Indiana Appeals

     It's been over a decade since the Indiana Supreme Court has issued an opinion regarding the "fireman's rule."  See Heck v. Robey, 659 N.E.2d 498, 500 (Ind. 1995).  Over time, courts had begun to erode the applicability of the rule, and had limited the rule to premises liability cases.  See, e.g., Johnson v. Steffen, 685 N.E.2d 1117, 1119 (Ind. Ct. App. 1997), trans. denied.

     In Babes Showclub, Jaba, Inc. v. Lair, Case No. 49A05-0805-cv-262, the Indiana Supreme Court reaffirmed the fireman's rule.  The Court held:  "[T]he 'fireman's rule' bars recovery by a professional emergency responder for the negligence that created the situation requiring the response."  In other words, "an emergency responder may not recover for the negligence that created the situation to which the responder responds."  In Lair, a police officer was unable to state a claim for injuries he incurred when responding to a call to remove an unruly patron from Babes Showclub.

     The purpose of the rule stems from a policy decision that emergency responders know of the dangerous circumstance for which they are entering (example, a burning building) and incur the associated risk.  Courts have made the policy decision that the emergency responders should not be able to sue for the negligence that created the emergency circumstance.

     In addition to reaffirming the rule's bar, the Court was careful to describe the rule's limitation.  The fireman's rule "does not bar recovery for negligence [or intentional tortious conduct] unrelated to the creation of the emergency."  For example, in Johnson, a police officer, while responding to a call to remove a parked car from a bicycle lane, was hit by a cyclist involved in a racing event and injured.  Under the rule, as described in Lair, the officer would be barred from recovering from any negligence from the driver/owner of the car, but may pursue a claim for any alleged negligence of the cyclist or cyclist event organizer.

"Jetson, You're Fired!"

            Indiana is an “employment at will” state, i.e. generally, employment may be terminated by the employer or employee at will, with or without reason. The Indiana Supreme Court has recognized only three exceptions to this doctrine. In Baker v. Tremco, Inc., Cause No. 29S02-0902-cv-00065, the Court extended the second exception, which rests on retaliatory discharge.

            Baker believed that one of Tremco’s suppliers was overcharging schools for their products and services. Baker claims that he was forced to resign because of his refusal to sell these products, and sued Tremco for breach of contract/wrongful termination.

            In McClanahan v. Remington Freight Lines, Inc., 517 N.E.2d 390, 428 (Ind. 1988), the Court had found a public policy exception to the employment at will doctrine “when an employee is discharged solely for exercising a statutorily conferred right.” The Court went on to state “firing an employee for refusing to commit an illegal act for which he would be personally liable is as much a violation of public policy declared by the legislature as firing an employee for filing a workmen’s compensation claim.” Id. at 392-93 (emphasis added).

            In Baker, the Indiana Supreme Court extended this exception to include instances where an employee is not fired – but is constructively discharged from his employment for refusing to participate in illegal activity. The Court stated: “Depending on the facts, it is merely retaliatory discharge in reverse.” Despite the extended exception, the Court held that Baker’s facts did not fall within the ambit of the exception because the alleged overpricing did not, as a matter of law, contravene the public bidding statutes.

by Steven D. Groth and Curtis T. Jones

           Since 1916, courts have been discussing in dicta or predicting what presumption should be accorded to Indiana children ages 7 to 14 who are claimed to have contributed to negligence alleged in civil cases. In Clay City Consolidated School Corp. v. Timberman, Cause No. 11S04-0904-CV-134, the Indiana Supreme Court unanimously ended the speculation in this wrongful death case.

            Instances of Negligence. If the issue is whether a child between the ages of 7 and 14 was negligent, the Indiana Supreme Court has adopted the Restatement (Second) of Torts § 283A (1965) for the standard of care to be used: such children are “required to exercise due care for his or her own safety under the circumstances and that the care required is to be measured by that ordinarily exercised under similar circumstances by children of the same age, knowledge, judgment, and experience.” citing Creasy v. Rusk, 730 N.E.2d 659, 662 (Ind. 2000) and Schultz v. Ford Motor Co., 857 N.E.2d 977, 980 n.2 (Ind. 2006).

            Burden of Proof for Contributory Negligence Defense: If the  question is what is the defendant's burden to prove that a child between the ages of 7 and 14 was contributorily negligent, then the  defendant  must overcome a rebuttable evidentiary presumption that the child is incapable of contributory negligence. The Court’s opinion in Timberman recognized the “presumption,” yet emphasized the “rebuttable” nature of that presumption. The Court stated that “this presumption in favor of youthful alleged victims is a very modest benefit at best” and “will not preclude summary judgment for the alleged tortfeasor on grounds of contributory negligence in the appropriate case.” 

            The Court further emphasized: the evidentiary “presumption is rebuttable such that the child nevertheless ‘may be guilty thereof.’”  Despite  expressly  recognizing this presumption, the Court's holding in Timberman sets the procedural limits for the presumption, and outlines how alleged tortfeasors  may prove contributory negligence against a child between the age of 7 and 14,  by offering evidence that the child was accountable, based on his or her age, mental capacity, intelligence, and experience. 

