Indiana Court Decisions — Sept. 26-Oct. 9, 2019

7th Circuit Court of Appeals

Oct. 8

Civil Tort — Defamation/Employment

Alejandro Yeatts v. Zimmer Biomet Holdings, Inc.

19-1269

A former Biomet employee has lost his argument before the 7th Circuit Court of Appeals that he was defamed by his former employer when it included his name in a list for the Department of Justice as part of a corruption investigation.

Zimmer Biomet Holdings, a global medical device manufacturer and seller based in Warsaw, hired Alejandro Yeatts at its Argentina subsidiary. Yeatts worked for several years as the company’s South America business manager, tasked with implementing Biomet’s compliance policies.

In 2012, Biomet entered into two deferred prosecution agreements with the U.S. Department of Justice to resolve criminal and civil charges against it stemming from bribery payments. Years prior, Biomet had terminated its partnership with a Brazilian distributor run by Sergio Galindo, who had been bribing health care providers to promote and market Biomet products in violation of the Foreign Corrupt Practices Act.

Although the partnership with Galindo had ended and he was aware of the corruption, Yeatts continued to sell and market Biomet products with the distributor. Biomet ultimately fired Yeatts, and created a restricted parties list for the DOJ, which included Yeatts’ name due to his connection to the corruption investigation.

Yeatts filed suit in the Northern District Court of Indiana, alleging Biomet defamed him by including his name on the restricted parties list. He challenged as false and defamatory Biomet’s statement that he “poses a risk to Biomet’s efforts to comply with anti-bribery laws because of improper activity supposedly uncovered by the company’s anticorruption investigation in Brazil.” The district court denied Yeatts’ motion for partial summary judgment, and the 7th Circuit Court of Appeals affirmed in Alejandro Yeatts v. Zimmer Biomet Holdings, Inc., 19-1269.

The 7th Circuit agreed with the district court on its first finding that Biomet’s statement regarding Yeatts’ misconduct was accurate, and therefore not actionable defamation. It likewise concluded that the statement had no provably false factual connotation.

“Though Yeatts claims a factfinder could determine the precise limits Biomet placed on his interactions with Galindo and whether he violated those limits, those factual resolutions would not be dispositive of whether Yeatts posed a compliance risk,” Circuit Judge Joel Flaum wrote for the 7th Circuit. “Even if Yeatts proved to a jury that he did not violate the specific limits Biomet imposed on his interactions with Galindo, that does not mean Biomet was incorrect or unreasonable in considering Yeatts a compliance risk.

“Yeatts’s focus on the alleged lack of evidence that he engaged in criminal conduct misses the point. Even if there were zero evidence he engaged in criminal conduct, that would not prove false Biomet’s concern that Yeatts posed a compliance risk,” the 7th Circuit concluded. “The inability to prove the statement false demonstrates that it is a statement of opinion, beyond the reach of defamation law.”

Indiana Supreme Court

Oct. 1

Juvenile — Hearings Via Video

C.S., Jr. v. State of Indiana; Z.T. v. State of Indiana

19S-JV-136, 19S-JV-137

Two juveniles will remain wards of the Indiana Department of Correction after the Indiana Supreme Court found that while their participation in their modification hearings through Skype violated an administrative rule, it did not cause a fundamental error.

The juveniles, C.S. Jr., and Z.T., both appealed, separately, the Elkhart Circuit Court’s order which made them wards of the DOC. They both argued, in part, that the trial court violated Indiana Administrative Rule 14 when it held their hearings via videoconference when each defendant had a right to be physically present. Additionally, Z.T. argued he was denied his due process rights.

In affirming the trial court, the Indiana Court of Appeals found the Skype participation was acceptable. The juveniles were given notice of the modification hearing and had the opportunity to be heard, which, the appellate panel held, was all that was required by statute.

The panel ruling on Z.T.’s case went further and concluded Rule 14 did not apply to the juvenile.

The cases were consolidated at the Indiana Supreme Court, with a majority of the justices concluding C.S. Jr., and Z.T. failed to show their remote participation resulted in fundamental error.

The entire court concluded Indiana Administrative Rule 14(B) does apply to the use of telephones and audiovisual telecommunication devices in juvenile disposition-modification hearings. Likewise, they all found the trial court erred when it allowed C.S. Jr., and Z.T. to appear and participate in their hearings through Skype. The summaries of the hearings did not indicate that the juveniles agreed to participate remotely, the justices said, and the trial court did not make findings of good cause.

