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Indiana Court Decisions – July 25-Aug. 7, 2012

August 15, 2012

For Publication opinions on Indiana cases released by the 7th Circuit Court of Appeals and the Indiana Supreme Court, Court of Appeals and Tax Court during this issue’s reporting period are highlighted in this section. To read the complete opinion issued in any of these cases, visit www.theindianalawyer.com and search by case name.


7th Circuit Court of Appeals

July 27

Civil – Expert/Daubert

Leonard Lapsley, et al. v. Xtek Inc.

11-3313

The 7th Circuit Court of Appeals has affirmed the admittance of an expert’s opinion as to causation of an accident at a northern Indiana steel rolling mill, finding the federal court properly denied a company’s Daubert motion to bar that testimony.

Leonard Lapsley was severely injured in an mill accident when industrial grease was propelled from the roll end with enough energy to pass through his body like a bullet. He is disabled as a result of the accident.

At trial, Dr. Gary Hutter testified as a plaintiff expert witness that an internal spring in the industrial product designed and made by Xtek was the culprit mechanism behind the accident and an alternative design of a thrust plate in the equipment would have prevented the accident being as severe. Xtex filed a Daubert motion for the trial court to scrutinize Hutter’s testimony to determine whether it’s reliable enough to present to the jury. Xtek argued that Hutter’s proposed testimony lacked scientific basis.

The District Court disagreed, pointing to the “commonly known methodologies and physics calculations” that Hutter used in reaching his conclusions. The court also found that the conclusions were relevant, ruling that Xtek’s disagreement with Hutter’s theory on causation could not be the sole reason for excluding it.

The court found Hutter’s testimony about the alternative thrust plate design raised a genuine issue of fact with regard to the Lapsley’s design-defect claim. It denied summary judgment on his failure-to-warn claim. The jury found Xtek was 65 percent at fault for the accident and awarded $2.97 million. The court also denied Xtek’s Rule 50(b) motion for judgment as a matter of law that sought reconsideration of the court’s refusal to exclude Hutter’s testimony.

With regard to the Rule 50(b) denial, Xtek argued that the evidence as actually presented would have been insufficient without Hutter’s testimony. Xtek argued again that Hutter’s expert opinions regarding causation, alternate design, and reasonable care or foreseeability lacked scientific basis and should have been excluded under Federal Rule of Evidence 702 and Daubert.

The 7th Circuit rejected all of Xtek’s arguments in a 32-page opinion.

“The uniqueness of an accident can weigh against jury findings of foreseeability and lack of reasonable care in design, but that is a matter for the jury to decide,” Judge David Hamilton wrote. “The jury here accepted Dr. Hutter’s uncontradicted expert opinion that a reasonable designer would have considered the danger of the powerful spring being bound up unexpectedly and releasing its energy so as to act like a ram on the grease in the spindle assembly. Rule 702 provides a test of reliability, not of ultimate merit. District courts acting as gatekeepers of scientific, technical, or specialized knowledge evidence retain significant discretion under the flexible Daubert inquiry. The district court here did not misapply Daubert, and Xtek has identified no compelling reason to disturb the court’s exercise of its discretion.”

July 30

Civil Plenary – Contract

Winforge, Inc., et al., v. Coachmen Industries, Inc., et al.

10-3178

The 7th Circuit Court of Appeals affirmed a District Court ruling in favor of two Indiana companies involved in a Tennessee hotel project that failed to develop.

Coachmen Industries Inc. and All-American Homes LLC were involved in a proposed hotel development in Pigeon Forge, Tenn., that would be built with modular components that All-American was to design and provide and that Coachmen was to finance.

A broad development agreement was executed in 2004 between the Indiana companies and Winforge Inc. in North Carolina and Mod-U-Kraf Homes LLC of Virginia to build a hotel, but the project proceeded in “fits and starts,” according to court records.

After a protracted period of planning, the city of Pigeon Forge rejected the building permit for the project because its sewer system lacked capacity. Ten days later, Coachmen notified Winforge that it was in default on a loan agreement. Its two principals had drawn loans of about $1.2 million – more than 40 percent of the total project cost.

Coachmen foreclosed on the property and purchased it for $1.8 million in March 2006. Less than a year later, it was sold at auction for $283,142.79.

The 7th Circuit rejected Winforge’s arguments that the District Court erred in concluding the contract was not a valid contract, or that the defendants were not in breach. The court found that Winforge had not met its obligations under the development agreement, which prevented modular units from being built.

“The district court reasonably concluded that the Mod-U-Kraf’s failure to construct any modular units did not constitute a breach of the contract because its failure to do so was due to Winforge’s deficient performance of its obligations under the contract, not Mod-U-Kraf’s or All-American’s deficiencies,” Judge Sue Myerscough, of the Central District of Illinois, wrote in a unanimous opinion.

July 31

Civil – Disability Benefits

Carol Aschermann v. Aetna Life Insurance Company, et al.

12-1230

A former worker whose degenerating discs and spondylolisthesis caused her to no longer be able to work as a sales rep for AstraZeneca was not improperly deprived of benefits when the insurer terminated them.

The 7th Circuit Court of Appeals affirmed the District Court decision in favor of the defendants. The appeals court held that Aetna and defendants had not acted in an arbitrary and capricious manner when Lumbermens Mutual Casualty Co. terminated disability benefits that Carol Aschermann had been collecting between 2003 and 2009.

Aetna claimed that Aschermann submitted outdated tests and medical information in submitting a claim for continuation of benefits; Aschermann claimed she could work no more than four hours a day even at a sedentary job.

“The statement that existing records were outdated, coupled with a request for new diagnostic tests, gave Aschermann a ‘reasonable opportunity’ to supplement the file and receive a ‘full and fair review’ within Aetna’s bureaucracy,” Chief Judge Frank Easterbrook wrote for the panel. “Honesty is a virtue, not a problem. Given the record that Aetna evaluated, its decision was not arbitrary or capricious.”

Aug. 3

Civil – Lender Agreement

BKCAP, LLC, GRAYCAP, LLC, AND SWCAP, LLC v. Captec Franchise Trust 2000-1

11-2928, 11-3378

A dispute between a lender and subsidiaries created by a restaurant owner to refinance its debt made its way before the 7th Circuit Court of Appeals for the second time. This time, the judges ruled in favor of the borrowers.

Quality Dining Inc. created subsidiaries BKCAP LLC, GRAYCAP LLC, and SWCAP LLC and made a deal with Captec Financial and GE Capital for 34 separate loans, with each loan secured by a restaurant. Captec Financial assigned 13 of its loans to Captec Franchise Trust 2000-1. The borrowers and lender disagreed about the prepayment requirements for 12 of the loans, landing the parties in court and before the 7th Circuit in 2009.

There is ambiguity in the prepayment provision of the loan agreements, so the judges sent the case back to the District Court for a full trial on the merits. The 7th Circuit found both parties’ arguments as to how to interpret the loan agreement impossible without additional evidence. The District Court then ruled in favor of the borrowers, awarded prejudgment interest, and denied attorney fees for lender Captec.

The lender appealed, claiming the borrowers’ interpretation of the prepayment provision is unreasonable based on the language of the decision issued by the 7th Circuit in the first appeal. The judges did say the borrowers’ interpretation was unreasonable, but the lender’s argument is way off base, wrote Judge John Tinder. The judges didn’t call the lender’s interpretation unreasonable, but they should have, he wrote.

The evidence offered at trial supports the borrowers’ interpretation, and the District Court didn’t err in considering the testimony of the borrowers’ lead negotiator, who testified about an original lenders’ lead negotiator’s construction of the prepayment provision.

There is also no question that the borrowers are entitled to prejudgment interest after September 2009, Tinder wrote, and that the lender is not entitled to attorney fees.

Civil – Family Medical Leave Act

Daryl Scruggs v. Carrier Corp.

11-3420

Carrier Corp. had an “honest suspicion” that one of its employees was abusing his leave under the Family Medical Leave Act, so the District Court was correct in granting summary judgment for Carrier in the fired employee’s lawsuit.

Carrier had excessive employee absenteeism at its Indianapolis plant, so it hired a private investigator to follow employees suspected of abusing the company’s leave policies. Daryl Scruggs was authorized to take intermittent leave under the FMLA to care for his mother, who is in a nursing home.

Scruggs was one of the employees suspected of abusing the leave policies, so the company set up surveillance of his house on a day he requested FMLA leave. The surveillance revealed he never left his home that day, so he was suspended by the company pending further investigation. Scruggs submitted several documents to support his argument that he left the house and had been with his mother, but Carrier believed the documents were suspicious and inconsistent. Carrier fired Scruggs for misusing his FMLA leave.

Scruggs filed a lawsuit for interference and retaliation under the FMLA. The District Court granted summary judgment for Carrier, which the 7th Circuit affirmed. In the Circuit Court, because an employee has “no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed,” an employer need only show that “it refused to reinstate the employee based on an ‘honest suspicion’” that the employee was abusing leave.  

When Carrier asked Scruggs about the day in question, he couldn’t recall what he did that day but said he didn’t misuse his leave. He later brought paperwork from the nursing home and doctor’s office, but these documents only raised further questions for Carrier, the opinion says. Taken together, this was enough for Carrier to have an honest suspicion that Scruggs misused his FMLA leave.

The 7th Circuit also found that Carrier did not retaliate against Scruggs for using his FMLA leave.

Indiana Supreme Court

July 25

Criminal – Mistrial/Defendant Conduct

Kenneth Dwayne Vaughn v. State of Indiana

45S05-1112-CR-684

The Indiana Supreme Court found no harm was done when an uncooperative defendant’s mouth was covered by a bailiff in order to quiet the man, so the trial court correctly denied the defendant’s motion for a mistrial.

Kenneth Dwayne Vaughn was on trial for robbery, theft and resisting law enforcement before Lake Superior Judge Thomas Stefaniak. Before his trial began, he had an uncooperative relationship with his court appointed attorney, vacillating back and forth between having an attorney and proceeding pro se. Vaughn disagreed with his attorney’s decision to not call a certain witness to testify.

Vaughn was uncooperative when he took the stand. Stefaniak told Vaughn to stop talking four times, but Vaughn kept speaking. Stefaniak then ordered the bailiff, who was not in the room when Vaughn began testifying, to put his hand over Vaughn’s mouth to quiet him. The jury was also instructed to leave the room during this incident.