The Indiana Law Review recently published a law review article co-authored by Bryan H. Babb and Kellie M. Barr regarding developments in Indiana appellate procedure during 2008.  The article summarizes rule amendments, examines appellate court opinions affecting appellate procedure, and synthesizes case law to provide tips for practitioners to improve their appellate practice.  The Indiana Law Review publishes an annual survey about developments in Indiana law, and Bryan and Kellie have been asked to co-author the appellate procedure article again next year.

By George T. Patton, Jr. and Kellie M. Barr

      In May, the Indiana Supreme Court issued six civil opinions and granted transfer in two civil appeals. The Indiana Court of Appeals issued twenty-three published civil opinions, seven of which are briefly summarized in this column. The full text of each decision is available via Casemaker at www.inbar.org.    
 

INDIANA SUPREME COURT

Dispute between Internet marketing firm and company for website design is not for "goods and services" pursuant to Indiana's Article 2 of the Uniform Commercial Code and, under the facts of this case, the company could not sustain conversion claim for website's removal

      The Indiana Supreme Court tackled numerous issues of first impression to resolve a dispute between a company and an Internet marketing firm that created and hosted the company's website.  Conwell v. Gray Loon Outdoor Mktg. Group, Inc., 906 N.E.2d 805 (Ind. 2009). Although the parties fulfilled their obligations under their written agreement, the company later refused to pay for hosting fees and additional changes it requested to the website. The marketing firm sued the company for payment, and the company counterclaimed that the marketing firm committed conversion by taking down the original website for which the company had already paid.

      The Supreme Court first addressed whether Article 2 of Indiana's Uniform Commercial Code ("U.C.C.") or common law principles of contract law governed the parties' transaction. By applying the "predominant thrust" test to determine whether the transaction involved the transfer of goods or the performance of service, the Court held that "[a] website created under arrangements calling for the designer to fashion, program, and host its operations on the designer's server is neither tangible nor moveable in the conventional sense." Id. at 812. Because agreement of the parties "contemplated a custom design for a single customer and an ongoing hosting relationship[,]" the U.C.C. did not apply. Id.

      The Court examined the marketing firm's claim for payment under common law principles and determined that although the website modifications were not contemplated by the parties' original agreement, the company requested the changes without inquiring into the amount the changes would cost. The marketing firm's invoice was the only evidence submitted to the trial court regarding the reasonableness of the charges, and there was evidence that a representative of the company accepted the price after receiving the invoice. Because there was no evidence that the marketing firm "participated in an unconscionable effort to 'strong arm' [the company] into paying an unreasonable fee," the Court affirmed the trial court's decision to enforce the parties' agreement, even though the marketing firm had not provided a cost estimate. Id. at 813.

      Turning to the company's counterclaim that the marketing firm committed conversion by taking down the website for which the company paid, the Court analyzed how copyright law affected the legal status of the website. For the company's counterclaim to succeed, the website either had to be a "work made for hire" where the company was the original owner or the marketing firm had to have transferred ownership of the website to the company. The Court determined that the website was not a work made for hire because the marketing firm was an independent contractor, not the company's employee. The Court also concluded that language in the marketing firm's proposal that the company inherently owned the product was insufficient to transfer ownership of the website from the marketing firm to the company. The marketing firm did, however, have a nonexclusive license because the "parties intended to transfer a copyright, but failed to do so in writing." Id. at 816. Because a nonexclusive license is not an ownership interest under copyright law, however, the marketing firm did not commit conversion by removing the website, and the company's counterclaim failed.

      Concurring in result, Justice Boehm wrote separately to explain that, in his view, a website is "property" for the purposes of tortious or criminal conversion. Id. at 817. Although the company was a licensee that could not sustain a conversion claim, Justice Boehm emphasized that licensees are not without remedy. In this case, the marketing firm arguably "created the problem that the licensed code no longer existed" and "had no right to seize both phases [of the website design] as collateral for its unpaid work on the second phase." Id. 818-19. Although the company's damages were "a matter of speculation on this record," Justice Boehm noted that the company could have asserted breach of license as either an affirmative defense or set-off. Because it did not, he concurred with the majority's result.

Evidence of discounted payments healthcare providers accept from insurance carriers on behalf of injured plaintiffs can be introduced into evidence to determine the reasonable value of the services to the extent it can be done without referencing insurance

      The Indiana Supreme Court confronted "the question of how to determine the reasonable value of medical services when an injured plaintiff's medical treatment is paid from a collateral source at a discounted rate." Stanley v. Walker, 906 N.E.2d 852, 855 (Ind. 2009). In an opinion authored by Justice Sullivan, the Court held that evidence of a healthcare provider's acceptance of a reduced amount of compensation for services provided to a plaintiff may be introduced to help a jury determine the reasonable value of the services "[t]o the extent the discounted amounts may be introduced without referencing insurance." Id. at 853. The Court analyzed Indiana Rule of Evidence 413 and the "complexities of health care pricing structures[, which] make it difficult to determine whether the amount paid, the amount billed, or an amount in between represents the reasonable value of medical services." Id. at 857. Ultimately, the Court held that Indiana's collateral source statute does not bar evidence of discounted payments accepted by healthcare providers to determine the reasonable value of services. "Given the current state of the health care pricing system where . . . authorities suggest that a medical provider's billed charges do not equate to cost, the jury may well need the amount of the payments, amounts billed by medical providers, and other relevant and admissible evidence to be able to determine the amount of reasonable medical expenses." Id. at 858. 

