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Tuesday, May 14, 2013

Ind. Decisions - Supreme Court decides two today, both direct appeals

In Girl Scouts of Southern Illinois v. Vincennes Indiana Girls, Inc., a 10-page, 5-0 opinion, Justice Rush writes:

The Contracts Clause of the Indiana Constitution protects vested contract rights, including agreed contractual restrictions on land use, against retroactive impairment. Here, one Scouting organization deeded its campground to another on the condition that the Scouting use continue for 49 years, with the deed providing that ownership of the campground would revert to the original owner (the grantor) if the Scouting-use condition was breached during that time. We conclude that the Contracts Clause of the Indiana Constitution protects the enforceability of this 49-year land use limitation despite a subsequently enacted statute, Indiana Code section 32-17-10-2, that purports to limit reversionary clauses in land transactions to a maximum of 30 years.* * *

The trial court granted summary judgment quieting title in VIG, and GSSI appealed. The appeal was initially filed in the Court of Appeals, but because the trial court’s judgment declared a state statute unconstitutional, Appellate Rule 4(A)(1)(b) gives this Court mandatory and exclusive jurisdiction over the appeal. The case was therefore transferred to this Court under Appellate Rule 6, and proceeded as a direct appeal. * * *

Conclusion. A corporation continues a limited corporate existence even while it is administratively dis-solved, and reinstatement restores its full status as if the dissolution never happened. VIG’s administrative dissolution, and subsequent reinstatement, therefore did not trigger the deed’s provision extinguishing VIG’s reversionary interest if its “existence is terminated or corporate charter surrendered.”

And because VIG’s interest imposes a land-use restriction similar to a restrictive covenant, it deserves the same level of Contracts Clause protection. Since the parties bargained for a 49-year land use limitation on Camp Wildwood, terminating that restriction after just 30 years would substantially impair VIG’s contract rights. Indiana Code section 32-17-10-2 is therefore unconstitutional as applied retroactively to the land-use restriction in VIG’s deed to GSSI. Accordingly, we affirm the trial court.

In the following case, after a jury awarded the plaintiff in a personal injury action $150,000 in punitive damages, the Marion Superior Court declared that the limitations on punitive damage awards set out in IC 34-51-3-4 and 5 violate Article 3, Section 1 and Article 1, Section 20 of the Indiana Constitution. The State of Indiana intervened and initiated this direct civil appeal. Oral argument was held Dec. 13, 2012. Today, in State of Indiana v. John Doe, a 9-page, 5-0 opinion, Justice Massa writes:
The State here appeals from a judgment declaring Indiana Code §§ 34-51-3-4, -5, and -6 impermissibly inconsistent with Article 1, Section 20 and Article 3, Section 1 of our Indiana Constitution. We reverse. * * *

In April 2008, a jury awarded John Doe $150,000 in punitive damages as part of a judgment in his lawsuit against Father Jonathan Lovill Stewart for childhood sexual abuse. Stewart moved to reduce the punitive damages pursuant to the statutory cap. Ind. Code §§ 34-51-3-4 & -5. On February 27, 2009, the trial court denied that motion, holding those statutes violated two provisions of our state Constitution: Article 3, Section 1, which requires the separation of governmental powers, and Article 1, Section 20, which guarantees the right to trial by jury in civil cases.

In March 2009, the State intervened in the case to protect its interest in the punitive damages award. Doe filed various documents contending the allocation provision was unconstitutional as applied to him. His argument was initially based solely on the state and federal Takings Clauses, although he later raised separation of powers and jury trial arguments.

On September 27, 2011, without holding a hearing on Doe’s constitutional claims or allowing the State to respond to his late-raised arguments, the trial court issued an order declaring both cap and allocation violated the separation of powers and right to jury trial. The State moved to correct error, seeking an opportunity to demonstrate the statutes comport with those constitutional provisions, but the trial court denied that motion.

The State now appeals. We have mandatory and exclusive jurisdiction over this and all appeals from judgments invalidating state statutes on constitutional grounds. Ind. Appellate Rule 4(A)(1)(b). * * *

[W]e agree with the State that, as we have said before, the jury’s determination of the amount of punitive damages is not the sort of “finding of fact” that implicates the right to jury trial under our state constitution. Stroud v. Lints, 790 N.E.2d 440, 445 (Ind. 2003). We believe the allocation of punitive damages is similarly not a “finding of fact” for constitutional purposes. Therefore, we find the cap and allocation provisions are fully consonant with the right to jury trial protected by Article 1, Section 20 of our state constitution. * * *

[B]oth cap and allocation delineate a boundary within which the court may exercise its discretion to award damages, order remittitur, or otherwise modify the judgment as appropriate in light of the evidence and circumstances of the particular case before it. That boundary is within the legislature’s power to set, and the exercise of that power does not offend Article 3, Section 1 of our Indiana Constitution.

Conclusion. We hold that Indiana Code §§ 34-51-3-4, -5, and -6 do not violate either Article 1, Section 20 or Article 3, Section 1 of our Indiana Constitution. We therefore reverse the trial court and remand this case with instructions to (1) grant Stewart’s motion to reduce the punitive damages to the statutory maximum and (2) order that 75% of the award be deposited into the Violent Crime Victim Compensation Fund.

Posted by Marcia Oddi on May 14, 2013 12:16 PM
Posted to Ind. Sup.Ct. Decisions