7th Circuit Court of Appeals
Civil – Disability Benefits
Michael E. Garcia v. Carolyn W. Colvin
Judges of the 7th Circuit Court of Appeals slapped down the denial of disability benefits for a man they said was among the most severely disabled applicants they had ever seen.
“We can’t figure out what the administrative law judge was thinking when he found that (Michael) Garcia could do construction work as late as 2010,” Circuit Judge Richard Posner wrote in reversing the denial of benefits. The panel remanded the matter to the Social Security Administration for further proceedings with a clear message that Garcia’s disability benefits were erroneously denied.
Garcia had been a construction worker until his employer shut down in 2008, according to the record. But Posner recited a litany of Garcia’s medical problems and wrote that those who denied his disability claim overlooked his former employer’s testimony that Garcia’s particular skills and abilities were highly valued, and so he was permitted to take off work two or three days a week on account of his health problems.
“Garcia is, and has been since he applied for disability benefits, in awful shape,” Posner wrote. “We are astonished that the administrative law judge, seconded by the district court, should have thought him capable of full-time employment (40 hours a week). The administrative law judge’s opinion is riddled with errors.”
Two doctors – including a Social Security physician – attested that Garcia was incapable of full-time work, and the panel said no weight was given to that testimony even though no contrary evidence was presented.
“Garcia is one of the most seriously disabled applicants for (S)ocial (S)ecurity disability benefits whom we’ve encountered in many years of adjudicating appeals from benefits denials. We are surprised that the Justice Department would defend such a denial,” Posner wrote for the court.
Indiana Supreme Court
Agency Action – Rockport Coal Gasification Contract
Indiana Gas Company, Inc. and Southern Indiana Gas and Electric Company, et al v. Indiana Finance Authority and Indiana Gasification, LLC
The Indiana Supreme Court revived a controversial state-backed deal that would facilitate construction of a $2.7 billion coal-using synthetic natural gas plant in Rockport. The decision likely sets up another round of state regulatory review if developers choose to move forward.
Justices unanimously affirmed a contract between the Indiana Finance Authority and Indiana Gasification LLC that a divided panel of the Court of Appeals invalidated. But the Court of Appeals’ differences over whether the contract was valid were rendered moot when the state agency and the private company amended the deal, the Supreme Court ruled.
In affirming the decision of the Indiana Utility Regulatory Commission to approve the contract, Chief Justice Brent Dickson cited language used in cases dating to 1904: “When the concrete controversy at issue in a case ‘has been ended or settled, or in some manner disposed of, so as to render it unnecessary to decide the question involved,’ the case will be dismissed.
“Appellants requested that this Court vacate the IURC’s Order in part because the Contract’s definition of (retail end use customers) improperly applied to industrial transportation customers; IFA and Indiana Gas have addressed this concern by amending the Contract approved by the IURC and rendering it unnecessary for this Court to decide the issue,” Dickson wrote.
The politically charged deal obligates the state to purchase synthetic natural gas for 30 years at guaranteed prices much higher than current market rates.
An unusual alliance of environmental groups, utilities and business concerns oppose the deal championed by former Gov. Mitch Daniels and cite it as a polluting example of crony capitalism. The project is backed by former Daniels adviser Mark Lubbers, whose connections to Justice Mark Massa resulted in calls for Massa to recuse himself, which he refused to do.
The final outcome for the contract and the fate of the proposed plant likely will be decided elsewhere in the Statehouse. Lawmakers this year enacted Senate Enrolled Act 494 that deferred to the Supreme Court and also put new regulatory hurdles before the proposal. Gov. Mike Pence also signaled opposition to the project, backed by hedge fund Leucadia National Corp.
Justices ducked the change in the law that passed as the case was being argued on appeal.
“We decline the request of (Indiana Gasification) to address the validity and impact of Senate Enrolled Act 494 as part of this appellate proceeding,” Dickson wrote in a footnote.
Indiana Court of Appeals
Civil Tort – Partnership Agreement/Interference
Carol Sparks Drake v. Thomas A. Dickey, Craig Anderson, Charles E. Podell, and Duke Realty Corporation
There are genuine issues of material fact as to whether Duke Realty, involved in a dispute over a land agreement with a Parr Richey Obremskey & Morton partner, intentionally induced the firm to terminate Carol Sparks Drake’s partnership agreement and whether that interference was justified, the Indiana Court of Appeals ruled.
