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General Assembly, Supreme Court ponder big changes for small claims

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A national nonprofit organization has been tasked with a fresh study of Marion County’s troubled township small claims court system, while a bill that passed the General Assembly has implications for small claims courts around the state.

Lawmakers adopted House Enrolled Act 1347 that included numerous tweaks of clerk duties and court administration matters. It also calls for the legislative Commission on Courts to study small claims courts, looking at administration, venue and distribution of resources in the courts, as well as the jurisdictional limit of small claims actions. Small claims disputes currently are capped by statute at $6,000.

Gov. Mike Pence signed HEA 1347 March 24. The bill also includes language regarding income garnishments that could impact parties in small claims actions. Those provisions include:

• Reducing the maximum allowable garnishment from 25 percent to as little as 10 percent of income based on a showing of good cause.

• Requiring a judge, after holding a hearing once a judgment debtor fails to comply with an agreed order, to order any non-excluded property, income or profits applied to satisfy the judgment.
 

smallclaims01apb-15col.jpg The National Center for State Courts is studying township small claims courts in Marion County. Franklin Township Court, shown here, is one of the nine venues. (IL File Photo)

• Outlining how courts may cancel garnishment orders in favor of third parties in certain situations.

The bill also relieves clerks in all courts of the obligation to notify a garnishee when a judgment has been satisfied.

The small claims language in the bill was grafted from Senate Bill 366 that passed the Senate but stalled in the House of Representatives. SB 366 also would have created an administrator for the Marion County Small Claims Courts chosen from among the nine township court judges, but that provision was stripped out of HB 1347, leaving no language in the bill specific to Marion County’s township courts.

That disappointed bill author Sen. Scott Schneider, R-Indianapolis, who said he’s hopeful the proposal for an administrator will return next year. “The intent was simply to allow the small claims courts to be self-managed and out of the governance of the Circuit Court,” Schneider said.

“I think it’s important to allow the courts themselves, just like Superior courts do and Circuit courts do, to elect from among themselves an administrative judge. I think they’ve got a better handle on how they manage their courts.”

Authority over the township courts currently is vested with Marion Circuit Judge Louis Rosenberg, who has presided over rule changes and reforms instituted in the wake of national media attention on the courts. Well-documented problems included large-volume filers accused of forum shopping to find venues that catered to them and numerous people sued who had never stepped foot in Marion County.

Rosenberg believes the small claims courts could use an administrator, but he also sees a need remaining for a countywide oversight function, whether through Marion Circuit or Superior Court.

“We should come up with a governing structure that reflects this is a township function, but there is a countywide role,” he said.

Township trustees and advisory boards want their courts to generate case-filing fees, a portion of which is revenue for the townships. That’s been at the root of some of the courts’ problems. “Some of that has been at the expense of a fair and open system,” Rosenberg said.

“Because of ‘township tunnel vision,’ so to speak, you get varying policies and practices throughout the county,” he said. “What we need is uniformity.”

A task force headed by Court of Appeals Judge John Baker and Court of Appeals Senior Judge Betty Barteau released a report in 2012 that recommended an overhaul of township courts’ practices and recommended options for restructuring the courts. One option was to place the township courts under the purview of Marion Superior Court administration.

If the Commission on Courts or another legislative study committee takes up small claims issues this summer, it could do so at about the time that findings may be released from a fresh study of Marion County’s township courts.

John Doerner, principal court management consultant with the National Center for State Courts, is examining changes that took effect in the township courts at the beginning of the year as part of a $30,000 study funded by the Indiana Supreme Court Division of Court Administration. The study was ordered in January, and Doerner recently visited several township courts. He hopes to speak with all nine township judges.

“One open question at this point is the impact of the venue rule change that went into effect in January,” Doerner said. That rule change stipulated that cases could be filed only in the township where a party lives or works, or in the township where the disputed transaction or occurrence took place. “We’re looking at data over the past several years as well,” he said.

Doerner hopes the NCSC study will be able to discern the impact of the rule change, and he hopes it also may be able to predict future filing volume. That could lead to recommendations for reorganizing the courts to best serve users.

“If the quality of the data is of a sort that it seems logical to make some suggestions as to where the courts should be located, maybe we can go down that route,” he said.

David Remondini, chief deputy executive director for the Division of State Court Administration, said the Supreme Court authorized the study in an effort to improve the small claims experience.

“It has amazed me how much detail (Doerner) has gone into,” Remondini said. “He asked for quite a bit of data from us, and he had many meetings while he was here in Indianapolis for five days.

“We really feel he got a pretty good picture of the landscape.”

Rosenberg hopes the study results in “very practical steps outlined for how we should fund and staff the township court system.”

Fixing the Marion County Township Courts was among one of the few requests Indiana Chief Justice Brent Dickson had for lawmakers in his State of the Judiciary address in January.

“Our present system has been the subject of ridicule,” he said. “Local leadership and changes in court rules, however, can only scratch the surface. Systemic change is imperative, and this requires legislative action.”

But Schneider sees little need for broader reforms of the Indianapolis courts. He’s open to perhaps raising the jurisdiction of small claims courts from the current $6,000 limit, one of the more sweeping proposals expected to be referred to the study committee.

“Anything we can take off and lighten up the workload of some of our higher courts would be better, and certainly give people an opportunity to seek justice without getting into serious legal debt,” Schneider said.

“The general public has pretty good access to the judicial system” through the township courts, he said. “A lot of people would rather work through an issue in a small claims court setting than go to the next level.

“I’m a big advocate of small claims courts as we have them in Marion County. I think it works, and I think people receive justice out of that,” he said.•

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