GREATER HAMMOND COMMUNITY SERV., INC. v. Mutka

• Decision Date: 21 September 2000
• Docket Number: No. 45S03-9904-CV-224.,45S03-9904-CV-224.
• Citation: 735 N.E.2d 780
• Parties: GREATER HAMMOND COMMUNITY SERVICES, INC., Appellant (Defendant Below), v. Lucile MUTKA, Appellee (Plaintiff Below). Lake County Equal Opportunity Council, Northern Indiana Regional Planning Commission, Gleason B. King And Frederick J. Leep, Non-Appealing Parties, (Defendants Below),
• Court: Indiana Supreme Court

735 N.E.2d 780

GREATER HAMMOND COMMUNITY SERVICES, INC., Appellant (Defendant Below), v. Lucile MUTKA, Appellee (Plaintiff Below).

Lake County Equal Opportunity Council, Northern Indiana Regional Planning Commission, Gleason B. King And Frederick J. Leep, Non-Appealing Parties, (Defendants Below),

No. 45S03-9904-CV-224.

Supreme Court of Indiana.

September 21, 2000.

Robert J. Kopka, Lawrence M. Hansen, Gregory M. Bokota, Merrillville, Indiana, Attorneys for Appellant.

David W. Holub, David M. Hamacher, Hammond, Indiana, Attorneys for Appellee.

SHEPARD, Chief Justice.

About thirty-five years ago, President Johnson's war on poverty gave birth to hundreds of local non-profit corporations that carry out programs assisting the poor. Our legislature brought some of those entities within the coverage of the Indiana Tort Claims Act. One such organization, Greater Hammond Community Services, became a defendant in two tort suits. In rulings issued on the same day, two panels of the Court of Appeals reached conflicting conclusions about whether Greater Hammond is covered by the Act. We hold it is not.

Facts and Case History

On October 19, 1994, Gleason King was driving a bus operated by his employer Greater Hammond Community Services, Inc. (GHCS). GHCS was affiliated with the Lake County Equal Opportunity Council (LCEOC). LCEOC leased the bus from the Northern Indiana Regional Planning Commission (NIRPC).

When King failed to stop for a red traffic signal, the bus collided with another vehicle. Lucile Mutka, an 86-year-old widow, was a passenger on the bus who sustained personal injuries and incurred significant medical expenses.

On February 16, 1995, Mutka filed a complaint for damages against King, GHCS, LCEOC, and NIRPC. The defendants moved for partial summary judgment, seeking a determination that they were governmental entities and that their aggregate liability for Mutka's injuries could not exceed $300,000, pursuant to the Indiana Tort Claims Act. Mutka also moved for partial summary judgment, claiming that GHCS was not a governmental entity entitled to the damages limitation. The trial court granted Mutka's motion. It eventually entered a final judgment under which GHCS conceded liability in the amount of $700,000, subject to its ability to appeal the trial court's determination that GHCS was an independent, rather than governmental, entity. The trial court dismissed the remaining defendants with prejudice.

GHCS appealed, and the Indiana Court of Appeals upheld the trial court's determination that GHCS was not a governmental entity. Greater Hammond Community Serv. v. Mutka, 699 N.E.2d 757 (Ind.Ct. App.1998). On the same day, another panel decided LCEOC, Inc. v. Greer, 699 N.E.2d 763 (Ind.Ct.App.1998) (Greer), holding that GHCS was a governmental entity. Each losing party sought transfer to this Court under Appellate Rule 11(B)(2)(c) claiming a conflict in decisions by the Court of Appeals. This point was obviously well taken, so we transferred both cases here.

The Tort Claims Framework

The Indiana Tort Claims Act provides in relevant part, "The combined aggregate liability of all governmental entities and of all public employees, acting within the scope of their employment ... does not exceed three hundred thousand dollars ($300,000) for injury to or death of one (1) person." Ind.Code Ann. § 34-4-16.5-4 (West 1983).¹ Indiana Code § 34-4-16.5-2(c)² defines a "governmental entity" as the state or a political subdivision of the state.

The Indiana Tort Claims Act says that community action agencies³ shall be treated as political subdivisions. Ind.Code Ann. § 34-4-16.5-20 (West Supp.1994).⁴ While the status of LCEOC under the Indiana Tort Claims Act is at issue in the companion case of Greer, the parties to this case stipulate that LCEOC is entitled to political subdivision status under the Indiana Tort Claims Act. (R. at 95.) The only remaining issue is, therefore, whether GHCS is a political subdivision. See Appellant's Pet. for Trans. to the Supreme Court at 2. We approach such questions with the recognition that the Indiana Tort Claims Act is in derogation of the common law and must therefore be strictly construed against limitations on the claimant's right to bring suit. See, e.g., Hinshaw v. Board of Comm'rs of Jay County, 611 N.E.2d 637, 639 (Ind.1993)

; Indiana State Highway Comm'n v. Morris, 528 N.E.2d 468, 473 (Ind.1988).

