Indiana Court Decisions – Aug. 16-28, 2017

7th Circuit Court of Appeals

Aug. 18

Civil – Interpreter

Dustin King v. Marion Circuit Court

16-3726

A federal court ruling in favor of a deaf litigant who was denied a court-provided sign language interpreter for mediation in his child custody case was reversed on appeal.

The 7th Circuit Court of Appeals reversed the judgment and award of $10,380 in damages in favor of Dustin King. The panel remanded his federal civil rights case brought under the Americans with Disabilities Act with instructions to dismiss the suit, though King may file an action in state court.

“The district court held that Indiana does not enjoy sovereign immunity because this case falls within the abrogation of (state sovereign) immunity sustained in Tennessee v. Lane, 541 U.S. 509 (2004). We disagree with that conclusion,” Circuit Judge Frank Easterbrook wrote for the panel. In Lane, a litigant who used a wheelchair couldn’t reach a second-floor courtroom, which the court held violated his right to fundamental access to the court.

Easterbrook wrote that no such violation occurred in King’s case, when he requested and was denied a court-appointed American Sign Language interpreter in Marion County’s Modest Means Mediation Program. King ultimately participated in mediation with the interpretative assistance of a relative and received a satisfactory outcome. Further, Easterbrook wrote, local court rules provide Marion Superior judges the discretion to determine when mediation is appropriate.

“King does not contend that the Marion Circuit Court treats deaf litigants unfairly or that deaf litigants encounter any barrier to litigation on a par with litigants who can hear. The Circuit Court’s invitation to litigate therefore afforded King full access to court,” Easterbrook wrote.

District Judge Jane Magnus-Stinson ruled in King’s favor in May 2016, holding that the denial of a court-appointed interpreter for King was discrimination under Title II of the Americans with Disabilities Act. King’s suit was joined by the U.S. Justice Department and the American Civil Liberties Union of Indiana. The federal government argued in a brief that the Marion Superior Courts were deliberately indifferent to King’s disability.

The 7th Circuit saw otherwise.

“The United States has not explained how awarding damages to King could ward off future unconstitutional conduct. As far as we know (and as far as King contends), the Circuit Court does not wield its power to order mediation as part of a scheme to bar the disabled from obtaining legal redress. It does not routinely demand mediation as a prerequisite to adjudication, knowing that the parties’ disabilities will block mediation and so block litigation too,” Easterbrook wrote.

“Nor does King contend that the Circuit Court plans to implement such a strategy in the future. What happened to him points to just the opposite conclusion. Our sample of one indicates that, when a disabled person might have trouble mediating, the Marion Circuit Court immediately offers full adjudication. We do not have any reason to believe that a single disabled person in Marion County will ever be denied access to court because of the limits on the subsidies provided by the (Modest Means Mediation) Plan, or because of the mediation process as a whole. And in the absence of any other evidence, we cannot say that allowing King’s damages action would plausibly function as a prophylactic against future constitutional violations.”

Indiana Supreme Court

Aug. 24

Civil Tort – Child Abuse Reporting

John Doe #1, et al. v. Indiana Department of Child Services

49S02-1609-CT-464

A divided Indiana Supreme Court has affirmed summary judgment for the Department of Child Services after one of its employees revealed the name of a child abuse reporter, finding there was no statutory or common law basis to impose a duty of confidentiality.

John Doe, who lived in a small town in Southern Indiana, regularly drove neighborhood children to church, which caused him to notice that “something wasn’t quite right” with some of his passengers. Doe suspected the children were victims of abuse and neglect, so he called the Department of Child Services’ abuse and neglect hotline to file a report.

While speaking with a DCS employee, Doe explained he did not want others to know he had called. The operator told Doe his identity would be kept confidential, so he provided his first name and phone number.

A few days later, one of Doe’s neighbors began screaming at Doe and waving an unredacted DCS report at him while he was working in his yard. Word of Doe’s report began to spread around the town, and he was labeled a snitch and was subject to the ire of his neighbors. Doe’s wife and children were also subject to threats and taunts, which were bad enough to cause his daughter to need counseling.

