7th Circuit Court of Appeals
Criminal – Search/Cell Phones
United States of America v. Abel Flores-Lopez
The 7th Circuit Court of Appeals, which likened modern cell phones to computers, had to decide whether police could search a man’s phone for the phone’s number without a search warrant.
Police suspected Abel Flores-Lopez supplied drugs to dealer Alberto Santana-Cabrera, who then unknowingly sold them to a police informant. Police tracked down Flores-Lopez and Santana-Cabrera and arrested them. Police seized a cell phone on Flores-Lopez and two from the truck he was in. Flores-Lopez only admitted to owning the one found on him. Police searched that phone at the scene of the arrest to obtain Flores-Lopez’s phone number. That number was used to produce three months of the phone’s call history, which was introduced into evidence.
Flores-Lopez objected to the admittance, but that was overruled. He argued that the search was unreasonable because police didn’t have a warrant, so the evidence obtained from the phone company shouldn’t be admitted.
Judge Richard Posner examined the issue by comparing modern cell phones to computers and whether just looking for a phone’s number – and nothing more – is allowed without a warrant. Cell phones are containers of data, much like a diary, but also go beyond diaries because they contain far more personal and private information and data, he wrote.
“It’s not even clear that we need a rule of law specific to cell phones or other computers. If police are entitled to open a pocket diary to copy the owner’s address, they should be entitled to turn on a cell phone to learn its number,” Posner wrote.
He also looked at the urgency issue – do police need to obtain the cell phone’s number right away? There is the possibility of an arrestee erasing all the data from his phone, either on scene or remotely.
In the end, the appellate court decided the invasion of privacy by looking for just a cell phone number of a phone was slight. It could be obtained by doing a quick search on the phone and without seeing other data.
Indiana Supreme Court
Certified Question – Police Officer/Disability
Mark J. Thatcher v. City of Kokomo, et al.
A police officer who was injured in the 1980s and received disability benefits – but later was physically able to rejoin the police department – is statutorily prohibited against returning to the force, the Indiana Supreme Court decided in answering a certified question.
Mark Thatcher was a City of Kokomo police officer in the 1980s. After four years of service, he hurt his knee in the line of duty and eventually received Public Employees’ Retirement Fund disability benefits pursuant to his membership in the “1977 fund.” After more than 20 years of receiving the disability pension, surgery allowed Thatcher’s knee to be repaired and he asked for reinstatement to active duty.
Initially, the local pension board voted to reinstate Thatcher, but the Board of Works notified PERF that no suitable work was available for Thatcher. He then filed a federal suit claiming discrimination on the basis of age and disability. Thatcher was 49 at the time he asked for reinstatement.
When the city finally received money to hire more officers, it believed it was statutorily prevented from reinstating Thatcher based on Indiana Code 36-8-4-7(a): “A person may not be appointed as a member of the police department or fire department after the person has reached thirty-six (36) years of age. A person may be reappointed as a member of the department only if the person is a former member or a retired member not yet receiving retirement benefits of the 1925, 1937, 1953, or 1977 fund and can complete twenty (20) years of service before reaching sixty (60) years of age.”
The federal court sent the justices the certified questions: “1) Does Indiana Code section 36-8-4-7(a) apply to a member of the 1977 Fund who is receiving disability benefits and who has been determined to have been recovered pursuant to 35 Indiana Administrative Code section 2-5-5(c)? 2) If yes, does Indiana Code section 36-8-8-12(e) apply to determination of eligibility under Indiana Code section 36-8-4-7(a), such that time spent receiving disability benefits counts toward ‘years of service’ as that term is used in Indiana Code section 36-8-4-7(a)?”
The justices determined that I.C. 36-8-4-7(a) applies to a member of the 1977 fund who is receiving disability benefits and who has been determined to have been recovered pursuant to 35 Indiana Administrative Code 2-5-5(c). They also held that the time period during which a person receives disability benefits under Indiana Code 36-8-8-12(e) doesn’t count toward “years of service” as that term is used in I.C. 36-8-4-7(a).
“We commend Thatcher for his commitment to police service and for his efforts to return to active duty on the KPD. And we sympathize with his frustrations at not being able to return to serve his community in this capacity. Indeed the City initially believed it could offer Thatcher a position when one became available. The City later realized, and correctly so, that there was a statutory prohibition against allowing Thatcher’s return to the Department,” wrote Justice Robert Rucker.
