Vandam Estate v. Mid-America Sound

Jan 14 2015, 9:50 am

FOR PUBLICATION

ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:

ANTHONY W. PATTERSON GREGORY F. ZOELLER
Lebanon, Indiana Attorney General of Indiana

ROBERT S. PECK THOMAS M. FISHER
Washington, D.C. Solicitor General

HEATHER HAGAN MCVEIGH
Deputy Attorney General
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA
VanDam Estate v. Mid-America Sound, et al., ) Consolidated
49D02-1111-CT-044823-001, )
Urschel v. Mid-America Sound, et al., )
49D02-1111-CT-044823-002, )
Brennon v. Mid-America Sound, et al., )
49D02-1111-CT-044823-003, ) No. 49A04-1405-CT-207
Porter v. Mid-America Sound, et al., )
49D02-1111-CT-044823-004, )
Santiago Estate v. Mid-America Sound, et al., )
49D02-1111-CT-044823-005, )
BigJohny Estate v. Mid-America Sound, et al., )
49D02-1111-CT-044823-006, )
Vinnegar v. Mid-America Sound, et al., )
49D02-1111-CT-044823-007, )
Indiana Farmers v. Dave Lucas Ent., et al., )
49D02-1111-CT-044823-008. )

APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Theodore M. Sosin, Judge
Cause No. 49D02-1111-CT-44823

January 14, 2015

OPINION – FOR PUBLICATION
MAY, Judge

Jordyn Polet was injured when the stage collapsed at a concert at the Indiana State

Fair. Polet declined the State’s settlement offer, and the State distributed, to the claimants

who were willing to settle, all the money available under the Indiana Tort Claims Act

(ITCA) cap of five million dollars. After her parents sued the State and others, the State

asserted, as an affirmative defense, that the ITCA made it immune to Polet’s claim.

Polet moved for partial summary judgment on the State’s affirmative defense it was

immune under the ITCA. The trial court denied her motion. Polet argues the limits on the

State’s aggregate tort liability, as applied to her, violate the Indiana Constitution’s open

courts and equal privileges guarantees. We affirm.

FACTS AND PROCEDURAL HISTORY1

Before a concert at the Indiana State Fair in 2011, there was severe weather and the

stage roof collapsed, causing a number of deaths and injuries. Some of the victims sued

the State of Indiana, the Indiana State Fair Commission, the Indiana State Police

(collectively, “the State”), and various private entities. Ind. Code § 34-13-3-4 provides

that when a governmental entity or employee is not immune from liability, the combined

aggregate liability of all governmental entities and of all public employees is capped at

seven hundred thousand dollars for injury to or death of one person in any one occurrence

1
We heard oral argument December 15, 2014 in Indianapolis. We commend counsel on the quality of
their advocacy.

2
and at five million dollars for injury to or death of all persons in that occurrence.

The five million dollar limit was made available to settle the victims’ claims. Polet

was offered $1690.75, which she declined. She was the only claimant who did not settle.

The other sixty-four claimants accepted the State’s settlement offers, and those settlements

exhausted the five million dollar cap.

The following year the legislature made available an additional six million dollars

to compensate the victims, but it specified the money was available only to victims who

had already released the State from liability: “To receive a distribution under this chapter

for an occurrence, an eligible person must have already released all governmental entities

and public employees from any liability for loss resulting from the occurrence.” Ind. Code

§ 34-13-8-6. Polet was therefore not eligible for any of that money either.

The trial court determined the statutory liability cap did not violate Polet’s

constitutional rights, and it denied her motion for summary judgment.

DISCUSSION AND DECISION

Summary judgment is appropriate only when there are no genuine issues of material

fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule

56(C). On review of a summary judgment, we face the same issues that were before the

trial court and follow the same process. Owens Corning Fiberglass Corp. v. Cobb, 754

N.E.2d 905, 908 (Ind. 2001). The party appealing from a summary judgment has the

burden of persuading us the grant or denial of summary judgment was erroneous. Id. When

a trial court grants summary judgment, we carefully scrutinize that determination to ensure
3
a party was not improperly prevented from having its day in court. Id. On a motion for

summary judgment, all doubts as to the existence of material issues of fact must be resolved

against the moving party. Id. at 909. All facts and reasonable inferences from those facts

are construed in favor of the nonmoving party. Id. If there is any doubt as to what

conclusion a jury could reach, then summary judgment is improper. Id.

