Verdict Volume 40 No. 2

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INDIANA TRIAL LAWYERS ASSOCIATION

VERDICT

Published by INDIANA TRIAL LAWYERS ASSOCIATION Editor LANCE LADENDORF Volume 40 No. 2 2021

FROM THE EDITOR’S DESK

by Lance Ladendorf

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Volume 40 No. 2 2021

Contents ARTICLES

IN EVERY ISSUE 2 3 41 43 45 51 88

ITLA Board of Directors ITLA Officers and Executive Committee Law-Pac of Indiana Contributors Verdicts & Settlements Indiana Appellate Case Reporter

4

From the Editor’s Desk

by Lance Ladendorf

7

ITLA President’s Statement

by Fred Schultz

9

Use of a Party’s Deposition at Trial

by Rich Cook

Welcome New & Sustaining Members Index of Advertisers

Insurer Good Faith: Considering the 17 Indiana Reasonable Expectations of Indemnity

by Charles Anthony Ashford

29

Alabama Courts Take A Stand Against Insurance Carrier Misbehavior

by B.J. Kelley

VERDICT is published by

150 West Market Street #210 Indianapolis, Indiana 46204 Winter 2021 ⁜ VERDICT • 1

OFFICERS AND EXECUTIVE COMMITTEE:

President President Elect Vice President Secretary Treasurer Treasurer Elect Immediate Past President

Frederick W. Schultz, Bloomington Daniel A. Ladendorf, Indianapolis Daniel H. Pfeifer, South Bend Emily C. Guenin-Hodson, Wabash Jerry Garau, Indianapolis G. Steven Fleschner, Terre Haute Thomas E. Hamer, Anderson

Robert W. Johnson, Indianapolis David L. Farnbauch, Ft Wayne Kathleen A. Farinas, Indianapolis

Tara M. Worthley, Valparaiso Scott A. Faultless, Indianapolis Alexander J. Limontes, Indianapolis

Nick Baker, Indianapolis Rex Baker, Avon Tina M. Bell, Indianapolis Bryan L. Bradley, Valparaiso Dan Buba, Indianapolis David L. Cloutier, South Bend Richard A. Cook, Indianapolis John P. Daly, Jr, Indianapolis Kimberly H. Danforth, Indianapolis Amy M. Davis, Kokomo Nicholas C. Deets, Indianapolis Timothy F. Devereux, Indianapolis Robert H. Ebbs, Indianapolis Theresa L. Ebbs, Indianapolis Laura L. Ezzell, Elkhart Kathleen Farinas, Indianapolis Scott A. Faultless, Indianapolis Roger B. Finderson, Fort Wayne G. Steven Fleschner, Terre Haute Enrique Flores, Jr., Carmel Kate Franke, Indianapolis Dustin F. Fregiato, Indianapolis Christopher B. Gambill, Terre Haute Dennis Geisleman, Fort Wayne Barbara Germano, Indianapolis Caroline Gilchrist, Avon Matthew M. Golitko, Kokomo Sarah Graziano, Indianapolis R.T. Green, Fort Wayne Mark C. Guenin, Wabash

Ashley Hadler, Indianapolis Emily Guenin-Hodson, Wabash Jeffrey A. Hammond, Indianapolis George Hoffman, III, Indianapolis Monica L. Humphrey, Kokomo Travis N. Jensen, Indianapolis Kelley J. Johnson, Indianapolis Robert Johnson, Indianapolis Sam Krahulik, Indianapolis Lance R. Ladendorf, Indianapolis Alexander J. Limontes, Indianapolis James F. Ludlow, Indianapolis Thomas A. Manges, Fort Wayne Jonathon B. Noyes, Indianapolis Daniel H. Pfeifer, South Bend Kyle T. Ring, Indianapolis Marc Sedwick, Indianapolis Jason Shartzer, Indianapolis Jeffrey J. Stesiak, South Bend Yasmin L. Stump, Indianapolis Jennifer L. Thompson, New Albany Bryan C. Tisch, Indianapolis Daniel J. Tuley, Evansville Daniel B. Vinovich, Highland Stephen M. Wagner, Carmel C. Dennis Wegner, Indianapolis Tess A. White, Indianapolis Joseph N. Williams, Indianapolis Tara M. Worthley, Valparaiso Christopher D. Wyant, Indianapolis

J. Michael Antrim, Noblesville Bruce D. Aukerman, Terre Haute Edward E. Beck, Fort Wayne Charles L. Berger, Evansville Sandy L. Bryant, Indianapolis Daniel S. Chamberlain, Indianapolis Edward J. Chester, Elkhart C. Jack Clarkson, Rushville Lance D. Cline, Indianapolis Sherrill W. Colvin, Fort Wayne Neil R. Comer, Osgood J. Aaron Cooke, Lafayette Jeffrey A. Cooke, Lafayette P. Gregory Cross, Muncie Frederick W. Crow, Indianapolis Robert T. Dassow, Indianapolis Thomas C. Doehrman, Indianapolis Richard S. Eynon, Columbus David L. Farnbauch, Fort Wayne Kevin P. Farrell, Indianapolis John O. Feighner, Fort Wayne Mary A. Findling, Indianapolis Jerry Garau, Indianapolis W. Brent Gill, Bedford George Clyde Gray, Indianapolis Lynette Gray, Franklin Betsy K. Greene, Bloomington Richard Hailey, Indianapolis Susannah M. Hall-Justice, Lafayette Thomas E. Hamer, Anderson Daniel J. Harrigan, Kokomo Patrick W. Harrison, Columbus F. Boyd Hovde, Indianapolis Frederick R. Hovde, Indianapolis Max Howard, Anderson William W. Hurst, Indianapolis Samuel L. Jacobs, Indianapolis Franklin D. Julian, South Bend D. Bruce Kehoe, Indianapolis Paul S. Kruse, Lebanon Daniel A. Ladendorf, Indianapolis Mark C. Ladendorf, Indianapolis

Steven L. Langer, Valparaiso C. Max Layden, Lafayette Thomas M. Leatherman, Goshen Kathy A. Lee, Indianapolis Thomas A. Manges, Fort Wayne C. Richard Marshall, Columbus Mark A. Matthes, Goshen James O. McDonald, Terre Haute W. Scott Montross, Indianapolis Jack E. Morris, Fort Wayne Peter L. Obremskey, Lebanon Jeff D. Oliphant, Indianapolis Stephen A. Oliver, Martinsville Roger L. Pardieck, Seymour Terry Kaiser-Park, Indianapolis Anthony W. Patterson, Lebanon Mary Beth Ramey, Indianapolis Jason R. Reese, Carmel Michael Riley, Rensselaer Timothy A. Rowe, Indianapolis Fred Schultz, Bloomington David V. Scott, New Albany Mark A. Scott, Kokomo Theodore F. Smith, Jr., Anderson Michael J. Stapleton, Lafayette David W. Stewart, Carmel Roy T. Tabor, Indianapolis Teresa L. Todd, Indianapolis John F. Townsend, Jr., Indianapolis John F. Townsend, III, Indianapolis Karl N. Truman, Jeffersonville John D. Ulmer, Goshen Charles R. Vaughan, Lafayette Donald W. Ward, Indianapolis Stephen L. Williams, Terre Haute William E. Winingham, Indianapolis Robert W. York, Indianapolis Louis B. Yosha, Indianapolis James H. Young, Indianapolis John P. Young, Indianapolis Richard A. Young, Indianapolis

AT LARGE MEMBERS OF EXECUTIVE COMMITTEE: DIRECTORS:

EMERITUS DIRECTORS:

2 • VERDICT

VERDICT is published in the interest of the members of the Indiana Trial Lawyers Association Corp. and the legal profession to improve communications with the legal community.

Statements and opinions expressed in editorials or articles are not necessarily those of the ITLA. Publication of advertising does not imply endorsement of products, services or statements made concerning them. All advertising is subject to approval of the publisher; publisher reserves the right to reject advertising.

Contributions should be mailed to: VERDICT Indiana Trial Lawyers Association, Corp., 150 West Market Street, #210 Indianapolis, IN 46204 All editorial and article copy is subject to approval of the publisher; publisher reserves the right to reject editorial and article copy. This magazine will assume no responsibility for loss of or damage to such material. Any material accepted is subject to such revision as is necessary in our sole discretion to meet the requirements of this publication.

Material published in VERDICT remains the property of this magazine. No material, nor part thereof, may be reproduced nor used out of context without prior, specific approval of and proper credit to the magazine.

ATTENTION: VERDICT solicits scholarly articles of interest to the trial bar from its membership or the judiciary. All material is subject to the approval of the editor. Please submit typewritten manuscript to: Editor-VERDICT-ITLA 150 West Market St., #210 Indianapolis, IN 46204

HONORARY MEMBERS OF THE BOARD OF DIRECTORS: Glenn J. Tabor, Rochester

ASSOCIATE MEMBERS OF THE BOARD OF DIRECTORS: Thomas A. Clements, Merrillville Neil R. Comer, Osgood David S. Gladish, Highland Ronald F. Layer, Hammond Irwin B. Levin, Indianapolis Michael Miller, Indianapolis John Nichols, Terre Haute Gayle Pettinga, Evansville William N. Riley, Indianapolis

Stanley Rosenblatt, Fort Wayne Gregory J. Sarkisian, Portage Larry Schad, New Albany John Schuerman, Batesville Matthew J. Schad, New Albany Rusell Sipes, Indianapolis Charles Ward, Indianapolis Jeff Wrage, Valparaiso Joseph Young, Indianapolis

2020-2021 ITLA OFFICERS and EXECUTIVE COMMITTEE

Thomas E. Hamer Immediate Past President

Fred Schultz President

Attorney At Law Anderson

Daniel H. Pfeifer Vice-President

Pfeifer Morgan and Stesiak South Bend

Robert W. Johnson Johnson Jensen LLP Indianapolis

Daniel A. Ladendorf President-Elect

Greene & Schultz Bloomington

Emily Guenin-Hodson Secretary Guenin Law Wabash

David Farnbauch

Sweeney Law Firm Fort Wayne

Scott Faultless Craig, Kelley & Faultless Indianapolis

Ladendorf Law Indianapolis

Jerry Garau Treasurer

G. Steven Fleschner Treasurer-Elect

Garau Germano, PC Indianapolis

Fleschner Stark Tanoos & Newlin Terre Haute

Kathy Farinas

Tara M. Worthley

George & Farinas Indianapolis

Langer & Langer Valparaiso

Alexander Limontes Hurst Limontes LLC Indianapolis Winter 2021 ⁜ VERDICT • 3

FROM THE EDITOR’S DESK As I write this inaugural column as the Editor of this publication, our country and our entire planet continue to confront a myriad of interrelated public health, economic, and humanitarian crises on a scale unparalleled in our lifetimes. Just as injured parties seek redress and justice from our courts of law, we pray for relief from the unceasing toll on human life and vulnerable communities everywhere.

The events of this year have made us painfully cognizant of the limited control any one of us has over the trajectory of the contagion. Yet in spite of these limitations, we persist in our belief that knowledge is power. We seek knowledge from the most relevant and reliable sources on how our individual actions can be part of the collective solution, rather than the problem. And, being the social animals we are, we strive to find ways to meet our innate need for connection despite the constraints on our ability to encounter each other face-to-face.

Interestingly, the pursuit of timely information as well as connection with colleagues were the impetuses leading to the creation of Verdict magazine. Long before the proliferation of the means of connectivity that we enjoy today—before email, before listserves, and before we could search activity in virtually any state court litigation through Odyssey—Indiana trial attorneys grappled with their own unique quandary of access to information. Our trial lawyer forebears wanted to know what was transpiring in our State’s courts, and they were especially desirous of details related to trial outcomes. Verdict was conceived as a means of breaking down knowledge siloes and disseminating timely information among our Association’s membership in order to better equip us for the battles still to come. We have come a long way from the mimeographed copies of trial reports of Verdict’s early years, but the raison d’être of this publication as an information resource for trial attorneys and judges remains no less compelling.

I feel honored and humbled to have been selected to steer the ITLA’s flagship publication in this new decade. A lifelong “Zine-ophile” (as my bookshelves will confirm), Verdict has been an indispensable part of my litigator’s curriculum since my first day as a licensed attorney. I have learned and borrowed more from the hard-earned expertise and insights of the magazine’s past writers than I could ever expect to offer in return… though I will try! I am excited to harness the ideas and ingenuity of you, our readers, so that each quarterly issue both educates and inspires us in our craft.

I want to thank the contributing authors of the substantive articles contained within these pages: Rich Cook, B.J. Kelley, and Tony Ashford. These ITLA veterans each approached me with the ideas for their pieces, rather than the other way around, because they recognized areas of Indiana civil practice where inconsistencies in the application of our law warrant examination and correction.

Gentlemen, thank you again for your hard work and supreme patience with this new Editor.

Continuing in a spirit of gratitude, we owe a heaping measure of appreciation to 4 • VERDICT

Jan Vargo, my predecessor and the steady hand at the helm of Verdict’s editorship for the past decade. Jan’s passion for justice and dedication to legal scholarship are second only to her quintessential warmth and generosity. Jan approached her editorial work not as a “side gig” but as a labor of love, always with an eye toward enhancing our effectiveness as advocates in an ever-evolving practice. We often use the word “stalwart” when describing ITLA members whose service to our organization is especially noteworthy. By this definition, Jan Vargo and husband John Vargo are, without question, two of the ITLA’s true stalwarts of the past halfcentury. Jan and John, thank you for your friendship and advice, enjoy your wellearned retirement, and don’t be strangers when your favorite ITLA conferences resume in person someday.

Building on the strong foundations laid by past leaders of this publication, every issue of Verdict will aspire to meet the following objectives: Relevant content: While we welcome articles addressing any topic germane to our members’ practices, we especially seek to feature articles that advance the conversation in underdeveloped areas of Indiana law or areas where there are uncertainties in need of greater clarification by our courts. Our readership also benefits immensely from articles concentrating on trial skills and successful trial preparation strategies borne of experience in the trenches.

Scholarship: Verdict will always aim to elevate the practical over the esoteric in terms of substantive content. However, this publication will never compromise on quality legal writing when it comes to depth of analysis and clarity of communication.

Variety: Our readership is not a monolith. It comprises hundreds of lawyers and legal professionals scattered about Indiana’s ninety-two counties, in addition to all of our State’s trial and appellate judges. Some of our readers carry on general practices, while many others are more concentrated on certain types of cases involving physical or financial harm, such as medical malpractice actions, workers compensation claims, and asbestos litigation. Consequently, Verdict best serves its readers when it reflects that diversity of practice in its content. In addition to running the gamut with respect to fields of practice, we also hope and plan for future issues to include “human interest” columns of various types.

While I have set sights high in terms of the value Verdict will deliver to our readership, this is not a one-man mission. Your ideas, coupled with your willingness to bring them to life on these pages, are the intellectual and creative lifeblood of this magazine.

To our membership, I encourage each of you to think deeply about your law practices, identify areas where Indiana law can be better bent toward justice, and bring your concerns and proposed solutions in the form of an article for Verdict. I call upon our veteran trial attorneys to share the wisdom you have gained through the “classroom of the courtroom” with the younger members of our ranks. And to those young lawyers, I can think of few better ways to build a reputation as a competent professional and gain visibility within our trial lawyer community than Winter 2021 ⁜ VERDICT • 5

writing for Verdict.

To our judicial audience, please consider this a standing invitation to communicate through this medium to our sizable group of civil trial and appellate lawyers who appear before you. Though we are our clients’ lawyers in any given litigation, we are also your partners in this endeavor called justice. Help us raise the bar by sharing your observations on effective advocacy in your courtrooms.

I want to conclude this message in a similar way to how I began and acknowledge the adversities of living through this moment in history. This year has foisted enormous challenges upon our ability to safely practice our professions as well as our ability to efficiently advance our clients’ interests. With the pressures of our work being what they are, we may even find ourselves feeling exhausted or barely keeping our heads above water. Please know that there is a vast network of strength and solidarity in the very DNA of the Indiana Trial Lawyers Association.

I learned very early in my career that the hallmarks of the ITLA are the collegiality, generosity, and unyielding support among our members. As we eagerly await the day when we can be with each other at seminars, fundraisers, and our other favorite social events, there is no better time than the present to reach out and encourage each other along this extraordinary journey. Until that day, stay safe and happy reading.

Lance Ladendorf is an attorney at Pavlack Law LLC in Indianapolis and the Editor of Verdict, the flagship publication of the Indiana Trial Lawyers Association (ITLA). Lance devotes his legal practice to championing the rights of individuals harmed by the negligence of others, combining passion with practicality in pursuit of justice. He draws daily inspiration from the perseverance through adversity shown by the diverse clients he serves, as well as the unyielding commitment of the ITLA’s membership to protecting civil rights and remedies. A member of the ITLA’s Board of Governors since his third year of practice, Lance’s service to the ITLA has included amicus curiae appellate advocacy, government affairs advising, seminar presentations, and his personal favorite endeavor: volunteering alongside friends and colleagues at service events organized by the Young Lawyers Division.

A proud, lifelong resident of the Hoosier State, Lance grew up in Fishers, Indiana, attending Hamilton Southeastern and Park Tudor Schools. He completed his undergraduate studies at the University of Notre Dame, graduating in 2009 with concentrations in Psychology and Theology, and then earned his J.D. from the Indiana University – McKinney School of Law in 2012. He currently resides in Carmel with his wife, Cynthia, who is both muse and master editor of his life outside of the office.

Lance appreciates the continued support of Verdict through your contributions of time, talent, and knowledge. He welcomes your ideas and constructive feedback at: Lance@indianatriallawyers.org.

6 • VERDICT

ITLA PRESIDENT’S STATEMENT

By Fred Schultz We find ourselves in challenging times, to say the least. COVID-19 numbers are going up, not down. Parents and children are attending work and school remotely. We’re split along political fault lines in such a way that we don’t just disagree – we often feel hate towards each other.

It’s tempting to throw up our hands and move to some foreign land – except they won’t accept our passport because of the pandemic. We need to remember that we have many more things that unite us than divide us. That sounds like a throw-away line, but it is still true.

In the summer of 2012, I had the privilege to participate in an exercise while at the Trial Lawyers College that opened my eyes to our shared humanity. Josh Karton was the instructor. Josh is an actor who works Fred Schultz with lawyers across the country. One of my classmates at the TLC was President Greene & Schultz a woman who had been born in Vietnam and fled the country in the Bloomington last days of the Vietnam War. Her family immigrated to America and she grew up in California. Josh asked her to give our group an opening statement in a case she was working on. We all arranged our chairs to form a jury box and waited for her to start.

Just before she began, Josh added one wrinkle to the exercise. She had to give her opening statement in Vietnamese. Speaking only Vietnamese, she had to give one fact in her opening statement to a juror. She could not move on until that juror understood what she was trying to say. One person at a time. One important fact at a time. She moved from one person, to the next, to the next, to the next. In less time than you might think, we were able to repeat back her opening statement in English – even though none of us understood Vietnamese.

That exercise taught me the incredible importance of body language. It taught me how much we communicate with our eyes. On a deeply human level, it taught me how much we all think alike even if we do not or cannot understand the other person’s language.

Which brings me back to today – here and now. Interacting with someone from a different political party, or different faith tradition, may feel like you’re speaking a different language, but that does not mean you have different core beliefs. They are likely very similar or the same. Our tribal nature as humans may cause us to express our deepest feelings of fear, love, or pain in different manners, but our end goals are the same.

Despite the rage or despair or anxiety we all feel in varying degrees right now, we are all alike. Recognizing that we all feel this way sometimes and identifying commonality is the first step towards reducing the tension, solving the problems, and finding a way back together.

As Trial Lawyers, we need to put our skills and talents to use, not just in the courtroom, but in our communities. We are used to gathering new information, Winter 2021 ⁜ VERDICT • 7

explaining what we learned to others, and then leading them towards a logical conclusion that solves a problem for our clients. We have an innate ability that affords us the opportunity to speak out on behalf of those who feel as though they will never be heard. I urge all of you to help bring your families, friends, and communities together. Be the peacemaker. Be a leader. Set an example of professionalism, reconciliation, and hope. Our families and communities need us.

Being a Trial Lawyer has never been more important.

Growing up in rural Indiana, Fred admired his uncle who was a lawyer in a nearby town. He enjoyed reading and learning new things and felt that becoming a lawyer was a way to use his natural skills to help others. Fred graduated from Indiana University Maurer School of Law in 1996 and began his legal career as a deputy prosecuting attorney with the Greene County Prosecutor’s Office from 1996 to 1998.

He joined Nunn & Greene Law Office as an associate attorney until he left in May of 2005 to form the law firm of Greene & Schultz with Betsy Greene.

Fred has tried numerous jury trials in both State and Federal Courts in Indiana, and has written and spoken at a number of Continuing Legal Education programs, both in Indiana and across the country. During his career as a trial lawyer, Fred has received numerous awards and recognitions. He has received the top award for a lawyer in practice less than ten years from both the Indiana Trial Lawyers Association and the Association for Justice, the Max Goodwin Award from ITLA, and the F. Scott Baldwin Award from the American Association for Justice. He is also a graduate of the Trial Lawyers College. Fred has been named a Super Lawyer for every year since 2008 by Law & Politics Magazine, and the publishers of Indianapolis Monthly. The Super Lawyer award is given out only after an extensive peer review and screening process of all the lawyers in Indiana and is bestowed upon those attorneys who are considered to be among the top five percent of all lawyers in Indiana. He has also been recognized by Best Lawyers in America every year since 2013.

Fred is frequently asked to serve in leadership positions in the various organizations which he is involved. He has served as president of the Monroe County Bar Association, chairperson of the Indiana Trial Lawyers Association (ITLA) Annual Institute, co-chaired ITLA’s Professional Responsibility Seminar, and has been asked to speak many times at the Annual Convention for the American Association for Justice. He is also a member of the Indiana State Bar Association. Fred is active in leadership in the Indiana Trial Lawyers Association (ITLA), where he has served on the Board of Directors since 2004 and the Executive Committee since 2011. He currently serves as the President of ITLA and is currently President of the Indiana chapter of ABOTA. He is also a member of the American Association for Justice, where he is a past member of the Board of Governors, and still serves on several committees. Fred is also a member of the American Board of Trial Advocates. He is also board certified as a Civil Trial Advocate by the National Board of Trial Advocacy.

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8 • VERDICT

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USE OF A PARTY’S DEPOSITION AT TRIAL

By Rich Cook Editor’s Note: This article was first drafted in Spring 2020. A major impetus behind the article was author Richard Cook’s firsthand frustration with the inconsistent application of Indiana Trial Rule 32 as it pertained to the use of a party’s deposition transcript at trial. Apparently, the author was not alone in his views, as several other trial attorneys representing both plaintiffs and defendants found this issue in need of a more uniform resolution.

In July 2020, the Indiana Supreme Court Committee on Rules of Practice and Procedure recommended a proposed amendment to the language of Trial Rule 32(A) (2) that would remove any doubt and promote consistency across Indiana trial courts. On November 12, 2020, the unanimous Indiana Supreme Court issued an “Order Amending Indiana Rules of Trial Procedure” in which it officially adopted the Rules Committee’s proposal. The amendment, which went into effect on January 1, 2021, can be found at the conclusion of Mr. Cook’s article.

While the prior controversy over the matter may have been put to rest by this amendment, I feel obliged to honor Rich Cook’s role in advocating for this necessary change by featuring the following article, which had already been finalized when the Supreme Court issued the November 12 order. As you will see, it is still quite “Rich” with useful guidance. – L.L. ***** Anecdotally, a number of attorneys lament that trial courts sometimes prevent the liberal use of an opposing party’s deposition at trial. I have experienced resistance myself, told there is no need to do so because the opposing party is present for examination or that this is not a proper form of impeachment because the defendant has not first had a chance to testify. Is this judicial mindset based upon some vestige of Indiana’s “Patterson Rule”?1 The common law “rules” of evidence have been superseded by the Indiana Rules of Evidence. Perhaps, the trial court is treating a party’s statement like that of a non-party. However, as will be seen, the rules are different when dealing with a party.

Sure, a party could call the opposing party as a hostile witness, impeach as needed, and allow the opposing attorney to lead his client by the nose on redirect, but why? If you already have a pretrial deposition where the opposing party has made damaging admissions, then you should be able to use the deposition without putting the opposing party on the stand. Isn’t that why you took the deposition to begin with, in order to lock in favorable testimony for use at trial? Let us take a look at why this type of legal reasoning is wrong and illogical.

Indiana Trial Rule 32 states unequivocally, in pertinent part: 1 Under Indiana's “Patterson rule” set out in Patterson v. State, 263 Ind. 55, 324 N.E.2d 482 (Ind. 1975), out-of-court statements were admissible as substantive evidence where the declarant (1) acknowledged having made the out-of-court statement, and (2) was present and available for cross-examination. Patterson, at 57–58, 484–85.

Out-of-court statements that satisfied these requirements were not considered “hearsay” under Indiana law. This common law rule of evidence was abrogated by Indiana’s adoption of formal Rules of Evidence.

Winter 2021 ⁜ VERDICT • 9

USE OF A PARTY’S DEPOSITION AT TRIAL

A. Use of Depositions. At the trial… any part or all of a deposition, so far as admissible under the Rules of Evidence applied as though the witness were then present and testifying, may be used against any party who was present or represented at the taking of the deposition, by or against any party who had reasonable notice thereof or by any party in whose favor it was given in accordance with any one [1] of the following provisions: * * * (2) The deposition of a party, or an agent or person authorized by a party to testify or furnish such evidence or of anyone who at the time of taking the deposition was an officer, director, or managing agent, executive officer or a person designated under Rule 30(B)(6) or 31(A) to testify on behalf of an organization, including a governmental organization, or partnership which is a party may be used by an adverse party for any purpose.

