Indy law firm not responsible for attorney fees in contentious estate case

No abuse of discretion occurred in allowing an Indianapolis law firm to recover fees in a heated estate dispute, the Indiana Court of Appeals ruled Thursday. Neither was there an abuse of discretion in failing to declare the law firm responsible for attorney fees stemming from the filing of what an estranged wife called a meritless petition.

After Bogdan Mihuti died intestate in 2015, his estate was opened and litigation ensued between Bogdan’s estranged spouse, Layla Mihuti, and his brother, Ovidiu Mihuti. Ovidiu was initially appointed as the personal representative, and Elizabeth Ruh was later appointed as the successor personal representative.

Eventually, Ciobanu Law, representing Ovidiu, Ruh, and Ruh’s counsel, Coffin & Blackman, sought to recover fees against the estate. Although Layla challenged, among other things, whether the fees were recoverable and that Ovidiu and Ciobanu Law should be responsible for all attorney fees incurred in the matter, the Hendricks Superior Court declined to hold them responsible and found most of the fees were recoverable against the estate.

Ruh ultimately recovered $1,358.80 for services as personal representative between July 27, 2017 and June 18, 2018; Coffin recovered $21,835.00 in attorney fees; and Ciobanu Law recovered $6,691.32 in attorney fees.

Later, when Ovidiu failed to show at a hearing on Layla’s property conversion claim against him, the court entered default judgment against Ovidiu on the issue of liability. It also entered a written order awarding Layla $42,546.99 for the conversion of household goods, but later denied both Layla and Ovidiu’s motions to correct error.

In affirming the trial court, a panel of the Indiana Court of Appeals concluded that the trial court did not abuse its discretion in awarding the fees to Ruh or to Coffin. Even if it did identify error, the amount at issue was de minimis, the appellate panel noted. 

Additionally, the appellate panel rejected Layla’s claims that Ciobanu Law was not entitled to $6,691.32 for fees related to the early estate-related filings for Ovidiu – specifically the work on opening the estate and preparing the petition to determine heirship, alleging Layla was ineligible to inherit.

“Focusing on fee-shifting provisions in the Indiana Code, Layla claims that Ovidiu ‘is liable for every party’s attorney’s fees for having filed a meritless petition. Layla also directs us to Trial Rule 11 and asserts that Ciobanu Law should be held jointly and severally liable because the Heirship Petition was ‘groundless’ and ‘taken primarily for the purpose of harassing or maliciously injuring Layla Mihuti,’” Judge L. Mark Bailey wrote in a memorandum decision. “As we have identified legal merit, we conclude that the trial court did not abuse its discretion by declining to shift the responsibility for the disputed fees.”

It likewise concluded that because Ovidiu did not allege a meritorious defense, the court did not err in declining to set aside the default judgment on liability for conversion.

“As to the damages hearing, we are not persuaded of reversible error in the admission of evidence, and we discern no abuse of discretion concerning the challenged aspects of the damages award,” the appellate court concluded.

The case is In the Matter of the Supervised Estate of Bogdan T. Mihuti: Layla Cristina Mihuti v. Ciobanu Law, P.C., et al. (mem. dec.),19A-ES-1945.