Indiana Court of Appeals
Post Conviction/Ineffective Assistance of Counsel
Keith Woodson v. State of Indiana
The Indiana Court of Appeals declined to find an attorney provided ineffective assistance of trial counsel to a man on trial for the second time because that attorney didn’t defend the case in the same manner as did the attorney on the first trial.
Keith Woodson appealed the denial of post-conviction relief relating to the representation of private attorney Paul Harper at Woodson’s second trial for murder and carrying a handgun without a license. Woodson was represented by private attorney Kimberly DeVane at his first trial, which resulted in a mistrial. DeVane withdrew her representation on the second trial due to payment concerns.
Unlike what DeVane did at the first trial, Harper didn’t question either of the two eyewitnesses on specific matters, such as their having told a detective that the person they identified as the shooter was known as “PG,” which is Woodson’s nickname. At the second trial, the state was able to present additional evidence it didn’t have at the first trial provided by an acquaintance of Woodson’s. Shelby Stone was being transported with Woodson from jail to court and claimed that Woodson told him something about the murder that would mean Woodson murdered the victim as revenge. Woodson was found guilty at his second trial.
“An argument could be made that Harper’s cross-examination of Owens and Johnson was not as thorough as DeVane’s in the first trial. However, our job here is not to grade Harper’s performance as compared to DeVane’s,” wrote Judge Michael Barnes. “Additionally, juries are not interchangeable machines but instead are made up of twelve unique individuals, and there was nothing precluding the second jury from weighing the evidence differently than the first jury.”
The appellate court found that Harper did question the eyewitnesses extensively on their identification of Woodson as the killer, and he did attempt to impeach their credibility, just not in the same manner as DeVane, wrote the judge.
The COA also declined to find that Harper was ineffective for failing to procure the services of an eyewitness identification expert to assist with and testify at the second trial.
Criminal – Evidence/Operating While Intoxicated
Bernard Short v. State of Indiana
The Indiana Court of Appeals declined to find that a Marion Superior court abused its discretion when it admitted the results of a chemical breath test.
Bernard Short appealed his conviction of Class A misdemeanor operating a vehicle while intoxicated. He was pulled over by police after an officer saw Short’s car make unsafe lane movements and cut off other cars. Lieutenant Richard Kivett performed a certified chemical breath test on Short, which showed he had a blood alcohol concentration of 0.10.
Short tried to suppress the results of the breath test, but the trial court denied it.
On appeal, Short claimed the trial court abused its discretion in admitting the results of the breath test because Kivett’s testimony as to how he administered the test differed from the suppression hearing to the trial. Short argued Kivett didn’t follow the appropriate testing procedures.
Given the appellate court’s standard of review for admissibility of evidence, it couldn’t say that the trial court abused its discretion in admitting the test results.
Short also argued that the trial court erred in rejecting his proposed jury instruction regarding the breath test and when it should not be admissible.
“The proposed instruction tracks the language of Indiana Code Section 9-30-6-5(d) and Ramirez v. State, 928 N.E.2d 214 (Ind. Ct. App. 2010), trans. denied,” wrote Judge Michael Barnes. “However, simply because the language tracks the language from an opinion from this court and a statute does not make it proper for a jury instruction.”
The proposed instruction concerns admissibility of evidence, which is determined by a trial court, and the trial court properly rejected it, wrote Barnes.
Criminal – Jury Information/Child Molestation
Eriberto Quiroz v. State of Indiana
The Indiana Court of Appeals relied in part on two decades-old cases from the state Supreme Court to find that exposing the jury to dismissed charges did not deprive a defendant of a fundamentally fair trial.
Eriberto Quiroz appealed his convictions of Class A and Class C felony child molesting and argued that he was denied a fair trial when the jury was given a copy of the charging information which included counts that had been dismissed.
Quiroz, 27, had molested the 6-year-old half-sister of his friend by pulling down the girl’s pants and licking her vagina. He also threatened her with a knife to not tell anyone.
The jury was given the charging information, which included two child molesting charges that were dismissed. He didn’t object at trial and the judge specifically instructed the jury that those two counts had been withdrawn and to not consider them when evaluating the other charges. Although the appellate court couldn’t find any Indiana case directly on point, it relied on Berry v. State, 196 Ind. 258, 148 N.E. 143 (1925), and Nordyke v. State, 213 Ind. 243, 11 N.E. 2d 165 (1937), as well as decisions from outside of Indiana to find there is no error in permitting the jury to have access to an information or indictment that has dismissed counts when the jury is also told that the dismissed counts aren’t to be considered or the charging instrument isn’t evidence.
