7th Circuit Court of Appeals
Civil – Medicaid
Planned Parenthood of Indiana, Inc., et al. v. Commissioner of the Indiana State Department of Health, et al.
An injunction against an Indiana law that blocks state Medicaid funding for Planned Parenthood has been upheld by the U.S. 7th Circuit Court of Appeals.
The court affirmed the decision by U.S. Judge Tanya Walton Pratt, of the U.S. District Court for the Southern District of Indiana, who granted a preliminary injunction against enforcing I.C. 5-22-17-5.5(b) that bars providing state or federal funds to “any entity that performs abortions or maintains or operates a facility where abortions are performed.”
Immediately after the defunding law was enacted in 2011, Planned Parenthood of Indiana and several plaintiffs filed this lawsuit seeking to block the law’s implementation. The law prohibits abortion providers from receiving any state-administered funds, even if the money is earmarked for other services.
The appellate court held that Medicaid grants individual rights enforceable under U.S.C. Section 1983. The ruling was less clear with regard to the law’s efforts to prevent federal block-grant dollars from being provided to Planned Parenthood. The court held that the District Court likely erred in ruling in favor of Planned Parenthood on that issue, finding the block-grant program does not create actionable rights under U.S.C. Section 1983.
Judge Richard Cudahy joined the majority in other aspects but dissented on that point, writing, “I believe the issue of unconstitutional conditions should be remanded to the district court for development of the record with respect to any possible imposition of a burden on access to abortions.”
Writing for the majority, Judge Diane S. Sykes wrote, “Planned Parenthood is likely to succeed on (the Medicaid Act) claim. Although Indiana has broad authority to exclude unqualified providers from its Medicaid program, the state does not have plenary authority to exclude a class of providers for any reason – more particularly, for a reason unrelated to provider qualifications.
“The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients’ statutory right to obtain medical care from the qualified provider of their choice.”
Indiana Attorney General Greg Zoeller said in a statement that the 49-page decision was being reviewed to determine how best to proceed with defending the statute.
“The people’s elected representatives in the Legislature decided they did not want an indirect subsidy of abortion services such as payroll and overhead to be paid with taxpayer’s dollars and so crafted this law. Although the injunction concerning Medicaid funding was not lifted, we note that the 7th Circuit found the state has the legal authority to decide how federal block-grant dollars – which are tax dollars – will be distributed.”
The case goes back to Walton Pratt for modification of the injunction.
Indiana Supreme Court
Agency Appeal – Unemployment Benefits
J.M. v. Review Board of the Indiana Dept. of Workforce Development and T.C.
Indiana Justice Steven David authored a unanimous opinion in which the court held “when the facts of a case support more than one statutory ground for discharge, we are not confined to narrowly review the [Indiana Department of Workforce Development] Review Board’s decision when the facts point to the Review Board’s ultimately correct conclusion.”
The Supreme Court upheld the denial of unemployment benefits to J.M., a former employee in an unnamed county surveyor’s office. J.M. sought to take a class during work hours and make up the time later by working through lunch and working later hours. His supervisor told J.M. that he could take the class, but he would have to use vacation time instead, as that has been the office policy.
The employee handbook also states an employee can face discipline for “disobeying a reasonable order … or to comply with written or verbal instructions.”
J.M. took the class anyway, and did not log all missed hours with personal time. He instead worked through a lunch and came in early sometimes. He was fired in September 2010.
His unemployment claim was initially denied, but an administrative law judge reversed. The county appealed, and the review board reversed, finding J.M. violated the direction from his supervisor as well as the policy in the handbook. The Court of Appeals then reversed the board.
The justices affirmed the review board. The board found J.M. was discharged for just cause based on I.C. 22-4-15-1(d)(2) – “knowing violation of a reasonable and uniformly enforced rule of an employer, including a rule regarding attendance.” The COA found J.M. did not violate (d)(2), but did not consider (d)(5) – “refusing to obey instructions” – because it was not named in the conclusions of law by the review board. Subsection (d)(5) mirrors the policy in the handbook.
