Indiana Court Decisions — May 10-22, 2018

7th Circuit Court of Appeals

May 10

Civil Tort — Defamation

Anthony Mimms v. CVS Pharmacy, Inc.

17-1918

An Indianapolis doctor awarded $1.025 million in defamation damages against CVS after a federal jury trial lost it all when the 7th Circuit Court of Appeals reversed the decision.

The judgment for Dr. Anthony Mimms was vacated by the Chicago appellate panel that found District Court Judge Tanya Walton Pratt erred in allowing three allegedly defamatory comments regarding Mimms to be tried to a jury. The 7th Circuit also concluded that CVS was entitled to a new trial on the fourth and final allegedly defamatory statement.

The award for Mimms in January 2017 came after CVS workers allegedly told patients that his prescriptions were no longer being filled for various reasons. Mimms’ patients said they were refused prescriptions at Greenfield, McCordsville and Rushville CVS stores after pharmacists and technicians at those stores said he was running a pill mill; he had gone to jail; he had been or would be arrested; and that he was under investigation by the U.S. Drug Enforcement Agency.

The 7th Circuit said the first three of those remarks never should have been tried to the jury. CVS was entitled to summary judgment as a matter of law on those comments, because Mimms provided no evidence they were made with actual malice, the standard for defamation under Indiana law.

As to whether Mimms was under DEA investigation, the district court should have allowed CVS to present evidence that the statement was true — a complete shield to defamation.

“CVS sought to introduce evidence that the clinic Mimms formerly worked for, Rehabilitation Associates of Indiana, had been subpoenaed for records of Mimms’s former patients, including patients that had died or been charged or convicted of drug crimes. Mimms objected to the introduction of the evidence, arguing that he had left the practice before the subpoenas were served and thus the subpoenas could not be part of any investigation of Mimms,” Judge Michael S. Kanne wrote for the panel.

“The district court agreed and suppressed the evidence. While this may not be conclusive evidence that the DEA was investigating Mimms specifically, the fact that the DEA was seeking records for Mimms’s patients shortly after he left the practice supports CVS’s claim that Mimms was under investigation,” the court wrote.

“So we leave untouched the district court’s denial of summary judgment as to the fourth statement. We find, however, that the district court abused its discretion when making several evidentiary rulings and that these errors prevented CVS from presenting its case. Therefore, the jury’s verdict is vacated and CVS is entitled to a new trial on the fourth statement,” Kanne wrote.

Indiana Supreme Court

May 10

Miscellaneous — Medical Malpractice/Anti-SLAPP Statute

Paul Gresk, Trustee for the Bankruptcy Estate of Derek VanWinkle and Stacey VanWinkle on behalf of M.V. and A.V. their minor children v. Cortney Demetris, M.D., et al.

49S02-1711-MI-686

A medical malpractice suit filed against a doctor who reported his suspicions of child abuse to the Department of Child Services will proceed after the Indiana Supreme Court ruled May 10 that the state’s anti-SLAPP laws do not apply to this case.

Justices reversed a Marion Superior Court’s dismissal of the case under state laws against Strategic Lawsuits Against Public Participation. Indiana’s high court found the anti-SLAPP laws enacted in 1998 as a shield against lawsuits targeting speech protected under the First Amendment provide no defense to Dr. Cortney Demetris in this case.

Demetris was the attending physician when Stacey and Derek VanWinkle’s daughter A.V. was admitted for observation. Demetris concluded A.V. suffered from medical child abuse — formerly known as Munchausen syndrome by proxy — in which a child receives unnecessary and potentially risky treatment due to false reporting by a parent or caregiver.

Demetris reported his suspicions to the Department of Child Services, which removed the VanWinkles’ children from their home and substantiated allegations of abuse, which were later reversed by the trial court. The VanWinkles then filed a malpractice claim against Demetris, which was dismissed by the trial court — a decision that was reversed by the Indiana Court of Appeals.

The Indiana Supreme Court agreed with the COA’s ruling on this issue of first impression in Paul Gresk, Trustee for the Bankruptcy Estate of Derek VanWinkle and Stacey VanWinkle on behalf of M.V. and A.V. their minor children v. Cortney Demetris, M.D., et al., 49S02-1711-MI-686.

