Indiana Law Review


30 INDIANA LA W REVIEW [Vol. 12:1

statutes. The General Assembly will undoubtedly need to consider

each of these areas carefully in order to decide what, if any, revi-

sions are needed and whether any of the provisions should be includ-

ed in the new code.

II. Administrative Law

Gary P. Price*

A. Administrative Fact-Finding

In last year's administrative law Survey discussion, the author

outlined V.I.P. Limousine Service, Inc. v. Herider-Sinders, Inc., 1

which elaborated on fact-finding requirements for administrative

agencies.
2 As noted by the author, V.I.P. Limousine demanded that

the agency fact-finder state not only the ultimate facts upon which
conclusions are based, but also the basic facts necessary to support

the ultimate facts and conclusions thereon. In addition, the court

stated that situations may arise in which the agency must go
beyond fact-finding, and give a statement of reasons for the factual
determination.3

Once again, the Indiana Court of Appeals has seen fit to
elaborate on what exactly will be required of agency fact-finders. In
Wolfe v. Review Board of the Indiana Employment Security Divi-
sion,* the appellant challenged a denial of unemployment compensa-
tion by the Review Board, alleging inter alia that the Board "failed
to make findings relative to each of the reasons he gave for
leaving."5 The appellant had raised eight specific grounds which he
claimed constituted good cause for voluntarily leaving his employ-

ment. Although the Board had made findings specifically disposing
of a number of appellant's claims, it was silent with respect to other
allegations raised. The posture of the court of appeals, in responding
to appellant's challenge and remanding for further findings on the

issues not addressed by the Board, illustrates the clearest statement

Member of the Indiana Bar. J.D. Indiana University School of Law— In-
dianapolis, 1977.

'355 N.E.2d 441 (Ind. Ct. App. 1976).
2See Utken, Administrative Law, 1977 Survey of Recent Developments in In-

diana Law, 11 Ind. L. Rev. 20, 22 (1977).
3355 N.E.2d at 445.
4375 N.E.2d 652 (Ind. Ct. App. 1978).
5M at 653.



1979] SURVEY-ADMINISTRA TIVE LA W 31

to date of the appellate review standards regarding agency decision-

making.

The court first noted that it would be bound by the Board's deci-
sions on questions of fact, but stated that the issue in the instant

case was a failure of the agency to decide all the facts. Citing Cole v.
Sheehan Construction Co., 6 an Indiana Supreme Court decision on
the same question, the court of appeals held that, so long as the claim-
ant has properly preserved error,7 the reviewing court "no longer

may affirm by merely determining whether there was some
evidence to support an award"8

Next, the court of appeals stressed the need for specific findings

by an administrative board, citing Transport Motor Express, Inc. v.
Smith9 for the proposition that administrative appeals must focus on
the sufficiency of the facts found, rather than the sufficiency of the

evidence used to establish the facts. In language that portrayed a

certain degree of peevishness, the court opined:

Perhaps it is still the case that review boards do not know
how to make specific findings. But, we believe that it is time
the administrative boards learned. A finding of fact "must
contain all the specific facts relevant to the contested issue

or issues so that the court may determine whether the
Board has resolved those issues in conformity with the

law."
10

Finally, the court added a constitutional dimension to its deci-

sion by noting that the procedural due process provisions of

Goldberg v. Kelly11 require, at a minimum, a statement of the
reasons for an agency decision and some indication of the evidence
upon which the agency relied in arriving at that decision.12 The court
found the rationale of Goldberg particularly apropos to the case at

bar. An individual who is denied statutory benefits, after asserting
that he fulfills the requirements for those benefits, should be in-

formed with particularity of all the material facts that led to the

•222 Ind. 274, 53 N.E.2d 172 (1944), cited in Wolfe v. Review Bd. of the Ind.

Employment Security Div., 375 N.E.2d at 654-55.
7The claimant must frame his appeal as being contrary to law.
8375 N.E.2d at 655.
9289 N.E.2d 737 (Ind. Ct. App. 1972), vacated on other grounds, 262 Ind. 41, 311

N.E.2d 424 (1974), cited in Wolfe v. Review Bd. of the Ind. Employment Security Div.,
375 N.E.2d at 655.