The Supreme Court did not agree with the appellate court that it could not affirm a just cause finding on a different ground than one cited by the review board. David pointed out that the findings of fact state that the project manager told J.M. that he could miss work, but that policy would not allow him to make up the time. The findings of basic fact are within the scope of the substantial-evidence standard of review, the justices held.
“We may rely on a different statutory ground of a just cause finding than the one relied upon by the Review Board when, as here, the Review Board’s findings of fact clearly establish the alternate subsection’s applicability. As such, we affirm the Review Board under Indiana Code section 22-4-15-1(d)(5), that J.M. refused to obey instructions, and was thus fired for just cause,” he wrote.
Civil Tort – Binding Arbitration
National Wine & Spirits, Inc., National Wine & Spirits Corporation, NWS, Inc., NWS Michigan, Inc., and NWS, LLC v. Ernst & Young, LLP
A claim arising after a dispute between a company and its accountant was resolved through binding arbitration may not proceed, the Indiana Supreme Court ruled.
The four justices unanimously agreed that summary judgment in favor of the defendant was proper.
That case was filed after an NWS employee committed fraud and theft that caused significant losses. NWS alleged negligence, breach of contract and unjust enrichment against Ernst & Young and demanded arbitration.
“Under the facts of this case, the issue underlying the deception claim is the veracity of the documents produced at arbitration, which was an issue necessarily decided by the arbitration panel,” Justice Steven David wrote for the court. “Accordingly, issue preclusion bars the company’s deception claim, and we affirm the trial court’s grant of summary judgment in favor of the accounting firm.”
NWS was estopped from making the deception claim because it had already litigated and lost in arbitration proceedings, according to the ruling. “Although the arbitration agreement limited discovery to that which is expressly authorized by the panel, NWS never asked the panel for additional discovery,” David wrote. “NWS cannot now complain it could not adequately prepare to litigate (a comparative fault) issue when given the opportunity to postpone the arbitration.”
Criminal – Jury Instructions
Lisa J. Kane v. State of Indiana
The Indiana Supreme Court found that a final jury instruction in a woman’s trial for receiving stolen property did not correctly state the law, and it remanded for a new trial.
Lisa Kane appealed her Class D felony conviction on the basis that the trial court abused its discretion in giving final instruction No. 12 on accomplice liability. At trial, her attorney objected to proposed instruction No. 8 on accomplice liability, which said, “You are instructed that when two or more persons combine to commit a crime, each is responsible for the acts of his confederate(s) committed in furtherance of the common design, the act of one being the act of all.”
After a discussion between Kane’s attorney and the court, the proposed instruction was eventually included in final instruction No. 12 and mirrored the instruction used in Harrison v. State, 269 Ind. 677, 382 N.E.2d 920 (1978). It said, “Where two or more persons combine to commit a crime, each is criminally responsible for the acts of his or her confederates committed in furtherance of common design, the act of each being the act of all.”
A split Court of Appeals affirmed her conviction. Judge Michael Barnes dissented, finding that the final instruction was “outdated and woefully inadequate” and did not include the mental state requirement for accomplice liability.
The justices agreed with Barnes, overturning Kane’s conviction and ordering a retrial. They found the instruction was an incorrect statement of the law as it seemed to impose strict liability on Kane for the unlawful acts of her ex-boyfriend Sam Rifner whether she knew about them or not.
Due to economic reasons, Rifner and Kane had to move in with their parents. At one point, Rifner’s mom noticed some items in her home were missing, and Rifner admitted pawning some of them. Kane’s signature was on two of the pawn tickets. Kane maintained she didn’t know Rifner didn’t have permission to sell the items.
The justices found the error was not harmless because they couldn’t say the verdict would be the same if the jury had been properly instructed as to the knowledge requirement of the offense.
Indiana Tax Court
Tax – Exemptions
Wendt, LLP v. Indiana Department of State Revenue
A Wabash-based company that relocates oversized factory machinery won a partial victory in the Indiana Tax Court. Judge Martha Wentworth ordered the Indiana State Department of Revenue to reassess the company’s tax obligations after finding some property should be considered exempt.
