7th Circuit Court of Appeals
Civil – Labor Union/Compensation
Beverly K. Copeland, et al. v. Penske Logistics LLC; Penske Logistics, Inc.; and Chauffeurs, Teamsters, Warehousemen and Helpers Local Union Number 135
The 7th Circuit Court of Appeals held that only the National Labor Relations Board has authority to hear a complaint from employees who brought a hybrid suit against an employer and labor union.
Former employees of Penske Logistics filed suit, dissatisfied with the compensation package Penske offered them when it lost its contract with The Indianapolis Star, its only customer. The company provided transportation services for the newspaper. The hybrid suit claimed that Penske failed to provide its employees all the benefits available to them under its contract with The Star. The suit also claimed that the union should be held liable for failing to bargain with Penske in good faith to secure the extra benefits for the employees.
In the 7th Circuit opinion, Chief Judge Frank Easterbrook wrote: “As a hybrid action, it is doomed by the fact that the plaintiffs do not even contend that Penske Logistics failed to implement the collective bargaining agreement.”
The appellate panel also held that the good faith claim is a matter only under the jurisdiction of the National Labor Relations Board. It affirmed the District Court’s grant of summary judgment in favor of the defendants in the matter of fair representation. Citing lack of subject matter jurisdiction, it remanded for dismissal of the claim that the union failed to engage in good faith bargaining.
Criminal – Sentencing
United States of America v. Jaymie T. Mount
The 7th Circuit Court of Appeals has ordered a man resentenced because the District judge erred by not granting the defendant the one-level reduction under the United States Sentencing Guidelines that was triggered by the government’s motion.
Jaymie T. Mount appealed Judge Jane Magnus-Stinson’s refusal to grant the government’s motion for Mount to receive an additional one-level reduction following his decision to plead guilty to possession of a gun by a felon. While awaiting trial on the charge, Mount disappeared for nearly three months before being captured. He pleaded guilty to the gun charge, which led to the District Court granting him a two-level reduction in his offense level under the sentencing guidelines. But Magnus-Stinson denied the one-level reduction based on Mount’s decision to flee.
Mount argued that the one-level reduction is mandatory once the government determines that the criteria spelled out in U.S.S.G. Section 3E1.1(b) are satisfied and it makes the necessary motion. The federal appellate court hasn’t squarely addressed this issue, but it agreed with Mount. The judges looked to decisions from other Circuits and the language of the guidelines to find the reduction is mandatory.
However, nothing in Mount’s argument touches on the District Court’s duty to evaluate the outcome of the correct computation of the advisory guideline range and then impose a reasonable sentence. In this case, the judges found Magnus-Stinson erred in not granting the one-level reduction because it ultimately affected the advisory guideline range.
Criminal – Sentencing/Career Offender
United States of America v. Anthony Raupp
Amends original opinion issued March 9, 2012, in which majority affirmed 100-month sentence and determination Raupp is a career offender.
Criminal – Sentence/Certificate of Appealability
United States of America v. Kimani Lanier Fleming
Dealing with the issue for the first time, the 7th Circuit Court of Appeals has held that a certificate of appealability is needed for the part of a case that challenges the denial of collateral relief.
Kimani Fleming appealed his revised 480-month sentence and the District Court’s decision to use aggregation of individual drug quantities over a period of time to conclude whether Fleming possessed more than 50 grams of crack. Fleming was originally sentenced to life in prison for his various drug and firearms convictions, but his sentence was revised after he filed a petition under 18 U.S.C. Section 2255 asserting his counsel had been constitutionally ineffective. The government then admitted it had failed to file its notice of enhanced penalty within the permitted time frame, causing the District Court to set aside the mandatory life sentence.
Fleming then appealed his revised sentence and challenged his conviction of possession of cocaine base with intent to distribute. He has no certificate of appealability on the conviction issue.
“The question is whether he needs a CA for his challenge to the aggregation ruling, which is the part of the case that was rejected in his Section 2255 proceeding. Although we have not had occasion to address this situation before, our sister circuits have done so and have unanimously concluded that a CA is needed for the part of the case that challenges the denial of collateral relief,” wrote Judge Diane Wood. “We see no reason to part company with them, and we thus conclude that Fleming is not entitled to challenge the adverse portion of the district court’s decision on his Section 2255 motion without a CA.”
The judges declined to grant him a CA based on alleged ineffectiveness of counsel and affirmed his sentence. They found the District Court reasonably relied in part on the testimony of a witness indicating the amount of cocaine powder Fleming was moving.
Indiana Tax Court
Tax – Attorney Disqualification
Utilimaster Corp. v. Indiana Dept. of State Revenue
Indiana Tax Court Judge Martha Wentworth has denied the state Department of Revenue’s attempt to disqualify the two attorneys representing a company in a refund dispute.
Attorneys Robert Romack and Dan Dunbar are president and vice president, respectively, of ROAR Consulting. Utilimaster hired ROAR Consulting to calculate the amount of natural gas it needed for use in its production process. The data was used to file for a refund of Indiana gross retail (sales) and use tax remitted on purchase of natural gas.
The Indiana Department of Revenue granted a refund, but in a reduced amount. Utilimaster then filed an appeal with the Tax Court with Romack and Dunbar entering appearances as the company’s counsel of record. After the discovery deadline had passed, the Department of Revenue sought to reopen discovery, claiming it just learned that Romack and Dunbar admitted that ROAR had conducted the utility study. The department also filed for a motion to disqualify the two attorneys pursuant to Indiana Professional Conduct Rule 3.7 on the basis that they would be necessary witnesses at trial.
The study by ROAR does nothing more than provide the total square footage of Utilimaster’s facility and the portion of that square footage used in the manufacturing process, Wentworth wrote. This information is easily ascertainable, and employees of Utilimaster could testify about the company’s manufacturing processing and use of space.
In addition, the department could have discovered that ROAR was involved in the project before the discovery period ended, because when Utilimaster filed for its refund, it noted that it was with assistance from ROAR. The refund claim was also signed by Romack as ROAR’s president.
