Indiana Court Decisions – March 8-21, 2012

7th Circuit Courtof Appeals

March 8

Criminal – Probable Cause

U.S.A v. Marlon K. Spears

10-3338

The 7th Circuit Court of Appeals has determined that enough probable cause existed to justify a search warrant that led to a man’s jury convictions on drug charges.

The case involves Marlon Spears, who was the subject of a police search in August 2008 where drugs and a firearm were found in his home. Spears filed motions to suppress the evidence from the search, challenging statements in the probable cause affidavit that had accompanied the warrant application. The District Court held a hearing pursuant to Franks v. Delaware, 438 U.S. 154 (1978), and denied the motion.

Spears challenged the finding that no Franks violation had occurred.

The 7th Circuit determined that enough evidence existed in the probable cause affidavit for the warrant to be executed.
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March 9

Criminal – Sentencing/Career Offender

United States of America v. Anthony Raupp

11-2215

The 7th Circuit Court of Appeals has affirmed a 100-month sentence for a man deemed to be a “career offender.”

Anthony Raupp appealed the determination that he was a “career offender” after he pleaded guilty to possessing a firearm, despite his status as a felon.

The 7th Circuit majority held that the single question for review was whether Raupp’s prior conviction of conspiracy to commit robbery could be considered a “crime of violence” under U.S. Sentencing Guidelines.

The majority wrote that an application note accompanying USSG Section 4B1.2 defines an inchoate offense such as conspiracy as a “crime of violence” when the underlying crime is one. “That disposes of this appeal, as far as the Sentencing Commission is concerned,” the 7th Circuit majority wrote.

But in her dissent, Judge Diane Wood wrote that the majority opinion is inconsistent with a long line of cases holding that the text of USSG Section 4B1.2 and the nearly identical language in the Armed Career Criminal Act have the same meaning. Wood wrote that her colleagues concluded that the sentencing guidelines have adopted a significantly broader definition of “crime of violence” than the ACCA.

The majority wrote that Raupp’s “sole contention is that district judges must ignore the first application note to Section 4B1.2, and that contention does not carry the day.”

Application notes in the sentencing guidelines should be treated as an agency’s interpretation of its own legislative rule, Wood wrote, who would vacate and remand for resentencing.
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March 13

Civil – Age Discrimination/Retaliation

Julie A. Smith v. Lafayette Bank & Trust Company

10-3556

The 7th Circuit Court of Appeals has upheld summary judgment for a bank in a lawsuit filed by a former employee alleging retaliation in violation of the Age Discrimination in Employment Act of 1967.

The 7th Circuit affirmed a ruling involving a woman who worked at Lafayette Bank & Trust Co. for 26 years before being fired in June 2006.

Julie Smith received poor annual reviews in the two years before her firing based on complaints from employees and customers about negative attitude and unprofessional behavior. The bank’s executive vice president met with Smith and gave her the option to resign or write a letter committing to improving her attitude. She chose the latter, acknowledging that she would be terminated if improvements weren’t made. Two weeks later, the bank received a complaint about cursing and inappropriate behavior to another employee, and Smith was fired. At the time of her termination, Smith was 44 years old.

Five months later, Smith filed a charge of discrimination with the Equal Employment Opportunity Commission. She later dropped the age discrimination claim.

The District judge granted the bank’s motion for summary judgment on Smith’s ADEA retaliation claim and remanded the bank’s counterclaims to the state court. Smith appealed, arguing the District Court erred in granting the summary judgment.

The appellate court determined that Smith failed to meet the standard required to survive summary judgment because she tried to use three prior general complaints as justification for her age discrimination or retaliation claim. Those don’t apply here, the appellate panel found.

Her EEOC complaint also doesn’t apply because Smith filed that claim in November 2006, five months after her termination.

Civil – False Arrest

Shannon McComas v. Edward Brickley

11-2138

The 7th Circuit Court of Appeals has reversed a decision involving a former police officer’s claim that he was falsely arrested for murder following a shooting outside an Indianapolis bar.

The events leading up to this false arrest action took place during a 2007 New Year’s Eve celebration at a pub where Shannon McComas’ wife was a manger. McComas, an off-duty Indianapolis police officer, was present when a fight broke out about 3 a.m. It resulted in a shooting, which killed a security guard.

The Indianapolis detective being sued, Edward Brickley, responded to the police call, and the investigation led to McComas being interviewed. His statements about what happened that night didn’t add up, and police eventually determined he was involved in the fatal shooting and may have assisted a suspect. State prosecutors charged him with only false informing and assisting a criminal, but after police dropped the charges, McComas filed a false arrest action under 42 U.S.C. Section 1983.

The District judge denied Brickley’s motion for summary judgment, finding that a genuine dispute existed as to whether Brickley’s actions were protected by the existence of probable cause and whether he was protected by qualified immunity.

The judge relied on Chelios v. Heavener Chelios, 520 F.3d 678 (7th Cir. 2008), and Clash v. Beatty, 77 F.3d 1045 (7th Cir. 1996), when she held that factual disputes prevented the application of qualified immunity at the summary judgment stage. But the 7th Circuit found this case is different, because the earlier decisions involved factually intensive questions about whether officers employed excessive force. Looking at all the facts together, the appellate panel found that arguable probable cause existed for an arrest on the charges of assisting a criminal and false informing based on what Brickley knew at the time of the investigation.

The 7th Circuit remanded for further proceedings.
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March 16

Civil – Insurance

Harry Foster III and Linda Foster v. State Farm Fire and Casualty Co.

11-3100

The 7th Circuit Court of Appeals has affirmed summary judgment in favor of an insurer because an attorney and his wife failed to produce documents the company requested repeatedly.

Harry and Linda Foster and their family were away when a fire severely damaged the family’s home on Jan. 3, 2009. Linda Foster submitted a claim to State Farm under the family’s homeowners’ policy.

The insurer learned that the Fosters had at least two businesses, held numerous business and personal accounts, and were involved in multiple lawsuits. State Farm promptly requested documents including blueprints, utility bills and receipts. The insurer sent a letter to the Fosters at the end of January, reminding them of their obligation to submit requested documents, and did so again in March.

By mid-March, State Farm’s fire investigator concluded the fire was set intentionally and referred the claim to its Special Investigative Unit.

The Fosters’ deadline to submit proof of loss was May 2, 2009, but they requested an extension. On Aug. 5, the couple submitted nearly 1,000 pages of documents.

On Aug. 13 and 15, Harry Foster sat for his examination under oath; Linda Foster’s EUO was on Aug. 26. Based on statements the couple made about previously undisclosed bank accounts and business dealings, State Farm requested additional documents, dating back to 2002.

Citing Morris v. Economy Fire & Cas. Co., 848 N.E.2d 663 (Ind. 2006), the 7th Circuit wrote that the Fosters’ duty was not only to give State Farm documents they possessed, but to acquire and deliver other documents related to their financial condition.
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March 20

Civil – Inmate Death/Mental Illness

Estate of Nicholas D. Rice, deceased, by Rick D. Rice and Diane J. Waldrop, co-personal representatives v. Correctional Medical Services, et al.

09-2804, 10-2389

The 7th Circuit Court of Appeals has ordered the trial court to take another look at two cases combined on appeal, which stem from the death of an inmate at the Elkhart County jail.

Nicholas Rice’s parents filed a lawsuit in federal court pursuant to 42 U.S.C. Section 1983, alleging among other things, that jail officials and medical personnel had deprived Rice of due process by exhibiting deliberate indifference to his declining mental and physical condition. Rice was in jail for nearly 15 months awaiting trial when he died from excessive drinking of water, a disorder known to manifest in some people with schizophrenia. Jail officials knew of his mental illness.

The District Court entered summary judgment against the estate on its Section 1983 claims, suit No. 09-2804, finding in part that correctional and medical personnel hadn’t consciously disregarded Rice’s medical needs and that the ultimate cause of his death wasn’t reasonably foreseeable to them. The estate then filed its second federal suit, No. 10-2389, invoking the court’s diversity jurisdiction, in which it reasserted the state wrongful death claims that the judge in the first suit had dismissed without prejudice after disposing of the federal claims. The judge in the second suit dismissed that case on the basis of collateral estoppel, reasoning that his colleague’s finding as to the foreseeability of the cause of Rice’s death precluded recovery on any of the state claims.

“On review of the record, we conclude that a material dispute of fact precludes summary judgment on one of the Estate’s section 1983 claims: that his conditions of confinement were inhumane. We also conclude that the district court erred in dismissing his state claims. We therefore affirm in part and reverse in part,” wrote Judge Ilana Rovner.

They sent both cases back for further consideration.

