Indiana Court Decisions – Sept. 12–25, 2019

7th Circuit Court of Appeals

Sept. 18

Civil Tort — Breach of Contract/Countersuit

Karma International, LLC v. Indianapolis Motor Speedway

18-2054 and 18-3487

A federal appeals court upheld a jury’s award of $75,000 to Indianapolis Motor Speedway in a breach of contract lawsuit brought by an event-planning company that had sued IMS due to poor ticket sales at a party marking the 100th running of the Indy 500.

The 7th Circuit Court of Appeals ruled against Karma International, LLC, which in 2016 hosted a Maxim men’s magazine-themed party for the 2016 IndyCar race. The party lost more than $420,000, according to the court. Karma filed a breach of contract suit seeking $817,500 in damages, alleging Speedway officials had speculated the event would raise at least $1 million in ticket and table sales. After Karma sued the Speedway, IMS countersued, claiming that Karma failed to place promised banner ads and marketing support on Maxim’s website and social media channels.

Southern District Senior Judge William T. Lawrence awarded the Speedway summary judgment against Karma’s claim, but IMS’s counterclaim proceeded to a jury trial. Jurors in Indianapolis found Karma liable and issued a $75,000 damages verdict in favor of the Speedway.

That ruling was affirmed by the 7th Circuit in Karma International, LLC v. Indianapolis Motor Speedway, 18-2054 and 18-3487.

“The Indianapolis 500 race has been a fixture of American life since 1911, interrupted only by world war. So when its 100th running arrived in 2016, organizers wanted to shift the race-weekend entertainment into high gear,” with the Karma-sponsored Maxim party, Circuit Judge Diane Sykes wrote for the appellate panel.

“Unlike the Indianapolis 500 itself — which sold out for the first time in history — the Karma party was a disappointment,” Sykes wrote in affirming the jury’s verdict. Nevertheless, the panel agreed with the district court that IMS was not to blame for the party’s poor results in terms of revenue.

“Karma’s evidence of damages is indeed speculative, so its claim fails under Indiana law. And we see no reason to second-guess the jury’s determination that Karma breached the parties’ contract by failing to fulfill its promises to advertise the event online.”

The panel also rejected Karma’s request for a new trial or other potential relief.

“Finally, we see no abuse of discretion in the judge’s ruling on Karma’s motion for a new trial. The jury had plenty of evidence that the Speedway complied with its promise to send a ‘dedicated email’ to its database,” the panel concluded.

Indiana Supreme Court

Sept. 23

Criminal — OWI/Juror Bias, Remand for Retrial

Tracie Easler v. State of Indiana

19S-CR-324

A woman convicted on a drunken driving charge will get a new trial after the Indiana Supreme Court unanimously threw out her conviction Sept. 23. The justices remanded the Marion County case because the trial court did not hold a hearing to determine whether the defendant could have challenged a selected juror who later admitted that a family member had been killed by a drunken driver.

Justice Christopher Goff wrote for the high court in Tracie Easler v. State of Indiana, 19S-CR-324, overturning decisions by both the Marion Superior Court and the Indiana Court of Appeals.

The defendant in the case, Tracie Easler, was charged with two counts of operating a vehicle while intoxicated after she was found unconscious behind the wheel of her SUV. Among the selected jurors was Juror 4, who during voir dire was only asked questions about signs of intoxication and reasonable doubt.

Before being sworn in, Juror 4 submitted a note telling the court that “a family member was killed by a drunk driver. It was before I was born, but altered my family dynamic irreparably. I can be a jury member, but thought it is relevant to disclose.” Though defense counsel asked if Juror 4 could be submitted to further questioning, the trial judge said, “I just thought I’d share that with you, okay. But I don’t think there’s anything else we can do.”

Defense counsel then raised a for-cause challenge to Juror 4, arguing she had not been completely forthcoming on her juror questionnaire. But the trial court rejected the challenge and swore in the jury, and Easler was found guilty on both counts.

The Indiana Court of Appeals upheld Easler’s convictions, finding in February that “neither ‘the incompleteness of Juror 4’s questionnaire’ nor the note Juror 4 provided to the court ‘present[ed] specific, substantial evidence establishing Juror 4’s bias’ that would entitle Easler to a hearing.” But the Supreme Court granted transfer and disagreed with both lower courts.

