7th Circuit Court of Appeals
Civil – Admission of Evidence/Motorcycle Accident
Betty M. Jordan and Theodore R. Jordan v. Kelly D. Binns and U.S. Xpress Inc.
A woman who lost her legs after an Indianapolis motorcycle crash isn’t entitled to a new trial even though hearsay evidence was improperly admitted, including her statements that the crash was her fault.
The 7th Circuit Court of Appeals affirmed a verdict for the defense reached in the U.S. District Court for the Southern District of Indiana. Oral arguments were conducted Oct. 12 at Indiana University Maurer School of Law.
Betty Jordan was permanently injured on Aug. 22, 2008, when she was driving a motorcycle eastbound and made contact with a truck driven by Kelly Binns, who said he heard a “banging noise” on his truck and saw the motorcycle sliding on the ground in the passenger rearview mirror.
Binns stopped and ran to help Jordan, and Binns testified that she repeatedly told him, “Tell the trucker it’s not his fault. It’s my fault.” Binns relayed those statements to an Indiana state trooper and claims managers at the company he drove for, U.S. XPress.
A trooper testified that Jordan’s husband, Ted, initially affirmed that Betty told him the accident was her fault, but he later denied making such statements.
The Jordans challenged six pieces of evidence admitted as hearsay, and the 7th Circuit agreed that some were. Nevertheless, the errors weren’t significant enough to warrant a new trial, the judges wrote in a 33-page ruling.
“Not only was the improperly admitted evidence cumulative, but the other evidence presented at trial strongly favored the defendants’ position,” Judge John Daniel Tinder wrote for the panel.
“Even though the central issue at trial was fault, the cumulative nature of the improperly admitted evidence coupled with this additional evidence leads us to conclude that the improper evidence did not have a substantial effect on the jury’s verdict,” Tinder wrote.
Criminal – Alternate Juror/Deliberations
United States of America v. Geoffrie Allen Lee Dill
A man’s conviction of methamphetamine and firearms crimes in the U.S. District Court for the Southern District of Indiana was not prejudiced by the presence of an alternate juror in the deliberation room, the 7th Circuit Court of Appeals ruled.
Geoffrie Allen Lee Dill argued that his conviction and 420-month sentence should be thrown out because allowing the alternate in the deliberation rule violated Federal Rule of Criminal Procedure 24(c)(3) which requires the court ensure alternates not discuss the case with anyone.
“Though the parties agree that the rule prohibits alternates from deliberating with the regular jury, Dill has offered no evidence to suggest that the alternate juror participated in deliberations,” Judge Ann Claire Williams wrote in an eight-page decision affirming the District Court.
The 7th Circuit noted that neither party objected to the alternate being allowed into the deliberation room, and that the court instructed the alternate orally and in written jury instructions to refrain from participating in deliberations.
“Dill has failed to establish that the alternate juror’s presence in the deliberation room affected his substantial rights and the outcome of the proceedings,” Williams wrote.
Criminal – Firearms/Possession
United States of America v. Steven Dotson
A gun that can no longer shoot is still a gun for purposes of federal firearms convictions, the 7th Circuit Court of Appeals ruled.
The court affirmed a conviction of felon in possession of a firearm and a 188-month federal prison sentence.
Judge Richard Posner wrote for the panel that an inoperable gun that still could have been repaired met the statutory requirement that someone may be convicted under 18 U.S.C. § 922(g)(1) for possessing “any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive.”
Posner wrote that Steven Dotson “confuses ‘design’ with ‘object’ when he says in his brief that ‘the design [of his gun] has been so altered that the original purpose for which it was intended no longer exists.’ The object has been altered, but not the design.”
In affirming the conviction, Posner said the government was on shaky ground arguing in essence that a gun is always a gun. “But what if the gun is so damaged that it can’t be restored? What if it’s just a heap of twisted metal barely even recognizable as having once been a gun?”
Posner also offered for supposition an illustration of a realistic gun fashioned into a lighter. He further referenced news accounts of toys being converted into working guns. Those items weren’t “designed” as firearms per the statute.
“Surely the government doesn’t think that a felon who owns a gun that started life as a toy gun but now shoots real bullets can’t be convicted of being a felon in possession,” Posner wrote.
Civil – Employer Liability/Wrongful Death
NES Rentals Holdings, Inc., et al. v. Steine Cold Storage, Inc.
An employer bears no liability in a lawsuit brought by the estate of a man who died operating a rented 40-foot boom lift, the 7th Circuit Court of Appeals ruled.
The 7th Circuit affirmed a grant of summary judgment in favor of a company that was installing thermal units at a Wal-Mart store being built in Gas City. The ruling affirms judgment by Magistrate Judge Roger B. Cosbey of the District Court for the Northern District of Indiana.
Humberto Menendez was fatally injured and his family sued Wal-Mart, NES and other parties, alleging wrongful death. His employer, Steine Cold Storage, wasn’t named, the court presumes, in light of Indiana’s Worker’s Compensation Act.
NES demanded that Steine indemnify and hold it harmless. “We agree with Steine that the indemnification clause in the rental agreement does not expressly state, in clear and unequivocal terms as Indiana law requires, that Steine agreed to indemnify NES for NES’s own negligence,” Judge Ann Claire Williams wrote for the court. “We therefore affirm the district court’s grant of summary judgment in favor of Steine.”
