7th Circuit Court of Appeals
Civil — Alcohol Distribution/Prohibited Interest Statute
E.F. Transit, Inc. v. David Cook, et al.
The legal battle over an Indiana law that prohibits companies from holding permits for both beer and liquor wholesaling will continue after the 7th Circuit Court of Appeals reversed the dismissal of a federal case that challenges the enforcement of Indiana’s prohibited-interest statute.
The case of E.F. Transit, Inc. v. David Cook, et al., 16-3641, traces back to 2009, when E.F. Transit — an Indiana motor carrier that warehouses and transports beer, wine and liquor — entered into a tentative agreement to provide services for Indiana Wholesale, a wine and liquor wholesaler. The agreement would have allowed E.F. Transit to transport Indiana Wholesaler’s products in tandem with its deliveries for E.F.’s largest customer, Monarch Beverage.
Monarch is licensed as a beer and wine wholesaler that shares both ownership and leadership with E.F. Transit. That relationship raised concerns at the Indiana Alcohol and Tobacco Commission, which found that E.F. had an indirect interest in Monarch’s beer wholesaling permit. Thus, there were concerns about violations of Indiana’s prohibited-interest statute if E.F.’s relationship with Indiana Wholesale, which had a liquor wholesaling permit, proceeded.
Indiana Wholesale eventually withdrew from the agreement after the ATC refused to give its stamp of approval to the arrangement, prompting E.F.’s instant suit against the commission and its individual commissioners. The transportation company alleged the Federal Aviation Administration Authorization Act preempted enforcement of Indiana’s prohibited-interest laws, but the U.S. District Court for the Southern District of Indiana dismissed the claim on ripeness grounds.
While E.F. Transit’s federal case was up on appeal, the Indiana Supreme Court issued a ruling in July in the related case of Indiana Alcohol and Tobacco Commission v. Spirted Sales, LLC, 79 N.E.3d 371, 379 (Ind. 2017). In that case, the justices — excluding Mark Massa, who did not participate, and Christopher Goff, who had not yet joined the court — overturned a ruling granting Spirited Sales, LLC a liquor wholesaling permit. Spirited is an affiliate of Monarch, so the justices concluded “Monarch and Spirited’s overlapping ownership … bars Spirited from obtaining the sought-after permit.”
The high court also concluded the “ties between EFT and Monarch (are) so extensive that EFT could reasonably be deemed to hold an interest in a beer wholesaler’s permit — an interest prohibited by a combined reading of (Indiana Code) sections 7.1-5-9-6 and 7.1-1-2-5.” That decision eliminates the ripeness concerns in the instant federal case, 7th Circuit Court of Appeals Judge Diane Sykes wrote in a reversal of the district court’s dismissal.
“…(T)he Indiana Supreme Court has now construed the prohibited-interest statutes to forbid E.F. Transit from entering into an agreement like the one it negotiated with Indiana Wholesale (or any similar company),” Sykes wrote. “Although the penalty of a permit revocation would fall on Monarch, prosecution for a prohibited-interest violation is a standing threat against both it and E.F. Transit.”
“That’s easily enough for a ripe claim,” Sykes wrote.
Indiana Supreme Court
Criminal – Habitual Offender Evidence
Darryl Calvin v. State of Indiana
A divided Indiana Supreme Court reversed a man’s habitual offender enhancement after determining his two prior Illinois convictions were statutorily considered Level 6 felonies, thus disqualifying the enhancement. The dissenting justice, however, found ambiguity in the statutes at issue.
After breaking into and burglarizing a Fort Wayne home, Darryl Calvin was arrested and charged with Level 4 felony burglary. The state also alleged he was a habitual offender based on two prior Illinois convictions for Class 1 felony residential burglary.
A jury found Calvin guilty as charged, and he was sentenced to six years for the burglary, plus an additional 10 years for the habitual offender enhancement. The Indiana Court of Appeals upheld Calvin’s conviction, agreeing with the state that Calvin’s appellate argument — that Indiana treats all out-of-state felonies as Level 6 felonies, two of which cannot support a habitual offender enhancement — would lead to absurd results.
