Indiana Court Decisions – Dec. 3-15, 2020

Indiana Supreme Court

Dec. 9

Criminal — Murder/Attorney Juror Misconduct

Clinton Loehrlein v. State of Indiana

20S-CR-376

Indiana Supreme Court justices affirmed that a Vanderburgh County man who murdered his wife was not harmed when an attorney juror in his trial committed gross misconduct. The high court reinstated the man’s convictions that had been vacated by the Indiana Court of Appeals over the attorney’s misconduct in providing a misleading answer on a jury questionnaire.

Clinton Loehrlein was convicted of murder in the January 2017 slaying of his wife, Sherry Loehrlein, two counts of Level 1 felony attempted murder for attacking his daughters, two counts of Level 3 felony aggravated battery and one count of Class A misdemeanor resisting law enforcement. He was sentenced in March 2019 to 150 years in prison.

Loehrlein, whose defense team unsuccessfully pursued an insanity defense, said after the attack that he “wanted to kill his family so that they would go to heaven, then kill himself so he could join them.”

The Indiana Court of Appeals vacated Loehrlein’s conviction on the basis of juror misconduct by the jury forewoman, whom the appellate panel identified as L.W. She gave a false answer on a jury questionnaire that came to the attention of Loehrlein’s defense attorneys after his conviction. Specifically, she answered “N/A” instead of “Yes” to questions concerning whether she, immediate family members or close friends had been charged or convicted with a crime.

A divided COA remanded for a new trial on that issue, and the Indiana Supreme Court granted petition to transfer, affirming the trial court’s decision in Clinton Loehrlein v. State of Indiana, 20S-CR-376.

Justices first noted that L.W. committed gross misconduct, and her actions were even more egregious “because she is an attorney who had previously handled some criminal matters and as such, she should have known better.”

“Perhaps we would be in a different position had she not been an attorney or even if she was more open and honest during her post-trial deposition. She was not though. Because her answers on the jury questionnaire were cryptic and her demeanor during her post trial deposition was defensive and evasive, we find that her misconduct was gross,” Judge Steven David wrote for the unanimous high court.

Although the justices concluded that L.W. did commit gross misconduct, given the facts and circumstances of the case, including the strong evidence of Loehrlein’s sanity, it was not likely he was harmed.

“We would perhaps be in a different situation if the evidence were closer regarding Loehrlein’s sanity or if the issue to be determined at trial was whether he harmed his family. But as it stands, it is not likely L.W.’s misconduct harmed Loehrlein at trial because L.W.’s prior personal experience with domestic violence is not directly related to a sanity inquiry and further, she testified that she was impartial,” the high court wrote.

“The trial court, having heard the evidence in a post-trial hearing and after presiding over the trial and voir dire denied Loehrlein’s request for a new trial based on juror misconduct. Given the facts and circumstances of this case, we find that the trial court did not abuse its discretion because while L.W. committed gross misconduct, Loehrlein has not demonstrated that this misconduct probably harmed him,” it concluded.

L.W. is Newburgh attorney Lisa Watson, revealed through a wrongful-termination lawsuit she filed against the state in May, Lisa Watson v. Indiana Department of Child Services, 82C01-2005-CT-001957. Watson claims in the suit that she was fired from her job as a DCS staff attorney due to “claims against Plaintiff as a member of the jury alleging that Plaintiff ‘lied’ on her jury questionnaire … .

“On or about February 21, 2020, the Indiana Court of Appeals granted the above criminal defendant’s appeal and ordered that a new trial is to be held in the matter …,” Watson’s suit says. “On February 26, 2020, Plaintiff was terminated from her employment … for alleged ‘unprofessional behavior’ while serving on the aforementioned jury.”

Watson, the suit claims, “was terminated for her service on a jury in violation of Indiana Code 35-44.1-2-11 and Indiana Common Law.” The suit seeks her reinstatement at DCS, back wages, compensatory and punitive damages and attorney fees and costs.

The DCS’s motion to dismiss Watson’s lawsuit is pending before special judge Robert Kreig in Vanderburgh Circuit Court, according to online court records. According to the Indiana Roll of Attorneys, Watson was admitted to practice in Indiana in 1999 and has no prior or pending disciplinary history.

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Dec. 15

Civil Plenary — Annexation Law/‘Special Legislation’

Eric Holcomb, in his official capacity as Governor of the State of Indiana v. City of Bloomington

19S-PL-304

A divided Indiana Supreme Court ruled in favor of the city of Bloomington, upholding a ruling against the Indiana governor and striking down “special legislation” targeting the city’s annexation efforts. Dissenting justices, however, warned that the majority’s holding “erodes separation of powers.”

While the city of Bloomington was taking initial steps toward the annexation of nearly 10,000 acres, the Indiana General Assembly in April 2017 added a provision into the state’s budget bill. The special legislation, codified at Indiana Code § 36-4-3-11.8, voided a Bloomington annexation ordinance and prohibited the city from pursuing any municipal annexation until July 1, 2022.

Bloomington filed a complaint for declaratory and injunctive relief against Indiana Gov. Eric Holcomb, claiming the provision targeting the city’s attempts to annex the land was unconstitutional. Specifically, Bloomington sought declarations that Section 11.8 constituted special legislation that violated Article 4, Section 23 of the Indiana Constitution and that it violated Article 4, Section 19’s single-subject rule.

Holcomb moved to dismiss Bloomington’s complaint, arguing he was not a proper defendant because he does not enforce the statute, but the trial court denied that motion. The court then granted summary judgment to the city in April 2019, declaring Section 11.8 unconstitutional under Article 4, Sections 19 and 23.

Splitting in its decision, the Indiana Supreme Court affirmed the trial court’s ruling in the case of Eric Holcomb, in his official capacity as Governor of the State of Indiana v. City of Bloomington, 19S-PL-304. The high court addressed two issues in its decision: whether Bloomington properly sought declaratory relief from the governor and whether Section 11.8 is unconstitutional.

Keeping in mind the governor’s narrow justiciability argument, the high court majority first found that the governor, in light of his constitutional authority and duty, does enforce Section 11.8. As such, it concluded Bloomington could bring its declaratory judgment action against him in the case at hand because of the unique way in which the Legislature drafted the statute.

“The unique features of Section 11.8 show that the Governor enforces the statute pursuant to his general executive power and his duty to take care that the laws are faithfully executed,” Justice Christopher Goff wrote for the majority. “Because the Governor enforces Section 11.8 under these rare circumstances, a judgment in Bloomington’s favor here will provide redress to the city by removing the statute as a barrier to its proposed annexation.

“Therefore, Bloomington’s suit against the Governor easily presents the ripening seeds of a controversy that our Declaratory Judgments Act requires,” Goff continued, joined by Chief Justice Loretta Rush, concurring, and Justice Steven David, concurring in result. “We emphasize, however, that the Governor’s argument will win in most cases — his general constitutional powers and duties will not establish enough of a connection to a statute to allow a suit like this one under most circumstances. But, given the one-of-a-kind statute involved, the Governor’s constitutional authority and duty, the significant injury suffered by Bloomington, and the ability to afford it redress through declaratory judgment, we must reach this unusual result.”

Additionally, the majority found that Bloomington’s declaratory judgment action presents an actual controversy, and prudential concerns compel the high court to resolve it.

On the second question, the majority concluded the Legislature drafted Section 11.8 as a special law when a general law could have been made. Thus, it determined Section 11.8 violates Article 4, Section 23’s limitation on special laws.

“If the legislature were truly concerned with the pace and mood of Bloomington’s proposed annexation or Bloomington’s use of remonstrance waivers, that concern would have applied equally across Indiana. But the legislature did not pass a law prohibiting such activity by every municipality in the state,” Goff wrote. “Instead, it singled out Bloomington. Under the circumstances here, that special treatment doled out by Section 11.8 is unconstitutional.

“… Accordingly, we affirm the trial court’s order granting summary judgment and declaratory relief to Bloomington and ruling that Section 11.8 constitutes impermissible special legislation in violation of Article 4, Section 23 of the Indiana Constitution.”

