Indiana Supreme Court
Civil Plenary – Insurance
WellPoint, Inc. (f/k/a Anthem, Inc.) and Anthem Insurance Companies, Inc. v. National Union Fire Insurance Co. of Pittsburgh, PA, AIG Europe (U.K.) limited, New Hampshire Insurance Co., et al.
Anthem Inc. is entitled to its costs of settling litigation in which the insurance giant was accused of improperly handling claims, the Indiana Supreme Court ruled. The reinsurance companies argued that coverage was barred based on the excess insurance policies.
Lawsuits were brought in Florida and Connecticut in the late 1990s accusing Anthem Inc. – which later merged with WellPoint Inc. – of engaging in a pattern of failing to pay claims in a full and timely manner. Anthem denied the claims, which were consolidated into multi-district litigation in Florida, but eventually settled the case in 2005 for nearly $200 million without admitting any wrongdoing.
Anthem was self-insured for errors and omissions liabilities and purchased policies from other insurers to reinsure its E&O liabilities. After it settled, Anthem sought indemnification from its reinsurers, some of which denied coverage and successfully obtained summary judgment.
Anthem sought coverage under Part II of its policies with the excess reinsurers for its losses in the underlying litigation including its ultimate settlement for $198 million, its defense costs, and other losses it incurred in the settlement agreement.
The justices reversed summary judgment for the reinsurers and ruled largely in favor of Anthem.
“The use of the word ‘solely’ in the professional liability insuring agreement operates here to prescribe coverage for Anthem losses resulting from claims for any wrongful acts by Anthem in the course of its claims handling and adjusting services but not for losses resulting from claims for wrongful acts that occur outside its rendering of such services. The wrongful acts alleged by the original plaintiffs – engaging in an improper, unfair, and deceptive scheme designed to systematically deny, delay, and diminish claim payments – are clearly alleged wrongful acts by Anthem in the course of its claims handling and adjusting services and thus qualify as covered Wrongful Acts occurring in the rendering or failure to render Professional Services as specified in the insuring agreement,” Justice Brent Dickson wrote, noting Anthem is entitled to coverage for defense costs.
The justices declined to find the covered risks to be uninsurable under Indiana law in light of the very strong presumption of enforceability of contracts and the relative equality of sophistication and bargaining power among the parties.
They did find that Exclusion (b) of the policy, which says Coverage II does not apply to any dishonest or fraudulent act or omission, but then qualifies it with an exception that “this exclusion shall not apply to any Claim seeking both compensatory and punitive damages based upon or arising out of allegations of both fraud and bad faith in the rendering of or failure to render Professional Services,” does not apply to plaintiff Connecticut State Medical Society. CSMS only sought declaratory and injunctive relief and litigation expenses, but not punitive damages. As such, Anthem is not entitled to settlement losses resulting from CSMS’ claim nor for Anthem’s bad faith claim.
The matter is remanded for further proceedings. Justice Robert Rucker concurred in result without a separate opinion.
Indiana Court of Appeals
Criminal – Bail/Evidence
James Satterfield v. State of Indiana
A defendant accused of murder must be allowed to present evidence and witnesses at a bail hearing in an endeavor to rebut the state’s burden that the defendant likely committed murder, the Indiana Court of Appeals held. Since that did not happen in James Satterfield’s case, the judges remanded the matter for further proceedings.
Satterfield was charged with murder after shooting and killing Andre Brown, the friend of the prostitute Satterfield was with at the time of the shooting. Satterfield and Maegan Biddle were in Satterfield’s parked car when he saw a man approach it and open the door Satterfield said he had locked. That man – Brown – was holding a shiny object. Satterfield grabbed his gun and fired one shot that struck Brown. Satterfield is licensed to carry a gun.
He turned himself in after learning of Brown’s death and sought to be released on bail. He claimed he shot Brown in self-defense, but the judge denied his motion.
The appeals court determined that even though Satterfield forfeited his right to appeal when he failed to timely file a notice of appeal, based on In the Matter of Adoption of O.R., 16 N.E.3d 965, 971 (Ind. 2014), his case deserved a determination on the merits.
In 2013, the Indiana Supreme Court reversed nearly 150 years of precedent regarding bail in Fry v. State, 990 N.E.2d 429, 435 (Ind. 2013). The justices shifted the burden of proof from the defendant to the state to show that in the murder case either the proof is evident or the presumption is strong that the defendant committed murder.
“In light of this reassessment of the burden of proof in bail hearings, we are called upon today to determine whether a defendant is allowed to present evidence of an affirmative defense to rebut the State’s strong presumption that the defendant more likely than not committed the murder (or treason) accused of,” Judge Patricia Riley wrote.
“While Satterfield answered this issue of first impression in the affirmative and suggests that we should impose on the trial court a requirement to assess a defendant’s justifiable defenses during a bail proceeding, the State maintains that ‘[p]ossible defenses have no bearing on the bail issue.’ We disagree.”
The judges looked at cases dating back to the Civil War for guidance as to the nature of evidence admissible in bail proceedings and reaffirmed a defendant’s right to present exculpatory evidence as to his or her culpability during a bail proceeding and the trial court’s duty to take this evidence into account when considering a request for bail.
Since the trial court refused to weigh any evidentiary facts alluding to possible self-defense, the judges sent the case back to the trial court to conduct a new bail hearing in accordance with this opinion.
Criminal – Robbery/Burglary/Sentence
Jeffery J. Hunt v. State of Indiana
Noting that a defendant who broke in to an elderly couple’s home and beat the husband would have received a lesser sentence if he had actually killed the victim, the Indiana Court of Appeals ordered Jeffrey Hunt’s 120-year sentence revised.
Hunt and his father forced their way into the home of Don and Joan Neer. Hunt hit Don Neer on the head with a tire iron several times, which caused severe injuries. Hunt and his father took money, guns and a television.
Hunt agreed to plead guilty without a written plea agreement to four charges: Class A felony robbery while armed with a deadly weapon causing seriously bodily injury, Class A felony burglary, Class B felony conspiracy to commit burglary, and Class B felony criminal confinement. He was sentenced to 50 years on the Class A felonies and 20 years on the Class B felonies, with all but one 20-year sentence to be served consecutively, for a total of 120 years.
The maximum possible sentence Hunt could have faced was 140 years, Judge Paul Mathias pointed out. He also noted that had Hunt killed Don Neer, he would have received a maximum aggregate sentence of 113 years.
“As heinous as Hunt’s crime was, it would be disproportionate to impose a sentence for his crime resulting in serious bodily injury to the victim that is greater than the sentence that would be imposed upon Hunt for killing the victim.”
The judges noted that the sentence imposed on Hunt, who does have a criminal history, is an outlier when compared to sentences imposed in similar cases. They ordered the trial court to revise his Class A felony sentences to 30 years each, with his Class B felony sentences remaining at 20 years each. All sentences will be served consecutively for an aggregate sentence of 100 years.
Civil Tort – Medical Malpractice/False Parental Consent
Angelique Lockett and Lanetra Lockett v. Planned Parenthood of Indiana, Inc., and Cathy McGee
A woman who gave her son’s 17-year-old girlfriend another person’s ID and posed as her mother to help her obtain an abortion was not properly dismissed from a lawsuit brought by the pregnant girl’s mother, the Indiana Court of Appeals ruled. Summary judgment in favor of Planned Parenthood of Indiana was proper, the court held.
Angelique Lockett was 17 when she sought an abortion, and her boyfriend’s mother, Cathy McGee, lent her an 18-year-old girl’s identification, according to the record. The teens looked similar, and McGee accompanied Lockett to a Planned Parenthood office where Lockett signed the other girl’s name.
Lockett was examined and it was confirmed she was pregnant. Six days later after a mandatory waiting period, she returned to the clinic with McGee for an abortion.
Lake Superior Judge William E. Davis granted summary judgment to all defendants in the case, a medical malpractice action against Planned Parenthood that restated similar claims in naming McGee.
“We affirm the trial court’s grant of Planned Parenthood’s motion for summary judgment because the Locketts failed to present their claims first to a medical review panel, as required by the Medical Malpractice Act … and thus the trial court lacked subject matter jurisdiction over the claims,” Judge L. Mark Bailey wrote for the panel. “However, to the extent that the trial court’s order appears to have dismissed the Locketts’ claims against defendant Cathy McGee, … we reverse and remand with instructions to correct the order.”
The opinion notes that while Lockett and McGee misrepresented their identities, a Planned Parenthood employee testified she received the ID and that she “saw no reason to doubt the identity that the patient had presented.”
The suit alleged liability against Planned Parenthood for failing to comply with the state’s informed consent and parental consent statute, I.C. 16-34-2, and claims of assault, battery and negligent infliction of emotional distress against both Planned Parenthood and McGee. The trial court entered summary judgment “for defendants.”
The court noted McGee was not served, making summary judgment for her premature. “Moreover, although the claims the Locketts state against McGee are framed identically to those brought against Planned Parenthood, McGee’s role in encouraging Angelique’s misrepresentation to Planned Parenthood places McGee in a substantially different position than Planned Parenthood,” Bailey wrote. “In this respect, we believe the trial court’s order was also overly-broad.”
Civil Plenary – Criminal Trespass/Attorney Fees
Pamela Frazee v. Douglas J. Skees and Angela D. Skees
A feuding neighbor who twice entered the property next to hers to unplug a sump pump will not have to pay treble damages because the Indiana Court of Appeals found she did not commit criminal trespass.
Pamela Frazee and her neighbors Douglas and Angela Skees got into a protracted dispute over a subsurface drain running through their properties.
After the Skeeses installed a new septic system to comply with the county health department’s order, they placed a sump pump near the hole where their connection to the subsurface drain had been severed. However, the pump forced water onto Frazee’s property and flooded one of her barns.
Frazee entered the Skees’ property on two occasions to unplug the pump.
The Tippecanoe Superior Court awarded the Skeeses compensatory damages of $1,299 and ruled Frazee had committed criminal trespass which made the Skeeses entitled to three times the amount, or $3,897. In addition, the court awarded the couple attorney fees of $1,299.
The Court of Appeals reversed the trial court’s conclusion that Frazee committed criminal trespass. The unanimous panel held Frazee did not trespass because she was never denied access to the neighbor’s property. In fact, the Skeeses did not tell her to stop disconnecting the pump until after she unplugged it a second time.
Consequently, the Court of Appeals concluded since the trial court erred when it found that Frazee committed criminal trespass, the lower court also erred when it awarded treble damages and attorney fees to the Skeeses.
The Court of Appeals also cut part of Frazee’s claim of $5,000 plus attorney fees of $1,667 for a total award of $6,667. The appellate court reversed the award of attorney fees to Frazee, finding, in part, the obdurate behavior exception did not apply to this situation.
Civil Plenary – Breach of Contract/Rule 41(E) Motion
William I. Babchuk, M.D., P.C., d/b/a Babchuk Imaging, P.C., and William I. Babchuk v. Indiana University Health Tipton Hospital, Inc., d/b/a Indiana University Health Tipton Hospital
The Indiana Court of Appeals decided in a case of first impression that a hospital, which filed its Ind. Trial Rule 41(E) motion to dismiss on the same day the plaintiff resumed prosecution of the case, did not timely file its motion.
Dr. William Babchuk was still under contract with Indiana University Health Tipton Hospital when the hospital terminated its contract with him to provide radiology services and suspended his privilege to practice there. The decision came after learning Babchuk allegedly had two staff members delete or destroy hospital records.
Babchuk sued in state court in November 2012 alleging breach of contract. In August 2013, he filed a federal complaint against the hospital and sought to add the breach of contract claim to his federal case. On May 29, 2013, Babchuk filed with the state court a motion to stay or to set a scheduling conference. Also that day, the hospital filed its motion to dismiss the state court action for failure to prosecute. After learning the federal court denied Babchuk’s request to add the breach of contract claim, the trial court held a hearing on the motion to dismiss and dismissed the matter based on T.R. 41(E).
Judge Edward Najam wrote that it is the defendant’s burden to timely file a T.R. 41(E) motion to dismiss and the motion must be filed before the plaintiff resumes prosecution. As such, the judges held the hospital’s motion to dismiss, which was not filed before Babchuk resumed prosecution, was not timely.
“Our research reveals no Indiana precedent squarely addressing what constitutes diligent prosecution under Trial Rule 41(E). But a request for a scheduling conference indicates a party’s intent to move forward with litigation. And we hold that where, as here, a plaintiff requests a scheduling conference, even in the alternative to a stay, that is sufficient to constitute resumption of prosecution for purposes of Trial Rule 41(E),” Najam wrote.
The case is remanded for further proceedings.
Criminal – Robbery/Battery/Double Jeopardy
Bryson Tyrone Street v. State of Indiana
Three of a man’s eight convictions stemming from his robbery of acquaintances were reversed or reduced because the convictions or elevated classes were based on the same elements of the crime, the Indiana Court of Appeals held.
Bryson Tyrone Street was convicted of burglary, as a Class A felony; attempted robbery, as a Class A felony; attempted robbery, as a Class B felony; battery, as a Class C felony; carrying a handgun without a license, as a Class C felony; criminal recklessness, as a Class D felony; neglect of a dependent, as a Class D felony; possession of marijuana, as a Class A misdemeanor; and being an habitual offender. Street broke into the home of acquaintances Michael Corn and his girlfriend, Bria Benjamin. Corn and Benjamin recognized Street as the perpetrator. Street sought money from Corn, and then shot him in the thigh after Corn said he did not have any. Street took marijuana off the kitchen counter and fled.
The Court of Appeals reversed the convictions of Class A felony attempted robbery, Class B felony attempted robbery and Class C felony battery based on double jeopardy concerns. It remanded for the trial court to vacate Street’s Class A felony attempted robbery conviction, reinstate his conviction under Count III for robbery, as a Class C felony, and reduce his conviction under Count IV to battery as a Class B misdemeanor; and resentence him accordingly.
The judges affirmed his remaining convictions and rejected Street’s argument that his convictions must be reversed because the trial court committed fundamental error when it permitted the jury to hear video recordings of two people, who both referenced Street’s prior incarceration. The judge admonished the jury to not consider that testimony when deliberating, and “If we must presume the jury followed the admonishment, then we cannot assume, as Street does, that the jury considered the erroneous statements covered by the admonishment,” Judge Edward Najam wrote.
The COA also ordered the lower court to impose Street’s habitual offender conviction as a sentence enhancement instead of an independent, 30-year sentence consecutive to the other sentences imposed.
Civil Tort – Attorney/Legal Duty
Timothy Devereux v. Jim and Diana Love
An Indianapolis attorney who spent several years working in a firm with attorney William Conour satisfied his legal duty to clients of Conour based on his lack of knowledge of any specific wrongdoing related to the clients, the Indiana Court of Appeals ruled. Conour is currently in federal prison for stealing from client settlement funds.
Jim and Diana Love hired Conour Law firm in August 2008 to represent them in a personal injury lawsuit. Timothy Devereux worked at the law firm and joined Conour on the case. In December 2011, Devereux left the law firm amid concerns that Conour wasn’t timely paying expenses and expert witness fees. At that time, he had no suspicion or knowledge, according to the opinion, that Conour was settling cases without clients’ knowledge and keeping their settlement funds.
When Devereux left, the Loves elected to remain with the Conour firm instead of following Devereux to Ladendorf & Ladendorf. He believed he had been removed from the Loves’ case but later learned he was still listed as an attorney on their matter in April 2012.
The opinion notes that when Devereux left the Conour firm, he also contacted the Indiana Supreme Court Disciplinary Commission with his concerns about timely paying expenses and expert witness fees. The next month, Devereux was contacted by the FBI regarding an investigation that Conour was not properly funding annuities for clients.
After the Loves discovered that Conour had settled their case for $120,000 in February 2012 without their knowledge or consent, they filed a complaint against Devereux that he had a duty to inform them that Conour “was in serious ethical and criminal predicaments and that the Loves were in peril of being victimized.”
Both parties filed for summary judgment, which the trial court denied. On interlocutory appeal, the Indiana Court of Appeals reversed and ordered summary judgment entered in favor of Devereux.
“As is set forth above, the instant matter involves deceit and theft of client funds by Conour, who, at the time, was a highly-respected member of the Indiana legal profession. Hindsight proves that Conour was not worthy of this high level of respect but, rather, was a thief who violated the trust and confidences that numerous clients, including the Loves, had placed in him. In reviewing the claims of legal malpractice set forth herein against Devereux, however, we must not view the matter through the lens of hindsight, but rather must look to what Devereux knew at the time he is alleged to have committed legal malpractice by failing to warn the Loves of Conour’s potential wrongdoing,” Judge Cale Bradford wrote.
“Devereux acknowledges that he had a duty to exercise ordinary skill and knowledge in relation to his representation of the Loves while serving as one of their counsel of record. Devereux contends, however, that his decision not to discuss his concerns regarding Conour with the Loves did not amount to a breach of this duty. We agree.”
The judges agreed that it would not have been appropriate for him to share his concerns regarding Conour with the Loves at the time he ended his employment with the firm. And the designated evidence supports his assertion that he did not have any specific knowledge of any wrongdoing by Conour relating to the Loves or that Conour was mishandling any active cases.
Civil Tort – Bank/Overdraft Fees
Old National Bank v. Steven Kelly, Jon A. Cook, and Rebecca F. Cook, individually and on behalf of others similarly situated
A bank being sued by customers over how it orders transactions – allegedly to maximize profits from overdraft fees – is entitled to summary judgment on most of the state claims alleged by customers in a class-action lawsuit, the Indiana Court of Appeals ruled.
Customers of Old National Bank sued over the bank’s bookkeeping device known as “high-to-low” posting, the delayed debiting of transactions, and the bank’s alleged utilization of a so-called “shadow” line of credit. Customers allege that transactions would not be posted in the order they occurred and often were grouped together in order to allow the bank to charge more overdraft fees. The customers also alleged that they were automatically enrolled in the overdraft program.
The five counts brought against the bank are breach of contract and breach of the covenant of good faith and fair dealing; civil conversion; unjust enrichment, unconscionable overdraft policies and practices; and a violation of the Indiana Crime Victim Relief Act.
The bank moved for summary judgment in June 2013. It did not directly dispute its use of the procedures that maximized overdraft fees, but rather claimed entitlement to judgment as a matter of law due to preemption by federal banking law and the non-viability of state claims. The trial court denied the bank’s motion, leading to this interlocutory appeal.
The COA rejected the preemption argument offered by Old National.
“The bank has not shown an irreconcilable conflict or that the state laws do more than incidentally affect the bank’s deposit-taking power. The Bank is not entitled to a declaration of preemption in these summary judgment proceedings,” Judge L. Mark Bailey wrote.
Taking a look at the viability of the state claims, the judges ruled in favor of the bank except on the breach of contract and breach of good faith and fair dealing claim.
“[I]n order to show that Depositors’ breach of contract claim could not survive, the Bank would be obliged to show that its contract is not ambiguous and is not inconsistent in its terms or in relation to extrinsic evidence. We cannot, by examination of the contract and with reference to undisputed facts, conclude that the Deposit Agreement unambiguously and consistently provides for the sums actually charged by the Bank. Summary judgment is inappropriate where, as here, a factfinder could infer from the designated materials that the Bank breached its duty of good faith and fair dealing,” Bailey wrote.
The COA remanded the class action for further proceedings consistent with the opinion.
Criminal – Resisting Law Enforcement/Battery
Adegoke Adetokunbo aka Robert Adesanoye, and Grace Itaniyi v. State of Indiana
A couple arrested after they screamed and resisted arrest at a local Department of Child Services’ office after learning their child was being removed from their care had all but one of their convictions from the incident upheld by the Indiana Court of Appeals.
Adegoke Adetokunbo and Grace Itaniyi have a child together and were the subject of a DCS investigation, leading to the conclusion the child needed to be removed from their care. After learning the child would be taken away, Itaniyi began screaming and the DCS security guard, Luis Flores, and Indianapolis Metropolitan Police Department officer Perry Renn intervened.
When the couple refused to hand over the child, a scuffle ensued in which Adetokunbo punched Flores and Itaniyi pushed Renn away. Adetokunbo stiffened his arms when Renn tried to handcuff him, and Itaniyi, once handcuffed, tried to kick the officer.
They were both convicted of Class A misdemeanor resisting law enforcement and Class B misdemeanor battery, and Itaniyi was also convicted of Class B misdemeanor disorderly conduct. They both appealed their convictions.
The judges found sufficient evidence to support both of Adetokunbo’s convictions and two of Itaniyi’s convictions. But they reversed her battery conviction because the charging information said Itaniyi touched the security guard. The state failed to present any evidence she made any contact with Flores, but there was testimony she pushed Renn.
The state argued this was an immaterial variance, but the judges disagreed. In this case, it was necessary for the information to name the correct victim. This is a material, fatal variance under Indiana Supreme Court precedent, therefore her conviction must be reversed and vacated, the COA held.•