10375 N.E.2d at 655-56 (citing Whispering Pines Home for Senior Citizens v.
Nicalek, 333 N.E.2d 324 (Ind. Ct. App. 1975)).

u397 U.S. 254 (1970), cited in Wolfe v. Review Bd. of the Ind. Employment Security
Div., 375 N.E.2d at 656.

12375 N.E.2d at 656.



32 INDIANA LA W REVIEW [Vol. 12:30

denial. This requirement includes, at a minimum, a specific finding
disposing of each material issue presented by a claimant, not find-

ings on three of eight, or negative findings on some, but not all, of

the material issues presented.13

The Wolfe decision represents an important development in ad-
ministrative law for a number of reasons. First, it advocates protec-
tion of the claimant or aggrieved party in an agency hearing; the in-

dividual is often unrepresented by counsel and his real and substan-

tial interests may be overshadowed by the inexorable process of the
administrative machinery. Second, Wolfe sends a definite signal to

agency review boards, requiring them to take an "active role" in fer-
reting out evidence sufficient to establish all the facts necessary to

support a decision granting, or denying, benefits to a claimant. Last,

but most important for the practitioner, the case indicates the stand-
ards agency decision-making must fulfill, and points out the
framework for appeal of an adverse agency decision.14

B. Estoppel

Middle ton Motors, Inc. v. Indiana Department of State
Revenue 15 illustrates that the "king's men,"16 as well as the private
citizen, will sometimes be held accountable for words and actions
which induce reliance on the part of another. In Middle ton, the tax-

payer had made arrangements to pay back taxes in installments
and, at the same time, had been told by the deputy director, second
in command at the Department of Revenue, that he had two years
to sue for a refund of the contested taxes. This informal agreement
was not honored, however, when the taxpayer later filed suit seek-
ing a refund of the taxes paid after the state had denied his claim.

The state argued that the controversy was controlled by a
statute

17 which precluded judicial jurisdiction of a refund suit if the

complaint was not filed within "three (3) months" after notification
of an adverse ruling by the Department of Revenue. Obviously, the
three-month limitation of the statute was considerably different

from the two-year period stated by the deputy director in his

13
I<L

u
Cf. Zehner v. Indiana State Alcoholic Beverage Comm'n, 364 N.E.2d 1037 (Ind.

Ct. App. 1977) (challenge of findings waived on appeal if not included in motion to cor-

rect errors pursuant to Ind. R. Tr. P. 59).
15366 N.E.2d 226 (Ind. Ct. App. 1977), rev'd, No. 978 S 192 (Ind. Sept. 14, 1978).
16See Campbell v. State, 259 Ind. 55, 284 N.E.2d 733 (1972). In severely limiting

the defense of sovereign immunity, the Campbell court noted that the doctrine

originated from the early common law principle that " 'the king could do no wrong.'

"

Id. at 57, 284 N.E.2d at 734.
17
Ind. Code § 6-2-1-19 (1976).



1979] SURVEY-ADMINISTRA TIVE LA W 33

negotiations with the taxpayer. Basing its decision on the statutory

terms, the trial court granted the state's motion to dismiss.

The court of appeals reversed the decision of the trial court,
holding that the doctrine of estoppel would apply to acts of a

governmental unit, whether those acts be of a proprietary or

governmental character.18 The court premised this conclusion on the
decision of the Indiana Supreme Court in Campbell v. State. 19

Prior to Campbell, the doctrine of sovereign immunity protected
the state from liability for those acts which involved governmental

functions as compared to proprietary functions.20 Noting that the
distinction between governmental and proprietary functions has
never been clearly defined, the Campbell court eliminated the

distinction and concluded that the doctrine will be inapplicable

where there has "been a breach of duty owed to a private in-
dividual" by the state.21 The Middle ton Motors court, therefore, con-
cluded:

4t

[T]he State must be held to the same standards as private
citizens when dealing with other parties . . . ," 22 The court reasoned
that this standard would require the application of the estoppel doc-

trine, if the trier of fact found all the elements to be present,23 since

the state's claim of immunity from estoppel was simply an
"offshoot" of sovereign immunity.24

The supreme court, however, adopted a much narrower view of
the issues involved and vacated the decision of the court of
appeals.

