Indiana Law Update

IN THE NEWS: Black’s Law Dictionary Now in iTunes
Posted April 24, 2009 from the ABA Journal
By Molly McDonough
Adding to the ever-expanding toolbox for the wired lawyer who needs to work while on the go, West has launched a Black's Law Dictionary in iTunes. “The idea that you can have a very full, elaborate, complex and richly-textured book like Black’s available at your fingertips is fantastic,” the dictionary's editor Bryan A. Garner said in a statement.
Before heading to the app store, be forewarned that the price is a bit steep compared to most of the freebies or less-than-a-dollar applications many are used to seeing. The Federal Rules of Evidence are available on The Law Pod app for 99 cents. And the U.S. Constitution is available in a number of apps for free or for a nominal price. So what’s West’s price for the Black's Law Dictionary? $49.99.

P.S. Indiana Law Update is also now available in iTunes

1. Continuing objections: Hayworth v. State of Indiana, 2009 WL 1058612 (Ind.Ct.App. April 20, 2009) (Vaidik)

At trial, Hayworth's attorney attempted to lodge a continuing objection to the evidence seized pursuant to the search warrant. However, after asking for a continuing objection, Hayworth affirmatively said “No objection” to the vast majority of the evidence. We take the opportunity here to clarify that once counsel lodges a sufficiently specific objection to a particular class of evidence and the trial court grants a continuing objection, the proper procedure is to remain silent during the subsequent admission of that class of evidence. We therefore find that Hayworth has waived her objection to the evidence seized during the search warrant for which she affirmatively stated “No objection.”
Indiana recognizes continuing objections. This is because continuing objections serve a useful purpose in trials. That is, they avoid the futility and waste of time inherent in requiring repetition of the same unsuccessful objection each time evidence of a given character is offered.
However, as this case illustrates, there are dangers to using continuing objections. As such, the proper procedure must be carefully followed if attorneys wish to use continuing objections and still properly preserve the admission of specific evidence as an issue on appeal. First, objecting counsel must ask the trial court to consider the same objection to be made and overruled each time a class of evidence is offered. It is within the trial court's discretion to grant counsel a continuing objection. If the trial court grants the continuing objection, then counsel does not have to object each time the class of evidence is subsequently offered. If, however, the trial court does not specifically grant the right to a continuing objection, it is counsel's duty to object to the evidence as it is offered in order to preserve the issue for appeal.
Objecting counsel must ensure, however, that the continuing objection fully and clearly advises the trial court of the specific grounds for the objection. If so, the issue is sufficiently preserved for appeal.
Hayworth’s counsel stated: “Judge, I need to make a continuing objection to all this evidence because there was a Motion to Suppress filed prior to this with regard to all of the things they've found and they wanted-Just note my continuing objection to any of this evidence, pursuant to that motion.”
The trial court did not specifically grant Hayworth a continuing objection. Because the court did not grant Hayworth a continuing objection, she must have objected to each and every piece of evidence in order to preserve her challenge to that evidence on appeal.
Even though Hayworth repeated her continuing objection to several exhibits, there were other exhibits to which Hayworth inexplicably said, “No objection.” On appeal, Hayworth asserts that “No objection” really meant “no objection other than the continuing objection.” However, we will not read “No objection,” a simple and powerful two-word phrase, to have such meaning. We thus find that Hayworth has waived her objection to the admission of the evidence seized during the execution of the search warrant.
Although we determined that Hayworth waived her objection to some of this evidence by stating “No objection,” we conclude that the admission of this evidence amounts to fundamental error. Given the misleading statements in Detective Southerland's affidavit and the police's utter lack of corroboration of the informant's statements of criminal activity, we find the error to be so prejudicial to the rights of Hayworth as to make a fair trial impossible.

Lesson: To make a continuing objection: (1) Ask the trial judge to allow a continuing objection to a specific class of evidence; (2) Get a clear ruling on the record allowing the continuing objection; and (3) thereafter, remain silent when evidence in the class is offered.

2. The doctrine of completeness: Donaldson v. State of Indiana, 2009
WL 997088 (Ind.Ct.App. April 13, 2009) (Riley)

Appellant-Defendant, Jacob A. Donaldson (Donaldson), appeals his conviction for operating a motor vehicle while privileges are suspended, as a Class A misdemeanor. Donaldson argues that the trial court abused its discretion by admitting State's Exhibit 1 as evidence because it did not contain his complete driving record. Donaldson contends that State's Exhibit 1 “purported to be a complete driving record.” However, this contention is erroneous. The request for record by the State was entitled “Request for HTV Packet.” Donaldson makes no contention that State's Exhibit 1 was not a complete HTV packet. As such, we cannot say that the trial court abused its discretion by determining that State's Exhibit 1 was a complete record.
Moreover, the remedy which Donaldson seeks, reversal of the conviction, would not be the correct remedy even if State's Exhibit 1 was an incomplete record. Donaldson cites to Ind. Evidence Rule 106 for support, which provides: “When a writing or recorded statement or part thereof is introduced by a party, an adverse party may require at that time the introduction of any other part or any other writing or recorded statement which in fairness ought to be considered contemporaneously with it.” When applying this rule, we have stated that, “[u]nder the doctrine of completeness, when one party seeks to admit a portion of a document or recorded statement into evidence, the opposing party can place the remainder of the statement into evidence.” Donaldson has access to his own driving record, just as the State does, and was at liberty to admit any portion thereof which promoted his defense.

Lessons:
1. To preserve a Rule 106 objection, the objecting party should offer the remainder of the incomplete record into evidence.
2. A subset of a file can be a complete record for purposes of Rule 106.

3. Jurors reading text messages: Hape v. State of Indiana, 903 N.E.2d 977 (Ind.Ct.App. March 31, 2009) (Vaidik)

Darby L. Hape was convicted by a jury of Class A felony possession of methamphetamine with the intent to deliver and Class D felony resisting law enforcement and was found to be a habitual offender. After trial, the parties learned that the jury, during deliberations, read text messages saved in Hape's cellular telephone that were previously undiscovered by the State and the defense. The cellular telephone was admitted into evidence during trial as part of an exhibit showing the items confiscated from Hape at the time of his arrest.
Hape contends that the trial court erred in denying his motion to poll the jury about the effect that the text messages had upon the verdict. He argues that the trial court's denial of this motion “deprived [him] of his ability to question and poll jury members on the issue of prejudicial error.”
Indiana Evidence Rule 606(b) provides for the polling of a jury as part of an inquiry into the validity of a verdict in limited circumstances. The rule provides, in part:
Inquiry into Validity of Verdict or Indictment. Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter or statement occurring during the course of the jury's deliberations or to the effect of anything upon that or any other juror's mind or emotions as influencing the juror to assent to or dissent from the verdict or indictment or concerning the juror's mental processes in connection therewith, except that a juror may testify ... on the question of whether extraneous prejudicial information was improperly brought to the jury's attention[.]
Thus, as a general matter, a jury's verdict may not be impeached by evidence from the jurors who returned it. However, “extrinsic or extraneous material brought into deliberation may be grounds for impeaching a verdict where there is a substantial possibility that such extrinsic material prejudiced the verdict.”
The defendant’s cellular telephone was admitted into evidence without objection. Turning on the telephone did not constitute an extrajudicial experiment that impermissibly exposed the jury to extraneous information. First, the text messages themselves are not extraneous to the cellular telephone. We agree with the State that text messages are intrinsic to the cellular telephones in which they are stored. “Intrinsic,” as defined by Black's Law Dictionary, means “[b]elonging to a thing by its very nature; not dependent on external circumstances; inherent; essential.” We conclude that the text messages at issue here are part and parcel of the cellular telephone in which they were stored, just as pages in a book belong to the book by their very nature, and thus they are intrinsic to the telephone. Hape may not impeach the jury's verdict with affidavits regarding the text messages.
To lay a foundation for the admission of evidence, the proponent of the evidence must show that it has been authenticated. “The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims.” Ind. Evidence Rule 901(a).
We see no reason why the writings or recordings generated and saved inside of a cellular telephone should be exempted from the same authentication requirement. The proponent of a piece of evidence has to decide the purpose for which the evidence is offered. Even though we have determined that a text message stored in a cellular telephone is intrinsic to the telephone, a proponent may offer the substance of the text message for an evidentiary purpose unique from the purpose served by the telephone itself. Rather, in such cases, the text message must be separately authenticated pursuant to Indiana Evidence Rule 901(a).
Nevertheless, the presentation of the text messages to the jury without proper authentication did not rise to the level of fundamental error because the jury's exposure to the text messages was harmless error.

Lessons:
1. Be careful when admitting electronic evidence; make sure you know what’s on it or in it.
2. Text messages should be authenticated separately from the telephone on which they may be found.

4. Jurors reading newspapers: Jackson v. State of Indiana, 903 N.E.2d 542
(Ind.Ct.App. March 31, 2009) (Bradford)

A jury was sworn and impaneled on April 23, 2007. That same day, a local newspaper ran an article about the trial which contained an excerpt from a letter the defendant Jackson had written to Jefferson County's chief deputy prosecutor. Jackson was quoted as writing “I know my life to you doesn't mean anything, just another poor black man the [S]tate can clean up the book on.”
First thing the next morning, the State requested a mistrial. The trial court asked the jury if any members knew of the article and five acknowledged they did. The trial court then held voir dire with each of those five jurors individually to determine what they knew about the newspaper article.
• The first juror questioned stated that he saw the article and read the first couple of sentences, but remembered that he had been instructed to stay away from newspaper articles or radio coverage of the trial, and stopped reading. He testified that what he read would not influence his determination of guilt or innocence.
• The second juror that was questioned stated that he read the article. He stated that he did not know the facts of the case and the article did not influence him to lean toward either side.
• The third juror questioned stated that his wife started reading the article aloud, but he told her to stop.
• The fourth juror stated that her husband started reading the article but she told him to stop. Her husband stopped reading, but told her he knew “that person in [the] article.” She testified that she heard nothing that would cause her to form an opinion either way, and that her husband knowing Roberts would not influence her either.
• The fifth and final juror who knew of the article stated that he had read the article. He testified that the part about the letter to the chief deputy prosecutor meant nothing to him because he did not know the facts of the case. He said the article would not influence him in any way.
After voir dire and taking argument from the State and Jackson, the trial court granted the State’s motion for a mistrial.
Before addressing Jackson's contention, we address the State's contention that Jackson has waived this issue for review by failing to object to the grant of the mistrial. Although Jackson's attorney never uttered the words “I object,” he did explain to the trial court that all of the jurors questioned about reading the article have “indicated it has not had any impact upon their ability to be fair and impartial jurors in this case, and for that reason we believe a mistrial would not be appropriate.” We conclude that this is a sufficient objection to preserve this issue for appeal.
The fact that a juror has read a newspaper article pertaining to a case is not grounds for a mistrial, new trial, or reversal unless it is shown that the jurors were influenced thereby. A mistrial is an extreme remedy in a criminal case and should be granted only when nothing else can rectify the situation.
We conclude that an admonition from the trial court would have been sufficient considering the limited nature of the jury's exposure to the passage from the article and lack of evidence that the article influenced any juror. As such, the trial court abused its discretion by granting the mistrial.
Once jeopardy has attached, the trial court may not grant a mistrial over a defendant's objection unless “manifest necessity” for the mistrial is found. We conclude that the discharge of the jury at Jackson's second trial operated as an acquittal and the subsequent trial of Jackson was a violation of his right to be free from double jeopardy.

Dissent by J. Bradford: The prosecutor argued that the State's case was irretrievably compromised, both because the prosecutor had been branded a racist and because Jackson had been permitted to allege unfairness by the State without risk of cross-examination. Although the jurors had reassured the court that they had not been influenced by the article, the trial court was not required to accept their claims on this point. I would affirm the trial court on the grounds that a “high degree” of necessity existed justifying the State's request for mistrial such that retrial did not violate double jeopardy.

Lessons:
1. Expect some jurors to read (or be told) what’s in the newspapers even when instructed otherwise.
2. Declaring a mistrial is not always the safe course in a criminal case where double jeopardy creates risks that are not present in civil cases.
3. You needn’t use the word “object” to preserve an objection but your opposition to the motion should be stated clearly on the record.




5. Jurors watching the news: Morgan v. State of Indiana, 903 N.E.2d 1010
(Ind.Ct.App. April 7, 2009) (Brown)

The State charged Morgan with murder, felony murder, and robbery as a class A felony. Ocie Brasher was Morgan's friend, and in March 2008, they were incarcerated in the Marion County Jail at the same time. Morgan told Brasher that he and Price had robbed and killed Hager.
Brasher informed the police about Morgan's statements. Brasher was subpoenaed to testify at Morgan's trial. He appeared as required, and the victim's advocate escorted him to the witness waiting room. However, he disappeared from the witness waiting room before he testified. Various agencies and approximately fifty officers attempted to locate Brasher. Over Morgan's objection, Brasher's deposition was read to the jury.
During the trial, the trial court learned that several jurors had been exposed to publicity and information concerning Brasher's disappearance. Seven jurors indicated they had been exposed to such information, and the trial court questioned those jurors individually. Morgan argued at trial and on appeal that Juror Jackson and Juror Peyton should have been dismissed.
Juror Jackson indicated that she heard on the 10:00 p.m. news the night before that a witness was missing and Morgan's name was mentioned. Juror Peyton informed the trial court that his mother had called him that morning and told him that a witness was missing in a murder trial. Other jurors indicated that Juror Jackson and Juror Peyton had mentioned the missing witness in the jury room.
Both jurors indicated that they could disregard the information and base their decision solely upon the evidence presented at trial, and the jurors were admonished that their decision must be “exclusively, solely based on the evidence that [they heard] from the witness stand” and that they were not to consider outside sources.
Given our deference to the trial court in these matters, we conclude that the trial court did not abuse its discretion by denying Morgan's request to dismiss the two jurors.

Lessons:
1. Expect some jurors to watch the news on television even when instructed otherwise.
2. Watching the news need not lead to disqualification if the jurors say that the broadcast will not influence their decision and they’ll make their decision solely on the evidence from the witness stand.

6. Waiving challenges for cause; individual voir dire: Ward v. State of Indiana, 903 N.E.2d (Ind. April 7, 2009)(Shepard)

The defendant, Roy Lee Ward, appeals his death sentence for the 2001 rape and murder of fifteen-year-old Stacy Payne in Dale, Spencer County, Indiana. The defendant presents two discrete claims of trial court error regarding the conduct of voir dire, the trial court's jury selection process. He contends that the trial court erred (a) in failing to strike ten prospective jurors for cause, and (b) by changing the method of questioning potential jurors about the death penalty from initially speaking with one juror at a time to later discussing the issue with small groups of jurors. To support these claims, the defendant argues that he was forced to use his peremptory challenges on prospective jurors who should have been removed for cause, thus compelling him to accept other jurors who, though not challengeable for cause, held biases favorable to the death penalty for the pleaded-to offenses and unfavorable to dispassionate consideration of his mitigation evidence.
The United States Supreme Court addressed a similar claim in Ross v. Oklahoma, 487 U.S. 81, 108 S.Ct. 2273, 101 L.Ed.2d 80 (1988). The Ross Court found that any claim that the jury was partial must focus not on the removed juror, but rather “on the jurors who ultimately sat.” The Court stated:
Petitioner was undoubtedly required to exercise a peremptory challenge to cure the trial court's error. But we reject the notion that the loss of a peremptory challenge constitutes a violation of the constitutional right to an impartial jury. So long as the jury that sits is impartial, the fact that the defendant had to use a peremptory challenge to achieve that result does not mean the Sixth Amendment was violated.
The Court concluded that failing to dismiss the juror for cause, while error, “did not deprive petitioner of an impartial jury or of any interest provided by the State.”
In light of this reasoning, it is irrelevant whether the trial court erred in denying any of the defendant's challenges for cause. Of the jurors who were selected to serve, only one was challenged for cause by the defendant, and this challenge was denied by the trial court. The defendant does not question this ruling on appeal. We therefore decline the defendant's request for reversal of his death penalty sentence premised on the trial court's failure to grant his challenges for cause with respect to jurors he later removed by peremptory challenge.
The defendant also contends that the trial court erred by changing the mode of voir dire from individual to group questioning of prospective jurors. This change, he asserts generally, “exposed members of the jury panels to grossly prejudicial opinions and statements.”
Two days before the trial began, the trial judge informed counsel that, in light of the broadcast publicity regarding unidentified “events of last week,” the questioning of prospective jurors regarding the death penalty and publicity would be done individually, away from other prospective jurors. But the trial judge quickly recognized that “[a]t the rate we[']re going, it will be months, not days, before we get a jury picked,” and modified that plan following lunch recess on the first day of voir dire. The court explained that henceforth the “only individual voir dire will be on the issue of pretrial publicity” and that “everybody else will be voir dired together on the death penalty questions.”
Other than his general trial objection to the judge's change in format, however, the defendant does not identify any particular objection made during the ensuing voir dire asserting improper exposure of prospective jurors to prejudicial statements. He does not assert on appeal any claim that specific jurors were permitted to serve following a trial court failure to grant a defense challenge for cause arising out of any such incidents.
A trial court has broad discretionary power to regulate the form and substance of voir dire. Individually sequestered voir dire is not mandated in any case under Indiana law, including capital cases, absent highly unusual or potentially damaging circumstances. The defendant has not established reversible error in the trial court's modification of the format for questioning potential jurors in this case.

Lessons:
1. The improper denial of a challenge for cause is waived by use of a peremptory challenge.
2. There is no right to voir dire individually, separate from other jurors, even in a death penalty case.

7. Just cause for termination due to personal emails: Coleman v. Review Board of Indiana, 901 N.E.2d 1176 (Ind.Ct.App. Feb. 11, 2009) (Barnes)

Garry Coleman appeals the denial of unemployment compensation benefits by the Department of Workforce Development (“DWD”) following the termination of his employment with the Indiana Department of Local Government Finance (“DLGF”). We address only one dispositive issue, which is whether there is sufficient evidence that the DLGF terminated Coleman's employment for “just cause.”
We are reminded that emails last forever and can come back to haunt the writer. The DLGF hired Coleman as a systems analyst in June 2005. Coleman signed an “Information Resources Use Agreement” providing a “De Minimis Personal Use” policy that required Coleman to “make every effort to minimize personal use of Information Resources.”
On January 25, 2008, the DLGF Commissioner sent Coleman a letter stating that his employment was terminated for violating the “de minimis” exception and for distributing inappropriate comments or messages via his DLGF email account. The letter listed six dates on which Coleman allegedly had violated these policies, and claimed he had wasted a total of sixteen hours sending improper or excessive emails.
We conclude the record here lacks substantial evidence to support a finding that Coleman knowingly violated a uniformly enforced rule. There might be a situation where email usage is so inordinate that it should be clear to any reasonable person that it exceeded a “de minimis” amount, thus justifying immediate termination. This is not such a case. What is in this record are ten email conversations that Coleman participated in over the course of many months. Coleman did not initiate many of them, and none of them were lengthy dissertations.
On that point, we observe that the termination letter also alleged that Coleman sent “inappropriate” material through email at work. It is abundantly clear that to the extent the DLGF has a ban on sending “inappropriate” messages or items through email, the DLGF does not uniformly enforce that ban. The most explicit sexual material in the record is the emailed photograph appearing to depict two persons having sex atop a bridge. The DLGF employee who originally sent that photograph to numerous recipients, instead of being fired, was given a raise after Coleman was terminated.
Certainly, the DLGF is entitled to restrict the amount of personal emailing that its employees do during work hours. The DLGF could have confronted Coleman about his email usage if it felt that usage exceeded the vague “de minimis” boundary. The DLGF also was entitled to fire Coleman when it did, particularly given his apparent dislike of his superiors at the agency; this is not a wrongful termination case. But the DLGF failed to establish that Coleman's firing, with no advance warning regarding his email usage, was for just cause as that term applies in the context of unemployment insurance.

Lessons:
1. An employer may limit personal email usage on office computers to a de minimis level.
2. Ten email conversations over many months does not clearly exceed that level.



8. Buyer’s duty to inspect real property: Dickerson v. Strand and German, 2009 WL 1124453 (Ind.App.Ct. April 24, 2009) (Riley)

In 1995, Strand and German purchased a house in Ladoga, Indiana. At that time, S S Pest Control inspected the house and noted visual evidence of active termite infestation in the “crawl space north foundation wall and base sill plate.” In early 2000, Strand and German wanted to sell the house and hired Central Indiana Home Inspections to inspect it. In its report, under the heading “Major Structural Defects,” Central Indiana Home Inspections stated, “Some floor joists & the box sill on the north side by the deck have termite damage. Some re-enforcement has been done to the joists but not the box sill.”
On March 17, 2000, after having toured the house “a couple of times” with Strand and German’s agent, the Dickersons signed an agreement to purchase the house. The agreement gave the Dickersons the right to have the house inspected. The Dickersons never had their own inspection done.
In October of 2003, the Dickersons hired Rob Wethington to replace the siding on the house. Wethington uncovered significant termite damage.
On April 12, 2004, the Dickersons filed a Complaint against Strand and German alleging, among other things, fraud. The Dickersons contend that Strand and German made fraudulent statements in two different documents: in the Seller’s Residential Real Estate Sales Disclosure form, where they indicated that the house had no structural problems at the time of closing, and in the Purchaser’s Response Regarding Inspection, where they indicated that Dawson had re-enforced the floor and wall on the north side of the house.
We need not decide whether Strand and German’s representations were fraudulent because, under Indiana law, the Dickersons had no right to rely on those representations. In Cagney v. Cuson, 77 Ind. 494, 1881 WL 6689 (1881), the plaintiff alleged that the defendant made certain fraudulent statements in order to induce the plaintiff to buy land and farm equipment. The plaintiff had “a suitable opportunity of examining both the lands and the personal property” but failed to do so. Our supreme court held that, even as to fraudulent representations operating as an inducement to the sale or exchange of property, “the purchaser has no right to rely upon the representations of the vendor as to the quality of the property, where he has a reasonable opportunity of examining the property and judging for himself as to its qualities.”
Though we had to dust it off, Cagney is still good law, and the Dickersons offer us no way around it. The Dickersons, like the plaintiff in Cagney, had a reasonable opportunity to inspect the house. The fact that the Dickersons did not actually inspect the house is irrelevant; under Cagney, it is the opportunity to inspect that matters. We encourage our supreme court to reevaluate the social value of a rule allowing a seller of property to lie with impunity as long as the prospective buyer had a reasonable opportunity to inspect the property. But until then, we are bound by that rule.
Fn.: We might have reached a different result if the Dickersons had directed us to evidence tending to show that a reasonable inspection of the house would not have revealed the termite damage in question.

Lessons:
1. A buyer of real estate cannot sue a seller for misrepresentations about the property if the buyer could have learned the truth by inspection.
2. In light of Judge Riley’s urging that the Supreme Court to reevaluate the rule and the dissent by Judge Vaidik based on the disclosure statute, this rule could change soon.
3. In the meantime, if you’re a buyer, get an inspection.