“Indiana’s anti-SLAPP statute was adopted in response to the discrete problem of retaliatory lawsuits aimed at chilling constitutional rights” such as free speech, Justice Mark Massa wrote. “The VanWinkles’ lawsuit ‘is not the type of lawsuit that the anti-SLAPP statute was enacted to prevent’ because it was not filed to stifle Dr. Demetris’s ‘speech on a public issue or an issue of public interest,’ but to recover damages for alleged medical malpractice. … Thus, we reverse, and remand for consideration of the stayed issues.”

The court expressed no opinion on the outcome of stayed issues in this litigation, but the opinion narrows the potential scope of anti-SLAPP litigation. All justices concurred in the opinion except Justice Geoffrey Slaughter, who did not participate.
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May 17

Mental Health — Involuntary Commitment/Right to Be Present

A.A. v. Eskenazi Health/Midtown CMHC

49S02-1711-MH-688

A man whose attorney waived his right to be present at his mental health civil commitment hearing will be released from involuntary commitment after the Indiana Supreme Court ruled that attorneys may not waive a client’s right to be present at those hearings. The court also found that trial courts can independently waive a respondent’s presence but must do so at the beginning of a civil commitment proceeding.

The court reached that unanimous decision May 17 in A.A. v. Eskenzai Health/Midtown CMHC, 49S02-1711-MH-688. The case began when 36-year-old A.A.’s mother filed an application for emergency detention of her son, who had been diagnosed with schizophrenia and previously had been hospitalized for his mental illness. After being admitted to Eskenazi, A.A. was recommended for involuntary commitment and was scheduled for a commitment hearing in September 2016.

A.A. did not appear at that hearing, with his counsel informing the Marion Superior Court that he was waiving A.A.’s presence because A.A. was “agitated” and would not answer the phone. The attorney then called Dr. David Pollock as a witness, and Pollock testified that A.A.’s “menacing” and “aggressive” behavior made him dangerous to others and gravely disabled.

The court subsequently ordered A.A.’s involuntary commitment, and the case proceeded to the Indiana Court of Appeals, where attorneys asked the court to provide guidance on an area of law that was not well developed. The appellate court determined that civil commitment respondents could not voluntary waive their presence at a commitment hearing, but neither could their attorneys.

The Court of Appeals also determined that trial courts have statutory authority to waive a respondent’s right to be present when their “presence would be injurious to the individual’s mental health or well-being.” That was the case here, the panel ruled, so A.A. did not suffer a due process violation. However, the court also found that trial courts must make waiver determinations at the outset of civil commitment hearings.

The appellate court ultimately affirmed A.A.’s involuntary commitment, and the case proceeded to the Indiana Supreme Court in December, where attorneys once again urged the court to provide guidance on the waiver of a right to be present at a commitment hearing. In providing that guidance, Chief Justice Loretta Rush first wrote that a respondent who is mentally competent can make a knowing, voluntary and intelligent waiver of their right to be present.

“A court may not assume that a civil-commitment respondent is mentally incompetent just because the person is facing a claim of mental illness,” Rush wrote, noting the court disapproved of a contrary holding in In re Commitment of M.E., 64 N.E.3d 855, 860-61 (Ind. Ct. App. 2016).

Rush went on to write that trial courts must expressly find that respondents are capable of making knowing, voluntary and intelligent waivers on the record, an inquiry she said would be case-sensitive.

“Regardless, before accepting a personal waiver of appearance, the trial court must find, through direct contact with the individual, that the respondent understands the nature and importance of the right, the consequences of waiving the right, the elements required to obtain an involuntary commitment, and the applicable burden of proof,” she said.

Turning to the applicable statute, Indiana Code section 12-26-2-2, the court then found that respondents and trial courts are given the right to waive their presence, but attorneys are not considered by the statute. Thus, A.A.’s attorney could not legally waive his right to be present, the court found.

Finally, the justices agreed with the Court of Appeals that trial courts must waive a respondent’s right to be at a hearing at the outset of the hearing. The court based that holding on the structure of the statute, which lists three due process rights: the right to notice of a hearing, copy of the petition and counsel.

