Indiana Law Update Blog - Price Waicukauski & Riley Legal Blog

Attorney's Discovery Missteps Justified Dismissal of Case

January 22, 2012

We previously told you about a decision from the Indiana Court of Appeals that reversed the dismissal of a case because of discovery sanctions. The Indiana Supreme Court granted transfer in that case and reversed in Whitaker v. Becker, ___ N.E.2d ___ (Ind. 2012), Cause No. 02S03-1201-CT-27. In doing so, it did not disagree with the standard applied by the Court of Appeals, just the manner in which that standard was applied.

I don't want to rehash all of the facts of the case. It should suffice to describe the conduct that justified the dismissal in the Court's eyes.

Here, Whitaker's counsel failed to respond to discovery requests on time, the trial court issued an order to compel discovery, and Whitaker responded in a false and misleading way.

None of the plaintiff's excuses justified this conduct. This conduct was "particularly egregious" and the trial court was entitled to "mak[e] it clear to counsel that this type of behavior is unacceptable." Thus, it could dismiss the case without imposing intermediary sanctions.

When I described the Court of Appeal's decision, I said that it showed "great leniency." This decision prevents others who engage in sharp practice from avoiding severe sanctions.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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Parties Do Not Always Need to Renew Their Objections

Evidence

January 20, 2012

Recently, the Seventh Circuit dealt with a Daubert challenge to an expert's opinion in Messner v. Northshore Univ. Healthsystem, ___ F.3d ___ (7th Cir. 2012), Case No. 10-2514. On appeal, that expert's proponent argued that there had only been a motion to strike the initial report, and not the expert's later testimony and supplemental report, so the objection to this evidence was waived. The Court disagreed because it found the initial objection was sufficient to preserve the issue for appeal.

The district court repeatedly put off dealing with the substance of these objections. Plaintiffs' objections gave the district court and defendant ample opportunity to address the issues. Where the district court repeatedly put off dealing with the issues, plaintiffs did not need to renew their unsuccessful objection every time the same witness attempted to provide additional information.

The best practice is, of course, to object to the introduction of objectionable evidence every time it is introduced. However, the court's decision shows that appellate courts will apply waiver rules in a common-sense manner, so that issues will not be waived unnecessarily.

Lesson:

When a district court puts off dealing with an objection, the objecting party need not renew its objection every time the same witness attempts to provide additional evidence.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG 7th Circuit, Evidence, Objection, Waiver

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Possessing Marijuana Gets You Sanctioned

Professional Conduct

January 12, 2012

In August 2009, a deputy prosecuting attorney was arrested for possessing marijuana and entered a diversion program, thereby admitting the offense. A disciplinary action was brought against him and he entered a conditional agreement with disciplinary counsel, which recommended a public reprimand. The Court did not like this recommendation, but went along with it anyway.

A lawyer's possession of marijuana involves a nexus with the chain of distribution and trafficking of illegal drugs. The impact of that association affects adversely the public's perception of the lawyer's fitness to be an officer of the court. See Matter of McNeil, 704 N.E.2d 114 (Ind. 1998). And "[w]hen the law is broken by one whose job it is to enforce the law, the public rightly questions whether the judicial system is worthy of respect." Matter of McFadden, 729 N.E.2d 137, 138 (Ind. 2000).

The parties propose the appropriate discipline for Respondent's illegal conduct is a public reprimand. The discipline the Court would impose for Respondent's misconduct would likely be more severe had this matter been submitted without an agreement. However, in light of the Court's desire to foster agreed resolutions of lawyer disciplinary cases and the mitigating factors in this case, the Court now APPROVES and ORDERS the agreed discipline.

