Indiana Court Decisions: June 2-15, 2022

7th Circuit Court of Appeals

June 10

Emily Lewis v. Indiana Wesleyan University

21-2327

Summary judgment for IWU affirmed on retaliation, age discrimination claims; race discrimination claim remanded

The grant of summary judgment to Indiana Wesleyan University on a former employee’s retaliation and age discrimination claims has been upheld, but the issue of whether the employee’s termination was racially motivated has been remanded.

Emily Lewis, a 60-year-old Black woman, began working at IWU in 2017 as director of instructional design, supervising a team of five instructional designers in that position, all of whom were white. Not long after taking the job, Lewis reported to Lorne Oke, the executive director of the Center for Learning and Innovation, that she believed her subordinates did not take direction from her because of her race.

During a July 2018 meeting with Oke and IWU’s diversity officer to address Lewis’ concerns, Oke told Lewis that she should get “Black woman syndrome off of [her] shoulders” and that she was “too smart.”

The following month, Oke informed Lewis that he intended to remove her from her supervisory position and sent her home for the day. According to Oke, he wanted Lewis to take some time away from her subordinates until a new position could be created.

For her part, Lewis believed she was being fired because of her race and immediately contacted the diversity officer and the university’s chancellor.

Lewis claimed she was not told that her position was being changed, but that she was allowed to work from home on intermittent assignments for two months. Instead, a new title was created for her that offered the same pay and benefits as her prior role but didn’t involve any supervisory or leadership responsibilities.

Meanwhile, Erin Crisp was selected to lead two newly combined departments, including the Center for Learning and Innovation. Crisp ultimately decided to eliminate Lewis’ position, writing in an email that Lewis was “unable to lead or be led.”

In June 2019, Lewis was told that her position was being eliminated and was given two choices: accept a research assistant position or be terminated. Lewis passed on the assistant position and subsequently sued IWU for employment discrimination.

Lewis alleged that her August 2018 “demotion” was retaliatory and that her 2019 termination was in retaliation for her discrimination complaint in 2018. She also asserted her termination was discriminatory on the basis of her race and age.

The U.S. District Court for the Northern District of Indiana granted summary judgment in favor of IWU on the retaliatory demotion and retaliatory termination claims. It also determined Lewis had waived her age discrimination claim by failing to raise it after the university moved for summary judgment.

However, “the district court failed to explain why it was granting summary judgment on Dr. Lewis’s claim that her termination was racially discriminatory,” the 7th Circuit held in Emily Lewis v. Indiana Wesleyan University, 21-2327.

“As a result, we cannot be sure that the district court adequately considered the merits of that claim,” Circuit Judge Amy St. Eve wrote for the 7th Circuit. “The University argues that remand would be futile, and we can affirm for any basis supported by the record. … But given the fact-specific nature of Dr. Lewis’s race discrimination claim, we decline to assess it in the first instance. Accordingly, we vacate summary judgment as to that claim and remand it to the district court.”

But the appellate court affirmed as to the age discrimination claim, finding Lewis waived that issue by failing to point to evidence before the district court suggesting her age drove the decision to eliminate her position.

As to the retaliation claims, the 7th Circuit found that the retaliatory demotion claim could not survive summary judgment because “the facts simply do not support a causal connection between her protected activity and an adverse employment action.”

“Because Dr. Lewis’s protected activity (reporting a claim of race discrimination) did not occur until after the August 6 conversation with Oke, her protected activity could not have caused Oke to demote her,” St. Eve wrote. “The University adds that her new role provided the same pay and benefits, so it could not have constituted a demotion.”

As for the retaliatory termination claim, the 7th Circuit concluded that when Crisp decided to eliminate Lewis’ position, she was unaware that Lewis had complained of discrimination previously.

“Dr. Lewis suggests that Oke’s retaliatory animus should be imputed to Crisp, even though there is no evidence that Crisp knew of her protected activity,” St. Eve wrote. “Unfortunately, she failed to develop this theory below, so she has waived it.

“… The district court’s judgment is affirmed in part, vacated in part, and remanded for further proceedings consistent with this opinion,” the court concluded.

