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FILED
Sep 30 2010, 7:25 am

FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: AREND J. ABEL MICHAEL J. BLINN Cohen & Malad, LLP Indianapolis, Indiana

of the supreme court, court of appeals and tax court

CLERK

ATTORNEYS FOR APPELLEE KELLY EUGENE THARP: JULIA BLACKWELL GELINAS JOHN M. T. CHAVIS, II LUCY R. DOLLENS Frost Brown Todd LLC Indianapolis, Indiana ATTORNEYS FOR APPELLEE PAPA JOHN`S U.S.A., INC.: JOHN B. DRUMMY MARK D. GERTH JEFFREY D. HAWKINS Kightlinger & Gray, LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA
THOMAS WILLIAMS and SANFORD KELSEY, ) ) Appellants-Plaintiffs, ) ) vs. ) ) KELLY EUGENE THARP and ) PAPA JOHN`S U.S.A., INC., ) ) Appellees-Defendants. )

No. 29A02-1003-CT-283

APPEAL FROM THE HAMILTON CIRCUIT COURT The Honorable Paul Felix, Judge Cause No. 29C01-0510-CT-1146

September 30, 2010

OPINION - FOR PUBLICATION

CRONE, Judge

Case Summary Thomas Williams and Sanford Kelsey were handcuffed and detained for over an hour in Williams`s driveway after Kelly Eugene Tharp, a Papa John`s pizza delivery driver, told a passerby and a police officer that Kelsey had pulled a gun inside the Papa John`s restaurant where Kelsey and Williams had recently paid for and picked up their pizza. Police searched Williams and Kelsey in full view of their families and neighbors and found no gun. The two men sued Tharp and his employer, Papa John`s U.S.A., Inc., for defamation, false imprisonment, negligence, and intentional infliction of emotional distress. The trial court determined that Tharp`s statements were covered by a qualified privilege developed to protect those who report suspected criminal activity and entered summary judgment in favor of Tharp and Papa John`s. Williams and Kelsey appealed. While the appeal was pending, Tharp pled guilty to falsely reporting that Kelsey had a gun inside the restaurant. As to Williams and Kelsey`s appeal, the Indiana Court of Appeals ruled in their favor, but the Indiana Supreme Court upheld the trial court`s judgment in favor of Tharp and Papa John`s. The supreme court determined that Williams and Kelsey had failed to establish a genuine factual dispute regarding whether Tharp knew that his statements were false and thus abused the qualified privilege. The court also noted that after
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it held oral argument, Williams and Kelsey petitioned to file a motion for relief from the trial court`s judgment based on Tharp`s guilty plea to false reporting. The court denied Williams and Kelsey`s petition and said that they could file a motion for relief with the trial court, which could consider whether the motion was filed within a reasonable time and should be granted. Williams and Kelsey then filed a motion for relief from judgment with the trial court, which summarily denied it. Williams and Kelsey (Appellants) now appeal the trial court`s denial of their motion for relief from the judgment in favor of Tharp and Papa John`s (Appellees), asserting that their motion was filed within a reasonable time and that Tharp`s guilty plea creates a genuine factual dispute regarding whether he knew that his statements were false and thus abused the qualified privilege. We agree with Appellants on both counts and reverse and remand for further proceedings consistent with this opinion. Facts and Procedural History In Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009),1 Justice Dickson (joined by Chief Justice Shepard and Justice Sullivan) outlined the relevant facts as follows: On February 19, 2005, around 9:30 p.m., the plaintiffs [Kelsey and Williams] drove to a Papa John`s restaurant to pick up an order. Kelsey wore a full-length tan coat and at the front of his waist a rectangular black fanny pack with silver reflective material. Williams planned to pick up the tab, but inside the restaurant Kelsey contributed by handing cash to Williams, which Kelsey removed from his brown leather bi-fold wallet inside the fanny pack. Williams