Drake owned land in Boone County next to the Anson Project development Duke Realty was constructing in 2003. She declined to sell her land, and the two later entered into a land-use agreement that limited how Duke Realty could develop the property near Drake’s land. During this time, Parr Richey suspended its representation of Duke Realty on the project until the land-use agreement was executed in 2004.
But a dispute over the agreement caused Duke Realty to inform the partners at Parr Richey that it was in the firm’s best interest to resolve the issue between Drake and the company. If Drake filed anything against Duke Realty regarding the land-use agreement, then whatever relationship Duke Realty had with the firm would be ended, Duke Realty told Parr Richey.
Shortly thereafter, the other partners agreed to remove Drake as a partner at the end of 2006. She sued Duke Realty for tortious interference with her partnership. The trial court granted the company’s motion for summary judgment.
At issue are the tortious interference elements of the defendant’s intentional inducement of breach of the contract and the absence of justification. The Court of Appeals found genuine issues of material fact regarding both these elements.
“The question remains whether, when Duke Realty demanded of Parr Richey that Drake cease and desist from enforcing her rights under the Land Use Agreement, Duke Realty intentionally induced Parr Richey to remove Drake as a partner without legal justification,” Judge Edward Najam wrote.
The judges also found it is not necessary for Duke Realty to have specifically intended only that Drake be terminated as a partner for the company to have tortiously interfered with the partnership agreement.
Duke Realty pointed to Indiana Professional Conduct Rule 1.7(a)(2) to say that even if it did interfere with the partnership agreement, it had a legitimate business reason to do so.
“But our Rules of Professional Conduct do not justify a client’s tortious behavior toward an attorney. While Duke Realty has an unfettered right to terminate its attorney-client relationship with Parr Richey, Duke Realty could have exercised that right without issuing a threat or ultimatum regarding Drake,” Najam wrote.
“Again, Duke Realty’s argument ignores the fact that it did not simply terminate its attorney-client relationship but, rather, used its status as a Parr Richey client as leverage in its dispute with Drake.”
A jury should decide Duke Realty’s intent and whether its threat to withdraw all of its business from Parr Richey was merely an expression of a client’s legitimate concern about a conflict of interest.
Civil Tort – Inmate/Medical Care
John Kader v. State of Indiana, Department of Correction, and The Geo Group, Inc.
The Indiana Court of Appeals ordered more proceedings on a negligence lawsuit filed by an Indiana Department of Correction inmate after he fell and injured himself. In the decision, the judges also decided that prison operators are subject to liability in much the same manner as other private actors.
Inmate John Kader has difficulty lifting his right foot off the ground while walking. In September 2007, he fell while walking through the New Castle Correctional Facility and hit his head. He claimed his foot caught on an uneven floor grate. He was transferred to the hospital for treatment. The hospital recommended follow-up treatment for his head injury, which neither the Department of Correction nor The GEO Group, a private corporation which operated the prison, took action on.
Kader sued the state, DOC and GEO alleging negligent supervision, negligent installation of the floor grate and negligence in providing medical care after returning from the hospital. The trial court granted summary judgment in favor of GEO.
The Court of Appeals affirmed summary judgment for GEO on Kader’s duty of care regarding his medical treatment after leaving the hospital, finding the state and DOC have the ultimate authority over his medical treatment.
But the judges reversed summary judgment on several other matters. They found the trial court abused its discretion in striking the entirety of LaDarryl Holland’s affidavit, which Kader designated as evidentiary material in response for the motion for summary judgment filed by the defendants. Holland was the inmate clerk in charge of cleaning the hallway where the floor grate in question was located and saw Kader fall.
The trial court also found Kader’s walking without a cane or wheelchair amounted to contributory negligence, but the COA held prison operator GEO, as a private business, is not entitled to relief from liability under a contributory negligence defense. Prison operators do not merely stand in the shoes of a government body for purposes of liability at tort.
The appellate judges found the trial court’s assessment of the credibility of testimony and factual determination that Kader’s conduct was contributorily negligent because he did not use a cane or wheelchair were both in error. His claims against GEP should be treated within the scope of comparative, not contributory, negligence, Judge L. Mark Bailey wrote.
Domestic Relation – Child Visitation
Charity Lindquist v. Cory Lindquist
The longtime boyfriend of a mother of triplets should be allowed to continue his relationship with her children as long as it does not undermine or damage the relationship with their father, the Indiana Court of Appeals ruled. As such, the judges reversed the order preventing the boyfriend from spending time with the children alone.
Charity and Cory Lindquist divorced when their triplets were around 3 years old. Charity Lindquist began a relationship with Robert Criswell and she and the children lived with Criswell for nearly seven years before moving out when the children were 9. Charity Lindquist and Criswell continue to date.
After she moved out, Charity Lindquist continued to allow Criswell to spend time with the children and take them on family vacations without her.
At a court hearing regarding parenting time, Cory Lindquist said he wanted to spend as much time with his children as he can, but his ex-wife refused him chances to do so. He also believed the relationship between the triplets and Criswell is undermining his relationship with the children.
The trial court found Charity Lindquist in contempt for refusing parenting time with her ex during Christmas 2012 and then ordered that Criswell is not allowed to spend any time one-on-one with the children unless Charity Lindquist is present because Criswell’s relationship has interfered with the children’s relationship with their father.
Charity Lindquist appealed and the appellate court reversed the portion of the order preventing Criswell from spending alone time with the children, citing Section I(C)(3) of the Parenting Time Guidelines. Criswell has developed a meaningful relationship with the children, so he should be able to continue to see them as long as it is in the children’s best interests. There are no allegations of abuse or neglect. But, this relationship should not undermine or damage the triplet’s relationship with their father, Judge John Baker pointed out.
Cory Lindquist should first be given the opportunity to exercise additional parenting time before Criswell is allowed to spend unsupervised time with the children.
The judges affirmed the portion of the order finding Charity Lindquist in contempt for denying parenting time last Christmas. They remanded with instructions that the trial court craft an order permitting the children to maintain their relationship with Criswell and to spend unsupervised time with him because it is within the children’s best interest to do so, and so long as that relationship does not interfere with or impede Cory Lindquist’s opportunity to exercise his parenting time in accordance with the guidelines.
Civil Plenary – Homeowners Association/Restrictive Covenant
Avon Trails Homeowners Association, Inc. v. Kellie Homeier
A trial court erred in denying a homeowners association’s request for an injunction against a resident who parked a trailer on her lot. The court then twice rejected joint settlement requests, according to a panel of the Indiana Court of Appeals.
The COA sent the case back to Hendricks Circuit Judge Jeffrey V. Boles with instructions to enter the settlement agreement the parties reached after Avon Trails appealed Boles’ denial of a preliminary injunction the association sought to enforce a restrictive covenant that applied to members of Avon Trails.
Judge Elaine Brown noted “the peculiar procedural posture of this case” in which the court denied the injunction request, which the court said was clearly erroneous, then “on multiple occasions refused the parties’ overtures” to settle. Kellie Homeier agreed to abide by terms of the covenant and Avon Trails would drop the case and any claim for court costs or legal fees.
“Instead of accepting the proposed settlement expressed in the Joint Motion to vacate its order, enter a permanent injunction, and end any proceedings at the appellate court level, the court in its CCS entries on May 3 and July 1, 2013, opted to leave in place its interpretation of the Covenant as expressed in its Order,” Brown wrote for the panel that also included Chief Judge Margret Robb and Judge Michael Barnes.
“It was error for the court to refuse to accept the parties’ Joint Motion,” Brown wrote. “We remand with instructions to the court to vacate its original order and enter an order substituting the applicable language of the Joint Motion.”
Civil Plenary – Insurance Coverage
Indiana Restorative Dentistry, P.C. v. The Laven Insurance Agency, Inc., and Proassurance Indemnity Company, Inc. f/k/a The Medical Assurance Company, Inc.
An insurer that for decades wrote policies for a dental office had a special duty to advise the office about coverage and ensure the office was fully covered, the Indiana Court of Appeals ruled in reversing summary judgment in favor of the insurer.
The litigation arose after the Carmel offices of Dr. Stephen Lehman were destroyed by fire in 2009. The insurer paid the policy limit, but damages were in excess of the limit by more than $500,000. Even though the insurer notified the office of its policy limits, the court ruled that based on past practice, the insurer was obliged to make sure those limits were sufficient for full coverage.
The longstanding nature of the business relationship between the insurer and the office should have made it clear to the insurer that full coverage was expected, the court ruled.
Marion Superior Judge Patrick McCarty granted summary judgment to Laven Insurance and Proassurance Indemnity, but the panel reversed and remanded for partial summary judgment for Indiana Restorative Dentistry.
“(W)e hold that (1) Laven was under a special duty to advise IRD about its insurance coverage based on their long-term relationship; (2) Laven had a duty to procure full coverage insurance based on its past dealings with IRD; and (3) there is a genuine issue of material fact as to whether Laven is ProAssurance’s agent and therefore ProAssurance can be held vicariously liable for Laven’s actions,” Judge Patricia Riley wrote for the panel that included Chief Judge Margret Robb and Judge James Kirsch.
“Consequently, we reverse the trial court’s summary judgment in favor of ProAssurance and grant summary judgment to IRD with respect to Laven’s duty to advise and duty to procure. Additionally, we reverse the trial court’s summary judgment with respect of ProAssurance’s vicarious liability and remand to the trial court for further proceedings.”
Civil Tort – Trustee/Negligence Lawsuit
Ralph Stockton v. Falls Auctioneers and Realtors and Peggy Buck as Trustee of the Peggy Buck Trust
A trial court’s decision to grant summary judgment to a homeowner after a man slipped and fell on her property was overturned when the Indiana Court of Appeals found sufficient dispute over material facts.
The Court of Appeals reversed the order for summary judgment and remanded for further proceedings.
Peggy Buck had hired Falls Auctioneers to conduct an auction of her personal property. While Ralph Stockton was at the event inspecting a lawnmower, his feet became entangled in some chains causing him to fall and break his hip. Stockton claimed he could not see the chains lying on the ground because of the lawn had not been mowed.
The Delaware Circuit Court granted summary judgment to Buck.
However, the Court of Appeals found there are questions of fact as to whether Stockton’s fall was caused, in part, by the length of the grass and whether Buck controlled the condition of the property.
Buck maintained she was not in control of the property at the time of Stockton’s fall. She had hired Falls Auctioneers to do the auction, so Falls was in control of the property and therefore had the duty to Stockton in premises liability.
Stockton countered there is no evidence that Buck relinquished control over the condition and maintenance of the premises, including mowing the grass.
The COA found the contract contains no language that Buck surrendered control of her property or that Falls agreed to be responsible for the condition of the premises. Also, there is no evidence which suggested Buck was unable to have the grass mowed prior to auction.
Moreover, the Court of Appeals pointed out, the question has not been answered as to whether Stockton’s fall was caused, at least in part, by the length of the grass.
Judge Elaine Brown concluded, “There is sufficient factual dispute regarding control of the condition of the premises and in particular the length of the grass that a trier of fact should decide the question.”
Civil Tort – State Involvement/Private Litigation
Mark S. Weinberger, M.D. v. Estate of Phyllis R. Barnes, Deceased, By Peggy Hood as Personal Representative, Joe Clinkenbeard, P.A., et al.
Finding the law does not allow the state to become a party to otherwise private litigation at any stage of the proceedings, the Indiana Court of Appeals reversed its prior order granting the state’s motion to intervene in a settlement reached between former doctor Mark Weinberger and the estate of a patient.
Phyllis Barnes filed a medical malpractice complaint against the nose, throat and ear doctor after discovering he performed an unnecessary surgery on her sinuses. After getting a second opinion, she learned she had advanced cancer, which could have been discovered at the time she saw Weinberger. After her death, her estate took over her claim.
A jury awarded $3 million in compensatory damages and $10 million in punitive damages, which was later reduced to $1.25 million in compensatory damages and $9 million in punitive damages. The parties then entered into a settlement agreement in which Weinberger agreed to pay $1.72 million and waived the estate’s interest in the punitive damages award.
The state sought to intervene because it would be entitled to 75 percent – $6.75 million – of the punitive damages award under state law.
The Court of Appeals concluded that I.C. 34-51-3-6 does not give the state power to intervene in otherwise private litigation, ostensibly to protect its interest in a punitive damage award. Because the only proper parties to the appeal have amicably resolved their dispute, the COA dismissed as there is nothing left for the judges to decide. Upon petition by the parties, the trial court shall vacate the damages judgment against Weinberger.
Civil Collection – Industrial Site/Contamination
Dana Companies, LLC v. Chaffee Rentals, a/k/a, Chaffee Rentals and Storage, BRC Rubber Group, Inc., Charles V. Chaffee, Karen J. Chaffee and Clifford Chaffee
Court-ordered environmental damages caused by PCB contamination at a Churubusco industrial site were reduced from a total of $154,632 to $7,383 by a panel of the Indiana Court of Appeals.
Chaffee and BRC appealed a ruling in Whitley Circuit Court that BRC owed the six-figure sum to Dana Companies, which had caused the PCB pollution during Dana’s ownership of the site it operated from the 1960s to the mid-1980s as a car-parts manufacturing site. Dana also appealed.
Dana sold the property to Chaffee Rentals in the 1980s, which rented it to BRC, a maker of rubber parts for cars. As the site came under the purview of the Indiana Department of Environmental Management for the cleanup of PCBs left from Dana’s operation of the site, the parties in the 1990s executed a settlement agreement. Judge Rudy R. Pyle III wrote that the agreement continues to govern.
Pyle wrote that the trial court correctly ruled that the doctrine of fortuity didn’t apply and that BCR didn’t breach its contract, rejecting Dana’s appellate arguments. The court found that BRC was responsible only for non-PCB contamination found in an area of the site that it solely operated.
“Of all the areas investigated and remediated ... the trash burning area ... was the only area of the plant used solely by BRC; Dana never used this area during the time it operated the plant. Confining recovery of damages to the settlement agreement, and effecting the intent of the parties as stated therein, BRC should hold Dana harmless for these costs,” Pyle wrote for the panel.
“We find that the trial court erred by not confining its allocation of costs to the four corners of the settlement agreement. Accordingly, we affirm the trial court’s award of damages to Dana, but reverse the amount awarded. Dana is entitled to damages of $3,608.87 in investigative costs and administrative costs of $1,818.01, for a total damage award of $5,426.88,” Pyle wrote.
Prejudgment interest in the sum of $1,956.32 also was ordered, bringing the total to $7,383.20.
Domestic Relation – Divorce/Change of Gender
In Re the Marriage of Melanie Davis and Angela Summers
Indiana law does not automatically void a marriage if one of the parties later is legally recognized as the same gender as the spouse, the Indiana Court of Appeals ruled.
Melanie Davis filed a petition to dissolve her marriage with Angela Summers in 2012. The two were married in 1999 when Davis was living as David Paul Summers, and they have one child. In 2005, Davis petitioned the Marion Circuit Court to change her name and birth certificate to recognize that she is female. Davis has “gender dysphoria,” which is a disorder of people whose gender at birth is contrary to the one they identify with.
Davis’ birth certificate was changed in October 2008.
The trial court originally approved of the provisional order for dissolution, but then sua sponte issued an order that the marriage became void when Davis’ birth certificate was changed to female based on I.C. 31-11-1-1. That statute prohibits same-sex marriage. The trial court dismissed the petition for dissolution.
“Simply said, there is nothing in the Indiana Code chapter dealing with void marriages that declares that a marriage that was valid when it was entered into becomes void when one of the parties to that marriage has since changed his or her gender,” Judge Paul Mathias wrote.
“To conclude that the parties’ marriage somehow became void when the gender was changed on Davis’s birth certificate would permit Davis to effectively abandon her own child, even though the parties were validly married at the time of the child’s birth and even though Davis is the child’s father. It would also leave the parties’ child without the protection afforded by Indiana’s dissolution statutes with regard to parenting time and child support. We do not think that our General Assembly intended such a result.”
Mathias pointed out in a footnote that the trial court ruling could terminate her parental rights, something Davis does not want.
Criminal – Drug Search/Fourth Amendment
Duane Jadrich v. State of Indiana
A sheriff’s deputy who tried to serve a protective order was not justified in entering the backyard of a home after no one answered knocking at the front door, the Indiana Court of Appeals ruled. The deputy saw marijuana in the backyard, leading to the homeowner’s arrest.
Hendricks County Sheriff’s Deputy Robert Butterfield attempted to serve the protective order at the home of Duane Jadrich in Brownsburg. There were several signs on the property saying to use the front door, including on a closed gate on a fence. Butterfield went through the gate to the backyard and knocked on that door after no one answered. He saw what he thought was marijuana growing in the backyard.
Eventually homeowner Jadrich and his wife responded to knocking on a window and allowed the deputies inside, where they found marijuana in a smoking pipe. Jadrich was arrested and charged with drug offenses. He filed a motion to suppress, which was denied, and he was convicted of two misdemeanor charges.
Jadrich argued that Butterfield conducted an unconstitutional warrantless search of his property. The Court of Appeals agreed and reversed his convictions.
The appellate court noted that the route to Jadrich’s back door is not one that visitors would reasonably view as open to the public. The judges looked to other jurisdictions to determine whether a police entry into curtilage or approach to a secondary entrance was justified.
“In summary, seemingly unanimous authority requires some justification before a police officer may permissibly venture into spaces not normally used by the public, such as approaching a secondary entrance to a house located in the curtilage,” Judge Cale Bradford wrote.
“The State has failed to convince us that Deputy Butterfield’s purpose for being at Jadrich’s home — to serve a civil protective order — justified his foray into the back yard,” he continued. “The State points to no authority suggesting that the service of protective orders is a purpose that excuses police entry into areas that are otherwise constitutionally protected and off-limits.”•