Indiana Supreme Court

June 13

E.F. v. St. Vincent Hospital and Health Care Center, Inc. d/b/a St. Vincent Stress Center

22S-MH-194

Justices remand appeal of moot commitment order, clarify precedent on public-interest exception in commitment cases

Despite her involuntary commitment order having long since expired, a woman will be permitted to challenge the order at the Court of Appeals of Indiana after the Indiana Supreme Court issued a decision clarifying its precedent on how appellate courts should review involuntary commitment cases that have become moot. A dissenting justice, however, repeated previous concerns about the majority’s approach to the public-interest mootness exception.

The case of E.F. v. St. Vincent Hospital and Health Care Center, Inc. d/b/a St. Vincent Stress Center, 22S-MH-194, is directly tied to the Indiana Supreme Court’s previous decision in T.W. v. St. Vincent Hospital and Healthcare Center, Inc., 121 N.E.3d 1039, 1042 (Ind. 2019), reh’g denied. In T.W., the justices held that “temporary commitment appeals should be, as a rule, dismissed as moot, though in rare circumstances a question of great public importance may justify not dismissing the otherwise moot appeal.”

Mootness was at issue in the instant case, in which E.F. was taken to the St. Vincent Stress Center during a manic episode. St. Vincent applied for emergency detention of E.F., and the Marion Superior Court entered an involuntary temporary commitment order after finding her gravely disabled.

E.F. appealed, but her commitment order expired while the appeal was pending. Thus, the Court of Appeals dismissed the appeal, “interpreting T.W. to create a rule that the merits of moot temporary commitment appeals should be reviewed only in ‘rare circumstances.’”

Judge Nancy Vaidik dissented from the COA’s dismissal, writing in November 2021 that T.W. did not alter the “well-established doctrine” of reviewing temporary involuntary commitments “notwithstanding their mootness under the public-interest exception.”

Likewise, in a per curiam opinion granting transfer, the majority justices held that “T.W. does not signal that appellate courts should rarely address the merits of appeals for expired temporary commitment orders.”

“Too much has been read into our narrow approach in T.W.,” the per curiam opinion says. “… Our decision to reach some, but not all, of the issues in T.W. should not be read to discourage merits consideration of appeals from expired temporary commitment orders.”

The majority pointed to In re Commitment of J.B., 766 N.E.2d 795, 798 (Ind. Ct. App. 2002), In re Commitment of M.Z., 829 N.E.2d 634, 637 (Ind. Ct. App. 2005), and M.L. v. Eskenazi Health/Midtown Mental Health CMHC, 80 N.E.3d 219, 222 (Ind. Ct. App. 2017), as examples of the Court of Appeals considering the merits of involuntary commitment cases despite finding them moot. The majority justices said they did not disapprove of that practice, but it was also not required given that “one of the hallmarks of a moot case is the court’s inability to provide effective relief … .”

“In an appeal from an expired temporary commitment order, the appellate court should thoughtfully and thoroughly consider whether the case is moot and whether the public-interest exception to mootness should apply,” the majority held. “Parties appealing in those cases should avail themselves of the opportunity to raise relevant issues, including any reasonable challenge to mootness or argument that an exception to mootness applies.

“Here, finding that E.F. should have the opportunity to make these arguments before the Court of Appeals, we remand for the Court of Appeals to consider any arguments the parties may have about mootness and the public-interest exception.”

Chief Justice Loretta Rush and Justices Steven David, Mark Massa and Christopher Goff concurred with the majority opinion, but Justice Geoffrey Slaughter dissented, writing separately that he would either deny transfer or summarily affirm the COA’s dismissal of E.F.’s appeal.

“The problem with our disposition today is that the Court applies a broader mootness exception than I believe is consistent with our constitution’s structural limits on judicial power,” Slaughter wrote, pointing to his dissent in Seo v. State, 148 N.E.3d 952 (Ind. 2020).

“Unlike the Court, I would adopt the bright-line rule that a court can decide an expired commitment case only if the patient shows an actual controversy remains — because, for instance, specific adverse consequences arising from the commitment are likely to affect the patient in the future,” the dissent continued. “On this record, E.F. failed to make that case.”