In a footnote, the majority noted that it did not consider the argument under Article 4, Section 19 because the legislation was struck down under Section 23.

Justices Geoffrey Slaughter and Mark Massa, however, dissented in a separate opinion, arguing against the majority’s holding that “broad principles of standing do not apply here but prudential considerations do.”

“I respectfully disagree on both points and would not give our state constitution’s separation-of-powers mandate such short shrift under either doctrine,” Slaughter wrote in a dissenting opinion, joined by Massa. “Our constitution confines courts to deciding cases over which they have jurisdiction. A justiciable case — one suitable for judicial resolution — has essential constitutional requirements like standing and nonessential considerations like prudence. Today’s decision conflates the essential with the nonessential and thus erodes separation of powers.

“… Because our decision cannot be reconciled with the structural limits on judicial power compelled by Article 3, Section 1, and the governor’s grant of power under Article 5, Section 16, I respectfully dissent.”

IndianaCourt of Appeals

Dec. 7

Civil Plenary — Railroad Right of Way/Adverse Possession

Dennis Millikan and Vicki Millikan v. City of Noblesville and KACE, LLC

20A-PL-1061

The Indiana Court of Appeals has reversed in favor of two longtime Noblesville residents who exercised control over an abandoned railroad right of way for decades, finding the residents reasonably believed they were paying taxes on the right of way during a period of adverse possession.

For 46 years, Dennis and Vicki Millikan owned a property in Noblesville whose entire northern boundary was bordered by a Conrail railroad right of way. To the north of the railroad right of way and the Millikan Property is the Park 32 West subdivision, where Lot 5 of the subdivision and the Millikans’ property is divided by the railroad right of way.

A dispute eventually arose between the Millikans and Kace LLC, which purchased Lot 5 in 2011, concerning a portion of the railroad right of way. The Millikans had exercised control over the right of way in 1982 after Contrail abandoned the track, planting grass and trees on the spot and maintaining that landscaping for the next 28 years.

The couple recorded an Affidavit In Support Of Vesting Interest In Abandoned Railroad Right Of Way in 1991, which claimed that the Millikans owned the disputed property in fee simple but that a deed containing a complete description of the railroad right of way was not known to exist. The affidavit was also stamped as “duly entered for taxation,” but no property taxes were ever assessed on the disputed property.

In 2014, Noblesville showed interest in acquiring the old railroad right of way for use as the Midland Trace Trail. Despite knowing of the Millikans’ claim of ownership to the disputed property, the city entered into an agreement with Kace, by which Kace was to transfer title to a portion of the disputed property to Noblesville.

The Millikans in 2018 filed their complaint for title by adverse possession and trespass against the city, then in 2019 filed a motion for summary judgment as to their claim. Following a hearing, the Hamilton Circuit Court denied the Millikans’ motion for summary judgment and granted summary judgment to the city.

Specifically, the trial court held that that the Millikans had satisfied “the common law elements of adverse possession to the Disputed Property” but “failed to prove they have substantially complied with the requirements of [Indiana Code section 32-21-7-1], which requires an adverse claimant to have a reasonable and good faith belief that [they] paid the Special Assessments due during the period of adverse possession.”

In response, the Millikans filed a motion to correct error, arguing that title had irreversibly vested in them many years before any special assessments were assessed against the disputed property. When the trial court denied the motion to correct error, the couple appealed in Dennis Millikan and Vicki Millikan v. City of Noblesville and KACE, LLC, 20A-PL-1061.

The couple argued, among other things, that they had already obtained title to the disputed property before the special assessments were even assessed. They also contended that even if they were required to comply with Indiana Code § 32-21-7-1(a) after the 10-year possessory period ended, they satisfied the statute’s good faith requirement because they recorded the 1991 affidavit claiming ownership of the disputed property, and the recorder’s office marked that affidavit as “duly entered for taxation.”

“Although they were mistaken in their belief that they obtained possession of the Disputed Property pursuant to then Indiana Code section 8-4-35-5, contrary to the trial court’s findings, the Millikans were not paying taxes on one property (the south right of way) and not another (the Disputed Property) during the period of adverse possession. The designated evidence showed that no taxes or assessments were due for the Disputed Property until after the period of adverse possession had passed,” Judge James Kirsch wrote for the Indiana Court of Appeals.

The appellate court ultimately concluded that the Millikans substantially complied with the statutory tax payment requirement because they had a reasonable and good faith belief that they were paying the taxes during the period of adverse possession.

“This is particularly true because there were no taxes or assessments assessed on the Disputed Property for a least 28 years after the Millikans began asserting control and possession of the Disputed Property and for at least 18 years after they filed their 1991 Affidavit,” Kirsch wrote.

“We, thus, find that the trial court erred in granting summary judgment in favor of the City and in denying the Millikans’ motion for summary judgment. We reverse and remand to the trial court to enter summary judgment in favor of the Millikans,” the appellate panel concluded.

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Dec. 9

Civil Plenary — Final Judgment/Post-Judgment Interest

State of Indiana v. International Business Machines Corporation

20A-PL-925

Indiana’s argument that although it affirmed, the state’s Supreme Court really intended to reverse the trial court and award more than $4.3 million in post-judgment interest from IBM was met with exasperation from the Indiana Court of Appeals.

The argument was presented in the fourth appeal of the case that began in 2010 and involves a soured contract between Indiana and IBM. In this latest ruling, the appellate court asserted the state made a “remarkable misinterpretation” of the Indiana Supreme Court’s ruling in the matter, which has led to a “continuation of litigation that should have long since ended.”

In State of Indiana v. International Business Machines Corp., 20A-PL-925, the Court of Appeals found the Marion Superior Court properly denied the state’s verified motion to enter final judgment on remand.

Indiana entered into a 10-year $1.3 billion contract in 2006 with IBM to modernize and improve the state’s welfare system. However, less than three years later, the state terminated the deal because of IBM performance issues.

Breach of contract lawsuits ensued and in 2017 the state was awarded $128 million in total damages, which was offset by the $49.8 million in damages due IBM. Following several appeals and rulings, the Supreme Court affirmed the trial court’s award of post-judgment interest in IBM v. State, 138 N.E. 3d 255, 259 (Ind. 2019).

However, Indiana is now arguing the interest on the IBM and the state judgments should be calculated separately based on different statutes, interest rates and accrual dates.

The state contends it is owed more than $4 million in additional post-judgment interest. Primarily, the state argues the interest it is due should be based on its gross award of $128 million at a rate of 8% from Aug. 4, 2017, while the interest due IBM should be based on its award of $49.8 million at a rate of 6% from March 14, 2018.

“The gist of the State’s appeal is that the Supreme Court, in actuality, reversed the trial court on this issue and remanded,” Judge Robert Altice wrote for the court. “This can’t be so. A plain reading of the Supreme Court’s opinion, and the trial court’s order which was affirmed, indicates that no post-judgment interest was due IBM because its damage award was zeroed out by the setoff.”

As the Court of Appeals explained, the Supreme Court held that since IBM’s award was less than the state’s award in the 2017 order, IBM’s award was applied to offset what was owed to the state.

“… (T) here was no judgment due IBM and, thus, no post-judgment interest on IBM’s offset award,” Altice wrote.

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Dec. 10

Civil Plenary — Dismissal Reversal/Order for Damages

David McLean, individually and derivatively on behalf of Greek’s Mobile Response Team, LLC v. Joshua Trisler, et al.

19A-PL-417

A panel of the Indiana Court of Appeals has reversed a judgment against a Hamilton County pizzeria company’s owner after finding the trial court erred in concluding that he failed to establish money damages for his partners’ acts of forgery and counterfeiting related to the business, among other things, awarding more than $197,000 in damages and $21,000 in legal fees.

In 2014, David McLean joined Joshua Trisler and David Koeppen as members of Greek’s Mobile Response Team, LLC, which owned and operated a Greek’s Pizzeria franchise in The Village of West Clay in Hamilton County. Later in the year, Koeppen’s interest in GMRT was divided pro rata between McLean and Trisler, giving McLean at least a 50% share.