When a statute is challenged as violating the Indiana Constitution, our standard of

review is well settled. A statute is presumed constitutional until the party challenging its

constitutionality clearly overcomes the presumption by a contrary showing. Sims v. United

States Fid. & Guar. Co., 782 N.E.2d 345, 349 (Ind. 2003). If a statute has two reasonable

interpretations, one constitutional and the other not, we will choose the interpretation that

will uphold the constitutionality of the statute. Id. We do not presume the General

Assembly violated the constitution unless the unambiguous language of the statute so

mandates. Id. A reviewing court should nullify a statute on constitutional grounds only

where such result is clearly rational and necessary. Id.

1. Open Courts

Ind. Const. art. I, § 12 provides: “All courts shall be open; and every person, for

injury done to him in his person, property, or reputation, shall have remedy by due course

of law. Justice shall be administered freely, and without purchase; completely, and without

denial; speedily, and without delay.” The application of the ITCA liability cap to Polet did

not violate the open courts clause.

There is no right under the open courts clause to any particular cause of action and
4
the legislature may create, modify, or abolish a particular cause of action. Smith v. Indiana

Dep’t of Correction, 883 N.E.2d 802, 810 (Ind. 2008). But to the extent there is an existing

cause of action, the courts must be open to entertain it. Id. The constitution does not

preclude the General Assembly from modifying or eliminating a common law tort, but

Section 12 requires legislation that deprives a person of a complete tort remedy must be a

rational means to achieve a legitimate legislative goal. McIntosh v. Melroe Co., a Div. of

Clark Equip. Co., 729 N.E.2d 972, 979 (Ind. 2000). The ITCA aggregate liability cap is a

rational means to achieve a legitimate legislative goal, and we cannot find its application

to Polet unconstitutional.

Polet characterizes herself as “a claimant with a valid, accrued cause of action

authorized by statute,” but who “has no practical means of asserting it” just because she

declined a settlement offer she felt was inadequate and because the State paid the maximum

amount of its liability to others. (Plaintiff-Appellant’s Opening Br. (hereinafter “Polet

Br.”) at 12.)

We note initially the aggregate liability caps in the ITCA have been found

constitutional: “The legislative purpose behind the liability limitations was to protect the

financial integrity of a governmental entity, and this statutory provision cannot be deemed

repugnant to the constitution merely because it restricts the amount of damages available

to the Class.” In re Train Collision at Gary, Ind. on Jan. 18, 1993, 654 N.E.2d 1137, 1149

(Ind. Ct. App. 1995), reh’g denied, trans. denied.

“Article I, Section 12 does not specify any particular remedy for any particular
5
wrong. Rather, it leaves the definition of wrongs and the specification of remedies to the

legislature and the common law.” Cantrell v. Morris, 849 N.E.2d 488, 499 (Ind. 2006). It

is within the legislature’s authority to expand or restrict the scope of sovereign immunity

through the ITCA. State v. Rendleman, 603 N.E.2d 1333, 1337 (Ind. 1992). The

Rendleman Court held the law enforcement immunity section of the Act was a

constitutional exercise of legislative authority. Id. That the immunity section “may result

in Rendleman bearing the full economic burden of his injuries and damages without the

ability to insure himself against such losses, is a matter of policy for the legislature, not

this Court, to address.” Id. at 1333.

Because the open courts clause does not prevent the legislature from modifying or

restricting common-law rights or remedies, the State argues Polet has “no protectable

interest” in a tort claim against the State. (State’s Br. at 12.) The State asserts Polet’s

“right to bring her claim is subject to the Act’s restrictions,” including the liability cap. (Id.

at 15.) The State notes Polet was not precluded from pursuing a claim; in fact, she did and

the State offered her a settlement. It was not lack of access to the courts that prevented

Polet’s recovery – it was the statutory limit on the State’s liability.

Even if the effect of the application of the ITCA’s aggregate cap left Polet “no

practical means of asserting” her tort claim, the restriction on Polet’s right to bring her

claim did not violate the open courts clause. There is a right of access to the courts, and

the legislature cannot unreasonably deny citizens the right to exercise this right. Martin v.

Richey, 711 N.E.2d 1273, 1283 (Ind. 1999). Nor can the legislature deprive a person of a
6
complete tort remedy arbitrarily and unreasonably, consistent with the protections Section

12 affords. Legislation that restricts such a right must be a rational means to achieve a

legitimate legislative goal. Id. And see McIntosh v. Melroe Co., a Div. of Clark Equip.

Co., 729 N.E.2d 972, 979-80 (Ind. 2000) (Section 12 requires that legislation that deprives

a person of a complete tort remedy must be a rational means to achieve a legitimate

legislative goal).

One of the main concerns the ITCA was intended to address was protection of the

public treasury from a multitude of tort lawsuits. Harrison v. Veolia Water Indianapolis,

LLC, 929 N.E.2d 247, 253 (Ind. Ct. App. 2010). See also Jack M. Sabatino, Privatization

and Punitives: Should Government Contractors Share the Sovereign’s Immunities from

Exemplary Damages?, 58 Ohio St. L.J. 175, 199 (1997) (noting the concept of sovereign

immunity “may be substantially predicated on protecting the public treasury, and thereby

the taxpayers at large, from what could be enormous monetary liabilities if government

were held legally accountable in civil litigation in exactly the same fashion as private

entities and persons”). The aggregate liability cap is a rational means to achieve the

legitimate legislative goal of protecting the public treasury. See Thompson v. State, 425

N.E.2d 167, 176 (Ind. Ct. App. 1981) (there is a rational basis to the legislature’s attempt

to protect the public treasury from unlimited liability in tort).

2. Equal Privileges

Ind. Const. Art. I, § 23 provides “[t]he General Assembly shall not grant to any

citizen, or class of citizens, privileges or immunities, which, upon the same terms, shall not
7
equally belong to all citizens.” Where a statute grants unequal privileges or immunities to

different classes of persons, proper constitutional inquiry under Section 23 requires

consideration of two factors. First, the disparate treatment accorded by the legislation must

be reasonably related to inherent characteristics that distinguish the unequally treated

classes. Second, the preferential treatment must be uniformly applicable and equally

available to all persons similarly situated.2 Collins, 644 N.E.2d at 78-79. The test for a

rational relationship for legislative classifications under Article 1, § 23 is very similar to

the requirement of rationality under Article 1, § 12 discussed above. Morrison v. Sadler,

821 N.E.2d 15, 35 (Ind. Ct. App. 2005).

The protections assured by Section 23 apply fully, equally, and without diminution

to prohibit any and all improper grants of unequal privileges or immunities, including not

only those grants involving suspect classes or impinging upon fundamental rights but other

such grants as well. Collins, 644 N.E.2d at 80. In determining whether a statute violates

Section 23, we exercise substantial deference to legislative discretion. Id.

The considerations embodied in the first factor focus on the nature of the

classifications of citizens on which the legislature is basing its disparate treatment. Where

the legislature singles out one person or class of persons to receive a privilege or immunity

not equally provided to others, such classification must be based on distinctive, inherent

characteristics that rationally distinguish the unequally treated class, and the disparate

2
As we find no disparate treatment that raises a section 23 concern, we do not address whether any
“preferential treatment” was “uniformly applicable and equally available to all persons similarly situated.”
8
treatment accorded by the legislation must be reasonably related to such distinguishing

characteristics. Id. at 78-79.

Legislative classification becomes a judicial question when the lines drawn appear

arbitrary or manifestly unreasonable. Id. If the classification is based on substantial

distinctions with reference to the subject matter, we will not substitute our judgment for

that of the legislature; nor will we inquire into the legislative motives prompting such

classification. Id.

Polet characterizes the “class of citizens” she is in as persons who are victims of the

“[S]tate’s negligence that results in injuries to multiple persons” as opposed to “persons

who are the sole victims of the [S]tate’s negligent acts.” (Polet Br. at 13.) When there are

many victims, none can be eligible for damages at the individual cap amount of seven

hundred thousand dollars. The disparate treatment between a small group of injured

persons and a large group violates the first prong of the Collins analysis, Polet says, because

it is not reasonably related to inherent characteristics that distinguish the unequally treated

classes. She asserts no such inherent characteristics distinguish claimants injured by

themselves from claimants injured along with numerous other persons, nor is there

anything that distinguishes Polet’s claim from that of anyone else who was injured in the

stage collapse “that would justify complete foreclosure of her claim.” (Polet Br. at 15.) “It

is the claim, not any innate characteristic of the person, that defines the class.” McIntosh,

729 N.E.2d at 981.

We note initially that nothing in the ITCA classifies claimants or “promises
9
recovery to some while denying it to others.” (State’s Br. at 20.) The State characterizes

Polet’s proposed classification as just “an incidental effect of the Act,” which treats all

claimants the same, not differently. Id. at 21. In limiting the amount recoverable by

individual and by incident, the ITCA applies equally to all claims and all incidents, and

both categories Polet defines are subject to the individual and aggregate caps. We therefore

cannot find there is a classification in the case before us that implicates the equal privileges

clause.

We acknowledge that in Estate of McCall v. United States, 134 So. 3d 894 (Fla.

2014), the Florida Supreme Court found unconstitutional the classification of tort claimants

when there are multiple victims rather than a single victim. Even if we were to recognize

such a classification in Indiana, its application would not violate the Indiana equal

privileges clause.

Florida’s statutory cap on wrongful death noneconomic damages in medical

negligence actions provided for a limit of five hundred thousand dollars per claimant. “The

total noneconomic damages recoverable by all claimants from all practitioner defendants

under this subsection shall not exceed $1 million in the aggregate.” Fla. Stat § 766.118(2).

The McCall Court determined the statutory cap on wrongful death noneconomic

damages imposed “unfair and illogical” burdens on injured parties when an act of medical

negligence gave rise to multiple claimants. Id. at 901. That type of classification was

“purely arbitrary and unrelated to a true state interest.” Id. In such circumstances, medical

malpractice claimants do not receive the same rights to full compensation because of
10
arbitrarily diminished compensation for legally cognizable claims:

[T]he death of a wife who leaves only a surviving spouse to claim the
$250,000 is not equal to the death of a wife who leaves a surviving spouse
and four minor children, resulting in five claimants to divide $250,000. We
fail to see how this classification bears any rational relationship to the
Legislature’s stated goal of alleviating the financial crisis in the medical
liability industry. Such a categorization offends the fundamental notion of
equal justice under the law and can only be described as purely arbitrary and
unrelated to any state interest. Further, the statutory cap on wrongful death
noneconomic damages does not bear a rational relationship to the stated
purpose that the cap is purported to address, the alleged medical malpractice
insurance crisis in Florida.

Id. (quoting St. Mary’s Hospital, Inc. v. Phillipe, 769 So.2d 961, 972 (Fla. 2000), reh’g

denied) (emphasis supplied by the McCall Court).

The dual-cap system in Indiana has the same effect, Polet argues, because it is

inherently discriminatory when applied without regard to the number of claimants who are

entitled to recover. No inherent characteristic of the class justifies the differential treatment

of identical claims. The State’s consent to be sued, as represented by the ITCA, therefore

is not uniformly applied and available to all qualified claimants, as required by Collins.

McCall is distinguishable. There, the distinction between single claimant and

multiple-claimant classes had no rational relationship to the legislature’s goal of alleviating

a purported crisis in the medical liability insurance industry. The aggregate cap in the

ITCA, by contrast, does bear a rational relationship to the legislative goal of protecting the

public treasury against unlimited tort liability. The ITCA’s aggregate cap does not classify

tort victims, but only occurrences, and the legislature may properly decide that occurrences

that generate over five million dollars in liability place too great a burden on the treasury.
11
 CONCLUSION

The application of the ITCA aggregate liability cap to Polet did not violate the open

courts clause of the Indiana constitution, nor was Polet in a class of persons treated

unequally compared to other claimants seeking relief under the ITCA. We accordingly

affirm.

Affirmed.

VAIDIK, C.J., and FRIEDLANDER, J., concur.

12