But the Indiana Supreme Court reversed Calvin’s habitual offender enhancement in Darryl Calvin v. State of Indiana, 02S03-1709-CR-611. Chief Justice Loretta Rush, writing for the majority of a 4-1 court, said under Indiana Code section 35-50-2-1(a) (2014), the definition of a Level 6 felony includes convictions “in any other jurisdiction at any time, with respect to which the convicted person might have been imprisoned for more than one (1) year.”
Further, I.C. 35-50-2-8(b) (Supp. 2016) allows for a habitual offender enhancement if an offender has two prior unrelated felonies, one of which cannot be a Level 6 or Class D felony. Thus, the plain reading of those two statutes together means Calvin’s two Illinois convictions cannot qualify him as a habitual offender, Rush wrote.
The majority then went on to reject the state’s absurdity claim, with Rush writing a “trifecta of cases dating back to 1991” support the court’s current reading of the habitual offender statute. Those cases are Rowold v. State, Cain v. State, and Johnson v. State.
Additionally, invoking the absurdity doctrine would “expand criminal liability beyond the habitual-offender statutes’ long-settled plain meaning,” which would conflict with the principles of separation of powers and the narrow construction of criminal statutes, the chief justice wrote.
“To be clear, we are not abolishing the absurdity doctrine, which we have consistently applied since the early days of our 1851 Constitution,” Rush wrote, noting that the outcome of the plain reading of the statutes is “peculiar.” “This case, though, falls outside the doctrine’s boundaries.”
The case was remanded for a retrial on the enhancement, but Justice Mark Massa dissented, writing separately that a recognition of ambiguity in the statute in question would “allow for a more common-sense construction of the statute.”
“Here the legislature used the traditional line of demarcation between felonies and misdemeanors — imprisonment for at least a year — to define low-level felonies from other states, which otherwise might use a different nomenclature of class or level, too varied to be included by specific reference,” Massa wrote. “This doesn’t mean they meant all out-of-state felonies are Level 6s, regardless of severity.”
“They certainly could have been more precise in their drafting,” Massa continued, “but their imprecision does not dictate this windfall for serious habitual offenders who built their records victimizing people in other states.”
But in a footnote to the majority opinion, Rush wrote that even if the majority agreed the statutes are ambiguous, they “could not ignore the rule of lenity’s decree that ambiguity ‘must be resolved against the penalty.’”
Indiana Court of Appeals
Civil Tort—Inverse Condemnation
Bellwether Properties, LLC v. Duke Energy Indiana, Inc.
An inverse condemnation complaint against Duke Energy can continue after the Indiana Supreme Court determined the complaint did not allege sufficient facts that could support a dismissal for failure to state a claim.
In Bellwether Properties, LLC v. Duke Energy Indiana, Inc., 35S04-1703-CT-121, Bellwether Properties owns real property in Bloomington on which Duke Energy Indiana, Inc. also holds a utility easement. Duke obtained the easement in 1957 that gave it the right to build, remove and maintain electrical lines for transmitting electricity over a 10-foot strip of land.
In 2015, Bellwether filed an inverse condemnation action alleging Duke’s maintenance of the electrical line imposed a 23-foot easement, 13 feet wider than what was permitted. Thus, Duke had taken its property for public use, which required compensation.
Duke, however, filed a motion to dismiss, arguing that when the Indiana Utility Regulatory Commission incorporated by reference the 2002 National Electrical Safety Code, the easement was required to be extended to 23 feet at a certain voltage level. The Monroe Circuit Court agreed, determining the six-year statute of limitations began to run when the NESC was adopted in 2002, thus making the claim untimely.
A divided Indiana Court of Appeals reversed the dismissal in September 2016, determining Indiana’s discovery rule tolled the statute of limitations because the circumstances were “too attenuated to concluded that the taking was ascertainable by Bellwether.” But Judge Melissa May dissented, relying on Tiplick v. State, 43 N.E.3d 1259 (Ind. 2015).
The Indiana Supreme Court also reversed the dismissal of Bellwether’s complaint, but on different grounds than the Court of Appeals.
Justice Geoffrey Slaughter, writing for the unanimous court, said the face of Bellwether’s complaint failed to establish that the statute of limitations had run. Rather, the facts of the complaint only allege Duke’s maintenance of the electrical line “currently” imposes the 23 feet requirement, not when that additional requirement first occurred due to a certain voltage level, Slaughter said.
“Because the complaint does not establish that the statute of limitations had already run when Bellwether sued, Duke Energy jumped the gun by arguing the claim’s untimeliness in a motion to dismiss,” Slaughter wrote.
The court then went on to address another issue sua sponte: whether the 2002 NESC was reasonably accessible to Bellwether. He noted the court made attempts to obtain a copy of the safety code on its own, but was told the code could only be inspected in the IURC’s Indianapolis office. The court was eventually able to obtain a copy online, though Slaughter noted he was unsure when the online version became available or if it was identical to what was incorporated in 2002.
“Our employee’s unsuccessful effort to obtain a copy of the Code from the Commission may be a one-off,” he wrote. “But if it happened once, it is not inconceivable it happened before. And if it did, a fair question is whether the practice recurs in accordance with Commission policy.”
While the justices did not rule on the question of Bellwether’s access to the code, it did encourage the trial court to consider that question on remand.
Finally, Slaughter wrote the Tiplick decision does not govern in this case because the decision in that case does not address the threshold question of whether Bellwether can be charged with knowledge of the 2002 NESC. All justices concurred.
Civil Plenary – Water Rate Ordinance
City of Washington, Indiana v. Daviess County Rural Water System, Inc.
The city of Washington cannot impose a 57 percent rate increase on a local nonprofit water utility after the Indiana Court of Appeals determined that increase was not reflected by an actual increase in costs.
More than 25 years ago, the city of Washington and Daviess County Rural Water System, Inc. executed a contract for the city to sell DCRW up to 30 million gallons of water. The contract allowed for rate adjustments if there was a demonstrable increase or decrease in the costs of performance.
Then in July 2016, a cost-of-service study was completed that recommended increasing water rates. The study used the city’s “depreciation expense” to calculate the city’s revenue requirements and the cost of servicing DCRW, and determined the revenue requirement had increased by more than $400,000.
The city subsequently approved an ordinance that raised rates 57 percent increase for DCRW and 14.8 percent for individual customers living outside Washington. DCRW responded by filing two complaints in the Daviess Superior Court, one alleging the ordinance violated the contract, and the other seeking declaratory judgment that the ordinance was void, both as applied to DCRW.
The trial court granted a motion to consolidate the two cases, then ruled in January 2017 the ordinance’s rate increase to DCRW breached the contract because it was not based on a “demonstrable increase in costs.” The court further determined the provisions of the contract regarding rate increases to DCRW could not be severed from those related to individual rate increases on non-city residents, so the ordinance was invalid.
On appeal, the city argued the trial court erred in determining its rate increase breached the contract. But the Indiana Court of Appeals upheld that ruling, with Judge Cale Bradford writing first that the city’s decision was not entitled to legislative deference because it was bound by the terms of the contract.
The appellate court then went on to uphold the trial court’s finding that because the city used the depreciation expense method to calculate its 2016 rate increase – as opposed to the “detailed extension and replacement” or “capital improvement program” methods used in previous years – the increase in revenue requirements did not reflect an actual increase in costs. That’s because there was evidence the increase would have only been 5.89 percent between 2012 and 2016 had Washington not switched to the depreciation method, Bradford said.
“We have little trouble concluding that a 57 percent rate increase cannot be based on a 5.89 percent increase in the cost of performance,” he wrote.
Thus, the ordinance was null and void as it related to DCRW, the appellate court concluded. However, the panel also concluded the ordinance can remain in effect as it relates to individual out-of-city customers because there was no evidence to support the finding that all rates in the ordinance were interrelated to the point of nonseverability.
Finally, the appellate court determined the trial court did not err by consolidating both of DCRW’s causes of actions or by denying the city’s motion to dismiss the declaratory judgment action.
Civil Tort – Dog Bite/Negligence
Michael Martin v. Colby Hayduk and Tiffany Stafford
A Brownsburg dog-bite case must proceed to trial after the Indiana Court of Appeals ruled there were genuine issues of material fact as to whether the dog owners breached their duty to the man who was attacked and, thus, reversed summary judgment in favor of the owners.
Tiffany Stafford and Colby Hayduk own seven dogs, each of which is trained to stay inside an invisible electric fence on Hayduk’s property. One day while Hayduk was at work, Michael Martin approached the property, uninvited, and was attacked and injured by at least five dogs.