Wendt LLC provides its relocation services within a transportation process that includes four operational phases – project planning, pre-transport preparations, transportation and reassembly. Wendt sought to recover the sales and use tax remitted on purchases made during the 2001 to 2004 tax years, claiming they were exempt. The revenue department denied Wendt’s claims, finding most of the purchases were partially or fully taxable.
In analyzing whether Wendt’s property is necessary and integral to its integrated public transportation process, which allows it to qualify for the exemption, Wentworth partially affirmed the revenue department. The tax judge agreed that property used in preparing estimates for potential customers is not necessary and integral to Wendt’s public transportation process, nor are the reassembly services as they are a convenience for its customers. She also agreed that property used for lawn care is not entitled to the public transportation sales and use tax exemption.
Wentworth found that property used to plan transportation routes, obtain permits, and disassemble, load and secure the machinery onto trucks for transport are necessary and integral to Wendt’s public transportation process, as well as the property used to transport and escort the machinery.
Warehouse storage and transportation of machinery to third-party locations for repair services also fall within the scope of public transportation, she concluded.
Wendt was able to show that it predominately uses the tangible property at issue in providing public transportation, so Wentworth ordered the department of revenue to make the necessary determinations regarding the tax exemption in accordance with this opinion.
Indiana Court of Appeals
Civil Tort – First Impression/Custody/Rights of Family Members
D.L., Glen Black, Ann Black, Steven Lucas, and K.L., by her Next Friend, D.L. v. Christine Huck, Laura Zimmerman, Angela Smith Grossman, Rhonda Friend, Angyl McClaine, and Indiana Dept. of Child Svcs.
A case involving the Department of Child Services before the Indiana Court of Appeals provided the court with two issues of first impression – the interpretation of a statute relating to the agency, and the liberty interests that may reside with extended family members involved in the lawsuit.
Family members of K.L., born in 2008, sued the Department of Child Services and several employees after the DCS appeared unannounced at Glen and Ann Black’s home and removed K.L. from their custody. A CHINS case had been opened regarding K.L., and K.L.’s biological parents, D.L. and T.L., terminated their parental rights so that K.L. could be adopted by D.L.’s sister, Ann, and her husband.
Before placing K.L. with the Blacks, the agency completed a home study and background check of the couple. The background check turned up no issues; the agency later found a 20-year-old child abuse report against Glen Black, in which his then-16-year-old sister accused him of sexually abusing her as a child. DCS never performed a comprehensive investigation into the report, interviewed the Blacks or provided a copy of the report to the Blacks. The Blacks didn’t even know of the allegations until K.L. was removed. DCS removed the child without a court order.
K.L. was eventually returned to her biological father’s custody.
The family filed suit alleging eight claims, including negligence and fraud, but Tippecanoe Superior Judge Thomas J. Busch dismissed seven of counts, holding they were barred by quasi-judicial immunity because they were based on allegations that DCS acted wrongly in the course of duties within a CHINS proceeding for K.L. The judge also found that the Blacks, including Steven Black, K.L.’s grandfather, did not have standing to sue because they didn’t have a custodial relationship with K.L. before the CHINS proceedings.
“DCS’s handling of this case was extremely sloppy, careless, and regrettable. Based on a twenty-year-old report and with no investigation, they independently decided to remove K.L. from the Blacks’ home,” Chief Judge Margret Robb wrote. “Because there was no court oversight of DCS’s actions and decisions, and they were not implementing a court order, DCS is not entitled to quasi-judicial immunity for any of the actions underlying the Family’s complaint. DCS may not choose to side-step the judicial process and then hide behind that same process.”
The judges for the first time had to interpret Ind. Code 31-25-2-2.5, which the DCS claimed also granted it immunity. That statute states with regard to DCS that “[t]he following are not personally liable, except to the state, for an official act done or omitted in connection with performance of duties under this title: (1) The director of the department. (2) Other officers and employees of the department.”
This statute does appear to apply to most of the family’s claims, Robb pointed out, except for the fraud claim. That claim is based on alleged acts that would not be within the duties of the department.