By November 2014, Trisler sought to acquire a Greek’s Pizzeria franchise in Carmel, then operated by Rolling in Dough GP1, LLC, with GMRT assets. Trisler applied $41,000 in GMRT funds to the purchase and capitalization of Greek’s Carmel. Then in January 2015, Koeppen personally executed a promissory note and applied $4,000 in GMRT funds to his loan.

Becoming concerned about Trisler’s and Koeppen’s activities, McLean unsuccessfully attempted to review the books and records of GMRT. Trisler in September 2016 entered into an agreement to convey all of the assets of GMRT to a buyer for $350,000.

Koeppen — despite supposedly no longer having any interest in GMRT — and Trisler approved the sale over McLean’s objection, prompting McLean to sue them both, as well as GMRT, Rolling in Dough, and several other defendants for claims for which he sought both money damages and injunctive relief.

The trial court granted McLean’s motion for further sanctions against the defendants for damages discovery violations, ruling that the defendants were prevented from producing evidence at the damages hearing and awarding McLean attorney’s fees.

But when the damages hearing concluded in January 2019, the defendants moved for involuntary dismissal, which the trial court granted, dismissing all claims against all defendants brought by McLean on the basis that McLean had failed to sufficiently prove his actual damages.

On appeal, McLean argued whether the trial court’s conclusion was clearly erroneous in the case of David McLean, individually and derivatively on behalf of Greek’s Mobile Response Team, LLC v. Joshua Trisler, et al., 19A-PL-417. The appellate court first found that the trial court’s finding that McLean failed to establish damages related to the unauthorized sale of Greek’s West Clay was clearly erroneous.

“Pursuant to our holding in JKL Components Corp. v. Insul-Reps, Inc., 596 N.E.2d 945, 954 (Ind. Ct. App. 1992), the Trisler Parties’ failure to produce any evidence regarding debts or liabilities of GMRT cannot support a finding that McLean failed to establish damages with sufficient specificity. To conclude otherwise would be to essentially reward the Trisler Parties for their recalcitrance and repeated defiance of the trial court’s discovery orders. Consequently, we conclude that McLean is entitled to directly recover fifty percent of the sale price of Greek’s West Clay, or $175,000.00,” Chief Judge Cale Bradford wrote for the appellate court.

It further found that the admitted allegations, which were not countered by any evidence, were sufficient to establish damages in regard to the conversion of GMRT funds. Thus, the appellate court concluded that McLean established direct damages of $22,500, or half of the $45,000 withdrawn, reflecting his 50% share in GMRT.

“We remand for the entry of judgment in favor of McLean, as an individual, in the amount of $197,500.00, divided as follows: $175,000.00 against Trisler and Koeppen, $20,500.00 against Trisler and Rolling in Dough, and $2000.00 against Koeppen. We also remand for the entry of an award of attorney’s fees in the amount of $21,193.84. We further instruct the trial court to determine the appropriateness of the award of up to three times the actual damages to McLean, the costs of the actions, reasonable attorney’s fees, and/or other amounts which may be due pursuant to the CVRA. Finally, we instruct the trial court to enter a declaratory judgment in favor of McLean on his direct claim for the determination of ownership rights in Rolling in Dough,” it concluded.

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Dec. 14

Civil Tort — Negligence/Summary Judgment Reversal

Sandra Hogan, as Personal Representative of the Estate of Mary Hogan, Deceased v. Magnolia Health Systems 41, LLC

20A-CT-1101

A negligence suit against a Carmel assisted living facility in which a resident was seriously injured when a buffet table fell, knocking her to the ground, was reinstated after a Hamilton County court ruled in favor of the assisted living facility.

The Indiana Court of Appeals reversed the Hamilton Superior Court’s grant of summary judgment in favor of Magnolia Health Systems 41 LLC, which operates Crowne Point of Carmel assisted living.

The lawsuit was filed on behalf of resident Mary Hogan, who claimed that in April 2016, she was standing near a buffet table when an employee “negligently cause the buffet table to fall onto [her] walker, causing her to fall to the floor,” hit her head and suffer serious injury.