“In short, while certainly not the best practice, the trial court did not commit fundamental error in including in the jury instructions a copy of the charging information that included the counts against Quiroz that had previously been dismissed,” wrote Judge Paul Mathias.
Mortgage Foreclosure – Bank Merger
CFS, LLC and Charles Blackwelder v. Bank of America, Successor in Interest to LaSalle Bank Midwest National Association
The Indiana Court of Appeals ruled that a federal statute provides the authority for a bank that survives after a merger to enforce the promissory note and mortgage established by a predecessor bank.
The Indiana Court of Appeals affirmed a ruling by Hamilton Circuit Judge Paul Felix that granted summary judgment in favor of Bank of America.
The case involves a promissory note and construction mortgage that CFS obtained in June 2007 in exchange for a $982,500 loan from LaSalle Bank Midwest National Association. Charles Blackwelder executed a personal guaranty of the debt, but in August 2004, Bank of America – which had merged with and was a successor-in-interest to LaSalle – filed a mortgage foreclosure complaint alleging the loan was in default. CFS admitted to the debt but asserted it didn’t have any knowledge of the merger or Bank of America’s role as successor and right to collect the balance.
Bank of America moved for summary judgment on grounds that it had merged and had the authority to collect the debt or foreclose, and after a December 2010 hearing, the trial judge took the matter under advisement. He initially declined summary judgment after the bank couldn’t provide any caselaw authority proving a successor-in-interest is sufficient to prove ownership, but he later granted summary judgment when Bank of America filed a motion to correct error that cited a federal statute providing that authority.
The bank cited 12 U.S.C. section 215a(e) that outlines the corporate existence of each merging bank and how all rights, franchises and interests of the individual merging banks are transferred to the successor merged bank without any deed or other transfer being needed.
Although the bank referenced a copy of the merger certificate and no factual dispute existed that a merger had occurred, Bank of America didn’t include a copy of that merger certificate. The trial court granted its judgment of foreclosure and decree of sale in the bank’s favor in April 2011. Appealing, CFS alleged the trial court granted summary judgment only after improperly considering “new evidence” about that federal statute.
The Court of Appeals ruled that Bank of America didn’t have to attach a copy of the merger when there was no factual dispute it had happened, and that the federal statute wasn’t “new evidence” presented to the trial court. The appellate panel found that no genuine issue of material fact existed about the merger and that summary judgment was properly granted to Bank of America.
Criminal – Double Jeopardy
Augustus Mendenhall v. State of Indiana
The Indiana Court of Appeals has ruled that two convictions of a former attorney who attacked a lawyer-legislator violated Indiana’s double jeopardy clause and that one of the charges should be reduced in order to remedy the violation.
Augustus Mendenhall, the man who beat and held at gunpoint Rep. Ed DeLaney, D-Indianapolis, in October 2009 because of a long-standing dispute in which Mendenhall blamed DeLaney for his family’s legal issues, appealed his convictions.
Mendenhall, an attorney who was admitted to practice in 2008 but has since been permanently disbarred as a result of his attack on DeLaney, was convicted of Class A felony attempted murder, Class A felony robbery resulting in serious bodily injury, Class B felony aggravated battery, Class B felony criminal confinement and Class A misdemeanor resisting law enforcement. A jury found Mendenhall guilty but mentally ill on all counts, and Hamilton Superior Judge William Hughes sentenced him to an aggregate term of 40 years.
On appeal, Mendenhall raised five issues that included the trial court’s denying his motion for mistrial, his objection to allowing the state to present a rebuttal witness, and whether the state should have been allowed to present rebuttal to Mendenhall’s case following court-appointed medical witness testimony. The court affirmed on those issues, as well as on claims questioning the evidence sufficiency.
But in examining double jeopardy questions, the appellate court found that the Class B felony conviction of aggravated battery and Class A felony conviction of robbery resulting in serious bodily injury violate Indiana’s probation against double jeopardy. The court remanded with instructions to reduce the robbery conviction to a Class C felony.
Civil Tort – Home Construction/Defective Work
ARC Construction Management, LLC, and Alan Muncy v. John Zelenak and Cecilia Zelenak
The Indiana Court of Appeals has found that a Clark County case can continue involving claims against a home construction company. The former homeowners allege that the company defectively built their home and that mold and water damage occurred, leading to loss of habitability.