      Justice Dickson authored a dissenting opinion, joined by Justice Rucker, arguing that the majority's rule "contravenes the express requirements of the collateral source statute." Id. at 860 (citing Ind. Code § 34-44-1-2). The dissent also disagreed that the collateral source statute abrogated the common law collateral source rule because "the statute's precise language appears to create a limited exception to the common law rule, which is otherwise left intact." Id. at 862. "Under today's new rule, the existence and extent of any improvement to the accuracy of verdicts seems overwhelmed by the significant probability of incompleteness, confusion, and resulting unfairness, all further compounded by detrimental effects on the fairness and efficient administration of justice." Id. at 865.

      Justice Boehm, joined by Chief Justice Shepard, wrote separately to respond to points made by the dissent and emphasized that "we hold today only that the discounted price actually paid for medical services is admissible evidence as to the reasonable value of those services. We do not hold that it is conclusive." Id. at 859.

Although claim against mother's estate was timely, daughter failed to rebut presumption that services rendered to her incapacitated mother were gratuitous because no evidence that daughter had an express or implied contract with mother's guardian

      The Indiana Supreme Court unanimously reversed the trial court's denial of an estate's motion for summary judgment on a daughter's claim against her mother's estate for reimbursement for various expenses and personal services that the daughter rendered to her mother while the mother was subject to a guardianship. Estate of Prickett v. Womersley, 905 N.E.2d 1008 (Ind. 2009). First, the Court addressed the Estate's argument that the daughter's reimbursement claim was time-barred because she had not filed her claim in the guardianship proceeding. Interpreting the Guardianship Code, the Court held that Indiana Code § 29-3-10-1(d) does not require a claim to be filed against the guardianship estate and "in the absence of legislative direction mandating a guardian's approval, we are apprehensive of the administrative and other practical consequences of ordering a guardian's review of all claims filed in a probate estate that accrue during a decedent's guardianship." Id. at 1012. Therefore, the daughter's claim for reimbursement was not time-barred because she was not required to pursue it in the guardianship proceeding and she properly filed it against her mother's estate.

      The Court reaffirmed the rebuttable presumption that services rendered by a family member are gratuitous. Although the daughter designated evidence that her mother signed a statement in front of two witnesses that she wanted her estate to compensate her daughter for her services, the Court held that the mother could not enter into a contract at the time she executed the statement and, consequently, "when the provider is a family member the implied contract must exist between that person and the incapacitated person's guardian." Id. at 1013. Because the daughter failed to produce evidence that she had an express or implied contract with her mother's guardian, she failed to rebut the presumption that her services were gratuitous as a matter of law.

An insurance company's policy was consistent with Indiana's uninsured motorist statute and insureds were not entitled to uninsured motorist benefits for the death of their unmarried adult son because they did not suffer bodily injury

      The Indiana Supreme Court unanimously held that named insureds who brought an action against their automobile insurer to recover uninsured motorist benefits for the death of their unmarried adult son were not persons "legally entitled to recover damages" for their son's death. Bush v. State Farm Mut. Auto. Ins. Co., 905 N.E.2d 1003, 1008 (Ind. 2009). For purposes of its uninsured motorist coverage, the parents' insurance policy defined "insured" to include the named insureds and their relatives, which were defined as related persons primarily residing with the named insureds. Because their adult son no longer lived with his parents, he was not an insured under his parents' policy.

      The insured parents argued that they were entitled to uninsured motorist benefits because their policy was inconsistent with Indiana's uninsured motorist statute-Indiana Code § 27-7-5-2-and, thus, unenforceable. The Court disagreed and emphasized that "the statute itself makes clear that it contemplates uninsured motorist coverage only for the 'insured's' bodily injury." Id. at 1005. The insurance company's policy was "consistent with the uninsured motorist statute by requiring that the insured sustain bodily injury to trigger uninsured motorist coverage." Id. Reaffirming a previous holding, the Court held that the definition of bodily injury includes emotional distress "only if it arises from a bodily touching." Id. (citing State Farm Mut. Auto. Ins. Co. v. Jakupko, 881 N.E.2d 654 (Ind. 2008)). "Indiana's uninsured motorist statute requires coverage only for bodily injuries sustained by an insured." Bush, 905 N.E.2d at 1007-08. Because the parents did not suffer bodily injury, they did not have uninsured motorist coverage for their adult son's death.

For purposes of the Family and Medical Leave Act, the 1250-hour requirement applies to an employee's overall service, not service in any particular position, and a trial court's exercise of equitable jurisdiction to award an employee front pay had to be discounted to reflect present day value

      The Indiana Supreme Court addressed issues of first impression surrounding a full-time teacher, part-time football coach's claims against his school corporation employer under the Family and Medical Leave Act ("FMLA"). Gary Cmty. School Corp. v. Powell, 906 N.E.2d 823 (Ind. 2009). Although the school reinstated the employee to his full-time teaching position after his medical leave, it did not reinstate him to his head coaching position. Additionally, the school rejected him as head football coach in subsequent years, which the teacher argued was retaliatory conduct for comments he made to a local newspaper regarding the school's failure to restore him to his coaching position following his medical leave.

      The Court held as an issue of first impression that "an employee filling multiple positions with the same employer is eligible for FMLA leave as to all positions if that employee has completed 1,250 total hours of service to that employer in the twelve months preceding the request for leave." Id. at 828. As the Court noted, "the test for [FMLA] eligibility is phrased in terms of 'hours of service' to an 'employer,' not service in any particular position." Id. Therefore, because the 1,250-hour requirement applies to an employee's overall service, the school corporation was required to reinstate the employee to both the full-time teaching position and the part-time coaching position. Additionally, the Court concluded that the employee presented sufficient evidence to support the jury's conclusion that the school corporation retaliated against him for voicing his complaints to a local newspaper, which were not permissible grounds for retaliation under FMLA.

      The school corporation presented numerous arguments challenging the trial court's award of damages. As an issue of first impression, the Court concluded that although the trial court did not abuse its discretion by exercising equity jurisdiction and awarding front pay, "front pay should be discounted to present value. Without discounting, [the employee] would receive a windfall in the form of the use of the money years before it would have been earned." Id. at 834. The Court remanded the action to the trial court to discount the front pay award to present day value, but otherwise affirmed the trial court in all respects.

Employees' damages award for backpay after employer's violation of Indiana Civil Rights Act should not have been reduced by amount of unemployment benefits received

      Two employees filed a complaint with the Michigan City Human Rights Commission ("Commission"), alleging that their employer violated the Indiana Civil Rights Act when it discriminated against them on the basis of race and terminated them for timecard fraud. Filter Specialists, Inc. v. Brooks, 906 N.E.2d 835 (Ind. 2009). The Commission concluded that race was the motivating factor behind the firings and awarded the employees damages for backpay and fringe benefits. The Indiana Supreme Court concluded that the employees proved their claim even though they did not introduce evidence of the ordinance establishing the Commission because the ordinance "has no bearing on whether [the employer] discharged [the employees] on the basis of race in violation of the Indiana Civil Rights Act." Id. at 845. Additionally, the employees presented substantial evidence to support the Commission's conclusion that they had suffered unlawful discrimination, even though there was "no smoking gun" regarding the employer's mental processes. Id. at 848.

      Regarding damages, the Court agreed with a majority of federal circuit courts that "unemployment benefits should not be deducted from backpay awards in discrimination cases." Id. at 849. Consequently, the trial court erred by ordering the case remanded to the Commission because "the damages awarded to [the employees] should not have been affected by their receipt of unemployment compensation." Id. at 850.

INDIANA COURT OF APPEALS

> Father had independent cause of action against Indiana Patient's Compensation Fund for negligent infliction of emotional distress after he witnessed the death of his son, which was caused by the negligent conduct of healthcare providers. Ind. Patient's Comp. Fund v. Patrick, 906 N.E.2d 194 (Ind. Ct. App. 2009).

> Oral findings and conclusions that are "thoroughly detailed in the record" satisfy the purpose of special findings under Indiana Trial Rule 52(A). Nunn Law Office v. Rosenthal, 905 N.E.2d 513 (Ind. Ct. App. 2009). Additionally, an attorney employed under a contingency fee contract who is discharged prior to occurrence of the contingency is limited to quantum meruit recovery. 

> Trial court should have granted party's request for a hearing on motion to change venue pursuant to Indiana Trial Rule 75(A) because of conflicting evidence and the lack of evidence regarding the location of plaintiff's principle office. Painters Dist. Council 91 v. Calvert Enter. Electronic Servs., Inc., 906 N.E.2d 254 (Ind. Ct. App. 2009).

> The Indiana Motor Vehicle Protection Act, commonly known as the Lemon Law, "obligates a consumer to demonstrate that the vehicle was subject to repair at least four times and that the same defective condition remained unresolved after the fourth attempt." Metro Health Profs., Inc. v. Chrysler, LLC, 905 N.E.2d 1026, 1033 (Ind. Ct. App. 2009). Once a consumer has met the four-repair requirement and files a claim shortly after the fourth attempt, as a matter of law, the automobile manufacturer is obligated to either refund the amount the buyer paid or provide a replacement vehicle of comparable value.

> Employee's claim against political subdivision employer is governed by the three-year statute of limitations contained in the Federal Employers' Liability Act instead of the two-year statute of limitations governing Indiana personal injury claims. Januchowski v. N. Ind. Commuter Trans. Dist., 905 N.E.2d 1041 (Ind. Ct. App. 2009).

> Bureau of Motor Vehicles' policy of revoking driving privileges after class members whose recorded personal information did not match information on file with the Social Security Administration violated federal due process because the BMV failed to articulate ascertainable standards for current identification holders. Leone v. Ind. Bureau of Motor Vehicles, 906 N.E.2d 172 (Ind. Ct. App. 2009). The policy did, however, have the rational basis of preventing identity theft, and the trial court properly denied the class members' request for a preliminary injunction because the class failed to show an injunction would be in the public interest. 

> Jim Mansfield was initially declared the winner of the Muncie mayoral election but his opponent, Sharon McShurley, was declared the winner after a recount. Mansfield v. McShurley, --- N.E.2d ---, No. 18A02-0804-CV-375 (Ind. Ct. App. 2009). The trial court dismissed Mansfield's statutory challenge to the election as well as his amended complaint asserting a quo warranto action. On appeal, the Court of Appeals held that a statutory contest action "may not be brought outside the statutorily prescribed time frames even if, as in the case before [the Court of Appeals], the election result changes by virtue of a recount." Additionally, the trial court did not err by dismissing the quo warranto complaint because the recount commission did not act unlawfully by declining to count certain absentee ballots.

TRANSFER ORDERS

> Babes Showclub v. Lair, 901 N.E.2d 44 (Ind. Ct. App. 2009) (whether a police officer's claims for injuries he suffered responding to a complaint on the club's premises were barred by the Fireman's Rule), transfer granted on May 7, 2009.

> Ind. Family & Soc. Servs. Admin. v. Meyer, 900 N.E.2d 74 (Ind. Ct. App. 2009) (whether the trial court had discretion to respond to procedural error by granting a belated extension of time), transfer granted on May 14, 2009.

      George T. Patton, Jr., is a partner at Bose McKinney & Evans LLP, Indianapolis/Washington, D.C. and co-chair of its Appellate Group. He was the first chair of the ISBA Appellate Practice Section, served as an Adjunct Assistant Professor of Appellate Advocacy and Procedure at the Indiana University School of Law-Bloomington for five years, and has written four articles on recent developments in Indiana appellate procedure for the Indiana Law Review. George's book on the 2001 Indiana Appellate Rules is 24 Indiana Practice-Appellate Procedure (3d Ed. West Publishing Co. 2001 & 2006 Supp.). 

      Kellie M. Barr is an associate at Bose McKinney & Evans LLP, Indianapolis, and works on business, commercial, and appellate litigation. Upon graduating from the Indiana University School of Law-Bloomington, Kellie served as a law clerk to Chief Judge John G. Baker at the Indiana Court of Appeals. Kellie is the co-author of an article on recent developments in Indiana appellate procedure to be published in the Indiana Law Review later this year.

by Steven M. Badger 

In Indiana zoning law, the doctrine of "vested rights" protects developers who have made large investments in a construction project from having those investments thwarted by changes in zoning requirements while the development project is underway.  City of New Haven v. Flying J. Inc., No. 02A03-0902-CV-74, Ind. Ct. App. (August 31, 2009), recently addressed the question of what steps a developer must take in reliance on a set of existing zoning standards before that developer enjoys the protection of such "vested rights."

Flying J involved a tortuous litigation path including two appeals (and even a diversionary foray by the developer into federal court).  Flying J proposed to build a travel plaza (including a gas station, convenience store, 24-hour restaurant and other amenities) on a 17-acre site.  The initial BZA decision rejected the development, but that decision was overturned in the first appeal because the Indiana Court of Appeals concluded the travel plaza involved permitted uses under the New Haven zoning ordinance.  After that decision, however, New Haven amended its zoning ordinance to impose new restrictions on the size (by acerage) of service stations.  The size and scale of Flying J's planned travel plaza exceeded the limitations of the amended ordinance.  The issue addressed by the Indiana Court of Appeals in the second appeal was whether Flying J had a "vested right" to proceed with its development plans under the earlier version of New Haven's ordinance.

The Indiana Court of Appeals affirmed the trial court's decision finding that Flying J's vested right in its planned development precluded application of the amended ordinance.  The Court rejected the BZA's argument that Flying J had no vested right because it had not yet begun construction on the travel plaza.  Quoting an earlier decision in Pinnacle Media LLC v. Metropolitan Dev. Comm'n, 868 N.E.2d 894, 900 (Ind. Ct. App. 2007), the Court stated that "there is no bright-line rule that construction must have commenced in order to show a vested right."  The Court elaborated:

We read the Pinnacle cases to mean that, while construction definitely does establish a vested right, mere preliminary work, including filing of a building permit, does not.  In situations falling between these two extremes, courts must engage in a fact-sensitive analysis to determine whether vested rights have accrued prior to application for a building permit or construction.

