Estate of Moreland v. Dieter

• Decision Date: 11 August 2009
• Docket Number: No. 08-1478.,08-1478.
• Citation: 576 F.3d 691
• Court: U.S. Court of Appeals — Seventh Circuit
• Parties: ESTATE OF Christopher A. MORELAND, Plaintiff-Appellant, v. Erich DIETER and Michael Sawdon, Defendants, and St. Joseph County Board of Commissioners, St. Joseph County, et al., Third-Party Defendants-Appellees.

576 F.3d 691

ESTATE OF Christopher A. MORELAND, Plaintiff-Appellant, v. Erich DIETER and Michael Sawdon, Defendants, and St. Joseph County Board of Commissioners, St. Joseph County, et al., Third-Party Defendants-Appellees.

No. 08-1478.

United States Court of Appeals, Seventh Circuit.

Argued February 9, 2009.

Decided August 11, 2009.

Sean W. Drew, I, Drew Law Office, Niles, MI, Mark R. Bendure (argued), Bendure & Thomas, Detroit, MI, for Plaintiff-Appellant.

David E. Ballard, James F. Groves (argued), Lee, Groves & Zalas, South Bend, IN, for Third-Party Defendants-Appellees.

Martin W. Kus, Newby, Lewis, Kaminski & Jones, LLP, Laporte, IN, for Defendants.

Before POSNER and SYKES, Circuit Judges, and DOW, District Judge.^*

DOW, District Judge.

Plaintiff-Appellant, the Estate of Christopher Moreland (the "Estate"), filed a motion for a writ of execution to enforce a judgment against St. Joseph County, Indiana and its Board of Commissioners (the "County"), pursuant to Indiana Code § 34-13-4-1 and Rule 69 of the Federal Rules of Civil Procedure. The district court denied the Estate's motion. Because we conclude that the state law that the Estate seeks to invoke was not intended to apply retroactively, we affirm the order of the district court.

I. Background

The Estate has appeared before this Court twice, both stemming from the beating of Christopher Moreland. In 1997, Moreland was detained in St. Joseph County's jail on a drunk driving charge. Erich Dieter and Michael Sawdon, officers at the jail, took part in a beating of Moreland that would result in the imposition of massive civil liability against them. Its more immediate effect was Moreland's death.

The details of the assault are reported in Estate of Moreland v. Dieter, 395 F.3d 747 (7th Cir.2005). For present purposes, we note only that Moreland's beating and subsequent denial of medical care spanned multiple floors of the jail, lasted several hours, and was ruthless. Moreland was physically restrained for much of the incident. Ultimately, he was placed (unconscious) into the jail's "drunk tank" and left for dead.

Pursuant to 42 U.S.C. § 1983, the Estate filed suit against Dieter, Sawdon, and a third officer, Paul Moffa, alleging violations of Moreland's constitutional rights. The County paid for the officers' defenses. In May 2002, a jury returned a verdict against Dieter and Sawdon and determined that they were liable for $56.5 million in damages ($29 million of which were compensatory). The jury deadlocked, however, on the claims against Moffa; a new trial was held, and a jury returned a verdict in his favor in September 2003. This Court subsequently upheld the verdict against Dieter and Sawdon. Estate of Moreland, 395 F.3d at 761.

On July 1, 2003—prior to the Moffa retrial, but more than a year after the jury returned the verdict against Dieter and Sawdon, and nearly ten months after the County stopped paying their legal bills— an amendment to the Indiana Code took effect. See 2003 Ind. Acts 1193, 1203-04 (the "2003 Amendment" or the "Amendment"). As discussed below, the 2003 Amendment made changes to Indiana's statutory scheme governing indemnification by "governmental entities" for the conduct of their employees. Critically, the Amendment converted a discretionary indemnification provision into one that is mandatory—although only for non-punitive damages and only when the governmental entity "defends or has the opportunity to defend" the employee.

In 2007, the Estate sought to invoke the 2003 Amendment, filing with the district court a motion for a writ of execution to collect against "St. Joseph County and/or its Board of Commissioners" on the Dieter-Sawdon judgment. The Estate argued that the 2003 Amendment required St. Joseph County to pay the $29 million in compensatory damages for which Dieter and Sawdon were found liable. The district court denied the motion, and this appeal followed.

II. Indiana Code § 34-13-4-1¹

Section 34-13-4-1 of the Indiana Code relates to indemnification for civil rights claims against public employees. It provides, with the key language in italics:

If a present or former public employee, including a member of a board, a committee, a commission, an authority, or another instrumentality of a governmental entity, is or could be subject to personal civil liability for a loss occurring because of a noncriminal act or omission within the scope of the public employee's employment which violates the civil rights laws of the United States, the governmental entity (when the governmental entity defends or has the opportunity to defend the public employee) shall, subject to IC 34-13-3-4, IC 34-13-3-14, IC 34-13-3-15, and IC 34-13-3-16, pay:

(1) any judgment (other than for punitive damages) of the claim or suit; or

(2) any judgment for punitive damages, compromise, or settlement of the claim or suit if; ...