“The Department has invoked Professional Conduct Rule 3.7 in an attempt to conceal its failure to timely pursue discovery as well as to remove Utilimaster’s attorneys from the case, calling their professionalism into question. The Court will not countenance the Rule’s abuse as a procedural weapon by invading Utilimaster’s right to counsel of its choice,” she wrote.
Indiana Court of Appeals
Civil – Court Deadlines
Melanie Webster v. Walgreen Co.
The Indiana Court of Appeals has a simple message for litigants: if you are filing anything by certified mail, make sure to put enough postage on your paperwork. Otherwise, don’t expect to use that insufficient postage as an excuse to get around trial rules and court deadlines.
The court affirmed a judgment by Morgan Superior Judge Jane Spencer Craney that denied a woman’s motion to amend the filing date of her complaint in order to comply with the filing deadline.
Melanie Webster filed a complaint against Walgreens after she slipped and fell Dec. 17, 2008, outside the Mooresville store, alleging the business was negligent in failing to remove ice and snow from a sidewalk. Four days before the two-year statute of limitations expired and barred the suit, Webster’s attorney, C. Stuart Carter, weighed the envelope with the complaint, summons, appearance and filing fee to send by certified mail. But the postal service reweighed the envelope and determined an additional 17 cents was owed. The Morgan County Clerk’s Office declined to pay the extra postage and the envelope was returned a few days after the statute of limitations had run.
After Carter reweighed and sent the envelope back, the local clerk’s office stamped it filed Dec. 22, 2010. Walgreens objected to a request to amend the filing date to when the envelope had initially been sent within the two-year window, and after a hearing the trial court denied Webster’s motion and found the filing untimely.
On appeal, the three-judge panel held that “mailing” for purposes of the Indiana Trial Rules requires the sender to affix sufficient postage, and since that didn’t happen here the original complaint was untimely.
The appellate judges cited Comer v. Gohil, 664 N.E.2d 389 (Ind. Ct. App. 1996), a medical malpractice case in which the panel determined that “affixing a sufficient amount of postage to the envelope was a matter wholly in [the plaintiff’s] hands” and that mailing the complaint with insufficient postage did not result in the complaint being filed. The Indiana Supreme Court issued a similar holding about filing fees three years earlier.
The court noted that Webster presents no authority suggesting that sending a complaint with insufficient postage constitutes “mailing” for purposes of Trial Rule 5, and she did not show public policy favors allowing her case to proceed.
Civil – Land Title/Dispute
Calvin Hair v. Mike Schellenberger and Lawyers Title Ins. Corp., Wells Fargo Bank, N.A., Felix Adejare, and Sharon Adejare
The Indiana Court of Appeals has upheld a ruling by a Marion Superior judge in a land title case, finding that a bona fide property purchaser cannot be held responsible for deficiencies in the court record that led to the underlying dispute.
The court affirmed the judgment by Judge Ted Sosin concerning who owned a superior title to a piece of property on Talbott Street in Indianapolis.
When Mike Schellenberger bought the Talbott Street property at a foreclosure sale in 2008, the title search did not show a money judgment that Calvin Hair had obtained against former owners Felix and Sharon Adejare. The judgment had never been indexed in the county records, and Schellenberger was unaware of it until a year later when Hair sent him a letter claiming that he had a judgment lien on the property. Schellenberger later tried to remove the cloud on the title, arguing that he was a bona fide purchaser as a matter of law. The trial court ruled against Hair’s argument that the Adejares fraudulently conveyed the property and he had a valid judicial lien that should be enforced.
Examining the issue, the Court of Appeals found that Hair’s judgment was outside the chain of title and that Schellenberger was a bona fide purchaser as a matter of law. Schellenberger can only be responsible for what he knew about, and it was up to Hair to take steps to cure any deficiencies in county records that might be important. For example, Hair could have checked the records to ensure his judgment was on record and perfected, giving rise to a lien, or he could have acted within the statute of limitations and raised the alleged fraudulent conveyance during other court proceedings.
The court pointed out that Hair was in a better position to prevent the dispute at hand, and as a result, the trial court did not err in granting full summary judgment to the appellees.
Civil – Insurance
Mid-Century Ins. Co. v. Estate of Thomas Lynn Morris, by and through his personal representative, Tommy Lynn Morris, Daemen Sampson, and Dora Robinson
The Indiana Court of Appeals has upheld a judge’s ruling against a California reciprocal insurance exchange in a dispute over whether the insurer would have to pay part of a million dollar judgment.
The appellate panel affirmed a judgment by Brown Circuit Judge Judith Stewart granting an estate’s motion to dismiss a complaint involving an auto accident in December 2004.
One of the passengers in the vehicle was Thomas Lynn Morris, whose estate later sued Mid-Century Insurance Co. that provided coverage to the driver of the car. The insurance company believed the total $100,000 per occurrence liability limit might be exhausted by the three claimants injured in the accident, and that led to the estate’s lawsuit demanding payment of the policy limit.
The action went to trial and resulted in a jury verdict for the estate in the amount of $1,195,024. Mid-Century in 2010 filed a complaint seeking to not have to pay any portion of the judgment, and the estate filed a motion to dismiss pursuant to Indiana Trial Rule 12(B)(6) because the insurer’s complaint was made in bad faith. The trial court granted the estate’s motion and the appellate panel has affirmed.
Mid-Century argued that no question exists that it was seeking a determination of its rights and obligations stemming from the insurance contract in this case. The company contended that it is not seeking a liability determination, but a review of the contract construction after it was breached to determine the obligations.
Analyzing the record in this case, the appellate judges determined that Mid-Century was attempting to preemptively defend itself against a claim of breach of good faith duty. The judges can’t determine declaratory relief is appropriate or that the trial court abused its discretion here.
Criminal – Child Molestation/Double Jeopardy
Ronald Rexroat v. State of Indiana
The Indiana Court of Appeals has ruled that a man convicted of two child molesting counts didn’t have his constitutional rights violated because no double jeopardy violation occurred, and the trial judge’s probation condition that he have no contact with anyone younger than 18 is constitutional.