Indiana Supreme Court

March 8

Criminal – Vouching Testimony/Child Sex Abuse

Keith Hoglund v. State of Indiana

90S02-1105-CR-294

The state’s rules of evidence don’t allow for “vouching testimony” in child sex abuse cases to help determine when a youth isn’t exaggerating, and the Indiana Supreme Court won’t carve out an exception allowing for that testimony in these types of cases.

The justices affirmed two Class A felony child molesting convictions and a 50-year sentence for Keith Hoglund.

Hoglund allegedly had sexually abused and showed pornographic material to his 4-year-old daughter. At trial, the state called as expert witnesses a pediatrician, clinical psychologist, and mental health counselor who evaluated the girl. They each testified that the girl was “not prone to exaggerate or fantasize” about sexual matters. 

Hoglund challenged on appeal the admission of the vouching testimony. Last year, a divided Indiana Court of Appeals affirmed the convictions and sentence.

The Indiana justices addressed an issue that hasn’t been ruled on before – the interaction between the state’s rules of evidence and a 1984 decision in Lawrence v. State, 464 N.E. 2d 923, 925 (Ind. 1984), that allowed for corroboration of a child’s testimony in court.

The justices pointed out that Indiana is in the minority of allowing some form of vouching for child witness testimony in these types of cases.

“To summarize, we expressly overrule that portion of Lawrence allowing for ‘some accrediting of the child witness in the form of opinions from parents, teachers, and others having adequate experience with the child, that the child is not prone to exaggerate or fantasize about sexual matters,’” Justice Robert Rucker wrote. “This indirect vouching testimony is little different than testimony that the child witness is telling the truth. As such it is at odds with Evidence Rule 704(b).”

Even though the trial court allowed the evidence improperly, the justices ruled that the admission of vouching testimony was harmless and other evidence supports the convictions and sentence.

This new rule doesn’t undercut the court’s decision in Carter v. State, 754 N.E.2d 877 (Ind. 2001), which involved testimony from an autistic child and a psychologist who was allowed as an expert to “supplement the jurors’ insight.”
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March 9

Tax Appeal – Evidence

Indiana Department of State Revenue v. Rent-A-Center East, Inc.

49S10-1112-TA-683

The Indiana Supreme Court has found that the Indiana Tax Court erred in requiring the state revenue department to produce more evidence of a proposed assessment of additional tax liability for a corporation.

The Tax Court in May denied the revenue department’s motion for summary judgment and granted one in favor of Rent-A-Center East. The department failed to designate any facts to show it complied with Indiana Code 6-3-2-2(p), so it had not made a prima facie case that it is entitled to judgment as a matter of law regarding whether the department should consider alternatives to assessing tax based on a combined return.

Judge Martha Wentworth construed the tax statutes to require the revenue department to make its Trial Rule 56(C) prima facie showing by designating facts material to RAC East’s separate return from 2003 on income sources and the use of combined income tax return being reasonable and equitable. Then, the court denied the department’s motion after finding it didn’t comply with Indiana Code 6-3-2-2(p).

“We conclude that Section 6-3-2-2(p) and Trial Rule 56 must function together in a different way,” Chief Justice Randall T. Shepard wrote.

The justices found that the department may make a proposed assessment only if it reasonably believes that a person has not reported the proper amount of tax due, and it makes its assessment on the basis of the best information available. The General Assembly has provided that the notice of proposed assessment is prima facie evidence that the department’s claim for the unpaid tax is valid, Shepard wrote, so the burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made.

The case is remanded for consideration of summary judgment motions on their merits in light of all the designated evidence the parties may tender.

Civil Plenary – Attorney Fees

R.L. Turner Corp. v. Town of Brownsburg

32S01-1109-PL-573

The Indiana Supreme Court has affirmed the award of attorney fees to an Indiana town, although two justices would have reversed the trial court.

The trial court had dismissed R.L. Turner Corp.’s claims of tortious interference with a contractual relationship, quantum meruit, and breach of duty to a third-party beneficiary after Brownsburg allegedly interfered with a settlement agreement between R.L. Turner and the Brownsburg Municipal Building Corp. concerning a construction project.

The trial court’s judgment provided for “costs to be assessed” against R.L. Turner but didn’t specifically mention attorney fees. Brownsburg later filed a petition seeking more than $27,000 in attorney fees and expenses, which the trial court granted.

Last year, the Indiana Court of Appeals affirmed, finding the trial court had the authority to award the fees and the record supported the finding that R.L. Turner’s claims were frivolous, unreasonable or groundless.

Looking at the concept of awarding “costs” to the prevailing party, the justices held that means what it usually means – filing fees and witness fees, not the trial court’s action in denying or granting the town’s request for attorney fees.

“A petition for fees does not disturb the merits of an earlier judgment or order, so it does not implicate Indiana Trial Rules 59(C) or 60(B),” Chief Justice Randall T. Shepard wrote. “As such, none of those respective time limits govern a petition for attorneys’ fees. Instead, trial courts must use their discretion to prevent unfairness to parties facing petitions for fees. A request for attorneys’ fees almost by definition is not ripe for consideration until after the main event reaches an end. Entertaining such petitions post-judgment is virtually the norm. To be sure, a request for fees is in some sense an equitable petition, and it might be that an extremely tardy request should fall on deaf ears due to lack of notice or staleness.”

The court also summarily affirmed the Court of Appeals’ review of the record that special findings weren’t made on this case.

Justices Robert Rucker and Brent Dickson joined in a separate opinion that dissented on the aspect relating to the award’s defectiveness for want of special findings. The pair found that no hearing was held on the matter and the trial court didn’t indicate why it concluded that way, so the two would have reversed the award on that point and remanded.
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March 12

Disciplinary – Prosecutor/Public Statements

In the Matter of Carl Brizzi

49S00-0910-DI-425

The Indiana Supreme Court has publicly reprimanded former Marion County Prosecutor Carl Brizzi for statements he made about a high-profile murder case, and in doing so the state’s justices have issued a warning for prosecutors statewide. See story on page 10.
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March 14

Civil Plenary – Life Insurance

Phyllis Hardy, Alax Keith Furnish and Megan Jessica Furnish, by next friend Phyllis Hardy v. Mary Jo Hardy

51S01-1106-PL-366

In a dispute between two ex-wives over the life insurance policy of their deceased husband, the Indiana Supreme Court has ordered the trial court determine how much money each woman is entitled to.

Carlos Hardy was married to Phyllis Hardy when he held a life insurance policy issued as part of a federal employee benefit plan. When they divorced in 1998, the divorce decree and property settlement required Carlos Hardy to maintain the life insurance policy and designated Phyllis Hardy and their two grandchildren as equal beneficiaries. Carlos Hardy later married Mary Jo Hardy and changed his beneficiary to her and increased his coverage. They divorced after several years of marriage.

When Carlos Hardy died, a dispute arose over who was entitled to the life insurance proceeds. The trial court determined that the Federal Employees’ Group Life Insurance Act preempted Phyllis Hardy’s equitable state law claims and the proceeds belonged to Mary Jo Hardy. The Indiana Court of Appeals affirmed.

The Indiana justices decided that FEGLIA doesn’t preempt equitable state law claims to recover FEGLIA proceeds that have been paid in accordance with FEGLIA’s provisions and the regulations promulgated under it. A different conclusion would run afoul of the strong presumption against preemption in this traditional area of state regulation, wrote Justice Steven David.

The justices also decided that Ridgway v. Ridgway, 454 U.S. 46 (1981), did not support the conclusion that FEGLIA precludes a court from imposing a constructive trust on life insurance proceeds, as Mary Jo Hardy argued.

The justices held the divorce decree and property settlement agreement undoubtedly entitle Phyllis and the grandchildren to whatever the death benefit under Option A would have been at the date of Carlos’ death, as Carlos had to “maintain” his policy for the benefit of Phyllis and the grandchildren. Mary Jo Hardy argued that she should be entitled to whatever amount accrued once she married Carlos Hardy. They remanded the issue to the trial court.
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March 15

Miscellaneous – Secretary of State/Residency

Charlie White, et al. v. Indiana Democratic Party, through its Chairman, Daniel J. Parker

49S00-1202-MI-73

The Indiana Supreme Court has held that Charlie White was eligible to assume the office of secretary of state after being elected to that post in the 2010 general election. See related story on page 9.

Certifiable Question – Municipal Reorganization

Michael R. Kole, Joseph L. Weingarten, and Glenn J. Brown, et al. v. Scott Faultless, Daniel Henke, Eileen Pritchard, Stuart Easley, et al.