This demonstrates two things: (1) the Court really doesn't like lawyers who use marijuana and (2) it pays to settle with disciplinary counsel.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG Attorney Discipline, IN Supreme Court

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Patient's Records Should Be Released to Patient, Even Though Release Is Not Authorized by Statute

Evidence/Privilege

January 12, 2012

Yesterday, the Indiana Court of Appeals addressed an interesting privilege issue in Williams v. State, ___ N.E.2d ___ (Ind. Ct. App. 2012), Cause No. 49A02-1103-CR-266. At issue was whether a person could subpoena his own prescription drug records, because a statute requiring the confidentiality of those records did not authorize such a release. The Court engaged in some practical judging and ignored the language of the statute, allowing the release.

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In this case, Willaims was arrested for possessing controlled substances. The existence of a valid prescription is a defense to such a charge, but the man could not remember his prescription information. Pursuant to a statute, the Indiana Board of Pharmacy maintained a computerized database that contains information that is required by law to be transmitted by controlled substance prescription dispensers, which includes the information Williams required. Williams sent a subpoena and request for documents to the Board for a copy of "any and all" of his prescription records. The Board moved to quash the subpoena, arguing that a statute prevented it from disclosing this information to Williams. The trial court granted that motion and Williams appealed.

On appeal, the Court recognized that the information requested by Williams was confidential under I.C. 35-48-7-11.1. That statute described circumstances under which the information could be provided to certain persons, but the patient is not one of the people authorized by statute to receive that information. The Court refused to be strictly bound by this statutory language.

It seems obvious that the confidentiality provisions of Indiana Code Section 35-48-7-11.1 were enacted to uphold the protections of the physician-patient privilege and the pharmacist-patient privilege. Where, as here, a patient seeks to waive those privileges for the purpose of exercising his or her constitutional right to present a complete defense to charges in a criminal case, both the rationale for and the Board's interest in keeping the patient's prescription records confidential evaporate.

Therefore, the Court concluded that the trial court erred when it quashed the subpoena.

It will not be often that a litigant will prevail despite the fact that the plain reading of a statute is contrary to his position. Thus, we should not hope that we will encounter such a situation often in our practices. However, we should keep in mind that the Court of Appeals can be swayed by practical argument from the strict application of apparent law.

Lessons:

A criminal defendant may subpoena his prescription records from the Board of Pharmacy to defend against a charge of possessing a controlled substance.
A Court may be persuaded to ignore statutory language by the practical consequences of strictly applying that statute.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG IN Court of Appeals, Physician-Patient Privilege, Statutory Construction

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A Sport's Governing Body Isn't In the Business of Ensuring that Teams in that Sport Compete

Insurance/Coverage Questions

January 12, 2012

On January 10, 2012, a divided Indiana Supreme Court issued a decision in a coverage action against the insurer of the Indiana Youth Soccer Association (IYSA) that dealt with what precisely is the business of the IYSA in Haag v. Castro, ___ N.E.2d ___ (Ind. 2012), Cause No. 29S04-1102-CT-118. The question was whether injuries to members of a soccer team associated with the IYSA suffered in an automobile accident in Colorado were covered by th IYSA's business auto coverage. The Court held that it was not.

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The plaintiffs in this case were players on a Carmel soccer team that traveled, with the IYSA's approval, to Colorado to participate in a youth soccer tournament. The team belonged to a soccer club that was an affiliated member in good standing with the IYSA. While in Colorado, the team decided to go white-water rafting as a "team-building" exercise. On the way to the rafting activity, the team was involved in an automobile accident, resulting in injuries to several players.

The players sued a variety of parties, among them the IYSA's insurance carrier. The trial court granted summary judgment to the carrier, finding that the policy did not provide coverage. A divided panel of the Court of Appeals affirmed, holding that the van the players were riding in was not being used "in the business of" the IYSA at the time of the accident. The Indiana Supreme Court granted transfer.

The only issue before the Court was whether the players were in a vehicle "being used in the business of" the IYSA at the time of the accident. Although the policy did not define that phrase, the Court did not find it to be ambiguous, thereby avoiding the doctrine that an ambiguous insurance policy be construed against the insurer. Rather, the Court looked to "the IYSA's organizational documents combined with widespread general familiarity with the business of sports governing bodies" to conclude that the phrase was "unambiguous here."

