Indiana Court Decisions – Jan. 30-Feb. 12, 2020

Keywords Court opinions

7th Circuit Court of Appeals

Feb. 7

Civil Plenary – Social Security Disability/Reversal, Order for Benefits

Gail A. Martin v. Andrew M. Saul

19-1957

In taking what it called a rare step, the 7th Circuit Court of Appeals has ordered an award of disability benefits to a woman who was previously denied her request for them. The 7th Circuit concluded an administrative law judge’s decision denying her request was not supported by substantial evidence.

Gail Martin, a 67-year-old woman living in northeast Indiana, sought benefits due to physical and psychological problems she suffered that stem partially from two car accidents. Martin claims to suffer persistent back pain from those accidents, as well as depression, anxiety, bipolar disorder, panic disorder and PTSD. As a result, she stopped working in 2009. She had worked as a home health aide, data entry clerk and administrative assistant.

Martin sought disability benefits and before her first administrative law judge hearing, the commissioner of Social Security requested that a doctor examine Martin. That doctor concluded that Martin experienced back spasms, was slow moving and had significantly limited range of motion in her neck, back and hips. Two non-examining state agency doctors also reviewed Martin’s medical records and case file for physical impairments and concluded that she could perform no more than a limited range of light work. Only one state agency doctor found she had no physical limitations, a view that was provided without examining Martin or reviewing the first state agency doctor’s findings.

The ALJ in Martin’s first hearing concluded she had severe physical impairments but could work in a sedentary job requiring little social interaction, including in her previous positions as a data entry clerk or administrative assistant. During a hearing on remand with a new ALJ, Martin was determined to have serious psychological problems that limited her work, but that her back pain was not severe and did not in any way affect her ability to work.

The 7th Circuit, although finding no issue with the second ALJ’s determination regarding Martin’s mental abilities, concluded that the second ALJ’s determination that Martin could perform physical work at all exertional levels “finds nowhere close to substantial support in the record.”

“The second ALJ assigned little weight to every medical opinion related to physical conditions except for the one provided by Dr. (Joshua) Eskonen, an agency physician who never examined Martin nor reviewed her previous case file. The ALJ even credited Dr. Eskonen’s opinion over that of Dr. (David) Ringel, the state-agency doctor who did perform a physical examination of Martin at the Commissioner’s request,” Circuit Judge Michael Scudder wrote. “Even more, in choosing to credit particular findings Dr. Ringel made about Martin’s physical ability, the second ALJ altogether ignored others making plain that Martin had serious neck and back problems. The ALJ’s analysis strikes us as impermissible cherry-picking — highlighting facts that support a finding of non-disability while ignoring evidence to the contrary.

“… If Martin can barely perform simple household tasks, it defies reality to conclude that she is able to perform physical labor at any level of exertion. Because the evidence falls far from supporting the second ALJ’s finding, we must reverse,” the 7th Circuit wrote.

Additionally, the 7th Circuit took the “rare step” of ordering the award of benefits for Martin, reversing and remanding in Gail A. Martin v. Andrew M. Saul, 19-1957.

Indiana Supreme Court

Jan. 31

Protective Order – Successive Order Vacated/Evidence S.H. v. D.W.

19S-PO-118

Justices Christopher Goff and Mark Massa split from their colleagues in the majority of the Indiana Supreme Court that reversed the grant of a woman’s second protective order against her ex-husband.

In the case of S.H. v. D.W., 19S-PO-118, D.W. was granted a protective order from her then-husband after he physically abused her. At one point during 2016, while the couple’s divorce proceedings were pending, S.H. grabbed D.W. by the neck, forced her from her car, and slammed her face into the car door. S.H. continued to throw D.W. to the ground and threw a printer and table at her. D.W. called the police, and the day after she filed her petition for a protective order, S.H. sought his own against D.W.

At a hearing, S.H. disputed the allegations of D.W.’s petition but did not object to the entry of a two-year protective order against him. He, in turn, voluntarily dismissed his own petition in exchange for D.W.’s agreement to a restraining order against her in their separate dissolution-of-marriage action.