The Does sued DCS for negligently disclosing his identity, arguing Indiana Code 31-33-18-2 implies a private right of action and that the DCS employee created a common-law duty of confidentiality when she told Doe his identity would remain confidential. The department moved for summary judgment, which the Marion Superior Court granted.

A divided panel of the Indiana Court of Appeals then reversed the grant of summary judgment, with the majority agreeing with Doe that DCS owed a common-law “private duty” based on the promise of confidentiality. Chief Judge Nancy Vaidik dissented, finding there was no right of action and that the private-duty test could apply only to emergency dispatch situations.

The high court heard oral arguments in the case in November, then affirmed the grant of summary judgment in a divided opinion.

Chief Justice Loretta Rush, writing for the majority, first noted the objective of Section 2 is to protect all Hoosier children, not individual child abuse reporters. Further, the statute contains two alternative enforcement mechanisms — a conviction of a Class A infraction against a DCS employee who “knowingly or intentionally discloses” confidential information, and the possibility of employee discipline. Thus, there is no inferred private right of action with Section 2, she wrote.

Similarly, Rush said there was not common-law duty on DCS, as the “private duty” test laid out in Mullin v. Municipal City of South Bend, 639 N.E.2d 278, only applies to a government’s promise to send emergency services. Additionally, because the DCS employee merely communicated an existing rule about confidentiality, she did not meet the standard for a “specific undertaking” to create liability under the Restatement (Third) of Torts section 42.

Finally, the high court agreed to consider the belated claim that a duty was created under the three-part test in Webb v. Jarvis, 575 N.E.2d, 992 (Ind. 1991), but the majority found Doe’s argument also failed under that test.

“Regrettably, this result does not undo the wreckage,” Rush wrote. “By relaying the statutory requirement of confidentiality and then violating it, DCS exposed an innocent family to harassment and threats.”

Regardless, the majority determined there was no basis for imposing a duty of confidentiality on DCS and affirmed the grant of summary judgment. Justice Steve David, however, wrote in a separate opinion that Doe could bring a common-law negligence claim under Webb, so summary judgment would be inappropriate.

Specifically, David said all three Webb factors — the relationship between the parties, the reasonable foreseeability of harm and public policy concerns — weigh in Doe’s favor because the majority’s ruling could chill reporters from coming forward and because the DCS employee’s promise that “nobody will find out” was an “explicit assurance.”

“It is this extra promise that is beyond the statute that gives rise to the common-law duty in this case,” David wrote.

“While I acknowledge that this case involves a question of law rather than an issue of fact, allowing the claim to proceed is consistent with our state’s constitutional mandate that plaintiffs may seek a remedy and our practice of letting cases proceed to trial,” David continued. “… I believe dismissing his claim on summary judgment might send a message that government actors can make false promises in an effort to achieve a desired result and not be held legally accountable when harm comes to the promise.”

David would have reversed summary judgment, though he did concur that there is no private right of action under the statute.
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Aug. 28

Civil Plenary – Caseload/Mandate

Mary Price v. Indiana Department of Child Services; Director of Indiana Department of Child Services

49S05-1705-PL-285

The Indiana Supreme Court has declined to issue a judicial mandate that would require the Department of Child Services to comply with statutory caseload limits, finding the statute in question does not provide specific compliance guidelines that would warrant issuing a mandate.

That decision comes after DCS family case manager Mary Price sued her employer for failing to comply with Indiana Code 31-25-2-5, which limits her caseload to 17 children. According to her 2015 complaint against DCS and its director, Price’s caseload rose as high as 43 children, prompting her to seek an order mandating compliance with the caseload limits in the statute.

The department moved to dismiss on the grounds of a lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted, and the Marion Superior Court dismissed Price’s complaint under Rule 12(B)(6). But a divided panel of the Indiana Court of Appeals reversed as to the mandate, finding a “clear, absolute and imperative duty on DCS to comply with maximum caseload standards as determined by the legislature.”

After hearing arguments in the case in June, the Indiana Supreme Court agreed with the trial court that dismissal of Price’s case is the appropriate action, finding the issuance of a mandate would be inappropriate in this case.

