Property Appeals

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.

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Deutsche Bank National Trust Company appeals summary judgment for Mark Dill Plumbing Company, Mark E. Neff, and Invironmental Technologies, LLC. (collectively, "Appellees"). Deutsche Bank owned a mortgage on Welch's property. Deutsche Bank filed a mortgage foreclosure action against Welch, but did not join any of the Appellees as parties. The foreclosure proceeded to judgment and Deutsche Bank purchased Welch's real estate at a Sheriff's sale. Thereafter, Deutsche Bank learned of the judgment liens belonging to Appellees, and filed an action to remove their liens. Appellees individually answered, and Neff and Invironmental counterclaimed to foreclose their liens. Deutsche Bank then filed a motion for summary judgment, claiming the Appellees' liens were subordinate to Deutsche Bank's interest and claiming Appellees' rights and equity should be cut off. Neff filed a cross-motion for summary judgment, which Dill Plumbing and Invironmental joined, that requested Deutsche Bank's equity of redemption be foreclosed and another Sheriff's sale be held to satisfy the amounts owed to Appellees. After a hearing, the court denied Deutsche Bank's motion and granted Appellees' motion.

Conclusion (slip op. at 8): We affirm the summary judgment for Dill Plumbing, Neff, and Invironmental.

Key Analysis (slip op. at 6, 8): When junior lienholders are not made parties, the foreclosure and sale cannot be enforced against them . . . Deutsche Bank foreclosed its mortgage without making Appellees parties. Deutsche Bank acknowledges Appellees' liens were properly recorded; its agent that conducted the title search presumably missed them. Accordingly, Deutsche Bank should have known about Appellees' liens. The trial court ordered the property sold to satisfy the liens belonging to Appellees and . . . the trial court reached the proper result.

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FISHER, J.

Kooshtard Property VIII, LLC (Kooshtard) challenges the final determination of the Indiana Board of Tax Review (Indiana Board) affirming the 2002 assessment of its real property. Kooshtard presents one issue on appeal, which the Court restates as: whether the Indiana Board erred in affirming the application of only one negative influence factor of 50% to Kooshtard’s land.

Conclusion (slip op. at 7): The Indiana Board’s final determination is affirmed.

Key Analysis (slip op. at 6-7): Kooshtard has done nothing more than assert that the applicable neighborhood valuation form "recommends" a negative influence factor to account for its land’s size and shape. Kooshtard, however, was required to present a calculation which quantified (and would have possibly supported) the alleged loss in value to its property due to that condition. Consequently, the Indiana Board did not err when it held that Kooshtard did not make a prima facie case that it was entitled to a second negative influence factor of 50% to account for its land’s size and shape.

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Gloria Murray et al. ("the Plaintiffs") brought suit against the City of Lawrence ("the City"), the Lawrenceburg Conservancy District ("the Conservancy District"), and Indiana Gaming Company, L.P. ("Indiana Gaming") (collectively "the Defendants"), claiming ownership of a certain portion of land being used by the Defendants. The Defendants filed a motion for a judgment on the pleadings, which the trial court denied. The trial court then denied the Plaintiffs' demand for a jury trial. The Plaintiffs now bring this interlocutory appeal and claim that the trial court erred in denying their demand for a jury trial. The Defendants cross-appeal and claim that the trial court erred in denying their motion for judgment on the pleadings.

Conclusion (slip op. at 24): The Defendants' cross-appeal is properly before us, as our earlier decision to decline to accept interlocutory jurisdiction is not final, and we now, under these limited facts and circumstances, choose to reconsider our earlier decision to decline jurisdiction over the Defendants' appeal from the trial court's certified interlocutory order. Considering the merits of the Defendants' cross-appeal, we conclude that the Plaintiffs' were not required to bring a claim for inverse condemnation, because inverse condemnation is not an exclusive remedy and because ownership of the Disputed Property has not yet been determined . . . Lastly, the essential features of the Plaintiffs lawsuit were not equitable, and the entire case is therefore not drawn into equity. On remand, the trial court should resolve the timeliness of the Plaintiffs' claims; sever the timely-filed distinct, legal claims; and grant the Plaintiffs' demand for a jury trial as to these claims.

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Bay Bridge LLC ("Bay Bridge") filed a complaint in Lake Superior Court to quiet title to a parcel of real estate commonly known as 149th and Colfax, Cedar Lake, Indiana ("the real estate") and named Atul Kumar ("Kumar") as a defendant. Kumar had purchased the real estate at a tax sale but failed to record his deed. The trial court granted Bay Bridge’s motion for summary judgment. Kumar appeals and raises several issues. However, we address only the following dispositive issue: whether Bay Bridge was a bona fide purchaser of the real estate at issue.

Conclusion (slip op. at 7): The trial court properly granted Bay Bridge’s motion for summary judgment on its complaint to quiet title. Affirmed.