Two years later, D.W. filed for a second petition, alleging that S.H. had twice tried to indirectly contact her through social media. She argued that the first protective order had “kept him away physically” and that she would like the second order to continue that. She admitted that during the protective order’s two-year term, S.H. had not violated the order, visited her residence or place of employment or contacted D.W. directly. The trial court granted a second petition and denied S.H.’s motion to correct error.

In its decision, the Indiana Court of Appeals concluded that although she provided minimal evidence to support the extension of the protective order, that evidence was enough to satisfy her burden. After granting transfer in the case, however, a majority of the Indiana Supreme Court reversed the appellate court’s decision.

With Justice Geoffrey Slaughter writing for the majority, the high court concluded there was insufficient evidence to support that S.H. posed a present, credible threat to D.W. to justify the second protective order. Slaughter noted this is the first time the Supreme Court has considered the meaning and application of the Indiana Civil Protection Order Act.

“Entering one protective order does not, by itself, justify entering a second order — or renewing or extending the first order,” the majority wrote. “… But the existence of a prior order does not dictate the outcome of a later dispute between the same parties. … Thus, the circumstances leading to entry of a prior order generally cannot be the sole basis for entering a new order or renewing or extending the previous one.”

The majority concluded that because S.H.’s physically violent act against D.W. only happened once with no follow-up act, no threat that it would recur and no other reasonable grounds to believe that he presently intends to harm D.W. or her family, the act does not permit the reissuance, renewal, or extension of the protective order.

“Evidence that the respondent violated a protective order may alone justify extending the order’s duration because it shows a disregard of judicial efforts to ensure a prior victim’s safety and security. But when, as here, the respondent did not violate the prior order, we would put the respondent in an impossible, no-win situation ‘if full compliance with a [prior] protective order can be a basis for extending the order or issuing a new one,’” the majority wrote.

Finding the evidence “simply lacking,” the majority, consisting also of Chief Justice Loretta Rush and Justice Steven David, reversed and remanded the trial court’s decision with instructions to vacate entry of the second protective order against S.H. But in a separate opinion, Goff, joined by Massa, dissented from the majority, stating that his “colleagues seek only to assure fairness to all parties in cases arising under the Act.”

“However, by requiring new evidence of an act or threat to justify extending the protection order beyond its initial two-year period, I believe the Court’s opinion today — although confined to the record here — unnecessarily weakens the Act’s protection,” Goff opined.

Goff argued that requiring new evidence of conduct by the respondent to justify extending a protection order puts the protective order’s petitioner at risk of further harm.

“Is it really necessary for our trial courts, in issuing an extension, to wait for the respondent to commit an act of violence or to otherwise violate the original order of protection? I think not,” Goff wrote. “And to conclude otherwise, in my opinion, defeats the Act’s purpose of promoting the ‘protection and safety of all victims of domestic or family violence’ and preventing that violence.”

The dissenting justices agreed with the majority that the mere “existence of a prior order does not dictate the outcome of a later dispute between the same parties.” But Goff argued that the petitioner’s sworn testimony, so long as the trial court finds it credible, should suffice in meeting the evidentiary requirement.

In addition to his dissent, Goff opined that courts should develop an adequate record and factual basis for issuing and/or extending a protection order to “ensure the proper outcome” by including “testimony from the parties and witnesses, as well as other evidence sufficient to allow a reviewing court to determine that a petitioner made a prima facie case satisfying the Act’s requirements.”

Indiana Court of Appeals

Jan. 30

Civil Plenary – Zoning/Delegated Authority

City of Bloomington Board of Zoning Appeals v. UJ-Eighty Corporation

19A-PL-457

A split appellate court has affirmed for a southern Indiana property owner in a dispute over a former Indiana University fraternity house after the university decided to no longer recognize the fraternity. In doing so, the panel struck down a local Bloomington ordinance that deferred to IU in regulating fraternities and sororities.

Since 2016, property owner UJ-Eighty Corp. had leased one of its properties near the Indiana University campus to the Gamma-Kappa Chapter of Tau Kappa Epsilon fraternity. Concerns arose between UJ-Eighty and the city of Bloomington in February 2018 when IU notified TKE members that its fraternity would no longer be recognized. Thus, all members living in the house had to move out.

Although most of the men found other housing and left the property, two members continued to live there. But because the property no longer met Bloomington’s Unified Development Ordinance definition of a “Fraternity/Sorority House,” the city issued two notices of violation to UJ-Eighty.

