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Cerajeski v. Zoeller

United States District Court, S.D. Indiana, Indianapolis Division

January 26, 2015

KATHERINE CERAJESKI, Guardian for Walter Cerajeski, Plaintiff,
v.
GREG ZOELLER, Attorney General of the State of Indiana, et al., Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

JANE MAGNUS-STINSON, District Judge.

Plaintiff Katherine Cerajeski, as Guardian for Walter Cerajeski, has filed a Motion for Award of Attorneys' Fees. [Filing No. 84.] Ms. Cerajeski requests that this Court award her $258, 462.50 for time that her appellate counsel spent working on her case, which culminated in her obtaining a favorable decision in Cerajeski v. Zoeller, 735 F.3d 577 (7th Cir. 2013).[1] [Filing No. 84; Filing No. 85.] Defendants Greg Zoeller, in his official capacity as the Attorney General of the State of Indiana, and Kelly Mitchell, in her official capacity as the Treasurer of the State of Indiana[2] (collectively, the "State") oppose Ms. Cerajeski's request for attorneys' fees. [Filing No. 88.] For the following reasons, the Court concludes that Ms. Cerajeski is not entitled to attorneys' fees and, thus, denies her motion. [Filing No. 84.]

I.

BACKGROUND

A. Ms. Cerajeski's Claim

On December 23, 2011, Ms. Cerajeski filed a Complaint against the State, asserting "an action under 42 U.S.C. § 1983 and the United States Constitution."[3] [Filing No. 1 at 1.] In relevant part, Ms. Cerajeski alleged that a portion of the Indiana Unclaimed Property Act (the "UPA") violated the Takings Clause of the Fifth Amendment to the United States Constitution, as applied to Indiana through the Fourteenth Amendment. [Filing No. 1 at 1-2.] At that time, the UPA provided that unclaimed property, as defined by the statute, remitted to the State once certain conditions are met and was "presumed abandoned." See Ind. Code § 32-34-1-1, et seq.; Ind. Code § 32-34-1-20 (titled "Presumption of Abandonment"). The UPA further provided at that time that although the owner could file a claim and receive the property back, the owner was not entitled to any dividends, interest, or other increments accrued after delivery to the Attorney General. Ind. Code § 32-34-1-30(b) (2013).

Ms. Cerajeski alleged that on or about September 21, 2006, Mainsource Bank of Hobart delivered certain funds from a bank account to the State. [Filing No. 1 at 7.] Ms. Cerajeski had not made a claim for the money, and she believed at the time she filed her Complaint that if she did make such a claim, the State "will return only the principal amount held, but will not pay just compensation for the use of that money during the period of custody." [Filing No. 1 at 7.] There is no evidence in the record, and it appears undisputed, that to this day Ms. Cerajeski has never made a claim for the money the State is holding.

Ms. Cerajeski's Complaint sets forth three claims: 1) "Count I-Violation of 42 U.S.C. § 1983 and the Constitution of the United States (Substantive Due Process)"; 2) "Count II-Violation of 42 U.S.C. § 1983 and the Constitution of the United States (Procedural Due Process)"; and 3) "Count III-Claim for Prospective Relief (Fifth Amendment Takings Clause)." [Filing No. 1 at 7-11.] Ms. Cerajeski specifically noted that

[i]n Count III, Plaintiffs seek prospective relief in the form of a declaration that the State of Indiana must pay just compensation to unclaimed property owners in the future for the use of their private property, and/or an injunction to prohibit the State of Indiana, including the Defendants, from enforcing the unconstitutional provisions of the UPA in the future.

[Filing No. 1 at 11.]

In response to Ms. Cerajeski's Complaint, the State filed a Motion to Dismiss. [Filing No. 14.] This Court granted the State's Motion to Dismiss, concluding in relevant part that Ms. Cerajeski had not stated a takings claim that was plausible on its face.[4] [Filing No. 13 at 10.] In so holding, the Court emphasized Ms. Cerajeski's repeated assertions that she sought "purely prospective" relief and was "not seeking interest earned on their property" but, instead, sought "an order enjoining Defendants to pay just compensation with respect to future claims for their use of unclaimed property." [Filing No. 35 at 5 (quoting Filing No. 19 at 21; Filing No. 19 at 23 (original emphasis)); Filing No. 19 at 27.]

B. Ms. Cerajeski's Appeal

On December 7, 2012, Ms. Cerajeski appealed the Court's dismissal of her action to the Seventh Circuit Court of Appeals. [Filing No. 37.] On November 22, 2013, the Seventh Circuit issued a Mandate reversing this Court's decision and remanding Ms. Cerajeski's action to this Court. [Filing No. 48.] The Seventh Circuit held that "[t]he confiscation of the interest on Cerajeski's principal was [] a taking of a part of [the] property." Cerajeski v. Zoeller, 735 F.3d 577, 579 (7th Cir. 2013). The Seventh Circuit emphasized that "Cerajeski did not voluntarily relinquish either the principal or the interest in [the] bank account... [so t]he account was unclaimed rather than abandoned." Id. at 581. Because the State was "merely a custodian" of the unclaimed property, "[t]here is no basis for the state's confiscating the interest in Cerajeski's account." Id. at 582. Ultimately, the Seventh Circuit reversed and remanded the case to this Court for further proceedings consistent with its opinion. Id. at 583. The Seventh Circuit concluded as follows:

The plaintiff is entitled to just compensation from the state when she files her claim to Cerajeski's account, but the amount of that just compensation has yet to be determined. The plaintiff has also sought an injunction-why we don't know; and injunctive relief may well be unavailable in this case. "Equitable relief is not available to enjoin an alleged taking of private property for a public use." Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984). The ...

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