“We believe that this grouping of certain due process rights in Indiana Code section 12-26-2-2(b) was deliberate,” Rush wrote. “They share a common temporal characteristic — they attach before a commitment hearing, and their utility decreases or even disappears if a respondent cannot exercise them in a timely manner.”

“… A respondent’s right to appear — which is implicated before the proceeding begins — would not be adequately protected if the trial court conducted the entire hearing before waiving the individual’s presence,” she continued.

If a trial court fails to make a proper statutory waiver, the court determined that error is subject to harmless-error review. The court stressed that harmlessness does not depend on whether the evidence supports commitment, but whether it supports waiver, which addresses whether being present at a hearing would be injurious to the respondent.

In this case, the court determined the waiver of A.A.’s presence was not harmless because the court did not know why A.A. was agitated and, thus, whether his presence would have been injurious. The justices remanded the case to vacate A.A.’s commitment order.

Indiana Court of Appeals

May 11

Infraction/Removal of Yorktown Clerk-Treasurer

State of Indiana v. Beth A. Neff

18A02-1708-IF-1933

The Indiana Court of Appeals ordered the removal of the Yorktown clerk-treasurer from office after determining that her failure to properly reconcile the town books for four consecutive years warranted her removal. In response, the elected office holder has pledged to take her case to the Indiana Supreme Court.

Beth Neff was elected Yorktown clerk-treasurer in 2007 and has held the position since. The State Board of Accounts performed an audit of the town’s 2012 financial records in 2013 and found that Neff failed to reconcile the town accounts for that entire year, while the town’s wastewater utility account was overdrawn by nearly $141,000.

Field examiner Mike Wade and his supervisor, Bill Vinson, met with Neff to go over the issues and help her rectify her errors, but a subsequent audit of the town’s records from 2013 through 2015 found the same and new errors affecting more than 20 town accounts. Vinson later testified that Neff’s errors were so numerous that the SBA could not identify them all.

The Town Council subsequently approved a proposal for Neff to hire accounting firm Hartman Williams to assist her, and the firm ultimately identified net errors totaling $346,340.82. The state then filed a complaint to remove Neff from office in July 2017, with Delaware County Prosecutor Jeff Arnold alleging in the complaint that Neff’s conduct led to a “general and continuing series of misfeasance and nonfeasance and a disregard for statutory requirements that amount to negligent neglect.”

The Delaware Circuit Court denied Neff’s motion to dismiss, but also declined to remove her from office. The court found that though Neff failed to reconcile the books for 48 consecutive months, her removal was not warranted because “Neff is making mistakes and not performing up to the standards expected by the State Board of Accounts for Town Clerks. This is misfeasance and not nonfeasance.”

The Indiana Court of Appeals reversed that ruling May 11, with Judge Paul Mathias writing Neff’s removal was warranted under the state’s Removal Statute, Indiana Code section 5-8-1-35.

The panel distinguished the instant case from Neff’s interpretation of State v. McRoberts, 207 Ind. 293, 192 N.E. 428 (1934) and State ex rel. Ayer v. Ewing, 231 Ind. 1, 106 N.E.2d 441 (1952), which both parties relied on to support their positions. Neff had argued those cases stood for the proposition that an official must shirk each of their duties to be found to have committed nonfeasance warranting removal, an argument the court disagreed with.

“While Neff’s actions may not rise to the level of the hypothetical provided by the McRoberts court ‘where a sheriff closes his office and remains away and refuses and neglects to discharge the duties thereof,’ she neglected to perform a critical, official, and mandatory duty of her office for an extended period of time,” Mathias wrote. “Therefore, we hold that Neff’s failure, over a period of years, to perform a critical, official and mandatory duty for a clerk-treasurer falls squarely within the confines of Article VI Sections 7 and 8 of the Indiana Constitution and our legislature’s response via the Removal Statute.”

Neff cross-appealed, arguing the trial court erred in denying her motion to dismiss, but the appellate panel determined the state “sufficiently alleged specific facts necessary to fall under the trial court’s jurisdiction… .” The case of State of Indiana v. Beth A. Neff, 18A02-1708-IF-1933, was remanded for further proceedings.

In a statement after the ruling, Fishers attorney Jeffrey M. Heinzmann of the Heinzmann Law Office, who is representing Neff, called the court’s decision “an abandonment of Indiana precedent.”