Vaughn eventually agreed to answer his attorney’s questions before the jury. Only after Vaughn finished speaking did his attorney move for a mistrial, which Stefaniak refused to grant.

The justices had to decide whether Vaughn suffered actual harm from the judge’s order that the bailiff cover his mouth. A defendant has the right to appear before a jury without physical restraints – Vaughn was briefly restrained by the bailiff. The Supreme Court found there was no actual harm because the incident was so brief, and the jury was quickly removed. The justices also pointed to the fact Vaughn’s attorney didn’t immediately seek a mistrial.

Hindsight is 20/20, Justice Steven David wrote, so it may have been better practice for the judge to warn Vaughn that if he kept talking he would not be allowed to speak in the future. David also suggested that security should have been in the room, particularly because Vaughn had been uncooperative in the past.

The high court also agreed with the trial judge and Court of Appeals Judge Ezra Friedlander that it appeared Vaughn was trying to have a mistrial declared. Vaughn said in one of his pro se motions that he was familiar with trial procedures from having represented himself in 2006. He said he read about trial procedure while in prison.

“It is clear to us he knew his way around the criminal justice system and had the knowledge to attempt to create his own mistrial,” David wrote.

July 26

Criminal – Suspended License/Constitutionality

Michael J. Lock v. State of Indiana

35S04-1110-CR-622

Four justices found that Indiana Code 9-30-10-16 indicating when a person commits a Class D felony while driving with a suspended license is not unconstitutionally vague and evidence supports a man’s conviction of Class D felony operating a motor vehicle as a habitual traffic violator.

At issue is whether Michael Lock’s conviction can be upheld when the only evidence admitted at trial as to whether his Honda Zuma’s “maximum design speed” exceeded 25 MPH was that Lock was clocked by radar going 43 MPH on a flat, dry surface. The state’s motor vehicle statutes allow someone with suspended driving privileges to operate motorized bicycles as long as certain requirements are met. One is that the vehicle’s “maximum design speed,” which isn’t defined, does not exceed 25 MPH.

Lock appealed his conviction, arguing the habitual traffic violator statute is unconstitutionally vague and that the evidence didn’t support his conviction. Only addressing the evidence issue, the Court of Appeals reversed in a split opinion.

But the majority of justices upheld Lock’s conviction, finding the statute is not unconstitutional. The justices looked at how an ordinary person would interpret the statute, finding one would interpret the statutory definition of “motorized bicycle” to exclude any devices having a highest possible speed – as conceived of, planned or devised – of more than 25 MPH, Justice Mark Massa wrote. It’s possible that the manufacturer could design the bicycle to not go more than 25 MPH, but after-market modifications could be made. This is probably why the Legislature used the broader term of “maximum design speed” over “maximum manufacture’s design speed,” Massa pointed out.

The majority also found the stipulation that Lock was clocked driving 43 MPH supported his conviction.

Justice Robert Rucker believed the state didn’t prove the elements of Class D felony operating a vehicle while suspended, so he would reverse. He didn’t address the constitutional issue.

“I would read Indiana Code section 9-13-2-109 evincing the Legislature’s intent to exclude those motorized bicycles which, among other things, a manufacturer has designed to travel safely at a maximum speed no greater than twenty-five miles an hour,” he wrote. “That is not to say that the vehicle is incapable of traveling in excess of that speed. Indeed it may very well do so, even if it means damage to the engine or other component parts.”

Construing the statute this way means that the actual speed Lock was traveling has no relevance to the question of “maximum design speed,” he wrote.

Criminal – Prison Escape/Sentence

Roger L. Bushhorn v. State of Indiana

40S01-1206-CR-309

In a four-page per curiam decision, the Indiana Supreme Court reinstated the trial court’s 47-year sentence of Roger Bushorn, who pleaded guilty to charges stemming from his escape, kidnapping and assault of jail officials.

Bushorn coordinated the escape attempt with two inmates. Bushorn and the two men rushed jail officer Vicki Day, handcuffed her and took her chemical agent container. One of the inmates stabbed Day. Bushorn sprayed chemical agent at two responding jail officers, and the three inmates handcuffed them. Shortly thereafter, the three men were apprehended.

Bushorn pleaded guilty to kidnapping Day, confining the other two officers, and attempted escape. He was sentenced to 47 years with three years suspended. The Court of Appeals revised his sentence to 35 years, believing Bushorn met his burden of establishing that the sentence was inappropriate.

But the justices believed the trial court sentence was not inappropriate under Appellate Rule 7(B) and there was no abuse of discretion. They summarily affirmed the Court of Appeals in all other respects.

Justice Sullivan voted to deny transfer to the case.

Tax Appeal – Income Tax

Indiana Dept. of Revenue v. Miller Brewing Co.

49S10-1203-TA-136

Miller Brewing owes $806,366 in income tax on beer transported by common carriers to Indiana from its Milwaukee brewery, the Indiana Supreme Court determined in a ruling that reversed the state Tax Court, ending a decade-long dispute.

In a 4-1 ruling written by Justice Mark Massa, the court held that the Tax Court clearly erred in determining that an example of how taxes are to be assessed had the force of law.

“The Tax Court determined that Example 7 was an administrative rule with the force of law and that it operated to exempt Miller from liability for Indiana tax on income from sales of goods delivered by common carrier to Indiana customers. We find that this determination was clearly erroneous and hold that Example 7 does not have the force of law,” Massa wrote.

Miller in its appeal said that an administrative rule contained an example that said “[s]ales are not ‘in this state’ if the purchaser picks up the goods at an out-of-state location and brings them back into Indiana in his own conveyance.”

“Miller contends that the term ‘in his own conveyance’ includes not only vehicles owned by the purchaser himself, but also vehicles owned by common carriers hired by either the purchaser or the seller to transport the goods to Indiana. … That interpretation is plainly inconsistent with the language of the example; the ordinary reader would understand ‘his own conveyance’ to mean a conveyance owned by the purchaser, not a conveyance owned by anyone else, such as a third-party common carrier,” Massa wrote.

Justice Robert Rucker dissented, agreeing with the Tax Court that Indiana Code 6-3-2-2(e)(1) is ambiguous.

“I am not convinced an error was made here. Applying our cautious deference standard of review I would affirm the judgment of the Tax Court,” Rucker wrote.

Criminal – Credit Time

Douglas Cottingham v. State of Indiana

06S01-1112-CR-703

The Indiana Supreme Court interpreted a 2010 amendment on credit time earned during placement in community corrections to only apply to those placed on home detention on or after its July 1, 2010, effective date.

Douglas Cottingham sought to receive good-time credit under Indiana Code 35-38-2.6-6 when his home detention under a community-corrections program was revoked and he was ordered to serve time in the Department of Correction. He was placed on home detention before the 2010 amendment took effect.

Before the amendment to section 6, the General Assembly expressly provided that persons placed on home detention in community-corrections programs weren’t entitled to earn good-time credit. The amendment removed language preventing someone from earning that credit.

Justice Frank Sullivan noted that there is a conflict in the Indiana Court of Appeals on whether the amendment is retroactive. The justices examined the amendment language and held that it only applies to people put on home detention on July 1, 2010, or later.

“By using ‘is placed’ (or by not amending that language as it existed in the prior statute), we think that the Legislature intended for this amendment to apply only to those persons who ‘are placed’ on home detention on or after the amendment’s effective date,” he wrote. “If the Legislature intended for the amendment to apply to persons who had already been placed on home detention, it would have used language to include such persons – language like ‘a person who has been placed’ or even ‘a person who is in community corrections.’”

He pointed out an offender who committed an offense before the statute’s effective date and was placed on home detention after the effective date would be eligible for good-time credit.

Criminal – Probation/Right of Confrontation

Robert Smith v. State of Indiana

49S02-1109-CR-529

The Indiana Supreme Court rejected a man’s argument that he should be afforded the same right of confrontation in his probation revocation hearing as is outlined in Crawford v. Washington, 541 U.S. 36 (2004).

Robert Smith was on home detention through Marion County Community Corrections when the community supervisor manager alleged eight counts of violations, including testing positive for drugs. At a hearing on the allegations, the state was allowed to enter into evidence Exhibit 1, which consisted of five lab reports showing Smith tested positive for cocaine and marijuana on five separate occasions, and an affidavit from Megan Jones, the supervisor of the lab that performed the tests. She attested to the positive results of the test.

Smith argued that admitting that evidence violated his due process right to confrontation, and it was not reliable because it only spoke of general lab procedures and not specific results.

Smith’s community-corrections placement was revoked, and he was ordered to serve time in the Department of Correction. He has since been released. Because of this, the justices only addressed Smith’s right to confrontation argument, in which he argued that the high court should find his due process right to confrontation requires confrontation as defined in Crawford.

“We reject the argument that Smith’s due process right to confrontation should be the same right to confrontation as defined in Crawford for purposes of the Sixth Amendment; more-over, we reject any argument that Crawford changed the due process analysis we employ in revocation proceedings,” Justice Frank Sullivan wrote.

The justices adopted the “substantial trustworthiness” test in Reyes v. State, 868 N.E.2d 438, 440 n.1 (Ind. 2007), for determining when hearsay evidence should be admitted at probation revocation hearings. In Smith’s case, his due process rights to confrontation weren’t violated by the admission of Exhibit 1 because the evidence supports the trial court’s finding that it was substantially trustworthy. The trial judge found Jones’ affidavit to be reliable.

July 27

Attorney Discipline – Unreasonable Fees

In the Matter of Thomas E. Q. Williams

30S00-1101-DI-37

A Hancock County attorney was suspended for two years after the Indiana Supreme Court ruled in a 3-2 opinion that he charged unreasonable fees to an elderly client, converted funds belonging to her, and was dishonest before the Indiana Supreme Court Disciplinary Commission.

Thomas E.Q. Williams was suspended without automatic reinstatement effective Sept. 7. Justice Mark Massa joined Justice Frank Sullivan Jr. in a dissent in which they would have disbarred Williams.

Williams was sued in 2002 after a client, M.D., revoked power of attorney upon learning that her account at a retirement facility was past due. A trial court ruled Williams failed to properly account for the elderly client’s expenses and his services for which he fraudulently billed $93,500. The court awarded the damages against Williams of $67,292, and the disciplinary grievance was filed.

The disciplinary order notes that after the disciplinary commission filed its verified complaint against Williams, he argued for the first time that he used his client’s funds “to produce for her a gospel following her near death and other writings or perhaps publishing with M.D.’s funds since these things may be something a little different from what a usual trusted friend would do with funds.”

“Respondent’s nearly complete lack of even rudimentary records of his dealings with M.D.’s property under the POA is a fact in aggravation of his professional misconduct,” according to the per curiam opinion.

“We also find the following additional facts in aggravation: (1) Respondent’s groundless attacks on M.D. and others associated with her when she attempted to obtain the accounting to which she was legally entitled; (2) his dishonesty in denying under oath in this case that the funds he took from M.D. were for legal services after he repeatedly and unequivocally stated under oath in the civil suit that they were for attorney fees; and (3) his lack of remorse for any of his misconduct.”

The opinion said disbarment was not an effective discipline because Williams “has essentially withdrawn from the practice of law since the early 1990s. Thus, from his vantage point, disbarment is a non-event — it would simply prohibit him from doing that which he has not done for nearly two decades. And because disbarment is permanent, he would have no incentive to come to grips with the pain and suffering he has wrought.”

But Sullivan and Massa wrote in dissent that disbarment was appropriate.

“I would not provide an opportunity to return to practice to a lawyer who, after helping himself to his frail and elderly client’s money, says the money was a gift after his first explanation that it constituted payment for legal services was rejected by a court,” Sullivan wrote.

July 30

Civil Tort – Wrongful Death/Venue

Dalmas Maurice Otieno Anyango and Jane Tinna Agola Otieno, as Natural Parents and Next of Kin of Isaiah Omondi Otieno, Deceased v. Rolls-Royce Corporation, Honeywell International Inc., et al.

49S04-1207-CT-434

The family of a man killed by a falling helicopter that crashed in British Columbia will not have their case heard in Indiana where the helicopter engine was built, the Indiana Supreme Court ruled.

Isaiah Omondi Otieno, 20, a Kenyan citizen and student at the College of the Rockies in Cranbrook, B.C., was killed four years ago as he was mailing a letter to his parents in Kenya. A helicopter lost power overhead, crashing and killing Otieno in a crash the court described as bizarre.

Otieno’s family filed a wrongful death suit naming as a defendant Rolls-Royce, the successor to Indianapolis-based Allison Division of General Motors, which designed and built the engine for the 1974 Bell Helicopter. The family sued in Indianapolis, Justice Frank Sullivan wrote, “because they would only be entitled to nominal damages under British Columbia law.”

But Sullivan wrote that the Indiana court was not the most appropriate venue.

“Because we conclude that British Columbia provides an available and adequate forum under applicable law, and that the trial court did not otherwise abuse its discretion in dismissing the complaint on the ground of forum non conveniens, we affirm the trial court’s judgment,” Sullivan wrote in a unanimous opinion.

The Court of Appeals also had previously affirmed the Marion Superior Court dismissal. Honeywell International Inc., which designed engine components in Indiana, and Bell Helicopter Textron Inc. of Texas, also had been named as defendants in the suit.

Miscellaneous – Drainage Assessment

Thomas R. Crowel v. Marshall County Drainage Board

50S03-1202-MI-71

A Marshall County landowner will have to pay a drainage assessment on a county-maintained ditch, even though he said his property derives little benefit from the drainage system for which he’s ordered to pay a share.

The Indiana Supreme Court affirmed a Circuit Court decision that upheld the county drainage board’s assessment of $7,055.41 on 26 acres that Thomas R. Crowel owns near the northern Indiana city of Plymouth.

“We affirm the assessment because under Indiana law, all landowners whose surface water flows into a drain receive a benefit by virtue of that drainage,” Justice Frank Sullivan Jr. wrote in a unanimous opinion. 

Crowel argued that his property was not in the watershed drained by the maintenance project in question, but the justices said “the extent to which property is benefited is a question of fact to be decided by the (drainage) board in the first instance,” and that the burden of proof is on landowners to prove they are not benefited by a drainage project.

“Because Crowel did not seek de novo review in the trial court under [I.C. § 36-9-27-107(a)] the board’s decision is conclusive and not susceptible to attack on appeal,” Sullivan wrote.

July 31

Criminal – Habitual Offender Enhancement

Anthony H. Dye v. State of Indiana

20S04-1201-CR-5

The Indiana Supreme Court found a habitual-offender enhancement tacked onto the 20-year sentence of a serious violent felon was an “impermissible double enhancement.”

Anthony H. Dye was convicted of unlawful possession of a firearm by a serious violent felon and found to be a habitual offender after a shootout at a music studio in Elkhart on March 18, 2007. During the incident, Dye was shot twice and his 20-year-old son, Jermaine Jackson, was killed.

The state subsequently charged Dye with one count of unlawful possession of a firearm by a SVF.

In addition, the state sought to have Dye’s sentence enhanced under the habitual-offender statute, which provides that the sentence of a person convicted of a felony can be enhanced up to 30 years if he or she previously has been convicted of two unrelated felonies. To prove Dye’s habitual-offender status, the state used a 1998 conviction for possession of a handgun within 1,000 feet of a school and a 1993 forgery conviction.

Dye pleaded guilty to unlawful possession of a firearm by a SVF. However, he filed a motion to dismiss the habitual-offender allegation, arguing that enhancing his sentence under the habitual-offender statute would constitute an impermissible double enhancement.

Denying the motion, the trial court moved forward with a jury trial on the habitual-offender allegation. After a two-day trial, the jury found that Dye was a habitual offender. The trial court sentenced him to the maximum 20 years imprisonment on the SVF conviction, enhanced by 30 years due to his status as a habitual offender. Then the court suspended 15 years to probation, for an executed term of 35 years.

The Supreme Court found Dye’s habitual-offender enhancement violated the rule against double enhancements for two reasons. First, the SVF statute Dye was convicted under is a progressive-penalty statute. Second, the general habitual-offender statute does not include “explicit legislative direction indicating that a double enhancement is proper here.”

Finding that the trial court erred in denying Dye’s motion, the Supreme Court vacated the 30-year enhancement. Also, the Supreme Court summarily affirmed the decision of the Court of Appeals that an executed term of 20 years imprisonment is not inappropriate. It remanded to the trial court with instructions to enter an order sentencing Dye to an executed term of 20 years.

Justice Mark Massa dissented, writing, “The courts of this state communicated to the General Assembly what was, and was not, permissible with respect to double enhancements. Several times, the General Assembly has responded. I believe their 2001 response amending the habitual offender statute shows first that the SVF statute is not a progressive penalty statute, and second that, even if the SVF statute were still subject to the general rule against double enhancement, there is explicit legislative direction permitting an adjudicated serious violent felon to be subject to additional enhancement under the general habitual offender statute.”

Civil Plenary – Attorney Fees/Access to Public Records

Shepherd Properties Co., d/b/a Shepco Commercial Finishes v. International Union of Painters and Allied Trades, District Council 91

49S04-1112-PL-697

The Indiana Supreme Court affirmed a trial court’s ruling that held a private party liable for attorney fees in an Access to Public Records Act claim.

The International Union of Painters and Allied Trades filed a complaint against the Metropolitan School District of Warren Township after the township and the Public Access Counselor denied a request to inspect and copy payroll records. The records had been submitted by ShepCo Commercial Finishes, a subcontractor on a public-works project.

Although the trial court denied the township’s motion to add ShepCo as a necessary party, it did grant ShepCo’s motion to intervene.

After a hearing, the trial court entered summary judgment for the union and ordered the township to disclose the records. The trial court also awarded the union $20,234 in attorney fees against the township and ShepCo, jointly and severally.

The union then filed a motion to amend the final judgment seeking additional attorney fees expended by its counsel in litigating the original request for attorney fees. The trial court entered an amended judgment awarding the union an additional $2,425.

ShepCo appealed; the Court of Appeals concluded that the company was not liable for attorney fees because it was not a public agency that denied access to public records.

The Supreme Court reversed that decision, finding that private parties may be liable for attorney fees under the APRA.  

Writing for the court, Justice Steven David argued, “To shield private entities from liability for attorney’s fees would thwart, rather than further, the public policy underlying APRA. Here, the legislature has made it clear that the APRA must be ‘liberally construed to implement’ the policy of full access to public records and transparency of government affairs. And the legislature clearly contemplated the involvement of private parties in APRA litigation. Removing from private entities any fear of liability for attorney’s fees would deter persons seeking to inspect public records from filing APRA actions, as the private entities could assert non-meritorious defenses to avoid disclosure and drive up litigation costs.”

The Supreme Court affirmed the award of attorney fees to the union and remanded to the trial court to determine what additional attorney fees the union incurred as a result of ShepCo’s appeal.

Mortgage Foreclosure – Church Property

The Presbytery of Ohio Valley, Inc., d/b/a The Presbytery of Ohio Valley, d/b/a Ohio Valley Presbytery, et al. v. OPC, Inc., f/k/a Olivet Presbyterian Church, Inc., et al.

82S02-1105-MF-314

Neither the trial court nor the Court of Appeals got it right in a dispute between an Evansville Presbyterian church and its former denomination when the church left over simmering disagreements on matters of doctrine, the Indiana Supreme Court ruled in a 3-2 decision.

Olivet Presbyterian Church split from Presbyterian Church U.S.A. in 2006 after an affiliation with predecessor denominations dating back more than a century. The denomination, claiming a trust on Olivet’s property, sued after the church declined to relinquish it.

The justices ruled that neither a trial court grant of summary judgment in favor of the church or an appeals court reversal and grant of summary judgment for the denomination was adequate, and sent the case back to Vanderburgh Circuit Judge Carl Heldt.

“We hold that genuine issues of material fact arise from the inferences flowing from the stipulated designated evidence and that neither Olivet nor the Presbytery is entitled to the full relief sought in their respective motions for summary judgment,” Chief Justice Brent Dickson wrote in an opinion joined by justices Steven David and Robert Rucker.

“Genuine issues of disputed fact, resulting from varying inferences possible from the designated evidence, must be resolved at trial rather than on summary judgment,” Dickson wrote.