John and Cecilia Zelenak bought the home in 2004. Four years later, they filed a complaint against ARC Construction Management that alleged the company breached the contract by not constructing the home in a structurally sound manner and building it contrary to code. Specifically, the suit alleged the windows and doors weren’t properly installed or were defective, the lintels remain unpainted, one rafter was missing, electrical wires were left exposed, and there was water intrusion that damaged personal property inside. The Zelenaks wanted ARC to cover the losses and pay punitive damages in order to deter similar conduct in the future.
In 2010, the Zelenaks foreclosed on their home and ARC filed a motion to dismiss on grounds that they lacked standing after foreclosing on their ownership. Although the Zelenaks conceded the foreclosure barred most of their claims, they argued that they still had standing to bring a claim concerning the loss of use and enjoyment in the house during their time there due to the water intrusion. The trial court preserved that claim but granted summary judgment in ARC’s favor on the remaining issues, and the court then certified the order for interlocutory appeal.
On appeal, the three-judge panel found that ARC had adequate notice of the implied warranty breach claim because it was alleged in the amended complaint. The court found the Zelenaks have standing because they are alleging damage sustained as a result of ARC’s defective construction, and the panel determined a genuine issue exists for trial on that claim of habitability.
The court also denied a request for attorney fees from the Zelenaks, finding that ARC’s failure to include exhibits in its appendix weren’t so flagrant or significant to warrant those fees.
Civil Tort – Automobile Accident/Courtesy Wave
Jacob Key, Ted J. Brown and Sally A. Brown v. Dewayne Hamilton
In a case of first impression, the Indiana Court of Appeals has affirmed a trial court’s grant of summary judgment in favor of a motorcyclist injured in a crash. One judge disagreed with the majority decision, stating the opinion is contrary to sound public policy.
The question the court was asked to review for the first time is whether a driver who signals another driver to proceed onto a roadway is liable for injuries sustained by a third party. (Read more in expanded coverage on page 1.)
Civil Plenary – Underinsured Motorist
Monte Hanna and Kim Hanna v. Indiana Farmers Mutual Insurance Co.
The parents of a teenager killed in a crash during a drag race cannot recover funds in their individual capacities under their automobile insurance underinsured motorist provisions, the Indiana Court of Appeals concluded.
Parents Monte and Kim Hanna received $50,000 from the insurer of one of the drivers involved and $250,000 from the insurer of the driver of the vehicle Casey Hanna was riding in.
The Hannas also sought to recover the $250,000 per person limit under their UIM endorsement, which would be adjusted based on the amount they received from the drivers’ insurers. They claimed since neither of the parents received the “per person” limit of the UIM coverage in the amount of $250,000, then the vehicles involved in the accidents should be considered underinsured.
The trial court granted summary judgment for Indiana Farmers Mutual Insurance, finding the Hannas have only one, joint derivative claim and are subject to the $250,000 per person limit of their Indiana Farmers’ policy. They received $300,000 from the drivers, so they are not underinsureds.
The COA agreed after examining the policy language and the Child Wrongful Death Act, finding the two are precluded from asserting a claim on their own or under common law.
“Pursuant to the CWDA, it is apparent that the parents of a minor child can maintain a single, joint claim for the death of their minor child. In other words, nothing in the statute permits each parent to maintain a separate wrongful death claim in his or her own right,” wrote Judge John Baker.
Criminal – Sexual Battery
Kevin B. Perry v. State of Indiana
The Indiana Court of Appeals has reversed a man’s conviction of Class D felony sexual battery because the defendant’s actions don’t qualify as sexual battery under Indiana statute. It ordered the man be convicted of Class B misdemeanor battery.
Kevin Perry invited his teenage son’s girlfriend and two of her friends over to his house while his son wasn’t there. He gave them alcohol and later got into bed with his son’s girlfriend. Without her consent, he inserted his fingers into her vagina and rubbed his penis on her buttocks. He was charged and convicted of Class D felony sexual battery.
Although the evidence can support a battery conviction, it can’t support one for sexual battery because the evidence doesn’t show that the girlfriend was compelled to submit to the touching by force or imminent threat of force, wrote Judge John Baker.
