COA affirms denial of $8K attorney fee award in small claims case

The Indiana Court of Appeals has affirmed the denial of a man’s request for $8,000 in attorney fees in a small claims case after roughly $350 was deducted from his paychecks for damaging a client’s property.

After performing landscaping work in 2019 as a laborer for Harris & Sons Landscaping LLC, James Prater received a deduction from two of his paychecks after he damaged a customer’s gate.

Harris paid $356.25 to repair the gate, then deducted that amount from two of Prater’s paychecks per the guidelines in its company handbook, which Prater had signed. The company handbook stated that “[c]osts associated with damages” to company equipment or customers’ property “will be deducted from employees’ paychecks if the site supervisor and/or owner sees fit.”

But Prater filed a small claims action against Harris, alleging the deductions violated the Indiana Wage Deduction Act. Prater sought liquidated damages and attorney fees under Indiana Code § 22-2-5-2.

Although Harris paid him back the deducted amount, Prater requested nearly $8,000 in attorney fees and expenses for more than 25 hours of work. The itemized list of legal services and the costs for those services included Prater’s counsel’s charge of roughly 2½ hours, $800 attributed to “locating my client” and about $100 per interrogatory question.

Opposing counsel claimed Prater’s request was “way out of proportion.”  The Marion County Small Claims court agreed, noting that it had “concerns about the reasonableness and the necessity of this kind of time on a small claims case.” It pointed out that the case wasn’t complicated.

After it entered judgment for Prater including $356.25 in damages and $300 in attorney fees, the court ordered that Harris receive a credit against the total judgment for the $356.25 payment already paid and accepted by Prater. It subsequently refused to grant Prater $8,000 in attorney fees or liquidated damages, also declining to find that Harris was not acting in good faith under I.C. 22-2-5-2 when it deducted Prater’s pay.

In affirming that decision Wednesday, the appellate court agreed that Harris did not act with an absence of good faith and that Prater was not entitled to liquidated damages under the Indiana Wage Deduction Act. It also declined to accept Prater’s attorney fees argument, finding it was merely an attempt to relitigate his demand for thousands of dollars.

“The court properly exercised its discretion. Prater has not shown that the court’s award of $300 in attorney’s fees is either contrary to the logic and effect of the facts and circumstances before the court or that the court misinterpreted the law,” Judge Edward Najam wrote for the appellate court.

The case is James M. Prater, III v. Harris & Sons Landscaping, LLC, 21A-SC-7.