VOL. XXXV, No. 13 |
May 7, 2008 |
CASE CLIPS
Selected decisions of the Indiana appellate courts abstracted for judges by the Indiana Judicial Center
The full text of Indiana opinions may be retrieved from the Indiana Judicial System website at www.IN.gov/judiciary/opinions.
IN THIS ISSUE
CRIMINAL ISSUES
Beer v. State (Ind. Ct. App., Mathias, J.) - Indiana statute does not prohibit "no-knock" search warrants; one was properly issued in this case based on affidavits that the subject possessed weapons and had said he would use them to avoid going back to prison.
Miller v. State (Ind. Ct. App., Riley, J.) - When defendant is ordered to reimburse the county for incarceration expenses, ability to pay inquiry is required if order to pay is made a probation condition.
Campos v. State (Ind., Boehm, J.) - Passenger's testimony that he and driver had owner's consent to use the borrowed car conferred standing to object to car's search absent evidence to the contrary from the State. Officer's statement it was "necessary" to search the car effectively placed driver in custody, so that Pirtle advice of right to counsel was required for a valid consent to search. Incriminating conversation between driver and passenger in police car was voluntary and admissible, and not "tainted" by unlawful detention and unlawful search.
CIVIL ISSUES
Nichols v. Minnick (Ind., Boehm, J.) – A broker who breaches his fiduciary duty to disclose material information to his client loses his right to receive a commission for his services.
Fifth Third Bank v. PNC Bank (Ind. Ct. App., Bradford, J.) – When plaintiff failed to comply with discovery requests, trial court erred in dismissing one defendant (but not the other) from the lawsuit, because the order benefited the dismissed defendant, but did not punish the plaintiff.
Hieston v. Hendricks (Ind. Ct. App., Vaidik, J.) – Mother cannot receive credit for the lump sum payments of retroactive Social Security disability paid to her children for arrearages accumulated before she filed a petition to modify her child support; in addition, any prospective Social Security disability payments that exceed the modified child support amount are to be considered as a gratuity to the children and shall not be applied as a credit toward any arrearages.
CRIMINAL ISSUES
BEER v. STATE, No. 01A02-0707-CR-569, __ N.E.2d __(Ind. Ct. App., Apr. 29, 2008).
MATHIAS, J.
Beer argues that Indiana law does not recognize a no knock search warrant. Specifically, Beer cites Ind. Code § 35-33-5-7(d) (2004), which provides that “[a] law enforcement officer may break open any outer or inner door or window in order to execute a search warrant, if he is not admitted following an announcement of his authority and purpose.” Beer argues that “Indiana is unique” because Ind. Code § 35-33-5-7(d) “requires the police to knock and announce their presence and authority.”[6] . . . .
Initially, we note that Ind. Code § 35-33-5-7 does not expressly prohibit entry without announcing the law enforcement officer’s authority and purpose when there are exigent circumstances or when it would be dangerous to officers or others to make such an announcement. . . . Accordingly, we conclude that Ind. Code § 35-33-5-7 authorizes forcible entry when entry is not allowed following announcement of the officer’s authority and purpose. The alternative to use of force in such a circumstance would be to go away and try later. The legislature has made it clear that execution of a warrant cannot be frustrated by refusal of entry or silence. The statute says nothing to either authorize or prohibit a “no knock” execution of a warrant under appropriate conditions.
. . . .
In summary, Ind. Code § 35-33-5-7 does not expressly prohibit a no knock warrant. It is well settled in Indiana common law that the knock and announce requirement need not be followed blindly in all circumstances. The Legislature appears to have acquiesced in the interpretation that a notice of purpose requirement need not be met in all circumstances. We conclude that Indiana law supports no knock warrants under certain circumstances.
. . . .
Here, Detective Mawhorr’s affidavit stated in part:
. . .
