Indiana Court Decisions – Feb. 19 to March 4, 2014

7th Circuit Court of Appeals

Feb. 24

Civil – Affordable Care Act/Contraception

University of Notre Dame v. Kathleen Sebelius, Secretary of U.S. Department of Health & Human Services, et. al. and Jane Doe 1, et al.

13-3853

A divided 7th Circuit Court of Appeals panel affirmed denial of a temporary injunction sought by the University of Notre Dame to block enforcement of the contraception mandate contained in the Affordable Care Act.

Notre Dame failed to convince the District Court for the Northern District of Indiana to grant an injunction blocking enforcement of the mandate. The Affordable Care Act allows religious institutions such as Notre Dame to sign a form opting out of paying for contraception, but insurers must provide such services to women at no cost to them.

Circuit Judge Richard Posner wrote for the majority, joined by Judge David Hamilton, that it was unclear what Notre Dame was asking the court to do, since a requirement that it provide a form opting out didn’t trigger provision of contraceptive services.

“If the government is entitled to require that female contraceptives be provided to women free of charge, we have trouble understanding how signing the form that declares Notre Dame’s authorized refusal to pay for contraceptives for its students or staff, and mailing the authorization documents to (insurers), which under federal law are obligated to pick up the tab, could be thought to ‘trigger’ the provision of female contraceptives.”

But Circuit Judge Joel Flaum would have reversed and granted the injunction, believing that Notre Dame has a strong case under the Religious Freedom Restoration Act – a position on the likely outcome the majority cautioned against reaching in an interlocutory appeal.

“I conclude that Notre Dame has shown a likelihood of success on the merits, and that it has met the other requirements for a preliminary injunction,” Flaum wrote. “I would therefore reverse the district court’s order denying relief.”

Civil – School/Equal Protection/Title IX

Patrick Hayden and Melissa Hayden, on behalf of their minor child, A.H. v. Greensburg Community School Corp., et al.

13-1757

A dispute pitting long hair against an attempt to promote a clean-cut image of Hoosier boys’ basketball is headed for overtime since the 7th Circuit Court of Appeals found a high school’s hair-length requirements pertaining only to male basketball players violated equal protection and Title IX.

Patrick and Melissa Hayden challenged the short-hair policy of the Greensburg public high school that members of the boys’ basketball team must keep their locks cut above the ears, eyebrows and collars. The team coach, Stacy Meyer, set the policy to promote team unity and project a clean-cut image.

The Haydens filed a lawsuit against the school system when their son, A.H. was prohibited from practicing with the team because his hair was longer than permitted. They argued the short-hair mandate constitutes sex discrimination because it applies to boys and not girls.

The U.S. District Court for the Southern District Court of Indiana, Indianapolis Division, rejected the parents’ equal protection and Title IX claims on the grounds that the short-hair requirement does not apply to all boys’ teams.

Although the policy was not universally applied, the 7th Circuit found that it was still based on gender. The hair-length rule applied only to male athletes even though female athletes had the same need to keep their hair from their eyes and promote team unity. The 7th Circuit found the obvious disparity of the policy gave rise to an inference of discrimination.

The 7th Circuit reversed the judgments in favor of the Greensburg School Corp. on the equal protection and Title IX claims.

“It is also worth reiterating that Coach Meyer’s policy prohibits far more than an Age-of-Aquarius, Tiny-Tim, hair-crawling-past-the-shoulders sort of hair style – it compels all male basketball players to wear genuinely short hair,” Judge Ilana Rovner wrote for the majority. “In 2014, it is not obvious that any and all hair worn over the ears, collar, or eyebrows would be out of the mainstream among males in the Greensburg community at large, among the student body, or among school athletes. (Even one or two men on this court might find themselves in trouble with Coach Meyer for hair over the ears.)”

Judge Daniel Manion dissented in part. He noted while he agreed with the court’s general summary of the law of equal protection, the record did not establish any violation of the Equal Protection Clause or Title IX.

Indiana Supreme Court

Feb. 20

Civil Plenary – Evidence/Final Judgment

James T. Mitchell v. 10th and The Bypass, LLC and Elway, Inc.