“We do not mean for our holding and reasoning in this case to be construed as approval for Perry’s actions. Indeed, we find the fact that he invited underage girls to his house, furnished them with alcoholic beverages, and then invasively touched one of them to be quite repulsive,” he wrote.
Because the evidence supports the Class B misdemeanor battery conviction, the judges ordered the trial court to enter the conviction as the misdemeanor and sentence Perry to 180 days incarcerated with 90 days suspended.
Civil Tort – Defamation
Joseph A. Davis v. Herbert Simon and Bui Simon
A divided Indiana Court of Appeals has reversed the decision of a Marion Superior judge that denied a California attorney’s motion to dismiss a defamation lawsuit filed by Herbert and Bui Simon for lack of personal jurisdiction. The lawsuit stems from comments the attorney made to an Indianapolis television station regarding lawsuits involving the Simons.
Joseph Davis, a California attorney representing plaintiffs in several suits against the Simons in California, was contacted by an Indianapolis TV station for comment on the lawsuits, including one involving the Simons’ former house manager in California. Over the phone, Davis said “[t]he firing is because my client refused to engage in an unlawful, meaning a criminal, act pursuant to our immigration laws. . . . This was all designed to conceal from local and state authorities the existence of this undocumented worker.” The comments were aired in Indiana.
The Simons sued in Marion County for defamation and false light publicity based on those statements. Davis wanted the suit dismissed for lack of personal jurisdiction or grounds of forum non conveniens. Marion Superior Judge Heather Welch denied the motion.
On interlocutory appeal, the majority ruled in favor of Davis. The judges relied in part on the “express aiming test” outlined in Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482 (1984), and Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir. 1994).
Davis’ act of responding to the questions of a reporter who initiated the contact with Davis in California regarding a California lawsuit, in which he is the plaintiff’s attorney, wasn’t done with the purpose of expressly targeting a resident of the forum state, the majority ruled.
“Davis neither wrote nor disseminated the news story which is the object of the Simons’ defamation and false light claim. In short, the record does not reveal ‘purposeful conduct’ which was ‘intentionally directed at’ Indiana on the part of Davis to defame the Simons in Indiana, and accordingly Davis did not ‘expressly aim’ conduct at the State of Indiana,” wrote Judge Elaine Brown.
The majority concluded that an attorney, in answering a reporter’s unsolicited questions – in which the attorney made comments regarding the allegations of a lawsuit and represented that the allegations were truthful – without more, doesn’t constitute expressly aiming one’s conduct at the forum state.
Judge James Kirsch dissented, writing that Davis engaged in intentional conduct in Indiana that was calculated to cause injury to the Simons in Indiana by “intentionally communicating defamatory statements … to a reporter for an Indianapolis television station.” He believed Davis’ conduct was “expressly aimed” at Indiana.
Civil Tort – Labor Union/Hiring
Engineered Steel Concepts, Inc., ESC Group Limited, and Tom Anderson v. General Drivers, Warehousemen, and Helpers Union Local 142, International Brotherhood of Teamsters, and Steven Parks
The Indiana Court of Appeals has upheld the decision by a trial court to dismiss a company’s state law claims against a labor union, finding those claims are preempted by a decision of the National Labor Relations Board.
Engineered Steel Concepts, owned by Tom Anderson, negotiated with Steven Parks, a business agent for a union, to have union members drive trucks hauling a by-product of the steel-making process. Anderson had two agreement options: a Section 8(f) general construction agreement, applicable to employers who are primarily in the building and construction industry; and Section 9(a), a commodity hauling agreement. Anderson signed the Section 8(f) agreement under the belief that this was the best agreement since the work would be temporary.
After the by-product hauling project ended, the company told the union employees that no other work was available. The union filed a charge against ESC with the National Labor Relations Board claiming the employees were unjustly terminated. An administrative law judge found that the company couldn’t have entered into a Section 8(f) agreement and treated the agreement instead like the Section 9(a) agreement. Under Section 9(a), ESC couldn’t terminate the agreement at the end of the project. The ALJ found ESC violated several sections of the National Labor Relations Act.
Anderson and the company then alleged three counts against Parks and the union, including fraud in inducement of the contract. The trial court granted the union’s request to dismiss the complaint under Indiana Trial Rule 12(B)(1) for lack of subject matter jurisdiction.
The appellate judges found that the National Labor Relations Act preempted the state claims. The three state law claims against Parks and the union are essentially based on the exchange between Anderson and Parks in deciding which agreement to use. These issues were before the ALJ for resolution of the NLRB complaint.