4. CI 504 stated to Detective Kyle Randall that Gary Beer has stated to CI 504 that Gary Beer will not go back to prison and that if he were caught driving he would not stop for the police. Additionally, CI 504 stated that CI 504 had observed cocaine, rifles, hand guns and shotguns in Gary Beer’s residence in the past and knows Gary Beer to carry a .22 caliber handgun on his person. The last time that CI 504 observed these items was on April 4, 2005. [Footnote omitted.]
* * * * *
7. On April 11, 2005 Kyle Randall met with CI 1014 who had provided information regarding another individual who had been dealing in controlled substances and Detective Randall was able to confirm and corroborate this information.
8. CI 1014 stated that during the fall of 2004 he had been in contact with Gary Beer. Gary Beer is known to him to have numerous weapons and keeps several of those weapons in the upstairs bedroom. CI 1014 described these weapons as assault weapons. [Footnote omitted.]
9. CI 1014 stated that Gary Beer told him that if Gary Beer’s house were to be raided again by the police he (Gary Beer) would not go back to prison and would not go down alone. Gary Beer stated that he would take out as many cops as he could. (see attached exhibit 2)[Footnote omitted.]
* * * * *
. . . Detective Mawhorr’s affidavit also indicated that C.I. 1020 observed a .357 handgun and a .22 caliber handgun on the desk in Beer’s bedroom during the controlled buys. . . . Detective Mawhorr’s affidavit concluded as follows:
40. I also have good cause to believe that based upon the observation of a firearm on March 29, 2005, April 1, 2005 and April 13, 2005 and information gathered from CI 504 and CI 1014 Gary Beer has several firearms and intends to use them if law enforcement attempt to enter his residence.
41. Therefore, I am hereby requesting a no knock search warrant to be served during the night time hours due to the above exigent circumstances of the presence of firearms and threats on the safety of law enforcement officers.
. . . .
Based on the affidavits, we conclude that C.I. 504 and C.I. 1014 were credible because they had provided correct information in the past. [Footnote omitted.] The information provided by C.I. 504, C.I. 1014, and C.I. 1020 establishes a reasonable suspicion that knocking and announcing their presence, under the particular circumstances, would be dangerous to the officers. See, e.g., U.S. v. Ramirez, 523 U.S. 65, 71, 118 S. Ct. 992, 997 (1998) (holding that police had a reasonable suspicion that knocking and announcing their presence might be dangerous to themselves or to others when a subject of search warrant was a prison escapee with a violent past who reportedly had access to a large supply of weapons and had vowed that he would “not do federal time”); Dumas, 512 P.2d at 1214 (holding that police need not comply with knock and announce rule when police had reliable information that defendant possessed weapons and habitually answered the door with a firearm).
In summary, Ind. Code § 35-33-5-7 does not prohibit no knock warrants under all circumstances, and the State had reasonable suspicion that knocking and announcing their presence, under the particular circumstances, would be dangerous. Accordingly, we conclude that the trial court did not abuse its discretion by admitting the evidence obtained during the search.
BARNES, J. and VAIDIK, J. concur.
MILLER v. STATE, No. 40A01-0707-CR-343, __ N.E.2d __ (Ind. Ct. App., Apr. 29, 2008).
RILEY, J.
Finally, Miller asserts that the trial court erred in ordering him to pay $10,770.00 to the Jennings County Prisoner Reimbursement Fund without first inquiring into his ability to pay. Indiana Code section 36-2-13-15 authorizes the legislative body of a county to adopt an ordinance that requires prisoners to reimburse the county for the costs of incarceration. The statute provides, in pertinent part:
(b) This section applies to a county only if the legislative body for the county elects by ordinance to implement this section.
(c) A person who is:
(1) sentenced under this article for a felony or a misdemeanor;
(2) subject to lawful detention in a county jail for a period of more than seventy-two (72) hours;
(3) not a member of a family that makes less than 150% of the federal income poverty level; and
(4) not detained as a child subject to the jurisdiction of a juvenile court;
shall reimburse the county for the costs described in subsection (d).
