Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

The Indiana Tort Claims Act (“ITCA”) governs tort claims against local governmental entities. The ITCA requires that notice of a claim must be provided to the governing body of the governmental entity, and to the Indiana Political Subdivision Risk Management Commission within 180 days of the complained injury.

Strict compliance with the notice requirements is not mandatory. Instead, a plaintiff need only substantially comply with the ITCA’s requirements. Failure to substantially comply typically results in the claim being barred; but the claim may still proceed if the governmental entity or its agent induces the plaintiff to believe that compliance with the notice requirement is unnecessary.

The Indiana Court of Appeals recently addressed that issue in Madison Consolidated Schools v. Trisha Thurston. In that case, a student was riding a school bus when it struck a guardrail, causing injuries to the student. The student’s mother and the school’s insurer agreed to postpone discussion of settlement until medical treatment had been completed. The insurer indicated that a lawsuit would need to be filed within a certain time, but failed to mention the formal notice requirements of the ITCA. The mother failed to provide formal notice, and filed suit less than two years thereafter. While the school argued that the claim was time-barred, the mother argued that notice was unnecessary since the insurer had recommended waiting for medical care to conclude before any discussion of settlement and never informed her that a tort claim notice was required.

The Court of Appeals determined that cases may proceed under the ITCA under the doctrine of “equitable estoppel”. A plaintiff wishing to base a claim on equitable estoppel must show: (1) lack of actual and constructive knowledge of the facts in question; (2) reliance upon the conduct of the opposing party; and (3) action based on that conduct that changed the plaintiff’s position. While government entities are not generally subject to claims based on equitable estoppel, the Court concluded that those claims do have merit when it is clear that the agents of the governmental entity made representations which induced the Plaintiff to reasonably believe that formal notice was not required. The Court in the Thurston case found that there was evidence of multiple communications between the school’s insurer and the student’s mother and that the notice requirement was never raised or discussed. The Court, therefore, found that whether the student’s mother was excused from complying with the notice requirements of the ITCA based on the theory of equitable estoppel was a question to be decided by the jury at trial.

In light of this case, government entities and their agents must be careful when discussing potential claims with would-be plaintiffs.

 

This article constitutes a brief summary of the notice requirement under the ITCA. The information provided does not constitute legal advice, nor does it establish an attorney/client relationship. If you have any questions regarding the contents of this article, please contact the attorneys at Hodges and Davis.

 

Hodges & Davis- August 2020

As of July 1, 2020, certain changes went into effect regarding Indiana’s Probate and Trust statutes pursuant to Senate Enrolled Act 50.  Once such change was Indiana Code § 29-1-7-3 regarding the devolution of real property of a decedent. This statute may provide an avenue for distributees to transfer real property without opening a formal Probate Estate.

Under Indiana Code § 29-1-7-23, when a person dies, the person’s real property passes to persons whom it is devised to by their will, or in the absence of a will, to the person’s heirs at law.  This passing of real property is, however, subject to the possession of the property by a personal representative if a formal Probate Estate is opened, the election of the surviving spouse and the expenses of administration and the payment of other claims and allowances.

Under the changes to Indiana Code § 29-1-7-23, a person can sign and record a devolution affidavit to establish prima facie evidence of the passage of title to the real property.  Under the changes to the statute, that affidavit may contain the following information: (i) the decedent’s name and date of birth; (ii) a statement of the affiant’s relationship to the decedent; (iii) a description of how the decedent acquired an ownership or leasehold interest in the real property including deeds or other instruments recorded in the Office of the Recorder; (iv) a legal description of the real property as it appears in deeds or other instruments; (v) the names of all distributees known to the affiant, (vi) an explanation of how each interest in the property was acquired; and (vii) how any fractional interest to each distributee was calculated and how interests in the real property will be apportioned.  The devolution affidavit can then be presented to the county auditor where the real property is located, and then is also recorded with the Office of the Recorder in the same county.

A devolution affidavit, properly filed and recorded in good faith, may be relied upon as prima facie evidence of transfer of the decedent’s title to the real property interest, if the affidavit is filed and at least seven (7) months have elapsed since the decedents death, the clerk of a court has not issued letters testamentary or letters of administration to a court appointed personal representative within the time limits to open a formal Probate Estate and the court has not issued an order otherwise preventing this chapter from applying to the real property.

Several of the changes to the statute that took effect on July 1, 2020, were changes that clarified information in the statute and the affidavit procedure.  There were several changes that are worth noting.  First, the addition to the word “may” regarding the information that is contained in the devolution affidavit was a significant change. Whereas, the prior statute required certain information to be included in the devolution affidavit, the changes ensure that the affidavit can still be filed absent some of the information that used to be mandatory.

Additionally, one of the big changes to the statute that is of importance to note is that the devolution affidavit no longer requires a statement in the affidavit that seven (7) months has elapsed since the decedent’s death.  This means that a devolution affidavit could be filed prior to seven (7) months from the decedent’s death.  In light of the statute still containing the provision for reliance on the devolution affidavit after seven (7) months from the decedent’s death, it still may be beneficial to wait until after seven (7) months to file and record the affidavit.

There is no one-size-fits-all approach to a formal Probate Estate or to probate substitutes such as a devolution affidavit.  Each individual’s situation is different and unique.  If you are interested in learning whether a devolution affidavit may be used in lieu of a formal Probate Estate, please contact Benjamin T. Ballou or Carl J. Hall at Hodges and Davis for more information.

 

This article provides a brief summary of the changes to Indiana Code § 29-1-7-23 regarding devolution affidavits. The information contained herein does not constitute legal advice, nor does it establish an attorney/client relationship.

 

Hodges and Davis, P.C. – August 2020

Benjamin T. Ballou | Hodges & Davis Law Firm Northwest Indiana

In 1989, the Indiana Court of Appeals held that a lease for a safe deposit box is sufficient to establish a right of survivorship, if the language of the agreement specifically provides for that arrangement.

In Matter of Estate of Langley, two women, Langley and Highman, rented a safe deposit box following nearly 40 years of friendship.  In renting the box, Langley and Highman signed a contract that provided: “all right of access thereto shall belong exclusively to the survivor or survivors.”  Following Langley’s death, the personal representative of Langley’s Estate obtained a restraining order against Highman to prevent her from accessing the safe deposit box and asserted that the box was the property of the Estate.

This case thus presented a single issue: Whether a lease contract that specifically provided for a right of survivorship between Highman and Langley was sufficient to create such a right.

The Court of Appeals held that the lease was sufficient to create a right of survivorship.

The Court adopted a “contract” theory regarding the lease. To that end, the Court was careful to distinguish between agreements that specifically indicate an intention to create rights of survivorship, and those that do not.  Since the lease agreement contained such specific language, and Highman and Langley signed the document, the Court held that the contents of the safe deposit box passed to Highman upon Langley’s death.

By contrast, the Court of Appeals has also concluded that gun collections are not “household goods”, and therefore may not be subject to survivorship rights under state law.  In In re Estate of Roberts, a couple had amassed a sizeable gun collection of nearly 300 items. Both spouses died, but the Court had to decide whether the gun collection passed to the wife’s estate upon the prior death of her husband.

Under Indiana Law, “household goods” pass to the surviving spouse upon the others’ death.  “Household goods” are those items with which a home is equipped which are necessary for a person to live in a “convenient and comfortable manner.”  Since the gun collection was so large, not used for protection, and stored out of sight in the basement, the Court concluded that the collection was not imbued with a right of survivorship.

The key takeaway here is that people who wish to create a right of survivorship in the contents of a safe deposit box must ensure that the bank’s safe deposit contract language specifically indicates that intention.  In other words, agreements that merely allow for a surviving co-tenant to access the contents of the safe deposit box are insufficient to create survivorship rights.  By contrast, a large gun collection may not be subject to rights of survivorship unless the guns are demonstrably used for self-defense, in which case they may constitute “household goods”, and pass to a surviving spouse.

 

This article constitutes a brief summary regarding rights of survivorship.  The information provided does not constitute legal advice, nor does it establish an attorney/client relationship.  If you have any questions regarding the contents of this article, please contact Hodges and Davis attorneys Benjamin T. Ballou or Carl J. Hall.