Noting a judicial mandate is an “extraordinary remedy,” Justice Geoffrey Slaughter wrote Monday for the unanimous court that such a remedy is only available when needed to compel a specific, ministerial act and only if the plaintiff is clearly entitled. While I.C. 31-25-2-5 does impose strict caseload limits, it does not specifically explain how DCS is expected to comply with those limits, Slaughter wrote. Without that specific guidance, the statute “affords the Department wide latitude in complying” and, thus, is not amenable to a mandate, he wrote.

“Although she seeks a mandate to force the Department’s compliance with caseload ratios, her brief recognizes the department’s discretion in accomplishing that goal: ‘How DCS does this is, of course, ultimately up to DCS,’” Slaughter wrote. “Price’s acknowledgment underscores our conclusion that the statutory cap is an outcome not susceptible to a judicial mandate.”

“…We think the best yardstick for resolving this question is the extent and nature of judicial oversight required to ensure compliance with the underlying obligation,” Slaughter continued. “Weighing in favor of mandate are those matters requiring little or no judicial time or expertise. Militating against mandate are those matters requiring more oversight, expertise, and that are not readily susceptible to a simple directive to obtain compliance.”

Price also supported her claim by pointing to the 1934 Indiana Supreme Court case of Gushwa v. State ex rel. Oster, 206 Ind. 237, 189 N.E. 129, in which the high court affirmed a judicial mandate to require a township trustee to comply with a statute that said the trustee “shall establish and maintain…a high school,” in certain conditions which had been met. But Slaughter rejected that argument, noting no cases since Gushwa have followed its precedent and that no other case authorizes the “issuance of a mandate to compel such an open-ended set of tasks.” However, the justices did not expressly overrule the 1934 case.

Though Price cannot proceed with the mandate action, the high court noted she can still seek relief through the state’s civil-service complaint procedure. However, it did not specify what relief she might be entitled to.

Indiana Court of Appeals

Aug. 16

Miscellaneous – Tax Deed

In re Petition of Wiper Corporation for Tax Deed, Wiper Corporation v. Patricia E. Godwin, Barbara S. Sanders, Joseph Kaufman, James Zwickel, Thad Fischer, Trent Fischer, and Trina Fischer Boden

87A01-1512-MI-2335

A judgment for owners of a property wrongly redeemed after a tax sale was affirmed in part by the Indiana Court of Appeals, with Judge Terry Crone appropriating a Kenny Rogers classic to introduce a 31-page decision that reduced the attorney fees and other relief to which owners were entitled.

“Attorneys, like gamblers, should ‘know when to hold ’em [and] know when to fold ’em.’ Instead of walking away from litigation that was essentially over, attorneys representing the owners of property that was sold for nonpayment of taxes racked up thousands of dollars in fees and costs trying to keep (Wiper) from receiving a refund for its tax sale purchase, which had been invalidated,” Crone wrote.

The owners of a Warrick County property that was redeemed after a tax sale but later voided because the deed buyer failed to provide proper notice are entitled to relief the trial court ordered, but not all the legal fees.

Wiper Corp. bought a tax sale deed to property James Zwickel grew up in. Zwickel had moved to Tennessee and was the legal owner, but taxes went unpaid after another owner was supposed to pay them but didn’t. Wiper Corp. President Vinod Gupta purchased the tax sale deed in 2010 and sought a deed to the property, though he failed to provide statutory notice to Zwickel and misrepresented to the court that he had.

Ultimately, the owners sued and won. The trial court entered an order affirming county officials who voided the sale; applying the $6,800 Gupta paid for the tax deed to the owners’ past tax obligations and denying him a refund; barring Gupta from participating in the next county tax sale; and awarded the owners attorney fees of more than $72,000.

The panel ruled the trial court had no authority to deny Wiper a refund for its invalidated tax sale and apply the purchase money to the owners’ tax obligations. Likewise, the trial court abused its discretion in awarding attorney fees after Wiper withdrew its petition for a tax deed. The award of fees is justified only to the point when Wiper ceased a claim of ownership of the property. The owners also waived any claim that the trial court erred by failing to impose sanctions against Wiper’s attorney, Vivek, who is Gupta’s son.

The matter was remanded and the COA ordered a recalculation reducing the amount of attorney fees the owners are entitled to receive from Wiper.

“We are sensitive to the Owners’ indignation at Wiper’s attempt to obtain their ancestral home by less than scrupulous means. And we strongly condemn Wiper’s efforts to deceive the trial court and frustrate the discovery process. But once Wiper finally withdrew its petition for tax deed, the Owners’ counsel no longer had any basis for holding Wiper’s feet to the fire, except perhaps to pursue an independent claim, which they did not do,” Crone wrote.

Miscellaneous – Civil Forfeiture

Robert Bowman, Tommy Maurry, and Jacob Murphy, et al. v. State of Indiana

49A02-1606-MI-1463

The state of Indiana must return $30,000 that was seized as part of a suspected drug trafficking scheme after the Indiana Court of Appeals ruled the state failed to prove the money could reasonably be considered the proceeds of drug trafficking.

While visually inspecting parcels at a local shipping company in November 2015, Indianapolis Metropolitan Police Detective Brian Thorla was drawn to two parcels that were both shipped from Illinois to the same man, Jacob Murphy, in California. Thorla noticed the packages because they were being sent by priority overnight shipping, heavily taped and addressed to the same California recipient, which is known as a “source state for the importation/exportation of controlled substances.”

Thorla conducted a K-9 dog sniff on the parcels, which alerted positively to the odor of controlled substances in each package. Thorla then obtained a search warrant authorizing law enforcement to search the packages “for controlled substances, records of drug trafficking, and proceeds of drug trafficking.”

When law enforcement officials opened the parcels, they found $30,300, but no controlled substances or records of drug trafficking. The money was seized, but no criminal charges were brought against any of the defendants involved, including Murphy or Robert Bowman and Tommy Maurry, who were listed as the senders on the packages. There is also no indication that any of the men have been the subjects of a state or federal criminal investigation.

The state moved to transfer the money to the United States, but the men objected, arguing the seizure of the currency exceeded the scope of the search warrant. The Marion Superior Court ultimately granted the state’s motions, finding there was probable cause to “authorize the seizure of ‘proceeds of drug trafficking’ … .”

The men appealed, and the Indiana Court of Appeals reversed the grant of the state’s motion to transfer.

Judge John Baker, writing for the unanimous appellate panel, said the only way the seizure of the money could have fallen within the terms of the search warrant was if it could “reasonably be concluded to be ‘proceeds of drug trafficking.’” In this case, Baker said the fact that the parcels were heavily taped and were being shipped overnight to the same California recipient was not enough to prove the money could reasonably be considered the proceeds of drug trafficking.

“So, we are left with the fact that a K-9 unit gave positive alerts on both parcels at issue,” Baker continued. “The very most that this fact means is that at some point, someone handling the parcels transferred an odor of controlled substances to them. It may have been Bowman and Maurry, who sent the parcels, or it may have been any number of individuals involved with the handling of the parcels in transit.”

Further, no drugs or drug paraphernalia were found in the parcels, and none of the men were charged with drug crimes, so the seizure of the currency exceeded the scope of the search warrant, Baker said. The appellate court remanded the case with instructions to return the money to the appellants.
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Aug. 24

Agency Action – Ordinance

Duke Energy Indiana, LLC v. Town of Avon, Indiana

93A02-1704-EX-780

The Indiana Utility Regulatory Commission must consider the reasonableness of an Avon ordinance seeking to force a utility company to pay for the cost of moving power lines for a road construction project after the Court of Appeals ruled the commission erred in dismissing a complaint challenging the ordinance.

In 2014, the town of Avon informed Duke Energy Indiana LLC that it intended to make road and trail improvements near the intersection of County Road 625 East and U.S. Highway 36 in Hendricks County and would need Duke to move certain utility poles, power lines and other equipment in that area. The equipment in question was owned by Duke, but was located either on land owned by Avon or in the town’s right-of-way.