25 The supreme court found that nothing in the briefs or
pleadings filed by the Department of Revenue indicated that its
defense to the estoppel issue emanated

u
from the defense of

sovereign immunity."26 Instead, the defense to Middleton's estoppel

18366 N.E.2d at 228.
19259 Ind. 55, 284 N.E.2d 733 (1972), cited in Middleton Motors, Inc. v. Indiana

Dep't of State Revenue, 366 N.E.2d at 228.

™See Perkins v. State, 252 Ind. 549, 251 N.E.2d 30 (1969), discussed and limited

in Campbell v. State, 259 Ind. at 60, 284 N.E.2d at 736.
21259 Ind. at 63, 284 N.E.2d at 737.

^366 N.E.2d at 228.

^The court of appeals listed the elements as follows:
" '(1) A representation or concealment of material facts; (2) The representa-
tion must have been made with knowledge of the facts; (3) The party to
whom it was made must have been ignorant of the matter; (4) It must have
been made with the intention that the other party should act upon it; (5) The

other party must have been induced to act upon it.'

"

Id. (quoting State ex reL Crooke v. Lugar, 354 N.E.2d 755, 766 (Ind. Ct. App. 1976)

(quoting Emmco Ins. v. Pashas, 140 Ind. App. 544, 551, 224 N.E.2d 314, 318 (1966))).
24366 N.E.2d at 228.
25No. 978 S 192 (Ind. Sept. 14, 1978) (Givan, C.J., Pivarnik & Prentice, J.J., concur-

ring; DeBruler, JM dissenting with opinion, Hunter J., concurring in dissent).
26/d, slip op. at 3.



34 INDIANA LAW REVIEW [Vol. 12:30

argument was traced to the express language of Indiana Code sec-
tion 6-2-1-19,

27 which established a statutory condition precedent to

the right to bring a civil action in refund cases. Hence, the use of

sovereign immunity as a defense to an assertion of estoppel was con-
sidered to be not fairly raised by the record, and was not treated in
a substantive manner by the supreme court.

However, the supreme court, in holding that the court of appeals
"erred in its application of estoppel to the facts herein,"28 appeared

to engage in an analysis of merits of the estoppel defense. According

to the court, legislative enactments which establish conditions prece-

dent to the exercise of a right or remedy can never be circumvented
by the unauthorized acts of government officers or employees.29 Fur-
ther, the decision noted that all persons are charged with knowledge

of rights and remedies prescribed by statute30 and concluded that

the taxpayer's reliance on the representations of the deputy director

was unjustifiable.31

The issues left unresolved by Middle ton Motors should be noted.
First, it is unclear what position the supreme court would adopt if
the issue of estoppel, and the state's ability to avoid the estoppel

doctrine as a variant of its sovereign immunity, were raised by the
record. Presumably, under the court's ruling in Campbell the state's
power to ignore the estoppel challenge would be abrogated by the
demise of sovereign immunity. Second, the court looked to the facts

of the case and relied, to a certain extent, on the adage that ig-

norance of the law is no excuse. One might conclude, therefore, that
representations by the state of material facts peculiarly within the

ambit of the governmental entity and not found in statutes equally

accessible to all parties involved will present the factual context

necessary for the invocation of estoppel against the state or its sub-

divisions.

"Ind. Code § 6-2-1-19 (1976) states, in pertinent part:

That except as hereinafter provided, no court shall have jurisdiction over

any such suit unless the taxpayer shall show that the complaint therein was

filed within three [3] months after he shall have received notification of the

action of the department denying said petition for refund in whole or in part.

In the event that the department shall take no action upon such petition for

refund within six [6] months after the same shall have been filed, the tax-

payer may elect to institute such suit for refund at any time thereafter, but
not more than three [3] months after such claim shall have been denied in

whole or in part, in no event more than three [3] years from the date of the

filing of the claim for refund.
28No. 978 S 192, slip op. at 3.

"Id. (citing Walgreen Co. v. Gross Income Tax Div., 225 Ind. 418, 75 N.E.2d 784

(1947)).

MNo. 978 S 192, slip op. at 3-4 (citing City of Evansville v. Follis, 315 N.E.2d 724

(Ind. Ct. App. 1974)).
31No. 978 S 192, slip op. at 4.



