7th Circuit Court of Appeals

May 1

Civil – Leases/Sanctions

Securities and Exchange Commission v. First Choice Management Services Inc., et al.; SonCo Holdings LLC v. Joseph D. Bradley, receiver, and ALCO Oil & Gas Co. LLC

11-1702

The 7th Circuit Court of Appeals found that an order, while unclear, did require a company to become the operator of leases involving oil and gas fields in Texas. But the judges held the District Court judge didn’t fully explain why he was imposing the sanction he did, so the 7th Circuit vacated the sanction.

At issue is the sanction imposed stemming from a settlement SonCo Holdings entered into with the receiver of First Choice Management Services, which had defrauded victims out of $31 million. Some of First Choice’s assets had been used to acquire “Hull-Silk” oil and gas leases in Texas through a sham corporation. SonCo claimed to have a valid legal interest in the leases obtained through the sham corporation. ALCO Oil & Gas Co. was the operator of the leases.

As part of the settlement, SonCo paid the receiver $600,000 and was ordered to “obtain a bond … that shall replace ALCO’s bond so that ALCO and the receiver may obtain the release of its bond paid for with the defrauded investor funds.” ALCO had paid a $250,000 cash bond with the Texas Railroad Commission to assure payment of any costs the commission might impose on ALCO for failing as operator of the wells.

SonCo failed to post the bond that would replace ALCO’s bond and didn’t obtain the commission’s authorization to operate the wells. The District Court held SonCo in contempt, ordered it to return the Hull-Silk leases to the receiver, and allowed the receiver to keep the $600,000 SonCo paid to the receiver. The receiver then assigned the leases to another company, which in turn assigned them to an unrelated party.

The 7th Circuit found the agreed order was poorly drafted but the language did indicate that SonCo post a bond so ALCO’s could be released. The order doesn’t say that SonCo must be the operator; it could have engaged with another oil company to become the operator, noted Judge Richard Posner.

Since the District judge in this case used the term “contempt” when sanctioning SonCo, he had to prove the contempt by clear and convincing evidence, which he did not do. The 7th Circuit vacated the sanction and remanded with instructions: the District judge can reimpose the sanction he imposed upon demonstration that it is a compensatory remedy for a civil contempt after all; impose a different or even no sanction, whether for civil contempt or for misconduct not characterized as contempt; or proceed under the rules governing criminal contempts, wrote Posner.

Indiana Court of Appeals

April 19

Post Conviction – Ineffective Counsel

Anthony Hogan v. State of Indiana

20A03-1103-PC-158

The Indiana Court of Appeals has upheld the denial of a man’s request for post-conviction relief because he couldn’t prove that his trial or appellate counsel were ineffective.

Anthony Hogan had been convicted of criminal deviate conduct, attempted rape, battery resulting in serious bodily injury, and being a habitual offender. On direct appeal, the COA vacated his battery conviction on double jeopardy grounds. He then sought post-conviction relief pro se.

Hogan claimed his trial and appellate counsel failed to argue that a statement that he made to a detective was inadmissible for any purpose because it was involuntary; his trial counsel didn’t advise him of his right to a jury trial on the habitual offender charge, and appellate counsel should have argued that the record was devoid of evidence of a valid waiver of that right; and his trial counsel should have requested an instruction on criminal deviate conduct as a Class B felony as a lesser-included offense of the Class A felony criminal deviate conduct charge, and appellate counsel should have raised the issue as fundamental error.

The appellate court found that Hogan was correct that his statement couldn’t be used unless it was taken voluntarily, but he didn’t present any evidence that it was involuntary. He was also correct that an advisement of his right to a jury trial on the habitual offender charge and his personal waiver should have been made on the record, but he failed to show that he was prejudiced by this, the court found.

Hogan also didn’t show that his trial attorney’s decision not to tender an instruction on a lesser-included offense was an unacceptable strategy or that the appellate counsel should have raised the issue as a fundamental error.

Criminal –Fleeing/Appeal

Linda G. Darby v. State of Indiana

45A04-1106-CR-318

A woman convicted of murdering her husband in the 1970s who escaped from prison and remained a fugitive for 35 years isn’t entitled to file a petition for belated appeal because her willful act of fleeing prevented her attorney from pursuing the appeal.

Linda G. Darby was convicted of killing her husband in 1970 and sentenced to life imprisonment. She filed a motion to correct error Nov. 28, 1970, which was denied. She was appointed counsel but no appeal was ever filed. She escaped from prison in 1972 and was apprehended in Tennessee in 2007. In 2011, she filed a petition to file a belated notice of appeal, which the trial court denied without a hearing.