The Bloomington Board of Zoning Appeals affirmed the issuance of the violation notices, but the Monroe Circuit Court granted UJ-Eighty’s petition for judicial review. The trial court concluded that the city had improperly delegated authority to IU to determine whether the property was being used by students in a sanctioned fraternity. It also found the ordinance to be unconstitutional under the Due Process Clause of the 14th Amendment of the United States Constitution and Article 4, Section 1 of the Indiana Constitution.

The BZA appealed in City of Bloomington Board of Zoning Appeals v. UJ-Eighty Corporation, 19A-PL-457, arguing that the trial court erred in finding that Bloomington delegated zoning authority to the university in contravention of federal and state constitutions. But a majority panel of the Indiana Court of Appeals affirmed the trial court, agreeing that the city improperly delegated authority to IU.

First, the majority noted that Bloomington provided no mechanism for reviewing the university’s decision, leaving both the city and property manager bound by IU’s decision. It further rejected the BZA’s contention that “[c]odifying a requirement for university affiliation is not an impermissible delegation of zoning authority[.],” finding that the ordinance went beyond defining fraternities or sororities as “entities affiliated with universities.”

“Additionally, it should be noted that the amendment to the Ordinance is also clearly arbitrary and unreasonable; the amendment created a situation where the University was allowed to act, but UJ-Eighty would be punished,” Judge Rudolph Pyle III wrote for the majority, joined by Judge Margret Robb.

“It was the University’s action (removing TKE from the list of sanctioned fraternities) which triggered the ordinance violation that the City sought to enforce against UJ-Eighty,” the majority continued. “As a result, allowing a third party to engage in actions, following whatever procedures it deems necessary, that trigger zoning violations against a property owner arbitrarily and unreasonably deprives the property owner of its due process rights under the Fourteenth Amendment.”

Dissenting from the majority, Judge L. Mark Bailey in a separate opinion argued that UJ-Eighty did not meet the “heavy burden” of demonstrating there is “no set of circumstances under which the [law] can be constitutionally applied.”

“To the extent the majority characterizes the Ordinance as ‘clearly arbitrary and unreasonable’ because ‘UJ-Eighty took no affirmative action to violate the Ordinance,’ this case arose because UJ-Eighty chose to rent its property,” Bailey wrote. “Its tenants did not satisfy the definition in the Ordinance — and I discern nothing arbitrary or unreasonable about holding a landlord accountable for ensuring use of its property complies with the law.”

The dissenting judge further disagreed with the majority’s conclusion that the city delegated power to the university.

“Under the unique circumstances of this case — involving the interrelationship of independent arms of government that are protecting students in a university town — I would conclude UJ-Eighty failed to demonstrate that the Ordinance and its attendant procedures are deficient,” Bailey wrote.

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Juvenile – Intimidation/School Shooting Threat

In the Matter of B.B., A Child Alleged to be a Delinquent v. State of Indiana

19A-JV-1803

A homeschooled teen who threatened to shoot students at northern Indiana high school did not convince an Indiana Court of Appeals panel that there wasn’t enough evidence to support his delinquency adjudication.

Members of the appellate court affirmed the adjudication of minor B.B. as a delinquent in In the Matter of B.B., A Child Alleged to be a Delinquent v. State of Indiana, 19A-JV-1803. In that case, B.B. admitted his desire to shoot students at Rochester High School in 2018, where his friend R.A. attended as a student. B.B. made threats via the social media app Snapchat, over the phone and in person.

B.B.’s friend, who at first thought the comments were a joke, later took them seriously when B.B. made repeated comments about using an assault rifle from his home and disclosed a “manifesto,” which described B.B.’s plan to shoot students at the high school. R.A. suspected B.B. would attack the school on the anniversary of the Columbine High School shooting. Word spread through the high school on that date, and many students did not attend classes for several days afterward.

During an investigation, law enforcement interviewed B.B. with his mother present, located the “manifesto” and photos of the minor holding the assault rifle. The “manifesto” included statements indicating that B.B. planned to harm others, stating: “I’m not doing this because I’m mad at anyone, it’s just that suicide is overrated, if you want to die take others with you,” and “[s]ometimes I wonder why I want to shoot up the school but then I remember all of the hatred and loneliness I feel everyday, knowing nobody.”