(d) A person described in subsection (c) shall reimburse the county for the sum of the following amounts:
(1) The lesser of:
(A) the per diem amount specified under subsection (e); or
(B) thirty dollars ($30);
multiplied by each day or part of a day that the person is lawfully detained in a county jail or lawfully detained under IC 35-33-11-3 for more than six (6) hours.
(2) The direct cost of investigating whether the person is indigent.
(3) The cost of collecting the amount for which the person is liable under this section.
I.C. § 36-2-13-15 (emphases added). Because both parties reference Indiana Code section 36-2-13-15, and because the trial court’s sentencing order referred to the “Jennings County Prisoner Reimbursement Fund”, we will assume that Jennings County has adopted an ordinance under the statute.
The use of the word “shall” in the statute indicates that trial courts have no discretion on this issue in counties that have adopted the relevant ordinance; they must order prisoners to reimburse the counties for the costs of incarceration. However, things become more complicated when the trial court wishes to make such reimbursement a condition of the defendant’s probation. In such cases, the trial court cannot fix an amount of reimbursement that exceeds an amount the person “can or will be able to pay.” I.C. § 36-2-13-15(a)(20)(A). Such rules exist “in order to prevent indigent defendants from being imprisoned because of their inability to pay.” Shaffer v. State, 674 N.E.2d 1, 9 (Ind. Ct. App. 1996), trans. denied; see also Sales v. State, 464 N.E.2d 1336, 1340 (Ind. Ct. App. 1984) (“[E]qual protection is denied where an indigent defendant is consigned to a jail term due to an inability to satisfy financial conditions of a judgment.”). Therefore, when such an obligation is made a condition of probation, the trial court must inquire into the defendant’s ability to pay. See Pearson v. State, 883 N.E.2d 770 (Ind. 2008). It is undisputed that the trial court made no such inquiry in this case.
Nonetheless, the State argues that the trial court did not err because it did not make payment to the Jennings County Prisoner Reimbursement Fund a condition of Miller’s probation. Rather, the State contends, the reimbursement order is merely a money judgment against Miller for which Miller cannot be imprisoned for non-payment. See Shaffer v. State, 674 N.E.2d at 9.
Viewed in isolation, the provision of the trial court’s sentencing order requiring payment to the Jennings County Prisoner Reimbursement Fund supports the State’s argument. It states: “The Defendant shall pay Ten Thousand Seven Hundred Dollars ($10,770.00) to the Jennings County Prisoner Reimbursement Fund, which shall be entered as a judgment against the Defendant and in favor of the Auditor of Jennings County in the judgment docket of the Clerk of this Court.” (Appellant’s App. p. 134). However, the State makes no mention of the fact that the above provision was item (20) of (24) under the following heading: “Five (5) years of the sentence are suspended provided the Defendant complies with all conditions of probation for sixty (60) months as follows: . . . .” (Appellant’s App. p. 131) (emphasis added). Likewise, in the “Conditions of Probation” attached to its sentencing order, the trial court ordered Miller to “make a minimum payment of $225.00 per month/week toward all fines and fees associated with this case until a total of $13,309.00 is paid.” (Appellant’s App. p. 138). The $13,309.00 amount included the $10,770.00 payable to the Jennings County Prisoner Reimbursement Fund. Therefore, while the trial court entered the reimbursement order as a judgment in favor of the county, it also made payment of that judgment a condition of Miller’s probation. It did so without inquiring into Miller’s ability to pay. As such, we must remand this cause to the trial court.
On remand, the trial court has two options. If it wishes to keep the reimbursement order as a condition of probation, it must make a proper inquiry into Miller’s ability to pay.1 On the other hand, the trial court could remove the reimbursement order as a condition of probation and enter it solely as a money judgment against Miller. Under the latter option, the trial court would not be required to inquire into Miller’s ability to pay, as he could not be imprisoned for his failure to pay. See Shaffer, 674 N.E.2d at 9. We leave these choices to the trial court.
