Indiana Court Decisions – Sept. 17-30, 2014

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7th Circuit Court of Appeals

Sept. 26

Civil – Educational Debt/Collection

Scott Ian Richardson v. The Koch Law Firm P.C.


The 7th Circuit Court of Appeals had harsh words for counsel on both sides of a lawsuit involving an unpaid educational debt, finding the attorneys have demonstrated “appalling judgment” in this case.

Scott Ian Richardson sued The Koch Law Firm P.C., claiming its post-2007 efforts to collect on an educational loan Richardson incurred while attending Indiana University in 1988 violate two sections of the Fair Debt Collection Practices Act. Since 1998, the law firm hired by IU has attempted to collect a default judgment entered against Richardson in state court. But Richardson has twice filed for bankruptcy, which automatically stays the judgment. Once his second bankruptcy proceeding ended in April 2007, the law firm again attempted to collect on its end.

Judge Jane Magnus-Stinson treated this lawsuit as a collateral attack on the state court’s judgment and dismissed it for want of jurisdiction, invoking the Rooker-Feldman doctrine.

Before this appeal made it before the 7th Circuit, Richardson successfully asked the Bankruptcy Court to reopen his 2000 bankruptcy proceeding. The court stated that the judgment is “invalid,” but did not enjoin its enforcement or award damages under 11 U.S.C. Section 362 (k)(1) as Richardson had sought. Then the state court vacated its own judgment in 2014, so the District Court’s basis for dismissal under the Rooker-Feldman doctrine no longer exists, Judge Frank Easterbrook pointed out.

“Demonstrating appalling judgment, neither side brought this development to our attention, although both sides filed their appellate briefs after the state court vacated its judgment. Because that step affects subject-matter jurisdiction, counsel for both sides—Ruberry, Stalmack & Garvey, LLC, representing the Law Firm, and Richardson, a member of the bar representing himself—had an ethical duty to alert the court. Yet until the judges asked pointed questions at oral argument, neither side was forthcoming. Richardson even professed not to know the status of the state judgment to which he was a party. That assertion is hard to credit, for the state court’s order shows that it was sent to Richardson. But apportioning blame gets us nowhere. What matters now is that the rug has been pulled out from under the district court’s decision,” Easterbrook wrote.

Easterbrook then pointed out how Richardson has still not paid the 1988 debt, did not alert Koch Law Firm or the state court about his 2000 bankruptcy petition, did not appear for trial and did not appeal the bankruptcy court’s 2013 decision, among other things.

“It is hard to see how someone so deficient in the defense of his own interests could be an effective advocate for the interests of clients,” he wrote. “And it turns out that he has not been; Indiana has suspended Richardson from practice at least three times.

“Richardson is on notice: misfeasance or nonfeasance in federal litigation will lead to professional discipline.”

The judgment of the District Court is to be modified on the merits, and as modified is affirmed.

Indiana Supreme Court

Sept. 17

Post Conviction – Ineffective Assistance of Counsel

State of Indiana v. Frank Greene


The Indiana Supreme Court rejected a defendant’s claim that his attorneys were ineffective for not arguing that, based on a Supreme Court case, his conviction for Class B felony criminal confinement should be reversed or reduced. But the man inappropriately relies on the case, and what he claims his attorneys should have argued is not the law.

Frank Greene was convicted of several offenses for terrorizing his girlfriend and holding her captive over the course of two days. He challenged his conviction of Class B felony criminal confinement, which is based on the evidence that, while in their bedroom, he strangled Brenda Johnson until she passed out. When she woke up, she was on a couch in their living room.

Greene’s appeals were denied, so he sought post-conviction relief. He argued that his trial and appellate counsel should have argued that Long v. State, 743 N.E.2d 253 (Ind. 2001), holds that in order for a person to be convicted of Class B felony criminal confinement, the state must have proven beyond a reasonable doubt that serious bodily injury to the victim resulted when the victim was moved from one place to another. The post-conviction court ordered Greene’s conviction reduced to a Class D felony and resentenced accordingly.  

Long’s Class B felony criminal confinement was reduced because the state did not present evidence that his victim’s fractured facial bones occurred when she was forcefully removed from one place to another. Without that evidence his charge could not be enhanced, and Long’s victim was murdered during her captivity.

