7th Circuit Court of Appeals
Civil Tort — Social Security Disability/Evidence
Shannon McHenry v. Nancy Berryhill
A woman denied Social Security disability benefits was granted a second chance after a panel of the 7th Circuit Court of Appeals found her administrative law judge lacked substantial evidence to prove she wasn’t disabled.
Shannon McHenry applied for supplemental security disability benefits, asserting a disability onset date of January 1, 2011. McHenry claimed she suffered back pain after a 1990 car accident and was disabled by degenerative disc disease, fibromyalgia and depression. She worked as a hairdresser until 2009, when she alleged she could no longer work due to back pain, cubital tunnel syndrome, sciatica, pinched nerves, spinal stenosis and fibromyalgia.
A 2014 MRI of her lumbar spine showed that McHenry had multiple impinged nerve roots in addition to spinal cord compression. A physician treating McHenry also found that her degenerative disc disease met the severity required in 20 CFR § 404.1520(d), Pt. 404, Subpt. P, App. 1, Listing 1.04A [“Listing 1.04A”].
McHenry’s initial request for disability was denied in December 2013, after which her oral request for an amended onset date of January 1, 2011, was accepted by an ALJ to be heard in March 2015. After two denials of disability benefits by the Social Security Administration, the ALJ found that despite McHenry’s diagnoses of degenerative disc disease and fibromyalgia, she lacked sufficient medical evidence that the conditions were disabling, and that she was not credible about her limitations. The ALJ further concluded McHenry could perform jobs that existed in the national economy, finding her not disabled.
That decision was affirmed in the Indiana Southern District court, but the 7th Circuit Court of Appeals vacated the decision, finding the ALJ should have acquired a medical expert to review a consequential MRI report in Shannon McHenry v. Nancy Berryhill, 18-1691.
The panel found error in the ALJ’s determination that McHenry’s condition did not meet Listing 1.04A’s requirement, finding his conclusion was unsupported by substantial evidence. Specifically, it found the ALJ failed to obtain a medical expert to review the 2014 MRI and rejected the only medical opinion regarding whether McHenry’s condition met Listing 1.04A.
“Our task is to determine whether substantial evidence supports the ALJ’s conclusion; here, it does not,” the panel unanimously wrote.
The 7th Circuit Court therefore vacated the judgment of the district court upholding the ALJ’s decision to deny McHenry benefits and remanded to the Southern District for further proceedings.
Civil Plenary — Inmate Religious Rights/Sovereign Citizen
Derrick Neely-Bey-Tarik-El v. Daniel Conley, et. al.
An Indiana prisoner and professed sovereign citizen who claimed his religious rights were violated when he was forbidden from fully participating in certain religious services may get another review, the 7th Circuit Court of Appeals ruled.
The appellate panel remanded Derrick Neely-Bey Tarik-El v. Daniel Conley, et al., 17-2980, while partially affirming a decision that restricted Derrick Neely-Bey Tarik-El’s ability to participate in religious services at the Pendleton Correctional Industrial Facility.
Neely-Bey sued prison officials who prohibited him from fully participating in worship services of the Moorish Science Temple of America. He sought damages of $750,000 and an injunction against the officials, who restricted his participation because a Moorish Temple religious leader claimed Neely-Bey had been disruptive during services.
The religious leader also said Neely-Bey’s status as a professed sovereign citizen — which the DOC classifies as a security threat group — precluded him from full participation in services. Prison officials ordered Neely-Bey to not speak at Friday services unless called upon. Neely-Bey claimed, among other things, that DOC officials, through their orders, had become impermissibly entangled in religious doctrine.
The district court granted summary judgment for the prison officials, and the 7th Circuit agreed this was proper as it pertained to Neely-Bey’s complaint for damages and on qualified immunity grounds. But the appellate panel agreed with Neely-Bey’s assertion that the Southern District Court misread his complaint as not clearly seeking injunctive relief, and not just under the Establishment Clause.
“Moreover, the district court should have read Mr. Neely-Bey’s pro se free exercise claim as seeking injunctive relief under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. § 2000cc et seq. (‘RLUIPA’). Consequently, we must remand so that the district court may consider whether injunctive relief should be granted on the free exercise claim,” Judge Kenneth Ripple wrote for the panel.
But the 7th Circuit cautioned the district court in its 38-page order that it first should confirm that the issues in the case are not now moot, because Neely-Bey no longer is incarcerated at Pendleton.
