7th Circuit Court of Appeals
Criminal – Fair Sentencing Act
United States of America v. Tony Currie
The 7th Circuit Court of Appeals ordered a limited remand in a drug case after finding the lower court should have sentenced the defendant based on the Fair Sentencing Act of 2010, which took effect after his crimes were committed but before he was sentenced.
Tony Currie appealed his 121-month sentence following a guilty plea to conspiring to distribute 50 grams or more of cocaine base and possession of a firearm following a felony conviction. The sentence was just above what the court and parties believed to be the statutory 10-year minimum prison term.
Currie was charged in June 2010 following several controlled buys with a confidential informant. He was sentenced by Judge Sarah Evans Barker after the FSA took effect, but the parties involved assumed that the FSA did not apply since the crimes were committed prior to the enactment of the Act. But several months after Currie was sentenced, the Supreme Court of the United States held in Dorsey v. United States, 132 S. Ct. 2321 (2012), that the FSA applies to any defendant sentenced after its effective date, even if the offense was committed before the Act’s enactment.
“The district judge’s remarks at sentencing give us no indication that she ever considered the possibility that a lower statutory minimum might apply to Currie (recall that Currie did not challenge the applicability of the ten-year minimum term below), nor do they include an unambiguous statement to the effect that the judge would have considered the 121-month sentence it imposed reasonable even if the five-year minimum specified by the Fair Sentencing Act applied, as we now know (in hindsight) that it does,” Judge Ilana Diamond Rovner wrote.
“We therefore order a limited remand so that the district judge may consider, and state on the record, whether she would have imposed the same sentence on Currie knowing that he was subject to a five-year rather than a ten-year statutory minimum term of imprisonment. We shall retain jurisdiction over this appeal pending the district court’s answer to our inquiry.”
Criminal – Affirmative Misadvice/Deportation
Julio Cesar Chavarria v. United States of America
A legal permanent resident who argued pro se that ineffective assistance of legal counsel led to his deportation after he pleaded guilty to cocaine distribution failed to persuade the 7th Circuit Court of Appeals to reinstate his claim that was dismissed by a federal court.
Julio Cesar Chavarria argued that his criminal trial counsel told him not to worry about deportation when he pleaded guilty and told him authorities weren’t interested in deporting him.
Chavarria initially argued that Padilla v. Kentucky, 559 U.S. 356 (2010), could be applied retroactively, but the Supreme Court of the United States foreclosed such a possibility in affirming the 7th Circuit’s holding in Chaidez v. United States, 655 F.3d 684 (7th Cir. 2011).
Chavarria then appealed on the argument that affirmative misadvice allows an alternative constitutional claim under pre-Padilla law. Judge Joseph Van Bokkelen of the District Court for the Northern District of Indiana in Hammond dismissed Chavarria’s 28 U.S.C. § 2255 claim and the 7th Circuit affirmed.
“The district court correctly concluded that it was bound by Chaidez and that Padilla had no retroactive effect on Chavarria’s case,” Circuit Judge James Cudahy wrote for the panel. “(T)he distinction between affirmative misadvice and failure to advise does not somehow evade the non-retroactivity of Padilla.”
Civil – FMLA/ADA
Kimberly Spurling v. C&M Fine Pack, Inc.
An Indiana company violated the Americans with Disabilities Act when it fired an employee for falling asleep on the job after it learned the worker had a medical condition covered by the federal protection.
The 7th Circuit Court of Appeals reversed, in part, the summary judgment granted on the ADA claim in favor of the company, C&M Fine Pack Inc., by the U.S. District Court of the Northern District of Indiana, Fort Wayne Division.
The 7th Circuit found, despite the company’s claim to the contrary, C&M fired Kimberly Spurling after it had been notified that she had a medical disability that was interfering with her ability to do her work.
Following several warnings and suspensions for sleeping at work, Spurling was given a final warning/suspension on April 15, 2010. Six days later, she gave the company the paperwork her physician had just filled out, indicating she had a disability covered under the ADA and that more medical testing was needed.
On April 28, C&M fired Spurling. About a month later she received a definitive diagnosis for narcolepsy that, in her case, was manageable with medication.
The District Court ruled that C&M terminated Spurling on April 15, before it knew of her disability.
The 7th Circuit reversed because, although C&M traded emails about firing Spurling on April 15, the company did not clearly communicate its intentions to her and it did not inform her of the decision to terminate prior to April 28.
Moreover, C&M received the doctor’s note on April 21 but did not talk to Spurling to find out whether a reasonable accommodation could be made for her disability. C&M did not contact her doctor to determine the severity of Spurling’s claim or how to adapt her work to her condition.
Civil – Auction/Collusion
In the matter of: New Energy Corporation; Appeal of: Natural Chem Holdings LLC
The 7th Circuit Court of Appeals affirmed the confirmation of a sale of an ethanol plant in South Bend to a joint venture, rejecting a nonbidder’s claim that the establishment of the joint venture amounted to collusion that spoiled the auction.
Natural Chem Holdings opposed confirmation of the sale of New Energy Corp.’s ethanol plant, which it sold after entering bankruptcy. Maynards Industries Inc. and Biditup Auctions Worldwide Inc. entered a joint venture and won with a $2.5 million bid.
The bankruptcy judge denied Natural Chem’s motion to reconsider because the company hadn’t participated in the auction and thus could not have been harmed. The sale closed and later was confirmed by a District judge.
Judge Frank Easterbrook pointed out that Natural Chem didn’t post the bond to participate, so it wouldn’t prevail no matter what the other bidders did. It couldn’t have been injured as a creditor that stood to receive a reduced payout because Natural Chem is not among New Energy’s creditors.
“… bankruptcy courts are entitled to require cash bids, rather than complex and hard-to-value bids including leases and options. Cash bids are comparable; the sort of bid Natural Chem wanted to make could not easily have been compared against others. Natural Chem chose not to play by the auction’s rules. That was its right — but, because it did not bid, it also was not harmed by the outcome.”
“Natural Chem lacks standing for two independent reasons: it did not bid at the auction, and had it done so it would have been helped rather than harmed if the conduct of which it complains were indeed collusive,” Easterbrook wrote.
Criminal – Sentence/Possession of Firearm
United States of America v. Lovoyne Drain
The District Court did not abuse its discretion in sentencing a man who pleaded guilty to one count of possession of a firearm by a felon to a sentence above guidelines, the 7th Circuit Court of Appeals ruled.
Lovoyne Drain argued that Judge Sarah Evans Barker ran afoul of U.S.S.G. Section 4A1.3(a)(3) and the Due Process Clause by considering his record of unadjudicated arrests, many of which involved drugs or violence. His presentence report calculated a guidelines imprisonment range of 33 to 41 months; Barker imposed a 57-month sentence.
“Although the presentence investigation report did not describe the underlying facts of the unadjudicated arrests, the district court could reasonably rely on Drain’s long arrest record in combination with his adjudicated criminal history as a part of its holistic evaluation of the § 3553(a) factors,” Judge Diane Sykes wrote. “The relevance and reliability of the arrest record was bolstered by Drain’s own acknowledgement at sentencing that he had a long and unbroken history of criminal conduct.”
“In his colloquy with the judge, Drain admitted that drug dealing had been his sole livelihood as an adult, that drug use had been an ‘every day pursuit,’ and that he acquired his guns to protect his drug business. These admissions supplied an adequate factual predicate for the court to consider the string of arrests, among all the other sentencing factors, to arrive at a reasonable sentence,” she continued. “Collectively, this information allowed the court to draw a reliable negative inference about his risk of recidivism.”
Indiana Supreme Court
Civil Plenary – Annexation/Remonstrance
American Cold Storage, et al. v. The City of Boonville
Multiple parcels of land acquired by the state for an adjoining public roadway should be counted as one parcel for purposes of remonstration, the Indiana Supreme Court ruled.
The justices had to decide whether the statutory prerequisite 65 percent of remonstrating landowners is to be determined by separately counting the multiple parcels acquired by the state to make up State Road 62 or collectively as one parcel.
Landowners filed an action to remonstrate against an attempt by the city of Boonville to annex 1,165 acres of real estate located west of the city’s geographical limits. The city sought to dismiss, claiming the landowners didn’t satisfy the statutory requirements of I.C. 36-4-3-11(a). The case wound its way to the Indiana Court of Appeals – where the judges ruled that separate parcels were not to be counted except as constituting the public highway – and back to the trial court. In 2011, the trial court dismissed the landowners’ action for lack of subject-matter jurisdiction.
The landowners then appealed, asserting that the trial court, in calculating whether the 65 percent remonstrance threshold was satisfied, erroneously separately counted those parcels that had been acquired by the state and that now comprise State Road 62, thereby precluding the remonstrators from satisfying the threshold. The Court of Appeals reversed and held that the multiple parcels acquired by the state to build State Road 62 should be counted as a single parcel under the Remonstrance Statute.
The justices found this case to be distinguishable from the cases involving private owners of multiple parcels in Arnold v. City of Terre Haute, 725 N.E2d. 869 (Ind. 2000), and City of Fort Wayne v. Certain Northeast Annexation Area Landowners, 564 N.E.2d 297. (Ind. Ct. App. 1990).
“We hold that the land in this case, which comprises the portion of State Road 62 included in the annexed territory, should be considered and counted as a single parcel in determining whether the remonstrating Landowners comprise 65 percent of the owners of the annexed territory. We therefore reverse the decision of the trial court and remand for further proceedings consistent with this opinion,” Chief Justice Brent Dickson wrote.
Indiana Court of Appeals
Small Claim – Personal Jurisdiction
Wolf’s Marine, Inc. v. Dev Brar
The Indiana Court of Appeals found a plaintiff’s claims that personal jurisdiction existed in Indiana over a Michigan company involved in a lawsuit about his damaged boat didn’t hold water.
Hamilton County resident Dr. Dev Brar filed a small claims lawsuit in Hamilton County seeking $6,000 for damages to the bow of his boat. The boat, which docked in Chicago from May to October, was stored at Wolf’s Marine in Michigan for the winter. When Brar’s personal agent, Thomas Leonard – who found the facility to store the boat – retrieved the boat from Wolf’s in May 2012, he said the bow was damaged.
Wolf’s sought to have the case dismissed and filed in Berrien County, Mich. The trial court found it had personal jurisdiction over Wolf’s and denied Wolf’s motion to dismiss.
On interlocutory appeal, the Court of Appeals reversed, rejecting Brar’s argument that merely entering into a contract with an Indiana resident subjects an out-of-state defendant to suit in Indiana.
The judges found this case to be similar to ones in which a hotel or other attraction advertises its services to residents in other states, a person decides to visit that hotel or attraction, he or she sustains injury at the hotel or attraction, and then attempts to sue the hotel or attraction in his or her home state.
“Additionally, the mere fact that a plaintiff executes a contract in his or her home state and sends the contract back to an out-of-state defendant does not confer personal jurisdiction over the defendant,” Judge Michael Barnes wrote.
“Wolf’s deliberate contacts with Indiana were limited to general advertising, emailing a form contract to Leonard at Leonard’s request, and invoicing and receiving payment from Leonard. We hold this was not sufficient ‘purposeful availment’ of the privilege of conducting business in Indiana by Wolf’s so as to permit Indiana to exercise specific personal jurisdiction over it with respect to Dr. Brar’s cause of action.”
Civil Plenary – Personal Jurisdiction
Joel Bowden, Ruby Bowden, Golden Companies, Inc., and Golden Purchasing and Staffing, Inc. v. E.J. Agnew and Golden-AGI, LLC
A trial court erred in awarding treble damages to an Indiana man who entered into a business venture with a North Carolina couple that ended up costing him more than $1 million in money owed to him, the Indiana Court of Appeals concluded.
E.J. Agnew and Golden-AGI LLC sued Joel and Ruby Bowden and their companies, Golden Companies Inc. and Golden Purchasing and Staffing, after learning that he was owed profits from the Bowdens from a joint business venture they entered into to develop business with U.S. auto and truck producers and arrange for the production and delivery of parts from overseas manufacturers.
They entered into the 50/50 ownership deal in 2004 that created Golden AGI LLC. They were to split profits from a deal with a manufacturer in India, but Agnew later learned the Bowdens, who lived in North Carolina, used money from the India deal to pay off debts in a separate deal supplying parts to Cummins. He also learned that Golden AGI income and expenses were comingled with that of other Golden entities and that the Bowdens never intended to operate GAGI as a functional business entity.
Agnew sued for money damages in 2009; the Bowdens sought dismissal for lack of personal jurisdiction, which was denied. At the bench trial, Agnew’s expert David DeWitt, a licensed CPA, testified regarding the profits derived from the India deal. He said Agnew’s share was at least $1,754,278, which is the amount the trial court awarded to Agnew. The trial court also awarded treble damages based on the conclusion the Bowdens committed conversion. The Bowdens appealed.
“The Bowdens’ wrongful failure to distribute net revenue in accordance with the 50/50 agreement constitutes a failure to pay a debt, not criminal conversion. The money withheld from Agnew was not a separate, specifically identifiable chattel,” Judge Ezra Friedlander wrote. As such, the trial court erred in awarding treble damages under I.C. 34-24-3-1. The judges ordered the judgment reduced to the original $1.75 million awarded to Agnew.
The Court of Appeals found the trial court’s reliance on DeWitt’s expert testimony regarding damages was not erroneous and that the Indiana courts have personal jurisdiction over the North Carolina couple in their individual capacities.
Civil Tort – Construction Damage/Underground Utility
The City of Fort Wayne v. Northern Indiana Public Service Company and NiSource, Inc.
Because the city of Fort Wayne did not provide accurate locations of its drains to a utility company involved in constructing an underground monolith, its negligence suit against the utility company can’t survive summary judgment. An underground drain was damaged during the process, causing flooding in the area.
Northern Indiana Public Service Co. hired a contractor to perform remediation work on land it owns in Fort Wayne. It asked the city for the locations of underground facilities operated by the city. Fort Wayne provided the information, but some of it was incorrect, which led to a drain being crushed and clogged by concrete-like material placed in the ground as a part of the remediation project. The site near the project flooded in the spring and summer of 2009.
Fort Wayne sued alleging negligence. The trial court granted NIPSCO’s motion for summary judgment in May 2013.
The appellate judges relied on the Indiana Damage to Underground Facilities Act to affirm.
“Essentially, the City is arguing that it complied with DUFA’s requirements by providing NIPSCO with the best information in its possession, however inaccurate it may have been. DUFA, however contains no provision for good faith compliance,” Judge Cale Bradford wrote.
“Because the city failed to comply with the requirements of I.C. 8-1-26-18(a), NIPSCO was given a full defense to the city’s action against it pursuant to section 22(c). The trial court correctly entered summary judgment in favor of NIPSCO.”
The judges also held that any common-law action the city might have had at one time against NIPSCO has been abrogated by the enactment of DUFA.
Miscellaneous – Zoning Jurisdiction
Floyd County and Floyd County Plan Commission v. City of New Albany and New Albany City Plan Commission
In a dispute between the city of New Albany and Floyd County concerning which entity has zoning jurisdiction over an unincorporated area outside city limits, the Indiana Court of Appeals affirmed summary judgment for the city.
The county and city sought declaratory judgment on the issue. The Court of Appeals had to decide whether I.C. 36-7-4-205(e) or (f) applied. The city contends that subsection (f) applies in this situation because Floyd County has fewer than 95,000 residents as shown by the 2010 census and the city has elected to exercise jurisdiction in the fringe area and has given notice to the county. The county contends that subsection (e) applies because the county has now adopted a comprehensive plan and an ordinance to terminate the city’s jurisdiction over the fringe area.
New Albany had been providing sanitary sewer services to the fringe area since the 1970s. It also provided building code and enforcement services in the designated area. The county argued that the city wasn’t providing multiple municipal services as required by statute.
“We can say, though, that the legislature has set a minimum standard for the exercise of extraterritorial jurisdiction by requiring a city to provide ‘municipal services,’ plural. But it has not set a specific standard by requiring the provision of all or of certain municipal services. The County asks this court to set a standard beyond that clearly set in the statute itself, and that is a job reserved to the legislature,” Judge Margret Robb wrote.
“The City has been providing sanitary sewer services in the fringe area for decades. That is clearly the largest and most substantial of the services provided to the fringe area by the City, but the evidence in the record and considered by the trial court shows that the City is also providing building code inspection and enforcement services.
“The County asserts that by adding the requirement that a city provide municipal services, the legislature’s intent was to ensure that a municipality has a stake in the fringe area over which it purports to exercise jurisdiction. The provision of sanitary sewer services in this case accomplishes that intent because it is, as the trial court noted, not insignificant due to the capital investment the City has made in offering those services outside its municipal boundaries. We conclude the City meets the requirements of section 36-7-4-205(f) for exercising jurisdiction over the fringe area.”
Civil Plenary – Insurance/Statute of Limitations
Michael Weist v. Kristen Dawn and State Farm Insurance Companies
The lawsuit filed by man who was hit by a car while crossing the street will continue with respect to the driver of the car, the Indiana Court of Appeals ruled. The judges affirmed summary judgment in favor of the driver’s insurer.
Kristen Dawn struck Michael Weist with her car, injuring him. Her insurance provider was State Farm Insurance Cos. Several days after the Sept. 2, 2010, accident, State Farm claim representative Barb Easley called Weist and admitted Dawn’s liability and that he was entitled to damages in the form of lost wages, pain and suffering, and payment for medical bills.
For the next two years, Weist underwent treatment for his injuries and spoke with Easley on the matter. She contacted his doctors for medical records. In August, 2012, his case was transferred to Ashanda Dunigan. When Weist called Easley in November 2012, he was transferred to Dunigan, who told him she could not assist him because the two-year statute of limitations had run.
Weist sued, and the trial court granted summary judgment in favor of Dawn and State Farm, ruling “There exists no genuine issue of material fact as to whether (Dawn and State Farm) are equitably estopped from asserting the Statute of Limitations as affirmative defenses.”
The Court of Appeals reversed with respect to Dawn, citing a two-part test outlined in Davis v. Shelter Insurance Cos., 957 N.E.2d 995 (Ind. Ct. App. 2012), to determine the availability of equitable estoppel.
“Weist’s allegations, if proven, would fall within the parameters of Davis’s requirement of a promise to settle under the first part of the test, thereby establishing a dispute of material fact,” Senior Judge John Sharpnack wrote.
There are also genuine issues of material fact as to whether State Farm’s conduct on behalf of Dawn induced Weist to delay action.
The judges affirmed summary judgment for State Farm based on the direct action rule, which bars a third party from pursuing a claim based on the actions of an insured directly against an insurer.
Protective Order – Contempt/Due Process Right
In the Matter of the Petition for Temporary Protective Order: A.N. v. K.G.
The Indiana Court of Appeals found a trial judge committed some improper conduct during a hearing on a protective order, with one judge noting the court was “precariously close to crossing the line” when intervening in the proceedings. Despite this, the appellate court affirmed the order of contempt in favor of the petitioner.
K.G. had a protective order in place against A.N., who was not to directly or indirectly contact him or three other people. K.G. filed several petitions for contempt against A.N., alleging she called his home and ex-wife’s phone. The trial court held a hearing on a contempt petition filed Nov. 10, 2011, the subject of this appeal.
K.G. appeared pro se and A.N. was represented by counsel. The judge, Marion Superior Judge Barbara Crawford, found A.N. violated the protective order and ordered her 120-day sentence executed and placed her on home detention. The judge relied on evidence K.G. presented of a photograph he took of his home phone that displayed a telephone number he claimed belonged to A.N.
A.N. appealed, arguing the trial court improperly acted as an advocate for K.G., thereby violating her due process right to a fair trial.
“The record shows that the trial court’s questions were neutral, served to clarify K.G.’s testimony, and did not discredit A.N. or her defense. Although A.N. alleges prejudice since the trial court cited the photograph when explaining its rationale for finding A.N. in contempt, A.N. was not prejudiced because she cross-examined K.G. on the photograph. We therefore conclude that the trial court did not act as an advocate by asking K.G. foundational questions regarding the photograph,” Judge Patricia Riley wrote.
“A.N. asserts that the actions of the trial court, even if individually insufficient to establish improper advocacy, require reversal based on their cumulative effect. The record before us and the nature of the proceedings admittedly contains a number of irregularities and arguably improper conduct by the trial court. However, because the trial court did not err in each of circumstance alleged by A.N., we find no cumulative error and therefore conclude that A.N. was not denied a fair trial. As a result, A.N. has not shown fundamental error,” she continued.
Judge Margret Robb wrote in a concurring opinion that she believed “the trial court was precariously close to crossing the line of acceptable intervention into the course of these proceedings. Had the evidence of A.N.’s impermissible contacts not been so strong, the trial court’s actions may have been enough to compromise the parties’ rights to a fair trial.”•