Preview:

FOR PUBLICATION

ATTORNEYS FOR APPELLANT: JOHN R. CARR III CHRISTOPHER D. SEIGEL CHARLES N. DOBERNECK Ayres Carr & Sullivan, P.C. Indianapolis, Indiana

ATTORNEYS FOR APPELLEES: HUDNALL A. PFEIFFER SUSAN W. KLINE Baker & Daniels LLP Indianapolis, Indiana THOMAS E. DEER BONNIE L. MARTIN Ogletree, Deakins, Nash Smoak & Stewart, P.C. Indianapolis, Indiana

FILED
Oct 15 2008, 10:11 am
of the supreme court, court of appeals and tax court

CLERK

IN THE COURT OF APPEALS OF INDIANA
WILLIAM H. HART, Appellant-Plaintiff, vs. WALTER C. WEBSTER and THE STEAK-N-SHAKE COMPANY, Appellees-Defendants. ) ) ) ) ) ) ) ) ) )

No. 49A05-0802-CV-47

APPEAL FROM THE MARION SUPERIOR COURT CIVIL DIVISION, ROOM 13 The Honorable S.K. Reid, Judge Cause No. 49D13-0705-CT-21093 October 15, 2008 OPINION - FOR PUBLICATION

RILEY, Judge

STATEMENT OF THE CASE Appellant-Plaintiff, William H. Hart (Hart), appeals the trial court's dismissal of his claims for defamation and invasion of privacy against Appellees-Defendants, Walter C. Webster (Webster) and The Steak-n-Shake Company (SNS) (collectively, Defendants). We reverse and remand. ISSUE Hart presents several issues for our review, which we restate as the following single issue: Whether the trial court erred in determining that it lacked subject matter jurisdiction over Hart's claims. FACTS AND PROCEDURAL HISTORY Hart's original Complaint in this case alleged the following facts. Hart began working for SNS in 1979. In 1988, Hart became SNS's Vice President of Purchasing. In 2005, SNS instructed Webster, its Director of Quality Assurance, to investigate allegations that Hart had violated SNS's gratuity policy and engaged in unethical relationships with SNS's vendors. Hart was initially suspended from his employment, but he was eventually cleared of all wrongdoing. Nonetheless, Hart claims that Webster "maliciously communicated to persons employed by SNS, persons who had dealings with SNS, including but not limited to, vendors from which SNS purchased products and supplies, and others, that Hart had engaged in unethical conduct in the course of Hart's duties as Vice President of Purchasing." (Appellant's App. pp. 16-17). According to Hart, "Such communications included

allegations that Hart was `on the take' and had accepted gratuities, `kick-backs', and bribes 2

from vendors, which had allegedly enriched Hart at the expense of higher costs, lower quality, or `shorted' quantity of products and supplies ordered by Hart on behalf of SNS." (Appellant's App. p. 17). Hart claimed that, because of the "embarrassment, humiliation, and severe emotional and physical distress" that he suffered as a result of the investigation, he became "fully disabled and unable to work." (Appellant's App. p. 18). As a result, on April 24, 2006, SNS terminated Hart's employment. On May 15, 2007, Hart filed a Complaint against Webster and SNS, claiming defamation and invasion of privacy against both Defendants, and claiming tortious interference with his employment against Webster only. Hart claimed, in part, that his "business and personal reputation" had been damaged and that the "defamatory communications resulted in Hart suffering embarrassment, humiliation, and severe emotional and physical distress to the point that Hart's doctor determined that Hart was fully disabled and unable to work." (Appellant's App. p. 18). On July 9, 2007, the Defendants filed a joint motion to dismiss. The Defendants asked for dismissal "with prejudice" under Indiana Trial Rule 12(B)(1) for lack of subject matter jurisdiction because Hart's claims arose out of his employment and therefore lie within the exclusive jurisdiction of Indiana's Worker's Compensation Board. The

Defendants also asked that Hart's defamation and invasion of privacy claims be dismissed under Indiana Trial Rule 12(B)(6) for failure to plead with sufficient specificity. Finally, the Defendants asked the trial court to dismiss Hart's tortious interference with employment

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claim against Webster under Indiana Trial Rule 12(B)(6) for failure to state a claim upon which relief could be granted. On August 31, 2007, Hart filed a memorandum in opposition to the Defendants' joint motion to dismiss and an Amended Complaint. In his Amended Complaint, Hart dropped his claim of tortious interference with employment against Webster. Furthermore, in the amended defamation and invasion of privacy counts, Hart wrote: Although in addition to damage to Hart's business and personal reputation, and loss of past and future compensation, Hart has suffered severe emotional and physical distress and has incurred and will incur costs and expenses in connection with the treatment of such emotional and physical distress, as well as certain impairment or disability, Hart expressly disclaims recovery for any physical injuries, medical expenses, anything constituting impairment or disability as defined by the Indiana Worker's Compensation Act [(WCA)], and any other recovery or benefit whatever for any injury covered by the [WCA] which resulted or may result from the facts and circumstances alleged in this [Amended Complaint]. (Appellant's App. pp. 41-42). However, the Amended Complaint still claimed that the "defamatory communications resulted in Hart suffering embarrassment, humiliation, and severe emotional and physical distress to the point that Hart's doctor determined that Hart was fully disabled and unable to work." (Appellant's App. p. 40). On November 26, 2007, the trial court held a hearing on the Defendants' motion to dismiss and gave the parties ten days to file proposed orders. On November 29, 2007, before Hart could tender a proposed order, the trial court issued an order dismissing Hart's Amended Complaint "based solely upon Trial Rule 12(B)(6)." (Appellant's App. p. 47). The trial court held that Hart's Amended Complaint "lack[ed] the required specificity for the claims of defamation and invasion of privacy." (Appellant's App. p. 47). However, the trial