“Two days after Hoosier voters went to the polls in the 2018 primary election, it is fresh in our minds that it is the voters who choose our elected officials and can choose to remove them,” Heinzmann said. “Today’s opinion is an abandonment of Indiana precedent that transforms the standard for impeachment from a bright line of nonfeasance to a sliding scale where courts can overturn the will of the voters based upon the mistakes of office holders.”
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May 16

Criminal — Contempt/Bail Condition Violation

Cameron Hunter v. State of Indiana

43A03-1711-CR-2633

A northern Indiana trial court’s contempt order against a man who violated a condition of bail was an abuse of discretion, the Indiana Court of Appeals ruled May 16, reversing the order.

Cameron Hunter was released on bail pending criminal charges against him before Kosciusko Superior Judge David C. Cates. At a plea hearing, Hunter sought to postpone consideration of a guilty plea to determine if he was eligible for community corrections. The court continued the hearing and modified conditions of Hunter’s bail, specifying he was not to be around anyone younger than 18.

After Hunter left the courthouse with his girlfriend, his minor sister and a 16-year-old female, the state filed a petition and, after a hearing, the court determined Hunter was in contempt and ordered him to serve 180 days in jail.

A panel of the COA reversed in Cameron Hunter v. State of Indiana, 43A03-1711-CR-2633, finding the contempt order was an abuse of discretion because “Hunter’s conduct did not rise to the level of punishable criminal contempt” and didn’t affect the dignity or operation of the court, Judge L. Mark Bailey wrote for the panel.

“Hunter failed to comply with a condition of his bail. Under such circumstances, an appropriate remedy was to revoke bail — a remedy the State should have sought in accordance with the controlling statute,” the panel concluded.

In footnotes, the panel noted that in February it had granted Hunter’s motion for recognizance bond pending appeal and remanded for a hearing and determination on an appropriate bond. It also outlined the proper procedures for trial courts to follow in contempt proceedings and cautioned judicial officers to “exercise their extraordinary contempt powers with the utmost sense of responsibility and circumspection … and, in selecting contempt sanctions, exercise the least-possible power adequate to the end proposed.”
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May 18

Civil Tort — Personal Injury/Sudden Emergency

Calvin B. Yates v. Rebecca Hites

44A03-1710-CT-2459

A man injured in a LaGrange County car crash will get a second chance to make his negligence case against the driver who allegedly caused the collision after the Indiana Court of Appeals reversed judgment in favor of the allegedly negligent driver and remanded the case for a new trial.

In the early morning of Jan. 31, 2014, Rebecca Hites was traveling west on U.S. 20 when she lost control of her vehicle, crossed the center line and struck Calvin Yates’ vehicle. Yates was injured and sued Hites for negligently and recklessly driving her vehicle.

Hites requested a “sudden emergency” jury instruction at trial based on the black ice that allegedly caused her to lose control. Yates, in turn, moved to exclude testimony or evidence related to Hites’ sudden emergency and related to the black ice. The LaGrange Superior Court granted both of Yates’ requests and denied the jury instruction.

Hites then testified at trial that the weather had been bad in the days leading up to the crash, while Indiana State Police Trooper Marc Leatherman testified that his investigation showed Hites had been driving too fast for the weather conditions, which included black ice. As a result of that testimony — which Hites said provided evidence of a sudden emergency — the trial court allowed the sudden emergency instruction over Yates’ objection.

The jury then found in favor of Hites, so Yates appealed in Calvin B. Yates v. Rebecca Hites, 44A03-1710-CT-2459. The Indiana Court of Appeals reversed that judgment May 18, with Judge L. Mark Bailey writing the record was “completely devoid of evidence that Hites’s vehicle drove over black ice.”

“Hites herself never testified that she drove over black ice,” Bailey wrote for the unanimous appellate panel. “Rather, she testified that the roads were not icy that day and that she never saw any ice.”

Further, in closing argument, Hites’ attorney heavily relied on the sudden emergency doctrine to justify the reason why she moved into Yates’ lane. Thus, it is likely that the jury improperly relied on the sudden emergency instruction to reach its verdict, a fact that was prejudicial to Yates, Bailey said.