In the unanimous opinion, Goff said Easler’s case implicates the “foundational principles” of the right to a fair trial before an impartial jury. “Specifically,” he said, “this case raises the following question: What is the minimum amount of new information — in terms of quality and quantity — that would require a court to hold a hearing to investigate the alleged bias or misconduct?”

In answering that question, the court looked to four cases: Barnes v. State, Stevens v. State, Stevens II and Lopez v. State. The justices agreed with Easler that Lopez does not apply here because its “specific, substantial evidence” requirement was meant to prevent harassment of jurors post-trial.

“Instead, when a party requests a hearing on possible juror bias or misconduct after the jury has been selected but before it is sworn in, a trial court should hold such a hearing if the party provides some relevant basis, arising outside the normal course of voir dire, that indicates a juror is possibly biased or possibly committed misconduct,” Goff wrote. “Such a hearing should comply with the requirements laid out in Barnes and Stevens I & II.

“… This standard — set lower than that in Lopez — recognizes the paramount importance of impartial juries and the relative ease with which trial courts can correct potential improprieties before the jury is sworn in,” he continued. “… Thus, to repeat the applicable rule here, if a party requests a hearing on juror bias or misconduct after the jury is selected but before it is sworn in and the party provides some relevant basis, arising outside the normal course of voir dire, that indicates a juror is possibly biased or possibly committed misconduct, a trial court should hold a hearing to determine if the juror is biased or committed misconduct.”

Here, the trial court abused its discretion in not holding such a hearing on Juror 4 at defense counsel’s request, the court concluded. Though the justices said in a footnote that they do not believe Juror 4 committed misconduct, her note “shows a relevant basis indicating possible bias.”

As for a remedy, the state advocated for a remand only for an evidentiary hearing. But the justices agreed with Easler that a new trial is necessary.

“Whether Juror 4 was biased during Easler’s trial involves a subjective assessment that would be difficult to make outside the context and timing of the voir dire setting,” Goff wrote. “This difficulty is compounded by the passage of time since Juror 4’s potential bias should have been examined.

“And allowing such an examination to take place now would open the door to potential post-trial juror harassment,” he continued. “Based on these reasons, a new trial is the proper remedy in this case.”

In a footnote, the court said it did not need to address the denial of Easler’s for-cause challenge to Juror 4 given the remand for a new trial.

Indiana Court of Appeals

Sept. 12

Criminal — Public Intoxication/Lack of Endangerment

Danish Pulido v. State of Indiana

19A-CR-00834

A man’s public intoxication conviction has been reversed after he successfully argued to the Indiana Court of Appeals that his life was not endangered by being drunk next to an Indianapolis street.

After police responded to an anonymous 911 call reporting a man staggering on the sidewalk, Danish Pulido was found doing just that. An officer noted Pulido stopped when ordered to, but that he was struggling to maintain his balance while standing straight and was swaying.

When asked if he was okay, where he was headed and where he lived, Pulido told police “he did not know any of those things,” according to the record. He also told the officer that he didn’t know of anyone who could come pick him up because he was “so drunk right now.”

Pulido was then arrested and charged with Class B misdemeanor public intoxication, alleged to have “endangered his life.” When the officer testified at trial that she had been dispatched by the anonymous 911 call, Pulido raised a hearsay objection but was overruled. During closing arguments, Pulido again argued that the 911 call could not be used as substantive evidence, and the trial court sustained his second objection. Specifically, Pulido pointed out that there was no evidence he was ever in any danger of being hit by a vehicle or hurting himself, and that his act of staggering on the sidewalk was not enough to prove endangerment.

Regardless, the Marion Superior Court found Pulido guilty as charged and concluded that because he was staggering next to a city street, the endangerment obligation was satisfied.

The Indiana Court of Appeals disagreed in Danish Pulido v. State of Indiana, 19A-CR-00834, finding that the state failed to prove beyond a reasonable doubt that Pulido endangered his own life as required by the public intoxication statute.

Noting Pulido’s reliance on Sesay v. State, 5 N.E.3d 478 (Ind. Ct. App. 2014) and Davis v. State, 13 N.E.3d 500 (Ind. Ct. App. 2014), the appellate court pointed out that the public intoxication statute neither defines the term “endangers the person’s life” nor the general term of endangerment.

“It is undisputed that Pulido was intoxicated in a public place. The State, however, did not present any evidence of Pulido’s past or present conduct or action that endangered his life,” Judge Rudolph Pyle wrote. “We reject the State’s argument that the evidence was sufficient to support his conviction because Pulido’s act of being intoxicated while on the sidewalk ‘created a dangerous situation.’