Darby claimed that even though she fled the state, that didn’t relinquish her right to appeal. The Court of Appeals disagreed, citing Evolga v. State, 519 N.E.2d 532, 533 (Ind. 1988), and Prater v. State, 459 N.E.2d 39, 41 (Ind. 1984). It’s well settled in Indiana that when someone escapes from lawful custody, he isn’t entitled during the period he remains a fugitive to prosecute his appeal, noted Judge Carr Darden.

“In short, Darby’s counsel was prevented from pursuing Darby’s appeal by her willful act of fleeing the jurisdiction,” he wrote.
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April 23

Criminal – Continuing Crime Doctrine

Richard Leggs v. State of Indiana

49A02-1105-CR-522

The Indiana Court of Appeals has reversed one conviction against a man charged with multiple offenses for stabbing his wife.

Richard Leggs appealed his convictions on multiple charges and argued that his two convictions of criminal confinement violate the continuing crime doctrine.

Leggs attacked his wife in their apartment in 2010, first threatening to kill her and then pinning her down and stabbing her twice in the stomach.

A trial court found Leggs guilty of two counts of Class B felony criminal confinement and one count each of Class C felony intimidation, Class C felony criminal recklessness, and Class A misdemeanor resisting law enforcement.

The trial court ordered the following four sentences served concurrently: 14 years for Class B felony criminal confinement, five years for Class C felony intimidation, 545 days for Class D felony criminal recklessness, and 365 days for Class A misdemeanor resisting law enforcement. For the second count of Class B felony criminal confinement, the trial court sentenced Leggs to six years and ordered it served consecutive to his other sentences, for an aggregate sentence of 20 years.

In his appeal, Leggs argued that the evidence was insufficient to support his conviction of Class C felony intimidation. But the COA affirmed the trial court, holding that Leggs did not file a motion to dismiss the charges in trial court, nor did he demonstrate that deficiencies in the charging information rose to the level of fundamental error.

The appellate panel found the two convictions of Class B felony criminal confinement violated the continuing crime doctrine. Accordingly, the court reversed one of his criminal confinement convictions and remanded for resentencing.

Civil Collection – Contracts/Conversion

Nathan Abernathy v. Larry Bertram and Keith Broyles

33A04-1106-CC-317

A trial court did not abuse its discretion when it denied a man damages for conversion, the Indiana Court of Appeals found.

Nathan Abernathy appealed some of the trial court’s findings in his claims of breach of contract, quantum meruit, and unjust enrichment and conversion, stemming from a dispute over unpaid rent.

In the late spring of 2007, Keith Broyles and Abernathy entered into an oral agreement whereby Abernathy would pay cash to rent farm land from Broyles. Abernathy cleared the land and planted winter wheat for harvest in the summer of 2008. At some point during the summer of 2008, Broyles talked to Abernathy about his failure to pay rent. After that conversation, Broyles hired Larry Bertram to harvest the wheat Abernathy planted, and Broyles sold it to a grain mill for $3,293.74.

On June 4, 2009, Abernathy filed a complaint against Broyles for breach of contract and quantum meruit. Abernathy stated a claim against Broyles and Bertram for unjust enrichment and damages for conversion. On March 25, 2011, the trial court awarded Abernathy $3,950. That amount was based on the amount for which Broyles sold the crop and the value of lost hay or straw, minus $2,000 in rent Abernathy owed Broyles. The trial court found Abernathy proved his breach of contract, unjust enrichment, and quantum meruit claims, but it denied his conversion claim.

The Court of Appeals affirmed the trial court’s decision to omit the value of Abernathy’s crop insurance policy in the amount of damages it ordered Broyles to pay. The COA also held the court did not err when it denied Abernathy’s conversion claim because he did not prove by a preponderance of the evidence that Broyles and Bertram intended to exercise unauthorized control over Abernathy’s property.

Civil Tort – Insurance/Policy Language

Omni Insurance Group v. Lake Poage, Tonya Poage, Cody Bauer, Jill Bauer, Gary Bauer, and Allstate Insurance Co.

92A03-1105-CT-208

Because a genuine issue of material fact exists as to whether a teenager lived with his mother or father, an appellate panel has remanded the matter for trial.

