INDIANA LAW UPDATE
by Ronald J. Waicukauski and Brad A. Catlin
ISSUE 1: 2016 SERIES – March 31, 2016
Available online at: www.IndianaLawUpdate.com
301 Massachusetts Avenue
Indianapolis, Indiana 46204
T: 317-633-8787
rwaicukauski@price-law.com
bcatlin@price-law.com
IN THE NEWS:
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Indiana’s Six Commercial Courts Set to Begin June 1.................. 2
What Is Stare Decisis?; Myers v. Crouse-Hinds Div. of Cooper Indus., Inc., 2016
WL 825111 (Ind. 3/2/16) (Dickson)........................................................................ 3
A Duty Of Retroactive Indemnification Cannot Arise From A Course Of
Dealing; In re Indiana State Fair Litig., 2016 WL 348155 (Ind. 1/28/16) (Rush)
................................................................................................................................ 6
A Tax Sale Trumps Adverse Possession; Bonnell v. Cotner, 2016 WL 6023075
(Ind. 2/16/16) (Massa) ............................................................................................ 8
Pay Attention To Claims Raised In Summary Judgment Responses; Schmidt v.
Indiana Ins. Co., 45 N.E.3d 781 (Ind. 12/2/15) (Dickson) .................................... 9
Summary Judgment Can Be Hard To Get; Knighten v. E. Chicago Housing
Auth., 45 N.E.3d 788 (Ind. 12/8/15) (Rucker) ..................................................... 11
Unambiguous Contract Language Makes Owner Personally Liable For
Business Obligation; Yellow Book Sales & Distribution Co. v. JB McCoy
Masonry Inc., 2015 WL 8479321 (Ind. Ct. App. 12/10/15) (Kirsch) ................... 13
An “Intentionally Broad” Contractual Fee-Shifting Clause May Shift Fees In
Negligence Cases; Storch v. Provision Living, LLC, 2015 WL 9392674 (Ind. Ct.
App. 12/23/15) (Baker) ......................................................................................... 15
Contract Can Define What Breaches Are Material; State v. Int’l Bus. Machines
Corp., 2016 WL 1117697 (Ind. 3/22/16) (David) ................................................. 16
Evidence Of Sexual Abuse Is Inadmissible Hearsay; Wood v. D.W., 2015 WL
7710293 (Ind. Ct. App. 11/30/15) (Crone) ........................................................... 18
Statements Must Be Objectively Verifiable To Constitute Defamation Per Se;
Wartell v. Lee, 2015 WL 7983987 (Ind. 12/7/15) (Mathias) ................................ 19
Carmel City Traffic Ordinance Is Void; Maraman v. City of Carmel, 2015 WL
8523087 (Ind. Ct. App. 12/11/15) (May) .............................................................. 21
Don’t Let Trial Court Clerks Tell You How To File A Case; Blackman v.
Gholson, 2015 WL 7770752 (Ind. Ct. App. 12/3/15) (Barnes) ............................ 22
HIP Payments Inadmissible Under The Collateral Source Statute; Patchett v.
Lee, 46 N.E.3d 476 (Ind. Ct. App. 11/19/15) (Brown) ......................................... 23
Self-Help Is a Bad Idea; Auto Liquidation Ctr., Inc. v. Chaca, 2015 WL
8479305 (Ind. Ct. App. 12/10/15) (Vaidik) .......................................................... 24
ADVOCACY TIP OF THE MONTH: An Inside Look at Judicial Decision-Making . 27
1
IN THE NEWS:
Indiana’s Six Commercial Courts Set to Begin June 1
From: The Indiana Lawyer, January 21, 2016
Six commercial courts handling specialized dockets of business cases were
announced Wednesday in an order of the Indiana Supreme Court. The pilot project
establishes these courts for business disputes in which parties agree to have their
cases resolved:
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Allen Superior Civil Division Judge Craig Bobay;
Elkhart Superior 2 Judge Stephen Bowers;
Vanderburgh Superior Judge Richard D’Amour;
Floyd Superior 3 Judge Maria Granger;
Lake Superior Judge John Sedia; and
Marion Superior Civil Division 1 Judge Heather Welch.
The order says the courts will operate under guidelines adopted by the Commercial
Court Working Group on case eligibility, assignment, transfer, caseload, and other
matters.
The order notes the term of the pilot project shall not exceed three years and will
begin June 1.
“The purpose of commercial courts is to (1) establish judicial structures that will
help all court users by improving court efficiency; (2) allow business and commercial
disputes to be resolved with expertise, technology, and efficiency; (3) enhance the
accuracy, consistency, and predictability of decisions in business and commercial
cases; (4) enhance economic development in Indiana by furthering the efficient,
predictable resolution of business and commercial law disputes; and (5) employ and
encourage electronic information technologies, such as e-filing, e-discovery,
telephone/video conferencing, and also employ early alternative dispute resolution
interventions, as consistent with Indiana law,” the order says.
Indiana joins more than 20 states with specialized commercial court dockets since
the first such venues appeared in 1993, according to the court.
2
1.
What Is Stare Decisis?; Myers v. Crouse-Hinds Div. of Cooper
Indus., Inc., 2016 WL 825111 (Ind. 3/2/16) (Dickson)
Earlier this month, the Indiana Supreme Court issued a decision finding that strict
application of the statute of repose on asbestos claims was unconstitutional. While
this was newsworthy, the most wide-reaching part of the opinion is its discussion of
stare decisis.
Indiana’s general statute of repose on product liability claims is 10 years. In Covalt
v. Carey Canada, Inc., 543 N.E.2d 382 (Ind. 1989), the Court held that the discovery
rule was an exception to this general rule for diseases “contracted as a result of
protracted exposure to a foreign substance.” The Legislature enacted a statute
which specifically stated that the discovery rule applied to asbestos-related claims
against defendants who both mined and sold raw asbestos. But that statute did not
address non-mining defendants who sold asbestos-containing products.
In AlliedSignal v. Ott, 785 N.E.2d 1068 (Ind. 2003), the Indiana Supreme Court
interpreted these statutes and found that the discovery rule no longer applied to
asbestos-related claims against defendants who did not mine raw asbestos. When
doing so, it ruled on an equal privileges claim under Article 1, Section 23 of the
Indiana Constitution. That claim argued that the statute drew an improper
distinction between asbestos victims and other victims. The Court disagreed and
upheld the statute.
Myers and Geyman developed mesothelioma after working with asbestos-containing
products, a deadly disease caused by asbestos exposure. Myers was diagnosed in
March 2014, and filed suit the next month. Geyman was diagnosed in March 2007
and filed suit in July 2007. The Myers court granted the defendants’ motion for
summary judgment based on the statute of repose. In the Geyman suit, the trial
court denied the defendants’ motion for summary judgment on that statute. Both
Myers and Geyman argued the statute of repose violated Section 23, as the
plaintiffs did in Ott, but they focused on a different set of classes—those injured by
defendants who both mined and sold raw asbestos and asbestos plaintiffs who were
injured by defendants outside that category. The appeals were taken directly to the
Indiana Supreme Court.
On transfer, the Court’s opinion was sharply divided. The majority opinion placed a
great deal of emphasis on the doctrines of stare decisis and legislative acquiescence.
It then looked at its precedent, noted that Ott did not address the class distinction
raised by Myers and Geyman, and found that the statutes impermissibly
distinguished between these two classes. The classes had no inherent differences
(they both were comprised of asbestos victims), and the preferential treatment (no
statute of repose) was not available for all similarly situated persons (victims of
asbestos disease). The Court then specifically responded to the argument that this
conclusion overruled Ott.