The COA also was unable to find any cases to provide guidance as to the liberty interests that may reside with the Blacks in this case. The judges found the family made a convincing argument for finding a liberty interest in favor of Ann and Glen Black, citing cases from other courts, including Rivera v. Marcus, 696 F.2d 1016, 1024-25 (2d Cir. 1982). There is no caselaw to support that the grandfather has a liberty interest, and the judges found Busch correctly determined Steven Black did not have standing to bring suit.
They remanded for further proceedings on the fraud claim.
Post Conviction – Habitual Offender Enhancement/Retroactivity
John A. Dugan v. State of Indiana
A post-conviction court erred when it denied a defendant’s request for post-conviction relief to vacate a habitual offender enhancement, finding a case decided after the man’s direct appeal applies retroactively.
John Dugan was convicted of Class B felony possession of a firearm by a serious violent felon in 2006. The state alleged he was a SVF because he had been convicted of Class C felony battery in 1994. The state also alleged Dugan was a habitual offender based on that 1994 conviction and an attempted burglary conviction.
After his conviction, Dugan pleaded guilty to the habitual offender allegation in exchange for the minimum 10-year sentence for the enhancement. His total sentence was 15 years for the SVF conviction enhanced 10 years. The conviction was affirmed on direct appeal in February 2007.
Dugan later sought relief based on Mills v. State, 868 N.E.2d 446 (Ind. 2007), in which the Indiana Supreme Court held a person convicted of unlawful possession of a firearm by a serious violent felon may not have his sentence enhanced under the general habitual offender statute by proof of the same felony used to establish he was a serious violent felon. The post-conviction court denied relief, citing Townsend v. State, 793 N.E.2d 1092 (Ind. Ct. App. 2003), as applicable since it was in effect at the time Dugan was sentenced.
Dugan wanted Mills applied retroactively to his case, which the state fought. The state claimed because Dugan pleaded guilty, he’s not entitled to relief even if Mills is retroactive.
Dugan’s guilty plea does not preclude relief because he did not receive a favorable outcome as a result of the plea, Judge Michael Barnes wrote. The judges cited State v. Jones, 835 N.E.2d 1002, 1004 (Ind. 2005), and Ross v. State, 729 N.E.2d 113 (Ind. 2000), to support applying Mills retroactively.
Criminal – Traffic Stop/Drugs
Rodney Killebrew II v. State of Indiana
Finding that the continuous use of a turn signal without turning does not justify a traffic stop, the Indiana Court of Appeals threw out a conviction for possession of marijuana.
Rodney D. Killebrew II was stopped after he traveled through an intersection with his blinker on but did not make a turn. Kokomo Police Officer Chad VanCamp subsequently stopped Killebrew, searched his car and found two clear plastic bags of marijuana.
During a bench trial, Killebrew was found guilty of possession of marijuana, a Class A misdemeanor, and sentenced to one year suspended, except for time served. He appealed, arguing the trial court abused its discretion when it admitted the evidence discovered when VanCamp pulled him over.
The state countered that the traffic stop was based on a traffic violation and that the officer’s actions fell within the community caretaking function of law enforcement. The COA rejected both arguments and reversed the conviction.
The COA found state law does not prohibit driving with the turn signal on. Since there was no other indication of impairment, VanCamp did not have a reasonable suspicion of lawbreaking to stop Killebrew.
Writing for the court, Judge Patricia Riley stated, “If we were to hold that an action equally common among unimpaired drivers could justify a traffic stop, that ruling would be ripe for abuse and would not strike a reasonable balance between the government’s legitimate interest in traffic safety and an individual’s reasonable expectation of privacy.”
In rejecting the community caretaking argument, the COA noted VanCamp stopped Killebrew to investigate whether he was an impaired driver. The officer’s search of the car was then an extension of a criminal investigation and not the product of an administrative caretaking function.
Pointing to the U.S. Supreme Court’s finding that the application of the probable cause and warrant requirements of the Fourth Amendment are necessary when investigating criminal conduct, the COA stated it would not extend the community caretaking function to justify a search conducted as a result of a criminal investigation.