The case involves allegations that Ronald Rexroat molested the daughter of his friends in 2009. The girl told her mom that Rexroat touched her on three separate occasions. The mother reported the allegations to the Indiana Department of Child Services, and the state in 2010 charged Rexroat with two Class C felonies, which were two identically worded counts. A jury found him guilty of both, and the trial court sentenced him to six years on each count to be served concurrently, with three years suspended to probation. One of the probation conditions was that Rexroat have no face-to-face, telephonic, electronic or indirect contact with anyone under age 18 unless first approved.
Rexroat appealed his sentence on double jeopardy grounds and also the probation condition that he alleged was overbroad and a violation of his First Amendment rights.
The Court of Appeals found that Rexroat failed to show any double jeopardy violation under the Indiana or U.S. constitutions. Specifically, the “same elements” test adopted by the Supreme Court of the United States in 1932 doesn’t apply here. As for the state claim, the Indiana Supreme Court in 1999 held that that the second charge must be for the same, identical act and crime as the first offense and that’s not what happened here. The two counts arose from two separate incidents, and so the statutory elements test does not apply.
Turning to the probation condition claim, the appellate panel disagreed that Rexroat’s constitutional rights have been violated. The court looked to its Smith v. State ruling, 727 N.E.2d 763, 767 (Ind. Ct. App. 2000), that adopted a three-prong test to determine whether a probation condition requiring the defendant to avoid all contact with minors was unduly intrusive on constitutional rights.
Rexroat ignored the Smith holding, the court wrote, and he hasn’t shown the probation condition regarding contact with minors is unconstitutional.
Criminal – Speedy Trial
Mark Todisco v. State of Indiana
A Hendricks County judge did not err in denying a man’s motion that his criminal case be discharged because the state failed to conduct a speedy trial within one year of charges being filed, the Indiana Court of Appeals ruled.
Charged in March 2009 with disorderly conduct and intimidation resulting from a domestic disturbance at the home of his son and daughter-in-law, the case against Mark Todisco experienced numerous delays before a jury trial was set for September 2010. Todisco filed a motion in August 2010 requesting that the case be discharged under Indiana Criminal Rule 4(C), which generally requires the case be brought to trial within a year of the charges. The trial court found he didn’t timely object to the trial date and denied his motion, and a jury found him guilty of Class B misdemeanor disorderly conduct.
The judges determined that Todisco failed to promptly and specifically object when the trial date was set beyond the one-year period. He had two chances to raise the speedy trial issue, but he failed to do so.
The court also acknowledged that the standard of review for Criminal Rule 4(C) appeals has been somewhat unsettled, but the court referenced its recent ruling in Feuston v. State, 953 N.E.2d 545, 548 (Ind. Ct. App. 2011), that held disputed facts are entitled to deference but legal conclusions are reviewed de novo. Since the trial court didn’t issue findings of fact in this case, the appellate panel reviewed this appeal de novo.
Mortgage Foreclosure – Borrower Obligation
GMAC Mortgage, LLC v. Ronald Glenn Dyer
The Indiana Court of Appeals has ruled that federal law and housing regulations require that deeds in lieu of foreclosure release the borrower from any mortgage obligation, and the mortgage company issuing an agreement can use that federal language in the contract.
Ronald Dyer and his wife entered an FHA-secured mortgage loan in 2008 for their home in Greene County, but after the wife died, Dyer defaulted on the loan now assigned to GMAC Mortgage. The company foreclosed, but agreed to settle and decided to proceed with a deed in lieu of foreclosure. GMAC drafted a written agreement that included a provision using language required by the U.S. Housing and Urban Development that neither would pursue a deficiency judgment. Dyer didn’t feel it provided enough protection, and he refused to sign until a new agreement provided that he was released from all personal liability.
The trial court agreed with Dyer and ordered the contract be rewritten, but a two-judge Court of Appeal majority struck down that decision.
Reviewing federal statute and HUD regulations, the appellate court found the language GMAC used was sufficient and protected Dyer. The state appellate panel disagreed with Dyer’s reliance on a single court opinion from Maryland in 1999 that found the “shall not be pursued for deficiency judgments” language not protective enough because HUD could still intercept future tax refunds pursuant to the Deficit Reduction Act of 1984.
The panel found that precedent doesn’t control here because it was written before the current statute and doesn’t apply to the facts in this case. Judge Nancy Vaidik wrote the opinion and Judge Edward Najam concurred.
Chief Judge Margret Robb concurred with the majority’s determination that a deed in lieu of foreclosure releases a borrower from any obligation under a mortgage. But she dissented with the specific resolution in this case, seeing no harm in including Dyer’s requested provision and saying she would affirm the trial court’s order requiring the agreement revision.
“If a deed in lieu of foreclosure does in fact release a mortgagor from personal liability and if everyone agrees Dyer should be released from personal liability, the requested provision would only clarify this reality,” she wrote. “HUD regulations do not prohibit parties adding language in addition to what is required, and Dyer is not attempting to remove a provision required by HUD.”
Civil Tort – Medical Malpractice
Sharon Wright and Leslie Wright v. Anthony E. Miller, D.P.M. and Achilles Podiatry Group
The Indiana Court of Appeals has reversed a trial judge’s order to dismiss a woman’s medical malpractice case because of her failure to comply with discovery deadlines and trial rules, finding that the decision to deny her a day in court was too harsh.
The COA reversed a ruling by Montgomery Superior Judge David Ault and sent the action back for further proceedings.
Sharon Wright brought a medical malpractice claim against Dr. Anthony Miller and Achilles Podiatry Group in Crawfordsville for an allegedly negligently performed bunion surgery in 2004.
After the medical review panel found in her favor, Wright brought the case to court in 2009. Discovery began, but Wright asked for continuances because she was not able to secure her expert witnesses and for personal medical reasons. In January 2011, the defendants asked for dismissal because of the delays.