Omni Insurance Group appealed summary judgment for Allstate Insurance Co.; Lake and Tonya Poage; and Cody, Jill and Gary Bauer (known collectively as the Poages).

In 2008, Cody Bauer was driving a car owned by his mother, Treva Bauer, when he collided with a motorcycle driven by Lake Poage. Treva was insured by Omni, and her policy provided liability coverage to Treva, the named insured, to family members who used Treva’s car, and to anyone who used her car with her permission. But the policy excluded liability for coverage of bodily injury resulting from the use of a vehicle by “any resident, including a family member, of your household who is not listed in the Declarations page.” The policy doesn’t define “resident.”

Cody was not listed on Treva’s declarations page.

On the date of the collision, Cody was spending the night at Treva’s residence. Treva shared joint legal custody of Cody with Cody’s father. Cody had his own bedroom at both residences and kept belongings at both places. He considered both residences to be his home. At the time of the collision, Treva was moving from Churubusco to Columbia City, and when she moved Cody changed schools. Cody used his father’s address on his driver’s license and received his mail there. Cody was a listed driver on his father’s policy, but not Treva’s.

The Court of Appeals held that pursuant to the policy language, if Cody was a resident of Treva’s household, Omni was entitled to summary judgment because Cody was not listed on the declarations page. If he was not a resident of Treva’s household, the Poages were entitled to summary judgment, as Cody was driving Treva’s car with her permission. Because there is a genuine issue of fact as to his residency, the court found that summary judgment was not appropriate and remanded the matter for trial.
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April 24

Miscellaneous – Trusts/Notice of Motion

George Clements v. Kimberly Hall and Stanley Harmon

06A04-1106-MI-282

The Indiana Court of Appeals held that the trial court improperly granted summary judgment to parties whose attorney did not notify opposing counsel that a motion had been filed.

George Clements appealed the trial court’s grant of summary judgment in favor of Kimberly Hall and Stanley Harmon. Clements, Hall and Harmon were all due to receive property, as outlined in Arthur and Mary Lou Clements’ trust.

Arthur and Mary Lou Clements died in 2006 and 2008, and in July 2010, George Clements filed a personal representative’s deed as executive of the estate of Arthur Clements, deeding property to himself for $10. In August, Hall and Harmon’s attorney, Arvin Foland, filed an appearance and claim for quiet title, constructive trust and partition of the property, contending the deed George Clements filed was improper. Hall and Harmon argued the deed should be deemed a cloud upon the title to the property and that the property should be held in constructive trust until it could be sold and the proceeds divided.  

The court entered an order granting summary judgment for Hall and Harmon and disposing of the case. Nothing in the record indicates Clements or his attorney were served with the motion for summary judgment or received notice of any proceedings on the motion.

Clements then filed a motion for relief from judgment, and the trial court denied it.

Hall and Harmon contend their attorney discussed the claim with Clements’ attorney, but they did not say that Foland served Clements or his attorney with the motion for summary judgment or in any way notified Clements when it was filed.

The Court of Appeals held that Foland knew Clements had an attorney and was therefore obligated to provide notice. Accordingly, it reversed the trial court and remanded for further proceedings consistent with its opinion.

Civil Plenary – Insurance/Drug Use

Shawn A. Keckler, Kari Felda, Special Admin. to the Estate of Ryan S. Holloway, Janice Norman, Dewayne Scott, Timothy J. Boganwright, et al. v. Meridian Security Insurance Co.

43A03-1112-PL-551

Because a drug test failed to show conclusively when a driver last used marijuana before a fatal crash, an insurer cannot deny payment based on an exclusionary clause in the policy, the Indiana Court of Appeals determined.

A grant of summary judgment in favor of Meridian Security Insurance Co. on its declaratory judgment action was appealed.

In 2008, Nathan Creighton was driving, with passengers Shawn Keckler, Bryant Scott and Ryan Holloway as passengers. Creighton attempted to pass a car that stopped in his lane and crashed head-on into a truck driven by Timothy Boganwright. Scott and Holloway were pronounced dead at the scene; Creighton and Keckler sustained brain injuries and have no memory of the crash. Boganwright also was injured.

Police investigating the crash scene discovered that Holloway was in possession of several bags of marijuana and that Creighton was in possession of one bag of marijuana. Police also stated in a crash report that Creighton “also had glassy eyes and appeared very disorderly,” although Creighton was unconscious when police arrived on the scene.

At the time, Creighton’s primary insurer, through his father, was Progressive, with a global policy limit of $500,000. Creighton also was insured under his father’s umbrella policy with Meridian, with a coverage limit of $1 million.

