Indiana Court Decisions - Dec. 6-18, 2017

December 27, 2017

Indiana Supreme Court

Dec. 12

Civil Plenary — Amended Subdivision Plat

Town of Ellettsville, Indiana Plan Commission and Richland Convenience Store Partners, LLC v. Joseph V. DeSpirito


After determining a Monroe County appeal that came before the Indiana Court of Appeals was not an appeal of a final judgment, the Indiana Supreme Court has stayed its consideration of the case and remanded for the trial court to decide if it will enter a final appealable judgment.

The Indiana Court of Appeals handed down an opinion in May in the Monroe County case, which stemmed from the Town of Ellettsville Plan Commission grant of a request to amend a subdivision plat to allow Richland Convenience Story Partners, LLC to move a utility easement. Joseph V. DeSpirito, Richland’s neighbor who benefitted from the location of the easement, sued for judicial review, declaratory and injunctive relief and damages.

All three parties filed cross-motions for summary judgment, and the Monroe Circuit Court entered summary judgment in favor of DeSpirito and stated a preliminary injunction against Richland would remain in effect. However, the trial court did not rule on DeSpirito’s request for damages or a permanent injunction.

The Indiana Court of Appeals reversed that decision on the grounds that local regulations did not require DeSpirito’s consent in the circumstances of the instant case. However, the the appellate court first grappled with the question of whether Richland and the commission had appealed from a final judgment, considering a preliminary, rather than permanent, injunction remained in place.

The court ultimately decided to consider the case on the grounds that the Supreme Court “significantly relaxed procedural requirements in this regard” in the case of In re D.J. v. Indiana Department of Child Services, 68 N.E.3d 574 (Ind. 2017). The high court however, disagreed with the lower court’s reading of D.J. in a per curiam opinion Dec. 12.

“Nothing in D.J. eliminated or relaxed the requirements for appellate jurisdiction,” the court wrote. “It reaffirmed that the prerequi-sites for appellate jurisdiction are (1) entry of an appealable order by the trial court and (2) the trial court clerk’s entry of the notice of completion of the clerk’s record on the chronological case summary … D.J. explained that in a child in need of services (‘CHINS’) case, the CHINS determination is not a final judgment and that finality does not occur until the court enters a dispositional order.”

Unlike in D.J., the record in the instant case shows no final judgment, the high court said. Rather, the order the trial court entered did not direct entry of judgment on less than all of the issues, claims or parties, or determine there was not just reason for delay, as is required for an order to be considered a final judgment.

Thus, rather than ruling on DeSpirito’s appeal, the justices stayed its consideration and instead remanded the case for the trial court to decide within 90 days whether to expressly determine in writing there is no just reason for delay and to direct entry of judgment under Trial Rules 54(B) or 56(C). Richland and the board can then file a supplemental appendix that includes copies of the updated CCS and any new orders entered by the court.

“We caution, though, that in the overwhelming majority of cases, the proper course for an appellate court to take where it finds appellate jurisdiction lacking is simply to dismiss the appeal,” the court wrote.

Finally, the justices, who all concurred, wrote the trial court does not have to wait for certification of the opinion before exercising its jurisdiction on remand. They also noted no petitions for rehearing can be filed given the interlocutory nature of the remand.


Dec. 13

Tax — Refund of Sales Tax

Merchandise Warehouse Co., Inc. v. Indiana Department of State Revenue


In the first opinion written by Indiana’s newest Supreme Court justice, the high court on Dec. 13 struck down a Tax Court ruling that found an Indianapolis food freezing company did not engage in direct production of new tangible personal property.

In 2011 and 2012, Merchandise Warehouse Co., Inc. filed for refunds for sales tax it paid on electricity and equipment it used during its blast freezing process, which involves more specificity and additional steps not associated with a typical freezing process. Specifically, the company cited Indiana Code section 2.5-5-5.1(b) and 6-2.5-5-3 to support its assertion that blast freezing the food “constitutes the last stage in the (food’s) manufacturing process.”

After initially denying the refund requests, the Indiana Department of Revenue granted a 15 percent refund for only the electricity purchased and used during the freezing process. Refunds for the actual freezing equipment were once again denied.

MWC then filed for judicial review in the Indiana Tax Court, and both parties moved for summary judgment. Tax Court Judge Martha Wentworth ruled in favor of the department in January, writing that Merchandise Warehouse’s freezing process “(does) not culminate in the production of new, distinct marketable goods” as is required to qualify for the exemptions. The Tax Court also determined taxpayers must use purchased items such as electricity or freezer equipment “as part of its own process to produce other tangible personal property.”