“As such, it would be impossible for a state court to determine the merits of Anderson and the Company’s allegations without becoming an obstacle to the federal objective of having the NLRB exclusively ‘oversee and referee’ the collectively bargaining process between these two entities,” wrote Judge Edward Najam.
Estate/Supervised – Medicaid Reimbursement
State of Indiana ex rel. Family and Social Services Administration v. Estate of Phillip Roy
The Indiana Court of Appeals has found that a trial court erred in concluding that the Family and Social Services Administration’s preferred claim for reimbursement of Medicaid benefits against an estate was not timely filed.
The FSSA filed a notice of lien in April 2009 against the estate of Phillip Roy after he died in November 2008 for nearly $40,000 in Medicaid expenses incurred by Roy during his lifetime. The estate moved to dismiss the petition. The trial court disallowed the lien because it was invalid and found that FSSA’s claim to recover the benefits was time-barred by Indiana Code 29-1-14-1(d) because it was filed more than nine months after Roy died.
The trial court focused on the part of the statute that says all claims barrable under subsection (a) would be barred if not filed within nine months. But the judge disregarded the language of subsection (a) that says the time limitations apply to all claims filed “other than … claims of the United States, the state, or a subdivision of the state …” The FSSA is a subdivision of the state, the judges found.
Judges James Kirsch and Cale Bradford also rejected the argument by the estate that because an estate wasn’t opened within five months, the estate representatives are prevented from selling Roy’s real estate and using the proceeds or a portion of it to pay FSSA’s claim based on I.C. 29-1-7-15.1(b). The judges remanded with instructions.
Judge Michael Barnes disagreed with his colleagues that subsection 15.1(b) doesn’t preclude the sale of Roy’s real property to pay a debt owed to FSSA.
“To give effect to Subsection 15.1(b), I believe that because FSSA is no longer claiming that it has a valid lien upon Roy’s real property and because his estate was not opened within five months of death, the property cannot be sold to pay FSSA’s claim,” he wrote.
Civil Tort – Indiana Products Liability Act
Jeremy K. Warriner v. DC Marshall Jeep a/k/a DC Marshall, Inc.
The Indiana Court of Appeals has ruled in favor of a southwestern Indiana car dealer being sued by a customer for injuries in a car accident under the Indiana Products Liability Act after Chrysler LLC filed for bankruptcy.
Jeremy Warriner was severely injured in an automobile accident in 2005 after his Jeep Wrangler was hit, causing it to roll over and catch fire. He leased the car from DC Marshall in Sullivan, Ind. Warriner originally sued Chrysler LLC, claiming the company was strictly liable under the IPLA for his injuries due to a design defect of the Wrangler. He also sued DC Marshall, claiming the dealership contributed to his injuries by negligently marketing the Wrangler as safe.
Chrysler filed for Chapter 11 in 2009 and sold its assets to Chrysler Group. Warriner believed this sale meant he could no longer sue Chrysler, and he amended his complaint to go after DC Marshall for strict liability under IPLA and for negligent marketing. The trial court granted summary judgment in favor of the dealership.
The Indiana Court of Appeals affirmed, although the judges had differing reasons. Judges John Baker and Carr Darden found the trial court still holds jurisdiction for purposes of the IPLA and Warriner can’t rely on Indiana Code 34-20-2-4 to assert a claim in strict liability against the dealership.
“…a discharge injunction enjoins a creditor or claimant from initiating or continuing a cause of action, but does not divest state courts of jurisdiction over an enjoined action,” wrote Baker. “Indeed, if discharge deprived a state court of jurisdiction, then there would be no need for the permanent injunction that accompanies the discharge.”
While Judge L. Mark Bailey concurred in result with his colleagues, he wrote separately to say he would affirm because Warriner voluntarily dismissed Chrysler LLC from the case before the effective date of liquidation of the company by the bankruptcy court, so he can’t seek recovery from DC Marshall on his products liability claim.
The judges agreed that the evidence didn’t create a genuine issue of material fact as to whether the dealership participated in the marketing of Chrysler before it filed for bankruptcy.
Criminal – Miranda Rights/Statement at Trial
Brian Scott Hartman v. State of Indiana
The Indiana Court of Appeals has affirmed the denial of a defendant’s motion to suppress an incriminating statement to a detective because the defendant initiated the discussion and understood his Miranda rights before speaking.
