Hefty v. All Other Members of Certified Settlement Class, 61A05-9308-CV-290

Decision Date18 August 1994
Docket NumberNo. 61A05-9308-CV-290,61A05-9308-CV-290
Citation638 N.E.2d 1284
PartiesMichael D. HEFTY, David R. and Sheila R. Herring, Michael D. Friskney, Steven C. Boszor, Virgil Jackson, Mangus Trust (Walter L. Mangus, Trustee), Mary Ann's Trust and Richard's Trust (Forest Warren, Trustee), Carolyn Pickering, Forest Warren, Ron Moore, and All Others Similarly Situated, Appellants, v. ALL OTHER MEMBERS OF THE CERTIFIED SETTLEMENT CLASS, Namely, All Initially Noticed Persons Owning Real Property Adjacent to Railroad Rights-of-Way in the State of Indiana which the Penn Central Corporation Formerly Owned or Controlled and Which Were Transferred to U.S. Railroad Vest by Quitclaim in 1992 Except for Those Who Have Submitted Valid Written Requests for Exclusion, and Penn Central Corporation and U.S. Railroad Vest Corporation, Appellees. 1
CourtIndiana Appellate Court

Henry J. Price, Paul S. Bailey, Katherine M. Varie, Price & Barker, Indianapolis, Nels Ackerson, Stewart A. Block, Ackerson & Bishop Chartered, Washington, DC, for appellant.

James P. Buchanan, Buchanan & Buchanan, Lebanon, for appellee Class Members.

Robert J. Palmer, May, Oberfell & Lorber, South Bend, Matthew J. Siembieda, Carl M. Buchholz, Blank, Rome, Comisky & McCauley, Philadelphia, PA, for The Penn Central Corp.

Gerald F. Lutkus, Joseph R. Fullenkamp, Barnes & Thornburg, South Bend, for U.S. Railroad Vest, Corp.

BAKER, Judge.

Appellants-plaintiffs Michael D. Hefty, et al. oppose the class action settlement agreed upon by appellee-class representative Warren Buchanan and appellees-defendants Penn Central Corp. and U.S. Railroad Vest Corp. (USRV). The settlement agreement affirmed by the court provides a process to quiet title to the rights-of-way formerly owned or controlled by Penn Central.

FACTS

On July 31, 1992, Warren Buchanan filed a class action (Buchanan action) in Parke County on behalf of Indiana landowners adjacent to the Penn Central railroad line, known as the Crawfordsville Secondary Track. The Buchanan action sought to quiet title of the right-of-ways previously granted to Penn Central and later assigned to USRV. The complaint also asserted damages for slander of title. On August 31, 1992, Buchanan petitioned to enlarge the class to include Indiana landowners adjacent to all of the former Penn Central right-of-ways statewide.

Meanwhile, Fern E. Firestone filed a similar class action (Firestone action) in Hamilton County on October 19, 1992. Firestone's complaint against Penn Central and USRV asserted claims for fraud, slander of title, theft, criminal conversion, criminal mischief and deception, and racketeer influenced and corrupt organizations (RICO) violations.

On December 15, 1992, Buchanan filed an amended class action complaint, enlarging the class as requested in the previous petition and adding claims of conversion, fraud, and RICO violations. That same day, the Parke Circuit Court entered a preliminary order that certified the Buchanan statewide class action and approved a settlement class. On December 30, 1992, the parties submitted a proposed settlement agreement to the Parke Circuit Court. The court set a hearing on the proposed settlement for April 2, 1993. The notices to all class members provided that all requests for exclusion from the settlement class be postmarked no later than March 2, 1993. The notice presented the procedures by which settlement class members could object to the proposed settlement or opt out of the settlement class.

On January 14, 1993, Firestone filed an emergency petition to intervene in the Buchanan action to revoke the Parke Circuit Court's certification of a statewide class. The trial court denied the petition to intervene. Firestone returned to the Hamilton County court and obtained statewide class certification of the Firestone action on February 23, 1993. On February 24, 1993, Buchanan obtained an order from the Parke Circuit Court vacating the February 23, 1993, order of the Hamilton County court and consolidating the two actions pursuant to Ind. Trial Rule 42(D). 2 The past Firestone class representatives then opted out of the Buchanan action.

On March 16, 1993, the past Firestone representatives filed another motion to intervene as of right to dismiss the amended Buchanan complaint under Ind. Trial Rule 12(B)(8). Also on March 16, some of the class members who had not opted out of the settlement class (Objectors) filed a separate motion to intervene, objections to the settlement proposal, a motion to dismiss the amended complaint under T.R. 12(B)(8), a motion for limited discovery, and a motion to disqualify the class representative and class counsel. The Parke Circuit Court rejected the motions of the past Firestone class representatives and some of the Objectors' motions.