“The statute required that the State prove that Pulido ‘endanger[ed] [his] life[.]’ We also reject the State’s suggestion that we should affirm Pulido’s public intoxication conviction based on Officer (Danielle) Lewis’ attempt to protect Pulido from any future, potential harm of walking in the street and getting struck by a car,” the panel continued. “The State’s argument is ‘merely speculative, not proof beyond a reasonable doubt.’”

Post-conviction — Reversal on Rehearing/Juror Bias

Jeffrey Archer v. State of Indiana

18A-PC-2681

An Indiana Court of Appeals panel admitted it erred in a prior post-conviction ruling, finding after rehearing that a man was entitled to a new trial because a clearly biased juror was seated in his child molesting trial.

Jeffrey Archer lost his first post-conviction appeal in July, when the COA in a memorandum decision held that Archer did not receive ineffective assistance of appellate counsel in his child molesting trial, in which he was sentenced to 25 years in prison in 2012. His conviction and sentence were affirmed on direct appeal.

But in ruling on rehearing of his post-conviction appeal, the panel reversed itself in Jeffrey Archer v. State of Indiana, 18A-PC-2681, finding Archer’s appellate counsel failed to obtain voir dire transcripts that would have shown a juror was seated despite admitting she might not be able to be fair and apply the law as instructed by the trial court judge.

“Archer correctly points out in his petition for rehearing that, despite a seeming assumption from both attorneys and the trial court that dismissal would occur, the juror was not, in fact, dismissed. And in this case, that is highly problematic,” Judge John Baker wrote for the panel.

“… Appellate counsel decided to raise the issue of ineffective assistance of trial counsel in Archer’s direct appeal. That decision had two consequences. First, it means that we cannot consider that issue here. … Second, it means that appellate counsel had an obligation to review the entire record of the trial proceedings, including the voir dire transcript” in accordance with Wilson v. State, 94 N.E.3d 312, 321 (Ind. Ct. App. 2018).

“Had appellate counsel done so, counsel would have seen this significant, obvious, and strong issue to be raised on appeal. And we believe that had appellate counsel raised the issue, we would have ruled in Archer’s favor, reversing and remanding for a new trial,” Baker wrote.

“Archer has established both that appellate counsel was ineffective and that he was prejudiced as a result. Under these circumstances, we find that the post-conviction court erred by denying Archer’s petition for post-conviction relief,” the panel concluded, remanding for a new trial in Marion Superior Court.

Criminal — Rape/Suppression of Cellphone Evidence

State of Indiana v. Luke Bryon Fahringer

18A-CR-2985

Although the state was able to get a trial court to reconsider the suppression of cellphone evidence in a rape trial, it could not convince the Indiana Court of Appeals that its pursuit of an interlocutory appeal was timely.

Tippecanoe County Sheriff’s Department applied for a search warrant after a woman accused Luke Fahringer of taking her against her will and forcing her to submit to a number of sexual acts.

Investigators filed for a search warrant but before it was granted, they encountered Fahringer. Law enforcement informed the defendant he was free to leave but that they were getting a search warrant and wanted to take custody of his cell phone. The woman told the sheriff’s department that Fahringer had used his cell phone to take a picture of her identification card and threatened to kill her family if she reported the offenses.

Fahringer was allowed to contact his attorney before surrendering his phone. A subsequent search found the photo of the woman’s identification card. The state then charged the defendant with strangulation, intimidation, kidnapping, conspiracy to commit rape, two counts of criminal confinement and three counts of rape.

On July 6, 2018, Fahringer filed a motion to suppress the evidence found after the warrantless search of his cellphone. The Tippecanoe Superior Court granted the motion July 10, 2018.

Initially, the trial court indicated to the state that it would like the formal, written motion for interlocutory appeal filed by July 13, 2018, but granted the state’s request for additional time. On July 26, 2018, the trial court entered its written order granting Fahringer’s motion to suppress.

The state filed a motion to reconsider Aug. 21, 2018. In that filing, it presented new arguments against the suppression, including that plain view exceptions applied to the warrantless seizure of Fahringer’s cellphone.

On Nov. 19, 2018, the trial court certified for interlocutory appeal the July 26 suppression order and the Oct. 12 order denying the state’s motion to reconsider. The lower court found “good cause” to grant certification because the state had orally indicated its intention to request an interlocutory appeal. Also, the state had filed a timely motion to reconsider and had filed its request for interlocutory appeal certification within 30 days of the denial of that motion to reconsider.

