YTC Dream Homes, Inc. v. Directbuy, Inc.

18 N.E.3d 635

YTC DREAM HOMES, INC., et al., Appellants–Plaintiffs

v.DIRECTBUY, INC., et al., Appellees–Defendants.

No. 45A03–1312–PL–467.

Court of Appeals of Indiana.

Sept. 30, 2014.

James F. Groves, Lee Groves & Zalas, South Bend, IN, Attorney for Appellants.

F. Joseph Jaskowiak, Lauren K. Kroeger, Hoeppner Wagner & Evans LLP, Merrillville, IN, Attorneys for Appellees.

OPINION

BROWN, Judge.

In this interlocutory appeal, YTC Dream Homes, Inc., et al. (the “Appellants”)¹ appeal the trial court's order denying five pro hac vice petitions in favor of DirectBuy, Inc., et al. (the “Appellees”).² The Appellants raise three issues which we consolidate and restate as whether the court erred when it denied the pro hac vice petitions. We reverse and remand.

FACTS AND PROCEDURAL HISTORY

The Appellants consist of ten franchisees of DirectBuy, Inc. (“DirectBuy”), each of which are located outside the state of Indiana. On February 22, 2013, the Appellants filed a complaint³ stemming from a contract dispute through local counsel (“Local Counsel”). On April 11, 2013, local counsel filed a Motion to Accept Admission Pro Hac Vice (the “Motion to Accept”) which named Attorneys Kristy Zastrow, Michael Dady, Barbara Bagdon, Joseph Goode, and Mark Leitner (the “Attorneys”), who work at two law firms located in Minneapolis, Minnesota, and Milwaukee, Wisconsin, and asked the court to admit the Attorneys as co-counsel for the limited purpose of this case. The Appellants' Motion to Accept contained Temporary Admission Receipts demonstrating that each of the Attorneys paid $145 on April 2, 2013.

The court initially granted the Appellants' Motion to Accept on April 22, 2013; however, on April 25, 2013, the Appellees filed an Opposition and Objection to the Appellants' motion arguing that the motion “fails to comply with Rule 3 of the Indiana Rules for Admission to the bar and the Discipline of Attorneys ... and also fails to comply with Lake County Local Rule 45–TR3.1–5(C),” and the court vacated the order and set the matter for hearing on June 3, 2013. Appellees' Appendix at 19.

On April 29, 2013, Attorney Bag don sent an email to Appellees' counsel with attached materials regarding the previous Motion to Accept and requested that the Appellees withdraw their Opposition and Objection. The hearing was continued at Appellants' request, and on May 28, 2013, Local Counsel filed Amended Verified Applications for Temporary Admission for each of the Attorneys (the “Petitions”). On June 5, 2013, the Appellees filed an Opposition to Amended Verified Applications for Temporary Admission of the Attorneys (the “Opposition”) arguing that the Petitions “fail to provide any of the information required by Rule 3, Section 2(a)(4)(vii) that would allow the Court to determine whether or not the requisite good cause exists for the appearance in this action of out-of-state lawyers.” Id. at 61. On June 20, 2013, the Appellants filed a Response arguing that the contents of the original Motion to Accept was sufficient save for the omission of the Attorneys' bar numbers and that they moved for a continuance and amended their Petitions to include the Attorneys' bar numbers. They asked the court to require Appellees' counsel to pay the Appellants' attorneys' fees and costs for “responding to [Appellees'] groundless motion” pursuant to Ind. Trial Rule 11(A). Id. at 88.

On July 8, 2013, the Appellees filed a Sur–Reply in Support of their Opposition stating that “[a] showing of ‘good cause’ ... is the cornerstone of Rule 3 ” and the Appellants failed to make such a showing. Id. at 130. The Sur–Reply also stated that the Appellees' representations regarding certain deficiencies in the Motion were completely accurate, arguing specifically that the proper paperwork was not filed in the trial court. The Sur–Reply also argued that even if the Attorneys had complied with Ind. Admission and Discipline Rule 3, they are not automatically entitled to temporary admission and, in fact, should be denied temporary admission because “[t]here is no need for out-of-state attorneys to appear in a garden-variety contract lawsuit in which Indiana law applies.” Id. at 133. The Appellees also noted that “admission of out-of-state lawyers whose admitted style is ‘aggravated litigation’ per their own web site (www.kravitlaw.com), is different from the style of handling a lawsuit in Lake County,” that “[t]heir aggressive nature is demonstrated in the tone of their brief and attached e-mail and letter,” and that “[i]n fact, they have sought sanctions even before they have been admitted to practice.” Id.