At the April 2, 1993, hearing on the fairness of the settlement, the court heard objections from certain class members, but refused to allow testimony from nonclass members and class members who had opted out. 3 On April 19, 1993, the trial court entered its final judgment accepting the settlement.

DISCUSSION AND DECISION 4
I. Standing

Before considering the merits of the case, we must first address Penn Central's argument, adopted by USRV, that the named appellants lack standing to challenge the settlement. Penn Central first maintains that because the appellants are unnamed class members, they cannot appeal the judgment absent a grant of a petition to intervene. The Seventh Circuit has held that if a class member intervenes or objects to the dismissal or compromise of a class action, he has a right to appeal. Research Corp. v. Asgrow Seed Co., 425 F.2d 1059, 1060 (7th Cir.1970). The federal court specifically stated that a person disagreeing with the settlement terms must take these minimal steps to preserve his right to appeal. Id. at 1060-61. In In the Matter of VMS Ltd. Partnership Sec. Lit., 976 F.2d 362 (7th Cir.1992), the Seventh Circuit adopted the reasoning of other circuits to the appeal of a post-settlement order. The court dismissed the VMS action holding that an unnamed class member has no right to appeal a post-settlement order. However, the VMS court recognized that Research would have controlled if the case had been an appeal of the approval of the settlement agreement. Id. at 368. Hence, we adopt the holding of our federal cousin in Research and apply it to the present situation. If the appellants intervened or objected to the settlement, they have standing.

On March 16, 1993, certain class members (Objectors) filed objections to the settlement and a motion to intervene pursuant to Ind. Trial Rule 24(A). Of the named appellants, the Objectors included Michael Hefty, Virgil Jackson, Magnus Trust, Mary Ann's Trust and Richard's Trust, Carolyn Pickering, and Forest Warren. Record at 864-65. However, appellants Ron Moore, David and Sheila Herring, Michael Friskney, and Steven Boszor failed to intervene or object to the settlement. Thus, the appeal is dismissed as to Moore, the Herrings, Friskney, and Boszor.

Regarding the Objectors, Penn Central contends that the trial court never granted their motion to intervene and therefore, they lack standing to appeal. We need not consider the parties' dispute about the effect of the motion to intervene because the Objectors did file objections to the settlement. Research deems such action sufficient to preserve the Objectors' right to appeal. See Research, 425 F.2d at 1060.

Next, Penn Central contends that the Objectors' claims are limited to their individual interests, not the class's. We agree. The Objectors argue, without citation to any authority, that the prerequisites of T.R. 23 representation do not apply on appeal. We find the Objectors' suggestion risible. They further contend that if the settlement is determined to be unfair, it must be reversed as to the entire class, citing In re General Motors Corp. Engine Interchange Lit., 594 F.2d 1106, 1122 (7th Cir.1979), cert. denied, 444 U.S. 870, 100 S.Ct. 146, 62 L.Ed.2d 95. In General Motors, the Seventh Circuit refused to limit the appeal to only those objectors prosecuting the appeal because the objectors were the original named plaintiffs of the class action and the subclass representatives that had informed the other subclass members that their interests would be represented by counsel for the named plaintiffs. Id. at 1121. The facts in General Motors are distinguishable from those here where the Objectors were not certified class representatives. We conclude that the Objectors represent only their own interests on appeal.

II. Jurisdiction

The Objectors argue the trial court erred in exercising jurisdiction over the statewide class when the Firestone action was pending. Our supreme court has already resolved this issue against the Objectors. See State ex rel. Firestone, 621 N.E.2d at 1113-14. The supreme court specifically held that the Parke Circuit Court's consolidation of the Firestone action with the Buchanan action was proper. Id. Under the law of the case doctrine, the trial court had jurisdiction over the statewide class. For the same reason, the trial court did not err in failing to grant the Objectors' T.R. 12(B)(8) motions to dismiss the amended complaint.

III. Notice

The Objectors also lodge attacks against the 14-page notice of the proposed settlement. They assert that the notice did not comply with T.R. 23 requirements because 1) it was not sufficiently clear that class members must take affirmative action to exclude themselves from the class, and 2) it did not inform class members of the then pending Firestone action.

The notice stated that the class members have the right to exclude themselves from the class and those who wish to remain in the class need do nothing. The opt out form itself instructed the class members to check only one box--a) to be included in the settlement, or b) to be excluded, and to return the forms. The...

To continue reading

Request your trial
1 cases
  • Hefty v. All Other Members of the Certified Settlement Class, 61S05-9507-CV-799
    • United States
    • Supreme Court of Indiana
    • 2 Junio 1997
    ...April 19, 1993. Objectors appealed. The Court of Appeals affirmed the trial court's judgment. Hefty v. All Other Members of the Certified Settlement Class, 638 N.E.2d 1284, 1292 (Ind.Ct.App.1994). The Court of Appeals found that those Objectors who filed objections to the settlement in the ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT