Jane M. Anderson (Jane) appeals the judgment dismissing her amended complaint.
Jane has presented several issues which we have consolidated into the following:
Robert S. Anderson (Robert), an attorney, filed a petition for the dissolution of the parties' thirty-year marriage on December 26, 1973. Thereafter Robert and Jane negotiated a property settlement agreement which they executed on March 12, 1974.
On December 26, 1974 Jane commenced a new and distinct cause of action by filing a three-count complaint.
The first count further alleged Robert's representations in regard to the agreement were false and fraudulent in the following particulars: the agreement is not a fair and equitable division of the property in accordance with the guidelines set out in the Indiana Dissolution of Marriage Act; the bulk of what she received under the agreement was property or dividends and interest or appreciation on property she received through inheritance from her mother's estate; the agreement only awards her 30% of the marital property; the agreement did not take into account the earnings or earning abilities of the parties; the agreement did not take into account her contributions to the marriage as a homemaker; and the agreement did not convey the value Robert represented. The first count prayed for actual damages of $110,000 and treble damages of $330,000.
The second count of Jane's complaint incorporated by reference the first count and alleged the acts, omissions, and misrepresentations of Robert were done intentionally or with heedless disregard for her rights. The second count prayed for punitive damages of $100,000.
The third count, based upon a theory of legal malpractice, alleged between December 26, 1973 and March 15, 1974 Robert, a licensed attorney, undertook to advise her concerning her rights and remedies relative to a pending dissolution of marriage action; she relied upon Robert's knowledge and experience and the fiduciary relationship existing between them; Robert, in rendering said services, failed to exercise the degree of skill and care expected of an attorney; as a proximate result of Robert's negligence, she received far less by way of the property division than she would have received had she been adequately represented. The third count prayed for damages of $110,000. Jane attached to her complaint a copy of the hand-written list of assets she was to receive and a copy of the property settlement agreement.
In his answer, Robert requested Jane's complaint be dismissed because it "fails to state a claim upon which relief can be granted." Later Robert requested a judgment on the pleadings," with respect to the defense raised by ... [his] Answer." Admitting for the purposes of the motion the facts alleged in Jane's complaint, Robert argued in his supporting brief that these facts prevented Jane from any recovery under Indiana law. Because the dissolution decree referred to in her complaint was a final and complete adjudication of the parties' property rights, he argued her complaint was an impermissible collateral attack. After hearing the parties' arguments on the motion, the trial court entered a judgment dismissing Jane's complaint.
Robert responded with a "Motion to Strike Amended Complaint," accompanied by a supporting brief presenting two legal arguments: first, the amended complaint was an improper pleading following an entry of judgment; and, second, admitting the dissolution decree did not address the issue of the parties' property, he argued the power of the trial court in a dissolution action to adjust and determine the property rights is mandatory; therefore, a dissolution decree, even though silent on the issue of property rights, may not be collaterally attacked. In response to Robert's motion, Jane argued she had an absolute right to amend her complaint within ten days from the time she was served with notice of the judgment of dismissal. On September 8, 1975 the trial court granted Robert's motion to strike the amended complaint "for the reasons set forth in said motion."
Jane's motion to correct errors challenging the June 17 judgment dismissing her original complaint was overruled by the trial court on September 8, 1975. Jane challenged the order striking her amended complaint with a second motion to correct errors. The trial court overruled her second motion to correct errors on September 23, 1975.
CHALLENGED SUBSTANTIVE ERROR IN DISMISSING AMENDED COMPLAINT: EFFECT OF DISSOLUTION DECREE
The trial court held the dissolution decree operated as an absolute bar to the maintenance of Jane's asserted claims under the
Action for Fraud
Jane argues when one is induced to enter a contract by the fraud of the other contracting party common law allows the injured party to keep what has been derived under the contract and recover in an action for fraud the damages caused by the fraud. She contends, because the dissolution decree does not adjudicate the parties' property rights, res judicata does not bar her from maintaining an action for fraud based upon her agreement with Robert. This claim is proper, she argues, because it is not based upon the dissolution decree but upon the settlement agreement as a contract. We disagree.
