Indiana Court Decisions: March 9-21, 2023

7th Circuit Court of Appeals

March 10

National Labor Relations Board v. Neises Construction Corporation

18-1774

7th Circuit imposes NLRB proposed sanctions, fine in collective bargaining case

The 7th Circuit Court of Appeals has found a northern Indiana construction company in contempt and imposed most of the National Labor Relations Board’s proposed sanctions against the company, including a $192,400 fine.

The case involved collective bargaining between Neises Construction Corporation and the Indiana/Kentucky/Ohio Regional Council of Carpenters, which represents the company’s employees.

The case began in 2018, when the NLRB obtained enforcement of its order requiring Neises to recognize and bargain with the union.

Then in May 2019, the board sought to hold Neises in contempt for failing to bargain with the union. The 7th Circuit entered a consent order that required Neises to bargain with the union not less than once every 30 days.

But in February 2020, the labor relations board again sought to hold Neises in contempt for failing to bargain with the union as required. The court again entered a consent order that required Neises to bargain with the union at least once every 30 days.

In April 2021, the NLRB sought to hold Neises in contempt for a third time.

The board alleged that while the previous consent order was under submission, Neises and the union engaged in productive discussions and came to tentative agreements on many aspects of a collective bargaining agreement.

But Neises effectively retracted those tentative agreements when it hired a new attorney who refused to adhere to them, the board continued — specifically, after it filed its February 2020 contempt petition.

Writing for the court, 7th Circuit Senior Judge Kenneth Ripple said Neises refused to bargain in good faith with the union, noting it had been ordered to do so three times.

“Despite these orders, Neises’s contumacious conduct persists,” Ripple wrote. “After reaching numerous tentative agreements on the articles to be included in a collective bargaining agreement with the Union, Neises retracted those tentative agreements without good cause.”

The court rejected Neises’ objections arguing that the NLRB did not have the authority to file the contempt petition and that the petition was not properly ratified.

It also rejected Neises’ objections arguing that a special master report improperly decided the parties reached tentative agreements, and that it did not violate an unambiguous command because the court’s February 2020 judgment and consent order do not use the phrase “in good faith,” and such a phrase is too vague anyway.

Finally, the court rejected Neises’ arguments as to why it should not be held in contempt for refusing to bargain in good faith with the union.

“There is no fair ground of doubt that our orders required good-faith bargaining. A command to bargain necessarily encompasses an order to engage in genuine efforts to reach an accord,” Ripple wrote.

The NLRB sought $192,400 in penalties.

It arrived at that number as follows: an initial $10,000 fine per violation — the board stipulated that there was just one violation here, failing to bargain in good faith — plus $200 per day that the violation continued, running from Aug. 4, 2020, through Feb. 2, 2023, totaling 912 days.

Ripple said Neises’ protest that it would be fined for defending the contempt petition relied on a false premise. Specifically, the noted the company agreed to the fine schedule in the 2020 consent order and judgment.

“The penalty we impose here is designed to address Neises’s failure to comply with our prior orders and to coerce Neises into compliance,” Ripple wrote.

The case is National Labor Relations Board v. Neises Construction Corporation, 18-1774.

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March 17

Toya R. Crain v. Denis R. McDonough, Secretary of Veterans Affairs

22-1714

Reassigned VA worker didn’t face discrimination or retaliation, 7th Circuit affirms

A Black female Veterans’ Administration employee who was reassigned to a different position failed to convince the 7th Circuit Court of Appeals that the VA discriminated or retaliated against her.

Toya Crain was acting chief of the Environmental Management Service at the Veterans’ Administration Medical Center in Indianapolis from April through July 2014. EMS provides janitorial and sanitation services.

An HR memorandum indicates Crain took the job as a “learning opportunity” to shadow the chief but that the role was not supervisory. She then assumed the chief of EMS role in July 2014, subject to a yearlong supervisory probationary period, which began on July 13.

At the time Crain applied for the position, it was classified at a GS-12 pay grade. Before applying, though, Crain was told if she completed her probationary period, the VA Center would try to increase the pay grade to GS-13.

Shortly after assuming the chief position, Crain’s supervisor added responsibilities to her role in an effort to justify a higher pay grade. But an HR review concluded the upgraded pay grade wasn’t justified.