However, in State of Indiana v. Luke Bryon Fahringer, 18A-CR-2985, the Court of Appeals agreed with Fahringer that the trial court abused its discretion in certifying its suppression order.

The appellate panel found even if the state’s oral notification of its intent to pursue an interlocutory appeal had been considered a request for certification, the deadline for filing would have been Aug. 9, 2018.

Moreover, the Court of Appeals found the state was not able to toll the time by filing a motion to reconsider rather than immediately filing a request for certification of the suppression order. And the appellate court brushed aside the state’s contention that because it argued different grounds in the motion to reconsider, the trial court could create a new, appealable order by ruling on that motion.

“We find that the State has not presented us with any extraordinarily compelling reason to disregard its failure to pursue timely certification of the trial court’s suppression order, and we dismiss this appeal for procedural default,” Judge Patricia Riley wrote for the court.
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Sept. 17

Civil Plenary — Landlord-Tenant Dispute/Attorney Fees

Syed Umar Husainy v. Granite Management, LLC, and Jaffa Varsity 1, LLC

18A-PL-2752

An apartment tenant facing eviction who alleged his landlord failed to keep the space safe, clean and habitable won favor from an appellate panel.

In Syed Umar Husainy v. Granite Management, LLC, and Jaffa Varsity 1, LLC, 18A-PL-2752, tenant Syed Husainy was sued by his landlords, Granite Management LLC and Jaffa Varsity 1 LLC, who sought his eviction for alleged nonpayment of rent, maintenance and late fees totaling $1,280.50. Husainy’s leasing agreement states that his monthly rent was $725, not including a $25 monthly charge for parking, and that his security deposit was $605.

Husainy filed a jury trial demand, a counterclaim against Granite and a third-party complaint against Jaffa. Meanwhile, Husainy vacated his apartment at the end of his lease term in May 2017 but did not receive his security deposit because it had been applied against his outstanding unpaid balance of over $2,750.

While Granite and Jaffa alleged Husainy had clogged toilets and refused to pay for removal of the clogs, Husainy alleged that at times the building had no heating, that pipes leaked and covered the hallway and stairs with half an inch of water, and that he was forced to buy bottles of water and shower elsewhere because of interruptions of cold and hot water service.

A jury ultimately ruled in Husainy’s favor, and he requested nearly $60,000 in attorney’s fees. The Tippecanoe Superior Court, however, only awarded Husainy $2,000 and later granted in part the appellee’s motion to correct error on the jury’s verdict. It specifically vacated the breach of covenant of quiet enjoyment verdict but denied the motion in part under Indiana Code § 32-31-8-5.

On Husainy’s appeal, the Indiana Court of Appeals concluded the trial court abused its discretion in granting Granite and Jaffa’s motion to correct error on Husainy’s breach of quiet enjoyment claim. It noted the cost Husainy carried of purchasing his own water, at $5 or $6 per case, which he had purchased more than 20 times.

“The jury awarded Husainy damages equivalent to six months’ rent, including his parking fee ($750 × 6 = $4500). Given the numerous interruptions of and difficulties with the building’s water and heating service, we cannot conclude that the jury’s damages award falls outside the bounds of the evidence presented at trial,” Judge Terry Crone wrote, reversing and remanding with instructions to reinstate the jury’s verdict on the breach of quiet enjoyment.

Next, the appellate court found no abuse of discretion in the denial of Granite and Jaffa’s motion to correct error on Husainy’s I.C 32-31-8-5 claim. It noted a person could reasonably infer that the jury determined that awarding Husainy the amount of his security deposit for the appellees’ multiple failures to comply with the statute was a “remedy appropriate under the circumstances,” pursuant to I.C. 32-31-8-6(d)(3).

A jury could reasonably find that Granite did not remedy the lack of hot running water within a reasonable amount of time, the appellate court first noted. It continued to point out that Granite could be found to have had both actual knowledge and notice of the hallway’s pipe leak and did not make all reasonable efforts to keep the buildings common areas in a clean and proper condition as required under the statute.

Lastly, the appellate court found an abuse of discretion in the trial court’s award of $2,000 to Husainy when he requested nearly $60,000.