“Prior to oral argument, the defendants notified us that Mr. Neely-Bey had been transferred from the CIF to the Westville Correctional Facility. At oral argument, counsel for the defendants suggested that the transfer rendered Mr. Neely-Bey’s claims for injunctive relief moot. However, there is no evidence in the record regarding how Mr. Neely-Bey’s transfer will affect his ability to participate in MSTA worship. Moreover, we do not know the likelihood of Mr. Neely-Bey being transferred back to the CIF,” Ripple noted for the panel.
Indiana Supreme Court
Attorney Discipline — Disbarment
In the Matter of Kirmille D. Lewis
An Indianapolis attorney found guilty of converting client funds, falsifying attorney registration and lying to a court can no longer practice law in Indiana after the Indiana Supreme Court unanimously voted to disbar her.
Kirmille D. Lewis, who was placed under an emergency suspension in March, was disbarred via a per curiam disciplinary opinion. According to the six-page order in In the Matter of Kirmille D. Lewis, 18S-DI-102, Lewis was the subject of a six-count disciplinary action filed by the Supreme Court Disciplinary Commission June 12.
The commission was unable to serve Lewis with the complaint by certified mail at any of the three addresses associated with her, so constructive service was made upon the clerk as Lewis’ agent. Lewis has never appeared or responded to the disciplinary proceedings.
The first disciplinary count alleges that while Lewis was representing “Client 1” in a bankruptcy action, the attorney withdrew necessary funds from the client’s account, but used the funds for her benefit or the benefit of other clients. Client 1’s case was eventually dismissed for failure to make plan payments, and Lewis failed to provide a court-ordered accounting. Additionally, Lewis issued a personal check to cover the funds she had converted from Client 1, but the check bounced and Lewis provided conflicting and false information about the whereabouts of Client 1’s money.
Similarly, Count 2 alleges that while representing “Client 2” in another bankruptcy action, Lewis provided the client with inaccurate information that immediately placed the client’s plan payments in default. Lewis then failed to appear at a subsequent hearing and the case was dismissed, but the attorney withheld that information and demanded an additional fee. The client eventually lost her house because of Lewis’ actions.
Count 3 involves a third bankruptcy client, “Client 3,” who paid Lewis $3,000 up front. Lewis, however, took no action in the case, did not respond to requests for information from Client 3 and failed to return the fees the client paid. Client 3 currently has a small claims action pending against Lewis that seeks to recover the unearned fees.
In Count 4, the commission alleged Lewis’ October 2017 attorney registration falsely certified that she maintained an IOLTA account and instead listed a fictitious account. The following month Lewis falsely informed a bankruptcy court that she had an IOLTA account where she deposited client funds.
Finally, the sixth count against Lewis alleged that another bankruptcy client, “Client 6,” paid Lewis at least $325, but struggled to maintain contact with the attorney. Lewis failed to appear at scheduled appointments, then falsely sent Client 6 a text saying a bankruptcy action had been filed. Lewis later presented Client 6 with a petition that misspelled his name and included inaccurate information, and the client was unable to contact Lewis when he wanted to fire her.
Another count, listed as Count 5, alleged that Lewis failed to respond to the Disciplinary Commission’s requests for information during its investigation of grievances filed against her. However, in a footnote, the court wrote that “Count 5 did not include citation to any rule allegedly violated by the charged conduct, and the hearing officer’s entry of judgment on the complaint likewise does not include any finding of a rule violation in connection with Count 5.” Thus, the court did not find a rule violation with respect to Count 5 because no violation was charged.
But with respect to the five remaining counts, the court determined the bankruptcy attorney had violated 11 Indiana Rules of Professional Conduct, including: Rule 1.1; Rule 1.3; Rules 1.4(a)(3) and (4); Rule 1.5(a); Rule 1.16(d); Rule 3.3(a)(1); Rule 3.4(c); and Rules 8.4 (b), (c) and (d).
Lewis was also found to have violated Admission and Discipline Rule 2. In light of those violations, and Lewis’ emergency suspension and two other unrelated suspensions, the court determined disbarment was the appropriate sanction.
“Respondent stole clients’ funds, neglected clients’ cases, and disregarded court orders, all serious transgressions,” the justices said in the per curiam opinion. “…Respondent’s misconduct also involved pervasive dishonesty toward clients and the bankruptcy court, and Respondent falsified her attorney registration with the Clerk of this Court.