The Fulton Circuit Court adjudicated B.B. as a delinquent for committing an act that would be Level 6 felony intimidation if committed by an adult, ordering him to serve 60 days, suspended, in secure detention at Kinsey Youth Center. He was then placed on probation until Jan. 12, 2020.

B.B. appealed his adjudication, arguing there was insufficient evidence to support the trial court’s decision because the state failed to prove beyond a reasonable doubt that B.B. knew or reasonably should have known his plans to shoot students at the high school would be communicated to the potential victims. The appellate court agreed with the state, however, finding B.B. was not discreet in his plans to kill people at the high school.

“Unless R.A. was a co-conspirator in the attack, and no such argument has been made, a reasonable fact finder could conclude that B.B. knew or should have known that R.A. would report a plan of mass murder to other students at the high school. R.A. behaved in a predictable way when he exposed B.B.’s plans,” Judge Elizabeth Tavitas wrote. “The State presented sufficient evidence from which a trier of fact could conclude B.B. committed intimidation to interfere with the occupancy of the high school.”

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Jan. 31

Civil Plenary – State Carrier Motor Fees/Class Action

Small Business in Transportation Coalition, et al. v. Indiana Department of Revenue, et al.

19A-PL-370

An appeals court affirmed a judgment for the Indiana Department of Revenue in a class-action lawsuit that sought to recoup hundreds of millions of dollars in state motor carrier fees trucking companies paid online.

The Indiana Court of Appeals rejected a suit filed on behalf of the Small Business in Transportation Coalition, Daywalt Trucking and 12 Percent Logistics. They claimed the Indiana Department of Revenue lacked authority to collect fees under the Unified Carrier Registration Act of 2005. Indiana is one of 41 states that collect state motor carrier registration fees, Judge Robert Altice noted for the court in affirming for the state.

Between 2008 and 2018, the Department of Revenue operated a web portal in conjunction with the United Carrier Registration Board that allowed truckers to pay their federal and state registration fees in one stop. But the trucking firms alleged in the class action that the state lacked authority to collect fees and asserted claims for reimbursement on theories of unjust enrichment and other grounds.

“In sum, INDOR, under agreements with the UCR Board, collected UCR fees from interstate carriers across the country that were owed and then distributed the funds pursuant to the UCR Plan and Agreement. INDOR’s actions resulted in satisfaction of Plaintiffs’ UCR obligations for about a decade. Plaintiffs’ attempt to recoup, based on equitable theories, hundreds of millions of dollars paid through the Portal is without basis in law,” Altice wrote for the court in Small Business in Transportation Coalition, et al. v. Indiana Department of Revenue, et al., 19A-PL-370.

Altice noted there was no evidence that fees collected through the website were not forwarded to the rightful recipient. Likewise, the panel rejected plaintiffs’ claims that they were compelled to use the website.

“On the contrary, Plaintiffs were not obligated to use the Portal. They chose to do so out of convenience,” the court held. “Regardless of whether they utilized the Portal, Plaintiffs were required to register and pay their UCR fees. By using the Portal, Plaintiffs’ annual UCR obligations were satisfied with their base state.

“Common sense dictates that the only inequitable or unjust result here would be requiring INDOR to return the fees it collected through the Portal — fees that were either set by the Secretary or approved by the UCR Board and that were voluntarily paid by carriers to satisfy their undeniable obligations and funds that INDOR has properly distributed … .”

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Feb. 5

Civil Plenary – Easement Dispute/Order to Remove Improvements

Duke Energy Indiana, LLC v. J&J Development Company, LLC

19A-PL-735

A massive utility company has secured a reversal and judgment from the Indiana Court of Appeals following an easement-related dispute with a neighborhood developer. The result means a southern Indiana developer must remove the entrance to residential development under construction.

The appellate court found improvements within an easement the developer plans to build on unreasonably interfered with Duke Energy’s use of the easement and thus ordered their removal.

J&J Development Company LLC purchased a rural piece of land in Clark County with the intent of developing a residential subdivision on it. Duke Energy Indiana LLC owns a 300-foot-wide electric-transmission-line easement over that land, which it says is part of a greater transmission corridor. According to Duke, the two transmission lines of towers that run through the easement play an important role in providing electricity to the area, including Louisville, New Albany, Clarksville and Speed.

