ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
JEFFREY A. MODISETT BRYAN L. COOK
Attorney General of Indiana Indianapolis, Indiana
CHRISTOPHER L. LAFUSE
Deputy Attorney General
STATE OF INDIANA and the SPEEDWAY ) POLICE DEPARTMENT, ) ) Appellant-Petitioner, ) ) vs. ) No. 49A02-9711-CV-793 ) THOMAS PERSON, ) ) Appellee-Respondent. )
Denny court quoted Ind. Code § 34-4-16.5-4 of the Indiana Tort Claims Act, which
provided, A governmental entity is not liable for punitive damages, and then reasoned,
[s]uch Act should be considered as a statement of public policy by the legislature that the
State is not to be considered as being liable for punitive damages in cases such as this. Id.
at 557, 406 N.E.2d at 241.See footnote 3
The court further rationalized, The concept of the State not
having a state of mind or not being deterred by punitive damages should be the basis for the
prohibition of such punitive damages in all cases applicable to the State. Id.
Denny did not involve an award of attorney's fees per se. However, our court relied upon the policy advanced in that case to disallow awards of punitive attorney's fees when assessed against the State of Indiana and its agencies. See, e.g., Indiana State Highway Comm'n v. Curtis, 695 N.E.2d 143 (Ind. Ct. App. 1998) (reversed assessment of attorney's fees against the State of Indiana and the Indiana State Highway Commission for the costs of bringing suit to enforce a settlement agreement), trans. pending; State v. Carter, 658 N.E.2d 618 (Ind. Ct. App. 1995) (reversed assessment of mediation costs and attorney's fees against the State of Indiana for failing to mediate a personal injury claim in good faith); State v. Hicks, 465 N.E.2d 1146 (Ind. Ct. App. 1984) (reversed award of attorney's fees and costs against the State of Indiana for its employees' obdurate behavior); State v. Ziliak, 464 N.E.2d 929 (Ind. Ct. App. 1984) (reversed determination that State of Indiana was liable for
treble damages, attorney's fees and costs under Ind. Code § 34-4-30-1, a statute enacted to
provide civil remedies to crime victims), reh. denied, trans. denied.See footnote 4
In a recent case, a nursing home characterized the Indiana Family and Social Services Administration's refusal to award Medicaid benefits while mandating the nursing home to provide care for a patient as unreasonable, groundless and in bad faith. Family and Social Servs. Admin. v. Calvert, 672 N.E.2d 488 (Ind. Ct. App. 1996), trans. denied. The nursing home requested attorney's fees pursuant to Appellate Rule 15(G) and Ind. Code § 34-1-32-1, the same statute under which Person now seeks to recover fees. In refusing the nursing home's request, the court observed that trial courts award attorney's fees to punish alleged oppressive conduct and to prevent further misconduct; however, public policy dictates that the bad faith exception is inapplicable against a State entity. Id. at 495. The court embraced the rationale that the State entity does not have a mind that can be deterred by an award of punitive damages and that the citizen taxpayers would bear the burden of such an award. Id.
Person urges that we deviate from this well-settled policy and permit the recovery of attorney's fees from the State in the unique context of an unsuccessful civil forfeiture proceeding. He argues that, because police departments raise millions of dollars each year in seized property, public funds need not be used to pay attorney's fees awarded to innocent citizens. Person further maintains that [p]ublic policy mandates that citizens not be subjected to harassing and expensive litigation brought by police and prosecutors who are blinded by the 'gold fever' of prospective forfeiture.
2693 n.9, 115 L.Ed.2d 836, 854 n.9 (1991) (Scalia, J., joined by Rehnquist, C. J.).See footnote 6
there are competing public policy considerations. Illegal activities support a sizable untaxed
private industry. Forfeitures do compensate the Government, but are primarily designed to
confiscate property used in violation of the law, and to require disgorgement of the fruits of
illegal conduct. Ursery, 518 U.S. at 284, 116 S.Ct. at 2145, 135 L.Ed.2d at 565; see also
Katner, 655 N.E.2d at 347-48 (describing broad remedial characteristics of forfeiture
actions). The General Assembly has balanced these competing interests when it enacted the
forfeiture statutes but declined to include disincentives in the form of attorney fee
assessments. Barring constitutional difficulties, that choice was within the purview of the
legislature. Shook Heavy and Envtl. Const. Group v. City of Kokomo, 632 N.E.2d 355, 359
(Ind. 1994). We are not persuaded that our well-established precedent immunizing these
governmental entities from the assessment of punitive attorney's fees should be reversed
when there is no specific statutory provision authorizing those fees.
Person next insists that, even if the State of Indiana and its agencies are not subject to sanctions, the Speedway Police Department should be liable for his attorney's fees. We reject Person's argument. The Speedway Police Department is part of the Town of Speedway, a governmental unit, and was necessarily named as a party in this action because
the State of Indiana was not the employer of the officers making the seizure. See supra note
1. Adoption of Person's position would leave State law enforcement agencies immune but
all other police departments susceptible to the assessment of punitive fees. The reasons that
compel us to find the State of Indiana should not be required to pay punitive attorney's fees
also apply to the Speedway Police Department. See World Productions, Inc. v. Capital
Improvement Bd. of Managers, 514 N.E.2d 634 (Ind. Ct. App. 1987) (board comprised of
members appointed by executive of city and county board of commissioners was entitled to
immunity from punitive damages), reh. denied, trans. denied; In re Wardship of Turrin, 436
N.E.2d 130 (Ind. Ct. App. 1982) (attorney's fees under the bad faith exception could not be
assessed against the Department of Public Welfare of Allen County). Precedent dictates that
punitive attorney's fees should not be assessed against the Speedway Police Department
absent a specific legislative determination allowing such. Accordingly, we vacate the award
of attorney's fees against both the State of Indiana and the Speedway Police Department.
SHARPNACK, C.J., and GARRARD, J., concur.
Converted by Andrew Scriven