Indiana Court Decisions – Dec. 18-31, 2019

7th Circuit Court of Appeals

Dec. 18

Civil Tort — Excessive Force/Qualified Immunity

Timothy Johnson v. Michael Rogers

19-1366

The 7th Circuit Court of Appeals affirmed an Indianapolis police officer is entitled to qualified immunity in a federal civil-rights lawsuit filed after he took down a handcuffed man, fracturing the suspect’s leg in the process.

When Timothy Johnson showed up drunk to an appointment at his rehabilitation clinic, two officers arrested him after he began threatening the clinic’s therapist and security guard. The officers sat Johnson on the ground after he told them he would run away, but Johnson stood up, prompting the officers to sit him down again.

As Johnson stood up once more and began making threats, police officer Michael Rogers kicked Johnson to get him on the ground, leaving Johnson with a broken leg.

Johnson contended that the kick was designed to punish him rather than to return him to a sitting position. Rogers argued he used a leg sweep rather than a kick.

Johnson also asserted Rogers violated the Fourth Amendment by using unreasonable force during the encounter, but the Indiana Southern District Court granted summary judgment to Rogers and another officer.

The district court concluded Rogers was entitled to qualified immunity because the procedure that led to Johnson’s broken leg did not violate any of his clearly established rights, and that because Johnson pleaded guilty in state court to resisting arrest, Heck v. Humphrey, 512 U.S. 477 (1994) barred any claim under the Fourth Amendment while the judgment of conviction stands.

The 7th Circuit Court of Appeals affirmed the lower court’s decision in Timothy Johnson v. Michael Rogers, 19-1366, but noted that the district court’s reasons for ruling against Johnson were incompatible.

“A suit barred by the doctrine of Heck is premature and must be dismissed without prejudice, because Heck holds that the claim does not accrue until the conviction has been set aside. By contrast, a claim barred by the doctrine of qualified immunity fails on the merits and must be dismissed with prejudice. Here the district court dismissed with prejudice, an inappropriate step when Heck governs,” Circuit Judge Frank Easterbrook wrote.

Finding Heck ultimately did not block the suit, the 7th Circuit next addressed the issue of qualified immunity. It noted the available surveillance video detailing the incident was unclear and did not unambiguously establish Rogers’ actions.

“Because the video is grainy, and both Johnson and Rogers were moving at the critical moment, we cannot be sure just how the injury occurred. It looks like Rogers tried to use a knee to unbalance Johnson, and, when that did not work, used his foot — but whether Johnson’s foot motion was an effort to trip Johnson or a kick to the lower shin (or perhaps the foot) is not possible to discern,” Easterbrook wrote.

“What resolves this appeal in Rogers’s favor is this: Johnson, who had told the officers that he wanted to run away, was not under control when Rogers tried to use his knee to unbalance Johnson, who remained on his feet until Rogers took a further step. If that further step is best understood as a kick, it must also be understood as an attempt to regain control. That such an attempt causes injury, perhaps because poorly executed, does not lead to liability.”

The 7th Circuit therefore affirmed, concluding the district court properly found Rogers was entitled to qualified immunity.

Indiana Supreme Court

Dec. 19

Civil Plenary — Employment/Noncompete Agreement Enforceability

American Consulting, Inc. d/b/a American Structurepoint, Inc. v. Hannum Wagle & Cline Engineering, Inc., d/b/a HWC Engineering, Inc., Marlin A. Knowles, Jr., Jonathan A. Day, David Lancet, et al.

18S-PL-437

A divided Indiana Supreme Court has affirmed the denial of summary judgment to an Indianapolis-based civil engineering firm, finding an issue of material fact remains as to whether the firm’s former employees tortiously interfered with their contracts not to recruit.

Marlin Knowles agreed that for two years after leaving civil engineering firm American Structurepoint, Inc., he would not recruit ASI employees away from the company or solicit business from clients he had any business contact with while at ASI. If he did recruit and breached the contract, Knowles agreed to pay liquidated damages amounting to 45% of all fees and other amounts billed by ASI to the customer during the year prior, as well as 50% of the employee’s pay from ASI during that time.

A similar agreement was made with ASI employees Jonathan Day and David Lancet, who agreed to pay 100% of liquidated damages of a recruited employee’s pay from ASI if the contract was breached.

Knowles resigned from ASI in May 2014 and began working for competitor HWC Engineering as vice president of operations, prompting a series of resignations of employees who moved from ASI to HWC. Day and Lancet later joined Knowles, successfully recruiting seven ASI employees to work for HWC. Additionally, after joining ASI, Knowles networked with various ASI client contacts and signed various contracts with them.

ASI sued all three men and their new employer, alleging, among other things, breach of contract and tortious interference with ASI’s contractual and business relationships. The Marion Superior Court granted summary judgment for Knowles, Day and Lancet on the issue of liquidated damages, finding that the liquidated damages clauses were unenforceable as a matter of law. But while it granted judgment on ASI’s tortious interference with a contractual relationship claim pertaining to Day, the trial court found an issue of material fact regarding ASI’s contracts with Knowles and Lancet.

A divided Indiana Court of Appeals affirmed the trial court on its tortious interference issue, but reversed on the issue of liquidated damages after finding those provisions were enforceable. Judge Margret Robb wrote for the appellate majority that the ASI employment agreements were individually negotiated and specific to each employee, while the actual damages ASI suffered were difficult to ascertain due to the relational nature of the business. However, dissenting Judge Patricia Riley agreed with the trial court that the liquidated damages ASI sought were disproportionate.

In a split decision, a majority of the Indiana Supreme Court held that the liquidated damages provisions in the employees’ contracts were unenforceable penalties. Finding the provisions to be facially problematic for several reasons, the majority first noted that it would be highly unlikely to cost ASI 250% of a recruited employee’s salary to replace them, the amount ASI was essentially seeking from their respective salaries.

“As discussed by Judge Riley in her dissent, ASI is seeking damages for contracts it was ineligible for and the contracts gained by HWC involving ASI clients are far less valuable than those ASI previously had with the client,” Justice Steven David wrote for the majority. “Thus, this liquidated damages provision is a penalty meant to secure performance and one that is not proportional to ASI’s actual losses.

“… With regard to American Structure-point, Inc.’s tortious interference claims, we find that the trial court correctly held that summary judgment was not appropriate because there remains an issue of material fact,” David continued. “… As our Court of Appeals majority aptly noted, there is both evidence that HWC has a legitimate business purpose in recruiting ASI employees and also evidence that HWC targeted ASI for an improper purpose.”

The majority thus found the trial court properly denied summary judgment on ASI’s claims of tortious interference, affirming the trial court and remanding in American Consulting, Inc. d/b/a American Structurepoint, Inc. v. Hannum Wagle & Cline Engineering, Inc., d/b/a HWC Engineering, Inc., Marlin A. Knowles, Jr., Jonathan A. Day, David Lancet, et al., 18S-PL-437.

In a partially dissenting opinion joined by Justice Mark Massa, Justice Geoffrey Slaughter disagreed that ASI could not enforce its contracts and collect the liquidated damages at issue. He argued that at bottom, the issues of causation, value, damages and different treatment “are factual questions for a factfinder to decide at trial, not legal questions for our Court to decide summarily as a matter of law.”

Additionally, the dissenting justices argued that HWC needed to establish both that the liquidated damages are “grossly disproportionate” to ASI’s likely loss resulting from the breach and that ASI could not sustain its burden at trial of proving a correlation between the liquidated damages and its actual losses.

“If we are going to make wholesale changes to the law of liquidated damages, we should move in the opposite direction from the course today’s opinion charts,” Slaughter wrote. “Rather than condemning such damages when judges conclude they are facially problematic, courts should get out of the business of deciding whether the parties’ estimate of the harm underlying liquidated damages is reasonable.”

Indiana Court of Appeals

Dec. 18

Civil Plenary — Order to Enforce Mediated Settlement

City of Plymouth Indiana, et al. v. Michael Kinder and Sons Inc.

19A-PL-01214

A northern Indiana trial court erred in ordering the city of Plymouth to enforce a mediation settlement agreement to pay a contractor $130,000 because terms of the agreement had not been fulfilled, an appellate panel ruled Dec. 18.

The Indiana Court of Appeals ruled in favor of Plymouth, remanding the case to the Marshall Circuit Court, which previously had granted the contractor’s motion to enforce a mediation agreement.

The city in February 2017 hired Michael Kinder & Sons Inc. for architectural design and engineering services for a proposed aquatic center. The company sued the city and related entities 13 months later for lack of payment, claiming multiple counts of breach of contract and unjust enrichment.

The parties later were ordered to meditation and reached a settlement agreement in which the city would pay MKS $130,000 contingent on the approval of the city’s redevelopment commission. That contingency language proved dispositive to the panel in City of Plymouth Indiana, and City of Plymouth Redevelopment Commission v. Michael Kinder & Sons, Inc., 19A-PL-1214.

“… (W)e hold that the mediation agreement required that the Commission approve the settlement offer of $130,000 before Kinder could accept it,” Judge Edward Najam wrote for the panel. “This was a condition precedent supplied by the parties.”

The contractor pointed to language in the agreement’s second paragraph that read, “If the Plaintiff accepts the defendants(’) … offer to pay $130,000 to settle this case then the case shall be settled.”

“Kinder’s reliance on the second numbered paragraph of the agreement as if it were a stand-alone provision is misplaced,” Najam wrote. “Because the Commission did not approve the offer, there was no offer for Kinder to accept. The trial court erred when it granted Kinder’s motion to enforce the parties’ agreement.”

Civil Plenary — Condemnation/Damages

City of Kokomo v. Estate of Audra Newton

19A-PL-01321

A Howard Superior jury’s damages award of $305,600 plus legal fees was voided Dec. 18 by the Indiana Court of Appeals, which instead ordered the trial court to enter judgment of just $100,000 to owners of property in Kokomo that the city condemned.

The appellate panel voided the jury’s verdict in a case involving property that formerly housed The Kokomo Glass Shop, which was forced to relocate because of the city’s taking of the property. Bradley Newton was the sole shareholder in the glass shop, and he was also the son and personal representative of Audra Newton, whose estate the city sued to obtain the property in this case, City of Kokomo, Indiana v. Estate of Audra R. Newton, 19A-PL-1321.

The city brought the action after the estate rejected a settlement offer of $160,000. At trial, the city moved for a directed verdict at the close of evidence, arguing that because Kokomo Glass was not a named party to the suit, any damages it claimed could not be considered by the jury. Judge Brant Parry denied the motion and handed the case to the jury for its damages determination.

“We hold that the trial court erred when it denied the City’s motion for a directed verdict,” Judge Edward Najam wrote for the panel. “The record is clear that the only evidence of damages presented at trial, other than the agreed-upon $100,000 for the Main Street parcel, were damages allegedly incurred by Kokomo Glass.

“The Estate’s attempt to conflate Kokomo Glass with the Estate or with Bradley is not well taken. They are not ‘one and the same’ as the Estate argued at trial,” Najam continued. “While Bradley is both the sole shareholder of Kokomo Glass and the personal representative of the Estate, only the Estate is a party to this matter, and it is a separate entity from Kokomo Glass. The Estate did not present any evidence that it had incurred damages related to the Union Street parcel, which was the sole issue before the jury.

“The City was entitled to a directed verdict awarding damages to the Estate of $100,000 for the condemnation of the Main Street parcel … .”

The panel remanded the case with instructions to enter an order with just such a judgment, and no award of litigation expenses.

Domestic Relations No Children — Motion to Continue/Counsel Withdrawal

Rickey Smith v. Leslie M. Smith

19A-DN-00926

The Indiana Court of Appeals has reversed the denial of a man’s motion to continue his divorce proceedings after his attorney withdrew as counsel just one day before the case’s final hearing.

One day before the final hearing in his dissolution of marriage proceeding, Rickey Smith fired his attorney, prompting the counsel to file a motion to withdraw that day. The attorney indicated that “a breakdown in the attorney client relationship has occurred” and that he would no longer be able to adequately represent Smith. Counsel also stated that Smith did not desire to have him continue representing the case and that he had been given a copy of his entire file.

Smith explained to the court that the attorney-client relationship broke down when his attorney called him a “liar” and that the attorney did not provide information about the couple’s assets. Smith contended during the final hearing that he wished to continue the proceedings.

However, the Marion Superior Court denied his motion for a new divorce hearing, noting that there had been no contemplation of the need for a continuance and that the parties were “going to finish this today.” It ultimately granted Smith $318,858.26, or 49.87% of the couple’s marital assets.

The Indiana Court of Appeals reversed in Rickey Smith v. Leslie M. Smith, 19A-DN-00926, finding that the trial court abused its discretion when it denied Smith’s motion for a continuance without hearing argument by impeding his ability to show good cause as to why the motion should be granted.

“Shortly after denying Husband’s motion without argument, trial court pre-determined the outcome of the case, telling Husband that he was going to ‘split’ the marital assets ‘right down the middle.’ The trial court’s actions demonstrated a ‘myopic insistence upon expeditiousness,’” Judge Elizabeth Tavitas wrote for the appellate court.

Specifically, the appellate panel noted that no evidence existed in the record that Smith was attempting to prolong the proceedings or engage in dilatory tactics, the dissolution hearing was held four months after the petition for dissolution was filed, the attorney had still not provided Smith with documents relating to the dissolution two weeks before the hearing, and that the denial came despite the trial court’s knowledge that Smith’s counsel withdrew one day before the hearing.

“Although Husband terminated his attorney, Husband was not provided ten-day notice of his attorney’s withdrawal as required by the local rule. We are mindful that the ‘unexpected and untimely withdrawal of counsel does not necessarily entitle a party to a continuance.’ Still, this consideration is relevant when looking at whether the trial court abused its discretion in failing to grant Husband’s motion to continue at a crucial stage in the proceedings, especially when not insignificant assets were at issue,” the panel wrote.

It therefore concluded that Smith was prejudiced by the trial court’s decision — which the appellate panel determined had infringed upon his due process rights — and thus reversed and remanded.

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Dec. 19

Criminal — Lookalike Drugs/Fourth Amendment

Michael D. Johnson v. State of Indiana

19A-CR-975

A man suspected of trying to sell look-alike substances at an Indiana casino has had his drug-related conviction reversed, with the Indiana Court of Appeals finding insufficient evidence to dispel a claim of a Fourth Amendment violation.