Court of Appeals of Indiana

June 2

Joseph L. Wilson v. State of Indiana

21A-CR-2308

Parole not part of sentence modification statute; trial court lacked authority to modify to probation

An Indiana man’s request to modify his sentence to probation instead of parole has been denied by the Court of Appeals of Indiana, as it concluded the trial court didn’t have authority to make the change.

In August 2018, Joseph L. Wilson pleaded guilty to Level 5 felony incest in exchange for the state dropping a charge of Class A misdemeanor invasion of privacy. He was sentenced to four years executed.

Wilson completed his sentence in December 2020 and was placed on parole.

The following September, Wilson moved to modify his sentence, arguing “it would be in the best interest of [Wilson] if his sentence were modified and he were released from parole and would service [sic] the remainder of his sentence on supervised probation.” But Jay Circuit Court Judge Brian Hutchison expressed doubt as to whether he had authority to modify Wilson’s, repeatedly saying, “I don’t know.”

Wilson filed a post-hearing memorandum in support of sentence modification. But in October 2021, the trial court denied his motion, writing, “Insomuch as this Court did not suspend any portion of the sentence imposed (which would have allowed for probation), and that the Court knows of no lawful mechanism whereby probation can be imposed after service of a fully executed sentence, the Court finds that the relief sought is not available to [Wilson].”

On appeal, Wilson argued Indiana Code § 35-38-1-17(e) allows the sentencing court to modify a sentence “any time after the Defendant begins serving their sentence.” Also, he said the statute “contains no specific language confining its application to the executed portion of the Defendant’s sentence, nor does it preclude application to defendants on parole at the time of the petition.”

The Court of Appeals wasn’t convinced, finding the statute doesn’t mention the word “parole.”

“Here the legislature chose to exclude the word ‘parole’ from the plain language of Indiana Code section 35-38-1-17,” Judge Melissa May wrote. “Based thereon, we conclude the legislature intended for the trial court’s authority to modify a sentence to extend only until the sentence had been served and not while the person was on parole.”

Citing Majors v. Broglin, 531 N.E.2d 189 (Ind. 1988), the appellate court further opined that a person who is on parole “is not discharged [from parole] until the Indiana Parole Board acts to discharge him.”

The case is Joseph L. Wilson v. State of Indiana, 21A-CR-2308.

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June 10

In the Matter of R.A.M.O., Child in Need of Services, D.F., Mother v. Indiana Department of Child Services

21A-JC-1873

COA finds unavailability of ‘essential witnesses’ key to delay in CHINS case

The Court of Appeals of Indiana has found a juvenile court that reset four times a factfinding hearing for a CHINS petition and, consequently, exceeded the 120-day statutory deadline did not abuse its discretion because the Indiana Department of Child Services needed extra time to procure the testimony of two physicians.

D.F. had her child, R.A.M.O., removed from her care after the Department of Child Services found D.F. refused to feed the infant. Department staff became concerned about the child’s weight and worried that the youngster could become malnourished or ultimately die because of the feeding issues.

A child-in-need-of-services petition was filed and the Johnson Circuit Court set a factfinding date of April 22, 2021.

However, at the request of the parties, that date was reset to June 21, 2021. The parties agreed to waive the 60-day statutory timeframe set forth in Indiana Code § 31-34-11-1(a) that requires a factfinding hearing to be completed no later than 60 days after the CHINS petition is filed.

When June 21 arrived, DCS requested a continuance because the mother’s psychological examination revealed that she was mentally incompetent and needed to have a guardian appointed. The trial court granted the continuance and reset the factfinding for June 25, 2021.

The day before that date, DCS filed another motion for a continuance. It claimed that the attorney handling the matter had been admitted to the hospital and a substitute was not available because all the DCS attorneys in the region were out of town attending a mandatory training event.

Over the mother’s objection, the juvenile court again reset the factfinding for June 28, 2021. Subsequently, DCS filed an additional motion for a continuance explaining two of its “essential witnesses” were unavailable to testify on that date. It argued that both witnesses were physicians who had performed neuropsychological evaluations on the mother and their findings were therefore relevant to her ability to understand the underlying proceedings.

