Indiana Court decisions – Feb. 1-14, 2018

7th Circuit Court of Appeals

Feb. 6

Civil — Inmate Grievance

Terry Davis v. David Mason and Blake Thrasher

16-2707

The 7th Circuit Court of Appeals has vacated summary judgment for two correctional officers accused of attacking a prisoner unprovoked, determining the evidence could support the inference that the prisoner did all he could to exhaust his administrative remedies, yet was prevented from doing so.

In Terry Davis v. David Mason and Blake Thrasher, 16-2707, Terry Davis filed a federal lawsuit after David Mason and Blake Thrasher allegedly assaulted him, resulting in two black eyes, broken teeth and a possibly broken nose. Davis filed his initial prison grievance five days after the incident, but the form was returned for a “classification” issue and because it was “not completely filled out,” though no explanation about the deficiencies was offered.

Davis was instructed to contact Internal Affairs, but instead he tried to resubmit his grievance. As before, the grievance was returned for a “classification” issue, and he was instructed to contact Internal Affairs for an investigation. The grievance coordinator also told Davis to contact his “unit team for the separate issue,” though she did not elaborate as to what issue she was referring to.

Davis continued to resubmit his grievance form on two additional occasions, but it was returned each time. The grievance counselor indicated the subsequent filings — submitted in early March 2014 after the Jan. 5 incident — were untimely, but she forwarded a copy to Internal Affairs.

No other administrative review was performed, and Davis proceeded with his federal complaint in the U.S. District Court for the Southern District of Indiana. In response, Mason and Thrasher asserted Davis failed to exhaust his administrative remedies and moved for summary judgment.

Judge Tanya Walton Pratt ruled in the correction officers’ favor, finding Davis’ grievances were inadequate to show failure of administrative remedies. The 7th Circuit Court of Appeals, however, vacated that ruling on appeal.

Judge Diane Sykes wrote in a Feb. 6 opinion that Mason and Thrasher failed to meet their burden of proving Davis did not exhaust his administrative remedies. Though they argued the repeated instructions for Davis to contact Internal Affairs was the first step in the grievance process — attempted informal resolution — Sykes said the grievance coordinator never indicated to Davis that his submissions failed to complete that step.

Additionally, contact with Internal Affairs is not included in any step of the informal resolution process, Sykes said. Further, administrative remedies can be found to be unavailable to a prisoner if, as here, prison officials “inaccurately describe the steps he needs to take to pursue it.”

“And the grievance coordinator did not elaborate on how Davis could fix any of these perceived shortcomings,” Sykes wrote. ‘The grievance policy specifically required her to explain ‘how (the form) may be corrected.’”

Thus, a reasonable factfinder could conclude Davis did all he could to follow the prison grievance process, so the grant of summary judgment was vacated, and the case remanded for further proceedings.

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Feb. 7

Civil — Special Needs Trust

National Foundation for Special Needs Integrity, Inc. v. Devon Reese, as Personal Representative for the Estate of Theresa A. Givens.

17-1817

The estate of a woman whose special needs trust was drained under questionable circumstances prevailed before the 7th Circuit Court of Appeals. The founder of the organization that took the money is a suspended Indiana attorney facing charges that he stole from other clients’ trusts. The organization must now repay the estate more than $200,000.

The court reversed Southern District Judge Tanya Walton Pratt and ordered the National Foundation for Special Needs Integrity Inc. to pay the estate of Missouri woman Theresa Givens $234,181.23 plus prejudgment interest.

“We respectfully disagree with our colleague on the district court,” Circuit Judge David Hamilton wrote for the panel in National Foundation for Special Needs Integrity, Inc. v. Devon Reese, as Personal Representative for the Estate of Theresa A. Givens, 17-1817. The 7th Circuit held that Pratt’s ruling that the estate’s claims against Special Needs Integrity were barred by the doctrine of laches “was based on clearly erroneous findings of fact.”

Further, Hamilton wrote, “We must note that the Foundation’s (former) counsel, (Kenneth) Shane Service, testified that he intentionally drafted (a section of Special Needs Integrity’s agreement dealing with distributions upon the death of a beneficiary) to confuse Missouri government officials.”

Givens had set up a special needs trust with about $255,000 in settlement proceeds from a lawsuit related to injuries she received from dialysis treatments. She died shortly after the trust was established, and her children were told by Special Needs Integrity that there would be no money left in Givens’ account. Hamilton, though, noted in the opinion that Service also had testified that Givens’ “main concern was always about her children.”

While the children received none of the roughly $234,000 that remained in Givens’ trust when she died in 2011, the foundation claimed the money after initially informing Givens’ children there would be no money because the proceeds most likely would be consumed by Medicaid refunds. After the children questioned distributions to the foundation, Special Needs Integrity filed a declaratory judgment action against the estate in April 2015, which Pratt awarded.