The transmission lines are approximately 100 yards from the subdivision entrance, according to Duke, and an occurrence or outage at or near the entrance may impact a significant number of residential and business customers.

In 2013 and 2014, J&J received plat approval from the Clark County Plan Commission and purchased the land but did not contact Duke. The following year, J&J constructed certain improvements within the easement, including the neighborhood’s only entrance, a road with curbs running parallel to and largely within the easement, detention basins, a fire hydrant and buried utility lines. However, when Duke eventually inspected the improvements, it concluded they impermissibly encroached upon the easement and would have to be removed.

The Clark Circuit Court granted summary judgment in J&J’s favor after the development company sued Duke, alleging that its improvements did not unreasonably interfere with Duke’s use of the easement. The Indiana Court of Appeals reversed, concluding that the trial court “made credibility determinations involving issues that were in dispute,” which is improper at the summary judgment stage.

Both parties filed new motions for summary judgment and the trial court ruled for J&J. The appellate court again reversed, holding that J&J’s improvements did unreasonably interfere with the easement’s use.

In Duke Energy Indiana, LLC v. J & J Development Company, LLC, 19A-PL-735, the appellate court first noted, among other things, that Duke did not assert that its right-of-way restrictions were enforceable independent of the easement instrument.

It further pointed out that the purpose of the easement extends “far beyond the simple transmission of electricity.” Rather, Duke must also be able to move freely “now or in the future” within the easement to build and maintain the necessary infrastructure to transmit electricity.

“The fact that J & J’s improvements have not yet hindered any of Duke’s work by no means establishes that they will not do so in the future,” Judge Nancy Vaidik wrote for the appellate court. “To the contrary, Duke designated extensive evidence that J & J’s improvements could seriously impair Duke’s ability to perform maintenance and repairs in the future.”

The COA ultimately concluded that J&J failed to meaningfully rebut Duke’s designated evidence. It therefore reversed and ordered summary judgment in favor of Duke, including an injunction requiring J & J to remove the challenged improvements.

“We recognize that this may strike some as a harsh result,” the appellate panel concluded. “But as we have said, a landowner who constructs improvements on an easement — especially without consulting the easement holder — does so ‘at their peril.’”

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Feb. 7

Juvenile Paternity – Child Support/Nonbiological Father

Paternity: Abriel Theresa Jenika Gonzalez v. Johnathan Michael Ortiz

19A-JP-1957

The Indiana Court of Appeals has reinstated a petition to establish child support from a man who is not the biological father of the child.

The panel concluded that time had run out for the man, who signed a paternity affidavit without reading it and waited years before taking judicial action.

Although he was informed by Abriel Gonzalez that he was the father of her child, Johnathan Ortiz was unsure if the child was really his. When Gonzalez allegedly told him that he would not be able to see the child unless he signed the paternity affidavit, Ortiz signed without reading it first.

The affidavit stated, among other things, that “A man should NOT sign this form if he is not sure he is the biological father … After sixty (60) days the father may not be able to reverse paternity even if genetic tests prove he is not the biological father.”

One month after the child’s birth, a DNA test kit Ortiz purchased revealed he was not, in fact, the child’s biological father. Submitted genetic samples sent to a certified laboratory the following year revealed the same conclusion, which Gonzalez denied.

She subsequently sought to initiate a child support proceeding to obtain a court-sanctioned genetic test, but that test also concluded that Ortiz was not the biological father.

Ortiz filed a motion to dismiss a petition to establish child support and sought to have his name removed from the birth certificate.

The trial court ultimately granted his motion to dismiss the child support establishment after finding the court-ordered genetic test results showed Ortiz was not the child’s biological father.

In reversing and remanding that decision, the Indiana Court of Appeals concluded that although Ortiz questioned being the child’s father and two DNA tests revealed that he was not, he waited until child support requests were made years after the child’s birth before seeking redress with the trial court.

“We simply cannot find that these facts constitute the extreme and rare circumstances required to set aside paternity after the sixty-day window has closed. As in (In re the Paternity of B.M. and O.M., B.S.M. v. E.S.F. and State of Indiana, 49A02-1706-JP-1383), the only reason Father sought genetic testing was to contest his paternity, meaning that the evidence establishing non-paternity was discovered intentionally rather than inadvertently,” Judge John Baker wrote for the appellate court.