On September 5, 2013, the court held a hearing on the Petitions and took the matter under advisement. On September 9, 2013, the court issued its Order (the “September 9 Order”) denying the Petitions. The September 9 Order states in part:

5. A temporary admission of an out-of-state lawyer pursuant to Admission and Discipline Rule 3(2) is within the discretion of the trial court, State ex rel Ind. Supreme Court Disciplinary Comm'n v. Farmer, 978 N.E.2d 409 (Ind.2012), Matter of Fieger, 887 N.E.2d 87, 90 (Ind.2008). However, in Lake County, this discretion is tempered by Lake County Local Rule 5(C) under which there is a presumption that an attorney not licensed in Indiana is not permitted to practice before the Lake Superior Court.

6. The plaintiffs argue that it is necessary for the five attorneys they seek to admit pro hac vice have specialized knowledge regarding franchise disputes, which is a large part of the subject matter of this case, and that the plaintiffs wish to avail themselves of this specialized knowledge to assist them in prosecuting their case. There is no doubt that the five are eminently qualified, knowledgeable and have a high level of competence in the area of franchise law.

7. The defendants argue that out-of-state attorneys of this ilk propound a “style” of litigation that causes their own costs of litigation to double, maybe even triple. The way these expert attorneys the plaintiffs propose to admit litigate their cases is a “no-holds-barred” technique heavy on motion practice. This is exacerbated even more, the defendants argue, by sheer numbers: five attorneys from two separate firms from two separate states are sought by the plaintiffs to be admitted.

8. Neither of these arguments is persuasive on the issue before the Court: Exhibit B to plaintiffs' own Response to the defendants' objections lists no less than seventeen licensed Indiana attorneys from some of the largest Indiana law firms with multiple offices all over the state that are members of the American Bar Association Forum on Franchising. At the same time, unfortunately for the defendants, many of these large Indiana firms have offices located in jurisdictions that comprise large cities where the practice of “no-holds-barred” style of litigation is quite common.

9. Even assuming that the plaintiffs have shown good cause to admit these attorneys because of their specialized skills, the pro hac vice petitioner must overcome the presumption under Lake County Local Rule 5(C) that an attorney not licensed in Indiana is not permitted to practice before it. As stated above, the Court is not persuaded that the plaintiffs cannot locate attorneys licensed in the State of Indiana that have expertise in the field of franchise law.

Appellants' Appendix at 17–18.⁴

On September 26, 2013, the Appellants filed a Motion to Vacate September 9, 2013 Order For Lack Of Jurisdiction raising the question of “whether Supreme Court Trial Rule 81(A) and Supreme Court Admission and Discipline Rule 3(A) permit the Lake County Superior Court to adopt a local rule ... imposing a presumption against the temporary admission of out-of-state attorneys based solely on their status as residents of states other than Indiana,” as well as a memorandum in support of the motion. Appellees' Appendix at 195. That same day, the Appellants filed a Motion for Reconsideration of Order Denying Pro Hac Vice Admission of the Attorneys (the “Motion to Reconsider”) requesting that the court reconsider and reverse its denial of the Attorneys' Petitions pursuant to Indiana Trial Rule 53.4, as well as a memorandum in support. The Appellants attached materials supporting the arguments in their memorandum, including declarations of certain Appellants and Attorneys that prejudice would result if the Attorneys were not admitted to try the case. The court did not rule on the Appellants' Motion to Reconsider, and it was accordingly deemed denied pursuant to Ind. Trial Rule 53.4(B).

On October 9, 2013, the Appellants filed a Motion for Entry of Final Judgment Pursuant to Indiana Rule of Trial Procedure 54(B) (the “October 9 Motion”) requesting that the court enter final judgment and stating specifically that the “Motion is supported by Indiana Rule of Trial Procedure 54(B), Indiana Rule of Appellate Procedure 14(B),” and the memorandum in support of the motion, which it filed contemporaneously. Appellants' Appendix at 160–161. The memorandum in support stated in its conclusion that the Appellants “respectfully request that this Court certify its September 9, 203[sic] Order as a Final Judgment pursuant to Rule 14(B) of the Indiana Rules of Appellate Procedure and declare that there is no just reason for delay.” Id. at 169. The Appellees filed a memorandum in opposition to the October 9 Motion on October 23, 2013 arguing that Ind. Trial Rule 54(B) did not apply and that the Appellants' “Appellate Rule 14(B) argument is equally misplaced” because the court's decision did not involve a substantial question of law and their alleged substantial expense is a problem of their own making. Appellees' Appendix at 315. On October 29, 2013, the Appellants filed a Reply Re: Motion for Entry of Final Judgment Pursuant to Indiana Rule of Trial Procedure 54(B) asserting that the September 9 Order was final under Ind. Trial Rule 54(B) and that, alternatively, they satisfied the requirements for...