$156K in damages against business, lawyer in bad-faith litigation upheld

A lawyer and his clients who collectively were ordered to pay more than $156,000 in damages and attorney fees after defaulting in a Hamilton County business breach of contract and defamation suit won no relief Tuesday from the Indiana Court of Appeals.

Bryan and Jennifer Sandys bought a non-emergency medical transport business franchise from Medex Patient Transport in 2014, but they terminated the agreement after a few months. Afterward, Medex’s owners sent an email to other franchisees that contained allegedly defamatory statements about the Sandys, who responded with a breach of contract and defamation lawsuit.

Eventually, after other defendants settled for $80,000, the Sandys narrowed their claim to include only affiliated company K.R. Calvert Co. LLC, represented in this litigation by Indianapolis attorney P. Adam Davis. After a discovery dispute, Hamilton Superior Judge Jonathan M. Brown issued an order compelling Calvert to comply with discovery.

After Calvert failed to comply or answer the Sandys’ amended complaint, the Sandys notified Calvert that they were prepared to move for default judgment if Calvert didn’t answer its amended complaint within about a week.

“Approximately one month later, the Sandyses moved for default judgment against K.R. Calvert, which had not answered the amended complaint, and the trial court granted the motion,” Chief Judge Cale Bradford wrote Tuesday in a memorandum decision. “K.R. Calvert moved to vacate the default judgment, which motion the trial court denied on the basis that K.R. Calvert had not timely answered the Sandyses(‘) amended complaint and could not establish excusable neglect.”

When the Sandyses moved to voluntarily dismiss all other parties to the case except Calvert because the other parties had settled, Davis filed a motion on Calvert’s behalf to strike that motion, which the trial court denied.

“In addition, the trial court ordered … Davis to personally pay $630.00 in attorney’s fees for filing what it determined to be an improper motion to strike,” Bradford wrote. “Davis did not pay, and this award of fees was eventually increased to $1260.00 and reduced to a civil judgment against him in favor of the Sandyses. In January of 2019, the trial court entered its final judgment against K.R. Calvert in favor of the Sandyses, awarding them damages of $10,000.00 for breach of contract, damages of $40,000.00 for defamation per se, and $106,676.40 in attorney’s fees.

“K.R. Calvert contends that the trial court abused its discretion in denying its request for relief from the default judgment, erred in awarding damages for breach of contract and defamation per se, and improperly awarded attorney’s fees. Because we disagree with all of K.R. Calvert’s contentions, we affirm,” Bradford wrote for the panel in K.R. Calvert Co., LLC, and Philip Davis v. Brian Sandys and Jennifer Sandys (mem. dec.), 19A-PL-443.Likewise, the appellate panel rejected Davis’ argument that he should not have been sanctioned by the court for bad-faith litigation.

“Attorney Davis claims only that the trial court’s fee order and civil judgment should be vacated because the trial court allegedly found that his motion to strike the Sandyses’ voluntary dismissals of the other defendants was not made in bad faith. While it is true that the trial court’s May 22, 2018, order declined to award any fees to the Sandyses at that time, its July 19, 2018, order did award the requested fees. So, even if we assume that the trial court initially found no bad faith on Attorney Davis’s part, it clearly changed its mind,” the panel held.

“Attorney Davis does not argue that the trial court was not allowed to revisit its initial determination; he simply fails to acknowledge that it did. Attorney Davis also does not challenge anything that occurred after the initial fee order, up to and including the trial court’s imposition of additional fees and reduction of the amount to a civil judgment. Attorney Davis has failed to establish that the trial court’s order that he personally pay $1260.00 to the Sandyses was improper in any way.”