Civil – Discrimination/ADA
Nancie Cloe v. City of Indianapolis
An Indianapolis woman who worked in the city’s Department of Metropolitan Development and was diagnosed with multiple sclerosis may pursue her discrimination and retaliation claims under the Americans with Disabilities Act.
The 7th Circuit Court of Appeals reversed Judge William T. Lawrence’s grant of summary judgment in favor of the city on two of three claims made by fired city employee Nancie Cloe. Cloe, an unsafe buildings/nuisance abatement project manager, was fired in June 2009.
The appeals court reversed the District Court’s summary judgment against Cloe’s claims that she was discriminated against and faced retaliation for requesting a work accommodation be made because of her disability. The 7th Circuit affirmed summary judgment for the city on Cloe’s claim that the employer failed to reasonably accommodate her disability.
“Both sides agree that Cloe engaged in protected activity (requesting accommodations for her disability) and that she suffered an adverse employment action (termination). The question, then, is whether a reasonable jury could infer a causal link between the two. We think so,” Judge Michael S. Kanne wrote for the panel. “There is evidence that (a report of insubordination) may have been motivated by hostility towards Cloe’s disability.”
“We do not know whether Cloe will eventually be able to show a triable issue of fact regarding discriminatory termination. But she deserves the chance make that showing fairly, with notice, and with a full opportunity to present her evidence,” Kanne wrote.
Criminal – Sentencing Guidelines
United States of America v. Tristan Davis
Although a gun buyer had his sentence affirmed, his argument for reduced time has caused the 7th Circuit Court of Appeals to call upon the Sentencing Commission to clarify a section of the U.S. Sentencing Guidelines.
The case was appealed from the Northern District of Indiana, Hammond Division.
Tristan Davis pleaded guilty to two counts of lying to gun dealers and was sentenced to 18 months imprisonment. His offense level, and possibly his sentence, would have been lower if the District judge had given him a three-level reduction for accepting responsibility by pleading guilty. However, the prosecutor declined to move for the subtraction under U.S.S.G. 3E1.1(b) because Davis refused to waive his right to appeal.
Davis contended that a motion from the prosecutor is mandatory whenever the defendant pleads guilty early enough and spares the prosecutor the burden of trial preparation.
In United States v. Deberry, 576 F.3d 708 (7th Cir. 2009), the court rejected that 3E1.1(b) requires a prosecutor to file a motion, noting the statute confers an entitlement on the prosecutor, not on the defendant.
Chief Judge Frank Easterbrook, in his opinion for Davis, noted the courts of appeals are divided on this issue. While a majority has reached the same conclusion as Deberry, two have sided with Davis’ contention that a court may direct the prosecutor to file a motion even if the prosecutor’s reason for withholding that motion does not violate the Constitution.
“This circuit could not eliminate the conflict by changing sides, so stare decisis supports standing pat,” Easterbrook wrote. “Resolution of this conflict is the province of the Supreme Court or the Sentencing Commission.”
Judge Ilana Diamond Rovner wrote a concurring opinion, also calling upon the Sentencing Commission to give further guidance.
However, she explained she does not believe that section 3E1.1(b) permits the government to insist that a defendant waive his appellate rights before it will ask the court to grant him an addition one-level decrease in his offense level for acceptance of responsibility.
Rovner noted sentencing judges can err when imposing sentences and these errors are rarely attributable to the defendant. Consequently, the defendant has a right to be sentenced accurately and fairly. Nothing in section 3E1.1(b), she continued, requires the defendant to accept responsibility for the court’s errors as well as his own.
Civil –Religious Documents/Religious Orders
Kevin B. McCarthy, et al., and Langsenkamp Family Apostolate, et al. v. Patricia Ann Fuller, et al.
12-2157, 12-2257, 12-2262
Taking up three appeals stemming from a lawsuit filed surrounding control of religious documents and artifacts from the appearance of the Virgin Mary, the 7th Circuit Court of Appeals found that a federal judge erred in ruling that it should be up to a jury to decide whether a party to the lawsuit is still a religious sister.
The case has been pending in federal court in Indianapolis for five years. The lawsuit is over who can be allowed to promote devotions to Our Lady of America and who may possess related artifacts. Sister Mary Ephrem saw the Virgin Mary appear in Rome City, Ind. in 1956 and programs of devotions to Our Lady were created. Ephrem was a member of the Congregation of the Sisters of the Most Precious Blood of Jesus when she and two other women broke off and created their own congregation. When Ephrem died, she left all her possessions – which were related to Our Lady – to Sister Mary Joseph Therese, born Patricia Fuller.
In 2005, attorney Kevin McCarthy and Albert H. Langsenkamp worked out an agreement to help Fuller with the devotions to Our Lady. But they had a falling out in 2007, leading to this suit over who should own the possessions and promote Our Lady. The main issue the 7th Circuit looked at was the claim McCarthy made that Fuller is a “fake nun,” which led to Fuller’s defamation counterclaim. McCarthy obtained a statement from the Apostolic Nunicature of the Holy See that Fuller is no longer a nun or religious sister and hasn’t been since 1983.