3
The defendants collectively urge the importance of stare decisis and
the impropriety of overruling Ott. While this present case is factually
similar to Ott, the Article 1 Section 23 claim is different in that it
raises a new set of classes and requires a new Collins v. Day analysis.
All statutes, of course, are open to new constitutional challenges, even
if they have previously been upheld against a different constitutional
challenge.
What to do next? Apply the statute without a discovery rule for everyone? Or apply
a discovery rule to everyone? The Court chose the latter.
Covalt interpreted Section 1 standing alone, because Section 2 had not
yet taken effect, but Ott interpreted Section 1 in light of Section 2. As
Ott emphasized, “Covalt was decided under prior law.” Ott’s partial
overruling of Covalt was thus predicated on the intervening enactment
and effective date of Section 2. But today, because we find that Section
2 is void due to its partial unconstitutionality, Covalt is restored as
this Court’s controlling precedent. As a result, the Product Liability
Act statute of repose does not apply to cases involving protracted
exposure to an inherently dangerous foreign substance, in accordance
with Covalt.
Under the facts of these cases, the Court found that each met Covalt’s test, and that
each should survive the motions for summary judgment based on the statute of
repose.
In dissent, Justice Rush expressed sympathy for those who thought Ott wrongly
decided, but felt bound to follow that case here. She noted that the Ott dissent
discussed the class distinction the majority followed in this case, and that this
discussion was not adopted by the majority. Given the fact the issue was discussed
in Ott, she felt bound by that decision here.
But we are not writing on a clean slate. The plaintiffs’ constitutional
argument here is not “new.” Precisely the same view failed to garner a
majority in Ott, despite being ably advanced in the dissent. Thirteen
years is hardly an eon in the realm of constitutional law, but it is long
enough to generate reliance. Moreover, the General Assembly could
have abrogated Ott with the stroke of a pen amending the statute, but
rather left it intact—signifying the legislature “acquiescence and
agreement with the judicial interpretation.” Despite my own
ambivalence about Ott, I cannot say it is so clearly wrong or unjust to
warrant upending an issue we have already settled—when nothing has
changed since 2003 but a third vote for the opposing view.
And in light of the politics surrounding Justice Scalia’s death, Justice Rush
expressed fear that abandoning Ott would undermine the authority of the judicial
system as a whole.
4
In an era of increasingly polarized and hostile public discourse, I pause
to say what would have gone without saying a generation ago. Today’s
decision does nothing to change my deep respect for my colleagues, or
my unwavering confidence in this Court as an institution. Reasonable
people can (and today, do) disagree about each of the issues in this
case, including the force of stare decisis. Still, I fear the Court’s change
of heart sets into motion a pendulum that will swing long into the
future—not because I expect we will actually reverse other close or
controversial decisions, but because that is the inevitable perception.
As the Chief Justice and this Court’s newest member, I am
particularly conscious of our changing composition, both in the recent
past and in the near future. And in turn, I am particularly aware of
what our actions imply when our narrowly divided Court reverses
itself on an issue that, barely a decade ago, narrowly divided us in the
opposite direction.
Judicial authority is a fragile thing. The executive branch has the
power of police; the General Assembly has the power of the purse
strings; but our Court has only the power of persuasion. Our efficacy
therefore depends wholly on the rule of law—which is just another
name for the respect we earn by showing stability and consistency in
our judgments and integrity in our processes. Today’s reversal is not a
catastrophe. But instead of building a little bit on the rule of law, this
decision chips a little bit away.
Justice Massa also dissented. He found Ott to be “clear and unmistakable
precedent” that a retiring trial court judge ignored in “an unusual act of defiance”
(the trial court judge noted that he agreed with the Ott dissent). He rued the fact
that the Court “accelerated” the judicial process by bypassing the Court of Appeals.
And he paid the majority a backhanded compliment by calling its reasoning
“clever,” while simultaneously criticizing its Section 23 analysis. He understood the
statute to limit the pool of potential defendants, rather than creating different
classes of plaintiffs.
The only thing that is new is the make-up of our Court, and that
dissenting viewpoint garnering a third vote. And so, we are confronted
with the very circumstance stare decisis exists to discourage. Of
course, the majority insists stare decisis has not been offended,
claiming it resolves the case on grounds not decided in Ott. But not
only were those grounds raised in Ott, they were properly rejected as a
matter of law. Through artful reasoning, the majority has engaged in
stealth overruling, to the detriment of the public, confusing the law
and eliminating transparency and predictability.
Finally, Justice Massa disagreed with the Court’s decision to revert to the Covalt,
rather than apply the statute of repose to all asbestos plaintiffs.
5
Since Section 2’s enactment 18 years ago, the law in Indiana has been
clear and predictable for litigants and for those doing business in
Indiana. Parties have organized their affairs in reliance on our settled
law. Yet today we take a time machine back to 1989, to a case
interpreting a statute before it was amended. It is the resuscitation of
Covalt that I find particularly disturbing, and quite frankly, ironic,
given the dissent’s worthy criticism of the tortured statutory
construction employed to resolve the case. This cannot be good for a
state that has taken well-deserved pride in its efficient and just
litigation climate; our “courts are not a barrier to economic
development.” That reputation may be diminished by today’s hard
turn.
Based on this decision, there is a divide in the Court over what stare decisis is. The
majority apparently believes that when applying stare decisis, courts should only
look to whether a majority opinion explicitly dealt with a particular subject. The
dissent would look to all of the opinions written in a case, and apply stare decisis if
the issue was addressed in any justice’s opinion. It will be interesting to see if this
disagreement is developed in future opinions. But in the meantime, litigators keep
this case in mind when reading the opinions of divided courts.
Lessons:
1. A majority of the Indiana Supreme Court believes that you should only look
to the language of a majority opinion when applying stare decisis; the
minority believes that the opinions of all justices in a case inform stare
decisis.
2. A product liability statute of repose that distinguishes between claims for the
same condition against different manufacturers is unconstitutional.
3. If a statute is found to be unconstitutional, then the law may revert to what
it was prior to the statute’s enactment.
2.
A Duty Of Retroactive Indemnification Cannot Arise From A
Course Of Dealing; In re Indiana State Fair Litig., 2016 WL
348155 (Ind. 1/28/16) (Rush)
Last April, we told you of a decision of the Indiana Court of Appeals arising out of
the 2011 collapse of a roof at the Indiana State Fair, killing seven and injuring
many more. That case dealt with the question of whether the Indiana State Fair
Commission would be required to indemnify Mid-American, the company that
supplied the roof. There, a divided court found a genuine issue of fact regarding
whether the Commission knowingly and willingly agreed to indemnify Mid-America
for the roof collapse. The Indiana Supreme Court reached a different result.
6
In this case, Mid-American’s claim for indemnification arose from invoices it sent to
the Commission after the incident. For the previous ten years, the Commission and
Mid-American had agreed on the equipment to be delivered and its price. MidAmerican would deliver the equipment and collect it after the fair. And after
collecting the equipment, Mid-American would submit an invoice. On the back of
that invoice, Mid-American included an indemnity clause.
After the roof collapse, Mid-American and the Commission continued to engage in
this course of conduct, and Mid-American submitted an invoice with the indemnity
clause after the fair for payment. The Commission signed a voucher and paid the
invoice.
After the State Fair litigation began, Mid-American claimed that the Commission
should indemnify it pursuant to the indemnity clause. The parties filed crossmotions for summary judgment, and the trial court granted the Commission’s
motion. The Court of Appeals reversed.
On transfer, the Court began its analysis with the following sentence: “Our analysis
begins with a dim view of indemnity clauses like the one at issue here.” Such
clauses, even when dealing with prospective liability, are “disfavored” and “strictly
construed.” But this case dealt with retrospective, rather than prospective,
indemnity. The Court compared the issue in this case to the known-loss doctrine
“which embodies the commonsense principle that a party cannot ‘insure’ against a
loss that has already happened.”
If a potential future liability “is a harsh burden that a party would not
lightly accept,” then actual retroactive liability for a known loss is
harsher still—indeed, it would ordinarily be a fool’s bargain. “This is
not to say, however, that parties may not explicitly agree to cover
existing losses,”—that is, “in clear and unequivocal terms,” to be
strictly construed. But Indiana law makes clear that we will not infer a
party’s agreement to such an onerous liability unless that intent is
expressed unmistakably.
In this case, “none of the indemnity language in this invoice expressly extends to
losses prior to the invoice date,” so Mid-American’s claim failed this test.
Mid-American argued that a duty to indemnify should nevertheless arise from its
long-term course of dealing with the Commission.
In essence, Mid-America argues that under this course of dealing, the
invoices’ indemnity language is not being applied retroactively.
Instead, it asserts that the invoices memorialized a standing
recognition from each previous year’s dealings that the following year’s
rental would be subject to the same indemnification requirements.
But the Court refused to accept this argument, because its “clear and unequivocal”
test is a bright-line rule.
7
Indemnification
for
another
party’s
negligence—especially
retroactively—is an “extraordinary obligation” that is generally “not
favored.” Accordingly, as a matter of law, we will not infer that
obligation from a course of dealing when, as here, the parties’ contract
does not expressly call for it in “clear and unequivocal terms.”
Lesson:
Indemnity clauses are disfavored and Indiana courts will not enforce them
unless they are expressly stated in clear and unequivocal terms.
3.
A Tax Sale Trumps Adverse Possession; Bonnell v. Cotner, 2016
WL 6023075 (Ind. 2/16/16) (Massa)
This is another case that we’ve addressed in the past. Last July, we told you about a
Court of Appeals decision which held that a tax sale does not sever title obtained by
adverse possession. But on transfer, the Indiana Supreme Court disagreed.
The property in question is in a subdivision within Pulaski County. About 35 feet
east of the property’s eastern boundary is an old farm fence. The property owners in
the subdivision believed that they owned the land to the fence.
In 1968, the Cotners’ predecessors-in-interest built an outbuilding on the eastern
end of their parcel, which lay in part on the 35-foot area between their border and
the fence. In 2010, the Cotners built an extension on that outbuilding, which
extended it about 22 feet past their eastern border.
In 1993, the Pulaski County Auditor issued a tax sale deed to the area between the
Cotner’s property and the fence following a tax sale. It then put that property up for
a tax sale again in October 2011, and the Pulaski County Board of Commissioners
was issued a tax sale deed by the Pulaski Circuit Court. The Board then conveyed
the property to Bonnell in January 2012.
When buying the property, Bonnell thought he was purchasing the land east of the
farm fence, but after he had the area surveyed, he discovered that he had actually
purchased the land west of the farm fence, where the Cotner’s building was located.
A lawsuit ensued, and the trial court found for Bonnell, concluding that the tax sale
to Bonnell divested the Cotners of their interest. The Court of Appeals reversed, and
the Supreme Court granted transfer.
On transfer, the Court held that the Cotners established adverse possession (they
paid taxes on a portion of the outbuilding). But it then held that the subsequent tax
sale stripped them of their ownership by adverse possession.
Acquiring ownership by adverse possession does not render operative
all the rights and responsibilities of the record title holder; indeed, as
demonstrated by the facts of this case, the adverse possessor would
8
first have to succeed in an action to quiet title in order to become the
legally acknowledged owner of the property.
As the Cotners did not seek to quiet title before the tax sale, the claim of title
obtained through the tax sale was superior to their claim of title based on adverse
possession. “There are a finite number of ways to defeat a tax deed by appeal; claim
of title by adverse possession is not among them.” The “uncompromising” statutory
text stating that a tax sale provided “fee simple absolute” carried the day, and the
Cotners were divested of their ownership claim.
The trial court tried crafting an equitable remedy, by giving the Cotners a
prescriptive easement. But the Court “unfortunately” found that this was not an
option. The tax sale would not extinguish recorded easements, but it did extinguish
any unrecorded easement, like this prescriptive easement.
The Court’s conclusion highlights a separate issue—what happens when parties let
their emotions run the litigation.
After more than three years of litigation and two vigorous appeals, Mr.
Bonnell now owns a 35-foot-by-100-foot section of land in the Cotners’
backyard, predominately covered with a pole barn, which Bonnell
values at approximately $890.
I can’t imagine how the parties thought that this was the best use of their
resources.
Lesson:
A tax sale extinguishes any existing claim for adverse possession or an
unrecorded easement.
4.
Pay Attention To Claims Raised In Summary Judgment
Responses; Schmidt v. Indiana Ins. Co., 45 N.E.3d 781 (Ind.
12/2/15) (Dickson)
In recent years, the Indiana Supreme Court has taken the effort to clarify summary
judgment procedure. It did so again in Schmidt, a case involving negligence claims
against an insurance agent.
Schmidt owned residential property and allowed his cousin to live there. He
received multiple complaints about animals and odors on the property. And when
his cousin was jailed, Animal Control took seven dogs and about thirty cats from the
property. Later, Schmidt’s cousin moved out, abandoning even more animals. The
property was declared unfit for human habitation, and Schmidt began cleaning it
up.
9
Before the property was clean, Schmidt contacted Stith, an insurance agent, to
procure insurance on the property. He hadn’t insured the property previously, and
the property was vacant, but it was being renovated as a rental property. Schmidt
says that he told Stith this, but the insurance application Stith submitted did not
contain this information. A policy was issued.
About two months later, the property was destroyed by fire. The insurer denied
coverage and rescinded the policy because of material misrepresentations in the
application.
Schmidt sued Stith, and Stith moved for summary judgment. The trial court
granted that motion and Schmidt appealed. The Court of Appeals reversed, finding
genuine issues of fact as to whether the plaintiff told the insurance agent Stith
about the condition of the property and whether someone forged his signature on
his application. The Indiana Supreme Court granted transfer.
On transfer, the Court emphasized the movant’s burden to demonstrate a prima
facie case on the issue on which they sought summary judgment. For example,
Schmidt asserted that Stith was negligent with regards to the contents of the
insurance application. Stith designated evidence showing a lack of proximate cause,
because no dwelling fire insurance policy “would have been issued providing fire
coverage on property that was condemned, uninhabitable, without utilities, vacant
for over a year, and undergoing renovation.”
With this designated evidence the Agents met their burden to establish
a prima facie case demonstrating the absence of any genuine issue of
fact as to the issue of damages proximately caused by the alleged
breach of duty, at which point the burden shifted to the plaintiff as the
non-moving party to come forward with contrary evidence. The
plaintiff, however, failed to designate contrary evidence to show that,
despite the condition and usage of the property, it would have qualified
for a dwelling fire insurance policy issued by Indiana Insurance or
another insurance company. Even if the owner provided the Agents
with truthful and complete information and the Agents failed to
accurately report the information to the insurance company, as alleged
by the owner, there remains no genuine issue of fact regarding
proximate causation. No dwelling fire insurance policy would have
been issued based on such information. Although the Agents did not
establish their entitlement to summary judgment as to the elements of
duty and breach, they did establish a prima facie case to negate the
element of proximate causation of damages from the alleged inaccurate
reporting, to which the plaintiff failed to adequately respond.
However, Schmidt also stated a claim for negligent failure to procure appropriate
insurance. On this claim, the Court found that Stith’s designated evidence did not
foreclose “the possibility that other types of fire insurance coverage for the property
10
could have been obtained and issued.” As Stith did not foreclose this possibility,
summary judgment on that claim was improper.
