ILNews

Court allows relief under Crime Victims Statute

Jennifer Nelson
January 1, 2008
Keywords
Back to TopCommentsE-mailPrint
Contract provisions that exempt a party from liability under the Indiana Crime Victims Statute are void when the party violates public policy, the Indiana Court of Appeals ruled Friday.

In The State Group Industrial (USA) Unlimited v. Murphy & Associates Industrial Services, No. 82A04-0703-CV-158, State Group appealed the trial court judgment denying the company's request for relief under Indiana Code 34-24-3-1, the Crime Victims Statute. The trial court awarded State Group actual damages, but denied relief under the statute based on a contract provision between State Group and Murphy & Associates (M&A).

M&A prepared an estimate for State Group regarding supplying materials for a control system project in Texas in which State Group was the prime contractor. The project aimed to ensure the safety of a community's drinking water. At a meeting between the two companies, M&A confirmed that salinity probes, which are necessary components for the control system, would be part of the contract and M&A would provide engineering for the start-up process.

Once M&A began submitting invoices to State Group for payment, there were discrepancies between the invoices and the original contract. The two companies did not discuss changing the terms of the contract and M&A misrepresented to State Group that it had paid for materials in full and no other party had claim on the materials for the control system.

State Group paid the invoices in full, but did not receive the salinity probes and necessary cabling. State Group was forced to hire a replacement subcontractor to obtain the materials, including necessary software, which M&A was supposed to provide. M&A filed a complaint against State Group alleging breach of contract. State Group counterclaimed, saying that M&A breached the contract. State Group also claimed fraud, and sought damages under the Crime Victims Statute.

The trial court found M&A breached the contract and knowingly made numerous false or misleading statements, and awarded State Group actual damages.

The trial court concluded M&A violated I.C. 35-43-5-3, committing deception, which allowed State Group to bring an action under the Crime Victims Statute. The issue of whether a contract provision can exempt a party from liability under this statute for violating public policy is something Indiana hasn't ruled on, wrote Judge Margret Robb. Other states have ruled that a party may not contract against liability for intentional tortuous acts.

Other states' courts have ruled public policy violations are not included in contract liability protection clauses when the conduct is intentional, a matter of gross negligence, or willful and wanton misconduct. The Indiana appellate court is more likely to hold an exculpatory clause to be against public policy when it affects public interest in utilities, she wrote in a footnote.

Recovery under the Crime Victims Statute is not based on breach of contract, but must be predicated on an independent tort, wrote Judge Robb. Under Indiana law, a contract may release a party from liability for damages caused by its own negligence, but these clauses must specifically and explicitly refer to the negligence of the party seeking release from liability, Avant v. Cmty. Hosp., 826 N.E.2d 7, 10 (Ind. Ct. App. 2005).

Release from liability cannot happen if the contract provisions are phrased in general terms. The indemnification clause in the contract between State Group and M&A was not specific, as it did not refer to the criminal or fraudulent conduct on the part of M&A, thus M&A was not protected from liability under the Crime Victims Statute.

The appellate court remanded the case to the trial court with instructions that it exercise its discretion in determining whether to award damages and the amount of any damages.
ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

ADVERTISEMENT