The trial court struck Wright’s expert witness and dismissed her claims under Indiana Trial Rule 37(B) for failure to comply with discovery orders and Indiana Trial Rule 41(E) for failure to prosecute and failure to follow court orders. Specifically, the court noted Wright did not identify her expert witness on time and would have to proceed without the expert testimony at trial, and that all led to a lack of evidence in her case and warranted dismissal.
Although on appeal the judges noted their typical deference to the trial judges and a local court’s right to run its calendar efficiently, the appellate panel weighed that against the individual litigant’s right to have her day in court. The delays in her being able to secure an expert witness were ultimately out of Wright’s control because of medical reasons, the appellate court noted, and the trial court hadn’t issued an order compelling discovery or warning that dismissal was on the horizon. Wright also wasn’t trying to deceive anyone, the judges found.
The appellate court found this case is unlike past cases where delays and missed deadlines were egregious and the sole fault of the offending party.
“We do not mean to suggest or imply by our opinion that the timely observance of pre-trial deadlines is unimportant, only that when all factors are considered, the extent to which Wright failed to comply with several deadlines was not sufficiently onerous or egregious to justify striking her expert and dismissing her claims without warning,” Judge Nancy Vaidik wrote.
Criminal – Drug Dealing/Evidence
Douglas W. Fancil v. State of Indiana
A divided Indiana Court of Appeals has determined that the state can’t use the amount of manufacturing materials and empty packets of ingredients at a person’s home to prove he was dealing in that substance, without clear evidence the drug would have been produced in that amount.
The panel affirmed and reversed in part a ruling by Elkhart Circuit Judge Terry Shewmaker.
Douglas W. Fancil appealed his jury conviction of Class A felony dealing in methamphetamine, based on the police finding no meth in his residence and the prosecutor’s reliance on the amount of manufacturing materials and his past history of buying pseudoephedrine as key evidence. At trial, the state called a detective experienced in meth manufacturing to testify about the process and prove that Fancil manufactured the pseudoephedrine into three or more grams of meth.
At the end of the trial, the court instructed the jury on both Class A felony dealing in meth and Class B felony dealing in meth as a lesser-included offense. But the court refused to instruct the jury on the lesser-included offense of possession of reagents or precursors with intent to manufacture methamphetamine. The jury found Fancil guilty and he received a 48-year prison sentence, with four years suspended to probation.
On appeal, the panel found the evidence was insufficient to support the conclusion that Fancil manufactured three or more grams of meth. But the judges found no other error.
Relying on its decision in Halferty v. State, 930 N.E.2d 1149, 1153 (Ind. Ct. App. 2010), that involved similar facts, the appellate panel determined that the police detective’s testimony could not be included because it was not conclusive about how much meth could have been made from the materials in the residence. The Supreme Court denied transfer in that case, and Halferty’s conviction was reversed.
In this case, a two-judge majority remanded with instructions to enter a conviction of Class B felony dealing in meth with an appropriate sentence.
Judge L. Mark Bailey disagreed with his colleagues, Judges John Baker and Carr Darden, finding the evidence was sufficient to conclude what the state charged. He disagreed that the Halferty precedent applies to these facts. He wrote that the police detective’s testimony was more conclusive here than it was in that earlier case. As a result, he would have affirmed the trial court because a reasonable inference that Fancil produced three or more grams of meth was possible.
Civil Plenary – Homeowners Association
William J. Harness and Bridget V. Harness v. Tabassum Parkar, Arshad Husain, John Mattingly Homes, Inc., and Lakeridge Crossing Homeowners Association, Inc.
The Indiana Court of Appeals has upheld a lower court’s ruling against two homeowners challenging their homeowners association’s interpretation of covenants on building a new home.
The appellate court affirmed a ruling by Warrick Superior Judge Keith Meier denying a request for injunctive relief and final judgment from William and Bridget Harness.
The Harnesses filed suit against their Lakeridge Crossing Homeowners Association, as well as a local builder hired by two neighbors to build a home, because of their concerns about the new structure complying with the neighborhood’s restrictive covenants. The HOA held a public hearing about the Harnesses concerns – specifically one provision regarding the proposed project’s building details that gave the HOA sole and exclusive jurisdiction to approve or disapprove a plan.
In March 2011, after a hearing on the topic, the HOA approved the neighbor’s proposed site plan as long as the home is located no closer to the water’s edge of Blue Lake than the Harnesses’ home. The Harnesses disagreed with the resolution and appealed in court, but the trial judge agreed with the HOA’s right to decide the matter and granted summary judgment against the Harnesses.
On appeal, the judges found the evidence supported the trial court’s findings about the HOA’s approval, the deliberative process required by the covenant at issue. Finding otherwise would invalidate the covenant, which the court has refused to do in past cases.
The appellate court affirmed the trial judge’s decision to not substitute his subjective judgments about the covenants in place of the HOA’s subjective judgment that has exclusive authority on this case.
Even though the Harnesses didn’t prevail in this appeal, the appellate panel determined that they didn’t file a frivolous suit or maintain the appeal in bad faith. The requested appellate attorney fees should not be awarded to the opposing parties.
Small Claims – Venue Transfer
Amy and Steven Cerajewski v. Erin and Robert Kieffner
The Indiana Court of Appeals has determined that a small claims venue question is not on the list of authorized interlocutory appeals, so it dismissed a case arising out of southern Indiana.
The appellate court dismissed an interlocutory appeal after the plaintiff-appellants didn’t get approval first from Vanderburgh Superior Magistrate Judge Sheila M. Corcoran to certify the small claims case for appeal.
Erin and Robert Kieffner bought a Posey County home in 2010 from Amy and Steven Cerajewski, and the Cerajewskis moved to Michigan. Later that year, the Kieffners filed a small claims action in Vanderburgh County, where Erin had lived. The claim alleged breach of contract and fraud resulting from the real estate transaction.
The Cerajewskis filed a motion to transfer venue based on Indiana Trial Rule 75, saying that Vanderburgh County wasn’t the preferred venue. The trial court set a trial date and took the venue question under advisement, but the issue wasn’t decided by that trial date and the Cerajewskis didn’t appear. The small claims court entered a default judgment, but later set that aside and continued to deny the request for venue change.