The juvenile court held a hearing on DCS’s second motion for a continuance and, again over the mother’s objection, reset the factfinding for July 14, 2021.

After the factfinding, the juvenile court issued an order determining R.A.M.O. was a CHINS. Following a dispositional hearing, it concluded that the child’s best interests would be served by being removed from the mother’s home.

The mother appealed, arguing the juvenile court abused its discretion in continuing the factfinding hearing beyond the 120-day statutory time limit.

Despite noting the mother waived her 120-day time frame argument because she did not file a motion to dismiss when the factfinding hearing was not held by the deadline, the Court of Appeals still considered her abuse of discretion argument.

The appellate panel pointed out that after granting the June 21 and 25 requests, the juvenile court purposefully reset the factfinding hearing to June 28, which was still within the 120-day time frame.

However, when the key witnesses were unavailable to testify about the mother’s mental health, the trial court picked the July date, which was beyond the deadline.

“Ultimately, we conclude the juvenile court did not abuse its discretion when it reset the factfinding hearing beyond the 120-day timeframe,” Judge Derek Molter wrote for the court. “DCS showed good cause when requesting additional time to procure its two essential witnesses, whose testimonies were directly related to Mother’s ability to comprehend the underlying proceedings, care for herself, and care for Child.

“As the juvenile court noted, the court and parties would have been prejudiced without testimony from the two physicians,” the COA continued. “And Mother has not shown or even asserted that she was prejudiced by the continuance.”

The case is In the Matter of R.A.M.O, Child in Need of Services, D.F., Mother, v. Indiana Department of Child Services, 21A-JC-1873.

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June 13

Charles T. Ramey, III and Jordan McHenry v. Ashley D. Ping

21A-CT-2103

COA affirms for mom in false reporting child abuse case brought against father, girlfriend

The Court of Appeals of Indiana has upheld a nearly $300,000 judgment in favor of a mother who sued her ex-husband and his new girlfriend for making a false claim of child abuse against her.

After parents Charles Ramey and Ashley Ping divorced, Ping received sole legal and physical custody of their minor child while Ramey exercised parenting time. Soon after the divorce, Ramey began dating Jordan McHenry.

Following one of Ramey’s parenting time sessions in August 2017, Ping noticed a blister on the child’s genitals, notified the Indiana Department of Child Services and sought medical treatment for the child. Roughly a week later, Ramey and McHenry observed a similar blister on the child, which they claimed was new.

McHenry reported the blister to the child abuse and neglect hotline, and DCS subsequently removed the child from Ping’s care on an emergency basis and placed him with Ramey.

DCS then filed a petition alleging the child was a child in need of services based on Ping’s alleged neglect, but the Johnson Superior Court denied the DCS petition and ordered that the child be returned to his mother’s care after being separated for more than one month.

Shortly thereafter, Ramey was granted his request to obtain sole legal and primary physical custody of his son. But the COA reversed the lower court’s decision last August and remanded “for reconsideration of the evidence based on the entirety of the circumstances concerning these parties.”

On remand, the trial court again ruled for Ramey, and the COA affirmed.

The Indiana Supreme Court later denied transfer to the child custody case, drawing a dissent from Justice Steven David, who expressed concern about the “increasing number of appellate opinions that explicitly circumvent Appellate Rule 65(E).”

Meanwhile, Ping sued DCS and two family case managers in federal court, alleging her constitutional rights were violated.

The federal matter was settled out of court, with Ping receiving a $988,000 settlement. In exchange, she signed a release agreeing to forgo her right to a trial on the issues raised in her complaint.

But Ping did file suit back in state court, this time alleging Ramey and McHenry had made a false report of child abuse in violation of Indiana Code § 31-33-22-3.

The trial court denied Ramey and McHenry’s assertion that Ping’s complaint was barred under the doctrine of res judicata and the prohibition against double recoveries. It also rejected their first motion for judgment on the evidence at the end of trial, in which Ramey and McHenry alleged the release agreement Ping had signed to settle the federal complaint precluded her from bringing the instant lawsuit.