1979] SURVEY-ADMINISTRA TIVE LA W 35

C. The Delegation Doctrine

A general principle of administrative law well known to both the
student and the practitioner is the delegation, or rather the

nondelegation, doctrine. Simply stated, the doctrine states that no

legislative body may delegate to an administrative agency the
legislative powers inherent to that body unless authorized by rele-

vant constitutional provisions.32 The theoretical underpinnings of the
doctrine were based upon a fear that legislative powers would be

displaced by the administrator, that the separation of powers would

be diluted, or that the traditional democratic process would be sup-

planted by administrative fiat.33 This doctrine, although a senior

citizen of administrative law theory, was the focus of analysis in a
recent Indiana decision.

Indiana University v. Hartwell3* involved an appeal of an award
of damages pursuant to a decision of the Human Rights Commission
of the City of Bloomington. One of the issues raised35 challenged the
authority of the Commission to award damages under the terms of
the pertinent enabling statute.36 The court of appeals agreed with
the cross-appellants (Hartwell, et al) that the statute did grant the

authority to award money damages, but left the cross-appellants
with a Pyrrhic victory since it also determined that the language

providing for such powers37 went far beyond the range of delegable
authority and violated the terms of the Indiana Constitution.38

The court of appeals stated that the natural sense of the words
utilized in the statute leads "inescapably" to the conclusion:

[T]he legislature has, unwittingly or not, arrayed the full

panorama of powers of the State and has given any city,

32
See, e.g., State ex reL Standard Oil Co. v. Review Bd. of the Ind. Employment

Security Div., 230 Ind. 1, 101 N.E.2d 60 (1951). See generally 1 Am. Jur. 2d Ad-
ministrative Law, §§ 100-37 (1962); K. Davis, Administrative Law Text § 2.06 (3d ed.
1972).

"See authorities cited in note 32 supra.
M367 N.E.2d 1090 (Ind. Ct. App. 1977).

^Other issues raised in the case, and the legislature's response thereto, are
discussed in Constitutional Law, 1978 Survey of Recent Developments in Indiana
Law, 12 Ind. L. Rev. 69, 69-71 (1978).

m
Ind. Code § 22-9-1-12 (1976) (repealed 1978; re-enacted Act of Mar. 7, 1978, Pub.

L. No. 123, § 2, 1978 Ind. Acts 1120 (codifed at Ind. Code § 22-9-1-12.1 (Supp. 1978))).
87
Ind. Code § 22-9-1-12 (1976) read, in pertinent part, as follows:

An ordinance enacted as provided in this section may impose penalties or
grant such powers to the local commission agency as may be deemed
necessary or appropriate to implement its purpose and objective, whether or
not such powers are granted to the state commission under section 2 of this
chapter including, but not limited to ... .
38367 N.E.2d at 1093 (citing Ind. Const, art. 3, § 1; art. 4, § 1; art. 5, § 1; art. 7, §

1).



36 INDIANA LAW REVIEW [Vol. 12:30

town, or county uncontrolled discretion to select in

smorgasbord fashion those powers "deemed necessary and
appropriate" to implement the purpose and objective of the

Civil Rights Act and to vest a local commission agency with

such selected powers.39

The logic expressed by the court was that, although it was highly
improbable that a governmental sub-unit would grant "the full

panorama" of powers to a commission formed pursuant to the

statute, it was clearly possible for a sub-unit to be invested with
powers equal to or greater than the state itself, a legally imper-

missible result. Finding that no saving construction was possible,

the court declared the statute unconstitutional and vacated the Com-
mission award of damages which instigated the appeal.

The Hartwell decision is important not so much for what it does,
since application of the nondelegation doctrine is a mainstay of state

administrative law. Hartwell is important, nevertheless, because the

decision, as the most recent pronouncement of Indiana law, stead-
fastly refused to adopt the so called "modern" approaches to the
delegation problem in the administrative framework, approaches

which have abandoned the clinical examination of statutory enact-

ments in vacuo, and focused instead on the effect of the particular
statute as applied. One author characterizes this shift as a require-
ment of administrative standards and argues that the nondelegation
doctrine should not be applied until, and unless, the administrator

fails to provide adequate procedural safeguards to the potentially

defective statute.
40 The net result of Hartwell is a reaffirmation of

traditional nondelegation theory in Indiana. The practitioner should
also note that careful examination of the text of enabling statutes

will often yield legal support in a challenge of an agency decision.

