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Recently, the Indiana Supreme Court decided that a business that loses customer traffic due to a State highway expansion project is not entitled to compensation.1 In State of Indiana v. Kimco of Evansville, Inc., the State took, by eminent domain, a strip of land in front of a shopping center to expand a state highway.2 As a result, southbound drivers could not longer access the shopping center through one of the main entrances and the shopping center lost the ability to widen or change the main entrance in the future.3 The State paid the shopping center for the strip of land, but refused to compensate the shopping center for “consequential damages” resulting from the reduced customer flow.4

The Court held that under Indiana law, the physical taking of the strip of land and the State’s “coincident roadway improvements” were two distinct governmental actions.5 In this case, the reduction in customer traffic to the shopping center did not qualify as a taking.6 The Court acknowledged a compensable taking would have occurred had the state project highway completely eliminated all points of access to the shopping center.7 However, in this case, the highway project did not eliminate access to the main entrance for northbound drivers and there was another access point for southbound drivers.8 Finally, the Court explained that commercial property owners do not have property rights in the “free flow of traffic” past their properties nor do they have a right to “unlimited access” to adjacent property at any point along a State highway.9 Thus, the State’s “coincident roadway improvements” that reduced customer flow and revenues to the shopping center did not constitute a compensable taking.10

Erin Casper Borissov was an associate (now partner) at Parr Richey Frandsen Patterson Kruse LLP, with offices in Indianapolis and Lebanon practicing in the areas of energy and telecommunications law and corporate law.

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On July 14, 2009, the Indiana Court of Appeals issued an opinion in a case affecting Indiana municipal law, Board of Commissioners of Hendricks County v. Town of Plainfield, addressing whether a town had proper standing to ask for declaratory judgment to validate their own ordinance. The Court also addressed whether a town may exercise storm water jurisdiction and whether the town could charge storm water fees for property that was outside the corporate boundaries of the municipality.

On July 24, 2006, the Board of Commissioners (“Commissioners”) of Hendricks County adopted Ordinance No. 2006-15 (“County Ordinance”), which created a county storm water management board pursuant to Indiana law for the purpose of managing storm water. No fee structure was adopted.

Two weeks later, the Town Council of Plainfield (“Plainfield”), a town located in Hendricks County, adopted Ordinance No. 20-2006 (“Town Ordinance”) which established a Storm Water Department for the purpose of implementing storm water conditions and engaging in operation and maintenance activities to comply with both federal and state environmental laws. The Plainfield Town Ordinance authorized the new Storm Water Department “to impose a storm water fee on all property within the sewage works system service area.” The sewage works service area was defined by the Town Ordinance to include all property within the corporate boundaries of the municipality of Plainfield, but also included any property outside the corporate boundaries of Plainfield that used Plainfield’s services.

Robert Daum owned property within Plainfield’s sewage works service area, but outside the corporate boundaries of Plainfield. Plainfield sent notice to Daum stating that he, on behalf of himself and his two businesses, Daum LLC and Daum Trucking, Inc., would have to pay a storm water fee of $182.00 per month starting on September 29, 2006, and that this amount would increase to $364.00 per month on January 1, 2007. Daum paid the monthly bill under protest starting on January 1, 2007.
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This past May, the Indiana Court of Appeals ruled on a municipal annexation case coming out of Madison County. The Indiana municipal law case dealt with whether a county board of commissioners had standing to file a complaint challenging acts of annexation by a town of land in a formerly unincorporated area of the county.

In Indiana, the statutory framework of annexation consists of three stages: Legislative adoption of an ordinance annexing of certain territory and pledging to deliver certain services within a fixed period, an opportunity for remonstrance by affected landowners, and judicial review. Without the filing of a remonstrance, a court is not authorized to grant judicial review. Pursuant to Indiana law, the following code sections specify when a remonstrance may be filed: Ind. Code 36-4-3-11 allows a remonstrance to be filed by landowners in the annexed territory, Ind. Code 36-4-3-15.5 permits owners of land within ½ mile of the annexed territory to appeal the annexation, Ind. Code 36-4-3-16 allows property tax payers within the annexed territory to file a complaint against the municipality if it fails to implement the fiscal plan associated with the annexation, and Ind. Code 36-4-3-17 allows property owners on the border of a municipality to file a petition seeking disannexation with the works board of the municipality.

This dispute began when Madison County (“Madison”) approved the Summerbrook Planned Unit Development, which was to be developed by D.B. Mann Development, Inc, (“Mann”) on June 6, 2000. Per the approval of Madison, Mann was to pay fire service fees of up to $400,000 to Green Township at the time Summerbrook went through secondary review.