53S01-1303-PL-222

In reversing an order granting a company’s motion to vacate partial summary judgment in an environmental cleanup lawsuit, the Indiana Supreme Court tackled the apparently conflicting Indiana Trial Rules 54(B) and 56(C).

10th and the Bypass LLC sued James T. Mitchell and his corporation and other defendants, asserting a claim for an environmental legal action based on contamination from the operation of a dry cleaning business in Bloomington on land owned by the LLC. Mitchell was granted partial summary judgment in his individual capacity, claiming he was never involved in any dumping of chemical waste.

About a year later, a former Mitchell employee provided the landowner with a statement that there was a spill in the 1980s at the facility allegedly caused by Mitchell. The LLC relied on Trial Rule 54(B) in its request that the trial court vacate the partial summary judgment in favor of Mitchell. Mitchell cited Trial Rule 56, which says newly discovered evidence must be properly designated and timely submitted. The trial court granted the LLC’s motion to vacate.

“This case requires us to explore the interplay between Trial Rule 54(B) – Judgment upon multiple claims or involving multiple parties and Trial Rule 56 – Summary judgment, when new evidence is submitted to the trial court following entry of partial summary judgment,” Justice Robert Rucker wrote. “ … [H]ow can the dictates of Rule 54(B) ‘subject to revision at any time’ be reconciled with the apparently conflicting ‘thirty (30) day[]’ time limit imposed by Rule 56(C)? In order to harmonize Trial Rule 54(B) and Trial Rule 56(C) we hold that although a trial court may indeed make material modifications to a non-final summary judgment order, it must do so based on the timely submitted materials already before the court when the order was initially entered.”

“Here the trial court revised its previous order granting partial summary judgment in Mitchell’s favor. Under other circumstances this would not be problematic. However, by understandably but mistakenly misinterpreting the law, the trial court abused its discretion in relying on evidence not properly before the court at the time the previous order was entered,” he continued.

The trial court also ruled that the LLC is not entitled to relief under Trial Rule 60(B) as the order granting partial summary judgment to Mitchell was not a final judgment. But a 2008 amendment deleted the word “final” such that the express language of the rule no longer limits relief only from a “final” judgment, the justices ruled.

“In light of the 2008 amendment, LLC is not precluded from seeking Trial Rule 60(B) relief from the trial court’s January 2010 order on grounds that the order was not a final judgment,” Rucker wrote.

The case is remanded for further proceedings.

Indiana Court of Appeals

Feb. 24

Juvenile – Child Support Arrearage/Incarcerated Father

In Re: Paternity of J.M.; C.M. v. T.S.

18A02-1308-JP-684

The Indiana Court of Appeals instructed a trial court to do the work necessary before entering an order garnishing a parent’s money for child support.  

A father, incarcerated in the Indiana Department of Correction, disputed an income withholding order that garnished his inmate trust fund account to pay down his child support arrearages.

He pointed to a pre-dispositional report from April 2008 that found he did not have the ability to pay child support and that no arrears would be sought against him. Also, the father noted the court had not issued a new order regarding payment of the arrearages.

The father then requested a hearing to present evidence that the arrearage never should have accrued, to determine the amount of any arrearage owed, and to determine the monthly amount he should pay, if any. In addition, he requested the court suspend the garnishment of his prison account until his release from incarceration.

The trial court issued an “Order Denying Father’s Request to Disallow Income Withholding Order.”

The Court of Appeals concluded the trial court abused its discretion in denying the father’s motion.

It reversed and remanded with instructions to conduct an evidentiary hearing for the purpose of determining the arrearage amount and the father’s ability to pay plus a payment schedule.

In reaching its conclusion, the Court of Appeals pointed out that the trial court never entered an income withholding order with respect to any arrearage and, in fact, never entered an order which required the father to make payments toward his arrearage.

Also, the lower court did not hear any evidence about the father’s ability to pay his arrearage. The trial court did not establish the total amount of the arrearage or set up a payment schedule.

Judge Margaret Robb wrote a separate opinion. She concurred in substance with the majority’s opinion but pointed out the trial court’s denial was signed only by a magistrate and not reviewed or approved by the judge.

Criminal – Hearsay Evidence

Shawn Blount v. State of Indiana

49A02-1304-CR-365

A man’s felony conviction was overturned after a split Indiana Court of Appeals ruled that the detective’s testimony about how he identified and found the man was inadmissible hearsay.

Shawn Blount was convicted of Class B felony possession of a firearm by a serious violent felon and sentenced to 12 years following a shooting at an Indianapolis motel.

Detectives were conducting surveillance of the scene at the time the gun was fired. In the mayhem afterwards, they located a mother and her young son who gave law enforcement the nickname of the shooter. From that information, the detectives were able to identify Blount.

Over the objections of the defense, the trial court allowed the detective to relay what the mother and son had told him. This gave Blount grounds for an appeal in which he argued the court abused is discretion by admitting hearsay evidence.

The state asserted the testimony was not hearsay because it was offered only to show how the detectives investigated the shooting and eventually identified Blount as the shooter.

“How the police narrowed the investigation to Blount was irrelevant to any contested issue in the case,” Senior Judge Carr Darden wrote. “Moreover, the prejudicial impact of the testimony was great: in a jury trial to determine whether Blount unlawfully possessed a firearm, Detective Smith related out-of-court statements asserting that Blount possessed a firearm. Any probative value to the statements were thus substantially outweighed by the danger of unfair prejudice. We therefore conclude that Detective Smith’s testimony was inadmissible hearsay and that the trial court abused its discretion by admitting it.”

The Court of Appeals reversed Blount’s conviction and remanded for further proceedings consistent with its opinion. Judge James Kirsch dissented without opinion.
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Feb. 25

Civil Plenary – Preliminary Injunction

James Kindred, Thomas Kindred, and Sam Kindred v. Betty Townsend and Harmon Crone

60A01-1304-PL-156

In dismissing an interlocutory appeal as untimely, the Indiana Court of Appeals told the appellants they still have the ability to attack the trial court’s interlocutory orders.

James Kindred, Thomas Kindred and Sam Kindred filed a motion to dissolve a preliminary injunction six months after the Owen Circuit Court entered an order granting the injunction.

The trial court denied the Kindreds’ motion to dissolve as well as their motion to reconsider. Within 30 days of the denial, they filed a notice of appeal from the trial court’s interlocutory order.

On appeal, the defendants claim the motion to dissolve was not based on any new facts or circumstances that had arisen since the trial court’s entry of the preliminary order. Instead it was based on arguments that were available at the time the preliminary injunction was entered.

 “If a party fails to do so (to challenge a preliminary injunction order within 30 days), it may not thereafter seek to dissolve the preliminary injunction based upon grounds that were known or knowable at the time of the entry of the preliminary injunction, as this would simply be a belated, collateral attack on the trial court’s initial decision to enter or deny the injunction,” Judge Paul Mathias wrote. “To hold otherwise would allow limitless appeals based on the same facts tried and decided to enter or deny a preliminary injunction.”

In a footnote, the Court of Appeals pointed out to the Kindreds that their appeal may not be dead. Citing Bojrab v. Bojrab, 810 N.E.2d 1008, 1014 (Ind. 2004), the COA noted the Kindreds may attack the trial court’s interlocutory orders on appeal from the final judgment.
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Feb. 26

Criminal – Resisting Law Enforcement/Lawful Entry

Robin Harper v. State of Indiana

49A04-1305-CR-222

A police officer who lied to a woman in order to gain entry into her home was not lawfully engaged in the execution of his duties, the Indiana Court of Appeals ruled, so the judges reversed the woman’s resisting law enforcement conviction.

Indianapolis Metropolitan Police Department officer James Gillespie responded to a call from Robin Harper regarding a domestic dispute with her husband. She was outside when the officer arrived and explained the situation. Then Gillespie and officer Scott Hartman located her husband, who had some minor injuries from the incident.