Without asking for certification for appeal, the Cerajewskis filed an interlocutory appeal based on Indiana Appellate Rule 14(A)(8), which allows for interlocutory appeals as a matter of right for actions involving Trial Rule 75. However, the appellate court found that Trial Rule 75 doesn’t apply to a small claims venue. Specifically, that rule says venue is proper in a small claims court when one of the defendants resides or has a place of employment at the time of the complaint.
Since the Cerajewskis failed to have the small claims court certify their appeal, the appellate panel dismissed the case for lack of jurisdiction.
Civil Tort – Withdrawal of Counsel/Defamation
James Gagan, Fred Wittlinger, Jack Allen and Eugene Deutsch v. C. Joseph Yast
An attorney who withdrew as counsel for two related, family-owned businesses did not make false and defamatory statements in explaining his withdrawal, the Indiana Court of Appeals held.
James Gagan claimed that C. Joseph Yast made defamatory statements in a conversation with Gagan’s son, Jamie. Yast is an attorney and was close friends with the Gagan family for nearly 30 years. Yast represented the Gagans and their various businesses in numerous lawsuits during a 20-year period. In 2006, Gagan, founder of DirectBuy, offered Yast a position as the company’s vice president and general counsel, and Yast accepted. Yast’s employment contract allowed him to work on outside projects, and Yast represented Jamie Gagan’s company ThinkTank in various litigation matters.
In 2007, Gagan and the minority shareholders in DirectBuy sold the company to Trivest, a holding company, for $550 million. Gagan and the other shareholders had taken $17 million in member merchandise money as a dividend, and Trivest challenged that withdrawal under the merger. DirectBuy’s highest ranking officers contacted Gagan to explain their concerns, believing the withdrawal was inconsistent with the company’s core values.
When Trivest, Gagan and the other sellers were unable to reach an agreement, Yast withdrew his appearance for Gagan in federal litigation, believing that representing Gagan presented a conflict of interest. Yast also determined that his conflict with Gagan created a conflict of interest in continuing to represent ThinkTank. Yast called Jamie to explain why he was withdrawing from ThinkTank litigation.
Two days later, Jamie filed a disciplinary grievance against Yast, challenging the manner in which Yast withdrew his representation. Jamie argued that Yast’s disclosure of his conflict of interest in their telephone call on April 23, 2008, was inappropriate because Yast’s purpose was to leverage his withdrawal to force Gagan to capitulate in his dispute with Trivest. The Disciplinary Commission determined that Jamie’s grievance did not raise a substantial question of misconduct and dismissed the matter on April 1, 2010.
In its opinion, the COA held that Gagan and the other sellers set forth no designated evidence demonstrating that they have suffered any reputational harm or actual damage from Yast’s statements to Jamie during the telephone call and that no evidence supported the claim that Yast abused his qualified common interest privilege. The COA concluded that the trial court properly granted Yast’s motion for summary judgment on this basis.
Criminal – Revocation of Probation/No-Contact Order
Joshua Alford v. State of Indiana
The Indiana Court of Appeals affirmed a trial court’s revocation of probation for a man who wrote a false review of his father’s cleaning company.
Joshua Alford appealed the revocation of his probation and the trial court’s order that he serve the remaining 309 days of his previously suspended sentence in the Indiana Department of Correction.
On April 29, 2010, the state charged Alford with two counts of Class C felony child molesting and later added a charge of Class D felony criminal confinement. It also issued a no-contact order for several parties, including Alford’s father, Jim. In January 2011, Alford pleaded guilty under a combined plea agreement to Class D felony criminal confinement and Class A misdemeanor domestic battery under another cause number. He was sentenced to concurrent suspended sentences of 887 days for each conviction, with 268 days of credit time and 365 days of probation. As a special condition of probation, the trial court continued the no-contact order for several people, including Alford’s father.
On July 28, 2011, the state filed a notice of probation violation alleging that Alford had violated the no-contact order by submitting a false report to Angie’s List about his father’s cleaning business that said, “They did a good job cleaning, but they stole my wife’s diamond earrings.”
The COA wrote that Alford was aware that he was to have no direct or indirect contact with his father. When Alford submitted the false review, he used an intermediary to harass his father, clearly violating his no-contact order. The appellate court affirmed the trial court’s determination that Alford serve the remainder of his sentence.
Civil Tort – Motion to Transfer/Motor Vehicle Accident
Salsbery Pork Producers, Inc., Richard K. Wilson, Tipton Co. Commissioners, Tipton Co. Highway Department, Chad Bergin, State of Indiana, Indiana Department of Transportation v. Latina Booth
The Indiana Court of Appeals has reversed a trial court’s denial of a motion to transfer, holding that Marion County is not a preferred venue for the case.
Latina Booth filed a lawsuit in Marion County after she was seriously injured in a crash. The basis for filing in Indianapolis was that she named the state as a defendant, holding it had failed to properly maintain the Tipton County road where she was injured. Booth was a passenger in Chad Bergin’s car, traveling along County Road 1100 in Tipton County. Richard K. Wilson was driving a tractor in the scope of his employment with Salsbery Pork Producers when he pulled onto the road and struck Bergin’s car. Booth named Bergin, Wilson, Salsbery, the state and Tipton County as defendants in her negligence suit.
Tipton County filed a motion for change of venue, saying that only the county – not the state – had control over CR 1100, and therefore the case should be moved from Marion County. The trial court denied the motion.
The COA held that the state should have been dropped from the case and that the preferred venue is Tipton County, where most of the defendants are located and where the accident happened. But the appellate judges rejected the defendants’ claims that Booth’s decision to file in Marion County was in bad faith, because evidence of who controlled the county road surfaced only after the Tipton County defendants moved for transfer of venue. The case is remanded for proceedings consistent with the appellate court opinion.
Civil Tort – Negligence/Product Liability
Anthony Wade v. Terex-Telelect, Inc.
A divided Indiana Court of Appeals has ordered a new trial in a case alleging a product was negligently designed, with the majority finding the trial court erred when it instructed the jury on the rebuttable presumption under Indiana Code 34-20-5-1.