When the Dissolution of Marriage Act addresses a situation the traditional rules of contract and tort must yield to the provisions of that Act, §§ 31-1-11.5-1 to 31-1-11.5-24 (Burns Code Ed., 1978 Supp.),
Under the law existing prior to the Dissolution of Marriage Act, a divorce decree operated as an absolute bar to maintaining an independent action involving property rights growing out of or connected with the marriage,
We believe the current Dissolution of Marriage Act has preserved the prior law in this regard. The provisions of the Dissolution of Marriage Act evidence a legislative intent to vest the trial court in a dissolution proceeding with exclusive jurisdiction over all aspects of the marital relationship, including questions of property rights and child custody. For example, IC 31-1-11.5-11, addressing disposition of property in a dissolution proceeding, provides "the court shall divide the property of the parties ..." [Burns Code Ed. 1978 Supp.] (emphasis added). The use of the "shall" evidences an intent to preserve the prior law requiring the trial court in a dissolution proceeding to adjust and determine the parties' property rights. The trial court may exercise its duty by approving an agreement or dividing the property itself when it disapproves an agreement or when there is no agreement. Waitt v. Waitt, (1977) Ind. App., 360 N.E.2d 268.
While the current dissolution law encourages a negotiated agreement by the parties, IC 31-1-11.5-1, supra; Covalt v. Covalt, (1976) Ind. App., 354 N.E.2d 766; Flora v. Flora, (1975) 166 Ind.App. 620, 337 N.E.2d 846,
Jane's suit for fraud, therefore, cannot be grounded on the settlement agreement,
In Nicholson v. Nicholson, supra, the former wife brought suit for "damages on account of fraud alleged to have been practiced by [her former husband] in obtaining the entry of a decree of divorce from [her]." In reversing the trial court's ruling that the complaint stated a good cause of action, our Supreme Court stated:
In this case there is no question the dissolution court had jurisdiction. Thus the court had the power and, indeed, the duty to decide questions pertaining to the marital property. Hence, so long as the dissolution decree stands, Jane may not question the method by which the decree was obtained, except in a direct proceeding.
T.R. 60(B) Claim Fraud in Procurement of Judgment
Jane contends, notwithstanding her other claims, her complaint stated facts sufficient to state a claim for an independent action for fraud in the procurement of a judgment pursuant to T.R. 60(B).
An attack upon a judgment for fraud in its procurement
The independent action to avoid a judgment because of fraud in the procurement is an equitable proceeding and, as such, is subject to the rules of equitable discretion. See generally, 4 W. Harvey &
We have previously held that dissolution of the marriage and division of property may be accomplished through two separate orders issued on two separate dates. Lewis v. Lewis, (1977) Ind. App., 360 N.E.2d 855. Here, the trial court has failed to render a decision on an issue statutorily presented to it by any petition for the dissolution of the parties' marriage — the division of marital property. Thus, the decree is in the nature of a judgment upon less than all of the issues and the dissolution court retains exclusive jurisdiction over the issue of the parties' property rights. See also Indiana Rules of Procedure, Trial Rule 54(B). Jane's remedy, therefore, is to secure the court's disposition of this remaining issue. In that proceeding the question of Robert's concealment or misrepresentation of the marital property will properly be in issue and the appropriate relief obtained.
Action for Legal Malpractice and Attorney Deceit
We agree with Jane that the dissolution decree does not bar either her negligence action for legal malpractice nor her action for attorney deceit pursuant to IC 34-1-60-9. We do not agree, however, that she has alleged facts in her complaint sufficient to state either cause of action.
