Justices take appeal from HHGregg managers denied bonus proceeds

The Indiana Supreme Court will hear a case weighing whether HHGregg senior managers are entitled to share in $40 million worth of life insurance proceeds from the 2012 death of then-executive chairman of the board Jerry Throgmartin.  

A class of senior managers claimed that under the company’ annual incentive plan, Throgmartin’s life insurance benefits should have factored as company earnings. Then-Marion Superior Judge Robert Altice agreed and granted summary judgment in favor of the managers. Altice since has been appointed to the Indiana Court of Appeals.

But a panel of the Court of Appeals reversed and entered summary judgment in favor HHGregg, holding that life insurance proceeds were properly excluded from earnings before interest, taxes, depreciation and amortization, which was the basis for the managers’ bonuses.

The case granted transfer to the Supreme Court is Gregg Appliances, Inc., and HHGregg, Inc. v. Dwain Underwood, on behalf of himself and all others similarly situated, 49S02-1701-PL-25.

Also last week, justices granted transfer in a Lake County personal-injury case where a central issue is whether decades-old evidence of prior alcohol-related offenses should have been admitted in a civil case filed after a vehicle crash.

The issued divided the Indiana Court of Appeals, whose majority held that a drunken driver’s old drunken-driving convictions were irrelevant in considering punitive damages in an alcohol-related crash. Injured driver Andrew Pappas was awarded $1.44 million in compensatory damages, $182,500 in punitive damages, and $373,500 for loss of consortium.

Senior Judge Randall Shepard and Judge Patricia Riley reversed and ordered a new trial, finding evidence of driver Danny Sims’ distant offenses irrelevant and prejudicial. Altice dissented, arguing the admissibility of the evidence should go to its weight rather than its age.

The case is Danny Sims v. Andrew Pappas and Melissa Pappas, 45S03-1701-CT-26.

Justices also voted 3-2 against granting transfer in a case regarding whether communications with an unlicensed social worker are considered privileged and confidential. The majority let stand a COA ruling that held state law only extends that privilege to licensed social workers. As a result, a counselor to an alleged child-molestation victim must answer four questions from the defendant that the counselor’s attorney advised her not to answer.

After oral arguments last week, Chief Justice Loretta Rush and Justice Mark Massa were in the minority voting to grant transfer. The case is James S. Rogers v. State of Indiana, 49A02-1508-CR-01033.

These cases are among 25 petitions for transfer ruled on last week by the court, only two of which were granted. The full list of transfer dispositions may be viewed here.