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SCI Propane, LLC v. Frederick

Court of Appeals of Indiana

August 13, 2014

SCI PROPANE, LLC; SOUTH CENTRAL INDIANA RURAL ELECTRIC MEMBERSHIP CORPORATION; RUSHSHELBY ENERGY RURAL ELECTRIC COOPERATIVE, INC., Appellants/Defendants,
v.
COURTNEY FREDERICK, as Personal Representative of the Estate of Stephen Frederick, deceased, Appellee/Plaintiff

As Corrected August 15, 2014.

Page 1016

[Copyrighted Material Omitted]

Page 1017

APPEAL FROM THE MORGAN SUPERIOR COURT. The Honorable Robyn L. Moberly, Special Judge. Cause No. 55D01-0510-PL-658.

ATTORNEYS FOR APPELLANTS: KENT M. FRANDSEN, MICHAEL L. SCHULTZ, Parr Richey Obremskey, Frandsen & Patterson LLP, Lebanon, Indiana; KARL L. MULVANEY, NANA QUAY-SMITH, Bingham Greenebaum Doll LLP, Indianapolis, Indiana; ATTORNEY FOR AMICUS CURIAE DEFENSE TRIAL COUNSEL OF INDIANA: DONALD B. KITE, SR., Wuertz Law Office LLC, Indianapolis, Indiana.

ATTORNEYS FOR APPELLEE: DAVID K. HERZOG, JON LARAMORE, JANE DALL WILSON, KATRINA GOSSETT, Faegre Baker Daniels LLP, Indianapolis, Indiana; STANLEY E. KARON, Karon Trial Law PA, Richfield, Minnesota. ATTORNEY FOR AMICUS CURIAE INDIANA PATIENT'S COMPENSATION FUND: MATTHEW W. CONNER, WADE D. FULFORD, BRYAN H. BABB, Indianapolis, Indiana

PYLE, Judge. MATHIAS, J., and BRADFORD, J., concur.

OPINION

Page 1018

PYLE, Judge

STATEMENT OF THE CASE

SCI Propane, LLC (" SCI" ); South Central Indiana Rural Electric Membership Corporation (" SCI REMC" ); and RushShelby Energy Rural Electric Cooperative, Inc. (" RushShelby Energy" ) (collectively, " the SCI Defendants" ) appeal the trial court's order requiring them to pay the attorney fees and litigation expenses of Courtney Frederick (" Courtney" ), as Personal Representative of the Estate of Stephan Frederick, deceased (" The Estate" ), resulting from the Estate's wrongful death claim.

The SCI Defendants argue that the General Wrongful Death Statute (" GWDS" ) does not allow recovery of attorney fees for decedents who are survived by dependents. Alternatively, they argue that the trial court erred in calculating attorney fees because it should have awarded the Estate only the amount of fees the Estate agreed to pay its counsel pursuant to a contingency fee agreement. The Estate cross-appeals the trial court's reduction of its recovery based on non-party fault and requests us to remand for a calculation and award of appellate attorney fees.

With regard to the SCI Defendants' appeal, we conclude that the trial court did not err in awarding the Estate attorney fees because, although the GWDS does not explicitly provide for the recovery of attorney fees, it does specify that damages are not limited to those enumerated in the statute. However, we conclude that the trial court abused its discretion in calculating its award of attorney fees because it should have limited the award to the Estate's actual losses, as governed by its contingency fee agreement with its counsel. We remand to the trial court to revise its award of attorney fees so that it is consistent with the contingency fee agreement. With regard to the Estate's cross-appeal, we conclude that the trial court did not err when it reduced its award of attorney fees according to fault allocation because its award of attorney fees was compensatory in nature and subject to Indiana's Comparative Fault Act. Finally, we decline to award the Estate appellate attorney fees.

We affirm in part, reverse in part, and remand.

ISSUES

Appeal:

1. Whether the trial court erred in ordering the SCI Defendants to pay the Estate's attorney fees

2. Whether the trial court erred in calculating the Estate's attorney fees because the trial court did not limit the Estate's recovery to the amount specified in its contingency fee agreement with its counsel.

Cross-Appeal:

3. Whether the trial court erred when it reduced the Estate's recovery of attorney fees and litigation expenses based on allocation of party fault.
4. Whether the Estate may recover appellate attorney fees.

FACTS

SCI is a limited liability company that engages in the business of providing metered propane services. On October 16, 2003, SCI hired Midland-Impact, LLP (" Midland" ), a business that engages in supplying liquid propane, to install and fill

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the propane tank of two of SCI's customers, William and Betty Kindle (collectively, " the Kindles" ). While at the Kindles' house, a Midland representative tested the Kindles' propane system and determined that the gas-control valve for their water heater needed to be replaced. The Kindles replaced the valve with a new valve of the same model, but neither Midland nor SCI re-tested the system after the Kindles' repairs.

Early in the morning on May 13, 2004, a propane gas leak occurred in either the Kindles' home or their office--which was attached to the home--and caused a gas explosion and fire. The explosion injured four of the Kindles' family members who were staying in the home (collectively, " the Personal Injury Plaintiffs" ) and killed another family member, Stephan Frederick (" Frederick" ). Frederick's minor son and his wife, Courtney, were injured in the explosion but survived. Courtney is now the Personal Representative of the Estate. After the explosion, the gas-control valve was identified as the likely source of the leak.

On June 3, 2004, the Personal Injury Plaintiffs and the Estate (collectively, " the Plaintiffs" ) engaged the law firm Baker & Daniels, now Faegre Baker Daniels, LLP (" FBD" ), to represent them. The Plaintiffs and FBD signed a fee agreement in which FBD agreed to represent the Plaintiffs on a contingency basis in exchange for twenty-five percent (25%) of any recovery collected by settlement before trial; thirty-three and one-third percent (33?%) of any recovery collected after the commencement of trial and without an appeal; and forty percent (40%) of any recovery after the trial and in the event of an appeal. In addition to these fees, the Plaintiffs agreed to pay any disbursement expenses FBD incurred, including: " expert witness fees, deposition costs, filing fees, long distance telephone charges, photocopying costs, mileage, and any other cost or expense incurred and paid [] on [a Plaintiff's] behalf or otherwise connected with the representation." (Estate's App. 312).[1]

Subsequently, on October 24, 2005, the Plaintiffs filed a wrongful death and personal injury action against SCI, Midland, and White-Rogers (" White Rogers" ), the company that had designed and manufactured the gas-control valve in the Kindles' water heater.[2] Then, on January 16, 2008 and April 1, 2008, the Plaintiffs filed motions to amend their complaint to add further parties as defendants. These parties included SCI Services, LLC, a limited liability company that owned one half of SCI; SCI REMC; RSE Services, Inc. (" RSE Services" ), a corporation that owned one half of SCI and was a subsidiary of RushShelby Energy; and RushShelby Energy, an agricultural cooperative (collectively, " the Defendants" ).[3] The trial court granted the Plaintiffs' motions to amend their complaint ...


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