Criminal – Judicial Recusal
David Mathews v. State of Indiana
An Adams Circuit Court judge who learned that he had previously represented a defendant on trial in his courtroom acted appropriately when he recused himself but denied a mistrial, the Indiana Court of Appeals ruled.
The matter came before the appellate court. David Mathews claimed that Judge Adam Miller should have declared a mistrial when Mathews notified the judge that he had represented him in a prior criminal case.
Mathews told the judge about the prior representation after a jury trial in which Mathews was convicted of Class D felony intimidation and Class B misdemeanor public intoxication, but before arguments on whether Mathews would be ruled a habitual offender.
Upon notification, Miller recused himself and said in court, “My representation of you on an underlying offense that has never been presented to the jury as of yet has no impact on the first phase of this trial so I will deny the request for mistrial.”
“Given that Judge Miller did not serve as a lawyer in the matter in controversy, i.e., the matter involving the public intoxication or intimidation charges, we cannot say that Rule 2.11(A)(6) required recusal prior to the habitual offender phase of the trial or that the trial court abused its discretion by denying Mathews’s request for a mistrial,” Judge Elaine Brown wrote.
Judge Rudolph Pyle III concurred with a separate opinion in which he wrote, “The language and examples provided with the rule presuppose that a judge has knowledge of an event that calls into question his or her ability to be fair and impartial.
“In this case, the record reveals that neither the judge, prosecutor, defense counsel, nor Mathews himself was aware of the judge’s prior representation of Mathews until after the completion of the first phase of the trial. At that point, the judge correctly disqualified himself from the case. Therefore, because there was no knowledge during the trial, there was no duty to disqualify.”
Criminal – Sentence/Child Molestation
Calvin Merida v. State of Indiana
A man who pleaded guilty to child molesting had his sentence halved by the Indiana Court of Appeals on the grounds that the sentence imposed by the trial court was an outlier.
The COA reversed and remanded with instructions the trial court’s sentence. It found the nature of the offense and the character of the defendant did not warrant the 60-year aggregate term of imprisonment assessed by the lower court.
Calvin Merida pleaded guilty to two counts of child molesting, as Class A felonies, for abusing his adopted daughter. The trial court sentenced him to 30 years imprisonment for each of the two counts with the sentences to run consecutively for an aggregate term of imprisonment of 60 years.
Merida appealed, challenging the appropriateness of his sentence. In reviewing the case, the COA pointed out there was no evidence that Merida’s conduct was particularly violent although the victim is said to suffer from “life-altering anxiety” as a result of the offenses becoming known. Also with respect to his character, the court found he has no prior criminal history and did graduate from high school and has maintained steady and well-paid employment.
Citing in its role to “leaven the outliers,” the COA revised Merida’s sentence. It remanded with instructions for the court to revise the sentencing order to run his two 30-year sentences concurrently for an aggregate 30-year term.
Judge Terry Crone concurred in part and dissented. He disagreed with the majority’s decision to run Merida’s two 30-year sentences concurrently.
Instead, he wrote, he would have remanded with instructions that Merida’s sentence be revised so that eight years of the 30-year sentence on the second count would run consecutive to the 30-year sentence on the first count and the remainder would run concurrent for a total executed sentence of 38 years.
Crone acknowledged that Indiana Code 35-50-1-2 does not specifically authorize partially consecutive sentences, but he believes the statute should be interpreted to provide trial courts with flexibility in sentencing.
“If it is determined that the statute as currently written does not authorize partially consecutive sentences,” Crone wrote, “it is my hope that the legislature would amend the statute accordingly and give trial courts and appellate courts an important tool for crafting appropriate sentences in cases like this one.”
Criminal – Sentence/Plea Agreement
Leslie Ann Grider v. State of Indiana
The Indiana Court of Appeals reduced a woman’s sentence for theft, forgery and check fraud after finding the trial court erred by imposing a sentence that violated the terms of her plea agreement.