However, Justice Steven David dissented when the majority ruled the trial court’s noncompliance with the rule did not make a fair hearing impossible or presented a substantial potential for harm.

The juveniles had argued that remote participation is more difficult, lessens the reformative impact of the contact with the juvenile courts and undermines trust in the justice system. But the majority was unconvinced.

“While some nuances may be lost during the course of some video-conference hearings, we cannot agree that a properly conducted juvenile hearing with remote participants necessarily results in the harms the Juveniles predict,” Justice Christopher Goff wrote for the majority. “In some cases, a juvenile may benefit more from sticking closely to a routine built for rehabilitation and appearing at a hearing remotely rather than by being taken out of his or her rehabilitative setting and routine to be transported to a hearing.”

But in his one paragraph dissent, David asserted the failure of the trial court to follow Administrative Rule 14(B) resulted in a fundamental error. Accordingly, he would have reserved and remanded the case for further proceedings.

The court did offer guidance to courts and parties facing remote hearings in the future. In particular, the court noted trial courts will need to consider the unique aspects of the juvenile justice system.

“…(J)uvenile courts are generally concerned with acting in the child’s best interest,” Goff wrote, citing to In re K.G., 808 N.E.2d 631, 636 (Ind. 2004). “This concern about the child’s best interests can extend to the way the juvenile court addresses and interacts with the child. Thus, the child’s best interests will generally constitute a relevant factor under Rule 14(B)(2)(f) in a juvenile court’s good-cause determination.”

The cases are C.S., Jr., v. State of Indiana, 19S-JV-136, and Z.T. v. State of Indiana, 19S-JV-137.
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Oct. 8

Criminal — Stalking/Following in Vehicle

Rodney W. Falls v. State of Indiana

19S-CR-557

A man’s act of following a college student for more than two hours on U.S. Highway 30 from Valparaiso to Warsaw constituted stalking, Indiana Supreme Court justices affirmed, finding his actions were continuous in nature.

Rodney Falls was convicted by a Kosciusko County jury of Level 6 felony stalking after he relentlessly pursued college student A.G.’s vehicle for hours as she attempted to evade him. While stopped at a red light in Valparaiso, Falls waved to A.G. from his vehicle in the adjacent lane, and she ignored him. Falls, who the woman did not know, then followed her onto the highway, mimicking her as she switched lanes and sped up or slowed down.

Falls continued to mimic A.G.’s car by driving up and down residential streets, which she did to test if he was following her. Upon realizing he continued to closely pursue her vehicle, she fled to the Warsaw Police Department, where Falls again pulled up beside her and waved to her. The pursuit only stopped when A.G. pulled into the parking lot of the Warsaw Police Department for the second time and ran inside for help.

A divided Indiana Court of Appeals panel rejected Falls’ appeal, concluding that evidence that his actions were “repeated” pursuant to Indiana Code § 35-45-10-2 was not insufficient, despite the court’s definition of “repeated” as “more than once.”

In a per curiam decision, Indiana Supreme Court justices unanimously affirmed Falls’ conviction in Rodney W. Falls v. State of Indiana, 19S-CR-557. The court noted that while Indiana’s anti-stalking statutes do not define “repeated,” Indiana’s appellate courts have long held that “the term ‘repeated’ in Indiana’s anti-stalking law means ‘more than once.’

“This does not mean that Falls is entitled to acquittal — his actions of following A.G. in his vehicle for two and one-half hours, despite her efforts to evade him, certainly fall within the statutory definition of ‘continuing harassment,’ which expressly includes ‘[f]ollowing or pursuing’ the victim,’” the per curiam order states.

“But because Falls’s conduct was not ‘repeated,’ we grant transfer to clarify this portion of the Court of Appeals opinion and to reaffirm that a charge of stalking may be supported by conduct that is purely continuous in nature,” the Supreme Court wrote. “We find that Falls’s conduct on February 13, 2018 met the statutory definition of ‘continuing’ harassment, thereby supporting his conviction for stalking as a Level 6 felony.”

All justices concurred and summarily affirmed the appellate court’s opinion in all other respects.

Indiana Court of Appeals

Sept. 30

Civil Tort — Personal Injury/Damages

Patrick Humphrey v. U.S. Xpress, Inc., et al.

19A-CT-721

A man who claimed a semi-truck driver and the driver’s employer caused him personal injuries after an interstate collision will receive a new damages trial after the Indiana Court of Appeals found that an instruction given to the jury on the man’s failure to mitigate his damages was erroneous.