Judge William Lawrence decided that this issue should go before a jury. The 7th Circuit obtained a 51-page amicus brief from the Holy See on whether Fuller is still a member of a religious order. The Holy See said she is not since she left and joined the new congregation.
“In it the Holy See has spoken, laying to rest any previous doubts: Fuller has not been a member of any Catholic religious order for more than 30 years. Period. The district judge has no authority to question that ruling. A jury has no authority to question it. We have no authority to question it,” Judge Richard Posner wrote.
The 7th Circuit dismissed the other two appeals before it for either being premature or not final rulings
Civil – Defense Investigation
Torray Stitts v. Bill Wilson, superintendent, Indiana State Prison
The 7th Circuit Court of Appeals reversed the denial of a man’s petition for habeas corpus and ordered the District Court to take another look at his counsel’s alibi defense investigation.
Torray Stitts was convicted of the murder of Kevin Hartson in Kokomo and sentenced to 60 years in prison. The state’s case was based on the testimony of two witnesses whose reliability was attacked at trial. Stitts’ direct appeal failed as did his post-conviction relief petition. He claimed that his trial counsel was ineffective for failing to adequately investigate his alibi defense for potential presentment at trial.
His attorney interviewed Stitts’ father, who claimed his son was at the American Legion Post with him and that other people saw Stitts there. Stitts’ attorney decided there weren’t any quality witnesses to testify on Stitts’ behalf and did not interview anyone else.
The 7th Circuit had to decide whether Stitts’ counsel’s alibi investigation violated Strickland v. Washington, 466 U.S. 668, 687 (1984), not the decision to not present an alibi defense at trial. The Indiana Court of Appeals affirmed the denial of Stitts’ petition for post-conviction relief, finding that the attorney did investigate Stitts’ alibi defense and the investigation did not fall below an objective standard of reasonableness nor was he prejudiced.
The Indiana Supreme Court declined to take the case. Judge Larry J. McKinney in the Southern District of Indiana denied Stitts’ petition for habeas corpus.
“When a defendant’s alibi is that he was at a nightclub at the time of the shooting, where there are presumably many people, we cannot fathom a reason consistent with Supreme Court precedent that would justify a trial counsel’s decision to interview only a single alibi witness without exploring whether there might be others at the venue who could provide credible alibi testimony,” Judge Ann Claire Williams wrote. “There is simply no evidence in the record to suggest that exploring the possibility of other alibi witnesses ‘would have been fruitless’ under these circumstances.”
The 7th Circuit remanded the case to the District Court to determine whether the trial counsel performed no further alibi investigation. If the attorney did not, then the District Court should grant the habeas petition. If the court finds the attorney did more, then the court must determine de novo whether that investigation was reasonable under Strickland.
Civil – Employment/Discrimination/Retaliation
Renee S. Majors v. General Electric Co.
A longtime employee at the Bloomington General Electric Co. plant could not prove to the 7th Circuit Court of Appeals that the company discriminated against her because of a disability and retaliated against her when she filed a complaint with the Equal Employment Opportunity Commission.
Renee Majors suffered a work-related shoulder injury in 2000 that permanently left her limited to lifting no more than 20 pounds and other restrictions regarding her right arm. In May 2009, she was the senior most eligible bidder for a temporary purchased material auditor position. Under the plant’s collective bargaining agreement, vacant positions are to be awarded to the senior most eligible employee who bids on the position.
But the auditor position required lifting more than 20 pounds occasionally and GE determined Majors was not medically qualified for the position. Majors suggested that a material handler could do the heavy lifting. Majors filed a charge of discrimination with the EEOC alleging she was denied the temporary position because of her disability and sex. She then claimed as a result of filing her EEOC charge, she was denied overtime hours and the chance to work “lack of work” Fridays at the plant.
A few months later, she decided to participate in the early retirement program and retire in November 2009. But before her retirement, she applied for a permanent senior auditor position. It went to another bidder because of the lifting requirements. Majors then filed a second suit alleging discrimination under the Americans with Disabilities Act and Title VII, retaliation and constructive discharge.
The District Court granted summary judgment to GE on all of Majors’ claims. She appealed, except the Title VII discrimination claim.
“The accommodation Ms. Majors seeks – another person to perform an essential function of the job she wants – is, as a matter of law, not reasonable, so GE isn’t required to show the accommodation would create an undue hardship. Ms. Majors hasn’t pointed to evidence that could support a finding that she was a qualified individual (under the ADA); without that, she can’t show that GE failed to provide a reasonable accommodation,” wrote Judge Robert L. Miller Jr. of the Northern District of Indiana, sitting by designation.
Looking toward her retaliation claim, Miller wrote, “When examined in context, the assignment to Ms. Majors of less overtime hours than two of her coworkers and fewer ‘lack of work’ Fridays than three of her coworkers during the months after she filed an EEOC charge doesn’t amount to sufficient evidence to support an inference of causation.”
“We agree with the district court that Ms. Majors has offered no evidence that would allow her retaliation claim to survive summary judgment under either the direct or indirect method of proof,” he wrote.
The 7th Circuit affirmed in all respects.
