## Facts

- In October 1989, a rented mobile-home fire injured Patrick and Lorrie Skaggs and their daughter Patricia and killed Amber Nicole Mitchell; investigators attributed the fire to an electrical short, and the trailer allegedly lacked a smoke alarm and had a back door wired shut.
- The Skaggs initially retained attorney Joseph Rabb, but Rabb failed to file suit within the two-year limitations period.
- The Skaggs then retained attorney Ronald W. Frazier, whose work included investigating a malpractice claim against Rabb, filing a state-court action against the landlord (Cossell Group, L.P.), and defending a federal declaratory-judgment coverage action filed by the landlord’s insurer (Midwestern Indemnity Company).
- The malpractice claim against Rabb resolved for $50,000 (against Frazier’s advice, according to the record), while the fire-related litigation continued.
- Frazier and attorney James A. Mellowitz entered a written litigation referral agreement under which Mellowitz would take primary responsibility for the litigation; the agreement provided for a referral fee to Frazier from any contingent recovery and required Frazier to pay a stated percentage (described in the opinion as 25%) of litigation expenses as they were incurred.
- Mellowitz advanced litigation expenses during the case. A dispute developed over whether Frazier was obligated to pay his share contemporaneously, whether he failed to do so, and what the parties’ course of dealing showed about enforcement of that term.
- In April 1999, Mellowitz filed an action for declaratory relief seeking a determination that Frazier breached the referral agreement and that Mellowitz owed Frazier nothing.
- In June 2002, Mellowitz moved for summary judgment; the trial court granted the motion on April 10, 2003.
- Frazier appealed, arguing summary judgment was improper because factual disputes remained concerning breach, materiality, and the parties’ conduct.

## Issues

1. Whether the trial court erred by granting summary judgment declaring that Frazier’s failure to pay his share of litigation expenses as incurred was a material breach that relieved Mellowitz of any duty to pay a referral fee.
2. Whether genuine issues of material fact existed regarding the parties’ course of performance, including waiver or estoppel, that would prevent summary judgment on the referral agreement.

## Decision

- The Court of Appeals of Indiana reversed the summary judgment for Mellowitz and remanded for further proceedings.
- The court held that the designated evidence permitted competing inferences on whether any nonpayment by Frazier was a material breach and on whether Mellowitz’s conduct could constitute waiver or support estoppel, making summary judgment improper.

## Legal Principles

- Summary judgment is proper only when the designated evidence shows no genuine issue of material fact and the movant is entitled to judgment as a matter of law; on appeal, courts consider the record in the light most favorable to the nonmovant and draw reasonable inferences in that party’s favor.
- Whether a breach is “material” commonly depends on context and the effect on the bargain; when the evidence allows more than one reasonable conclusion, materiality is not resolved on summary judgment.
- Waiver (intentional relinquishment of a known right) and estoppel (conduct that reasonably induces reliance) often turn on the parties’ conduct and communications and are generally fact questions when the evidence is disputed.
- A party’s course of performance under a contract can bear on whether strict enforcement of a timing or payment term was required, excused, or treated as nonessential by the parties.

## Conclusion

Because the summary-judgment record left factual disputes about the nature and materiality of Frazier’s alleged nonpayment of litigation expenses and about whether Mellowitz’s conduct showed waiver or supported estoppel, the Indiana Court of Appeals reversed the declaratory summary judgment and sent the case back for further proceedings.


Frazier v. Mellowitz, 804 N.E.2d 796 (2004)