The dissolution decree does not bar Jane's actions for legal malpractice and attorney deceit because judgments are presumptively only conclusive against parties in the character in which they sue or are sued. Burrell v. Jean, (1925) 196 Ind. 187, 146 N.E. 754; American National Bank & Trust Co. v. Hines, (1968) 143 Ind.App. 217, 239 N.E.2d 589. In the dissolution action, Robert brought suit in his personal capacity as a spouse, i.e., as a party litigant; in her claims for legal malpractice and attorney deceit Robert is being sued as an attorney. The dissolution decree obtained by Robert in his capacity as a party litigant is not a bar to the present actions against Robert as an attorney.
While the dissolution decree does not bar Jane's purported claims for legal malpractice and attorney deceit, we hold these actions are premature because the amended complaint reveals Jane has not at this time suffered damage.
The law is well settled in Indiana that an attorney may be held liable to his client for damages resulting from his failure to exercise ordinary care, skill, and diligence. See Reilly v. Cavanaugh, (1868) 29 Ind. 435; Nave v. Baird, (1859) 12 Ind. 318; Rooker v. Bruce, (1909) 45 Ind.App. 57, 90 N.E. 86. A cause of action for legal malpractice, however, does not accrue until the aggrieved party has suffered both an injury to his property and damages.
In her claim for legal malpractice, Jane alleges Robert induced her not to retain an attorney for the negotiations concerning the property settlement agreement, and he acted as her attorney during said negotiations; in rendering services Robert "failed to exercise the degree of skill and care expected and required of an attorney" and "[t]hat as a proximate result of the carelessness and negligence of [Robert], [Jane] received far less by way of division of the property than she would have received had she been adequately represented by counsel." Her claim amounts to this: she had a claim for marital property in the dissolution
The measure of damages recoverable in such cases is generally the value of the claim lost. See Moorman v. Wood, (1889) 117 Ind. 144, 19 N.E. 739; see generally, Anno. 45 A.L.R.2d 62 (1956); 7 Am.Jur.2d Attorney at Law § 190 (1963); 7 C.J.S. Attorney and Client § 157(F) (1937). However, the dissolution decree did not dispose of the parties' property and, therefore, the damages or loss alleged by Jane are, at this time, nonexistent. The dissolution court may ultimately enter a property disposition more favorable than Jane thought she received; in which case she may not sustain the damages she now claims.
The Louisiana Court of Appeals addressed a similar situation involving a malpractice suit by an individual against several attorneys who had represented her in several contractual disputes. Marchand v. Miazza, (1963) La. App., 151 So.2d 372. Plaintiff claimed the failure of the attorneys to properly represent her caused her to lose certain property rights. The attorney-defendants met the suit with a plea of prematurity. Because plaintiff had four suits pending in which she was still attempting to enforce the contractual rights allegedly lost, it was possible the court in the pending suits would decide these contractual rights had not been lost. Thus defendant-attorneys argued the alleged malpractice would have caused plaintiff no damage.
The Louisiana Court of Appeals initially held the statute of limitations for legal malpractice commences to run where, in point of time, the damage follows the wrongful act. Plaintiff's suit was, therefore, premature.
See also Capital Bank & Trust Co. v. Core, (1977) La. App., 1st Cir., 343 So.2d 284.
We find Jane's cause of action for legal malpractice cannot arise until it has been established that Robert wrongfully permitted the loss alleged. This cannot be known until a property disposition is entered by the dissolution court.
We further find Jane's claim for attorney deceit, pursuant to IC 34-1-60-9, suffers a similar fate as her claim for legal malpractice. The complaint does not reveal Jane has at this time suffered the damages she alleges.
Although the statute concerning attorney deceit, IC 34-1-60-9, has been in existence since 1881,
In line with the foregoing authorities, we hold IC 34-1-60-1 does not create a new cause of action but, instead, trebles the damages recoverable in an action for deceit. The essential elements required to sustain an action for deceit are:
See also, Jagers v. Jagers, (1875) 49 Ind. 428. Plaintiff must show a defendant-attorney accused of such deceit practiced such deceit in his capacity as an attorney and not in his individual capacity as a citizen or party-litigant.