Patrick Humphrey began experiencing pain in his left eye after his vehicle had collided with a semi-tractor trailer earlier in the day on Feb. 7, 2016. There was a crack on his windshield where the trailer had hit his car, and later that day, Humphrey found a sliver of glass in his eye.

When his vision started changing, Humphrey sought medical attention, and an MRI scan found a tumor on his pituitary gland. However, the tumor was found to be a preexisting condition at the time of the collision.

The tumor was removed in surgery, and Humphrey was prescribed medication that he eventually stopped taking because he couldn’t afford it and because it caused him to be ill. He then became lethargic and gained weight and continued to experience vision problems.

Humphrey sued the truck driver, Brian Tuck, and his employer, U.S. Xpress Inc., alleging their negligence caused his personal injuries. U.S. Xpress argued Humphrey had failed to mitigate his damages because he had not taken his medication as prescribed and because he had never gotten eyeglasses that had been prescribed for him. It also proffered an instruction to the jury on a plaintiff’s duty to mitigate damages, which Humphrey unsuccessfully objected to. Humphrey was ultimately awarded $40,000 in damages.

The Indiana Court of Appeals reversed, finding insufficient evidence to support giving the instruction to the jury in Patrick Humphrey v. U.S. Xpress, Inc., et al., 19A-CT-721. Specifically, the COA found that U.S. Xpress could not point to evidence showing Humphrey’s failure to follow his doctor’s orders caused him to suffer a “continuance of symptoms” for any specified period of time, or that his symptoms were exacerbated in any way.

The panel also found U.S. Xpress did not show that Humphrey’s failure to get the eyeglasses prescription filled caused him any discrete harm. Thus, the Jackson Superior Court erred in its instruction of the jury on Humphrey’s failure to mitigate his damages, the appellate court ruled.

“Here, the jury award was a general verdict, and, thus, the erroneous instruction ‘could have formed the basis for’ that verdict,” Judge Edward Najam wrote for the court. “Accordingly, we reverse and remand for a new trial on damages only.”

Criminal — Voyeurism/Sex Offender Registration

Marty V. Straw v. State of Indiana

19A-CR-934

A man convicted of voyeurism won’t have to register as a sex offender, the Indiana Court of Appeals ruled, concluding the man was not convicted of a crime requiring that he do so.

Marty Straw was convicted of Level 6 felony voyeurism after putting a recording camera in his teenage daughter’s bathroom before she took a shower and under her bedroom door while she was changing clothes.

Straw was sentenced to two years and 60 days, with his two years suspended to probation, and was ordered to comply with the standard conditions of probation, as well as a probation addendum order requiring him to register as a sex offender. The order also required that Straw complete an electronic monitoring supervisory period; attend, participate in and successfully complete a sexual perpetrator treatment program; not reside within 100 feet of school property; not possess obscene matter or child pornography; and not use a social networking site or chat room to communicate with a child less than 16 years old.

Agreeing with Straw’s opposition to the sex offender registry requirement, the Indiana Court of Appeals found the Allen Superior Court abused its discretion in that regard because voyeurism is not listed as an offense requiring sex offender registration under Indiana Code § 11-8-8-4.5.

“Nor was Straw convicted of any of the offenses enumerated in the statute,” Judge Rudy Pyle wrote. “When the legislature defines a word, the courts are bound by that definition.

“… Here, the legislature did not include a person convicted of voyeurism in its definition of sex offender. It could have easily done so but chose not to do so. A trial court is without authority to order a person who has not been convicted of one of the offenses set forth in the statute to register as a sex offender,” Pyle concluded.

The panel therefore reversed and remanded the requirement for Straw to register as a sex offender in Marty V. Straw v. State of Indiana, 19A-CR-934.
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Oct. 4

Civil Tort — Wrongful Death/Remand for New Trial

Tammi Clark v. Samer Mattar, M.D.

19A-CT-380

A wrongful death case will proceed to retrial after the Indiana Court of Appeals reversed the denial of a woman’s motion to strike a potential juror who expressed an unwillingness to decide the question of damages.

In Tammi Clark, as personal representative of the estate of Kandace Pyles, deceased, v. Samer Mattar, M.D., 19A-CT-380, a member of the venire informed Tammi Clark’s counsel that he was unable and unwilling to determine damages in a medical malpractice verdict. Clark, the personal representative of Kandace Pyles’ estate, filed a wrongful death suit against Dr. Samer Mattar seeking non-economic damages.

Clark moved to strike venireman Miller for cause, but the Marion Superior Court denied the motion, concluding Miller did not meet the qualifications for such a challenge. Clark then used one of her peremptory challenges to remove Miller, a challenge she later could not use to remove Juror 3, who was objectionable.

The Indiana Court of Appeals reversed, agreeing with Clark’s assertion that the trial court abused its discretion when it refused to strike Miller. It concluded that Miller’s statement did, in fact, amount to bias or prejudice against Clark’s party.

“We have little trouble concluding that a stated refusal to participate in a determination of non-economic damages amounts to bias or prejudice against a plaintiff seeking such damages,” Judge Cale Bradford wrote for the panel. “Although Miller certainly expressed no bias or prejudice against Clark in particular, his statements would apply to any plaintiff seeking damages for non-economic loss in a lawsuit, a class to which Clark clearly belonged.”

The court then said that although Miller had initially expressed a willingness to follow the law before speaking with Clark’s counsel, his opinion changed considerably when he was informed what the law actually was.

Additionally, the appellate court found that because Clark was forced to accept the objectionable Juror 3, and because she demonstrated prejudice pursuant to Oswalt v. State, 19 N.E.3d 241, 250 (Ind. 2014), she established that the trial court’s erroneous denial of her motion to strike Miller for cause was reversible error.

The case was therefore reversed and remanded with instructions for a new trial.
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Oct. 8

Criminal — Child Molesting/Admission of Counselor Records

Marty Friend v. State of Indiana

18A-CR-2359

An adoptive father’s child molesting conviction will stand, a divided appellate court determined Oct. 8, disagreeing as to whether privileged records from a one-on-one counseling session with the victim should be admitted.

Marty Friend was convicted of Level 1 felony molestation after the Elkhart Superior Court found him guilty for molesting his adopted child. When the child, A.F., began seeing private social worker Kate Creason, she was assessed for reactive attachment disorder. Creason did not diagnose A.F. with RAD, and neither of A.F.’s adoptive parents were provided with records from the therapy sessions.

In Marty Friend v. State of Indiana, 18A-CR-2359, Friend argued that the trial court erred by denying his motions for preliminary discovery of privileged records from A.F.’s session with Creason. He claimed that Creason’s reports might contain information that A.F. had been diagnosed with RAD, and consequently, that she could have been lying about the molestation allegations.

Friend also argued against the exclusion of 137 emails and text messages along with testimony from expert witness Dr. Gerald Wingard on his behalf. A divided appellate panel majority affirmed, however, finding the trial court did not err in its decision.

First, it found Friend unentitled to relief because A.F.’s one-on-one sessions with Creason were privileged and could not be disclosed unless under one of the statutorily defined exceptions. The majority also rejected Friend’s argument that his federal constitutional rights entitled him to Creason’s records in order to present a complete defense.

“Friend also argues that the trial court should have conducted an in camera evaluation of these privileged records. But, ‘Indiana’s [counselor-client] privilege is one that generally prohibits disclosure for even in camera review of confidential information,’” the majority wrote. “Friend had ample opportunities during his trial to access non-privileged information to show that A.F. was showing symptoms of RAD.”

The majority further concluded that without an official diagnosis or a more solid foundation that A.F. was suffering from RAD, the trial court did not err by concluding that the information should be excluded. Likewise, no error occurred in the exclusion of testimony from Wingard.

While partially concurring with the majority, Judge Terry Crone dissented in part in a separate opinion, disagreeing that the trial court did not abuse its discretion in denying Friend’s request for pretrial discovery of Creason’s records.

Crone contended that unlike victim advocate privilege, counselor-client privilege is not absolute. The judge thus agreed with Friend on his argument that “the interest in maintaining confidentiality of A.F.’s counseling is outweighed by the need for fair administration of justice regarding the truth of A.F.’s accusation.”

“Accordingly, I would hold that Friend ‘is entitled to know whether [Creason’s] file contains information that may have changed the outcome of his trial had it been disclosed’ and therefore ‘a remand is necessary’ for an in-camera review by the trial court,” Crone wrote. “All that being said, I agree with the majority’s determination that the trial court’s other evidentiary rulings did not constitute reversible error.”

Civil Tort — Negligence/Release of Medical Records

Amanda Henry v. Community Healthcare System Community Hospital

19A-CT-1256

A Lake County woman whose medical records were unknowingly shared with her employer by a hospital worker who took her x-rays has won a reversal of her dismissed complaint against the hospital.

Amanda Henry, who received medical treatment in March 2018 at Community Hospital in Munster, was required to have x-rays taken as part of her treatment. A few days after the x-rays were taken, Henry’s employer showed her digital images of her x-rays on the employer’s cell phone. Her employer, who is married to the radiologic technician who performed Henry’s imaging, had received the digital images from the spouse.

Henry then sued Community Healthcare System Community Hospital, arguing that Community owed a duty to protect the privacy, security and confidentiality of health records generated or maintained by providers within its network, and that Henry suffered damages for which Community is liable as a result of its employee’s actions.

A trial court dismissed her complaint, finding that because the motion to dismiss was filed after the pleadings were closed, the motion should be treated as a motion for judgment on the pleadings pursuant to Trial Rule 12(C). Henry appealed, arguing that the Health Insurance Portability and Accountability Act may be used to establish the standard of care in a common law negligence action.

The appellate court reversed in Amanda Henry v. Community Healthcare System Community Hospital, 19A-CT-1256, noting the “age-old recognition that medical providers owe a duty of confidentiality to their patients.”

“We have little trouble concluding … that there is — and, in modern times, always has been — a common law duty of confidentiality owed by medical providers to their patients,” Judge John Baker wrote for the court. “And it is necessarily true that if a duty exists, a breach of that duty is also possible.

“Having found that a common law duty exists, we have little trouble agreeing with a sister court that ‘HIPAA and its implementing regulations may be utilized to inform the standard of care’ in tort claims related to alleged breaches of the duty of confidentiality owed by medical providers to their patients,” Baker continued, citing to a Connecticut Supreme Court ruling.

It concluded that under Indiana’s liberal notice pleading standard, Henry’s complaint included the operative facts necessary to make a negligence-based claim against Community. Specifically, the court wrote, the complaint alleged a duty to protect the privacy, security and confidentiality of her health records, a breach of that duty by Community’s employee when the employee shared Henry’s x-rays with the employee’s spouse, and resulting damages, if any.

“Under these circumstances, it was erroneous to grant Community’s motion for judgment on the pleadings because it is not clear from the face of the complaint that under no circumstances could relief be granted,” the panel concluded. Judgment was therefore remanded for further proceedings in Lake Superior Court.
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Oct. 9

Mortgage Foreclosure — Bankruptcy/Summary Judgment

Michael J. Mannion v. Wilmington Savings Fund Society FSB

19A-MF-446

The Indiana Court of Appeals reversed judgment awarded to a bank against a former homeowner who filed for bankruptcy, finding that because the man had been discharged of any liability on the mortgage, the judgment was in error.

After Michael Mannion filed for bankruptcy on a residence he owned in Kokomo, he received a discharge from the mortgage debt and stopped making payments on the mortgage. During the next decade, Mannion faced three foreclosure actions brought against him by predecessors in interest, two of which were dismissed.

The third, brought by Wilmington Savings Fund Society FSB, survived the Howard Superior Court after Wilmington claimed that its foreclosure action was based upon a default by Mannion that occurred after the dismissal of the first foreclosure action, and was therefore not barred by res judicata. The trial court granted Wilmington’s motion for summary judgment and denied Mannion’s, also entering a separate in rem summary judgment and decree of foreclosure in favor of Wilmington.

The Indiana Court of Appeals reversed, finding the trial court erred in awarding summary judgment to Wilmington. The appellate court first noted that it was not a novel concept that because Mannion had received discharge in bankruptcy before the initiation of the first foreclosure, he was no longer personally liable for the debt secured by the mortgage.

“Wilmington’s assertion ignores the undisputed fact that Mannion’s personal liability under the mortgage had been discharged in bankruptcy,” Senior Judge John Sharpnack wrote. “The essentials of the controversy are the same in both foreclosure actions: the debt is unpaid; Mannion is discharged from liability for the debt; the creditor can foreclose on the property; and the creditor is seeking an in rem judgment. Thus, both foreclosure actions were based on the nonpayment of the mortgage due to the mortgagor’s discharge in bankruptcy.”

Additionally, the appellate court pointed out in Michael J. Mannion v. Wilmington Savings Fund Society FSB, 19A-MF-446, that different amounts alleged in each of the foreclosure actions were of no consequence.

“Due to the creditors’ lack of success in their attempts to foreclose, the litigation has spanned many years, thus increasing the amount of the debt; this does not create a new and independent basis for foreclosure,” the panel wrote.

“Finally, Wilmington includes a public policy argument that Mannion should not receive the property ‘free and clear’ of its lien. However, where, as here, the creditor created the situation as a direct result of its failure to prosecute, and the homeowner obtained a judgment on the merits, the judgment should have its full res judicata effect in accordance with res judicata principles.”

The appellate court therefore remanded with instructions for judgment to be entered in Mannion’s favor.•