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court denied the Defendants' motion to dismiss for lack of subject matter jurisdiction under Indiana Trial Rule 12(B)(1), noting that it was "unable to make a determination as to jurisdiction based upon the facts as [pled] in [Hart's] Amended Complaint." (Appellant's App. p. 47). The trial court dismissed Hart's Amended Complaint "without prejudice" and ordered him to file another amended complaint within fifteen days. (Appellant's App. p. 48). On December 7, 2007, Hart filed a Motion to Reconsider Order of Dismissal Under Trial Rule 12(B)(6), arguing that his Amended Complaint was sufficiently specific and asking that it be reinstated. In turn, on December 13, 2007, the Defendants filed a Joint Motion to Reconsider Ruling on Motion to Dismiss Under Trial Rule 12(B)(1). The Defendants suggested that Hart had "essentially decline[ed]" the trial court's offer to replead by filing his December 7 motion to reconsider. (Appellant's App. p. 50). "In doing so," the Defendants urged, "it is clear [Hart] realizes he cannot `fix' the defects in his claims. . . . Accordingly, the Defendants respectfully request that the Court reconsider their Motion under Trial Rule 12(B)(1) and dismiss [Hart's] claims for lack of subject matter jurisdiction." (Appellant's App. p. 50). Specifically, the Defendants claimed, "Here, [Hart] says there was total disability, so workers' compensation is the exclusive remedy, and the Court lacks jurisdiction." (Appellant's App. p. 50). The following day, December 14, 2007, contrary to the Defendants' claim that he had "essentially declin[ed]" the trial court's offer to replead, Hart filed his Second Amended Complaint, in accordance with the trial court's prior dismissal order. In his Second Amended Complaint, Hart omitted his prior references to "severe emotional and physical distress" and

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the claim that he was "fully disabled and unable to work." Also, he again "expressly disclaim[ed] recovery" under the WCA. (Appellant's App. pp. 57-58). On December 18, 2007, the trial court denied Hart's Motion to Reconsider Order of Dismissal Under Trial Rule 12(B)(6). Thereafter, on January 4, 2008, the trial court granted the Defendants' Joint Motion to Reconsider Ruling on Motion to Dismiss Under Trial Rule 12(B)(1). The trial court wrote, "IT IS THEREFORE ORDERED that [Hart's] Complaint is dismissed in its entirety, with prejudice, under Trial Rule 12(B)(1)." (Appellant's App. p. 11). The trial court did not specify whether it was referring to Hart's original Complaint, his Amended Complaint or his Second Amended Complaint, or all three. On January 11, 2008, Hart filed a Motion to Clarify and Reconsider Order of Dismissal Under Trial Rule 12(B)(1). Hart asked the trial court to clarify which of his complaints it meant to dismiss, to reconsider its dismissal order, and to hold that it has subject matter jurisdiction over the claims in Hart's Second Amended Complaint. On February 4, 2008, Hart filed a Motion to Treat Motion to Clarify and Reconsider as Motion to Correct Error. On February 8, 2008, the trial court granted Hart's Motion to Treat Motion to Clarify and Reconsider as Motion to Correct Error. On April 28, 2008, the trial court issued an order denying Hart's motion to correct error. Hart now appeals. Additional facts will be provided as necessary. DISCUSSION AND DECISION On appeal, Hart contends that the trial court erred in dismissing his claims for lack of subject matter jurisdiction under Indiana Trial Rule 12(B)(1). The parties agree that, because the trial court did not have to resolve any disputed factual issues, the jurisdictional question is 6

purely one of law that should be reviewed de novo. GKN Co. v. Magness, 744 N.E.2d 397, 401 (Ind. 2001). Initially, we conclude that the trial court properly dismissed Hart's original Complaint and his Amended Complaint for lack of subject matter jurisdiction. The relevant question in determining subject matter jurisdiction is whether the type of claim presented by the plaintiff falls within the general scope of the authority conferred upon the court by constitution or statute. Dietz v. Finlay Fine Jewelry Corp., 754 N.E.2d 958, 964 (Ind. Ct. App. 2001). The WCA generally governs "compensation for personal injury or death by accident arising out of and in the course of [] employment[.]" Ind. Code

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