Civil – 401(k) Revenue Sharing/Fiduciary Duty
Robert Leimkuehler, as trustee of and on behalf of the Leimkuehler Inc. Profit Sharing Plan, and on behalf of all others similarly situated v. American United Life Insurance Co.
12-1081, 12-1213, & 12-2536
The 7th Circuit Court of Appeals has ruled in favor of an insurance company on a 401(k) plan trustee’s lawsuit that the insurance company’s revenue-sharing practices breached a fiduciary duty under the Employment Retirement Income Security Act of 1974.
“This case presents a challenge to the practice known in the 401(k) services industry as ‘revenue sharing’– an arrangement allowing mutual funds to share a portion of the fees that they collect from investors with entities that provide services to the mutual funds, the investors, or both. … As the existence and extent of revenue sharing has become more widely known, some have expressed concern that the practice unduly benefits mutual funds and 401(k) service providers to the detriment of plan participants. This concern has fueled a number of lawsuits alleging that the practice violates the Employee Retirement Income Security Act of 1974 (ERISA),” Judge Diane Wood wrote
Leimkuehler Inc. operates a 401(k) plan for its employees and American United Life Insurance Co. provides services to the plan. Plan participants’ contributions in mutual funds are deposited into a separate account that AUL owns and controls. AUL uses the funds in that account to invest in whatever mutual funds the plan participants have selected.
Robert Leimkuehler as trustee sued alleging AUL’s revenue-sharing practices breached a fiduciary duty to the plan under ERISA. The District Court granted AUL’s motion for summary judgment, finding AUL didn’t owe any fiduciary responsibility to the plan with respect to its revenue-sharing practices and that it wasn’t a “functional fiduciary” under 29 U.S.C. Section 1002(21)(A).
“We therefore confirm that, standing alone, the act of selecting both funds and their share classes for inclusion on a menu of investment options offered to 401(k) plan customers does not transform a provider of annuities into a functional fiduciary under Section 1002(21)(A)(i),” Wood wrote.
The judges also noted that AUL’s control over the separate account can support a finding of fiduciary duty only if Leimkuehler’s claims arise from AUL’s handling of the separate account.
“They do not. As we noted earlier and as Leimkuehler concedes, AUL selects share classes and decides how much it will receive in revenue sharing when it designs its investment-options menu. Those steps occur well before a Plan participant deposits her contributions in the separate account and directs AUL where to invest those contributions. Because the actions Leimkuehler complains of do not implicate AUL’s control over the separate account, the separate account does not render AUL a fiduciary under the circumstances of this case,” Wood wrote.
The judges also affirmed the denial of AUL’s motion for attorney fees or costs under ERISA or under the Federal Rule of Civil Procedure 54(d).
Indiana Supreme Court
Civil Plenary – Jury Request
Utility Center, Inc. d/b/a Aqua Indiana, Inc. v. City of Fort Wayne, Indiana
A case involving a compensation award for condemnation initiated by Fort Wayne’s Board of Public Works that may appear at first blush as a “no brainer” is actually not as simple as it seems, the Indiana Supreme Court pointed out.
At issue in the decision is the scope of judicial review when a property owner challenges the compensation awarded for condemnation of its property by a city’s board of public works under an eminent domain statute applicable to cities and towns. Utility Center Inc. owned and operated certain water and sewer facilities in Fort Wayne. In 2002, the city’s Board of Public Works passed a resolution to condemn the facility’s north system. Utility Center challenged the condemnation, which was ultimately affirmed by the Indiana Supreme Court in 2007. Afterward, Utility Center filed a written remonstrance with the board challenging the $16.9 million assessment of damages, which the board confirmed. Utility Center appealed to the trial court and sought a jury trial. The city moved for partial judgment on the pleadings on the grounds that the trial court was limited to a review of the record before the board. The trial court ruled in favor of the city.
I.C. 34-24-1 and -2 deal with eminent domain procedures; Chapter 2 deals with proceedings initiated by a municipal works board. The board initiated the proceedings under Chapter 2 in this case.
“At stake in this case is what does it mean to say, in the context of a Chapter 2 eminent domain proceeding, that ‘[t]he court shall rehear the matter of the assessment de novo.’ More precisely: What did the Legislature intend in this context? The City argues the trial court is limited to a review of the record before the Board. Utility Center counters the trial court’s review includes a full evidentiary hearing before a jury,” Justice Robert Rucker wrote.
“In short our courts have long held that judicial review of administrative decisions is restrained and limited, even where statutory language suggests otherwise. However, the question remains whether the Legislature intended this limited review under the facts presented here,” he continued.
Rucker pointed out that eminent domain statutes must be strictly construed as to the extent of power and the manner of its exercise. Also, the inviolability of private property has been a central tenet of American life since before the country’s founding.
“Because the determination of just compensation is a judicial rather than a legislative function, … and recognizing the extent to which protecting the ownership of private property is woven into the fabric of our jurisprudence, we are not persuaded the Legislature intended a limited role of the judiciary when declaring that an aggrieved party may ‘take an appeal’ of the compensation awarded by an administrative municipal board and that ‘[t]he court shall rehear the matter of the assessment de novo . . . .’ I.C. § 32-24-2-11(a). Rather we are convinced the opposite is true,” he wrote.
