Indiana Supreme Court
Miscellaneous – Tenants by the Entireties
Cheryl L. Underwood v. Thomas Bunger, in his capacity as the personal representative of the Estate of Kenneth K. Kinney; Judith M. Fulford; and Sheree Demming
A woman’s case to partition and sell a Bloomington property will continue after the Indiana Supreme Court reversed a lower court’s finding that the husband and wife with whom the woman purchased the property were not tenants by the entireties of the property.
In 2002, a warranty deed on a Bloomington property near the Indiana University campus was granted to Cheryl Underwood, Kenneth Kinney and his wife, Judith Fulford. The granting clause of the deed held that the three were granted the warranty “all as Tenants-in-Common.”
Twelve years later in 2014, a damages judgment was entered against Kinney and Underwood and in favor of Sheree Demming, Underwood’s former employer, becoming a lien on the property. Kinney died the same year, and in 2015, Underwood filed the present action asking the court to partition and sell the property and distribute its proceeds.
Thomas Bunger, personal representative of Kinney’s estate, moved to dismiss Underwood’s petition under Trial Rule 12(B)(6), arguing that the estate no longer had an interest in the property. Further, Demming moved for summary judgment, similarly arguing that the estate had no interest in the property and that she had a valid, enforceable lien against Underwood’s interest.
The Monroe Circuit Court granted both motions, finding that the deed clearly and unambiguously created “an estate by the entireties as to the interest of” Kinney and Fulford. The Indiana Court of Appeals affirmed those decisions on appeal nearly one year ago.
The Indiana Supreme Court, however, reversed the trial court’s decision in a unanimous opinion. Writing for the court, Justice Geoffrey Slaughter first noted that the granting clause in the warranty deed defeats the presumption that a conveyance of real property to spouses creates an estate by their entireties “by expressing an intention to create a tenancy in common among all three grantees – Underwood, Husband, and Wife.”
In 2002, the same year the warranty deed was granted, the Indiana Legislature reaffirmed the common-law presumption that spouses are tenants by their entireties, but reduced the showing required to overcome that presumption in Indiana Code Section 32-17-3-1(d) by holding that, “If: a contract expressly creates a tenancy in common; or it appears from the tenor of a contract that the contract was intended to create a tenancy in common; the contract shall be construed to create a tenancy in common.”
The deed’s granting clause included the phrase “all as Tenants-in-Common,” Slaughter said, and the use of the word “all” signifies that the grantor “did not view Husband and Wife as one entity whose unitary estate in the Property was by the entireties.”
“Were that his intention, the Deed would have described two sets of grantees – Underwood and Husband/Wife – and said they were acquiring their interests ‘both as Tenants-in-Common,’” the justice wrote. “We hold that the phrase actually used – ‘all as Tenants-in-Common’ – refers to more than two such tenants and denotes that ‘all’ three grantees take hold as tenants in common.”
The case was remanded for further proceedings.
Discipline – Disbarment
In the Matter of Donald Edward James02S00-1607-DI-389
A Fort Wayne attorney who repeatedly failed to cooperate in a disciplinary action has been disbarred for mismanagement of his trust account and converting client funds.
The justices of the Indiana Supreme Court disbarred Donald Edward James after previously suspending him in January for failing to respond to a September 2016 show cause order related to two disciplinary cases.
In the per curiam opinion, the justices wrote that James’ disciplinary trouble began in July 2016 when the Indiana Supreme Court Disciplinary Commission first filed a disciplinary complaint against him. The disciplinary complaint stemmed from James’ conduct in 2015, when he “significantly overdrew his attorney trust account on three occasions, regularly commingled personal funds with client funds, made unauthorized cash and check withdrawals from the trust account for his own personal purposes, and failed to maintain adequate trust account records.”
James largely failed to cooperate with the investigation into his misconduct, the justices wrote, and did not participate in any of the disciplinary proceedings. As aggravating factors, the hearing officer cited James’ “dishonest and selfish motive,” his multiple offenses, the criminal nature of his misconduct, his deceptive practices during the investigation and his refusal to acknowledge the wrongfulness of his actions.
The hearing officer recommended that James be disbarred, and after finding that he had violated Indiana Professional Conduct Rules 1.15(a), 8.1(b), 8.4(b) and (c) and Indiana Admission and Discipline Rules 23(29)(a)(2), (3) and (4), the high court justices agreed, effective immediately. The costs of the proceeding are assessed against James.
Indiana Court of Appeals
Criminal – Right to Allocution
Larenda Jones v. State of Indiana
A Marion County woman will be given an opportunity to urge the court not to revoke her placement in a work release program after the Indiana Court of Appeals held that the trial court had violated her right to allocution by refusing to let her speak.