BAKER, C.J., and ROBB, J., concur.
CAMPOS v. STATE, No. 45S03-0804-CR-199, __ N.E.2d __ (Ind., Apr. 30, 2008).
BOEHM, J.
In United States v. Miller, 821 F.2d 546, 548 (11th Cir. 1987), the court found the driver of a borrowed car had standing because the driver had testified that he had consent to drive the car and the government had introduced no evidence to the contrary. In response to the state’s contention that the driver's assertions were insufficient to establish standing, the court noted
The holding that the government advocates would mean that a perfectly innocent citizen who, say, borrowed a neighbor’s car with permission, would not have standing to challenge a search of that car. We are not willing to require such a signed affidavit that could be presented to a law enforcement officer to establish legitimate possession of the car.
We agree with the reasoning of the court in United States v. Miller. The only evidence in the record regarding the ownership of the car comes from Campos and Santiago. Specifically, both Campos [the passenger] and Santiago [the driver] told [Officer] Villarreal that the car was Campos’s brother’s and Campos said he had permission to use it. The State has produced no evidence that the car is not Campos’s brother’s or that Campos did not have permission to use it. Accordingly, Campos has standing to challenge the search of the car.
. . . .
When Villarreal told Santiago that it was “necessary” to search his car, no reasonable person would think that he had the right to leave or to decline Villarreal’s request. Therefore, Santiago was in custody. It is conceded that Santiago did not receive a Pirtle warning. Thus, there was a Pirtle violation with regard to Santiago. . . . .
. . . .
Campos argues that his statements recorded while in the police cruiser should be suppressed as a violation of his Fifth Amendment right to silence. [Footnote omitted.] Statements are protected under both the Fourth and Fifth Amendments and may be inadmissible as self-incrimination under Miranda or as the product of duress, coercion, or an unconstitutional search. Brown v. Illinois, 422 U.S. 590, 600-02 (1975). Incriminating statements made pursuant to an illegal search can be admissible, however, if the statements are voluntary under the Fifth Amendment and “sufficiently an act of free will to purge the primary taint of the unlawful invasion” under the Fourth Amendment. Id. at 599 (quoting Wong Sun v. United States, 371 U.S. 471, 486 (1963)).
Although Campos’s statements were made after an unlawful search and accompanying seizure, they were voluntary and freely given without duress or coercion. They therefore were not “tainted” by the unlawful search and detention.
Shepard, C.J., and Dickson and Sullivan, JJ., concur.
Rucker, J., concurs except as to Part I. B, in which he concurs in result.
CIVIL ISSUES
NICHOLS v. MINNICK, No. 53S01-0711-CV-515, ___ N.E.2d ___ (Ind. Apr. 29, 2008).
BOEHM, Justice.
We hold that a broker who breaches his fiduciary duty to disclose material information to his client loses his right to receive a commission for his services.
. . . .
Minnick [the broker] was acting as agent for Nichols [the seller]. A real estate broker representing a seller has the duty to “[disclose] to the seller . . . adverse material facts or risks actually known by the [broker] concerning the real estate transaction.” Ind. Code §§ 25-34.1-10-9.5, -10(a)(3)(C) (2004). The parties agree that a buyer’s creditworthiness is material to a real estate transaction and therefore a broker must disclose to the seller any loans the broker has made to the buyer to finance the purchase. The trial court found that Minnick did not disclose his loan of $15,000 [to the buyer, Blickensdorf] for the down payment. . . .
. . . By failing to disclose the $15,000 loan to Nichols, Minnick violated his duty to disclose material information known to him, namely, Blickensdorf’s lack of cash. Presumably as events unfolded this lack of financial stability contributed to BHL’s later struggles.