After reviewing the IYSA's articles of incorporation, the Court found that it engaged in 3 types of business: (1) "promoting" soccer; (2) "regulating" competition, leagues, teams, and players; and (3) "conducting" specific events. It found that these lines of business did not include "competing" and that this is consistent with the "widespread general familiarity" that the people of Indiana have with sports governing bodies. Thus, the fact that the IYSA encouraged the team to participate in the tournament did not mean that the team's actual participation was part of the business of the IYSA.

Justice Dickson dissented. He noted that the IYSA's articles of incorporation indicated that part of its business was to "develop and encourage sportsmanship and playing proficiency" and that the vehicle for achieving and evaluating this goal was competing on the field of play. He also concluded that "promoting soccer" embraces interstate travel to engage in competitive sport as an incentive to the youth of Indiana to participate in soccer under the IYSA. Thus, he found the majority's decision to be too narrow.

In the abstract, I find Justice Dickson's dissent to be more persuasive than the majority's decision (to which only Justices Sullivan and Shepard fully concurred). However, the plaintiffs had a difficult fact-pattern. They were traveling to a non-soccer related activity when the accident occurred, which makes it natural to question why the IYSA's insurer should pay for the injuries associated with the accident. This fact alone may explain why only 2 of 8 judges agreed with the plaintiff's argument.

Lessons:

A sport's governing body is not in the business of competing in that sport.
It can be difficult to overcome relatively unsympathetic facts

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG IN Supreme Court, Insurance Coverage

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Indiana Supreme Court Refines Standard of Review for Preliminary Injunctions

Procedure/Appellate

January 6, 2012

On December 29, 2011, the Indiana Supreme Court decided a challenge to Indiana's Autodialer Law, a law that regulates the use of devices that select and dial telephone numbers and then disseminate prerecorded messages to those numbers in State of Indiana v. Economic Freedom Fund, ___ N.E.2d ___ (Ind. 2011), Cause No. 07S00-1008-MI-411. The court found that the trial court erred in finding that the law's challengers had a reasonable likelihood of success on their claims. But while the merits are interesting, the part of this decision that will likely have the greatest effect on Indiana's legal community is the portion of the opinion that addressed the standard of review.

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The Autodialer Law's challengers argued that the law was unconstitutional under both the Indiana and federal constitutions. However, the trial court evaluated the Autodialer Law only under the Indiana Constitution. The law's challengers argued that the Court could affirm the trial court's decision on First Amendment grounds, even if it did not affirm on the grounds of the Indiana Constitution. The Court rejected this argument.

We recognize the principle that "where a trial court has made special findings pursuant to a party's request under Trial Rule 52(A), the reviewing court may affirm the judgment on any legal theory supported by the findings." Mitchell v. Mitchell, 695 N.E.2d 920, 923 (Ind. 1998). Notably, this case involves two facts that take it out of the purview of this principle: first, this Court is not reviewing a judgment but rather an interlocutory order granting a preliminary injunction; and, second, the trial court's special findings were not "pursuant to a party's request" but were mandatory under Indiana Trial Rule 52(A)(1). We believe the first fact is especially significant.

A preliminary injunction is not a final judgment but rather "an extraordinary equitable remedy" that should be granted "in rare instances." Gary Bd. of Zoning Appeals v. Eldridge, 774 N.E.2d 579, 584 (Ind. Ct. App. 2002), trans. denied. Furthermore, due to the provisional nature of a preliminary injunction, the record on review is not fully developed. See Jos. Guidone's Food Palace, Inc. v. Palace Pharmacy, Inc., 252 Ind. 400, 406, 248 N.E.2d 354, 357 (Ind. 1969). Thus, with those considerations in mind, a review of a grant or denial of a preliminary injunction should be confined to the law applied by the trial court, and this Court should evaluate only the merits of arguments reached by the trial court. We find this consistent with the limited and deferential appellate standard of review afforded to trial court rulings on motions for preliminary injunction.