The justices concluded that “rehear the matter of the assessment de novo” contemplates a new hearing with trial and judgment as in all other civil actions, and a trial by jury where a party so requests.
The case is remanded for further proceedings.
Indiana Tax Court
Tax – Land Assessment
Hamilton County Assessor v. Allisonville Road Development, LLC
The Indiana Tax Court upheld a final determination by the Indiana Board of Tax Review to assess farm land as agricultural that was purchased by a developer but remained undeveloped for years.
The Hamilton County assessor appealed the board’s final determination, which reduced Allisonville Road Development’s 2008 assessment to $15,684 on vacant land located in Fishers. The land had been in the hands of developers since the 1990s; it was actively farmed prior to that. Allisonville Road Development purchased the parcels in 2006.
The land developer challenged the assessor’s change in property classification from agricultural land to undeveloped, useable commercial land. No commercial activity had taken place on the land. The land was originally assessed at $2.237 million, which was reduced by the county property tax assessment board of appeals to $1.427 million before the developer appealed to the Board of Tax Review.
The Board of Tax Review explained that land could be reassessed under Indiana Code 6-1.1-4-12 if new events occurred, such as a change in the land’s use. Cessation of farming activities didn’t constitute a change sufficient to warrant reassessment.
“Here, the Assessor claims that the subject property has been used for commercial purposes since the 1990s because that is when it was sold to commercial developers and all active farming operations ceased. Thus, the Assessor equates a ‘change in use’ to nothing more than a change in ownership and potential use. A ‘change in use’ under Indiana Code § 6-1.1-4-12, however, requires something more,” Senior Judge Thomas Fisher wrote.
“Under the 2002 version of Indiana Code § 6-1.1-4-12, reassessments based on new classifications are permissible when land is subdivided into lots, rezoned, or put to a different use: i.e., when events that indicate that commercial development is imminent occur. Here, the cessation of farming activities and the subsequent non-use of land does not necessarily evidence the imminence of commercial development.”
Indiana Court of Appeals
Civil Plenary – Arbitration
Welty Building Co., LTD. and Ohio Farmers Insurance Company v. Indy Fedreau Company, LLC, et al.
The Indiana Court of Appeals reversed the denial of a general contractor’s motion to stay proceedings and compel arbitration regarding disputes with subcontractors, finding general contractor Welty Building Co. LTD did not waive its right to insist upon arbitration.
Welty was chosen as general contractor to construct the new FBI headquarters in Indianapolis. The building would be owned by Indy Fedreau Company LLC, and Ohio Farmers Insurance Co. provided a contract performance bond on Welty’s behalf. Welty hired 21 subcontractors to work on the project. Their agreements included an arbitration clause. But Indy Fedreau filed a lawsuit against Welty and OFIC in November 2011 alleging breach of contract, breach of bond, fraud and bad faith based on claims Welty ran up the costs of the project. Indy Fedreau also believed that Welty wasn’t timely paying the subcontractors, which resulted in mechanic’s liens. Several subcontractors also sued Welty.
Welty later filed a counterclaim in the Fedreau case, seeking to foreclose its own mechanic’s lien on the property. It joined the subcontractors with respect to the mechanic’s lien notices they had filed. This led to counterclaims being filed against Welty by the subcontractors. Welty and OFIC then sought to stay the subcontractors’ claims pending mediation and arbitration, which was denied. The trial court agreed with the subcontractors that Welty had waived its contractual right to insist upon arbitration.
“It is clear that Welty did not ‘elect’ to sue the subcontractors without first engaging in mediation or arbitration, nor did it voluntarily ‘institute’ a legal proceeding, to use the language of Article 37 of the subcontract. Welty’s hand was forced by Fedreau’s filing of the lawsuit against it, at which time Welty was compelled to countersue for foreclosure of its mechanic’s lien and to name the subcontractors as co-defendants on that claim,” Judge Michael Barnes wrote.
The judges sent the case back to the trial court so that arbitration can be ordered between Welty and the subcontractors and that the litigation between those parties be stayed. The trial court did not assess whether the subcontractors’ claims against OFIC should be stayed pending arbitration, so the judges ordered the trial court to consider that issue.
Civil Plenary – Jurisdiction/Liability
John V. Sebring v. Air Equipment and Engineering, Inc., Donaldson Co., Inc., William W. Meyer and Sons, Inc., Newton Conveyors, Inc. and Emerson Power Transmission Corp.
The Indiana Court of Appeals found that a Texas corporation that made a component of a dust collector that injured a Fort Wayne man did nothing more than place the screw conveyor in the stream of commerce, which supports dismissing the Texas business from a lawsuit filed here.
John Sebring sued several companies, including Newton Conveyors Inc., after the dust collector he used at work at OmniSource in Fort Wayne severely injured several of his fingers. NCI, a Texas company that has its sole place of business in that state, made the screw conveyor that Donaldson Co. Inc. used to make the dust collector. Donaldson is incorporated under the laws of Delaware and has a plant in Kentucky. NCI argued for dismissal because it doesn’t have any employees or facilities in Indiana, has not advertised in the state since 1993, has not had any sales reps in the area since 2003 and doesn’t have any ongoing business relationships with any Indiana residents.
As part of their analysis, the judges looked at the shipping process of the part, in which Donaldson arranged for and paid for it to be picked up in Texas and sent to Fort Wayne. They also cited several cases, including J. McIntyre Machinery Ltd v. Nicastro, 131 S. Ct. 2780 (2011), to affirm the dismissal of NCI for lack of personal jurisdiction. “… all of NCI’s actions relating to this case took place within Texas, the decision to ship the product to Indiana was made by Donaldson, and Donaldson took responsibility for sending the product to Indiana. We cannot agree that NCI did ‘something more’ than placing the screw conveyor in the stream of commerce,” Judge Terry Crone wrote.
Mortgage Foreclosure – Property Ownership/Foreclosure
Deutsche Bank National Trust Co., as Trustee under the pooling and servicing agreement dated as of Nov. 1, 2002, Morgan Stanley ABS Capital I Inc. Trust 2002-HE3 v. Patricia Harris and Shawn Harris
A Howard Superior Court erred in denying a bank’s motion for relief from the court’s quiet title decree finding the bank no longer held any interest in certain real property owned by a divorcing couple, the Indiana Court of Appeals ruled.
Deutsche Bank filed a complaint on note and to foreclose on real estate owned by Patricia and Shawn Harris, alleging they were in default. Both Shawn and Patricia Harris filed counterclaims fighting the foreclosure. The case languished for nearly a year without any activity, leading to a Trial Rule 41(E) motion by the court for purposes of dismissing the complaint. The bank’s counsel did not appear at the hearing and the judge dismissed the complaint with prejudice. Shawn Harris’ attorney proposed an order for quiet title on the property, which the court later issued.
The bank sought relief from judgment, which was denied, noting in part the bank didn’t file its motion for relief until nearly a year had passed.
“While the Property and the Bank’s security interest in the Property pursuant to the Mortgage, as well as the parties’ obligations pursuant to the Note, were important to the division of the marital estate in the Borrowers’ divorce proceedings, we decline to find that the reinstatement of the Bank’s claim or the reversal of the Quiet Title Decree would prejudice the Borrowers to an extent that such a reinstatement or reversal would be unreasonable or unjust under the circumstances,” Judge Elaine Brown wrote.
“As previously mentioned, even if the court dismissed the Bank’s current action with prejudice under Trial Rule 41(E), the Bank would not be precluded from later filing a claim under the Note and Mortgage in connection with separate alleged defaults by the Borrowers. We therefore conclude that the court did not have the authority to enter the Quiet Title Decree to the extent that it ruled or ordered that the Bank no longer held any interest in the Property under the Mortgage or that the Note was cancelled, and the court erred or abused its discretion in denying the Bank’s motion for relief from judgment on that basis,” she continued.
The case is remanded for further proceedings.
Criminal – Driver’s License Suspension
Thomas Porter v. State of Indiana
A Marion Superior Court exceeded statutory authority when it suspended a man’s driving privileges for life, the Indiana Court of Appeals has held. At the time Thomas Porter was arrested and charged, his driving privileges were suspended for life, but that was no longer the case when he was sentenced.
Thomas Porter was pulled over by a police officer because the officer was unable to read Porter’s license plate from 50 feet away based on poor lighting around the plate. He was charged with Class D felony operating a motor vehicle while being a habitual traffic violator and Class C felony operating a motor vehicle after his license had been forfeited for life.
Porter filed a motion to suppress and challenged every stage of the encounter. He claimed the lights had never been modified, and he could see the license plate in person. Photographs introduced by the state showed a shadow over part of the plate.
The judge found Porter guilty of the Class C felony and dismissed the other count out of double jeopardy concerns. At his sentencing hearing, the judge learned that Porter’s conviction in an arrest in 2008 in another county had been reduced to a misdemeanor, so his license was no longer suspended for life. The state sought to suspend Porter’s license for life, which the trial court granted.
“The record reveals evidence that Officer Montgomery had a reasonable and objectively justifiable basis for making the initial traffic stop. Even assuming that Porter’s vehicle met federal regulations, we cannot say that Officer Montgomery lacked reasonable suspicion to initiate a traffic stop of Porter’s vehicle when he could not see the license plate from fifty feet away,” Judge Elaine Brown wrote.
The judges looked at Indiana Code 9-30-10-16 and -17 and found Section 17 does not provide for a lifetime suspension.
“Mindful that penal statutes should be construed strictly against the State, that ambiguities should be resolved in favor of the accused, and that the judicial function is to apply the laws as enacted by the legislature, we conclude that the trial court exceeded statutory authority and improperly suspended Porter’s driving privileges for life,” Brown wrote.
The case is remanded for further proceedings.
Criminal – Toxicology Reports/Drunken Driving
Halden Martin v. State of Indiana
A Tennessee man’s drunken-driving conviction in Shelby Superior Court was tossed because his trial took place more than a year after his arrest, largely due to a toxicology lab worker’s failure to appear for scheduled depositions, the Indiana Court of Appeals ruled.
Shelbyville police arrested Halden Martin in the early morning of July 17, 2010, on Interstate 74 as he crossed over the center line several times. Martin told police he had been drinking at Indiana Grand Casino for several hours.
Martin failed field sobriety tests but refused to submit to a breath test. He was arrested and charged with Class A misdemeanor operating a vehicle while intoxicated. A search warrant was obtained for a blood test, but court documents show the State Department of Toxicology didn’t return blood-test results for almost eight months.
After multiple continuances attributable to both side, Martin moved in March 2012 to dismiss pursuant to Indiana Criminal Rule 4(C) because 608 days had passed. The trial court denied the motion, and at a bench trial in June 2012 convicted Martin and sentenced him to a year in prison with all but 30 days suspended to probation.
But Judge Nancy Vaidik wrote for the court that the key delays came when a state witness from the toxicology department failed to show for scheduled depositions.
“What this boils down to is what party should bear the responsibility of a State’s witness not showing up to two scheduled depositions at which the witness was subpoenaed both times. Martin says the State Department of Toxicology told him that Anderson was ‘unavailable’ both times, and the State does not offer a contrary explanation on appeal,” Vaidik wrote.
“We find that the balance tips in favor of Martin and therefore conclude that the trial court abused its discretion in charging the delay to him,” Vaidik wrote, recalculating the delay to 476 days. “Because the days that count toward the Rule 4(C) period exceed 365, the trial court should have granted Martin’s motion for discharge. We therefore reverse the trial court and remand for vacation of his conviction.”
Criminal – Bond
Adolfo Lopez v. State of Indiana
The owner of a chain of Mexican restaurants in southeast Indiana charged with numerous crimes will have a lower bond after the Indiana Court of Appeals ruled a trial court abused its discretion in denying his motion to reduce his $3 million bond.
Dearborn Circuit Judge James D. Humphrey set Adolfo Lopez’s bond at $3 million surety plus $250,000 cash after Lopez was charged with corrupt business influence, conspiracy to commit corrupt business influence, four counts of forgery, all as Class C felonies, and four counts of Class D felony perjury. He faces up to 60 years in prison and a $100,000 fine if convicted.
Lopez was under investigation by State Excise Police who learned that the chain of Acapulco Mexican restaurants he owned might not have been reporting and documenting all sales. The Department of Revenue found sales were being underreported and revealed fraudulent Social Security numbers of employees. Search warrants were obtained for safety deposit boxes in Lopez’s name that revealed $3 million in cash.
Humphrey had a hearing on the bail-reduction motion but gave little weight to factors that weighed in Lopez’s favor, Judge Terry Crone wrote for the panel. The court was “troubled” by a ruling that didn’t account for the forfeiture of assets.
“We must emphasize that we are dealing with a constitutional right here, and the goal is not to punish in advance of conviction but to assure the defendant’s appearance in court,” Crone wrote. “Significantly, the State has already seized in excess of $3,000,000 from the search of Lopez’s safety deposit boxes. Nonappearance by Lopez jeopardizes his ability to eventually recover any portion of that large sum of money. This fact alone indicates that the risk of nonappearance is lowered and that the extraordinary bail set here is at an amount significantly higher than reasonably calculated to assure Lopez’s presence in court.
“We reverse the judgment of the trial court and remand with instructions for the trial court to set a reasonable bond amount based upon the relevant statutory factors,” Crone wrote.
More than 100 other people initially were charged along with Lopez after raids in September 2012, but those charges have been dismissed except for those against Lopez and his brother.
Civil Plenary – Insurance/Policy Language
Gary Hammerstone, Susan Hammerstone, Palmor Products, Inc., Northhampton Farm Bureau Cooperative Association, and Canns-Bilco Distributors, Inc. v. Indiana Insurance Company
Describing an insurance company’s policy as “inherently ambiguous,” the Indiana Court of Appeals has reserved the summary judgment granted by the trial court.
The COA agreed with the appellants that the trial court erred in granting summary judgment in favor of Indiana Insurance Co. because the umbrella policy contained contradictions. The Court of Appeals remanded for more proceedings.
Gary Hammerstone severely injured his right hand and arm while trying to unclog the Trac-Vac, a vacuuming device for yard debris like mulched leaves, grass and sticks. In December 2009, he and his wife, Susan, filed a complaint in Pennsylvania against Palmor Products, which designs and manufactures the vacuum, and Northhampton Farm Bureau Cooperative, which sells and services the Trac-Vac. Later Cannis-Bilco Distributors, a distributor of Palmor, was added as a defendant.
Hammerstone alleged Palmor, Northhampton and CBD were, among other things, negligent; failed to property warn of the hazards of the Trac-Vac; and failed to adequately inspect the machine for defects.
Indiana Insurance, the primary insurer of Palmor, filed motions for summary judgment against Palmor, Northhampton and CBD as well as the Hammerstones. The appellants subsequently filed cross-motions for summary judgment against Indiana Insurance.
In appealing the trial court’s order, the appellants argued the lower court erred when it found the insurance company’s umbrella policy unambiguously denied covered. They alleged the policy was ambiguous because the declarations page clearly stated the policy included coverage for products-completed operations hazard but later language maintained the coverage did not apply to injuries and damages included within the operations hazard.
The COA found the umbrella policy contains an endorsement that contradicts its language defining products-completed operations hazard as “bodily injury” and “property damage.”