Justices Mark Massa and Frank Sullivan Jr. dissented without separate opinions, believing the decision and analysis of the Court of Appeals to be correct.

Domestic Relation – Property Agreement

Sean Thomas Ryan v. Dee Anna Ryan

71S03-1111-DR-644

The Indiana Supreme Court unanimously held that a trial court had no authority to modify a property agreement made by ex-spouses and that the ex-wife is entitled by law to refuse to waive a provision that neither party had to accept a sale that was below specified minimums.

When Sean and Dee Anna Ryan divorced in 2008, they agreed to sell a property they had in Granger and a lake house in Michigan. Until the properties sold, Sean Ryan would pay 75 percent of the mortgages; Dee Anna Ryan would pay the remainder. In the agreement, the two could “bind” each other to accept a purchase price as long as the “resulting net proceeds” equaled at least $1.1 million on the Granger house and at least $300,000 on the lake house.

For two years, the properties hadn’t sold, so Sean Ryan sought a motion for relief from judgment pursuant to Indiana Trial Rule 60(B)(8) so that the court could order that the properties will be sold at the prevailing fair market value and he could accept a price lower than stated in the agreement without his ex-wife’s consent.

The trial court denied the request, but the Court of Appeals ordered the court to hold an evidentiary hearing on the motion.

The justices agreed with the trial court that it didn’t have authority to modify the property-distribution agreement without Dee Anna Ryan’s consent. The agreement was incorporated and merged into the divorce decree and did not provide for, nor did the parties consent to, modification, Justice Frank Sullivan wrote.

A court can have authority to resolve a dispute over the interpretation of a settlement agreement or property-division order, he noted, and the court’s task would be one of contract interpretation.

In the instant case, the justices found that the Ryans’ agreement as to the disposition of their properties is unambiguous. As a matter of contract law, Dee Anna Ryan is bound to agree to the sales prices for the properties that would produce net proceeds less than those stated in the agreement.

“We conclude by saying that, in writing this opinion, we have been struck by the recurrence of several fact patterns that have been avoidably problematic – the use of specific dollar amounts rather than percentages, the failure of a QDRO’s terms to conform to ERISA requirements, the failure to provide a contingency if the marital residence cannot be sold – and trust that practitioners and judges alike will contemplate them in their work as well,” Sullivan wrote.

Civil Tort – Fraud/Contracts

James C. Purcell v. Old National Bank

49S02-1201-CT-4

Two Indiana justices believed that a man’s actual fraud and tortious interference with contract claims against Old National Bank should go to trial, an opposite conclusion reached by their fellow justices.

Justices Frank Sullivan, Mark Massa and Steven David – who authored the majority opinion – found there wasn’t sufficient evidence presented by James Purcell to withstand a motion for judgment on the evidence by the bank on his claims of fraud, deception, and tortious interference with a contract.

Purcell had a security interest in Midwest Fulfillment, a company he established in 1998, that required if the company’s assets-to-liabilities ratio fell below a certain level for three consecutive months, Midwest Fulfillment would be in default and Purcell would gain 100 percent ownership of the company. He previously had sold his majority interest in the company.

Midwest got a line of credit from Old National Bank, which required Purcell to sign a subordination agreement making his security interest in the assets subordinate to Old National’s interest. Both Purcell and Old National received monthly financial statements from the company. A couple of years later, the company went out of business and Old National liquidated the assets.

Purcell sued Midwest, and during interrogation of Joseph Stein, a majority owner of the company, Stein testified as though an employee of Old National instructed Stein to make adjustments to the company’s balance sheets. These adjustments kept the company above the threshold ratio. Purcell then sued Old National for negligence, constructive fraud, actual fraud, deception and tortious interference with a contract. At this trial, Stein’s interrogatory answer was entered as proof that the bank employee instructed Stein to knowingly make false statements. Both the bank employee and Stein denied that the balance sheets were falsified at the bank’s direction.

The trial court granted Old National’s motion for judgment on the evidence on all claims, finding the bank owed no duty to Purcell. The Court of Appeals affirmed in part and reversed with respect to the fraud, deception, and tortious interference with a contract claims.

The majority affirmed the trial court, finding Purcell didn’t produce sufficient evidence to withstand the motion for judgment on the evidence on the claims of fraud, deception, and tortuous interference.

Justice Robert Rucker and Chief Justice Brent Dickson dissented regarding these claims because the majority affirmed the lower court on grounds the trial court didn’t reach, Rucker wrote. Also, the conflicting inferences from the evidence before the jury on Stein’s testimony precluded judgment on the evidence on these two claims.

The justices did all agree with the lower court’s judgment on the evidence regarding Purcell’s claims of negligence and constructive fraud. Purcell’s relationship with the bank as a subordinate creditor didn’t give rise to a duty of care required to prove these claims. They also affirmed the denial of attorney fees for Old National.

Criminal – Life Without Parole/Juvenile

Andrew Conley v. State of Indiana

58S00-1011-CR-634

A 3-2 decision of the Indiana Supreme Court upheld a sentence of life without parole for a 17-year-old who killed his 10-year-old brother while babysitting and later dumped his body near a school in Rising Sun.

Justice Steven David wrote for the majority, affirming the Ohio Circuit Court sentence for Andrew Conley in the murder of Conner Conley.

“We hold that based on the age of Conley, the age of Conner, and the particularly heinous nature of the crime, a sentence of life without parole was appropriate,” David wrote. “We hold that on the facts of this case, the sentence of life without parole is constitutional.”

“A seventeen-and-a-half-year-old caring for his ten-year-old brother murdered the defenseless child with his bare hands. After disposing of the body, Conley acted as if nothing was out of the ordinary,” David wrote. “He took steps to cover up the crime and hid his brother’s body in a park. The aggravating factor was clearly established and uncontroverted. The judge was within his discretion in weighing the mitigating factors in the manner in which he did.”

Justices Robert Rucker and Frank Sullivan Jr. dissented, saying they would have imposed a 65-year sentence, given Andrew Conley’s age and other mitigating factors.

“I do not believe the trial court manifestly abused its discretion in weighing aggravating and mitigating circumstances in this case. However, I do not agree Conley should have been sentenced to die in prison,” Rucker wrote.

Rucker’s dissent also points to research concluding that less than 6 percent of juveniles convicted in homicides receive sentences of life in prison without parole, and that the United States is the only country that doesn’t comply with the norm against imposing life without parole sentences on offenders under age 18. Indiana is one of 15 states allowing such sentences, Rucker wrote.

The dissent said the brutality of the crime wasn’t the only inquiry for the court, and noted Andrew Conley’s troubled upbringing and multiple attempted suicides. But he also had been a solid student with aspirations of going to college, no prior criminal record and a solid relationship with his family. Rucker also noted that the 17-year-old turned himself in the day after the killing.

“Conley was only seventeen at the time of this crime, and I find, as has the Supreme Court, that his age is relevant to the assessment of his character,” Rucker wrote. “It seems clear that Conley ‘was still a teenager with a developing brain and impulse control issues made worse by his mental illness.’”

Andrew Conley is only the fourth juvenile in Indiana to receive a sentence of life without parole.

Criminal – Murder/Sentence

Engelica E. Castillo v. State of Indiana

45S00-1102-LW-110

The Indiana Supreme Court reduced the sentence of a woman who, along with her boyfriend, was convicted in the events that led to the murder of the woman’s 2-year-old cousin while in her care.

The court ruled in a 4-1 opinion that Engelica Castillo’s sentence for murder should be reduced to 65 years in prison. Castillo challenged the appropriateness of her sentence and also raised the argument of prosecutorial misconduct.

Castillo and her then-boyfriend, Timothy J. Tkachik, were charged in June 2009 with murder, neglect of a dependent, battery and false informing after the body of Jada Justice, 2, was found in a swampy body of water near LaPorte.

About a year later, Tkachik pleaded guilty to a Class A felony neglect charge and agreed to testify against Castillo in exchange for a sentence of no more than 50 years in prison.

Both Tkachik and Castillo admitted beating Jada before a planned trip to Chicago to buy heroin, according to court records. On the way, the boyfriend found the baby leaning down in her car seat, not breathing. Efforts to revive the baby with CPR failed, and the baby was covered with a tarp as the two set off again toward Chicago.

Both said the baby was dead when they returned later that night.

The justices said that to be convicted of murder as a principal, a defendant must knowingly or intentionally kill another. “These facts do not support a conviction of the defendant for murder as a principal but only as an accomplice,” Chief Justice Brent Dickson wrote, noting that Tkachik might have been as likely to have been responsible for the fatal injuries.

“Notwithstanding the defendant’s terrible treatment of the child, none of her actions were causally linked to either cause of death offered to explain the victim’s death at trial,” Dickson wrote in an opinion in which Justice Frank Sullivan concurred. Justice Robert Rucker concurred in the result, and Justice Steven David concurred in a separate opinion.

David said he believed evidence was sufficient to prove to a jury that Castillo knowingly killed the victim, but he didn’t object to revising the sentence due to Castillo’s difficult upbringing, Tkachi’s involvement, and terms of his plea agreement and prosecutorial misconduct.

The justices found the prosecutor “actually told the jury not to compare the mitigating and aggravating factors. … Telling the jury not to balance the aggravators and the mitigators touched on the central task of the jury in deciding whether to impose life without parole,” Dickson wrote.

Prosecutorial misconduct occurred, the justices concluded, but it did not result in an adjustment of sentence because the sentence was adjusted based on the appropriateness argument.  

Justice Mark Massa dissented. He held that there was evidence for a jury to conclude that Castillo was a principal actor, and that the prosecutorial misconduct did not constitute fundamental error.

“Even taking the majority’s view of culpability, I still believe a sentence of life without parole is not inappropriate on these facts,” Massa wrote.

Indiana Court of Appeals

July 25

Criminal – Child Molestation/Corroborative Evidence

Erasmo Leyva, Jr. v. State of Indiana

02A03-1111-CR-535

Indiana Court of Appeals Judge John Baker thinks it’s time that corroborative evidence is required in child molestation cases in which the charges are supported by the testimony of a single witness.