 

Hodges & Davis- July 2020

Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

On March 18, the Indiana General Assembly passed Senate Enrolled Act No. 249.  That Act added I.C. 35-31.5-2-235.2 which addresses the exploitation of dependent and endangered adults, and the penalties that attach thereto.

The Enrolled Act prohibits a “person in a position of trust” from engaging in self-dealing with, or exploitation of, the property of an endangered adult or a dependent person.  The Act defines a “person in a position of trust” as one who has or has had the care of an endangered adult or a dependent, whether that care was assumed voluntarily or pursuant to a legal obligation.  A person may also fall under this definition if they have had a professional relationship with an endangered adult or a dependent.

A person engages in “self-dealing” if they use the property of another person to gain a benefit that is “grossly disproportionate” to the benefits received by the dependent or endangered adult.  Further, a person engages in “exploitation” if they exert control over an endangered adult or dependent’s personal property for their own personal gain, and not for the profit of the endangered person.

If a person engages in self-dealing or exploitation, that offense constitutes a Class A misdemeanor.  The offense elevates to a Level 6 felony if the person has a prior unrelated conviction.

 

This article provides a brief summary of Senate Enrolled Act No. 249. The information contained herein does not constitute legal advice, nor does it establish an attorney/client relationship. If you have any questions with regard to the new law, please contact the attorneys at Hodges and Davis.

Hodges & Davis- June 2020

On July 1, 2020, a new law will take effect that bans the use of mobile phones while operating a motor vehicle, subject to a few narrow exceptions.  The law provides that a person may not hold or use a cellular device while operating a moving motor vehicle.

The following actions are excepted from the ban on the use of mobile phones. A person may hold or use a cell phone to call 911 in an emergency.  A person may also use their phone in conjunction with a Bluetooth or “hands-free” device.  Finally, a person may also hold a phone while their vehicle is at a complete stop.

The new law takes effect as a growing number of states wish to draw attention to the hazards presented by texting and driving. Currently, 21 states have similar laws on their books.  The statute does not directly address penalties.  All drivers should be prepared to comply with the new law by July 1, 2020.

 

This article provides a brief summary of Indiana’s new Distracted Driving law. The information contained herein does not constitute legal advice, nor does it establish an attorney/client relationship. If you have any questions with regard to the new law, please contact the attorneys at Hodges and Davis.

Hodges & Davis- June 2020

Benjamin T. Ballou | Hodges & Davis Law Firm Northwest Indiana

In the recent case of In re the Name Change of Jane Doe, the Indiana Court of Appeals held that state law does not require that a person seeking a name change prove United States citizenship.

At issue in the appeal was the petition of Jane Doe and R.A.C. (petitioners) to change their legal name pursuant to Indiana Code § 34-28-2. The trial court found that it could have easily granted their request, but for petitioners’ lack of United States citizenship. The trial court interpreted I.C. § 34-28-2-2.5(a)(5) to require proof of citizenship in order to grant a name change petition.

The Court of Appeals disagreed with the trial court’s interpretation of the statute. It determined that requiring proof of citizenship conflicted with “the history of liberally allowing non-fraudulent name changes in Indiana.” The Court of Appeals opted to interpret the statute broadly, and allow name changes unless there is evidence of fraudulent intent.

The statute requests that a name change petitioner produce certain information. Among those are: date of birth; current address; a driver’s license; a list of previous names; proof of citizenship; and a passport. The Court of Appeals interpreted the language of the statute to be permissive. In other words, if a person is unable to provide certain information, they are not required to provide it.

So what is the practical effect of this recent decision?

First and foremost, one need not be a United States citizen to legally change his/her name. The decision creates wide latitude for persons who wish to change their name. Indeed, a petitioner need only show that they lack a fraudulent intent for the name change, and a court should grant the petition.

The predicted effect of this ruling is that if a person wishes to change his/her name, the amount of required personal information is limited under the Court’s interpretation. So for people who wish to change their legal name, only the information that is available to them must be provided.

 

This article is a brief summary of the Indiana Court of Appeals’ recent decision in In re the Name Change of Jane Doe. The information provided does not constitute legal advice, nor does it establish an attorney/client relationship. If you have any questions regarding the contents of this article, please contact Benjamin T. Ballou or Carl J. Hall.

 

Hodges & Davis- May 2020

Shawn D. Cox | Hodges & Davis Law Firm Northwest Indiana

We are experiencing an economic disruption unlike any in our lifetimes. With the wholesale interruption of many business segments, market volatility, and the current stay-at-home order, it is difficult to get a handle on the long-term impact of COVID-19 on our economy and the small businesses that are a fundamental part of that economy. To protect our nation’s small businesses, the Federal government is providing stimulus checks to every household, and is also offering several SBA loan programs as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

While Indiana has placed a moratorium on residential foreclosures and evictions, and nearly all civil actions and sheriff’s sales are delayed, there is no current prohibition on business foreclosures and evictions. The temporary delay in legal proceedings moving forward may allow for some breathing room for companies, but when a business is prohibited from doing business with its customers, how will it pay its accrued rent and other expenses when we return to some semblance of normal? While the media has largely focused on the economic stimulus elements of the CARES Act, it also contains amendments to the Bankruptcy Code that expand the availability of small business Chapter 11 bankruptcy relief to more small businesses, in the event SBA loans and lender workouts do not provide the relief necessary to weather the storm.

Traditionally, Chapter 11 bankruptcies have been a difficult last resort for small businesses; – having been costly and taking years to resolve. Unless secured creditors are wiling to cooperate and compromise with small business debtors, the result of Chapter 11 is often an unsuccessful dismissal or a liquidation. In a standard Chapter 11, at least one “impaired” group of creditors must approve a plan of reorganization, and under the “absolute priority rule,” it can be difficult for owners to satisfy conditions necessary to retain their ownership interests in connection with reorganization.

The Small Business Reorganization Act of 2019 (the “SRBA”) became law in August 2019 and went into effect on February 19, 2020. The SBRA streamlines the Chapter 11 process for eligible individuals and small businesses through a new Subchapter V of Chapter 11. Few Subchapter V cases have been filed to date, but the hope is that SRBA will make Chapter 11 a viable option for eligible small businesses. Under the CARES Act, the debt ceilings for SRBA debtor eligibility have been temporarily increased, for one year, from $2,725,625 to $7,500,000, expanding the availability of Subchapter V to small business debtors that are considerably leveraged, including companies that have financed a fleet of vehicles, significant equipment and inventory, or commercial real estate. Under the SRBA, at least fifty percent (50%) of the debt must be related to the operation of a business. Contingent, non-liquidated claims, as well as intracompany and other “insider” debt are excluded from the debt ceiling calculation. Debtors comprised solely of a single real estate asset (i.e., a shopping center or apartment complex) are not eligible for Subchapter V under the SRBA.

Although a Subchapter V debtor maintains “debtor-in-possession” status unless revoked, a case trustee is appointed in each case, and that trustee plays a role much like a Chapter 13 trustee: the trustee collects and distributes plan payments, reviews the Debtor’s finances, participates in significant hearings, and is to play a key oversight rule in reviewing whether a plan should be confirmed.

Subchapter V seeks to streamline and reduce the costs of a Chapter 11 case. Absent unusual circumstances, there is no creditor’s committee. Quarterly fees are not owed to the United States Trustee, although the case trustee will be paid compensation after confirmation. Unlike other Chapter 11 cases, other administrative expenses (such as attorney fees) need not be paid in full upon confirmation and can instead be paid over the life of the plan of reorganization.

While extensions of time are allowed under some circumstances, Subchapter V anticipates the prompt filing of a plan, within ninety (90) days following the order for Chapter 11 relief. The mostly duplicative disclosure statement, which resembles a securities offering, is eliminated, although a plan must still contain financial projections and a liquidation analysis. Plan requirements are a hybrid of Chapter 13 and Chapter 11 principles. A small business debtor must commit all “disposable income” to plan payments (or property equivalent to disposable income) for three (3) to five (5) years, and the plan must be “fair and equitable” to each class of creditors. A creditor must still receive no less value than it would have received in a Chapter 7 liquidation. The “absolute priority rule” applicable in other Chapter 11 cases, which generally requires unsecured creditors to be paid in full before shareholders or members can retain their pre-bankruptcy interests, is not applicable to small business debtors and is a vital aspect of Subchapter V.