9. Insurance agent liability: Mintz v. Connecticut General Life, 903 N.E.2d (Ind. March 25, 2009) (Rucker)

By March 1995, then sixty-four-year-old Dr. Jerome Mintz had been a professor at Indiana University for over thirty years. On March 22, 1995, the University sent Mintz a letter advising him that his total life insurance coverage would be reduced from $178,000 to $115,700 on his sixty-fifth birthday unless he exercised a conversion option. The letter also instructed Mintz to contact Wayne Gruber with any questions regarding the conversion. Gruber was a servicing agent for the University.
Mintz and his wife Betty telephoned Gruber to make arrangements to convert the group coverage into individual policies. They informed Gruber that Mintz was terminally ill with lung disease and leukemia and wanted to convert the entire value of the group coverage to individual policies. According to Mrs. Mintz, Gruber responded, “Absolutely. Just leave it to me. I will do everything.”
In February 1996, Mrs. Mintz discovered that the entire value of the group coverage had not been converted into individual policies; but rather, only coverage worth $62,300 had been converted. On April 21, 1997, Mintz filed a complaint against Gruber and Connecticut General alleging negligence, breach of contract, and intentional infliction of emotional distress.
The trial court concluded Gruber was entitled to summary judgment on the Estate's negligence claim because Mintz’s injuries “were not proximately caused by Gruber’s negligence ...” Pointing in part to the letters the Estate received from both Indiana University and Gruber, and characterizing Gruber’s representation that he would “take care of everything” as an “initial general statement to offer the Mintzes help through the process of conversion,” the Court of Appeals' majority also concluded that “Gruber’s actions were not the proximate cause of the Mintzes’ loss of insurance coverage.”
We make two observations. First, “summary judgment is generally inappropriate in negligence cases because issues of contributory negligence, causation, and reasonable care are more appropriately left for the trier of fact.” Whether Gruber’s actions proximately caused the Mintzes’ injuries is highly fact sensitive and more appropriately left for resolution by a fact-finder than resolved by summary disposition. We conclude therefore that the trial court erred in granting summary judgment in Gruber’s favor on the basis of a lack of proximate cause.
The Estate contends the trial court erred in granting summary judgment in Connecticut General’ s favor because genuine issues of material fact remain as to whether Gruber was an agent of Connecticut General such that it is liable for Gruber's negligence. The term “insurance agent” is often used loosely. Depending on whose interests the “insurance agent” is representing, he or she may be a “broker” or an “agent.” A critical distinction exists.
A representative of the insured is known as an “insurance broker.” As a general rule, a broker is the agent of the insured, and not the insurer. As such the insurer is not liable for the broker's tortious conduct. A broker represents the insured by acting as an intermediary between the insured and the insurer, soliciting insurance from the public under no employment from any special company, and, upon securing an order, places it with a company selected by the insured, or if the insured has no preference, with a company selected by the broker. In contrast, an “insurance agent” represents an insurer under an employment agreement by the insurance company. Unlike acts of a broker, “acts of an [insurance] agent are imputable to the insurer.”
But the undisputed facts in this case demonstrate that Gruber was not the agent of Connecticut General. There was simply nothing before the trial court showing that the relationship between Gruber and Connecticut General, their actions, or their usual course of dealing, made Gruber Connecticut General's insurance agent.
The trial court properly granted summary judgment in Connecticut General's favor.

Lessons:
1. An insurance agent is usually an employee of the insurer and his acts are imputed to the insurer.
2. An insurance broker represents the insured and usually deals with several insurers. A broker’s negligent acts are not imputed to the insurer.
3. A broker who promises to “take care of everything” may be liable for negligence if he does not.
4. The insurer will not have vicarious liability for such negligence by a broker.
5. “Summary judgment is generally inappropriate in negligence cases,” so sayeth the Indiana Supreme Court and this time, they meant it, reversing the trial court and the Court of Appeals which had found no genuine issue on proximate cause.

10. Insurance agent liability: Brennan v. Hall, 2009 WL 1085625
(Ind.Ct.App. April 21, 2009)(Barnes)

Terence Brennan and Burt Insurance Agency (“Burt”) appeal a jury's verdict in favor of Patricia and Harry Hall. The sole restated issue is whether the jury properly found Brennan and Burt liable for negligently failing to procure insurance for the Halls.
The evidence most favorable to the verdict is that in late 2002, Patricia contacted Brennan, an insurance broker working at Burt, and asked him to look into homeowner's insurance policies for the Halls. Patricia told Brennan she had three specific concerns she would want the policy to address: coverage for her dogs, earthquake coverage, and coverage for a wood burning stove. Brennan later informed Patricia that he had found a suitable policy through Buckeye State Mutual Insurance Company (“Buckeye”).
In August 2004, one of the Halls' dogs, a Doberman Pinscher, bit their niece. When the Halls made a claim on the Buckeye policy, Buckeye denied coverage for the claim and additionally declared the policy null and void for “material misrepresentation,” i.e. the application's failure to disclose that the Halls had a Doberman Pinscher.
On December 20, 2006, the Halls filed suit against Brennan and Burt, alleging negligence. On October 21, 2008, a jury found that Brennan and Burt were liable to the Halls based on negligent failure to procure a policy.
The salient issue we will consider is whether Brennan was negligent in procuring insurance for the Halls, where Patricia specifically advised that she wanted coverage for her dogs, Brennan filled out the application and indicated the Halls had no dogs after Patricia specifically stated that they had dogs, but Patricia signed the application, which included a statement that the application was complete and accurate.
The Halls are not seeking any recovery against Buckeye. They are suing only Brennan and Burt for their alleged negligence in the application process, which left the Halls without any homeowner's insurance generally, and without specific coverage for the dog bite. No Indiana state court case has addressed precisely this question.
We hold that if an agent is negligent in assisting a client complete an insurance application, and such negligence leads to a basis for the insurance company to deny coverage to the applicant and/or revoke the policy, the applicant may seek damages from the agent, even if the applicant signed or ratified the application after having a chance to review it.
There is sufficient evidence from which the jury could have concluded that Brennan's actions amounted to a breach of his duty to procure insurance requested by the Halls. Such breach led to the Halls being damaged because they lack coverage for the dog bite claim. To the extent Patricia herself might share some of the blame for the inaccurate application and subsequent denial of coverage, it would be more appropriate to assess her fault in accordance with the Comparative Fault Act, just as would be the case in another ordinary negligence action; it is not a basis for completely barring the Halls' action.

Lessons:
1. An insurance agent may be held liable for negligently filling out an application form if it leads to denial of coverage.
2. The agent may still be liable even if the insured signs the application, indicating that she read it and the contents were “true, complete and correct.”
3. The fault of the insured will be assessed in accordance with the Comparative Fault Act.

11. Golf outing liability: Clary v. Dibble, 903 N.E.2d 1032 (Ind.Ct.App.
April 9, 2009) (Darden)

Odetta Clary, individually and as personal representative of the Estate of Kevin Dale Clary, and Kasey Dale Clary, a minor, by his mother and natural guardian, Odetta Clary (collectively, “Clary”), appeal the trial court's entry of summary judgment in favor of K & P Roofing Siding & Home Improvement, Inc. (“K & P”).
In 2006, Patrick H. Dibble worked as a salesperson for K & P pursuant to a Commissioned Salesperson's Agreement. He used his own tools and drove his own vehicle, a Ford pick-up truck. Dibble was considered to be an independent contractor.
On July 16, 2006, Shelter Distribution, Inc., a materials supplier for K & P, sponsored a golf tournament for several companies at the Covered Bridge Golf Club, located in Sellersburg. Since he had been invited to participate in the tournament, Dibble “felt obligated to go play[.]”
Dibble had taken a prescription pain reliever the morning of the golf tournament and had a hangover from drinking the previous night. Dibble played in a foursome along with Ron Cogburn, K & P's owner, James Reynolds, K & P's General Manager, and John Survance, a K & P salesperson. While playing, Dibble “was tired and felt a little bit nauseous, but for the most part tired.” He started falling asleep during the last nine holes and stayed in the golf cart. He had one beer after the 9th hole and drank water throughout the day. He informed the others in his foursome that he was tired.
Dibble left the golf club at approximately 6:30 p.m. and drove west on Perry Crossing Road in Clark County. At some point, he either fell asleep or blacked out, allowing his vehicle to cross the centerline. His vehicle struck a motorcycle on which Kevin and Kasey were riding, resulting in Kevin's death and injuries to Kasey.
Clary filed a complaint for damages against Dibble on September 25, 2006. She alleged that Dibble had negligently operated his vehicle. In Count II, she alleged that K & P was liable under the theory of respondeat superior.
Clary asserts that the trial court erred in granting K & P's motion for summary judgment. She raises several issues, one of which we find dispositive: whether “K & P owed [Clary] a duty not to allow ... Dibble to leave the golf course impaired.”
Whether the defendant must conform his conduct to a certain standard for the plaintiff's benefit is a question of law for the court to decide. Courts will generally find a duty where reasonable persons would recognize and agree that it exists. This analysis involves a balancing of three factors: (1) the relationship between the parties, (2) the reasonable foreseeability of harm to the person injured, and (3) public policy concerns.
1. Relationship: Dibble was not an employee of K & P but an independent contractor, and therefore, not under K & P's influence and control. Also, the accident did not involve a vehicle of K & P; did not occur on K & P's property; and did not occur after an event sponsored, hosted, or required by K & P. More importantly, K & P did not in any way contribute to Dibble's impairment, where Dibble had been drinking on his own the night before the tournament and had taken a prescription medication prior to the tournament.
2. Foreseeability: We disagree with Clary that it was foreseeable that a person, who had been feeling ill or tired during the day but was coherent and had not been observed drinking alcohol or taking drugs, would, after resting and proclaiming to feel better, later cause an automobile accident. Accordingly, we do not conclude that there was a high degree of foreseeability that failure to prevent such a person from driving would result in an accident.
3. Public Policy: It would be unreasonable to find it sound public policy to impose a duty on persons to determine the extent of their perceived influence and control over a person; surmise whether that person is too ill or tired to drive; and based on their conjecture, prevent that person from driving. “Ultimately, sound public policy dictates that the responsibility for negligent driving should fall on the driver.”
Upon balancing the three factors necessary in determining whether a duty exists, we conclude that K & P did not owe a duty to Clary.

Lesson: There’s no duty on a company to prevent an impaired golfer from driving home after a golf outing when (1) the golfer was an independent contractor; (2) the outing was not sponsored by the company; (3) the company didn’t contribute to the impairment; and (4) he wasn’t driving a company vehicle.