Anthony Wade, an employee of Richmond Power, was paralyzed in 1997 when he fell 12 feet out of a double-man bucket attached to a company truck when trying to exit the bucket. Two years later, he sued Terex-Telelect, the manufacturer of the bucket, claiming the company was negligent under the Indiana Products Liability Act in the design of the bucket. He argued that the company should not have been able to sell a bucket liner that contained no molded interior step.
Terex presented evidence that it complied with Richmond Power’s specifications for the product desired and that it was manufactured to meet the standards in place at the time of production. Wade made a motion for a directed verdict, arguing there was a lack of evidence to support the company’s claim that its product was in conformity with the generally recognized state of the art applicable to the safety of the product, and he objected to Terex’s tendered final jury instruction pertaining to the rebuttable presumption allowed under the act that a product is not defective if it was made state of the art and in compliance with government standards. Both motions were overruled and the trial court adopted the tendered instruction. The jury allocated zero fault to Terex and 100 percent fault to Wade.
Judges James Kirsch and Nancy Vaidik found Wade was prejudiced by the instruction of the jury as to the rebuttable presumption because it was unsupported by relevant evidence and went to the very heart of the case. Terex didn’t present sufficient evidence to support its contention that the liner at issue complied with applicable government regulations.
Judge Cale Bradford dissented on this point, disagreeing that the trial court abused its discretion in instructing the jury regarding the rebuttable presumption that a product is non-defective if it conforms to applicable government regulations.
The three judges agreed that Terex was not entitled to a “state of the art” instruction and that a retrial would be necessary based on this error.
Criminal – Drugs/Enhanced Sentence
Robert A. Baker v. State of Indiana
Because the state failed to prove that an early training center located near the defendant’s home constituted school property for purposes of enhancing drug charges, the Indiana Court of Appeals ordered the man’s convictions be reduced.
Robert Baker challenged his convictions of Class B felony possession of methamphetamine within 1,000 feet of a school and Class C felony possession of a controlled substance within 1,000 feet of a school.
At Baker’s trial, North Vernon police officer Craig Kipper, who responded to the report of a chemical odor coming from Baker’s apartment, testified that the apartment was approximately 600 feet from the Early Training Center. He said the ETC offered continuing education classes for students who wanted to get their high school diplomas.
Baker argued on appeal that the evidence doesn’t support enhancing his convictions based on the location of the ETC. The judges agreed. The state didn’t point to any evidence presented at trial that showed the ETC was a building or other structure owned or rented by a school corporation or other entity described under Indiana Code 35-41-1-24.7, nor was there evidence that any of the students enrolled in the program were school-age children and not adults or college-age individuals.
Judge Elaine Brown pointed out that previous caselaw has dictated that college and university property does not fall under the term “school property” as used under I.C. 35-41-1-24.7 to support a charge enhancement.
The appellate court ordered that Baker’s convictions be entered as Class D felonies and he be resentenced accordingly.
Civil Tort – Medical Malpractice
John Morse, M.D. v. Jeffrey Wayne Davis
The Indiana Court of Appeals has affirmed the $1.25 million judgment against a gastroenterologist after a patient brought a medical malpractice claim for a missed cancer diagnosis. The judges found the trial court didn’t abuse its discretion in excluding certain evidence.
Dr. John Morse appealed the verdict against him – which had been reduced from $2.5 million to the statutory cap of $1.25 million – after a jury found he committed medical malpractice when he failed to order tests or diagnose colon cancer in patient Jeffrey Davis.
Davis visited Morse, who was his mother’s doctor when she had colon cancer, in 2004 complaining of nausea, upper stomach pain and occasional rectal bleeding. Morse performed some tests, but did not order a sigmoidoscopy or colonoscopy. A year later, Davis came back to have medication refilled before he moved to Arizona. Davis’ records don’t note his family history of colon cancer, that Davis reported rectal bleeding or that he reported any other symptoms at his follow-up visit. When Davis moved to Arizona, he visited another doctor, who performed a colonoscopy and found advanced stage four cancer in his bowel, lymph nodes and liver.
There was conflicting evidence as to whether Davis told Morse about his rectal bleeding and that his mother had colon cancer. At a pre-trial hearing, Davis moved to strike two defense witnesses – a doctor who saw Davis for unrelated medical treatment, and a nurse who wrote down Davis’ complaints during the follow-up office visit with Morse. Both would have supported Morse’s argument that Davis was contributorily negligent by not reporting his symptoms. Davis also moved to exclude from evidence a medical history questionnaire submitted to the Arizona doctor which did not indicate a family history of colon cancer. Davis testified that he couldn’t recall whether he or someone else filled the form out. He also moved to preclude any opinion from the medical review panel doctors stating that Morse complied with the standard of care. The jury was instructed on contributory negligence.
The COA found that Morse didn’t show that the trial court abused its discretion when it precluded testimony from his expert witnesses saying that they believed Davis had not advised Morse that his mother had a history of colon cancer despite Davis’ testimony to the contrary. The purpose of that testimony would have been to impeach Davis’ credibility on a critical issue of fact, namely, whether he had told Morse about his mother’s colon cancer, wrote Judge Edward Najam. A determination of Davis’ credibility was within the sole province of the jury, and the proffered testimony was prohibited under Evidence Rule 704(b). Likewise, Morse has not shown any abuse of discretion in the exclusion of the questionnaire or the testimony of the doctor and nurse, the judges concluded.
Criminal – Child Molestation/Testimony
Jarrad L. Mastin v. State of Indiana
The Indiana Court of Appeals found that a child molestation victim’s statement to her grandmother – as testified by the grandmother at trial – should not have been admitted. But, that hearsay reference did not deprive the defendant of a fair trial.
Jarrad L. Mastin was convicted of Class A felony child molesting and two counts of Class B felony child molesting and sentenced to 90 years for molesting his daughter beginning when she was 4 years old. The molestations came to light when the victim’s grandmother took her to the hospital because K.M. was urinating blood and in severe pain when she tried to use the bathroom. Tests showed she had Type II genital herpes. Mastin confessed to having engaged in sexual conduct with his daughter.