Both tort damages and restitution are available remedies for a breach of the duty to dis-close material information. Minnick argues that neither remedy is appropriate because Nichols suffered no losses. That is an appropriate response to the claim for damages but not to the claim for an equitable remedy.
. . . .
[T]he Court of Appeals has held that when a broker breaches his duty of disclosure, restitution takes the form of disgorgement of the broker’s right to a commission. Smitley v. Nau, 143 Ind. App. 113, 116, 238 N.E.2d 681, 683 (1968) (“The law is well settled in Indiana that a broker cannot recover a commission if, unknown to his principals, he has an adverse individual interest in the transaction.” (citing H.H. Woodsmall & Co. v. Steele, 82 Ind. App. 58, 60, 141 N.E. 246, 247 (1923))).
In this case, the trial court concluded that neither an award of tort damages nor disgorgement was appropriate. The trial court found that “Nichols has not proven that she suffered monetary damage as a result of Minnick’s actions as her agent in the sale of her business.” We agree that the record supports this finding. Presumably, Nichols could have attempted to show loss of a better deal, but there is no evidence that this occurred. Blickensdorf was the only per-son to look at the property, and the only estimates of BHL’s value are Minnick’s listing price and what Nichols hoped to get out of the deal. It is speculative on this record whether a different buyer would have offered more for BHL. Indeed, Minnick suggests there would have been no willing buyer at all and points to operating losses BHL incurred after the sale.
Although we agree that there is no proof of loss to support tort damages, we do not agree with the trial court’s conclusion that disgorgement is not required. The trial court based its judgment on its finding that Nichols had reason to know of the relationship between Minnick and Blickensdorf, and its conclusion that Minnick’s failure to disclose the $15,000 loan for the down payment “was not a serious violation of a duty of loyalty or seriously disobedient conduct such that Minnick should be ordered to repay the commission he received to Nichols.” As explained above, a fiduciary is required to disgorge any benefit from failure to disclose material information. The trial court’s conclusion is inconsistent with its findings of breach of fiduciary duty and materiality.
Although disgorgement is required, it may be of little consequence. In this case, Minnick’s benefit was to be a commission of ten percent of the purchase price, or $22,500. What Minnick actually received was a $22,500 note from Blickensdorf. In this case equity re-quires only that Minnick disgorge and transfer to Nichols what he wrongfully obtained—the $22,500 note and any payments he has received toward that debt, together with interest on those payments. If Blickensdorf’s note proves to be uncollectible, that merely reflects the fact that Minnick did not benefit from his breach, and restitution is not meaningful.
The trial court’s order is reversed and the case is remanded with instructions to enter judgment ordering Minnick to assign to Nichols the note representing his commission and to dis-gorge to Nichols any payments received on that note, with interest on those payments at the statutory rate of eight percent per annum pursuant to Indiana Code section 24-4.6-1-101 (2004).
Shepard, C.J., and Dickson, Sullivan, and Rucker, JJ., concur.
FIFTH THIRD BANK v. PNC BANK, No. 31A01-0711-CV-527, ___ N.E.2d ___ (Ind. Ct. App. Apr. 29, 2008).
BRADFORD, Judge.
Appellant/Defendant/Third-Party Plaintiff Fifth Third Bank (“Fifth Third”) appeals from the trial court’s dismissal of Appellee/Third-Party Defendant Young, Lind, Entres & Kraft Title Company (“YLEK”) from the foreclosure action originally filed by Appellee/Plaintiff PNC Bank against Appellees/Defendants John O. Sturdy, Jr., Diana K. Sturdy, Sturdy Construction, John W. Waggoner, and Appellant/Defendant/Third-Party Plaintiff Fifth Third. We reverse and remand with instructions.
. . . .