Baker dissented from his colleagues because he believed that the victim’s testimony was incredibly dubious. A.L., who was 11 at the time, accused her father of placing his fingers inside her vagina during a visit to her father’s home. A.L. and her brother were at Erasmo Leyva’s home to celebrate Easter and their birthdays. When her stepmother, brother, and half-sibling were all asleep in the living room after watching a movie, A.L. said that her father molested her.

She intended to call her mother, but couldn’t immediately find a phone. She informed her mother of the alleged molestation when she arrived home the next day. A.L. said this was the only time her father had ever molested her.

The Court of Appeals upheld Leyva’s Class A felony child molesting conviction, rejecting his claim that his daughter’s testimony was incredibly dubious. He argued she had reasons to lie about the incident – A.L. was upset because her birthday party was being held on her brother’s birthday; she didn’t get a new cell phone for her birthday; and she was angry that her brother took her spot during the movie.

Baker, however, pointed to the multiple times in A.L.’s testimony in which she couldn’t remember many events and circumstances during the weekend of the alleged incident and couldn’t remember the events that didn’t reflect positively on her, like her anger toward her brother.

He also found the circumstances around the alleged molestation to run “counter to the human experience,” and she had a motive to fabricate. Baker then explained why courts should consider requiring corroborative evidence in these types of cases, citing cases from other jurisdictions.

“With the advent of modern technology, including DNA testing and analysis, it is not unreasonable to require some form of corroborating evidence before convicting a defendant when the sole witness is the victim,” he wrote.

Civil Plenary – Collusion

North Gibson School Corporation v. Shea Truelock, Brian Douglas, Doyin Barrett, Tony Hensley, et al.

26A01-1111-PL-505

The lawsuit for collusion brought by 13 bus drivers against the North Gibson School Corporation as a result of bids for a transportation services contract failed on interlocutory appeal before the Indiana Court of Appeals.

Bus Corp. was awarded two contracts with the school corporation, which would cover bus transportation from 2011 to 2015.  The school corporation then scheduled “negotiation sessions” with individual drivers who wanted to renew or acquire a contract for their respective routes. Thirteen drivers sued based on how the negotiation sessions were carried out – using a “reverse auction” process. The drivers were presented with a contract at a reduced price resulting from the “reverse auction” and told by the school corporation’s representative that if the contracts at the stated daily rates weren’t executed by a certain date, the school corporation would award the contract to the next lowest bidder – Bus Corp.

The drivers alleged collusion in their suit and sought compensatory damages under the Indiana Antitrust Act. The school corporation tried to have the suit dismissed, but the trial judge denied the motion.

The drivers, as unsuccessful bidders, don’t have a private right of action against the school corporation, even if they allege collusion, Chief Judge Margret Robb wrote. The school corporation also can’t be held liable for damages under the Indiana Antitrust Act. The appellate court cited Brownsburg Cmty. Sch. Corp. v. Natare Corp., 824 N.E.2d 336 (Ind. 2005), reading that decision to mean that governmental entities can’t be liable for actions prohibited by the Indiana Antitrust Act. That Act provides a cause of action for unsuccessful bidders against other bidders.

Robb pointed out that a suit against Bus Corp. may have been a better strategy. The drivers have no remedy against the school corporation.

The judges ordered the trial court to enter an order consistent with the appellate opinion.

July 26

Miscellaneous – Sex Offender Registry

Jeremiah Cline v. State of Indiana

06A05-1111-MI-611

Indiana Court of Appeals Chief Judge Margret Robb dissented from her colleagues in a case involving a man who wanted his name taken off the Indiana Sex Offender Registry.

Jeremiah Cline had sex with a 15-year-old and 14-year-old in February and June 2001. An amendment to the Indiana Sex Offender Act effective July 1, 2001, required someone with Cline’s Class C felony sexual misconduct with a minor convictions to register as a sex offender.

When he was released from prison, he was required to register. In 2011, he sought to have his name removed from the registry. The trial court found he had no obligation to continue to register but that it lacked authority to “expunge” his existing information from the registry.

Although Indiana Code 11-8-8-22, the statute created as a result of Wallace to provide for how to remove one’s name from the registry, provides a mechanism to petition the court for relief from obligation of continued registration and disclosure, the majority believed that Cline must go through administrative routes with the Department of Correction to remove his name.

Robb wrote that the majority misused the term “expungement” and that Cline wanted removal of his name, not a complete erasure of his record. She believed that I.C. 11-8-8-22, which “is poorly written and confusing,” allows the trial court to remove one’s name from the registry. If the statute does not mean that a court may remove an offender’s name and information, then it has no meaning at all, she wrote.

Domestic Relation – Child Support/Driving Privileges

Denise A. Mertz a/k/a Denise A. Grimmer v. Robert G. Mertz

64A03-1108-DR-360

The Indiana Court of Appeals split over whether a father who was more than $100,000 behind in child support should be allowed to have his driving privileges reinstated. Robert Mertz sought in 2010 to modify his child support obligation regarding his youngest daughter, J.M. At the time, Mertz had been found in contempt twice for not paying child support, jailed twice, and had criminal charges filed against him for not paying. His driving privileges were suspended in 2008 pursuant to Indiana Code 31-16-12-7 for not paying.

The trial court granted Mertz’s motion, citing that his income had dropped since 2005, when the last support order was entered. Imputing his income at $1,000 a week based on Mertz’s employment skills and the economy, the judge ruled he was to pay $49 toward his current support and $62 to educational expenses, with the remaining amount toward his arrearages, which the judge said could be as much as $100,000. Mertz agreed to pay half of his income wages toward these amounts. The judge also reinstated Mertz’s driver’s license because of his plan to pay back his owed support. His ex-wife, Denise Grimmer, objected, arguing that Mertz has a history of hiding his income and his driving privileges shouldn’t be reinstated.

The appellate court has yet to look at I.C. 31-16-12-7 and -11, which deal with license suspension and reinstatement for failure to pay child support. Section 11 says the court may stay the suspension if the person pays the child support arrearage in full; or an income withholding order under I.C. 31-16-15 … is implemented and a payment plan to pay the arrearage is established.

Judges Nancy Vaidik and Edward Najam upheld the license reinstatement, pointing out the judge realized if Mertz is able to drive, he is more likely to meet his support obligations. His plan to pay one-half of his income toward his obligation was sufficient, they held.

Chief Judge Margret Robb dissented on this point, writing, “Given that the two alternatives for reinstatement are to pay in full or establish a payment plan to pay, the ‘plain, ordinary, and usual meaning’ of ‘a payment plan to pay the arrearage’ is a plan that will pay the arrearage in full, not simply pay toward or pay down the arrearage.”

Robb calculated that that statutory interest alone on $100,000 of arrearage would exceed $140 a week, and Mertz’s payment plan will barely make a dent in it. If Mertz established a plan to pay the maximum amount allowed by law – 65 percent of his income – then she believes the trial court could have reinstated his driving privileges. The judges unanimously upheld the decision to modify Mertz’s support obligation.

Civil Tort – Attorney Fees

J. Michael Kummerer v. C. Richard Marshall

03A01-1201-CT-33

A southern Indiana lawyer who entered into an agreement with another attorney to handle some of his cases due to his suspension from practice is not entitled to prejudgment interest on his portion of a client fee, the Indiana Court of Appeals held.

J. Michael Kummerer was arrested in 2007 and charged with possessing cocaine and aiding, inducing or causing dealing in cocaine. He was suspended for 6-months by the Indiana Supreme Court Disciplinary Commission and entered into an agreement with C. Richard Marshall for Marshall to handle four of Kummerer’s contingency-fee cases.

Their agreement called for the attorneys to share equally in any fee recovered without a trial. At issue is a case that settled during mediation – the parties agreed to a compromise fee with the client of $275,000. Marshall paid himself a total of $137,500. After the settlement, Marshall tried to get Kummerer to change their agreement so that he would receive 90 percent and Kummerer would get just 10 percent. Marshall believed paying Kummerer the 50 percent would violate the proportionality provision of Rule 1.5 of the Rules of Professional Conduct. Marshall claimed that he had done most of the work on the case.

Kummerer sued Marshall, alleging he had been defrauded. Marshall claimed Kummerer misrepresented the amount of work he had completed on the case. Marshall moved to have the disputed money put in an account with the clerk’s office so it could earn interest, but Kummerer objected. Marshall left the funds in his IOLTA account.

The trial court found no fraud and that Kummerer’s work on the case justified the contract. The trial judge looked at Rule 1.5 and found that the equal fee split was a reasonable forecast of the work that each attorney would perform on the case. Kummerer was awarded $137,500, but no prejudgment interest. He then filed a motion to correct errors, claiming the trial court needed to make special findings regarding whether the contract damages were determined by simple mathematical calculations when deciding to deny prejudgment interest. The trial court denied this motion.

The Court of Appeals affirmed because the trial court had to determine whether the two attorneys’ forecast of the amount of each work was reasonable. The judge had to consider the eight factors in Rule 1.5(a) to do so. That determination involved the court’s judgment in order to assess the damages, so prejudgment interest was not appropriate, Judge Nancy Vaidik wrote.

The appellate court also found that the trial court did make specific findings of fact that the fee division was reasonable under Rule 1.5 for the circumstances of this case. The trial court had to exercise its judgment in determining damages and the calculations of those damages were not merely a simple mathematical evaluation, she wrote.  

July 27

Criminal – Drug/Sentence

John Cherry v. State of Indiana

55A01-1112-CR-585

A defendant who contended the trial court abused its discretion and imposed an inappropriately harsh sentence had his drug conviction upheld by the Indiana Court of Appeals.

John Cherry was stopped May 24, 2011, as part of a drug sting in Morgan County. Cherry told a detective at the scene that he was supplying heroin to Austin Quick who was with Cherry that night. Police also recovered a syringe from Cherry’s pants pocket.

The state charged Cherry with two counts of Class B felony aiding, inducing or causing dealing in heroin and Class D felony unlawful possession of a syringe.

During the trial, the state’s first witness testified that balloons swallowed by Quick during the drug bust contained heroin, and a laboratory report was entered into evidence. However, the report was later withdrawn after the trial court ruled that the state had failed to establish a sufficient chain of custody for the heroin. Cherry moved for a mistrial and requested an admonition. The trial court admonished the jury not to consider any evidence from the witness or the lab report.