Keckler filed a motion for summary judgment against Meridian, and the other plaintiffs joined in. But Meridian claimed that the crash was not covered, due to an exclusionary clause in the policy that precludes payments for injuries that arise out of the use, sale, manufacture, delivery, transfer or possession of drugs. In support of that claim, Meridian submitted testimony from a toxicologist, but the toxicologist could not determine from a post-crash blood draw when Creighton might have last used marijuana before the crash.

The Court of Appeals concluded that Meridian did not meet its burden on summary judgment of establishing that the exclusionary clause for injuries arising out of the use of marijuana applied in this case. It held that denying insurance coverage would have drastic consequences not only for Creighton, but also for injured parties seeking recompense for the injuries he caused. The COA reversed summary judgment in favor of Meridian and remanded for further proceedings.

Civil – Unemployment Benefits/Employment

Delbert Conklin v. Review Board of the Indiana Department of Workforce Development and Carter Express, Inc.

93A02-1109-EX-864

The Indiana Court of Appeals held that a company was not obligated to continue employing a driver who lost consciousness behind the wheel, but because he holds no fault for that incident, he is eligible for unemployment benefits.

Delbert Conklin appealed a finding by an administrative law judge that he was ineligible for unemployment benefits. Conklin was a truck driver for Carter Express when on May 24, 2011, he blacked out while driving, veering off the road and damaging the truck and its contents. He awoke in time to avoid hitting trees by the side of the road, and no evidence was presented to explain why he lost consciousness. He has no prior record of a similar event and no evidence suggests he was under the influence of drugs or alcohol.

Carter terminated Conklin, and initially, a claims deputy held Conklin was entitled to unemployment benefits. But Carter appealed, and an ALJ held that Conklin was an “imminent safety hazard” and therefore not entitled to unemployment benefits.  

The COA reversed that decision, holding that Carter was not obligated to continue Conklin’s employment, and the record contains no evidence that the blackout was his fault. Therefore, Conklin did not breach a duty to Carter in the statutory sense and is eligible for unemployment benefits.
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April 25

Criminal – Fifth Amendment

John Ludack v. State of Indiana

49A02-1109-CR-930

The Indiana Court of Appeals ruled that because a defendant’s attorney asked a detective whether the defendant admitted to molesting his girlfriend’s daughter, the defense opened the door to the prosecution to ask about the scope of the interview. The defendant claimed his Fifth Amendment rights were violated when the detective said the defendant asked to “stop speaking” during the interview.

John Ludack was in a relationship with T.E. for several years and watched her children while she worked. About two years after he began dating T.E., Ludack started to molest T.E.’s 10-year-old daughter, M.E. He molested her several times and told her not to tell anyone. Several years later, she told her older brother, who reported it to their father. T.E. then called police and Ludack was arrested and charged with two counts each of Class A felony child molesting and Class C felony child molesting.

He was convicted of the charges and found to be a habitual offender. The Class C felony charges were dismissed per the state’s request, and Ludack was sentenced to the maximum 130 years.

Ludack argued that his right against compulsory self-incrimination under the Fifth Amendment was violated by detective Chris Lawrence’s testimony at his trial. Lawrence interviewed Ludack after he was arrested. The defense first brought up whether Ludack made any admissions during the interview, and the detective said no. The trial court then allowed the prosecutor to further examine Lawrence to confirm Ludack neither admitted nor denied the charges. Lawrence then said, “He didn’t deny doing it either, he just asked to stop speaking.”

The appellate judges found the admission of the testimony didn’t rise to a fundamental error. Ludack’s attorney was the one who opened the door for the testimony.

“To open the door, the defendant’s evidence must use his or her pre-trial silence as probative of the defendant’s innocence and leave the trier of fact with a false or misleading impression,” wrote Judge Terry Crone.

The COA also upheld his sentence, noting Ludack was in a position of trust when he molested M.E., had a lengthy criminal history, and that the molestations appeared to stop only because he was arrested.

Civil Plenary – Criminal Mischief/Trespass/Conversion

The Kroger Co. v. WC Associates, LLC, as successor in interest to Metro Acquisitions, LLC

49A05-1108-PL-412

The Indiana Court of Appeals reversed summary judgment for a developer on its claims of criminal mischief, criminal trespass and criminal conversion against grocer Kroger after the store modified a shopping plaza’s sign once it added a fueling station. There isn’t evidence that Kroger had criminal intent when it modified the sign pylon.