The Indiana Supreme Court reversed the Tax Court’s opinion and entered summary judgment in favor of MWC in Merchandise Warehouse Co., Inc. v. Indiana Department of State Revenue, 49S10-1712-TA-735.

Justice Christopher Goff, writing in his first majority opinion since he joined the high court last summer, first wrote that under the Consumption and Equipment exemptions cited by MWC, the company would only be entitled to refunds if it used the equipment in question for the “direct production of other tangible personal property.” Indiana law defines direct product as “a process that substantially changes tangible personal property, transforming it into a distinct marketable good,” Goff wrote.

Indiana caselaw holds that the production process ends when it yields the most marketable good, rather than a potentially marketable product, Goff continued. Under that definition, Merchandise Warehouse’s blast freezing process constitutes direct production because it increases the food’s shelf life, thus creating a distinct product that is marketed to consumers, he said.

“Without MWC here, there is no blast-frozen food for MWC’s (customers) to sell to their own customers,” the justice wrote, likening the case to Indianapolis Fruit v. Indiana Department of State Revenue, 691 N.E.2d 1379, 1383 (Ind. Tax Ct. 1998).

Goff went on to strike down the Tax Court’s reading of the exemption statutes as requiring taxpayers to be engaged in their own production process to qualify for the exemptions. Rather, the plain language of those statutes “simply requires that the equipment be directly used in direct production.”


Indiana Court of Appeals

Dec. 8

Juvenile — Carrying a Handgun Without a License

J.R. v. State of Indiana


A juvenile adjudicated as a delinquent for two handgun-related offenses will have one of those adjudications vacated after the Indiana Court of Appeals found a lack of statutory authority to support the adjudication.

In J.R. v. State of Indiana, 49A02-1704-JV-754, Indianapolis Metropolitan Police Department Officer Richard Christian was dispatched to an eastside Family Dollar store in January, where he found three males trying to enter a vehicle. They fled when they saw Christian, but officer Nicholas Snow, who was on patrol nearby, caught one of the suspects, later identified as 16-year-old J.R.

Snow conducted a pat-down search of J.R. and did not find anything on his person, but later observed him moving his legs as if he was trying to adjust something. Snow then conducted a second pat-down, this time including a pants sweep, and found a concealed gun.

The state filed a petition alleging J.R. had committed acts that would be considered dangerous possession of a firearm and carrying a handgun without a license, both Class A misdemeanors if committed by an adult. The juvenile court entered true findings on both allegations and placed J.R. on probation, with a suspended commitment to the Department of Correction.

On appeal, J.R. first argued Snow’s second pat-down search violated his rights under the Fourth Amendment and Article I, Section 11 of the Indiana Constitution. But in a Dec. 8 opinion, Indiana Court of Appeals Judge John Baker disagreed, writing instead that J.R. had been hostile toward Snow when he was initially stopped and that his leg movements drew attention to his body.

“These actions gave Officer Snow a particularized and objective basis for suspecting that J.R. was concealing something on his person and justified the officer’s second pat-down search,” Baker wrote.

Similarly, under the three-part test in Litchfield v. State, 824 N.E.2d 356, 359 (Ind. 2005), Snow’s second search was reasonable under the totality of the circumstances and, thus, was not a violation of J.R.’s state constitutional rights, the judge said.

However, the appellate panel agreed with J.R. that his adjudication for carrying a handgun without a license must be vacated, but for a different reason than he put forth. Rather than relying on J.R.’s double jeopardy claim, the court pointed to Indiana Code section 35-47-10-5(a), which holds that a child who possesses a firearm for any purpose not permitted by statute commits dangerous possession of a firearm.

“In other words, Indiana Code section 35-46-2-1 applies only to adults who possess handguns without a license, and as a matter of law, a person under the age of eighteen is not eligible for such a handgun license,” Baker wrote for the unanimous court. “Instead, a person under the age of eighteen, such as J.R., who possess a handgun for any unauthorized reason commits, and only commits, dangerous possession of a firearm.”

Thus, the case was remanded for the carrying adjudication to be vacated and for resentencing, if necessary.


Dec. 11

Criminal — Impounded Vehicle Search

Richard Bernard Sansbury v. State of Indiana


After determining an inventory search of a man’s car was actually investigatory in nature, the Indiana Court of Appeals overturned the man’s conviction of possession of a handgun without a license. The court also threw out the man’s conviction of driving with a suspended license for lack of evidence.

After stopping Richard Sansbury’s car for failing to use a turn signal and a faulty headlight on Jan. 17, 2016, Indianapolis Metropolitan Police Department Detective Andrew McKalips learned Sansbury did not have a valid driver’s license. The vehicle was also parked in the middle of traffic at an apartment complex, so McKalips called a tow truck to impound the vehicle and began an inventory search.

During the search, McKalips found three handguns and ammunition and determined neither Sansbury nor his passenger had a valid permit for the guns. The search then ended, but McKalips had not prepared a written inventory of what he found in the vehicle.

The state charged Sansbury with possession of a handgun without a license and driving with a suspended license with a similar infraction within the past 10 years. Sansbury moved to suppress the evidence found during the search, but the Marion Superior Court denied the motion after an evidentiary hearing.

The evidence was then admitted over Sansbury’s objection at a bench trial, during which he declined to present any evidence. The trial court found him guilty as charged, prompting the instant appeal in Richard Bernard Sansbury v. State of Indiana, 49A05-1704-CR-793.

On appeal, Sansbury argued the guns and ammunition should not have been admitted as evidence because the impoundment of the vehicle violated his state and federal constitutional protections against unreasonable search and seizure. The Indiana Court of Appeals agreed, with Senior Judge Betty Barteau writing Dec. 11 the issue could be resolved completely under the Fourth Amendment.

Turning to a Fourth Amendment analysis, Barteau wrote the vehicle did pose a “threat of harm or was itself imperiled,” considering Sansbury did not have a valid license and chose to stop the car in the middle of the flow of traffic. However, the subsequent search of the vehicle was not constitutional, Barteau wrote, because the officers’ conduct “deviated greatly from the requirements of (IMPD’s impoundment) policy.”

Specifically, Barteau said neither McKalips nor Officer Mollie Johanningsmeier, whom he was training, created a list of the property found in the car. Additionally, McKalips focused his search on only valuable items, which was against department policy of taking an inventory of all items.

Johanningsmeier attempted to explain the deviations from department policy by saying that after McKalips found the guns, the search became one for evidence, not inventory. But Barteau said that testimony, coupled with their “misinterpretation of the policy,” led to the conclusion the search was investigatory. Thus, Sansbury’s conviction for possession of a handgun without a license was reversed.

The appellate court also overturned Sansbury’s driving without a license conviction on insufficient evidence grounds, finding his official driving record showed his license was suspended only from July 7 through Oct. 5, 2015. The case was remanded for further proceedings.

Civil Collection — Delinquent Property Tax Collection Contract

U.S. Research Consultants, Inc. v. The County of Lake, Indiana; Board of Commissioners of the County of Lake, Indiana, in their official capacities; and the Lake County Treasurer


In the second appeal stemming from a cancelled contract between Lake County and a delinquent tax collector, the Indiana Court of Appeals reversed a grant of summary judgment in favor of the county based on its precedent from a previous 2015 decision.

From 2000 to 2006, U.S. Research Consultants, Inc. had a contract with Lake County in which the county would assign all of its real property tax collections cases to USRC, which would collect delinquent payments. Pursuant to the contract, USRC could receive a 20 percent commission for taxes collected from cases begun before June 4, 2003, and 15 percent after that date.

To start the collection process, the county would send discs to USRC with information about property taxes that were delinquent for less than or more than one year. The treasurer instructed USRC to collect only those taxes that were delinquent for more than one year.

The county terminated the contract in November 2006 and subsequently paid requested commissions to USRC. However, USRC filed a breach of contract claim in May 2008, alleging the county owed more than $200,000 in unpaid commissions.

After a series of motions, the Lake Superior Court granted summary judgment to USRC on the basis that it was required to collect all delinquent monies, not just those that were delinquent for more than one year. The Indiana Court of Appeals, however, overturned the grant of summary judgment on that issue and remanded for the entry of summary judgment in favor of the county on the issue of interpretation of the phrase “delinquent monies” in the contract. The appeals court determined that phrase referred to just those taxes that were delinquent for more than one year, pursuant to the treasurer’s instructions.

The trial court was also instructed in a 2015 appellate opinion to conduct further proceedings on whether USRC was owed any unpaid commissions of taxes that were delinquent by more than one year. After the parties filed subsequent cross-motions for summary judgment, the trial court ruled in favor of the county on the basis of the appellate court’s 2015 ruling, prompting the instant appeal in U.S. Research Consultants, Inc. v. The County of Lake, Indiana, et al., 45A05-1704-CC-902.

The appellate court once again overturned the trial court’s grant of summary judgment, with Judge Terry Crone writing first that the original appellate panel made no determination as to when USRC had to file its claims for commissions. Thus, the 2015 opinion did not require the company to prove that it filed its commission claims within a specified time frame, as the county asserted, Crone said.

Further, billing was not an essential element of USRC’s responsibilities to the contract, so it was not required to “expeditiously” bill for commission as it was to complete its contractual duties, Crone said. Thus, the county was not entitled to summary judgment on that basis, either.

The case was remanded for further proceedings to determine whether USRC is owed any unpaid commissions. Further, if USRC can prove it is entitled to certain commission, then an award of prejudgment interest would also be appropriate, Crone said.


Dec. 13

Civil Plenary — Medical Malpractice

Diana Zelman v. Central Indiana Orthopedics, P.C., and Francesca D. Tekula, M.D.


A woman with severe back pain will be able to pursue a medical malpractice claim against her orthopedic surgeon after the Indiana Court of Appeals ruled that the clock on the two-year statute of limitations does not start until the patient discovers the malpractice.

Diane Zelman underwent spinal fusion in May 2010 to stop the pain in her lower back. After the procedure, the surgeon, Francesca Tekula, M.D., told Zelman the surgery was more involved than originally expected with the discovery of a second cyst and the decision to do a second-level fusion.

Zelman felt “intense pain” following the surgery and shared her concerns with Tekula but the surgeon maintained everything was fine. The patient sought out different specialists, receiving injections and pain medications along with physical therapy. She also met with another surgeon who told Zelman that a second back surgery would be “brutal” and had no guarantee it would alleviate her discomfort.

In 2014, Zelman underwent a second back surgery. Afterward, the surgeon, Michael Coscia, M.D., said he had found there was no fusion. Also there were no pedicle screws, which is extremely unusual because the screws are used as part of a fusion.

The next year, Zelman filed with the Indiana Department of Insurance a proposed complaint alleging medical negligence against Tekula and Central Indiana Orthopedics. The defendants filed a motion for summary judgment that the Delaware Circuit Court granted. Specifically, the court found Zelman had the ability to discover the alleged negligence before the statute of limitations deadline, which was March 1, 2013.

A unanimous Indiana Court of Appeals panel reversed the trial court in Diana Zelman v. Central Indiana Orthopedics, P.C., and Francesca D. Tekula, M.D., 18A02-1705-PL-1121.

Citing David v. Kleckner, 9 N.E.3d 147, 152-153 (Ind. 2014) and Booth v. Wiley, 839 N.E.2d 1168, 1172 (Ind. 2005), the appellate panel held the two-year limitation starts when the claimant either knew of the malpractice or learned of that facts leading to the discovery of the malpractice.

The Court of Appeals pointed out that Zelman consulted several medical professionals and was initially discouraged from undergoing a second surgery.

“Given that the second surgery was required to discover the malpractice, and given that it was described as brutal with no guarantee of success, we cannot say as a matter of law that Zelman was not reasonably diligent when she did not have the second surgery sooner than she did,” Judge Elaine Brown wrote for the court. “Thus, we hold that a genuine issue of material fact exists as to when Zelman’s pain and diligent pursuit would have led her to discover that medical malpractice was the cause.”


Dec. 14

Criminal — Direct Criminal Contempt

Bryan Fearman v. State of Indiana


The Marion Superior Court must reduce a man’s sentence for criminal contempt of court to six months in order to comply with his Sixth Amendment rights and U.S. Supreme Court precedent, the Indiana Court of Appeals ruled.

In Bryan Fearman v. State of Indiana, 49A04-1704-CR-802, Bryan Fearman was convicted of the attempted murder of Lerron McDowell, along with several other offenses. When Fearman learned McDowell’s family was in the courtroom during his sentencing hearing, he told the court, “Who gives a f--- if they’re in the f---ing room.”

The judge admonished Fearman and informed him that his behavior in court would be considered during sentencing. Fearman responded by rolling his eyes and said he would “wring (McDowell’s) f---ing neck” when he was released from prison.

The judge had Fearman removed from the courtroom, then issued an order finding him in direct contempt of court for his behavior. Noting Fearman’s behavior was the equivalent of Level 6 felony intimidation, a crime punishable by up to 2½ years in prison, the judge sentenced Fearman to 910 days in the Department of Correction on the contempt charge, with that sentence to run consecutive to his other sentences.

Fearman appealed, and the Indiana Court of Appeals agreed to reverse the contempt sentence Dec. 14. Judge Melissa May wrote for the court that Fearman’s Sixth Amendment rights were violated when he was sentenced to more than six months without being tried before a jury. That’s because his multiple interruptions and profane outbursts during the sentencing hearing occurred during a single, uninterrupted proceeding, May said, citing Codispoti v. Pennsylvania, 418 U.S. 506, 517 (1974).

“Fearman’s multiple acts of contemptuous behavior constitute a single contemptuous episode and can only warrant a ‘single punishment of not more than six months, without a jury trial,” May wrote. “Therefore, we reverse Fearman’s 910-day sentence for contempt and remand for the trial court to enter a sentencing order for criminal contempt with a six-month sentence, to be served consecutive to Fearman’s criminal convictions … .”


Dec. 15

Mental Health — Order of Regular Commitment

In the Matter of the Commitment of P.B. v. Evansville State Hospital


A woman involuntarily committed to the Evansville State Hospital for mental health treatment must be released after the Indiana Court of Appeals determined Dec. 15 there was insufficient evidence to support her commitment.

As a result of her diagnosis with schizoaffective disorder and post-traumatic stress disorder, P.B. suffered from paranoia and delusions and believed her mother was conspiring to harm her. She was also “poorly compliant” with outpatient treatment because she believed her medication was poisonous.

P.B. was admitted to the Evansville State Hospital on Feb. 13, and one day later the St. Joseph Superior Court entered an order to continue her regular commitment without a hearing. After P.B. filed for dismissal of her commitment, the trial court held a hearing, where Dr. Boris Vatel testified in favor of continuing the commitment because she was gravely disabled.

The trial court ultimately continued P.B.’s involuntary commitment, but the Indiana Court of Appeals reversed that decision Dec. 15. Judge Michael Barnes, writing for the unanimous panel, cited T.K. v. Department of Veteran Affairs, 27 N.E.3d 271, 273 (Ind. 2015), which disapproved of the Court of Appeals using a standard of review that affirmed involuntary commitments “merely if a reasonable person could have drawn the conclusion that commitment was necessary, even if other reasonable conclusions were possible.”

Although P.B. had paranoid delusions and often had confrontations with her neighbors, there was no evidence her delusions caused her to destroy property or harm herself or other people, Barnes said. Additionally, there was no evidence she was unable to provide food, clothing and shelter for herself, he said.

“Essentially, Dr. Vatel’s recommendation in favor of P.B.’s continued involuntary commitment was based on her unpleasantness and inability to get along with other people, her paranoid delusions, and her failure to fully cooperate with treatment,” the judge wrote. “None of this is untrue, and there is no doubt that P.B. suffers from severe mental illness. However, the statutory definition of ‘gravely disabled’ is very specific, and it has not been met here.”


Dec. 18

Criminal — Theft from Restaurant

Tony McMiller v. State of Indiana


The Indiana Court of Appeals has reversed a man’s misdemeanor theft conviction after finding the state failed to prove the man went to a restaurant and consumed food and drink with the intention of not paying. However, the court upheld the man’s related disorderly conduct conviction.

After ordering food and drink at Scotty’s Brewhouse for herself and Tony McMiller, Karri Garcia tried to pay the bill with her husband’s credit card. The card was declined, and when the manager learned McMiller and Garcia could not pay, he called the police.

Officers arrived, and McMiller tried to pay the bill with his SSI debit card, which also was declined. He then claimed his sister would come and pay after she got off work, but she never arrived. Other patrons also were asked to pay, but no one offered to do so.

The officers then placed McMiller and Garcia under arrest, and McMiller began talking very loudly and trying to convince other patrons sitting nearby to pay his bill. McMiller continued to bother the other customers, even after officers asked him to stop.

After a subsequent bench trial, McMiller was convicted of Class A misdemeanor theft and Class B misdemeanor disorderly conduct. He appealed in Tony McMiller v. State of Indiana, 49A02-1706-CR-1192, and the Indiana Court of Appeals partially reversed his convictions Dec. 18.

Judge Melissa May, writing for the panel, wrote that the state failed to present evidence that McMiller behaved in a manner that suggested he consumed Scotty’s food and drink with an intent to deprive the restaurant of the value thereof. Rather, the record showed McMiller thought Garcia was taking him out to dinner and would pay, then tried to make other arrangements when her credit card was declined.

“While it is not our role to reweigh evidence or judge the credibility of witnesses, we also cannot sustain a conviction for a crime the State did not prove,” May wrote. “…(T)he state has not proven McMiller had the intent to deprive Scotty’s of the value when he consumed the food and drink. Therefore, we must reverse.”

However, the appellate court did uphold McMiller’s disorderly conduct conviction, considering the evidence that McMiller continued to talk at an increasing volume to try to convince other patrons to pay for the meal, even after officers told him to stop.•


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