Crosson v. Berry

• Court: Supreme Court of Indiana
• Citation: 829 N.E.2d 184
• Docket Number: No. 53A05-0407-409.,53A05-0407-409.
• Parties: Cathy E. CROSSON, Appellant-Defendant, v. Thomas A. BERRY, Appellee-Plaintiff.
• Decision Date: 15 June 2005

829 N.E.2d 184 Cathy E. CROSSON, Appellant-Defendant,
v.
Thomas A. BERRY, Appellee-Plaintiff. No. 53A05-0407-409. Court of Appeals of Indiana. June 15, 2005.

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COPYRIGHT MATERIAL OMITTED

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Cathy E. Crosson, Bloomington, Appellant Pro se.

Robert C. Price, Price & Runnells, Bloomington, for Appellee.

OPINION

SHARPNACK, J.

Cathy E. Crosson appeals the judgment against her in a claim for malicious prosecution brought by Thomas A. Berry. Crosson raises three issues, which we consolidate and restate as:

I. Whether the trial court erred by denying Crosson's motion to dismiss under Ind. Trial Rule 12(B)(6); and

II. Whether the trial court erred by denying Crosson's motion for summary judgment.

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We affirm.¹

The relevant facts follow. In 1998, Crosson was involved in litigation in federal court and was represented by attorney Michael Ausbrook. The federal court scheduled the case for a settlement and pre-trial conference to occur in February 1999. In January 1999, after learning that Ausbrook was going to be out of the country at the time of the settlement conference, Crosson hired attorney Thomas A. Berry to represent her in the federal case. Crosson and Berry attended the settlement conference, which lasted approximately ten hours, and Crosson ultimately settled her case.

Berry later sent Crosson an invoice for his services, which totaled $3,673.25. Crosson sent Berry a letter that indicated that she was not pleased with her settlement or his representation during the settlement conference, and she did not pay the invoice. Berry withdrew from Crosson's case and later filed a complaint against Crosson, which sought recovery of his unpaid attorney fees. Thereafter, Crosson paid Berry $3,000 but did not pay the balance. Crosson hired Ausbrook to represent her in the attorney fee case, and she filed a counterclaim for legal malpractice against Berry.

Berry filed a motion for summary judgment in which he: (1) sought summary judgment on his claim for unpaid attorney fees from his representation of Crosson in her federal lawsuit; (2) sought summary judgment on Crosson's counterclaim of attorney malpractice; and (3) moved for attorney fees under Ind.Code § 34-52-1-1, the obdurate behavior exception, and Ind. Trial Rule 11. The trial court granted summary judgment to Berry on his claim for unpaid attorney fees of $673.25 and on Crosson's counterclaim of attorney malpractice and "denied" Berry's motion for attorney fees "based upon a lack of either statutory or contractual authority." Appellant's Appendix at 429. As part of its order, the trial court entered judgment in favor of Berry. Berry filed a motion to correct error and argued, in part, that he "should still have a right to a trial on the issue of attorney fees." Id. at 426. The trial court partially granted Berry's motion to correct error, and its order provided, in part:

* * * * * *

3. In paragraph five of the court's Order ... the court inartfully addressed the reason for denying [Berry's] Motion for Attorney Fee Judgment Against Both Cathy Crosson and Michael K. Ausbrook; the court should have denied said motion "... based upon insufficient statutory or contractual authority for purposes of summary judgment."

4. Regarding [Berry's] inquiry regarding the right to a trial, to the bench or jury, regarding [Berry's] Motion for Attorney Fee Judgment Against Both Cathy Crosson and Michael K. Ausbrook, the court finds that said motion is simply an independent motion filed in this action, presumably associated with [Berry's] summary judgment motions, and was not included as an allegation or prayer for relief in [Berry's] underlying Complaint for Damages ... hence, the court [inartfully] denied said motion upon granting the summary judgment

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motions and did not set said motion for trial.

* * * * * *

Id. at 422 (emphasis and "[inartfully]" bracket in original).

Berry later filed a complaint for malicious prosecution against Crosson and Ausbrook for their filing of the attorney malpractice counterclaim against Berry. Berry sought damages "for an amount sufficient to compensate [him] for his time and litigation expenses in defending the claim of malpractice filed against him and for an amount sufficient to compensate him for mental anguish and humiliation." Appellant's Appendix at 17.