The Court of Appeals concluded that the $4 million-plus spent by Flying J gave rise to a vested right (or at least the trial court did not err in so concluding).  By far the largest portion of the $4 million was the purchase price of the property -- a point pressed vigorously by the BZA.  (The BZA no doubt pointed out that if the cost of acquiring a property alone created vested rights under the zoning regulations in existence at the time the property was acquired, then zoning changes would be enforceable only against those property owners who happen to acquire their properties after the zoning ordinance is changed.  Such a rule would make it virtually impossible to update zoning regulations.)  Without directly addressing that argument, the Court of Appeals held that Flying J's other expenses, "including tens of thousands of dollars on engineering and surveying, constitute more than mere 'preliminary' work or expenses," and were sufficient to give Flying J a vested right under the original ordinance.
 

By Steven M. Badger

Whether a law suit involves a zoning dispute, property appeal or business litigation question, the Indiana law firm handling the matter must be familiar with the unique procedural aspects of Indiana law.  Two decisions issued this week by the Indiana Appellate Courts focus on questions of Indiana procedure when a property owner initiates a court challenge to a decision by a local Board of Zoning Appeals.
 
In Thomas v. Blackford County Area Board of Zoning Appeals and Oolman Dairy, LLC, the Indiana Supreme Court affirmed the trial court's conclusion that Thomas, a property owner who remonstrated against locating a confined animal feeding operation one-third of a mile from Remonstrator Thomas' property, failed to show she had standing to challenge a Board of Zoning Appeals' ("BZA's") decision granting a special exception for the feeding operation. 
 
The standing question itself and the Indiana Supreme Court's affirmance of the trial court's findings are neither novel nor surprising to an Indiana appellate lawyer.  The interesting aspect of the decision is the Supreme Court's approval of the procedure followed by the trial court to reach the result.
 
The question of Thomas' standing was first raised by the owner of the feed operation in a motion to dismiss under Indiana Trial Rule 12(B)(6).   The trial court correctly denied that motion because it was based on matters outside the four corners of the Complaint.  The trial court, nevertheless, held an evidentiary hearing on the question of whether Thomas had standing as an aggrieved party.  Based on the testimony and evidence at the hearing (principally relating to the impact of the feeding operation on the value of Thomas' property), the trial court determined that Thomas failed to establish she had standing to challenge the BZA's decision.

The decision was first reviewed by the Indiana Court of Appeals, which reversed the trial court's decision.  The Court of Appeals reasoned that the trial court should have treated the Motion to Dismiss as a Motion for Summary Judgment.  See Ind. Trial Rule 12(B) (when "matters outside the pleading are presented to and not excluded by the court" on a motion under Rule 12(B)(6), "the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.").  That procedural determination by the Court of Appeals was outcome determinative because the evidence as to Thomas' standing (i.e., the impact the feeding operation would have on her property's value) was conflicting, thereby creating genuine issues of material fact.

The Indiana Supreme Court granted transfer, vacated the Indiana Court of Appeals decision, and affirmed the trial court's decision finding Thomas lacked standing.  The Indiana Supreme Court agreed with the trial court and Court of Appeals that dismissal was not appropriate under Indiana Trial Rule 12(B)(6).  However, departing from the Court of Appeals' analysis, the Supreme Court concluded that the procedure for summary judgment under Trial Rule 56 did not apply.  Instead, the Supreme Court compared the situation to a motion to dismiss for lack of personal jurisdiction in which a trial court may hold an evidentiary hearing to determine the jurisdictional question.  Thus, the Supreme Court approved of the procedure followed by the trial court in holding an evidentiary hearing and deciding whether the Plaintiff had standing based on the conflicting evidence presented.
 
There is no specific provision in Trial Rule 12(B) that the Indiana Supreme Court relied upon in holding that the trial court may determine the Plaintiff's standing on a motion to dismiss.  Implicit in that result is the notion that standing is a legal issue for the judge, not the jury, to decide.
 
A novel procedural issue was also addressed in Edward Rose of Indiana, LLC v. Metropolitan Board of Zoning Appeals, Indianapolis-Marion County.  In Edward Rose, an apartment owner challenged the Indianapolis-Marion County BZA's denial of a variance sought by the apartment owner to maintain a pole sign on the premises of the apartment complex.  Like Thomas, the decision is noteworthy for the Indiana property law attorney not because of the Court's conclusion that the variance was properly denied to the apartment owner, but rather for the Court of Appeals' dictum regarding the procedure followed by the trial court.
 
Specifically, the Indiana Court of Appeals addressed under what circumstances a landowner who had unsuccessfully petitioned for a variance in the local BZA may challenge that decision based on evidence the landowner failed to offer in the zoning hearing.  The issue hinged on an Indiana statute that provides in relevant part:  "If the court determines that testimony is necessary for the proper disposition of the matter, it may take evidence to supplement the evidence and facts disclosed by the return to the writ of certiorari, but the review may not be by trial de novo."  Indiana Code section 36-7-4-1009.  The apartment owner sought to buttress its case in court with testimony and evidence that had not been submitted to the BZA.  The trial court admitted that testimony and evidence, but ruled nevertheless that the BZA's decision was not clearly erroneous or illegal.
 