[Emphasis added.]

Federal Rule of Civil Procedure 32 similarly provides: (a) USING DEPOSITIONS. * * * (3) Deposition of Party, Agent, or Designee. An adverse party may use for any purpose the deposition of a party or anyone who, when deposed, was the party’s officer, director, managing agent, or designee under Rule 30(b)(6) or 31(a)(4).

[Emphasis added.]

Hearsay limitations imposed by both state and federal Rules of Evidence are not an impediment to the admissibility and liberal use of a party’s deposition at trial. There are several classes of statements that are considered non-hearsay under the Rules of Evidence. These statements are admitted not because the information is considered necessarily reliable (such as those typically encompassed by the hearsay exceptions), but rather because of our adversarial process. See: Notes of Advisory Committee on Proposed Rules of Federal Evidence, Subdivision D.

Hearsay is generally defined as “an out-of-court statement offered in evidence to prove the truth of the matter asserted.” Indiana Rule of Evidence 801(c). Certain types of statements are exempted from this general definition. For instance, Indiana Rule of Evidence 801(d)(2) provides, in pertinent part: Statements That Are Not Hearsay. Notwithstanding Rule 801(c), a statement is not hearsay if: * * * An Opposing Party’s Statement. The statement is offered against an opposing party and:

10 • VERDICT

Rich Cook

A. was made by the party in an individual or representative capacity; B. is one the party manifested that it adopted or believed to be true;2 C. was made by a person whom the party authorized to make a statement on the subject; D. was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed; or E. was made by the party’s coconspirator during and in furtherance of the conspiracy.

The statement does not by itself establish the declarant’s authority under (C); the existence or scope of the relationship under (D); or the existence of the conspiracy or participation in it under (E).

The federal counterpart to this rule of evidence is nearly identical. See F.R.E. 801(d)(2).3

As the clear language of the evidentiary rules indicate, a person who is acting as an agent or intermediary may bind the principal, and the statement may be considered that of the party. See I.R.E. 801(d)(2)(A) thru (E). The statements of employees while they are still employed by the company are admissible against a company or entity as admissions under Indiana Rule of Evidence 801(d)(2)(B).

Moreover, testimony from a Rule 30(B)(6) deponent on behalf of the company or entity qualifies as statements by the party’s agent or employee on a matter within the scope of that relationship as well as statements made by a person whom the party authorized on the subject.

By definition, admissions of a party opponent do not even need to be made under oath in order to be admissible into evidence. This is because statements made by an opposing party, including those of a representative, are defined as non-hearsay under Rule 801 (d)(2). Therefore, an objection of hearsay cannot be sustained.

The Indiana Court of Appeals recently decided this issue in an unpublished decision in Grigsby v. Martin’s Super Markets, Inc., 129 N.E.3d 828, 2019 Ind. App. Unpub. LEXIS 788 (Ind. Ct. App. 2019).4 In Grigsby, the plaintiff claimed the 2 Federal Rule of Evidence 801(d)(2)(B) does not require the party to specifically adopt another person’s statements. Rather, a “manifestation of a party’s intent to adopt another’s statements, or evidence of the party’s belief in the truth of the statements, is all that is required for a finding of adoptive admission.” United States v. Rollins, 862 F.2d 1282, 1296 (7th Cir.1988), reh’g denied.

3 Rule 801. Definitions That Apply to This Article; Exclusions from Hearsay (d) Statements That Are Not Hearsay. A statement that meets the following conditions is not hearsay - (2) An Opposing Party’s Statement. The statement is offered against an opposing party and: (A) was made by the party in an individual or representative capacity; (B) is one the party manifested that it adopted or believed to be true; (C) was made by a person whom the party authorized to make a statement on the subject; (D) was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed; or (E) was made by the party’s coconspirator during and in furtherance of the conspiracy.

The statement must be considered but does not by itself establish the declarant’s authority under (C); the existence or scope of the relationship under (D); or the existence of the conspiracy or participation in it under (E).

4 Grigsby v. Martin’s Super Markets, Inc. is an unpublished memorandum decision by our Court of Appeals and thus does not have the force of precedent. Therefore, it is of limited value and is persuasive authority at best. That being said, I will be the first to acknowledge, from my own research, the scarcity of appellate treatment of this issue. Perhaps it is a recognition by the Court of Appeals that this interpretation of the rules is intuitively obvious. In other words, the text of Indiana Trial Rule 32(A)(2)

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trial court abused its discretion by permitting the defendant to impeach her trial testimony by admitting portions of her deposition on whether her footwear had water on it. The trial court also permitted the defendant to recall the plaintiff as a witness and confront her with relevant portions of her prior deposition.

In its opinion, the Court of Appeals noted: In the present case, the trial court apparently believed that the admission of the relevant portions of the deposition was improper unless Grigsby was unavailable as a witness. On this issue, the trial court was incorrect, as Trial Rule 32(A)(1) clearly allows a deposition of any witness to be used for impeachment purposes, and Trial Rule 32(A)(2) allows the deposition of a witness who is a party to be used by an adverse party “for any purpose.”

2019 Ind. App. Unpub. LEXIS 788 at 16-17. [Emphasis added.]

The plaintiff also argued that extrinsic proof of her prior inconsistent statements was not allowed because she already admitted she had made the prior statements, relying upon Indiana Rule of Evidence 613(b). The Indiana Court of Appeals rejected this argument and observed Rule 613(b) was not controlling.

The Court stated: Evidence Rule 613(b) provides that “extrinsic evidence of a witness’s prior inconsistent statement is admissible only if the witness is given an opportunity to explain or deny the statement and an adverse party is given an opportunity to examine the witness about it, or if justice so requires.” Notably, however, “[t]his subdivision (b) does not apply to an opposing party’s statement under Rule 801(d)(2).” (emphasis added). Here, Grigsby was an opposing party, and Evidence Rule 613(b) is therefore inapplicable.

Instead, our Evidence Rules provide that a prior statement by an opposing party offered against them is admissible as it is “not hearsay” by definition. Evid. R. 801(d)(2). Indeed, prior inconsistent testimony by any witness, even if not a party, may be offered as substantive evidence if the statement was given under penalty of perjury at a prior deposition. Ind. Evid. Rule 801(d)(1)(A); see also T.R. 32(A)(2) (“The deposition of a party ... may be used by an adverse party for any purpose.”).

Id. at 18-19.

The Indiana Court of Appeals went on to hold a prior inconsistent statement made by a party, or any witness if the prior statement was given under oath, may be used as substantive evidence, and not merely as impeachment evidence, citing to Ind. Evid. Rule 801(d)(1)(A). Id. at 19. means what it says and allows liberal uses of deposition testimony of an opposing party at trial.

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“Neither the Rules of Civil Procedure nor the Rules of Evidence make any distinction between discovery depositions and depositions for use at trial.”

Henkel v. XIM Prods., Inc., 133 F.R.D. 556, 557 (D. Minn. 1991). Indeed, our federal courts have broadly allowed the use of an opposing party’s deposition for any purpose without a showing of unavailability. See, e.g., Globe Savings Bank, F.S.B. v. U.S., 61 Fed. Cl. 91 (Fed. Cl. 2004); Estate of Thompson v. Kawasaki Heavy Industries, Ltd., 291 F.R.D. 297, 306-307 (N.D. Iowa 2013); Patsy’s Italian Rest., Inc. v. Banas, 508 F.Supp.2d 194, 200 n. 3 (E.D. N.Y. 2007); Northern Ins. Co. of N.Y. v. Albin Mfg., Inc., C.A. No. 06-190-S, 2008 WL 3285852, *3 n. 4 (D.R.I. Aug. 8, 2008).

There have been a few federal cases where the liberal use of a party’s deposition at trial was called into question in light of the trial court’s interest in controlling the manner and mode by which evidence is presented under Rules of Evidence 4035 and 611(a).6 Crimm v. Missouri Pac. R.R., 750 F.2d 703, 709 (8th Cir. 1984) (If possible, it is always better if the jury can observe the witness firsthand to judge his or her demeanor.); Loinaz v. EGG, Inc., 910 F.2d 1, 8 (1st Cir. 1990) (Judge Learned Hand proclaimed the deposition to be “second best, not to be used when the original is at hand.”). To allay such concerns, I recommend always videotaping depositions of the opposing party or their designated representatives.

Videotaping these depositions gives you, the judge, and the jury a chance to view the party’s demeanor firsthand, which should eliminate this spurious argument entirely.

The defense may claim that it would be cumulative to present such evidence twice: once in the plaintiff ’s case-in-chief, and a second time in the defense’s case. However, such evidence is neither cumulative nor a waste of time in the plaintiff ’s case-in-chief. In reality, this is the first time the evidence is presented to the jury. Accordingly, it cannot be cumulative, and any objection on such grounds should be overruled. On the other hand, if the defense later calls its client and that defendant testifies to the same points, then the defense would be the one violating these principles, not the plaintiff. The objection of “cumulative” would then belong to the plaintiff. If the defense chooses to “plow the same field” covered by the deposition excerpts, they will be the ones violating Rules of Evidence 611 and 403 and wasting the jury’s time. The plaintiff has the burdens of proof and production, not the defense. Therefore, the plaintiff should be free to use the defendant’s deposition excerpts in the plaintiff ’s case-in-chief, and any ruling prohibiting a plaintiff from using a defendant’s deposition excerpts would ignore the “for any purpose” language of Indiana Trial Rule 32(a)(2).

5 Rule 403. Excluding Relevant Evidence for Prejudice, Confusion, or Other Reasons The court may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, or needlessly presenting cumulative evidence. [Emphasis added].

6 Rule 611. Mode and Order of Examining Witnesses and Presenting Evidence (a) Control by the Court; Purposes. The court should exercise reasonable control over the mode and order of examining witnesses and presenting evidence so as to: (1) make those procedures effective for determining the truth; (2) avoid wasting time; and (3) protect witnesses from harassment or undue embarrassment. ***

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If the concern is the deposition excerpts will be taken out of context, the rules provide a solution. If a party’s deposition excerpts are taken out of context, there is still a remedy and safeguard under both the Indiana Rules of Trial Procedure and the Indiana Rules of Evidence. See, e.g., Ind. T.R. 32(A)(4) and I.R.E 106. Under Indiana Trial Rule 32(A)(4), “[i]f only part of a deposition is offered in evidence by a party, an adverse party may require him to introduce any other part which ought in context to be considered with the part introduced, and any party may introduce any other parts.” Compare F.R.C.P. 32(a)(6).7 Similarly, under Indiana Rule of Evidence 106, “[i]f a party introduces all or part of a writing or recorded statement, an adverse party may require the introduction, at that time, of any other part—or any other writing or recorded statement—that in fairness ought to be considered at the same time.”

These remedial provisions support admission of an opposing party’s deposition excerpts while ensuring the integrity of the proceeding and eliminating any unfair prejudice. They prevent improper use of deposition excerpts by protecting the opposing party’s interest in making sure the proffered evidence is presented in context in a fair and accurate manner. See Clark v. Sporre, 777 N.E.2d 1161, 1172 (Ind. Ct. App. 2002) (trial court properly excluded compilation of selected portions of video-taped doctor deposition testimony for creating misimpression).

CONCLUSION

Indiana Trial Rule 32 and Indiana Rule of Evidence 801 make it clear that a party is not required to call the adverse party or party’s representative “live” in its case, nor must the the use of a party’s deposition be limited to merely impeachment purposes. To give the intended effect to Trial Rule 32(A)(2)’s “for any purpose” mandate, our trial courts should consistently allow liberal use by a party of an opposing party’s deposition.

Richard A. Cook Attorney at Law Yosha Cook & Tisch 9102 North Meridian Street, Suite 535 Indianapolis, IN 46260 Email: rcook@yoshalaw.com Web: www.yoshalaw.com Blawg: www.the-barristers-toolbox.com Phone: 317-334-9200 Fax: 317-566-3578

7 FRCP(a)(6): Using Part of a Deposition. If a party offers in evidence only part of a deposition, an adverse party may require the offeror to introduce other parts that in fairness should be considered with the part introduced, and any party may itself introduce any other parts.

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Charles Anthony Ashford

INDIANA INSURER GOOD FAITH: CONSIDERING THE REASONABLE EXPECTATIONS OF INDEMNITY

by Charles Anthony Ashford I recall when college basketball star Hank Gathers died suddenly on the court during a game. After his untimely death, I learned that college athletes could purchase an insurance policy to protect against the loss of a career that had not yet begun.1 I later learned that professional athletes were purchasing similar policies to protect themselves against injuries, thereby providing leverage in contract negotiations.

The universe of potential insurable losses is astounding, as a simple Internet search will reveal. Recently, when Googling “strange insurance policies,” I have even found policies insuring against such extraordinary events as alien abduction and kidnapping, as well as providing specific coverage for damage to prized individual body parts, such as legs, lips, or even a moustache. While it seems clear that insurers will eagerly accept premiums to protect against the loss of just about anything, the bigger question is how they will respond when those unusual losses ultimately occur. While one would expect that they would act fairly and in good faith to all insureds, in practice, it seems that Indiana insurers would prefer to avoid such responsibility.

Ever since the Indiana Supreme Court recognized a cause of action against an insurer for tortious breach of the duty to exercise good faith and fair dealing in Erie Ins. Co. v. Hickman, 622 N.E.2d 515 (Ind. 1993), insurers have sought to narrow the scope of the same. For the most part, Indiana litigants and appellate courts have obliged the insurers to the extent that the independent tort of bad faith seems to have lost its teeth as a means of redressing egregious insurance claims practices.

Recently, however, the Indiana Court of Appeals in Schmidt v. Allstate brought the insurer’s duty of good faith back to the forefront by reconciling the issue of to whom such duty is owed. Schmidt v. Allstate, 141 N.E.3d 1251 (2020), trans. denied. In Schmidt, the Indiana Court of Appeals was confronted with the issue of whether an insurer owed a duty of good faith and fair dealing to an unnamed insured who brought a first-party claim for uninsured motorist (UM) coverage.

Schmidt, a passenger injured while riding with the insured, sued Allstate, her driver’s insurer, alleging bad faith for the refusal to tender the policy limit for uninsured motorist coverage. Relying on Cain v. Griffin, 849 N.E.2d 507 (Ind. 2006)2, the trial court granted Allstate’s motion for summary judgment on the bad faith claim. Schmidt, 141 N.E.3d at 1252.

The Indiana Court of Appeals reversed the trial court, distinguishing Cain and 1 Unfortunately for Gathers’ family, he had purchased a disability policy with no death benefit.

2 In Cain, the Indiana Supreme Court held that while a third-party beneficiary of medical payments coverage could sue the insurer for breach of contract, there was an insufficient relationship between the beneficiary and the insurer to warrant a duty of good faith by the insurer. Cain v. Griffin, 849 N.E.2d at 515 (Ind. 2006).

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concluding that an insurer owes a duty of good faith and fair dealing even to an insured who is not a policyholder. Id. at 1256, 1258. Specifically, the court held that evaluation of the three-factor test in Webb v. Jarvis3 determines whether an insurer owed a duty of good faith—even to a non-payor also insured under the policy. Id. at 1258. The appellate court observed that no Indiana appellate case has “squarely held that an insurer does not owe a duty of good faith and fair dealing to an insured, named or unnamed, who is not the policyholder.” Id. at 1255 (emphasis added). Rather, a policyholder holds a “‘special’ or ‘first-among-equals’ status with respect to all other insureds covered by a policy” and, therefore, “there can be little doubt that dealing with those other insureds in good faith only benefits the policyholder[.]” Id. at 1258.

The Schmidt court correctly recognized that, regardless of how one labeled the unnamed insured, the insurer had specifically agreed to provide such coverage to the additional insured, and both the policyholder and the insurer would have anticipated and considered such claims when the policy was issued (i.e., the unnamed insured was an intended indemnitee of the policy). That is, the label given by the insurer to the unnamed insured was not dispositive to the question of whether that insured is nonetheless owed duties of good faith and fair dealing. The court also looked to the language of the Unfair Claims Settlement Practices Act, Indiana Code § 27-4-1-4.5 et seq., to show that public policy supports protecting all insureds, not just policyholders, from unscrupulous insurers.4 Finally, the Court of Appeals recognized perhaps the most important feature of insurance, the reasonable expectations of indemnity at the time a policy is purchased: In light of this government-mandated and -regulated insurance market, with an emphasis on providing coverage for innocent insureds who are injured by uninsured or underinsured motorists, we can think of no principled reason for not requiring insurers to deal in good faith with all insureds. As Schmidt persuasively observes, The policyholder purchases insurance for peace of mind. Surely policyholders entering into the insurance contract expect that their family and friends (who are also being provided coverage by the policyholder [as either permissive drivers or permissive passengers]) will be treated fairly by their insurance company. Otherwise, their relationships and friendships may be ruined and the financial lives of their loved ones devastated because the insurance company does not want to treat such [additional] insureds fairly.

3 In Webb v. Jarvis, the Indiana Supreme Court established a three-part test for determining the existence of a duty in tort, balancing the following factors: (1) the relationship between the parties, (2) the reasonable foreseeability of harm to the person injured, and (3) public policy concerns. Webb v. Jarvis, 577 N.E.2d 992, 995 (Ind. 1991).

4 The provisions of Indiana’s Unfair Claims Settlement Practices Act are useful guidance as to insurance practices that may constitute bad faith, but the Act does not create private civil causes of action. See I.C. § 27-4-1-18. As such, it is often effectively toothless as a real enforcement mechanism.

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Id. at 1258 (quoting Appellant’s Br. at 32) (emphasis and alterations in original).

In its petition for transfer, Allstate argued that the insurer’s duty of good faith should extend only to policyholders and named insureds. Further, the Insurance Institute of Indiana appeared and filed an amicus curiae brief, seeking to narrowly limit the insurer’s duty to just policyholders in privity of contract with an insurer.

Prior to making its decision to deny transfer, the Indiana Supreme Court held oral arguments on September 3, 2020. Had the Court granted transfer and accepted either proposed rule, it would have driven a stake in the heart of Indiana’s bad faith law by allowing insurers to creatively draft their policies to avoid such duty in most coverage scenarios.

The Many Varieties of Insurance Coverage Understanding the peril of narrowly limiting an insurer’s duty of good faith requires first understanding the vastness of even common types of insurance.

Insurance comes in many forms: • Motor vehicle coverage (liability, collision, medical payments, uninsured/ underinsured motorist, umbrella); • Homeowners insurance (liability, structure, contents, additional living expenses, medical payments); • Business owners coverage (liability, structure, contents, loss of income, completed products, errors and omissions); and • Individual or group health, individual or group life, individual or group disability, mortgage insurance, flood insurance, and title insurance, to name a few. 5 Given the considerable differences between the types of policies and the parties purchasing and benefitting from them, “insurance” would seem difficult to narrowly define. However, Indiana Code § 27-1-2-3(a) defines “insurance” generally as follows: “Insurance” means a contract of insurance or an agreement by which one (1) party, for a consideration, promises to pay money or its equivalent or to do an act valuable to the insured upon the destruction, loss or injury of something in which the other party has a pecuniary interest, or in consideration of a price paid, adequate to the risk, becomes security to the other against loss by certain specified risks; to grant indemnity or security against loss for a consideration.

(Emphasis added). Black’s Law Dictionary defines insurance as a “contract by which one party (the insurer) undertakes to indemnify another party (the insured) against risk of loss, damage or liability arising from the occurrence some specified contingency.” (11th ed. 2019) (Emphasis added). The authoritative law dictionary then includes more than 150 types of insurance within its definitions (although it somehow omitted alien abduction insurance).

What is common to nearly every insurance policy is that a payor pays premiums 5 These are merely a subset of the hundreds of forms of insurance that may be purchased or sold in the state of Indiana.

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in advance to an insurer to indemnify one or more individuals or entities against a future loss. In fact, the Indiana Supreme Court has long held that the basic purpose of insurance is indemnity. See, e.g., Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind. 1985). While the receipt of premiums may be of the utmost importance to the insurer from a business perspective, it is the need for indemnification in the event of an identified loss that drives a consumer’s decision to purchase coverage.

Beyond the insurer, each insurance policy includes, in some form or fashion, one or more of the following: • A payor, who pays the premiums; • A policyholder, who holds or owns the policy; • An insured, who defines the covered risk; and • A beneficiary, or indemnitee, who is indemnified by the loss of the covered risk.

In some very limited circumstances, such as an individual disability insurance policy, the same person may occupy all four roles. For a private auto insurance policy, the policyholder and the payor are usually one and the same, while the insureds (whether named or unnamed) are also the beneficiaries to the extent of their insurable interest in a particular loss. In other cases, such as life insurance policies, a different person may occupy each such role.6 In fact, an insured will rarely be the beneficiary as it is typically the insured’s death that is the triggering event that creates the loss for which the beneficiary is indemnified. The various roles in group insurance plans are even more complicated.

To understand the illogic of the proposed rules sought by Allstate and the Insurance Institute of Indiana in Schmidt, one need only examine one’s own insurance policies and apply the proposed rules. For my personal policy for homeowners and motor vehicle coverage, I am the payor and the policyholder. My wife and I are the only named insureds, while my mother and adult son are listed as drivers but not as named insureds. There are other potential unnamed insureds, including but not limited to permissive drivers and passengers. While I purchased the coverage for my family, the insurer determined the details of how the coverage would be provided.

Under the rule proposed by the Insurance Institute of Indiana, my insurer would owe a duty of good faith to me if a loss occurred but would not owe a similar duty to my wife, family, or anyone else covered under my policy. Meanwhile, under Allstate’s proposed limiting rule, my insurer would only owe a duty of good faith to me and my wife if a loss occurred but not to my mother, son, or the rest of my family. Under my prior bundled home and auto policy, which afforded similar coverage, I was the only named insured on the policy. As such, under either of the rules proposed by Allstate and its amicus curiae, our previous insurer would have owed a duty of good faith to me but not to my wife or the rest of my family.

6 The payor may not necessarily be a policyholder, insured, or beneficiary, such as when a grandparent purchases a whole life insurance policy for a grandchild.

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It makes no sense to allow insurers to treat one class of consumers differently from another class when the intent of the policy is to provide coverage to all who may fall under the definition of “insured.” Whether or not an insured pays the premiums should not determine the insurer’s duty to the insured.

When listening to the oral arguments in Schmidt v. Allstate before the Indiana Supreme Court on September 3, 2020, it was clear that most of the justices understood this reality. Justice David, for example, questioned Allstate’s counsel regarding his own circumstances, wherein he purchased auto insurance coverage for his family, including his wife and adult stepson away at school, and why it would make sense for his insurer to treat each insured under his policy differently.

Other justices picked up on those same issues in their questioning. In the end, just a week later on September 10, 2020, the Indiana Supreme Court denied transfer by a vote of 3-2.

While Schmidt has resolved any questions regarding the existence of a duty by an insurer to exercise good faith and fair dealing to both named and unnamed “insureds,” it has further opened the door for claims of bad faith by other indemnitees. Given that insurance is purchased specifically to provide financial protection to intended indemnitees when the need is heightened by the occurrence of a named loss, shouldn’t we reasonably expect an insurer to treat all intended indemnitees in good faith when a covered loss occurs instead of placing them at the mercy of the claims handler?

In addition to multiple personal and business liability policies, I also maintain numerous life insurance policies for the protection of my family in the event of my death. On each of these policies, I am the payor, the policyholder, and the insured, and my family members are the beneficiaries. The clear intent of these policies is to indemnify my family upon my death. If the Indiana courts were to limit the duty of good faith and fair dealing to just individuals defined by the insurance policy as “insureds”, my intended indemnitees would be at the mercy of my insurers upon the occurrence of the triggering loss, which would be my death. Considering the staggering amount I pay for such coverage to protect my family, I certainly expect our insurers to treat them fairly when they are most vulnerable, at a time of such profound loss.

With the vast assortment of types of insurance and roles played by those with rights under the contract, how does it serve public policy to disregard the primary purpose of insurance—indemnity—when determining an insurer’s duty of good faith? By applying the Webb v. Jarvis analysis, the insurer’s duty of good faith should naturally extend to those intended to be indemnified by the policy.

The Nature of Insurance Contracts While the purchase of insurance is often described as an “arm’s length” transaction, most insurance policies are not the result of typical arm’s length transactions between two sophisticated parties with equal bargaining power. In many circumstances, the purchase of the insurance policy may be mandated by law Winter 2021 ⁜ VERDICT • 21

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or by contract. For instance, the individual mandate of the Affordable Care Act required the purchase of health insurance. Similarly, state financial responsibility laws mandate the purchase of auto insurance. A typical mortgage mandates the purchase of homeowner’s insurance to protect the mortgagee. And a lease may require the renter to purchase property damage and liability coverage to protect the lessor. There are numerous other circumstances in which the purchase of insurance coverage is not an option but a mandate, often for the express protection of others.

Furthermore, a typical insurance policy is purchased from an insurer through an agent. While the agent may explain the types of coverages available for purchase or otherwise assist in satisfying the purchaser’s individual insurance needs, the agent is often employed and/or compensated directly by the insurer.

Additionally, in my experiences as an insurance policyholder, an attorney representing injured claimants, and a licensed insurance agent, the typical insurance purchaser often will receive the actual policy only after purchasing it—if at all. Even if one is provided a copy of the policy prior to purchase, the policy’s terms, conditions, amendments, and endorsements are often so complex that even seasoned attorneys have difficulty interpreting them.

