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On December 16, 2016, the Court of Appeals found that “the reasonable necessity of an intersection expansion outweighed whatever injurious effect that expansion would have on an electric utility’s enjoyment of its easement.” Duke Energy Indiana, LLC v. City of Franklin, 41A01-1607-CT-1549, at 23. Duke Energy Indiana, LLC (“Duke”) had an easement for the transmission of electrical energy in the area of the City of Franklin’s proposed traffic plan, which would connect a four-lane state road to two city streets. Duke, believing that the plan would unreasonably interfere with its easement rights, filed for a preliminary injunction. The trial court denied the request, finding that Duke failed to establish unreasonable interference, and therefore, failed to show a reasonable likelihood of success at trial. Duke asserted that the increased volume and speed of traffic proceeding past the utility pole, located adjacent to and just northwest of the proposed intersection, would increase the hazard to maintenance and repair crews. The trial court found that Duke did not show material impairment, unreasonable interference, or irreconcilable conflict. Instead, the trial court found that Duke essentially argued that to repair and maintain the utility pole and transmission lines, Duke’s crews would interfere with the public’s use of the road. While the court found this concern valid, it did not address the issue of Duke’s use, and the need for additional traffic measures was not found to equate unreasonable interference with Duke’s easement. Duke appealed.

The Court of Appeals addressed Duke’s two claims related to its contention of a reasonable likelihood of success on the merits at trial: (1) the City should not be able to expand the intersection because it does not have adequate property interests in portions of the land and (2) the proposed expansion of the intersection unreasonably burdens its rights pursuant to the easement. The Court of Appeals found that the first claim was essentially a trespass action. However, as an easement holder, Duke lacked standing to maintain an action for trespass for invasion of a right of way or easement. As for the second claim, the Court found that the proposed intersection was a reasonably necessary use of the City’s right-of-way, as it will beautify the corridor, enhance safety, and spur growth. Duke would still be able to repair and maintain the transmission lines and utility poles by simply using additional traffic measures. Ultimately, the Court of Appeals affirmed the trial court’s decision, finding that the reasonable necessity of the expansion outweighed the injury to Duke’s enjoyment of its easement.

Jeremy Fetty is a partner in the law firm of Parr Richey Frandsen Patterson Kruse with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

BOUNDARY TREES:  WHO OWNS THEM?  WHO’S RESPONSIBLE?

Trees can be either an asset or a nuisance, depending on your perspective and situation. A tree that provides shade, privacy or other value to one person’s property may block the view of a neighbor or interfere with the neighbor’s use and enjoyment of his own property.

Questions often arise about the ownership of trees growing on or near a boundary line between adjoining properties.  Which landowner has the legal right or responsibility for a tree’s care or removal? What if they disagree over what is needed?  Whose interests take priority?

Up to par

Few people would be as qualified as a Lebanon-based litigation attorney, who is also an Indiana Golf Hall of Fame member and Crooked Stick Golf Club member, to co-chair the 2016 BMW Championship at Crooked Stick Golf Club in Carmel Sept. 6-11.

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In the recent case of Parkview Hospital, Inc. v. Frost, which is now before the Indiana Supreme Court, the issue of the reasonableness of hospital charges in the context of a contested hospital lien is addressed and may pose some issues with a hospital’s chargemaster. Frost was seriously injured in a motorcycle collision and was uninsured and incurred $625,117.66 in charges from the hospital which subsequently filed a statutory hospital lien under IC 32-33-4 et. seq.  No financial responsibility agreement was signed until after Frost left the hospital.  As authorized under the statute, Frost argued against the lien alleging that Parkview’s charges were unreasonable because they were greater than the amounts the hospital accepts from patients with private health insurance or government healthcare programs.  Parkview sought the determination of the trial court that, as a matter of law, their default medical expense rates were reasonable.  The Court of Appeals, in affirming the trial court, held that the trial court “correctly found that Frost should be allowed to discover [this] evidence” and that it was admissible under the Hospital Lien Act in determining the reasonableness of the charges.  The Indiana Supreme Court accepted transfer and oral argument was heard on September 1, 2016.

Depending on the outcome from the Indiana Supreme Court, hospitals might expect more disputes over the reasonableness of charges in uninsured situations.

James A. L. Buddenbaum has practiced law for more than 25 years with Parr Richey representing municipalities and businesses in utility, healthcare and general business sectors in both regulatory and transactional matters. Jim also has extensive experience in representing businesses in making large property damage and similar insurance claims.

On June 21, 2016 the FAA issued its final rule on small Unmanned Aircraft Systems (sUAS) codified at 14 C.F.R. Parts 107 (Parts 21, 43, 61, 91, 101, 107, 119, 133, and 183 are also impacted).  The primary effect of this final rule is that commercial use of qualified small UAS that are operated in accordance with the sUAS rule will no longer require special airworthiness certificates, section 333 exemptions, or certificates of waiver or authorization (COAs).

