Indiana Law Update Blog - Price Waicukauski & Riley Legal Blog

Attorney's Statements at Hearing Is Binding on Client Against All Defendants

August 19, 2010

Today, the Indiana Court of Appeals issued a decision which held that an attorney's statements during a hearing were binding on the client and entitled the opposing party to judgment on some of the claims against it in Heyser v. Noble Roman's, Inc., 933 N.E.2d 16 (Ind. Ct. App. 2010), Case No. 29A04-1002-PL-71.

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In this case, the plaintiffs filed suit, asserting fraud and other claims. Two of the defendants moved to dismiss under Rule 12(b)(6) and that motion was granted. At a hearing on that motion, plaintiffs' counsel stated:

So I would submit to the Court that we have certainly alleged sufficient facts to fall within that case to hold the banks liable or at least pass a motion to dismiss on a claim that [the Banks] conspired and acted in concert with Noble Roman's under these alleged facts. We've cited some other cases on constructive fraud and basically under those kind of cases the claim that you were making a representation about future promises and opinions and not facts was not upheld. We haven't pleaded constructive fraud so I would submit to the Court that we state the cause of action for fraud, Gable v. Curtis, supports that.

The remaining defendant then moved for partial summary judgment, asserting that the plaintiffs were alleging actual fraud, not constructive fraud. The plaintiffs responded, asserting that their complaint and subsequent amendments alleged both actual and constructive fraud. The Court granted the defendant's motion because the plaintiffs' counsel, at a hearing on the other defendants' motion to dismiss, had told the court that the plaintiffs had not pleaded constructive fraud. The plaintiffs then appealed.

On appeal, the plaintiffs argued that their attorney's statement did not constitute a binding admission. The Court disagreed.

[T]he Franchisees' then counsel admitted that the Franchisees were only pleading actual fraud against Noble Roman's, who was the only defendant that allegedly made fraudulent statements. That admission was binding upon the Franchisees throughout the lawsuit. Under these circumstances, Noble Roman's was entitled to judgment as a matter of law on the Franchisees' subsequent attempt to plead constructive fraud, and the trial court did not err by granting partial summary judgment to Noble Roman's on that claim.

This decision clarifies that statements made by counsel at a hearing are binding for all purposes in the lawsuit. Therefore, counsel should be aware of all possible consequences of any particular statement, rather than solely focusing on the statement in relation to a particular opponent.

Lessons:

Any unambiguous statement that an attorney makes during the course of litigation will be binding on that attorney's clients against all parties to that litigation.

UPDATE
The Indiana Supreme Court denied transfer in this case on March 9, 2011.

Brad A. Catlin
Price Waicukauski & Riley, LLC
Learn more about Brad and contact us
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Attorney's Statements at Hearing Is Binding on Client Against All Defendants

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