Kroger and developer Metro Acquisitions entered into a reciprocal easement agreement and later amendment involving a shopping center in Indianapolis. Part of the agreement addressed a sign advertising Kroger and other shops on Parcel I. The sign pylon was later moved to Parcel IV. Kroger was responsible for keeping up the sign and the other shops would pay Kroger for the maintenance.

When Kroger installed a fuel station on its property, it modified the sign by removing a portion of it to advertise for the fuel and left the other businesses’ sign panels without lighting and electricity. WC Associates, as successor in interest to Metro, paid nearly $50,000 to restore the original sign pylon.

WC sued Kroger for breach of contract, theft, criminal conversion, criminal trespass and mischief. WC filed for summary judgment; it later claimed that Kroger had submitted false affidavits. The trial judge ruled in favor of WC and awarded a total of $143,440.88 to WC.

The COA affirmed the finding of breach of contract against Kroger. Under the agreement and amendment, WC owned the sign and the amendment and agreement detailed what Kroger had to do to maintain the sign, which did not include allowing Kroger to modify the sign pylon or attach multiple sign panels to it.

The judges reversed summary judgment on the criminal trespass, criminal mischief and criminal conversion claims because there was no evidence of criminal intent on Kroger’s part. That will be up to a jury to decide.

The trial court properly awarded sanctions against Kroger for its affidavits and WC is entitled to appellate attorney fees only with regards to the breach of contract claim, the COA held. The judges remanded for further proceedings.
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April 27

Juvenile – Subpoena/CHINS

In the Matter of V.C., Child Alleged to be in Need of Services v. Indiana Dept. of Child Services

79A02-1112-JC-1172

It is not up to the court to find someone named in a subpoena if the person requesting it doesn’t know where to send the subpoena, the Indiana Court of Appeals ruled. That argument was being made by an incarcerated father appealing a determination that his child is in need of services.

Child V.C. lived with the child’s mother, who had a history of issues with her mental state. At one point, the mother was no longer able to care for V.C., which led to a CHINS determination. Eventually, the mother was able to adequately care for V.C. After that initial proceeding, V.C.’s maternal aunt was approved to care for V.C. for short periods if the mother’s mental state deteriorated to the point where she needed a break from the child.

In August 2011, the mother told police and the Department of Child Services that she could no longer provide suitable care for her child. V.C.’s father, V.S., was incarcerated at the time. DCS alleged that V.C. was a CHINS and was granted temporary wardship.

V.S. denied the CHINS allegations and claimed that the maternal aunt would take V.C. He requested the aunt be subpoenaed, but did not provide the court with an address. He believed the court should track her down. V.S. also sought a continuance of the fact-finding hearing so he could secure the aunt’s testimony regarding her potential willingness to take the child. The juvenile court denied the subpoena request and continuance, and the court determined V.C. was a CHINS. V.C was placed in foster care.

The appellate judges affirmed, finding V.S.’s procedural due process rights weren’t denied when the court denied his requests to issue a subpoena to the aunt or continue the hearing. The father didn’t show how being incarcerated prevented him from contacting V.C.’s mother or the DCS to get the aunt’s contact information or that he couldn’t access research databases to find her information, wrote Judge Cale Bradford. It’s not the juvenile court’s responsibility to “go out and find” the person named in the subpoena, wrote the judge.

The father was also mistaken about the prior case plan involving the aunt. The former case manager, Kirstin Meadows, testified as a witness during the fact-finding hearing that the aunt was only approved to babysit.

“In light of Meadows’ testimony refuting Father’s claim that no CHINS determination was necessary because maternal aunt had been approved to accept custody of V.C., as well as DCS’s stipulation to Father’s desired testimony that maternal aunt would be willing to be considered as a relative placement for V.C., we conclude that Father has failed to demonstrate good cause for granting his request for a continuance,” Bradford wrote.
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April 30

Civil Plenary – Property/Title

Daniel P. Millikan v. Lori A. Eifrid

92A03-1109-PL-433

The Indiana Court of Appeals affirmed the trial court’s decision to award title over a disputed piece of property, but reversed regarding the order the defendant pay the plaintiff’s attorney fees.

Lori Eifrid filed claims against Daniel Millikan for foreclosure, specific performance and promissory estoppel regarding a certain parcel of real property. The trial court applied the doctrine of equitable subrogation and awarded the property to Eifrid.