In an action for deceit, however, as in the case with legal malpractice actions, damage to the plaintiff as a result of the fraudulent representations is a necessary prerequisite to recovery. See Strader v. Strader, (1898) 151 Ind. 339, 51 N.E. 479; See generally, W. Prosser, Law of Torts 731 (1971). The measure of damages in such cases is the difference between the value of what he has parted with and the value of what he has received. Rochester Bridge Co. v. McNeill, (1919) 188 Ind. 432, 122 N.E. 662; but see Nysewander v. Lowman, (1890) 124 Ind. 584, 24 N.E. 355, [holding that the measure of damages for deceit is the difference between the actual value of what he has received and the value that it would have been had the facts been as represented].
The trial court did not err, therefore, in deciding Jane's Amended Complaint failed to state a claim for relief.
CHALLENGED PROCEDURAL ERRORS IN DISMISSING AMENDED COMPLAINT: JUNE 17 "JUDGMENT"; MOTION TO STRIKE AMENDED COMPLAINT
Jane contends the trial court erred by entering its June 17 judgment dismissing her original complaint and in granting Robert's motion to strike her amended complaint. Because Robert's motion for judgment on the pleadings, under Indiana Rules of Procedure Trial Rule 12(C), challenged her original complaint for failure to state a claim upon which relief can be granted, she argues it should have been treated and disposed of in the same manner as a motion to dismiss, Indiana Rules of Procedure, Trial Rule 12(B)(6). The trial court therefore erred in entering a judgment dismissing her original complaint the same day as its ruling because T.R. 12(B) allows her an absolute right to amend a pleading dismissed under T.R. 12(B)(6). Jane also contends Robert's motion to strike, Indiana Rules of Procedure, Trial Rule 12(F), was not the proper procedural tool to seek dismissal of her amended complaint.
Robert responds that a motion for judgment on the pleadings under T.R. 12(C) should be treated and disposed of in the same manner as a motion for summary judgment, Indiana Rules of Procedure, Trial Rule 56. Thus, he contends when his T.R. 12(C) motion was sustained the trial court properly entered judgment. Jane's remedy at that time was to file a motion to correct errors, Indiana Rules of Procedure,
Trial Rule 12(C)
Motion for Judgment on the Pleadings
The disagreement between the parties to this appeal as to the nature and treatment of a T.R. 12(C) motion for judgment on the pleadings is understandable, for few Indiana decisions have addressed the motion and the holdings of those cases are prone to malentendu.
A T.R. 12(B)(6) defense of failure to state a claim upon which relief can be granted may properly be raised by way of a T.R. 12(C) motion for judgment on the pleadings. Indiana Rules of Procedure, Trial Rule 12(H)(2);
When, however, the motion is predicated upon matters extraneous to the pleadings, the motion should be treated in the same manner as a motion for summary judgment made pursuant to T.R. 56.
The purpose of a T.R. 56 motion for summary judgment, on the other hand, is to go behind the pleadings to determine if evidence exists to support allegations or denials in the pleadings. See, Indiana Suburban Sewers, Inc. v. Hanson, (1975) 166 Ind.App. 165, 334 N.E.2d 720. A T.R. 56 motion, unlike a T.R. 12(B)(6) motion, does not test the sufficiency of the pleadings but tests whether the allegations in the pleadings have any factual basis. Thus, T.R. 56 requires the parties, before trial, to bring forward evidence from which the material facts alleged in the pleadings can be inferred.
Thus, the test to be applied when ruling on a T.R. 12(B)(6) motion or a T.R. 12(C) motion that raises the defense of failure to state a claim upon which relief can be granted is whether, in the light most favorable to the non-moving party and with every intendment regarded in his favor, the complaint is sufficient to constitute any valid claim. See, State v. Rankin, (1973) 260 Ind. 228, 294 N.E.2d 604; Gladis v. Melloh, (1971) 149 Ind.App. 466, 273 N.E.2d 767. In applying this test the court may look only at the pleadings, with all well-pleaded material facts alleged in the complaint taken as admitted, supplemented by any facts of which the court will take judicial notice. See, George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., (2nd Cir.1977) 554 F.2d 551.