Brian Scott Hartman was in jail on burglary charges when a sheriff’s detective asked Hartman about his father. Hartman requested to speak with an attorney, so questioning stopped. The next day, detective Tom Pullins executed two search warrants of Hartman’s property and found the body of the father. Pullins went to the jail to read the search warrants to Hartman and ask if he had any questions. Hartman indicated he wanted to speak, was advised of his Miranda rights, and Hartman waived his rights and made an incriminating statement about his involvement in his father’s death.
Hartman tried to have the statement suppressed at his trial for murder and Class C felony assisting suicide, but the trial court denied it.
On interlocutory appeal, the COA couldn’t find an Indiana case directly on point with this issue and relied on State v. Person, 104 P3.d 976, 980-83 (Idaho Ct. App. 2004), to affirm the lower court. The facts are similar in the Person case, in which the trial court concluded that police had not re-initiated the interrogation, but had appropriately contacted Person to inform him of the charges he faced by reading an arrest warrant to Person.
As in Person, Pullins didn’t re-initiate the interrogation. Hartman initiated further communication by asking whether the search warrant had been served and whether anything had been found. Hartman then told Pullins he wanted to speak with him and waived his Miranda rights before making the statement. Thus, the trial court didn’t err in denying Hartman’s motion to suppress.
Civil Plenary – Unpaid Wages
Brandy L. Walczak v. Labor Works-Fort Wayne, LLC, d/b/a Labor Works
The Indiana Court of Appeals found that a woman’s lawsuit for unpaid wages should have been brought before the Indiana Department of Labor before she filed her action.
Brandy Walczak, who filed her suit on her behalf and all others similarly situated, appealed the grant of summary judgment for Labor Works – Fort Wayne. Labor Works provides temporary day-laborer services to businesses. Those who seek work assignments for the day must show up at Labor Works’ facility that morning and there is no guarantee there will be work. Walczak sought work sporadically through Labor Works over the course of nearly four months. She was hired to work one day. She filed her lawsuit in February 2010 alleging violations of the Wage Payment Statute and the Wage Deduction Statute.
Labor Works filed for summary judgment, claiming Walczak didn’t have the right to file the lawsuit and the court didn’t have jurisdiction over her claim.
The appellate court reversed summary judgment, finding that she had to first submit her claim to the Department of Labor for resolution.
“The determination of whether, when she filed her complaint in the instant action, Walczak was separated from the payroll by Labor Works within the meaning of the Wage Claims Statute is a question of fact, not a matter of statutory interpretation,” wrote Judge Ezra Friedlander.
The judges held that this type of fact-sensitive inquiry should be resolved in the first instance by the administrative agency. The trial court lacked subject matter jurisdiction over the claims until the DOL had made a determination on that question.
The COA ordered the trial court to dismiss the complaint.
Civil Tort – Breach of Contract
CBR Event Decorators, Inc., Gregory Rankin, Robert Cochrane and John Bales v. Todd M. Gates
Because there was no causal connection established between misuse of the corporate form and fraud or injustice, the Indiana Court of Appeals reversed the trial court’s decision to pierce the corporate veil.
Robert Cochrane, John Bales and Gregory Rankin arranged to purchase MCS Decorators Inc.’s assets from Todd Gates. Gates had loaned money to the company, which was owned and operated by his then-son-in-law, David Marquart. Cochrane, Bales and Rankin formed a limited liability company to purchase the assets from Gates, who had initiated a replevin action to foreclose on his security interest in MCS’ assets. The three men became shareholders of CBR Event Decorators Inc.
The shareholders gave Gates $100,000 for a down payment, but a day later, the shareholders claimed MCS’ status with regard to clients’ relationships with the company was misrepresented. Gates refused to return the money, so a stop payment was put on the check. Gates never transferred any assets to CBR.
Gates sued CBR claiming breach of contract and that the corporate veil should be pierced to allow the imposition of personal liability on the shareholders. The trial court accepted in full Gates’ proposed findings of fact and conclusions of law and entered judgment in favor of Gates for $260,815.77 plus interest and attorney fees. The judge also found that the shareholders had fraudulently conveyed $100,000 by withdrawing it from their attorney’s trust account.
To justify the decision to pierce the corporate veil, the trial court determined that CBR was undercapitalized, lacked corporate records, and the shareholders had fraudulently represented to Gates in the purchase agreement that there were no representations, warranties, or understandings other than those set forth or provided for in the purchase agreement.