Although the Indiana Court of Appeals affirmed the trial court's decision on the merits finding no clear error in the BZA's decision, the Court disagreed with the trial court's decision to hear new evidence offered by the apartment owner.  The Indiana Court of Appeals reasoned that allowing the apartment owner to present new evidence was "tantamount to conducting a trial de novo" -- in essence relitigating the merits of the variance petition from scratch.  Such an approach would directly violate Indiana Code section 36-7-4-1009's proscription that the trial court's review of BZA decisions "may not be a trial de novo."
 
The Indiana Court of Appeals elaborated to provide guidance in future cases by listing circumstances when it may be appropriate for a trial court reviewing a BZA decision to consider new evidence.  Such situations arise, for example:
 

1) when the record before the BZA is incomplete because the aggrieved party was refused an opportunity to be fully heard or the BZA excluded relevant evidence;

 2) when good and sufficient cause is shown for the failure to have offered the evidence to the BZA;

 3) when the record presented to the trial court does not contain all the evidence actually presented to the BZA;

 4) when the BZA’s record fails to present the hearing in sufficient scope to determine the merits of the appeal; and 

 5) when new evidence is discovered after the BZA’s proceedings.

An Indiana litigation law firm's understanding of Indiana procedure can be as important as knowledge of the substantive law in obtaining a positive outcome in Indiana litigation matters.  The Indiana appellate decisions summarized above guide Indiana lawyers on important procedural questions in Indiana property appeals.

    By:  Kelly Scanlan

            In a recent decision, the Supreme Court of Indiana clarified what evidence litigants may introduce to assist juries in determining the “reasonable value of medical services.” In Stanley v. Walker, the Court did away with the notion that Indiana’s Collateral Source Statute precludes defendants from introducing discounted amounts paid and accepted for a plaintiff’s medical bills. Relying primarily on the realities of health care billing and finance, the Court held that “the collateral source statute does not bar evidence of discounted amounts in order to determine the reasonable value of medical services. To the extent the adjustments or accepted charges for medical services may be introduced into evidence without referencing insurance, they are allowed.”

            The Stanley opinion comes on the heels of the Supreme Court’s decision in Butler v. Indiana Dep’t of Ins., 904 N.E.2d 198 (Ind. 2009), in which the Court held that in wrongful death actions, the amount recoverable for reasonable medical and hospital expenses is the total amount ultimately accepted by health care providers after any billing adjustments, not the total originally billed. Due to the language of a settlement agreement between the parties in Butler, the Court did not reach the collateral source doctrine issue in that case. The narrow holding in Butler rested almost exclusively on the plain language of Indiana’s Adult Wrongful Death Statute. 

            Bose McKinney & Evans LLP filed amicus briefs on behalf of the Insurance Institute of Indiana in both appeals. Despite their differing underlying rationale, and the Court’s slightly more middle of the road approach in Stanley, both cases represent positive results for defendants in personal injury and medical malpractice cases in Indiana. These decisions will help ensure that juries are provided with accurate evidence regarding the amount of damages necessary to compensate plaintiffs for medical bills they are actually required to pay.  

by Steven M. Badger

In all litigation, but particularly in Indiana business litigation, it is important for the litigants to know the reasons for the judge's decision on the merits of the dispute.  Those reasons also become a focal point in any appeal to the Indiana appellate courts.  Indiana Trial Rule 52 serves these purposes by requiring that upon the timely written request of any party, "the court in all actions tried upon the facts without a jury or with an advisory jury . . . shall find the facts specially and state its conclusions thereon."

In Nunn Law Office v. Rosenthal, the Court of Appeals of Indiana addressed whether Trial Rule 52(A) is satisfied when a trial court makes findings orally rather than in writing.  At issue was the share of plaintiff's attorney fees that should be paid to the attorney who originally filed a personal injury action, but who was discharged by the plaintiff before the case was resolved.

The Court of Appeals observed that nothing in Trial Rule 52(A) specifies that the trial court's findings and conclusions must be in written form, although the Court of Appeals notes that written findings and conclusions are preferred.  Further, the Court reasoned that oral findings and conclusions serve the purposes of Trial Rule 52(A) "so long as they are thoroughly detailed in the record."  Therefore, the Indiana appellate court held that the trial court's failure to enter written findings and conclusions, in and of itself, does not constitute reversible error.

As to the sufficiency of the trial court's oral findings, the Indiana appellate court determined that the trial judge's oral explanation of how she determined the amount of attorneys' fees awarded to co-plaintiff's counsel was sufficient.  Among other things, the trial judge stated the number of hours, billable rates and service descriptions of the professional services for which the fees were earned.

Finally, the Court of Appeals affirmed the trial court's use of a quantum meruit or equitable measure to determine the amount of the fees, rather than a contingency basis, because the fee contract in question failed to specify the measure of fees upon a pre-contingency termination of the representation.

This aspect of the case relating to how the fee award was determined, however, merely reaffirms existing Indiana law.  The real lesson for the Indiana appellate lawyer is that a trial court's failure to enter written findings and conclusions even when properly requested may not constitute reversible error if the trial court stated somewhere in the record the reasons for its decision.