He appealed, claiming the admission of a statement by K.M. as told to her grandmother was hearsay; there wasn’t sufficient evidence to support the convictions based upon sexual intercourse; and his sentence is inappropriate.
The judges agreed that the testimony by the grandmother that K.M. said to her that her daddy played “secret games” with her should not have been allowed. K.M. did not testify at the trial. But Mastin didn’t contemporaneously object at trial, and he claimed on appeal the admission was a fundamental error. The judges found it did not rise to that level and other evidence supported Mastin’s convictions.
Mastin also argued that there wasn’t any evidence of penetration to support his Class B felony convictions, but the statute only requires penetration by a male sex organ of the female sex organ. That can include penetration of external genitalia, wrote Judge L. Mark Bailey. There is sufficient evidence to conclude that Mastin’s sex organ penetrated his daughter’s sex organ.
The judges also upheld the 90-year sentence and found that his claim of prosecutorial misconduct is waived.
Civil Plenary – Purchase Agreement/Business
Whiskey Barrel Planters Co., Inc., n/k/a Diggs Enterprises, Inc., Robinson Family Enterprises, LLC, et al. v. American GardenWorks, Inc., and Millennium Real Estate Investment, LLC
The Benton Circuit Court erred in denying partial summary judgment to the former shareholders of a garden accessories company, the Indiana Court of Appeals held. The court found the former shareholders were entitled to judgment on charges brought by the new owners of the company that the company was entitled to football tickets and a loan made to the previous owners.
American GardenWorks and Millennium Real Estate Investment entered into an agreement to purchase Whiskey Barrel from Ralph and Ann Robinson. The agreement said AGW would buy “substantially all of the machinery, equipment, inventory, goodwill, assets, real estate, paraphernalia and trade name of the Business, Business Real Estate, and Residence.” The agreement also outlined the types of assets purchased, which included the accounts receivable of Whiskey Barrel.
AGW filed a complaint against Whiskey Barrel, alleging 13 counts – the two at issue are Count III, alleging that AGW was entitled to collect as assets the $327,000 in loans by Whiskey Barrel to the Robinsons that weren’t included as accounts receivable but were shown on the balance sheet and tax returns of Whiskey Barrel as “other current assets”; and Count VII, where AGW claims it can collect as assets the 2008 Purdue football season tickets that Ralph Robinson purchased with Whiskey Barrel funds.
Whiskey Barrel counterclaimed, which questioned whether AGW converted personal property belonging to the Robinsons by not allowing them on the premises to retrieve it and whether it’s entitled to replevin on the converted personal property. The trial court ruled in favor of AGW on its complaint and against Whiskey Barrel on its counterclaims.
The Court of Appeals reversed, noting the language in the agreement states “substantially all,” which would indicate “most but not all of the assets.” The agreement could have stated it was for all of the assets – which would have included the shareholder loans and the football tickets – but did not, wrote Judge Carr Darden. Also, the balance sheet attached to AGW’s complaint clearly shows that the term “accounts receivable” as used in the agreement doesn’t include the shareholder loans, the COA found.
The trial court erred in determining that AGW acquired the Robinsons’ personal property under the terms of the agreement and in finding that the couple abandoned any claims to their property by not removing it within a specific timeframe.
The trial court awarded AGW nearly $25,000 in attorney fees and costs; the judges remanded for the trial court to determine whether that award amount was proper.
Criminal – Drugs/Traffic Stop Search
Charles Westmoreland v. State of Indiana
Relying on United States Supreme Court precedent, the Indiana Court of Appeals has reversed the denial of a man’s motion to suppress marijuana found on him after a traffic stop. The appellate court found police officers did not reasonably believe the man was armed and dangerous to justify the pat down.
Charles Westmoreland was the passenger in a car lawfully stopped by police. The driver had warrants out in two counties, so police placed her in custody and decided to tow the car. Westmoreland didn’t have any outstanding warrants and cooperated with police. One officer performed a pat down on Westmoreland, saw a piece of a baggie sticking out of his pants, and discovered a plastic baggie with marijuana in it. Westmoreland was arrested and charged with Class A misdemeanor possession of marijuana.
He moved to suppress the evidence, which was denied. On interlocutory appeal, the COA reversed, citing Arizona v. Johnson, 555 U.S. 323 (2009). Johnson held that to justify a pat down of a driver or passenger during a traffic stop, “the police must harbor reasonable suspicion that the person subjected to the frisk is armed and dangerous.”
No evidence showed that Westmoreland was armed or dangerous, so officers shouldn’t have performed the pat down. The judges ordered the trial court to dismiss Westmoreland’s possession of marijuana charge.
Domestic Relation – Settlement Agreement/Protective Order
Barbara (Rosario) Bessolo v. William I. Rosario
The Indiana Court of Appeals has upheld finding a mother in contempt of court for not dismissing a protective order against her ex-husband as required by their dissolution decree. The judges also affirmed the award of compensatory damages and attorney fees to the father, but reversed a 10-day sentence imposed for future violations.
Barbara Bessolo and William Rosario, who have a young daughter, divorced Dec. 1, 2010. As part of their mediated settlement agreement, Bessolo was to dismiss a protective order she had against Rosario by Nov. 12, although the terms of the agreement weren’t binding until it was approved by the court. Even after the decree was approved in December, Bessolo didn’t dismiss the protective order.
An incident on Dec. 5, 2010, led to Bessolo calling the police on Rosario and telling officers she had a protective order against him. Rosario was arrested, spent 20 hours in jail and had to pay $2,500 to expunge the arrest from his record. She filed for the protective order to be dismissed two days later.
Rosario then filed a motion to show cause requesting Bessolo be held in contempt for her actions. The trial court ordered Bessolo to pay $10,000 in compensatory damages, $10,000 in attorney fees, and imposed the suspended jail sentence. She appealed, but the COA affirmed.