D. Administrative Duty—Mandamus

The principle that an administrative agency, or an official within
such an agency, must perform those duties which statutory
authorities require is clearly established.

41 When an administrative

"367 N.E.2d at 1093.

*°See K. Davis. Administrative Law of the Seventies § 2.00, at 20 (1976). See
also White v. Roughton, 530 F.2d 750 (7th Cir. 1976) (holding due process requires ad-

ministrator of state welfare funds to implement written standards governing disburse-

ment).

"See, e.g. f Fromuth v. State, 367 N.E.2d 29 (Ind. Ct. App. 1977). Fromuth held

that the State Personnel Director had a legal duty to follow and implement the deci-

sion of the Indiana State Employees Appeals Commission by virture of Ind. Code §
4-15-2-35 (1976) which provided, in pertinent part: "[T]he appointing authority shall

follow the recommendation of the commission" (emphasis added). 367 N.E.2d at 34. See



1979] SURVEY-ADMINISTRA TIVE LA W 37

agency or official does not perform a duty which the law requires,

the appropriate remedy is an action for mandate pursuant to In-
diana Code sections 34-1-58-1 to 2.42

Indiana Alcoholic Beverage Commission v. State ex rel Har-

mon** held that, in addition to a court order compelling the agency

or official to do what the law requires, an award of damages may be
properly included in the appropriate circumstances. The court of ap-
peals, citing Indiana Code section 34-1-58-444 and relying upon State

ex rel Cheeks v. Wirt,*5 held that the statutory language authoriz-

ing damages "as in actions for false returns" was illustrative rather
than restrictive and would support an award of damages in conjunc-
tion with the appropriate equitable relief for failure to perform a

statutory duty.
46

On grant of transfer, however, the Indiana Supreme Court
recast the decision of the court of appeals.

47 The supreme court,
recognizing that the relevant statutory language "has never been

fully considered by this Court,"48 undertook a clarification of the

damages aspect of a mandamus action.

also Grenchik v. State ex rel Pavlo, 373 N.E.2d 189, 191 (Ind. Ct. App. 1978) (holding a

municipality to be mere creature of the state and requiring conformance of its acts to

statutory pronouncements); Indiana State Highway Comm'r v. Zehner, 366 N.E.2d 697,
701-02 (Ind. Ct. App. 1977) (ordering administrative bodies to perform discretionary

acts if the bodies have abused their discretion, or have refused to use their discretion

at all; holding that Indiana State Highway Commission must make "expeditious" deter-
mination of condemnation claim wrongfully delayed).

42
Ind. Code § 34-1-58-1 (1976) provides as follows:

Writs of mandate in the circuit and superior courts of this state are hereby

abolished, and the causes of action heretofore remedied by means of such

writs shall hereafter exist and be remedied by means of complaint and sum-

mons in the name of the state on relation of the party in interest, in the cir-
cuit, superior and probate courts of this state, as other civil actions, and shall

be known as actions for mandate. Writs of mandate and prohibition may
issue out of the Supreme and Appellate Courts of this state in aid of the ap-
pellate powers and functions of said courts respectively.

Id. § 34-1-58-2 (1976) provides as follows: "The action for mandate may be prosecuted
against any inferior tribunal, corporation, public or corporate officer or person to com-

pel the performance of any act which the law specifically enjoins, or any duty resulting

from any office, trust or station."

"365 N.E.2d 1225 (Ind. Ct. App. 1977), rev'd, 379 N.E.2d 140 (Ind. 1978).

"Ind. Code § 35-1-58-4 (1976), cited in Indiana Alcoholic Beverage Comm'n v.
State ex rel Harmon, 365 N.E.2d at 1230. The statute provides* in pertinent part:
"The court shall grant plaintiff such relief, and such only, as he may be entitled to
under the law and facts in such action, together with damages as in actions for false
returns . . . ."

46203 Ind. 121, 177 N.E. 441 (1931), relied upon in Indiana Alcoholic Beverage
Comm'n v. State ex rel Harmon, 365 N.E.2d at 1230.

46365 N.E.2d at 1231.
47379 N.E.2d 140 (Ind. 1978).

"Id. at 143.