The court remanded the case for a new trial, but in a footnote, Bailey noted that other states have abolished the sudden emergency instruction and suggested that Indiana should consider following suit.

“We believe that Indiana’s pattern sudden emergency instruction, while an accurate statement of the law that requires the jury to consider the defendant’s actions leading up to the alleged emergency, nevertheless suffers from the potential to mislead the jury into applying a reduced standard of care and/or unduly focusing its attention on the defendant’s actions during and after the emergency rather than on the totality of the circumstances,” Bailey wrote in Footnote 5. “And we believe that the sudden emergency instruction is unnecessary as ‘the rule requiring reasonable care is sufficient to take into consideration the excitement and confusion which normally accompany the emergency situation.’”

Miscellaneous — Inmate Suit/Seizure of Paper Crosses

Anthony Wayne Reed v. Leann White and Darrin Chaney

67A01-1708-MI-1768

An inmate’s lawsuit against two people working for the Indiana Department of Correction will continue after the Indiana Court of Appeals ruled the trial court erred in dismissing the complaint for failure to state a claim.

While incarcerated in the Putnamville Correctional Facility in December 2015, Anthony Reed mailed four handmade paper crosses to family members. Three of the crosses were returned to the prison for insufficient postage, but they were not returned to Reed. The inmate later learned that mailroom employee Leann White had confiscated the crosses and given them to Darrin Chaney, an internal affairs officer.

Reed filed an informal grievance with the correctional facility in January 2016 but was informed that prison policy prohibited the use of colors and symbols to show gang affiliation. Reed maintained the crosses were not connected with any known gang memberships, but his grievance appeal with the Department of Correction was denied.

The inmate then filed a complaint against White and Chaney in the Putnam Superior Court, alleging White did not have a valid reason to confiscate the crosses and failed to follow DOC seizure policies, while both defendants committed “criminal conversion.”

The court dismissed the complaint for failure to state a claim, but the Indiana Court of Appeals reversed on May 18.

Specifically, Judge Edward Najam wrote in Anthony Wayne Reed v. Leann White and Darrin Chaney, 67A01-1708-MI-1768, that the state’s argument that White and Chaney were entitled to immunity failed because it is an affirmative defense. Dismissal for failure to state a claim is “rarely appropriate” when an affirmative defense is raised, Najam said.

“Here, if Reed had alleged in his complaint that White and Chaney were acting within the scope of their employment, dismissal under Indiana Code Section 34-58-1-2(a)(2) would have been appropriate,” Najam said.

“But Reed makes no such allegation. Accordingly, looking only at the face of Reed’s complaint, there is no basis to dismiss the complaint because of White’s and Chaney’s possible immunity defenses.”

The panel also determined that if they take the facts of the complaint as true, then there was no basis to confiscate the crosses.

“Reed’s allegations may prove incorrect at a fact-finding hearing,” Najam said, “but they state a claim.”
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May 21

Civil Tort — Personal Injury/Negligence

Sheila Gonzalez and Rod Gonzalez v. Sara Ritz, Northern Indiana Public Service Company, Porter County Drug Task Force, and Town of Chesterton

64A04-1712-CT-2850

A negligence case against the town of Chesterton and the Porter County Drug Task Force must proceed to trial after the Indiana Court of Appeals ruled there was a genuine issue of material fact as to whether the plaintiff who brought the case was contributorily negligent in the bicycle-vehicle accident.

In July 2014, Sara Ritz — a Chesterton Police Department detective and member of the Porter County Drug Task Force — was conducting an investigation in Portage when she struck Sheila Gonzalez, who was riding her bike across Lute Road with her children, Vanessa and Carter. Both children later testified that Ritz was driving faster than other cars they had seen on the road, while Gonzalez testified that it was her practice to stop at all intersections and look both ways before crossing.

Gonzalez and her husband, Rod, sued Ritz, the task force and the Town of Chesterton for negligence in February 2016, and the town and task force moved for summary judgment in the spring and summer of 2017. The Porter Superior Court granted the summary judgment motion, but the Indiana Court of Appeals reversed that ruling on May 21.

