June 29, 2004

Indiana Decisions - Four Supreme Court Decisions Today

Sharon Baker v. Marion County Office of Family & Children (6/29/04 IndSCt) [Family Law]
Shepard, Chief Justice

Mother and Father lost parental rights during a termination proceeding. Their appeal centers on the claim that the trial court did not adequately inquire about their decision to go forward with representation by the same lawyer. They contend that without an adequate demonstration that they understood the consequences of joint representation their right to counsel was violated. They say this right should be judged not by the test of Strickland v. Washington, so often transplanted from criminal law to parental termination cases, but rather by a standard that would make it easier for parents who lose at trial to gain a second one. We conclude otherwise, seeing the question as one of assuring due process in a setting that is dramatically different from criminal proceedings. * * *

There is nothing to suggest that representation by a single lawyer led to a fundamentally unfair hearing.

Conclusion. We affirm the decision of the trial court.
Dickson, Boehm, and Rucker, JJ., concur.
Sullivan, J., not participating.

Infinity Products, Inc. v. Herbert Quandt (6/29/04 IndSCt) [Trade Secrets]
Shepard, Chief Justice
Four days after T.E. Scott, Inc. fired Herbert Quandt, he began working for Fabri-Tech doing the same sort of work. Infinity Products, T.E. Scott’s successor, eventually sued Quandt and Fabri-Tech alleging that Quandt used stolen trade secrets to lure Infinity customers to Fabri-Tech. The trial court held that Quandt was liable for misappropriating and converting Infinity’s trade secrets and that Fabri-Tech was not.

We first address whether Fabri-Tech was directly liable under Indiana’s Trade Secrets Act ("the Act"). Second, we examine whether Fabri-Tech can be vicariously liable under the Act through the doctrine of respondeat superior. * * *

While Quandt’s disregard of Fabri-Tech’s pricing procedure is suspicious, the state of the evidence was such that the trial court could respectably regard it as inadequate to demonstrate that Fabri-Tech knew or should have known of the misappropriation. As Quandt was not prevented from contacting Infinity’s customers, Fabri-Tech was not prevented from authorizing him to do so. There is no evidence indicating that Fabri-Tech instructed Quandt to use trade secrets to lure Infinity customers away. Based on these facts, neither the trial court’s findings nor judgment is erroneous. The court’s judgment is not contrary to law, and we affirm the trial court on this issue. * * *

As Infinity correctly points out, respondeat superior is a common law doctrine under which liability is imposed by law upon the master for acts done by the servant, regardless of the master’s complicity in the acts. Indeed, it may impose liability even when the master directed the servant to the contrary. Surely, this doctrine must be thought of as conflicting with the uniform act’s requirements [Indiana’s Trade Secrets Act] that a claimant demonstrate that the defendant “knows or has reason to know” that the trade secret at issue was acquired by improper means. [IC 24-2-3-2] It is thus displaced by the provisions of the uniform act. * * *

We conclude that the trial court correctly held that Fabri-Tech could not be held liable absent the proof of scienter required by the uniform act.

Conclusion. We affirm the trial court’s judgment for Infinity against Quandt and its judgment for Fabri-Tech against Infinity.
Sullivan and Boehm, JJ., concur.
Dickson, J., dissents with separate opinion in which Rucker, J., concurs.

* * * The time-honored common law principle of an employer's respondeat superior liability for the acts of an employee done in the scope of employment is not "conflicting law of this state pertaining to the misappropriation of trade secrets." Ind. Code § 24-2-3-1(c). The Uniform Act's requirement that a claimant demonstrate the wrongdoer's scienter does not "conflict" with the imposition of vicarious liability of the wrongdoer's employer. To the contrary, the risk of such liability serves as an incentive for employers to discourage their employees from using misappropriated trade secrets. The doctrine of respondeat superior thus does not conflict with, but rather fosters, the purposes of the act. * * * I would reverse the trial court and find that Fabri-Tech can be held vicariously liable for Quandt's misappropriations done in the scope of employment.
Rucker, J., concurs

Mark R. Passmore v. Multi-Management Services (6/29/04 IndSCt) [Torts; Employment Law]
Shepard, Chief Justice
A nursing home hired a new worker in part on the basis of a favorable recommendation from his former employer. The claim is that this worker assaulted a patient. The patient asserts that the former employer wrongly gave a favorable recommendation and thus should be liable for the injury. The Court of Appeals affirmed summary judgment for the former employer, holding that there is no basis for liability running to patients of other nursing homes. We hold that former employers may be liable for knowing misrepresentation, adopting § 310 of the Restatement (Second) of Torts. * * *

On the other hand, we think it rather obvious that declaring employers liable for negligence in providing employment references will lead universally to employer reluctance to provide any information other than name, rank, and serial number. Only those employers dull-witted enough to issue free-wheeling assessments without calling their lawyers would supply any but the most rudimentary information. A legal policy that discourages providing assessments to subsequent employers will not make for safer nursing homes, or other safe workplaces, for that matter. We therefore decline to adopt § 311 as it applies to employment references. It was appropriate to grant judgment to Lee Alan on Passmore’s claim of negligent misrepresentation.

Conclusion. We affirm the judgment of the trial court.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.

State of Indiana v. Steve Boles, et al. v. Frontier Insurance Company, et al. (6/29/04 IndSCt) [Statutory Construction]
Sullivan, Justice

Nine defendants failed to appear in court and, pursuant to statute, the clerk of the court imposed late surrender fees on the sureties representing the defendants. The trial court vacated the fees because notice of the appearance date was not provided to the sureties and because the fees were not imposed by court order. We reverse, finding that notice of the appearance date was not required, and that the clerk has the requisite authority, to impose late surrender fees. * * *

We find that notice to a bail agent or surety under Section 8(a) [of IC 27-10-2] is not required in order to impose late surrender fees upon a bail agent or surety under Section 12(c) [of IC 27-10-2] or to find a forfeiture of a bond under Section 12(d). We also find that the clerk of the court has the authority to impose late surrender fees. Having previously granted transfer, Ind. Appellate Rule 58(A), we reverse the judgments of the trial court in these nine cases and remand them to the trial court to review its orders vacating the late surrender fees.
Dickson, Boehm, and Rucker, JJ., concur. Shepard, C.J., is not participating.

Posted by Marcia Oddi at June 29, 2004 01:54 PM