Further, it is fair to ask: How many supposedly arm’s length contracts include a declarations page that summarizes the coverages purchased, only to be modified by a standard policy form that is, at the same time, amended through a myriad of amendments and endorsements? In the end, the average insurance purchaser is more likely to simply rely upon and accept the advice and direction of the agent than to carefully review what is often hundreds of pages of policy documents in order to independently reconcile the coverage he or she was promised.

The Indiana Supreme Court has recognized the imbalance of power inherent in insurance contracts: An insurance policy is a contract prepared by the insurers with its provisions standardized and formulated for the insurer’s benefit and to comport with the insurer’s premium rate and actuarial base. The terms of the policy are not generally open to negotiation and because of this the policies are known as “adhesion contracts.” Given the complexity of these policies, an insured relies heavily upon his agent and expects that the policy issued to him will conform to his stated desires.

Huff v. Travelers Indemnity Co., 363 N.E.2d 985, 993 (Ind. 1977) (emphasis added).

The rules of construction for insurance contracts further demonstrate the significant imbalance of power as well as the vulnerability of those relying on their benefits.

While an insurance contract is generally construed as any other contract, “special rules of construction of insurance contracts have been developed due to the disparity in bargaining power between insurers and insureds[.]” Wagner v. Yates,

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912 N.E.2d 805, 810 (Ind. 2009) (internal citations omitted) (emphasis added). For example, where there is ambiguity in policy terms, they are strictly construed against the insurer and in favor of the insured. Id. at 811. This strict construction against the insurer “is driven by the fact that the insurer drafts the policy and foists its terms upon the customer.” Am. States Ins. Co. v. Kiger, 662 N.E.2d 945, 947 (Ind. 1996). As one Indiana appellate court acknowledged: “The insurance companies write the policies; we buy their forms or we do not buy insurance.” American Economy Ins. Co. v. Liggett, 426 N.E.2d 136, 142 (Ind. Ct. App. 1981).

Considering the complexity of the relationship, the control the insurer has in crafting the policy language, and the inherent opaqueness of the terms and conditions of the policy contract, it is essential that coverage should, at minimum, meet the reasonable expectations of indemnity for those obtaining the coverage.

When I go to purchase an insurance policy for the protection and indemnification of my family, is it unreasonable for me to expect the insurer to act fairly and to treat my family, who are my indemnitees, in good faith after a loss occurs?

Ultimately, the duty of good faith and fair dealing should protect those reasonable expectations of indemnity.

Defining an Insurer’s Duty of Good Faith Twenty-seven years after its issuance, Erie Ins. Co. v. Hickman remains a seminal and highly influential Indiana precedent concerning the duty of good faith in firstparty insurance claim handling. There, the Indiana Supreme Court reaffirmed that an insurer owes a duty to deal in good faith with its insured while also recognizing a separate cause of action in tort for a breach of that duty. 622 N.E.2d at 519. While the Erie court stopped short of determining the precise extent of that duty, it did make several general observations that should continue to be applied to insurance bad faith claims to this day.

The Erie court recognized that obligations arising under an insurance contract are complicated and may, at times, involve an arm’s length transaction, a fiduciary relationship, and even an adversarial relationship. Id. at 518. Unfortunately, many courts have dealt with the relationship as if it is exactly the same in all instances.

See, e.g., Martinez v. State Farm Mut. Auto. Ins. Co., No. 2:15 CV 137, 2016 U.S. Dist. LEXIS 42956 (N.D. Ind. March 31, 2016) (equating the rights of an unnamed insured under an auto policy to an adversarial third-party beneficiary under a casualty property in Cain). However, when it comes to the object of an insurer’s duty of good faith and fair dealing, “an insured is an insured is an insured is an insured.” Schmidt, 141 N.E.3d at 1258 n.9. Thus, in the context of an automobile insurance policy, the Indiana Court of Appeals in Schmidt correctly observed that insureds who are entitled to indemnity under the policy should have equal standing. Simply put, there is no principled justification for disparate treatment among insureds based upon whether or not the insurer chose to list them by name on a declarations page.

The question after Schmidt v. Allstate is whether the insurer’s duty of good faith and fair dealing should be limited only to those identified as “insureds” under 24 • VERDICT

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the terms of the insurance policy. Erie neither holds nor suggests that insurers can avoid treating fairly those intended to be indemnified under a policy or that certain indemnitees have no right to demand fair treatment (good faith) by an insurer. Rather, in establishing the independent tort of bad faith, the Erie court reasoned: “Easily foreseeable is the harm that proximately results to an insured, who has a valid claim and is in need of insurance proceeds after a loss, if good faith is not exercised in determining whether to honor that claim.” Erie, 622 N.E.2d 515, 518 (Ind. 1993). The Erie court was primarily concerned with safeguarding the basic purpose of any insurance policy: indemnity.

While the Indiana Supreme Court in Erie did not determine the precise scope of an insurer’s duty of good faith, nor was it asked to define “insured,” the Court’s reasoning certainly suggests a similar understanding as found in Black’s Law Dictionary. Black’s defines an insured as “[s]omeone who is covered or protected by an insurance policy. –Also termed assured.” “Assured” is further defined as “[s] omeone who is indemnified against loss; insured.” Under the Black’s definition, the beneficiary of a life insurance policy would be considered an “insured,” as it is one who is indemnified or protected by the policy. Ultimately, it is those intended to be indemnified by a loss that warrant protection from unscrupulous insurers, as they are the ones foreseeably harmed when “good faith is not exercised in determining whether to honor that [valid] claim.” See Erie, 622 N.E. 2d at 518. Whether the insurance policy defines the indemnitee as an “insured”, a “beneficiary”, a “driver” or otherwise should not determine whether a duty of good faith is owed after a loss occurs.

The Case for Extending a Duty of Good Faith to All Anticipated Indemnitees What is not directly addressed in the Indiana Court of Appeals’ Schmidt opinion, but should be covered under similar analysis, is whether the duty of good faith should also flow to intended indemnitees of an insurance policy who are not defined as an “insureds” in the policy. To meet the reasonable expectations of the purchaser of an insurance policy, insurers should owe a duty of good faith to all intended indemnitees.

In many instances, the purchaser not only intended to indemnify a policy’s beneficiaries, but that was the entire motivation for the purchase of the policy in the first place, such as with a life insurance policy. The damages from violation of the duty of good faith to an intended indemnitee/beneficiary are easily foreseeable.

See Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind. 1991) (finding that reasonable foreseeability of harm to the person injured is one factor in determination of whether courts should impose a duty at common law). Public policy further supports extending the duty of good faith to all intended indemnitees whether the insurer labels them as insureds (named or unnamed), beneficiaries, or otherwise. For example, the types of victims contemplated by Indiana’s Unfair Claims Settlement Practices Act are not limited to policyholders or named insureds, clearly applying to other indemnitees as well. Considering the basic Winter 2021 ⁜ VERDICT • 25

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purpose of purchasing insurance—to provide indemnity in times of financial and perhaps emotional insecurity and vulnerability—It makes no sense to limit the insurer’s duty of good faith and fair dealing to exclude from protection intended indemnitees who are not explicitly defined by the insurer as an “insured”.

Limiting the duty just to those defined in the policy as “insureds” would give insurers an incentive to write and issue policies with definitions of “insureds” that unfairly circumvent a duty of good faith and fair dealing to other reasonably anticipated indemnitees. For example, my previous home/auto policy insurer could have effectively eliminated any duty of good faith to mother and adult son by identifying them as merely “drivers” rather than as “insureds”. Such a result would defeat my reasonable expectations in purchasing coverage.

An Insurer’s Duty of Good Faith and Fair Dealing Should Be Based on the Reasonable Expectations of Indemnity at the Time of Contracting Coverage The prevalence of insurance in our modern world cannot be overstated. It affects nearly every aspect of our lives. In fact, we would be hard-pressed to find an acquaintance who does not have some form of insurance coverage. I have represented both insurers and insureds in a myriad of first-party insurance cases.

I have also brought my own insurance claims and, most recently, have become licensed to sell insurance. In the aggregate, I personally pay in excess of $50,000.00 per year in premiums for various forms of insurance for myself, my family, and my businesses. In my experience, which includes professional and personal insurance cases on both sides of the question, limiting an insurer’s duty to deal fairly only with a named or defined “insured” ignores the reasonable expectations of the purchaser at the time of contracting and, therefore, denies the purchaser the benefit of the bargain.

Considering the wailing and gnashing of teeth expressed by insurers over the tort of bad faith, one would expect compliance to be an arduous task. However, it merely requires an insurer to act fairly and in good faith in handling a claim, which includes, at a minimum, the obligation to refrain from the following: (1) (2) (3) (4)

making an unfounded refusal to pay policy proceeds; causing an unfounded delay in making payment; deceiving the insured; and exercising any unfair advantage to pressure an insured into a settlement of his claim.

Monroe Guar. Ins. Co. v. Magwerks Corp., 829 N.E.2d 968, 976 (Ind. 2005) (quoting Erie, 622 N.E. 2d at 519). These should not be difficult objectives to achieve.

While most insurance attorneys will suggest that finding bad faith is the functional equivalent of finding a unicorn, I have personally seen it while working on both sides. Below are some examples: • I was once hired to belatedly defend an insured from liability after the 26 • VERDICT

Charles Anthony Ashford

claims adjuster initially denied liability coverage because the third-party plaintiff ’s attorney refused to provide a HIPPA authorization to the adjuster, resulting in a default judgment. In that case, the fear (and high likelihood) of consequences for the bad faith led to a fair resolution of the claim.

• I also represented a widower whose wife had died of cancer and her group life insurer had refused to pay the claim. After the wife’s terminal cancer diagnosis, she could no longer work and had the automatic right to convert her group life policy into a personal one. Rather than accepting the wife’s request for conversion, the insurer intentionally mishandled the application and misled the wife to prevent her from exercising her rights. My client was destitute and in no position to battle a big insurer over this $100,000.00 policy. However, with multiple letters from counsel citing clear bad faith violations and threatening litigation, the insurer ultimately acknowledged and paid the claim.

• On a regular basis, I see insurance adjusters misrepresenting terms and conditions of coverage, misrepresenting facts from investigations, deceiving their insureds, or delaying or refusing payment of clearly valid claims because of the imbalance of power, all to avoid fulfilling the primary function of insurance coverage: indemnity.

Absent a tell-all book, most would be unaware of how tragically common bad faith claims practices occur because the insurers can better afford to settle these egregious cases than the victim indemnitees can afford to fight them. Considering the imbalance of power and financial superiority of insurers, the most significant protection an indemnitee may have against abusive and unfair treatment by insurers is the independent tort of bad faith. One could imagine the result, especially in these troubling times, if there were no consequences for robbery (criminal or financial) other than being required to return the stolen goods if caught.

Ultimately, the duty of good faith and fair dealing should extend equally to all intended indemnitees regardless of whether they are payors, policyholders, named or unnamed insureds, or beneficiaries. Any limitation on that duty which allows insurers to intentionally mishandle claims of indemnitees without consequence allows insurers to elevate their own economic interests over the consumer’s reasonable expectations of coverage. After the decisions of the Court of Appeals and the Indiana Supreme Court in Schmidt v. Allstate, it appears that the duty of good faith has been restored to its former standing.

C. Anthony (Tony) Ashford operates Ashford Law Group, in Valparaiso, Indiana, and has been practicing litigation since 1996, after graduating from Indiana University in Bloomington. He has previously practiced on behalf of insurers, handling both first-party and third-party defense, and special investigation unit matters. For the past ten years, he has primarily focused his practice on complex litigation matters, including professional negligence, personal injury, products liability and first-party litigation on behalf of insureds. He is licensed to practice law in the states of Indiana and Florida. He is also licensed in the state of Indiana as a life and health insurance producer.

Winter 2021 ⁜ VERDICT • 27

28 • VERDICT

B.J. Kelley

ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR

by B.J. Kelley I.

BACKGROUND

Every experienced personal injury lawyer has felt, at some point, that they are powerless to address bad insurance carrier behavior, including unfair claims handling and settlement practices. Because litigation is inherently adversarial, Plaintiffs’ attorneys are reluctant to run to the Judge for every perceived infraction by the defense and the insurance companies who pay their bills and often control every move. Yet, when the bad behavior happens repeatedly, over the course of multiple cases, justice requires some form of action. It is perhaps the most frustrating feeling plaintiffs’ attorneys can experience: the insurance carrier withholds the money the plaintiff deserves (invested and gaining interest) while the rules are bent, reasonableness and fairness is cast aside, and the client’s expenses, risk, and frustration grow. In many cases, the only remedy is to push the case to trial. And when the jury is finally empaneled, the Court will not allow plaintiff ’s counsel to mention the word “insurance” or speak the carrier’s name.

Frustration is exacerbated in first-party uninsured and underinsured motorist cases in Indiana. This is because, even though our clients have paid for the coverage from which they seek recovery—and are owed duties of good faith and fair dealing—the standard for making a bad faith claim against our client’s own carrier is so high that attempting to assert the claim, even with the best facts, is usually a waste of time. The result is that car wreck victims in Indiana can prove the defendant’s carrier is guilty of bad faith - - but not their own carrier.

In some jurisdictions, however, the results are different and justice is served.

When the Courts in these jurisdictions are provided with enough instances of unfair and improper insurance company practices, from which patterns of recurrent misbehavior emerge, they realize what has been happening and drop the hammer in a meaningful way.

On June 2, 2020, in the Madison County Circuit Court in Alabama, that’s exactly what happened. Judge Karen Hall sanctioned Allstate $620,141.36 after a fruitless, no-offer mediation and a subsequent jury trial disputing an available $75,000 in underinsured motorist coverage. The case is captioned as Doyle Harbin v. Irvin Douglas Stewart, II and Allstate Property and Casualty Insurance Company, Civil Action No: CV2017-9001688.

Allstate’s insured, Doyle Harbin, had medical bills of $234,206.02 and underinsured motorist coverage of $250,000 per person. Mr. Harbin’s attorney, Will Parks, settled with the tortfeasor and another insurance carrier for a total of $175,000, leaving Allstate with a remaining $75,000 available on Mr. Harbin’s policy. As the chances of trial increased, Mr. Parks brought in Alabama veteran Winter 2021 ⁜ VERDICT • 29

ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR

trial lawyer Kenny Cole to assist.

After the opinion came out, I had the opportunity to speak with Mr. Cole and learn more about the particulars of this Alabama litigation and what motivated the trial court to award substantial sanctions. As you might expect, he is a genuinely nice guy who was very gracious with his time.

II. CASE HISTORY On March 26, 2019, Allstate agreed to continue the original trial date and submit the case to mediation, which is not mandatory in Alabama. See Plaintiff ’s Motion for Entry of Judgment and Motion for Sanctions, p. 8. The Court ordered the parties to mediation, which both Mr. Parks and Mr. Cole attended on behalf of Plaintiff Harbin. Id. The mediation referral Order stated that “[a] representative of each party, which may be counsel, having full authority to settle the entire case for the party must attend the mediation conference.” Response to Motion for Entry of Judgment and Motion for Sanctions, p. 2.

Notwithstanding the trial court’s order, Allstate in-house counsel: 1) attended the court-ordered mediation with no participating adjuster, 2) stated that he had no settlement authority, and 3) ultimately offered nothing to resolve the case (although he got an adjuster on the phone during the mediation). To add insult to injury, Allstate did not even admit liability until the eve of trial in September of 2019. Order on Plaintiff ’s Motion for Sanctions, p. 2.

Mr. Cole and Mr. Parks then obtained a verdict of $690,000, of which $75,000 was “collectible” from Allstate pursuant to the terms of the UIM policy. After trial, Mr. Cole filed a motion for costs and sanctions requesting “at least $52,375.” Allstate countered by claiming, in a two-page response, that plaintiff ’s motion breached the mediation confidentiality rules (which it did not), citing Alabama Civil Court Rule 11(b). Allstate’s Response asserted that “. . . a court shall neither inquire into nor receive information about the positions of the parties taken in mediation proceedings.” Harbin v. Allstate, Response to Motion for Entry of Judgment and Motion for Sanctions, p. 2.

Allstate’s position was tantamount to saying “we can do what we want at mediation and you, the trial court, can’t know about it.” Furthermore, Allstate’s expansive interpretation of Alabama Civil Court Rule 11(b) invited the trial court to endorse an impenetrable smoke screen over ADR processes, which in effect would remove trial courts from any oversight to address misconduct. This did not seem to be a position that would endear Allstate to the Court. On the other hand, Plaintiffs’ counsel were very careful not to premise the motion for sanctions upon specifics of the negotiating process, and instead chose to discuss only “non-occurrences.”

Judge Hall agreed that the Plaintiff and his counsel did not breach the applicable mediation confidentiality rules. See Order, p. 2 Prior to filing the Motion for Sanctions, Plaintiffs’ counsel did their homework, and they quickly realized that Allstate’s treatment of Mr. Harbin was far from an isolated incident. Indeed, they found that Allstate and its affiliate companies had 30 • VERDICT

B.J. Kelley

recently been sanctioned by other Alabama trial courts for similar violations, adding further support for the propriety of sanctions in Mr. Harbin’s case.

In their original Motion for Sanctions, Mr. Cole and Mr. Parks cited to, and attached, a copy of a previous Jefferson County Alabama Circuit case where Allstate was sanctioned for essentially doing the same thing (i.e. not bringing someone with settlement authority to the mediation). See Order in Wright v. Allstate, Jefferson County Alabama, dated September 4, 2019 (attached to Plaintiff ’s Motion for Entry of Judgment and Motion for Sanctions, Exhibit F).

In a subsequent Supplement to their Motion for Sanctions in the Harbin case, Plaintiffs’ counsel provided the Court with yet another Order from Jefferson County, dated October 31, 2019 sanctioning Esurance (an Allstate Company) for the same behavior. See Idara v. Esurance Insurance Services (attached to Plaintiff ’s Supplement to Motion for Sanctions, Exhibit A).

Interestingly, Mr. Cole, though clearly upset after the fruitless mediation, decided to prepare for trial and file for sanctions afterwards. The gambit paid off. The $690,000 jury verdict, which was well beyond the applicable UIM policy limits, obviously helped to propel the amount of the sanctions awarded. By contrast, in the Jefferson County, Alabama cases cited above, Plaintiffs’ counsel filed motions for sanctions shortly after the failed mediations but before trial. In those cases, the awards were more modest. Of course, the timing of these filings worked in the Harbin trial team’s favor since they presumably would not have had the Orders to attach to their motions had the Jefferson County attorneys waited until after trial to request sanctions.

The Alabama trial courts adjudicating these sanctions motions were clearly exasperated by Allstate’s blatant disregard of Circuit Court mediation orders, as well as Allstate’s overall claims handling process. In fact, in the Harbin Order, Judge Hall concluded: Allstate’s conduct goes beyond just the facts and conduct in this case.

Allstate’s conduct affects all the courts of this State and contributes to backlogs of our civil justice system throughout Alabama.

Harbin v. Allstate, Order on Plaintiff ’s Motion for Sanctions, p. 2.

Judge Hall’s Order significantly exceeded the Plaintiff ’s request for a minimum sanction of approximately $52,000, indicating the Court’s agreement with Harbin’s assertion at oral argument that it would essentially take more than that amount to curtail Allstate’s recurring pattern of bad faith practices. Interestingly, Judge Hall’s sanction award seems to have been calculated by taking the verdict, subtracting the $75,0000 already paid by Allstate after the verdict and adding in Mr. Harbin’s costs. This was done because . . . in the opinion of the Court, the amount of money sanctions requested by the Plaintiff alone will not accomplish the overarching purpose of sanctions which is not to just punish Allstate but is to alter the conduct of Allstate for the benefit of future litigants and the Alabama Court System.

Winter 2021 ⁜ VERDICT • 31

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ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR

Order on Plaintiff ’s Motion for Sanctions, p. 4 (emphasis added).

In talking to Mr. Cole, it appeared that, aside from blatantly violating the mediation orders, there was something even more dangerous trending with Allstate in Alabama. Allstate seemed to be adopting a position in underinsured motorist cases that it was not required to offer or pay any money unless or until there was a jury verdict above the tortfeasor’s limits, regardless of the merits of individual cases. If this is what was happening, it would potentially be an unethical extension of the carriers’ usual position in underinsured claims - - i.e. they are not required to offer money or consider an underinsured claim until the tortfeasor’s carrier has first tendered its limits.

III. APPLICATION TO INDIANA The Alabama Supreme Court “has stated that because of the legislative mandate for Underinsured Motorist Coverage, the policy considerations for allowing bad faith claims are enhanced and not diminished in such a context.” Order on Plaintiff ’s Motion for Sanctions, p. 4 (citing Sanford v. Liberty Mutual, 536 So. 2d 941, 942 (Ala. 1988)). The Indiana Supreme Court made similar observations in the seminal Erie Ins. Co. v. Hickman by Smith opinion. 622 N.E.2d 515, 519 (Ind. 1993) (“Given the sui generis nature of insurance contracts . . . we conclude that it is in society’s interest that there be fair play between insurer and insured.”)

However, in contrast to the trajectory in Alabama, the Indiana plaintiff ’s bar has had much more difficulty alerting our Courts to the need for remedies when bad faith occurs in uninsured and underinsured motorist cases. This is not only frustrating, but also somewhat puzzling. If a carrier can be guilty of bad faith for not protecting its insured from an excess verdict - - why can’t it be just as guilty for denying or ignoring a first-party claim “when there is no basis in law or fact” to do so and “no other information is needed to pay the claim”? Order on Plaintiff ’s Motion for Sanctions, p. 4 (citing Sanford v. Liberty Mutual, 536 So. 2d 941, 942 (Ala. 1988)). It is worth questioning this double standard.

Perhaps the recent shots across Allstate’s bow in Alabama, especially the heavy sanctions award in the Hardin case for Allstate’s unacceptable mediation practices, will alert Indiana Judges to some of the institutional carrier behavior in greatest need of correction in the Hoosier State. Moreover, these cases should underscore the importance of increased judicial enforcement of basic rules and standards of claims handling applicable to all insurance companies doing business in Indiana.

As a Plaintiffs’ attorney, it is a helpless situation to be in when the tortfeasor’s carrier tenders its limits while the underinsured carrier refuses to treat its insured fairly because the topside of the verdict is capped by the amount of the underinsured coverage, absent the most egregious facts to support an independent bad faith claim. You can almost hear the discussion ensue inside the insurance company conference room: “Why should we pay the additional $50,000 when that’s the worst thing that can happen at trial - - even if the verdict is $500,000?”

Because Indiana’s tortious bad faith law in uninsured and underinsured motorist

34 • VERDICT

B.J. Kelley

cases seems to present such difficult hurdles, pursuing sanctions may be a more promising route. If carriers in Indiana blatantly engage in misconduct and waste the court’s time, we do have similar language in our ADR Rules that can be invoked to justify the award of sanctions.

Indiana Alternative Dispute Resolution Rule 2.7(B)(2) states: (2) All parties, attorneys with settlement authority, representatives with settlement authority, and other necessary individuals shall be present at each mediation conference to facilitate settlement of a dispute unless excused by the court.

Indiana Alternative Dispute Resolution Rule 2.10 further provides: Upon motion by either party and hearing, the court may impose sanctions against any attorney, or party representative who fails to comply with these mediation rules, limited to assessment of mediation costs and/or attorney fees relevant to the process.

While most insurance carriers in Indiana may not be blatantly and constantly violating ADR Rules, there are other forms of unfair claims practices they engage in quite often that are sanctionable. For example, see the article I did for the Verdict titled “What to Do When the Defendant Admits Fault - - and Takes Their Time Doing It.” Verdict magazine (Indiana Trial Lawyers Association), Vol. 39, No. 1 (2018). This article discussed the sanctions award that attorney Chris Barry of our office obtained in Dearborn County when the defendant waited until shortly before trial to admit fault. The article went through an analysis of the following topics: A) why admission of fault does not preclude the admission of evidence describing the event that caused injury, B) why evidence of late admission of fault should be admissible, and C) why costs and sanctions are appropriate when the defendant waits until the eve of trial to admit fault.

By bringing bad insurance carrier behavior to the attention of Indiana Courts, we are doing nothing more than asking Judges to treat large insurance carriers the way the Courts would treat plaintiffs if the roles were reversed. The only way to show a pattern of bad behavior is to bring the instances to light. If that is done, we can hope that our Courts will agree with Judge Hall that bad carrier behavior “affects all the courts of this State and contributes to backlogs of our civil justice system throughout [Indiana].” Harbin v. Allstate, Order on Plaintiff ’s Motion for Sanctions, p. 2.

William “B.J.” Kelley is the attorney who wrote the book, Soft Tissue Injuries and Hard Ball Tactics (available on Amazon and Barnes and Noble). B.J. grew up in Southeastern Indiana. He graduated from Georgetown University Law School with honors (cum laude, American Criminal Law Review) in 1985. As a member of D.C. Law Students in Court, B.J. helped local citizens and tried his first cases while still in law school. After law school, he was accepted into the Attorney General’s Honors Program and handled cases and trials for the Department of Justice throughout the country. B.J. is also admitted to practice in Ohio and has spoken at legal and medical seminars in Indiana, Ohio, Kentucky, Georgia and Texas. He has tried personal injury jury trial in Indiana and Ohio, and he is an Indiana Super Lawyer, a National Trial Lawyers Indiana Top 100 Trial Lawyer and Motor Vehicle Top 25 Trial Lawyer.

Winter 2021 ⁜ VERDICT • 35

ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR DOCUMENT 117

ELECTRONICALLY FILED 9/25/2019 5:02 PM 47-CV-2017-901688.00 CIRCUIT COURT OF MADISON COUNTY, ALABAMA DEBRA KIZER, CLERK

IN THE CIRCUIT COURT OF MADISON COUNTY, ALABAMA

DOCUMENT 117

See Exhibit A. However, Allstate has not indicated whether it agrees with or opposes these costs and expenses.

DOYLE HARBIN,

1.

Plaintiff,

“In civil litigation, ‘the usual rule is to tax the costs in favor of the prevailing party.’”

v.

CIVIL ACTION NO.: CV2017-9001688

IRVIN DOUGLAS STEWART, III, An Individual, ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, a corporation,

Ennis v. Kittle, 770 So. 2d 1090, 1091 (Ala. Civ. App. 1999) (quoting Merchants Nat’l Bank v.

Cowley, 89 So. 2d 616, 625 (Ala. 1956)). Procedural Rule 54(d) underscores this: “[C]osts shall be allowed as of course to the prevailing party unless the court otherwise directs.” Ala. R. Civ. P. 54(d) (emphasis added). The power of Alabama trial courts to award costs is accordingly broad.

Defendants.

Unlike federal Rule 54(d) — under which “costs” encompass only the “fees of the clerk and marshal, court reporter’s fees, printing costs and witness fees, costs for copies of papers, PLAINTIFF’S MOTION FOR ENTRY OF JUDGMENT AND MOTION FOR SANCTIONS

docketing fees, and compensation of court-appointed experts and interpreters,” see 28 U.S.C. § 1920 — Alabama law does not start by categorically limiting allowable costs. This state’s

Plaintiff Doyle Harbin hereby asks the Court to enter judgment in favor of Doyle Harbin and against Allstate Property and Casualty Insurance Company based on the jury’s verdict in the amount of $690,000 which was rendered on September 10, 2019, and accepted by the Court on that date. Plaintiff further requests sanctions in the form of costs and attorney’s fees as set forth below.

approach is rather one of broad initial permission. “The Alabama Code,” for its part, thus “does not contain a single statutory provision outlining permissible cost items.” Ennis, 770 So. 2d at 1092. Allowable “costs” in Alabama may be predicated upon statute or case law, id., and the determination of costs is ultimately left to the trial judge’s sound discretion. See Classroomdirect.com, LLC v. Draphix, LLC, 992 So. 2d 692, 710 (Ala. 2008); Vulcan Oil Co. v.

Gorman, 434 So. 2d 760 (Ala. 1983).

Judgment and Costs

2.

In that regard, Plaintiff asks the Court to provide credits and remittitur in conformity with the stipulations filed by the parties on or about September 6, 2019 (Document 106). Plaintiff also asks the Court to order Allstate to pay costs, expenses, and post-judgment interest in accordance with the law until such time as the judgment is satisfied. Regarding costs, the email dated September 12, 2019, informed Allstate’s lawyer of costs and expenses totaling $5,141.36.

To prepare this case properly, Mr. Harbin incurred costs that should rightfully be assessed against the defendant. Under established Alabama law, Mr. Harbin should recover: all deposition costs — including compensation paid to non-expert medical witnesses; copying costs, which include the expense of preparing medical records and images; the cost of the videographer who 2

DOCUMENT 117

helped present deposition and exhibits during trial; witness-subpoena fees; and filing fees. The

DOCUMENT 117

rays, or other medical “images” and “illustrations.” See Bundrick v. McAllister, 882 So. 2d 864,

full and specific list of the cost items that Mr. Harbin is asking the court to award appears in ¶ 4,

868 (Ala. Civ. App. 2003) (affirming cost award for “reproducing depositions, X-ray images,

infra.

and other medical records that were used as exhibits or illustrations”).

Two other expenses — the cost of witness subpoenas and deponents’ time — are partly

3.

Alabama law permits the recovery of every cost item that Mr. Harbin is asking for. First,

recoverable. As for subpoenas, it is clear that Mr. Harbin may recover the fees that he paid to

the Alabama Code provides for assessing the cost of depositions used at trial. Section 12-21-144

court for issuing those. Id.; Ennis, 770 So. 2d at 1093. The cost of hiring a private investigator to

states:

locate and serve subpoenas on witnesses, however, cannot be awarded. 2 Bundrick, 882 So. 2d at The costs of any deposition introduced in whole or in part into evidence at the trial by the party taking it shall be taxed as costs in the case upon the certificate of the person before whom the deposition was taken . . . .

Ala. Code § 12-21-144. 1 The cost of depositions that were not used at trial can also be recovered.

Ennis, 770 So. 2d at 1092 (citing Ex parte Strickland, 401 So. 2d 33, 34–35 (Ala. 1981)). And procedural Rule 30(b)(4) specifically allows for the costs of recording depositions — whether by

868 (reversing such award as abuse of discretion).

Finally, a prevailing party can recover the cost of paying a deponent for her time — as long as that deponent was not the party’s retained expert. E.g., id. (“[T]here is practically unanimity of authority in this country that compensation of experts cannot be . . . taxed . . . as costs . . . unless so provided by statute.”) (quoting Hartley v. Ala. Nat’l Bank of Montgomery, 25 So. 2d 680, 683 (Ala. 1946)). Consistent with this law, Mr. Harbin has shaped his request to ask

stenography, video, or “equivalent” means: [A] deposition may be recorded on videotape, or by other equivalent technology, in addition to the stenographic record . . . . The party requesting videotaping or recording by other equivalent technology will bear the expense associated with such videotaping or recording. . . . These expenses may be taxed as costs at the conclusion of the action.

Ala. R. Civ. P. 30(b)(4).

for only the cost of treating physicians — that is, physicians who testified as non-retained fact rather than retained expert witnesses. All of the Plaintiff’s medical testimony was provided by a treating physician. The Alabama Supreme Court has expressly confirmed that a prevailing party can recover the cost of non-expert “medical depositions.” Thomas v. Heard, 2017 Ala. LEXIS

Other expenses can be recovered, as well, whether they were incurred in deposition or at trial. For example, “travel expenses, copying costs, and filing fees” are properly awarded costs.

28, *40–42, 2017 WL 1101600 (Mar. 24, 2017); see also Ala. Code § 12-21-144; Ennis, 770 So. 2d at 1092; Strickland, 401 So. 2d at 34–35.

Ennis, 770 So. 2d at 1092 (citing Lewis, Wilson, Lewis & Jones, Ltd. v. First Nat’l Bank of Tuscaloosa, 435 So. 2d 20, 23 (Ala. 1983)). This includes the cost of copying medical records, x-

1

The mandatory language of § 12-21-144 notwithstanding, the Alabama Supreme Court has held that awarding these deposition costs remains discretionary. Vulcan Oil Co. v. Gorman, 434 So. 2d 760, 762 (Ala. 1983).

3

36 • VERDICT

2

Plaintiff instead seeks the cost of serving subpoenas by private investigator as part of the sanctions to be awarded against Allstate.

4

B.J. Kelley DOCUMENT 117

DOCUMENT 117

4.

1. Conchin & Cole

2. Will Parks

and the Court to invest the time and money which was necessary to both prepare for and actually

Mediation Fee Deposition fee for Dr. Tao Medical records fees Video charges for medical deposition and editing Overnight delivery charge to defense counsel Investigator fee related to service of trial subpoenas Court reporter fee relative to Dr. Tao deposition

$540 $2000 $54

TOTAL:

$4,085.58

Filing/service fee Medical records fees Mileage of 360 miles for 4 trips to Huntsville at 58 cents per mile Parking fees

$567.84 $269.14

TOTAL:

$1,055.78

GRAND TOTAL

try this lawsuit for two days.

Facts Related to Request for Sanctions

$800 $27.68 $196.90 $467

$208.80 $10

$5,141.36

On March 26, 2019, Allstate agreed to continue the existing trial setting and to submit the case to mediation. See Exhibit D (email dated March 26, 2019). On April 1, 2019, this Court ordered the parties to mediation with Ben Rice. See Document 63. That mediation took place on July 15, 2019. Plaintiff’s counsel spent time preparing a Mediation Position Statement for Mr. Rice. Both of Plaintiff’s counsel attended the mediation. One of the counsel traveled to the mediation from his office in Scottsboro. Plaintiff and his wife Melonie Harbin attended the mediation and also had to travel from their home in Scottsboro.

Below counsel is mindful that this Court ordered that “All discussions, representations, and statements made at the mediation conferences…shall be confidential and deemed…settlement negotiations….” See Document 63 at paragraph 8. However, this Court’s Order did not say that the parties could not explain to the Court the existence of non-occurrences

5.

These costs are all supported by the Affidavits of Kenneth B. Cole, Jr. and Will Parks and the invoices attached thereto. Mr. Cole’s Affidavit is Exhibit “B” and Mr. Parks’ Affidavit is Exhibit “C” to this motion.

at the mediation. Several very important non-occurrences existed at the mediation. The Court ordered that a representative of each party, which may be counsel, having full authority to settle the entire case for the party must attend the mediation. The only representative for Allstate who attended the mediation was defense counsel. However, defense counsel did not have any

Sanctions Furthermore, Plaintiff asks the Court to award sanctions in the form of costs, expenses, and legal fees based upon the undeniable fact that Allstate did not abide by this Court’s Order of Referral to Mediation, did not participate in the mediation in good faith, and forced the parties

authority to settle the case. No insurance adjustor from Allstate attended the mediation. The mediation lasted about 4 hours. During that time, Allstate never made any settlement offer or counteroffer whatsoever. None.

After the mediator Ben Rice terminated this non-mediation that was a complete waste of time, talent, and effort, Plaintiff’s counsel had to prepare the case for trial. In that regard, Mr.

5

6

DOCUMENT 117

DOCUMENT 117

Cole had to spend significant parts of 3 days to prepare for and take the deposition of Dr. Cheng

Mr. Cole had to attend a hearing on the Motion to Use Surgical Video as Demonstrative

Tao. The Spine and Neuro Center charged $2000 for the time spent by Dr. Tao providing

Evidence. He had to spend significant parts of a week to prepare for voir dire, opening

deposition testimony and being subjected to cross examination by defense counsel. Mr. Cole and

statements, direct examination of several fact witnesses, cross examination of witnesses

his staff had to spend significant amounts of time to prepare and file the following pleadings and

identified (but not called) by Allstate, closing argument, and rebuttal argument. Additionally,

motions:

Plaintiff’s counsel Mr. Will Parks had to spend significant amounts of five days preparing Mr.

1. Plaintiff’s Notice of Videotaped 30 (b) Deposition of Dr. Cheng W. Tao – July 26, 2019 DOC 67 2. Plaintiff’s Motion to Use Surgical Video as Demonstrative Evidence – August 16, 2019 DOC. 70

and Mrs. Harbin for trial, as well as interviewing all of the fact witnesses and helping with the preparation of witness and exhibit lists, jury charges, and general trial preparation. Both had to spend two days in trial. Mr. Cole spent at least 92 hours on the case following the mediation.

3. Plaintiffs’ Requested Jury Instructions – August 21, 2019 DOC 75

Mr. Parks spent at least 65 hours on the case following the mediation. At hourly rates of $375

4. Plaintiff’s Witness & Exhibit List – August 23, 2019 DOC 77

and $275, respectively, total legal fees are in the amount of at least $52,375.00. See Exhibit B, C,

5. Plaintiffs’ Supplemental Evidentiary Submission for Motion to Use Surgical Video as Demonstrative Evidence – August 27, 2019 DOC 84

and E.

6. Subpoena to Irvin Douglas Stewart III – August 29, 2019 DOC 87 7. Subpoena to Edward A. Gallenstein – August 29, 2019 DOC 89 8. Subpoena to Ronnie A. Claiborne – August 29, 2019 DOC 91 9. Subpoena to Christine Scherbeger – August 29, 2019 DOC 93 10. Plaintiffs’ Amended Requested Jury Instructions – August 30, 2019 DOC 95 11. Service and Return on Witness Gallenstein – September 4, 2019 DOC 101 12. Service and Return on Witness Claiborne – September 4, 2019 DOC 103 13. Joint Pretrial Stipulations – September 6, 2019 DOC 106 14. Agreed Summary of the Case to be Provided by the Court to the Jury Prior to Voir Dire – September 6, 2019 DOC 108 15. Plaintiff’s Motion to Reconsider Ruling on Use of Demonstrative Exhibit – September 6, 2019 DOC 111

7

Allstate completely failed to attend and participate in the mediation in good faith and in compliance with this Court’s Order. Allstate forced the parties to spend all of this time and effort to prepare for and try this case over a two day timeframe. Why? The case obviously was a significant damages case. Medical bills alone totaled $234,206.02. The case obviously was valued at a figure far in excess of the paltry $75,000 in Underinsured Motorist Coverage available to Mr. Harbin. Everyone knew this, yet Allstate hoped the other side would give up or some miracle or mistake at trial would result in a verdict favorable to Allstate. After years of fruitless waiting for a trial date and filing an Answer which denied everything, Allstate finally stipulated to liability just prior to trial. Allstate then tried to appear “reasonable” throughout trial so it could trick the jury into an award of damages which might sound “reasonable” but which would result in Allstate completely avoiding its obligation to pay Underinsured Motorist Benefits

8

Winter 2021 ⁜ VERDICT • 37

ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR DOCUMENT 117

DOCUMENT 117

to its insured Doyle Harbin. Its plan did not work, and the jury returned a verdict of $690,000

/s/Kenneth B. Cole, Jr._______ Kenneth B. Cole, Jr. (COL109) Attorney for Plaintiff

against Allstate.

Justification for Sanctions Allstate’s conduct goes far beyond just affecting this case. Allstate’s conduct affects all the courts of Madison County. Allstate’s conduct contributes to backlogs of our civil justice system throughout Alabama. In fact, Allstate has been sanctioned for similar conduct by a trial

OF COUNSEL: CONCHIN COLE & JORDAN 2404 Commerce Court Huntsville, AL 35801 (256) 705-7770 Office (256) 705-7778 Facsimile kenny@alainjurylaw.com

judge in Jefferson County. See Exhibit F. Allstate’s conduct causes heartache and consternation for its insureds and for the courts, including this one, which must constantly deal with the consequences of such obstreperous behavior. This is all part of the conduct which began in the 1990s when Allstate hired The McKenzie Company to come up with The McKenzie

CERTIFICATE OF SERVICE I certify that I have served a copy of the foregoing upon counsel of record by using the Alafile system which will send notification of such filing this the 25th day of September, 2019.

Papers. Allstate wanted to turn its claims department into a profit center. The McKenzie Company created and recommended the “Delay, Deny, and Defend Strategy.” Allstate

/s/Kenneth B. Cole, Jr. Kenneth B. Cole, Jr. (COL109)

implemented the “DDD Strategy” and has been making even higher profits via its claims department ever since.

Conclusion The Court should enter judgment according to the jury’s verdict. The Court should further enter sanctions for the costs, expenses, and legal fees resulting from the bad faith conduct of Allstate in failing to participate in the mediation in good faith and, instead, forcing the parties and the Court to invest the time, talent, and expenses associated with everything occurring since Allstate in bad faith failed to abide by the Order which set the Court-ordered meditation in which Allstate had agreed to participate.

Respectfully submitted, 9

DOCUMENT 149

38 • VERDICT

10

ELECTRONICALLY FILED 6/2/2020 10:02 AM 47-CV-2017-901688.00 CIRCUIT COURT OF MADISON COUNTY, ALABAMA DEBRA KIZER, CLERK

DOCUMENT 149

B.J. Kelley DOCUMENT 149

DOCUMENT 149

DOCUMENT 149

DOCUMENT 149

Winter 2021 ⁜ VERDICT • 39

40 • VERDICT

Winter 2021 ⁜ VERDICT • 41

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Verdicts & Settlements Date:

07/28/2020

Resolution:

Settlement

Category:

[Premises Liability]: Hot drink spilled on toddler

Case:

Jane Doe and Parents v. Carmax, Inc.

County:

Marion

Sex:

F

Age:

2

Settlement Offer:

Pre-suit settlement of $107,000 total: $80,000 to child, $25,000 to parents for negligent infliction of emotional distress, $2,000 med pay

Facts:

Nineteen-month old girl was burned on forearm after mother placed an open cup of hot tea on table in Carmax showroom child play area. The child bumped the table and the hot tea spilled on her arm. The cup did not have a lid because none were provided at the beverage bar, which also lacked a Keurig. Settlement driven by compelling pictures and video of the injury and child.

Injuries:

First and second degree burn on right forearm with extreme pain. Large blister had to be cut away. Bandage wrapping. Small residual lose of skin pigmentation. Gut-wrenching video of screaming child having her bandage changed and wound treated.

Medicals:

$2,783 billed.

Coverage:

Travelers

Plaintiff Attorney:

James A. Mellowitz

Submitting Attorney:

James A. Mellowitz

Winter 2021 ⁜ VERDICT • 43

Date:

11/18/2020

Resolution:

Jury Verdict

Category:

[Motor Vehicle Collision]: Low speed/Low impact rear-end collision

Case:

Timnesha Evans v. Andrew Fons

Court:

Lake Superior Court, Civil Div. #7

County:

Lake

Docket Number:

45D11-1704-CT-000080

Sex:

F

Age:

42

Occupation:

Call Center worker for Com Ed

Amount Awarded:

$75,000.00

Settlement Offer:

$1,000 offer prior to trial. Range of $zero to approximately $3,500 suggested at trial by Defendant’s counsel as appropriate.

Facts:

Rear-end collision on June 3, 2015 on the off-ramp from I-65 to W/B Rte 30 in Merrillville, Indiana. Low speed/Low impact collision. No damage to Defendant vehicle. Very little visible damage to Plaintiff vehicle. Defendants admitted 100% responsibility for the collision but claimed Plaintiff not injured from the collision.

Injuries:

Facet injury to the neck. Plaintiff waited 8 days before presenting at an Immediate Care facility. Was prescribed OTC medication such as Ibuprofen and physical therapy suggested. Plaintiff did not get physical therapy but, as pain persisted, Plaintiff sought a recommendation from a co-worker for a physician. Her coworker recommended Dr. Andrew Engel, to whom Plaintiff went for treatment.

Medicals:

Approximately $36,000

Lost Wages:

None

Coverage:

Liability carrier: State Farm

Experts:

Dr. Andrew Engel, Plaintiff’s treating physician. He is a physician based in Chicago double board certified in anesthesiology and pain management. Patient received medial branch blocks and radio frequency ablations in her neck. The procedures were successful resulting in alleviation of pain. Plaintiff was advised that she may need repeat procedures for life after the beneficial effects wore off after about 2 years. Even though the effects did wear off after two years, Plaintiff had not gone back for a repeat procedure at time of trial. Defendants hired two experts who testified via video deposition at trial. Dr. Marc Sloan, a pain medicine specialist from Chicago (referred by INSPE). And Dr. Edward Bain, M.D./biomechanical expert from Biodynamics Research Corporation (BRC). Dr. Engel testified live.

Dr. Sloan and Dr. Bain disputed that Plaintiff was injured in the manner claimed.

Plaintiff Attorney:

Daniel J. Zlatic from Rubino Ruman Crosmer & Polen, LLC

Defense Attorney:

Samantha Mihail from Kightlinger & Gray, LLP

Submitting Attorney:

Daniel J. Zlatic

44 • VERDICT

Chris Wyant and Paul Petro

Chris Wyant and Paul Petro

INDIANA APPELLATE CASE REPORTER

Cases Included in this Issue are from April 2020 through August 2020

INDIANA SUPREME COURT Juror should have been struck for cause based on bias, necessitating a new trial Clark v. Mattar (July 9, 2020) This appeal was based on whether a juror should have been stricken for cause based on bias, necessitating a new trial where the juror stated he did not want to serve as a juror, had a favorable impression of doctors, stated repeatedly that he could not and would not be able to assess noneconomic damages and absolutely no rehabilitation with regard to the damages issue occurred.

The Supreme Court held that under the facts and circumstances of the case, the juror should have been struck for cause and that there was prejudice because the party objecting to the juror was forced to exhaust her last preemptory challenge and accept an objectionable juror. It held that a new trial was appropriate.

Trial Rule 41(F) did not provide remedy to reinstate case that was dismissed for failing to comply with the Claims Against Public Schools Act when no response was filed to the motion to dismiss and then Plaintiff took no action for two months after the case was dismissed Smith v. Franklin Township Community School Corporation (August 25, 2020) In January 2016, 17-year-old Benjamin Smith suffered injuries when his vehicle was rear ended by a Franklin Township Community School Corporation bus. At some point over the next few months, Smith informed the School that he intended to file a claim for damages. Meanwhile, the legislature enacted the Claims Against Public Schools Act (CAPSA). This law requires a party, before filing a lawsuit against a school, to satisfy certain notice requirements. If a party files suit without providing the required notice, the court must dismiss the case without prejudice.

In October 2018, about four months after CAPSA took effect, and nine days before the applicable statute of limitations was set to run, Smith filed a negligence suit against the School. The School responded with a motion to dismiss, arguing that Smith failed to provide CAPSA notice before filing his complaint. Smith didn’t file a response to the School’s motion. Instead he sent a letter to the School, which he also filed with the court, that demanded $500,000 to settle the claim. The court held a telephonic conference. The court asked Smith whether he had cured the asserted defect in filing the lawsuit. The School responded that the later filed notice was not sufficient. So the next day, the court dismissed Smith’s case without prejudice.

Smith took no further action for two months. He then, over a six week period, filed three documents: a “Motion to Reinstate”, a “Verified Petition to Reinstate,” Winter 2021 ⁜ VERDICT • 45

INDIANA APPELLATE CASE REPORTER

and a “Memorandum in Support of Reinstatement.” Each filing cited Trial Rule 41(F) and requested reinstatement of his case. In response, the School asserted that Smith had not met Rule 41(F)’s requirements for setting aside a dismissal. He appealed and the Court of Appeals reversed. The School petitioned for transfer which was granted.

The Supreme Court found that Smith did not meet any of the requirements of Trial Rule 41(F) to reinstate his case. Also, the order dismissing the lawsuit was a final appealable order and Smith did not timely file a notice of appeal to challenge the order of dismissal. Smith used a Trial Rule 41(F) filing to collaterally attack the trial court’s order. The Supreme Court held that was not permissible. Given the timing and substance of Smit’s ultimate TR 41(F) filing, he cannot show the request was made within a reasonable time or for good cause. The Supreme Court affirmed the judgment of the trial court.

INDIANA COURT OF APPEALS Summary judgment was proper for manufacturer under Indiana Product Liability Act because plaintiff misused the machine in ways that could not have been reasonably anticipated by the manufacturer Hackney v. Pendu Manufacturing, Inc. (April 13, 2020) Hackney sued Pendu alleging that a piece of machinery manufactured by Pendu contained a design defect that made it unreasonably dangerous under the Indiana Product Liability Statute. Hackney worked for American Fibertech who produces wooden boards for wooden pallets. Hackney was working at a machine called the Pendu Edger 3000. The machine trims edges off boards. The machine was a part of Fibertech’s much larger production line and fed into Fibertech’s main conveyor belt.

While performing his job, Hackney got his sweatshirt caught in the machine and suffered injuries to his arm and shoulder when he tried to remove a piece of wood from the machine. Hackney admitted that had he hit one of two stop buttons before he tried to remove the wood, the accident would not have happened.

Hackney filed suit against Pendu alleging that the machine was negligently designed and that, under Indiana’s Product Liability Act, the machine was unreasonably dangerous and a defective product. Pendu filed for summary judgment, arguing that Hackney’s injuries were caused by Hackney’s misuse of the machine, which included failure to read the safety manual and failure to follow several safety warnings, that Pendu did not breach its duty to Hackney and was not the proximate cause of Hackney’s injuries, and Hackney should be barred from recovery because he had prior knowledge of the machine’s danger. Hackney filed a response. Pendu then filed a response alleging that Hackney’s accident was not caused by a design defect, the violation of safety rules and warnings by Hackney was misuse that constituted a complete defense under IPLA, alterations to the shaft of the machine constituted a complete defense under IPLA, and Hackney’s incurred risk and knowledge of the danger of reaching into the machine constituted a complete bar to recovery, among other things.

After a hearing, the trial court issued an order granting summary judgment in 46 • VERDICT

Chris Wyant and Paul Petro

favor of Pendu and held that the “issues of misuse and alterations of the equipment as they relate to the holding in Campbell Hausfeld/Scott Fetzer Co. v. Johnson, 109 N.E.3d 953 (Ind. 2018) is dispositive. Hackney appealed.

Pursuant to the IPLA, a plaintiff must prove that a product was placed into the stream of commerce in a defective condition that was unreasonably dangerous to the user and that plaintiff ’s injuries were caused by this dangerous product.

A product can be defective within the meaning of the IPLA because of a manufacturing flaw, a defective design, or a failure to warn of dangers while using the product.

The IPLA provides three non-exclusive defenses to a products liability action: incurred risk, misuse of the product, and modification or alteration of the product.

All three statutory defenses act as a complete bar to recovery in a products liability action, but all three defenses must be proven.

Pendu’s summary judgment motion argued that Hackney’s injuries were caused by his misuse of the machine, which included failure to read the safety manual and failure to follow several safety warnings. Hackney argued on appeal that it was error for the trial court to grant summary judgment on the basis of the misuse defense. Specifically, he claimed that a jury should decide whether the violations of warnings and instructions alleged by Pendu even constitute violations and whether they combine in the aggregate to constitute misuse.