A jury then ruled in favor of Ping, awarding her $275,000 in damages, with Ramey and McHenry each to pay $90,750. It also found Ramey and McHenry were each liable to Ping for $10,000 in punitive damages.

Ramey and McHenry filed a joint motion for judgment on the evidence and motion to correct error, which was denied. The Court of Appeals then affirmed.

In affirming, the COA determined the trial court did not err when it interpreted the false reporting statute. There was also no error in its instruction of the jury, the COA held, concluding that any false report of child abuse, whether direct or indirect, can subject a person to liability.

“Further, although Ramey did not text or call DCS, there is ample evidence that he and McHenry acted together to make the false report and, as such, Ramey communicated a report to DCS indirectly,” Judge Edward Najam wrote.

Additionally, the COA determined that Ping presented sufficient evidence to rebut the statutory presumptions of good faith and qualified immunity, and that a reasonable jury could conclude Ramey and McHenry had acted with gross negligence or willful or wanton misconduct.

“… (W)hile Ramey and McHenry denied knowledge of the blister prior to August 27, the evidence demonstrates that Child had the blister prior to August 27 and that Ramey and McHenry knew about it as early as August 22 but nonetheless reported it as a new injury,” Najam wrote.

The appellate panel also found sufficient evidence to support the award of punitive damages.

Finally, it concluded Ping was not precluded from bringing the instant lawsuit under either the principle of res judicata or the terms of the DCS release agreement.

The case is Charles T. Ramey, III and Jordan McHenry v. Ashley D. Ping, 21A-CT-2103.

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June 14

Indiana Department of Natural Resources v. Marvin Houin, Diane Houin, Charles Houin, Houin Grain Farms, LLC, and Marvin Houin as power of attorney for Marilyn J. Ralston

21A-CC-1178

COA finds statute grants DNR immunity from claims over flooded fields

A family of farmers in Marshall County who claimed their fields flooded because of the Indiana Department of Natural Resources’ negligent operation of a nearby dam had their trial court victory washed away when the Court of Appeals of Indiana ruled that a state statute grants the agency immunity from negligence claims.

Marvin and Diane Houin along with their son Charlie own and operate Houin Grain Farms. The family grows corn and soybeans on a portion of the 4,890 acres that is located in the Lake of the Woods watershed.

The Lake of the Woods is a public freshwater lake in Marshall County. In 1957, a dam was constructed, and to settle the continuing conflict between the residential property owners near the lake and the agricultural property owners, the Marshall Circuit Court issued a lake level order in 1986.

Under that order, the legal average lake level was set at 803.85 feet from May 15 to Sept. 15. That allowed neighboring fields to drain so the crops could be planted and harvested. From Sept. 15 to May 15, the level was lowered to 802.85 feet.

The residential lake property owners had operated the dam for years, but after they decided they no longer wanted the responsibility of opening and closing the dam, DNR took over the operation in 2009. However, the agency did not keep the lake at the summer level and, instead, mandated the gate would be kept closed until Sept. 15 unless lake level elevation exceeded 804.35 feet.

The Houins claimed DNR’s noncompliant operation of the dam caused their fields to flood in multiple years.

Thus, in 2016, the Houins filed a tort claim notice with the state, claiming damages because DNR did not operate the dam under the terms set by the Marshall Circuit Court’s 1986 lake level order. The following year, the Houins filed a complaint arguing DNR’s operation of the dam was negligent, constituted a nuisance and a trespass, and constituted inverse condemnation.

DNR asserted it was immune from liability under Indiana Code §§ 34-13-3-3 and 14-27-7.5-15. However, the Marshall Circuit Court concluded DNR was not entitled to immunity for how it operated the dam and ultimately award the Houins a judgment in the aggregate amount of $485,644.

On appeal, DNR argued the trial court’s ruling was contrary to law. Specifically, it claimed immunity under the Dam Safety Act, Indiana Code Chapter 14-27-7.5.

The Dam Safety Act gives DNR jurisdiction over the maintenance and operations of dams in Indiana. But while the act requires the agency to exercise care and maintain the dam, I.C. 14-27-7.5-15 provides DNR immunity.

The Houins countered the act only grants DNR immunity from its statutory duty to “operate” a dam. It does not grant immunity for the Houins’ common law negligence and nuisance claims, they argued.