Key Analysis (slip op. at 6, 7): Kumar failed to record his tax deed as required by Indiana Code section 32-21-4-1, and it remained unrecorded until after Bay Bridge filed its complaint to quiet title. Therefore, Bay Bridge did not have constructive notice of Kumar’s interest in the real estate at issue . . . With regard to actual notice, prior to purchasing the property, Bay Bridge requested a title search, which found of record no lis pendens, no certificate of tax sale, no tax deed, nor any other record interest of Atul Kumar in the property purchased by Bay Bridge. Moreover, Kumar did not designate any evidence to the trial court which would establish that Bay Bridge had actual notice of his claimed interest in the property.

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Donald L. Shaum and Nancy V. Shaum appeal the trial court’s grant of summary judgment to Progressive Engineering, Inc., and Dennis Gobble. The Shaums raise seven issues, which we consolidate and restate as whether the trial court erred by granting summary judgment and determining that the Shaums’ claim against Progressive and Gobble was filed outside of the statute of limitations.

Conclusion (slip op. at 8): We affirm the trial court’s grant of summary judgment to Progressive Engineering and Gobble.

Key Analysis (slip op. at 6, 7): For an action to accrue, it is not necessary that the full extent of the damage be known or even ascertainable, but only that some ascertainable damage has occurred . . . We hold that the two-year statute of limitations applies here as this is a claim for professional malpractice. Further, even if the six-year statute of limitations of Ind. Code § 34-11-2-7 applied, we conclude that the Shaums’ action against Progressive Engineering and Gobble was untimely . . . The Shaums should have known of the land dispute and discovered the survey error in 1997 when McClure constructed his residence on the disputed property.

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Appellants-Defendants, Bledsoe's, Inc. (Bledsoe's) and John Cress d/b/a West Otter Lake Estates (Cress), appeal the trial court's grant of summary judgment to Appellee-Plaintiff, Steuben Lakes Regional Waste District (the District). Cress raises two issues, the first of which Bledsoe's joins, which we restate as:

(1) Whether Ordinance No. 2002-03 is unconstitutionally vague for failing to define the terms "mobile home park" and "trailer park"; and

(2) Whether Cress should be required to pay sewage fees for the period prior to which his property was connected to the sewage system.

Conclusion (slip op. at 14):  We conclude that the ordinances are not unconstitutionally vague. Further, we conclude that the trial court erred by granting summary judgment to the District on its claim that it had properly billed Cress prior to his property's connection to the sewage system. Affirmed in part, reversed in part, and remanded for further proceedings.

Key Analysis (slip op. at 9, 13-14):  We conclude that the ordinances are sufficiently specific to provide fair warning to users such as Bledsoe's and Cress. If customers such as Bledsoe's and Cress wish to be treated as a campground and billed as a commercial property, their option is clear: reduce the amount of annual accommodations on their real property attributable to mobile homes . . . A substantial portion of the monthly fees billed to Cress were likely attributable to paying for the debt incurred by the District for the installation of the sewage system. Billing customers for such an expense prior to connection would fall within the District's discretion.

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Boehm, Justice.

In State v. Ensley, this Court held that roadway improvements that reduce or interfere with traffic flow to a commercial property do not constitute takings of a property right of the owner of the property. We reaffirm Ensley and hold that the shopping center owners are not entitled to consequential damages from street reconfigurations that affect traffic flow through the center and prevent expansion of existing points of ingress or egress, but leave existing points in place.

Conclusion (slip op. at 12):  Given the record testimony assessing the compensable takings at no more than $100,700, the $2,300,000 verdict is excessive as a matter of law. The judgment of the trial court is reversed and the cause remanded for proceedings consistent with this opinion.

Key Analysis (slip op. at 10, 11, 12):  The only substantive allegation is that traffic flow to the shopping complex has been encumbered. Under Ensley and its progeny, these consequences from the State's roadway improvements are not compensable because no property right has been taken . . . It is well settled that a property owner is not entitled to unlimited access to abutting property at all points along the highway . . . As a matter of law, under Ensley, the redirected traffic flow is not a deprivation of a property right.

Shepard, C.J., and Sullivan, J., concur. Dickson and Rucker, JJ., dissent, believing that the Court of Appeals correctly decided this case.

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Todd S. and Dawn E. Coombes (the Petitioners) challenge the final determination of the Indiana Board of Tax Review (Indiana Board) valuing their real property as of the March 1, 2003 assessment date. The Petitioners present one issue on appeal, which the Court restates as:  Whether the Indiana Board erred when it failed to value the Petitioners' land at $42,000.

Conclusion (slip op. at 7):  The Indiana Board's final determination is affirmed.

Key Analysis (slip op. at 7):  The 2002 neighborhood valuation form, as duly-promulgated, actually contained a "catch-all" provision under which Bridgewater generally – and the Petitioners' lot specifically – could be assessed in 2003 . . . As the Indiana Board properly concluded, there was no need for local assessing officials to amend the applicable 2002 neighborhood valuation form. As a result, the Petitioners' procedural due process rights have not been violated.

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Indiana Insurance Co. ("Indiana") filed the underlying declaratory judgment action requesting that the trial court determine whether the insurance policy it sold to T.R. Bulger, Inc. ("Bulger") covers losses sustained by a homeowner as a result of Bulger's faulty installation of a heating, ventilation, and air conditioning ("HVAC") system. The trial court granted summary judgment in favor of Indiana and Bulger appealed. For our review, Bulger raises three issues, which we consolidate and restate as: whether the trial court erred when it granted summary judgment in favor of Indiana.

Conclusion (slip op. at 11-12):  There is no genuine issue of material fact that Cipares acted as Bulger's agent until Bulger signed the insurance policy. Therefore, the trial court did not err in granting summary judgment in favor of Indiana on this issue. However, there are genuine issues of material fact regarding whether Bulger's faulty workmanship caused property damage to the rest of the Mussmans' house, whether such damage comprised a portion of the arbitration award, and whether such damages are covered by the products-completed operations hazard policy. Therefore, the trial court erred in granting summary judgment in favor of Indiana on this issue. Affirmed in part, reversed in part, and remanded for further proceedings in light of this opinion.

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Appellant-Defendant Thomas Grabowski ("Thomas") appeals the trial court's denial of his motion to set aside a default judgment entered in favor of Appellees-Plaintiffs Brian Waters and Richard Klare (collectively, "Plaintiffs") in their action to quiet title to certain real estate previously owned by Thomas's parents, Frank and Jane Grabowski ("the Grabowskis"). Upon appeal, Thomas claims that the default judgment is void for lack of personal jurisdiction due to improper service of process.

Conclusion (slip op. at 12):  The judgment of the trial court is affirmed.

Key Analysis (slip op. at 12):  Because the instant case involved tax-sale property previously owned by now-deceased persons lacking an estate or named representative, and given the Plaintiffs' efforts to serve these persons and their unnamed heirs and successors in interest both at their last known address and by publication in the county where the property at issue is located, we agree with the trial court that such notice was reasonably calculated to apprise the persons and their unnamed successors in interest, including Thomas, of the instant action. This is so especially in light of the fact that the record lacks evidence demonstrating how a more diligent search would have revealed the identities or locations of interested parties.

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UNPUBLISHED

Appellants-Defendants, Randyl A. McCauley (Randyl) and Deanna R. McCauley (Deanna) (collectively, the McCauleys), appeal the trial court's order permanently enjoining them from entering onto an easement over the property of Appellee-Plaintiff, Dale W. DuKate (DuKate), and requiring them to remove a water line and meter from DuKate's property. DuKate cross-appeals the trial court's judgment in favor of the McCauleys on his claim for trespass.

Conclusion (slip op. at 12):  We conclude that the trial court erred in permanently enjoining the McCauleys from entering onto the easement described in the quitclaim deed and by ordering them to remove the water line and meter from DuKate's property. We remand this cause to the trial court with instructions to amend its order accordingly. However, we affirm the trial court's judgment in favor of the McCauleys on DuKate's claim of trespass.

Key Analysis (slip op. at 7, 9-10): Reviewing the survey in conjunction with the deed, only one reasonable conclusion can be reached: DuKate intended to grant the easement to the McCauleys so that they can reach the county road. Therefore, the trial court erred in permanently enjoining the McCauleys from entering onto the easement . . . Evidence tends to prove that the McCauleys had DuKate's permission to install the water line and meter on DuKate's property. This conclusion disposes of DuKate's argument that the trial court properly ordered the McCauleys to remove the water line and meter.

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Robert V. Rohrman (Rohrman) appeals the final determination of the Indiana Board of Tax Review (Indiana Board) valuing his real property as of the March 1, 2004 and 2005 assessment dates. The matter is currently before the Court on the Tippecanoe County Assessor’s (the Assessor) motion to dismiss. The Assessor seeks to have Rohrman’s appeal dismissed on the basis that Rohrman had 45 days from the date of the Indiana Board’s final determination to file an original tax appeal which named her as the respondent and to effect service of process upon her. The Assessor maintains that because Rohrman did not name her as a respondent and serve her until December 12, 2008, when he filed his amended petition – which was 53 days after the Indiana Board’s final determination – Rohrman should not be permitted to amend his Petition and this matter should be dismissed.

Conclusion (slip op. at 5):  The Assessor’s motion to dismiss is denied. The case shall therefore proceed on its merits, with briefing due in accordance with this Court’s order of January 30, 2009.