The case of Michael D. Johnson v. State of Indiana, 19A-CR-975, began in November 2015, when Brett Eversole was at the Hoosier Park Casino in Anderson. According to a report he gave to a security guard, a black man in a white hat had approached Eversole and asked if he wanted to buy a “white girl,” meaning cocaine.

The report made its way to gaming enforcement agent Zach Wilkinson, who “confirmed the interaction” based on surveillance footage that did not have audio. Wilkinson then found Michael Johnson, a black man wearing a white hat, and brought him into an interview room.

Once in the room, Wilkinson told Johnson he would “need a pat down,” which led Wilkinson to remove what “felt like a ball of drugs” from the suspect’s pocket. Johnson was handcuffed and read his Miranda rights, but subsequent testing revealed the white powder was not a drug. Instead, it contained a chemical possibly deriving from baking soda.

Thus, Johnson was charged with dealing in a look-a-like substance. He moved to suppress the evidence obtained during the pat-down search, but the Madison Circuit Court denied the motion. Johnson then objected at trial to the admission of the evidence found in his pocket, but the trial court determined Wilkinson had completed a search incident to arrest when he removed the item from Johnson’s pocket.

Johnson was then convicted on a Level 5 felony charge and sentenced to four years, with three years suspended to probation. But the Indiana Court of Appeals reversed his conviction, finding the state failed to prove the search of Johnson’s pocket was constitutional under the Fourth Amendment.

“Johnson does not argue that Wilkinson lacked a reasonable suspicion of criminal activity and he does not challenge the decision to perform a pat-down search,” Judge L. Mark Bailey wrote. “But the encounter did not end with a pat-down.

“… The agent may have been conducting ‘a carefully limited search of outer clothing to detect weapons’ … when he discerned characteristics consistent with contraband, notwithstanding the fabric barrier. Or Agent Wilkinson, having received information of an attempted sale of contraband, may have reached into Johnson’s pocket and examined the item before concluding it was likely contraband,” Bailey continued. “In the first scenario, Agent Wilkinson would arguably have, without exceeding the scope of a Terry pat-down for weapons, developed probable cause for an arrest. In the second scenario, Agent Wilkinson would have conducted the search before having probable cause for an arrest and thus the seizure did not take place in a search incident to arrest.”

Here, the state failed to prove that Wilkinson had probable cause, Bailey said, writing that “the evidence does not dispel concern that the ball of powder retrieved from Johnson’s pocket was obtained in violation of his Fourth Amendment right to be free from an unlawful search and seizure.”

Though Johnson’s conviction was reversed under the Fourth Amendment, in a footnote, Bailey said Johnson also referenced Article 1, Section 11 of the Indiana Constitution. But because he did not develop a corresponding argument, his argument that the search violated the Indiana Constitution was waived.

Juvenile Termination of Parental Rights — Reversal/Insufficient Evidence

In the Matter of the Involuntary Termination of the Parent-Child Relationship of: K.T. (Minor Child) and D.T. (Father) v. The Indiana Department of Child Services

19A-JT-1528

The termination of a father’s parental rights has been reversed after a panel of the Indiana Court of Appeals found insufficient evidence proved he would threaten the wellbeing of his daughter.

After his daughter was removed from her mother’s custody and found to be a child in need of services, D.T. began participating in a father’s engagement program. Although the child, K.T. was in out-of-home placement, the Jasper Superior Court changed her permanency plan from reunification to termination of parental rights and adoption.

The trial court ultimately granted the TPR petition, finding a reasonable probability that the conditions resulting in K.T.’s removal would not be remedied and that placement with her father would not be in her best interests.

The Indiana Court of Appeals reversed, agreeing with D.T. that the termination of his parental rights was clearly erroneous and not supported by evidence. While the reasons for K.T.’s removal from her mother’s care was a result of the mother’s neglect, the appellate court noted there was “no evidence at all regarding why Child was not placed with Father at the time of removal from Mother.”

“There is no evidence that Father was ever convicted of a crime or that he ever committed any criminal act in Child’s presence. There is also no evidence that Father was ever diagnosed with any sort of anger-related mental health issue or that he ever expressed anger in Child’s presence. And there is no evidence that Father abused alcohol or that he ever consumed alcohol in Child’s presence,” Judge L. Mark Bailey wrote for the appellate court.

It further pointed out that although the evidence did support the trial court’s conclusion that D.T. failed to fully participate in and complete court-ordered services, his failure to fully participate, alone, could not sustain the TPR order.

“The findings that Father missed some visitations with Child are also insufficient to support the conclusion that Father is not likely to remedy the reasons for Child’s initial and/or continued removal,” the appellate court continued. “Father missed visits toward the beginning of the CHINS case because of his son’s baseball schedule. However, Father subsequently attended eighty percent of the visitations even though his full-time job required him to travel around the state.”