The property in question is a parcel of land directly to the south of Eifrid’s parcel (Parcel A), which is referred to as the Triangle. Without it, Eifrid’s ingress and egress to the cul-de-sac is effectively prevented. Millikan owns property adjacent to Eifrid’s property.

In 2001, Millikan’s brother executed a warranty deed transferring and conveying Eifrid’s parcel and the Triangle to Roger Maxey. Those two pieces were identified as single parcels of property. Maxey got a mortgage on those properties. Maxey agreed to swap with Millikan the Triangle for a 4-foot-wide strip of land just east of Parcel A.  Eventually, Maxey executed a warranty deed in lieu of foreclosure in favor of the Secretary of Veterans’ Affairs on Parcel A and the Triangle, which then sold the property to Eifrid in 2006. She was given a deed that said Parcel A and the Triangle were a single tract, so she believed she was buying land that included access to the cul-de-sac.

Eifrid learned of the issues caused by the attempted “swap” of the properties between Millikan and Maxey when she received notice that a mortgage company was seeking to foreclose on the strip, which is a 4-foot-wide strip of land directly east of Parcel A. She sought to foreclose on the mortgage on the strip, and she purchased the land at a sheriff’s sale. She then filed her complaint of foreclosure, specific performance and promissory estoppel against Millikan for a determination that her legal title to the Triangle is superior to any right, title or interest Millikan might claim and that Millikan exchange the Triangle for the strip of land.

The trial court originally gave Millikan clear title to the Triangle and Eifrid title to the strip. She filed a motion to correct error, which the trial court granted. It then ruled in favor of Eifrid and awarded her legal title of the Triangle. It also ordered Millikan pay Eifrid’s attorney fees even though it did not find he committed fraud.

The COA affirmed, finding the trial court did not err in determining that the doctrine of equitable subrogation applied in these circumstances. There is no showing that Eifrid or the SVA are culpably negligent in failing to discover the improper swap of the property, wrote Judge John Baker.

The trial court did abuse its discretion in ordering Millikan to pay Eifrid’s attorney fees because it did not find Millikan committed fraud or conversion and there’s no statement that Millikan was litigating the matter in bad faith. The judges remanded with instructions to vacate the award of attorney fees.

Criminal – Habitual Offender Status/Enhancement

Jason Jeffries v. State of Indiana

87A01-1102-CR-128

The trial court did not err when it denied a defendant’s motion to withdraw his guilty plea after his attorney failed to discover that the state could charge him with being a habitual offender in only one of the two separate causes that were filed against him, the Indiana Court of Appeals ruled.

Jason Jeffries pleaded guilty to Class A felony possession of methamphetamine with intent to deliver or manufacture under Cause FA-029. In exchange, the habitual offender charges on that cause and a separate one, FC-113, were dismissed. At his sentencing hearing, Jeffries’ attorney told the trial court that his review of the habitual offender statute indicated that Jeffries couldn’t have been subject to such an enhancement under FA-029, but was still eligible for that charge under FC-113.

Jeffries then tried to withdraw his guilty plea, which the trial court denied. He was sentenced to 40 years as outlined in the plea agreement.

The COA held that the trial court did not abuse its discretion in denying the motion to withdraw because Jeffries could have been tried on one of the habitual offender counts, potentially resulting in a longer sentence than he received under the plea agreement, and both habitual offender counts were dismissed pursuant to the plea agreement.

Jeffries’ claim of ineffective assistance of counsel also failed because he can’t establish he would have received a better outcome than the 40-year sentence he received under the agreement if he had been convicted of the charges at trial.

Criminal – Witness Statement/Right of Confrontation

Dontevius Hutcherson v. State of Indiana

45A03-1109-CR-420

Although it would have been better for the trial court to excuse the jury before reading an illiterate witness’s prior statement to him to refresh his memory, any error attributable to its use is harmless, the Indiana Court of Appeals ruled.

Dontevius Hutcherson was charged with murder, murder in the perpetration of a robbery, Class A felony attempted murder, Class A felony robbery, Class B felony aggravated battery, and Class C felony battery for shooting two men. Police took a statement from Victor Lee, who said that Hutcherson told him he had shot and robbed two men. At trial, Lee was able to authenticate his signature on the statement to police and remembered talking to police, but said he couldn’t remember what Hutcherson had told him.

Because Lee is illiterate, the trial court allowed the prosecutor to read the statement aloud to Lee in front of the jury. Lee then said he remembered “half of it but not all.” Hutcherson was found guilty as charged, but the trial court only entered judgment on the murder, attempted murder and robbery charges.