Crain alleged that pay grades for six white service chiefs with similar duties were elevated either to GS-13 or GS-14. HR explained that at one point, the VA Center’s medical director elevated the pay grade for the chief of logistics, who was white, even though HR didn’t agree with the decision. An HR employee also testified that the medical director restructured positions and services to create a new GS-14 position for a white employee.

Several performance and behavior-related concerns arose during Crain’s tenure as chief of EMS. Those included using profanity in the workplace and mishandling a project to distribute new uniforms for nursing staff. Crain was also accused of giving advance notice on interview topics to a candidate to become her assistant.

Crain was informed in June 2015 that she was being reassigned to a different role with the same salary because she didn’t successfully complete her yearlong supervisory probationary period for the chief of EMS position.

Three months before her reassignment, Crain had initiated a complaint with the Equal Employment Opportunity Commission, alleging that one of her subordinates “verbally attacked” her and that the VA Center didn’t respond sufficiently because of her race and sex. She later added a charge alleging that she was not making the same salary as white males who held the same position.

After the reassignment, Crain added another charge claiming that her reassignment was retaliatory.

Crain filed suit against Denis McDonough in his official capacity as the secretary of the VA, alleging various Title VII violations. The VA moved for summary judgment on all Crain’s claims, and the U.S. District Court for the Southern District of Indiana granted the motion.

Crain appealed on two claims: disparate pay based on her race and removal for the position of chief of EMS in retaliation for her EEOC complaint.

The 7th Circuit disagreed on both points.

Crain argued other nonmedical service chiefs — the chief of logistics, for example — were valid comparators because they led a service at the VA Center and were on the same managerial level. She argued it was irrelevant if they performed distinct functions and types of work, but the 7th Circuit called that “plainly incorrect.”

“Indeed, the record reflects that each service chief performs different work and is subject to a different set of standards and that, as such, their pay grades are not directly comparable,” the opinion says.

In arguing that the VA Center removed her from her role as chief in retaliation for the EEOC complaint, Crain said the center’s stated reasons for her removal were pretextual.

The court said that although the briefing left Crain’s argument “opaque,” she seemed to suggest a jury would be more likely to conclude the center’s reasons were pretextual because the center “dishonestly” miscalculated her probationary period.

Crain argued her yearlong probationary period began when she assumed the acting chief position, not when she assumed the chief position, which would mean the period was already over when she was reassigned for failing to complete it.

Rather than getting into the parties’ competing interpretations of regulations, the court said Crain “fails to present any evidence to suggest her EEOC activity played a part in the VA Center’s alleged miscalculation.” The court also noted that the memo documenting Crain’s acceptance of the acting chief position explicitly stated the role was not supervisory in nature, meaning it was the VA’s belief that Crain’s time in that role wouldn’t count toward her probationary period.

Crain also took issue with the “performance-based deficiencies” the VA Center cited in support of removing her as chief, but the court ruled Crain failed to identify any weaknesses or contradictions in the VA’s reasoning.

Senior Judge Joel Flaum wrote the opinion.

The case is Toya R. Crain v. Denis R. McDonough, Secretary of Veterans Affairs, 22-1714.

Indiana Supreme Court

Published March 8, posted to theindianalawyer.com March 9

In the Matter of Robert McMahon

22S-DI-279

Merrillville attorney convicted of child porn possession suspended 2 years; 2 justices vote for disbarment

A northwest Indiana attorney who last year pleaded guilty to possession of child pornography will be suspended from the practice of law for at least two years without automatic reinstatement, the Indiana Supreme Court ordered in a per curiam opinion. Two justices, however, voted in favor of disbarment.

Robert McMahon, an attorney in Merrillville, had been under an order of interim suspension since October 2022 following his conviction in federal court. He was sentenced to 24 months of imprisonment, followed by three years of supervised release.

According to a 2022 press release from the U.S. Attorney’s Office for the Northern District of Indiana, McMahon possessed pornographic images of minors between March 2019 and August 2021. At least one of the minors was younger than 12.

