Cleveland Range, LLC vs. Lincoln Fort Wayne Associates, LLC

The Indiana Supreme Court recently denied transfer in the matter of Cleveland Range, LLC v. Lincoln Fort Wayne Associates, LLC, No. 2A05–1503–PL–96, ___ N.E.3d ___ , 2015 WL 5172888 (Ind. Ct. App. Sept. 4, 2015) [1] thereby leaving the Court of Appeals’ decision in place. The Court of Appeals’ decision is important for two of its holdings, one regarding appellate procedure and one regarding pre-litigation depositions.

The Cleveland Range case involved an appeal of a trial court order allowing Lincoln, a prospective plaintiff, to depose non-party witnesses for the purpose of preserving their testimony for potential environmental litigation. Lincoln made its request pursuant to Indiana Trial Rule 27, which allows such depositions under certain circumstances. In a matter of first impression, the Court of Appeals held that these orders are final and, therefore, are appealable as of right. The Court’s brief explanation, contained in the opinion’s first footnote, is as follows:[2]

No Indiana decision appears to have addressed when we have jurisdiction over such matters, but we have noted that the rule closely parallels the federal rule of procedure governing the perpetuation of testimony in advance of litigation. Where a state trial rule is patterned after a federal rule, we will often look to the authorities on the federal rule for aid in construing the state rule. Sowers v. Laporte Superior Court, No. II, 577 N.E.2d 250, 252 (Ind. Ct. App. 1991).

A Rule 27(a) order is deemed final because it is the only matter pending in the district court at a time when no complaint has yet been filed. Ash v. Cort, 512 F.2d 909, 912 (3d Cir. 1975). Unlike the usual discovery motion, the denial or grant of which has been considered interlocutory and non-appealable, motions to perpetuate testimony must be judged by different standards. Id. An order authorizing depositions is a final order when, as here, it grants all the relief sought in the petition and disposes of the proceeding. Id.

This decision relied on the Third Circuit’s approach, a view shared by some other jurisdictions as well. See, e.g., Mosseller v. United States, 158 F.2d 380, 383 (2d Cir. 1946); Holland v. Courtesy Corp., 563 So. 2d 787, 789-90 (Fla. Dist. Ct. App. 1990). Other jurisdictions take the view that orders regarding pre-litigation depositions are not final orders and must be appealed through the process for interlocutory orders. See, e.g., Frye v. Massie, 450 N.E.2d 411, 414-15 (Ill. App. Ct. 1983); Sunrise Hosp. v. Dailey, 860 P.2d 162, 163 (Nev. 1993); In re Bejarano, 583 N.E.2d 379, 381 (Ohio Ct. App. 1989). Indiana now falls squarely into the former camp.

The second aspect of the Cleveland Range decision involved the propriety of the trial court’s order allowing Lincoln to take pre-litigation depositions. The Court noted the liberal approach that Indiana takes to pre-litigation depositions and the discretion that trial courts have when deciding whether to allow such depositions. The Court also noted that, although Indiana does have an impediment requirement (that is, the party seeking to take a deposition must show some impediment to filing a suit at that time), “there may be a case in which perpetuation of testimony is proper even though the petitioner is not technically precluded from initiating the lawsuit.” Cleveland Range, 2015 WL 5172888 at *3; Slip Opinion at 6 (quoting U.S. Fid. & Guar. Ins. Co. v. Hartson-Kennedy Cabinet Top Co., 857 N.E.2d 1033, 1037-38 (Ind. Ct. App. 2006)). The Court found that allowing Lincoln to take the depositions was appropriate, as tactical reasons existed for not filing suit and there was “ample evidence supporting [Lincoln’s] expectations to be a party to a suit.” Cleveland Range, 2015 WL 5172888 at *3; Slip Opinion at 7.

The Court then clarified the scope of a Trial Rule 27 deposition. The Court explained that a Rule 27 deposition is not a substitute for discovery, but noted that some discovery is permissible under the Rule. See Cleveland Range, 2015 WL 5172888 at *4 n.3; Slip Opinion at 8 n.3 (“[D]iscovery is allowed under Rule 27(A) – but its scope is not as broad as that available under Rule 26.”).

Finally, the Court found that Lincoln had sufficiently shown that allowing the depositions could prevent a failure or delay of justice. The Court noted the witnesses’ ages (sixty-seven to seventy-eight) and the amount of time that environmental remediation could take. Cleveland Range, 2015 WL 5172888 at *4; Slip Opinion at 9.

This decision relied on existing Indiana case law when ruling on the adequacy of Lincoln’s petition and reviewing the trial court’s discretionary decision. But the decision clarifies some of the finer points of Indiana’s approach to Trial Rule 27 depositions and provides guidance to prospective litigants who have legitimate reasons or impediments to bringing a lawsuit but want to preserve evidence in case litigation becomes necessary. Therefore, the decision is notable for both appellate practitioners and litigators in general.

[1] For purposes of full disclosure, Barrett McNagny attorneys Tom Herr and Will Ramsey, the author of this piece, represented Lincoln on appeal.

[2] The fact that the Court decided this issue in a footnote reinforces this author’s position, stated in a 2010 article, that judges use footnotes to decide important issues and that judicial statements in a footnote carry the same precedential value as statements in the body of an opinion. See William A. Ramsey, Taking Note of Footnotes: The Precedential Value of Footnotes in Judicial Opinions, Res Gestae (Sept. 2010).

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