Indiana Appellate Rule 22(A) provides in pertinent part that [a]ll Indiana cases shall be cited by giving the title of the case followed by the volume and page of the regional and official reporter (where both exist), the court of disposition, and the year of the opinion[.] For reasons unknown, Appellants do not provide the North Eastern Reporter citation for Williams in their appellate briefs, but rather cite to a copy of the slip opinion in their appellants` appendix.
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accepted the money and paid the bill by credit card. The men left the store and drove directly home. Tharp worked that night as a delivery driver. He had never met and did not know the plaintiffs. While the plaintiffs were paying, Tharp had come to the front of the store and, according to his deposition testimony, saw a guy at the counter, and he was looking down ..., and he pulled out what I thought was a gun. Tharp said the man looked up.... He didn`t move his head, he moved his eyes, and he saw me looking at him, and he stuck his hand back in his coat. Tharp went out the door, and whoever was there, the first person it was ... I said, we need to watch that guy because I think he had a gun. He pulled out a gun, and he stuck it back in when he thought--when he saw me looking at him. The passerby called police. Meanwhile, Tharp returned inside and told another restaurant employee, Christian Martin, that one of the customers had a gun. Martin walked to the front of the store and noticed Kelsey`s fanny pack but did not see a gun. The Westfield, Indiana, Police Department dispatched Officer Jeff Frolick to Papa John`s on a report of a person carrying a weapon. The officer happened to be across the street at the time, so he arrived quickly, but the plaintiffs had already left. After parking, Officer Frolick spoke with two men in the parking lot--one was Tharp, who falsely identified himself as Arthur Tharp; the other was the passerby. Tharp told the officer that two black males came into Papa John`s Restaurant, one was wearing a long tan coat and he pulled a hand gun out of his waistband or a holster and then put it back into some type of holder. Tharp gave Officer Frolick the license plate number, which he had written down, and a description of Williams`s car. Frolick relayed this information to dispatch. Tharp described the weapon as a medium-sized silver gun with a brown wooden handle with two small silver circles. He told Officer Frolick that he had been standing behind the clerk at the register when he saw the gun. (Later in his deposition Tharp recalled the gun as having a black grip with small silver circles on the handle.) It is undisputed that Tharp never claimed that either plaintiff committed a robbery, made threats, demanded money, or pointed a gun at anyone. Officer Frolick told Tharp to stay by the police car while he went inside to speak with other employees. None of the three other employees reported that the store had been robbed or that anyone had made threats with a gun or demanded money. Frolick went behind the counter to where he understood Tharp to say he had been standing, but the officer did not think someone standing in that location could see a customer`s waist and believed that Tharp, who is shorter than Frolick, could not have seen what he claimed. When Officer Frolick returned outside, Tharp was gone. Tharp explained at his deposition that he fled because he had outstanding warrants and feared arrest