Because we decline to extend the holding from Mitchell to orders granting or denying preliminary injunctions, FreeEats's First Amendment claim is not properly before this Court at this time, as the trial court did not address the merits of that claim.

It is unclear whether the Court based its decision on the fact that findings in this case were mandatory under Rule 52(A), because of the peculiar nature of a preliminary injunction, or both. Therefore, parties appealing from any instance in which findings and conclusions are required by Rule 52(A) are encouraged to argue that this case, rather than Mitchell, describes the applicable standard of review.

Lessons:

Review of a grant or denial of a preliminary injunction is confined to the law applied by the trial court, and and appellate court should evaluate only the merits of arguments reached by the trial court.
It is unclear whether this standard applies to other instances in which findings of fact and conclusions of law are mandatory under Trial Rule 52(A).

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG IN Court of Appeals, Preliminary Injunction, Standard of Review

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The Possibility of Prejudgment Interest Is Supposed to Encourage Settlement

Prejudgment Interest

January 6, 2012

On December 30, 2011, a divided panel of the Indiana Court of Appeals disagreed over application of Indiana's prejudgment interest statute in Kosarko v. Estate of Herndobler, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 45A03-1012-CT-668. Given the fundamental nature of the panel's disagreement over how the statute should be applied, it will be interesting to see if the Indiana Supreme Court grants transfer.

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In this case, two people were involved in an automobile accident. The plaintiff sued the defendant in February 2007 and, in March 2008, served the defendant with a settlement offer in the amount of $100,000, payable within 60 days. At that time, the plaintiff was claiming medical expenses in the amount of $23,216.49. The defendant rejected this offer. In September 2008, the plaintiff asserted that her medical expenses were $31,410.32. On March 25, 2009, the plaintiff provided the defendant with new medical bills and asserted that her medical expenses now totaled $72,733.58. The case was subsequently presented to a jury, who returned a verdict for the plaintiff in the amount of $210,000.

After the verdict, the plaintiff moved for prejudgment interest and the trial court denied that motion, concluding that the plaintiff's damages were not ascertainable within a time frame that justified granting the plaintiff's motion. The plaintiff appealed.

Normally, prejudgment interest is not available if the plaintiff does not make a qualified settlement offer within one year after the claim is filed. However, trial courts have the discretion to extend this time period based on a showing of good cause.

The majority reversed the the trial court's decision for the following reasons:

We find no dispute as to the amount of Kosarko's medical bills. Kosarko provided an accounting of her health care expenditures at all times during the case. As the trial court noted, Kosarko's medical bills increased as the case progressed. Nevertheless, a year elapsed from March 2009, when Kosarko notified Padula of the biggest increase in her medical bills, and the beginning of the trial in March 2010. Thus, Padula had ample opportunity to evaluate the known dollar cost of the dispute and consider settlement. There is no indication in the record before us that Kosarko's increased medical expenses were unnecessary, fraudulent, or unrelated to the automobile accident. There is also no evidence that Kosarko unduly delayed the surgery that caused the largest increase in her medical costs. Under such circumstances, "the defendant and not the plaintiff should bear the cost of the time value of money in the intervening period if the ultimate result is within the parameters set by the legislature." Cahoon v. Cummings, 734 N.E.2d 535, 547 (Ind. 2000). The trial court abused its discretion by denying Kosarko's motion for prejudgment interest. Consequently, Kosarko is entitled to prejudgment interest in the amount of $79,627.40, which she requested in her motion.

In her dissent, Judge May stated that the focus of the Court's inquiry should have been on the information available to the defendant within the time for accepting or rejecting the settlement offer. Thus, she disagreed with the majority's decision to place the risk of increased damages through further medical treatment on the defendant.

The majority's decision puts a lot of emphasis on the purpose of the prejudgment interest statute, which is to encourage settlements. Both plaintiffs and defendants should take the anticipated costs of further medical treatment into account when making decisions that affect the application of this statute.