“Thus the Umbrella Policy states that it both provides $2,000,000 of coverage for products-complete operations and that the insurance does not apply to products-completed operations hazard injuries,” Judge James Krisch wrote for the court. “As a result, the Umbrella Policy is inherently ambiguous.”
Civil Tort – Medical Liability
Danielle Helms v. Max H. Rudicel, M.D., Open Door/BMH Health Clinic (a division of Cardinal Health Systems), Cardinal Health Systems, d/b/a Ball Memorial Hospital, et al.
The apparent agency of Ball Memorial Health Clinic as it pertains to the alleged malpractice of an affiliated doctor and nurse practitioner is a fact question the Indiana Court of Appeals sent back to the trial court, which had granted the hospital summary judgment on the issue.
Danielle Helms in 2007 filed a complaint before the Department of Insurance alleging negligence in her prenatal care resulted in a stillbirth in 2005. A separate federal action was filed because the doctor and nurse practitioner were federal employees.
Judge Melissa May wrote that the trial court erred.
“As the federal decision is not res judicata as to BMH’s potential liability as the Doctor and Clinic’s apparent principal and there is a fact question as to such apparent agency, summary judgment for BMH was error. The trial court correctly found BMH might be vicariously liable for any act of Dr. Rudicel or Nurse Practitioner Steinbarger at BMH. We accordingly affirm in part, reverse in part, and remand,” May wrote.
Criminal – Sentence/Restitution
Adam Morris v. State of Indiana
A man will have to serve his full sentence, but the Indiana Court of Appeals has ruled since his plea agreement makes no mention of restitution, he will not have to pay.
Adam Morris was charged in October 2009 with Class C felony causing death while operating a vehicle with a blood alcohol equivalent of 0.08 or more. His fiancée, Jennifer Celeste, died of injuries she sustained when the ATV Morris was driving was involved in an accident with another ATV. A blood test later indicated Morris had a BAC of 0.158.
In July 2012, Morris agreed to plead guilty to the lesser included offense of Class A misdemeanor operating while intoxicated. The agreement noted he would be sentenced at the discretion of the court, but it made no mention of restitution.
Subsequently, the trial court sentenced Morris to a term of one year, full executed. It also ordered Morris to pay $14,972.45 to Celeste’s family as restitution related to her funeral expenses.
Morris appealed, in part, challenging the restitution order. He asserted the order improperly applies to the Class C felony charge that was dismissed.
In considering Morris’ argument, the COA pointed to a “more fundamental problem.” Specifically, the plea agreement made no mention of whether the defendant could be ordered to pay restitution.
The COA reversed the order that Morris pay, ruling that when a plea agreement is silent on the issue of restitution, a trial court may not order the defendant to pay as part of the sentence. Such an order would exceed the scope of the plea agreement.
Civil Tort – Jury Verdict/Defamation
State Farm Fire & Casualty Company v. Joseph Martin Radcliff and Coastal Property Management LLC, a/k/a CPM Construction of Indiana
Miscellaneous – Trademark
Serenity Springs, et al. v. The LaPorte County Convention and Visitors Bureau
A dispute over who could use the designation “Visit Michigan City LaPorte” led to a legal battle between the LaPorte County’s visitors bureau and an area hotel-resort, with the trial court ruling in favor of the visitors bureau. But the Indiana Court of Appeals reversed, ruling the bureau didn’t prove it held a valid and protectable trademark.
An employee from Serenity Springs attended a public meeting at which the LaPorte County Convention and Visitors Bureau announced that the phrase “Visit Michigan City LaPorte” had been chosen as the branding identifier for the area. Immediately after the meeting, Serenity registered the domain name “visitmichigancitylaporte.com” and redirected traffic from that site to its hotel website. That same day, the bureau attempted to register the same domain name, but discovered it had been purchased and was used by Serenity.
The visitors bureau sought to prevent Serenity from using the domain and slogan, and filed an application with the Indiana Secretary of State to register the slogan and logo as a trademark. It claimed it first used the words in commerce Sept. 9, 2009, the same day Serenity registered the website. When Serenity wouldn’t voluntarily relinquish the domain name, the visitors bureau sued, alleging trademark infringement, cybersquatting and unfair competition.
The trial court ruled in favor of the visitors bureau, permanently enjoined Serenity from using the designation or domain name, and ordered Serenity to transfer the domain to the bureau.
The Court of Appeals reversed because it found the “Visit Michigan City LaPorte” slogan is primarily geographically descriptive and not subject to protection as a trademark. In order to be protectable, the slogan must have acquired secondary meaning, but it did not. The judges rejected the visitors bureau’s claim that its registration with the SOS is sufficient proof of distinctiveness or secondary meaning.
“Secondary meaning is acquired through actual use of a mark, and there is simply no evidence in the record supporting a conclusion that the mark became associated with the Bureau in the minds of consumers on September 9, 2009 in the hours prior to Serenity’s registration of the domain name,” Judge Ezra Friedlander wrote.
The COA reversed and remanded with instructions to vacate the judgment and enter judgment in favor of Serenity on the trademark infringement and cybersquatting claims. But the trial court did not rule on other claims the bureau asserted, including common-law unfair competition. The judges ordered the trial court consider the bureau’s other claims and limit its consideration to the claims and evidence already presented by the bureau.•