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once his identity was discovered and that what I saw was the only motivation. I didn`t--I didn't really want to talk to police that night. After Williams and Kelsey made the short drive to Williams`s home and parked, police ordered them out of the car at gunpoint, ordered them to their knees, and handcuffed them, thereafter detaining the men for over an hour while family and neighbors looked on. Police told the men they were investigating a report of someone flashing a gun around at the Papa John`s location or pulling a gun out. No officer said they were investigating a robbery. Police found no gun, and the men were released. Tharp had worked for Papa John`s elsewhere twice before. The first stint ended with a firing and a later conviction for theft. He used a false name for his second period of employment, which ended because of his incarceration for fraud stemming from events unrelated to his employment. When hired the third time, he used his father`s name, social security number, and driver`s license number. After he left the scene on February 19, Tharp did not return to work at Papa John`s (he later learned that he was fired). Tharp later returned money to Papa John`s that was in his car when he left and penned a letter, maintaining, I don't care what that Black guy says--he was getting ready to rob the store. Why else put his hand on his gun & start to pull it out[?] The plaintiffs sued Papa John`s and Tharp, seeking compensatory and punitive damages, alleging that Tharp`s statement constituted defamation per se, that the plaintiffs were falsely imprisoned as a result, that Tharp intentionally inflicted emotional distress upon them, and that Tharp`s actions were negligent. Papa John`s was alleged to be liable under the doctrine of respondeat superior as well as for negligent hiring, retention, and supervision. Papa John`s moved for summary judgment, and Tharp joined that motion. Papa John`s also moved to strike certain items of evidence that the plaintiffs designated in their opposition to summary judgment, including paragraph 9 of Officer Frolick`s affidavit (stating his belief that Tharp could not see a customer`s waist from behind the counter) and paragraph 10 (his testimony based on reviewing Papa John`s surveillance video), as well as in-car video from Frolick`s vehicle and a transcript of that video. The trial court granted summary judgment on all counts. The court held that a qualified privilege protected Tharp`s statements, compelling summary judgment for defamation, as well as for negligence, intentional infliction of emotional distress, punitive damages, and, with no underlying tort, negligent hiring. The court also granted summary judgment on the plaintiffs` claim of false imprisonment, concluding that a false report to police was insufficient to create liability. The trial court granted in part and denied in part Papa John`s motion to strike. The court struck the video taken from Officer Frolick`s car at