“The trial court’s order disregards Appellees’ significant role in driving up Husainy’s legal fees,” Crone wrote, agreeing with Husainy that the award was “far too small to recompense a successful plaintiff for filing and prosecuting a complaint and preparing for and conducting a multiple-day jury trial” and that it “would discourage attorneys from representing parties without financial means to pay attorney’s fees, even where the legislature created a remedy for the same.

“… We also agree with Husainy’s contention that the trial court abused its discretion in limiting the fee award based on counsel’s requested verdict. It was counsel’s prerogative to request a minimal recovery as a matter of trial strategy, and the jury was the ultimate arbiter of the value of Husainy’s claim,” Crone wrote.

The panel therefore reversed and remanded with instructions to reconsider Husainy’s request for fees in light of nonexclusive factors listed in Indiana Professional Conduct Rule 1.5(a) regarding the reasonableness of a fee.

The appellate court ended with a note stating that because Husainy waived his argument that the trial judge was biased against him — based on remarks made before, during and after trial — and should have disqualified himself, it would not address that point.

“We do, however, take this opportunity to remind the trial judge of his obligation to be ‘patient, dignified, and courteous to litigants, jurors, witnesses, lawyers, court staff, court officials, and others with whom the judge deals in an official capacity[.],’” the panel concluded, quoting from Rule 2.8(B) of the Indiana Code of Judicial Conduct.
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Sept. 24

Civil Plenary — Charter School Funding

State of Indiana; Indiana Department of Education; Eric Holcomb, in his official capacity as Governor of Indiana; et al. v. Indiana Connections Academy, Inc.; Rural Community Schools; et al.

18A-PL-2634

Several Indiana charter schools couldn’t convince an Indiana Court of Appeals panel that they are entitled to a semester’s worth of tuition support funding, as a trial court had ruled.

Indiana Connections Academy Inc. and various other state charter schools sued the state of Indiana, seeking to recover tuition support they alleged the state failed to pay for the public education supplied to students enrolled during the 2012-13 school year.

The Marion Superior Court had previously granted summary judgment in favor of the charter schools, ordering the state to pay a total of more than $8.5 million in tuition support to Indiana Connections Academy, Andrew J. Brown Charter School and Aspire Charter Academy, as well as Rural Community Schools and National Heritage Academies.

On appeal, the state alleged the pre-2013 statutory scheme meant that charter schools were wholly unfunded for the first semester they are open. Instead of the tuition support funds covering the first semester, they would be real-time payments. But the charter schools argued that system created a six-month funding lag.

The Indiana Court of Appeals agreed with the state that there was no statutory authority suggesting that the funding lag existed. It also agreed that the trial court’s determination that the charter schools were entitled to receive the funds was a fundamental misunderstanding of the prior funding formula. The appellate court then pointed out that a six-month funding lag would not fit into Indiana’s budgeting process.

“Because there was no so-called funding lag, it is apparent that the Charter Schools received tuition support funding on a real-time basis,” Judge John Baker wrote for the panel. “The DOE distributed those funds continuously throughout the transitional period. Therefore, the evidence undisputedly shows that they have received all funds to which they are entitled.”

The appellate court also found that the General Assembly never made a suggested policy change that the legislature provide funding for a charter school’s first semester of operations.

“But regardless of whether the process and result are fair or unfair, it is solidly within the wheelhouse of the legislature to create a statewide budget and to decide how to fund charter schools, which are a creation of the General Assembly to begin with,” the panel wrote. “The General Assembly has the discretion to decide how to allocate State funds.

“In sum, while the Charter Schools may argue that it is bad public policy for the legislature to have decided that charter schools should not be funded for their first semester of operation, that does not change the language of the relevant public law, which does not provide for the so-called funding lag. There is no statute providing that the tuition payments beginning in January paid for public education provided the previous fall,” it concluded.

In a last note, the appellate court observed that even if charter schools had to be self-funded for their first semester or had to close their doors as a result, Hoosier children “were always going to be able to obtain a tuition-free education at traditional public schools.”

It therefore concluded that it was within the purview of the Legislature to structure its budgets, and nothing in the case at hand suggested that it exceeded its discretion. The trial court thus erred by determining that the charter schools were entitled to a semester’s worth of tuition support, the appellate court held.

The case of State of Indiana; Indiana Department of Education; Eric Holcomb, in his official capacity as Governor of Indiana; et al. v. Indiana Connections Academy, Inc.; Rural Community Schools; et al., 18A-PL-2634, was thus reversed and remanded with instructions to enter judgment in the state’s favor.•