GHCS as a Political Subdivision

Although the parties agree that GHCS is not a community action agency, as defined by statute, GHCS claims it should still be considered a governmental entity on a variety of grounds.

A. Uniquely Governmental Services? GHCS asserts that an entity not listed in section 34-4-16.5-20 can nevertheless be covered by it, citing Ayres v. Indian Heights Volunteer Fire Dep't, 493 N.E.2d 1229 (Ind.1986). In that case, our Court set out a test for determining when a group may be deemed a governmental instrumentality. Borrowing language from the U.S. Supreme Court, we reasoned that when private groups are "endowed by the state with powers or functions governmental in nature, they become agencies or instrumentalities of the state and are subject to the laws and statutes affecting governmental agencies and corporations." Id. at 1235 (citing Evans v. Newton, 382 U.S. 296, 86 S.Ct. 486, 15 L.Ed.2d 373 (1966)). We held that, because firefighting is a "uniquely governmental" service, the volunteer fire department of Indian Heights was "an instrumentality of local government and was protected by the Indiana Tort Claim[s] Act." Id. at 1237.

GHCS points to certain facts it believes qualify it for treatment as a governmental entity under this test. We examine these under the standard on appeal for summary judgment. The reviewing court analyzes the issues presented at trial in the same fashion as the trial court, de novo. Carie v. PSI Energy, Inc., 715 N.E.2d 853, 855 (Ind.1999). A grant of summary judgment requires that no genuine issue of material fact exist and that the movant is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). The court must also view the pleadings and designated materials in the light most favorable to the non-movant, in this case, GHCS.

GHCS contracted with LCEOC "to provide certain enumerated services to the low income, elderly, and handicapped for which LCEOC receives grants and contracts from various funding sources." (R. at 82.) LCEOC's enumerated services are: employment, education, better use of income, housing, emergency services, nutrition, food, medicine, disabilities, child development, transportation, referral for other services, outreach, and in-home services, such as home-delivered meals and nutrition education.

Providing these types of services to disadvantaged people is not uniquely governmental. Hundreds of charities in our state also do this valuable work. We cannot deem GHCS a governmental instrumentality under the Ayres test.

B. Governmental Control? GHCS also argues that World Prods., Inc. v. Capital Improvement Bd., 514 N.E.2d 634 (Ind.Ct.App.1987), supports its position that it may be deemed governmental without being specifically classified as a particular political subdivision under the Indiana Tort Claims Act. (Appellant's Br. at 10, 15.)

In World Productions, the Court of Appeals was called upon to decide whether the Capital Improvement Board was a governmental entity immune from claims for punitive damages. The court did not focus on the governmental character of the group's function, but instead used a two-prong test borrowed from the Seventh Circuit. 514 N.E.2d 634, 637 (Ind.Ct.App. 1987) (citing Brock v. Chicago Zoological Soc'y, 820 F.2d 909, 910 (7th Cir.1987)). Brock examined the claim of a nonprofit group that it was a political subdivision for Occupational Safety and Health Act purposes. Brock, 820 F.2d at 910. The Brock court largely relied on factors used in the Secretary of Labor's regulations concerning claims of exemption: (1) whether the state created the entity, and (2) whether the state or the public controls the entity. Id.

We have some doubt about the analytical framework deployed in World Productions,⁵ but we will accept it for the sake of argument and examine GHCS's claim on its own terms. The holding in World Productions that the Capital Improvement Board was a governmental entity was based in large part on the fact that the statute creating the Board requires an exceptionally high level of governmental control.

Board members are appointed by the executive of the consolidated city (Indianapolis) and the Board of Commissioners of the County (Marion), IC XX-XX-X-X(a)[]; a board member may be removed for cause by the appointing authority, IC XX-XX-X-X(d); real property which the Board acquires is held in the name of the County and may not be sold without the approval of the executive of the consolidated city (Indianapolis), IC XX-XX-X-X(b)[ ]; the Board's funds must be handled and accounted for in the same manner as other public funds, IC XX-XX-X-X(b)[ ]; the Board's annual budget must be approved by the city-county legislative body, IC XX-XX-X-X[]; and the Board is subject to audit and supervision by the State Board of Accounts, IC XX-XX-X-X(f).

World Productions, 514 N.E.2d at 637.

GHCS relies on evidence showing that in furtherance of its charitable objectives it uses the LCEOC log, publishes documents stating that it is a division of LCEOC, receives funding through LCEOC, complies with LCEOC procedures in providing services, maintains financial records pursuant to LCEOC requirements, and operates pursuant to LCEOC's directives. LCEOC also budgets for and audits GHCS. GHCS argues that these factors are sufficient to support a conclusion that it is an instrumentality of LCEOC, which is itself a governmental entity covered by the Indiana Tort Claims Act.

On the contrary, it is apparent that GHCS voluntarily submitted to this degree of LCEOC control. Our statutes do not...