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the scene as well as paragraph 10 of his affidavit, but declined to strike paragraph 9. The Court of Appeals reversed and remanded on each count.[2] Id. at 759-61 (footnote omitted). Our supreme court granted transfer and addressed the following contentions raised by Appellants: (1) the designated evidence creates a genuine issue of material fact as to whether Tharp abused the qualified privilege, precluding summary judgment based on qualified privilege for the plaintiffs` claims of defamation, false imprisonment, intentional infliction of emotional distress, negligence, negligent hiring, and punitive damages; (2) the trial court erred in striking the in-car video and Officer Frolick`s observations of the security video, which, if admitted, more clearly demonstrate the existence of a genuine issue of material fact; and (3) the language of the complaint was sufficient to allege the plaintiffs` defamation claim. Id. at 762. Because the majority`s analysis of the first issue is critical to our analysis, we quote from it at length: The trial court believed that a qualified privilege protected Tharp`s statements, and accordingly granted summary judgment in the defendants` favor on the plaintiffs` defamation claim. We agree. A qualified privilege applies to communications made in good faith on any subject matter in which the party making the communication has an interest or in reference to which he had a duty, either public or private, either legal, moral, or social, if made to a person having a corresponding interest or duty. Bals v. Verduzco, 600 N.E.2d 1353, 1356 (Ind. 1992) (internal quotation marks omitted). As a defense to defamation, the qualified privilege operates not to change the actionable quality of the words published, but merely [to] rebut[] the inference of malice that is [otherwise] imputed. Holcomb v. Walter's Dimmick Petroleum, Inc., 858 N.E.2d 103, 106 (Ind. 2006) (internal quotation marks omitted). To merit its protection, [t]he
See Williams v. Tharp, 889 N.E.2d 870 (Ind. Ct. App. 2008), vacated by 914 N.E.2d 756 (Ind. 2009). As will be explained more fully infra, before we issued our opinion in Williams, Appellants filed with the trial court a motion for relief from judgment based on Tharp`s guilty plea to false reporting, which the trial court struck because Appellants should have filed an application for leave to file such a motion with this Court.
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burden is upon the defendant in the first instance to establish the existence of a privileged occasion for the publication, by proof of a recognized public or private interest which would justify the utterance of the words. Bals, 600 N.E.2d at 1356. Then the plaintiff ... has the burden of overcoming that privilege by showing that it has been abused. Id. When speaking of abuse, the essence of the concept is not the speaker`s spite but his abuse of the privileged occasion by going beyond the scope of the purposes for which privilege exists. Holcomb, 858 N.E.2d at 106-07 (internal quotation marks omitted). And [u]nless only one conclusion can be drawn from the evidence, the question of whether the privilege has been abused is for the jury. Kelley v. Tanoos, 865 N.E.2d 593, 601 (Ind. 2007). The privileged occasion implicated in this case relates to the public interest in encourag[ing] private citizens and victims not only to report crime, but also to assist law enforcement with investigating and apprehending individuals who engage in criminal activity. Id. The chief benefit is enhanced public safety by facilitating the investigation of suspected criminal activity. Holcomb, 858 N.E.2d at 108.... On the other hand, a reporting citizen may, out of an excess of caution or even for a nefarious purpose, make false accusations, and our citizens` equally valid interest in having reputations untarnished by false imputations of criminal misconduct has been a cornerstone of defamation law for hundreds of years. See State ex rel. Lopez v. Killigrew, 202 Ind. 397, 401-02, 174 N.E. 808, 810 (1931). Because of the compelling public interest in encouraging citizens to report suspected wrongdoing, however, the law recognizes a limited defense to civil liability premised on erroneous reports of criminal conduct to police: [I]t is well established that in Indiana, communications made to law enforcement to report criminal activity are qualifiedly privileged. Kelley, 865 N.E.2d at 600; see id. at 599-601 (collecting cases). This Court has also noted protection for communications to private citizens that further the same end: enhancing public safety by facilitating the reporting of crime. Id. at 600-01. But the privilege is not without limits: a statement may lose its privileged character upon a showing of abuse wherein: (1) the communicator was primarily motivated by ill will in making the statement; (2) there was excessive publication of the defamatory statements; or (3) the statement was made without belief or grounds for belief in its truth. Bals, 600 N.E.2d at 1356. Against this backdrop, the plaintiffs on appeal do not question that Tharp`s statements fell within the privileged occasion mentioned above, but argue that they came forward with evidence which creates genuine issues of material fact as to whether the privilege was abused. Specifically, the plaintiffs do not argue that Tharp was primarily motivated by ill will (he had never met the plaintiffs before), or was guilty of excessive publication (he told only a few people at the restaurant and responded to Officer Frolick`s
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investigation), but argue that they designated evidence to create a genuine issue about whether Tharp made his statement without belief or grounds for belief in its truth. .... .... A citizen who reports wrongdoing to police knowing that the information is faulty fails to earn protection against a later civil action. But merely arguing about what the speaker should have known is insufficient to show that the speaker made a statement without belief ... in its truth. Bals, 600 N.E.2d at 1356.... [W]ould or could the designated evidence, or the reasonable inferences drawn therefrom, create a genuine issue of material fact regarding whether Tharp made the statement knowing it to be false? The plaintiffs label this a quintessential issue of fact, and we realize that a defendant`s state of mind is ordinarily a question for the jury. See, e.g., Best Homes, Inc. v. Rainwater, 714 N.E.2d 702, 707 (Ind. Ct. App. 1999). [W]e find that the plaintiffs have not designated sufficient evidence to give rise to a genuine issue about whether Tharp made the statement knowing it to be false. Nor was he so obviously mistaken as to support a reasonable inference that he had lied. .... In this case, the plaintiffs rely on several items of evidence which they contend gave rise to a genuine issue of material fact regarding whether Tharp made his accusations without belief or grounds for belief in their truth: (1) Officer Frolick`s testimony that it was not possible to see what Tharp claimed he saw from where he had been standing; (2) none of the other three employees saw a gun (one of whom explained that Tharp, after having left the store, returned inside while the plaintiffs were still present and reported that he thought Kelsey had a gun); (3) Tharp`s admitted record of misconduct, his providing a false name to police, and his flight from the scene; and (4) Tharp`s inconsistent descriptions of the gun. Further, the plaintiffs contend that the evidence excluded on the motion to strike would further establish the fact that Tharp was not merely mistaken, but mendacious. That no other employee thought Kelsey had a gun fails to defeat the privilege. It bears stating the obvious--in a qualified privilege action, the reporting citizen is necessarily mistaken about what he thought he saw. Inasmuch as liability for defamation does not exist where statements are true, the privilege exists to protect tipsters from liability for making inaccurate reports. Thus, the issue is not the factual accuracy of the statements. Kelley, 865 N.E.2d at 602. This evidence, at most, shows that other people disagreed with Tharp`s belief that Kelsey had a gun, and a person`s subjective state of mind is not ordinarily established by majority vote. See Bals, 600 N.E.2d at 1357. The plaintiffs cannot show that the privilege was abused by pointing to the fact that other people disagreed with Tharp`s belief or that Tharp`s belief
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turned out to be mistaken, especially where as here one coworker reported, I did notice the grey and black fanny pack on the one gentleman, but as I said before there was no gun vis[i]ble. As in Bals, this evidence does not support a reasonable inference that Tharp actually lacked belief in the truth of his statement that Kelsey had pulled out a gun. By simply denying the factual content of [the defendant`s] reports, or by referring to other evidence disputing such content, [the plaintiff] does not present substantial evidence that [the defendant] had no grounds for belief in the truth of [his] statement. Bals, 600 N.E.2d at 1357. In other words, although others may have disagreed and reached a different conclusion, [t]he election to make one of two reasonable interpretations does not demonstrate a knowing disregard for the truth. Burns v. Rice, 157 Ohio App. 3d 620, 813 N.E.2d 25, 36 (2004), appeal denied. The plaintiffs add that evidence that Tharp left the store and told the passerby about the gun, then went back into the store and told a coworker about the gun, belies any notion that Tharp truly believed the store was about to be robbed. Although this argument was not made below, it similarly misses the point. It is undisputed that Tharp told Officer Frolick only that Kelsey had pulled out a gun and put it back and that he never claimed that either plaintiff committed a robbery, made threats, demanded money, or pointed a gun at anyone (although he expressed a belief in his later letter that he thought the plaintiffs were about to rob the store). The plaintiffs` argument that Tharp`s inconsistent descriptions of the gun proves he had no belief in his statements also fails to create a genuine issue of material fact regarding whether Tharp stated that Kelsey pulled out a gun knowing the statement was false. During his deposition, Tharp described the gun as having little silver circles on it and a grip that he thought was black. According to Officer Frolick, Tharp described the weapon in detail as a medium-sized silver gun with a brown wooden handle and with two small circles on the handle. The slight difference in descriptions does not create a genuine issue for a jury to decide whether Tharp was lying about believing he saw a gun. If the question was whether Tharp lied about whether the gun he thought he saw had a brown or black handle, the plaintiffs` point may have some traction. But with respect to whether Tharp was lying about his belief that Kelsey had a gun, this discrepancy, at best, shows that his recollection was not perfect. A lapse of memory, however, does not equate to knowledge of falsity; Tharp consistently maintained his belief that Kelsey had a gun, and his consistent description was of a silver gun with a dark handle. Nor was this description so far afield from the items Kelsey was actually wearing to allow a fact finder to conclude that Tharp completely lacked grounds for his belief. Tharp`s description of the gun was consistent with the description of the fanny pack and wallet Kelsey actually possessed (and with the exemplar photos in

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the appendix and parties` briefs), indicating that Tharp not only had grounds for his belief but in fact believed that Kelsey had a gun. The plaintiffs also argue that Tharp`s criminal record supports an inference that his actions were the result of a deliberate lie, but we believe that such use of his record to prove he acted in conformity with his criminal past by lying to police constitutes improper propensity evidence. It is true that the designated evidence establishes that Tharp did falsely identify himself as Arthur and did flee the scene after detailing his version of events. However, the same uncontradicted designated evidence establishes that Tharp provided a false name because he had applied to this Papa John`s using the name Arthur, knew that he had out-standing warrants, and fled to avoid arrest. While correct, as the plaintiffs suggest, that evidence of flight is relevant as circumstantial evidence of Defendant`s consciousness of guilt, the undisputed proof here--Tharp`s deposition testimony--indicates that Tharp`s use of a false name and flight evidenced consciousness of outstanding warrants, not of a deliberate lie regarding his observations of Kelsey. It is not reasonable to infer that he dodged police because he knew he had lied about Kelsey having a gun. What is significant is that Tharp was willing to speak at all, and by doing so, he placed himself at risk for arrest. The plaintiffs` most compelling piece of evidence that Tharp abused the privilege is Officer Frolick`s observation that Tharp could not have seen what he claimed from where he was standing. When taken as true, the officer`s statement supports an inference--however slight--that Tharp fabricated his account. On the other hand, it is undisputed that Kelsey was wearing a black and silver fanny pack at his waist containing a brown leather wallet and, while inside the store and while Tharp was working at the front of the store, retrieved money from his wallet. Furthermore, another employee testified to seeing the fanny pack. It is also undisputed that Tharp said Kelsey had an object on or near his waist which was silver and black or brown. As the trial court observed, [t]he description of the alleged gun fits the characteristics of the fanny pack and the location of the fanny pack is the exact location where Tharp said the gun would be. Tharp otherwise accurately described Kelsey`s appearance and apparel, as well as Williams`s car and license plate number. As in Holcomb, [a]lthough there are logical possibilities, all of these factors are too great a coincidence to support a reasonable inference that Tharp invented his detailed and mostly accurate report. See Holcomb, 858 N.E.2d at 107-08. We find that no genuine issue of material fact exists. Whether Tharp`s misperception was speculative, negligent, or even reckless, it was not so obviously mistaken to permit a reasonable inference that he lied. The trial court did not err in finding a qualified privilege established as a matter of law, thereby precluding the plaintiffs` claim for defamation.