The Court of Appeals reversed the piercing of the corporate veil, relying on caselaw that supports the shareholders’ assertion that the fraud or injustice alleged by a party seeking to pierce the corporate veil must be caused by, or result from, misuse of the corporate form. The fraud alleged by Gates had nothing to do with the misuse of the corporate form, wrote Judge Nancy Vaidik, and the necessary causal link doesn’t exist because the alleged misrepresentation doesn’t pertain to CBR’s corporate status.
The judges did affirm the judgment against CBR for breach of contract and against the shareholders for $100,000 for fraudulent conveyance, fraudulent transfer, and wrongful stop payment. The appellate court ordered the trial court to determine the portion of attorney fees the shareholders are liable for to Gates as a result of the wrongful stop payment.
Civil Plenary – Real Estate/Contracts
Ronald E. Izynski and Linda Izynski v. Chicago Title Insurance Co.
The Indiana Court of Appeals has reversed a decision in favor of a title company, finding that the trial court must re-examine the case to decide if the two property owners have an action for negligent contract misrepresentation relating to a land easement dispute.
The appellate court analyzed a contract dispute arising from a land ownership deal in 2003.
Ronald and Linda Izynski bought real estate in Porter County from Charles Ashton, and that property had a 50-foot easement that was publicly recorded but wasn’t reflected in multiple versions of a title commitment issued by Chicago Title Insurance Co. After the Izynskis learned about the easement and bought the property at a reduced price, they sued Chicago Title for breach of contract and negligence. But after a bench trial, the judge found in the title company’s favor.
The appellate panel found the trial court erred by finding the Izynskis were in contractual privity with Chicago Title because of the preliminary title and final policy issued. The trial court found that because Chicago Title and the Izynskis had a contract, no tort claim of negligent misrepresentation was available and they’re left with only contractual remedies. That was an error, the appellate panel determined, because Chicago Title had issued the title documentation to the owner the Izynskis bought the property from and the company didn’t actually have a contract with the Izynskis.
Chicago Title aruged the Izynskis had no breach of contract action because when they agreed to purchase the property, all versions of the title commitment had been issued to a prospective buyer and not to the Izynskis. It also argued the Izynskis have no tort remedy because they were in contractual privity with Chicago Title.
“Chicago Title cannot have it both ways,” wrote Judge Melissa May. “As we find there was no privity when the Izynskis agreed to buy the property, we remand for a determination whether the Izynskis have an action for negligent misrepresentation.”
The appellate panel also found the trial court erred in finding that mention of a previous easement from 1972 serves as notice for the 1979 easement at issue.
Criminal – Methamphetamine/Jury Instruction
Angela C. Garrett v. State of Indiana
The Indiana Court of Appeals has ordered a new trial for a woman convicted of felony methamphetamine dealing, finding that the Hendricks Superior judge should have instructed the jury on a lesser-included offense of methamphetamine possession.
The appellate court examined a case involving a traffic stop in which Angela Garrett was a passenger. The driver told police he’d smoked marijuana that day and gave officers the remains of several joints. When police searched Garrett, they found two bundles of cash totaling $4,500, and in her purse they discovered a gun, two scales, small plastic baggies and material to cut methamphetamine and increase the volume. She also had a small pouch with about 26 grams of meth in three baggies, as well as a pipe, scale, and more small baggies. Another gun was found in the trunk.
Garrett first told police the drugs and weapons were hers, but later she said that the driver was the dealer, and that he’d been physically abusive and had threatened to hurt her and her children if she didn’t tell police the drugs and weapons were hers.
Although Garrett asked at trial that the jury be instructed on the lesser-included offense of possession, the judge declined to instruct the jury and she was subsequently found guilty of Class A felony dealing methamphetamine and Class A misdemeanor carrying a handgun without a license.
On appeal, the Court of Appeals declined to accept the state’s position that Garrett had waived her challenge to the court’s decision not to instruct the jury because she hadn’t submitted a written instruction for the trial court to review.
A serious evidentiary dispute existed about whether Garrett had intent to deal methamphetamine, the appellate court ruled. Citing its own caselaw from 1996, the Court of Appeals determined that the jury should have had the option to hear about that lesser-included offense – even if it wasn’t required to believe Garrett. The case is remanded for a new trial.•