Hutcherson argued that allowing the prosecutor to read Lee’s prior statement aloud in front of the jury to refresh Lee’s memory violated his constitutional right of confrontation. Hutcherson’s attorney had raised a continuing objection to any line of questioning from Lee, but the trial court denied it, stating it would take one question at a time. When the prosecutor read the statement aloud, Hutcherson did not object so he waived this issue for appeal, wrote Judge Terry Crone. There was also no fundamental error on this issue.

Regarding the prosecutor reading aloud Lee’s statement before the jury, the COA noted that the court should have excused the jury before the actual reading of the statement to avoid potential prejudice. But Lee’s prior statement is cumulative and corroborated other witnesses’ testimony, so any error attributable to its use is harmless, wrote the judge.

Juvenile – Treatment Facility Placement

D.A. v. State of Indiana

49A02-1108-JV-692

Because the record shows that a juvenile’s placement at an inpatient treatment facility is consistent with the goals for the teen’s rehabilitation, the Indiana Court of Appeals upheld the juvenile court’s placement order. The judges also found they did not have jurisdiction to rule on the teen’s claim that the juvenile court violated his due process rights by accepting his conditional plea on a child molesting count.

D.A. was 13 when he was accused of touching a 3-year-old girl’s vagina. D.A. entered into a plea agreement where he admitted to Class B misdemeanor battery when committed by an adult in exchange for the state dismissing a Class B felony child molesting charge. D.A. also “conditionally” pleaded guilty to a Class C felony child molesting charge when committed by an adult; the juvenile court took his admission on that count under advisement and if he completed the terms of his probation successfully, the state would move to dismiss the count. If he violated his terms of probation, the court could proceed to disposition on the count.

At a hearing, D.A. admitted to touching the girl’s vagina, but the element of intent was never established. The juvenile court found sufficient factual basis to find the petition true. The probation department recommended formal probation with inpatient placement for sex offender counseling. D.A.’s attorney sought outpatient treatment. The juvenile judge ordered D.A. serve at the inpatient facility.

D.A. attempted to appeal the juvenile court’s acceptance of his conditional plea on the child molesting count, arguing that the evidence didn’t show his intent to arouse or satisfy his sexual desires, which is an element of the crime of child molesting. Because his plea on that count was conditional, it is equivalent to a withheld judgment and so there is no final judgment or appealable order from which to appeal, wrote Judge Edward Najam. Thus, the appellate court does not have jurisdiction to resolve that issue.

The judges also found that D.A. can’t show that the dispositional hearing violated fundamental fairness. Based on the facts, the COA cannot say that the court abused its discretion in placing D.A. in the inpatient facility.

Civil Collection – Employment/Breach of Notice

Walter B. Duncan v. The Greater Brownsburg Chamber of Commerce, Inc.

32A01-1109-CC-429

In its decision ordering summary judgment be entered in favor of the Brownsburg Chamber of Commerce in a lawsuit involving damages to a former employee, the Indiana Court of Appeals adopted the proposition that damages for breach of notice provisions are limited to compensation for the notice period.

Walter Duncan sued the Greater Brownsburg Chamber of Commerce over the amount of damages he received after he was forced to resign as executive director in March 2010. The chamber’s board of directors voted to terminate his contract immediately, but Duncan was given the option of resigning. Per his resignation, he was to work one more week and take a three-week paid vacation. His daily salary was $138, so he was due just under $15,000 for working through April 18, one month after he submitted his resignation letter. The chamber paid more than $15,500 to him in 2010.

Duncan sued later that year, arguing he should have been due damages from the date of the alleged breach through the term of the contract. Both Duncan and the chamber filed for summary judgment. The chamber’s argument basically asks the appellate court to adopt the general proposition that damages for breach of a notice requirement are limited to the compensation for the notice period.

The COA did, adopting the majority rule that “the summary discharge of an employee entitled under the employment contract to a specified period of notice ordinarily permits him to recover his compensation for the notice period only and not for the entire balance of the contract period.” This is consistent with decisions from other jurisdictions.

Here, the contract required a 30-day written notice to the other party before canceling the employment agreement. The most that Duncan was entitled to recover then was 30 days compensation. He received more than what he was entitled to, so the appellate court declined to address whether the chamber actually breached the notice requirement. The judges ordered the trial court enter summary judgment in favor of the chamber.
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May 2

Civil Plenary – Shareholders/Trusts

Andrew C. Kesling, individually and as Trustee of the Andrew C. Kesling Trust v. Peter C. Kesling, et al.

