception to the rule, the court may award attorneys' fees under its inherent equitable powers.
The City responds that there is absolutely nothing in the record to show bad faith on its part.
Finally, the Railroads argue that the Indiana Relocation Assistance Act 5 allows the payment of attorneys fees to condemnees if the State dismisses prior to suit, and should be applicable to justify attorneys' fees in this case.
The City answers that the Indiana Relocation Assistance Act only applies to projects funded with federal money, and since no federal money was to be used in this project, this Act does not apply.
CONCLUSION Attorneys' fees may not be awarded on dismissal of the condemnor's (City's) complaint under these circumstances.
Deeply engrained in our adversary system of jurisprudence is the concept that absent specific statutory authority or contractual agreement each party involved in the litigation shall bear its own counsel fees. The American Rule, which is contrary to the English practice, has been adopted in Indiana:
The general rule requires each party to the litigation to pay his own counsel fees. Attorneys fees are not allowable in the absence of a statute, or in the absence of some agreement or stipulation specially authorizing the allowance thereof; and it has been held that the rule applies equally in courts of law and in courts of equity.
Trotcky v. Van Sickle (1949), 227 Ind. 441, 445, 85 N.E.2d 638, 640.
Utilization of the court's inherent equitable power has resulted in the recognition of several exceptions to the rule: (1) "obdurate behavior", (2) existence of a "common fund", and (3) the "private attorney general" theory. See Saint Joseph's College v. Morrison, Inc. (1973), 158 Ind.App. 272, 302 N.E.2d 865.
To justify the award of attorneys' fees by the trial court in this condemnation action, the Railroads seek sustenance from four sources: (1) the obdurate behavior, or bad faith exception to the general rule of non-recovery of attorneys' fees by the successful party, (2) the provisions of TR. 41(A)(2), (3) the allowance for "costs" in the Eminent Domain Statute (Ind. Code § 32-11-1-10), and (4) the authorization for payment of attorneys' fees by the Indiana Relocation Assistance Act of 1971.
The "Obdurate Behavior", "oppressive conduct", or bad faith (take your choice) exception to the general rule barring attorneys' fees in the absence of a specific statutory provision has been recognized in Indiana, Saint Joseph's College, supra, and other jurisdictions, 6 but has never formed the basis for an award of attorneys' fees in this state.
The Railroads cite City National Bank & Trust Company of Oklahoma City v. Owens (1977), Okl., 565 P.2d 4, as authority for the proposition that such an exception should be adopted in Indiana. In Owens the City National Bank brought a tort action arising out of an automobile accident. The case was filed in June, 1973, the cause was finally set for trial in December, 1976, a jury was impanelled, the case was tried for three full days, and on the fourth day after all the evidence was presented and the court had prepared instructions, the plaintiff dismissed his case without prejudice (which he could do under Oklahoma practice).
In awarding attorneys' fees the court commented on the special circumstances present:
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