Cherry was found guilty and sentenced to an aggregated sentence of 10 years for aiding, inducing or causing dealing in heroin, with two years suspended and four years of probation.  

Cherry said that the trial court abused its discretion in admitting certain evidence and in denying his mistrial motion. He also claimed the state failed to produce sufficient evidence to sustain his convictions and his sentence was inappropriately harsh.

The Court of Appeals found the trial court did not abuse its discretion in admitting the videotape of Cherry’s statement made to a detective nor in admitting syringes found near the scene. In addition, the court ruled the trial court did adequately admonish the jury and that Cherry failed to establish the trial court abused its discretion in denying his mistrial motion.

Also, the court found the state produced sufficient evidence to sustain Cherry’s Class B felony convictions. Judge Nancy Vaidik dissented on the grounds that the evidence was insufficient to prove the substance in the balloons Quick swallowed was heroin.

Finally, the court upheld Cherry’s sentence.

Executive Administrative/Workers’ Comp – Traffic Accident/Location

Dale Brenon v. The 1st Advantage Corp, d/b/a Omega Insurance Services

93A02-1202-EX-108

A worker injured in a traffic accident who received a settlement for a workers’ compensation claim in Wisconsin may proceed with a claim in Indiana, where the crash occurred, the Indiana Court of Appeals ruled.

The appellate court reversed and remanded a ruling by the Worker’s Compensation Board of Indiana, which dismissed an application for adjustment of claim from Dale Brenon, a Wisconsin resident hired by Omega Insurance Services as an investigator.

After a 2003 crash in Lakeville, Ind., Omega through its insurers negotiated a $100,000 settlement with Brenon. Before the settlement was accepted, Brenon filed an application in Indiana seeking workers’ compensation benefit.   

The judges remanded the matter to the Worker’s Compensation Board, holding that the board’s dismissal was “not sustainable under the doctrine of collateral estoppel, Wisconsin laws or Supreme Court precedent, and that the Board’s decision gave no effect to the reservation of rights clauses contained in settlement agreements.”

Criminal – Post Conviction Relief

Phillip L. White v. State of Indiana

18A05-1201-PC-1

A man convicted of murder in Delaware County is not entitled to post-conviction relief due to ineffective counsel, the Indiana Court of Appeals ruled.

Phillip L. White sought post-conviction relief for the 2004 hit-and-run killing of Ryan Ylovchan, for which White was sentenced to 55 years in prison.

The appeals court previously affirmed White’s conviction, which he appealed on the basis that his confession was not admissible and that the state failed to provide evidence sufficient for his conviction.

In his bid for post-conviction relief, White said his attorney failed to raise the issue of whether his conviction was constitutional under Article I, Section 16 of the Indiana Constitution, commonly referred to as the Proportionality Clause. White argued that the elements of the crime for which he was convicted were identical to the elements of the lesser offense of involuntary manslaughter.

“White cannot demonstrate that his appellate counsel’s performance was deficient. Hence, he likewise cannot demonstrate that he received ineffective assistance from his appellate counsel. We affirm the post-conviction court’s judgment denying White’s petition for post-conviction relief,” Judge Edward Najam Jr. wrote for the unanimous panel.

Criminal – Drugs/Sentence

Kathleen K. Peterink v. State of Indiana

57A03-1112-CR-586

The Indiana Court of Appeals agreed with a defendant that her sentence for a Class A misdemeanor possession of marijuana exceeded the statutory maximum and remanded for resentencing.

After a search of her home in July 2010, Kathleen Peterink was charged with possession of cocaine or narcotic drug as a Class D felony and possession of marijuana as a Class A misdemeanor. She pleaded guilty to the second count and the state dismissed the first.

On Nov. 1, 2011, the trial court in Noble County sentenced Peterink to one year of imprisonment, suspended to probation. As a special condition of probation, Peterink had to serve six months in home detention for which she would not receive good-time credit.

 Peterink argued that her sentence exceeded the statutory maximum for a Class A misdemeanor. She cited Jennings v. State in support of her view that the trial court gave her a two-year sentence by sentencing her to one year suspended and one year probation.

The state did not challenge Peterink’s reliance upon Jennings but asked the court to revisit the issue addressed by Jennings with regard to misdemeanor sentencing.

Noting that Jennings holds the term of imprisonment to include both the executed and suspended portions of a sentence, the court agreed with Peterink. It reversed the sentence imposed by the trial court and remanded for resentencing.

In his dissenting opinion, Judge Michael Barnes stated he would not follow the Jennings holding. He wrote that Peterink’s sentence does not exceed the statutory maximum, saying such an interpretation would “fundamentally disrupt the sentencing practices of trial courts.”  

The court also reversed the trial court’s order that Peterink serve six months of home detention without receiving good-time credit. Citing an ambiguity in the state code, the court ruled that a “fair reading of the statutes taken together” leads to Peterink being entitled to good time credit.

Criminal – Fourth Amendment/Drugs

Andre Graham v. State of Indiana

10A01-1108-CR-440

A man convicted of multiple felony drug charges and sentenced to 50 years in prison with 15 years suspended was not deprived his Fourth Amendment rights, the Court of Appeals ruled.

Andre Graham appealed his convictions of Class A felony dealing in cocaine, Class A felony possession of cocaine, Class B felony dealing in a schedule III controlled substance, and Class D felony possession of a controlled substance. Graham argued that the traffic stop that led to discovery of the drugs was a violation of the Fourth Amendment and that the evidence that led to his convictions was insufficient.

Jeffersonville police arrested Graham in May 2010 after a traffic stop that was instigated after a lieutenant witnessed Graham in what he believed was a drug deal. The lieutenant informed a patrolman who stopped the car Graham was driving after Graham failed to signal a lane change.

Graham said the traffic stop lasted 58 minutes, including a long period of time before he was questioned about whether he possessed drugs. The appellate court agreed with the state’s contention that the amount of time wasn’t improper because an officer had to run checks on Graham and two passengers and prepare the citation for an illegal lane change.

Graham argued there wasn’t circumstantial evidence from which a reasonable fact finder could determine he had the intent to deal, but the appellate court held it didn’t need to consider circumstantial evidence. 

“Graham admitted at trial he intended to share the pills and cocaine with his friends,” according to the unanimous decision written by Judge Melissa May. “As ‘delivery’ is statutorily defined as an actual or constructive transfer from one person to another, Ind. Code § 35-48-1-11, we conclude there was sufficient evidence to prove Graham intended to deliver the drugs in his possession, thus supporting his convictions of dealing.”

Criminal – Sentence/Murder

Ronald Davis v. State of Indiana

49A05-1109-CR-459

The gunman who pleaded guilty to four murders in the 3200 block of Hovey Street in Indianapolis was properly given and deserved a 245-year sentence for the crimes, the Indiana Court of Appeals ruled.

The court affirmed Ronald Davis’ sentence, rejecting his arguments that it violated terms of his plea agreement, that the court abused its discretion in sentencing, and that the sentence was inappropriate.

“Davis is a dangerous person from whom society must be protected. In light of Davis’s character and the particularly heinous nature of the crime, we conclude that his 245-year sentence is not inappropriate,” Judge Ezra Friedlander wrote in a unanimous opinion.

Davis was among four people who hatched a plan to break into the house and steal a large amount of marijuana and cash they believed was inside. Finding none, Davis found Gina Hunt and her 23-month-old son, Jordan, and Andrea Yarrell and her five-month-old daughter, Charlii, hiding between a bed and a wall in a back bedroom.

Davis shot and killed them all at close range.

“The trial court properly indicated at the guilty plea hearing that Davis faced a maximum sentence of 280 years in prison. Davis, in fact, received a sentence below the maximum in part because the trial court ordered (the conspiracy counts) to be served concurrently with one of the felony-murder counts. The 245-year sentence imposed clearly did not violate the terms of the plea agreement,” Friedlander wrote.

“Davis cannot seriously challenge his sentence on the basis of the nature of the offense, which is among the most heinous in Indiana’s history,” the judge wrote.

July 30

Criminal – Evidence

State of Indiana v. Raymond P. Coleman

29A05-1108-CR-435

The Indiana Court of Appeals dismissed the state’s appeal of a criminal case in which a trial court granted the state’s motion to dismiss.

The Court of Appeals held that the state had no grounds to attempt to reinstate two counts of Class B felony criminal confinement, two counts of Class C felony battery, and one count of Class D felony pointing a firearm against Raymond Coleman for an alleged incident.

The state requested the dismissal, and the trial court granted it, after Coleman objected to the state’s request that the court declare the victim unavailable and enter her deposition testimony into evidence.

The court declined to find the victim unavailable, preventing deposition testimony from being admitted into evidence. After the trial court denied the state’s motion to reconsider, the state moved to dismiss, which the court granted.

In its appeal, the state argued that Indiana Code 35-38-4-2(5) gave the state authority to appeal by stating appeals are permitted “from an order granting a motion to suppress evidence, if the ultimate effect of the order is to preclude further prosecution.”

But the unanimous appeals court ruling held that Coleman didn’t move to suppress evidence, but rather objected on the basis that the victim was not an available witness.

“In light of the clear language of the statute, we are not at liberty to conclude that the legislature has authorized the state to appeal any adverse evidentiary ruling that deals a fatal blow to the state’s case,” Senior Judge William Garrard wrote for the unanimous panel.

Civil Plenary – Environmental Contamination

The Peniel Group, Inc. and Beech Grove Holdings, LLC v. Elizabeth Bannon, Kenneth G. Schaefer, Linda A. Schaefer, et al.

49A02-1201-PL-42

The former owners of a Beech Grove shopping plaza that once contained a laundry and dry cleaning business that contaminated soil and groundwater cannot be held liable due to the statute of limitations, the Indiana Court of Appeals ruled.

The Peniel Group and Beech Grove Holdings LLC have owned and managed Churchman Hill Plaza since September 2005. Beech Grove Holdings filed a complaint against the former owners in 2008, after an assessment found the dry-cleaning solvent tetrachloroethene, known as PCE, more than 10 years after the last use of the dry-cleaning equipment.

Prior spills had been remediated through the Indiana Department of Environmental Management, and the trial court granted summary judgment for the defendants, finding the statute of limitations had run out under Indiana’s Environmental Legal Action statutes adopted in 1988.

A unanimous appeals court ruling written by Senior Judge Carr Darden held that the statute of limitations for an action under those laws must be initiated within six years.

“Beech Grove Holdings’s predecessor-in-interest knew of the contamination of the site for at least eight years before Beech Grove Holdings commenced the action. We therefore find that Beech Grove Holdings is barred from bringing its claim under the ELA,” Darden wrote, affirming the court’s summary judgment for Kenneth G. and Linda A. Schaefer, Betty Benefiel, Janet Beeler, and Charles and Beth Dodson.    

July 31

Civil Tort – Wrongful Death

The Estate of K. David Short by Judith Y. Short, Personal Representative v. Brookville Crossing 4060 LLC d/b/a Baymont Inns & Suites and MPH Hotels, Inc. d/b/a Baymont Inns & Suites

49A02-1112-CT-1128

The family of a hotel guest who died after falling and hitting his head outside on a cold night may not proceed with a wrongful death suit against the hotel, the Court of Appeals held in a ruling.

The court affirmed summary judgment to the defendants.

The estate of David Short sued the hospital after Short, a guest at Baymont Inn & Suites in Indianapolis, left through a side door at some point after 11:15 p.m. when only a night auditor was working at the hotel.

At about 3:20 a.m., Short returned to the side door. Security video showed Short appeared to fumble with his key card before collapsing and hitting his head on a wall. He went undiscovered until a maintenance worker arrived at about 7 a.m., and he was pronounced dead at 7:38 a.m.

Short’s cause of death was determined to be complications of acute alcohol intoxication and atherosclerotic coronary artery disease.

The estate argued that an innkeeper has a duty to aid and protect guests after it knows or has reason to know they are ill or injured.

“We conclude that Baymont did not have reason to know of Short’s peril and thus the court did not err in granting its motion for summary judgment,” Judge Elaine Brown wrote in the unanimous opinion.

Aug. 2

Juvenile – Murder/Evidence

N.B. v. State of Indiana

55A01-1111-JV-574

The Indiana Court of Appeals affirmed a Morgan County boy’s adjudication for shooting his younger brother while the two were home alone. The 11-year-old claimed that the juvenile court abused its discretion in admitting his statement to the investigating officer at the evidentiary hearing.

In June 2011, N.B. was left home alone with his 6-year-old brother, A.F., and told by their mom if they cleaned their room, they’d have pizza for dinner. A.F. refused to clean their shared room, so N.B. got his stepfather’s .22 caliber rifle from the master bedroom and again told A.F. to clean their room. The boy refused again, so N.B. pulled the trigger, fatally shooting A.F. between the eyes.

N.B. called 911 and told dispatchers and police that A.F. shot himself. The police found some discrepancies in his answers and asked his mother for permission to re-interview N.B. An autopsy revealed it impossible for A.F. to have shot himself.  At the police station, the detective gave the mother and N.B. papers to read setting forth N.B.’s rights. They signed the papers and were later given 20 minutes in private to discuss whether N.B. should speak to the detective.

N.B. later admitted to shooting A.F. This statement was introduced at the evidentiary hearing, at which N.B. faced murder and reckless homicide charges. The judge adjudicated him on the reckless homicide charge and placed the boy in the Children’s Bureau Program.

N.B. argued that the procedural safeguards for the waiver of a juvenile’s constitutional rights weren’t followed as dictated in Indiana Code 31-32-5-1. He claimed his mother wasn’t an appropriate custodian to the joint waiver because she was the mother of the victim and she faced a criminal charge as a result of the shooting. N.B. also argued that his waiver wasn’t knowing or voluntary because he signed the waiver before being allowed to have meaningful consultation with his mother.

The judges rejected his arguments, finding that his mother faced the neglect of a dependent resulting in death charge regardless of how A.F. was shot. In addition, the Indiana Supreme Court has held that the parent of an alleged juvenile delinquent does not have a conflict of interest by virtue of being a parent of the that juvenile and the victim.

“The totality of the circumstances surrounding the interrogation of N.B. supports the juvenile court’s conclusion that he knowingly, intelligently, and voluntarily waived his rights,” Judge Cale Bradford wrote, agreeing with the trial court that while the signing of the waiver should happen after the juvenile and parent have a chance for meaningful consultation, under the facts of this case, N.B. impliedly waived his rights after engaging in consultation with his mother.

Aug. 3

Civil Plenary – Utility/Immunity

Veolia Water Indianapolis LLC, City of Indianapolis Dept. of Waterworks, and City of Indianapolis v. National Trust Ins. Co. and FCCI Ins. Co. a/s/o Ultra Steak, Inc. d/b/a Texas Roadhouse

49A04-1108-PL-412

The Indiana Court of Appeals found that the city of Indianapolis and a water company – which contracts with the city to operate the water utility – are entitled to common law immunity from a lawsuit brought by a restaurant and its insurers after a fire destroyed a Texas Roadhouse restaurant. The plaintiffs argued that frozen hydrants, which delayed firefighters’ ability to put out the fire, were a result of the hydrants not being properly closed by private parties who paid the defendants for water use.

Texas Roadhouse and two of its insurers – National Trust Insurance Co. and FCCI Insurance Co. – sued Indianapolis, its department of waterworks and Veolia Water Indianapolis LLC. The trial court partially denied the city’s motion to dismiss and Veolia’s motion for judgment on the pleadings. Both defendants claimed they were entitled to immunity.

The trial court concluded that the commercial sale of water took their actions outside the scope of common law immunity for firefighting. The trial court also held that the insurers were third-party beneficiaries of Veolia’s contract with the city.

On interlocutory appeal, the Court of Appeals reversed, finding both are entitled to common law immunity because the common law rule turns on the purpose for which the water is being used, not the underlying cause of the lack of water, wrote Judge Terry Crone. The judges cited precedent on immunity in firefighting cases that bar claims for fire damages stemming from an inadequate supply of water or inoperable fire hydrants.

The judges also found that the insurers are not third-party beneficiaries to the management agreement entered into by the city and Veolia, so they can’t pursue a breach of contract claim. The management agreement contains a section that explicitly disavows any intent to create third-party beneficiaries.

Aug. 6

Criminal – Criminal Recklessness

Donald Gregory Huls v. State of Indiana

64A04-1110-CR-552

A Porter County man who shot at four teenagers near his property at night because he claimed they were trying to break into his home is not entitled to a new trial, the Indiana Court of Appeals ruled.

Donald Gregory Huls appealed his convictions of Class D and Class C felony criminal recklessness. Huls was outside his home around midnight when he began shooting in the direction of four teens walking near his property along a highway on the way to a convenience store. A bullet hit one of the teens in the leg. Even after the teens yelled that they were leaving, he fired again. Huls then called 911 and told the dispatcher he shot at people trying to break into his home.

He claimed on appeal he was entitled to a mistrial based on prosecutorial misconduct because during a witness testimony, the state objected to Huls attempting to show the witness a copy of Huls’ statement by saying “the defendant is here to testify.” Huls argued that the prosecutor improperly commented upon his failure to testify in violation of his privileges against self-incrimination.

The Court of Appeals found that the statement was isolated in nature and it didn’t appear that the prosecutor was trying to prejudice the jury to deprive Huls of a fair trial. The judges also affirmed the rejection of Hul’s proposed jury instructions on self defense and the defense of mistake of fact, finding the instructions either incorrectly stated the law on self-defense or weren’t supported by the evidence.

The judges also disagreed with Huls that the evidence at trial showed he shot at the teens because he believed it was necessary to protect himself and his property. The teens never entered his property, he opened fire without identifying his target, and he continued to shoot even after one of the teens shouted at Huls to stop firing and that they were leaving. Police found 14 shell casings on Huls’ property from that night.

Mortgage Foreclosure – Receiver

PNC Bank, National Association, et al. v. LA Development, Inc., Andrew L. Arbuckle, et al., and INTA, LLC v. PNC Bank, National Association, et al.

41A01-1107-MF-314

Because PNC Bank was able to show that the requisite provisions of Indiana Code 32-30-5-1 have been satisfied and it did not relinquish its right to the appointment of a receiver, the trial court order denying PNC’s request for appointment of a receiver was an error, the Indiana Court of Appeals concluded.

In June 2004, the bank and LA Development entered into a loan agreement, with obligations due to the bank secured by two mortgages. In the fall of 2008, LA Development needed more money to complete a housing development; INTA LLC agreed to advance $705,000 to LA Development. A three-party closing occurred between LA Development, INTA and PNC Bank, which included a subordination agreement that made all liens, mortgages, encumbrances, security interests and assignments of every kind granted to the bank subordinated and made secondary to those of INTA.

Two years later, PNC filed a complaint for damages to foreclose on the mortgages and for appointment of receiver against LA Development, INTA, and two individuals who guaranteed the loans. At issue on interlocutory appeal is the denial by the trial court to appoint a receiver.

PNC argued that it satisfied the requirements of I.C. 32-30-5-1(4)(B) and (C), which required the trial court to appoint a receiver. INTA maintained that the bank relinquished its right to the mandatory appointment of a receiver in the subordination agreement.

The Court of Appeals found the subordination agreement is ambiguous, so the judges looked to the parties’ intent when construing the agreement and the other closing documents. The argument that the bank subordinated all of its default rights and remedies in the mortgages by signing the subordination agreement, as INTA argued, can’t be reconciled with the language in the forbearance agreement signed on the same date and at the same closing, wrote Senior Judge Carr Darden.

Also, the extrinsic evidence shows that the parties didn’t intend to subordinate all rights and remedies.

The judges ordered the trial court grant PNC’s request for the appointment of a receiver.

Aug. 7

Civil Plenary – Water Damage/County Liability

Warrick County, Indiana, A Political Subdivision, by and through its County Commissioners, Nova Conner, Don Williams, and Phillip Baxter, and Cincinnati Insurance Co. v. William Hill and Stacy Hill

87A01-1201-PL-8

A release agreement a Warrick County couple signed in 2002 regarding water issues in their home resulting from county work that disconnected downspout lines from the home does not preclude the couple from suing the city after discovering water damage to their home in 2007, the Court of Appeals held.

William and Stacy Hill found a significant amount of standing water in the crawl space under their home in 2002 after Warrick County performed drainage work in a ditch adjacent to the Hills’ home. The ditch was filled, eliminating it. In the process, downspout lines that had previously drained the Hills’ home’s roof gutters into the ditch were disconnected.