But the 7th Circuit found the contract Givens signed to be ambiguous and found no reason to believe Givens intended her money to go to the foundation rather than to her children. “The Foundation provided Givens with a service by managing her assets for what turned out to be just a few weeks before she died — a service for which Givens paid the Foundation” Hamilton wrote. “There is no plausible reason she would have intended to give it all the money that might be left upon her death.

“… We thus conclude that the agreement is best construed as providing that the remainder funds go to the Estate of Theresa Givens,” the panel held in reversing and ordering the foundation to pay the estate $234,181.23 plus prejudgment interest.

Separately, Service is awaiting trial on theft charges in Lawrence County, where he is accused of stealing more than $85,000 from two former clients’ special needs trusts. Authorities believe Service may have other special needs trust victims in different states. An Indiana State Police investigator said in September officials were looking into the possibility of “numerous victims in multiple states.”

Service’s next court date on the Lawrence County charges is set for March 21.

Indiana Supreme Court

Feb. 12

Civil Plenary — Lethal Injection Protocol

Roy Lee Ward v. Robert E. Carter, Jr., Commissioner of the Indiana Department of Correction, and Ron Neal, Superintendent of the Indiana State Prison, In Their Official Capacities

46S03-1709-PL-00569

The Indiana Department of Correction can alter its lethal injection protocols without going through a rule-making process because such protocols are internal procedures without the effect of law, the Indiana Supreme Court ruled in a decision affirming the dismissal of a death row inmate’s challenge to Indiana’s lethal injection cocktail.

After being convicted in a 2001 rape and murder case, Roy Lee Ward was sentenced to death and has been sitting on Indiana’s death row since 2007. Meanwhile, in 2014, the Department of Correction announced a change to a never-tried three-drug lethal cocktail for use in executions, substituting the drug Brevital for Sodium Thiopental.

Ward challenged that change in the LaPorte Circuit Court, alleging his rights had been violated under the Indiana Administrative Rules and Procedures Act because the new three-drug cocktail was not adopted and promulgated as a rule pursuant to ARPA. The trial court dismissed Ward’s complaint, finding a change to the lethal injection protocol was considered an internal policy, not a rule promulgation subject to the ARPA.

The Indiana Court of Appeals, however, reversed the dismissal, determining the change to the three-drug cocktail was a rule promulgation. Thus, the appellate court halted all future executions and held the formula containing Brevital was “void and without effect.”

The COA’s ruling created uncertainty about the future of the death penalty in Indiana, experts said. The state, however, told the Supreme Court during oral arguments in October that it no longer planned to use the three-drug combination at the center of the case. Instead, the state said it was seeking guidance on how it should proceed when it introduces a new execution procedure.

In offering that guidance Feb. 12, Justice Christopher Goff — writing his second majority opinion since joining the court in July — agreed with the trial court that “the lethal injection protocol is an internal Department policy exempt from ARPA’s strictures.” Goff said the decision to add Brevital to the cocktail did not carry the “effect of law,” as would be required for the protocol to be considered a rule under Indiana Code Section 4-22-2-3(b).

Looking to precedent in Villegas v. Silverman, 832 N.E.2d 598, 609 (Ind. Ct. App. 2005), and Am. Trucking Ass’ns, Inc. v. City of Los Angeles, 569 U.S. 641, 649 (2013) the unanimous court determined an agency requirement has the “effect of law” if it affects citizen’s conduct, not just agency conduct.

“We therefore settle on the following summation of the phrase ‘effect of law’ for Indiana jurisprudence: An agency regulation carries the effect of law when it prescribes binding standards of conduct for persons subject to agency authority,” Goff wrote.

Using that definition, the high court determined the DOC’s lethal injection protocol does not have the effect of law because it does not bind offenders’ standards of conduct. Thus, the lethal injection protocol is not a rule and is exempt from the ARPA, the court held, so Ward’s due process claims fail.

“Unlike the Villegas plaintiffs or the American Trucking companies, Ward is not required to alter his conduct in any way,” the justice wrote. “He is not faced with a choice of conforming his conduct to Department standards or foregoing a substantive right — his fate remains unaltered.”

Indiana Attorney General Curtis Hill praised the ruling, calling Ward’s complaint “merely an effort to impede the wheels of justice.”

“Thanks to the court’s wisdom, however, the path is now clear once again toward a destination that is right and proper for those dangerous lawbreakers who commit society’s most heinous crimes,” Hill said in a statement.

Ward is one of 12 people on Indiana’s death row at the Indiana State Prison in Michigan City. There currently are no scheduled executions in Indiana.