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The Indiana Court of Appeals recently reviewed the enforceability of a three-year, 50-mile radius non-compete agreement for a physician in Mercho-Roushdi-Shoemaker-Dilley Thoraco-Vascular Corporation v. Blatchford, 900 N.E.2d 786 (Ind. Ct. App. 2009). Indiana business lawyers and their clients will benefit from the clarification offered by the Court. The case is noteworthy because the court held the non-compete agreement to be unenforceable, not because of the enormous geographical area, but solely because the particular physician was uniquely qualified to provide cardiovascular services in Terre Haute and the patients in Terre Haute would be harmed if the court enforced the non-compete clause.

Mercho-Roushdi-Shoemaker-Dilley Thoraco-Vascular Corporation (“MRSD”) is a physician group practice that provides cardiovascular medical services in both Indianapolis and Terre Haute. Blatchford was a shareholder of MRSD and a cardiovascular surgeon employed by MRSD who signed non-compete agreements pursuant to both his shareholder agreement and his employment agreement. Both non-compete agreements prohibited Blatchford from competing with MRSD or performing cardiovascular medical services for three years within a 50-mile radius around Terre Haute and a 50-mile radius around Indianapolis. After a dispute arose and MRSD terminated Blatchford’s employment, MRSD brought suit to enforce the non-compete agreement and requested a preliminary injunction to prohibit Blatchford from practicing in Terre Haute.
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The Indiana Court of Appeals has awarded unemployment compensation to an employee who violated a neutral attendance policy, making it clear in a new opinion that absences from work caused by a medical condition do not constitute “just cause” for termination of employment. As a result, an employee terminated because of such absences is likely to be entitled to unemployment compensation, even if the employee is terminated pursuant to a written, uniformly enforced no-fault attendance policy.
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The United States Consumer Products Safety Commission began enforcement on December 19, 2008 of the Virginia Graeme Baker Pool and Spa Safety Act, 15 U.S.C. §8001, which creates a duty of care for all owners and operators of public swimming pools and spas that are fitted with submerged suction drain outlets known as main drains.

The Act requires that all main drains, new and existing, of all sizes are to be protected by devices which prevent entrapment of persons utilizing those pools and which comply with ASME, ANSI, A112.19.8-2007 standards.  The Act also provides for a secondary level of protection if a pool has a single main drain outlet which is not “unblockable” (as defined by the Act) or multiple outlets which are closer than 3 feet center to center.  The Act is to prevent against recognized suction entrapment hazards in pools and spas including hair entrapment, limb entrapment, body suction entrapment, evisceration and disembowelment, and mechanical entrapment (jewelry, swimsuits, etc.).  Sadly, this writer has been involved in a case involving a prolapsed colon caused by the suction of the main drain of a toddler pool.

The additional secondary safety function under the Act could be: disabling the drains (not a great option); drain replacement with a single “unblockable” drain or dual drains at least 3 feet center to center; safety vacuum release system; suction limiting vent system; gravity drainage system; automatic pump shut off; or a catch all approved system.

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On December 13, 2006, the Indiana Court of Appeals reviewed the statute of limitations applicable to claims of accountant malpractice.  In so doing, it also considered whether the accountant’s “continuing representation” after the client’s financial harm became known should postpone commencement of the limitations period for a claim against the accountant.

In this case the court upheld summary judgment in favor of the accounting firm, but it held that in some situations an accountant’s representation of the client in attempting to adjust or resolve the harm will postpone commencement of the limitations period.

The facts were that the plaintiff roofing contractor was a longtime client of the defendant accounting firm.  The representation included compilation of annual financial statements, preparation of tax returns, and assistance to and training of the client’s in-house accounting manager.  In March 2003 the client discovered its accounting manager had been embezzling company funds.  In July 2004 the client sued the firm alleging its negligence contributed to the loss.  The trial court entered summary judgment for the accounting firm on the grounds the suit was not timely filed.

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Are your clients envious of new businesses moving to town and receiving tax abatement on a new plant or equipment?  They, too, often upgrade or expand their business building or install new equipment.  Why shouldn’t they receive a similar credit for their investment?  Well, now they can.

Starting in 2006 taxpayers who qualify can obtain a “capital investment deduction” on their property taxes by notifying local authorities and demonstrating their new business investment has either created or retained at least one local job.

The purpose of the new deduction is to provide an incentive for businesses to invest in new or renovated plant or manufacturing equipment before March 2009.  If any new employment is created or existing employment is retained, a taxpayer may receive a three-year phase-in of the property taxes from the increased assessment.  The first-year deduction is 75% of the increase in assessed value, the second-year is 50% of the increase, and the third-year is 25%.  The maximum available deduction for both real estate improvements and personal property is $2 million.

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