Indiana Court Decisions – July 1-14, 2021

7th Circuit Court of Appeals

July 14

Civil Plenary – Disability Benefits/Vocational Expert

Mike Butler v. Kilolo Kijakazi, Acting Commissioner of Social Security

20-3187

An administrative law judge’s reliance on expert testimony in denying a claim for disability benefits was proper because the claimant suffered from both exertional and nonexertional limits, the 7th Circuit Court of Appeals has ruled.

The case of Mike Butler v. Kilolo Kijakazi, 20-3187, involves plaintiff-appellant Mike Butler’s request for disability insurance benefits based on such exertional and nonexertional limits. An administrative law judge denied Butler’s claim, and the appeals council declined review.

The denial centered on step five of the five-step analysis of a person’s eligibility for disability benefits: whether “the claimant is unable to perform any work existing in significant numbers in the national economy.” The ALJ heard testimony from a vocational expert who identified three unskilled light work occupations that Butler could still perform despite his limitations. At the time of the expert’s testimony, about 3,050 such jobs — furniture rental consultant, usher and information clerk — existed in Indiana, plus 136,000 nationally.

Butler, however, argued on appeal that the ALJ should have applied the Medical Vocational Guidelines, or “the grids,” to his case, rather than hearing testimony from a vocational expert. Specifically, he argued that the ALJ failed to consider that Butler was “closely approaching advanced age,” an adverse vocational factor.

“But that argument is belied by the record,” Judge Ilana Rovner wrote in a July 14 opinion. “The ALJ quite clearly recognized that Butler was in the category of persons closely approaching advanced age, and in eliciting the testimony from the VE as to jobs that Butler could perform, the ALJ incorporated Butler’s age as one of the characteristics to be considered in making that decision, asking the VE ‘whether jobs exist in the national economy for an individual within the claimant’s age, education, work experience, and residual functional capacity.’”

Butler also argued that the ALJ cut off cross-examination as to how much the unskilled light occupational job base would be eroded based on his limits to only occasional reaching, handling and fingering with the left upper extremity. But the appellate panel also found that argument unconvincing, concluding that “the ALJ followed the procedures that are appropriate to a case such as this one in which exertional and nonexertional impairments impede the claimant’s ability to perform some jobs within a category.”

Butler relied on the case of DeFrancesco v. Bowen, 867 F.2d 1040 (7th Cir. 1989), but Rovner said that case actually supported the ALJ’s decision.

“Unlike in DeFrancesco, the ALJ here consulted a vocational expert to obtain an assessment. The ALJ thus followed the procedure that was lacking in DeFrancesco, consulting with a vocational expert and denying benefits only after the expert identified light work jobs that Butler could perform, which existed in sufficient numbers to conclude that Butler’s condition was not medically disabling,” the judge wrote.

“… Along the same lines, in numerous other cases we have upheld the resort to vocational experts in cases involving both exertional and nonexertional limitations, as are present here, because the grids do not reflect nonexertional limitations,” she continued.

“… Therefore, where the exertional impairments alone do not dictate a finding of disabled, and where the impact of the nonexertional limitations on the ability to perform jobs is not obvious, we have required resort to a vocational expert to assess how the confluence of the exertional and nonexertional limitations impacted the number of jobs that the claimant could perform within a given occupational base. That is precisely what the ALJ did here.”

Finally, the panel rejected Butler’s argument that the ALJ failed to state that work existed in significant numbers in Butler’s region of the country, noting that the expert testified about the number of jobs that Butler could perform specifically in Indiana.

“Here, Butler argues only that the ALJ failed to recite in the decision the undisputed testimony of the vocational expert. The alleged error, then, would be eliminated if the ALJ merely reissued the same opinion, including sentences that set forth that additional testimony by the vocational expert,” Rovner wrote. “… Because he alleges merely the pro forma error of failing to recite in the decision the uncontested testimony of the VE, we can predict with great confidence what the result of remand will be, and accordingly any alleged error would be harmless.”

Indiana Supreme Court

Published on theindianalawyer.com July 1

Death Penalty – Murder/Post-conviction Relief

Kevin Charles Isom v. State of Indiana

45S00-1508-PD-508

The Indiana Supreme Court has denied a final request for relief sought by a man facing the death penalty for the murder of his wife and stepchildren nearly 15 years ago.

