IN CoA (Bradford; Mathias & Pyle Concur). Real Estate – Sales Disclosures, Mold
Where two inspections prior to sale of home did not show mold, buyer could not claim seller failed to comply with sales disclosure requirements (which require disclosure of actual knowledge under Ind. Code § 32-21-5-9) or that seller committed fraud. Trial court’s decision was affirmed and seller was entitled to $450,000 in attorneys’ fees and costs at the trial level. The amount of fees was not contested by buyer for reasons unknown.
IN CoA (Najam; Mathias and Brown concur). Foreclosure actions, evidence of costs
Where sheriff’s sale actually netted an amount in surplus of the agreed judgment of foreclosure, former homeowner’s motion to compel payment of surplus was treated as a Rule 13(M) motion for satisfaction of judgment or 60(B)(7) motion to vacate judgment based on satisfaction. As such, bank could not present inadmissible hearsay in affidavits and letters as evidence of costs. “Only the judgment creditor has the records that would prove or disprove the allegation that there is a surplus. When challenged, the judgment creditor must present admissible evidence to show the costs included in the winning bid.” The former homeowner was thus entitled to small surplus.
IN CoA (Kirsch; Friedlander and Bailey concur). Healthcare Law – 3rd Party Guarantor Agreements
Court of Appeals reverses judgment of small claims court. Plaintiff nursing care facility had move-in agreement with defendant’s mother containing 3rd Party/Responsible Agent language where resident could designate party to handle resident’s tab with the facility using resident’s funds. In this case, resident’s daughter (the defendant) was never appointed as agent and was given oral assurances that the move-in agreement did not make her financially liable for her mother’s care. The small claims court disagreed, eventually citing the move-in agreement.
The nursing care facility did not even file an Appellate brief and the CoA reversed the small claims court’s decision. The Court tinkered with the idea of ruling on the legality of 3rd party agent/nursing home agreements but declined and opted to wait another day.
7th Circuit (Posner; Flaum concurs and Sykes dissents w/ sep. opinion). Civil Rights – absolute immunity for prosecutors.
Interesting civil rights opinion by Judge Posner last week on immunity for Cook County Illinois prosecutors in 1983 claims. The Plaintiff, Fields, was allegedly wrongfully prosecuted with evidence falsified by the prosecutor before he was arrested or indicted. He subsequently spent over 17 years in prison and was finally released and given a certificate of innocence from the Cook County court. He then filed suit against, inter alia, the prosecutors who falsified the evidence against him. The prosecutors moved for dismissal on grounds of absolute immunity and the District Court denied it. This appeal ensued.
By way of background, prosecutors, particularly those in Indiana are nearly impossible to sue in a civil rights action. They enjoy absolute immunity for their actions in the decision to prosecute defendants and in their case against the same defendants. This immunity applies to them in their individual capacity and thus bars 1983 actions against prosecutors even when they act with malice. The immunity does not apply to actions taken within an investigatory capacity prior to indictment or arrest, though, in which case qualified immunity applies. In their official capacity, they also enjoy 11th Amendment protections since Indiana Federal District Courts have long held that the Indiana Constitution deems them an arm of the state rather than a county. (On a side note, when I last looked in 2008, Illinois held the opposite to be true thereby eliminating this bar to recovery.)
With that background in mind, Judge Posner’s opinion deals with what occurs when a prosecutor falsifies evidence in the investigation stage and the same prosecutor goes on to prosecute the wrongfully accused. Essentially, Judge Posner states that such an action enjoys neither absolute nor qualified immunity since fabriaction is a clear violation of due process. Citing Whitlock v. Brueggemann, 682 F.3d 567 (7th Cir. 2012), an opinion authored by the current Chief Judge Diane Wood, Judge Posner finds that coerced testimony may enjoy immunity since such evidence may turn out to be true but such a rationale cannot apply to falsified evidence, which is inherently false. Therefore, regardless of whether a harm results from the falsification, the immunity itself is lost by virtue of the act of falsification during the investigation phase.
What does it mean? Prosecutors, particularly those in Indiana, have long been impossible to file suit against for alleged civil rights violations, even those where qualified immunity may apply. This opinion certainly provides a roadmap on what language to use and how to frame a complaint against a prosecutor to allow an attorney to a) see whether a viable claim exists and b) to move past the 12(b)(6) motion that always meets these actions.
IN CoA (Friedlander; Baker & Vaidik concur)
In this case, a punitive damages verdict was entered against Defendant. The case was subsequently settled but the Indiana Attorney General intervened and opposed the dismissal of the case, using its stake in the punitive damages component as leverage.
In holding that the Attorney General could not intervene or forestall the settlement, the Court of Appeals stated that the State’s interest was limited to the 75% of the funds paid into the clerk’s office on the punitive damages judgment. Essentially, the State had no right to interfere with the settlement of the case and should never have been invited to the table, so to speak, in the first place. Even if there is collusion between the underlying parties to settle for an amount in excess of the compensatory judgment (which was not the case here), the Court noted the State still would not have an interest since the statute is aimed at reining in punitive damage judgments and not at providing a source of revenue for the State.
What does it mean? Any and all Plaintiffs with potential punitive damage claims have one less deterrent from seeking such an award from the jury.
(Disclaimer: I was personally involved with this case for nearly two years so if any personal bias becomes apparent, that is why.)
CoA: Pyle; Crone concurs & Barnes dissents w/ sep. opinion
In action for bad faith by sales representative against former principal, CoA affirms trial court’s ruling that punitive damages provided by Ind. Code § 24-4-7-5 (in the Indiana Sales Representative Act) are subject to the heightened burden of proof and distribution standards provided by Indiana’s civil punitive damages statute (Indiana Code §§ 34-51-3-2 and 34-51-3-6).
Both the majority and dissenting opinions noted the absence of the legislature’s guidance on how punitive damages should be handled under the ISRA.