Although the divorce wasn’t approved until Dec. 1, instead of Nov. 12 as the agreement originally stated, Bessolo still had to file to dismiss the protective order once the settlement was approved, wrote Judge Nancy Vaidik. The judges upheld the monetary damages and attorney fees imposed, finding the experience was a humiliating one for Rosario. He was handcuffed in front of his young daughter in a public parking lot and had to miss a day of work. The COA reversed the imposition of the suspended jail sentence because it does not coerce current or future compliance with a specific court order. The judges also denied Rosario’s request for appellate attorney fees.
Civil Plenary – Property Rights/Easements
Trust No. 6011, Lake County Trust Company, Trustee, Simon Beemsterboer, and Victoria J. Beemsterboer v. Heil’s Haven Condominiums Homeowners Assn.
The Indiana Court of Appeals ruled partly in favor of a couple seeking to place a fence along their property line shared with a condominium complex, which would affect the use of a sidewalk by the condo homeowners.
Simon and Victoria Beemsterboer live on property that belongs to a trust that is adjacent to the property of Heil’s Haven Condominiums. A previous owner of the Beemsterboer property executed several agreements with the condo complex, granting various easements to each other to use portions of the others’ property.
When the Beemsterboers attempted to develop their property in a manner that allegedly infringed on the easements originally granted to the association, the homeowners association sought to enjoin the improvements. The work included modifying a deck and building a fence around a sidewalk that was on the Beemsterboers’ property, but used by the condo residents. The trial court granted the requested relief.
The COA concluded that one of the agreements at issue has terminated and the improvements can be made in a manner that don’t infringe upon the association’s continuing easements. The Water and Walkway Easement was terminated by its own express terms when the residence on the Beemsterboer property of the previous owner burnt down and the water supply to that property failed.
The judges also found that paragraph 4 of the judgment wasn’t an error. The trial court permanently enjoined the Beemsterboers “from in any fashion interfering with the (association’s) deck … even though the actual location of the deck encroachment may vary slightly from the description contained in the (encroachment agreement).”
“We read the trial court’s order as restricting the Beemsterboers from interfering with the deck based on the fact that its current and historical encroachment is somewhat greater than that described in the Encroachment Agreement. The trial court’s order does not affect the terms of the Encroachment Agreement,” wrote Judge Terry Crone.
They judges also affirmed a portion of the judgment pertaining to the septic easement.
Civil Tort – Personal Injury/Jurisdiction
Todd Walters and Matenia Walters v. Aaron Austin and Herman & Goetz, Inc.
The majority on a personal injury case has dismissed it for appellate review, finding the Indiana Court of Appeals doesn’t have jurisdiction. The majority believed the case was not timely appealed.
Todd and Matenia Walters sued Aaron Austin and his employer, Herman & Goetz, after Austin’s company van lost control on black ice and hit Todd Walters. Walters had just hit a patch of black ice and was standing on the side of the road next to his car when he was hit.
A jury ruled in favor of Austin and his employer. The Walterses filed a motion to correct error May 20, 2011, which the trial court denied on May 23. Unaware of this ruling, that same day the couple filed an amended motion to correct error and a motion to relate the amended motion back to the filing date of the original motion to correct error. The trial court granted the motion to relate back May 24, but denied the amended motion to correct error. The Walterses then filed their notice of appeal June 23.
The defendants argue that the appeal should be dismissed for failure to timely file a notice of appeal because it was filed after 31 days. The majority agreed. Judges Edward Najam and Patricia Riley cited Indiana Trial Rule 53.4, which says that repetitive motions “shall not delay the trial or any proceedings in the case, or extend the time for any further required or permitted action, motion, or proceedings under these rules.” The amended motion to correct error was nearly identical to the original motion, except for typographical and grammatical corrections. The amended motion was also to relate back to the original motion.
“We conclude that the amended motion to correct error was a repetitive motion and, therefore, the filing of the amended motion did not change the date for filing the notice of appeal,” wrote Najam.
Judge Carr Darden dissented because he believed the couple did not file their amended motion in an effort to extend time to file their notice of appeal. He would review the case on the merits.
Agency Appeal – Unemployment Benefits/Terminable Offense
Alebro, LLC v. Review Board of the Indiana Department of Workforce Development and Jason Scheidell
The Indiana Court of Appeals has held that if an employee’s explanation for the behavior that led to his termination is another terminable offense, that provides just cause for termination. As a result, the judges reversed the decision to grant a fired man unemployment benefits.
Alebro, which is a retail seller of salt, appealed the grant of unemployment benefits to terminated employee Jason Scheidell. Scheidell worked for the company for seven years and during that time, some of the company’s salt had been missing. The company learned in 2011 that Scheidell had approached a customer offering to sell him the same salt at a cheaper price. He conducted the sale at Alebro’s property.
Scheidell was fired for theft, but because Alebro didn’t follow proper procedure to admit evidence of the theft, Scheidell was able to rebut the theft allegation. He claimed he did not steal the salt, but just breached his duty of loyalty by selling salt on company property at a lower price. This is also a terminable offense.
The COA concluded that Scheidell is ineligible for benefits because he attempted to rebut the allegation that he stole from Alebro by admitting instead that he only breached his duty of loyalty by selling salt on the company’s property for cheaper than Alebro did, another terminable offense. The judges rejected Scheidell’s argument that their review is limited only to the theft charges. The appellate court decided that the reasoning of Voss v. Review Board of Dept. of Emp’t and Training Servs., 533 N.E.2d 1020, 1021 (Ind. Ct. App. 1989), on which Scheidell relied for his argument, is no longer applicable when an employee defends his behavior against a stated offense by admitting another terminable one.
“He no longer requires the protection of fair notice because he is the one setting forth the allegations of his terminable offenses, not his employer. To do otherwise would allow an employee to turn the shield of Voss into a sword, using his own terminable offenses to obtain undeserved unemployment benefits. This would turn Voss on its head and accomplish the opposite of what the holding in Voss is designed to do,” wrote Judge Nancy Vaidik.
Judge Terry Crone concurred with a separate opinion in which he wrote about why he believes initials should be used in these types of cases instead of identifying the parties.•