The Northwest Indiana Times reported McMahon worked as a deputy prosecutor in Lake and Porter counties and as a judicial commissioner in Lake Superior Court in Crown Point from 2017 until his arrest in March 2022. He was admitted to the Indiana bar in October 2016.

The Supreme Court found McMahon violated Indiana Professional Conduct Rule 8.4(b) by committing a criminal act that reflects adversely on his honesty, trustworthiness or fitness as a lawyer. The order calls McMahon’s crime “insidious.”

“An attorney who would commit such a depraved act cannot be entrusted with the responsibilities that accompany a license to practice law and, at a minimum, should be required to demonstrate his professional fitness before ever again practicing law in this state,” the order reads. “The question before us, quite frankly, is whether Respondent should be afforded that opportunity.”

Chief Justice Loretta Rush and Justice Mark Massa voted to disbar McMahon. But looking at disciplinary precedent and the recommendation of the hearing officer and Indiana Supreme Court Disciplinary Commission, the majority ordered the two-year suspension.

The case is In the Matter of Robert McMahon, 22S-DI-279.

Court of Appeals of Indiana

March 9

Indiana Office of Utility Consumer Counselor, Duke Industrial Group, and Citizens Action Coalition of Indiana, Inc. v. Duke Energy Indiana, LLC, and Indiana Utility Regulatory Commission

22A-EX-1685

State law supports approval for Duke’s $2 billion economic development plan

Duke Energy will be able to proceed with a nearly $2 billion economic development plan after the Court of Appeals of Indiana ruled a regulatory commission’s approval met the requirements of state law.

Duke submitted a petition in November 2021 requesting approval for a six-year plan for transmission, distribution and storage system improvements — or TDSIC — that had an estimated cost of $1.98 billion. The objectives were to improve reliability for customers, advance grid hardening and resiliency, enable expansion of renewable and distributed generation, and facilitate economic development growth.

Duke Industrial Group and other parties intervened, and the Indiana Utility Regulatory Commission held an evidentiary hearing in March 2022. The commission then issued an order approving Duke’s plan in June, finding that the costs were justified by the likely incremental benefits and that the plan was reasonable.

On appeal, the industrial group argued the commission erred by misapplying two sections of Indiana’s TDSIC statute, found at Indiana Code Chapter 8-1-39, and by failing to make necessary factual findings relating to the merits of its objections to Duke’s plan.

The Court of Appeals disagreed with both arguments.

The industrial group argued it wasn’t enough that a TDSIC plan as a whole is cost-justified, but rather that each project within the plan is cost-justified. Duke’s plan included subcategories, such as $812 million for circuit improvement projects and $517 million for transmission line improvements.

The issue came down to whether the Indiana General Assembly intended for the applicable law to apply to each individual part of a plan or the plan as a whole.

In 2019, the Court of Appeals concluded the latter in NIPSCO Indus. Grp. v. N. Ind. Pub. Serv. Co., 197 N.E.3d 316 (Ind. Ct. App. 2022), trans. pending.

The industrial group argued in this case that NIPSCO was wrongly decided, but the court stuck with its interpretation, stating in the opinion that “Indiana Code section 8-1-39-10(b)(3), as written, is satisfied when the proposed improvements are justified by the benefits attributable to the plan as a whole.”

As for the commission’s determination that the incremental benefits associated with Duke’s plan justified its cost, the court couldn’t say the commission’s conclusion was unreasonable based on Duke’s evidence.

The industrial group also argued that the commission erred by treating deferred operating and maintenance expenses as if the expenses were capital investments. I.C. 8-1-39-9(c) says a public utility that recovers capital expenditures and TDSIC “shall defer” the remaining 20% of capital expenditures and TDSIC costs until its next general rate case.

The Court of Appeals opinion emphasized the word “shall.”

“Given that Indiana Code section 8-1-39-7 clearly defines TDSIC costs to include O&M expenses incurred both while the improvements are under construction and post in service, we conclude that the Commission’s interpretation of the statutes to include O&M expenses in the amount for which recovery is deferred is, at the very least, reasonable,” the opinion reads.

Finally, the industrial group argued the commission’s order was unsupported by evidentiary findings because the order didn’t address each challenge.