12. Payday loans and usury: Payday Today v. Defreeuw, 903 N.E.2d 1057 (Ind.Ct. App. April 9, 2009) (Barteau)

On June 5, 2004, Defreeuw applied for a $200.00 loan from Payday. The stated term of the loan was for fourteen days and the finance charge was $25.00. Defreeuw presented security to Payday in the form of a postdated check in the amount of $225.00 to cover the principal and the finance charge. Defreeuw did not pay off the loan within fourteen days, and when her check was presented by Payday, it was returned by Defreeuw's bank stamped “closed account.”
Payday sued Defreeuw in small claims court for fraud and requested treble damages in the amount of $675.00, attorney fees in the amount of $500.00, and a one-time statutory fee in the amount of $20.00, totaling $1,195.00 plus court costs in the amount of $46.00. In the alternative, Payday also requested damages in the amount of $2,100.00 to represent the 325.89% interest it believed it was charging over the 84 bi-weekly periods when the loan was unpaid.
The trial court ordered Defreeuw to pay the $1,195.00 plus court costs because she “provided false information on her loan application when she failed to disclose to [Payday] other outstanding payday loans.” However, the court did not order the payment of the interest accrued at the 325.89% rate. Payday now appeals.
Payday contends that the trial court erred in not awarding the $2,100.00 that represents the 325.89% interest rate applied to the $200 loan made to Defreeuw. In responding to this contention, we initially note that the “Small Loans” statute under which Payday asserts its protection from usury laws, conflicts with both statutory law as developed throughout American jurisprudential history and the common law. Accordingly, the statute must be strictly construed.
At the time Payday made a loan to Defreeuw, finance charges on a $200.00 loan were limited to the $25.00 charged by Payday. The statute made no reference to continuing to assess this original finance charge every two weeks until the loan is paid. Upon the bank's dishonoring of Defreeuw's check, Payday was allowed to charge a fee not to exceed $20.00. The Small Loans Act stated that finance charges made on small loans were exempt from both, which limited a loan finance charge for supervised loans to 36%, and Ind.Code § 35-45-7, which stated that a person committed loansharking when he contracted to receive an APR exceeding 72%.
We assume that Payday believes that the Small Loans Act frees it from both the usury and loansharking statutes and is licensed to ignore the historically moral and practical foundations for usury statutes and charge any amount of interest that the so-called payday loan “free market” will bear. In this case, Payday believes that rate to be based upon the transformation of its initial two-week 15% finance charge into an APR of 325.89%. We disagree.
We do not believe our legislature intended to free lenders to assess the unconscionable interest rate sought by Payday against Defreeuw. The question then, is how high the APR on a payday loan can rise. The Small Loans Act tells us only that it may exceed 36% and that the charging of greater than 72% will not result in the prosecution of the lender. The Act does not explicitly cap the APR on the loan, but given that it is in derogation of both statutory and common law, we cannot say that it authorizes what can only be described as an astronomical deviation from established law.
If Payday wants to collect interest, it must include that interest as part of the agreement between itself and the payday borrower. Because Payday failed to do so, it cannot recover any interest.

Lessons:
1. Payday lenders can collect only for the fees specifically authorized in the Small Loans Act.
2. The Act does not protect continuing interest charges at a rate of 325.89%.
3. When you get a $1,200.00 judgment on a $200 loan, don’t appeal for more.
• “Pigs get fat; hogs get slaughtered.”

13. Governmental immunity: City of Bloomington v. Walter, 2009 WL 1035091 (Ind. Ct.App. April 15, 2009) (Kirsch)

The City of Bloomington Utilities Department (“CBU”) brings this interlocutory appeal challenging the trial court's denial of its motion for summary judgment. CBU raises the following restated issue: whether the trial court erred in failing to find that CBU is immune from liability under the Indiana Tort Claims Act, Indiana Code chapter 34-13-3 (“ITCA”), for damage caused by sewage flowing from its sewer pipes into the home of one of its customers.
Here, Homeowners alleged that CBU negligently maintained and controlled the sewer lines by failing to clear severe root invasion from the sewer pipes. As a proximate result of this negligence, the Homeowners' sewer line became blocked, sewage flowed into the home, and the sewage caused damage to the Homeowners' real and personal property. In its motion for summary judgment, CBU argued that its conduct qualified for governmental immunity as a discretionary function under Section 3 of the ITCA. The trial court denied CBU's motion for summary judgment.
“A governmental entity ... is not liable if a loss results from ... [t]he performance of a discretionary function....” Ind. Code § 34-13-3-3(7). CBU asserts that, contrary to the trial court's findings, it is entitled to immunity for the discretionary function of enacting and following its Capacity, Management, Operations and Maintenance (“CMOM”) Program-a program that set forth guidelines for CBU to inspect, clean, and repair the City's sewer system.
We note that, in Peavler v. Monroe County Bd. of Comm'rs, 528 N.E.2d 40 (Ind.1988), our Supreme Court adopted the “planning/operational” test as the standard for defining discretionary acts under the ITCA. The essential inquiry is whether the challenged act is the type of function that the legislature intended to protect with immunity. Discretionary immunity is provided to governmental units for undertaking a policy-oriented decision-making process.
CBU engaged in policy-oriented decision-making when it determined which part of the system it would maintain (public gravity sewers equal to or greater than eight inches in diameter and public force mains) and that it would not use chemicals for root control. However, much of the CMOM Program merely set forth “things that [CBU has] been doing for years.”
The planning/operational test allows us to “‘distinguish between decisions involving the formulation of basic policy, entitled to immunity, and decisions regarding only the execution or implementation of that policy, not entitled to immunity.’”
While the decisions regarding sewer cleaning required CBU and its employees to exercise professional judgment, these decisions may be evaluated under traditional tort standards of reasonableness. We find no designated evidence in the record here on appeal to convince us that CBU's actions involved the formulation of policy that would entitle it to immunity under Indiana Code section 34-13-3-3(7).

Lessons:
1. A governmental entity is entitled to immunity for the performance of discretionary policy-oriented decisions, but not for decisions regarding the execution or implementation of a policy.
2. The line between the two is often gray.

14. Unjust enrichment; constructive trust; Zoeller v. East Chicago Second
Century, Inc., 2009 WL 987170 (Ind. April 13, 2009) (Shepard)

In 1993, Showboat Marina Partnership initiated the process of applying for a riverboat casino license in the City of East Chicago pursuant to Indiana's Riverboat Gambling Act. Showboat entered into a local development agreement with East Chicago. Under the agreement, Showboat agreed to “contribute annually to and for the benefit of economic development, education and community development in the city” an amount of total contribution equal to 3.75% of its adjusted gross receipts.
Showboat proposed that of the total contribution 1% be allocated directly to East Chicago; 1% to the Twin City Education Foundation, a non-profit corporation; 1% to the East Chicago Community Foundation, another non-profit; and 0.75% to East Chicago Second Century, Inc., a for-profit corporation. The agreement also included promises that Second Century would undertake development activities at sites within East Chicago, that all projects pursued by Second Century would conform to the City's development and master plans, and that all Second Century projects would require approval from the City.
The Commission issued a gaming license to Showboat on January 8, 1996, based in part on these representations, and the Commission incorporated the terms of the agreement as conditions to Showboat's receipt and maintenance of the license. The gaming operation commenced in April 1997. Between this commencement and June 2006, Second Century received about $16 million from the casino operation.
The Commission subsequently asked the Attorney General to investigate the agreement; the Attorney General found that much of the $16 million could not be accounted for and could be traced to Second Century's principals.
On April 15, 2005, Second Century sought a declaratory judgment that Resorts would be required to continue the payments to Second Century. In November 2005, the Attorney General intervened, seeking imposition of a constructive trust for public benefit and an accounting over the money paid to Second Century and its principals. Second Century moved to dismiss the Attorney General's claims, and the trial court did so. The Attorney General appealed, and the Court of Appeals affirmed.
Second Century moved to dismiss on grounds that its status as a for-profit corporation took it out from under the provisions in the trust code that describe the Attorney General's supervisory role as respects charitable activity. The people’s interest in the rectitude of entities created in the name of public good, such as charities, has long led to regarding the Attorney General as an officer with authority to enforce those interests. The notion was hornbook law even in the time of Blackstone, who wrote:
The king, as parens patriae, has the general superintendence of all charities; which he exercises by the keeper of his conscience, the chancellor. And therefore whenever it is necessary, the attorney general, at the relation of some informant, (who is usually called the relator) files ex officio an information in the court of chancery to have the charity properly established.
Given the broad common law and statutory authority conferred upon the Attorney General to protect the public interest in charitable and benevolent instrumentalities, we conclude that it was error to dismiss the Attorney General's counterclaim on grounds that Second Century is a for-profit corporation.
Second Century has argued that the unjust enrichment claim is unavailable because the local development agreement specifically addressed the subject matter of the funds that Second Century should receive. There are three general types of contracts-express, implied-in-fact, and constructive contracts. Express and implied-in-fact contracts are traditional contracts, while constructive contracts, “also referred to as quantum meruit, contract implied-in-law, [unjust enrichment], or quasi-contracts[,]” are not contracts at all.
Indiana’s Court of Appeals has declared, “The existence of express terms in a valid contract precludes the substitution of and the implication in law of terms regarding the subject matter covered by the express terms of the contract. When the rights of parties are controlled by an express contract, recovery cannot be based on a theory implied in law.”
There was an express contract in this transaction, but it was not one to which the Attorney General or the State were parties. Showboat entered into the local development agreement with East Chicago. That transaction is thus not a bar to the Attorney General's claim for unjust enrichment, an equitable remedy. Its terms were intended to control the rights and duties of East Chicago and the casino licensee in relation to each other; they were not intended to control the rights of any non-parties. The Attorney General's claim for unjust enrichment is actionable.
Second Century has argued that the claim for imposition of a constructive trust is defective because the Attorney General has not pleaded any allegations of fraud. The general notion of constructive trust is succinctly outlined in the Restatement (Second) of Trusts:
[A] relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property.
“A constructive trust is imposed where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it.” This type of trust is more in the nature of an equitable remedy rather than an independent cause of action.
While Indiana courts have certainly said on occasion that fraud is a prerequisite, the meaning of this declaration is not confined to fraud as one might define it for purposes of criminal law. Rather, the remedy is available where there is standard fraud (i.e., misrepresentation, reliance, etc.) or a breach of duty arising out of a confidential or fiduciary relationship. The Attorney General's allegations against Second Century and its principals on this point are: Upon information and belief, the monies paid to Second Century under the Showboat Agreement have not led to public benefit commensurate with the monies paid out under said agreement, but instead have led mainly to the unjust enrichment of the directors and officers of Second Century. This allegation states a claim for constructive trust.

Lessons:
1. The Attorney General has authority to protect the public interest in charitable and benevolent instrumentalities, including, asserting a claim against a for-profit company if it took money on a promise to perform a public purpose, such as the economic development of East Chicago.
2. Having an express contract will usually preclude a claim for unjust enrichment but not so as to claims by non-parties to the contract.
3. Standard fraud is not required to assert a claim for imposition of a constructive trust; such a claim may arise out of a confidential or fiduciary relationship if the defendant’s retention of the property in question is wrongful and he would be unjustly enriched if he were permitted to retain the property.

P.S. Attorney General Greg Zoeller said: “It is our belief that this lawsuit will shine the spotlight of public attention onto the historic problems of corruption that have plagued East Chicago and parts of Lake County. Gambling proceeds from the riverboat were supposed to benefit the citizens of East Chicago; now we have the opportunity to find out how those $16 million really were spent.”


ADVOCACY TIP OF THE MONTH: Avoid taking extreme positions.

In Westfield Insurance v. Sheehan Construction (7th Cir. April 29, 2009), Chief Judge Easterbrook writes:
Sheehan’s insistence that it is entitled to punitive damages because Westfield’s denial of coverage was “in bad faith” is the sort of argument that calls into question the bona fides of all other contentions. How can an insurer exhibit “bad faith” by taking a position that not only follows the policy’s language but also is endorsed by a district judge? We can imagine a procedural form of bad faith—refusal to take any stance on the policy’s coverage while leaving the insured to fend for itself in the underlying litigation—but Westfield addressed Sheehan’s claim with dispatch and filed a prompt declaratory-judgment suit to have the dispute resolved. Sheehan’s insistence, even after losing on the merits in the district court, that the insurer acted “in bad faith” implies that its strategy has been to strong-arm a settlement by in terrorem claims, rather than to vindicate its legal entitlements. Lawyers should think carefully about the message that their contentions convey to the court, as well as the effect they may have on the other litigants.