Martin called Hayduk to ask if all of the dogs had their shots, but during the call Hayduk informed Martin there were “Beware of Dog” signs posted on the property. Martin then sued Hayduk and Stafford, alleging they had negligently failed to confine and control the dogs.
During subsequent proceedings, Stafford admitted one of her dogs had previously bitten her and her ex-husband. But Stafford and Hayduk also moved for summary judgment on the grounds that they did not owe Martin a duty other than that owed to a trespasser. They also argued they were not negligent by confining the dogs with an electric fence, and that signs were posted at multiple locations on the property.
Martin responded by asserting there were genuine issues of material fact as to whether the couple violated local ordinances by failing to properly confine the dogs and keeping more dogs on the premises than permitted. He also argued there was an issue of fact as to whether they breached a duty of reasonable care to Martin, and that the signs were covered by foliage.
The Hendricks Superior Court granted summary judgment to Hayduk and Stafford, prompting this appeal in Michael Martin v. Colby Hayduk and Tiffany Stafford, 32A01-1705-CT-974. Martin argued on appeal the trial court erred in granting summary judgment, and the Indiana Court of Appeals agreed and reversed.
While the appellate court determined Martin failed to prove the couple was negligent per se by violating local ordinances regarding dog ownership, a genuine issue of material fact regarding common law negligence remains, Judge Edward Najam wrote. He noted the standard in dog-bite cases is reasonable care, regardless of whether the victim was allowed on the land.
Najam then wrote the evidence showed a genuine issue of fact as to whether the dogs “had vicious or dangerous propensities,” considering Stafford’s admission that at least one of the dogs had bitten people in the past. He also noted that Martin testified to not seeing the “Beware of Dog” signs, creating a genuine issue as to whether had had actual knowledge of the dogs’ presence on the property.
“The jury may conclude that a reasonable person would have seen the signs and, as such, that Martin’s assertion that he did not see the signs lacks credibility,” Najam wrote. “These questions of fact cannot be answered as a matter of law on summary judgment.”
The case was remanded for further proceedings.
Miscellaneous – Medical Records
Mary (Jones) Shirey v. Rex Flenar, M.D.
The Indiana Court of Appeals has struck down a claim for a private right of action raised under Indiana’s medical record production statute, but allowed a spoliation claim against a doctor who no longer possesses a patient’s medical records to proceed. However, two judges urged the Indiana Supreme Court to reconsider a 1991 opinion that required them to strike the private right of action claim.
In Mary (Jones) Shirey v. Rex Flenar, M.D., 02A03-1704-MI-876, Mary Shirey was injured in a car accident in March 2013 and sought treatment from Dr. Rex Flenar. Shirey filed a complaint against Flenar in August 2016, alleging her attorney had requested her medical records and bills multiple times over the course of three years, but Flenar never responded.
In her complaint, Shirey alleged that Flenar had violated Indiana Code section 16-39-1-1(c), the record production statute requiring doctors to supply records when a patient requests them, or that he might not be in possession of the records at all. The second allegation was based on Flenar’s indication that his medical records software provider had destroyed the records without his knowledge.
Flenar filed for summary judgment, but Shirey argued she had a private right of action against Flenar for violation of the record production statute. Additionally, she asserted a claim for spoliation of evidence because without her records, she was unable to completely document her claim for damages related to the car accident.
The Allen Superior Court granted Flenar’s summary judgment motion, so Shirey appealed on both the statutory and spoliation claim. The Indiana Court of Appeals partially upheld the grant of summary judgment to Flenar, with Chief Judge Nancy Vaidik writing first that the General Assembly did not intend to confer a private right of action through the statute.
Specifically, Vaidik said the omission of clear language indicating such a right is evidence the Legislature did not intend to create a private remedy, especially considering Title 16 allows the state Health Department to enforce the title. Further, finding a private right of action in the record production statute would be at odds with the Supreme Court’s interpretation of the record retention statute in Howard Regional Health System v. Gordon, 952 N.E.2d 182 (Ind. 2011), she said.
However, the appellate overturned the grant of summary judgment on Shirey’s spoliation claim, holding that under all three factors in Webb v. Jarvis, 575 N.E.2d 992 (Ind. 1991), Flenar had a duty to preserve Shirey’s medical records. Thus, the spoliation claim was remanded and allowed to proceed.
Though all judges concurred, judges John Baker and Terry Crone each wrote separately that they concurred with dissatisfaction and reluctance as to the issue of a private right of action under the record production statute. Both judges took issue with the Supreme court’s ruling in Gordon, with Baker writing there are no consequences if a doctor loses patients’ records under the holding in that case.
“To tell the citizens of this State that their physicians are required to maintain their medical records, but that there is no consequence for a failure to do so – even when that failure results in financial or health-related consequences to patients – is to make the requirement wholly meaningless,” Baker wrote. “I encourage our Supreme Court to reconsider the Gordon holding.”
Criminal – Unreasonable Search
Frederico A. Conn v. State of Indiana
A divided Indiana Court of Appeals has thrown out a man’s drug and firearm convictions after determining the officers who discovered the evidence violated the Indiana Constitution by maneuvering around a locked gate to locate the evidence.
In April 2015, Frederico Conn was shooting firearms at a target with friends at the Laurel Conservation Club when a nearby neighbor called police to report gunfire. When officers arrived, the gunfire had ceased, and a locked gate blocked to their entrance to the club.
The officers maneuvered around the gate and were walking through the property when they observed Conn walking behind the club’s building. Upon further investigation and questioning by the officers, Conn admitted to hiding a firearm behind the building. Conn led the officers to the location where he had hidden the firearm and where ammunition and two change purses containing a glass pipe, a pen modified into a straw and baggies of methamphetamine were also concealed.
During an ensuing trial on Conn’s charges of Level 6 felony possession of meth, Class A misdemeanor possession of a firearm by a domestic batterer and Class A misdemeanor possession of paraphernalia, the Franklin Circuit Court admitted the evidence found at the club over Conn’s objection. He was then found guilty as charged and sentenced to 2½ years served at the Franklin County Security Center.
Conn appealed, challenging the admission of the evidence on the grounds that it was obtained in violation of the Fourth Amendment and Article 1, Section 11 of the Indiana Constitution. The Indiana Court of Appeals agreed, reaching only the issue of unreasonableness under Article 1, Section 11.
Judge Paul Mathias, writing for the majority of a divided appellate panel, determined the officers’ degree of concern, suspicion or knowledge of unlawful activity was “negligible” considering the shooting had stopped by the time they arrived and there was no evidence of poaching or killing any animals. The degree of intrusion on Conn, however, was high in light of the fact that the officers had to maneuver around the locked gate to gain access to the property.
“Our courts have consistently held that when Indiana citizens put mechanisms in place to keep others out, ignoring these obstructions constitutes highly intrusive conduct by law enforcement,” Mathias wrote.
Finally, the majority determined there was no evidence of an emergency or threat to the public in this situation, so the extent of law enforcement needs was low. The majority further ruled there was no exigent circumstances that justified the officers’ unlawful intrusion.
Thus, the officers’ conduct failed the test under Litchfield v. State, 924 N.E.2d 356, 359 (Ind. 2005), so their conduct was unreasonable under the state constitution. The majority reversed Conn’s convictions and remanded the case for further proceedings.
Mathias also wrote in a footnote the state had waived its argument that Conn lacked standing to bring his state constitutional challenge by failing to challenge his standing at trial. Chief Judge Nancy Vaidik, however, dissented, writing separately that Conn failed to establish “premised search” or “property seized” standing as explained in Peterson v. State, 674 N.E.2d 528 (Ind. 1996).
Further, Vaidik noted that when Conn initially objected to the admission of the evidence, the prosecutor told the court there had been “no evidence that the Defendant has any kind of reasonable expectation of privacy on private property whether it’s his or had any right to be there.” While the majority concluded that argument went only to a Fourth Amendment issue, Vaidik said under Peterson, the standing analysis is the same for both state and federal constitutional claims.
“To be clear, I acknowledge that the officers’ conduct in this case was constitutionally suspect,” the chief judge wrote. “I simply concluded that Conn has not shown that he is entitled to challenge that conduct.”
Civil Plenary – Property Condemnation
Coutar Remainder I, LLC, Kooshtard Property I, LLC, Mac’s Convenience Stores, LLC, f/k/a Bigfoot Food Stores, LLC, and Union Fidelity Life Insurance Company v. State of Indiana
A property rights dispute between the state and a Monroe County property owner must proceed to a trial on damages after the Indiana Court of Appeals determined the state’s condemnation action against the Monroe County property constituted a compensable taking.
More than 45 years ago, Jane Ellis deeded the state a portion of her property for the construction of State Road 37, but reserved in title an opening of nearly 80 feet in the state’s access control line to SR 37 to her and her successors. The deed also reserved to Ellis and her successors access to a local service road located in the right of way between Ellis’ property line and the opening in the access control line.
In 2001, Kooshtard Property I, LLC became the successor in title to the property. Meanwhile, the state conveyed control over the local service road, now known as Wayport Road, to Monroe County.
As part of its plans to convert State Road 37 into Interstate 69, the state plans to close the opening in the access line and extend Wayport Road. The state filed a condemnation action against a parcel to be taken from the Kooshtard property as part of its project, but Kooshtard responded by asserting the closing of the access control line constituted a compensable taking. Additionally, Kooshtard alleged the closure of the line would result in $1.3 million in damages, as well as the closure of a gas station and convenience store located on its property.
The Monroe Circuit Court eventually granted summary judgment to the state on the grounds that the closure of the line merely created a different route of travel to the Kooshtard property and did not constitute a taking. But the Indiana Court of Appeals reversed that judgment, with Judge Edward Najam writing Kooshtard was entitled to a trial on damages.
“Specifically, the Ellis deed states that ‘the access control line restriction shall be a covenant running with the land’…,” Najam wrote. “A covenant running with the land ‘constitutes a compensable interest in land.’”
While the state argued Kooshtard only had a right of ingress and egress to Wayport Road, not SR 37, the appellate court pointed to language in the deed that stated, “and further, the owner and her successors in title shall have access to a local service road … .”
The use of the phrase “and further” indicates that access to the service road, now Wayport Road was in addition to access to the control line opening, Najam said, further noting that Wayport Road is located entirely within the SR 37 right of way adjacent to the Ellis parcel.
“In other words, the Ellis deed reserves to the property owner a complete means of direct access over and across the State Road 37 right of way through the opening in the access control line to State Road 37 itself,” he said.
Thus, Coutar Remainder I, LLC, et al. v. State of Indiana, 53A01-1704-PL-798, was remanded for further proceedings, though Najam noted the court was not expressing an opinion on the proper amount of damages, if any, to be assessed against the state.
Civil Tort – Breach of Duty/Defamation
Jeff West v. J. Greg Allen Builder, Inc., and Princeton Homes, and Greg Allen
The Indiana Court of Appeals deconstructed a tangle of lawsuits erupting over allegations of theft of more than $1 million from a home building company and ruled that although the accused was found to have breached his fiduciary duty and wrongly taken money, he was still defamed by his accuser.
J. Greg Allen Builder, Inc. (GABI), and Princeton Homes filed suit against Jeff West, the former company president, after their investigation revealed numerous accounting discrepancies and financial irregularities.
Allen then sent a letter through GABI and Princeton to customers, subcontractors and suppliers in Marion and Johnson counties, alerting them to West’s alleged actions. In particular, Allen asserted that West and Kim Hutchinson, West’s assistant, made over 100 unauthorized withdrawals from company funds in excess of $1 million.
West then filed a counterclaim for defamation because of that letter.
After an 11-day trial in Johnson Superior Court in 2016, the jury found in favor of GABI on the theft claim in the amount of $4,000 and on the breach of fiduciary duty claim in the amount of $220,000. It also ruled in favor of West for defamation, awarding him presumed damages of $50,000 and punitive damages of $300,000. The award for punitive damages was later reduced to $150,000.
Both West and Allen appealed to the Court of Appeals in Jeff West v. J. Greg Allen Building, Inc., and Princeton Homes, and Greg Allen, 41A01-1701-CT-182.
The unanimous appellate panel affirmed the verdict against West, determining the evidence was sufficient to support the breach of fiduciary duty claim and the award of $220,000.
Also, the Court of Appeals affirmed the jury’s finding of defamation, but reversed the award of punitive damages.
Allen, GABI and Princeton Homes argued the defamation could not stand because the jury’s verdict on the breach of fiduciary duty and theft claims established that the letter was true.
However, the appellate court pointed out the letter accused West of stealing more than $1 million while the jury found that West’s breach caused GABI $220,000 in damages and his theft was $4,000. The amounts are far less than what he was accused of taking.
“Put another way, the jury could have found that West ‘stole’ $224,000.00 from GABI but that Cross-Appellants defamed him by alleging that he stole far more,” Judge Cale Bradford wrote for the court. “Because the jury’s verdicts are not inconsistent based on logical or legal impossibility, Cross-Appellants have failed to establish that the jury’s verdict that they defamed West must be overturned on that basis.”
Even so, the Court of Appeals reversed the award of punitive damages against Allen. The judges held there was insufficient evidence to sustain a finding that Allen had actual malice when defaming West.
Civil Tort – Product Liability
Campbell Hausfeld/Scott Fetzer Company v. Paul Johnson
A man who lost an eye after a cut-off disc on a pneumatic grinder he was using disintegrated and struck him in the face may proceed with his claims against the toolmaker, the Indiana Court of Appeals ruled.
Paul Johnson was using a Campbell Hausfeld TL1120 grinder, an air-powered handheld tool designed to grind, polish and debur surfaces including metal. The tool included warnings for users to use eye protection and to ensure attachments are tightly secured and properly rated for minimum RPMs before using them with the device. Failure to do so could result in injury or death, the warnings said.
While the grinder was not specifically designed for cutting, Court of Appeals Judge Robert Altice wrote that its instructions referenced that potential use, stating, “Do not use a cut-off disc mandrel on this tool unless a safety guard is in place.”
Johnson installed a cut-off disc with a mandrel as he was cutting around a vehicle headlight housing. While he did not use a safety guard — which Altice noted was not supplied with the tool — he was an experienced tool handler who wore prescription glasses with safety glass as he worked in a tight space.
Nevertheless, when the cut-off disc disintegrated, it struck Johnson in the face, broke his glasses and seriously injured his cheek and eye, which he later lost as a result. He brought this product-liability case in which the COA reversed Porter Superior Court’s partial grant of summary judgment in favor of Campbell Hausfeld.
The toolmaker argued on appeal it was entitled to summary judgment on all Johnson’s claims, while Johnson contended Campbell Hausfeld wasn’t entitled to summary judgment on his defective design claim as the trial court found, or on his failure to warn claim. The COA agreed with Johnson.
“Campbell Hausfeld is not entitled to summary judgment based on any of its asserted statutory defenses,” Altice wrote for the panel. “Moreover, the designated evidence establishes a genuine issue of material fact regarding whether Campbell Hausfeld provided adequate warning concerning the use of the Grinder with a cut-off disc, especially where the operating instructions imply that the Grinder may be used as a cut-off tool. Finally, we conclude that Campbell Hausfeld has failed to establish its entitlement to summary judgment on the defective design claim. The trial court, therefore, improperly granted summary judgment on the defective design claim.”
The case is Campbell Hausfeld/Scott Fetzer Company v. Paul Johnson, 64A03-1705-CT-984.
Criminal – Drug Recognition Evaluation
Monica Dycus v. State of Indiana
A woman had her conviction overturned after the Indiana Court of Appeals ruled she should have been allowed to consult an attorney before undergoing a drug recognition exam.
Monica Dycus was convicted and sentenced to 365 days for operating a vehicle while intoxicated endangering a person, a Class A misdemeanor. Indianapolis Metropolitan Police Department officers found Dycus stopped at red light, partly out of her car and yelling at her former boyfriend in another vehicle.
The police noticed the odor of marijuana coming from her breath and she admitted to having smoked marijuana with her mother earlier that day. A field sobriety test was inconclusive so the officers took Dycus to the police station where they performed the DRE. This included behavioral tests as well as taking her temperature, looking inside her nasal cavities with a flashlight, measuring her blood pressure and determining her pupil size in three different lighting conditions.
The police entered all their observations from the test into a drug symptom matrix. The results led the officers to conclude Dycus was under the influence of marijuana. Dycus then consented to a blood draw that found THC.
On appeal, Dycus argued the DRE results should not have been admitted at trial because she was not given a Pirtle advisement before the 30-minute test was performed. She maintained she was entitled to be advised of her right to speak with counsel prior to submitting to the testing.
The state countered that because the DRE is not very intrusive and can only reveal the presence of drugs, no Pirtle warning was necessary.