In Greene’s case the victim was able to testify, allowing the jury to reasonably infer that Greene’s act of strangulation both facilitated the removal of Johnson from their bedroom and resulted in serious bodily injury to her, Justice Steven David wrote.

“[T]he viability of Greene’s ineffective assistance of counsel claim turns on the strength of his assessment of Long, which he claims holds that serious bodily injury to the victim must occur during the course of the victim’s removal for a class B felony criminal confinement conviction to be upheld. Our review has revealed that Long … actually hold[s] that serious bodily injury to the victim must be sustained during the charged offense of criminal confinement: a defendant’s knowing or intentional forcible removal of the victim from one place to another. Thus, the victim must suffer serious bodily injury as the result of the act of forcible removal, whether or not the act of force occurs simultaneously with the act of removal.

“What Greene argues his trial and appellate counsel should have argued, then, is not the law. By failing to present an incorrect interpretation of case law, Greene’s counsels’ conduct did not fall below an objective standard of reasonableness, and they did not render ineffective assistance. In deciding otherwise, the post-conviction court committed clear error,” he wrote.

Justices reversed modification of Greene’s conviction and sentence for the Class B felony.

Sept. 22

Attorney Discipline – Suspension

In the Matter of: Trezanay M. Atkins


The former treasurer for the Marion County Bar Association has been suspended from the practice of law for a minimum of two years for taking more than $9,100 from the organization.

Trezanay Atkins admitted to converting the proceeds of more than 50 checks drawn on the association’s bank account, according to the disciplinary order issued by the Indiana Supreme Court.

Atkins served from June 2011 until December 2012 as the treasurer of the local bar that in large part assists in the development of African-American and minority lawyers in Indianapolis. She disclosed her conversion to MCBA officers, but justices gave little weight to this, noting hearing officer Helen W. Marchal concluded Atkins confessed because her misappropriations were on the verge of being discovered.

The court ruled Atkins violated Indiana Rules of Professional Conduct 8.4(b), committing a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness; and 8.4(c), engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.

Atkins made restitution to the MCBA, but the court did not find this a mitigating factor.

“Respondent’s deliberate theft from an association she served as treasurer in violation of her fiduciary duty is among the most serious types of misconduct,” justices concluded in a unanimous, per curiam opinion. “The Court concludes that Respondent should be suspended from the practice of law in this state for a period of not less than two years, without automatic reinstatement,” effective Nov. 3.

Earlier this year, Atkins told IL she was resigned to the likelihood she would lose her license. She testified in a disciplinary hearing that she was in financial distress when she took money from the bar association, and she said she was shutting down her law practice and launching a public relations company.

Costs of the disciplinary proceeding are assessed against Atkins.

Sept. 24

Criminal – Speedy Trial/Child Molesting

Scott Logan v. State of Indiana


The “unduly long delay” in bringing a man to trial on a charge of child molesting – 1,291 days – violated his constitutional right to a speedy trial and requires reversing his conviction, the Indiana Supreme Court ruled.

Scott Logan was charged July 31, 2009, with one count of Class C felony child molesting related to his teenage daughter. Logan requested and was granted five continuances of his pre-trial conference, resulting in a 154-day delay attributable to him. But due to court congestion, his criminal trial was reset seven times. Logan continually asked to be released on his recognizance and have a speedy trial, but the trial court denied his motions.

He was not let out of jail until May 25, 2012, when the Supreme Court ordered his release until his trial began. The justices denied his request for discharge under Criminal Rule 4(C). At that point, he had been in jail for 1,029 days. His trial began Feb. 11, 2013, and he was convicted and sentenced to six years in the Department of Correction.

Logan’s time in jail awaiting trial was almost as long as his sentence when earned good-time credit is considered, the justices pointed out.

The justices looked at Logan’s appeal by analyzing Criminal Rule 4(C) and whether his constitutional rights to a speedy trial were violated.

Justice Steven David noted that the trial court technically complied with Criminal Rule 4(C) when it continued Logan’s case on Feb. 6, 2012, due to another defendant’s trial being schedule to start that same date. The other defendant had filed a Rule 4(B) motion for an early trial. By honoring the 4(B) request, the trial court fulfilled its responsibility of prioritizing motions for a speedy trial, which unfortunately delayed Logan’s trial date.

Although this decision led Logan to spend more time incarcerated, it was not erroneous, the justices held.

But the overall delay from the day the charge was filed until Logan was brought to trial does require reversal. The federal speedy trial analysis outlined in Barker v. Wingo, 407 U.S. 514 (1972), explains four factors to consider: (1) length of the delay; (2) reason(s) for the delay; (3) defendant’s assertion of his or her right; and (4) prejudice to the defendant. All four of these factors weigh in Logan’s favor.

“To prevent the potential for any subsequent violation of a defendant’s constitutional right to a speedy trial due to protracted court congestion, we encourage trial courts to consider setting the defendant’s trial date at his or her first initial hearing and to remain diligent in monitoring the age of these cases. We acknowledge that the State has a vested interest, and indeed an obligation, in monitoring criminal cases to ensure that defendants are brought to justice in a timely manner,” David wrote. This may mean scheduling jury trials to start on a different day of the week or delegate certain tasks to a magistrate to free up resources, he noted.

The justices ordered Logan released from prison and his conviction vacated.

Sept. 30

Civil Plenary – Abusive Litigants

Gersh Zavodnik v. Irene Harper


The Indiana Supreme Court released a per curiam decision dismissing the appeal of a man described as a “prolific, abusive litigant” based on the 123 cases he has filed in state court throughout Indiana. In its opinion, the justices also provide guidance to trial courts on how to deal with abusive and vexatious litigation practices.

The opinion comes after Gersh Zavodnik appealed the dismissal of his appeal for failure to timely file a brief and appendix. Zavodnik appealed to the COA after the trial court dismissed his action against Irene Harper under Ind. Trial Rule 41(E).

The justices noted Zavodnik’s lengthy submissions, numerous requests for a change of judge, and numerous motions and other files that are defective, repetitive and lacking merit.

The justices quickly dismissed his arguments and turned to how to deal with these types of litigants. In sum, the opinion says litigants do not have a license to abuse the litigation process; pro se litigants must play by the rules; litigants do not have an unfettered right to proceed in forma pauperis; courts may place reasonable limits on filings by abusive litigants; and judges should not bow to baseless demands for disqualifications.

“The courts of this state, after due consideration of an abusive litigant’s entire history, may fashion and impose reasonable conditions and restrictions, guided by those in the statutes, rules, and cases outlined above, on the litigant’s ability to commence or continue actions in this state that are tailored to the litigant’s particular abusive practices,” the opinion states.

With regard to Zavodnik’s repeated request to file in forma pauperis, the justices wrote, “We note that Mr. Zavodnik has somehow summoned the financial wherewithal to produce probably tens of thousands of pages of filings in well over 100 cases he has brought. Courts may rightfully explore how such an applicant can afford such expenses but claim to lack sufficient means to pay a filing fee.”

After considering a litigant’s history of abuse, a court may be justified in imposing restrictions, such as limiting the litigant’s ability to request reconsideration and to file repetitive motions, limit the length of a title used for a filing, and instruct a clerk to reject without return for correction future filings that do not strictly comply with applicable rules of procedure and conditions ordered by the court.

“Mr. Zavodnik’s abusive litigation practices in this case and others have included unrelenting attempts to replace the judges presiding over his cases for alleged delays in rulings pursuant to T.R. 53.1 and for alleged bias, prejudice, or misconduct by the judge. But judges presiding over a case are not required to disqualify themselves as a result of a litigant’s unfounded accusations, abusive tactics, or attempts to manipulate the system. To the contrary, judges have an affirmative duty to preside over cases unless disqualification is mandatory,” the justices wrote.

Litigants who engage in baseless, abusive attempts to obtain a change of judge should expect those attempts to fail and may face sanctions, they continued. But the justices decided not to impose any sanctions or restrictions on Zavodnik at this point, but will do so if necessary. He is also not allowed to petition for rehearing.

Indiana Court of Appeals

Sept. 18

Criminal – Exclusion of Evidence/Sentence

Michael W. Sloan v. State of Indiana


The Indiana Court of Appeals was divided over whether a Johnson County man convicted of having sex with a 13-year-old girl deserved to have his sentence enhanced above the 30-year advisory sentence.

Michael Sloan was convicted of Class A felony child molesting for having sex with K.W. at his home. He told her that if he got caught, he would say he was drunk and K.W. raped him. When he was arrested, he told officers that he was intoxicated and tired the night of the alleged offense, and he woke up to someone on top of him. Based on circumstances, he believed K.W. had sex with him. He also argued he did not know she was 13 but believed she was 20 based on what she told him and the age of her friend also at Sloan’s home that night.

Judges Elaine Brown and Michael Barnes decided that Sloan’s 35-year sentence, which was enhanced by five years by the trial court, should be reduced to the 30-year advisory sentence. The trial court found as aggravating factors that Sloan did not provide an explanation of why he committed the offense, that he lacked remorse, and that he was in need of correctional treatment.

The trial court erred in basing his sentence on the first two factors, because Sloan’s position throughout the trial was he did not commit the charged offense, but that K.W. assaulted him while he was passed out. Sloan was permitted to maintain his innocence, Brown wrote. In addition, Sloan’s criminal record doesn’t support the trial court’s use of the “in need of correctional treatment” aggravating circumstance.

Judge Cale Bradford dissented, disagreeing with his colleagues regarding Sloan’s lack of remorse. He pointed to evidence of a phone call Sloan made from jail in which he instructed others to kill his victim.

“This conversation … independently demonstrates that Sloan lacked remorse,” Bradford wrote. And because a single aggravating circumstance is adequate to justify an enhanced sentence, he would affirm Sloan’s 35-year sentence.

The majority in a footnote pointed out that the trial judge made no reference to the phone call or recording in sentencing Sloan, and the record is devoid of evidence the judge considered it in any way.  

Sept. 19

Civil Plenary – Law Enforcement/Personal Injury/Meth Lab

City of Mitchell v. Randy Phelix


See story on page 5.

Civil Plenary – Environmental Contamination

JDN Properties, LLC v. VanMeter Enterprises, Inc.


The Indiana Court of Appeals is allowing a claim under Indiana’s Environmental Legal Actions statute to move forward, ruling there are many questions for the lower court to examine about the former landlord’s role in the contamination of soil.

After discovering petroleum contamination on part of its land, JDN Properties LLC filed a complaint against the former landowner, VanMeter Enterprises Inc. JDN made a claim under the Environmental Legal Actions statute, arguing VanMeter either caused or contributed to the pollution.

The Kosciusko Circuit Court granted summary judgment in favor of VanMeter, but the Court of Appeals reversed. The COA stopped short of granting summary judgment in favor of JDN and instead remanded for further proceedings.

VanMeter argued on appeal there is no evidence it was involved with the petroleum leak that contaminated a portion of the property.

However, the appellate court found there are genuine issues of material fact still be to resolved regarding VanMeter’s role making a grant of summary judgment inappropriate.

The COA looked at the evidence and concluded it is reasonable to assume that VanMeter was aware of the fuel leak. It also rejected VanMeter’s assertion that JDN did not submit conclusive proof that the contamination happened while VanMeter owned the property.

The court noted JDN did not have to prove with certainty when the leak occurred. It only had to provide evidence that created a genuine issue of material fact.   

“The ELA clearly was intended to broaden the avenues for purchasers of property to recoup hazardous waste remediation costs and to shift the costs of such remediation onto those who were in the better position to prevent or alleviate the pollution,” Judge Michael Barnes wrote for the court. “As between JDN and (VanMeter), (VanMeter) was in the better position to do so.”

Sept. 23

Domestic Relation – Child Support/Dependent Claim

James Bogner v. Teresa Bogner


A Lake County father prevailed in appealing a trial court order regarding his child support obligations that deviated from those recommended under Indiana’s official guidelines.

The Indiana Court of Appeals ruled that a trial court improperly substituted its judgment for the father’s obligations calculated under the Child Support Guidelines. The trial court ruled James Bogner should pay $105 weekly instead of $59 per week recommended under the guidelines.

“(W)e conclude that the trial court abused its discretion when it held that the child support worksheet created an unjust result warranting a deviation from the worksheet. We remand for the trial court to modify Father’s support obligations to $59, which is the amount that is presumptively correct based on the worksheet and the Guidelines,” Judge Rudolph R. Pyle III wrote for the panel.

The trial court also erred in eliminating father’s right to claim his child as a dependent on income taxes every other year.

“Here, the trial court did not indicate in its order that it considered any of the factors that it was required to consider under the Guidelines,” Pyle wrote. “… Accordingly, we conclude that the trial court abused its discretion in modifying Father’s exemption. We remand to the trial court to re-evaluate the issue of the Parents’ tax exemption based on the factors listed in the Child Support Guidelines.”

Sept. 25

Civil Collection – Trucking Accident/Evidence

Averitt Express, Inc. v. State of Indiana ex rel. Indiana Department of Transportation


The crash report prepared after a fatal trucking accident on Interstate 70 that resulted in damage to the highway should not have been included as evidence in the state’s lawsuit seeking recovery of the money it spent repairing the highway, the Indiana Court of Appeals ruled. As a result, the judges reversed summary judgment in favor of the state and ordered the matter proceed to trial.

Averitt Express employee John Goins, who drove a semi-truck for the company, struck another semi-truck on I-70 in Putnam County in 2011. His truck caught fire and Goins died as a result of the accident. The collision and fire caused nearly $60,000 in damages to the highway and guardrail, which were completed through an emergency repair.

The state sued Averitt to recover the money spent fixing the highway. It alleged the company, through Goins, negligently damaged the highway and guardrail. Both parties filed for summary judgment, and the trial court granted the state’s motion. Before doing so, it struck paragraph six of Indiana State Trooper Brandon Mullen’s affidavit, but allowed his crash report to remain as evidence.

The Court of Appeals agreed paragraph six of the affidavit needed to be struck from the record because Mullen’s opinion on the accident was based in part on information he received from others, so it is not admissible under Rule of Evidence 701. But the judges reversed the trial court regarding the crash report, finding it is not admissible. Rule 803(8)(B) specifically excludes a police investigative report, such as Mullen’s, unless it is offered by the accused in a criminal case. The state, as the party that offered the report, is not the defendant here, nor is this a criminal case, wrote Senior Judge Betty Barteau.

The appellate court found without the crash report, the state did not submit evidence that Averitt, through Goins, breached a duty and proximately caused the damage to the highway and guardrail. The judges remanded for retrial.

Judge Cale Bradford concurred in a separate opinion, believing the traditional rationale for excluding police reports does not seem to apply under the facts of this case.

“An accident report used in a civil case … strikes me as a different animal, because, while an accident might give rise to adversaries in civil litigation, the agency employing the investigating police officer is not likely to be one of them,” he wrote.

Even though this is a civil case and there is no reason to doubt Trooper Mullen’s impartiality in preparing his report, Indiana Evidence Rule 803(8)(B)(i) clearly excludes investigative reports by law enforcement personnel, except when offered by an accused in a criminal case, he wrote.

Sept. 26

Civil Plenary – Breach of Duty/Infliction of Emotional Distress

Shacare Terry v. Community Health Network, Inc.


A trial court erred when it dismissed a woman’s intentional infliction of emotional distress claim filed against Community Hospital after she says staff made derogatory comments regarding her situation after she was brought in unconscious and under the influence of a date rape drug.

On Shacare Terry’s 21st birthday, she consumed a drug associated with date rape at a club. She blacked out and was taken to Community Hospital, where she was treated in the emergency department. An exam noted possible vaginal trauma, but a rape kit was not completed, no evidence was preserved, and staff did not contact police. She was also not told by staff she may have been raped.

While being treated, staff members called her an “addict” and told her they did not like treating addicts. One staff member also wrote “Happy Birthday” next to the doctor’s notation regarding her possible vaginal trauma.

She sued the hospital, alleging breach of duty and intentional infliction of emotional distress. The trial court granted Community’s motion to dismiss, concluding that Terry’s claims sounded in medical malpractice and were subject to requirements of the Act. Since she had not filed them first for review before a medical review panel, the trial court did not have jurisdiction.

This was correct related to her breach of duty care, the Court of Appeals affirmed, because issues about treatment and preserving evidence were made by the physician while acting in his professional capacity as a provider of medical services. Thus her breach of duty claim is, in substance, a medical malpractice claim.

But the Medical Malpractice Act is inapplicable to the facts involving her IIED claim. The comments made to Terry raise a factual issue capable of resolution by a jury without application of the prevalent standard of care in the local medical community. And these statements were not made while acting in a professional capacity as the provider of medical services, Judge Margret Robb wrote.

The case is remanded for further proceedings.

Sept. 29

Mortgage Foreclosure

Bryan L. Good v. Wells Fargo Bank, NA.


The Indiana Court of Appeals has reversed the foreclosure of an Elkhart man’s home, holding the bank that sought the foreclosure did not establish it was entitled to enforce the promissory note as its holder.

Bryan L. Good executed a mortgage with Synergy Mortgage Group in March 2008, where he signed an electronic promissory note. In 2011, he stopped paying the mortgage and the mortgage was assigned to Wells Fargo Bank N.A. In 2012, Wells Fargo sought to foreclose on the property; Good, acting pro-se, claimed the bank was not a holder in due course of the note and lacked standing.

The trial court granted partial summary judgment to Wells Fargo, finding it had standing to enforce the note and mortgage. It later issued a judgment of foreclosure.

Wells Fargo correctly asserted that because the note was an electronic note, “delivery, possession and endorsement of an electronic promissory note are not required pursuant to federal statute,” and it was entitled to enforce it pursuant to 15 U.S.C. Section 7021. But the bank did not designate evidence that a system employed for evidencing the transfer of interests in the note reliably established it as the person or entity to whom the note was transferred, Judge Michael Barnes wrote. It had relied on a certificate of authentication from its Assistant Vice President, Thresa Russell.

“Pursuant to statute, upon Good’s request, Wells Fargo was required to provide ‘reasonable proof’ that it was in control of the Note,” Barnes wrote. “Although Good repeatedly requested such proof, Wells Fargo did not provide any evidence documenting the transfer or assignment of the Note from Synergy to either Wells Fargo or Fannie Mae. Thus, Wells Fargo did not demonstrate it controlled the Note by showing that a system employed for evidencing the transfer of interests in the Note reliably established that the Note had been transferred to Wells Fargo.

“Because Wells Fargo did not establish that it controlled the Note as described in §7021, it did not establish that it was the person entitled to enforce the Note as the holder for purposes of the (Uniform Commercial Code). Thus, partial summary judgment for Wells Fargo on this issue was improper.”

Because of this lack of evidence, the trial court should not have granted the bank’s motion to foreclose, the judges ruled. The case is remanded for further proceedings.

Sept. 30

Mortgage Foreclosure – Service of Process

Calvin Hair v. Deutsche Bank National Trust Company, as Trustee for Ameriquest Mortgage Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2003-1


A bank’s failure to give proper notification of a foreclosure has kept a lienholder’s judgment alive and created uncertainty as to who holds the title to a property.

Deutsche Bank National Trust Co. filed a foreclosure action on a Talbott Street property in Marion County. Calvin Hair had a lien on the property as a result of a bankruptcy proceeding, but he was never notified of the foreclosure because the bank provided service only by publication.

Subsequently, the trial court entered judgment by default for $161,079.21 against Hair and others who had not responded to the bank’s complaint. Deutsche Bank then bought the property at a sheriff’s sale and conveyed to a third party.

After his motion to set aside the default judgment was denied by the trial court, Hair appealed. He asserted service by publication was not warranted and the judgment was rendered without personal jurisdiction to him.

The Indiana Court of Appeals agreed, reversing the denial of Hair’s motion.

The Court of Appeals determined that Hair was easily locatable and the bank did not do enough searching, instead opting to move too quickly to service by publication.

Once the Court of Appeals ruled the foreclosure judgment against Hair was void, the bank argued against providing any relief to Hair, saying his motion to set aside would be inequitable since a third party now had possession of the property.

“Deutsche Bank’s arguments disregard the importance of personal jurisdiction to a valid judgment, as well as approximately 150 years of Indiana precedent,” Judgment Michael Barnes wrote. “We emphasize that a judgment entered without personal jurisdiction is void, not merely voidable.”

The Court of Appeals ruled Hair’s judgment lien against the property was not extinguished by the foreclosure. It also remanded the case for further proceedings to determine how to address Hair’s lien against the property that is now owned by someone else.

Civil Plenary – Pro Hac Vice Admission

YTC Dream Homes, Inc., et al. v. DirectBuy, Inc., et al.


A Lake County judge misinterpreted a local rule when he determined that five attorneys seeking pro hac vice admission in a contract dispute did not overcome a presumption that attorneys not licensed in Indiana are not permitted to practice before the court. The Court of Appeals ordered the admission of the attorneys.

The five attorneys from Minnesota and Wisconsin sought pro hac vice admission to represent 10 franchisees of DirectBuy Inc., all of which are located outside of Indiana. The complaint was filed by local counsel, who then sought admission of the five out-of-state attorneys. DirectBuy’s counsel fought the admission, arguing that the attorneys have an “aggravated litigation” style that will drive up the costs of litigation. DirectBuy also claimed in-state attorneys could handle the “garden-variety contract lawsuit.”

Lake Superior Judge John Sedia ruled in favor of DirectBuy. While he found the five attorneys to be qualified and knowledgeable in franchise law, he pointed to Local Rule 5(C), under which there is a presumption that an attorney not licensed in Indiana is not permitted to practice before the Lake Superior Court. Sedia wrote in his order that he wasn’t persuaded that local attorneys couldn’t handle the franchise law issues.

Out-of-state admission is granted under Ind. Admission and Discipline Rule 3(2), as long as certain conditions are met. The appellants claimed that Local Rule 5(C) conflicted with Rule 3(2) and should be declared void, but the judges found that both rules can apply to a given situation. Rule 3(2) permits members of a bar of another state to appear in a particular case or proceeding “only if” the court determines that good cause for the appearance exists and that the attorney demonstrates the conditions of subparagraphs 1-4 are met, Judge Elaine Brown wrote. The local rule simply states that nonmembers of the Indiana bar are generally not permitted to practice in Lake County, they may appear for a specifically limited purpose and time, and in order to do so, must strictly comply with Rule 3(2)(a).

“Thus, we find that Local Rule 5(C) merely directs counsel to the applicable rule governing pro hac vice admission, Rule 3(2),” she wrote.

But Sedia misinterpreted the local rule in that he believed it holds a presumption against allowing pro hac vice admissions.

“Indeed, if Local Rule 5(C) were to contain a presumption against allowing members of another state’s bar to practice pro hac vice, then it would be ‘in conflict’ with Rule 3(2)(a), she wrote.

The judges remanded with instructions to grant the pro hac vice admission.

Civil Plenary – Insurance

Travelers Casualty and Surety Company of America, et al. v. Maplehurst Farms, Inc., et al.


A trial court misinterpreted a previous ruling involving an insurance coverage dispute for environmental cleanup costs, and as such, erred when it ordered the insurer to pay costs that were incurred as a result of a settlement, the Indiana Court of Appeals held.

Maplehurst Farms sold its property to Dean Foods Co. in 1997. In 2000, Dean discovered environmental contamination on the property as a result of underground storage tanks Maplehurst installed in the 1950s to store heating oil. In December 2002, Maplehurst entered into a settlement agreement with Dean. The parties also acknowledged that Maplehurst had submitted a corrective action plan to the Indiana Department of Environmental Management in September 2002.

Maplehurst sought coverage for the costs from three of its insurers; at issue is coverage provided by Travelers Casualty and Surety Co. of America. Travelers, which was notified of the claim in May 2003, denied Maplehurst’s claim and refused to provide a defense. IDEM later approved a revised CAP in May 2004.

The denial made it to the Court of Appeals in 2011, in which the judges held that Travelers does not have to pay pre-notice costs and expenses, but the company remains liable for the costs and expenses under the policy that Maplehurst incurred after it notified Travelers of the claim.

On remand, the trial court entered judgment against Travelers for more than $512,000.

The judges had to decide when Maplehurst incurred the costs and expenses at issue.

“Maplehurst clearly obligated itself to remediate the property when it entered into the Dean Settlement, not when IDEM approved the final CAP. The final CAP merely described how Maplehurst would be required to remediate the property; Maplehurst agreed in the Dean Settlement to remediate to IDEM’s standards long before Travelers was notified of the claim,” Judge Michael Barnes wrote.

“Although some of the remediation occurred after notice to Travelers, all of the post-notice costs at issue flowed from the Dean Settlement. As Travelers points out, an award of such costs would allow an insured to settle a claim, notify the insurer, and obligate the insurer to cover the settlement. Such a result would violate the policy provision that prevents an insured from voluntarily assuming any obligation without the insurer’s consent.”

The judges reversed summary judgment in favor of Maplehurst and remanded for further proceedings.•

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