38 INDIANA LAW REVIEW [Vol. 12:30

The supreme court engaged in an extensive and well-reasoned
chronological exegesis of the damages aspect of the mandamus
remedy. The court quoted a predecessor version of the relevant
statute

49 and concluded that the evolution of our present statute was
designed in part to consolidate the right of action for a false return

with the mandamus proceeding itself.50 The court reasoned that the
language preserved by the legislature in the contemporary counter-

part statute — "as in actions for false returns" — was intended to
preserve the common law need to show proof of false return.51 In
view of the fact that mandamus now proceeds through the summons,
pleading of complaint, and answer, the court concluded: "[T]he

Legislature intended to permit the successful plaintiff to recover

damages if he is required to make proof on issues of fact in order to
obtain a judgment compelling a defendant officer or body to comply
with the law."52

The court then held that the "subjection of the plaintiff to the
rigors, vexation and expense of trial" forms the basis of the award
of damages, and the successful plaintiff is entitled to compensation

for "all injuries flowing as a natural and probable consequence of

the subjection to such trials." 53 It is apparent that the supreme court
has, indeed, clarified the damages aspect of the mandamus remedy.
It is equally clear that the prospect of compensatory liability, upon

proper proof by a successful plaintiff in a mandamus action, should
induce a more responsive attitude on the part of the agency or of-
ficial who is petitioned to do something which the law clearly re-
quires. Thus, for the practitioner litigating a mandamus action, proof
of damages resulting from the necessity of trial should be a stand-
ard component of plaintiffs case in chief.54

E. Procedural Due Process

A relatively recent development in administrative law involves
the application of procedural due process, e.g., the right to notice

49The quoted portion is as follows:

In case a verdict shall be found for the plaintiff where the writ is in the

alternative, or if judgment is given for him, he shall recover damages as in

an action for a false return, against the party making the return, and a

peremptory writ shall be granted without delay.

Act of Apr. 7, 1881, ch. 38, § 808, 1881 Ind. Acts 380, quoted in Indiana Alcoholic

Beverage Comm'n v. State ex rel Harmon, 379 N.E.2d at 143.
M379 N.E.2d at 143.
61Id at 144.

"'Id.

<*Id.

"Given the rather murky history of damages in mandamus actions, the clarifying

decision of the supreme court has, in essence, revitalized this remedial device and

given the practitioner a powerful tool for both trial and negotiation.



1979] SURVEY-ADMINISTRA TIVE LA W 39

and an opportunity to be heard, in those cases in which state action

infringes upon alleged liberty or property interests.55 The pro-
cedural due process theory has become embedded in the framework
of the administrative appeal, and two cases decided during the
survey period indicate the circumstances under which an argument
for procedural due process will, or will not, receive a favorable

reception in the appellate courts of Indiana.

In Gardner v. Talley,™ the appellant challenged his dismissal
from the Indiana State Highway Commission, claiming a constitu-
tional right to a due process hearing prior to termination. The court
of appeals rejected this contention, finding on the basis of a two-

pronged test that the statute controlling appellant's employment
neither expressly authorized a pre-termination hearing, nor created

a property interest entitled to constitutional protections.57

55
See, e.g., Bishop v. Wood, 426 U.S. 341 (1976); Arnett v. Kennedy, 416 U.S. 134

(1974); Perry v. Sindermann, 408 U.S. 593 (1972); Board of Regents of State Colleges v.

Roth, 408 U.S. 564 (1972).
66373 N.E.2d 175 (Ind. Ct. App. 1978).
57
Id. at 177. The relevant statutes are as follows: Ind. Code § 8-13-1.5-5 (1976)

(limitation of number of employees of same political affiliation):

The highway commission shall not have more than sixty per cent (60%) of

the employees covered by this chapter (8-13-1.5-1 to 8-13-1.5-8) in each pay

classification, and insofar as practicable, as adherents to any one (1) political

party. To meet the requirements of this section, the Commission is hereby
authorized to discharge at least twenty per cent (20%) of all employees

employed under the provisions of this chapter at the beginning of each

Governor's administration. If, in the opinion of the Commission, rehiring of

discharged employees is in the best interest of the Commission, such

employees may be reinstated. Employees that are retained or employed
under the provisions of this chapter may be dismissed, demoted, suspended
or laid off because of their political affiliation in order to achieve the political

balance require by this chapter. It is the intent of this chapter, however, to

emphasize stability of government through continuity of employment and

career opportunity.