Before the litigation proceeded to summary judgment, Hogan died, though the COA in a footnote observed there are no allegations that her death was a result of her injuries in this case. The suit was carried forth by her daughter and personal representative of her estate, Sandra Hogan.

In February 2020, Magnolia moved for summary judgment, arguing it could not be held liable on a theory of respondeat superior. After a hearing, Special Judge Todd L. Ruetz granted Magnolia summary judgment.

The COA reversed and remanded in Sandra Hogan, as Personal Representative of the Estate of Mary Hogan, Deceased v. Magnolia Health Systems 41, LLC, 20A-CT-1101.

“The crux of the dispute between the parties is whether the dismissal of (Jackie) Young, the alleged negligent Magnolia employee, as a defendant extinguishes Magnolia’s liability under the theory of respondeat superior. We conclude it does not,” Judge Margret Robb wrote for the panel.

“Young’s dismissal as a defendant does not extinguish Magnolia’s potential liability arising from Young’s conduct,” Robb wrote. “Magnolia admits Young was acting within the scope of her employment at the time of the incident and therefore, if the trier of fact determines that Young acted negligently, her negligence will be imputed to Magnolia, and a judgment will be entered accordingly. Because Magnolia was not entitled to judgment as a matter of law and genuine issues of material fact exist as to whether Young was negligent, the trial court improperly granted summary judgment in favor of Magnolia.”

Ordinance Violation — Code Violation/Reversal of Judgment

Metropolitan Development Commission v. Everett Powell

20A-OV-871

A court ruling in favor of a Lawrence homeowner who was investigated after reports that he was building a deck and an above-ground pool without city permits was reversed Dec. 14. The Indiana Court of Appeals found judgment in the property owner’s favor was clearly erroneous.

The case involves Everett Powell, whose building on his property prompted a complaint of zoning violations that were investigated by Jeff Vaughn in July 2018. Then a zoning and licensing inspector for the Department of Businesses and Neighborhood Services, Vaughn inspected the outside property and found construction that violated the Consolidated City of Indianapolis/Marion County Code. In addition to lack of permits, some of the construction appeared to be in the setback area of the property.

After Vaughn told Powell he had to stop work immediately, Powell asked to speak with Vaughn’s supervisor then asked Vaughn to leave, which he did. Vaughn said he mailed notices of violation to Powell, but Powell says he didn’t receive them.

The next month, a follow-up inspection revealed the construction had been partially removed but the commission cited Vaughn for three code violations — failure to obtain a permit for a deck more than 18 inches tall, outdoor storage of trash or debris, and building a detached structure within the rear yard setback.

The commission sued Powell in September 2018 based on the violations, but after a bench trial, Marion Superior Judge John Chavis II ruled in Powell’s favor. He found “Vaughn obtained evidence that supported the violation by entering Mr. Powell’s property without first obtaining his permission or an administrative search warrant,” citing Chapter 740 of the code.

“We agree with the Commission that the trial court misinterpreted the plain language of the Revised Code,” Judge Elizabeth Tavitas wrote for the panel in Metropolitan Development Commission v. Everett Powell, 20A-OV-871. Specifically, the code prohibits inspectors from entering structures without a warrant or consent, but not the premises or property when responding to code complaints.

“Nothing in the record suggests, however, that Vaughn ever attempted to enter a structure. Rather, his inspection took place outdoors, and Vaughn removed himself from the premises immediately upon being asked,” Tavitas wrote.

“The trial court’s finding that the events precipitating the citations began with an unlawful entry conflicts with the evidence offered. There was a complaint about the violations before Vaughn even arrived at Powell’s residence. Vaughn’s testimony included the fact that many of the photographs of the violations were taken from a public street, as the violations were plainly visible to Vaughn,” Tavitas continued.

“… The trial court erroneously concluded that Vaughn’s initial entry onto Powell’s premises was unauthorized. Accordingly, the trial court’s denial of the Commission’s request for a permanent injunction is clearly erroneous,” the appellate panel concluded, remanding with instructions to enter such an order.•