Kevin Charles Isom in 2007 was accused of brutally killing his wife, Cassandra Isom, and her teenage children, 13-year-old daughter Ci’Andria Cole and 16-year-old son Michael Moore. Despite maintaining his innocence, Isom was convicted and sentenced to death row.

After the Indiana Supreme Court affirmed his convictions and death sentence on direct appeal, Isom sought post-conviction relief, raising many challenges to the effectiveness of his trial and appellate counsel. Although he refused to verify his petition per requirements of the post-conviction rules, the justices allowed him to proceed.

But following lengthy proceedings that led to the post-conviction court’s denial of Isom’s petition, the Supreme Court unanimously affirmed June 30 in a 46-page decision.

The high court, with Justice Geoffrey Slaughter penning the decision in response to Isom’s appeal, considered the claims that Isom’s trial and appellate counsel were ineffective, as well as “five allegedly erroneous rulings of the post-conviction court.”

“Because Isom waives his claims, or fails to meet his burden, or both, we affirm,” Slaughter concluded.

As to the effectiveness of his trial counsel, the justices disagreed with Isom’s contentions that his trial counsel were constitutionally ineffective “at all phases of Isom’s trial,” including during jury selection and at the guilt and penalty phases.

“Even had Isom carried his burden and proved deficient performance, however, ‘[g]enerally, trial errors that do not justify reversal when taken separately also do not justify reversal when taken together.’ Isom does not explain why the trial errors he alleged are exceptions to this general rule. The thrust of his argument seems to be that the alleged errors prevented the jury from hearing certain mitigating evidence and that this missing mitigating evidence calls into question the reliability of the sentencing verdict,” the high court wrote.

“Given that the aggravating factors for each sentence was the brutal murder of two victims — with two of the three victims children — and given that the jury was presented with thirty different mitigators spanning from Isom’s childhood to his mental health as an adult, we see no unreliability in the result,” it wrote.

The justices found similarly for Isom’s claims that his appellate counsel were ineffective for failing to raise fundamental-error challenges on direct appeal concerning instructions 17, 18 and 23.

They concluded Isom did not show that all evidence pointed unerringly to the conclusion that he met Strickland v. Washington, 466 U.S. 668, 687 (1984)’s “especially rigorous standard” for failure-to-raise claims.

“Isom argues that instructions 17 and 18 wrongly prevented the jury from considering his mitigating evidence during sentencing and that instruction 23 unconstitutionally informed the jury that its sentencing decision must be unanimous. But, as we held above … Isom did not make either showing. Thus, he cannot establish significant, obvious, or evident errors on the face of the record. This shortcoming alone provides an adequate basis for affirming the post-conviction court’s denial of relief on these grounds,” the high court wrote.

Justices next addressed Isom’s several free-standing challenges to the post-conviction court’s rulings, including denying Isom’s renewed motion for a competency hearing, his discovery request for the state’s lethal injection protocol and finding his execution-validity challenge waived, and Isom’s discovery request for juror contact information and finding that issue waived.

It also reviewed Isom’s argument that the post-conviction court erred in limiting the testimony of two expert witnesses and in finding Isom’s challenge to his petition’s filing date waived.

Ultimately, it concluded that because Isom did not establish that the post-conviction court erred, he wasn’t entitled to relief on any of the challenges.

The case is Kevin Charles Isom v. State of Indiana, 45S00-1508-PD-508.

Indiana Court of Appeals

July 7

Civil Plenary – Breach of Contract/Piercing the Corporate Veil

Craig Blackwell v. Superior Safe Rooms LLC, Michael M. Wharff, Wharff Excavating, LLC, John H. Byers, Jr.

20A-PL-2081

The Indiana Court of Appeals has reversed a trial court ruling by finding against a Hendricks County excavating business that tried to benefit from family ties to escape liability after excavators abandoned and left incomplete the installation of a safe room in a homeowner’s residence.

After Craig Blackwell paid $20,000 to have a waterproof and fireproof safe room installed in his home by Superior Safe Rooms, he ran into legal trouble when the company halted work on the project before completion.

Before signing the check, Blackwell met with Michael M. Wharff of Wharff Excavating LLC regarding the safe room installation. Wharff told Blackwell that his company would be installing the safe room, but a contract drafted by a Wharff employee listed no reference to Wharff Excavating other than in the email address listed for Superior.

When the project’s work was suspended before its completion, however, Blackwell sued Superior for breach of contract, among other things.