Id. § 8-13-1.5-6 (dismissal of employees for cause):

Any employee may be dismissed, demoted, suspended or laid off for cause.
For the purpose of this chapter (8-13-1.5-1 to 8-13-1.5-8) cause shall be any ac-

tion or inaction of any employee that produces, incurs or results in the

substantial diminution of the employee's ability or willingness to perform his

duties, impairs the ability or willingness of any other employee of the institu-

tion or agency of state government to perform his duties or brings discredit

upon the State of Indiana. Cause may include but shall not be limited to the
following: intoxication on the job; physical or mental inability to perform the

job requirements; personality characteristics which substantially limit the

employee's or his fellow employee's ability to perform his duties, or which

severely handicap the administration of the commission; and, action or inac-

tion which severely limits or prohibits the implementation of administrative

policies.

(emphasis added).



40 INDIANA LAW REVIEW [Vol. 12:30

The court first found that the terms of the Indiana State
Highway Commission— Bi-Partisan Personnel System58 "specifically
limits an employee's expectation of continued employment to the
term of the office of the governor of Indiana." 59 In addition, the
statutory provision dealing with dismissal "for cause" defined the

term in an extremely open-ended manner. The court, therefore, con-
cluded: "The specificity demonstrated in other Acts is conspicuously
lacking in the Bipartisan Personnel Act . . ."80 and held that no prop-

erty interest was created by the Act.61 Thus, since the text of the
Act itself was barren of any express or implied right to a pre-
termination hearing, and since no property interest was created, the
court of appeals reversed the decision of the trial court and held

that due process requirements did not require a hearing prior to

dismissal.
62

Interestingly, the Seventh Circuit Court of Appeals, in Indiana

State Employees Association v. Boehning,*3 had earlier held that the
Act did create a sufficient claim of entitlement to continued employ-
ment, a property interest, to require "notice and hearing before

discharge."
64 The Seventh Circuit construed the Act as authorizing

dismissal on two grounds: (1) Dismissal for cause under section 665

and (2) dismissal on account of political affiliation under section 5.66

The court reasoned that, because only two types of grounds were
specifically listed, the Act excluded dismissal for other grounds.67

The court concluded: "[T]he limitation to these two types of grounds
are sufficient to support a claim of entitlement under the principles

stated in Roth and Sinderman."68

The decision of the Seventh Circuit appears to be well-reasoned,
particularly in light of one of the Act's stated purposes: "It is the in-

tent of this chapter, however, to emphasize stability of government

through continuity of employment and career opportunity."69 The

^Ind. Code §§ 8-13-1.5-1 to 8 (1976). The ostensible purpose of the Act is to
achieve a balance between the political affiliations of employees and to create a work

force more responsive to the incumbent gubernatorial party.
59373 N.E.2d at 177.

"Id.
6
7<£

«2
Ia\ at 178.

63511 F.2d 834 (7th Cir.), rev'd on other grounds, 423 U.S. 6 (1975).
M511 F.2d at 838.

"Id. at 837-38 (construing Ind. Code § 8-13-1.5-6 (1976)). See note 57 supra.
M511 F.2d at 837-38 (construing Ind. Code § 8-13-1.5-5 (1976)). See note 57 supra.
67511 F.2d at 838.

"Id. While the court's holding was not expressly limited to dismissals for cause,

one should note that it did emphasize that the plaintiff was not dismissed for political

reasons. Id.
69
Ind. Code § 8-13-1.5-5 (1976).



1979] SURVEY-ADMINISTRA TIVE LAW 41

Talley court was obviously not persuaded by the Seventh Circuit's
construction of the Act. The court, noting that Boehning was re-
versed on the basis of abstention, stated that the case's impact had

been severely limited.70 Even if Boehning had not been subsequently
appealed and reversed on other grounds, the decision would have

had little precedential weight because the question of whether a
"property interest" or a "claim of entitlement" has been created is a

matter of state law and not federal constitutional law.71

In sharp contrast to Talley is Wilson v. Review Board of the In-
diana Employment Security Division. 12 In Wilson the facts disclosed
that the appellant (Wilson) had begun receiving benefits in
November, 1976. In December, Wilson's former employer submitted

a report indicating that Wilson had refused suitable employment.