In Indiana Department of Natural Resources v. Marvin Houin, Diane Houin, Charles Houin, Houin Grain Farms, LLC, and Marvin Houin as power of attorney for Marilyn J. Ralston, 21A-CC-1178, the Court of Appeals found for the agency.

“The Houins cannot avoid the General Assembly’s decision to grant immunity to the DNR for its operation of a dam by claiming that they have presented a claim for common law negligence,” Judge Paul Mathias wrote for the court, citing Sprunger v. Egli, 44 N.E.3d 690, 694 (Ind. Ct. App. 2015) (quoting F.D. v. Ind. Dep’t of Child Servs., 1 N.E.3d 131, 143 (Ind. 2013)).

“We agree with the Houins and the trial court that the DNR assumed a duty to operate the dam from 2009 to 2015,” Mathias continued. “But chapter 14-27-7.5-8 unequivocally provides that the DNR will not be held liable for its operation of a dam. And the General Assembly enacted the Dam Safety Act to give the DNR jurisdiction over dams on Indiana’s rivers, streams, and lakes.

“When the residential lake owners refused to operate the dam, the DNR had to step in to operate the dam,” the judge concluded. “Because DNR is immune to suit, it is irrelevant that the DNR assumed the lake property owners’ duty to operate the dam.”

However, the COA did uphold the judgment in favor of the Houins on their inverse condemnation claim, finding “the DNR’s failure to operate the dam as required by the 1986 Lake Level Order constituted a taking.”

The case was remanded for further proceedings.

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June 15

Scott A. Blattert, Jr. v. State of Indiana

21A-CR-1082

RFRA defense fails to stop child abuse prosecution

A Lawrence County man tried to defend himself against child abuse charges by asserting his right to religious freedom, but the Court of Appeals of Indiana found the state’s Religious Freedom Restoration Act did not apply in his case because the prosecution demonstrated it had chosen the least restrictive means to advance the state’s compelling interest in protecting children.

Scott A. Blattert Jr. was reported to the Indiana Department of Child Services in 2019 for physically abusing his children.

Video and testimony indicated he punched his children in the face, struck their heads with his elbow and choked them. One of the children told officials that Blattert allegedly settled on punishing them with industrial-grade glue sticks because “they caused the most pain while bruising the children the least.”

Blattert was subsequently charged with aggravated battery, a Level 3 felony, strangulation, a Level 6 felony, five counts of domestic battery resulting in bodily injury to a person less than 14 years of age, each as a Level 5 felony, and three counts of domestic battery resulting in moderate bodily injury, each as a Level 6 felony.

Blattert filed a notice with the Lawrence Superior Court that he intended to “invoke the privileges and immunities established” under Indiana’s Religious Freedom Restoration Act. A member of the Ellettsville Church of Christ, he claimed he must “do what Christ commands,” including practicing corporal punishment.

After a hearing, the trial court granted the state’s motion in limine to strike the defense.

Blattert filed an interlocutory appeal, arguing that even if physically hitting his children was unreasonable as a matter of criminal law, RFRA precluded a conviction because he was exercising his sincerely held religious beliefs.

The state countered that the religious freedom statute did not apply. In particular, the state asserted that limiting Blattert’s discipline to reasonable force did not substantially burden his religious exercise. And even if it did, the state continued, the prosecution can continue because the case is the least restrictive means to further the state’s compelling interest in protecting Blattert’s nine children.

In Scott A. Blattert, Jr., v. State of Indiana, 21A-CR-1082, the Court of Appeals agreed with the state that the prosecution meets the least-restrictive-means standard, so RFRA does not apply as a matter of law.

Blattert did not dispute that the state had a compelling interest in preventing the mistreatment of children. Rather he asserted “parental privilege” as an exception to the statutes he is charged with violating and maintained that those exceptions undermined the argument that the state has a compelling interest.

The appellate panel was not persuaded.