94S00-1112-CQ-692

Responding to a certifiable question from the Southern District of Indiana, the Indiana Supreme Court held that the town of Fishers may proceed with plans to reorganize as a city whose council chooses a mayor. The Supreme Court was asked whether a political unit may reorganize into a city under Indiana Code 36-1.5, the Reorganization Act, in a manner that eliminates voting rights recognized under I.C. 36-4-5-2 and 36-4-6-3(i), including reorganization as a city with a council elected entirely at large; and a mayor appointed by that council.

About 1,700 citizens of the town of Fishers filed a petition with the town clerk seeking a referendum on whether the town should convert itself from a town into a second class city; citizens would directly elect a city mayor for the city, plus six city council members from legislative districts and three more at large.

Two days after receiving the petition, the Fishers Town Council passed a resolution proposing reorganization with Fall Creek Township. The authority for such a merger is the Government Modernization Act. As proceedings on the town council’s proposal moved forward, the plaintiffs’ petition did not. The plaintiffs filed suit in Hamilton Superior Court seeking to compel the Fishers Town Council to schedule their petition for a referendum. They voluntarily dismissed that suit and refiled in U.S. District Court on Dec. 30, 2010.

On Dec. 20, 2010, the Fishers Town Council and the township held a public meeting during which both entities adopted the final reorganization plan. A referendum on the reorganization plan will occur in the November 2012 general election. On Feb. 21, 2011, the Town Council passed a resolution acknowledging the plaintiffs’ petition to incorporate the Town of Fishers into a second class city. The resolution further ordered a referendum on that proposal in the next general election, the same election in which residents would vote on the reorganization plan.

The Supreme Court wrote that the centerpiece of the plaintiffs’ contention is perhaps that the Town Council’s reorganization plan strips them of their chance to vote for a mayor, who is typically the executive head of a second class city.

The justices wrote that in light of the Legislature’s directives about construing the Act’s provisions, Article 1.5 of Title 36 does allow a municipality to reorganize into a city even though the reorganization plan provides for a city council elected at large and a city mayor appointed by the city council. If citizens approve a reorganization plan that describes the membership of new political branches and the manner in which those members will attain office, then the reorganization may proceed along those lines.
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March 16

Criminal – Forum Shopping

Jesse J. Harris Jr. v. State of Indiana

34S02-1203-CR-169

The Indiana Supreme Court has clarified that a defendant who claims forum shopping has happened in a criminal case does not need to establish prejudice in order to prevail on appeal. While the justices found no violation occurred and affirmed the trial court ruling, the court has asked Howard County judges to review a local rule.

Jesse J. Harris Jr. and two others left a strip club in Kokomo and followed a white Monte Carlo. They shot one man and two underage girls, killing one girl. A jury convicted Harris of murder and the court sentenced him to the maximum 165 years for three counts combined.

The Court of Appeals affirmed last year; the Supreme Court summarily affirmed the COA’s decision on all but one issue.

Harris argued that the only reason his trial occurred in Howard Superior 1 was because the prosecutors engaged in forum shopping. The Howard Circuit and Superior courts adopted a rule providing for a weekly rotation among the Circuit, Superior II and Superior IV judges – requiring a prosecutor to file felony charges in the court designated by the weekly rotation based on when the offense occurred. An exception says that when a defendant already faces an earlier criminal charge in a court not on rotation, the prosecutor must file the felony charges in that court. In this case, Harris already had a pending criminal charge in Howard Superior 1.

“We think that requiring a defendant to establish prejudice sets the bar too high and therefore hold that a defendant need not do so to win a reversal,” Chief Justice Randall T. Shepard wrote.

Harris argued that the “another charge pending” exception doesn’t apply because the first charge had already been resolved by the time the second charged was filed.

“Although Harris’s interpretation of Local Rule 29 has some force, the trial court’s reading of its own rule, approved here through the standard process, is a plausible one entitled to some deference on appeal,” Shepard wrote. “We are thus inclined to accept its interpretation and conclude that no violation occurred. Still, the shades of grey in Local Rule 29 that led to this dispute need sharpening up. We will therefore ask the judges in Howard County to draft amendments sufficient to prevent a recurrence.”

Tax Appeal – Online Sales

Indiana Department of State Revenue v. AOL, LLC

49S10-1108-TA-514

The Indiana Supreme Court has held that companies purchasing online promotional materials from outside the state must pay a use tax when those materials are distributed within Indiana.

The case involves online service provider AOL which mailed software and promotional materials to new and prospective clients. AOL didn’t physically manufacturer the CD or final promotional packages, but contracted with third-party vendors outside Indiana to produce and assemble the individual components and final packages. None of the out-of-state vendors paid sales or use taxes on the CD packages or promotional materials, and once completed the final packages were sent to customers throughout the United States, including Indiana.

AOL paid use taxes to the Indiana Department of Revenue between January 2003 and June 2007, based on the number of CD packages and promotional materials sent to prospective Indiana customers. In 2006 and 2007, AOL asked for two refunds totaling $371,464 for use taxes it had paid. After an investigation, the state agency denied both requests. The Tax Court reversed the department’s determinations in 2011, finding the company owned all the raw materials provided and had not purchased any tangible personal property in a retail transaction with the out-of-state providers.

Chief Justice Randall T. Shepard wrote that the heart of this case turns on provisions of Indiana Code 6-2.5-4-1, specifically, I.C. 6-2.5-4-1(b)’s use of the phrase “that property” which suggests that a retailer must acquire tangible personal property and then transfer that same property to a purchaser for either sales or use taxes to apply. The following provision (c)(1) goes on to say that “for the purposes of determining what constitutes selling at retail, it does not matter whether … the property is transferred in the same form as when it was acquired.”

The chief justice wrote that given the tension between the phrase “that property” and I.C. 6-2.5-4-1(c)(1), the court believes the sole purpose of I.C. 6-2.5-4-1(c)(1) is to prevent a person from arguing that a merchant was not selling at retail merely because the merchant changed the form of the property between acquiring it and transferring it.

Finding that the materials were being sold at retail, the court determined the transactions between AOL and its assembly houses and letter shops constituted retail transactions that triggered Indiana’s use tax once AOL used that property in Indiana.
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March 19

Criminal – Tendered Instructions

Jimmie E. Jones, Jr. v. State of Indiana

29S02-1108-CR-511

The Indiana Supreme Court has adopted the full opinion of the Indiana Court of Appeals, which upheld the decision by a trial court not to give a defendant’s tendered instructions on lesser-included offenses of murder.

The Court of Appeals ruled in favor of the state and outlined the three-step test for determining when a trial court should instruct the jury on a lesser-included offense. The COA found the trial court didn’t abuse its discretion by finding no serious evidentiary dispute. It also held that the state foreclosed an instruction on the factually lesser-included offense by omitting from Jones’ charging information any reference to battery.
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March 20

Civil Tort – Underinsured Motorist

Hannah Lakes v. Grange Mutual Casualty Co.

89S05-1109-CT-531

The Indiana Supreme Court has held that a tortfeasor’s vehicle was underinsured according to state statute because the benefit amount actually paid to a woman was less than the per-person limit of liability of the underinsurance endorsement of an insurance policy that applied to all the family members involved in the accident.

The case involves a severe auto accident in 2004 where Hannah Lakes and several family members were injured. The tortfeasor, James Isaacs, had an insurance policy that limited bodily injury liability to $25,000 per person and $50,000 per accident. Lakes’ sister, Anitra, was driving and had an insurance policy with underinsured motorist coverage for $50,000 per person and per accident. Their father, Jerry Lakes, also had UIM coverage for $100,000 per person and $300,000 per accident.

After the Lakeses filed a state suit against Isaacs and Anitra Lakes’ carrier, Grange Mutual Casualty Co., Isaacs’ carrier paid its limit but Grange filed for summary judgment on the basis that the tortfeasor’s vehicle was not an underinsured vehicle as a matter of law because the per-accident limit of his policy was equal to the UIM per-accident limit of Anitra’s policy. The trial court granted Grange’s summary judgment motion, holding that Jerry Lakes’ $50,000 policy limit was equal to the UIM limit Anita Lakes had in her policy and that it didn’t matter that more than one family member was receiving benefits. The trial court also held Hannah Lakes couldn’t recover under her father’s insurance because that policy excluded coverage for property damage or bodily injury for family members inside the vehicle.

The Court of Appeals reversed, holding that the tortfeasor’s vehicle was underinsured and that Hannah was entitled to recover up to $44,900 in UIM benefits under Anitra’s policy.

The Supreme Court agreed with Grange that the regime established by the COA may encourage “collusion” among insureds to structure their relationships in order to trigger Corr v. American Family Insurance, 767 N.E.2d 535 (Ind. 2002).

Justice Frank Sullivan wrote that when there are multiple claimants on these types of cases, courts should examine each claim individually and compare each with the per-person limits of applicable UIM coverage. The per-accident limits have no bearing on whether a vehicle is underinsured, and the per-accident limits come into play only to limit the insurer’s liability.

The case is remanded for further proceedings consistent with this opinion.

Criminal – Habitual Offender/Enhanced Sentence

Jerrell D. White v. State

15S01-1109-CR-545

The Indiana Supreme Court has found that a man convicted of helping to rob a restaurant did not preserve the issue of whether the trial court properly determined he was a habitual offender that could receive an enhanced sentence.

Jerrell D. White waited in a car while his friend took cash from a restaurant register. White drove away and police arrested him two days later, charging him with Class C felony robbery, Class D felony theft, and Class D felony receiving stolen property. Before trial, the court allowed a late habitual-offender charge based on two out-of-state convictions for offenses White committed when he was 15 years old.

The jury ultimately found him not guilty of robbery but guilty of theft and receiving stolen property and determined he was a habitual offender. The trial court sentenced him to three years on each conviction to be served concurrently. The judge also enhanced the sentence by 4.5 years because of his status as a habitual offender.

The Court of Appeals agreed with White’s double jeopardy argument and ordered the trial court to vacate the conviction of and sentence for receiving stolen property. The judges also agreed the evidence was insufficient to support the habitual-offender finding and ordered that it be vacated.

But four justices disagreed in part with the intermediate appellate panel. Justice Frank Sullivan dissented and wrote that he believed the Court of Appeals was correct.

Examining conflicting precedent on this issue during the past 25 years, the Supreme Court majority determined that the state didn’t articulate any grounds for good cause in requesting the belated habitual-offender charge and the trial court never explored that issue. However, White didn’t object, respond to the state’s filing, request a continuance or argue at trial that the state couldn’t file the tardy habitual-offender charge, so he didn’t preserve that argument, Justice Steven David wrote.

On the evidence sufficiency aspect, the justices disagreed with the Court of Appeals judges who determined additional evidence was required to prove White was tried and convicted in adult court in other states. The majority summarily affirmed the COA on the remaining issues and remanded with instructions to vacate the receiving stolen property conviction and sentence imposed thereon.

Civil Plenary –Evidence/Intent

Harold J. Klinker v. First Merchants Bank, N.A.

01S04-1107-PL-438

The Indiana Supreme Court has determined that not enough evidence of intent existed for a judge to grant summary judgment for a bank alleging a business owner committed fraud.

First Merchants Bank discovered that 31 vehicles that the bank had loaned purchase money for weren’t in Harold Klinker’s possession and some had been transferred to another dealer. The bank sued Klinker for fraud.

When the bank moved for summary judgment, Klinker filed an affidavit stating that only 22 vehicles were “missing.” But the trial court refused to consider the document, reasoning that it had not been properly designated and that no genuine issue of material fact existed about the vehicles. The judge also determined Klinker had defaulted and acted with intent to commit fraud and granted summary judgment to the bank along with attorney fees and treble damages.

The Court of Appeals held the trial court erred in refusing to consider Klinker’s affidavit, but that summary judgment was proper because the affidavit consisted of self-serving statements unsupported by real evidence.

The justices found that the bank’s evidence is not sufficient to warrant summary judgment on the element of intent. The justices made a similar finding in regard to whether Klinker acted with the requisite intent under the state’s bank fraud statute.

The justices emphasized that they’re only determining whether summary judgment was proper, not the strength of the fraud evidence presented by the bank. The case is remanded for further proceedings.

Certified Question – Land Use/Easements

Henry L. Howard, et al. v. United States

94S00-1106-CQ-333

The Indiana Supreme Court has issued an answer to a certified question about how state law plays into a federal railroad right-of-way case that involves property owners who want their land rights back for easements that once belonged to a railroad company.

A majority determined that federal laws on railbanking and interim trail use are not land uses within the scope of the easements dictated by Indiana law, and that railbanking with interim trail use does not constitute a permissible shifting public use.

Chief Justice Randall Shepard disagreed with his four colleagues, concluding that the contemplated railbanking and interim trail uses do fall within the scope of the easements presented.

Criminal – Restitution/Social Security Disability

Rebecca D. Kays v. State of Indiana

42S05-1107-CR-441

The Indiana Supreme Court sided with the federal courts that have concluded courts may consider one’s Social Security income when determining how much a person may pay in restitution.

Rebecca Kays appealed the order that she pay more than $1,400 in restitution to her neighbor after Kays was convicted of misdemeanor battery. Kays claimed that her sole source of income is Social Security disability payments, and she lacked the ability to pay restitution.

The Indiana Court of Appeals reversed, finding the trial court didn’t properly look into Kays’ ability to pay and failed to establish the manner and time of her payments. The judges also ordered the trial court to ignore her SSI in its determination of her ability to pay restitution because they held that a restitution order is an “other legal process” pursuant to 42 U.S.C. Section 407(a) which cannot be applied to Social Security benefits.

The justices agreed that the issue should be sent back to the trial court for a determination of Kays’ ability to pay and how she’d make those payments. But, they disagreed that SSI is exempt from consideration with regards to restitution payments.

“… we find nothing in 42 U.S.C. § 407(a) to prohibit a trial court from considering a defendant’s social security income when determining the ‘amount the person can or will be able to pay’ in restitution pursuant to Indiana Code section 35-38-2-2.3(a)(5),” Justice Robert Rucker wrote.  

Civil Tort – Jury Instructions/Wrongful Death

LaPorte Community School Corporation v. Maria Rosales

46S04-1105-CT-284

The majority of Indiana justices ordered a new trial on liability for a school corporation being sued for wrongful death, finding one of the jury instructions could have misled the jury about a key issue regarding liability.

Maria Rosales sued LaPorte Community School Corp. after her son choked to death on food while eating lunch at an elementary school. The jury awarded the maximum amount then allowed under the Indiana Tort Claims Act. The school corporation appealed, and the focus of this opinion is Final Instruction 22. The Court of Appeals reversed and remanded for a new trial on this issue.

The majority found that the language of Instruction 22 reasonably could have been interpreted and applied by the jury in a way that substantially misstated the plaintiff’s burden of proof with respect to establishing negligence on the part of the school corporation.

The majority reversed and remanded for a new trial on the issue of liability only.

Justice Frank Sullivan dissented, pointing out that Instruction 11 laid out the required standard by explaining that negligence is failure to exercise reasonable or ordinary care. It’s well settled that jury instructions are to be considered as a whole and in reference to each other, he wrote.

Civil Plenary – Medicaid Reimbursement

Randall L. Woodruff, Trustee, U.S. Bankruptcy Court, on Behalf of Legacy Healthcare, Inc.d/b/a New Horizon Develop. Center v. In. Family & Social Serv. Admin., Office of Medicaid Policy & Planning

29S02-1110-PL-598

The Indiana Supreme Court has affirmed the outcome of a case between the Family and Social Services Administration and a decertified intermediate care facility, in which the net result was a wash for both sides.

New Horizon Development Center was certified to receive Medicaid reimbursement from the state. However, an inspection found deplorable conditions and its certification was revoked. The facility operated without receiving federal or state funding for nine months, when the state then appointed a receiver. At issue is whether Legacy Healthcare, which ran the center, is entitled to funding for the care of the patients, after it was decertified, until all the patients could be transferred to other facilities.

The trial court denied restitution for the unpaid months under a theory of quantum meruit, afforded relief under related breach of contract claims, but offset that judgment by the amount the state paid for its receiver. The parties received no net gain. The justices affirmed.

The justices did reverse the trial court with respect to its findings on the issue of exhaustion, noting that the facility appealed its decertification through administrative channels and had sought relief in court.
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March 21

Criminal – Stalking

Rodney Nicholson v. State of Indiana

55S01-1107-CR-444

It’s up to a trier of fact to determine if someone’s conduct involved repeated or continuing harassment to qualify as stalking, the Indiana Supreme Court ruled, since there is no statutorily determinate timeframe required for this type of conviction.

The majority affirmed Rodney Nicholson’s stalking conviction. Nicholson repeatedly called a woman’s house in 2006 over a six-month period, breathing heavily and discussing masturbation. He would hang up if the woman’s husband got on the phone. Nicholson was convicted of voyeurism after he was found outside the victims’ home and arrested. For the time he was incarcerated, the calls stopped. He made another call on Nov. 1, 2008.

Nicholson appealed his stalking conviction, which a split Court of Appeals reversed, citing the time between the harassing phone calls. Justice Frank Sullivan agreed with the COA’s decision, but the rest of the justices upheld Nicholson’s conviction.

Justice Steven David noted that Indiana statute doesn’t define the timeframe for a stalking conviction, and it could happen over a matter of minutes or years. The trier of fact should determine if the course of conduct involves repeated or continuing harassment, he wrote.

In addition to meeting the time prong of the stalking statute, the state proved that the victim felt terrorized, frightened, intimidated or threatened.

Civil – Environmental Cleanup/Restraining Order

John Witt, HydroTech Corp, and Mark Shere v. Jay Petroleum, Inc., and Jack R. James

38S02-1110-CV-608

Three Indiana justices affirmed a trial court order finding a business owner, his attorney and an environmental firm in contempt for doing work on a site with possible environmental issues after a temporary restraining order had been issued.

At issue is whether the decision by John Witt and attorney Mark Shere to backfill holes on Witt’s property – which were dug to remove underground storage tanks and test soil – violated the terms of a temporary restraining order obtained by Jay Petroleum Inc. and Jack James, the previous owners of the land.

Shere interpreted the TRO to mean that HydroTech could backfill the holes for safety reasons and also conduct testing on one of the exposed pits. Jay Petroleum filed for contempt of court; the trial court found Witt, HydroTech and Shere in contempt and held them jointly and severally liable for $108,487.32 in costs and attorney fees.

Justices Brent Dickson and Steven David and Chief Justice Randall T. Shepard upheld the order, finding the collection of the samples clearly violated the order and that if they believed backfilling was the only way to provide for public safety, Witt should have sought permission from the trial court. The majority also upheld the decision to exclude from trial any evidence gathered after the entry of the TRO and the costs imposed.

Justices Robert Rucker and Frank Sullivan dissented, believing that the order did not prohibit any activity to ensure that the site wouldn’t pose a threat to public safety. With regards to the testing of samples, the record is unclear whether they were taken before or after the restraining order was issued and whether Witt would have used those tests in the case.

Civil – Tax Deed/Due Process

Marion County Auditor, and McCord Investments, LLC v. Sawmill Creek, LLC a/k/a Saw Creek Investments, LLC

49S02-1106-CV-364

The Indiana Supreme Court has reversed a trial court’s decision to set aside a tax deed, finding the Marion County auditor’s office satisfied the due process requirement articulated by the United States Supreme Court.

Sawmill Creek LLC, purchased four acres of unimproved land on Rockville Road in Marion County. The closing statement, general warranty deed and the title insurance policy named the purchaser as “Saw Creek Investments LLC.” Bill Simpson, the manager of Sawmill Creek, didn’t notice the error. When Simpson moved his office, he stopped receiving tax bills on the property and became delinquent. The auditor tried sending notices of the sale through first-class mail, but they came back as undeliverable and unable to forward. The auditor even sent notices to the previous owner, which also came back undeliverable. A title search didn’t reveal the new address of Sawmill Creek because the title company was using the incorrect name.

The property was sold at tax sale to McCord Investments. It wasn’t until an acquaintance of Simpson saw “for sale” signs posted on the property did Simpson learn of the tax sale. He filed a motion to set aside, which the trial court granted.

The Indiana Court of Appeals affirmed, but a majority of justices reversed, finding the auditor’s office did what it could to attempt to notify Simpson and Sawmill Creek of the sale. The majority also rejected Sawmill’s argument that notice must be posted on the property when the owner of record can’t be located through any reasonable means.

Justice Robert Rucker dissented, writing he agreed with the decision by the COA.

Civil Plenary – Government Official

State of Indiana v. International Business Machines Corporation

49S00-1201-PL-15

The Indiana Supreme Court released its opinion explaining its previous ruling that Gov. Mitch Daniels doesn’t have to testify in the dispute between the state and IBM regarding a cancelled contract to modernize the state’s welfare system.

The majority focused on Indiana Code 34-29-2-1, which says the governor is “privileged from arrest on civil process, and from obeying any subpoena to testify,” and whether that precludes a trial court from issuing an order to compel the governor’s deposition in this case. Writing for the majority, Justice Robert Rucker found that the statute does preclude Daniels’ deposition.

Rucker wrote that ultimately, the question in the case boils down to whether a trial court’s order to compel the governor’s deposition amounts to a “subpoena” from which the governor is privileged under Indiana statute. The majority found the reference to “subpoena” in the statute encompasses the order at issue here, and the statute clearly precludes the deposition of a sitting governor.

Justice Frank Sullivan concurred in result in a separate opinion, writing that it’s not necessary to rule on the privilege issue because the information IBM seeks from the governor isn’t relevant or material to any issue in the case.

Indiana Court of Appeals

March 8

Civil Tort – Workers’ Comp

Gladys E. Curry and Thomas Curry v. D.A.L.L. Anointed, Inc.

No. 45A04-1106-CT-290

The Indiana Court of Appeals has affirmed dismissal of a couple’s complaint for injuries and loss of consortium for subject matter jurisdiction, finding the woman’s injuries sustained while at her work fall squarely within the Indiana Worker’s Compensation Act.

Gladys Curry, an employee of a McDonald’s franchise, went to work on her day off for a meeting. After eating in the outdoor dining area, where other employees had gathered, she tripped over something on the ground and got hurt. D.A.L.L. Anointed, the owner of the McDonald’s, requested Curry be treated by a physician selected by its workers’ compensation insurer. All medical bills related to her treatment were paid by D.A.L.L.’s insurer, and she received wage payments from the insurer.

The trial court eventually dismissed the Currys’ complaint for injuries and loss of consortium with prejudice pursuant to Indiana Trial Rule 12(B)(1).

The issue is whether Gladys Curry’s injuries arose out of her employment.

“The connection between D.A.L.L.’s interest in improving the business by holding employee meetings and Gladys’s presence on the premises as an employee waiting for the meeting to begin, places jurisdiction of her claim for compensation for injuries sustained while on those premises squarely within the Act,” wrote Judge James Kirsch.

Criminal – Fourth Amendment/Evidence

Pamela J. Hensley v. State of Indiana

63A01-1105-CR-195

The Indiana Court of Appeals has found a trial judge erred in not suppressing evidence found during a home search.

The Court of Appeals examined a case involving a woman whose home was searched by police following a tip that her husband, who was on probation, possessed marijuana. Police went to check the home and Pamela Hensley let them inside where they found marijuana and generic Xanax. Police then obtained a search warrant and discovered rolling papers, a pipe and prescription bottles.

The state charged Hensley with felony possession of illegal drugs, maintaining a common nuisance and possession of paraphernalia. Before trial, Hensley filed a motion to suppress the evidence. The trial court denied that request but certified the case for interlocutory appeal.

The appellate judges rejected the state’s argument that the search was a probation search – not an investigatory search – and was reasonable. The Indiana judges found the police were “pursuing their own agenda” and conducted an investigatory search under the guise of a probationary search. The appellate panel remanded the case to the trial court for further proceedings.

Civil Plenary – Labor Union

United Brotherhood of Carpenters and Joiners of America, Local Union No. 2371, Official Bargaining Agent, et al. v. Merchandising Equipment Group, Div. of MEG Manufacturing Corp., et al.

33A05-1107-CP-345

The Indiana Court of Appeals has ruled that a judge correctly dismissed a union’s complaint about a manufacturing plant closure, finding that the union failed to prosecute the case for 18 years and that was an adequate basis for dismissal.

The appellate court analyzed a lawsuit dating back to the Cambridge City manufacturing plant closure in 1992 in which 220 former employees lost their jobs.

The United Brotherhood of Carpenters and Joiners of America, Local Union No. 2371 is the employees’ union representative. Employees believed that at the time of their termination they were owed compensation totaling $3.3 million. The employees filed notices in June 1992 to hold a mechanic’s lien and corporate employees’ lien, and the next year filed a complaint against Hewlett-Packard Company Financing and Remarketing Division because of security interests it held in the MEG property. The union made a novel argument under Indiana law in claiming that pursuant to the mechanic’s lien and corporate employees’ lien statutes, the employees’ liens were superior to HP’s and the bank’s.  

But the case barely moved forward. Status conferences were requested and held in 2001 and 2008, but eventually HP and the bank filed a Trial Rule 41(E) motion to dismiss because so much time had passed, which was granted.

Describing this delay as “unprecedented,” the COA rejected the union’s argument that it didn’t move forward because it was waiting for a summary judgment motion from the special judge. The appellate panel noted the union could have requested a ruling, additional status conferences, another hearing, a pretrial conference or even a trial date to address the delays.

Parental Termination – Statutory Requirement

Term. of the Parent-Child Rel. of K.E., and T.E. and J.E., T.E. and J.E. v. Indiana Dept. of Child Services

20A05-1104-JT-206

Finding that a trial judge and Indiana Department of Child Services didn’t follow the law before involuntarily terminating parental rights, the Indiana Court of Appeals has sent the case back to Elkhart Circuit Court.

The Elkhart County office of the Indiana DCS took emergency protective custody of the then-2-month-old child, K.E. The state filed a petition alleging K.E. was a child in need of services. Both parents admitted to the allegations of the CHINS petition. The trial court in July 2010 removed K.E. from the home after an evidentiary hearing and later terminated the parents’ rights in December after a hearing.

But the trial court didn’t follow Indiana Code 31-34-21-5.6 in allowing more time to lapse between the removal and the termination or finding that reasonable efforts for family preservation or reunification had happened or that those efforts weren’t required. That was reversible error, the COA found.
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March 13

Civil Plenary – Rental Dispute

The Guardianship of Harold G. Gardner, Scott A. Gardner, Guardian v. Carl Prochno 50A03-1108-PL-385

The Indiana Court of Appeals has affirmed the grant of summary judgment in favor of a tenant who was not given adequate notice to vacate rented land.

Carl Prochno rented 480 acres of farm land in Marshall County. On April 11, 2010, Prochno received a Notice to Terminate Tenancy for half of that acreage from Scott Gardner, who is Harold Gardner’s son, guardian and attorney-in-fact.

On Dec. 6, 2010, Prochno’s attorney sent a letter to Scott Gardner and the attorney for Harold Gardner’s guardianship requesting confirmation that the notice to terminate applied only to 240 acres. On Jan. 27, 2011, Scott sent Prochno an amended notice to terminate, including the additional 240 acres excluded from the original notice.

The COA wrote that Marshall County custom is that a farm lease is a year-to-year tenancy that commences on March 1 each year. And pursuant to Indiana Code 32-31-1, written notice to terminate a year-to-year tenancy must be tendered not less than three months before the expiration of the year.

While Prochno agreed that the first notice had been timely – well in advance of the March 1, 2011, expiration of the year-to-year agreement, the latest date the amended notice could have been filed was Nov. 30, 2010.

Criminal – Sentence

Kenneth Akers v. State of Indiana

49A05-1106-CR-313

A man’s criminal actions that resulted in a two-year sentence were not part of a single episode of criminal conduct, and therefore, his claim that his sentence was unconstitutional is without merit.

Kenneth Akers appealed his sentence, following his convictions of battery, resisting law enforcement and possession of paraphernalia, all Class A misdemeanors. The trial court ordered the battery and resisting sentences to be served concurrently, and consecutive to the possession sentence.

Akers raised one question for review: whether Indiana Code 35-50-1-2 violates the Equal Protection Clause of the United States Constitution or Article 1, Section 23 of the Indiana Constitution because the statute limits the imposition of consecutive sentences when someone is convicted of at least one felony, but no such statute exists limiting the imposition of consecutive sentences for those convicted of only misdemeanors.

The Indiana Court of Appeals held that Akers’ actions do not constitute a single episode of criminal conduct, so he does not have standing to challenge Indiana Code 35-50-1-2, because the statute would not apply to him even if it applied generally to defendants convicted of only misdemeanors.
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March 14

Criminal – Robbery/Jury Finding

Dominique D. Woods v. State of Indiana

45A03-1107-CR-292

The Indiana Court of Appeals has affirmed a woman’s Class B felony robbery conviction over her objections that the jury’s guilty finding for assisting a criminal is logically inconsistent with its guilty finding for robbery as an accomplice.

Dominique Woods drove the getaway car in a robbery of a woman’s purse. The woman jumped on the car to try to stop the car, and Woods drove away, causing injuries to the victim. After her arrest, Woods admitted she knew the robber was broke and wanted someone to rob. She was charged with Class B felony robbery, Class C felony robbery, Class C felony battery, Class D felony resisting law enforcement, and Class D felony assisting a criminal. The jury was instructed on accomplice liability; it found her guilty of Class B felony robbery, Class C felony robbery, Class A misdemeanor criminal recklessness as a lesser included offense of the battery charge, and Class D felony assisting a criminal.

Woods claimed based on Joseph v. State, 659 N.E.2d 676 (Ind. Ct. App. 1995), that the robbery and assisting a criminal verdicts were inconsistent and she couldn’t be convicted of both offenses. The trial court found Joseph controlling and entered a judgment of conviction for the Class B felony robbery and Class A misdemeanor criminal recklessness only.

According to Woods, the offenses of robbery and assisting a criminal are mutually exclusive, and the jury could not have found her guilty of both offenses. She asked for her robbery conviction to be vacated or to have a new trial.

The judges found there was sufficient evidence to support Woods committed Class B felony robbery as an accomplice.

Adoption – Fraud/Irregular Circumstance

In Re the Adoption of M.P.S., Jr.; A.S. v. M.P.S., Sr., M.S., and An.S.

88A01-1108-AD-387

The Indiana Court of Appeals has reversed the grant of an adoption petition by a child’s paternal grandparents, finding the matter was surrounded by irregular and fraudulent circumstances.

Mother A.S. appealed the grant of adoption of her son by M.S. and An. S., the mother and stepfather of M.P.S. Sr., who is the father of M.P.S. Jr. M.S. and An. S. sought to adopt M.P.S. Jr. The parents met with the grandparents’ attorney, but did not have their own attorney. The parents signed consent for the adoption, which was notarized by the attorney, but her notary commission had recently expired. She also advised the parents the consents were revocable up until the adoption hearing.

The parents were to go to Virginia to take a sibling of M.P.S. Sr. so the sibling could live with his parent in Virginia. M.P.S. Sr. quickly moved up the trip so that he and his wife would be out of town during the adoption hearing. They had not received notice of the hearing. While in Virginia, M.P.S. Sr. left A.S. behind in the middle of the night. While she was gone, she learned her son had been adopted. M.P.S. Sr. continued to live with his mother and stepfather.

The COA reversed. It appeared the trip was planned to keep the mother from withdrawing her consent. Also, at the hearing, the grandparents testified that the child had lived with them his whole life, which was incorrect. In addition, A.S. signed her consent for adoption under the premise that her living conditions would not change and she would continue to live with her son.

The judges remanded with instructions to vacate the adoption decree.
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March 15

Criminal – Drugs/Police Search

Canon Harper v. State of Indiana

10A01-1012-CR-687

The Indiana Court of Appeals has held that a trial court did not err in admitting evidence obtained from a search of a purse and hotel room.

Canon Harper was charged with various drug offenses, resisting law enforcement, and other charges.

In 2008, police noticed that the car Harper was driving had no working license plate light. The officers observed the car pull into a motel parking lot and park. Passenger Adrian Porch got out, carrying a purse toward a hotel room. Before he could enter the room, a woman inside slammed the door shut.

The police officers asked Harper and Porch to whom the purse belonged, and Harper said an ex-girlfriend left it in his car. When asked, both men consented to a search of the purse, which contained drugs and paraphernalia. Harper resisted arrest.

Police found about three grams of heroin and a coffee grinder, blender, razor blade and flour sifter in the hotel room.

While Harper did not physically possess any of the contraband, an accused may be convicted of possession charges based upon constructive possession. Harper’s possessory interest in the vehicle is sufficient to establish his constructive possession of the purse, the COA held.

Civil Plenary – Labor Union/Arbitration

Ayanna Wright and American Federation of State, County, and Municipal Employees, Council 62, Local 4009, AFL-CIO v. City of Gary, Ind.

45A04-1107-PL-362

The Indiana Court of Appeals has reversed a trial court that had determined an arbitrator exceeded his powers when he found that Ayanna Wright was entitled to “bump into” a job held by someone with less seniority when her job was eliminated, per terms of a collective bargaining agreement.  

The city of Gary and the American Federation of State, County, and Municipal Employees, Council 62, Local 4009, had a CBA that allowed this “bumping” procedure. Wright was a city employee and president of the Local 4009 when she was informed in 2008 that her job was being eliminated due to budgetary concerns. She elected to “bump into” an administrative assistant job held by Pamela Oliver. Oliver was an administrative assistant for the Gary Fire Civil Service Commission.

But according to Gary City Ordinance 6243, the CBA does not cover employees who have unrestricted access to confidential personnel files, as Oliver did. Wright filed a grievance through the union, and the city and union entered arbitration.

The COA wrote that the arbitrator’s findings that the GFCSC’s administrative assistant position was covered by the CBA and that Wright had greater seniority for bumping were a proper exercise of his powers. Judge Cale Bradford dissented.

Civil Tort – Medical Malpractice/Statute of Limitations

Irmina Gradus-Pizlo, M.D. and Select Specialty Hospitals Indianapolis, Inc. v. Donald Acton

49A02-1106-CT-503

Determining that a question exists about when the statute of limitations started running on a proposed medical malpractice complaint, the Indiana Court of Appeals has reversed a decision in a case involving the death of a woman at an Indianapolis hospital after receiving medication prior to heart surgery.

On April 1, 2008, Myrtle Acton’s husband, Donald, filed a medical malpractice complaint against Dr. Irmina Gradus-Pizlo and Select Specialty Hospitals, and in 2010 the defendants filed summary judgment motions alleging that Acton had failed to comply with the Medical Malpractice Act statute of limitations. The trial court denied both motions after a hearing, finding genuine issues of material fact with regard to the trigger date of the two-year statute of limitations.

The COA disagreed with Acton that he couldn’t have learned of any malpractice until after his wife’s death April 12, 2006. Addressing the doctrine of continuing wrong that Acton used to sidestep the statute of limitations argument, the COA determined that Myrtle Acton stopped receiving the medication at issue on March 29, and so the continuation of any possible wrong ended at that time.

The court found a similar result in looking at the allegations against Select Specialty Hospitals, finding that the hospital stopped giving her the medication on March 29 and that makes the medical malpractice complaint untimely.

The appellate court granted summary judgment to Gradus-Pizlo and the hospital.

Miscellaneous – Land Dispute

Brad A. Altevogt, et al. v. Dennis L. Brand, et al.

44A03-1106-MI-237

The Indiana Court of Appeals has upheld summary judgment for a group of landowners caught up in a court dispute with neighbors about a portion of land situated between the plaintiffs’ homes and the shore of Big Long Lake.

The plaintiffs are front-lot owners in a subdivision platted in the 1930s in LaGrange County. Plaintiffs’ lots are situated near the lake with only the Indian Trail separating them from the lakeshore. The defendants are all back-lot owners who claim that their access to the lake would be impaired if the plaintiffs prevail in their claim of adverse possession of those portions of land in front of their lots.

In November 2008, the front-lot owners filed a complaint against the back-lot owners seeking to quiet title to those portions of the Indian Trail between the front lots and Big Long Lake. The trial court held a hearing on summary judgment motions from both sides in April 2011 and entered summary judgment in favor of the defendants.

The COA rejected the plaintiffs’ arguments that the Indian Trail was dedicated as a public easement adjacent to the lake and that their fee ownership should extend to the lakeshore. The judges found that the trail was only for the use of lot owners and guests; not the public.
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March 16

Miscellaneous – Police/Discipline

Jack Messer v. New Albany Police Department

22A05-1104-MI-179

A divided Indiana Court of Appeals has ruled the New Albany Police Department had the right to discipline an officer whose racially charged comments made to fellow officers were made public.

Officer Jack Messer made a controversial comment to fellow officers after an internal roll call meeting, saying “The biggest mistake that government made was giving those people civil rights.” After saying he didn’t mean what he had said, a complaint was not filed and his supervising officer didn’t believe a violation had occurred. But several days later, the comment was leaked to the press.

An internal investigation cleared Messer of wrongdoing, but a police merit commission complaint found the statement was considered conduct unbecoming of an officer. The commission suspended him for 30 days, and on judicial review, the judge granted the department’s summary judgment motion.

Messer argued on appeal that his statement was protected by the First Amendment and the department should not have subjected him to discipline for making it. The parties agreed the First Amendment question was before the appellate court and is governed by Pickering v. Board of Education, 391 U.S. 563, 566 (1968). The court didn’t establish a general constitutional standard applicable to all government-employee-speech cases, but created a two-step test and held the government’s interest as employer must be balanced on a case-by-case basis against the individual and societal First Amendment interests.

Judges Melissa May and Edward Najam found that the department deserved special preference under the Pickering analysis because the officer’s speech caused a disruption and the comment wasn’t made as a private citizen. The value of the speech was also low, according to the court majority, because it wasn’t made as a part of government speech.

Judge John Baker disagreed in a separate opinion that said he would have reversed summary judgment for the police department because the statement was protected by the First Amendment.

Criminal – Fourth Amendment

Chad M. McLain v. State of Indiana

20A05-1109-CR-480

The Indiana Court of Appeals has ruled no constitutional violation occurred when a man allowed a police officer to search his car.

Elkhart County Police Officer Randy Valderrama pulled over Chad McLain when McLain failed to adequately signal before making a turn. Upon running a check on his license, Valderrama saw McLain had two prior “incidences” for possession of marijuana.

Valderrama issued a written warning and told McLain he was free to go. Valderrama then asked McLain if he had anything illegal in his vehicle and asked if he could search the car. McLain gave him permission. McLain admitted he had a marijuana pipe on the seat and a bag of marijuana in the dash console. A canine officer’s dog alerted police to the presence of marijuana, and McLain was arrested.

On appeal, McLain claimed the search of his car was a violation of his state and federal constitutional guarantees against unreasonable search and seizure.

Concluding McLain clearly and voluntarily consented to the search, the appellate court affirmed the trial court’s decision to admit evidence obtained in the search of the car.

Civil Plenary – Insurance/Contamination Cleanup

Indiana Farm Insurance Co. as subrogee of Joseph Koors d/b/a Koors Amoco v. Harleysville Insurance Co.

43A04-1109-PL-507

The Indiana Court of Appeals has determining that an insurance company was obligated to defend and indemnify a service station for contamination cleanup.

The case involves an Amoco station in Warsaw owned by Joseph Koors, who in 1998 notified the Indiana Department of Environmental Management of his desire to remove an underground storage tank system at the service station. An environmental site assessment found some contamination had occurred. Koors Amoco later demanded that its insurance carriers during that period, Indiana Farm Bureau Insurance and Harleysville Insurance Co., defend and indemnify relating to IDEM’s actions, environmental testing and remediation. Harleysville notified Koors that it didn’t believe it had a duty to defend and indemnify him on the basis that any loss relating to the IDEM action came before its insurance coverage began in August 1998, that Koors had breached the policy by failing to notify Harleysville as soon as practicable that a loss had occurred, and that the pollution exclusion in the contract barred at least some of the coverage, if not all.

Farm Bureau filed a complaint for contribution from Harleysville. The trial judge granted summary judgment for Harleysville and against Farm Bureau.

On appeal, Farm Bureau contended that the “known loss” doctrine – first recognized by the Indiana Court of Appeals in 2000 – does not excuse Harleysville from its obligation to defend and indemnify Koors. The common law concept comes from the fundamental requirement in insurance law that the loss be fortuitous. The appellate panel in this case found that Harleysville is not entitled to summary judgment on the basis that the known loss doctrine precludes coverage.

The judges determined that the question of unreasonable delay in Koors notifying Harleysville about the loss is one for the jury to address, as is the question about prejudice in regard to the delay. They also determined Harleysville is not entitled to summary judgment on the basis that the pollution exclusion applies to gasoline leaks.

The case is remanded for further proceedings.

Miscellaneous – Sales/Full Faith and Credit

Harry Kaufmann Motorcars, Inc. v. Schumaker Performance, Inc.

41A05-1108-MI-411

The Indiana Court of Appeals has determined a judge should not have set aside a Wisconsin court’s default judgment involving the sale and delivery of a boat between parties in the two states.

Wisconsin-based company HKM agreed to buy a boat from Schumaker Performance following the Indianapolis Boat, Sport and Travel Show and made a $9,000 down payment. A Schumaker representative delivered the boat in April 2007 to Wisconsin and accepted the final payment. After the initial delivery, a Schumaker representative picked the boat up and conducted repairs in Indiana before later returning the boat to HKM in Wisconsin.

 In July 2009, HKM filed a suit in Dane County, Wis., against Schumaker and co-defendant Eliminator Custom Boats alleging breach of contract and warranty claims relating to the boat sale. Schumaker was served with process in Indiana, but declined to appear and later informed the court of its intent. The Wisconsin court entered default judgment against Schumaker and Eliminator Custom Boats for $436,651.71. HKM later filed its complaint to domesticate foreign judgment in the Johnson County trial court, and in May 2011 the Indiana judge granted Schumaker’s motion to dismiss.

Finding that this case involves local services, goods or contracts received by a company in Wisconsin, the COA determined that Wisconsin’s long-arm statute applies to this case. The case is remanded for further proceedings.
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March 19

Domestic Relation – Division of Pension

Robert Hardin v. Carlotta Hardin

18A05-1105-DR-301

The Indiana Court of Appeals has ordered the lower court to take another look at the division of a husband’s pension, finding the court used the wrong number in its decision.

Robert and Carlotta Hardin were married, divorced, and then remarried in 1993. Robert Hardin retired in 2000 from General Motors. The pair separated in June 2010. The trial court awarded Carlotta Hardin $317 a month from Robert Hardin’s pension. The court based the number in part on the 17 years the two were married.

But the trial court should have used seven years as the applicable figure since Robert Hardin’s pension stopped accruing in 2000, 10 years before they separated, the COA held. The appellate court remanded for the trial court to recalculate the husband’s and wife’s portions of the combined monthly benefits.

The judges upheld the award of the entire survivor’s benefit to Carlotta Hardin, but found the trial court erred in determining that the cost of the survivor’s benefit is included in amount payable. This issue was also remanded for the trial court to re-divide the pension consistent with the opinion.

Juvenile – Custody Order Modification

In Re the Paternity of C.S.: M.R. (Mother) v. R.S. (Father)

53A01-1108-JP-381

The Indiana Court of Appeals has upheld the modification of a custody order giving the father primary custody of his son, finding the trial court didn’t abuse its discretion in deciding that the boy’s physical and mental/academic maturation constituted a substantial change warranting the change in custody.

Mother M.R. appealed the order that gave father R.S. primary custody of their son, C.S. The parents were never married, but when they split up, they entered into an agreed entry to share joint legal and equal physical custody. M.R., who is in the Active Army Reserves, took a job at Fort Knox. C.S. would split time with his mother there and his father in Bloomington.

R.S. requested primary physical custody, which the trial court granted. The judge cited the father’s more flexible schedule and the fact C.S. has lived in Bloomington his whole life in support of his decision. The judge also concluded that beginning kindergarten in 2011 – instead of waiting another a year as M.R. later argued – was in C.S.’ best interest.

The COA affirmed the finding that C.S.’ academic needs and abilities have substantially changed and he has reached an age that warrants a change in physical custody. The judges also found the trial court didn’t misinterpret Indiana Code 31-17-2-21.3, which outlines factors surrounding custody and active duty service. M.R.’s service doesn’t show the impermanency contemplated in the statute, wrote the judge, as she cannot be deployed to a combat zone.
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March 20

Criminal – Wrongful Action/Mentally Ill

Luke Keys Carson v. State of Indiana

29A04-1106-CR-278

The Indiana Court of Appeals has affirmed a trial court in finding a man who is mentally ill was nevertheless aware of the wrongfulness of his actions.

Luke Keys Carson appealed his sentence for two counts of battery by means of a deadly weapon, burglary and resisting law enforcement. At trial, a jury found the man to be guilty but mentally ill, and not guilty of two counts of attempted murder. In April 2009, Carson entered the unlocked trailer of a neighbor in a mobile home park. The woman – Angelina Zuniga – spoke little English and did not understand what he was saying to her. After standing inside her trailer for a few minutes, Carson left. When he returned later, Zuniga opened the door to ask him what he wanted, and he cut her hand with a knife.

That same morning, Carson got into a fight with Jorge Hernandez. Police arrived, and Hernandez and Carson stopped fighting. Hernandez pointed at Carson, who had retrieved his knife, and Carson fled. The officer told Carson to drop the knife and while Carson dropped the knife, he continued to run until he tripped on gravel and fell.

A competency hearing found Carson was not competent to stand trial, and he was committed to Logansport State Mental Hospital. On Oct. 25, 2010, Logansport filed a report notifying the court that Carson was competent to stand trial. The COA agreed that while Carson’s demeanor showed that he was mentally ill, statements he made at the time of his arrest indicated he was aware of the wrongfulness of his actions. He apologized, and he made comments that his actions were “stupid.”

Carson argued that his burglary conviction was not supported by evidence. But the COA wrote that Indiana Code 35-43-2-1 provides that a person who breaks and enters a dwelling of another person with intent to commit a felony in it commits Class B felony burglary. In statements to police, Carson said he had gone into Zuniga’s trailer to kill a baby but could not do it. That statement shows that he was able to appreciate the wrongfulness of the intent to commit murder, even though there was no baby in Zuniga’s home.

Post Conviction – Ineffective Assistance of Counsel

Curtis A. Bethea v. State of Indiana

18A05-1107-PC-416

In a man’s appeal of the denial of petition for post-conviction relief, in which he claimed ineffective assistance of his trial and appellate counsel, the Indiana Court of Appeals was divided on whether his appellate counsel was ineffective.

Curtis Bethea and several other people, including a minor female, tricked their way into the home of Angela Dailey and Jason Gates. Bethea and the others then confined and robbed the victims, who were injured in the course of the robbery. Bethea was charged with nine counts, but pleaded guilty to Class B felony robbery of one victim and Class B felony confinement of the other victim.

The judge sentenced Bethea to 40 years total, citing, among other things, Bethea’s criminal past, the teen’s involvement in the crime, the injury to a victim, and prior attempts at rehabilitation had failed. The sentence was upheld on appeal.

Bethea filed for post-conviction relief, alleging his trial counsel was ineffective because he failed to offer evidence that would have undermined the trial court’s findings about the use of a juvenile in the commission of the crime. With regards to the appellate counsel, Bethea argued that he failed to cogently challenge the aggravating factors found by the trial court and also should have challenged the appropriateness of the sentence pursuant to Indiana Appellate Rule 7(B). The post-conviction relief petition was denied.

The COA agreed that Bethea’s trial counsel wasn’t ineffective. The majority found that although the appellate counsel overlooked sentencing factors that could have been challenged as abuse of discretion or pursuant to Appellate Rule 7(B), Bethea wasn’t prejudiced.

Judge Melissa May concurred in result. Judge Elaine Brown dissented as to the effectiveness of the appellate counsel, finding Bethea met his burden on this issue and she would resentence him accordingly.

Civil Tort – Insurance Policy/Plain Language

Auto-Owners Insurance Co. v. Cathy Benko and Gerald Ewing, as Executors of the Estate of Laverna Ewing, Deceased

75A04-1108-CT-440

The Indiana Court of Appeals found under the plain language of a woman’s insurance policy, she did what was required to pursue an underinsured motorist claim.

Laverna Ewing was injured when Brent Vannorman’s vehicle hit hers. She filed a complaint for damages against Vannorman within the two-year statute of limitations applicable to her bodily injury claims. She settled for his policy limits, which didn’t cover all her expenses, so she filed an underinsured motorist claim with her insurer, Auto-Owners Insurance Co. Because this claim came outside of the statute of limitations, Auto-Owners denied it. The trial court granted summary judgment in favor of Ewing and the executors of her estate, finding the underinsured motorist coverage contractual limitation provision is unenforceable because it is vague and ambiguous. The Court of Appeals affirmed.
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March 21

Criminal – Murder/Sentence

Michael J. Griffin v. State of Indiana

53A05-1106-CR-288

The Indiana Court of Appeals upheld the murder conviction of a defendant who killed a Bloomington man, but found the circumstances around the killing warranted a lesser sentence.

Michael Griffin challenged his murder conviction and 55-year sentence for the stabbing death of Donald Belton. While at a Christmas party, the two were drinking and Belton allegedly sexually assault Griffin while he was intoxicated. Two days later, Griffin went to Belton’s house to confront him and stabbed Belton 21 times and sliced his throat.

Griffin asked the trial court to give a jury instruction on reckless homicide; it refused and only instructed the jury on voluntary manslaughter and murder.

Griffin argued on appeal that the state failed to negate the presence of sudden heat which, if found by the jury, would have reduced his murder conviction to voluntary manslaughter. But the evidence produced by the state negates Griffin’s claim that he was acting in sudden heat when he killed Belton, wrote Judge L. Mark Bailey.

The appellate court revised his sentence to 45 years given that the pervasive evidence is that the homicide was in response to a sexual assault, Griffin has no criminal history, and he received an honorable discharge and Purple Heart from the Marine Corps.

Post Conviction – Murder

Kristine Bunch v. State of Indiana

16A05-1007-PC-439

The Indiana Court of Appeals has ordered a woman convicted of killing her son by setting fire to their home in 1996 receive a new trial. See related story on page 10.

Miscellaneous – Surface Mining/Bond

Bill Musgrave v. Squaw Creek Coal Co. and Indiana Dept. of Natural Resources

49A05-1104-MI-164

The Indiana Court of Appeals has upheld the decision to release a surface mining reclamation bond obtained by a mining company, finding the reclamation requirements of the Indiana Surface Mining Control and Reclamation Act have been satisfied.

Squaw Creek Coal Co. obtained a permit to mine more of Squaw Creek Mine, and secured reclamation of the land with a bond.

At a public hearing on whether to release portions of the bond after active mining ended, environmental concerns were raised. The Indiana Department of Natural Resources approved the bond release. An administrative law judge affirmed the decision to release parts of the bond, but vacated the DNR decision to affirm the release on other portions.

SCCC petitioned the trial court for judicial review, and the trial court reversed.

The trial court did not err by reversing the ALJ’s order and remanding for entry of judgment in favor of SCCC and the DNR. There is no genuine issue of material fact that SCCC met the Phase III release requirements of the Indiana Surface Mining Control and Reclamation Act, and SCCC also satisfied the requirements of the Indiana Administrative code and its own permit, the court held.•