The court determined that while an order must contain specific findings on all the factual determinations material to its ultimate conclusions, findings aren’t required on particular arguments.

Thus, the commission’s order “includes sufficient particularity and specificity to allow for competent review,” and “provides a reasoned analysis outlining its decision.”

Judge Cale Bradford wrote the opinion. Judges Melissa May and Paul Mathias concurred.

The case is Indiana Office of Utility Consumer Counselor, Duke Industrial Group, and Citizens Action Coalition of Indiana, Inc. v. Duke Energy Indiana, LLC, and Indiana Utility Regulatory Commission, 22A-EX-1685.

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Jordan Brewer, Mark Timmons, and Josh Uitts, in Their Official Capacities as Commissioners of Clinton County v. Clinton County Sheriff’s Office and Richard Kelly, in his Official Capacity as Sheriff of Clinton County

22A-CP-117

Prohibition of e-cigarettes, nicotine products in county jail went too far, COA affirms

An attempt by county commissioners to regulate e-cigarette and nicotine use in the local jail went too far, the Court of Appeals of Indiana has affirmed.

In 2012, the Indiana Legislature prohibited smoking in places of employment, state government vehicles, public places, and within eight feet of an entrance to a public place or place or employment.

After passage of that legislation, the commissioners of Clinton County enacted an order prohibiting smoking in all county offices and places of employment, including the county jail.

Then in 2019, the Clinton County Sheriff’s Office received a certificate from the Indiana Alcohol and Tobacco Commission authorizing it to sell e-cigarettes and nicotine pouches to inmates. The inmates began purchasing the products and using them while housed in the jail.

According to the sheriff’s office, “disciplinary incidents and property damages … significantly decreased” after it received the certification, and the sales were generating enough income to be used for educational programs, religious literature and extra training opportunities for the inmates.

However, in 2021, the county commissioners passed an order that prohibited e-cigarettes and any smokeless tobacco in all county offices and buildings. The sheriff’s office immediately stopped selling e-cigarettes and nicotine pouches at the jail.

But the sheriff’s office also filed a complaint for declaratory judgment in Montgomery Superior Court, arguing the commissioners were attempting to regulate the conduct of inmates, which exceeded their authority.

For their part, the commissioners claimed they had authority to enact the order based on Indiana’s Home Rule Law.

Both parties moved for summary judgment, and the trial court ruled in favor of the sheriff’s office. It also denied the commissioners’ subsequent motions to correct error and for relief from judgment based on newly discovered material evidence.

The commissioners appealed and the Court of Appeals affirmed.

“In circumstances like those before us, where the Sheriff’s Office is required to take reasonable precautions to protect the life, safety, and health of an inmate in the county jail, ‘county commissioners do not have control over the acts of a sheriff,’” Judge Melissa May wrote, citing Robins v. Harris, 740 N.E.2d 914, 919 (Ind. Ct. App. 2000). “While the Commissioners have the power to enact a general ordinance governing the use of e-cigarettes in county buildings under the Home Rule Act, the Commissioners do not have the authority to regulate the use of e-cigarettes in the county jail because that power is entrusted in the Sheriff’s Office pursuant to the Take Care Provision (Indiana Code § 36-2-13-5(a)(7)).”

The case is Jordan Brewer, Mark Timmons, and John Uitts, in Their Official Capacities as Commissioners of Clinton County v. Clinton County Sheriff’s Office and Richard Kelly, in his Official Capacity as Sheriff of Clinton County, 22A-CP-117.

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March 15

Jacquelyn Ivankovic v. Milan Ivankovic

22A-DC-2933

No bones about it: COA rules children don’t have authority to take mother’s dog to father’s home

The children of divorced parents can’t take their mother’s dog to their father’s home during his parenting time, the Court of Appeals of Indiana has ruled in reversing a trial court’s order.

Jacquelyn Ivankovic and Milan Ivankovic were married in 2006 and, along with three children, had a lilac Boston terrier dog named Roxy.

Jacquelyn researched Boston terrier breeders in 2020 and was eventually put on a waitlist for a puppy. Before she was allowed to adopt, she had to participate in an interview process and was vetted for personal information, including the dynamics of her family.