Lessons:

A defendant's decision to reject a qualified settlement offer will not be excused by the fact that a plaintiff is still receiving medical treatment for his injuries.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG IN Court of Appeals, Prejudgment Interest

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A Continuing Wrong Can Continue After Last Interaction

Statute of Limitations

January 6, 2012

The Indiana Court of Appeals issued an interesting decision on its last day of business in 2011 dealing with the concept of continuing wrong in Manley v. Sherer, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 59A01-1104-PL-190. The Court's decision emphasizes how the application of this doctrine is a question of fact for the jury.

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In this case, Dr. Sherer had prescribed certain medications for one of his patients, a Ms. Zehr. Dr. Sherer saw Zehr several times per month, but never warned her that it was unsafe for her to drive due to her medical condition and the medications. The last of those visits occurred on November 21, 2006.

On November 27, 2006, Zehr was driving, lost consciousness due to her medical conditions and medication, and caused a head-on automobile collision with Ms. Manley. The Manleys settled with Zehr and filed a proposed complaint with the IDOI on November 25, 2008. Dr. Sherer moved for summary judgment based on both the statute of limitations and the merits. The trial court granted that motion.

On appeal, the Court concluded that the Manleys possessed sufficient information on November 27, 2006 to allow a reasonably diligent person to discover Sherer’s alleged malpractice, so they should have filed their proposed complaint before the statute ran on November 21, 2008. However, the Court then turned to whether the complaint was saved by the doctrine of continuing wrong. It concluded that this doctrine could apply in this situation.

In this case, Sherer saw Zehr several times per month in the months leading up to the accident. At an appointment on August 9, 2006, Sherer advised Zehr to "watch" her driving, but he did not advise her during that appointment or any subsequent appointment that it was absolutely unsafe for her to drive. Thus, although Sherer was aware of Zehr's inability to drive safely, he continuously failed to advise her to avoid driving. There is a dispute of fact as to whether Sherer's failure to warn was a continuing wrong, at least until the accident occurred on November 27, 2006. Under these circumstances, as in Garneau, the doctrine of continuing wrong, if applicable, would toll the statute of limitations until at least November 27, 2008. Under those circumstances, the Manleys' November 25, 2008 proposed complaint would be timely filed. We conclude that Sherer is not entitled to summary judgment based on the statute of limitations. The trier of fact must determine whether the doctrine of continuing wrong applies.

The Court went on to address the merits of the Manleys' claims. It concluded that It was reasonably foreseeable that Zehr, with her medical conditions and under medications prescribed by Dr. Sherer, was at risk of losing consciousness while driving and posed a danger to third persons. This and other factors led the Court to find that Dr. Sherer owed the Manleys a duty to warn Zehr not to drive.

The interesting part of this decision is the Court's application of the continuing wrong doctrine. As the Court stated in its opinion, the statutory limitations period begins to run at the end of the continuing wrongful act. But the Court held that the wrong in this case may not have ended at the conclusion of Zehr's last visit with Dr. Sherer. Thus, the Court appears to encourage a more liberal application of this doctrine to save claims that would otherwise be time-barred.

Lessons:

The question of whether the doctrine of continuing wrong applies is ultimately for the jury.
A doctor's failure to warn a patient not to drive could be a continuing wrong.
A deoctor may owe a duty of care to a third-pary victim of a patient's misconduct.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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TAG Continuing Wrong, Duty, IN Court of Appeals, Medical Malpractice, Statute of Limitations

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Parents of a Stillborn Child Can Obtain Emotional Distress Damages

Particular Actions/Negligent Infliction of Emotional Distress

December 30, 2011

Last year, we told you about a decision from the Indiana Court of Appeals that dealt with whether parents of a stillborn child could receive emotional distress damages. The Indiana Supreme Court later granted transfer in that case and, on December 13, 2011, rendered its decision in Spangler v. Bechtel, ___ N.E.2d ___ (Ind. 2011). This decision also allowed the parents' claims for damages to proceed.