Indiana Law Update

NOTE: The contents of this post consist primarily, but not completely, of words taken directly from the appellate court opinion with citations generally omitted. Anyone intending to rely upon the opinion should consult the published decision.

IN THE NEWS: “LAWYERS CRITICAL OF JUDGES FIGHT FOR RIGHTS”

The National Law Journal, February 9, 2009:

“Maybe it’s something in the air. In Florida, an attorney faces discipline this spring over a blog entry on a courthouse blog in which he described a judge as an “evil, unfair witch” with an “ugly, condescending attitude” and questioned her mental stability. The Florida Supreme Court refused to hear the lawyer’s constitutional argument in October. He will be reprimanded in April and has to pay a $1,200 fine. Florida State Bar v. Conway, No. SC08-326 (Fla.).

In Michigan, flamboyant trial attorney Geoffrey Fieger, the one-time lawyer to Dr. Jack Kevorkian, is pursuing a highly watched right-to-criticize-judges lawsuit. Fieger is challenging a state rule that was used to sanction him for calling state appeals judges “jackasses” in a radio show and comparing them to Nazis for overturning a $15 million verdict he had won.

“Even though we all thought we had First Amendment rights, be careful,” Conway warned. “It’s going to cost you a lot of money and maybe even your practice.”

1. Statute of Limitations for Wrongful Death/Medical Malpractice. Newkirk v. Bethlehem Woods Nursing and Rehabilitation Center, 898 N.E.2d 299 (Ind., December 24, 2008). (Sullivan)

On September 10, 2001, Martha O'Neal was admitted to Bethlehem Woods Nursing and Rehabilitation Center (“Bethlehem”) for rehabilitation following surgery. During her stay at Bethlehem, O'Neal was the victim of several acts of medical malpractice. On September 22, 2001, a Bethlehem employee discovered O'Neal lying in a pool of her own blood. She was transferred to the hospital. O'Neal died on November 6, 2001.

On October 22, 2003, more than two years after the medical negligence occurred, but within two years of O'Neal's death, the Estate of Martha O'Neal (“Estate”) filed a complaint under the Wrongful Death Act, Ind.Code § 34-23-1-2, against Bethlehem alleging that Bethlehem provided negligent medical care to O'Neal that ultimately led to her death. Bethlehem moved for summary judgment, arguing that the Estate's action was barred by the requirement to bring an action for medical malpractice within two years of the alleged act or omission. The trial court agreed and granted Bethlehem's motion.

The Court of Appeals reversed. It held (as had the trial court) that the Estate's claim arose under the Indiana Professional Services Statute (“PSS”), I.C. § 34-11-2-3, not the Indiana Medical Malpractice Act (“MMA”), I.C. § 34-18-7-1(b), because Bethlehem was not a “qualified provider” under the MMA and, therefore, not eligible for its protections. But the Court of Appeals went on to hold that because the Estate's lawsuit had been filed within the limitations period of the WDA, its claim was timely filed.

In this case, the substantive tort claim underlying the wrongful death action is precisely the same as it was in the Ellenwine [v. Fairley, 846 N.E.2d 657 (Ind. 2006)] scenario: medical malpractice. The PSS did not create or establish the medical malpractice claim but the Legislature did establish a two-year limitations period for filing such claims. As we said in Ellenwine: “Because a patient who has been the victim of medical negligence could well live many more than two years beyond the occurrence of the malpractice only to ultimately die as a result of it, applying the two-years-after-death limitations period of the wrongful death statute where a patient dies from the malpractice seems to us totally inconsistent with this legislative goal.” 846 N.E.2d at 664.

The Estate filed its complaint on October 22, 2003, more than two years after the last date upon which Bethlehem's alleged negligent conduct could have occurred, but less than two years from O'Neal's death. If death is caused by the malpractice, the malpractice claim terminates at the patient's death, and a wrongful death claim must be filed by the personal representative within two years of the occurrence of the malpractice. Id. at 665. O'Neal's death was alleged to have been caused by Bethlehem's medical malpractice. As such, the wrongful death claim was required to have been filed by her personal representative within two years of the occurrence of the malpractice. The Estate did not do so and the trial court properly concluded that its claim was not timely filed.

Lesson: A wrongful death claim for medical malpractice must be filed within 2 years of the malpractice; within two years of death may be too late.

2. Statute of Limitations for Wrongful Death/Products Liability. Technisand, Inc. v. Melton, 898 N.E.2d 303 (Ind., December 24, 2008). (Sullivan)

Patty Melton (“Patty”) died from leukemia on July 25, 2002. Her husband, Jessie Melton (“Jessie”), is the personal representative of her estate. In July, 2003, KIPT [Patty’s employer] provided Jessie's counsel with a letter from KIPT and a Material Safety Data Sheet for resin-coated sand made by Technisand. The letter stated that Patty might have been exposed to the resin-coated sand during her work at KIPT. The data sheet said that the use of the resin-coated sand could create formaldehyde fumes, and that formaldehyde was a carcinogen. On November 29, 2004, Patty's doctor, Dr. James K. Hwang, wrote to Jessie and disclosed that formaldehyde exposure “may have placed [Patty] at a greater risk for leukemia.”

Jessie contends that the limitations period under the Indiana Products Liability Act controls the time limitation on his ability to bring a claim. The PLA allows a product liability action to be filed within two years after the cause of action accrues. I.C. § 34-20-3-1(b)(1). A cause of action “accrues” under the PLA, “[o]nce a plaintiff's doctor expressly informs the plaintiff that there is a 'reasonable possibility, if not a probability' that an injury was caused by an act or product.” Degussa Corp. v. Mullens, 744 N.E.2d 407, 411 (Ind.2001). Jessie's claim was clearly filed within two years of the accrual of the products liability claim.
Technisand argues that Jessie's claim was required to be filed within the limitations period of Indiana’s Wrongful Death Act (“WDA”). Because Patty died more than two years before Jessie's claim was amended to name Technisand, Technisand maintains that Jessie's claim against it should be dismissed as untimely.

The Court of Appeals reasoned that because Jessie's claim “involves products liability,” and Technisand was added timely pursuant to the PLA, Jessie's claim against Technisand could proceed. The Court of Appeals was incorrect in this regard because it failed to take into account the operation of Indiana's Survival Statute (“Survival Act”), I.C. § 34-9-3-1. The Survival Act provides that if an individual who has a personal injury claim or cause of action dies, the claim or cause of action does not survive-unless the individual dies from causes other than those personal injuries. The claim here is that Patty died from personal injuries allegedly caused by Technisand. As such, once Patty died, Jessie's claim was a claim for wrongful death.

The Legislature's intent was that the limitations period provided in the WDA always serves as an outside limit on the amount of time that the personal representative of a person whose death is caused by the wrongful act or omission of another will have to file the lawsuit.

The injuries forming the basis for the substantive tort claim, that of products liability, caused Patty's death. Pursuant to the Survival Act, Patty's products liability claim against Technisand terminated at her death; only the WDA claim survived. The WDA requires that a wrongful death action be commenced within two years of the decedent's date of death. Jessie conceded that he did not bring suit against Technisand within two years of Patty's death. Jessie cannot use the PLA statute of limitations as an alternative to the statute of limitation contained within the WDA. His claim against Technisand was not timely filed.

Lesson: A wrongful death claim based on an underlying product liability claim must be filed within two years of the date of the decedent's death; two years after accrual of the product liability claim may be too late.

3. Statute of Limitations; Successor Liability Following Asset Sale. Cooper Industries v. South Bend, 899 N.E.2d 1274 (Ind., January 22, 2009). (Shepard)

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.

Cooper contends that South Bend’s claims are barred by the statute of limitation. In response, South Bend argues that its cause of action for damages to the Studebaker property did not accrue for limitation purposes until it became the owner of the property and had a right to commence the action. We cannot agree. Indiana adheres to the rule that “third parties are usually held accountable for the time running against their predecessors in interest.” Accepting South Bend's argument would have the practical effect of allowing the mere transfer of property to resurrect the claims of prior landowners and predecessors-in-interests who had actual knowledge of injuries to property.

One of South Bend’s claims is an “environmental legal action” (ELA) to recover costs of removal or remedial action pursuant to a statute enacted in 1997. “A statute of limitation does not begin to run against a cause of action before that cause of action exists, i.e., before a judicial remedy is available to the plaintiff.” Martin v. Richey, 711 N.E.2d 1273, 1284 n. 12 (Ind.1999). The substance of a cause of action, rather than its form, determines the applicability of the statute of limitation. Cooper asserts that “South Bend had several ways to sue exactly the same parties for the same contamination under the same (or more stringent) standards long before the ELA amendments.”

If the ELA simply amends, for clarification or other purposes, pre-existing environmental claims, any change would apply strictly on a prospective basis. On the other hand, if the ELA creates an entirely new action, no cause of action could have existed until its effective date. ELA seems to fall somewhere in the middle. In this case, however, South Bend did not have a complete cause of action until the ELA became effective. Therefore, the statute of limitation could not have begun to accrue until that date.

Cooper further asserts that the statute of limitation should have run against South Bend in accord with standard discovery rule principles-when it knew or should have known of the injury. This misses a broader point about applying statutes of limitation: a statute does not run until a cause of action is complete.
Cooper claims that under this logic a claim could be brought based on facts known for a hundred years. Such a claim still must be brought, however, within the applicable statute of limitation from the point of a new cause of action's effective date. In other words, any opening of the floodgates would have a time limit. That time for the ELA passed either on February 28, 2004 or February 28, 2008, depending on which statute of limitation applies.

Though the parties join in debate over whether South Bend has agreed that the property damage statute of limitation applies in this case, we will adopt six years as the applicable time period. Six years from the accrual date was February 28, 2004. Because South Bend filed this action March 19, 2003, it filed within even the shortest arguable limitation.

Both parties moved for summary judgment on whether Cooper is the corporate successor of Studebaker with regard to the environmental liabilities involved in this case. Cooper contends that the liabilities did not pass from Studebaker to Studebaker-Worthington in the 1967 asset sale and therefore did not end up with Cooper. Cooper's theory is that asset purchases do not transfer liability, so the liabilities stayed with Studebaker until Studebaker terminated its corporate existence, at which point the liabilities expired. South Bend argues that the liabilities were transferred to Studebaker-Worthington in the 1967 sale, and, in any event, the situation merits application of either the de facto merger or the “mere continuation” doctrines.

Under Indiana law, where a corporation purchases the assets of another, the general rule is that the buyer does not assume the liabilities of the seller. There are well-recognized exceptions to this rule. The “de facto merger” and “mere continuation” doctrines are widely accepted in the law of American states, including Indiana. Courts sometimes treat asset transfers as de facto mergers where the economic effect of the transaction makes it a merger in all but name. Some pertinent findings might include continuity of the predecessor corporation's business enterprise as to management, location, and business lines; prompt liquidation of the seller corporation; and assumption of the debts of the seller necessary to the ongoing operation of the business. We conclude that the facts here suffice to warrant the trial court's finding that the 1967 transaction constituted a de facto merger such that Cooper may be held to answer South Bend's claims.

The doctrine of “mere continuation” has a slightly different focus. It asks whether the predecessor corporation should be deemed simply to have re-incarnated itself, largely aside of the business operations. Factors pertinent to this determination include whether there is a continuation of shareholders, directors, and officers into the new entity. The trial court properly found that the 1967 transaction was a mere continuation of the earlier corporate forms.

The trial court was correct that the ELA claim is timely, and that Cooper is the rightful corporate successor of Studebaker.

Lessons:
1. A statute of limitations may begin to run on a claim under a new law even before its enactment if the substance of the cause of action already existed.
2. A new statute may create a timely cause of action for events 100 years ago.
3. The “de facto” merger and “mere continuation” doctrines create exceptions to the general rule that the purchaser in an asset sale does not assume the seller’s liabilities.

4. Consolidation of Preliminary Injunction Hearing with Trial on the Merits. Roberts v. Community Hospital of Indiana, 897 N.E.2d 458 (Ind., December 9, 2008). (Boehm)

On May 31, 2006, Dr. John Roberts sued Community for breach of his residency contract. He did not request a jury trial, but moved for both a temporary restraining order and a preliminary injunction reinstating him as a resident at Community. Approximately two months after the suit was filed, the trial court held a preliminary injunction hearing. Over the course of approximately eight hours, testimony was received from several witnesses and the parties also introduced several dozen documents.

After the hearing, in a single order entitled “Final Judgment,” the trial court consolidated the preliminary injunction hearing with a trial on the merits pursuant to Trial Rule 65(A)(2), denied Dr. Roberts's application for a preliminary injunction, and entered final judgment in favor of Community on the breach of contract claim. The court had not provided notice of consolidation to the parties prior to the entry of judgment. Dr. Roberts filed a Motion to Correct Error challenging the consolidation.

Indiana Trial Rule 65(A)(2) provides that “[b]efore or after the commencement of the hearing of an application for a preliminary injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application.” Neither Trial Rule 65(A)(2) nor FRCP 65(a)(2) expressly requires trial courts to provide notice to litigants prior to advancement and consolidation. However, federal courts have interpreted FRCP 65(a)(2) to require notice so that parties are afforded a fair opportunity to present their cases on the merits. But the prevailing federal rule has long been that consolidation without notice is not reversible error absent a showing of prejudice.

Further, the prevailing federal rule is that allegations of prejudice must be specific. We agree and think prejudice requires more than simply identifying steps that might possibly produce evidence not adduced at the preliminary injunction stage. Bare assertions that discovery was incomplete or witnesses were not called will not suffice, at least where, as here, there was time for significant discovery. Rather, prejudice from a surprise consolidation ordinarily requires either admissible, material evidence that would be produced at trial and that would have likely changed the outcome on the merits, or a persuasive showing why available evidence was not accessible in the time between filing the complaint and the hearing.
In the instant case, Dr. Roberts's counsel recited in an affidavit and in argument at the hearing on the Motion to Correct Error actions he asserted he would have taken had he been on notice of consolidation. Those included calling additional witnesses, and retaining an expert on the custom and usage of medical residency contracts. But there was no identification of the names of those witnesses, or any explanation of the substance of their testimony or how their testimony would affect the result. The record suggests that all the principal players testified at the hearing, and Dr. Roberts points to no relevant documents that were unavailable.
We are not persuaded by the plaintiff's proposal to present expert testimony on the custom and usage of medical residency contracts. To be sure, there are some potential ambiguities in Dr. Roberts's contract. But even if we assume the contract's due process requirements are ambiguous, and if we assume further that expert testimony on the custom and usage of residency contracts would be admissible to interpret the contract, plaintiff's counsel has still not shown what the evidence of custom and usage would be or how it would resolve any ambiguity. Most importantly, there is no suggestion how an interpretation of this contract would entitle Dr. Roberts to relief on the merits.

In short, by failing to identify admissible and material evidence that would have changed the outcome on the merits, counsel's post-hearing motion failed to show Dr. Roberts was prejudiced by the trial court's surprise consolidation.
We recognize that a stricter requirement of showing of prejudice has the potential to produce unfair results and may need to be relaxed in some situations. That may be the case where a party has had little to no opportunity for discovery of matters that are largely known only to the opponent. The case against surprise consolidation is stronger if the opponent of consolidation is also the party opposing preliminary injunctive relief. We therefore stress that any determination of prejudice following a surprise consolidation must consider (1) the scope of the issues in the case, (2) the opportunity that the parties have had for discovery, (3) the degree to which continuance and discovery requests have been honored, (4) the extent to which the parties litigated the merits of the case at the preliminary injunction hearing, and/or (5) the realistic ability of the trial court to render judgment using the testimony and evidence elicited at the preliminary injunction hearing.
None of the foregoing considerations justifies a finding of prejudice in Dr. Roberts's case. Given the scope of the issues litigated, the availability of witnesses and discovery, and the extent to which the merits were tried, we find no circumstances require relaxing the requirement of identification of specific evidence that was not available to be presented at the preliminary injunction hearing.

Lessons:
1. Notice is required before a trial court may consolidate a preliminary injunction hearing with the trial on the merits.
2. Failure to give notice will not be reversible error absent a showing of prejudice.
3. To show prejudice from a surprise consolidation, a party will generally need to present admissible material evidence that would have been produced at trial and would likely have changed the outcome on the merits.

5. Attorney Misconduct for Pre-Suit Subpoena. In the Matter of Anonymous, 896 N.E.2d 916 (Ind. November 21, 2008). (Per Curiam)

Respondent represented an insurance company. A third person made a claim against the company, asserting that an insured had caused personal injury to him. Before any legal action had been filed, Respondent served the third person on three separate occasions with a subpoena duces tecum commanding the third person to appear for an examination under oath with specified documents. Each subpoena commanded production of the documents pursuant to “Indiana Trial Rule 45(B)” and purported to be issued “pursuant to the provisions of Trial Rule 34(C) and 45(A)(2) of the Indiana Rules of Procedure.” The third party did not comply with any of the subpoenas.

The parties agree that Respondent had no authority to use subpoenas before litigation had commenced and that Respondent violated these Professional Conduct Rules, which prohibit the following misconduct:

Rule 4.4(a): Using means in representing a client that have no substantial purpose other than to embarrass or burden a third person or using methods of obtaining evidence that violate the legal rights of a third person.

Rule 8.4(d): Engaging in conduct prejudicial to the administration of justice.

By using subpoenas, Respondent purported to issue orders on behalf of a court, rather than simply making requests on behalf of an insurance company. Respondent's improper use of subpoenas tended to give the third party (who apparently was unrepresented) the false impression that he could be held in contempt of court if he failed to appear and produce the documents requested.
An offense of this gravity would usually have warranted discipline more severe than a private reprimand, but in light of the lack of adverse consequences and Respondent's cooperation with the Commission, the Court approves the agreed discipline.

Lessons:
1. An attorney cannot issue a subpoena duces tecum before suit is filed.
2. An attorney who does so is subject to disciplinary action.
Note: Rule 27 authorizes the taking of depositions pre-suit to preserve testimony but only after obtaining an order from a court.

6. Appealable Judgment; Summary Judgment and Waiver of Defenses. Reiswerg v. Statom, 897 N.E.2d 490 (Ind. Ct. App., December 5, 2008). (Brown)

In this legal malpractice case, the plaintiff Pam Statom filed a motion for partial summary judgment against Joseph Reiswerg and Cohen Garelick & Glazier (“CGG”), alleging that “they were negligent as a matter of law.” After Reiswerg failed to file a timely response, Judge David Shaheed granted Statom's motion for partial summary judgment as to Reiswerg and denied the motion as to CGG. At Statom’s request, the Court found that “there was no just reason for delay and expressly directed entry of final judgment as to the entry of partial summary judgment against Reiswerg.” Reiswerg then appealed this “final judgment.”

Reiswerg argues that the trial court could not grant final judgment on the order because issues of damages and allocation of fault remained outstanding. Reiswerg relies upon Ramco Industries, Inc. v. C & E Corp., 773 N.E.2d 284 (Ind.Ct.App.2002). On appeal, Ramco argued that the trial court improperly certified the order as a final, appealable order. We noted that to be properly certifiable as a final order under either Ind. Trial Rule 54(B) or 56(C), a trial court order must “possess the requisite degree of finality, and must dispose of at least a single substantive claim.” Under Ind. Trial Rule 8(A), a claim consists of two elements: 1) a showing of entitlement to relief, and 2) the relief. “Furthermore, a judgment that fails to determine damages is not final.” We concluded that the order did not possess “the requisite degree of finality to completely dispose of a single substantive claim in order to be properly certifiable.” As a result, we dismissed the appeal.

Here, the trial court's order on partial summary judgment against Reiswerg addressed liability only and left issues of damages and allocation of fault for trial. As in Ramco, the order did not completely dispose of a single substantive claim and was not properly certifiable as a final, appealable judgment.

Because the order is not a final, appealable order, Reiswerg asks that we “reverse” the trial court's entry of partial summary judgment. However, the proper disposition of this appeal is not reversal. Rather, because we do not have appellate jurisdiction to review the trial court's entry of the order on partial summary judgment, we must dismiss the appeal of the trial court's entry of final judgment.
The next issue is whether the trial court abused its discretion by striking Reiswerg's motion for summary judgment on statute of limitations grounds. Reiswerg did not request summary judgment on his statute of limitations defense until after the trial court had granted partial summary judgment to Statom on Reiswerg's liability for legal malpractice. By failing to assert the statute of limitations defense in response to Statom's motion for partial summary judgment, which the trial court granted, Reiswerg has waived the defense.

The final issue is whether the trial court abused its discretion by striking CGG's motion for summary judgment on statute of limitations grounds. We conclude that, because Statom's motion for partial summary judgment was denied as to CGG, CGG did not waive its statute of limitations defense.

Lessons:
1. The T.R. 54(b) magic language for a final, appealable judgment [“upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment”] is not magic if the judgment does not completely dispose of a single substantive claim.
2. A statute of limitations defense, if not raised in response to a plaintiff’s motion for summary judgment, will be waived if summary judgment is granted but not if summary judgment is denied.
3. Don’t take the risk.

7. Attorney’s Fees for Frivolous Claims. Smyth v. Hester, 2009 WL 367379 (Ind. Ct. App., Feb. 12, 2009). (Darden)

The law firm of Plews Shadley Racher and Braun LLP (“PSRB”), as intervenor, appeals the trial court's order awarding attorney fees to the Estate of Timothy P. Brazill (“Estate”) and to attorney Judy G. Hester (“Hester”) for actions by PSRB on behalf of its client James W. Smyth. The trial court awarded the fees after entering an order stating: “DECREED that Smyth and his attorneys' actions at the January 16, 2008 hearing illustrate their frivolous, unreasonable, and bad faith conduct in this case, and the Estate is entitled to present evidence of the reasonable attorney's fees and costs it has incurred due to Smyth's and his attorneys' conduct in this matter.”

The trial court appears to have awarded the fees pursuant to Indiana Code section 34-52-1-1, which authorizes “the award of attorney fees for litigating in bad faith or for pursuing frivolous, unreasonable or groundless claims.” Specifically, the statute provides, in relevant part, that “the trial court may award attorney's fees as part of the cost to the prevailing party, if the court finds that either party: (1) brought the action or defense on a claim or defense that is frivolous, unreasonable, or groundless; (2) continued to litigate the action or defense after the party's claim or defense clearly became frivolous, unreasonable, or groundless, or (3) litigated the action in bad faith.” Such a statutory award may be made “upon a finding” of any one of the statutory bases.

A claim is frivolous (a) if it is taken primarily for the purpose of harassing or maliciously injuring a person, or (b) if the lawyer is unable to make a good faith and rational argument on the merits of the action, or (c) if the lawyer is unable to support the action taken by a good faith and rational argument for the extension, modification, or reversal of existing law.

A claim is unreasonable if, based on a totality of the circumstances, including the law and facts known at the time of the filing, no reasonable attorney would consider that the claim or defense was worthy of litigation or justified.
A claim is groundless if no facts exist which support the legal claim relied on and presented by the losing party. A claim or defense is not, however, groundless or frivolous merely because the party loses on the merits.