By signing a purchase agreement, Jacquelyn agreed to certain contractual provisions, including that if Roxy were ever to be rehomed, she would have to return to the breeder. Roxy was microchipped with Jacquelyn’s information.

In January 2022, Milan filed for divorce. The parties entered into a partial mediation agreement but left two issues unresolved: ownership of a firearm and ownership of Roxy. The Lake Superior Court ultimately left Jacquelyn in possession of the dog while Milan got the handgun.

At Jacquelyn’s home, Roxy is treated like a fourth child, according to the COA, including having a fenced-in yard, swimming in the pool and even sitting at the dinner table with the rest of the family.

But the trial court also said the children were allowed to take Roxy to Milan’s home during parenting time, just as they would be able to take other personal effects.

“Neither parent shall attempt to influence the [C]hildren to convince them to bring Roxy or to not bring Roxy to Husband’s home,” the trial court’s order says.

Milan filed a contempt action less than a month after the dissolution decree was entered, alleging Jacquelyn had attempted to influence the children about bringing Roxy to parenting time and had supposedly failed to send the dog to his home with the children.

Jacquelyn appealed, arguing the trial court erred when, in considering Roxy to be personal property, it awarded the children decision-making authority over her personal property.

The Court of Appeals agreed, reversing the trial court’s decision granting the children the discretionary right to take Roxy back and forth during parenting time.

The Court of Appeals found in its opinion that because dogs are treated as chattel or personal property in Indiana, it is the property rights of the parties — rather than their respective abilities to care for the dog or their emotional ties to it — that are determinative. Whichever spouse is awarded the dog has sole possession at the complete exclusion of the other.

“While regrettably a harsh and seemingly unfeeling outcome, it is the only one that makes sense,” the opinion says. “It is no secret that our courts are inundated with child custody cases, cases in which the happiness and welfare of our most precious commodity, children, are at stake. To allow full-blown dog custody cases, complete with canine forensics and attorneys representing not only the parties but the dog itself, would further burden the courts to the detriment of children.”

Milan argued the trial court had discretion to allow the children to bring the dog with them to his home, just as they could bring a cellphone, teddy bear or favorite cup. But the COA disagreed, likening Milan’s position to an attempt at creating pet visitation.

The appellate court noted the trial court ordered Jacquelyn to pay Milan an equalization payment of $400 for Roxy.

“If Roxy had been the Children’s personal property, the dog would not have been included in the marital estate or be subject to division by the trial court, and no equalization payment would have been required,” the opinion says.

Finally, while Roxy “might be considered a member of the family, under Indiana law, she is Wife’s personal property, and the Children cannot be awarded discretionary decision-making authority to transport Wife’s personal property to Husband’s residence during parenting time,” the court concluded.

Judge Patricia Riley wrote the opinion. Chief Judge Robert Altice and Judge Rudolph Pyle concurred.

The case is Jacquelyn Ivankovic v. Milan Ivankovic, 22A-DC-2933.

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Harry C. Hobbs v. State of Indiana

22A-PC-1885

In 5th appeal, COA affirms denial of PCR petition filed by man whose sentenced was slashed

A man whose sentence was previously reduced to less than half of the original term could not convince the Court of Appeals of Indiana that the denial of his post-conviction relief petition was erroneous.

The ruling is the latest in a long list for Harry Hobbs, who has now appealed to the Court of Appeals five times.

Hobbs was found guilty in 1994 of Class A felony rape, two counts of Class A felony criminal deviate conduct and Class B felony burglary. He was sentenced to an aggregate 120 years.

Hobbs unsuccessfully challenged his convictions and sentence on direct appeal.

In 2015, Hobbs filed a motion to correct erroneous sentence, arguing his sentence violated various sections of Indiana Code. The Marion Superior Court denied that motion, and Hobbs appealed a second time, resulting in a remand with instructions to reduce his 55-year sentences to 45 years each.

However, the Court of Appeals rejected Hobbs’ argument that his aggregate sentence should be reduced to 110 years because the 120-year aggregate sentence was not facially erroneous. Thus, in 2016, the trial court reduced Hobbs’ 55-year sentences to 45 years but adjusted other portions of the sentence to maintain the 120-year aggregate.