[the statutorily specified officer or governing body] determines that paying the judgment for punitive damages, compromise, or settlement is in the best interest of the governmental entity. The governmental entity shall also pay all costs and fees incurred by or on behalf of a public employee in defense of the claim or suit.

Ind.Code § 34-13-4-1 (emphasis added).

After a relatively stable existence,² Section 1 was expanded by the 2003 Amendment. As amended, the provision has two noteworthy features. First, in certain cases and subject to a $300,000 cap,³ the code requires a governmental entity to indemnify its public employees for compensatory damages growing out of their noncriminal acts, where the governmental entity "defends or has the opportunity to defend the public employee." Under the prior version of the Act, the governmental entity—no matter how active it was in its employee's defense—could decide whether or not to indemnify its employee. See Ind.Code § 34-13-4-1 (2001 supp.); City of Muncie v. Peters, 709 N.E.2d 50, 56 (Ind.Ct.App.1999) (citing Kapitan v. City of Gary, Ind., 12 F.3d 678, 680 (7th Cir. 1993)).

The second noteworthy feature of amended Section 1 is that it keeps punitive damages and settlements on the same footing as all damages had been under prior law. That is, while indemnification for compensatory damages is in some cases mandatory, indemnification for punitive damages and settlements remains a matter of grace: the governmental entity must foot the bill only if the pertinent officer or governing body "determines that paying ... is in the best interest of the governmental entity."

As we discuss in greater depth in Part III, infra, the at-times mandatory payment of judgments combined with discretionary payment of settlements creates a regime which allows governmental entities to decide whether they would rather pay a settlement or risk a judgment.⁴

III. Analysis

The district court ruled that the 2003 Amendment to Section 1 did not apply to Dieter and Sawdon, concluding that the Amendment was not intended to apply retroactively. Indiana Code § 34-13-4-1 has not been extensively interpreted by the Indiana courts, and we review the district court's interpretation of the Indiana Code de novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991); United States v. Rosenbohm, 564 F.3d 820, 822 (7th Cir.2009).

In Indiana, the lodestar of statutory interpretation is legislative intent, and the plain language of the statute is the "best evidence of ... [that] intent." Cubel v. Cubel, 876 N.E.2d 1117, 1120 (Ind.2007). Generally, the words in a statute should be given their ordinary meaning. While courts should try to give effect to each word in a statute, they ought not to do so myopically. Instead, "[t]he statute should be examined as a whole, avoiding both excessive reliance on strict literal meaning and selective reading of individual words." Id.; Tormoehlen v. State, 848 N.E.2d 326, 330 (Ind.Ct.App.2006) (noting that "legislative intent as ascertained from the whole prevails over the strict, literal meaning of any word or term used" in a statute).

Indiana courts presume that the General Assembly's laws apply prospectively only, unless the statute contains explicit language mandating retroactive application. State v. Pelley, 828 N.E.2d 915, 919 (Ind. 2005) ("Statutes are to be given prospective effect only, unless the legislature unequivocally and unambiguously intended retrospective effect as well."); see also Landgraf v. USI Film Prods., 511 U.S. 244, 286, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (Scalia, J., concurring). The presumption against retroactivity is deeply rooted. See, e.g., Citizens' State Bank of Noblesville v. Julian, 153 Ind. 655, 55 N.E. 1007, 1011 (1899); United States v. Heth, 7 U.S. (3 Cranch) 399, 408, 2 L.Ed. 479 (1806) (laws should be applied prospectively unless "the words are too imperious to admit of a different construction").

An oft-cited (and occasionally invoked) exception to the general rule is that remedial statutes—those "intended to cure a defect or mischief that existed in a prior statute" (Bourbon Mini-Mart, Inc. v. Gast Fuel & Svcs., Inc., 783 N.E.2d 253, 260 (Ind.2003) (retroactive application to certain state environmental laws))—will be applied retroactively to carry out the statute's purpose "unless to do so violates a vested right or constitutional guaranty." Martin v. State, 774 N.E.2d 43, 44 (Ind. 2002) (retroactive application where a legislative amendment was an apparent corrective to a judicial decision). In the end, however, legislative intent remains the overriding goal of the retroactivity analysis, just as it is for statutory interpretation more generally. Bourbon Mini-Mart, 783 N.E.2d at 260; Cubel, 876 N.E.2d at 1120.

The Estate argues that the 2003 Amendment applies to the Dieter-Sawdon judgment because (1) the interpretation that it seeks is not retroactive at all, (2) the language of the Amendment requires retroactive application, and (3) the Amendment was a remedial statute whose purpose...