The couple signed an agreement and release with the county after it paid a contractor’s bill. But the Hills continued to have problems with accumulating water and, in 2007, discovered that their home had structural problems attributable to high moisture conditions in the foundation soil. An engineering firm submitted a report that the foundational problems were due to the elimination of the ditch.

In December 2007, the Hills filed a notice of tort claim. They filed their lawsuit in November 2008 against the county and Cincinnati Insurance Co. for damages. The county sought summary judgment, which was denied. The Court of Appeals affirmed on interlocutory appeal.

The release agreement the Hills signed did not preclude their 2008 lawsuit because the language of the agreement didn’t mention an elevated water table or connect the known blockage problems with structural damages to the home, wrote Judge Cale Bradford. The judges rejected the county’s claim that “other damages” and “interference with drainage from the home” shows that the structure problems now at issue were an understood term in the release agreement.

The Court of Appeals found the Hills filed their tort claim notice within the six-year statute of limitations on actions for injury to property other than personal property, and complied with the Indiana Tort Claims Act. The structural problems discovered in 2007 weren’t known in 2002, the judges held, and are distinguishable from the original issue of disconnected downspouts.

Criminal – Domestic Battery

Matthew Manuel v. State of Indiana

49A02-1112-CR-1135

A trial court did not abuse its discretion when it denied a man accused of hitting his live-in girlfriend the opportunity to cross-examine her about a past domestic battery incident, the Court of Appeals concluded.

Matthew Manuel faced several domestic battery and battery charges stemming from an incident involving D.S., with whom he lived for eight years and had a child. He also helped raise her child from a previous relationship. When Manuel saw D.S. delete an email on her computer, and she refused to tell him what she deleted, he got angry and hit her on the forehead with a cell phone. They argued and he ended up throwing the laptop on the floor and hit her on the head with it twice before grabbing D.S. and choking her.

D.S. called 911 when Manuel left the home to take their daughter’s computer to his car.

Manuel was convicted of the four charges, which were all merged into his Class D felony domestic battery conviction.

He claimed on appeal the trial court should have allowed him to ask D.S. more about a domestic battery charge in 2005 that was dropped. The state objected because it didn’t know about the specifics of the incident; Manuel argued it was relevant because it related to D.S.’s credibility as a witness. The charges were dropped after D.S. talked to the state, and he wanted to know whether she filed a recantation admitting the abuse never happened. The appellate court concluded that evidence of D.S.’s recantation was precluded under Ind. Evid. R. 608(b).

Manuel also argued the state was improperly allowed to bolster the truthfulness of D.S.’s testimony. The state asked if D.S. had been truthful about what happened in the laptop incident, which came after the defense counsel elicited testimony from D.S. that attempted to impeach her credibility. She gave conflicting answers regarding when Manuel first hit her or whether he went outside during the incident.

“Because the impeachment related to truthfulness, we further conclude that questioning D.S. on re-direct regarding whether she had testified truthfully logically refuted the specific focus of Manuel’s attack,” Judge Patricia Riley wrote. “Thus, the State’s question was properly intended to rehabilitate its witness, rather than bolster her testimony, and the trial court did not abuse its discretion in allowing the question.”

Finally, the Court of Appeals concluded that the state presented sufficient evidence to support Manuel’s conviction. Even though the two children were not in the same room at the time of the incident, they were present in their bedrooms and one child testified she could hear them arguing and it made her sad. The judges also rejected Manuel’s claim that D.S.’s testimony was incredibly dubious.

Civil Tort – Purchase Agreement/Liquidated Damages Clause

Dean V. Kruse Foundation, Inc., Dean Kruse and Kruse International v. Jerry W. Gates

59A05-1201-CT-37

A forfeiture provision in a purchase agreement between the Dean V. Kruse Foundation and Jerry Gates, the buyer of West Baden property, did not constitute a liquidated damages clause as the trial court ruled, the Indiana Court of Appeals held. The judges ruled that the Kruse parties are entitled to more damages as a result of Gates’ breach of contract.

The Kruse Foundation was given a large parcel of property and 300,000-square-foot manufacturing facility in West Baden. The foundation is the charitable organization that operates a World War II museum and automobile museum in Auburn. The foundation found that the costs were too much to maintain the property and it continually lost money, so the foundation sought to sell the property. Those attempts were unsuccessful, so Dean Kruse, an auctioneer and licensed real estate broker, auctioned the property. The auction was final and required earnest money. Gates bought the property with a $4 million bid and 5 percent buyer’s premium. He gave $100,000 to Kruse as earnest money. A few weeks later, Gates informed Kruse he was terminating the purchase agreement.

The property was eventually sold for $2.35 million. Gates then sued Kruse and the foundation for breach of contract, fraud and conversion, seeking the earnest money back. The Kruse parties counterclaimed for breach of contract and slander of title. After a ruling for Gates and an appeal that reversed, the trial court entered summary judgment for the Kruse parties and found the $100,000 was the appropriate amount of damages. The trial court believed the purchase agreement contained a liquidated damages provision and the Kruse parties were only entitled to the earnest money. The Kruse parties appealed.

Using caselaw, the Court of Appeals found that the provision at issue in the purchase agreement indicates intent to penalize the purchaser for a breach rather than intent to compensate the seller in the event of a breach. Although there is no mention of forfeiture as a penalty, the provision is also not labeled as liquidated damages, Judge Patricia Riley wrote.

The appellate judges also disagreed with the trial court that the evidence of the property’s value was uncertain as there was sufficient evidence to determine the fair market value of the property at the time of the breach. They also disagreed that the Kruse parties are precluded from asserting legal damages for Gates’ breach. The judges remanded with instructions for the trial court to calculate the measure of damages as a result of the breach of contract.

Civil Plenary – Builder/Damages Liability

James E. Corry and Gayle Corry v. Steve Jahn, Woodland Homes of Ft. Wayne, LLC, Scott R. Malcolm, Oakmont Development Co. LLC, and Mike Thomas Associates/F.C. Tucker, Inc.

02A03-1107-PL-323

A couple who sued a subdivision developer and real estate company after the builder went out of business to recover damages because their home was sinking could not convince the Indiana Court of Appeals to reverse summary judgment for the companies.

James and Gayle Corry’s home was built by Woodland Homes of Ft. Wayne, which has filed for bankruptcy and gone out of business. The Corrys purchased a lot from Woodland that it had obtained from Oakmont, the subdivision developer. Testing of the soil showed that the Corrys’ lot would require the home be built on pilings because the soil was unstable. The Corrys and their realtor, Steve Jahn, who was also president of Woodland, discussed the need for pilings, but Jahn told the couple that the house didn’t need pilings and they would “beef up” the concrete slab.

Almost immediately after moving into the home in 2002, the Corrys discovered structural problems. Jahn said the issues were cosmetic and corrected them, but in 2007, after learning that Woodland had gone bankrupt, the Corry’s sought to meet with Mike Thomas Associates, where Jahn had also worked. No solutions were agreed to, so later that year, the Corrys sued Jahn, Woodland, Oakmont and MTA for breach of contract, breach of fiduciary duty, breach of warranty, negligence and fraud. The trial court granted Oakmont and MTA’s motion for summary judgment on the claims.

The Court of Appeals held that Oakmont and MTA weren’t parties to the construction contract at issue, so summary judgment was appropriate on the breach of contract claim. There is no cause of action arising from belated provision of a limited agency disclosure form, so summary judgment was proper on the breach of fiduciary duty claim.

The trial court properly declined to impose an implied warranty of habitability on Oakmont and MTA where Woodland, as the builder, was the entity best positioned to prevent the home from sinking. The trial court also properly granted summary judgment on the negligence claim because the Corrys’ claim is for economic loss and they are relegated to recovery in contract as opposed to negligence law.

The designated materials show Oakmont and MTA didn’t make fraudulent misrepresentations to the Corrys, and Jahn did not act as an agent of Oakmont or MTA when representing that his building methodology was superior and would produce a long-standing product, the appellate court ruled. Thus summary judgment on the fraud claim was appropriate.

Post Conviction – Felony/Automatic Deportation

Naveed Gulzar v. State of Indiana

20A03-1202-PC-88

A Pakistan-born man who faces automatic deportation as a result of his guilty plea to felony theft lost his pursuit for post-conviction relief before the Indiana Court of Appeals. The judges found Naveed Gulzar was unable to show he was prejudiced by his attorney’s failure to advise him that automatic deportation is a consequence of his guilty plea.

Gulzar came to the U.S. in 2000 with his family, but only became a legal permanent resident. In January 2006, he stole a credit card from a customer at a convenience store and used the credit card to make purchases on four occasions. Gulzar was arrested in March 2006 and charged with one count of theft and two counts of fraud, all Class D felonies. He agreed to plead guilty to one count of Class D felony theft and he was sentenced to 18 months in the Indiana Department of Correction, all suspended to probation. He successfully completed his probation.

The agreement advised him of his rights, including that he understood that if he isn’t a legal citizen of the U.S., he may be deported as a result of the guilty plea. Gulzar initialed that section.

Over the next five years, Gulzar soughtto have his sentence modified. In November 2011, he filed a petition for post-conviction relief alleging his trial counsel was ineffective for not telling him that pleading guilty to theft would make him automatically deportable under two federal immigration laws.

At the post-conviction hearing, Gulzar’s trial attorney said he failed to tell Gulzar that the guilty plea would make him automatically deportable. Gulzar claimed if he had been told that, he would not have pleaded guilty. The post-conviction court found Gulzar failed to establish prejudice.

The Court of Appeals affirmed, rejecting Gulzar’s argument that his deportation would be a hardship on his parents and siblings. The judges cited Segura v. State, 749 N.E.2d 496 (Ind. 2001), in which the Supreme Court found no reason to require revisiting a guilty plea if, at the end of the day, the inevitable result is conviction and the same sentence. The justices also held that only in “extreme cases” does a “truly innocent defendant” plead guilty because of incorrect advice as to the consequences.

This is not one of those extreme cases, Judge Nancy Vaidik wrote, pointing to the surveillance video of Gulzar’s participating in the crimes and the discovery of the items purchased with the stolen credit card in his apartment.•

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