Interestingly, this second claim, which survived summary judgment, was not
specifically set forth in the complaint. Indeed, the Court found that the complaint
did not present that claim at all. However, Schmidt did raise that claim in response
to Stith’s motion for summary judgment. Stith’s reply responded to that claim; he
did not challenge the propriety of raising the claim for the first time in a responsive
summary judgment brief. The Court found that Stith impliedly consented to the
litigation of the issue, so the trial court could properly consider it. Thus, Stith would
have obtained a judgment in his favor, but for his counsel’s failure to object to
Schmidt’s new argument.
Lessons:
1. A defendant who does not object to a claim initially raised in response to a
motion for summary judgment and litigates that claim impliedly consents to
that litigation.
2. Someone moving for summary judgment must pay close attention to the
claims or defenses raised, so that evidence can be designated on each of the
claims or defenses.
5.
Summary Judgment Can Be Hard To Get; Knighten v. E. Chicago
Housing Auth., 45 N.E.3d 788 (Ind. 12/8/15) (Rucker)
The latest installment of our ongoing series in “The Indiana Supreme Court likes
jury trials” is a case in which it found a genuine issue of fact regarding whether the
employer of someone who shoots a romantic partner in the back should be liable for
the injuries. While common sense may make one skeptical of whether the shooting
was in the scope of employment, the Court emphasizes that it is the jury’s role to
reach those conclusions.
Caldwell was a security guard at a HUD property, and he was assigned to work at a
guard shack located at the property’s front entrance. Before his employment,
Caldwell was romantically involved with Knighton, who lived at the property. The
Court then described the following facts:
On August 7, 2010, while on duty at the guard shack, Caldwell
permitted Knighten and her friend to drive his car to a liquor store.
When Knighten returned, she and Caldwell argued about Knighten
having spent all of his money and that she was driving while
intoxicated. The argument escalated to the point that Caldwell ordered
Knighten to exit his car and walk home. Caldwell entered the guard
shack, retrieved his handgun, and set the traffic gate to allow incoming
11
traffic to enter the Complex automatically. Caldwell then got into his
car and drove home Knighten’s friend who also lived in the Complex.
When Caldwell returned to the guard shack, Knighten was waiting for
him. She angrily confronted Caldwell and the two resumed arguing.
The record is unclear but apparently this confrontation occurred
several yards away from the guard shack. At some point during these
events Knighten damaged the entrance gate to the Complex. Further
along in the confrontation Knighten turned away from Caldwell and
began walking home when Caldwell drew his handgun and fired a shot
striking Knighten in the back. Ultimately the gunshot injury left
Knighten paralyzed from the waist down.
Knighten sued, among others, Caldwell’s employer, Davis Security under a
respondeat superior theory. Davis Security moved for summary judgment, and the
trial court granted that motion. Knighten appealed, and the Court of Appeals
affirmed.
Turning to the merits of the matter, the Court noted that Caldwell’s conduct fell
within the scope of his employment if his “purpose was, to an appreciable extent,” to
further his employer’s business, even if Caldwell was “predominantly motivated” to
benefit himself. Here Caldwell’s primary duty was to monitor traffic in and out of
the property. But the Court found “some tension—if not outright conflict” between
Davis Security’s assertion that Caldwell’s duties “included” traffic control and
Caldwell’s representation that he “only” monitored traffic.
To be sure, if the Trial Rule 56 materials presented to the trial court
unequivocally showed that Caldwell had no responsibility other than
traffic monitoring, then one would indeed be hard pressed to explain
how shooting Knighten was somehow in furtherance of Davis
Security’s business. But, Davis Security’s contention that Caldwell’s
duties included traffic monitoring implies that his responsibilities were
more expansive.
The Court found that Davis Security’s contract emphasized this point, as it provided
for armed security guards.
We note it is not readily apparent why an armed security guard is
necessary if his sole duty consists of monitoring traffic.
And there was a factual dispute over whether Dais Security required that Caldwell
be armed.
If, as Davis Security alleges, it prohibited Caldwell from possessing a
handgun while serving as a security guard then that fact would
certainly undermine the notion that he used his handgun in
furtherance of his employer’s business. On the other hand if Caldwell
were required to be armed on duty, then the use of his firearm could
12
very well have been necessary. The record shows that an apparently
intoxicated Knighten was at least engaged in disruptive conduct while
present on the premises. In fact she damaged the gate to the Complex
at some point. Whether Caldwell fired his weapon in an effort “to deter
or mitigate the risk of loss,” as a result of Knighten’s behavior or
whether Caldwell—in his words—”did not fire [his] gun in any official
capacity, or as a security guard at the West Calumet Complex,” are
questions that must be resolved by the factfinder.
Ultimately, the Court found that these issues should be tried to a jury, even in the
face of the shooter’s own admission that he was acting outside the scope of his
employment.
Lesson:
An employee’s admission that he was acting outside of the scope of his
employment is not dispositive of the question of whether respondeat superior
applies.
6.
Unambiguous Contract Language Makes Owner Personally
Liable For Business Obligation; Yellow Book Sales &
Distribution Co. v. JB McCoy Masonry Inc., 2015 WL 8479321 (Ind.
Ct. App. 12/10/15) (Kirsch)
An issue that can arise often is the extent to which a business owner is personally
liable for the contracts that owners signs on behalf of their businesses. This case is
an attempt by one party to make the owner of the other party personally liable—
which succeeded.
McCoy Masonry was owned by Brooks. McCoy Masonry agreed to buy one year of
advertising with Yellow Book, with the company listed as the “Customer” on the
contract. At the bottom of the contract, Yellow Book included the following
language:
The terms and conditions set forth herein and on the reverse hereof are
agreed to by customer and signer.
The Court then described the signature block as follows:
The signature area on the Contract was configured so that the words
“JB McCoy Masonry, Inc.” were written on the first line, labeled “Print
Customer Name.” The signature “Robin J. Brooks,” with the
designated title of “Owner” was placed on the second line. Under that
second line, in all capital letters and bold text, were the words,
“Authorized Signature Individually and for the Customer.” Following
that language, the words “(Read paragraph 15F on the reverse hereof)”
13
were written in non-bold text and as a parenthetical. On the third line,
the words “Robin Brooks” were printed, with a number noted above the
designation “Signer’s SS # (required for new accounts or new signers).”
Section 15F of the contract stated that the signer was signing in both an individual
and representative capacity, and
By his/her execution of this agreement, the signer personally and
individually undertakes and assumes, jointly and severally with the
Customer, the full performance of this agreement, including payment
of amounts due hereunder.
McCoy Masonry defaulted under the contract, and Yellow Book filed an action
against Brooks. A bench trial was held to determine whether Brooks was personally
liable for the amount due under the contract. Finding the contract ambiguous, the
trial court entered judgment in favor of Brooks, and Yellow Book appealed.
On appeal, the Court found that the contract’s language clearly and unambiguously
made Brooks, as the signer, personally responsible to pay Yellow Book the amounts
due under the contract. It noted that the three parts of the contract highlighted
above were “particularly clear regarding this intent.”
Here, the Contract set forth, in three separate places, that the signer,
Brooks, was assuming personal liability under the Contract. Brooks’
failure to read the Terms of the Contract on the reverse side does not
make the Contract ambiguous. … Likewise, ambiguity is not created
because Yellow Book did not provide an explanation “with respect to
what was on the back and what the language meant underneath [her]
signature.” If Brooks had questions about the Contract, as owner of
McCoy Masonry, she had the responsibility to get the answers before
signing the Contract.
Lawyers drafting contracts should pay attention to this case, as it provides a
framework for making persons signing contracts in a representative capacity liable
in their personal capacity, too.