Leslie Grider was charged in three separate causes with a total of two counts of Class C felony forgery, four counts of Class D felony theft, and two counts of Class D felony check fraud. She pleaded guilty as charged, and the plea agreement said that her sentence would “be open to the Court with all counts to run concurrently.”
Under each cause number, the trial court ordered the sentences imposed for the charges be served concurrently, but ordered that her sentences in the three causes run consecutively, for a total of 19 years.
Grider believed the language in the agreement meant that the sentences for each of the counts would run concurrently; the state contended that the trial court could order the sentences in the three causes to run consecutively. The Court of Appeals agreed with Grider, noting the plain language of the agreement says “sentence” not “sentences,” which “clearly contemplates a single sentence for all three cause numbers and all counts,” Judge Edward Najam wrote.
And, even if the language was ambiguous, it would be resolved in favor of Grider. The judges ordered the trial court impose concurrent sentences for all counts and cause numbers, for a total sentence of eight years executed.
Mortgage Foreclosure – Timing of Payment
Rick Singleton, et al. v. Fifth Third Bank
Judges on the Indiana Court of Appeals declined to expand upon language in a forbearance agreement between a bank and business owner, finding the business owner timely made his final payment to the bank when he wired the money the day it was due, even though the bank did not receive it until the next day.
Fifth Third Bank, which made loans to Rick Singleton and companies affiliated with him, sought to foreclose on mortgages held by the Singleton parties. The bank and Singleton entered into a forbearance agreement, which stated Singleton would “make payments toward the outstanding Indebtedness owing to Lender under their respective Obligations” by dates set forth in a schedule in the agreement. The final payment of $350,000 had a due date of June 30, 2011.
A dispute between the parties as to when the bank must receive the funds led to a judge determining that the dates in the agreement, based on the language of it, means that a payment must be made by that date, not that the bank must receive the payment by that date.
On June 30, 2011, Singleton and his attorney were contacted by Michael Watkins of Fifth Third Bank to remind them that the final payment was due that day. Singleton’s attorney, Randall Arndt, asked Watkins how the money should be paid. Watkins directed Arndt to make a wire transfer as was done in the past. Singleton wired the money June 30, and Fifth Third received it the next day.
The bank then sought to renew its motion for entry of agreed final judgment, arguing the payment was untimely. Singleton filed a cross-motion to enforce the forbearance agreement. The judge ruled in favor of the bank, finding that Singleton had control of when and where to make the final payment, and chose a method that could delay payment.
The Court of Appeals reversed based on the language of the forbearance agreement. The agreement doesn’t expressly provide for a particular method of payment, nor does it spell out when the money would be deemed paid if used by a funds-transfer system.
“[T]he parties’ intent is determined from the four corners of the document,” Judge Elaine Brown wrote. “We are not at liberty to supply omitted terms while professing to construe a contract.”
Singleton’s action of issuing an order to wire the funds for the final payment on June 30, 2011, constituted making payment under the agreement and did not constitute a termination event under the forbearance agreement, the judges ruled. They ordered further proceedings on the matter.
Civil Tort – Attorney Fees
State Farm Mutual Automobile Insurance Company v. Ken Nunn Law Office
Relying on caselaw from 1892, the Indiana Court of Appeals decided that Ken Nunn Law Office may not collect attorney fees it says are owed by a former client from a third-party insurance company following a settlement.
Kenneth Henderson hired the Nunn Law Office in May 2009 on a contingency fee basis after he was involved in an accident with another driver, Joshua Beal. Beal was insured by State Farm Mutual Automobile Insurance Co. The law firm filed a lawsuit against Beal in March 2010; two weeks later, Henderson fired the law firm because he was unhappy with how his case had been handled.
The law firm then sent a notice of lien for attorney fees to the court, Henderson and State Farm. In late April 2010, Henderson and State Farm settled for more than $12,000. State Farm paid Nunn Law Office the $541 in costs it requested in its lien, but no attorney fees.