PSRB argues that the trial court's award of attorney fees cannot stand against it because the order contains no findings of fact to support the judgment that PSRB's representation of Smyth was frivolous, unreasonable, and in bad faith. In general, our review of the judgment leads us to agree. None of the findings of fact contain a specific reference to problematic litigation action, and none of the conclusions of law reflect the legal authority and standard for an award of attorney fees.
The Estate does not appear to argue that the findings support the judgment; rather it argues that the record provides support for a judgment awarding attorney fees. Inasmuch as the trial court's findings of fact and conclusions of law do not address the attorney fee award, we may consider that portion of the judgment to be a general judgment; and we may affirm a general judgment on any theory supported by the evidence. That said, we are mindful of our Supreme Court's observation that “the legal process must invite, not inhibit, the presentation of new and creative argument to enable the law to grow and evolve”; and that in reviewing an award of statutory attorney fees, we “must leave breathing room for zealous advocacy and access to the court to vindicate rights,” and “be sensitive to these considerations and view claims of frivolous, unreasonable, or groundless claims or defenses with suspicion.” Mitchell v. Mitchell, 695 N.E.2d 920, 925 (Ind.1998).

The order appealed does not provide us with any insight as to the trial court's reason for the award of attorney fees in this case, i.e., what the trial court found to be frivolous, unreasonable, and bad faith conduct. Accordingly, we remand to the trial court for further consideration and explanation of its judgment in that regard. Reversed and remanded.

Lessons:
1. The trial court must explain its basis when awarding attorney’s fees for frivolous claims.
2. There are different standards for frivolous, unreasonable and groundless claims.
3. An award of attorney’s fees is viewed with suspicion on appeal because we “must leave breathing room for zealous advocacy and access to the court to vindicate rights.”

8. Jurisdiction of the Case; Belated Filing of Agency Record. Indiana Family & Social Services Administration v. Meyer, 900 N.E.2d 74 (Ind. Ct. App., January 30, 2009). (Bailey)

This case involved an appeal to the Ripley Circuit Court of a final agency action by the Indiana Family and Social Services Administration denying medical assistance. Under the Administrative Orders and Procedures Act, a petitioner appealing such an action must transmit a certified copy of the agency record to the trial court within 30 days after filing of the petition for judicial review and states that failure to do so is “cause for dismissal.” The plaintiff failed to meet that deadline and FSSA moved to dismiss, arguing that in light of the failure to timely file the record, the trial court lacked jurisdiction of the case.

Like the rest of the nation's courts, Indiana trial courts possess two kinds of “jurisdiction.” Subject matter jurisdiction is the power to hear and determine cases of the general class to which any particular proceeding belongs. Personal jurisdiction requires that appropriate process be effected over the parties.
Where these two exist, a court's decision may be set aside for legal error only through direct appeal and not through collateral attack. Other phrases recently common to Indiana practice, like “jurisdiction over a particular case,” confuse actual jurisdiction with legal error, and we will be better off ceasing such characterizations.

Here, there is no question that the Ripley Circuit Court possessed jurisdiction over the subject matter of this case and over the parties. The FSSA makes no argument to this effect but instead refers to a lack of “jurisdiction over the case.” “Jurisdiction over the particular case” is something “now abolished.”
We conclude that Indiana Code Section 4-21.5-5-13 does not speak to subject matter jurisdiction, does not mandate automatic dismissal for procedural error, and must be read to confer upon the trial court discretion in some circumstances. Just as the trial court has discretion to grant an extension of time, subject to the “good cause” requirement, the trial court has the discretion to find that a petition “subject to dismissal” should not, upon a proper showing, be dismissed. Affirmed.

MATHIAS, Judge, dissenting. The timely and complete filing of the agency record is a condition precedent to the acquisition of jurisdiction to consider a petition for judicial review.

Lessons:
1. There is no such thing as “jurisdiction of the case”; only subject matter jurisdiction and personal jurisdiction.
2. The existence of a cause for dismissal does not mandate dismissal.

9. Dismissal without Prejudice and Res Judicata. Zaremba v. Nevarez,, 898 N.E.2d 459 (Ind. Ct. App., December 30, 2008). (Brown)

Peg Zaremba appeals the trial court's dismissal with prejudice of her claim against Jessica Nevarez and John Nevarez for rent and damages. On February 1, 2008, Zaremba filed a small claims eviction complaint against the Nevarezes under Cause Number 64D04-0802-SC-629 (“Cause No. 629”). The trial court entered an order setting a bench trial for May 30, 2008. On May 30, 2008, Zaremba failed to appear, but her counsel appeared and requested dismissal without prejudice. The trial court dismissed the matter without prejudice.
On July 7, 2008, Zaremba filed a second claim against the Nevarezes for $2,063.39 in connection with the rental property under Cause Number 64D04-0807-SC-3733 (“Cause No. 3733”). On August 14, 2008, the trial court dismissed this claim with prejudice, stating:

[Zaremba]'s Attorney set forth no reason for [Zaremba]'s failure to appear and filed no motion under Trial Rule 60 to set aside the dismissal. The finding of dismissal served as res judicata on this subsequent filing, which appears to be an attempt by [Zaremba] to circumvent the dismissal for [Zaremba]'s failure to appear.

Zaremba argues that the dismissal of Cause No. 629 cannot serve as the basis for res judicata. We agree. “Under the doctrine of res judicata, ‘a judgment rendered on the merits is an absolute bar to a subsequent action between the same parties or those in privity with them on the same claim or demand.’ ” Gill v. Pollert, 810 N.E.2d 1050, 1057 (Ind.2004) “For principles of res judicata to apply, there must have been a final judgment on the merits and that judgment must have been entered by a court of competent jurisdiction.” Matter of Sheaffer, 655 N.E.2d 1214, 1217 (Ind.1995). Because Cause No. 629 was dismissed without prejudice, it was not a judgment on the merits. Consequently, we conclude that Zaremba's complaint in Cause No. 3733 was not barred by the doctrine of res judicata.

Small Claims Rule 10(A) governs dismissal and default and provides: “If the plaintiff fails to appear at the time and place specified for the trial, or for any continuance thereof, the court may dismiss the action without prejudice .... If the claim is refiled and the plaintiff again fails to appear such claim may be dismissed with prejudice.” The rule is specific and “[d]ismissal with prejudice is contemplated only when the plaintiff again fails to appear after the claim has been refiled.” Here, the record does not reveal that Zaremba failed to appear after the claim was refiled. Thus, Ind. Small Claims Rule 10(A) does not contemplate dismissal with prejudice under the circumstances.

Lessons:
1. In small claims court, a dismissal without prejudice is available as an option to a plaintiff when a party or witness doesn’t show up for trial. (Note: This won’t work in other courts.)
2. A dismissal without prejudice can have no res judicata effect.

10. Children and Presumption of No Negligence; Proximate Cause. Clay City Consolidated School v. Timberman, 896 N.E.2d 1229 (Ind. Ct. App., December 2, 2008). (Riley)

On Monday, November 17, 2003, thirteen-year-old Kodi Pipes (Kodi) blacked out and fell down during the beginning of his eighth grade basketball team practice at Clay Jr. High School. Kodi was back at basketball practice on Wednesday November 19, 2003, and during a running drill, collapsed and died from a malignant type of heart rhythm abnormality known as ventricular fibrillation.

On August 25, 2006, Mother and Father filed a Complaint alleging that Clay City Schools was liable for Kodi's death under Indiana's Child Wrongful Death Statute. On December 13, 2007, the jury returned a verdict in favor of Mother and Father, awarding Mother $250,000 and awarding Father $175,000, which was reduced by the court to $300,000 total on a motion for remittitur.

Clay City Schools argues that the trial court erred by instructing the jury that Indiana law contains a rebuttable presumption that children between the ages of seven and fourteen years are incapable of committing contributory negligence. Specifically, the trial court's final instruction number twenty instructed the jury that: “In deciding whether Kodi Pipes was contributorily negligent, you should know that Indiana law recognizes a rebuttable presumption that children from the age of 7 to 14 years of age are rebuttably presumed to be incapable of [contributory] negligence.”

In spite of conflicting language in some cases, we conclude that Indiana law does not conclusively contain a presumption either in favor or against seven to fourteen-year-olds with respect to whether they can be found liable for their negligent acts. Thus, we conclude that the trial court's Final Instruction No. 20, which informed the jury that Indiana law contains a rebuttable presumption that children between the ages of seven and fourteen cannot be contributorily negligent, was a misstatement of Indiana law.

Indiana Pattern Jury Instruction No. 5.25, “Negligence or Contributory,” states in pertinent part: “A child age seven (7) through the age of fourteen (14) must exercise the same care that a reasonably careful child of the same age, knowledge, judgment, and experience would exercise in the same situation.” However, there is no pattern instruction on a presumption for this age group. Further, our supreme court has stated that an instruction on standard of care is required if warranted, but made no mention of whether an instruction should be given regarding any presumption.
Thus, we conclude that any jury instruction on the contributory negligence of a child between the age of seven and fourteen should focus on the standard of care for children of that age group-not on any presumption either in favor of or against finding them liable for their acts.

By instructing the jury that it should consider any evidence of Kodi's negligence in light of a rebuttable presumption that he could not be contributorily negligent, we cannot say that the verdict would have been the same despite the erroneous instruction. Therefore, we must reverse and remand for a new trial.
Clay City Schools argues that the trial court's instructions on proximate cause are in error because nowhere is it stated that Clay City Schools' act or omission must be a “substantial factor” as required by Indiana law. An instruction that the act or omission of a defendant must be found to be a “but for” cause of the plaintiff's injury cures any error of omitting an instruction on the “substantial factor” test. But here, the jury was not instructed on the “but for” test of proximate cause either.

The Indiana Pattern Jury Instruction (Civil), Instruction No. 5.06 does not define proximate cause by either a “substantial factor” test, or a “but for” test; rather the instruction reads that “an act or omission is a proximate cause of an [injury or death] if the [injury or death] is a natural and probable consequence of the act or omission.” The trial court's final instructions twice informed the jury of this requirement of proximate cause.

However, it is well established that: “[a]t a minimum, proximate cause requires that the injury would not have occurred but for the defendant's conduct.” Since the “but for” test is the minimal requirement to determine proximate cause, we conclude that it would be an abuse of discretion to omit language conveying that requirement in a jury instruction on proximate cause.

Lessons:
1. There is no presumption in favor or against 7 to 14-year-olds with respect to whether they can be found liable for their negligent acts.
2. Do not rely on the Pattern Jury Instructions for a complete statement of the meaning of proximate cause; the instructions need to convey the “but for” test for proximate cause.

11. Wrongful Death of Viable Fetus. Ramirez v. Wilson, 2009 WL 200027 (Ind. Ct. App., January 29, 2009). (Bailey)

On March 21, 2007, Megan Nelson (“Nelson”), who was then nine months pregnant with S.R., was driving a vehicle on State Road 10 in Newton County, Indiana. Wilson, the owner-operator of Suzy-Q Trucking, LLC, was driving a semi tractor in the opposite direction. During a passing maneuver, the vehicle and semi collided head-on. Nelson was killed and S.R. died in utero.

On April 10, 2007, Ramirez filed a complaint under the statute, alleging that he was S.R.'s father and that Wilson's negligence caused S.R.'s death. On February 29, 2008, the Appellees filed a motion for partial summary judgment, asserting that the statute is inapplicable because S.R. was not born alive, and thus the Appellees were entitled to judgment as a matter of law.