It appears from the record that the trial court properly dismissed Jane's original complaint.
The trial court did err, however, in entering a judgment dismissing the complaint. As noted earlier, T.R. 12(B) allows a party an absolute right to amend a pleading when a motion to dismiss for failure to state a claim is sustained. Jane had an absolute right to correct any deficiencies within ten days after service of the court's order sustaining the motion.
Trial Rule 12(F)
Motion to Strike
Notwithstanding its error in entering the June 17 judgment, the trial court did, however, properly strike and in essence dismiss Jane's amended complaint pursuant to Robert's T.R. 12(F) motion to strike alleging the amended complaint failed to state a claim upon which relief can be granted.
We do not agree with Jane's contention that the motion to strike was an improper device to seek dismissal of her amended complaint. Under federal practice, a motion to strike, Fed.R.Civ.P. 12(f) functions similarly to a motion to dismiss for failure to state a claim, Fed.R.Civ.P. 12(b)(6), when the motion to strike is properly used to test legal sufficiency of an answer.
Jane's amended complaint contained basically the same allegations as her original complaint, additionally alleging only that the issue of the parties' property rights was never presented to or adjudicated by the trial court in the dissolution proceeding. These facts, admitted by Robert, did not change the applicable rule of res judicata. The trial court had only to consider these facts to properly determine Jane's amended complaint, as did her original complaint, failed to state a claim upon which relief could be granted. Because the trial court did not need to consider any matters outside the amended complaint it properly granted Robert's motion to strike as allowed by T.R. 12(F).
The judgment of the trial court is, therefore, affirmed.
BUCHANAN, C.J., concurs.
CHIPMAN, J., sitting by designation, concurs.
Pursuant to the aforementioned section, a property settlement agreement that has been incorporated and merged into the decree may be revoked or modified upon the grounds of fraud asserted within two (2) years of the entry of the dissolution decree. Pactor v. Pactor, Ind. App., 391 N.E.2d 1148. Since, however, in the case at bar, the property settlement agreement was not incorporated and merged into the dissolution decree, Jane may not avail herself of the aforementioned provision. In this regard her appropriate remedy is discussed in IB of this opinion.
Similarly, N.Y.Jud.Law (McKinney), § 487 provides:
See also, Iowa Code Ann. § 610.15, providing:
March 15, 1974 Dissolution Decree entered by Adams Circuit Court dissolving parties' marriage December 26, 1974 Jane files three-count complaint in Adams Circuit Court January 14, 1975 Robert filed Motion for Enlargement of Time in Which to Plead; motion granted for period of thirty (30) days February 14, 1975 Robert files Motion to Strike; Robert files Answer March 5, 1975 Cause venued to Wells Circuit Court upon Jane's motion May 23, 1975 Robert files Motion for Judgment on the Pleadings May 30, 1975 Trial court hears arguments on Robert's Motion for Judgment on the Pleadings June 17, 1975 Trial court enters judgment dismissing Jane's complaint June 24, 1975 Jane files Amended Complaint in Wells Circuit Court July 14, 1975 Robert files Motion to Strike Amended Complaint July 23, 1975 Jane files response to Robert's Motion to Strike August 11, 1975 Trial court hears arguments on Robert's Motion to Strike August 15, 1975 Jane files Motion to Correct Errors addressing June 17, 1975 Judgment September 8, 1975 Trial court overrules Jane's Motion to Correct Errors and sustains Robert's Motion to Strike Amended Complaint September 12, 1975 Jane files second Motion to Correct Errors addressing the September 8, 1975 order September 23, 1975 Trial court overrules Jane's second Motion to Correct Errors
Similarly, T.R. 12(C) provides, in part:
with Indiana Trial Rule 12(f) providing: