7th Circuit Court of Appeals
Civil – Advertising/City Bus
Women’s Health Link Inc. v. Fort Wayne Public Transportation Corp.
The 7th Circuit Court of Appeals found a women’s health organization can advertise on city buses because its ad does not violate any of the transit company’s ad policies, overturning a Northern District of Indiana decision.
Women’s Health Link Inc. submitted an advertisement to the Fort Wayne Public Transportation Corp., locally referred to as Citilink, for its services. The ad did not mention Health Link is a pro-life organization in any way, but Citilink refused the ad. Citilink forbids public service ads that “express or advocate opinions or positions upon political, religious or moral issues.”
Citilink discovered Health Link suggests women with unplanned or crisis pregnanciesconsider alternatives to abortion such as adoption counseling. Since abortion is generally regarded as a moral issue, it concluded Health Link’s ad could not appear on its buses. Health Link sued Citilink alleging violations of constitutional rights and arbitrarily denying freedom of expression.
Judge Richard Posner wrote in a decision for the 7th Circuit panel the ad “is a public service announcement that does not so much as hint at advocating or endorsing any political, moral, or religious position. Even if one goes behind the ad to the organization’s website, one must go to the mission statement and the “Diaper Project” pages for an indication of a pro-life position. Yet the district judge granted summary judgment in favor of Citilink. He shouldn’t have.”
Posner wrote that Citilink’s “refusal to allow Health Link’s ad to be displayed is an unjustifiable, because arbitrary and discriminatory, restriction of free speech.” The denial of the ad had nothing to do with its contents, but only because the organization is pro-life, and mentions as much on its website. Citilink’s policy only bans controversial statements on advertisements, not on websites behind the ads.
Posner also pointed out that many other companies that could be construed to have a political message are allowed to advertise on Citilink, including services for immigrants, advocacy of vaccination, and a law firm that advertises itself as consistent with “Christian character.”
“Citilink’s refusal to post the ad was groundless discrimination against constitutionally protected speech,” Posner concluded citing Shuttlesworth v. City of Birmingham, 394 U.S. 147 (1969).
Civil – Supplemental Security Income
Nancy J. Thomas v. Carolyn W. Colvin, Acting Commissioner of Social Security
The 7th Circuit Court of Appeals ruled that an administrative law judge’s omission of fibromyalgia from a woman’s list of impairments was not supported by the evidence and reversed denial of her application for supplemental security income.
Nancy Thomas was diagnosed with Graves’ disease in 2006, an autoimmune disease affecting the thyroid gland. Over the next four years she complained of headaches, shortness of breath, fatigue, pain in her neck, depression, intolerance to heat and cold, and other symptoms. She saw two doctors before filing for SSI, where she saw a state medical consultant. The Social Security Administration denied her application for SSI in 2011.
She went back to one of her doctors, who diagnosed her with fibromyalgia and prescribed Lyrica to help. Another doctor completed a disability questionnaire which stated she had been diagnosed with Graves’ disease and moderate fibromyalgia causing muscle and joint pains and these conditions “substantially limit” Thomas’ ability to work.
Thomas appeared before an ALJ a year and half after her initial denial of SSI and he denied her claim. The ALJ admitted Thomas suffered from Graves’ disease, degenerative changes of the left shoulder and lumbar spine, and dysthymic disorder, but did not acknowledge fibromyalgia because neither doctor that diagnosed her and supported her was a rheumatologist. He also thought Thomas’ symptoms were not severe enough and at most caused minimal limitations to Thomas’ ability to work. The District Court upheld the verdict.
Thomas appealed, claiming the ALJ’s omission of her fibromyalgia diagnosis were unsound and the conclusion about the severity of her physical impairments is not back up by evidence.
In a per curiam decision heard by Chief Judge Diane Wood and Judges William Bauer and Michael Kanne, the 7th Circuit ruled the ALJ overlooked a second set of criteria when deciding whether Thomas had fibromyalgia, which includes a history of widespread pain and repeated occurrence of symptoms. Thomas supplied this evidence, refuting the SSA’s claim that overlooking this set of criteria was harmless error.
The 7th Circuit also agreed with Thomas that the ALJ’s claims about the severity of her symptoms were not backed up by sufficient evidence. It ruled the ALJ put too much weight on the testimony of the government’s two doctors who examined Thomas and not enough on Thomas’ doctors and her testimony.
“In finding Thomas not credible to the extent that she described more than minimal limitations, the ALJ relied on the seeming lack of objective evidence supporting Thomas’s subjective account of her symptoms, but, as discussed earlier, the ALJ skipped over the substantial findings of Thomas’s treating physicians and physical therapist that showed that her impairments indeed would limit her ability to perform work tasks,” the panel wrote in remanding the case for further proceedings.
Civil – Law Firm Creditor/Fraud Victims
ACF 2006 Corp v. Timothy Devereux
Fraud victims of disgraced former lawyer William Conour have the upper hand over his former law firm creditor who was awarded a judgment of almost $775,000, the 7th Circuit Court of Appeals ruled, reversing the District Court and signaling too much may have been awarded.
The reversal orders further proceedings in ACF 2006 v. Conour, 1:13-cv-001286, remanding the case to Judge Tanya Walton Pratt in the U.S. District Court for the Southern District of Indiana. Pratt previously ruled that victims who sought to intervene in the case brought by a former Conour creditor could not. Pratt ruled ACF was entitled to the money on a quantum meruit basis from the nearly $2 million in fees attorney Timothy Devereux earned on several cases he won at Ladendorf Law Firm after he left the Conour Firm.
Judge Frank Easterbrook wrote for the panel that this is an area of untested law in Indiana, but that victims who were defrauded by Conour should take precedence over a later creditor. Conour is serving a 10-year sentence for stealing more than $6 million from clients.
“The norm that victims of a lawyer’s breach of trust have a remedy notwithstanding the later grant of a security interest to a commercial lender is one of long standing and is reflected in Indiana by (Indiana Code) §30-4-3-22(c)(2). Section 23-1.5.2-7 tells us that the use of the corporate form to hold assets of a legal practice does not change that norm. It follows that the Victims have priority over the Lender in the funds that the Conour Firm is entitled to receive from (Devereux and Ladendorf). The judgment of the district court is reversed, and the case is remanded for the entry of judgment consistent with this opinion.”
Davis and Loretta Beals and their daughter Kristen sought to intervene in this case, claiming they were wrongly blocked at the District Court. Conour won a settlement for the Bealses, who were injured in a deadly crash involving a tractor-trailer, but the Bealses are still trying to collect about $500,000 of the money Conour stole from them.
But the 7th Circuit decision also likely will reduce the award Pratt granted. In one of Devereux’s cases that generated fees of about $1.4 million, Pratt ruled 40 percent should go to the Conour Firm to satisfy ACF’s lien. This despite three witnesses testifying the Conour Firm should be entitled to just 10 percent.
Easterbrook also ruled Pratt erred in awarding prejudgment interest at 8 percent, since the money is held in IOLTA accounts whose interest is not available to the firm, as such interest goes to the Indiana Bar Foundation to fund pro bono legal service. “The award of prejudgment interest was a misstep that must be undone on remand,” Easterbrook wrote.
Indiana Supreme Court
Discipline – Suspension
In the Matter of Charles P. White
Former Indiana Secretary of State Charlie White may never be allowed to practice law again, the Indiana Supreme Court suggested in extending his suspension another two years without automatic reinstatement.
The court issued a per curiam opinion that accepted agreed discipline White had worked out with the Indiana Disciplinary Commission after he was convicted of felony perjury, voting outside a precinct of residence and theft.
“It goes without saying that we hold a particularly dim view of attorney misconduct involving dishonesty, theft, or similar criminal conduct by public officials,” the court wrote.
“In the current case, Respondent and the Commission propose that Respondent receive a suspension from the practice of law for a period of at least two years, without automatic reinstatement. Viewed by itself, this would be at the low end of the discipline we have imposed in similar cases. We note, however, that Respondent already has been under interim suspension in this matter for over four years.
“(A) petition for reinstatement would be granted only if he is able to prove by clear and convincing evidence his fitness to resume the practice of law, a burden that likely will be particularly steep given the seriousness of Respondent’s misconduct,” the justices held.
White’s conduct violated Indiana Professional Conduct Rules 8.4(b) and 8.4(c), committing a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer; and conduct involving dishonesty, fraud, deceit or misrepresentation. The court was unanimous except for Justice Mark Massa, who did not participate.
Original Action – Removal of Judge
State of Indiana, Acting on Behalf of the Indiana Family & Social Services Administration v. The Marion Superior Court and The Hon. David J. Dreyer, as Judge Thereof
The Indiana Supreme Court removed the judge who has presided for six years over the litigation between the state and IBM over the failed $1.3 billion welfare-modernization contract.
Lawyers for the state brought an original action in May seeking to remove Marion Superior Judge David Dreyer, who they argued exceeded his authority with rulings issued the day the Indiana Supreme Court certified its opinion reversing the trial court and remanding for a determination of the state’s damages. The state lawyers also suggested Dreyer’s actions in response to the Supreme Court opinion called into question his impartiality.
“The Court’s participating members have reviewed and discussed the filed materials. The Court’s majority concludes the State is entitled to a change of judge. Accordingly, the Respondents, the Marion Superior Court and the Hon. David J. Dreyer, are ordered to vacate all orders issued in the underlying case on or after May 6, 2016, and to grant the change of judge,” the court wrote in a two-page per curiam order. Justice Mark Massa did not participate.
“Judge Dreyer is prohibited from exercising jurisdiction in the underlying case except that necessary to comply with this opinion and effectuate the change of judge. This opinion is final and effective immediately; petitions for rehearing or motions to reconsider are not allowed.”
Lawyers for IBM opposed the state’s petitions to remove Dreyer and vacate his rulings, which included finding that the state could prove no damages against IBM after the Supreme Court reversed his prior rulings, holding IBM had materially breached the contract. Justices remanded for a determination of damages, but Dreyer ruled without further proceedings that the state was entitled to no damages.
“Ultimately, the Supreme Court, on remand, instructed the trial court to make a ‘calculation’ of the parties’ damages,” IBM argued in opposing Dreyer’s removal. “The trial court did so correctly based on the trial record. It is wrong for the State to suggest that the ‘calculation’ of damages was made without giving the State a sufficient opportunity to be heard.”
State lawyers cited Indiana Trial Rule 76(C)(3), which grants parties 10 days from the date of certification of an appellate court remand to request a new judge.
Indiana Court of Appeals
Adoption – Background Check/Paternity Case
In Re: the Adoption of S.O., A.O., and N.O., P.P. v. A.O.
The Indiana Court of Appeals reversed an adoption petition after it found the adoptive mother did not participate in a sufficient background check and the court should have combined the adoption proceedings with a paternity hearing that was also occurring at the same time.
Father’s paternity of three children and custody of them was granted in 2012. He attempted to notify the mother of the children to her child support and parenting time obligations, but the mother did not attend the hearing. Father had remarried in 2009, and in 2015, the adoptive mother filed a petition to adopt father’s children.
The biological mother objected. During the hearing on the adoption petition, the parties discussed hearings pending in other courts and the trial court said during the hearing that the paternity case should be consolidated in the adoption case. But, since all the parties were together, the hearing on the adoption proceeded anyway. The trial court granted the adoption petition and the biological mother appealed.
The biological mother argued that the adoptive mother did not complete a background check as part of Indiana Code. The adoptive mother said she had complied with the background check, but that only covered arrests in Johnson County and was not a nationwide search. She also argued that the biological mother did not object to the background check, but the COA said those checks were vitally necessary to ensure children’s safety and the fact that the biological mother didn’t object didn’t mean they weren’t necessary.
The trial court also noted the absence of a child placement agency or the Department of Child Services in the adoption, and said one of those agencies needs to be involved in every adoption.
The court also ruled that the previous paternity case should have been combined with the current adoption case. The COA cited Indiana Code 31-19-2-14(a) which clearly mandates that process, and by closing the adoption case first, combination with the paternity case would be impossible.
The case was remanded for further proceedings.
Post Conviction – Ineffective Assistance of Counsel
Trondo L. Humphrey v. State of Indiana
The Indiana Court of Appeals reversed and remanded the denial of a man’s post-conviction relief petition, finding his trial counsel was ineffective and his petition was not barred by laches.
Trondo Humphrey was convicted of murder in 1996. In his direct appeal, Humphrey argued the trial court abused its discretion when it admitted into evidence a statement from a witness regarding Humphrey’s participation in the murder and erred when it admonished the jury to consider the statement for impeachment purposes only. The Indiana Supreme Court held the statement was admissible for impeachment and also said that had a proper objection to the instruction been filed, the court would have had to entertain it.
In 2012, Humphrey filed a pro se petition for post-conviction relief and requested counsel. With counsel, he filed an amended petition arguing his trial counsel was ineffective for a number of reasons, including not objecting to the statement correctly. The post-conviction court denied his petition and Humphrey appealed.
The trial court held that Humphrey’s petition wasn’t barred by laches, which the Court of Appeals affirmed. Judge Melissa May wrote there was no evidence that Humphrey knew post-conviction remedies were available to him. Also, the state did not meet its burden to demonstrate prejudice as a result of Humphrey’s delay.
The COA also ruled Humphrey’s counsel was ineffective because he did not object to or correct an instructional error given to the jury, which told members they were free to consider a prior inconsistent statement to both impeach and as evidence on Humphrey’s guilt or innocence. The instruction misstated the law, May wrote, and Humphrey’s counsel’s lack of action was error. His counsel also misstated the law in his closing arguments in the same way.
Humphrey’s counsel also erred in strategy. May wrote “If the decisions by Humphrey’s counsel were, as the State argues, part of a ‘strategy,’ we hold a strategy premised on allowing and making erroneous statements of law that improperly permit a jury to consider as substantive evidence of a client’s guilt a statement that was admissible only for impeachment is a strategy ‘so deficient or unreasonable as to fall outside of the objective standard of reasonableness,’” citing Autrey v. State, 700 N.E.2d 1140, 1141 (Ind. 1998).
May wrote Humphrey was prejudiced because the statement was the only evidence that specifically identified Humphrey in the murder in a case where identity is the crucial issue. The jury considered substantive evidence as the only evidence that Humphrey was the shooter in the murder.
Civil Tort - Indemnification
BC Osaka, Inc. and City Inn, Inc. v. Kainan Investment Groups, Inc.
The Indiana Court of Appeals ruled a tenant did not have to indemnify a landlord against a woman’s personal injury claims after she filed suit against both of them.
Angelica Magallanes was injured after she tripped over a rod sticking out a of a cement bumper in the parking lot of BC Osaka restaurant in Merrillville. She filed an amended complaint against BC Osaka and City Inn, the tenants, and Kainan Investment Groups Inc., the landlord, claiming they owed a duty of care to her.
Shortly after Magallanes’ filing, Kainan filed a cross-claim against City Inn, alleging the tenant owed them a contractual obligation to hold harmless and indemnify Kainan against the claims. After a hearing, the trial court granted Kainan’s cross-claim, and City Inn appealed.
In a decision written by Judge Paul Mathias, the COA did a two-step analysis to determine if the tenant had accepted indemnification. The COA ruled negligence is an area in which City Inn agreed to indemnify the landlord, but the lease agreement does not specify whether that indemnification extends to the landlord’s own negligence.
Kainan as landlord reserved the right to control and maintain the parking areas at the restaurant, according to the lease agreement, and establish rules related to its use. “At the very least, these provisions create an issue of material fact as to whether Tenant had full control and possession of the leased premises. As such, the issue of Landlord’s liability to Magallanes should not be disposed of on summary judgment,” Mathias wrote.
The court reversed the trial court’s decision and remanded it for further proceedings.
Agency Action – Unemployment Benefits
Employer v. Review Board of the Indiana Department of Workforce Development and Employee
The Indiana Court of Appeals reversed unemployment benefits awarded to a woman after it found she did have notice her job was in jeopardy despite various notes thanking her for her help in office matters she received from her employer.
C.G. was terminated on Aug. 4, 2015, by an employer referred to as M.F. She filed a claim for unemployment benefits which at first was denied by a claims deputy with the Indiana Department of Workforce Development. She appealed, and the administrative law judge found C.G. was not terminated for just cause, ruling the times the employer told her “thanks” or “thank you for your help” in notes sent to her about performance issues did not warn her that her job was in jeopardy. The ALJ held “a reasonable employee of Employer would not have understood that Claimant’s performance had violated a duty or that Claimant was subject to discharge for her job performance.” The Review Board of the Indiana Department of Workforce Development affirmed and the employer appealed.
In the decision written by Judge Elaine Brown, the court said the record indicated C.G. repeatedly failed to complete job tasks and enter patient insurance information correctly as part of her job. The employer also received complaints regarding incorrect bills. The employer had several progress notes and showed that these issues affected revenue and were discussed with C.G.
“Under the circumstances, we conclude that Claimant showed carelessness or negligence to such a degree or with such recurrence as to cause damage to Employer’s interest, breached a duty in connection with work which was reasonably owed Employer, and that Claimant’s conduct was of such a nature that a reasonable employee of Employer would understand that the conduct was a violation of a duty owed Employer,” Brown wrote.
Brown also wrote that the notes concluding the letters and notes that thanked her did not change the fact that C.G. had notice regarding the expectations of her position.
Civil Collection – Legal Malpractice
Elaine Chenore v. Robert Plantz
The Indiana Court of Appeals reversed the dismissal of a woman’s complaint against her attorney, finding the trial court improperly dismissed it pursuant to Indiana Trial Rule 12(B)(6).
Elaine Chenore hired Robert Plantz in July 2005 to pursue a claim of money damages against William Knight, in which she won nearly $11,000 in January 2006. Later that year, Knight filed bankruptcy, which Plantz told her about, but she never received notice directly from the court. The attorney told her to “wait until notified by the Bankruptcy Court” and that he was “going to appear at the Bankruptcy Court.”
Chenore learned in July 2012 that Knight’s bankruptcy was discharged and he had paid 100 percent of claims filed, but paid her nothing because nothing was filed on her behalf.
She then sued Plantz, who filed a motion to dismiss pursuant to Trial Rule 12(B)(6), claiming the two-year statute of limitations for attorney malpractice had expired. Chenore argued the statute of limitations was equitably tolled, in that Plantz never told her he didn’t represent her for purposes of filing a claim in bankruptcy court.
The trial court granted Plantz’s motion, leading to this appeal.
“Chenore was not afforded the opportunity to amend her complaint. However, she asserts that the complaint, viewed most favorably to her, indicates that she may prevail on her claim notwithstanding a two-year statute of limitations,” Judge L. Mark Bailey wrote. “According to Chenore, Plantz’s representations equitably tolled the statute of limitations and Chenore did not discover her harm until she became aware of Knight’s bankruptcy discharge in July of 2012. This was less than two years before she filed her complaint.
“Chenore’s complaint asserted facts in avoidance of the statute of limitation. To the extent that Plantz has argued that Chenore should have discovered her harm earlier, this presents a factual dispute not apparent on the face of Chenore’s complaint.”
Criminal – RICO/Theft
Charles Robinson v. State of Indiana
The Indiana Court of Appeals ruled in a split decision the state went too far when it convicted a man who committed two acts of shoplifting under the state’s Racketeer Influenced and Corrupt Organizations Act and reversed his conviction for corrupt business influence.
Charles Robinson walked into a Shelbyville Walmart with his fiancée Deborah Hill on Jan. 25, 2015, selected a home security system camera and after disposing of the box in the men’s apparel section, walked out with the camera. On Feb. 17, Robinson tried the same plan again, but this time was foiled by Walmart security.
The state charged Robinson with two counts of Class A misdemeanor theft and two counts of Level 6 felony theft based on Robinson’s prior theft convictions. He was also charged with one count of Level 5 corrupt business influence. Robinson moved to sever the trial of the theft charges from the corrupt business influence charge, but the trial court denied the motion. Robinson was found guilty of misdemeanor thefts and corrupt business influence. The trial court merged all four theft charges into the corrupt business influence charge and sentenced him on just that charge.
Noting that there is no evidence of any kind of “criminal enterprise” or increasing sophistication of his crimes, the COA majority of Judges Margret Robb and Michael Barnes, who wrote the decision, ruled the state overreached when convicting Robinson of a RICO violation. There was no evidence of planning, no evidence of accomplices or that Barnes’ fiancée was aware of Robinson’s actions, and no evidence that Robinson is a “criminal mastermind,” Barnes wrote.
“We simply do not believe the commission of two acts of shoplifting of this type is the kind of activity our legislature meant to be covered by our RICO statute,” Barnes wrote. “… Robinson, while no saint, does not fit the definition of someone involved with any kind of organized crime. He is no Lucky Luciano.”
He wrote the state was off-target “both legally and practically by attempting to elevate a two-time shoplifter to the status of a Carlo Gambino.”
The COA also ruled that the trial court was right to deny Robinson’s severance petition.
Judge Robert R. Altice Jr. dissented in the case in part. While he agreed with the denial of Robinson’s severance petition and that the state produced enough evidence to convict Robinson of theft, he thought there was enough evidence to convict Robinson of a RICO violation.
Altice disagreed that Robinson’s two shoplifting charges were not serious enough to rise to the level of a RICO violation, noting the plain language of the statute.
“Moreover, the provision of the RICO Act under which Robinson was charged does not require that he act in concert with others in any sort of criminal enterprise. If the legislature wished to limit the reach of the RICO Act to more sophisticated criminals and members of organized crime syndicates like Lucky Luciano or Carlo Gambino, it could easily have done so,” Altice wrote.
The majority remanded the case for the trial court to enter a sentence for two counts of Level 6 felony theft instead.
Criminal – Dog Sniff/Traffic Stop
State of Indiana v. Megan J. Cassady
The Indiana Court of Appeals reversed a woman’s motion to suppress evidence found at a traffic stop in a 2-1 decision after the court ruled the stop was not extended by an officer’s check of the car with his dog.
Megan J. Cassady was pulled over after not signaling properly while she was turning. During the traffic stop, DeKalb County Sheriff’s deputy Todd McCormick took his dog out and began checking the car. The dog alerted McCormick to the presence of narcotics. After searching the vehicle, McCormick found drugs under the driver’s seat. Cassady was charged with possession of methamphetamine as a Level 6 felony, possession of paraphernalia as a Class A misdemeanor and failure to signal turn as a Class C infraction.
Cassady filed a motion to suppress the evidence of the drugs at her hearing, claiming McCormick had no reasonable suspicion to extend the traffic stop because of the dog sniff. The trial court granted her motion. The state appealed.
The COA majority consisting of Judges John Baker and Elaine Brown, who wrote the decision in the case, said they disagreed with the trial court that a degree of suspicion is required to use a dog to sniff the car.
The majority also ruled that McCormick’s use of the dog did not prolong Cassady’s stop, noting that he completed the search with the dog in the time it took the dispatch center to check on Cassady’s license. The entire stop lasted just four minutes, so it did not take unreasonably long.
The case was remanded to the trial court for a hearing on Cassady’s charges.
Judge Melissa May dissented, noting she would have affirmed the trial court’s decision. She believed the stop was lengthened because of McCormick’s use of the dog to search and cited the fact that he called in Cassady’s license after he removed the dog from the car. While this wasn’t a long time, she said the amount of time the stop was prolonged has not been determined.
She also believed the officer did not have reasonable suspicion to search Cassady’s car.
Criminal – Sex Offender Registry/Ex Post Facto Laws
Richard J. McVey v. State of Indiana
The Indiana Court of Appeals agreed with a man challenging his lifetime registration as a sex offender that the law as applied to him violates the Indiana Constitution’s prohibition against ex post facto laws. But he lost a similar challenge to the unlawful-entry statute that prohibits him from entering school property.
Richard McVey was convicted of molesting his half-sister for acts that occurred between October 1998 and August 2001. He served eight years in the DOC, but returned in 2012 after violating his probation. He was then released to parole in 2014. At the same time, he challenged his convictions seeking post-conviction relief, and was partially successful. The PCR court vacated two counts, leaving only Count III, Class C felony child molesting, in which McVey admitted that his stepsister had masturbated him sometime in 2001, before the requirement for lifetime registration took effect that July.
Then McVey filed two petitions: one seeking to be removed from the lifetime sex-offender registry, and one asking to be exempt from the unlawful-entry statute because he was convicted of child molesting before that statute went into effect. The unlawful-entry statute makes it a crime for a person who is a registered sex offender and who is convicted of child molesting to enter school property. The trial court denied both petitions.
At his trial, although McVey did not testify as to when the masturbation incident occurred, a state police officer did, saying during an interview with McVey, McVey admitted the incident occurred approximately 12 to 14 months prior. That would have placed it between March and May 2001, before the lifetime registration amendment took effect.
Thus, McVey must only register for 10 years, the law in effect at the time the crime was committed, the COA held. His 10-year registration period started when he was released from prison on July 15, 2011, and is extended for the 730 days he was incarcerated for violating probation, Chief Judge Nancy Vaidik wrote.
The judges found using the seven-factor test outlined in Mendoza-Martinez that the unlawful-entry statute, which took effect July 1, 2015, is not an ex post facto law as applied to him. McVey wants to obtain his commercial driver’s license from Blue River Career Programs, but this is considered a school property. McVey chose to attend this school after the statute went into effect in July, Vaidik noted. In addition, the judges found factor 7, which addresses whether the statute appears excessive in relation to the alternative purpose assigned, is non-punitive as applied to him as McVey was convicted of a crime against a child.
Indiana Tax Court
Tax – Sales Tax
RDM Sales and Service Inc. v. Indiana Department of State Revenue
The Indiana Department of State Revenue and a company that sold food through vending machines and its cafeteria both were victorious in Indiana Tax Court on the issue of whether all of the company’s vending machine sales and cafeteria sales are subject to sales tax and negligence penalties.
RDM Sales and Service sold food through vending machines and operated two cafeterias at business locations owned by third parties. After an audit, the DOR claimed RDM did not report all vending machine and cafeteria food sales subject to sales tax during the 2006-2008 tax years and issued proposed assessments of tax, interest and penalties to RDM. RDM filed a protest and the department denied it in 2009. RDM initiated a tax appeal in 2010; three years later, DOR filed a motion for summary judgment.
The Tax Court granted summary judgment on DOR’s claim that bottled water and fruit juice sold at regular price from vending machines is subject to sales tax per Indiana Code 6-2.5-5-20(a). RDM was unable to convince the court that it should be exempt from this statute. However, RDM won a partial victory when the Tax Court ruled that bottled water and fruit juice dispensed from vending machines for free or at a discounted rate to exempt customers was not subject to sales tax.
The Tax Court also ruled food for immediate consumption sold by the company was subject to sales tax even though RDM only operated the restaurants where the food was served and didn’t own them. The court said the plain language “premises of the seller” does not mean ownership, but place of business. If the Legislature wanted to be more specific and include ownership, it would have clarified as such, Judge Martha Wentworth wrote.
The court also ruled that the DOR can impose negligence penalties on RDM for not paying sales tax because RDM relied unreasonably on a 2004 tax clarification without investigating it fully.
However, the Tax Court found genuine issues of material fact on whether cut or repackaged food, pasteurized food requiring cooking, or bakery items sole without utensils were subject to sales tax. A separate trial on these issues will be held at a later date.•