Unlike other Chapter 11 cases, a Subchapter V small business plan does not require the approval of an impaired class of creditors. The ability to receive Bankruptcy Court approval without creditor consent, as in a Chapter 13 case, is of critical benefit to small business debtors, as it will increase the probability of plan confirmation. Even if an impaired class of creditors does not consent to the “cram down” of secured claims to the value of the secured collateral, a plan may be approved. The timing of a small business debtor’s discharge will almost always occur shortly after the successful completion of the plan. Because the absolute priority rule is inapplicable in Subchapter V, it is more likely that small business owners will retain company ownership and control following plan confirmation.

A few other SBRA Act changes are worthy of mention. An individual debtor who qualifies as a small business debtor will be able to modify a residential mortgage for a principal residence, but only if the proceeds of the mortgage were primarily used for small business purposes. And while most provisions of the SRBA benefit debtors, some new restrictions were placed upon preference recovery proceedings, a type of lawsuit often used in Chapter 11 cases to pursue certain pre-bankruptcy creditor payments for the benefit of the bankruptcy estate, a change presumably intended to curtail litigation of questionable value.

Small businesses should not only continue to assess the availability and potential benefit of SBA loans and other stimulus programs available to them, as well as consensual workouts with key creditors, but should also review other available contingencies provided through the CARES Act, including the expanded opportunities for bankruptcy reorganization. Unfortunately, not every small business will qualify for the new loan programs, and borrowers may continue to struggle to recover from significant cash flow interruptions. No small business owner wants to consider a Chapter 11 reorganization, but considering current economic uncertainties, it may be a viable alternative available to prevent closure and liquidation.

Hodges and Davis, P.C. – April 2020

This Article is a brief summary of recent changes to Chapter 11 of the Bankruptcy Code, including the temporary amendments to the SRBA included in the CARES Act. The information provided in this article does not constitute legal advice nor does it establish an attorney/client relationship. Should you have any questions regarding this article, please contact Hodges and Davis attorney Shawn Cox.

Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

On January 1, 2020, a new rule took effect which updated the earnings threshold necessary to exempt executive, administrative or professional employees from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements.

The FLSA requires employers to pay the federal minimum wage to employees who work more than 40 hours per week, and overtime pay of at least 1.5 times the regular rate of compensation.

The FLSA also contains a provision which exempts executive, administrative or professional employees from the minimum wage and overtime pay requirements. To fall under this exemption, an employee must (1) be paid a pre-determined, fixed salary that is not subject to reduction based on quality or quantity of work; (2) meet a minimum specific amount; and (3) perform duties that primarily involve executive, administrative, or professional activity as defined by statute.

The updated rule increases the earnings threshold necessary for employees to fall under the exemption, and allows an employer to count a portion of bonuses or commission towards meeting the threshold. The update will (1) raise the “standard salary level” from $455 per week ($23,660 per year), to $684 per week ($35,568 per year); (2) raise the total annual compensation requirement for “highly compensated employees” from $100,000 to $107,432 per year; and (3) allow employers to count non-discretionary bonuses and commissions paid annually, toward 10 percent of the “standard salary level.”

In other words, while the old rule meant that employers did not have to pay overtime or minimum wage to employees who earned more than $23,660 per year. Under the updated rule, employers have to pay minimum wage and overtime to employees who earn less than $35,568 per year.

The Department of Labor estimates that the update will make an additional 1.3 million workers eligible for overtime pay.

Please note that this Article does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. – January 2020

On July 1, 2018, Indiana joined the 48 other states that allow the enforcement of so called in terrorem clauses in wills and trusts. These clauses, more commonly known as “no contest clauses” are provisions in a will or trust that state if a beneficiary seeks to contest the will or trust, they lose the property they were going to inherit. And now, pursuant to Indiana Code § 29-1-6-2 and Indiana Code § 30-4-2.1-3, these clauses, if included in a will or trust are enforceable by an Indiana court.