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The plaintiffs also contend that the same misconduct that prevents the Defendants from relying on qualified privilege also subjects them to liability for False Arrest. But Holcomb teaches that the qualified privilege defense to defamation applies as well to the plaintiffs` claim for false imprisonment. 858 N.E.2d at 106-08. Similarly, as regards the plaintiffs` remaining claims of intentional infliction of emotional distress, negligence, and punitive damages, we find that the qualified privilege applicable to citizen reports of suspected criminal activity prevents, as a matter of sound judicial and public policy, a claimant from succeeding on these claims if the privilege applies. Here it applies. With no underlying tort, the plaintiffs` claim against Papa John`s for negligent hiring necessarily fails. See Health & Hosp. Corp. of Marion County v. Gaither, 272 Ind. 251, 260, 397 N.E.2d 589, 595 (1979) (noting a judgment in favor of an employee requires judgment in favor of his employer when the employer`s liability is predicated solely upon the acts of said employee). Because no genuine issue of material fact exists with respect to the defendants` claim of qualified privilege and the privilege is here established as a matter of law, we conclude that the defendants were entitled to summary judgment as to all of their theories of liability. Id. at 762-69 (footnotes and citations to briefs and appendices omitted). The majority then affirmed the trial court`s evidentiary ruling and declined to address Appellants` contention that the trial court erred in finding that the allegations of the complaint were insufficient to raise a claim for defamation because its resolution of the other issues [was] independently dispositive. Id. at 770. The majority affirmed the trial court`s grant of summary judgment in favor of Appellees and dropped the following footnote at the conclusion of its opinion: On March 27, 2009, the plaintiffs filed an application for leave to file a Trial Rule 60(B) motion for relief from judgment in the trial court, asserting that the trial court`s judgment should be set aside because on June 2, 2008, Tharp pleaded guilty to False Reporting, a class B misdemeanor,[3] in violation of Ind. Code

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