Hobbs then appealed for the third time, arguing that his sentence must be reduced because his offenses constituted a single episode of criminal conduct.

The Court of Appeals again affirmed Hobbs’ sentence in 2017.

Hobbs’ next move was a petition for post-conviction relief based on ineffective assistance of counsel. The post-conviction court remanded the case to the trial court for resentencing.

The trial court resentenced Hobbs to an aggregate 45-year term and ordered his sentence to run consecutive to his sentences in two other causes.

Hobbs then filed his fourth appeal, arguing that the trial court lacked authority to order his sentences to run consecutively and that doing so violated constitutional prohibitions against ex post facto laws.

The Court of Appeals disagreed, affirming his new sentence.

Hobbs then filed another petition for post-conviction relief, which is at issue in the instant appeal.

The post-conviction court denied relief following a March 2022 evidentiary hearing, finding no merit to his challenge to consecutive sentencing nor to his claim of ineffective assistance of counsel. It also found it had no authority to review an Appellate Rule 7(B) claim.

In his fifth appeal, Hobbs argued the post-conviction court erred in denying his petition. The Court of Appeals disagreed.

Specifically, Hobbs argued the trial court erred by denying his claims of ineffective assistance of trial and appellate counsel based on their failure to cite Sizemore v. State, 531 N.E.2d 201 (Ind. 1988), which Hobbs said would have precluded consecutive sentencing.

The Court of Appeals acknowledged that Hobbs’ counsel did not cite Sizemore but said that didn’t constitute deficient performance.

In concluding the court’s resentencing of Hobbs didn’t conflict with Sizemore, the Court of Appeals said the fact that Hobbs had fully served his sentences for the other causes ensured the court couldn’t alter those sentences.

“Rather, the court resentenced Hobbs in 2019, utilizing the sentencing framework applicable as of Hobbs’s original July 12, 1994 sentencing hearing as instructed,” the opinion says.

Hobbs also argued the court erred by denying his claims of ineffective assistance of counsel based on the failure to cite Richards v. State, 681 N.E.2d 208 (Ind. 1997), which Hobbs maintained would have changed the outcome of his sentence.

The Court of Appeals disagreed again, ruling Richards doesn’t mandate a different result because it didn’t concern concurrent sentencing, which was used to impose his aggregate 45-year sentence.

Next, Hobbs argued his appellate counsel was ineffective for not raising a challenge under Blakely v. Washington, 542 U.S. 296 (2004). The COA, however, found no fundamental error.

The appellate court cited Spurlock v. State, 106 N.E.3d 1046 (Ind. Ct. App. 2018), in determining Hobbs was entitled to the protections of Blakely at his resentencing. However, it also ruled that because Hobbs’ counsel failed to object during resentencing, the Blakely issue was waived.

“Given that the court specifically stated that it would consider its prior sentencing statements, which detailed Hobbs’s lengthy and varied criminal history, Hobbs cannot seriously contend that the 2019 court relied only upon victim impact in making its resentencing determination,” the opinion says.

Finally, Hobbs argued that pursuant to State v. Stidham, 157 N.E.3d 1185 (Ind. 2020), his 2019 resentencing should be reconsidered under Appellate Rule 7(B). He faulted the post-conviction court for not permitting him to introduce extensive evidence of his rehabilitation.

The COA, however, noted the defendant’s juvenile status in Stidham was key to the decision, while Hobbs wasn’t a juvenile when he committed his felonies.

While the appellate standard for reviewing sentences eased between the time Hobbs was first sentenced and the time he was most recently resentenced, the Court of Appeals cited the fact that Hobbs’ sentence has already been reduced from 120 years to 45 years.

“Moreover, although we commend Hobbs’s efforts to rehabilitate himself and hope his hard work will serve him well, his situation simply does not present the same extraordinary circumstances that our supreme court found that justified its revision of Stidham’s prior sentence,” the opinion says. “Hobbs has not overcome the ‘rigorous standard of review’ for evaluating post-conviction determinations.”

Judge Terry Crone wrote the opinion. Judges Melissa May and Leanna Weissmann concurred.

The case is Harry C. Hobbs v. State of Indiana, 22A-PC-1885.•