Indiana Court Decisions – April 30 to May 13, 2014

7th Circuit Court of Appeals

May 9

Civil – Jurisdiction/Intellectual Property

Advanced Tactical Ordnance Systems Inc. v. Real Action Paintball Inc. and K.T. Tran

13-3005

The 7th Circuit Court of Appeals ordered a District judge to dismiss a case filed by a company with California ties against another California company alleging various IP violations. The judges found Indiana does not have personal jurisdiction over the matter based on emails the allegedly offending company sent.

Advanced Tactical, which manufactures and sells PepperBall branded items, filed its lawsuit against Real Action Paintball Inc. in the Northern District of Indiana, alleging violations of the Lanham Act, common law trademark infringement and unfair competition, trade dress infringement and misappropriation of trade secrets. The lawsuit stems from an email Real Action sent out in 2012 and a message on its website that announced it had acquired the machinery, recipes and materials once used by PepperBall Technologies Inc. But Advanced Tactical had acquired PepperBall Technologies after the business went into foreclosure.

Advanced Tactical claims to have a headquarters in Indiana, but that is unclear, according to the court record. After holding an evidentiary hearing, the District judge concluded the court had personal jurisdiction and that Advanced Tactical was entitled to a preliminary injunction.

The District Court found the necessary minimum contacts based on the following: Real Action fulfilled several orders of the allegedly infringing projectiles for purchasers in Indiana; it knew Advanced Tactical was an Indiana company and could foresee that the misleading emails and sales would harm Advanced Tactical in Indiana; it sent at least two misleading email blasts to a list that included Indiana residents; it had an interactive website available to residents of Indiana; and it put customers on their email list when they made a purchase, thereby giving the company some economic advantage.

The 7th Circuit found none of these meets the standards the Supreme Court of the United States has set governing specific jurisdiction.

“Specific jurisdiction must rest on the litigation-specific conduct of the defendant in the proposed forum state. The only sales that would be relevant are those that were related to Real Action’s allegedly unlawful activity. Advanced Technical – which has the burden of proof here – has not provided evidence of such sales,” Chief Judge Diane Wood wrote.

“To hold otherwise would mean that a plaintiff could bring suit in literally any state where the defendant shipped at least one item,” she continued.

The act that Real Action maintains an email list to allow it to shower past customers and subscribers with company-related emails doesn’t show a relation between the company and Indiana, the 7th Circuit ruled. “The connection between the place where an email is opened and a lawsuit is entirely fortuitous.”

The judges also found the interactivity of a website is a poor proxy for adequate in-state contacts. The case was remanded with instructions to vacate the judgment and dismiss the case for lack of personal jurisdiction.

Indiana Supreme Court

May 1

Civil Plenary – Antitrust/Public Work Statute

Alva Electric, Inc., Arc Construction Co., Inc., Danco Construction, Inc., Deig Bros. Lumber & Construction Co., Inc., et al. v. Evansville-Vanderburgh School Corporation and EVSC Foundation, Inc.

82S01-1307-PL-473

The southern Indiana school corporation that facilitated renovations of its warehouse through an agreement with a local public school endowment organization violated Indiana Public Bidding Laws, the Indiana Supreme Court ruled. The justices rejected taxpayers’ claims that the process also constituted a violation of the Antitrust Law.

The Evansville Vanderburgh School Corp. in August 2010 approached the EVSC Foundation regarding renovations of a warehouse into the school corporation’s administrative offices. The school corporation would convey the building to the foundation, which would then contract with Industrial Contractors Inc. for building renovations. The school corporation selected this arrangement because the foundation wasn’t subject to public bidding laws, so renovation could occur more quickly.

The foundation would then sell the building back to the school corporation, accepting installment payments for the “sale” price in the exact amount and on the exact schedule that payments under ICI’s construction contract were due. The foundation would make those payments to ICI.

A group of taxpayers consisting of area contracting businesses who paid taxes in the school district filed this lawsuit, seeking declaratory judgment and injunctive relief alleging violations of the public bidding statutes and the Antitrust Act.

The trial court ruled in favor of the defendants, noting they circumvented the public bidding statutes, but no violation had occurred. The Court of Appeals reversed and ordered the trial court to consider the antitrust issues since it did not do so after finding no public bidding violation.

The Supreme Court affirmed the Court of Appeals decision.  