“Further, Respondent has evaded numerous attempts by clients to contact her, and she has failed to accept service or participate in these disciplinary proceedings,” the court continued. “The seriousness and scope of Respondent’s misconduct, and her failure to participate in these proceedings, persuade us that Respondent should be disbarred.”
Lewis’ discipline is effective immediately, and the costs of the proceeding are assessed against her.
Criminal — Drug Dealing/‘Exceptional Case’ Sentence
Lisa Livingston v. State of Indiana
Finding the circumstances of an Orange County case to be “exceptional,” a majority of the Indiana Supreme Court has reduced a woman’s sentence and ordered that she be removed from the Department of Correction and instead placed in community corrections. A dissenting justice would have denied transfer of the case.
The decision in Lisa Livingston v. State of Indiana, 18S-CR-623, stems from Lisa Livingston’s August 2013 arrest on drug charges. Police received a tip that Livingston was making and dealing meth from her home, and a subsequent search revealed several baggies of meth, one baggie of cocaine and other items used in the production of meth.
After being charged with five drug counts and allegations that she was a habitual substance offender, Livingston posted bond and was released to Bliss House, a substance abuse recovery home where she first took up residence in November 2013. She then began filing a series of 10 motions to continue her trial over the next four years, each of which was granted without state objection.
Livingston remained at Bliss House for one year before moving to a transitional home for two years, eventually becoming the chair of the Bliss House alumni and serving on its committee. She also started a roofing business with her nephew and used her money to open BreakAway Home, a Floyd County home for women recovering from addictions.
Then, after being denied placement in a pre-trial detention program, Livingston voluntarily joined a Floyd County Community Corrections program, where she reported twice a week and successfully passed all of her random drug screens. She eventually pleaded guilty to all of the charges against her without a plea agreement in October 2017 and asked that she be allowed to serve her sentence in community corrections.
An arresting officer testified at the sentencing hearing that he was “impressed” with Livingston’s work at BreakAway, while her community corrections supervisor said she had been “completely compliant” with the program for 381 days. The supervisor also said community corrections was willing to take on Livingston for the duration of her sentence.
The trial court, however, ordered Livingston to serve a 30-year sentence in the Department of Correction, and the Court of Appeals affirmed the sentence in October. But in a per curiam opinion granting transfer, the majority justices found Livingston’s situation to be an “exceptional case” that warranted a downward sentence revision under Indiana Appellate Rule 7(B).
“The trial court’s oral sentencing statement indicates the court thoughtfully considered the mitigating and aggravating circumstances in reaching its sentencing decision,” the court wrote. “Nevertheless, ‘[e]ven where a trial court has not abused its discretion in sentencing, the Indiana Constitution authorizes independent appellate review and revision of a trial court’s sentencing decision.’ … After independent review, we conclude the sentence imposed in this case is inappropriate in light of Livingston’s offenses and character.”
Noting that Livingston was cooperative with police, pleaded guilty without the benefit of a plea agreement, has committed no new offenses and has “dedicated her time to becoming a productive member of her community,” the majority revised Livingston’s sentence to 23 years, with all remaining time served in community corrections. Though it is “highly unusual” to place a defendant in community corrections for that amount of time, the court said the “unique circumstances” of Livingston’s case warrant such placement.
The remainder of the COA’s decision was summarily affirmed, and the case was remanded for the entry of a revised sentencing order. Justice Geoffrey Slaughter dissented without opinion, believing transfer should not be granted.
Indiana Court of Appeals
Criminal — False Informing/Dog Attack on Horse
Daniel Cannon v. State of Indiana
A Monrovia man found guilty of failing to inform an officer that a dog who killed a mini horse was inside his home had his conviction reversed Dec. 20, with the Indiana Court of Appeals finding that the man’s failure to provide any information about the whereabouts of the dog could not be considered false informing.
In October 2017, Monrovia Town Marshal Kenneth Jackson visited a home in search of a pit bull that had been involved in a deadly attack on two miniature horses. The horse’s owner, Mac McCloud, discovered both of his pets lying on the ground, injured and bleeding, according to an RTV 6 report. One horse survived, sustaining stomach and leg injuries. The other died on the scene.
When Jackson entered the home, he found several people inside, including Daniel Cannon and a child. Cannon did not tell Jackson that the dog was inside the home’s garage, but the child pointed to the garage and Cannon ultimately retrieved the dog.
Cannon was thus charged with false informing and was convicted at a bench trial. On appeal, Cannon argued the state failed to present sufficient evidence to support the conviction under Indiana Code section 35-44.1-2-3(d).
The Indiana Court of Appeals agreed with Cannon, finding the state failed to prove a violation of the statute.
“The State called Marshal Jackson, who testified that he spoke to Cannon at the house. The prosecutor asked, ‘Did he indicate to you where that dog was that day?’ Marshal Jackson answered, ‘No,’” Chief Judge Nancy Vaidik wrote for the court. “The prosecutor then asked, ‘Did he indicate to you that the dog was in the house that day?’ … Marshal Jackson answered, ‘No.’”
“According to the State’s own evidence, Cannon did not give Marshal Jackson any information, let alone false information,” Vaidik continued. “As such, his conviction for false informing cannot stand.”
The appellate court further stated in a footnote that the state is barred by principles of double jeopardy from retrying Cannon.
Criminal — Manslaughter/Video Evidence of Deceased Eyewitness
Andrew W McWhorter v. State of Indiana
A split Indiana Court of Appeals affirmed a man’s conviction for voluntary manslaughter after he fatally shot his fiancé, finding, among other things, no abuse of discretion in the admission of video testimony from a since-deceased eyewitness.
After accusing his fiancé of unfaithfulness, an intoxicated Andrew McWhorter shot Amanda Deweese in the head with a shotgun in December 2005, killing her. His grandmother, Barbara Gibbs, witnessed the shooting.
McWhorter was charged with murder but convicted of Class A felony voluntary manslaughter, enhanced as a habitual offender, and initially received an aggregate 75-year sentence. He was later granted post-conviction relief by the Indiana Court of Appeals and Supreme Court upon a reversal of his denied petition, but ultimately received the same conviction and sentence after a second jury trial.
During the second trial in January 2017 – when the charging information was amended to include Class A felony voluntary manslaughter – the videotape of Gibbs’ previous trial testimony was played for the jury, as she had died prior to the second trial. In his second appeal, McWhorter contended the Henry Circuit Court abused its discretion in admitting Gibbs’ testimony from the first trial.
Though he conceded that Gibbs was unavailable at his second trial due to her death and that he had the opportunity to cross-examine her during his first trial, McWhorter argued he lacked a similar motive to develop Gibbs’ testimony during the first trial because his defense was one of accident and he did not interject the issue of sudden heat. But a majority of the Indiana Court of Appeals panel found that despite his contention, McWhorter was highly incentivized at his first trial to highlight any problem with Gibbs’ perception and recollection and to elicit from her any evidence that tended to negate or lessen his criminal culpability.
“The plain language of Rule 804(b)(1) requires only that the opponent have had a ‘similar’ motive to develop the former testimony,” Judge Cale Bradford wrote for the majority. “…(W)e conclude that McWhorter had a similar motive in both his first and second trials. As such, we cannot say that the trial court abused its discretion by admitting Gibbs’ former testimony.”
The majority further found that McWhorter’s due process rights were not violated and the the prohibition against double jeopardy did not barr his retrial for voluntary manslaughter in light of his previously acquitted murder conviction.
Citing to decisions issued in McWhorter’s previous appeal, the appellate court noted that the Indiana Supreme Court expressly directed that “neither the prohibition of double jeopardy nor the doctrine of collateral estoppel preclude[d] retrial for reckless homicide or voluntary manslaughter.” The majority, therefore, denied all three of McWhorter’s claims in Andrew McWhorter v. State of Indiana, 33A01-1710-CR-2415.
But in a separate dissenting opinion, Judge Mark L. Bailey, relying on Brantley v. State, 91 N.E.3d 566 (Ind. 2018), said voluntary manslaughter, as a standalone charge, is not a lesser included offense of murder. He also noted that Brantley held that “(t)he crime to be alleged and prove in a standalone charge of voluntary manslaughter is murder, albeit a mitigated murder… .”
“When the State pursued its standalone charge, McWhorter was again required to defend against the elements of murder,” Bailey wrote. “This is a classic example of double jeopardy.”
Bailey further noted that the Brantley framework makes “sudden heat” not an element of murder, but “something in addition to murder.” In this case, the record was devoid of “sudden heat” based on DeWeese’s silence leading up to McWhorter’s act of shooting her, Bailey said.
“Here, the conduct which Deweese apparently admitted was long past. Too, sudden heat is not shown by anger alone or by mere words,” Bailey wrote. “…In my view, Deweese’s mere silence cannot conceivably be considered provocation.”
The dissenting judge thus argued that the conviction should be reversed and remanded for entry of judgment for criminal recklessness and for a new sentencing hearing.
Criminal — Rehearing/Fixed-Sentence Plea Agreement
State of Indiana v. Pebble Stafford
In an opinion interpreting a sentence modification statute, a divided panel of Indiana Court of Appeals has ruled that a trial court lacked authority to modify a sentence that was entered pursuant to a fixed plea agreement. The majority’s ruling contrasts with the panel’s earlier decision in the same case, which was revisited on remand from the Indiana Supreme Court after a legislative amendment last year.
At issue in State of Indiana v. Pebble Stafford, 39A04-1705-CR-930, are two sets of amendments to Indiana Code Section 35-38-1-17. The first amendment, passed in 2014, included language in subsection (l) that prohibited the waiver of “the right to sentence modification under this section as part of a plea agreement.” Stafford, who pleaded guilty in June 2014 to drug and battery charges, argued that language allowed her to seek a modification of her three consecutive sentences, despite those sentences being imposed pursuant to a fixed plea agreement.
The Jefferson Circuit Court and Indiana Court of Appeals agreed, with the former finding Stafford had been sufficiently rehabilitated and the latter ruling in October 2017 that subsection (l) “plainly stated that a person may not waive the right to sentence modification as part of a plea agreement — any plea agreement [including fixed plea agreements].” Another appellate panel reached a similar decision the following January in Alberto Baiza Rodriguez v. State.
In response to those two rulings, the Indiana Legislature again amended I.C. 35-38-1-17 in 2018 to require that judges obtain the consent of the prosecutor if they wish to modify a fixed plea sentence. The 2018 amendment further provides that the statute “does not prohibit the finding of a waiver of the right to: (1) have a court modify a sentence and impose a sentence not authorized by the plea agreement… .”
Sen. Mike Young, the Indianapolis Republican who authored the 2018 amendments via Senate Enrolled Act 64, said the 2014 amendment was meant only to prohibit explicit sentence modification waivers in plea agreements. But the original Stafford and Rodriguez panels misinterpreted the 2014 language, Young said, so SEA 64 was meant to codify the longstanding practice of not allowing modification of fixed plea sentences without prosecutorial consent.
Meanwhile, the Stafford and Rodriguez decisions went up to the Indiana Supreme Court, which granted transfer and remanded the cases to the COA for reconsideration in light of SEA 64, which was passed in February. On remand, the majority of the panel in Stafford said Dec. 27 that SEA 64 “made a definitive statement that trial courts are not authorized to modify sentences that were imposed by virtue of a plea agreement unless the agreement itself contemplated such a modification and/or the prosecuting attorney agrees to the modification.”
Relying partially on former justice and now-Senior Judge Robert Rucker’s dissent in Rodriguez, the panel determined the Jefferson Circuit Court did not have authority to modify Stafford’s sentence for an “other reason” — because I.C. 35-35-3-3(e) bound the trial court to the terms of the plea agreement. The “other reason” language was included in the 2014 amendment.
“Here, the legislature acted swiftly following the decisions in Stafford and Rodriguez,” Judge Robert Altice wrote for the majority joined by Judge L. Mark Bailey. “We can glean from this that the legislature was simply making clear its original intent, and thus, the 2018 amendment to I.C. section 35-38-1-17(e) and (l) did not change the original meaning of the statute. We therefore conclude that the legislature never intended to create a right to modification of fixed sentences imposed under a plea agreement.”
Stafford’s case was remanded for the trial court to reinstate the sentence considered under the plea agreement, which included consecutive terms of six years in the Department of Correction, 30 days in the Jefferson County Jail and four years in community corrections.
“Notably, however, Indiana trial courts retain broad discretion to accept or reject plea agreements,” Altice concluded. “… Thus, if ever desired, a trial court may avoid the instant issue by rejecting a ‘fixed sentence’ plea agreement that fails to authorize sentence modification in the case of changed circumstances.”