“So the parental privilege is an exception to a criminal prohibition on some corporal punishment which might otherwise be prohibited even though it is reasonable,” Judge Derek Molter wrote for the appellate court. “But the compelling governmental interest the State seeks to advance here is protecting children from physical abuse, which does not require a prohibition on reasonable corporal punishment. Advancing that interest only requires a ban on unreasonable corporal punishment, and the parental privilege does not offer any exception to that restriction.”

The Court of Appeals also found the state met its burden of showing that it was pursuing the least restrictive means.

“The State has satisfied this part of its burden because it offers the parental privilege as a defense to battery and similar crimes rather than completely banning the practice of corporal punishments,” Molter wrote. “This accommodates religious practices which require reasonable corporal punishment. While it does not accommodate religious practices requiring unreasonable corporal punishment, there is no apparent accommodation of those practices which would still allow the State to achieve its compelling interest in protecting children from physical abuse.”

The case was remanded for further proceedings.

Indiana Tax Court

June 14

Mac’s Convenience Stores, LLC v. Hendricks County Assessor

21T-TA-00005

Tax Court rules for Hendricks Co. convenience store in appraisal dispute

A Hendricks County convenience store has won its appeal for a lower real property assessment after the Indiana Tax Court struck down an underlying appraisal and market adjustment.

In October 2014, Mac’s Convenience Stores LLC purchased commercial property in Hendricks County that included a convenience store and gas station, a car wash and personal property. The total sale was for a little more than $2.7 million.

In 2018 and 2019, the real property was assessed at $1,913,400, a 10% increase over the 2017 assessment. The Hendricks County assessor argued neither assessment exceeded the property’s market value, while Mac’s cautioned against putting too much emphasis on the 2014 purchase price because the price of convenience stores with gas stations is based on the value of the realty as well as related personal property.

The Indiana Board of Tax Review ultimately upheld the 2018 and 2019 assessments despite an appraisal report’s “imperfections.” But the Tax Court reversed in Mac’s Convenience Stores, LLC v. Hendricks County Assessor, 21T-TA-00005.

On appeal, Mac’s argued that the appraisal report — completed by Erick Landeen, a certified general appraiser — contravened assessment guidelines by including personal property.

Likewise, according to Judge Martha Wentworth, “The Assessor’s evidence … did not reveal whether the five comparable properties used in the appraisal report (convenience stores that also sold fuel) included or excluded non-realty costs in their unadjusted sales prices. Moreover, the sales disclosure forms for each of the comparable properties, unlike the sales disclosure form for Macs’s property, indicated just one sales price, and Landeen used these unadjusted sales prices as the basis for his analysis.

“… The Indiana Board’s final determination stated that the fuel pumps, underground storage tanks, walk-in coolers, and portable racks/shelves were personal property items and that they were included in the appraisal report’s valuation. The Indiana Board also explained that it had unanswered ‘concerns’ about the appraisal report’s valuation of the personal property and the real property,” Wentworth continued. “… Consequently, the totality of the evidence demonstrates that the appraisal report valued more than the real property contrary to Indiana’s real property assessment laws. Accordingly, the Indiana Board erred in finding that the appraisal report supported the real property assessments at issue.”

As for the 2014 purchase price, Landeen’s appraisal had adjusted the sales prices of the comparables upward by 3%, and the board determined that any “appreciation due to improving market conditions more than offset any deprecation … [incurred] between the subject property’s sale [and] the valuation date[s].”

“The record, however, contains no evidence or analysis regarding the extent of the subject property’s depreciation since its 2014 purchase,” Wentworth wrote. “Moreover, the Indiana Board, flirting with taking an advocacy role as it sometimes does, did little to explain how the ‘offset’ would work, and it did not, and could not, point to any evidence or argument from either party for this concept.

“… Here, the Indiana Board abused its discretion by finding the 3% market conditions adjustment was sufficient to relate Macs’s 2014 purchase price to the relevant assessment dates because that finding was based on speculation, not evidence,” Wentworth concluded, citing CVS Corp. v. Searcy, 137 N.E.3d 1053 (Ind. Tax. Ct. 2019). “Accordingly, the Court finds that (the) Indiana Board erred in upholding Macs’s real property assessments for the 2018 and 2019 tax years.”

The case was remanded to reinstate the assessment from the 2017 tax year of $1,734,100.•

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