The case is Roy Lee Ward v. Robert E. Carter, Jr., et al., 46S03-1709-PL-00569.

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Feb. 14

Civil Plenary — Lake Michigan Public Trust/Private Property

Don H. Gunderson and Bobbie J. Gunderson, Co-Trustees of the Don H. Gunderson Living Trust v. State of Indiana, Indiana Department of Natural Resources, Alliance for the Great Lakes, et al.

46S03-1706-PL-423

You may walk the shore of Lake Michigan, Indiana’s Supreme Court held. Justices settled that question in a landmark case, finding that the state’s public trust rights to the Lake Michigan shore extend to the ordinary high-water mark.

The decision comes in a case in which lakeshore landowners argued they were entitled to land on the shore up to the water’s edge at any time, potentially infringing public access.

“Today, we hold that the boundary separating public trust land from privately-owned riparian land along the shores of Lake Michigan is the common-law ordinary high-water mark and that, absent an authorized legislative conveyance, the State retains exclusive title up to that boundary,” Justice Mark Massa wrote for the court Feb. 14.

“We therefore affirm the trial court’s ruling that the State holds title to the Lake Michigan shores in trust for the public but reverse the court’s decision that private property interests here overlap with those of the State,” the court held.

The decision makes three key holdings:

• That Indiana acquired exclusive title to the bed of Lake Michigan up to the natural ordinary high water mark, including the temporarily-exposed shores, at statehood;

• Indiana retains exclusive title up to the natural ordinary high water mark of Lake Michigan; and

• At a minimum, walking along the Lake Michigan shore is a protected activity inherent in the exercise of traditional public trust rights.

The decision is the court’s first to address where a line in the sand divides public versus private interests in properties along Indiana’s 45-mile shoreline of Lake Michigan. Several amici filed briefs on either side of the issue in the case.

The Gundersons owned lakefront property in the LaPorte County community of Long Beach. They and other Long Beach landowners sued the Indiana Department of Natural Resources, seeking a declaration that their land deeds entitled them to exclusive access to all land up to the water’s edge. Opponents argued that Indiana received land below the ordinary high-water mark at statehood under the public trust doctrine, and that such land cannot be deeded to a private party without an act of the legislature.

In a compromise that pleased few, LaPorte Superior Judge John Stahlbrink set the ordinary high-water mark at DNR’s administrative level of 581.5 feet above sea level. Problematically, this level was underwater at some points and well inland from the shoreline elsewhere.

The opinion acknowledged that exactly where that ordinary high-water mark is remains murky. In a footnote, the court observed, “We acknowledge that the character of the shore at a particular site may present difficulties in determining the precise location of the OHWM. In such cases, ‘recourse may be had to other sites along the same stream to determine the line.’ Borough of Ford City v. United States, 345 F.2d 645, 648 (3d Cir. 1965).”

The justices’ decision leaves to the legislature any potential expansion of public access beyond the protection of the right to walk along the shore below the ordinary high-water mark.

“Refraining from exercising our common law authority more expansively here is particularly prudent and appropriate where the legislature has codified, in part, our State’s public trust doctrine,” Massa wrote. “Thus, we conclude that any enlargement of public rights on the beaches of Lake Michigan beyond those recognized today is better left to the more representative lawmaking procedures of the other branches of government.”

The decision was unanimous, with the exception of Justice Geoffrey Slaughter, who did not participate.

Indiana Court of Appeals

Feb. 1

Civil Plenary — Buyback Vehicle Disclosure Law

Adam Boots v. D. Young Chevrolet, LLC d/b/a Penske Chevrolet, and Capital One Auto Finance, Inc.

29A04-1708-PL-1948

A Maryland man who sued an Indianapolis auto dealer for fraud successfully overturned the grant of summary judgment in favor of the dealer, with the Indiana Court of Appeals instead ordering summary judgment for the man.

In June 2015, Adam Boots traveled from Maryland to Indiana to purchase a Corvette from the Penske Chevrolet dealership in Indianapolis. Paul Fiene, the Penske salesman, worked with Boots on the purchase and agreed to an acceptable price.

While Boots was signing paperwork, Fiene presented him with a Carfax report showing the vehicle had a “lemon” history and had previously been a manufacturer buyback. Fiene assured Boots that everything “was fine now,” including the certificate of title, and presented Boots with a signed document attesting that the state did not brand the title to the Corvette.

However, when Boots returned home and attempted to trade in the Corvette, he learned the Indiana certificate of title had a buyback vehicle brand. Thus, Boots filed a complaint against Penske alleging fraud and a violation of Indiana’s Buyback Vehicle Disclosure Law, Indiana Code section 24-5-13.5.