The appellate court concluded that if the trial court’s order were permitted to stand, the child would ultimately be left fatherless, running counter to Indiana public policy.

“We can only find, based upon the plain language of the paternity statute and our Supreme Court’s and this Court’s interpretations thereof, that the trial court erred by granting Father’s motion to dismiss,” it concluded. “Father is Child’s legal father with all attendant legal consequences, and it is too late now to find otherwise.”

The case is Paternity: Abriel Theresa Jenika Gonzalez v. Johnathan Michael Ortiz, 19A-JP-1957.

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Feb. 12

Civil Tort — Insurance/Bad Faith

Monika Schmidt v. Allstate Property and Casualty Insurance Company

19A-CT-1489

A woman’s bad-faith claim against her friend’s insurance company has been reinstated by the Indiana Court of Appeals, which determined that the trial court erred in concluding that an insurer does not owe a duty of good faith and fair dealing to an insured who is not the policyholder.

After being involved in a car accident in which she was a passenger, Monika Schmidt sued her friend, Deborah Fisher, who had been driving. She also sued the man whose vehicle crashed into them, asserting that both drivers were negligently operating their vehicles at the time of the incident.

However, Allstate Property and Casualty Insurance Company defended its policyholder, Fisher. Schmidt qualified as an insured under Fisher’s policy, which held on her vehicle $100,000 per person/$300,000 per accident liability coverage, as well as underinsured motorist coverage of $100,000.

Following unsuccessful settlement negotiations, Schmidt amended her complaint to include an underinsured motorist claim against Allstate and a bad-faith claim based on Allstate’s handling of that claim. Specifically, Schmidt alleged that the insurer breached its duty of good faith and fair dealing with respect to her as its insured by failing to promptly inform her of the existence of the underinsured motorist coverage under its policy, and by failing to promptly respond to her coverage claim, among other things.

Schmidt and Allstate ultimately settled the underinsured motorist claim, and Allstate later filed a motion for summary judgment, asserting that it did not act in bad faith in handling the claim. The Johnson Superior Court denied that motion, but partially granted Allstate’s second motion that asserted it did not owe Schmidt a duty of good faith because she “is not the named insured under the insurance policy, or even a party to the contract of insurance[.]”

Schmidt appealed, arguing that the trial court erred in granting summary judgment on the basis that Allstate does not owe her a duty of good faith and fair dealing as its insured. Agreeing with Schmidt, the Indiana Court of Appeals reversed in Monika Schmidt v. Allstate Property And Casualty Insurance Company, 19A-CT-1489.

“At the outset, we observe that no published Indiana Supreme Court or Court of Appeals case has squarely held that an insurer does not owe a duty of good faith and fair dealing to an insured, named or unnamed, who is not the policyholder. To the extent that the cases mentioned in the trial court’s order may suggest that no such duty exists, we believe that such a proposition is untenable and unjust,” Judge Terry Crone wrote for the appellate court.

The appellate court expressed it was unpersuaded with the trial court’s reliance on the cases of Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 518 (Ind. 1993), Cain v. Griffin, 849 N.E.2d 507, 511 (Ind. 2006), and Martinez v. State Farm Mut. Auto. Ins. Co., No. 2:15 CV 137, 2016 U.S. Dist. LEXIS 42956, at *1-3 (N.D. Ind. Mar. 31, 2016).

Additionally, it noted that there was “little difference between the nature of (Schmidt’s) contractual relationship with Allstate as an additional insured and the nature of Fisher’s so-called ‘special relationship’ with Allstate as a policyholder.”

“In sum, a balancing of the three (Webb v. Jarvis, (575 N.E.2d 992, 995 (Ind. 1991)) factors weighs decisively in favor of concluding that an insurer owes a duty of good faith and fair dealing to an insured who is not the policyholder. We therefore reverse the trial court’s entry of summary judgment for Allstate and remand for further proceedings on Schmidt’s bad-faith claim, including her motion for sanctions and contempt,” the appellate court wrote.

It further noted that the trial court “has already determined that a genuine issue of material fact exists regarding whether Allstate acted in bad faith.”•

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