The Court noted that misuse is typically a question of fact for the jury to decide.

However, misuse is established as a matter of law when the undisputed evidence proves that the plaintiff used the product in direct contravention of the product’s warnings and instructions.

Pendu argued that Hackney committed seven violations of the warnings and instructions for the machine. Hackney testified that turning off the machine first would have “obviously” prevented this accident and that he was trained to turn off the machine before removing a jam, and if he had hit one of the two stop buttons that he walked past on the way to remove the scrap of wood, the accident would not have happened.

The Court found it was clear that if Hackney had turned off the machine, the accident would not have occurred, and even if he had not done so, the accident may have been avoided if he did not lean directly across the moving machine, had maintained proper footing, and was not wearing a loose-fitting shirt that easily caught in the moving shaft. The Court held that Hackney’s failure to follow the instructions and warnings was the cause of his injuries.

The Court then looked to whether Hackney’s failure to follow the instructions and warnings was reasonably expected by Pendu. The trial court found that the undisputed evidence was clear that Hackney misused the machine in multiple ways that together could not be reasonably expected by Pendu and that misuse was the cause of his injuries. The Court found that Hackney had multiple failures to follow the machine’s warnings and instructions that were the cause of his accident and injury. It reasoned that while Pendu could have perhaps reasonably expected an operator to not follow one of the warnings or instructions, it could not have reasonably expected an operator to disregard the safety warnings and instructions in all of the ways that Hackney did. The Court of Appeals concluded that the trial court did not err in granting summary judgment in favor of Pendu.

Winter 2021 ⁜ VERDICT • 47

INDIANA APPELLATE CASE REPORTER

Tree company did not have duty to defend and indemnify City for claims made based entirely on the City’s own conduct The Davey Tree Expert Company and Davey Resource Group, Inc. v. The City of Indianapolis (April 27, 2020) Steven Smock died after a tree fell onto his car while he was driving on an Indianapolis street. Steven’s wife filed a wrongful death lawsuit against the City of Indianapolis and Davey Resource Group, Inc., and The Davey Tree Expert Company, whom the city had hired to inventory trees. The complaint set forth negligence and gross negligence claims against the City and negligence and gross negligence claims against Davey Tree. The City filed a cross-claim for declaratory judgment against Davey Tree, claiming that Davey tree had to defend it according to their contract. The City moved for judgment on the pleadings as to its crossclaim, which the trial court granted. Davey Tree then brought an interlocutory appeal.

The Court of Appeals held that Davey Tree’s defense obligation was only triggered if the City was sued for Davey Tree’s negligence. Because the claims against the City were based entirely on its own conduct, Davey Tree did not have to defend the City. It reversed the trial court’s order granting the City’s motion for judgment on the pleadings.

Trial court did not abuse discretion in refusal to read Burdick’s final instructions on premises liability, negligence, duty, and reasonable care in case involving injury while riding a horse because proper instructions related to those having to do with sporting events Burdick v. Romano (May 5, 2020) Julie Romano was renting and living on a property in Lowell, Indiana which she called Serenity Farms. Kathleen Burdick and her friend, Kathy Jacobsma, took Burdick’s horse Chip to Serenity Farms for boarding and training. Romano had a horse, Sheza, that was known for kicking other horses. Burdick was aware of this tendency as was Romano. On November 5, 2011, Burdick and Jacobsma went to Serenity Farms to ride horses in a pasture with Romano. Romano warned Burdick and Jacobsma several times to stay away from Sheza because Sheza tended to back up and kick other horses.

Three days later, Burdick returned to Serenity Farms and began to ride Chip in the arena. Romano entered the arena with Sheza. After a few minutes, Romano got off Sheza, dropped the reins, and walked away. Burdick was about twelve feet behind Sheza still sitting on Chip. Romano retrieved a barrel. As she returned with the barrel, Sheza spooked and suddenly started to back up, with Sheza’s rear end coming directly towards Burdick and Chip. Burdick stated that she saw two feet hit, felt a blow under her chin, and then everything went black. She said that this happened so quickly that she did not have time to react or take evasive maneuvers.

Romano’s testimony was that she walked Sheza to the location of the barrel and continued to hold Sheza’s reins. Burdick said she was about forty feet away when Chip turned to the right and then abruptly stopped, causing Burdick to lose her balance and fall off Chip.

48 • VERDICT

Winter 2021 ⁜ VERDICT • 49

INDIANA APPELLATE CASE REPORTER

Burdick was badly injured. She filed suit against Romano alleging negligence, gross negligence, and recklessness in her care and control of Sheza. The case proceeded to jury trial on October 28, 2019. The trial court refused to read Burdick’s final instructions on premises liability, negligence, duty, and reasonable care. The trial court then read Romano’s proposed instructions on incurred risk, inherent risks of equine activities, and sporting event injuries. The jury returned a verdict in favor of Romano.

On appeal, Burdick argued that the trial court abused its discretion when it instructed the jury. She argued that the trial court should have read her proposed instructions on negligence to the jury. Second, she felt the trial court should not have read Romano’s instructions on the inherent risks of equine activities, sporting event injuries, and incurred risk.

Burdick argued that trial court abused its discretion in refusing to read her instructions on negligence, duty, and reasonable care because, she claims, this is a simple negligence case. At trial, the trial court reaffirmed its conclusion that this was a sports-activity case. On appeal, Burdick claimed that she and Romano were not engaged in a sporting event. She claimed the trial court abused its discretion in giving the sporting event pattern jury instruction. Burdick’s argument centered on the position that Burdick and Romano were not engaged in a sporting event under the terms of the equine activity statutes at Indiana Code 34-31-5, et seq.

The Court of Appeals agreed with Romano that the statutory definition of equine activity did not preclude sporting activities. It held that the trial court did not abuse its discretion in finding that Burdick and Romano were engaged in a sporting activity. It reasoned that since Burdick and Romano were in an arena specifically and exclusively designed for horse training and were doing tricks and training related to the sport of horse-back riding, then they were engaged in a sporting activity.

Because Burdick and Romano were engaged in a sporting activity, Burdick was required to show that Romano was reckless, not merely negligent. Because the undisputed evidence showed that Burdick and Romano were engaged in a sporting activity, the trial court did not abuse its discretion in refusing to instruct the jury on negligence for two reasons: (1) the evidence did not support an instruction for negligence, and (2) an instruction on negligence could have confused and misled the jury about Burdick’s burden of proof. It affirmed the trial court’s decision to refuse Burdick’s tendered instructions on negligence.

The Court of Appeals also found that the trial court did not abuse its discretion by instructing the jury on the inherent risks of equine activity. The Court also found that the incurred risk instruction was appropriate because Burdick was well aware that Sheza had a tendency to kick other horses.

50 • VERDICT

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Winter 2021 ⁜ VERDICT • 51

INDIANA APPELLATE CASE REPORTER

Claimant’s failure to serve Notice of Tort Claim was fatal to claim against the Department of Child Services because evidence showed that claimant was on notice of the possibility of some claim against DCS more than 270 days prior to service of Tort Claim Notice Indiana Department of Child Services v. Justin Morgan (May 6, 2020) On June 23, 2011, Justin Morgan and Meghan Price had a son, Brayson. At the end of 2015, Morgan moved to New Mexico because of financial pressure and fear of Price and Price’s boyfriend, Steven Ingalls. Between July 18, 2014 and November 22, 2016, DCS received twelve preliminary reports of physical abuse and/or neglect regarding Brayson through its Child Abuse and Neglect Hotline.

On November 23, 2016, Brayson died. Morgan was interviewed by police and expressed his concerns with Price and Ingalls. The State eventually filed charges against Price and Ingalls related to Brayson’s death.

Morgan filed a Tort Claim Notice alleging that DCS knowingly and negligently placed Brayson in a situation that endangered his life and health and was responsible for his bodily injuries and death. Then Morgan filed a complaint against DCS and Price for damages for the wrongful death of his son.

DCS filed a motion for summary judgment and argued in part that Morgan’s failure to timely file a notice of tort claim precluded him from asserting a wrongful death action. The trial court denied the motion saying there were genuine issues of material fact in the case. DCS filed this interlocutory appeal.

DCS argued that Morgan’s claim was barred because he failed to file a timely notice of tort claim within 270 days of the November 28, 2016 interview. It argued that a person of common knowledge and experience would have been on notice of the possibility that some claim against DCS might exist no later than November 28, 2016. It claimed that Morgan knew on November 28, 2016, that Brayson had died in the Price household, DCS had received and assessed multiple reports of abuse or neglect involving Price and/or Ingalls, and DCS had not intervened to protect Brayson from Price and/or Ingalls by removing him.

Morgan argued that only law enforcement and DCS knew the cause of death in November 2016 and that information was deliberately and actively kept secret until June 23, 2017, when criminal charges were filed. He claims he had 270 days from that date to file his notice of tort claim.

Under the Indiana Tort Claims Act, notice must be given to the State within 270 days after the loss occurs. Loss is defined as injury to or death of a person or damage to property. A loss occurs when the plaintiff knew or, in the exercise of ordinary diligence, could have discovered that an injury had been sustained as a result of the tortious act of another. For an action to accrue, it is not necessary that the full extent of the damage be known or even ascertainable, but that only some ascertainable damage has occurred.

The opinion includes many different excerpts of the interview and conversations between a police detective and Morgan and his parents. The Court of Appeals held that based on their review of the interviews, it was clear that Morgan had serious concerns with Price and Ingalls and knew that Brayson had been injured on multiple occasions and ultimately died, and DCS had been informed on multiple occasions and had not removed him from the home. Also, Morgan and his 52 • VERDICT

Chris Wyant and Paul Petro

parents expressed concerns about DCS’s investigations and inactions. It concluded that notice of tort claims would have to be filed within 270 days of November 28, 2016. Morgan’s December 13, 2017 tort claim notice was untimely. The trial court erred in denying DCS’s motion for summary judgment.

Power company did not owe a duty to man who was electrocuted while working on a building near power lines Indianapolis Power & Light Company v. Gammon (May 6, 2020) In the course of his employment with Window Man, Joshua Gammon was installing metal trim on the roof of a commercial building, near uninsulated power lines owned by Indianapolis Power & Light Company (IPL). Gammon was electrocuted and later sued IPL. IPL moved for summary judgment, arguing it did not owe a duty to Gammon. The trial court denied IPL’s motion and IPL appealed.

Both IPL and Gammon noted that the Indiana Court of Appeals has noted that electric utilities have a duty to exercise such care as a person of reasonable prudence would use under like conditions and circumstances. Rogers v. Grunden, 589 N.E.2d 248 (Ind. Ct. App. 1992) Gammon argued that the duty analysis should begin and end with that statement. However, the Court of Appeals noted that the next sentence in the Rogers opinion indicates that the relevant duty is much narrower when the plaintiff is injured by an uninsulated power line.

“Companies engaging in the generation and distribution of electricity have a duty to exercise reasonable care to keep distribution and transmission lines safely insulated in places where the general public may come into contact with them.”

The Court of Appeals applied this narrow duty to insulate in a case relied upon heavily by IPL in Spudich v. N. Ind. Pub. Serv. Co., 745 N.E.2d 281 (Ind. Ct. App. 2001). In that case, the Court noted that, as a general rule, insulation of lines is not required when the lines are sufficiently isolated so that the general public could not reasonably be expected to come in contact with them. The Court of Appeals held that since the likelihood of the general public coming into contact with the lines was virtually nonexistent and because Spudich was near the lines only as a product of his employment, the utility did not owe Spudich a duty to insulate the lines.

The Court noted the similarities between that case and this case. As a result, the Court of Appeals found that IPL had no duty to Gammon to insulate the power lines. Next, the Court of Appeals held that the NESC building-clearance requirements did not establish a duty.

Gammon also argued that IPL owed him a duty because his injury was foreseeable under the standard adopted by the Indiana Supreme Court in Goodwin v. Yeakle’s Sports Bar and Grill, Inc., 62 N.E.2d 384 (Ind. 2016) The Court rejected that argument by noting that Gammon was well aware of the risks posed by power lines and knew to exercise caution around them.

The Court of Appeals held that IPL did not owe Gammon a duty and the trial court should have granted IPL’s motion for summary judgment.

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Medical provider was not entitled to a setoff of co-defendant’s settlement with estate under the Medical Malpractice Act until total value of estate’s injury could be determined Batchelder, as Special Administrator of the Estate of John E. Batchelder, M.D. v.

Indiana University Health Care Associates, d/b/a IUHP (May 14, 2020) The Decedent, John E. Batchelder, was a practicing cardiologist and also a paraplegic. On September 25, 2015, a vehicle driven by Emma Mourouzis collided with the decedent’s vehicle. The decedent was transported to IU North Hospital.

An IUHP radiologist misread the decedent’s x-rays, failed to diagnose the decedent’s cervical spine fracture, and released the decedent. On September 27, 2015, the decedent sough a second opinion from another medical provider, who diagnosed the spine fracture and performed neurosurgery.

The decedent filed suit against Mourouzis. Two days later, he died. The Estate then filed an amended complaint for damages against Mourouzis. Mourouzis later settled for $1.25 million. Then the Estate filed a proposed complaint for damages with the Indiana Department of Insurance. The medical review panel found negligence on the IUHP radiologist. The Estate filed a wrongful death complaint against Indiana University Health, Inc., and IUHP, alleging that their provision of negligent medical care resulted in the decedent’s death. IUHP moved for summary judgment arguing that the Estate was not entitled to additional damages because (1) the Indiana Medical Malpractice Act capped the Estate’s damages at $1.25 million; and (2) the Estate already obtained $1.25 million. The trial court granted the motion for summary judgment. The Estate appealed.

The Estate argued that the trial court erred in entering summary judgment in favor of IUHP. It claimed (1) that a setoff should be applied to the verdict; and (2) the trial court’s decision to apply the Mourouzis settlement setoff to a possible judgment against IUHP conflicts with controlling precedent as well as the policy considerations that gave rise to such precedent. IUHP countered that a jury verdict in excess of the $1.25 million statutory cap must be reduced to the statutory cap prior to becoming a judgment and once reduced, the judgment should then be reduced by the amount of any payments received in settlement from another joint tortfeasor. IUHP’s position was that doing so renders the Estate’s claim against IUHP moot because the Estate has already recovered $1.25 million.

The Estate alleged that Mourouzis and IUHP are joint tortfeasors whose acts or omissions caused the Estate to suffer injury, namely, the Decedent’s death. The common law rule of joint and several liability remains available to defendants in cases alleging medical malpractice. Under the one satisfaction rule, where a plaintiff asserts that the wrongful acts of two or more joint tortfeasors caused a single injury, satisfaction of the loss by one tortfeasor releases all other joint tortfeasors.

The Court examined the decisions in Indiana Department of Insurance v. Everhart, 960 N.E.2d 129 (Ind. 2012) and Palmer v. Comprehensive Neurologic Services, P.C., 864 N.E.2d 1093 (Ind. Ct. App. 2007) But it noted the difference in those cases was that the jury or trial court determined the value of the case or the entirety of the recoverable damages incurred by the plaintiffs before the trial court applied any setoffs. In this case, the trial court applied the setoff without first determining 54 • VERDICT

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(1) the value of the case or the extent of the Estate’s injury; and (2) whether the Mourouzis settlement satisfied the Estate’s injury and made the Estate whole. By prematurely applying the Mourouzis setoff to the statutory limit and offsetting the IUHP judgment to zero, without first determining the value of the Estate’s case, the trial court denied the Estate the potential full recovery to which it is legally entitled. The Court of Appeals found that genuine issues of material fact existed, as to the amount of damages, that IUHP was not entitled to judgment as a matter of law. The Court of Appeals reversed the decision of the trial court and remanded the case.

Question of fact existed as to whether employer was liable for employee’s unauthorized access of patient’s protected health information SoderVick v. Parkview Health System, Inc. (May 15, 2020) In October of 2017, SoderVick went to an appointment at the office of Catherine Reese, M.D., an OB/GYN at Parkview’s campus in Wabash. At the time, Alexis Christian was employed by Parkview Physical Group- General Surgery as a medical assistant. Christian also occasionally worked with the OB/GYN group by assisting Dr. Reese’s staff with registering and rooming patients and inputting patient registration information into Parkview’s electronic health record system. Christian was doing this on the day of SoderVick’s appointment. As a Parkview employee, Christian had signed a Confidentiality Agreement and an Acknowledgment Regarding Access to Patient Information acknowledging her

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understanding of Parkview’s confidentiality policy.

During SoderVick’s appointment with Dr. Reese, Christian accessed SoderVick’s electronic health record for about one minute. Christian said it was to input SoderVick’s personal information from a patient information worksheet.

Christian then texted information about SoderVick to Christian’s then husband, Caleb Thomas. Christian disclosed SoderVick’s name, the fact that she was a patient, a potential diagnosis, and that she worked as a dispatcher. Christian also texted Thomas that SoderVick was HIV positive and had more than fifty sexual partners. This information was not in her chart and was false. Christian said she came across this information in the chart and became concerned, asking her husband if he knew SoderVick, curious as to whether they might have had a sexual history together.

Later, Thomas’ sister saw the texts between Christian and Thomas. She reported the information to Parkview that a potential HIPAA violation had occurred.

Parkview conducted an investigation. It decided to terminate Christian as an employee. It then notified SoderVick of the violation.

SoderVick filed suit against Parkview. The complaint made claims for respondeat superior, direct negligence for Parkview’s negligent training, supervision, and retention, and direct negligence for Parkview’s violation of its statutory and common law duties of protection of privacy under HIPAA. Parkview moved for summary judgment arguing (1) Parkview was not liable under respondeat superior because it did not authorize Christian’s conduct and there was no legitimate business reason for her conduct; (2) Parkview was not negligent in its training, monitoring, and supervision of its employees; and (3) no violation of HIPAA occurred.

SoderVick’s reply conceded summary judgment on the direct negligence and HIPAA claims. She argued that the issue of respondeat superior must be left to the jury and that there was a clear HIPAA violation for which Parkview could be held vicariously liable. The trial court granted summary judgment on the respondeat superior and direct negligence claims and denied summary judgment on the HIPAA violation claim. Both parties filed motions to reconsider. The trial court then granted summary judgment on all three claims. SoderVick appealed the grant of summary judgment solely on the respondeat superior claim.

SoderVick argued that the trial court misapplied the respondeat superior standard and that all of Christian’s actions involving the access and communication of SoderVick’s personal information were within the scope of her employment for purposes of establishing Parkview’s vicarious liability.

To fall within the scope of employment, the employee’s injurious act must either (1) be incidental to the conduct authorized, or (2) to an appreciable extent, further the employer’s business. SoderVick argued that Christian’s conduct falls under the first prong of the scope of employment analysis because the acts of accessing and texting SoderVick’s personal health information was incidental to conduct Parkview had authorized Christian to do as part of her employment. SoderVick framed the relevant analysis as one in which the focus must be on context- not the specific act of texting, whereas the analysis provided by Parkview disregards the larger employment context and focuses only on the specific act of sending a text message to Christian’s husband.

The Court of Appeals agreed with SoderVick that there were several issues 56 • VERDICT

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of material fact as to whether Parkview should be held vicariously liable for Christian’s conduct. First, the evidence showed that Christian’s misconduct was of the same general nature as her regular and authorized job duties. Her job duties included implementation of electronic medical records and other tasks involving patient chart access. Second, Christian was in the midst of performing authorized job duties, namely entering patient information into the electronic charts, when she accessed SoderVick’s record and proceeded to text information about SoderVick to Thomas, thereby making the misconduct “intermingled” with her ordinary, authorized job duties. Third, Christian’s employment at Parkview enabled her to commit the misconduct in question. This factor weighed in favor of finding that Christian was acting within the scope of her employment.

Because at least some of Christian’s acts were authorized, the Court of Appeals held the issue was inappropriate for summary judgment. It reversed the trial court’s order granting summary judgment and remanded back to the trial court.

Denial of motion to set aside default judgment was proper where defendant failed to prove excusable neglect by affidavit, testimony of witnesses, or other evidence Denny v. Vanoy (May 18, 2020) On February 26, 2017, Nathan Vanoy ran a red light and struck a car driven by Brian Denny. On June 25, 2018, Denny filed a lawsuit against Vanoy in Marion Superior Court. Vanoy was served on September 14, 2018. On February 25, 2019, over five months after Vanoy was served, an adjuster from GEICO, Vanoy’s insurer, called Denny’s counsel. Denny’s counsel confirmed that suit had been filed and that service had been perfected on September 14, 2018. That same day, Denny’s counsel emailed the GEICO adjuster a copy of the complaint, crash report, and proof of service. Two weeks later, on March 11, Denny moved for default judgment against Vanoy, as no one had appeared for Vanoy since the phone call.

The trial court granted the motion on March 19 and scheduled a damages hearing for May 15. On May 14, Vanoy, represented by an attorney at Metzger Rosta, LLP, moved to set aside the default judgment based on excusable neglect under Indiana Trial Rule 60(B)(1). The trial court had a hearing and after the hearing, granted the motion to set aside the default judgment. Denny appealed.

Denny argued that Vanoy failed to prove excusable neglect by affidavit, testimony of witnesses, or other evidence. Vanoy did not dispute this, rather, he claimed he presented argument that there was excusable neglect due to a breakdown of communication between GEICO and Metzger Rosta, LLP. The basis of Vanoy’s claim that excusable neglect existed is that a GEICO adjuster contended she spoke to a member of counsel’s firm on March 1, 2019. But Vanoy presented no affidavit or testimony from this adjuster. There was no evidence before the court to support Vanoy’s claim that there was a breakdown of communication. The evidence led the Court of Appeals to find inattention, not excusable neglect. It held the trial court abused its discretion in granting Vanoy’s motion to set aside the default judgment.

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Defamation claims did not fall under continuing wrong doctrine to allow pursuit of defamatory statements made more than two years prior to the filing of the lawsuit Hall v. Shaw, et al. (May 21, 2020) In August of 2011, Melvin Hall began working at Central Indiana Protection Agency, Inc., as a security guard, eventually becoming a supervisor. Bradley Shaw is an owner, president, and employee of CIPA while Narducci is an owner, vice president, and employee. In June of 2013, Hall formed his own security company, Urban Tactical Response Agency, LLC, and resigned from CIPA to operate it.

From June of 2013 to July of 2015, Shaw and Narducci allegedly engaged in a coordinated campaign with others to defame Hall and drive him out of business.

According to Hall, Shaw, Narducci, other CIPA employees, and/or others working at Shaw’s and/or Narducci’s direction made false allegations against Hall to the Attorney General’s office, various state licensing boards, Indianapolis television station WRTV, and local law enforcement. The alleged communications were mostly to the effect that Hall had been impersonating a police officer.

The Marion County Prosecutor’s Office charged Hall with multiple counts of impersonating a police officer and he was arrested on June 15, 2015. On July 9, 2015, the Indiana Private Investigator and Security Guard Licensing Board revoked Urban Tactical’s professional license. Hall was tried and eventually acquitted of all charges.

Hall then filed suit against Shaw, Narducci, and CIPA, alleging defamation, abuse of process, malicious prosecution, and IIED. After that, Narducci initiated a consumer complaint with the Attorney General’s office against Hall and his new security agency, Superior Tactical Response Agency, which was then operating under a probationary license.

Defendants moved to dismiss Hall’s amended complaint on the basis that he had failed to state a claim upon which relief could be granted, arguing that Hall’s claims of (1) defamation, abuse of process, and IIED based on events that occurred prior to May 22, 2016, were time-barred; (2) defamation based on CIPA’s employees’ testimony at Hall’s criminal trial were barred by absolute privilege; (3) defamation based on alleged out-of-court statements by the CIPA’s employees’ testimony did not state a claim of civil conspiracy; (4) abuse of process and IIED based on Narducci’s alleged July of 2018 consumer complaint with the Attorney General’s office and voicemail were insufficient as a matter of law; and (5) malicious prosecution were insufficient because Defendants did not institute or cause to be instituted any legal action against Hall.

The trial court (1) granted Defendants’ motion as to all claims against Shaw and CIPA; (2) denied Defendants’ motion as to defamation and abuse of process claims against Narducci based on his July of 2018 consumer complaint and the IIED claim based on his voicemail; and (3) denied Defendants’ request for attorney’s fees. Defendants contended that the trial court erred in denying their motion to dismiss in one respect, while Hall felt that the trial court erred in several aspects in granting Defendants’ motion.

On appeal, the Defendants argued that Narducci’s July of 2018 consumer complaint cannot be the basis of any defamation or abuse of process claims because it is protected by absolute privilege. Indiana law has long recognized 58 • VERDICT

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an absolute privilege that protects all relevant statements made in the course of a judicial proceeding, regardless of the truth or motive behind the statements.

Hartman v. Keri, 883 N.E.2d 774 (Ind. 2008) Hall did not dispute that the evaluation of a consumer complaint with the Attorney General’s office qualified as a quasi-judicial proceeding, the Court of Appeals agreed with Defendants that Hall may not pursue defamation or abuse of process claims against Narducci based on his July of 2018 consumer complaint.

Next, Hall argued that the trial court erred in concluding that all of his claims of defamation against Shaw and CIPA are time-barred and that most of those claims against Narducci are. There was no dispute that almost all of the alleged acts of which Hall complained related to defamation occurred before May 22, 2016, or more than two years before he filed suit. Hall did not claim that the failed to ascertain the damage caused by any of the pre-May 22, 2016, statements until after May 22, 2016, but, rather, that these alleged events are all part of continuing wrongs extending past May 22, 2016. The Court of Appeals did not agree that the continuing wrong doctrine would help Hall in the case. It held that since Hall did not plead a course of conduct that led to a single injury, the continuing wrong doctrine will not benefit him. It held the trial court properly dismissed all defamation claims based on allegations of communications made before May 22, 2016.

Hall argued that the trial court erred in dismissing his malicious prosecution claim against all Defendants, while Defendants seemed to argue that Hall’s claims of malicious prosecution are absolutely barred because it was the prosecutor who made the final decision to file criminal charges. The Court of Appeals found that if Shaw and Narducci did cause the prosecutor’s office to initiate a felony prosecution against Hall by conspiring with their employees and other to provide false testimony to try to incriminate Hall for impersonating a public servant, was sufficient to allow a finding that Defendants were the proximate and efficient cause of Hall’s prosecution.

Next, Hall argued that the CIPA employees’ testimony and alleged out of court statements cannot support defamation claims against Shaw, CIPA, and Narducci as part of an alleged civil conspiracy. The Court held that Hall’s allegations were sufficient to support claims of a civil conspiracy to defame Hall based on the CIPA employees’ alleged false out of court statements. Hall alleged that the employees falsely testified that he had impersonated a police officer and that their out of court statements were consistent with their testimony. Hall also alleged that the employees made their out of court statements at the direction of Defendants as part of a conspiracy to defame him and destroy his business. Hall’s allegations were sufficient to support a claim that the employees’ out of court statements were defamatory and made in furtherance of a conspiracy involving Defendants.

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Medical record department employee’s unauthorized access of patient health information did not fall under the purview of the Medical Malpractice Act and employer can be held responsible under respondeat superior for these acts Community Health Network, Inc. v. McKenzie, et al. (May 26, 2020) Heather McKenzie, Daniel McKenzie, John McKenzie, Deborah West, Michael West, J.M. and O.M. (Appellees) filed a complaint against Community Health Network, Inc., and Katrina Gray in January 2014 and amended their complaint in July 2015. The complaint arose following Katrina Gray’s unauthorized access to their private health information while she was an employee of Community. The Appellees brought claims for vicarious liability under the doctrine of respondeat superior and negligent training, supervision, and retention against Community and negligence and invasion of privacy/intrusion against Katrina.

Community appealed the trial court’s denial of Community’s Trial Rule 12(B) (1) motion to dismiss and motion for summary judgment. Community claimed that the trial court lacked subject matter jurisdiction because Appellees’ claims fall within the purview of the Medical Malpractice Act and that the Appellees failed to comply with the requirements of the MMA and that the trial court erred in denying summary judgment on Appellees’ claims of respondeat superior and negligent training, supervision, and retention. Community also argued that even if Katrina’s actions were within the scope of her employment, it cannot be held vicariously liable under respondeat superior for Katrina’s actions because Appellees’ underlying negligence and invasion of privacy/intrusion claims against Katrina are not actionable under Indiana law.

The facts of the case were that Heather McKenzie and Katrina Gray worked together at Indiana Orthopedic Center from January 2005 until September 2010.

Katrina was a medical records coordinator and was Heather’s direct supervisor. At some time, Katrina introduced Heather to her stepson, Kevin Gray. They began dating and then married. They had two children together, J.M. and O.M. Heather and Kevin eventually divorced in 2010. Heather received full custody of J.M. and O.M. In 2011, Heather married Daniel McKenzie and he adopted J.M. and O.M. A family feud between the Gray family and Appellees ensued.

In 2012, Community Health Network bought IOC. Community hired and trained Katrina as a medical records coordinator. In September 2013, Community received an internal employee complaint via its anonymous hotline alleging that Katrina had accessed her personal chart, which, if true, violated Community’s policies and employee conduct rules. Community investigated and determined that Katrina had accessed her own chart, as well as the confidential health records of multiple other patients, including Appellees, at various times between January and September 2013. She did so on the job using equipment, software, and credentials provided to her by Community. Following the investigation, Community placed Katrina on administrative leave and eventually terminated her. Appellees eventually received notice from Community that their health information records had been compromised. Appellees later learned that it was Katrina who had improperly accessed their medical records.

On appeal, Community first argued that the trial court erred by denying its motion to dismiss pursuant to Trial Rule 12(B)(1) for lack of subject matter 60 • VERDICT

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jurisdiction. Community argued that the Appellees’ claims fell squarely within the purview of the Medical Malpractice Act and that Appellees failed to comply with the MMA when they did not submit a proposed complaint with the IDOI and did not obtain an opinion from the medical review panel before filing their complaint with the trial court.

The MMA defines malpractice as a tort or breach of contract based on health care or professional services that were provided, or that should have been provided, by a health care provider, to a patient. Indiana courts look to the substance of a claim, not the manner in which the conduct is framed in a pleading by the claimant. To fall within the purview of the MMA, a provider’s conduct must be undertaken in the interest of, or for the benefit of, the patient’s health. Conversely, the MMA does not apply to conduct demonstrably unrelated to the promotion of the plaintiff ’s health or an exercise of the provider’s professional expertise, skill, or judgment.

Community argued that is maintenance of medical records, including protocols, training, and procedures for accessing records are professional services it offers in furtherance of its patient care. The Appellees argued that claims alleging the mishandling of a patient’s confidential information, even by a treating physician, are not governed by the Medical Malpractice Act. Community relied upon Howard Regional Health System v. Gordon, 952 N.E.2d 182 (Ind. 2011) where the Indiana Supreme Court held that maintenance of health records was within the purview of the MMA because the “skillful, accurate, and ongoing maintenance of test and treatment records bears strongly on subsequent treatment and diagnosis of patients.”

The Court of Appeals did not find Gordon persuasive. The claims against the hospital and one of its physicians were for medical malpractice and, importantly, spoliation, claiming that the hospital lost health records that were vital to the medical malpractice claim. Here, the underlying claims against Community are for respondeat superior and negligent training, supervision, and retention.

The Court held that the MMA did not apply because the conduct at issue was demonstrably unrelated to the promotion of the plaintiff ’s health or an exercise of the provider’s professional expertise, skill, or judgment.

Next, Community argued that the trial court erred by denying its motion for summary judgment on Appellees’ claims for respondeat superior, negligent supervision, training, and retention.

On the respondeat superior claims, Community argued that because Katrina did not have a business need to access Appellees’ records, and because she did so for solely personal reasons, Community cannot be held vicariously liable for her conduct under respondeat superior. Community cited to Robbins v. Trustees of Indiana University, 45 N.E.3d 1 (Ind. Ct. App. 2015) In Robbins, the Court found a nurse was expressly not authorized to access, use, or disclose patient information for personal, unauthorized, unethical, or illegal reasons. The Court continued its analysis by emphasizing that the nurse’s affidavit, which was designated by the university hospital, stated that she had accessed the patient’s medical records on her own initiative and unrelated to any business function of her employment or her employer. Here, there was no evidence that Katrina acted for her own benefit.

Instead, the Court of Appeals pointed to the Walgreen Co. v. Hinchy, 21 N.E.3d 99 (Ind. Ct. App. 2014) decision as controlling here. In Hinchy, an employee Winter 2021 ⁜ VERDICT • 61

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pharmacist improperly accessed the prescription records of a Walgreen customer and divulged the information she had learned from those records to the customer’s ex-boyfriend. The Hinchy court explained that the pharmacist was authorized to use the Walgreen computer system and printer, handle prescriptions for Walgreen customers, look up customer information on the Walgreen computer system, review patient prescription histories, and make prescription-related printouts. The pharmacist was at work and using Walgreen equipment when the actions occurred, and much of her conduct was of the same general nature as her ordinary job duties authorized by her employer. Here, Katrina’s actions were of the same general nature as those authorized, or incidental to the actions that were authorized, by Community. As a result, the trial court did not err when it denied Community’s motion for summary judgment on Appellees’ respondeat superior claim.

Next, the Court examined Appellees’ negligent training, supervision, and retention claim. Community argued that neither under HIPAA nor Indiana Code 16-39-5-3 provide a private right of action. However, the Court noted that there has always been a common law duty of confidentiality owed by medical providers to their patients. Community’s argument that it had negated the element of a duty owed to Appellees failed.

Community next argued that it affirmatively negated any finding of breach because it appropriately trained and supervised Katrina, and it was unaware of Katrina’s misconduct or propensity to commit misconduct. Community did designate evidence detailing the steps it took to implement and enforce policies and procedures governing employee training and education. But the Appellees in response also designated evidence supporting reasonable inferences that Katrina was not properly trained, supervised, and that she should not have been retained because Community had notice of her unauthorized access to health information prior to the breach.

Last, Community argued that the Appellees’ negligent supervision, training, and retention claim must fail because they failed to proffer any evidence of an injury which resulted from its actions. The Court held that Community’s designated evidence and argument in support of summary judgment did not affirmatively negate Appellees’ claim. The Court of Appeals upheld the trial court’s denial of summary judgment on Appellees’ negligent supervision, training, and retention claims.

Community argued that even if Katrina was acting within the scope of her employment, it cannot be held vicariously liable for Katrina’s actions because Appellees’ underlying negligence and invasion of privacy/intrusion claims are not actionable under Indiana law. The Court already determined that the negligence claims remain. It then determined whether the invasion of privacy/intrusion claims were actionable.

Appellees alleged the disclosure of private facts. In Doe v. Methodist Hospital, 690 N.E.2d 681 (Ind. 1997), the Indiana Supreme Court declined to recognize the sub-tort of public disclosure of private facts as an actionable claim. Based on this case law, Community cannot be held vicariously liable for a tort that has yet to be recognized. In regard to the intrusion claim, intrusion occurs when there has been an intrusion upon the plaintiff ’s physical solitude or seclusion as by invading his home or conducting an illegal search. Indiana courts have not recognized claims of intrusion where the intrusion only invades plaintiff ’s emotional solace. Because 62 • VERDICT

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Appellees did not claim any physical intrusion by Katrina, Community could not be held vicariously liable for Appellees’ intrusion claim. The Court of Appeals held that Community was entitled to judgment as a matter of law on the invasion of privacy/intrusion claim.

Legal malpractice claim is not assignable to third party Smith v. Progressive Southeastern Insurance Company (June 10, 2020) Gregory Smith was seriously injured in a single vehicle crash where Nolan Clayton was driving Smith’s vehicle. Smith sued Clayton to recover for his personal injuries and property damage and Smith’s insurer, Progressive Southeastern Insurance Company, arranged for legal counsel to defend Clayton pursuant to a reservation of rights. After a jury returned a verdict for $21 million for Smith, Clayton irrevocably assigned to Smith any legal rights, claims, and causes of action that Clayton may have against Progressive and the attorneys who represented him, Metzger Rosta, LLC. In September 2018, pursuant to the assignment of claim, Smith filed a complaint against Progressive for bad faith. Smith also filed a motion for joinder of parties or, in the alternative, consolidation of actions. Smith sought to join Clayton as a plaintiff and Metzger as a defendant in his action against Progressive. In the alternative, Smith requested to consolidate Clayton’s Malpractice Action with his own against Progressive. Progressive opposed these efforts and also filed a motion to dismiss Smith’s complaint. The motion to dismiss was granted and the motion for joinder of parties or consolidation was denied.

Smith then filed a Second Complaint on January 21, 2019. Progressive filed a motion to dismiss, arguing that Smith’s Second Complaint raised no new issues or causes of action and essentially sought to re-litigate the same issues as the dismissed complaint. The trial court agreed and dismissed Smith’s Second Complaint. Smith appealed.

On appeal, Smith argued that the trial court incorrectly dismissed his Second Complaint because the complaint alleged sufficient facts to show that Progressive is vicariously liable for Metzger’s actions and inactions that contributed to a personal injury judgment against Clayton. The Court of Appeals held that Smith’s complaint against Progressive for vicarious liability was nothing more than a negligence claim that involved legal malpractice by Metzger, a claim that is not assignable under Indiana law. Rosby Corp. v. Townsend, Yosha, Cline & Price, 800 N.E.2d 661 (Ind. Ct. App. 2003) The Court reasoned that the nature of the vicarious liability claim in Smith’s Second Complaint still served as a legal malpractice claim against Metzger; that is, it alleged that Progressive was liable for Metzger’s actions or inactions in litigating the tort action, contributing to a substantial judgment against Clayton. The Court observed that Indiana law might support a respondeat superior claim by the insured, Clayton, against the insurer in this context, but it does not support such a claim being assigned to and litigated by Smith. The trial court did not err in dismissing Smith’s Second Complaint on the issue of vicarious liability.

Next, Smith argued that the trial court erroneously dismissed his Second Complaint because he made multiple allegations that Progressive breached its contractual duty to defend Clayton. The Court pointed out that the duty to defend issue had already been resolved in an earlier declaratory judgment action. Smith Winter 2021 ⁜ VERDICT • 63

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argued that even if Progressive did not have a duty to defend, it chose to hire attorneys to defend Clayton and therefore, it was required to proceed in good faith by providing competent defense counsel for Clayton. The Court of Appeals held that since it has already determined that Progressive did not have a contractual duty to defend Clayton, the trial court did not err in dismissing Smith’s Second Complaint on that issue.

Last, Smith argued that the trial court erred in dismissing his Second Complaint because he made numerous allegations that Progressive acted in bad faith beyond issues of coverage. Progressive responded that Smith did not plead any facts that would support his claim that Progressive acted in bad faith. It held that Smith’s allegations could not serve as the basis for a bad faith claim.

Smith then contended that the trial court erred when it denied his motion for joinder of parties. As to the request to join Clayton to the action, the Court pointed out that Clayton had irrevocably assigned to Smith all claims, legal rights, or causes of action that he may have had against Progressive and Metzger.

Therefore, there was no reason that Smith could not be afforded complete relief against Progressive without Clayton as a party.

Smith also sought to add Clayton and Metzger as permissive party-defendants pursuant to Trial Rule 20(A). The purpose of Trial Rule 20(A) is to promote trial convenience, expediate claims, and avoid multiple lawsuits. However, the Court of Appeals found that the trial court did not err in denying joinder of either party because Smith and Clayton did not jointly or severally assert any right to relief against Progressive because Clayton assigned any rights he would have had against Progressive to Smith and no right to relief had been asserted against Metzger because Smith had no such right to relief.

On the issue of denial of consolidation of the actions, Smith failed to demonstrate that he suffered prejudice as a result of the trial court’s denial of his motion.

Residents who were exposed to high levels of lead brought action against governmental entities. The governmental entities were not entitled to immunity under discretionary function immunity and were not entitled to summary judgment based on expiration of the statute of limitations State of Indiana, et al. v. Cristobal Alvarez, C.A., by next friend Cristobal Alvarez, et al. (June 10, 2020) In June of 2016, the Environmental Protection Agency sent a flyer to residents of the West Calumet Housing Complex notifying residents that high levels of lead had been found in yards in the complex. On July 25, 2016, East Chicago Mayor Anthony Copeland sent a letter to residents of the complex advising them that the land was contaminated with lead. The letter directed residents to move as soon as possible. On December 4, 2017, Cristobal Alvarez and over three hundred other former residents of the complex filed suit against the City of East Chicago, the East Chicago Housing Authority, the East Chicago Department of Public and Environmental Health, the School City of East Chicago, and the State Defendants.

The complaint alleged negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress.

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that they were immune from suit pursuant to the Indiana Tort Claims Act, that Plaintiffs’ suit was barred by the statute of limitations, and that the Plaintiffs failed to state a claim for intentional infliction of emotional distress. The trial court denied the motion. Certification of the interlocutory appeal followed.

The State argued that the decision of when and how to warn citizens of possible lead exposure is a discretionary function immune from liability under the Indiana Tort Claims Act. The State pointed out that there is not a statutory duty to notify citizens about exposure to toxic waste. The Court of Appeals observed that there was no Indiana case determining whether warning citizens about exposure to hazardous chemicals was a discretionary function under the ITCA, the State pointed to a decision interpreting a similar provision in the Federal Tort Claims Act. In Cisco v. United States, 768 F.2d 788 (7th Cir. 1985), the 7th Circuit held that in deciding not to warn about the contaminated landfill and in deciding not to remove the contaminated dirt from the landfill, the EPA made political, social, and economic judgments pursuant to its grant of authority. Cisco could not challenge those judgments under the FTCA because they fell within the discretionary function exception of 28 U.S.C. 2680. The State argued that like the EPA’s actions in Cisco, the State’s decision not to warn residents about high lead levels in the soil was a discretionary function because it required the State to make political, social, and economic judgments.

However, the Court of Appeals noted that the federal courts do not apply the planning-operational test in evaluating discretionary function immunity under the FTCA. In addition, the FTCA is interpreted more broadly in favor of immunity than the ITCA. Under the ITCA, the governmental entity bears the burden of demonstrating the applicability of discretionary function immunity. The Court was not persuaded by the State’s analogy to the FTCA. Since discretionary function immunity does not protect a governmental entity from liability when no policy-oriented decision-making process has been undertaken, the Court could not say as a matter of law, based solely on the pleadings, that warning citizens of possible lead exposure is a planning function.

It held that the trial court did not err in denying the State’s motion for judgment on the pleadings regarding discretionary function immunity.

The State also argued for ITCA immunity for acts or omissions of anyone other than the governmental entity or the governmental entity’s employee. The State argued they could not be held liable where the duty to notify the Plaintiffs of the presence of toxic chemicals in the soil fell to the City Defendants. The complaint alleged that both the City and State were aware that complex residents and students were being exposed to toxic substances, yet none of the defendants warned the Plaintiffs or took steps to reduce exposure. Therefore, the State is not entitled to judgment on the pleadings on the ground of vicarious liability immunity.

The State contended that 109 of the 315 plaintiffs (those who turned 18 years old before December 4, 2015) are barred from filing this lawsuit. The State argued that the complex residents know or should have known about elevated lead levels and exposure more than two years before the Plaintiffs sued. The Plaintiffs explained that they did not realize there was a reasonable probability of harm until Mayor Copeland sent the July 2016 letter advising the complex residents to move. In Winter 2021 ⁜ VERDICT • 65

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Rolan v. Atlantic Richfield Co., residents of the West Calumet Housing Complex filed suit against Richfield and Du Pont in July of 2017. One of the defendants moved for dismissal on the grounds it was barred by the statute of limitations. The district court denied the company’s motion. The court stated that although the Plaintiffs knew as early as 2012 that the defendants’ conduct was the reason for the clean-up, they did not know or have reason to suspect that the Defendants’ conduct had harmed them in any tangible way.

The State attempted to distinguish Rolan by arguing that the Plaintiffs in this case did not have to understand the full extent of their harm for their claim to accrue.

However, the EPA flyer quoted in the present complaint notes a low level of lead exposure is unavoidable and not cause for harm. It held that the facts stated in the complaint do not demonstrate it is untimely.

The State also argued that the doctrine of issue preclusion prohibited the 109 plaintiffs from suing because complex residents attempted to intervene in United States v. Atlantic Richfield Company (N.D. of IN, 2018) but their motion to intervene was denied. In United States v. Atlantic Richfield Company, the United States and the State of Indiana filed a complaint in federal court in 2014 against Richfield and Du Pont, and the governments filed a proposed consent decree on the same day. After a hearing in the fall of 2014, the court approved the consent decree, entered judgment, and closed the case. On November 1, 2016, complex residents filed a motion to intervene because of the lack of progress made by the EPA in cleaning up the area. The court denied the complex residents’ motion to intervene. Since the request to intervene in the federal lawsuit required a more complex balancing of factors than determining whether suit was barred by a statute of limitations, the statute of limitations issue was not “expressly adjudicated” in United States v. Atlantic Richfield Company and the doctrine of issue preclusion did not bar the Plaintiffs’ suit.

On Plaintiffs’ intentional infliction of emotional distress claim, the State argued Plaintiffs’ failed to allege facts sufficient to state a claim for intentional infliction of emotional distress because the alleged conduct of the State was not extreme and outrageous. The State also argued that Plaintiffs’ claim failed because the complaint does not allege any intentional action by an individual State actor.

Since discovery had not begun, the Court held that the State was not entitled to judgment on the pleadings regarding intentional infliction of emotional distress.

In total, the Court of Appeals affirmed the trial court’s denial of the State’s motion for judgment on the pleadings.

Trial court properly certified class action against landfill operator based on claims of noxious odors emanating from landfill Clark-Floyd Landfill, LLC v. Gonzalez, et al. (June 18, 2020) In August of 2016, Ricky Gonzalez, Yvonne Gonzales, Robert Scoles, and Tamara Scoles filed a putative class action complaint against Clark-Floyd Landfill, LLC based on noxious odors emanating from a landfill operated by CFL. The trial court certified the complaint as a class action. CFL appealed.

The issues on appeal were: (1) whether the trial court applied an incorrect legal standard in determining whether to certify the class action; (2) whether the trial court’s adoption of the Homeowners’ class definition is supported by substantial evidence; (3) whether the trial court abused its discretion when it found that the 66 • VERDICT

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class members would have common questions of law or fact; (4) whether the court erred when it found that the class’s common questions of law or fact would predominate over any questions affecting only individual members; (5) whether the trial court abused its discretion when it denied CFL’s motion to strike the Homeowners’ designated evidence.

After a lengthy analysis the Court of Appeals affirmed the ruling of the trial court certifying the class.

In disputed liability auto crash, testimony by defendant that he did not sue the plaintiff because he had been compensated for his vehicle did not open the door to questions about insurance and did not give rise to a mistrial Cook v. Beeman and State Farm Mutual Automobile Insurance Company (June 22, 2020) Edward Cook and Mark Beeman were involved in a motor vehicle crash. Cook filed suit against Beeman, blaming him for the crash. The trial court agreed to bifurcate the trial and held a jury trial on liability. Cook and Beeman gave conflicting testimony. Cook testified he had a green light at the intersection and Beeman testified he waited for the traffic light to turn green before entering the intersection. On direct exam, Beeman’s attorney asked him why he didn’t sue Cook. He answered that he was compensated for his vehicle and wasn’t injured, therefore, he did not feel he had a claim to make against Cook. Cook did not object or move to strike his testimony. On cross-exam, Cook asked Beeman who compensated him for his vehicle. Beeman’s counsel requested a sidebar conference before Beeman answered the question. Cook asked Beeman a different question after the sidebar conference and his cross-examination continued. The jury’s verdict assessed fault as 51% against Cook and 49% against Beeman.

On appeal, Cook argued that the trial court erred in admitting Beeman’s testimony that Beeman did not sue Cook because Beeman was compensated for the damage done to his vehicle. Cook argued such testimony violated a motion in limine.

Beeman argued Cook waived any claim of error because he did not object to Beeman’s testimony or move to strike the testimony. The Court of Appeals first noted that a ruling on a motion in limine was not a final order and a party must also object to admission of the evidence at trial to preserve the issue for appeal.

Swaynie v. State, 762 N.E.2d 112 (Ind. 2002) Since Cook did not object when Beeman was asked by Beeman did not sue Cook nor did he move to strike Beeman’s answer to the question, Cook waived any claim that the trial court erred in admitting the testimony.

Next, Cook argued that Beeman opened the door for Cook to ask Beeman about who compensated him for damages to his vehicle, the trial court sustained Beeman’s objection to such questioning by Cook, and Cook moved for a mistrial, which the trial court denied. Beeman contends that Cook did not move for a mistrial during the sidebar.

The sidebar conference was inaudible on the court’s record. The trial court’s chronological case summary indicated that Cook filed a motion for the trial court to certify his statement of evidence about what happened during that sidebar conference. However, Cook filed his reply brief before the Court of Appeals on the Winter 2021 ⁜ VERDICT • 67

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same day. Therefore, the trial court lost jurisdiction to rule on Cook’s motion on the same day Cook filed it. Neither party requested a stay in the Court of Appeals to permit the trial court to clarify the record, and, therefore, the trial court did not have jurisdiction to rule on Cook’s motion.

The Court of Appeals noted that Cook’s failure to supplement the record in a timely manner was particularly consequential because the Court was unable to determine whether Cook moved for a mistrial or what his basis was for such a motion. As a result, Cook waived any issues on appeal based on the arguments he made during the inaudible sidebar conference. It affirmed the jury’s verdict.

Claim for medical malpractice for reporting inaccurate test results was not precluded by the Indiana Business Trust Act Blackford v. Welborn Clinic (June 26, 2020) In 1963, Welborn Clinic was created as a business trust under the Indiana Business Trust Act with its principal place of business in Evansville. Teresa Blackford first became a patient at Welborn in 1999. In 2003, Blackford sought treatment from Welborn for Lichens Planus, an inflammatory skin condition. Since hepatitis can be an underlying cause of Lichens Planus, Welborn tested Blackford for hepatitis on October 1, 2003. Welborn told Blackford that her test results were negative and that hepatitis was not a cause of her Lichens Planus. For the next several years, Blackford continued to be treated for Lichens Planus at Welborn.

In the fall of 2008, Welborn was bought by Deaconess Clinic, Inc. Welborn changed its name to WC Liquidating Corp. On June 30, 2009, WC Liquidating Corp gave notice under the IBTA that it was surrendering its authority to transact business in Indiana. In 2014, Blackford’s health got worse. Her new family physician sent her to another doctor who ran some tests and determined that Blackford was positive for hepatitis C. The new doctor obtained the medical records from Welborn and found that the 2003 test at Welborn showed highly reactive and was positive for hepatitis, not negative.

In the eleven years between the 2003 test and the 2014 test, Blackford had not exhibited any symptoms of hepatitis and had received no treatment for hepatitis.