On June 24, 2004, YLEK served PNC with a request for production of documents and for admissions. PNC’s responses to the requests were due on July 24, 2004. On August 23, 2004, and on November 8, 2004, YLEK again requested responses from PNC. On May 12, 2006, YLEK moved to continue the trial date and requested sanctions based on PNC’s continuing failure to comply with its request for production of documents. On June 19, 2006, PNC and YLEK agreed to an entry ordering PNC to comply with YLEK’s request within thirty days. As of September 25, 2006, PNC had not complied, and YLEK, joined by Fifth Third and Waggoner, moved the trial court to dismiss PNC’s complaint for failure to comply with discovery.
On February 26, 2007, the trial court issued an order on YLEK’s motion to dismiss, granting it as to YLEK and denying it as to Fifth Third and Waggoner. In the order, the trial court noted that PNC’s delay in providing discovery was “particularly egregious, which should not be without sanction[.]” Appellant’s App. p. 77. Fifth Third now appeals the trial court’s denial of the motion to dismiss as to it.
. . . .
Fifth Third contends that the trial court abused its discretion in that its order did not punish PNC, the disobedient party. We agree with Fifth Third. Both the wording of Trial Rule 37 and our jurisprudence indicate that the sanctions to be imposed pursuant to a violation of a discovery order should be to the detriment of the offending party, and we see none to PNC here. Although there was some benefit conferred on YLEK, an order issued for the purpose of benefiting the offended party does not serve any of the purposes for Trial Rule 37 that we have recognized unless it also punishes the offending party. Here, due to the relationship between the parties, the trial court’s order has benefited YLEK and harmed Fifth Third, without punishing PNC in the least. In the end, we fail to see how an order that does not punish PNC would aid in ensuring compliance with future discovery orders or prevent PNC from profiting from its intransigence. We therefore conclude that the trial court abused its discretion in crafting an order that failed to punish PNC and reverse its dismissal of YLEK from the case. On remand, if the trial court concludes that sanctions are still justified, it is instructed to impose sanctions in a manner consistent with this opinion and Trial Rule 37 that serves to punish PNC for its failure to comply with discovery orders.
We reverse the judgment of the trial court and remand with instructions.
BAKER, C.J., and DARDEN, J., concur.
HIESTON v. HENDRICKS, No. 54A01-0701-CV-34, ___ N.E.2d ___ (Ind. Ct. App. Apr. 30, 2008).
VAIDIK, J.
Brown v. Brown, 849 N.E.2d 610 (Ind. 2006), established a bright-line test for determining when Social Security disability payments should be credited toward a child support arrearage. Brown determined that a disabled parent is entitled to credit against the parent’s child support obligation for Social Security benefits paid to a child effective as to the date the parent files a petition to modify a support order. Accordingly, we find that Mother cannot receive credit for the lump sum payments of retroactive Social Security disability paid to her children for arrearages accumulated before she filed a petition to modify her child support. This is so even though the trial court and the Title IV-D Prosecutor were aware that she had filed a Social Security disability claim nearly two years before she filed her petition to modify support.
Further, Brown dictates that any prospective Social Security disability payments that exceed the modified child support amount are to be considered as a gratuity to the children and shall not be applied as a credit toward any arrearages. As such, the trial court erred in crediting those prospective payments toward the arrearage. We, therefore, affirm in part, reverse in part, and remand.
. . . .
Here, the trial court modified Mother’s child support obligation from $71.00 to $50.79 per week, ruled that the modification was effective as of January 17, 2006, and determined that any Social Security disability payment received by the children after that date that exceeded the modified child support amount should be credited toward Mother’s child support arrearage. Based on the holdings in Brown and Dedek, we conclude that the trial court erred by treating the excess of the children’s prospective Social Security disability payments as a credit against Mother’s child support arrearage. Accordingly, we remand to the trial court with instructions to either order the excess be treated as a gratuity or to “modify [Mother’s] child support obligation to reflect the Social Security disability benefits.” See Brown, 849 N.E.2d at 616.
Affirmed in part, reversed in part, and remanded.
MAY, J., and MATHIAS, J., concur.