But in a separate dissenting opinion, Judge John Baker said he believes the COA’s original Stafford ruling was “right and reasonable,” and he disagreed with the state’s “tortured” interpretation of the 2014 version of the statute.
“First, as to what sentence the trial court is ‘authorized’ to impose at the time of sentencing, the authorization is bound not only by the language of the plea agreement but also by the law,” Baker wrote. “And the General Assembly has quite clearly stated that, as of July 2014, ‘[a] person may not waive the right to sentence modification under this section as part of a plea agreement.”
“… Second, while the State insists that subsection -17(l) does not allow modifications of fixed sentence plea agreements, I disagree,” Baker continued. “The General Assembly could have easily carved out an explicit exception for fixed sentence plea agreements, but it did not do so.”
Turning to the 2018 amendments, Baker said the General Assembly cannot and should not “attempt to retroactively void a court order by statute.” A similar argument was advanced by the majority in the COA’s second review of Rodriguez on remand from the Supreme Court. In the second Rodriguez decision handed down earlier this month, the majority determined SEA 64 was not retroactive, and even if it were, retroactive application would violate Rodriguez’s constitutional contract rights.
As with the original Rodriguez holding, Rucker dissented from the court’s reaffirmation of Rodriguez’s sentence modification.
Civil Tort — Commercial Lease/Landlord Liability in Fire
Robert Youell and Best One Giant Tire, Inc. v. The Cincinnati Insurance Company a/s/o Greg Dotson
The Indiana Court of Appeals reversed the denial of a tenant’s motion for judgment against a landlord’s insurer after finding that the parties’ commercial leasing agreement unambiguously provided that the landlord would insure a building damaged in a fire.
In August 2015, a fire destroyed property leased out by Greg Dotson to Robert Youell and Best One Giant Tire, Inc. The parties’ commercial lease provided that the landlord would insure the building “in such amounts as Landlord shall deem appropriate,” while the tenant would insure its personal property inside the building in the event of a fire.
Following the fire, the Cincinnati Insurance Company paid Dotson $227,653 for damages to the building, but later filed a complaint against the tenants to recover that amount as a subrogee of the landlord. The tenants filed a motion for judgment on the pleadings, arguing CIC had no right to pursue the subrogation claim because Dotson’s agreement to provide property insurance was an agreement to provide both parties with the benefits of insurance.
The Marion Superior Court denied the tenants’ motion but certified its order for an interlocutory appeal. On appeal, the tenants argued the trial court should have granted their motion for judgment on the pleadings. Specifically, the tenants asserted that Morsches Lumber, Inc. v. Probst, 180 Ind. App. 202, 388 N.E.2d 284 (Ind. Ct. App. 1979) was controlling, and the appellate court agreed.
“Like the contract in Morsches Lumber, here the Commercial Lease Agreement unambiguously provides that Landlord would insure the building and Tenant would insure its personal property inside the building,” Chief Judge Nancy Vaidik wrote for the court. “Landlord and Tenant’s agreement to insure was thus an agreement to provide both parties with the benefits of the insurance and expressly allocated the risk of loss in case of fire to insurance.”
The panel further noted Dotson was limited in his recovery to the insurance proceeds and that CIC had no subrogation rights against the tenants, dismissing CIC’s reliance on LBM Realty, LLC v. Mannia, 19 N.E.3d 379 (Ind. Ct. App. 2014).
“In LBM Realty, the lease did not require the landlord to maintain property insurance and only recommended that the tenant obtain renter’s insurance; as a result, the parties’ expectations with respect to liability for damage to the leased premises was unknown,” Vaidik continued. “Here, however, the Commercial Lease Agreement unambiguously provides that Landlord would insure the building.”
Thus, the appellate court reversed and remanded the case with instructions for the trial court to grant the tenants motion for judgement on the pleadings in Robert Youell and Best One Giant Tire, Inc. v. The Cincinnati Insurance Company a/s/o Greg Dotson, 18A-CT-1466.
Miscellaneous — Nonrenewal of Insurance Producer License
The Commissioner of the Indiana Department of Insurance v. Jeffrey A. Schumaker
A trial court order lifting a regulator’s nonrenewal of an insurance producer’s license stemming from his unauthorized use of funds from his homeowner’s association was affirmed by the Indiana Court of Appeals on Dec. 31. The appellate panel agreed that the man’s actions in this case did not warrant such a severe sanction.