Once discovered, the hepatitis was successfully treated in 2014, but due to the lack of earlier treatment, Blackford developed cirrhosis of the liver and now must undergo regular testing every two years due to a heightened risk for developing liver cancer. Blackford was also diagnosed with two other conditions which were likely caused by hepatitis and she transmitted hepatitis to her husband.

Blackford filed a complaint against Welborn for medical malpractice with the Indiana Department of Insurance on March 13, 2015. The case was reviewed by a Medical Review Panel and was then filed in the trial court on April 27, 2018.

Welborn filed a motion for summary judgment alleging that because Blackford’s claim was filed over five years after Welborn’s business trust dissolved, the claim was time barred by the IBTA’s nonclaim statute, Indiana Code 23-5-1-11.

Blackford filed a motion for partial summary judgment arguing that Welborn was equitably estopped from relying on the five-year claim limitation because Welborn’s fraudulent concealment prevented her discovery of the claim within that time frame. After a hearing, the trial court granted Welborn’s motion and denied Blackford’s motion.

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On appeal, Blackford argued that the five year nonclaim limitation imposed

by Indiana Code 23-5-1-11 should be tolled because Welborn’s fraudulent concealment prevented her from discovering she had a cause of action within the five year period. The Court started by pointing out the difference between the statute of limitations and a nonclaim statute. A nonclaim statute grants to every person having a claim of any kind or character against a defendant, the right to file the same in the court having jurisdiction thereof and have the same adjudicated, provided such claim is filed within the time specified in the statute. Unless such claim is filed within the time so allowed by the statute, it is forever barred. Unless the claim is filed within the prescribed time set out in the statute, no enforceable right of action is created.

The Court of Appeals framed the issue as: (1) whether the IBTA’s nonclaim statute may be tolled in cases of fraudulent concealment; and (2) whether the designated evidence conclusively demonstrates that Welborn committed fraudulent concealment, thereby tolling the nonclaim limitation period.

Blackford argued that the IBTA’s five year limitation is tolled due to Welborn’s alleged fraud in its inaccurate disclosure of Blackford’s hepatitis test results. In response, Welborn claimed that the plain language of the statute and its mere nature as a nonclaim statute or statute of repose as setting a distinct, outside limit as to when any claim involving a business trust which is being dissolved can be filed, and that the five year deadline is based upon the surrendering of the right to transact business, and not upon the occurrence of the facts underlying a claim.

The Court of Appeals noted that whether fraud can toll the five year nonclaim filing period under the IBTA had not been specifically addressed by Indiana courts. But the Court noted that past decisions had held that the fraudulent concealment statute, Indiana Code 34-11-5-1 applied to toll the Wrongful Death Act’s two year filing period under its nonclaim statute if the necessary factual showing is made to demonstrate fraudulent concealment.

In applying the rationale of Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257 (Ind. 2014), the Court of Appeals held tolling of the IBTA’s nonclaim limitation statutes in cases of fraudulent concealment was warranted.

The Court then examined whether fraudulent concealment had occurred in this case. Blackford argued that Welborn committed fraudulent concealment when it failed to disclose to her the correct results of her hepatitis test in 2003 and continued treating her and seeking the underlying cause for her Lichens Planus as if she was negative for hepatitis. Fraudulent concealment may be active or passive.

Passive or constructive concealment may be merely negligent and arises when the physician does not disclose to the patient certain material information. The physician’s failure to disclose that which he knows, or in the exercise of reasonable care should have known, constitutes constructive fraud.

Blackford testified that she was told by a Welborn employee in 2003 that the results of her test for hepatitis were negative. The evidence was undisputed that Welborn failed to disclose to Blackford that her hepatitis test was positive and, in fact, told her precisely the opposite. The Court of Appeals held as a matter of law that Welborn fraudulently concealed, at least passively, material medical information from Blackford.

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invoking the five-year nonclaim limit in the IBTA to time bar a claim and thereby benefit from its own fraud. It reversed the trial court’s order granting summary judgment for Welborn with instructions to grant Blackford’s motion for partial summary judgment.

Grocery store was not entitled to summary judgment in claim that it failed to clear snow and ice from sidewalk outside of store even though contractor was in charge of snow/ice removal Pioneer Retail, LLC, d/b/a Wiseway Food v. Jones (June 26, 2020) Gateway Arthur, Inc. owned the property at 10839 Randolph Street in Crown Point, Indiana where a Wiseway Food grocery store was located. Emmes Realty Services, LLC was the management company for the property, and it contracted with DLC Landscape and Snow Removal, Inc. to regularly clear snow, ice, and other debris from the property. Gateway leased the property to tenant Pioneer Retail, LLC which owned and operated the Wiseway Food grocery store.

On February 15, 2014, Jane Jones was walking into Wiseway Food through its main entrance when she slipped and fell on the sidewalk immediately outside the store. It was undisputed that prior to Jones’ arrival at the store, it had been snowing and some snow and/or ice had accumulated on the sidewalk where Jones fell.

Pioneer filed a motion for summary judgment, arguing that it was Gateway and not Pioneer that owed a duty to Jones to remove ice from the common area where Jones fell. Pioneer argued that Gateway was the landlord of the property and the sidewalk was a common area that Gateway was solely responsible for maintaining.

Therefore, Pioneer argued it owed no duty of care to Jones. The trial court denied Pioneer’s motion for summary judgment. The case proceeded to trial. A verdict was returned for Jones. Pioneer was found to be 25% at fault. Pioneer then appealed the trial court’s denial of summary judgment.

On appeal, Pioneer argued that the trial court erred in denying its motion for summary judgment because there was no genuine issue of material fact regarding which entity owed a duty of care to Jones. The Court of Appeals pointed out that Pioneer, as a business entity, had a duty of care to its invitees. It held that Pioneer owed some duty to Jones as an invitee. The fact that Gateway was the landlord of the property and contracted with DLC to clear ice and snow did not summarily absolve Pioneer of liability regarding its duty of care to its invitees. It held that the trial court did not err in denying Pioneer’s motion for summary judgment.

Injured jockey was unable to maintain claim when injured by another horse under Indiana’s sports activity laws Cruz v. New Centaur, LLC, et al. (June 26, 2020) Marcelle Martins was an experienced jockey who was exercising racehorses at Indiana Downs horse racing track in Shelbyville, Indiana. Martins began exercising horses for Michael E. Lauer Racing Stables at the track. As part of her work, Martins frequently exercised a horse named Accessorizing which was owned by Penny Lauer and trained by Michael Lauer. On May 7, 2018, Martins exercised Accessorizing at the track. Civilo Cruz was exercising a horse he owned named Glitter Cat. As Martins finished a turn around the track on Accessorizing, 70 • VERDICT

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the horse began to run out of Martins’ control. Martins called for an outrider for assistance. Two Indiana Grand outriders were working the track that day, one of whom tried to gain control of Accessorizing’s reins, without success. Martins was thrown from her mount. Accessorizing ran towards Glitter Cat and ran into it.

Cruz was thrown to the ground and injured.

Cruz filed a complaint raising premises liability and negligence claims against Indian Grand and respondeat superior and negligent hiring claims against the Lauers. Indiana Grand filed a motion for summary judgment arguing that it was entitled to judgment as a matter of law because it owed no duty of care to Cruz, who had assumed the risks of the inherently dangerous sport of horseracing. The Lauers filed a motion for summary judgment stating that they could not be liable for Martins’ alleged negligence under a theory of respondeat superior because she was an independent contractor and not their employee. After a hearing, the trial court granted summary judgment to Indiana Grand and the Lauers on the issue of whether they could be found to have breached their duty of care to Cruz, because Cruz was required to show that Indiana Grand and the Lauers had intentionally caused Cruz’s injury or engaged in reckless conduct toward him under Indiana’s sport activity laws. However, the trial court partially denied the Lauers’ motion because it found that genuine issues of material fact existed on the issue of whether Martins was an independent contractor of an employee of the Lauers. Cruz appealed and the Lauers cross-appealed.

First, the Court of Appeals underwent a lengthy summary of Indiana’s sports injury law. The Court found that Cruz had waived his argument on whether he was engaging in a sports activity at the time of his injury. Rather, Cruz argued that his negligence claim was distinct from the premises liability claim and should survive summary judgment. The Court held that Cruz’s negligence claim was really a premises liability claim because it was made against the track’s owner and his injuries were caused by a condition at the track. Also, the Court was not persuaded by the argument that Indiana Grand assumed a duty to him and he submitted no evidence that Indiana Grand increased the risk of harm to him or that he relied upon Indiana Grand’s exercise of care with its safety measures.

As to the claims against the Lauers, Cruz did not dispute that Martins was shielded from liability pursuant to the Indiana sports activity cases. If Martins cannot be held liable, then there is no negligence to impute to the Lauers on a theory of respondeat superior. Cruz also failed to demonstrate that summary judgment was precluded on his negligent employment claim.

On cross-appeal, the Lauers argue there is no genuine issue of material fact regarding their contention that Martins was an independent contractor, not an employee as alleged by Cruz, and that they are entitled to full summary judgment.

The Court agreed and reversed the trial court’s partial denial of summary judgment in favor of Cruz on the issue of Martins’ employment status and entered summary judgment in favor of the Lauers on that issue.

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Summary judgment was appropriate for fall in restaurant when plaintiff did not know what caused her to fall and did not observe any water or other defect that caused the fall Cooper’s Hawk Indianapolis, LLC, d/b/a Cooper’s Hawk Winery & Restaurant v.

Ray (June 29, 2020) Katherine Ray and Ian Ray entered Cooper’s Hawk restaurant while it was raining and walked to the tasting counter to begin their winetasting. After they had been poured their first taste, Katherine told Ian she needed to use the restroom, and she walked through the restaurant to the restroom. While she was on her way and walking down the hallway, she did not notice any water, any accumulation of water, or anything on the floor. She used the restroom, and slipped and fell on her way out of the restroom door. When Ian got to Katherine, he noticed her right knee was damp and her left flank was slightly damp and her jeans were damp. He noticed a few very small puddles, but it was mostly sort of the dampness like the sidewalk had outside.

Katherine filed suit against Cooper’s Hawk. Cooper’s Hawk filed a motion for summary judgment claiming it did not have actual or constructive notice of the defective condition that purportedly caused Katherine to injure herself, it did not owe her a duty, and it was not the proximate cause of Katherine’s injury. The trial court denied Cooper’s Hawk’s motion and denied their motion to reconsider.

On appeal, Cooper’s Hawk argued that it did not have actual or constructive knowledge of any hazard present outside of the women’s restroom. Katherine claimed that Cooper’s Hawk was incorrect in claiming it did not have constructive knowledge because no employee of Cooper’s Hawk was shown to be in the area prior to the fall.

The mere allegation of a fall is insufficient to establish negligence, and negligence cannot be inferred from the mere fact of a fall. A property owner must maintain its property in a reasonably safe condition for business invitees. Katherine’s deposition testimony was that she did not observe anything on the floor, did not feel any substance on her body after she fell, and did not see any wetness on her clothing after the incident. Ian stated that he did not know what the liquid was and did not know where it came from. Ms. Masters, the front house manager at Cooper’s Hawk that day, did not know how Katherine fell, Cooper’s Hawk was not notified of the presence and had no knowledge of any type of hazard or liquid substance on the floor outside of the women’s restroom prior to Katherine’s fall, and that she inspected the area where Katherine fell and found no sign of a hazard, water, or other liquid substance on the floor.

In summary, the Court found that Katherine did not know what caused her fall.

There was an indication that some wetness was present on the floor at some point, but it was raining and those observations regarding wetness occurred only after EMTs arrived. The Court of Appeals ruled that the trial court erred in denying the motion for summary judgment filed by Cooper’s Hawk.

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Dismissal of lawsuit was appropriate discovery sanction for plaintiff who refused to sign authorization for release of Social Security Administration records Doherty and Luedtke v. Purdue Properties I, LLC, et al. (June 29, 2020) Deborah Doherty suffers from congenital hydrocephalus, a condition in which excess cerebrospinal fluid builds up within the fluid-containing cavities or ventricles of the brain. Symptoms include headache, difficulty remaining awake, loss of coordination or balance, bladder control issues, and impaired vision and cognition. In 2010, Doherty applied for and received disability benefits through the Social Security Administration. On February 18, 2014, Doherty left her apartment which was owned and operated by Purdue Properties I, LLC. The stairs were covered with packed snow and Doherty fell on the stairs, hitting her head on the door frame. She filed suit against Purdue alleging negligence on the part of Purdue and that Doherty’s fall had caused a traumatic brain injury.

Doherty later sought to amend her complaint to add a request for punitive damages based on the allegation that Purdue’s actions had exhibited a conscious disregard for the safety of its residents. The trial court initially granted leave to amend but reversed upon Purdue’s motion to reconsider. Meanwhile, Purdue had sought discovery of Doherty’s medical records before and after her fall. Purdue requested that Doherty sign a request prepared by it to release Doherty’s SSA records. Doherty refused to sign. Purdue moved to compel discovery. Purdue argued that discovery had left a gap from 2008 to 2015 regarding medical records for Doherty’s hydrocephalus and that her SSA records were necessary to evaluate her condition prior to and after her fall in February of 2014. Purdue noted that Doherty herself was no longer competent to testify regarding her prior medical treatment and argued that, therefore, it was the only way to obtain the information it sought. Doherty argued that the trial court lacked authority to order them to request the release of Doherty’s SSA records and that they were not necessary in any event because of the medical records they had produced earlier. Following the hearing, the trial court granted Purdue’s motion to compel discovery, ordered Purdue to modify the SSA request to limit the release of only the records necessary to fill in the gaps in Doherty’s medical history, and ordered the parties to execute a confidentiality agreement.

Doherty refused to comply with the Court’s order. Purdue filed a motion for rule to show cause why Doherty should not be held in contempt or sanctioned. The trial court ultimately ordered Doherty’s complaint dismissed under Trial Rule 37(B)(2)(c) as a sanction for refusal to comply with the order to compel discovery.

On appeal, the Court of Appeals looked to whether the trial court abused its discretion in dismissing Doherty’s complaint. Doherty argued that Purdue failed to establish the need for Doherty’s SSA records. Doherty did not argue that her SSA records were not relevant, only that they were not necessary because of the medical records they had already produced. Doherty argued that Purdue failed to establish that Doherty’s SSA records were necessary to its defense because it did not introduce evidence at the motion to compel hearing tending to show that necessity. However, the Court found no such requirement. Given that discovery is supposed to be self-executing, the Court held that the trial court did not abuse its discretion in finding that Doherty’s SSA records were necessary.

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Next, Doherty argued that the Federal Privacy Act and SSA regulations do not permit the trial court to order them to request the release of Doherty’s SSA records. Purdue agreed, but contended that the trial court did have authority to order Doherty to request the release of the records. Doherty’s argument was that ordering her to release her records was the same as a direct order to the FPA to release them. The Court of Appeals disagreed. It held that while a state court may not directly order the SSA to release records, it can unquestionably order a party within its jurisdiction to comply with a discovery order, which is what occurred here.

Doherty also argued that the federal preemption doctrine prevented the trial court from ordering them to request the release of Doherty’s SSA records. The Court disagreed, reasoning that using a statutory method to secure the release of the records, such as when an individual requests them, does not thwart the purpose of the statute.

Doherty argued that even if the trial court did not abuse its discretion in ordering them to request a release of Doherty’s SSA records, ordering the dismissal of their complaint was unduly punitive. The Court found no abuse of discretion. It found that dismissal has been upheld as an appropriate sanction in similar cases and nothing in the record suggested this case was materially different. The judgment of the trial court was affirmed.

Claim that nurses altered medical records fell within the scope of the Medical Malpractice Act Cortez, et al. v. Indiana University Health, Inc., et al (July 20, 2020) On April 16, 2019, Plaintiffs, Santos Cortez, Fran Cortez, and Norris Choplin Schroeder filed a complaint against Defendants, Indiana University Health, Inc., Sharon V. Lucich, and Elizabeth Longmuir. Cortez alleged medical malpractice for the development of pressure wounds while receiving therapy at IU Health’s Wound Clinic. Sometime between August 29, 2012 and December 2013, Lucich and/or Longmuir altered certain medical records reflecting the care and treatment Santos received at the Wound Clinic in August 2012. IU Health first produced the altered records. During discovery in the medical malpractice case, IU Health produced the altered records as well.

Later, IU Health produced transcriptions of the altered records to Plaintiffs in advance of Lucich and Longmuir’s depositions. In November 2018, Norris Choplin Schroeder received a copy of Santos’ original records produced by IU Health from Broadspire, an entity involved in Santos’ worker’s compensation claim with his employer. IU Health had provided that copy of Santos’ records to Broadspire by fax on August 29, 2012. A few days later, while inspecting the records IU Health had produced to Broadspire, Plaintiffs discovered that Broadspire’s copy of the records did not include the altered handwritten notes. A few weeks later, IU Health agreed to resolve Santos’ and Fran’s medical malpractice claim. IU Health settled the claim with the right to proceed against the Patient’s Compensation Fund.

In Plaintiffs’ complaint, they alleged fraud, criminal counterfeiting, forgery, violation of Crime Victims Relief Act, and tort of outrage, perjury, and violation of Indiana Trial Rule 34. Defendants filed a motion to dismiss pursuant to Indiana Trial Rule 12(B)(1) and 12(B)(6). The trial court issued an order dismissing the 74 • VERDICT

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Defendants pursuant to Trial Rule 12(B)(1).

On appeal, the Court of Appeals determined that the dispositive issue was whether the trial court had subject matter jurisdiction. Plaintiffs argued that its claims did not involve the failure to maintain records, but rather the fraudulent alteration of records and facilitation of perjury that had nothing to do with curative or salutary conduct or the exercise of professional expertise, skill, or judgment and were instead actions decidedly unrelated to healthcare. Defendants argued that Plaintiffs’ claims fall within the purview of the MMA and they must bring their claims before the medical review panel and the trial court lacks subject matter jurisdiction until that condition precedent has been satisfied.

The Court of Appeals found Howard Regional Health System v. Gordon, 952 N.E.2d 182 (Ind. 2011) instructive. In that case, the plaintiff filed a complaint for medical negligence and third-party spoliation of evidence for losing medical records. The Indiana Supreme Court looked at whether the Gordons’ spoliation claim fell within the general scope of the MMA and whether Indiana’s statute on maintenance of health records created a private right of action. The Court held that the maintenance of health records by providers was so closely entwined with health care and because records in general are so important to a medical review panel’s assessment of whether the appropriate standard of care was met. The Court found it difficult to contemplate that such a service falls outside the MMA. The Court then held that no private right of action existed for violation of the statutory requirement to maintain health records under Indiana Code 16-39-7-1.

Based upon Gordon, the Court of Appeals held that the maintenance of health care records in this case including their alteration prior to the filing of the proposed complaint alleging malpractice against IU Health fell within the scope of the MMA. Since Plaintiffs did not submit these claims to the medical review panel, the Court of Appeals affirmed the trial court’s grant of Defendants’ motion to dismiss.

Ohio court’s order regarding Indiana hospital lien was void for lack of subject matter jurisdiction Parkview Hospital, Inc. v. American Family Insurance Company (July 20, 2020) Carl Willis suffered injuries in an automobile accident and American Family Insurance insured the parties responsible for the accident. The accident occurred in Ohio and Willis was transferred to Parkview Hospital for treatment. Parkview filed and recorded a hospital lien with the Allen County Recorder pursuant to Indiana Code 32-33-4-4. Parkview served a copy of the Hospital Lien on the relevant parties, including Willis and American Family. When Parkview became aware that Attorney Samuel Bolotin was representing Willis, Parkview provided a copy of the Hospital Lien to Bolotin by certified mail.

In June 2017, Willis filed a personal injury action in Ohio against the parties responsible for the accident, American Family, and several John Doe defendants.

A motion was filed to join Parkview as a party plaintiff in the Ohio action, which the Ohio court granted. The Ohio court ordered Parkview to enter an appearance in Willis’ Ohio action within twenty-eight days. The Ohio court order stated that if Parkview Hospital, Inc., failed to do so, any and all of the rights of Parkview Hospital, Inc. that could have arisen from this cause of action being brought

by Plaintiffs are hereby waived and forever barred. Parkview did not enter an Winter 2021 ⁜ VERDICT • 75

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appearance in the Ohio action. Parkview’s local counsel and Bolotin’s associate, however, were in contact regarding the claim. Parkview’s counsel informed Bolotin’s associate that the Ohio court did not have subject matter jurisdiction, and they discussed settlement of the claim.

Willis ultimately settled the claim without informing Parkview, and Parkview’s lien was not satisfied from the settlement. American Family expressed concern to Bolotin that the Ohio court did not have jurisdiction to extinguish the Hospital Lien. Willis filed a motion to enforce the settlement agreement with the Ohio court. The court ordered American Family to issue the settlement draft in the amount of $50,000.00 made payable to Plaintiffs Carl and Rhonda Willis and the Bolotin Law Offices, only. The Ohio court ordered Willis to execute a hold harmless agreement with respect to any remaining valid liens. The motion and order were not served on Parkview. The Ohio action was then dismissed with prejudice.

Parkview then filed a complaint in Allen County against American Family and Willis. Parkview obtained a default judgment against Willis. American Family filed a motion for summary judgment, and Parkview filed a response. American Family argued that Parkview was attempting to circumvent an order from the Ohio court and that Parkview’s Hospital Lien claim was barred by res judicata.

The trial court denied American Family’s motion for summary judgment. The trial court held that the Ohio court lacked subject matter jurisdiction to address the issue regarding Parkview’s perfected Hospital Lien, therefore its order was void. Parkview then filed its own motion for summary judgment. The trial court denied it. Both American Family and Parkview filed motions for certification of the summary judgment orders for interlocutory appeal, which the trial court granted.

The first issue the Court of Appeals attacked was whether the Ohio court’s orders were entitled to full faith and credit by the Indiana court. Parkview argued that the trial court properly decided that the Ohio court lacked subject matter jurisdiction. American Family contended that the subject matter jurisdiction issue was fully and fairly litigated in the Ohio court. The Court noted that Parkview did not participate in the Ohio court proceedings and there is no indication that the Ohio court specifically considered subject matter jurisdiction concerns. It held that the subject matter jurisdiction issue was not fully and fairly considered by the Ohio court. As a result, the Ohio court order was not entitled to full faith and credit.

Next, Parkview argued that justification was not a defense to American Family’s failure to follow the Hospital Lien Act. When the Allen County trial court denied Parkview’s motion for summary judgment, the trial court found a genuine issue of material fact as to whether the failure to honor the lien in Indiana was justified through American Family’s compliance with the Ohio court’s order to tender the settlement check. American Family argued that Parkview was not entitled to damages under Indiana Code Section 32-33-4-6(b) after the settlement of Willis’ claim without obtaining a release of Parkview’s lien because American Family was required to follow the orders of the Ohio court. But the Court of Appeals noted that the Ohio court’s order has been found to be void ab initio, or void from the beginning. The Court held that the Ohio court’s orders cannot provide a basis for American Family to justify its actions and establish a genuine issue of material fact in response to Parkview’s motion for summary judgment.

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The Court held that the trial court correctly denied American Family’s motion for summary judgment, but that Parkview was entitled to judgment as a matter of law.

Semi truck driver who stopped along side the road to check on injured motorist was immune from liability under Good Samaritan Law McGowen and Vision Logistics, Inc. v. Montes (August 6, 2020) On November 4, 2016, McGowen was driving a semi-tractor owned by his employer, Vision Logistics, Inc. McGowen came upon a vehicle off the side of the road that was damaged. He suspected a two-vehicle crash had occurred.

McGowen stopped his semi in the road. McGowen asked the driver of the vehicle in the ditch if he was ok. Rebecca Higgins came upon the scene approaching from the direction opposite McGowen. She pulled past McGowen’s semi, parked on the side of the road opposite the semi, and activated her hazard lights. Meanwhile, Montes was driving east, approaching McGowen’s stopped semi. Higgins activated the high beams on her car to warn Montes. She also rolled down her window, waved her arms, and yelled, but Montes still did not slow down. He instead collided with the rear of McGowen’s semi without braking. McGowen estimated no more than 15-30 seconds had passed since e stopped until the time Montes struck the semi.

Montes filed suit against McGowen and Vision. McGowen and Vision filed for summary judgment arguing that they were immune from Montes’ negligence claim under Indiana Code 34-30-12-1, also known as the Good Samaritan Law. The trial court decided that there was no dispute of material fact that McGowen was rendering emergency care, for purposes of the GSL, when he stopped and offered to call 911, but there was a dispute of material fact as to whether McGowen’s act in stopping on the road amounted to gross negligence or willful or wanton misconduct, for purposes of the GSL. All parties sought to certify the trial court’s order for interlocutory review.

Montes argued that the trial court should have granted his motion for partial summary judgment because McGowen was not rendering emergency care for purposes of the GSL when he stopped at the accident scene to ask if the driver was okay and whether he should call 911. He also argued there was no emergency at the time McGowen stopped his semi.

The Court noted no statutory definition or prior caselaw to define “emergency care.” It found that based on the plain language of the statute, “emergency care” encompassed actions other than direct medical treatment. The Good Samaritan Law immunizes an act or failure to act to provide or arrange for further medical treatment or care for the injured person. It was undisputed that McGowen stopped his semi to ask the driver if he was okay and if McGowen should contact 911. The Court held that McGowen was seeking to arrange medical treatment, as mentioned in the statute.