The warning derives its name from Pirtle v. State, 323 N.E. 2d 634 (Ind. 1975). This decision held that the Indiana Constitution requires an individual in custody must be informed of the right to counsel before consenting to a search.
A unanimous Court of Appeals in Monica Dycus v. State of Indiana, 49A05-1705-CR-978, agreed with Dycus, reversing her conviction and remanding for a new trial.
The appellate panel noted precedent has established the Pirtle warning is not required for field sobriety tests or chemical breath tests. However, in the Dycus case, the judges concluded the DRE was not a limited search only requiring a slight intrusion into an individual’s privacy.
Describing the DRE as a test that is “all-encompassing and amounts to a quasi-medical examination,” the Court of Appeals said the police get not only possible incriminating evidence but also information about a person’s general health. Moreover, the test required a police officer’s subjective assessment, which might tilt the results.
“Because the DRE is akin to an unlimited search that the Pirtle doctrine is designed to protect against, we hold that a person in custody must be advised of his right to consult with an attorney prior to consenting to a DRE,” Judge Patricia Riley wrote for the court. “As Dycus was not given the Pirtle advisement, her consent was invalid as a matter of law and the evidence obtained thereby was inadmissible.”
Civil Plenary – Public Defenders
Kenneth Alford et al. v. Johnson County Commissioners et al.
A case challenging the constitutionality of Johnson County’s contract-based public defender system will not proceed after the Indiana Court of Appeals upheld the dismissal of the case against several Johnson County judges, attorneys and commissioners.
The case of Kenneth Alford et al v. Johnson County Commissioners et al., 73A04-1702-PL-223, began in October 2015, when a group of Johnson County defendants with court-appointed attorneys sued the county commissioners — who are responsible for establishing a public defense system — judges and public defenders for failing to provide adequate representation. The complaint alleged the county’s system of contracting with attorneys to provide indigent defense services had resulted in public defenders handling caseloads well in excess of accepted maximums. Thus, the defendants alleged they were pressured into taking plea deals and were rarely able to meet with their counsel in person.
The indigent defendants sought declaratory judgment that Johnson County’s provision of indigent defense services is unconstitutional. Additionally, they moved for injunctive relief requesting, among other things, “the creation of public defender services, which are not under the Courts’ supervision or financial control, which are adequately funded, and which conform to the caseload standards set by the American Bar Association and the Indiana Public Defender Commission.”
The Shelby Superior Court dismissed the case, determining the issue of whether it could declare Johnson County’s system unconstitutional was non-justiciable. The trial court also found that compelling the creation of public defender services was an impermissible “request to rewrite the statutory scheme of public defender services.”
During oral arguments before the Indiana Court of Appeals on Dec. 7, Jessica Wegg, counsel for the defendants, urged the court to reinstate the case under Gideon v. Wainwright, 372 U.S. 335 (1963) and United States v. Cronic, 466 U.S. 648 (1984). The judges and commissioners, however, argued the case was not yet ripe under Strickland v. Washington, 466 U.S. 668 (1984).
While the Court of Appeals noted that it did not discount or minimize the indigent defendants’ allegations, their complaint nonetheless failed to properly raise claims for relief. Judge James Kirsch wrote for the unanimous appellate panel that Indiana’s Rules of Professional Conduct require attorneys to manage their own caseloads, so the entire Johnson County public defense system cannot be considered systematically flawed.
Further, the complaint did not allege the county judges compelled the public defenders to accept excessive caseloads, but rather only alleges the public defenders failed to provide effective assistance, Kirsch wrote. Such a claim is one for individual relief pursuant to criminal trial procedures, he wrote.
Kirsch went on to write that if Johnson County does employ too few public defenders, the remedy would be to seek additional funds from the commissioners. But because the complaint does not allege the judges are unable to seek those funds, there is no relief available.
The panel also rejected the indigent defendants’ third-part beneficiary breach of contract claim, finding again that the complaint does not allege a systematic deprivation of the rights they assert under the public defender contracts. Rather, the breach of contract allegations actually raise issues of legal malpractice, the court ruled.
The ruling comes as a statewide task force is in the information-gathering phase of its work toward improving Indiana’s indigent defense services. The Task Force on Public Defense was formed after the Sixth Amendment Center released a report last year criticizing Indiana’s provision of indigent defense services, including its use of contract-based public defense in some counties.•