Key Analysis (slip op. at 3):  Rohrman’s failure to name the Assessor in his December 1, 2008 petition is not the type of error that implicates this Court’s subject matter jurisdiction. Rather, it is the type of procedural error that may prevent this Court from exercising its jurisdiction . . . While the general rule requires that a new defendant to a claim be added prior to the running of the statute of limitations, Trial Rule 15(C) provides an exception.

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The Lake County Assessor, the Calumet Township Assessor, and the Lake County Property Tax Assessment Board of Appeals (PTABOA) (collectively, Lake County) appeal the final determination of the Indiana Board of Tax Review (Indiana Board) valuing United States Steel Corporation's (US Steel) real property as of the March 1, 2001 assessment date.

On appeal, Lake County presents several issues for the Court to decide. The Court restates those issues as:

I. Whether the Indiana Board erred when it admitted US Steel's Excess Cost Report under Calculation #1-B because it was not "scientifically reliable";
II. Whether the Indiana Board erred when it failed to discount US Steel's total functional obsolescence award by $23,112, 230;
III. Whether the Indiana Board erred when it failed to find that Calculation #2 was invalid because it utilized bankruptcy sales in its sales comparison approach;
IV. Whether the Indiana Board erred when it held that US Steel was entitled to an obsolescence adjustment at all, given the result of Calculation #1-C; and
V. Whether the Indiana Board erred in reducing the assessed value of US Steel's land.

Conclusion (slip op. at 18):  The Indiana Board's final determination with respect to Issues I, III, and IV are affirmed. The Indiana Board's final determination with respect to Issues II and V, however, are reversed. The matter is remanded to the Indiana Board to make adjustments to US Steel's 2001 real property assessment consistent with this opinion. 
 
Key Analysis (slip op. at 7, 8, 12-13):  Time and time again, over the course of the last ten years, this Court has explained that generally recognized appraisal techniques are acceptable methods by which to quantify obsolescence in Indiana's pre-2002 assessment system . . . The Court has held that the method utilized by US Steel in its Report is a generally recognized appraisal technique for calculating functional obsolescence . . . Many jurisdictions ascribe to the theory that bankruptcy sales can be reliable indicators of property value . . . Lake County's blanket assertion that the bankruptcy sales cannot be used as comparables goes to the weight of US Steel's evidence, not its admissibility. As such, Lake County's assertion is without merit.
 

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Shepard, Chief Justice.

The City of South Bend now owns much of the land where Studebaker Corp. once manufactured automobiles. It has sued Cooper Industries, LLC and others for environmental damage done to the site. In this appeal, the questions are whether the applicable statute of limitation bars these claims and whether appellant Cooper Industries is the corporate successor to Studebaker such that it may be liable on these environmental claims. We hold that the statute of limitation bars the City's common law claims, that its claim under the Environmental Legal Action statute accrued at the time the statute became effective and thus is not barred, and that Cooper is the corporate successor to Studebaker for these purposes.

Conclusion (slip op. at 32): We affirm the trial court's order and remand for further proceedings on the merits of the ELA claim.

Key Analysis (slip op. at 22, 30, 31): Because we understand the ELA as addressing the issue of "brownfields," that the legislature did not intend to bar cities from bringing these actions, and that the statute of limitation did not run until the cause existed, we hold that South Bend may proceed with its ELA claims . . . The fact the successor corporation was incorporated in Delaware does not control. While the law of the state of incorporation may determine issues relating to the internal affairs of a corporation, different principles apply where the rights of third parties external to the corporation are at issue . . . This case is a claim about property damage. The injury occurred in Indiana. The law of the place of the wrong occurred (lex loci delicti) governs. In disputes such as this, particularly because it involves a third person, the law of the state with the most significant relationship to the dispute – here Indiana – applies.

Dickson, Sullivan, Boehm, and Rucker, JJ., concur.

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UNPUBLISHED

The Gary Community School Corporation (the School) appeals from a jury verdict in favor of Lolita Roach-Walker (Walker) on Walker's complaint for damages arising from her slip and fall on the School's property. The School presents two issues for review, which we consolidate and restate as whether the School is entitled to immunity from liability under Indiana Code Section 34-13-3-3 of the Indiana Tort Claims Act (the Act).

Conclusion (slip op. at 6):  We conclude as a matter of law that the School has not demonstrated that it was entitled to immunity under the Indiana Tort Claims Act. Affirmed.

Key Analysis (slip op. at 3-4, 5):  Immunity under Section 34-13-3-3 contains two key concepts, one temporal and one causal. A determination of whether a condition is temporary or permanent is separate from a determination of whether the condition is due to some other cause. The focus of whether the condition is permanent is whether the governmental body has had the time and opportunity to remove the condition but failed to do so . . . The School has not met its burden to show on appeal that the condition that caused Walker's fall was temporary.