The common purpose of no contest provisions in a will or trust document is simply to reduce or eliminate the likelihood that beneficiaries will seek to initiate lengthy and expensive litigation to contest a will or trust. In this respect, a no contest provision can at least give beneficiaries something to think about before filing suit to contest a will or trust. It remains to be seen, however, whether or not the law has deterred these contests.

There are numerous exceptions contained in the statutes that limit the enforcement of no contest clauses in certain factual circumstances. Some notable exceptions include:

(1) An action brought by an executor or other fiduciary who is not a beneficiary;

(2) An action to determine whether a proposed motion or proceeding constitutes a contest;

(3) An action seeking to interpret the construction or interpretation of a will; and

(4) An action brought in “good faith” by the beneficiary.

Whether a no contest provision should be included in your will or trust may be dependent on many variables. If you are interested in having a will or trust prepared, contact the attorneys at Hodges and Davis, P.C. who can help you decide if a no contest provision is right for your will or trust.

Note that this post is only a brief summary of no contest clauses.  It does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. – January 2020

Gregory A. Sobkowski | Hodges & Davis Law Firm Northwest Indiana

Does your home improvement contract comply with Indiana’s Home Improvement Contract Act (“HICA”)? The Act can be found at Indiana Code § I.C. 24-5-11. Its intent is to protect home owners by placing minimum requirements on the contents of home improvement contracts. The law places the burden on the home improvement contractors (not home owners) to use contracts that comply with the mandates of the act.

A home improvement subject to the law includes any alteration, repair, replacement, reconstruction or other modification of residential property. For purposes of the law, a home improvement contract means the written or oral agreement between a home improvement contractor and home owner to make an improvement for which the contract price exceeds $150.00.

Under HICA, home improvement contracts must include:

  • The name of the home owner and the address of the home where the work will be done.
  • The names and phone numbers where the home owner can direct problems and inquiries, as well as an e-mail address maintained by the contractor.
  • The date the contract was submitted to the home owner and, if applicable, any time limit on the home owner’s acceptance of the home improvement contract.
  • A reasonably detailed description of the proposed home improvement(s).
    • However, if there are no specifications provided in the description of the work, a contractor can provide it later, so long as it is provided in a dated, written document prior to any work beginning and the home owner approves the specifications.
  • A statement that announces the approximate starting and completion dates of the home improvement(s).
  • A statement of any contingencies which would materially change the approximate completion date.
  • The contract price.
  • Signature lines for the contractor (or the applicable employees or agents) and for each home owner who is subject to the contract, including a legibly printed or typed version of that signature under each signature.

In addition to these mandatory contract provisions, the statute also requires that:

  • A home improvement contract must be written so each home owner who is a party to the contract can reasonably read and understand it.
  • A completed contract signed by the contractor must be provided to the home owner before the contract is signed by the home owner and before the contractor accepts a down payment for the work
  • The home owner be provided a fully executed copy of the home improvement contract “immediately” after the home owner signs it.
  • The contract must provide the dates each party signed the contract.
  • A modification of a contract must be in writing.

If a contractor fails to comply with the statutory provisions, he or she is subject to a deceptive acts lawsuit, which can be brought by either the Attorney General or a home owner. A home owner can be awarded damages actually sustained, and a court may triple the damage award for a willfully deceptive act. However, an award of treble damages cannot exceed $1,000.00. A court can also award attorney’s fees to a prevailing party and void or limit the application of a contract resulting from the deceptive acts.

In sum, Indiana contractors need to be aware of their duties to owners and tenants before entering into any home improvement agreement over $150.00; and failing to know the law could be costly. Please note that this article is only a brief summary of HICA, not legal advice, nor does it establish an attorney-client relationship. Should you have any specific questions regarding HICA, or any other business planning needs, please do not hesitate to contact Gregory A. Sobkowski at Hodges and Davis, P.C.

Please note that this Article does not constitute legal advice nor does it establish an attorney/client relationship.

Hodges and Davis, P.C. — January 2020