Then in 2015, the Avon Town Council passed an ordinance shifting the costs of relocation of Duke’s facilities to Duke, with a $500 fine for violation of the ordinance. In response, Duke told the town it would not comply with the ordinance because it was unreasonable and contrary to Indiana law.

Avon then filed a complaint against Duke seeking declaratory and injunctive relief in the Hendricks Circuit Court, while Duke filed a complaint with the Indiana Utility Regulatory Commission. In its IURC complaint, Duke alleged that because the construction project involved a “multi-use trail,” it was the town’s responsibility to pay for relocation of the facilities. Duke also argued the IURC had jurisdiction over the matter pursuant to Indiana Code 8-1-2-101(a)(1).

The parties eventually entered into an agreement which held that Avon would tender the more than $103,400 in relocation costs to the trial court while Duke would relocate its facilities by Dec. 1, 2016. Duke also reserved the right to seek a ruling from the IURC, but the commission dismissed Duke’s complaint without prejudice, holding that “Commission involvement in a pending trial court matter would be inappropriate.”

Duke appealed, and the Indiana Court of Appeals reversed the IURC’s dismissal.

In the unanimous opinion, Judge Edward Najam pointed to I.C. 8-1-2-115 (2017), which holds, “The Commission shall inquire into any…violation of the statutes of this state or the ordinances of any city or town…and shall have the power, and it shall be its duty, to enforce the provisions of this chapter… .” Further, Section 101(a)(1) of that chapter holds the commission must set a hearing if a public utility makes a complaint against a municipal ordinance and must determine if the ordinance is unreasonable.

“We hold that Section 101(a)(1) and Section 115 unambiguously establish exclusive jurisdiction in the IURC to hear Duke’s complaint on the validity of the Ordinance,” Najam wrote. “…Accordingly, Indiana law directs that the subject matter of the dispute between Avon and Duke be decided by the IURC.”

Thus, the dismissal was reversed and the case was instead remanded with instructions “that the IURC proceed in a manner not inconsistent with this opinion.” The court specifically declined to instruct the commission to hold a hearing, as Section 61(a) of the statute in question allows it to enter an order without a formal public hearing.
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Aug. 25

Estate – Settlement Agreement

In the Matter of the Supervised Estate of Gary D. Kent, Deceased, et al. v. Cynthia Kerr

55A01-1612-ES-2907

Ruling on a matter of first impression, the Indiana Court of Appeals found that family members may enter into an enforceable settlement agreement regarding the distribution of assets from an estate before the testator’s death.

Before Gary D. Kent died, he asked his children, Cynthia Kerr and John David Kent, to sign a settlement agreement in December 2015 specifying how their inheritance would be divided upon his death. The father had a valid will calling for an equal division of the estate, but the agreement specifically outlined who would receive particular property and satisfy a mortgage, among other things.

A week after the siblings signed the agreement that was notarized by their father’s lawyer, John executed a written notice that he was rescinding the agreement and sent it to Cynthia by certified mail. Gary died the next month, after which John and Kevin, a cousin of Gary’s who was a personal representative, filed a petition to probate the will. Cynthia challenged the probate action and asked the trial court to enforce the settlement agreement. She argued I.C. 29-1-9-1 permits prospective beneficiaries of a future inheritance to execute a family settlement before the decedent’s death. The trial court rejected her motion for summary judgment, leading to this appeal.

The COA reversed and remanded to the trial court to enter judgment on Cynthia’s motion to enforce the agreement. The panel’s statutory interpretation noted Indiana case law favors the strong presumption of the enforceability of contracts.

“Cynthia presents an issue of first impression for our courts, namely, whether Indiana Code Section 29-1-9-1 permits family settlement agreements to be executed prior to a decedent’s death,” Judge Edward Najam wrote for the court. “… (W)e hold that Indiana Code Section 29-1-9-1 does not prohibit pre-mortem family settlement agreements.

“John contends only that he had a right to rescind the agreement because Gary was still alive when he executed the rescission. But John does not support that contention with citation to authority, and we are not aware of any such authority. In sum, the agreement is supported by adequate consideration, and John’s purported rescission was a nullity. The trial court erred when it denied Cynthia’s motion to enforce the agreement,” Najam wrote•