The Hendricks Circuit Court ultimately granted Blackwell’s default judgment motion against Superior on all counts of Blackwell’s complaint and dismissed Superior’s counterclaim. Also, the court granted Blackwell $161,625.52 in damages.

At a subsequent hearing on Blackwell’s motion for proceedings supplemental, Wharff testified that he had been “operating” Superior since its formation in 2012 and thought he was an owner and member of Superior until his father-in-law, John H. Byers, informed him otherwise a month prior to testifying.

According to court testimony, Byers was and always had been the sole owner and member of Superior, which “conducted no business, had no employees, had no physical place of business, had no equipment other than a pickup truck, had no income, and filed no tax returns.”

In addition, Byers was named as the sole member of Superior “for convenience” and to draw business to Wharff Excavating. Byers had formed Superior with the intention that it would market, design and sell safe rooms that Wharff Excavating would then build. But Superior never did any business other than entering into the contract with Blackwell in 2015.

Wharff, Wharff Excavating and Byers were eventually added as garnishee defendants in the case, and the trial court ultimately ruled for the defendants, finding that Blackwell presented no evidence that any of the Aronson vs. Price, 644 N.E.2d 864, 867 (Ind. 1994), factors caused his damages.

The trial court ruled that it would “be unjust and [in]equitable to pierce the corporate veil where a judgment was entered against Superior by Default Order.” As such, it concluded “there is no causal connection between the complained of actions and the actual harm suffered by Blackwell … .”

But the Indiana Court of Appeals reversed in Craig Blackwell v. Superior Safe Rooms LLC, Michael M. Wharff, Wharff Excavating, LLC, John H. Byers, Jr., 20A-PL-2081.

It noted that the trial court erred by failing to address at all the relevant issues, including who the parties to the contract were and the factors relevant to the motion to pierce Superior’s corporate veil. It likewise expressed that it was “firmly convinced” after a review that a mistake had been made in that neither the findings nor the evidence supported the trial court’s ruling.

“Neither the evidence nor the trial court’s findings that Blackwell wrote a check to Wharff Excavating and knew Wharff Excavating did the work on the project support its conclusion that Blackwell could have sued Wharff for breach of contract or that Superior’s corporate veil should not be pierced,” Judge L. Mark Bailey wrote for the appellate court.

“Rather, the evidence in the record supports only the opposite conclusions: Garnishee Defendants’ misuse of Superior’s corporate form resulted in the injustice that they escaped liability for their actions in relation to the project, and they should be held liable for the judgment against Superior.”

It concluded that the trial court committed clear error when it failed to find as a fact that the contract for the safe room was between Blackwell and Superior, and failed to make necessary findings, as requested by Blackwell, about factors relevant to disregarding Superior’s corporate form.

Additionally, it noted that the findings and the record did not support the trial court’s conclusions that the Garnishee Defendants did not use Superior as a shield to liability and that they perpetrated no injustice.

“In short, the injustice in this case is that Garnishee Defendants used Superior’s corporate form to escape liability arising out of an operation conducted by Superior for the benefit of Garnishee Defendants,” the appellate court concluded. “That is precisely the situation the corporate alter ego doctrine was designed to alleviate.”

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July 8

Civil Tort – Medical Malpractice/Jurisdiction

Linda G. Holsten, individually and as surviving spouse of Paul A. Holsten, Deceased v. Lynn Faur, M.D., and Cameron Memorial Community Hospital, Inc. a/k/a Urgent Care of Cameron Hospital

20A-CT-2072

A sepsis theory included in a widow’s medical malpractice claim has been ordered dismissed by the Indiana Court of Appeals after it found a Steuben County court lacked jurisdiction to enter partial summary judgment on that portion of the claim.

In 2015, Paul Holsten died just one day after being treated at an urgent care center and hospital emergency room operated by Cameron Memorial Community Hospital Inc. in northeast Indiana.

Paul, who presented with complaints of shortness of breath, wheezing and a productive cough, was initially sent home with a diagnosis of COPD exacerbation. However, no routine chest X-ray was ordered or taken prior to making the diagnosis, and he had no history of COPD, pneumonia or asthma.

Paul actually had community acquired pneumonia that aggressively progressed into necrotizing staphylococcus aureus pneumonia after taking prescribed oral steroids and antibiotics. Upon his return to the hospital 11 hours later, Paul went into respiratory failure and died.