Penske moved for summary judgment and Boots moved for partial summary judgment, but the Hamilton Superior Court ultimately ruled in favor of Penske. The Indiana Court of Appeals, however, in a case that drew an amicus brief from the Automobile Dealers Association of Indiana, reversed the grant of summary judgment on Thursday and entered judgment for Boots as a matter of law.

Judge Patricia Riley, writing for the unanimous appellate panel, said that under Indiana law, “the face of a certificate of title of a buyback vehicle must be branded with the statement, ‘Manufacturer Buyback – Disclosure on File.’” Though Penske argued the statutory language only required written disclosure and extended warranty the first time a dealer sells a buyback vehicle after the manufacturer refurbishes it, Riley said the court could not read such a provision into the statute.

“Nowhere in the statutory language did the Legislature include a limiting provision for the statute’s applicability; rather, the statute plainly governs all buyback vehicle that ‘are sold, leased, transferred, or replaced by a dealer or manufacturer in Indiana’ regardless of whether this involves a first resale or the tenth,” Riley wrote.

Further, the court found Boots’ fraud claim also should have survived summary judgment because the uncontested evidence showed Fiene assured Boots that “everything with the certificate of title was fine.” The same Carfax report that Fiene referenced was used by the Maryland dealership to advise Boots of the branded title, so there was evidence that Fiene knew his statements were false, the court said.

“Because of Fiene’s assurance, Boots was deprived of the opportunity to make the informed decision of whether to purchase a Corvette with a branded certificate of title,” Riley wrote.

Thus, the case was remanded for further proceedings.

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Feb. 2

Miscellaneous — Special Driving Privileges

State of Indiana and the Indiana Bureau of Motor Vehicles v. Daniel Reinhart

01A02-1709-MI-2049

A northern Indiana man whose driving privileges were suspended for life in Noble County must petition the court in that county for specialized driving privileges, the Indiana Court of Appeals has ruled.

In April 2012, the Adams Superior Court suspended Daniel Reinhart’s driving privileges for 10 years for being a habitual traffic offender, followed by another 10-year suspension in 2015. Also in 2015, the Noble Superior Court suspended Reinhart’s driving privileges for life after he was convicted of Level 6 felony driving when his privileges were validly suspended.

Two years later, Reinhart petitioned the Adams Superior Court for specialized driving privileges related to all three of his suspensions, which the court granted. The state responded with a motion to correct error, arguing the Adams County court did not have jurisdiction to modify the Noble County court’s order.

The Adams Superior Court disagreed and denied the motion to correct error, but the Indiana Court of Appeals overturned that ruling. Judge John Baker rejected the trial court’s argument that because Noble County was statutorily required to suspended Reinhart’s privileges for life, that sentencing order was transformed into an administrative order which the Adams County court had jurisdiction over.

Rather, Reinhart should have filed a petition in Noble County to receive specialized driving privileges in that county, Baker wrote in the four-page Friday opinion. Thus, the case of State of Indiana and the Bureau of Motor Vehicles v. Daniel Reinhart, 01A02-1709-MI-2049, was remanded with instruction to vacate the portion of the Adams County order relating to the Noble County suspension.

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Feb. 7

Criminal — Restitution Order

Jimmy Person v. State of Indiana

49A02-1708-CR-1737

An Indiana trial court abused its discretion in ordering a man to pay restitution on the costs a woman incurred for having to take public transportation after he criminally damaged her car and the costs of her pain and suffering, the Indiana Court of Appeals has ruled.

In July 2017, Jimmy Person pleaded guilty to multiple felony drug convictions, as well as charges of felony resisting law enforcement and misdemeanor leaving the scene of an accident with bodily injury. Person was sentenced to an aggregate of 11 years and was ordered to pay $7,284 in restitution to Rosa Bailey, whom he injured when he crashed his car into Bailey’s car while fleeing from police.

The restitution order covered Bailey’s medical expenses and the value of her car, as well as the cost of her use of public transportation for the days she did not have a vehicle and her pain and suffering. Person argued on appeal in Jimmy Person v. State of Indiana, 49A02-1708-CR-1737, that the Marion Superior Court abused its discretion in ordering him to cover the costs of the latter two expenses, and the Indiana Court of Appeals agreed Wednesday.

Judge Melissa May wrote in a four-page opinion that the cost of public transportation and pain and suffering are not considered under Indiana’s restitution statute, Indiana Code section 35-50-5-3(a). The state also conceded that point, so the portion of the restitution order dealing with those cost considerations was vacated.

The case was remanded with instructions for the trial court to order Person to reimburse Bailey only for her medical expenses and the loss of her car in the amount of $2,985.•