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Monday, July 08, 2013

Ind. Decisions - Two Indiana decisions today (one a reversal) from the 7th Circuit; plus one on BACT

In CINCINNATI LIFE INSURANCE COMPANY v. BEYRER (SD Ind., McKinney), a 32-page opinion, Judge Kanne writes:

In 2006, Kevin Beyrer (“Kevin”) and his wife Marjorie Beyrer (“Marjorie”) moved to Terre Haute, Indiana, to manage several car dealerships owned by Mark Savoree. The next year, Savoree proposed selling the dealerships to the Beyrers through a series of stock purchases to be financed by a $3.5 million loan from Casey State Bank (“CSB”). The Beyrers accepted and began the process of acquiring the dealerships. Soon after negotiating the loan with CSB, Kevin took out a life insurance policy with Cincinnati Life Insurance Co. that named Marjorie as the beneficiary. Two months later, in July 2007, Kevin assigned that life insurance policy to CSB.

The dealership purchase began to fall apart almost immediately, however. Eventually the Beyrers declared bankruptcy, and multiple rounds of litigation between each of the aforementioned parties ensued. During all of this, Kevin was diagnosed with terminal cancer. He passed away in June 2010, which set the stage for an additional fight over the insurance policy proceeds. Cincinnati Life deposited the proceeds, some $3 million, with the Clerk of the Superior Court of Vigo County, Indiana, and sought judicial determination of the rightful owner. This appeal represents a culmination of that quest, including various cross- and third party claims that have been filed along the way. * * *

Marjorie Beyrer has brought this appeal challenging each of the decisions that the district court decided against her. By way of review, those decisions are: (1) the grant of summary judgment on the proceeds issue; (2) the rejection of the motions to modify and reconsider; (3) the dismissal of claims one, two, three, and seven; and (4) the entry of summary judgment on claims four, five, and six. Because of the rather complicated procedural history of this case and the large number of issues to be addressed, we will structure our review as follows: first, we will consider the dismissals of the Beyrers’ cross-claims and third party claims for failing to meet pleading standards; second, we will review the district court’s grant of summary judgment on claims four through six; third, we will address the district court’s grant of summary judgment on the life insurance proceeds distribution; and finally, we will review the court’s denial of Marjorie’s motions for modification and reconsideration. Finding no merit in any of the issues appealed, we affirm the district court’s judgments.

In DEBRA LEVESKI v. ITT EDUCATIONAL SERVICES (SD Ind., Pratt), a 51-page opinion, Judge Tinder writes [emphasis by ILB]:
Debra Leveski brings this lawsuit against ITT Educational Services, Inc. on behalf of the United States, pursuant to the qui tam provision of the False Claims Act (FCA), 31 U.S.C. § 3730(b). ITT is a forprofit institution with over 140 locations across the United States that offers post-secondary educational training, including associate’s, bachelor’s, and master’s degrees. Leveski, who worked at the ITT campus in Troy, Michigan, for more than a decade, alleges that ITT knowingly submitted false claims to the Department of Education in order to receive funding from federal student financial assistance programs.

Four years after Leveski filed this lawsuit, the district court dismissed it for want of jurisdiction, finding that Leveski’s allegations had already been publicly disclosed and that Leveski was not the original source of her allegations. In addition, the district court granted sanctions in the amount of $394,998.33 against all three law firms representing Leveski and against one of Leveski’s attorneys individually. Accusing Leveski’s attorneys of “pluck[ing] a plaintiff out of thin air and tr[ying] to manufacture a lucrative case,” the district court found Leveski’s allegations wholly “frivolous.”

Contrary to the district court, we believe that Leveski’s allegations merit further development, and more importantly, we believe they are sufficiently distinct from prior public disclosures to give the federal district court jurisdiction over Leveski’s lawsuit. Consequently, we reverse both the dismissal and the sanctions, and we remand the case back to the district court for further proceedings. * * *

Of course, if it becomes clear later in the course of litigation that Leveski has made up all of her allegations and all of her supporting evidence, then sanctions may be warranted. But for now, the truth of Leveski’s allegations is not appropriately resolved on a motion to dismiss for lack of subject-matter jurisdiction. Leveski has presented enough to move forward with this litigation. Consequently, we REVERSE both the district court’s dismissal of Leveski’s case for lack of subject-matter jurisdiction and the district court’s award of sanctions in the amount of $394,998.33 against Leveski’s counsel, and we REMAND the case back to the district court for further proceedings consistent with this opinion. Circuit Rule 36 will apply on remand.

Any “major emitting facility” built or substantially modified after August 7, 1977, in parts of the country subject to the rules about prevention of significant deterioration (PSD), needs a permit. 42 U.S.C. §7475(a). This construction permit is in addition to the operating permits that many facilities require under the Clean Air Act and the need to comply with state implementation plans. One condition of a construction permit is installation of “the best available control technology for each pollutant subject to regulation under” the Act. 42 U.S.C. §7475(a). * * *

The question “how much repair or change requires a permit?” has been contentious and difficult. * * * Commonwealth Edison took the position that permits were not required and that it therefore was not obliged to install “the best available control technology” (called BACT in the jargon of environmental law).

This was a risky strategy because, if someone had contested the decision within the statute of limitations (five years; see 28 U.S.C. §2462), then Commonwealth Edison could have needed to undertake a further round of modifications to get the permit and might have had to pay hefty penalties for the delay. As it happened, however, no one sued until 2009, a decade after the last of the modifications had been completed. * * *

Plaintiffs’ contention that a continuing injury from failure to get a preconstruction permit (really, from failure to use BACT) makes this suit timely is unavailing. What these plants emit today is subject to ongoing regulation under rules other than §7475. Today’s emissions cannot be called unlawful just because of acts that occurred more than five years before the suit began. Once the statute of limitations expired, Commonwealth Edison was entitled to proceed as if it possessed all required construction permits. That’s the point of decisions such as United Air Lines, Inc. v. McMann, 434 U.S. 192 (1977), and Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), which hold that enduring consequences of acts that precede the statute of limitations are not independently wrongful. AFFIRMED

Posted by Marcia Oddi on July 8, 2013 02:53 PM
Posted to Ind. (7th Cir.) Decisions