Larenda Jones pleaded guilty to Level 5 felony battery against a public safety officer and was sentenced to three years, with two years on home detention through Marion County Community Corrections and one year suspended to probation.
A few months after her sentencing, Jones admitted to violating the terms of her home detention, so the Marion Superior Court revoked her home detention placement and instead ordered her to a work release program at the Craine House Residential Center. However, the state soon presented evidence alleging that Jones had gotten into physical and verbal altercations with other inmates at the center, requiring the intervention of the Craine House staff.
Jones testified at a subsequent hearing that she had not been taking her medications for her mental health issues and further claimed that the two incidents in question were not as bad as the state had presented them to be. However, the trial court once against found that Jones had violated the terms of her placement, so she was ordered to serve two years in the Department of Correction and one year on “strict compliance” probation.
During a discussion about credit time, the trial court denied Jones’ request to interject and further told her that it could not provide her with a specific release date from the DOC. On appeal, Jones claimed that the court was required to inform her of possible release dates under Indiana Code 35-38-1-1, but the Indiana Court of Appeals disagreed.
Judge Paul Mathias, writing for the appellate court, said the panel agreed with the state’s argument that I.C. 35-38-1-1 only applies to when the trial court is pronouncing an initial sentence, not a sentence related to probation revocation proceedings. The appellate court based that decision on the Indiana Supreme Court’s holding in Vicory v. State, 802 N.E.2d 426, 429 (Ind. 2004), which dealt with a similar issue under I.C. 35-38-1-5.
However, the appellate panel agreed that the court had denied Jones’ right to allocution. Under Vicory, the court held that “when the situation presents itself in which the defendant specifically requests the court to make a statement, as it did here, the request should be granted.”
“Thus, although the trial court was not required to ask Jones if she wished to make a statement, once she expressed a desire to make such a statement, the trial court should have allowed her to do so, as due process required that she be permitted to speak,” Mathias wrote.
The appellate court, therefore, reversed the revocation of Jones’ placement in work release and remanded with instructions to allow her to make a statement to the court as to why her placement should not be revoked.
Judge John Baker, writing in a separate concurring opinion, urged the Indiana Supreme Court to revisit its interpretation of the right of allocution under I.C. 35-38-1-5.
Civil Plenary – Accountant Malpractice
Magic Circle Corp., D/B/A Dixie Chopper, Arthur Evans, Wesley Evans, and Jeffrey Haltom v. Crowe Horwath, LLP
The Indiana Court of Appeals has allowed an accountant malpractice claim to continue after holding that the economic loss rule and provisions with a contract do not bar a tort complaint.
When the Magic Circle Corp., also known as Dixie Chopper, began experiencing business and financial difficulty in 2008, it hired Crowe Horwath LLP to provide audit services through 2013. That year, Crowe’s year-end audit of the company’s 2012 financial records disclosed a $14 million loss for Magic Circle, a loss that had gone undiscovered in part due to inaccurate information provided to the company by two men hired to help it through a business turnaround effort.
Magic Circle subsequently hired another auditing firm, who confirmed that the two men had given the company inaccurate information but also found that Crowe’s audit reports were incorrect and that the auditors had not discovered the financial problems until 2013. Magic Circle and its shareholders filed suit against Crowe and the two men. The St. Joseph Circuit Court dismissed the complaints not relating to Crowe.
Crowe then filed a motion to dismiss to Magic Circle’s claims that Crowe aided and abetted fraud and committed malpractice. The St. Joseph Circuit Court granted the motion to dismiss the account malpractice claim for failure to state a claim under Trial Rule 12(B)(6), prompting the instant appeal.
The Indiana Court of Appeals reversed the trial court’s dismissal of Magic Circle’s case, with Judge L. Mark Bailey, writing for the panel, first finding the economic loss rule does not have the effect of barring the accountant malpractice claim at tort.
The Indiana Supreme Court has held that “the economic loss rule reflects that the resolution of liability for purely economic loss caused by negligence is more appropriately determined by commercial rather than tort law,” Bailey wrote. However, the judge noted that the Supreme Court has further held that the economic loss rule is a general rule with exceptions.
Drawing on precedent from the Illinois case of Congregation of the Passion, Holy Cross Province v. Touche Ross & Co., 636 N.E.2d 503 (Ill. 1994), the appellant panel held that Magic Circle’s case could be considered an exception and, thus, was not barred by the economic loss rule.
Further, Bailey wrote that the allegations Magic Circle brought against Crowe – including assigning auditors who lacked expertise with Magic Circle’s accounting system, failing to apprise the board of questionable transactions, failing to inquire into backup data and failure to undertake an independent analysis – if true, fall outside of the scope of an exculpatory clause in Crowe’s contract, which, thus, would not have the effect of barring the tort claim.