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In this case, a pregnant woman was admitted to a hospital in active labor the child died in utero prior to devlivery. The parents brought negligence actions against the hospital, the nurse-midwife who managed the labor, and the nurse-midwife's employer. As of the date of the unborn child's death, Indiana law precluded any claim for damages under the Child Wrongful Death Act. Therefore, the parents sought only damages for negligent infliction of emotional distress. The trial court granted summary judgment to all three defendants and the Court of Appeals reversed as to all three.

The Court held that the fact "that the CWDA provides no remedy for wrongful death damages for the death of an unborn child does not preclude the availability of a separate action for damages founded on a basis other than wrongful death." Therefore, "parents who have suffered a stillbirth of their child are not precluded by the
CWDA from seeking emotional distress damages in a negligence action." The Court then addressed whether the parents could recover under a theory of negligent infliction of emotional distress.

The Court described the history of this tort in Indiana, noting that there are two variations: (1) the modified impact rule and (2) the bystander rule. The Court recognized that the Court of Appeals had urged the Court to abandon the modified impact and bystander rules altogether on many occassions in favor of a general test of "direct involvement." It did not agree.

A "direct involvement" standard is likely to encounter the same problems as those faced by one testing the genuineness and foreseeability of alleged emotional distress, which has been utilized by other states. ... A pure foreseeability rule is "unsatisfactory because genuine emotional disturbance can occur and is foreseeable in many situations in which courts clearly would not permit recovery." A general standard of "direct involvement" would not be any more precise. We have found no other comprehensive uniform principle capable of satisfactorily reflecting the range of circumstances where liability for emotional distress is appropriate.

The Court then held that the trial court erred when it concluded that the plaintiffs' claims were precluded due to the absence of any negligently-inflicted injuries on another.

[Proof of a negligently-inflicted death or severe injury to another] is not required for emotional distress claims brought under the modified impact rule, where we have permitted recovery so long as the plaintiff personally sustained a physical impact, in addition to emotional distress damages. An action seeking emotional distress damages, if predicated not on the bystander rule but on the modified impact rule, does not require the negligent infliction of injury on a person other than the plaintiff.

In this decision, the Court emphasized two main points. First, it likes the way that it has defined negligent infliction of emotional distress and does not wish to alter that definition. Second, negligent infliction of emotional distress is not a derivative claim, such as loss of consortium.

Lessons:

The Child Wrongful Death Act does not preclude claims for emotional distress damages by parents who have suffered a stillbirth of their child.
Indiana will not apply a "direct involvement" test to negligent infliction of emotional distress claims.
Negligent infliction of emotional distress is not a derivative claim.
The defendant's negligence in breaching a legal duty is a required predicate to a claim for negligent infliction of emotional distress.

Brad A. Catlin
Price Waicukauski & Riley, LLC
Learn more about Brad and contact us

TAG Bystander Rule, IN Supreme Court, Modified Impact Rule, Negligent Infliction of Emotional Distress, Stillbirth

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Quote of the Day

General

December 29, 2011

"Unlike Humpty Dumpty, however, a litigant cannot use words any way it pleases."

Blue Cross Blue Shield of Mass., Inc. v. BCS Ins. Co., ___ F.3d ___ (7th Cir. 2011), Cause Nos. 11-2343 & 11-2757.

Judge Easterbrook refuses to be fooled by a party's "artful pleading" when the party calls a motion one thing, though it is really another.

TAG 7th Circuit

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Attorney's Discovery Missteps Justified Dismissal of Case

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Parties Do Not Always Need to Renew Their Objections

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Possessing Marijuana Gets You Sanctioned

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Patient's Records Should Be Released to Patient, Even Though Release Is Not Authorized by Statute

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A Sport's Governing Body Isn't In the Business of Ensuring that Teams in that Sport Compete

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Indiana Supreme Court Refines Standard of Review for Preliminary Injunctions

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The Possibility of Prejudgment Interest Is Supposed to Encourage Settlement

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A Continuing Wrong Can Continue After Last Interaction

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Parents of a Stillborn Child Can Obtain Emotional Distress Damages

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Quote of the Day

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