The sUAS rule:

  • Classifies “small” UAS

On May 18, 2016, the Department of Labor announced the publication of its final rule updating the overtime regulations (“Overtime Rule”) under the Fair Labor Standards Act (FLSA). The FLSA applies to “Covered Enterprises” as well as individuals. Covered Enterprises include businesses with annual sales or business of at least $500,000. However, hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies are “named enterprises,” meaning they are covered by the FLSA regardless of their total annual sales or business done. Under individual coverage, employees may be entitled to FLSA protection if they themselves are engaged in interstate commerce or in the production of goods for interstate commerce.

The Overtime Rule, both current and revised, applies to an employee of a CE unless the employee is “exempt.” The FLSA’s exemptions include ”bona fide” Executive, Administrative, and Professional employees as well as certain computer professionals and outside sales employees. The DOL’s revised rule will increase the number of employees that are not exempt from the Overtime Rule. The newly revised rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the revised rule:

1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);

Many nonprofit organizations in Indiana have either a duty or a policy of disclosing minutes of board meetings upon the request of certain stakeholders and allowing stakeholders to attend board meetings.  Often, this duty arises under state law, such as the general Non-Profit Corporation Act, if applicable, or the specific act under which the organization is organized, such as the Rural Electric Membership Corporation Act codified at Ind. Code ch. 8-1-13 (the “REMC Act”).  Transparency is generally a good thing.  It fosters open dialog among stakeholders and it leads to a more accountable board.  However, the organization must also protect its competitively sensitive information, as well as the privacy and dignity of its employees and stakeholders.

Therefore, the board of any nonprofit organization should understand how to effectively use Executive Session to balance the policy of transparency with need to protect sensitive information.  The board must also understand how to appropriately document and maintain a record of the discussions that do occur in Executive Session.

The board should use Executive Sessions for robust discussion of matters that should not be discussed in a public forum.  So what matters should not be discussed in a public forum?

In 2015, the Tax Court of Indiana ruled that sewer system development charges and connection fees that are paid by a developer or builder and not by the retail customer are not gross receipts subject to the utility receipts tax (URT). Hamilton Southeastern Utils., Inc. v. Indiana Dept. of State Revenue, 40 N.E.3d 1284 (Ind. Tax 2015). The Indiana Department of State Revenue completed an audit of Hamilton Southeastern Utilities, Inc. proposing URT assessments on receipts from sewer system development charges and connection fees. Hamilton Southeastern protested, and after an administrative hearing denied the protest, Hamilton Southeastern appealed.

In determining that the sewer system development charges and connection fees paid by a developer or builder and not by the retail customer were not subject to the URT, the court examined I.C. 6-2.3-1-4 and I.C. 6-2.3-3-10. Under I.C. 6-2.3-1-4, the court determined that ‘utility services for consumption’ simply refers to the removal of sewage and does not give indication of a broader definition. The Department of State Revenue argued that because the fees are necessary, they should be included in the URT; however, the court found that was not grounded in the words of the statute. Under I.C. 6-2.3-1-10, gross receipts “are: 1) received for an enumerated service, 2) the enumerated service is provided to a consumer, and 3) the enumerated service is directly related to the delivery of utility services to the (same) consumer.” At 1288 (emphasis in original). In the case of system development and connection fees, the charges are not paid by the retail consumer, but by the developer and builder.

The court granted summary judgment to Hamilton Southeastern under I.C. 6-2.3-1-4 and I.C. 6-2.3-1-10, but decided the issue of needing to separate receipts on records and returns of the taxpayer under I.C. 6-2.3-3-2 separately. Later, the court determined that the system development and connection fees were separated from the taxable receipts in accordance with the statute. Hamilton Southeastern Utils., Inc. v. Indiana Dept. of State Revenue, Cause No. 49T10-1210-TA-00068 (Ind. Tax April 29, 2016). Although Hamilton Southeastern did not report the amount of fees that was not required – simply separating the fees from the taxable receipts was sufficient. This was accomplished by only reporting the taxable receipts.

Whether telecommunications providers have a private right of action under Section 253 of the Telecommunications Act of 1996 is an issue that will only be resolved in time. In November 2015, the Eighth Circuit joined the Second, Fifth, Ninth, and Tenth in holding that they do not. This decision split from the Sixth and Eleventh circuits holding they do.

Spectra Communications Group, LLC (“Spectra”) provided telecommunications services in the City of Cameron (“the City”) for several years. Spectra also maintained facilities in the City’s rights of way (“ROW”). The City enacted a ROW and Communications ordinance that required communications providers, like Spectra, to pay user fees and obtain use permits in order to maintain facilities in the City’s ROW.

The City sued Spectra for failure to pay municipal license taxes and user fees and failure to obtain use permits. After this suit, Spectra sought a construction permit. The City denied Spectra’s request for failing to comply with the City’s ROW code. Spectra then sued the City.