Montes argued the scene of the vehicle collision did not qualify as an “objective emergency.” The Court disagreed because McGowen arrived on the scene of an automobile accident, possibly a two-car collision and the driver was wandering around drunk or injured. The Court held this was undisputed evidence of a sudden event. It held the trial court did not err in denying Montes’ motion for partial summary judgment.

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The GSL provides that a person is not shielded from civil liability if the person’s acts or omissions while providing emergency care amounted to “gross negligence or willful or wanton misconduct.” McGowen and Vision argue that the undisputed facts establish that his acts did not meet either standard and the trial court should have granted their motion for summary judgment in its entirety.

The Indiana Supreme Court has defined gross negligence as a conscious, voluntary act or omissions in reckless disregard of the consequences to another party. The Court held that the circumstances of McGowen stopping alongside the road for 15-30 seconds do not resemble a reckless disregard for others that characterizes gross negligence. The Court found immaterial that McGowen did not activate his hazard lights because it was undisputed that his brake lights were on and they illuminate as bright as his hazard lights. The Court concluded there was no dispute of material fact as to whether McGowen was grossly negligent.

Looking at willful or wanton conduct, such conduct consists of: (1) the defendant must have knowledge of an impending danger or consciousness of a course of misconduct calculated to result in probable injury; and (2) the actor’s conduct must have exhibited an indifference to the consequence of his conduct. The Court found that McGowen’s conduct was not willful or wanton under the circumstances. It held that as a matter of law, McGowen’s conduct did not meet the standard of willful or wanton misconduct. The trial court erred in denying in part McGowen and Vision’s motion for summary judgment, because they are entitled to the protection of the Good Samaritan Law.

Tort claim notice to Indiana Attorney General was not sufficient notice to Indiana State University for purposes of compliance with the Indiana Tort Claims Act notice requirements Murphy v. Indiana State University and Pledger (August 10, 2020) In early 2016, Shannon Murphy was a member of the Indiana State University women’s volleyball team. Sometime before May 4, 2016, Nick Pledger, an ISU student, obtained access to the team’s locker room, placed hidden cameras in various areas of the team’s locker room, and recorded members of the team as they changed clothing. Pledger recorded Murphy and others on the volleyball team in various states of undress and distributed the videos on the internet. On May 4, 2016, ISU notified Murphy and Murphy’s teammates regarding the hidden camera and the distributed videos. On May 11, 2016, Pledger was arrested.

On July 11, 2016, Murphy’s teammate, Stephanie Bindernagel, filed a notice of tort claim with ISU. In September 2016, Murphy filled out a notice of tort claim form that she obtained from the Indiana Attorney General’s website. Murphy submitted her notice only to the Attorney General.

On December 1, 2017, Murphy filed a complaint against ISU and Pledger. ISU filed a motion to dismiss alleging that ISU is a political subdivision and not a state agency, therefore, ISU alleged that Murphy did not provide ISU with the proper notice under the Tort Claims Act. Murphy sought to conduct discovery relating to the Tort Claims Notice issue. The trial court allowed Murphy to proceed with limited discovery for the sole purpose of being able to respond to Defendant’s motion to dismiss. Murphy ultimately filed a response and attached exhibits including Bindernagel’s tort claim notice, Winter 2021 ⁜ VERDICT • 79

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Murphy’s tort claim notice, and other communications regarding the claim.

The trial court considered ISU’s motion to dismiss a motion for summary judgment in light of the exhibits submitted by Murphy. The trial court granted summary judgment for ISU finding that Murphy did not substantially comply with the notice requirements of the Tort Claims Act. Murphy appealed.

The Court of Appeals first noted that Indiana State University is a political subdivision. Murphy was required to give notice of the claim to ISU and her claim is barred unless she provided timely notice of the claim. Murphy did not provide notice to ISU, but only to the Indiana Attorney General’s office. Since the notice only covered claims against the State or a State agency, Murphy’s notice did not comply with Indiana Code 34-13-3-8.

Murphy next argued that she substantially complied with the Indiana Tort Claims Act because (1) ISU investigated and was aware of the claims which were the subject of Murphy’s suit; (2) Murphy filed a notice of tort claim with the Indiana Attorney General; and (3) Bindernagel’s notice provided ISU with the relevant information regarding the claim.

The Court of Appeals held that since ISU’s investigation was focused on identifying Pledger and gathering information for Pledger’s criminal case, it differed from the investigation ISU would have undertaken to determine a defense to a negligence allegation.

Murphy also argued that since Bindernagel’s notice of tort claim indicated that Pledger videotaped Bindernagel and “other members” of the ISU volleyball team, ISU had knowledge that others on the team may bring claims. Murphy relied upon Budden v. Board of School Commissioners of City of Indianapolis, 698 N.E.2d 1157 (Ind. 1998) where a retirement plan administrator for the IPS school corporation embezzled funds from hundreds of teachers. The attorney for three teachers sent a letter to the school corporation stating it had been retained by the plaintiffs and potentially all teachers who had retirement funds embezzled. The plaintiffs filed an action and sought to certify the case as a class action. The school corporation argued that the notice of tort claim was insufficient under the Tort Claims Act except for the three teachers represented by the attorney at the time of the notice of tort claim. The Indiana Supreme Court found the notice sufficient finding no prohibition against class actions on behalf of a class including members who were not specifically identified in the tort claim notice.

The Court of Appeals did not find Budden applicable here. Although Bindernagel’s notice mentioned that Pledger videotaped Bingernagel and other members of the ISU Women’s Volleyball Team, the notice did not in any way indicate that other members of the women’s volleyball team would similarly file suit or that the attorney was seeking to represent other members of the team or certify a class.

Bindernagel’s notice did not notify ISU of claims or potential claims on behalf of the entire volleyball team.

The Court of Appeals held that Murphy did not substantially comply with the notice requirements of the Tort Claims Act. It held that the trial court properly granted summary judgment for ISU.

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Trial court did not abuse discretion when, during a jury trial, it revoked its earlier pre-trial order that theater had judicially admitted a building code violation existed which caused plaintiff to fall and be injured Vigus v. Dinner Theater of Indiana, L.P. (August 17, 2020) In 2012, Ruth and Eugene Vigus went to the Derby Dinner Playhouse in Clarksville, Indiana. The Derby Dinner Playhouse offers customers a buffet dinner along with a live show. Dinner Theater of Indiana, L.P. owns the Derby Dinner Playhouse. Ruth and Eugene were seated at a table on a riser. The step up to and down from the table is approximately 10 inches. They got up to the table, but when they attempted to leave, Ruth fell off the step and broke her hip. Ruth sued the Theater for negligence and Eugene sued for loss of consortium. During the course of the lawsuit, both Ruth and Eugene died, and Judy Vigus took over the suit as administratrix of their estates.

The Theater moved for a preliminary determination as a matter of law that a building code violation in the height of the step was not negligence per se. The Theater sought a motion in limine precluding a negligence per se instruction for any potential building code violation. Noting that Vigus had no objection, the trial court granted the Theater’s request.

During a hearing in September of 2017, the trial court held a hearing on other pending motions. The parties had a discussion with the court about the building code violation. A year and a half later, on the day before the jury trial was to being, Vigus moved to have the statements made by the Theater’s counsel at the 2017 hearing declared to be a judicial admission that the step at issue was in violation of relevant building codes. The Theater denied it made such admissions. The court found that the step was a violation of the applicable Indiana Building Code and it prohibited the Theater from attempting to submit argument or evidence to contradict these conclusive facts. During voir dire, the Theater’s counsel admitted that the code was broken. After voir dire, the court asked counsel for both sides how to proceed with the stipulation or the Theater’s admission on the building code violation.

After discussion, the case proceeded with opening statements. Vigus’ counsel stated that there was no dispute of a building code violation and the Judge would instruct them that there was a building code violation. The Theater’s counsel stated that the Judge would not tell them there was a building code violation.

The parties then proceeded with their cases and presented expert testimony regarding the step and the applicable building code. After the Theater expert’s testimony, the Theater asked the court to reconsider its pre-trial order granting Vigus’ motion for judicial admission and to deny the Theater’s motion to strike.

The court stated it was not comfortable with a judicial admission that there was a building code violation because it had not heard that in the evidence presented.

Ultimately the court accepted and read final instruction number 11 which said “At the time of Ruth Vigus’ injury, there were certain Indiana Building Codes … and industry practices that the Theater was subject to …. Relating to the safe construction and maintenance of the building. You are to consider the violation of any Indiana Building Code … or industry practice as evidence of negligence.”

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admission. The jury returned a verdict for the Theater, and the court entered judgment for the Theater accordingly. Vigus then appealed.

Vigus first argued that the trial court erred when it revoked its pretrial order finding that the Theater had made a judicial admission on the question of a building code violation. The Court of Appeals review of the transcripts did not lead it to conclude that the Theater’s counsel’s statements did not amount to a clear and unequivocal statement of fact. So it could not agree with Vigus’ statement, made during her opening argument at trial, that there was no dispute there is a building code violation. In addition, even if the Court assumed that the Theater made a judicial admission, it did not affect the manner in which the case was tried or the question the parties asked the jury to decide.

The Court noted that for the first time on appeal, Vigus argued that the trial court should have instructed the jury that the Theater had admitted that the step violated the applicable building code. But at no time did Vigus request a jury instruction on the Theater’s admission of a building code violation. The Court of Appeals held that the trial court did not abuse its discretion when it revoked its pretrial order finding that the Theater had made a judicial admission on the building code violation.

UM/UIM coverage was properly excluded for scooter which was purchased more than 30 days prior to crash, but had not been added to insurance policy as covered auto Progressive Southeastern Insurance Company v. Robert Chastain (August 17, 2020) On November 9, 2018, Chastain was the registered owner of a 2015 Kymco Scooter. On that day, while operating a 2017 Bashan Scooter, Chastain was involved in an accident in Indianapolis with a vehicle driven by Rafael Zuniga.

Chastain had been the owner of the 2017 scooter for more than 30 days and had not registered the scooter with the Bureau of Motor Vehicles. Prior to the crash, Chastain moved the license plate from the Kymco Scooter to the Bashan Scooter but had not officially switched the plate over with the Bureau of Motor Vehicles.

Zuniga’s insurer, Safe Auto Insurance, indicated to Chastain’s counsel that it was tendering the policy limits of $25,000 on behalf of Zuniga. Chastain then filed a claim against is insurer, Progressive, and in a letter dated January 9, 2019, Progressive informed Chastain: “As you were driving a moped that you were the owner of at the time of the accident, based on the policy, we must respectfully deny underinsured bodily injury coverage.”

Chastain filed a complaint for damage and declaratory relief against Progressive and Zuniga. He requested the court to enter a declaratory judgment regarding the benefits of the Policy’s underinsured motorist coverage. Progressive filed a counterclaim for declaratory judgment. Progressive filed a motion for summary judgment claiming that it was entitled to summary judgment because there was no genuine issue of material fact that the policy excluded underinsured motorist coverage for bodily injury where Chastain was using a motor vehicle he owned but which was not insured under the policy. Chastain responded by filing his own motion for summary judgment, claiming his use of the scooter did not constitute the use of a motor vehicle under the terms of the policy and that Progressive must provide him with the underinsured motorist liability benefits. The trial court 82 • VERDICT

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denied Progressive’s motion for summary judgment and granted Chastain’s motion for summary judgment. Progressive appealed.

On appeal, Progressive argued that the trial court erroneously determined that the exclusion contained in the Policy’s uninsured/underinsured motorist coverage provision was ambiguous with regard to whether the Bashan Scooter operated by Chastain constituted a motor vehicle within the meaning of the UIM provision.

Chastain pointed to the policy definition of “auto” which required four wheels, it was reasonable for him to believe he couldn’t even insure his Scooter under the policy even if he wanted to. He also argued the term “motor vehicle” was ambiguous and must be construed against Progressive. Progressive argued that whether the scooter was an “auto” within the meaning of the policy was entirely irrelevant to the determination of whether the phrase “motor vehicle” in the UIM exclusion was ambiguous. It claimed it was disingenuous for Chastain to claim that he would have no reason to believe the Scooter was a motor vehicle where not only was he required to register the Bashan Scooter, but he was required to register the Bashan Scooter, a class B motor driven cycle, with the Indiana Bureau of Motor Vehicles.

First, the Court of Appeals looked at Indiana Code 27-7-5-5(b) to see that an exclusion for owned autos not insured under the policy is allowed under Indiana law. Next, the Court held that the Bashan scooter was a motor vehicle under the plain and ordinary meaning of a motor vehicle.

The Court of Appeals held that the term “motor vehicle” under the policy was not unambiguous. The evidence showed that the 2017 Bashan Scooter was a motor vehicle owned by or available for Chastain’s regular use. Therefore, underinsured motorist coverage was excluded under Part III of the policy which stated that coverage under this Part III will not apply to bodily injury sustained by any person while using or occupying a motor vehicle that is owned by or available for the regular use of you, a relative or a rated resident.

The Court of Appeals reversed the trial court’s denial of Progressive’s motion for summary judgment and grant of Chastain’s motion for summary judgment.

Judgment was appropriate for medical device manufacturer on all tort claims premised on a failure to strengthen label warnings Bayer Corporation, et al. v. Leach, et al. (August 19, 2020) Rene Leach and more than thirty other women claimed that they were physically injured by a medical device called Essure, which was marketed as a form of permanent birth control. The Women sued Bayer Corporation and related entities, the alleged manufacturers of Essure. The nine-count complaint alleged liability under the Indiana Product Liability Act, the Uniform Commercial Code, and the Indiana Consumer Sales Act. Some defendants moved for judgment on the pleadings, asserting that (1) the claims are preempted and (2) aspects of the complaint are deficient. The trial court denied the motion. Bayer appealed.

In a lengthy opinion, the Court of Appeals held that Bayer was entitled to judgment on the pleadings on all tort claims premised on the failure to strengthen label warnings because federal law did not require Bayer to do so. It held Bayer was entitled to judgment on the pleadings on all tort claims that did not involve a defect recognized by the IPLA. Next, as to the claim that Bayer was liable for 84 • VERDICT

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a failure to warn, because the IPLA contemplates a defect only where labeling or packaging is inadequate- and because the Women did not allege that Bayer deviated from the FDA-approved labeling or packaging- Bayer was entitled to judgment on the pleadings on that claim. The Court of Appeals reversed the trial court’s judgment in those respects. As to the other elements of Plaintiffs’ claims, the trial court’s decision was affirmed.

Owner of property abutting roadway did not have duty to motorists because grass growth on the property did not encroach upon the roadway Reece v. Tyson Fresh Meats, Inc., et al. (August 20, 2020) On August 10, 2014, 92 year old motorist Harold Moistner was traveling southbound on Boyd Road in Wayne County. As his vehicle approached the intersection of Boyd Road and Hunnicut Road, Connie Sherwood was driving her vehicle eastbound on Hunnicut Road. Sherwood saw Moistner, who was driving very slowly, motion to her to enter the intersection. Sherwood then turned south onto Boyd Road. After turning, Sherwood looked in her rearview mirror. She observed Moistner execute a U-turn at Hunnicut Road west of Boyd Road, approach the intersection, hesitate briefly, and pull out. Moistner’s vehicle collided with a motorcycle being operated by Walter Reece. Walter suffered catastrophic brain injuries. Moistner left the scene of the accident but was located and interviewed by Wayne County Sheriff ’s Deputy Tyler Dougherty.

Moistner appeared to be unable to recount the accident details but he conveyed his perception that the motorcycle had pulled out in front of him. The deputy’s report stated that grass on the northwest corner of Hunnicut Road and Boyd Road was tall. He stated that the grass would have limited or prohibited the view of Driver 1 to see Vehicle 2 traveling southbound.

Reece filed suit against Moistner and then later amended his complaint to add Tyson. Tyson filed a motion for summary judgment. Reece filed a response with designations of Moistner’s responses to interrogatories and the affidavit of Shawn Gyorke, a certified accident reconstructionist. The trial court granted summary judgment to Tyson, concluding that landowner Tyson had no duty to Reece, as a member of the traveling public. The trial court entered two additional orders, one excluding Moistner’s interrogatory responses and the second excluding Gyorke’s opinion with respect to Tyson’s sign. Reece appealed.

The Court of Appeals held that the orders excluding Moistner’s interrogatory responses and Gyorke’s affidavit were not an abuse of discretion.

As to the grant of summary judgment, the Court noted that Tyson admitted ownership of the ditch at the northwest corner of the intersection. The Court of Appeals noted the well-established rule that a landowner owes a duty to the traveling public to exercise reasonable care in the use of his property so not to interfere with safe travel on public roadways. Pitcairn v. Whiteside, 34 N.E.2d 943 (Ind. 1941). In Sheley v. Cross, 680 N.E.2d 10 (Ind. Ct. App. 1997), the Indiana Court of Appeals held that to the extent a landowner owes a duty to travelers on an adjacent roadway, that duty is limited to refraining from creating hazardous conditions that visit themselves upon the roadway. Where an activity is wholly contained on a landowner’s property, there is no duty to the traveling public.

In this case, the Court found that the alleged dangerous condition was confined to Winter 2021 ⁜ VERDICT • 85

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the Tyson property. Reece made no allegation of encroachment upon the roadway.

Thus, consistent with Sheley, the grass growth did not give rise to a duty to the traveling public.

Next, Reece claimed that Tyson had voluntarily assumed a duty when its employee mowed the drainage ditch. The evidence was that the employee mowed the area to make it presentable to the public, but last mowed the ditch in 2012, the year of his retirement. The Court noted that Reece argued that the assumed duty cannot be abandoned, but that no legal support was provided for that argument. It held that even if it were to assume that the mower’s conduct at one time gave rise to a special relationship between the parties, he ceased to participate in the relationship upon his retirement. For approximately two years prior to the crash, the mower was not performing his “undertaking.” The Court held that Reece could not obtain a reversal of the grant of summary judgment on ground of the assumption of duty.

General contractor did not assume by contract non-delegable duty to protect employee of subcontractor’s subcontractor, but subcontractor did assume a non-delegable duty to protect employee of their subcontractor Shiel Sexton Company Inc.; Circle B Construction Systems, LLC v. Towe (August 24, 2020) Shiel Sexton Company Inc. and Circle B Construction Systems, LLC brought an interlocutory appeal of the trial court’s grant of partial summary judgment for Plaintiff Joshua Towe on the issue of whether Shiel Sexton and Circle B, individually, assumed by contract a non-delegable duty to protect Towe, who was a temporary worker assigned to work fro Rose and Walker Supply Lafayette, Inc., d/b/a Rose and Walker Supply Indianapolis, Inc, and was injured while on a construction site to deliver construction supplies to Circle B. The issues on appeal were: (1) did the contract that Shiel Sexton entered into to become general contractor contain language by which Shiel Sexton assumed a non-delegable duty to protect all individuals who worked on the construction site and (2) did the contract between Shiel Sexton and Circle B contain language by which Circle B assumed a non-delegable duty to protect the employee of Circle B’s third-party supplier of materials?

Shiel Sexton was general contractor on the project. They subcontracted with Circle B to build part of the project, and Circle B contracted with Rose and Walker (supplier) to deliver materials to the property that Circle B needed to construct its portion of the project. The Supplier sent three workers to deliver two truckloads of metal studs to Circle B at the property. Joshua Towe was one of the employees.

Towe was actually an employee of Express Employment Professionals and was on temporary assignment to the Supplier.

Towe was injured when a hoisted load tipped and spilled metal studs onto him and another man. An investigation revealed a leak in a hydraulic line on the boom had caused the boom to tip and drop the load. Towe sued Shiel Sexton, Circle B, the Supplier, and a number of businesses believed to have serviced and/or repaired the boom truck. Shiel Sexton filed for summary judgment arguing it did not owe a duty of care to Towe and was not the proximate cause of Towe’s injuries. Circle B filed its own motion for summary judgment arguing it could not have a duty of care to Towe when the contract between Shiel Sexton and the landowner imposed 86 • VERDICT

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a non-delegable duty upon Shiel Sexton which could not be modified by any subsequent agreement with Circle B. The trial court denied Shiel Sexton’s motion and granted Towe’s partial summary judgment ordering that Shiel Sexton assumed, by contract, a nondelegable duty for the safety of all persons working on the project, including Joshua Towe, and that Shiel Sexton was vicariously liable for the negligence of the subcontractors. As to Circle B, the trial court denied their motion and granted Towe’s partial summary judgment ordering that Circle B assumed, by contract, a nondelegable duty for the safety of all persons working under it on the project, including Joshua Towe, and that they were vicariously liable for the negligence of Rose and Walker Supply.

Shiel Sexton and Circle B appealed.

The Court of Appeals started by noting that the duty analysis starts with the Indiana Supreme Court decision in Ryan v. TCI Architects, 72 N.E.3d 908 (Ind. 2017) In Ryan, the Supreme Court stated that generally a principal will not be held liable for the negligence of an independent contractor. Therefore, a general contractor will ordinarily owe no outright duty of care to a subcontractor’s employees, much less so to employees of a sub-subcontractor. However, five exceptions to the general rule exist. One exception allows for the existence of a duty of care where a contractual obligation imposes a “specific duty” on the general contractor.

Both Circle B and Towe claimed that Shiel Sexton assumed a duty to protect Towe when Shiel Sexton signed its Master Contract with Hendricks, the landowner.

They both point to Article 10.1 which says, “The safety and health of Contractor or Contractor’s employees, subcontractors, and agents brought on Owner premises are and will be the sole responsibility of Contractor.” Towe claimed that the sentence meant that Shiel Sexton assumed sole responsibility for the safety of anyone and everyone who would have been on the project site performing any nature of work or providing any materials in furtherance of the completion of the project. However, the landowner made clear it wanted to be part of the process of hiring subcontractors and vendors. That required the Court to read the sentence as not including every possible sub-subcontractor or vendor of a subcontractor. The Court held that none of the other language cited by Towe or Circle B demonstrated Shiel Sexton’s intention to assume a duty toward the employee of a third-party delivery service bringing supplies to a subcontractor.

The Court concluded that the master contract between the landowner and Shiel Sexton did not contain language by which Shiel Sexton assumed a non-delegable duty to protect Towe. It held the trial court erred in denying Shiel Sexton’s motion for summary judgment.

Next, the Court looked at whether Circle B assumed a duty to Towe. In Ryan, the Indiana Supreme Court noted the “common thread” amongst the cases that found a contractor assumed a duty of care was that those contracts contained requirements for the contractor to: (1) take precautions for safety of employees, (2) comply with applicable law and regulation, and (3) designate a member of its organizations to prevent accidents. The contract between Circle B and Shiel Sexton contained those exact provisions. Therefore, the Court of Appeals held that Circle B had a duty to protect employees, agents, and other persons from hazardous or dangerous situations created by Circle B’s employees or agents. The Court affirmed the trial court’s grant of summary judgment for Towe as to the issue of Circle B’s assumption of a duty to protect him.

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Index of Advertisers Business/Commercial Litigation • Williams Law Firm................................................28

Forensic Economics • Ronald T. Smolarski, MA........................................40

Court Reporters • Connor Reporting.................................................77

Functional Capacity Evaluations • Ronald T. Smolarski, MA........................................40

Mediation • McDevitt Mediation Center.............Inside Front Cover • National Academy of Distinguished Neutrals...........49

Funding/Non-Recourse Lending • Preferred Capital Funding......................................12

Medical Malpractice • Williams Law Firm................................................28 Personal Injury and Wrongful Death • Williams Law Firm................................................28

Judges and Lawyers Assistance Program • JLAP.............................................................. 40, 55 Life Care Planning • Ronald T. Smolarski, MA........................................40

Product Liability • Williams Law Firm................................................28

Structured Settlements • KCI Settlements.....................................................8 • Morrow Settlement Services..................... Back Cover

Securities Cases • Williams Law Firm................................................28

Videography • Image Resources, Inc................................ 32-33, 83

Workplace Injuries • Klezmer Maudlin, PC...................... Inside Back Cover

Vocational Expert • Ronald T. Smolarski, MA........................................40

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Published by INDIANA TRIAL LAWYERS ASSOCIATION Editor LANCE LADENDORF Volume 40 No. 2 2021

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ITLA PRESIDENT’S STATEMENT

by Fred Schultz

Morrow Settlement Services brings together the best products, services and people in the settlement planning industry. Our team works closely with plaintiff attorneys, ad litems, mediators and judges during the settlement process to assure the financial futures of plaintiffs are being protected.

USE OF A PARTY’S DEPOSITION AT TRIAL

by Rich Cook

INDIANA INSURER GOOD FAITH: CONSIDERING THE REASONABLE EXPECTATIONS OF INDEMNITY

Structured Settlements

• Catastrophic Injuries, Wrongful Death, Medical Malpractice & Auto/Trucking Accidents • Mass Torts - Pharmaceutical/Product Liability STERLING G. MORROW Cell Phone: 512-983-2202 Sterling@morrowss.com

Structured Attorney Fees • Defer Taxes on Your Fees

by Charles Anthony Ashford

TODD S. MORROW, CPA Cell Phone: 512-657-6614 Todd@morrowss.com

Trust Services

• Special Needs Trust Administration and Implementation • Settlement Trusts (Individual and Pooled)

Lien Resolution Services

• Medicaid, Medicare & Private/ERISA

Medicare Set-Asides (MSAs)

• Development, Review & Submission to CMS

An affiliate of

430 Woodland Dr. Driftwood, Texas 78619 Toll Free: 855-227-9400

www.morrowsettlementservices.com

ALABAMA COURTS TAKE A STAND AGAINST INSURANCE CARRIER MISBEHAVIOR

by B.J. Kelley