Additionally, the appellate court noted the trial court’s failure to articulate how D.T.’s failure to participate “threatened the well-being” of his daughter. Rather, it noted the record showed that the father-daughter visits were progressing in both quality and consistency, despite D.T.’s personality conflict with the visitation supervisor.

“The only evidence of shortcomings in Father’s relationship with Child are the visitation supervisor’s statements indicating that she believed Father’s parenting style was too permissive, insufficiently structured, and unrealistic regarding expectations of Child,” the panel wrote. “However, the State may not forever terminate a parent/child relationship because it disagrees with a particular parenting style.”

It therefore concluded that the trial court’s decision did not meet the “high bar” set under the Indiana’s termination of parental rights statute. Finding insufficient evidence to support the termination, the panel thus reversed the TPR order in In the Matter of the Involuntary Termination of the Parent-Child Relationship of: K.T. (Minor Child) and D.T. (Father) v. The Indiana Department of Child Services, 19A-JT-1528.

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Dec. 26

Guardianship — Motion to Terminate/Ex Parte Orders

Thomas Meranda v. Mary Elizabeth Spaw

19A-GU-1218

A Boone County trial court wrongly rejected a husband’s effort to show that the guardianship for his wife was being financially mismanaged and should be terminated, the Indiana Court of Appeals ruled, finding the judge overseeing the case failed to properly notify the husband of regular accountings.

A few years after Gwendolyn M. Reagan was diagnosed with Alzheimer’s disease, her daughter, Mary Elizabeth Spaw, was appointed as her sole guardian in September 2014. Reagan moved from Lebanon to live with Spaw in her home in Kendallville from November 2014-March 2015, at which time she returned to Lebanon to live with her husband, Thomas Meranda, who had retired and could care for her at home, according to the record.

“At that time, Reagan’s monthly allowance was increased to allow for eating out and hairdresser appointments, while Meranda was reimbursed for medical expenses he paid on behalf of Reagan after providing the receipts to Spaw. On September 16, 2016, Spaw filed her verified guardian’s second amended inventory, with notice to Reagan. Three days later, the trial court approved the filing without a notice or hearing,” Judge Patricia Riley wrote.

“On June 8, 2017, Spaw filed a petition for authority to clean-up and sell Reagan’s real estate … . In her petition, Spaw noted that the property had been empty for years and had deteriorated as a result. The trial court granted the petition without notice, hearing, or service of the order.

“On June 21, 2018, Meranda filed a pro se letter with the trial court advising the court that because Spaw had not been paying Reagan’s medical bills, he had been forced to pay them and was falling in debt,” Riley continued. “Meranda requested that Spaw find Reagan another place to live due to the possibility of Meranda’s mortgage being foreclosed. A month later, on July 18, 2018, Spaw submitted a status report to the trial court, advising the court ‘that the medical bills are being paid by the Guardian herein.’”

Again, Boone Superior Judge Matthew Kincaid approved Spaw’s report and accounting without notice or hearing.

“On February 11, 2019, Meranda, represented by counsel, filed an emergency petition for termination of the guardianship and for succession of guardianship. In his petition, Meranda asserted that Spaw had mismanaged Reagan’s estate and failed to provide for Reagan’s physical and mental needs. In addition, he claimed to have incurred more than $40,000 of unreimbursed medical and personal expenses in his care for Reagan. On February 13, 2019, Spaw filed her response to Meranda’s emergency petition contending that the accountings ‘were approved [by the court] and none of which were appealed by Meranda’ and ‘no objections were raised at any time until the recent filing.’”

The trial court held a hearing on Meranda’s petition about a month later, finding it was “substantially a rehashing of issues previously decided.” The trial court denied Meranda’s petition and awarded Spaw attorney fees, finding his petition frivolous.

The COA reversed and remanded in Thomas Meranda v. Mary Elizabeth Spaw, 19A-GU-1218.

“Meranda’s main argument focuses on the trial court’s refusal to admit evidence of Spaw’s financial mismanagement of Reagan’s estate and the unreimbursed medical expenses incurred in his care for Reagan. The trial court denied their admission because the issues had been ‘previously decided’ and the trial court was ‘not going to revisit any of those.’ … (Meranda) now contends that because the trial court’s orders, accepting Spaw’s accountings and inventory, were decided ex parte, the issues are not definitely concluded and can still be challenged in the current proceedings,” Riley wrote.

“… Here, Spaw’s accounts of administration and inventories were not filed as part of a final settlement and discharge, but amounted to intermittent financial reports of the guardianship. The record is silent as to any evidence that the trial court notified Reagan, or in case of waiver, Meranda, of the filing and the subsequent court hearing. As no notice was given — and according to the record, no hearings were held — the trial court’s orders were issued ex parte. While an ex parte order is permitted, it is not binding on Meranda and can still be challenged and reviewed ‘at any subsequent time.’ See I.C. § 29-3-9-6(f).

“… Accordingly, because the trial court issued ex parte orders on Spaw’s interim accountings, Meranda may still challenge these findings,” the panel concluded. “While we acknowledge the discretionary power of the trial court of its subsequent review of the ex parte orders, here, the trial court erred by declaring the ex parte orders to have been conclusively decided and by denying admission of evidence purporting to establish financial mismanagement of Reagan’s estate and unreimbursed medical invoices. We reverse the trial court’s Order denying Meranda’s petition and remand for a new hearing.”

In a footnote, the panel also reversed the grant of attorney fees to Spaw.

Juvenile — Dangerous Possession of a Firearm/Applicability

K.C.G. v. State of Indiana

19A-JV-978

A juvenile dangerous possession of a firearm adjudication has been upheld by the Indiana Court of Appeals despite the finding that state statutes in play in his case are in conflict.

The COA affirmed K.C.G.’s adjudication for Class A misdemeanor dangerous possession of a firearm, despite the fact it is not a crime that can be committed by an adult, as required under the juvenile adjudication statute.

The dangerous possession statute, Indiana Code § 35-47-10-5(a), applies to “a child” who possesses a firearm, while the statute governing juvenile delinquency adjudications, I.C. § 31-37-1-2, requires a showing that a minor committed an act that “would be an offense if committed by an adult.” K.S.G. argued that because an adult cannot be charged with dangerous possession, he could not be adjudicated delinquent.

In seeking to harmonize the conflicting statutes, the panel looked to C.C. v. State, 907 N.E.2d 556 (Ind. Ct. App. 2009). “Based on the plain language of Indiana Code section 31-30-1-1, the court determined C.C.’s case was an instance in which the juvenile court had original jurisdiction as set forth in Indiana Code section 31-30-1-1(14) over ‘other proceedings specified by law,’” Judge Melissa May wrote.

The panel noted that the C.C. court held, “From a common sense standpoint, if we were to follow C.C.’s reasoning to its illogical conclusion, his misdemeanor violation of the firearm statute would not fall within the jurisdiction of either the juvenile court or the adult criminal court and thus would go unpunished. We do not think this was the legislature’s intent.

“… If C.C. had been an incorrect interpretation of the Legislature’s intent, the Indiana State Legislature could have remedied the situation by passing a new statute in the intervening years. This leads us to conclude the Indiana State Legislature’s intent is evident — those under the age of eighteen may be adjudicated delinquents for offenses that would be crimes if committed by adults and for crimes that can be committed only by those under eighteen … ,” May wrote.

The panel also concluded the evidence was sufficient to support the adjudication in K.C.G. v. State of Indiana, 19A-JV-978.

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Dec. 27

Miscellaneous — Civil Forfeiture/Amended Statutes

Eric Butler, $236.00 in U.S. Currency, and One 2004 Pontiac Grand Prix v. State of Indiana, the Consolidated City of Indianapolis/Marion County, and the Indianapolis Metropolitan Law Enforcement Agency

19A-MI-5

Legislative amendments to Indiana’s much-debated civil forfeiture scheme did not defeat a pre-existing forfeiture action in state court, the Indiana Court of Appeals ruled, finding the amendments did not constitute an ex post facto law.

The state of Indiana, Indianapolis/Marion County and the Indianapolis Metropolitan Law Enforcement Agency filed a forfeiture action against Eric Butler, $236 and his 2004 Pontiac Grand Prix after a 2016 traffic stop revealed that Butler had marijuana and heroin in the Pontiac, as well as the $236. Butler pleaded guilty to a state-law drug felony, while default judgment was entered against him in the forfeiture action.

Meanwhile, in August 2017, Indiana Southern District Chief Judge Jane Magnus-Stinson struck down part of Indiana’s civil forfeiture law in her ruling in Leroy Washington v. Marion County Prosecutor, et al., 1:16-cv-02980. The federal court said the state’s practice of withholding a seized vehicle without a “post-seizure, pre-forfeiture hearing” violated the Fifth and 14th amendments’ due process protections.

Based upon that ruling, the appellants in the instant case — which include Butler, the money and the Pontiac — moved for relief from the earlier default judgment. Meanwhile, in response to the federal court ruling, the Indiana General Assembly in 2018 passed a wide-ranging civil forfeiture reform bill that was designed to increase due process protections for property owners whose property is seized.

Among those protections is a requirement for a trial court to find probable cause to support a seizure within seven days of law enforcement taking the property. The legislation also built in hardship provisions for “innocent owners” — people who lend their property without knowing it will be used for illegal purposes — and created a disbursement mechanism for forfeiture proceeds.

The amendments to Indiana Code chapter 34-24-1 took effect in July 2018, and the Marion Superior Court subsequently granted the motion for relief from default judgment. A few days later, though, the trial court found probable cause to seize the car.