Crosson and Ausbrook² filed a combined motion to dismiss Berry's complaint for failure to state a claim under Ind. Trial Rule 12(B)(6). Crosson and Ausbrook argued that a malicious prosecution action could not be based on the filing of a counterclaim, especially a compulsory counterclaim, and therefore, Berry's complaint could not establish the malicious prosecution element of instituting an action. The trial court held a hearing and issued the following order, which denied Crosson and Ausbrook's motion to dismiss and provided:

1. That the court can find no authority in Indiana law for [Crosson and Ausbrook's] proposition that a malicious prosecution action may not be based on the filing of a counterclaim, compulsory or otherwise. In fact, the court can find no authority in any jurisdiction for said proposition.

2. That the court finds authority in three jurisdictions for the proposition that a malicious prosecution action may be based on the filing of a counterclaim. See Barret[t] Mobile Home Transport, Inc. v. John McGugin, et al., 530 So.2d 730 (Ala.1988), Slee v. Simpson, 91 Colo. 461, 15 P.2d 1084 (1932), and Bertero v. National General Corp., 13 Cal.3d 43, 118 Cal.Rptr. 184, 529 P.2d 608 (1974).

3. That the court agrees with the reasoning cited in Barret[t], Slee, and Bertero, and finds that to argue to the contrary is to draw a distinction without a difference. A complaint, whether initial or cross, if filed maliciously, must be subject to recourse under the law.

* * * * * *

Appellant's Appendix at 324.

Crosson and Ausbrook then petitioned the trial court to certify its denial of their motion to dismiss, which the trial court granted. However, the motions panel of our court denied Crosson and Ausbrook's motion to accept jurisdiction over their interlocutory appeal.

Crosson and Ausbrook later filed individual motions for summary judgment and argued that: (1) Berry was collaterally estopped from bringing a claim of malicious prosecution because he had litigated and lost his motion for attorney fees in the prior attorney fee/malpractice litigation; and (2) as a matter of law, Berry could not establish the elements of malicious prosecution. The trial court held a hearing and concluded that Berry was not collaterally estopped from raising a malicious prosecution claim and that there were genuine issues of material fact that precluded the entry of summary judgment. Crosson and Ausbrook filed a motion to certify the trial court's denial of their motions for summary

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judgment, which the trial court denied. Following a jury trial on Berry's malicious prosecution claim, the jury entered a verdict for Berry and against Crosson and found Berry's damages to be zero dollars. The jury also entered a verdict for Ausbrook. Crosson now appeals the trial court's denial of her motion to dismiss and her motion for summary judgment but does not appeal the jury's verdict.

I.

The first issue is whether the trial court erred by denying Crosson's motion to dismiss under Ind. Trial Rule 12(B)(6). An Ind. Trial Rule 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim, not the facts supporting it. Town of Plainfield v. Town of Avon, 757 N.E.2d 705, 710 (Ind.Ct.App.2001), trans. denied. A complaint may not be dismissed under Ind. Trial Rule 12(B)(6) for failure to state a claim upon which relief can be granted unless it appears to a certainty on the face of the complaint that the complaining party is not entitled to any relief. McQueen v. Fayette County Sch. Corp., 711 N.E.2d 62, 65 (Ind.Ct.App.1999), trans. denied. In ruling on a motion to dismiss for failure to state a claim, the trial court is required to view the complaint in a light most favorable to the nonmoving party and with every reasonable inference in his favor. Id. The trial court may only look to the complaint, and well-pleaded material must be taken as admitted. Id.

We view motions to dismiss for failure to state a claim with disfavor because such motions undermine the policy of deciding causes of action on their merits. Id. We will not affirm a dismissal under Ind. Trial Rule 12(B)(6) unless it is apparent that the facts alleged in the challenged pleading are incapable of supporting relief under any set of circumstances. Id.

The essence of malicious prosecution rests on the notion that the plaintiff has been improperly subjected to legal process. City of New Haven v. Reichhart, 748 N.E.2d 374, 378 (Ind.2001). The elements of a malicious prosecution action are: (1) the defendant instituted or caused to be instituted an action against the plaintiff; (2) the defendant acted maliciously in so doing; (3) the defendant had no probable cause to institute the action; and (4) the original action was terminated in the plaintiff's favor. Id.

Crosson's argument regarding the denial of her motion to dismiss focuses on the first element. Crosson argues that the trial court erred by denying her motion to dismiss because a malicious prosecution action cannot be based on the filing of a counterclaim, especially a compulsory counterclaim, and therefore, Berry's complaint did not establish the malicious prosecution element of instituting an action.

The issue of whether a malicious prosecution claim can be based upon the filing of a counterclaim appears to be an issue of first impression in Indiana. However, as the trial court noted in its order denying Crosson's motion for summary judgment, there is authority from other jurisdictions that have addressed this issue. See Slee v. Simpson, 91 Colo. 461, 15 P.2d 1084...