The law office sued Henderson and the insurer, and the trial court ordered Henderson pay nearly $4,000 to the law firm after granting default judgment against him. In doing so, the judge also denied State Farm’s summary judgment motion. Nunn Law Office claimed that State Farm and Henderson had a duty and failed to protect the “quantum meriut attorney’s fee lien” of the firm. State Farm argued that it was not liable for attorney fees for services rendered to Henderson.
On interlocutory appeal, the Court of Appeals reversed, finding the Nunn Law Office has no claim for attorney fees through either an equitable lien or quantum meruit. The judges cited Hanna v. Island Coal Co., 5 Ind. App. 163, 31 N.E. 846, 847 (1892), which held that no lien can be acquired before judgment that would prevent the client from compromising and releasing his claim without the attorney’s consent, including in personal injury actions.
“We decline to expand upon this State’s previous articulations of the boundaries of the reach of an equitable lien for the protection of attorney fees where the proceeds of the compromise have been transferred to the attorney’s former client and thus decline to hold that a charging or equitable lien may be enforced against a party other than Nunn’s former client under these circumstances where prior to settlement Nunn was no longer counsel for Henderson and was paid its expenses,” Judge Elaine Brown wrote.
The law firm may not recover from State Farm under the theory of quantum meruit because State Farm was not a party to the fee agreement between Henderson and Nunn Law Office, any work done by the law firm was for the benefit of Henderson, not the insurer, and State Farm was not unjustly enriched by the legal services provided by the firm to Henderson, the judges held.
The case goes back to Marion Superior Court for further proceedings.
Criminal – Use of Evidence/Sentencing
Shiloh Jones v. State of Indiana
Because the state relied on the same evidence to convict a Marion County man of three domestic battery or battery charges, the Indiana Court of Appeals vacated two misdemeanors. The judges also found no fundamental error in his sentencing or by the prosecutor during trial.
Shiloh Jones appealed his convictions of Class D felonies domestic battery and criminal confinement, and Class A misdemeanors domestic battery and battery, as well as his 730-day sentence in the Department of Correction. The charges stem from a four-hour incident involving Jones and his girlfriend where he slapped and bit her, choked her, poured baby formula on her face and did not allow her to leave the home. Their two infant children were home at the time.
Jones was initially sentenced by Marion Superior Commissioner John Boyce, who presided over the trial, to two years on each felony count and one year on each misdemeanor count, with all sentences served concurrently. He was to serve one year in the DOC, six months on community corrections and six months on probation. But the court had to address a probation violation from a previous conviction, which led to Marion Superior Judge Barbara Collins resentencing Jones to the same length of sentence – 730 days, but all executed in the DOC.
The Court of Appeals reversed Jones’ misdemeanor battery and domestic battery convictions because the state used the same general terms to charge him with the three counts. The judges ordered the misdemeanor convictions and sentences vacated. They did not find, as Jones had argued, any double jeopardy violations regarding his criminal confinement conviction.
Jones argued that fundamental error occurred when Collins resentenced him and based on comments the prosecutor made saying that the girlfriend was telling the truth about the domestic battery incident. Collins did not increase Jones’ original sentence, but only required he serve its entirety in the DOC instead of having some probation or community corrections. This does not constitute fundamental error, Judge James Kirsch wrote, as the grant of probation is a favor and not a right.
With regards to the prosecutor’s statements, the appellate judges pointed out that Jones’ defense strategy was to challenge whether his girlfriend’s testimony was truthful. The woman’s credibility was at issue and both sides had their say on the matter, so the prosecutor’s statements did not place Jones in a position of grave peril nor deny him a fair trial, the judges held.
Agency Appeal – DWD/Unemployment Accounts
Boulder Acquisition Corp. (n/k/a Affiliated Computer Services, LLC), et al. v. Unemployment Insurance Appeals of the Indiana Dept. of Workforce Development
The Indiana Court of Appeals has ordered the Department of Workforce Development to reinstate the original contribution rates for unemployment insurance experience accounts of a parent company and its subsidiaries. The DWD should not have combined the accounts and adjusted the rates following a merger.
Boulder Acquisition Corp., a subsidiary of Xerox Corp., merged with Affiliated Computer Services Inc. BAC acquired equity interests in various subsidiaries of ACS, 26 of which operate in Indiana, and those entities became subsidiaries of BAC. Those Indiana subsidiaries kept their own employees, had their own unemployment insurance accounts that were separate from ACS’s account, and each still operated as an individual legal entity.
After BAC reported the merger to the DWD, the agency determined BAC became the “successor employer” of the subsidiaries under state law and combined the experience accounts of all the subsidiaries with BAC. This resulted in a higher contribution rate of 3.7 percent and a higher combined unemployment insurance tax for the companies. The DWD also assessed a penalty against BAC for failure to timely pay the appropriate fees.
A liability administrative law judge within the DWD upheld the determination BAC was the successor employer to the subsidiaries, citing I.C. 22-4-10-6 and 22-4-11-7.
BAC argued that it did not acquire “the organization, trade or business, or substantially all the assets” of each of the subsidiaries, as defined in statute. The DWD claimed that I.C. 22-4-11.5-7 applies, so the experience accounts should have been recalculated and combined. The agency admitted that the relationship between the subsidiaries and its parent company didn’t change with the merger, but believed that the account setup prior to the merger was an error that it merely corrected once it learned of the merger.
This issue is one of first impression in Indiana. The Court of Appeals found guidance in Franklin Electric, although that decision doesn’t govern the COA’s interpretation of I.C. 22-4-10-6(a) because of Franklin Electric’s narrow holding.
The judges concluded that BAC did not acquire the organization, trade or business, or substantially all the assets of any of the subsidiaries, nor did the subsidiaries transfer all or a portion of their trade or business to BAC. The subsidiaries remained separate legal entities and can be separate employers from their parent company.
The subsidiaries should be permitted to maintain their own employment experience accounts, Chief Judge Margret Robb wrote. She noted the court’s decision remains the same when interpreting I.C. 22-4-11.5-7.
The judges remanded for the DWD to adjust BAC’s and the subsidiaries respective experience accounts and refund any overpayment by BAC and/or the subsidiaries.
Agency Appeal – Contract Definition/Utilities
Indiana Gas Company, Inc. and Southern Indiana Gas and Electric Company, et al. v. Indiana Finance Authority and Indiana Gasification, LLC
Chief Judge Margret Robb dissented from her colleagues on the Court of Appeals as to whether approval of a contract for the purchase and sale of substitute natural gas must be voided in its entirety because the contract definition of “retail end use customer” differs from the statutory definition.
The Indiana Finance Authority and Indiana Gasification LLC executed a contract in January 2011 that details the sale and purchase of substitute natural gas that IG plans to produce at a $2.7 billion Rockport plant, with delivery set to begin in the first quarter of 2016.
The IFA and IG sought approval of the contract by the Indiana Utility Regulatory Commission and requested that the commission order Indiana regulated gas utilities to enter into utility management agreements with IFA so that IFA could pass proceeds and costs to retail end use customers through the utilities, if necessary. Several utilities, industrial companies and citizens groups intervened.
After several public hearings, the commission approved the contract in November 2011. The commission didn’t address the scope of the term “retail end use customer” and found that it could be addressed at a future time. The industrial group filed a petition for reconsideration, arguing that industrial transportation customers were exempt from being classified as retail end use customers under statute and did not have to pay the pass-through costs of the substitute natural gas under the contract. The utilities and citizens groups also appealed.
The appellate judges agreed that the utilities’ and industrial group’s claims are justiciable and the industrial group has standing to sue. The court also unanimously found the commission did not exceed its jurisdiction under the Substitute Natural Gas Act when it approved the contract as a final purchase contract.
But Judge Patricia Riley and Senior Judge Carr Darden reversed the commission order approving the contract because the contract’s definition of retail end use customer did not conform to what the Legislature intended under the SNG Act. The majority found industrial transportation customers are not subject to the SNG Act as retail end use customers.
Robb believed that reversal of the commission’s approval of the contract in its entirety isn’t necessary and that the court could “merely exclude the part of the contract which includes transportation customers in the definition of retail end use customers without frustrating the primary purpose of the contract.”•