Similarly, the panel held that a limitation of liability clause within the contract also did not preclude Magic Circle’s claim because “the facts Magic Circle pled do not exclude the possibility of gross negligence in hiring or assigning employees or of failing to report known irregularities to the company’s board,” so “it is not possible to say that there is no set of facts under which a recovery might be possible.”
The case was remanded to the St. Joseph Circuit Court.
Criminal – Public Defender Fee
Darren Dwayne Langdon v. State of Indiana
The Marion Superior Court abused its discretion in imposing a second supplemental public defender fee on an indigent litigant because it lacked statutory authority to impose the fee, the Indiana Court of Appeals ruled.
After Darren Langdon was charged with Class A misdemeanor battery resulting in bodily injury, the Marion Superior Court found him to be indigent and appointed a public defender to represent him. The trial court also imposed a $50 public defender fee, which Langdon paid in addition to posting a $150 bond.
Langdon was found guilty as charged, was sentenced to time served and was once again found to be indigent for purposes of appointing appellate counsel. However, three days later, the trial court entered an order to Langdon to pay another $50 supplemental public defender fee, citing Indiana Code 33-37-4-1 and -4, and 33-37-5-19 as authority.
Langdon argued that the imposition of the second fee was an abuse of discretion. The Indiana Court of Appeals agreed and reversed the Marion Superior Court’s order for Langdon to pay the fee.
Judge Rudolph Pyle, writing for the appellate panel, said the specific sections of Indiana Code the court referenced as its authority do not support the imposition of the second fee, and further noted that the trial court offered no other statutory basis for its decision.
There are three statutory provisions that allow a trial court to order reimbursement, Pyle said – Indiana Code 33-35-7-6(a), 33-40-3-6 and 33-37-2-3. However, “Langdon is correct that none of these statutory provisions support the imposition of the second $50 fee,” the judge said.
The case was remanded with instructions to issue an amended sentencing order in Langdon’s case.
Juvenile – Termination of Parental Rights
In the Matter of the Termination of the Parent-Child Relationship of G.M. (Child) and M.M. (Mother) & K.C. (Father); M.M. (Mother) and K.C. (Father) v. The Indiana Department of Child Services
The Indiana Court of Appeals has allowed a Huntington County father to retain his parental rights to his son but terminated the mother’s parental rights after finding that she has not remedied the circumstances that led to her son’s removal from her home.
After G.M. was born to M.M. and K.C. in December 2014, the Indiana Department of Child Services took the child away from mother M.M., because she admitted to using unprescribed painkillers and heroin while pregnant. Further, K.C. reported that he was unable to care for his child because he was on probation for rape and could not be around children without supervision.
DCS filed a petition alleging that G.M. was a child in need of services, and the juvenile court in September 2015 ordered M.M. to participate in various services and allowed K.C. to participate in services as he was able while incarcerated after his probation had been revoked. M.M. did not consistently participate in her services, so DCS changed G.M.’s permanency plan to adoption. The department also moved to terminate both parents’ rights in March 2016, which the trial court agreed to order the following August.
On appeal, K.C. argued that because he was not under disposition when DCS changed G.M.’s permanency plan to adoption, the department failed to prove that G.M. had been removed from his care under a dispositional decree for at least six months, as required by Indiana Code section 31-35-2-4(b)(2)(A)(i). The Indiana Court of Appeals agreed, with Judge Melissa May writing that the juvenile court’s findings as to K.C.’s parental rights must be reversed on those grounds.
For her part, M.M. argued that she regularly visited G.M. until K.C. was incarcerated because, without him, she did not have transportation to visitations. Further, she said DCS did not approve a new service provider for her visitation until August 2015 and that her lack of transportation and work hours made it difficult to complete her other services.
However, DCS Services Manager Daniel Borne testified that M.M. did not complete an initial substance abuse assessment or meet with a substance abuse counselor, evidence May wrote was sufficient to support the juvenile court’s findings against her. The appellate panel rejected other similar arguments, such as an argument that M.M. could not respond to the guardian ad litem’s letters because she could not afford postage, finding that sufficient evidence supported the juvenile court’s findings.
But while the appellate panel disagreed with the juvenile court’s finding that G.M. views his foster parents as his “true parents” – May wrote that a non-speaking toddler could not indicate who his true parents are – such a finding does not warrant reversal because the juvenile court made other appropriate findings, the judge said.
Finally, May wrote for the appellate panel that the juvenile court correctly found that there was a reasonable probability that M.M. would not remedy the conditions that led to G.M.’s removal and that the termination of her parental rights was in G.M.’s best interests.