When officers went back to Harper’s residence to arrest her for domestic battery, she refused to open her screen door and allow them inside. She also refused to step outside, so Gillespie told Harper she needed to sign a protective order. When she opened the screen door, the officers stepped inside to arrest her.

She was charged with misdemeanor resisting arrest when she pulled away from Hartman as he tried to remove her wedding ring after she was in handcuffs. She was found guilty at a bench trial.

“In the case before us, Harper never abandoned the privacy interest in her home. She simply opened her front, prime door to answer Officer Gillespie’s knock, and after she did so, she stood behind the closed screen door to speak with him,” Judge Paul Mathias wrote. “Harper never crossed the threshold of her residence onto her stoop or porch. In addition, Harper expressly denied the officers entry to her home, and rather than obtain a standard warrant for her arrest, Officer Gillespie chose to use fraud to enter the residence to arrest her.”

The judges found that since the officers unlawfully entered Harper’s home, they were not engaged in the lawful execution of their duties at the time they arrested Harper and attempted to remove her ring in preparation for booking.
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Feb. 27

Criminal – Habitual Traffic Violator

State of Indiana v. Chad Bryant

32A01-1306-CR-282

Finding a trial court abused its discretion when it granted a man’s motion to dismiss a Class D felony operating a vehicle as a habitual traffic violator charge, the Indiana Court of Appeals reversed and ordered the charge reinstated.

Chad Bryant received notice in 2011 from the Indiana Bureau of Motor Vehicles that his license was suspended because he had three unrelated convictions for motor vehicle offenses over the course of 10 years. However, the letter from the BMV incorrectly included a charge that had been dismissed. Bryant does, however, have three unrelated convictions within that time frame.

He was pulled over in June 2012 and told police his license was suspended. That’s when the state charged him with operating as a habitual traffic violator. He filed a motion to dismiss, arguing his suspension wasn’t valid in 2012 because the notice informing him of his HTV status was incorrect. The trial court granted the motion to dismiss.

“Here, Bryant argues that, because one of the convictions the BMV listed on its HTV notice was actually a charge that the State dismissed, he did not commit the convictions underlying his HTV determination and there was thus a material error,” Judge Rudolph Pyle III wrote. “Based on the Supreme Court’s decisions in (Starks v. State, 816 N.E.2d 32 (Ind. 2004)), and (State v. Oney, 993 N.E.2d 157 (Ind. 2013)), he contends that the trial court did not abuse its discretion when it granted his motion to dismiss because it could not have convicted him for operating a vehicle as an HTV where there was a material error in the HTV determination. However, we disagree.

“In the instant case, Bryant has not challenged his HTV determination, either through the BMV or judicial review. Accordingly, in line with the preceding judicial precedent, we need not address whether the BMV’s erroneous listing of Bryant’s charges was a material error because we must consider his suspension valid until he directly challenges it. As a result, we conclude that the State properly charged Bryant with Class D felony operating a vehicle as an HTV as a matter of law and that the trial court abused its discretion when it granted Bryant’s motion to dismiss. We reverse the trial court’s dismissal and remand for further proceedings.”

Judge Cale Bradford concurred in result, saying the case could be decided on the basis that Bryant cannot establish his suspension suffers from material error within the meaning of the holding in Oney and that the suspension was invalid.

Criminal – Pat Down/Suppression of Evidence

State of Indiana v. Michael E. Cunningham

19A05-1310-CR-489

Two of the three judges on an Indiana Court of Appeals panel affirmed the suppression of marijuana and a pipe found on a man during a traffic stop, with the dissenting judge believing there was no infringement on the man’s Fourth Amendment rights.

Huntingburg police officer Andrew Hammock pulled over Michael Cunningham’s car because one of the two tail lamps was white – instead of red – because the red lens covering was missing. Cunningham asked to get out of his vehicle to see the tail lamp for himself, to which Hammock said he would pat him down for any weapons for officer safety. Cunningham said that was fine and got out of the car. A pat down yielded a pill bottle, which Cunningham admitted had marijuana in it. He told the officer he had a pipe in his car.