Lesson:
Clear, unambiguous contractual language can make a person signing a
contract on behalf a business personally liable for the contractual obligations.
14
7.
An “Intentionally Broad” Contractual Fee-Shifting Clause May
Shift Fees In Negligence Cases; Starch v. Provision Living, LLC,
2015 WL 9392674 (Ind. Ct. App. 12/23/15) (Baker)
Lots of contracts contain fee-shifting clauses, and these are commonly addressed in
breach of contract cases. But this case is somewhat different. Here, the plaintiff
sought fees under a contractual fee-shifting provision for a negligence claim.
The defendants operate an assisted living facility, Greentree, which Storch’s father,
Sindledecker, entered in 2006. Sindledecker signed a residence agreement that
contained the following fee-shifting provision:
In the event of any controversy, claim, or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach
thereof, the prevailing party shall be entitled to recover from the other
party reasonable expenses, costs, and attorney’s fees.
While at Greentree, Sindledecker fell near a fireplace and became unresponsive. An
ambulance came and paramedics were told that Sindledecker had been found
unresponsive “at a recreational activity.” He was taken to the hospital, where his
vital signs were checked, and discharged.
Sindledecker’s arm was badly burned in the incident, and his condition worsened.
Paramedics were again called, and this time were informed that Sindledecker fell
near a fireplace and was burned. But while Sindledecker’s burns were treated, he
never regained the mobility he had before the fireplace incident—he remained
unable to walk and required a feeding tube and catheter.
Storch filed a complaint against Greentree on her father’s behalf, alleging both
breach of contract and negligence. Storch dismissed the contract claim less than two
weeks before trial, and the negligence claim was tried to a jury. The jury returned a
verdict of over $1 million.
Storch petitioned for attorney fees under the contract. The trial court denied that
petition because Storch dismissed the contract claims. Storch appealed.
On appeal, the Court held that the question of whether Storch was entitled to fees
was governed by the terms of the contact, not by the form of the action. And in this
case, “the clear meaning of the language used” in the residential agreement applied
to Storch’s negligence claim.
Had Greentree intended this provision to apply only to claims of
breach of the agreement itself, it could simply have written a provision
awarding attorney fees to the prevailing party “in any action brought
to enforce this agreement.” Such language is commonly found in
attorney fee provisions. Yet the provision at issue here clearly goes
further, covering not only actions for breach of the agreement, but also
15
“any” other dispute “arising out of or relating to” the agreement “or the
breach thereof.”
The Court noted that precedent dealing with arbitration clauses applied similar
language to tort claims.
[W]e see no reason to read identical language two different ways
depending on whether it appears in an arbitration provision or any
other. … Simply because we have not recognized a similar
presumption in the attorney fee context does not mean that we would
refuse to enforce attorney fee provisions in cases where the plain
language clearly calls for enforcement.
…
Turning to the facts of this case, there can be no doubt that the
underlying subject matter of Sindledecker’s residence agreement was,
indeed, his residence at Greentree. And there can also be no doubt that
the events that led to his negligence claim occurred because he resided
there, which would not have been the case absent the residence
agreement. Thus, reading the contractual language in light of its plain,
simple, and intentionally broad meaning, it is hardly difficult to
conclude that Sindledecker’s negligence claim involves the same
underlying subject matter as, and therefore relates to, his residence
agreement. Consequently, we find that the parties must have intended
the disputed attorney fees provision to apply to such a claim.
Thus, Storch was entitled to attorney’s fees under the contract, even though she
dismissed the breach of contract claim.
Lesson:
A contractual fee-shifting provision that does not limit itself to contract
claims may be broadly interpreted to cover any claim related to the
agreement.
8.
Contract Can Define What Breaches Are Material; State v. Int’l
Bus. Machines Corp., 2016 WL 1117697 (Ind. 3/22/16) (David)
Billion-dollar cases involving the State of Indiana are rare, newsworthy events. But
while those cases are newsworthy, they do not always make for interesting legal
precedent. The State’s case against IBM is an exception to the rule, and may impact
the practice of many attorneys in this State.
At issue in this case was a $1.3 billion contract between the State and IBM for IBM
to modernize and improve Indiana’s welfare eligibility system over ten years. The
16
State was unhappy with IBM’s performance under the contract, and terminated it
after three years. Problems with IBM’s implementation of the system included call
center issues, untimely processing of applications and redeterminations for benefits
and a failure to follow proper procedures.
Both parties sued for breach of contract, with a key issue being whether IBM’s
breach of the contract was “material.” After a bench trial, the trial court found that
it was not, based on the contract “as a whole.” The Court of Appeals reversed in a
case we discussed in March 2014, finding that IBM’s breach went to the “heart of
the contract.” The Indiana Supreme Court then accepted transfer.
The lower courts based their decisions on the common law definition of materiality.
But the Indiana Supreme Court found that this was error because the contract itself
defined what would constitute a material breach of the contract.
[T]he default common law Restatement factors do not apply in this
case because the plain language of the MSA provides for evaluating the
materiality of a breach by considering the breach or a series of
breaches in light of the MSA “as a whole.” Applying the specific terms
agreed to by the parties rather than the common law default rule is
consistent with Indiana contract law principles. Indiana courts
zealously defend the freedom to contract. “The existence of express
terms in a valid contract precludes the substitution of and the
implication in law of terms regarding the subject matter covered by the
express terms of the contract.”
The Court acknowledged that this had not previously been addressed in Indiana,
but that the laws of other states agreed with this position.
While the Court disagreed with the Court of Appeals’ reasoning, it did agree with
its outcome. When doing so, the Court noted the following:

The State was dissatisfied with aspects of IBM’s performance, and IBM
admitted that the State had a reasonable basis for this dissatisfaction.

The fact that the contract provided for liquidated damages for IBM’s failure
to meet expectations had no bearing on the question of material breach,
because the contract clearly provided that liquidated damages would not
limit the State’s right to terminate the contract.

Outside events, such as the recession, natural disasters, and a surge in
applications from a new health insurance program had no effect, as the
contract anticipated these kinds of events, and IBM did not follow the
procedures set forth in the contract to address those events.

The State’s motive for terminating the contract was irrelevant.

It is improper to balance the benefits the State receives with IBM’s
performance failings when determining whether the breach is material.
17
Much of the Court’s rationale is likely to have limited immediate application, as it
expressly based its decision on the contract’s definition of a material breach, rather
than the common law definition. However, attorneys should pay attention to this
case when drafting contracts or contemplating a claim of material breach. Your
client may decide that it does not want to be bound by the common law on this
issue.
Lesson:
If a contract defines a “material” breach, then that definition, and not the
common law, controls the material breach analysis.
9.
Evidence Of Sexual Abuse Is Inadmissible Hearsay; Wood v. D.W.,
2015 WL 7710293 (Ind. Ct. App. 11/30/15) (Crone)
Allegations of sexual abuse of a minor are very serious things. But the evidentiary
rules apply, regardless of the type of case. The Court reaffirmed that principle here.
Rhonda has two children: D.W., who was seven years old in June 2015, and A.W.,
who was five. She is divorced from Shaun. Anna is Shaun’s half-sister. Rhonda filed
for a protective order against Anna, alleging that Anna committed sex offenses
against the two children.
At a hearing on a motion for protective order, the children’s nanny testified that
D.W. told her that Anna “touched my peenie,” and a detective testified that he
believed the children’s sex abuse allegations were truthful, despite their
inconsistent statements. Anna denied the allegations, and neither child testified.
Afterwards, the trial court dismissed the protective order as to A.W., but found that
Anna sexually abused D.W. by the preponderance of the evidence and granted a
protective order as to D.W. Anna appealed.