Post Conviction – Plea Agreement
Michael Lindsey v. State of Indiana
A man who pleaded guilty to criminal confinement will have his sentence reduced by eight years after the Indiana Court of Appeals held that his trial attorney’s erroneous counsel led the man to make the decision to reject a previous plea agreement.
After being released from prison for seven months and fearful that his parole officer was looking for him, Michael Lindsey approached a woman in the parking lot of a Hobby Lobby store and, armed with a screwdriver, attempted to force her to drive him out of the county. The woman got away, and Lindsey fled the scene.
A short time later, Lindsey encountered another woman, whom he forced to drive him away, but later let go. He was ultimately arrested and charged with attempted criminal confinement and criminal confinement, both as Class B felonies. As part of a plea agreement, Lindsey had agreed to plead guilty to both charges in exchange for a 32-year sentence, eight years shorter than the maximum sentence he was facing.
However, Lindsey changed his mind at the last minute, telling the court that his trial counsel had assured him that his two crimes were part of a single episode of criminal conduct, so his total sentence could not have exceeded 30 years. His counsel later testified it was his opinion “that it was a continuing criminal scheme or plan, because the one attempt was within a half an hour of the actual taking of the person.”
The plea agreement was modified to be an open plea and to leave sentencing to the trial court’s discretion. The trial court then found that the conduct was not part of a single episode, so Lindsey was sentence to 40 years total.
Lindsey’s first appeal was affirmed in 2010, so he filed for post-conviction relief, arguing ineffective assistance of trial counsel, leading to a guilty plea that was not knowing, voluntary or intelligent. The post-conviction court denied his petition, and the Court of Appeals affirmed the denial in 2015, finding that because Lindsey had always intended to plead guilty, he was not prejudiced.
Lindsey’s case then reached the Supreme Court of the United States, which vacated and remanded the appellate court opinion because the incorrect standard had been applied to the case. The Indiana Court of Appeals reversed the denial of Lindsey’s PCR petition.
Judge John Baker, writing for the appellate panel, said the advice from Lindsey’s counsel that his conduct constituted one episode of criminal activity “fell below the standard of performance required of attorneys.” Further, Lindsey told the post-conviction court that had he known that 40 years was “in play,” he would have elected to take the plea agreement.
Additionally, the plea agreement was drafted and Lindsey had signed it, thereby demonstrating that there was “a more than reasonable probability that the prosecutor would have gone along with the agreement,” Baker said. And because a sentence to 32 years from a maximum of 40 “is neither notably high nor low,” there was a reasonable probability that the judge would have accepted the agreement.
“Under these facts, we have little doubt that, but for trial counsel’s ineffectiveness, Lindsey would be serving a 32-year sentencing today,” the judge wrote.
Thus, the appellate panel reversed the denial of Lindsey’s PCR petition and remanded the case with instructions to modify his sentence to 32 years.
Post Conviction – Ineffective Assistance of Counsel
David Earl Ison v. State of Indiana
A convicted murderer facing life without parole in Franklin County is getting a second chance at post-conviction relief after the Indiana Court of Appeals found the trial court did not consider all the post-conviction claims properly before it.
David Ison already had 20 prior felony convictions when he was charged with five counts of murder in 2011 in Franklin County. Melvin Wilhelm, the Franklin County prosecutor, considered seeking the death penalty against Ison, but Ison ultimately signed a document agreeing to life without parole, though the document was never filed with the court.
During a guilty plea hearing, the court asked Ison multiple times if he had been coerced into pleading guilty to the murder charges. Ison said he understood his plea and had not been forced into making it, though he did not expressly waive his rights under Boykin v. Alabama, 395 U.S. 238, 242 (1969).
After receiving the LWOP sentence, Ison filed a pro se petition for post-conviction relief in June 2014, then moved in October 2015 to amend his petition and allege for the first time that his trial counsel was ineffective and that his plea was not knowing, intelligent and voluntary. The post-conviction court denied his petition, considering only the grounds for relief raised in Ison’s original 2014 petition.
Ison brought several claims on appeal, but Judge Robert Altice wrote that the Indiana Court of Appeals did not consider those arguments on their merits on appeal because the trial court did not reach those issues. However, the appellate panel did find that the 2015 amendment to Ison’s PCR petition was properly before the trial court under Indiana Post-Conviction Rule 1(4)(c).
Thus, the trial court’s conclusion that the only petition properly before it was the 2014 petition was erroneous, Altice said, so Ison’s claims of ineffective assistance of counsel and involuntariness should have been considered. The appellate panel remanded the case with instructions to the trial court to make specific findings of fact and conclusions of law with respect to those two claims.•