45A03-1106-PL-271

A dispute between family members over stock of the family company led to the Indiana Court of Appeals addressing an issue involving shareholders and revocable trusts that hasn’t yet been addressed in Indiana: whether the settlor, who places shares of stock into a revocable inter vivos trust and names himself as trustee and beneficiary, retains his shareholder status.

At issue is whether Peter Kesling was able, under the shareholder agreement of TP Orthodontics Inc., to sell shares of his stock in 2004 to his son, Andrew Kesling. At the time of the sale, Andrew Kesling, who was a shareholder in TPO, had placed his stock into a revocable trust which named himself as a beneficiary and trustee. TPO shareholders had an agreement that restricted the shareholder’s ability to transfer shares of the company to non-shareholders.  

Andrew Kesling’s siblings initiated a lawsuit, in which they asserted they were each entitled to purchase certain shares of TPO stock. Peter Kesling’s cross-claim against his son is the subject of this appeal, in which Peter Kesling argued that he later learned Andrew Kesling had transferred his shares of the company to a trust before the 2004 sale, so he couldn’t have sold his shares to Andrew Kesling because he wasn’t technically a shareholder. The trial court found the siblings’ claims were moot because it was returning to Peter Kesling the stock he sold because the court found Andrew Kesling wasn’t a shareholder at the time of the sale.

The COA found the trial court abused its discretion in concluding that Peter Kesling was entitled to rescission of the stock purchase agreements. The judges cited the Indiana Supreme Court decision in Marshall Cnty. Tax Awareness Comm. v. Quivey, 780 N.E.2d 380, 383 (Ind. 2002),  in which an individual asserted property rights where the property was held in a revocable trust; the shareholder agreement of TPO; and the Internal Revenue Code to find that Andrew Kesling, not the trust, was the owner of the stock and therefore a shareholder.

There is no question that Andrew Kesling is the beneficial and record owner of the shares and the trust makes clear that he is entitled to vote the shares, wrote Judge Elaine Brown. Because Andrew Kesling’s trust declaration didn’t extinguish his rights as a shareholder of TPO, the trial court abused its discretion when it ordered rescission in favor of Peter Kesling.

The judges didn’t address the siblings’ claims on appeal, but remanded for the trial court to rule on the claims they raised, which include breach of fiduciary duty and constructive fraud.

Post Conviction – Search/Admission of Evidence

Leondre Woodson v. State of Indiana

53A01-1109-PC-466

The Indiana Court of Appeals has affirmed the denial of a man’s petition for post-conviction relief, in which he claimed his trial counsel was ineffective.

Leondre Woodson argued his attorney should have objected at trial to the admission of evidence related to the search of the rental car Woodson was a passenger in, which failed to preserve the issue for direct appeal. He argued that the continued police detention and investigation beyond writing a traffic ticket violated the Indiana Constitution, and that he didn’t have authority to consent to the search of the car.

Chinedu Onyeji rented a car, and he and Woodson were stopped by police for speeding in Bloomington. When the police officer saw a gun in the glove compartment of the car, he called for backup until he could check to determine if the handgun was stolen. Onyeji had a valid permit for the gun, and both men claimed the car was rented so they could drive to Gary to get a copy of Woodson’s birth certificate. Because Onyeji owned a car and the men appeared nervous, police thought they may be involved in narcotics activity. Onyeji declined to allow police to search the car, but Woodson gave them permission. A gun and drugs were found in the trunk, and Woodson was charged on various drug and weapons counts.

Woodson filed a motion to suppress the evidence in the trunk, which was denied. His attorney did not renew any objection to the evidence at trial. Woodson was convicted of three of the charges. On direct appeal, the possession of cocaine while in the possession of a firearm conviction was vacated, but the 20-year sentence was upheld.

Ruling on his PCR petition, which was denied by the post-conviction court, the Court of Appeals found Woodson didn’t establish that he received ineffective assistance from his attorney. At all points of the traffic stop, police were justified in having at least a reasonably high degree of concern or suspicion that some kind of criminal activity may be happening, wrote Judge Cale Bradford. The intrusion of the detention before the search was minimal and the need to maintain officer safety was implicated in this case.

The appellate judges also rejected Woodson’s claim that his consent to search the rental car was invalid because he didn’t have actual or apparent authority to give that consent.•