On appeal, Anna argued that the testimony of the nanny should be excluded as
hearsay. The trial court admitted the statement as an excited utterance, but the
Court found that this was an abuse of discretion.
Anna points out that Rhonda failed to establish how much time
elapsed between the alleged molestation and D.W.’s statement, which
was made on April 30. … Although lapse of time is not a dispositive
factor, admitting a hearsay statement relating to a startling event with
no foundational evidence regarding when the event occurred would
undermine the rationale for the excited utterance exception to the
hearsay rule. The mere fact that D.W. exhibited stress when he made
the statement is not sufficient. Absent any indication of how much
time elapsed between the alleged molestation and D.W.’s statement,
we conclude that the trial court abused its discretion in admitting the
statement as an excited utterance.
18
Anna also argued that the detective’s testimony that he believed the children’s
statements was inadmissible. The court found this evidence was inadmissible under
Indiana Evidence Rule 704(b) which precludes opinion testimony concerning “the
truth or falsity of allegations.”
As this was the only evidence supporting the trial court’s decision to impose the
protective order, the Court ordered that the protective order be vacated.
Lesson:
A party who wishes to admit hearsay as an excited utterance has the
obligation to present some evidence of how much time elapsed between the
startling event and the statement.
10. Statements Must Be Objectively Verifiable To Constitute
Defamation Per Se; Wartell v. Lee, 2015 WL 7983987 (Ind. 12/7/15)
(Mathias)
This case presents an interesting twist on what exactly constitutes defamation per
se. Defamation per se imputes (1) criminal conduct, (2) a loathsome disease, (3)
misconduct in a person’s trade, profession, office, or occupation, or (4) sexual
misconduct. But not all statements that impute one of these characteristics
constitute defamation per se.
Wartell served as the chancellor of Indiana University Purdue University Fort
Wayne for eighteen years. Lee, a Fort Wayne businessman, was on the advisory
board of the school of business and had worked with Wartell on numerous occasions,
which sparked some disagreements.
School policy required that Wartell retire in 2012, the fiscal year in which he turned
sixty-five. In May 2011, Wartell requested that the school extend his position
beyond the mandatory retirement date. Lee received word of this and helped form a
group who opposed extending Wartell’s position. Lee collected the group’s thoughts
and sent them in a letter to the school’s president, France Córdova. The letter
included the following allegedly defamatory statements:

“[Wartell’s] word not always serving as his bond.”

“Too often, with persons in a variety of capacities in a variety of situations, he
has broken faith.”

“Lack of integrity.”

“How can IPFW be the leading force it should be in our community and
among our small area universities when too frequently its chancellor’s
character is at issue.”
19

“In the past couple of year [sic] it has become clear that significant financial
support from foundations and area business will be hard to come by while
[Wartell] remains as chancellor.”

“[W]e deserve a chancellor with impeccable integrity, the willingness to
cooperate with other area universities, and the esteem to inspire complete
trust from our business community.”
Wartell’s request to extend his position was denied, and he retired as chancellor in
June 2012.
Wartell sued Lee for defamation, and Lee moved for summary judgment. The trial
court granted summary judgment to Lee on Wartell’s claim of defamation per se,
and Wartell appealed that decision.
On appeal, the Court emphasized that a statement is only defamatory per se if it
implicates one of the four categories without any need for extrinsic evidence.
It is understandable and indeed tempting to leap from a determination
that an allegedly defamatory statement is related to a person’s trade,
profession, office, or occupation to the conclusion that the statement is
defamatory per se. However, that is simply not the proper legal
analysis. As a matter of law, for an allegedly defamatory statement to
qualify as defamation per se, it must impute not only the serious level
of misconduct of the type described in Dugan, but also in a way that
does not require reference to extrinsic facts for context.
After reviewing precedent, the Court found that the statements could only meet this
test if they were objectively verifiable.
Lee’s statements in the letter to Córdova were less harsh than the
union representative’s comments about the principal in Levee and
much like the vague comments made by the employer’s representative
about the former employee in Baker. Lee commented that Wartell’s
word did not always serve as his bond, but did not call him a liar.
Further, Lee’s statements were generalizations about Wartell’s
character and conduct “in a variety of capacities in a variety of
situations,” although directed at his role as chancellor. Like the
representative’s statement in Baker, Lee’s statements were directed
toward Wartell’s trade, profession, or occupation but did not impute
misconduct. Wartell does not establish that the statements were
objectively verifiable without referring to extrinsic evidence.
Lee’s vague statements without mention of specific incidents “were arguably
defamatory, [but] the vagueness with which they are stated prevents them from
imputing misconduct and rising to the level of defamation per se.” The trial court
was affirmed.
20
Lesson:
An allegedly defamatory statement that is related to a person’s trade,
profession, office, or occupation to the conclusion that the statement is
defamatory per se only if it is objectively verifiable without referring to
extrinsic evidence.
11. Carmel City Traffic Ordinance Is Void; Maraman v. City of
Carmel, 2015 WL 8523087 (Ind. Ct. App. 12/11/15) (May)
Hats off to pro-se litigants who are able to successfully beat a traffic ticket on
appeal. This non-attorney was able to successfully argue that a Carmel traffic
ordinance was void.
Maraman was stopped for speeding in Carmel; he was doing 30 in a 20 miles-perhour zone. The officer gave him a ticket citing Local Ordinance 8-2, an ordinance
that has been in effect since 1991. Maraman moved to dismiss the case, arguing
that the ordinance violates the Home Rule Act by simply incorporating by reference
a portion of the Indiana Code. The trial court denied the motion and entered
judgment against Maraman. He appealed.
On appeal, the Court noted that the Carmel City Code adopted by reference
“numerous statutes that define traffic infractions,” and that Indiana’s Home Rule
laws do not give municipalities the power to penalize conduct constituting a
statutory infraction. Carmel’s “duplication” of these various traffic laws violated the
Home Rule laws.
If a city wishes to establish local speed limits, it may do so [as statutes]
give[] the city the authority to adopt ordinances altering speed limits
within the city; however, it is nevertheless prohibited from simply
duplicating state imposed speed limits as Carmel City Code § 8-2
attempts to do.
Thus, Maraman was able to successfully beat the ticket. And today, more than 3
months after this decision, the relevant portions of the Carmel City Code remain
unchanged.
Lesson:
City ordinances prescribing traffic offenses which merely duplicate statutory
traffic infractions are invalid.
21
12. Don’t Let Trial Court Clerks Tell You How To File A Case;
Blackman v. Gholson, 2015 WL 7770752 (Ind. Ct. App. 12/3/15)
(Barnes)
It is reasonable for a lay person to rely on a trial court clerk who tells the person
how to file a claim. But that would be a mistake. And is a mistake an attorney
should never make. As this case shows, “The clerk told me so,” is not a sufficient
excuse.
Lilian Blackman died after having three children: Roger, Karen, and James. Karen
and James field a petition to open an estate and probate a will. Roger’s attorney
asked the trial court clerk how to file a will contest, and based on that advice, filed
the will contest under the same cause number as the original probate action. The
will contest was served upon counsel for Karen and James, but no summonses were
issued for Karen or James.
Karen and James moved to dismiss the will contest for lack of jurisdiction, which
the trial court granted. Roger asked that the dismissal be vacated, so that he could
file a new action under the Journey’s Account Statute. This motion was also denied,
and Roger appealed.
On appeal, the Court noted that it had previously held that a plaintiff in a will
contest “must fulfill all the obligations of Ind. Trial Rules 3 and 4 to commence a
lawsuit.” But is prior opinions finding that this requirement was jurisdictional was
supplanted by more recent Indiana Supreme Court authority. Nevertheless
dismissal was still proper.
The claimed defects in the will contest action were timely raised
through a motion to dismiss. And, such defects did exist. Roger did not
tender summonses for Karen and James and thus they were not
personally served with the will contest, nor did he pay a filing fee.
Such actions clearly are necessary to initiate a civil suit under the
Trial Rules.
This impacted the trial court’s personal jurisdiction over Karen and James, and
justified the dismissal.
The Court then addressed the “blame it on the clerk” defense:
Roger asserts that he should be forgiven for failing to file the will
contest as its own separate civil action, complete with summonses and
a filing fee, because his attorney was acting upon the advice of the trial
court clerk in not filing it as a separate proceeding. He cites no
authority for the proposition that an attorney should be able to rely
upon advice from a non-attorney as to legal matters. We decline to
create such authority.
22
Roger’s argument regarding the Journey’s Account Statute was also a loser, because
of both Roger’s “complete failure to file any summonses for Karen and James” and
his failure to pay the filing fee.
Lessons:
1. Relying on a trial court clerk for instructions on how to initiate a case is illadvised, as it does not provide you a defense if the clerk is wrong.
2. A will contest is a separate cause of action from an action probating the will.
13. HIP Payments Inadmissible Under The Collateral Source
Statute; Patchett v. Lee, 46 N.E.3d 476 (Ind. Ct. App. 11/19/15)
(Brown)
In Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009), the Court found that evidence of
discounted amounts that insurance companies pay for the healthcare used to treat a
plaintiff’s injury did not violate the collateral source statute, and that it was
admissible evidence of the reasonable value of medical services for that injury. The
question in this case was whether that rule applied to payments made by the
Healthy Indiana Plan (“HIP”).
Patchett crashed her automobile into Lee’s, serious injuring Lee. Lee was billed a
total of $87,706.36 for the treatment of her injuries by medical providers. At the
time of the accident, Lee was a member of HIP, which paid Lee’s medical providers
a total of $12,051.48 in full satisfaction of her medical bills.
Lee sued Patchett, and Patchett admitted both that she was negligent and that the
medical services provided to Lee were necessary. The matter was set for a jury trial
on damages. Lee moved in limine to exclude evidence of the HIP payments, and the
trial court granted that motion. It found that the HIP payments fell within a
statutory exception to the collateral source statute—if the payment in question was
made by an “agency, instrumentality, or subdivision of the state”—and that the
statutory reimbursement rate had no relation to the reasonable value of the
services provided. That decision was appealed.
On appeal, Patchett argued that Stanley’s reasoning applies to all discounted
payments which fully satisfy a medical provider’s charges. Lee argued that the
cases were different because the HIP rates were not negotiated rates—they were
statutorily tied to Medicare and Medicaid rates. The Court agreed with Lee.
[W]e find that the rule in Stanley does not apply to these facts. Again,
Stanley essentially ruled that “[g]iven the current state of the health
care pricing system” in which “a medical provider’s billed charges do
not equate to cost,” evidence of “discounted amounts” may be
introduced in order to assist in determining the reasonable value of
medical services so long as no reference to insurance is made in
23
admitting those discounted amounts, and that such evidence does not
violate the collateral source statute. …
The policy underlying the rule in Stanley breaks down, though, when
the amounts actually paid are not the result of arms-length
negotiation. …
The Court found that the amounts HIP paid were the result of political decisions,
and bore little relevance to the actual value of the services performed, unlike the
negotiated rates in Stanley, which were arguably the result of market forces.
Finally, the Court held that trial courts have the discretion to exclude evidence of
discounts on health care under Rule 403, regardless of whether the evidence is
admissible under Stanley.
Lessons:
1. Discounts in the costs of medical care that are not the result of contractual
negotiations are inadmissible.
2. Even if discounts in the costs of medical care are admissible under Stanley v.
Walker, a trial court may still exclude them under Rule 403.
14. Self-Help Is a Bad Idea; Auto Liquidation Ctr., Inc. v. Chaca, 2015
WL 8479305 (Ind. Ct. App. 12/10/15) (Vaidik)
Sometimes, people who think that they have the right to do something just go ahead
and do it, the law be damned. But as this case warns, self-help may prove to be an
expensive proposition.
Zojaji owns Auto Liquidation Center (“ALC”), a car dealership. ALC sold a car on
credit to Jorge for $14,500, with a $4000 down payment. As a condition of the sale,
Jorge agreed to allow ALC to install and maintain a GPS device in the car, and
agreed that tampering with the device was grounds for a default under the
agreement. Jorge made all payments in a timely manner.
ALC committed a bookkeeping error and neglected to record in its computer system
that Jorge made a double payment one month. The double payment was reflected in
ALC’s ledger book. The next month, ALC’s computer generated a report, which
stated that Jorge missed a payment. Zojaji ordered Jorge’s car repossessed without
checking the ledger book, and a “starter disable” command was sent to the car.
Jorge’s wife took the car to a mechanic because it was not functioning properly. The
mechanic determined that the GPS device was improperly installed, and was
causing damage to the transmission. He disconnected the device, and told Jorge
that it could be reconnected the next day. But when Jorge awoke the next morning,
the car had been repossessed.
24
Jorge called ALC for an explanation, and was told that the car was repossessed
because Jorge hadn’t paid. Jorge said that he was actually a payment ahead, and
that the receipts to prove it were in the car. Jorge then went to ALC to get the
receipts out of the car; as he reached in the car to get the receipts, Zojaji slammed
the door, hitting Jorge. Jorge nonetheless got the receipts out of the car and showed
them to Zojaji, who was yelling and “very angry.” Zojaji inspected the receipts and
then claimed, “I took the car because you had disconnected a GPS.”
Jorge explained that the GPS was disconnected because Jorge’s mechanic
determined that it was improperly installed and was damaging the car. But Zojaji
apparently refused to accept this explanation, even after speaking with the
mechanic. Eventually, ALC’s “GPS guy” confirmed that he GPS was improperly
installed, and that each command ALC sent to it damaged the car.
ALC’s office manager recommended to Zojaji that ALC return the car, but Zojaji was
“furious” and refused because Jorge “had been a pain in the tush.” Zojaji also
refused to return personal items Jorge left in the vehicle.
Jorge sued ALC and Zojaji. A few months later, Zojaji sold the car. In order to
obtain clear title, Zojaji had filled out the form and engaged a notary to falsely
certify that Jorge signed the form two days after Chace filed his complaint. The case
was tried to a jury, who found for Jorge on his criminal conversion claim. A
judgment was entered for Jorge in the amount of $121,069.66. ALC and Zojaji
appealed.
On appeal, ALC and Zojaji challenged the sufficiency of the evidence supporting the
verdict. But the Court wasn’t buying what they were selling.
In this case, even if Zojaji initially repossessed the car due to a genuine
misunderstanding as to the allegedly missed payment or the removal
of the GPS device, once those misunderstandings were clarified, Zojaji
simply had no reason—contractual or otherwise—to keep Jorge’s car.
ALC and Zojaji maintained that Zojaji’s firm belief that he had a contractual right
to repossess the car due to the removal of the GPS device was a valid defense.
Again, the Court disagreed.
Even if the jury believed that Zojaji had initially acted on a mistaken
belief that Jorge missed a payment, the evidence supports that the
misunderstanding morphed into an intentional, unauthorized taking of
Jorge’s property. In other words, when Zojaji realized Jorge was not
behind in his payments and that he, Zojaji, had wrongfully disabled
Jorge’s car via the GPS device, which resulted in Jorge’s mechanic
needing to disconnect the GPS to prevent further damage to the car,
the jury could very well have concluded that Zojaji’s continued
possession of the car constituted conversion.
25
The Court included “a final note” to those who, like Zojaji, engage in self-help.
[J]ustice is better dispensed in a courtroom and not in one’s own
hands. Self-help remedies are perilous and potentially expensive.
When self-help is attempted, a jury or judge decides the
appropriateness or inappropriateness of the actions regardless of how
justified the actor may have thought his actions were. As we see here,
the risks of paying damages, treble damages, pre-judgment interest,
attorney’s fees, appellate attorney’s fees, and costs are not worth the
possible benefits of sidestepping the court system.
Lesson:
Engage in self-help at your own peril.
26
ADVOCACY TIP OF THE MONTH: An Inside Look at Judicial DecisionMaking
Excerpt from Petition for Panel Rehearing, by Chad Flores, Beck Redden, LLP, in
Forum Subsea Rentals v. Elsharhawy, No. 14-20717, United States Court of
Appeals, Fifth Circuit, 2/5/2016:
Sometimes, in deciding a case, a Court ought to put itself “into the shoes of the
attorney” before it. Williams v. Dallas Area Rapid Transit, 256 F.3d 260, 261 (5th
Cir. 2001) (Smith, J., dissenting from denial of rehearing en banc). Consider the
conversation that naturally flows from the Court’s opinion here:
Lawyer…….I regret to inform you that the court of appeals affirmed.
Client………What reasons did they give?
Lawyer…….They said that they were persuaded by the trial judge’s reasons.
Client………Hmm. What did they say about personal jurisdiction?
Lawyer…….Well, I just told you that they adopted the trial judge’s reasons.
Client………But the judge didn’t give any reasons. He made no findings or
conclusions on jurisdiction. Remember? You were the one who
told me that last year.
Lawyer…….Oh, yes. You’re right. The Circuit affirms for “the reasons”
given below, but there weren’t any on jurisdiction.
Client………So what do we do?
Lawyer…….We move for panel rehearing.
Client………But how will that change anything?
Lawyer…….All institutions make mistakes. Panel rehearing’s purpose is for
overlooked matters like this. Trust the system.
Client………That’s a little challenging right now.
Lawyer…….Have faith. The 5th Circuit has to tackle thousands of cases a
year, so mistakes will happen once in a while, but the Court is
conscientious about fixing them on rehearing.
Decision by the Fifth Circuit on Petition for Rehearing, per Judge Edward Prado,
2/26/2016:
Sometimes, in litigating a case, lawyers ought to put themselves in the shoes of the
judges before them.
Consider the conversation that naturally flows from
Appellants’ Petition for Panel Rehearing here:
Judge 1:
Judge 2:
Judge 3:
Judge 1:
Judge 2:
Did you see Appellants’ petition for rehearing?
No, what did they say?
Well, they begin the petition with a strange hypothetical
conversation between a lawyer and a client.
I cannot imagine why they thought that was a good idea.
What’s their argument?
27
Judge 3:
Judge 2:
Judge 1:
Judge 2:
Judge 1:
Judge 3:
Judge 2:
They say we made a mistake by not expressly addressing their
personal jurisdiction argument.
That’s silly. It goes without saying that there was personal
jurisdiction here.
I agree. The company reached out to Appellee in Texas, traveled
to Texas to negotiate the contract, and entered into a contract
with a Texas corporation.
So what do you think we should do about their petition?
Deny it.
I agree. Deny.
Sounds right.
***
IT IS ORDERED that Appellants’ Petition for Rehearing is DENIED.
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Accessing The Indiana Law Update Electronically
For your convenience, a podcast of today’s presentation and a PDF version of this
document will be available online at www.indianalawupdate.com.
PDF:
Simply click on the dated item of interest, and with the proper
Adobe Acrobat software installed on your computer you will be
able to view, save or print.
PODCAST: To listen to an audio recording of the March 31, 2016
Indianapolis Law Club presentation simply click on the podcast
link. Upon following the link, you will be asked if you want to
save or open the file.
• To listen to the podcast, select the “open” button.
• To download through iTunes, select the “save” button.
• To download via your iPod, select the “save button”. After
signing in, select the “import” button found under the file
menu. Import the saved file from your computer. Select the
“Sync iPod/mp3” button and enjoy.
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Ronald J. Waicukauski
P RICE W AICUKAUSKI J OVEN & C ATLIN , LLC
301 Massachusetts Avenue
Indianapolis, IN 46204
317/633-8787 Phone
E-mail: rwaicukauski@price-law.com
Ron Waicukauski is a trial lawyer whose practice focuses on plaintiffs’ complex
litigation including matters involving business disputes, property rights,
professional malpractice, and class actions. He has tried more than seventy jury
cases to verdict as lead counsel in both state and federal courts. Ron has been
recognized in Best Lawyers in America (2006-2016) and Indiana Super Lawyers
(2004-2016) and with an AV Rating from Martindale-Hubbell. Ron was also selected
for the Indiana Lawyer 2016 Leadership in Law Distinguished Barrister Award.
Ron received his bachelor degree with Distinction from Northwestern University,
his J.D. degree from Harvard University where he was named Best Oralist in the
Ames Moot Court Competition, and an LL.M. degree, with Highest Honors, from
George Washington University. Ron has taught trial and appellate advocacy at the
Indiana University Schools of Law in Bloomington and Indianapolis, and has served
on the faculties of the National Institute of Trial Advocacy and the Defense Counsel
Trial Academy.
Ron has also served as President of the Indianapolis American Inn of Court, as
Chair of the Continuing Legal Education Board of the International Association of
Defense Counsel, and as Co-chair of the Training the Advocate Committee,
Litigation Section, American Bar Association. He formerly was a JAG and Captain
in the U.S. Marine Corps and served as the elected Prosecuting Attorney in Monroe
County, Indiana.
Ron co-authored The Twelve Secrets of Persuasive Argument (2009 ABA), The
Winning Argument (2001 ABA), Classical Rhetoric and the Modern Trial Lawyer,
Litigation (Winter 2010); and Ethos and the Art of Argument, Litigation (Fall 1999).
Ron also wrote Learning the Craft, Litigation (Spring 1998) and was the editor and
a contributing author of Law and Amateur Sports (Ind. Univ. Press 1982).
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Brad A. Catlin
P RICE W AICUKAUSKI J OVEN & C ATLIN , LLC
301 Massachusetts Avenue
Indianapolis, IN 46204
317/633-8787 Phone
E-mail: bcatlin@price-law.com
Brad is a member of Price Waicukauski Joven & Catlin, LLC, an Indianapolis based
plaintiffs’ litigation firm. His practice focuses on complex and class litigation,
including legal malpractice, commercial litigation, and consumer fraud. In 2012,
Brad was recognized as a “Rising Star” by the Super Lawyers publication in the
practice area of legal malpractice. Brad is admitted to practice in the States of
Indiana and Ohio.
Brad is a native of Westfield, Indiana and attended Wabash College as an Honor
Scholar. He graduated from Wabash cum laude with an A.B. in Political Science
and obtained his law degree from the University of Notre Dame School of Law.
While in law school, Brad worked for Jones Obenchain, LLP, in South Bend,
Indiana.
Brad also served as a law clerk to Hon. Mary DeGenaro of Ohio’s Seventh District
Court of Appeals, where, in addition to his regular clerkship responsibilities, he
helped prepare material for the Ohio exam governing certification as a specialist in
Appellate Law.
Brad is frequently asked to speak to lawyers on a variety of subjects, including the
use of technology in a legal practice and recent developments in Indiana law. Brad
authors Technolawgical, a column on the use of technology in a legal practice, in the
Verdict, the quarterly publication of the Indiana Trial Lawyers Association.
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