Cunningham was charged with Class A misdemeanors possession of marijuana and possession of paraphernalia. He filed a motion to suppress the marijuana and pipe, which the trial court granted based on its finding that the initial traffic stop was illegal.

The Indiana Court of Appeals judges agreed that the initial traffic stop was not illegal, as law requires vehicles like Cunningham’s to have two red-lighted tail lamps. But the court split on whether the search violated Cunningham’s Fourth Amendment rights.

The majority noted there was no evidence that Cunningham was hostile or threatening when he asked to get out of the car.

“We conclude that Officer Hammock clearly did not ask Cunningham for permission to conduct a pat-down search. Instead, Officer Hammock’s testimony demonstrates that he gave an ultimatum to Cunningham: if he decided to exit the vehicle to inspect the tail lamp, ‘I would pat him down for any weapons just for officer safety issue,’” Judge Michael Barnes wrote. “Phrased in this way, Cunningham had no choice but to submit to the pat-down when he exited the vehicle, despite the absence of reasonable suspicion that he was armed and dangerous.”

But the circumstances didn’t necessitate Cunningham exiting his vehicle, Judge Elaine Brown wrote in her dissent, so he did so with full knowledge that if he did leave his car, he would be subject to a pat down search. He agreed and even told the officer he had marijuana in the pill bottle, handed it to Hammock, and informed him about the pipe in the car. Under these circumstances, she wrote there is no violation of the Fourth Amendment.
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March 3

Civil Tort – Shareholder Liability

CBR Event Decorators, Inc., Gregory Rankin, Robert Cochrane and John Bales v. Todd M. Gates

49A02-1302-CT-159

In a case that stems from a failed transaction in 2000 to purchase an event-decorating company, the Indiana Court of Appeals has reversed the order that shareholders of a corporation are liable for attorney fees on a wrongful stop-payment claim.

Gregory Rankin, Robert Cochrane and John Bales created CBR Event Decorators Inc. to purchase Todd Gates’ event-decorating company. A $100,000 check and signed asset purchase documents were mailed to Gates, who signed and returned them to the shareholders. But the shareholders stopped payment on the check that same day after believing Gates misrepresented the value of the assets after speaking with some of his employees. Gates sued CBR and the shareholders when attempts to renegotiate the purchase agreement failed.

Gates alleged against CBR breach of the asset purchase agreement, wrongful stop payment of a check, and breach of the promissory note; and alleged fraudulent conveyance and wrongful withdrawal of capital against the shareholders. He also sought to pierce the corporate veil. The trial court ruled in favor of Gates and ordered the veil pierced. As part of an agreement staying execution of the judgment pending appeal, the shareholders provided Gates with an irrevocable letter of credit issued by PNC bank for $1 million.

The piercing of the corporate veil was reversed on appeal in 2012, but the appeals court wrote in its opinion that the trial court should determine the portion of the attorney fees the shareholders are liable for to Gates as a result of the wrongful stop payment. The trial court ordered attorney fees of $290,093 plus 18 percent interest.

The trial court, without holding a hearing, ordered the funds from PNC Bank deposited with the trial court clerk after Gates requested the deposit before the letter of credit expired. That order, along with the attorney fee issue, were before the Court of Appeals here.

The judges noted there was some confusion based on the language of the 2012 opinion in CBR I as to whether the shareholders should have to pay attorney fees. The wrongful stop payment claim was pled only against CBR, not the shareholders, Judge Margret Robb wrote. The shareholders could only be liable for these fees if the corporate veil was pierced, but that decision was reversed in CBR I.

The judges rejected Gates’ argument that regardless of any allegedly incorrect outcome, the legal doctrines of claim preclusion, issue preclusion and law of the case preclude the trial court and COA from addressing the issue of attorney fees. None of those doctrines are applicable here, so the appeals court does not have to uphold the award of attorney fees against the shareholders.

The order granting Gates’ request to deposit the letter of credit funds with the trial court clerk was not an improper ex parte order, the COA ruled. The trial court’s order wasn’t necessary to effectuate transfer of the funds to the clerk, as the terms of the letter allowed Gates to draw down the available balance of the letter of credit by providing a written demand to the bank, which he did.•