Judge Cale Bradford wrote for the unanimous appellate panel that the designated evidence would permit a finding that Gonzalez was not contributorily negligent in the accident. Bradford pointed to testimony from Gonzalez and her children that Lute Road was clear and that Gonzalez came to a complete stop and assessed the road before deciding to cross.

“As for why Sheila might not have seen Ritz’s vehicle or, perhaps, saw it but underestimated the threat it posed, Carter testified that Ritz’s vehicle was traveling faster than the other traffic on the road and Vanessa testified that Ritz was driving too fast,” Bradford wrote. “A factfinder could possibly conclude from the above that Sheila complied with the standard or ordinary care but nevertheless failed to see the approaching Ritz, and/or incorrectly concluded that her fast-moving vehicle was too far way to pose a threat.”

The appellees raised multiple arguments on appeal, including the assertion that Lute Road was, in fact, not clear when Gonzalez began to cross. But at this stage of the litigation, Bradford said the court was tasked only with determining if a genuine issue of material fact exists.

Having concluded that issue does exist, the case of Sheila Gonzalez and Rod Gonzalez v. Sara Ritz, Northern Indiana Public Service Company, Porter County Drug Task Force, and Town of Chesterton, 64A04-1712-CT-2850, was remanded for trial.

Indiana Tax Court

May 18

Tax/Real Estate Assessed Valuation

Nova Tube Indiana II LLC v. Clark County Assessor

49T10-1708-TA-13

The Clark County assessor must reduce its valuation of a Jeffersonville property by roughly $1 million for the 2011 through 2013 tax years after the Indiana Tax Court found the assessor abused her discretion in the assessment process.

During the years at issue, Nova Tube Indiana LLC owned two parcels of land in Jeffersonville covering 29.1 acres. Though the property was assessed at $2.2 million in 2010, the Clark County assessor more than doubled that value the three following years, assessing the property at or above $4.7 million in 2011, 2012 and 2013.

Nova Tube — a mechanical steel tubing manufacturer — appealed those assessments in October 2013, but the Clark County Property Tax Assessment Board of Appeals affirmed. Before that ruling, Nova Tube sold the property to the Port of Indiana for $6.1 million in May 2014.

The company then appealed to the Indiana Board of Tax Appeals, which found that the county assessor had met her burden of proving the assessment increase in 2011 was correct under Indiana Code section 6-1.1-15-17.2. Specifically, the board determined the assessment values were supported by evidence that the property was sold in a “market value” transaction, and that the market was relatively stable during the years at issue.

In response, Nova Tube countered that the sale was not a market value transaction because the Port was “atypically motivated” given its status as a government entity and its ownership of adjacent land. The company also presented an appraisal in conformance with the Uniform Standards of Professional Appraisal Practice that valued the property at $2.9 million in 2011.

The board ultimately upheld the 2011 assessment and the 2012 and 2013 assessment based on the same evidence. After its request for rehearing was denied, the company appealed to the Indiana Tax Court in Nova Tube Indiana II LLC v. Clark County Assessor, 49T10-1708-TA-13, which ruled in its favor May 18.

While Tax Court Judge Martha Wentworth upheld the board’s finding that the May 2014 sale of the property was a market value transaction, she also found the assessor’s evidence failed to show the 2014 sales price was “directly related to any of the appropriate valuation dates for the years at issue.” The evidence also did not show why the more than doubling of the assessment in 2011 was correct given other evidence that showed relatively flat market growth from 2009 to 2014, Wentworth wrote.

The assessor relied on two cases — Hubler Realty Co. v. Hendricks Cnty. Assessor, 938 N.E.2d 311, 315 n.5 (Ind. Tax. Ct. 2010) and Fisher v. Carroll Cnty. Assessor, 74 N.E.3d 582 (Ind. Tax Ct. 2017) — to support her position that the May 2014 sale was related to the valuation dates at issue, but Wentworth found that those two cases differed from the issues in the instant case.

“Therefore, the Court finds that the Indiana Board abused its discretion by finding that the May 2014 sales price was sufficiently related to each of the March 1 valuation dates,” Wentworth wrote. “Consequently, the Assessor did not meet her initial burden of proving that her assessment increases were correct.”

Thus, Wentworth remanded the case for the assessor to assess the property at the three values offered in Nova Tube’s appraisals — $2.9 million, $3 million and $3.1 million.•