His wife, Linda Holsten, sued the health care providers, alleging they were negligent in the standard of care because a chest X-ray should have been ordered as an essential first order to determine the nature and cause of Paul’s shortness of breath. She also alleged that upon the finding of a right lung infiltrate and suspicion of community acquired pneumonia, steroids were contraindicated and would not have been given to Paul.

A medical review panel found the evidence supported the conclusion that the health care providers failed to comply with the appropriate standard of care, with one panelist later stating in a meeting with Linda’s attorney that the physicians who treated Paul at the emergency room failed to follow the hospital’s sepsis protocol, which “may have played a role in Paul’s death.”

Holsten then filed a complaint with the Steuben Circuit Court and replaced the steroid theory of negligence with the sepsis theory. Cameron Hospital moved for partial summary judgment, arguing the sepsis theory of negligence had not been presented to the medical review panel as required by Indiana’s Medical Malpractice Act.

The trial court granted the motion, but the Indiana Court of Appeals vacated that decision in an interlocutory appeal in Linda G. Holsten, individually and as surviving spouse of Paul A. Holsten, Deceased v. Lynn Faur, M.D., and Cameron Memorial Community Hospital, Inc. a/k/a Urgent Care of Cameron Hospital, 20A-CT-2072.

The appellate panel concluded the trial court lacked subject matter jurisdiction to enter summary judgment on the sepsis theory portion of Linda’s medical malpractice claim because she did not present the sepsis theory to the medical review panel.

The panel began by noting that Holsten’s proposed complaint narrowly focused on two specific theories of negligence: the X-ray theory and the steroid theory. Nowhere in the proposed complaint did Holsten mention the sepsis theory of negligence or any other specific theory related to her husband’s care at the hospital emergency room, according to the COA.

The appellate court also disagreed with Holsten’s assertion that the last portion of her complaint contained “broad general allegations” of negligence that encompassed the sepsis theory.

“A reasonable person would interpret the ‘negligence’ in paragraph 8 as referring to the X-ray theory and steroid theory specifically alleged in the preceding paragraphs. … The content of Linda’s proposed complaint does not encompass — specifically or generally — the sepsis theory of negligence,” Judge Leanna Weissmann wrote for the appellate court.

The COA likewise found no indication that Holsten’s interrogatory objection — in which she said her “investigation of this case is continuing” — was submitted to the medical review panel. Even if it was, the appellate court said, “the objection does nothing to expand upon or generalize the specific theories of negligence alleged in Linda’s proposed complaint.”

“The trial court lacked subject matter jurisdiction over the sepsis theory portion of Linda’s medical malpractice claim,” Weissmann concluded. “We therefore vacate the court’s entry of partial summary judgment and remand, instructing the trial court to dismiss, without prejudice, the sepsis theory portion of Linda’s claim.”

Estate, Supervised – Rehearing/Advisory Opinions

Kenneth J. Schaefer v. Estate of Cletus P. Schaefer, Deceased

20A-ES-1007

The Indiana Court of Appeals on July 8 granted rehearing in an estate case to reiterate that it does not issue advisory opinions.

“Kenneth J. Schaefer files a petition for rehearing, asking this court to interpret Indiana Code section 29-1-17-3, which governs abatement of estate assets should the estate be insolvent. As the trial court did not rule on that issue in the order appealed to our court, any opinion we would render would be premature and purely advisory in nature,” Judge Melissa May wrote for the appellate court.

In Schaefer’s case, he inherited the family business from his father following his death. It was later ordered that Schaefer make his assets available for an appraisal after the Indiana Court of Appeals determined he may have received a “gift” subject to an abatement.

The Spencer Circuit Court had entered declaratory judgment in April 2020, finding that the language in Section D(2) of the third codicil to his father’s will was not an option to purchase, so the assets were “potentially” subject to abatement and the personal representatives could conduct discovery of the property. But the proceedings were stayed pending appeal, and the COA partially reversed. The case was then remanded for further proceedings.

In an opinion on rehearing, the COA wrote that it is “well-established” that it does not issue advisory opinions. It therefore granted rehearing to clarify its reason for declining Schaefer’s request to review the issue not decided by the trial court.

“We affirm our original opinion in all other respects,” May concluded.

The case is Kenneth J. Schaefer v. Estate of Cletus P. Schaefer, Deceased, 20A-ES-1007.•