Here, the parties do not dispute the relevant facts. They agree that S.R. was a viable, full-term, yet unborn fetus at the time of her death. They disagree as to whether S.R. was a “child” under the statute.In Bolin v. Wingert, 764 N.E.2d 201 (Ind.2002), our Supreme Court reviewed a case where the plaintiff had suffered the miscarriage of an eight to ten week old fetus after an automobile accident and had brought a claim for wrongful death under the statute. Based upon the language of the statute, the Court ultimately concluded that “the legislature intended that only children born alive fall under Indiana's Child Wrongful Death Statute.”

In Horn v. Hendrickson, 824 N.E.2d 690 (Ind.Ct.App.2005), this Court was asked to determine whether Bolin was inapplicable where a “viable” fetus of six months gestation had died as a result of a vehicular accident. After observing that the Bolin Court “arguably” addressed a larger question than the facts required, the Horn Court concluded that the holding of Bolin was nevertheless clear:

Only a child “born alive” fits the definition of “child” under the child wrongful death statute (“the statute”). In reaching that conclusion, the court declared a “bright line” test. Despite the salient factual difference here, namely, that Horn's fetus was viable, the Bolin opinion categorically precludes all parents from bringing a wrongful death claim for the death of a viable or non-viable fetus. It is not this court's role to reconsider or declare invalid decisions of our supreme court.

The Horn Court observed that “our supreme court's words and opinions are not carved in stone, and it is not inappropriate for the parties or the judges of this court to ask the court to reconsider earlier opinions.” With these precepts in mind, we will not proceed in direct conflict with the controlling precedent of our Supreme Court, and we will affirm the grant of partial summary judgment to the Appellees. However, we urge our Supreme Court to reconsider the appropriate breadth of the Bolin opinion in the compelling circumstances presented here.

RILEY, J., dissents with opinion.

The Horn court concludes with a forceful rebuke directed at our supreme court. “The holding in Bolin that parents in Indiana cannot recover for the wrongful death of a viable fetus is a return to the 19th century when, in tort law, a fetus and its mother were considered one and the same.” It is abundantly clear that the Bolin decision no longer has any contemporary value and requires modification to serve justice better, especially when a viable fetus is concerned.

I implore the parties here to seek transfer to the Supreme Court, requesting a modification of its Bolin decision.

I note that Senate Bill 341, introduced in the 2009 legislative session, proposes to amend Ind Code § 34-23-2-1 specifying that the statutory term “child” should include “a fetus that has attained viability.” If successful, a wrongful death action could then be maintained against the person whose wrongful act or omission caused the injury or death of a viable fetus.

Lessons:
1. For now the bright line test remains: There is no wrongful death claim for a viable or non-viable fetus.
2. This could be changed by the Supreme Court, if it grants transfer, or by legislative action.

12. Arbitration; Time-Bar on Motion to Vacate; Assent by Conduct to Arbitration. Weldon v. Asset Acceptance,LLC, 896 N.E.2d 1181 (Ind. Ct. App., November 25, 2008). (Baker)

Defendant Kevin M. Weldon appeals the trial court's orders denying his motion to vacate an arbitration award and for summary judgment and entering summary judgment in favor of appellee-plaintiff Asset Acceptance.

The Federal Arbitration Act (“FAA”) explicitly provides that “[n]otice of a motion to vacate ... an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” Inasmuch as Weldon failed to file his motion to vacate within the applicable statutory timeframe, he is not entitled to that relief and the trial court properly denied his motions to vacate and for summary judgment.

In his reply brief, Weldon argues for the first time that the FAA's three-month time limit does not “prevent a party who did not participate in an arbitration proceeding from challenging the validity of the award at any time on the basis that no written agreement to arbitrate existed between the parties.” Weldon's sole argument appears to be that his signature does not appear on the agreement in the record; consequently, Asset Acceptance has offered no valid and binding arbitration agreement. We cannot agree. It is well established that a credit cardholder may agree to arbitration “by conduct.”

Here, MBNA promised to loan Weldon money via a credit card in exchange for Weldon's promise to repay the funds in a timely fashion. The written agreement contains a binding arbitration provision. Although Weldon's signature does not appear on the document, his assent was implied from his conduct-when he used the MBNA credit card repeatedly, he impliedly consented to the terms of the credit agreement, including the binding arbitration provision. Under these circumstances, we find that the arbitration agreement included in the record is valid and binding on both parties. Thus, the arbitrator properly assumed jurisdiction over the arbitration proceedings.

BROWN, Judge, dissenting.

In MCI Telecommunications Corp. v. Exalon Industries, Inc., 138 F.3d 426 (1st Cir.1998), the court held that, under the FAA, “determining whether there is a written agreement to arbitrate the controversy in question is a first and crucial step in any enforcement proceeding before a district court.” The court concluded that “as a general matter, [9 U.S.C. § 12] ... and the other enforcement provisions of the FAA, do not come into play unless there is a written agreement to arbitrate.”
The court also concluded: “A party that contends that it is not bound by an agreement to arbitrate can therefore simply abstain from participation in the proceedings, and raise the inexistence of a written contractual agreement to arbitrate as a defense to a proceeding seeking confirmation of the arbitration award, without the limitations contained in [9 U.S.C. § 12], which are only applicable to those bound by a written agreement to arbitrate.”
Based upon MCI Telecommunications Corp., I would conclude that 9 U.S.C. § 12 does not come into play if there is no agreement to arbitrate, and that Weldon can argue that there was no agreement to arbitrate.

The majority concludes that Weldon's assent to the arbitration agreement was implied from his conduct when he used his MBNA credit card repeatedly. However, the record reveals that Weldon made his last purchase and payment in 1999, which was two years before the date appearing on the credit card terms containing the agreement to arbitrate on which Asset Acceptance relies. Thus, I would conclude that the 2001 arbitration agreement is inapplicable to the instant claim.

Lessons:
1. To challenge an arbitration award governed by the Federal Arbitration Act, you must file a motion to vacate within 3 months after the award is filed or delivered.
2. A party may assent to arbitration by using a credit card that is accompanied by a credit agreement with an arbitration term even if the agreement is not signed (and maybe even if the agreement isn’t provided until sometime after use).

13. Dead Man's Statute in Federal Court. Estate of Anthony J. Suskovich v. Anthem Health Plans of Virginia, Inc. 553 F.3d 559 (7th Cir., January 22, 2009) (Flaum)(appeal of decision by Judge Barker)

The estate argues that the district court improperly considered the testimony of two employees of defendant (Eberhard and Jeschke), who testified that Suskovich did not consider himself an employee because he routinely rejected offers of regular employment as a computer programmer with WellPoint. Specifically, the estate argues that this testimony is barred by the Indiana Dead Man’s Statute, Indiana Code § 34-45-2-4 et seq.

The estate made two federal law claims-under the FLSA and ERISA-and one state law claim. WellPoint and Trasys argue that the Dead Man's Statute should not apply in federal court. The law of this circuit is fairly clear that where state law provides a federal court with the grounds for its decisions, that court should also apply state law restrictions on the competency of witnesses. The evidentiary standard in a case such as this one, where both federal and state law claims are involved, is less certain. District courts in this circuit that have considered the issue have previously held that Federal Rule of Evidence 601, which creates a broad presumption of competency, applies to cases alleging both federal and state law claims.
Accordingly, Rule 601, rather than the Indiana Dead Man's Statute, applies to the competency of witnesses, at least insofar as the evidence relates to any of the federal claims. However, that rule provides that “in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the competency of a witness shall be determined in accordance with state law.” Fed.R.Evid. 601. We thus still need to consider whether the Indiana Dead Man's statute would bar testimony if the evidence related solely to the common law claims.

The Indiana Dead Man's Statute states, in brief, that in a case where an executor or administrator of an estate is a party and the estate may receive or be liable for or receive a judgment in the action, a person who is a necessary party to the issue or case and whose interest is adverse to the estate is not competent to testify. While the facts of this case satisfy a few of the requirements of the Dead Man's Statute, it is a stretch to hold that Eberhard and Jeschke are necessary parties or have interests adverse to the estate.

The estate argues that because both are employees of WellPoint, their interests are adverse to the estate's and thus that they are incompetent to testify. But nothing in the record suggests that Eberhard or Jeschke have any personal stake in the outcome of the litigation, and the estate's interpretation of the statute would sweep in any adverse witness who would testify against an estate in a case brought by the estate. Nor are Eberhard and Jeschke “necessary parties” to the action or issue, as they are not named in the suit. The district court thus did not abuse its discretion in considering this testimony on summary judgment.

Lessons:
1. The Indiana Dead Man’s statute does not apply to federal causes of action in federal court but will usually apply to state causes of action.
2. When a corporation has an adverse interest to an estate and would be subject to the Dead Man’s statute, its employees may still testify.

14. Economic Loss Rule. The Indianapolis-Marion County Public Library v. Charlier Clark & Linard, P.C., 2009 WL 280018 (Ind.Ct.App. Feb. 6, 2009)(Baker)

We once again turn the page and delve into another chapter of the saga surrounding the renovation and expansion of the Central Library Project in Indianapolis. The Library appeals the entry of summary judgment in favor Charlier Clark and Linard (CCL)(who provided civil engineering services related to the parking garage), Thornton Tomasetti Engineers (TTE)(who provided structural engineering services) and Joseph Burns (who provided structural engineering services for TTE).
The trial court found that the Library’s claims against all three of these defendants were barred by the economic loss doctrine. The Library had no contractual relationship and was not in privity with any of these defendants. CCL and TTE were retained as consultants by the architectural firm on the project (Woolen Molzen and Partners, Inc.) with whom the Library did have a contract.

In Gunkel v. Renovations, Inc., 822 N.E.2d 150 (Ind. 2005), the Indiana Supreme Court expanded the application of the economic loss doctrine to construction projects and explained that the theory underlying the economic loss rule is that the failure of a product or services to live up to economic expectations is best relegated to contract law or to the law of warranty, where the buyer and seller are able to allocate risks and price the product or service accordingly. Thus, under the economic loss doctrine, “contract is the sole remedy for the failure of a product or service to perform as expected” when there is no personal injury and no physical harm to other property. As for the damages that the Library sustained, it is apparent that no damage to tangible property resulted, other than that contained within the scope of the project itself.

The Library argued that certain exceptions to the economic loss rule should apply. First, relying on a Florida case, the Library argued that the economic loss rule does not bar a cause of action against a professional for his or her negligence even though the damages are purely economic in nature. This court, however, has recognized that third parties, not in privity with a professional, cannot recover in negligence unless there are either recognized exceptions or certain conditions exist.
An exception has been recognized to the economic loss rule when an architect creates a condition that is imminently dangerous to third parties and injury has resulted. However, there is no exception that permits recovery in negligence—absent privity—when there has been no physical injury or damage to property.

Some jurisdictions have recognized a negligent misrepresentation exception to the economic loss doctrine. In order to rely on this exception, however, the Library was required to assert a negligent misrepresentation theory against the defendants in question. Since it did not do so, this exception to the economic loss doctrine is inapplicable here.

We conclude that the negligence claims that the Library brought against the appellees are subject to the economic loss doctrine and are “best relegated to contract law” in accordance with Gunkel.

Brown, dissenting:

Because the theory of negligence protects interests related to safety and there is at least a question of fact regarding imminent danger as to TTE, summary judgment based on the economic loss doctrine was inappropriate.

LITIGATION TIP FOR THE MONTH: OVERPREPARE BUT UNDERTRY
Excerpt from Robert S. Bennett’s In The Ring: The Trials of a Washington Lawyer(2008)

“[I]f there is one lesson above all others I have learned as a trial lawyer, it is that while you should overprepare your cases, you should always undertry them. A trial lawyer always does better when he sticks to a few basic themes and supports them with his strongest evidence. However, in the preparation stage, there is no issue or fact that should be ignored."