“We want to make clear that the holding in this case should not be construed to mean that all (or even most) contracts entered into by private entities like Foundation ‘for the ultimate benefit of and in cooperation with a political subdivision like School Corporation’ necessary run afoul of the Public Work Statute,” Justice Robert Rucker wrote.

It appears the foundation was acting on behalf of the school corporation, although the justices declined to discuss the elements of an agency relationship since the record in the case is not developed as to this matter.

Instead of remanding the antitrust issue to the trial court, the justices agreed with the taxpayers that this issue could be decided on the record.

The taxpayers argued their injuries consist of a supposedly higher price for the building renovation than would have resulted if the project had been publicly bid and the loss of a contract which would have ultimately been awarded to one of them. But they designated no evidence to support a conclusion that these injuries in fact occurred, Rucker wrote.

“We agree with Taxpayers it is hornbook antitrust law that under ‘agreement eliminating competitive bidding … a seller will be able to charge a higher price than under conditions of perfect competition,’” Rucker continued. “But Taxpayers provided no evidence that is what happened here. And without evidence of injury, Taxpayers are not entitled to relief.”

The justices remanded with instructions for entry of summary judgment in favor of the taxpayers on the public bidding violation issue as well as a declaration that the transactions effected by the school corporation violated Indiana’s Public Work Statute.

May 7

Civil Plenary – Redistricting Ordinance

Mayor Gregory Ballard v. Maggie Lewis, John Barth, and Vernon Brown

49S00-1311-PL-716

The Indiana Supreme Court ruled in favor of Indianapolis Mayor Greg Ballard in a dispute between the mayor and Democratic members of the city-county council who challenged a redistricting plan passed in late 2011.

In the fall of 2011, the Marion County City-County Council, which had a Republican majority, voted to approve a proposal creating Ordinance 61. That ordinance redrew the 25 districts for elections to the council beginning in 2015. Ballard signed the ordinance Jan. 1, 2012.

The ordinance was approved before a Democratic majority would take hold in the City-County Council beginning Jan. 1, 2012. Democratic Councilor Maggie Lewis filed a lawsuit against the Marion County Election Board, arguing that the ordinance failed to comply with I.C. 36-3-4-3, the county’s Redistricting Statute.

The dispute went before a divided panel of trial court judges, who held that the ordinance was passed too early to satisfy the Redistricting Statue. The judges drew new legislative districts and ordered Lewis and Ballard to equally split the cost of the master who was brought in to issue the final judgment.

The justices, in the per curiam decision, noted that both sides presented reasonable arguments about how the Redistricting Statute should be construed, and in particular, whether Ordinance 61 constitutes mandatory redistricting in 2012. The justices determined that it would be proper, as a matter of judicial restraint, to adopt the interpretation that avoids judicial line-drawing in what “is presumptively a matter for the legislative and executive branches of local government to address.”

“While recognizing Ordinance 61 as mandatory redistricting is just one reasonable construction of the Redistricting Statute, we adopt it because it allows legislatively adopted districts to remain in place and avoids the need for districts drawn by a court,” the opinion states.

The justices also noted that the disputed legal issue in this case is whether the City-County Council acted too early, but there is no allegation that the ordinance was substantively defective.

In addition to ordering summary judgment be entered in favor of Ballard, the justices reversed any order requiring him to pay part of the cost of the master.

Discipline – Attorney Suspension

In the Matter of: Christopher E. Haigh

98S00-0608-DI-317

An attorney who continued to practice law despite being suspended in Indiana has been disbarred by the Indiana Supreme Court for his “on-going, pervasive and deliberate” violations of the suspension order.

The justices handed down the disbarment effective May 7. Christopher Haigh must also pay a $1,000 fine for repeatedly practicing law, even though he knew he was suspended. He was suspended effective Aug. 15, 2008, after becoming sexually intimate with two minors on a team he coached; providing them alcohol; and falsely assuring their parents, their school and others that he had no inappropriate relationship with the teens.

Haigh never sought reinstatement and instead continued to practice and perform legal functions for clients. He was also admitted as an attorney at the United States Patent and Trademark Office and the federal courts, which also suspended him after learning of the state suspension.

The per curiam opinion outlines Haigh’s actions in contempt of the suspension order, including performing significant legal work but holding himself out to be acting as a paralegal.

Haigh refused until the last day of his disciplinary hearings in this matter to acknowledge the wrongful nature of his conduct, the opinion notes.

“Respondent’s violation of the Suspension Order was on-going, pervasive, and deliberate, and it exposed the public to the danger of misconduct by an attorney who has yet to prove his remorse, rehabilitation, and fitness to practice law through the reinstatement process,” the justices wrote. “Under these circumstances, the Court concludes that a fine of $1,000.00 and disbarment is warranted. The Court cautions that any further contempt by Respondent will likely result in imposition of a period of imprisonment.”

May 13

Mental Health – Civil Contempt

In re Mental Health Actions for A.S., Sara Townsend

10S01-1402-MH-113

A Clark Circuit judge lacked statutory authority to find a nurse in indirect civil contempt for completing an application for emergency detention of her co-worker, the Indiana Supreme Court ruled.

Sara Townsend and A.S. worked as nurses in a hospital in Louisville. Townsend completed the emergency detention application, alleging that A.S. was mentally ill and dangerous or gravely disabled, claiming that she threatened suicide. A warrant was issued and A.S. was detained for emergency treatment, but released the next day after doctors at the hospital determined there was no reason to continue keeping her.

Judge Daniel Moore ordered Townsend to appear to show cause why she shouldn’t be held in contempt for making false and inaccurate statements. She tried to have the issue dismissed, but Moore denied it and found her in indirect civil contempt. He ordered her to pay the hospital bill A.S. incurred, fined her $500, ordered her to pay $1,000 in A.S.’s attorney fees, and to write apology letters to A.S. and the treating hospital.

But Townsend’s conduct did not rise to meet indirect contempt pursuant to I.C. 34-47-3-2, the justices held.  

“The factual basis for the trial court’s finding of contempt was that Townsend made false statements in the application for emergency detention, and that those false statements were used as the basis for the warrant issued to detain A.S. But the plain import of the statutory language is that the contemptuous misconduct is in the resisting, hindering, or delaying in execution of an existing process or previously issued court order,” Justice Steven David wrote. “And here, as Townsend argues, there was no such lawful process or court order in place when she acted — rather, her actions initiated the lawful process or court order. It is axiomatic that she could not resist, hinder, or delay the execution of something that did not yet exist. Thus, the trial court acted outside of its statutory authority in finding Townsend in indirect contempt and its judgment to that effect is reversed.”

And without a basis to find the party in contempt, the trial court does not have the inherent power to impose sanctions.

The justices found Townsend’s role not much different than that of one who calls 911 to report a person on the street is acting dangerously.

“A trial court cannot simply otherwise hale a citizen into court and sanction him or her. The inherent power of the judiciary to impose sanctions, while flexible and significant, begins and ends with the courtroom and the judicial process. Thus, because we conclude that the trial court here lacked authority for its contempt finding, and because Townsend otherwise committed no misconduct once the legal proceedings were initiated, she is outside the trial court’s inherent power to impose sanctions,” David wrote.

Criminal – Suppression of Evidence

McLynnerd Bond, Jr. v. State of Indiana

45S03-1309-CR-597

The Indiana Supreme Court had strong words for police officers who intentionally misled a suspect as to his rights to a fair trial and impartial jury because of his race: The tactic is unacceptable.

“Despite nearly two hundred years of effort by civil rights activists, legislatures, law enforcement, courts, and others, the perception remains that racial discrimination still exists within our justice system: from police treatment to jury selection to jury verdicts and sentences. And the perception is especially common within the African-American community,” Justice Steven David wrote. “It defines reality for many African Americans faced with, serving in, or incarcerated by our criminal courts, and unquestionably has roots in our nation’s tortured history of race relations. That there remains such fear or mistrust of the justice system is why all courts must remain vigilant to eradicate any last vestiges of the days in which a person’s skin color defined their access to justice.”

McLynnerd Bond Jr. was in police custody on outstanding warrants when a Gary Police detective questioned him about a cold case murder. For three hours, Bond denied being involved with the murder. During questioning, the detective implied he wouldn’t get a fair trial because of his race. Bond later admitted committing the murder.

Both the trial court and Court of Appeals denied Bond’s motion to suppress his statement. Judge James Kirsch dissented.

“But with respect to the detective’s statement that Bond might not receive a fair trial because of his race and the likely composition of a prospective jury, our sentiment goes beyond the trial court’s ‘great concern’ and the Court of Appeals majority’s disapproval of it as being  ‘inappropriate.’ This is not a police tactic that we simply do not condone’ because it is deceptive,” David wrote. “Instead, this was an intentional misrepresentation of rights ensconced in the very fabric of our nation’s justice system — the rights to a fair trial and an impartial jury, and the right not to be judged by or for the color of your skin — carried out as leverage to convince a suspect in a criminal case that his only recourse was to forego his claim of innocence and confess. And like Judge Kirsch, we condemn it.”

“This country has waged a long and difficult campaign aimed at ensuring equal access to justice for all its citizens — a campaign whose courtroom aspect has been perhaps marked most visibly by the efforts to ban racial discrimination in jury selection after the enactment of the Fourteenth Amendment. Such a police interrogation technique as we see here flies in the face of those efforts by implying that they were all for naught,” he continued.

“The trial court below concluded that, despite its great concern, ‘there is no caselaw that the Court is aware of that holds that this type of persuasion renders the confession involuntary.’ We clearly understand the trial court’s predicament. But now there is.”

Indiana Tax Court

May 7

Tax – Motion to Dismiss

MedCo Health Solutions, Inc. v. Indiana Department of State Revenue

49T10-1105-TA-35

The Indiana Tax Court agreed with the Indiana Department of State Revenue that two claims made by a company appealing its tax liability should be dismissed because legal relief cannot be granted.

MedCo Health Solutions Inc. is appealing the Indiana Department of State Revenue’s final determination that assessed it with an additional Indiana adjusted gross income tax liability for the tax years ending August 19, 2003, December 27, 2003, December 25, 2004, and December 31, 2005. The company is incorporated in Delaware and headquartered in New Jersey. It provides pharmacy benefit management services.

The DSR that MedCo can’t prevail on two claims: that the department was required to source MedCo’s receipts based on two separate advisory letters; and that it is entitled to a refund.

Tax Judge Martha Wentworth granted the department’s petition to dismiss those claims pursuant to Trial Rule 12(B)(6). The letters MedCo cites were requested through MedCo’s representative at Pricewaterhouse Coopers LLP. But when PWC asked for the department’s advice, it did not identify MedCo as the taxpayer but instead referred to it using an assumed name. As such, the department can’t be bound to them, Wentworth held, citing Indiana Administrative Code.

She also agreed MedCo is not entitled to a refund because it never filed any refund claims or amended returns. MedCo’s petition fails to indicate that it filed a claim for the refund as required by Indiana Code. In addition, the department’s final determination cannot constitute a denial of a claim for a refund because it only addresses MedCo’s protest of the proposed assessments, not whether the auditor ever considered that MedCo overpaid any tax.

May 12

Tax – Property Tax/Subject Matter Dismissal

West Ohio II, LLC v. Marion County Assessor, Marion County Treasurer, and Marion County Auditor

49T10-1404-TA-9

Washington Park Cemetery Association, Inc. v. Marion County Assessor, Marion County Treasurer, and Marion County Auditor

49T10-1404-TA-10

Because petitioners seeking to enjoin the collection of tax filed their petitions before an original tax appeal was initiated, the Indiana Tax Court granted Marion County’s motions to dismiss.

Judge Martha Wentworth issued two orders dealing with the same issue: the petitioners, before the Indiana Board of Tax Review had scheduled a hearing or ruled on the matters, filed their petitions asking the Tax Court to enjoin the collection of property taxes.

Washington Park Cemetery Association Inc. challenged the removal of an exemption previously applied to its Community Life Center, effective with the March 1, 2012, assessment. The entire complex had received an exemption from property taxes, including the life center. It was removed because special events, such as weddings, were sometimes held at the location.

West Ohio II LLC filed its petition asking the Tax Court to enjoin the collection of property taxes related to a disputed portion of its $39,314,000 assessment for March 1, 2013. West Ohio believed the property – a multi-tenant building and parking garage in Indianapolis – was substantially overvalued.

The same arguments were raised in both petitions, which involve the same attorneys: that the language “will raise” in I.C. 33-26-6-2(b)(1) allows for injunctive relief before an original tax appeal has been initiated; that the nature of preliminary injunctive relief typically seeks an order from the court before the full presentation of evidence and not after; and that the Tax Court should follow its holding in American Trucking Associations Inc. v. Indiana, 512 N.E.2d 920 (Ind. Tax. Ct. 1987).

But no relief can be granted because neither petitioner has filed an original tax appeal, Wentworth held. As such, the court does not have subject matter jurisdiction to rule on the petitions. In both cases, she granted the motion to dismiss filed by the Marion County assessor, treasurer and auditor.

She noted in a footnote that the principle established in American Trucking regarding the Tax Court’s subject matter jurisdiction was ultimately challenged and disposed of in another case by an original action with the Indiana Supreme Court in 1990.

“Because the Supreme Court issued an alternative writ of prohibition in that case barring the Tax Court from exercising subject matter jurisdiction without stating its rationale or publishing the writ, the parties debated its precedential value in this case. Nonetheless, the Court need not determine the effect of the  Supreme Court’s writ because it now comes to the opposite opinion regarding subject matter jurisdiction than that in American Trucking,” she wrote.

Indiana Court of Appeals

May 2

Civil Tort – Underinsured Motorist Coverage/Limits

Christine Anderson v. Indiana Insurance Company, a member of Liberty Mutual Group

64A03-1309-CT-359

A trial court erred in granting summary judgment to an insurance company that argued a driver injured in a car crash could not collect on an underinsured motorist policy because she received payments from other sources in excess of her policy limits.

The Indiana Court of Appeals reversed Porter Superior Judge Roger V. Bradford’s grant of summary judgment. Christine Anderson was injured when her car was struck by a motorist during the course of her employment.

She received more than $81,000 in workers’ compensation benefits and $25,000 from the other motorist’s insurer, but she had a policy with Indiana Insurance with an underinsured motorist coverage limit of $100,000.

Because she had received more than her coverage limit, Indiana Insurance refused to pay, and Bradford found for the insurer when Anderson sued.

The appeals panel turned to a recent ruling, Justice v. Am. Family Mut. Ins. Co. (filed March 13, 2014), Ind. No. 49S02-1303-PL-221, to determine whether the policy was consistent with state statutes.

“Based upon Justice, we conclude that the trial court erred in finding that Anderson could not recover anything from Indiana Insurance. In other words, if (the underinsured motorist) had carried the required amount of liability insurance, depending on her total damages Anderson may have received $50,000 in addition to the $81,166.15, and the purpose of the  uninsured/underinsured motorist statute is to put her in that position,” Judge Elaine Brown wrote for the court.

“In light of that statutory purpose, we conclude that Anderson may be entitled to recover the remaining $25,000 from Indiana Insurance depending on her total damages. … For the foregoing reasons, we reverse the trial court’s grant of summary judgment to Indiana Insurance and remand for proceedings consistent with this opinion.”

 May 7

Criminal – Enhanced Sentence/OWI

John Jacob Venters v. State of Indiana

79A02-1305-CR-481

The Indiana Court of Appeals reversed a man’s sentence for operating a vehicle while intoxicated, finding the trial court had no authority to order his present sentence, enhanced by the habitual substance offender statute, to be served consecutively to his previously enhanced sentences.

John Jacob Venters appealed his sentence referred to as Cause No. FD-011 in court records, in which he pleaded guilty to Class D felony operating a vehicle while intoxicated. He admitted to being a habitual substance offender. The trial court sentenced him to three years on the charge, enhanced by seven years because of the habitual substance offender statute. Two years of the executed sentence were suspended to probation. The sentence was ordered to be served consecutively to sentences imposed under Cause Nos. FB-024, FC-064, and FB-011. Those cases involve felony drug convictions as well as reckless homicide. He was also found to be a habitual substance offender and habitual offender in those cases.

The Court of Appeals reversed the trial court and remanded for his sentence in the OVWI case to be served concurrently with the other sentences.

Absent express statutory authority to do so, trial courts cannot impose consecutive enhanced sentences, regardless of the circumstances under which they arise, Judge Rudolph Pyle III wrote, citing Starks v. State, 523 N.E.2d 735 (Ind. 1988), and Aslinger v. State, 2 N.E.3d 84 (Ind. Ct. App. 2014).

“The habitual offender and habitual substance offender statutes have been amended several times since Starks. With those amendments, the statutes are still silent on a trial court’s authority to impose consecutive habitual offender sentences. Accordingly, we reverse and remand to the trial court with instructions to run Venters’s enhanced sentence at issue in this case concurrently with any previous sentence enhanced by the habitual offender or habitual substance offender statutes,” he wrote.

May 8

Juvenile – Paternity/Stillborn Child

In re the Paternity of D.M.: J.W. v. C.M.

10A01-1306-JP-253

A trial court erred in ordering a southern Indiana teen to undergo genetic testing to establish paternity of a stillborn child, the Indiana Court of Appeals held. It found the state, which filed the petition for paternity on behalf of the mother, had no authority to bring the action because there were no custody or support issues to be determined.

C.M. and her mother asked the Clark County Prosecutor’s Office for assistance in establishing paternity of D.M. C.M. gave birth at home to D.M., who was stillborn. C.M. indicated that she did not know that she was pregnant and did not have any prenatal care. She said J.W. was the father, which he denies.

C.M. assigned her rights to the state pursuant to an assignment for persons not receiving public assistance and Title IV-D of the Social Security Act. J.W. filed a motion to dismiss, arguing because of the circumstances of D.M.’s birth, there were no prenatal, birth or postnatal expenses to be reimbursed, nor was C.M. receiving services or assistance from the state which could be reimbursed.

The trial court, noting there is a “dearth of guidance by our appellate courts” in cases such as these, denied J.W.’s motion. The judge found J.W. should bear the cost of DNA testing if he chooses to do so.  

The Court of Appeals agreed there is a “dearth of guidance” on the particular point raised by this case, but disagreed with the decision to deny J.W.’s motion. In general, C.M., even though not receiving Title IV-D assistance, is allowed under state law to request the state’s assistance in pursuing a paternity action, and the state is authorized to do so.

But the purpose of Title IV-D and the Indiana Child Support program is to enforce support obligations owed to custodial parents and their children. Because J.W. would owe no support to D.M. even if his paternity was established, the state has no authority under the Indiana Child Support Program to bring this paternity action.

The prosecutor’s only interest in bringing a paternity action is to represent the child’s interests, but a stillborn child does not have any interests, the court held.

Paternity can still be established for a stillborn child, but just not in an action brought by the state. I.C. 31-14-4-1 provides a list of people or entities that may file a paternity action within two years of the child’s birth.

“Therefore, in an appropriate case, paternity of a stillborn child may be established for the purpose of recouping those costs,” Judge Margret Robb wrote.

“Although we understand and sympathize with C.M. and her family and their wish to legally establish paternity for purposes of closure, respect, and learning the truth, these are not issues that the paternity statutes are intended to remedy,” she continued in a footnote.

May 9

Civil Tort – Service of Complaint/Summons

Dan Weaver v. George Niederkorn

49A05-1309-CT-448

Noting the grounds on which a defendant sought relief from a $40,000 default judgment are unclear, the Indiana Court of Appeals affirmed that the man must pay his neighbor that amount.

George Niederkorn sued Dan Weaver for defamation, invasion of privacy and intentional infliction of emotional distress. Niederkorn attempted to serve Weaver by first-class mail and certified mail. In October 2012, Niederkorn personally served a copy of the complaint and summons on Weaver at his residence, which is across the hall from Niederkorn’s resident in a condominium complex.

A default judgment was entered in December after Weaver failed to respond. The judge in the case received a letter from Weaver dated the day before the default judgment was entered claiming he just received a letter and copy of the motion for default judgment. The trial court twice continued the evidentiary hearing on damages per Weaver’s request, but after he or an attorney failed to appear at a March 2013 hearing, the judge entered default judgment of $40,366.18 against Weaver.

Weaver later claimed he didn’t show up because he had jury duty; the judge checked and he had not been called for duty on the date of the hearing.  Weaver filed a motion to correct error, which was denied.

The judges noted the grounds on which Weaver sought relief are unclear, but whether they look at it under T.R. 60(B) (1) or (6), Weaver has not established reversible error.

Weaver cited no authority to support his claim that Niederkorn’s personal service upon him was insufficient to confer personal jurisdiction and the judges refused to reweigh the evidence regarding whether the complaint was credible.

Civil Plenary – Breach of Contract

Carroll Creek Development Company, Inc. v. Town of Huntertown, Indiana

02A03-1307-PL-282

A trial court erred as a matter of law in its interpretation of a disputed section of a water agreement between a real estate developer and the town of Huntertown; as such, the Indiana Court of Appeals reversed partial summary judgment in favor of the town.

Carroll Creek and Huntertown entered into a water agreement in October 2000 in which Carroll Creek would pay for constructing a water main that connects to Huntertown’s water service facility. Carroll Creek could recoup nearly $465,000 of its costs via a water connection charge from certain owners of real estate who connected to the water main.

Those charges led to this lawsuit and appeal. At issue is Section 4.1 of the agreement. The water main will serve real estate in a defined “excess area.” The section states: “In the event any present or future owners of real estate within the excess areas shall, at any time within fifteen (15) years after the date of this Agreement, desire to connect into the Water Main, whether by direct tap or through the extension or connection of lateral lines to service the real estate situated in the excess area or adjacent to the excess area, to the extent permitted by law, … .”

Carroll Creek and Huntertown couldn’t agree whether this section required people who lived in the Ravenswood subdivision and another subdivision on the Ruth Nobis farm to pay the connection charge. Huntertown argued that those homeowners do not have to pay because they are not included in the “excess area” as defined in the water agreement. Carroll Creek’s interpretation of Section 4.1 was that the owners of real estate in the excess area who connected to the water main would be subject to the area connection charge when they used their water main connection to service real estate that was in either the excess area or area adjacent to the excess area. The company argued Huntertown failed to prove that the property owners in question had never owned property in the excess area.

The trial court granted summary judgment to Huntertown on the issue. The judge concluded that the “whether by” clause in Section 4.1 was intended to clarify that the excess area owners will be subject to area connection charges even if they do not connect to the water main directly. But this interpretation changes the “to service real estate situated in the excess area or adjacent to the excess area” language to “that service the real estate …,” the judges noted. In doing so, the court disregarded the plain language of the water agreement.

“The plain language in Section 4.1 of the Water Agreement provides that owners of real estate in the excess area are subject to the area connection charge if they connect, directly or indirectly, to the water main ‘to service the real estate situated in the excess area or adjacent to the excess area[.]’ Thus, the language of Section 4.1, agreed upon by the parties, shows that the intent of the parties was that the area connection charge would be assessed against excess area owners in two specified situations,” Judge Rudolph Pyle III wrote.

The appeals court remanded for further proceedings.

May 13

Domestic Relation – Divorce/Maintenance/Division of Assets

Daylene M. (Atchison) Coleman v. Scott A. Atchison

90A02-1311-DR-921

The Indiana Court of Appeals has ordered a trial court to divvy up a marital estate with more than 50 percent of it going to the wife because she rebutted the presumption of an equal division.

Daylene Coleman appealed the order dissolving her marriage to Scott Atchison, arguing the court abused its discretion when it denied her request for incapacity maintenance and in its division of the marital estate.

Coleman and Atchison were married for 10 years when Coleman filed for divorce in 2011. During the course of their marriage, she became disabled, stopped working, and began receiving Social Security disability payments. Atchison has worked throughout the marriage and has children from a previous relationship.

The trial court found that the presumption of an equal division of assets and liabilities between the parties has been rebutted based on evidence presented by Coleman. Wells Circuit Judge Kenton W. Kiracofe held that a division of property in favor of Coleman is warranted, but then ordered the marital property split 50/50.

The parties also stipulated that Coleman is incapacitated to the extent that her ability to support herself is materially affected, but Kiracofe declined to award her incapacity maintenance.

The Court of Appeals reversed the dissolution order. The judges noted Kiracofe’s findings and conclusions on the maintenance award are inconsistent. He made findings based on Temple v. Temple, 164 Ind. App. 215, 328 N.E.2d 227 (1975), to explain why he did not award maintenance. But he also found that there are no extenuating circumstances “that directly relate to the criteria for awarding incapacity maintenance” and that Atchison should pay Coleman maintenance, quoting Cannon v. Cannon, 758 N.e.2d 524 (Ind. 2001), without citation.

Kiracofe also expressly found Coleman rebutted the presumption of an equal division, but then divided the martial estate in half. The appeals court ordered on remand for the lower court to award her more than 50 percent of the marital estate and to either award Coleman incapacity maintenance or identify specific extenuating circumstances directly related to the statutory criteria for awarding such maintenance that would justify denying the award.•