Both sides filed cross-motions for summary judgment, but Butler “did not acknowledge the 2018 Amendments, much less argue that they failed to cure Indiana Code chapter 34-24-1’s constitutional deficiencies.” The trial court granted summary judgment to the government and ordered forfeiture of the $236 and the Pontiac.

The federal case was also proceeding during this time, with the 7th Circuit issuing a ruling in February 2019 that remanded the Washington case to the district court for a determination on whether the amendments cured the “constitutional infirmities” in Indiana’s civil forfeiture statutes. A settlement agreement, however, meant the district court “never had the opportunity to determine the effect of the 2018 Amendments in Washington.”

On appeal of the grant of summary judgment to the government, Butler argued the 2018 amendments didn’t apply to the seizure of his car because the vehicle was initially seized in 2016. But the unanimous appellate panel disagreed.

“Without addressing the question of whether the 2018 Amendments cured the constitutional infirmities identified by the Washington court, we have little hesitation in at least concluding that the 2018 Amendments were all procedural in nature,” Judge Cale Bradford wrote. “… The 2018 Amendments do nothing to create, define, or regulate the State’s inherent power to seize property from citizens under certain circumstances; they affect only the procedures for enforcing that right and/or obtaining redress. Because the 2018 Amendments are procedural in nature, we conclude that applying them to the seizure of the car does not constitute an ex post facto law.”

The appellants, however, did not raise a claim as to the constitutionality of the 2018 amendments. Thus, like the 7th Circuit, the COA “decline(d) to address a constitutional question that was not raised or argued to the trial court or addressed by it, much less with an adequately-developed record,” Bradford said.

“We will diverge from the Seventh Circuit Court of Appeals, however, in that we will not remand for further proceedings on the effect of the 2018 Amendments; Butler, unlike Washington, had the opportunity to raise the issue but did not.”

Finally, the Court of Appeals upheld the trial court’s decision not to award attorney fees to the appellants because Butler did not prevail at the trial court. The panel also declined to award appellate attorney fees because the government presented “an entirely legitimate legal argument” on appeal.

Civil forfeiture has been a buzzword in Indiana for several years, especially after Magnus-Stinson’s 2017 ruling. But the 2018 amendments did not cure all concerns, with the revised mechanism for distribution of civil forfeiture proceeds remaining the subject of the constitutional challenge in Jeana M. Horner, et al. v. Terry R. Curry, et al., 18S-PL-333.

The Indiana Supreme Court in June upheld the amended disbursement procedure that allows for part of all forfeiture proceeds to be diverted to law enforcement and away from the Common School Fund. The Virginia-based Institute for Justice, which took Horner to the Indiana Supreme Court, had argued Article 8, Section 2 of the Indiana Constitution requires all forfeiture proceeds to be deposited in the Common School Fund.

Meanwhile, the United States Supreme Court in February rejected an Indiana Supreme Court ruling and held that the Eight Amendment’s Excessive Fines Clause applies to the states. Further, because civil in rem forfeiture is at least partially punitive, it is subject to the Excessive Fines Clause.

The case of Tyson Timbs v. Indiana was thus remanded to the state Supreme Court, which remanded it to the trial court for a determination as to whether the forfeiture of Tyson Timbs’ Land Rover was excessive.

Butler’s case is Eric Butler, $236.00 in U.S. Currency, and One 2004 Pontiac Grand Prix v. State of Indiana, the Consolidated City of Indianapolis/Marion County, and the Indianapolis Metropolitan Law Enforcement Agency, 19A-MI-5.

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Dec. 30

Miscellaneous — Attorney Fees and Costs/Harassing Blogger

Lutheran Health Network of Indiana LLC, et al. v. Brian B. Bauer, et al.

19A-MI-00654

More than $250,000 in attorney fees and costs have been awarded to numerous nonparties and an Indiana healthcare giant against Lutheran Health Network in Fort Wayne after the Indiana Court of Appeals affirmed the nonparties were entitled to seek the fees to recoup costs of tracking down a harassing blogger.

In 2016, former Lutheran Health Network and Lutheran Hospital of Indiana CEO Brian Bauer and a group of Fort Wayne physicians made a failed attempt to buy out Lutheran.

After it fired Bauer, Lutheran filed a complaint in Tennessee state court against him and others alleging they were responsible for an anonymous online commenter posting under the pseudonym ‘Sajin Young’ who was “intimidating and harassing Lutheran’s employees and creating a hostile work environment to drive away qualified employees from Lutheran’s businesses in Fort Wayne … .” It also alleged they were “falsely portraying Lutheran and LHN” via the social media posts.

Meanwhile, Lutheran was also granted a petition to open an ancillary proceeding in Allen Superior Court pursuant to Indiana Trial Rule 28(E), where the health network was ultimately authorized to serve subpoenas issued by the Tennessee court for testimony and production of documents on various nonparties.