Subsequently, when Wilson appeared to file her weekly claim, a
deputy informed her that her benefits had been suspended because

of her refusal. On these facts, the court of appeals held that an in-
sured worker, who is receiving benefits pursuant to the Indiana
Employment Security Act,73 possesses a claim sufficient to con-
stitute a property interest entitled to the protection of constitu-

tional due process.74

Yet, the gravamen of the opinion centered on the "specificity" of
the relevant statute,75 which included amended language that
"benefits shall continue to be paid to said claimant unless said ad-

ministrative determination has been reversed by a due process hear-

ing."
76 The state had argued that the provision had no application

70373 N.E.2d at 176.
71See Bishop v. Wood, 426 U.S. 341, 344 (1976); Board of Regents v. Roth, 408 U.S.

564, 577 (1972).
72373 N.E.2d 331 (Ind. Ct. App. 1978).
73
Ind. Code §§ 22-4-1-1 to 22-4-38-3 (1976 & Supp. 1978).

74373 N.E.2d at 338.
75
Ind. Code § 22-4-17-2(e) (1976). The statute provides, in pertinent part, as

follows:

In cases where the claimant's benefit eligibility or disqualification is

disputed, the division shall promptly notify the claimant and the employer or

employers directly involved or connected with the issue raised as to the

validity of such claim, the eligibility of the claimant for waiting period credit

or benefits, or the imposition of a disqualification period or penalty, or the

denial thereof, and of . . . the cause for which the claimant left his work, of

such determination and the reasons thereof. . . . unless the claimant or such

employer . . . asks a hearing before a referee thereon, such decision shall be

final and benefits shall be paid or denied in accordance therewith. ... In the

event a hearing is requested by an employer or the division after it has been

administratively determined that benefits should be allowed to a claimant,

entitled benefits shall continue to be paid to said claimant unless said ad-

ministrative determination has been reversed by a due process hearing.
n
Ia\ as amended by Act of Feb. 17, 1972, Pub. L. No. 174, § 2, 1972 Ind. Acts 848.



42 INDIANA LAW REVIEW [Vol. 12:30

since the decision of the deputy was a "new determination" rather
than a decision affecting a pre-existing right. The court flatly re-
jected this argument, holding that the quoted amendment was a
curative statute, which would be liberally construed and applied to

situations involving interruption of benefits as well as disputes in-

volving initial determination of eligibility.77 Thus, the case was
ultimately decided by reliance on the clear language of the

legislative amendment expressly authorizing a pre-termination due
process hearing, rather than on a constitutional basis.

Nevertheless, Wilson is an excellent review of procedural due

process considerations, and is highly recommended to both the stu-
dent and practitioner of administrative law. It is especially in-

teresting because, although the decision was eventually anchored in
statutory construction, the court actually structured, in the course

of its opinion, a constitutional argument which supports the results
achieved.

III. Civil Procedure and Jurisdiction

William F. Harvey*

A. Jurisdiction and Service of Process

1. Waiver of Change of Venue.— In Pruden v. Trabits,
1 both

the complaint and a motion for change of venue from the county

were filed on the same day. The court granted the motion for
change of venue and named five counties from which the plaintiff
struck one. The defendants did not, however, strike any counties
within the time limits in Trial Rule 76(9).2

The court of appeals held that Trial Rule 76(9) requires that the
moving party inquire whether the other parties have struck any
county,3 and if they have not, then the moving party must timely re-

77373 N.E.2d at 343-44.

*Dean, Indiana University School of Law— Indianapolis. A.B., University of
Missouri, 1954; J.D., Georgetown University, 1961.

The author wishes to extend his appreciation to Roger D. Erwin for his

assistance in the preparation of this discussion.

^70 N.E.2d 959 (Ind. Ct. App. 1977).
2
Ind. R. Tr. P. 76(9) provides in part: "[T]he parties within seven [7] days

thereafter, or within such time, not to exceed fourteen [14] days, as the court shall fix,

shall each alternatively strike off the names of such counties."
3
Ind. R. Tr. P. 76(9) also provides in part:

If a moving party fails to so strike within said time, he shall not be entitled

to a change of venue, and the court shall resume general jurisdiction of the