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Heartland Resources, Inc.; Heartland-Red River Prospect, L.P.; David A. Stewart; Richard Stewart; and Mark Haynes (collectively "Heartland") appeal from the trial court’s entry of default judgment against Heartland and award of damages to Ambrose Bedel and Catherine Bedel (collectively "the Bedels"). Heartland presents the following restated issues for our review:

1. Whether the trial court had personal jurisdiction over Heartland.

2. Whether the trial court erred when it awarded the Bedels treble damages.

The Bedels cross-appeal and contend that the trial court erred when it did not award them attorney’s fees.

Conclusion (slip op. at 7): Affirmed and remanded with instructions.

Key Analysis (slip op. at 4, 7): When Heartland failed to allege lack of personal jurisdiction in its Trial Rule 60(B)(1) motion to set aside, it waived that issue for review on appeal . . . Rather than awarding the Bedels damages under the Act, which does not provide for treble damages, the trial court expressly based the award on Heartland’s fraud and deception as detailed in the complaint.

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Defendant-Appellant Diana Meyer appeals the trial court’s grant of summary judgment in favor of Plaintiff-Appellee National City Bank. Meyer presents three issues for our review, which we consolidate and restate as two:

I. Whether the trial court erred in granting summary judgment for National City Bank.

II. Whether Weltman Weinberg & Reis Co, L.P.A. properly represents National City Bank in this action.

Conclusion (slip op. at 5-6): We conclude that the trial court properly entered summary judgment in favor of National City Bank. We further conclude that Jeannette M. Conrad of Weltman, Weinberg & Reis, Co., L.P.A. was the attorney of record for National City Bank, as reflected in the CCS of the trial court. Affirmed.

Key Analysis (slip op. at 3, 4, 5): Although we found no published cases in Indiana, we note with approval the determinations of other states that credit card agreements are contracts, and the issuance and use of a credit card creates a legally binding agreement . . . The Agreement expressly stated that it became binding on Meyer upon her use of the account, not upon her signature to the Agreement . . . There being no genuine issue of material fact as to Meyer’s consent to be bound by the Agreement and to the balance due and owing on the account, the trial court did not err in granting summary judgment in favor of National City Bank.

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Appellants-Petitioners, The Home Telephone Company of Pittsboro, Inc. (Home) and Communications Corporation of Indiana (CCI) (collectively, Appellants), appeal an Order of the Indiana Utility Regulatory Commission (IURC), which is defended by Appellees-Respondents, Verizon North, Inc., Contel of the South, Inc. d/b/a Verizon North Systems, MCI Communications Services, Inc. d/b/a Verizon Business Services, MCIMetro Access Transmission Services LLC d/b/a Verizon Access Transmission Services, Powertel/Memphis Inc. d/b/a T-Mobile, T-Mobile Central LLC d/b/a T-Mobile, Time Warner Telecom of Indiana, L.P., and Indiana Bell Telephone Company, Incorporated d/b/a AT&T Indiana (collectively, Appellees). The IURC was granted leave to intervene. Appellants raise three issues on appeal, which we restate as follows:

(1) Whether the IURC abused its discretion when it held that Section 10 of the Phase II Settlement Agreement precluded the Variance requested by Appellants;

(2) Whether the IURC deprived Appellants of their due process rights by rendering a decision on matters outside Appellants’ requested relief; and

(3) Whether the IURC abused its discretion when it required Appellants to modify their Qualification Test by excluding the impact of rate reductions that occurred in 2006.

Conclusion (slip op. at 11):  Affirmed.

Key Analysis (slip op. at 9, 10): The Appellants failed to raise the question of Section 10’s effective date before the administrative tribunal, they cannot now raise it for the first time on appeal . . . Appellants received notice and attended an evidentiary hearing with regard to their Petition for Variance and were not deprived of their due process rights . . . The IURC’s requirement to resubmit a new Qualification Test which did not incorporate the rate reductions requested by Appellants through their Variance Petition is merely a logical extension of its denial of Appellants’ Petition. An interpretation of a settlement agreement is not rulemaking.

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Richard Moore appeals from the trial court's judgment in favor of Wells Fargo Construction ("Wells Fargo"), formerly known as The CIT Group/Equipment Financing, Inc. ("CIT"), on its complaint to recover a deficiency owed under a personal guaranty. Moore raises two issues for review:

1. Whether the evidence is sufficient to support the trial court's finding that Wells Fargo conducted the sale of a repossessed excavator in a commercially reasonable fashion.

2. Whether Wells Fargo provided adequate notice to Moore of the sale of the excavator.

Conclusion (slip op. at 15): Affirmed.

Key Analysis (slip op. at 11, 14-15): We agree with Moore that I.C. 26-1-9.1-610 requires sales such as the instant one to be commercially reasonable. But the plain language of the Guaranty shows that Moore intended to waive any claim regarding the commercial reasonableness of a sale of the Excavator. Thus, under the Guaranty, Moore has waived that claim . . . We conclude that the Second Notice, containing the web address of the auction and the physical address of the auction company, satisfies the location requirement in I.C. 26-1-9.1-613(1)(E). As such, Moore's argument that the Second Notice was inadequate must fail.