Jeffrey A. Schumaker’s insurance producer license was not renewed by the Indiana Department of Insurance after he admitted during his license renewal process that he had taken about $8,300 from his homeowners association’s bank account. Schumaker took the money to pay a medical bill with the intent to repay it from an expected commission check. Schumaker ultimately did repay the money, and resigned as HOA treasurer, also disclosing his actions to the association, according to the record. The HOA declined to press charges.
Schumaker also disclosed the incident to parties including the Financial Industry Regulatory Authority and the Indiana DOI when he sought to renew his license. The Department of Insurance rejected his application for renewal, even after an administrative law judge ruled that “the evidence in this case demonstrates that Schumaker took $8300 from the homeowners’ association bank account with the intent to repay it” and “[w]hile dishonest, all evidence presented at the hearing was that this was a singular issue, out of character for Schumaker, and not part of a pattern of deceit or a series of ‘practices’ in either his personal or professional life.”
After his license renewal was rejected, Schumaker filed for judicial review, and the Marion Superior Court vacated the DOI’s decision against renewal. The Indiana Court of Appeals agreed in The Commissioner of the Indiana Department of Insurance v. Jeffrey A. Schumaker, 18A-MI-864.
“The evidence supports the conclusion that Schumaker’s action of taking money from his homeowners association, under the specific circumstances of this case as set forth in the administrative record, did not constitute ‘practices’ in Schumaker’s professional or personal life which warrant the severe sanction of refusal to renew his insurance producer license,” Judge Elaine Brown wrote for the panel.
“To the extent that he did not timely report the FINRA action to the Department and was required to do so, Schumaker testified that, because he was going through everything with FINRA, he assumed FINRA shared all of that information with the Commissioner, that he did not realize that was something he needed to do as well, and that as soon as he went online to complete his renewal he provided an explanation for what had happened,” Brown wrote. “We agree that any delay does not merit the strict sanction of nonrenewal of Schumaker’s license. We do not disturb the trial court’s ruling.”
Criminal — Felony Murder/Motion to Dismiss
James Alvin Trimnell v. State of Indiana
A man who provided drugs that ultimately resulted in a woman’s overdose death will not face a felony murder charge after the Indiana Court of Appeals found precedent did not stretch far enough to include his actions.
James Trimnell was charged with felony murder after Rachel Walmsley died from an overdose in July of 2017 of the drugs he had bought for Nathaniel Walmsley.
Nathaniel had texted Trimnell, saying he wanted to make a purchase. Later that afternoon, Trimnell arrived at Nathaniel’s home and delivered about a gram of what he believed was heroin, which he had purchased in Cincinnati. Trimnell then went home.
A few hours later, Nathaniel cooked the drug and injected Rachel. He later told police that he recalled seeing Rachel lying on the bathroom floor and that she seemed to be passed out, having a weak pulse and shallow breathing.
More than four hours later, Nathaniel and his son loaded Rachel in the car and took her to the hospital. She died there that evening and an autopsy the next day found the cause of death to be acute fentanyl and ethanol intoxication.
The Ripley Circuit Court denied Trimnell’s motion to dismiss the charge of felony murder. Then, at the request of both parties, the trial court certified its order for interlocutory appeal.
Before the Court of Appeals, Trimnell argued the trial court abused its discretion by denying the motion to dismiss because the facts alleged in the information, if taken as true, did not establish that he committed felony murder.
The state countered Trimnell’s delivery of the drug to Nathaniel was the first step in the chain of events leading to Rachel’s death, and that the killing occurred during the felony even though it happened after he had left the house and was nowhere around.
Reviewing the precedent set in Duncan v. State, 8567 N.E.2d 955 (Ind. 2006), the Court of Appeals rejected the state’s contention and reversed the trial court in James Alvin Trimnell v. State of Indiana, 18A-CR-987. The appellate panel found Trimnell did not “mediately or immediately” contribute to Rachel’s death.
“We believe (the state’s argument) stretches the holding in Duncan too far,” Senior Judge Carr Darden wrote. “Although harmful consequences, including death, are not outside the range of predictable results from delivering controlled substances to another, Rachel’s death was caused by the combination of acute fentanyl and ethanol intoxication. There is no indication in the record that Trimnell knew how much of the drug would be injected by Nathaniel in Rachel’s arm, or what or how frequently they would be using the drug he had delivered and that Rachel had been acutely intoxicated by alcohol for a period of time prior to using the drug.”•