Following the eventual dismissal of the Tennessee case and Lutheran’s request to terminate the ancillary proceeding in Allen County, the trial court granted the nonparties’ requests for attorney fees. The trial court noted it had issued more than 36 orders for Lutheran stemming from the ancillary proceeding and that the “amount of time and effort the Non-Parties expended on Lutheran’s relentless search for ‘Sajin Young’ was immense.” As such, it concluded that the nonparties “could never have navigated Lutheran’s discovery demands of voluminous documents and other information on their own.”

The trial court therefore ordered Lutheran to pay more than $158,000 to the nonparties and nearly $94,000 to Indiana University Health for attorney fees and costs. Lutheran appealed, arguing the trial court lacked ancillary jurisdiction to make the awards after the underlying Tennessee action was dismissed.

The Indiana Court of Appeals declined to accept that argument, however, finding the trial court did not lack jurisdiction to award the costs and fees. It likewise found the trial court did not err in ruling that the nonparties were entitled to attorney fees pursuant to Trial Rule 34(C)(3).

“Lutheran insists that Trial Rule 34(C)(3) ‘governs the procedure of document production requests to nonparties in cases originating in Indiana courts.’ But, as the Non-Parties point out, nothing in Trial Rule 34 ‘limits its application to nonparties being served by in-state litigants, and there is no compelling reason why a nonparty served a subpoena from out-of-state should be somehow less protected than a nonparty served a subpoena,’” Judge Terry Crone wrote for the appellate court.

Additionally, it found the nonparties’ petitions for attorney fees were not untimely and that they were entitled the fees related to preparing for and attending depositions, finding it reasonable that the witnesses would be expected to consult with counsel to ensure compliance with the subpoenas.

Neither did the trial court err in ruling IU Health had standing to seek attorney fees and costs under Trial Rule 34(C)(3), the appellate court concluded, after IU Health was allowed to intervene in the ancillary proceeding to protect its interests with respect to information Lutheran requested from nonparties who were IU Health employees. However, the appellate court remanded after agreeing that Lutheran was never given an opportunity to challenge the reasonableness of the nonparties’ requested attorney fees.

The case is Lutheran Health Network of Indiana LLC, et al. v. Brian B Bauer, et al., 19A-MI-00654.

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Dec. 31

Civil Tort — Product Liability/Judgment on the Pleadings

Bayer Corporation, et al. v. Rene Leach, et al.

19A-CT-00625

A pharmaceutical giant sued by dozens of women who claim they were injured by the company’s permanent contraceptive device did not convince the Indiana Court of Appeals to grant its motion for judgment on the pleadings.

Rene Leach and more than 30 women sued Bayer Corporation and other entities involved in manufacturing Essure, a permanent birth control device, after they claimed to experience injury after the device was implanted. Bayer stopped distributing the device in 2018.

The women alleged several potential defects and specific symptoms following the implantation of the device, including menorrhagia, extreme fatigue, abdominal pain, back pain, joint pain, and various skin rashes. The women also asserted Bayer violated federal manufacturing requirements and that they are users and consumers under the Indiana Product Liability Act.

Bayer and several other defendants sought judgment on the pleadings, asserting that aspects of the complaint were deficient and that the claims were pre-empted. Specifically, Bayer argued the women failed to adequately plead their claims of manufacturing defects, which it contended ran afoul of Indiana Trial Rule 8 because the women made “only a cursory effort to describe the manufacturing defects” and their allegations are conclusory. It also argued the women only described potential defects and failed to connect any defect to the alleged injuries.

The Marion Superior Court denied Bayer’s motion for judgment on the pleadings, which the Indiana Court of Appeals affirmed in the interlocutory appeal of Bayer Corporation, et al. v. Rene Leach, et al., 19A-CT-00625.

The appellate court found Bayer had sufficient notice of the defect-related claims under Indiana’s liberal notice-pleading standard. It likewise found the women’s claim of manufacturing defects is not expressly pre-empted because they are premised on the violation of federal requirements.

“Moreover, the claim is not impliedly preempted so long as it does not exist solely by virtue of the FDCA. That is, the claim survives if the Women are ‘relying on traditional state tort law,’” Judge L. Mark Bailey wrote for the appellate court.

“… Here, a jury could reasonably conclude that the alleged failure to comply with federal manufacturing standards rendered Essure in a defective condition unreasonably dangerous to any user or consumer. This type of claim is (1) not expressly preempted because it is premised on a violation of federal law and (2) not impliedly preempted because it is derived from traditional Indiana tort law. Thus, the state-law claim is viable,” the appellate court continued.

Finding the manufacturing-defect claim to be viable, the appellate court concluded Bayer did not demonstrate that the complaint was devoid of allegations upon which relief could be granted and that Bayer was therefore “not entitled to dismissal at this early stage of the proceeding.”•