FOR PUBLICATION
ATTORNEY FOR APPELLANTS: ATTORNEYS FOR APPELLEES:
NATHANIEL RUFF PAUL J. PERALTA
Merrillville, Indiana D. LUCETTA POPE
Baker & Daniels
South Bend, Indiana
IN THE COURT OF APPEALS OF INDIANA
EDDIE TRAIL and KATRINA TRAIL, )
)
Appellants-Plaintiffs, )
)
vs. ) No. 45A03-0309-CV-389
)
BOYS AND GIRLS CLUB OF NORTHWEST )
INDIANA, DONALD WEISS, BONNIE )
COLEMAN, JOHN DIEDERICH, PAUL )
BAILEY, EDWARD WILLIAMS, FRAN )
TAYLOR, JAMES GREINER, RAYMOND )
MORRIS and BONNIE FINE, )
)
Appellees-Defendants. )
APPEAL FROM THE LAKE CIRCUIT COURT
The Honorable John R. Pera, Judge
Cause No. 45D10-0302-CT-00035
July 8, 2004
OPINION - FOR PUBLICATION
SHARPNACK, Judge
Whether the trial court erred when it dismissed Eddies claim for tortious interference
with a contractual relationship;
Whether the trial court erred when it dismissed Eddies claim for defamation; and
Whether the trial court erred when it dismissed Katrinkas claim for loss of
consortium.
We affirm in part, reverse in part, and remand.
See footnote
The relevant facts alleged in the Trails complaint follow. The Club is
an Indiana not-for-profit corporation that is part of and chartered by the national
Boys and Girls Clubs of America. Eddie was the Executive Director of
the Club for six years. Weiss, Coleman, Diederich, Bailey, Williams, Taylor, Greiner,
Morris, and Fine were members of the Clubs Executive Committee.
(Appellants Appendix
at 16)
In June 2002, Eddie was allegedly removed as Executive Director of the Club,
and, on September 13, 2002, the Trails filed a complaint against the Club,
the members of the Executive Committee in their official capacities, and Weiss, Coleman,
Bailey, and Taylor in their personal capacities (Individual Defendants). The complaint alleged,
in part, that:
[Eddies] employment contract expired December 31, 2001. On January 7, 2002, [Weiss]
called [Eddie] to tell him the Executive Committee determined and voted to give
him a raise and a bonus. On February 4, 2001 (sic), [Diederich]
told [Eddie] that the Executive Committee went around the table and everybody was
asked to give their opinion. A vote then was taken, and it
was unanimously decided to retain [Eddie] as the Executive Director to lead the
organization into the future.
Defendants Weiss, Coleman, Bailey, and Taylor were unhappy for personal reasons with the
retention of [Eddie] as Executive Director. They were upset with [Eddie] because
he refused to defer to them those initiatives and actions that properly were
[Eddies] duties as Executive Director.
To justify reversing the decision of the Executive Committee to retain [Eddie], Weiss,
Coleman, Bailey, and Taylor contrived a study of the Club to assess the
organizations structure and functions . . . to determine if improvements could be
made, but in reality to discredit [Eddie] and justify his termination.
Towards this end, these Defendants structured the actual reporting so that only the
four of them and select individuals, chosen solely by them, would be interviewed
for the study to be performed by a consultant (consultants report).
Although any such report would be given to the Executive Director as a
matter of course, [Eddie] has been denied access to it.
It appears, though, that in addition to these four Defendants, the individuals interviewed
for the report were Club personnel who were unhappy with [Eddie] because he
had withheld performance raises because of poor performance.
In accordance with standard protocol and procedures with the [Club], an adverse consultants
report would be shared with an executive director, any issues or problems would
be openly discussed, and a cure period would be given to the executive
director. None of this occurred here.
On June 26, 2002, Bailey falsely told [Eddie] that the Board of Directors
voted unanimously to terminate him based on the contents of the consultants report.
The [C]lub has approximately 56 member Board of Directors. Under the [Clubs]
articles, [t]he Board has sole authority to terminate [Eddie]. The Board of
Directors was not even presented with the issue of whether or not to
terminate [Eddie].
Bailey subsequently falsely announced to the Board of Directors of the Club and
the media that [Eddie] had resigned.
[The Trails] do not know if the four individual Defendants used the slanted
consultants report to get the other members of the Executive Committee to reverse
their previous unanimous decision to retain him or whether these Defendants tried to
get [Eddie] to resign without any decision by the Board of Directors or
Executive Committee.
The Defendants have refused to release the consultants report to anyone, including the
members of the Board of Directors. The Defendants have released to a
few individuals the alleged contents of parts of the report highly negative about
[Eddie]. One of these individuals, with very close ties to the Club,
told [Eddie] he should have had those who supported him interviewed by the
consultant. [Eddie] told him that he was not allowed to select any
of the interviewees.
With most people the Defendants have refused to say anything about the report.
They know that with the national organization of Boys and Girls Clubs
this would be taken erroneously to mean that [Eddie] had been found to
have committed grave personal improprieties with the children they serve or financial misdeeds
such as embezzlement. Members of the Board of Directors and other officials
of the Club already have drawn these false conclusions from the Defendants silence.
Before the Defendants actions, [Eddie] had an exemplary reputation and status within the
Boys and Girls Clubs, locally and nationally. Since then he has been treated
in almost all instances as a pariah.
[Eddie] has since applied for various openings. He has received form rejections
or simply no response, which would have been inconceivable beforehand. [Eddie] has
sought to find out what was said about him by the Defendants.
The Clubs to which he applied have refused to tell him. In
one instance [Eddie] was offered an interim position, which immediately afterwards was withdrawn
without explanation.
Eddie Trail has suffered emotional pain and suffering and mental distress, loss of
earnings, and damage to his reputation from the Defendants actions. Katrinka Trail
has suffered a loss of consortium.
The actions of the individual Defendants were intentional and malicious. The imposition
of punitive damages against them is appropriate.
Appellants Appendix at 17-20.
The Defendants responded to the complaint by filing a motion to dismiss, alleging
that: (1) the Trails failed to state a claim for breach of contract;
(2) the Trails failed to state a claim in tort; and (3) the
directors of the Club were immunized from civil liability. In support of
the motion to dismiss, the Defendants submitted an affidavit from Bailey in which
Bailey affirmed that the Club was an Indiana not-for-profit corporation and that the
members of the Board of Directors do not receive any monetary or other
remuneration for service as a director. Id. at 17. The Trails
responded to the motion to dismiss by arguing that they had stated claims
for breach of the implied terms of Eddies employment contract, tortious interference with
contractual relationship and prospective business advantage, and defamation. The Defendants filed a
reply brief and submitted another affidavit of Bailey to which the Clubs articles
of incorporation and constitution and bylaws were attached. The trial court entered
an order under Ind. Trial Rule 12(B)(6) dismissing the Trails claims for: (1)
breach of contract; (2) tortious interference with Eddies employment with the Club; (3)
tortious interference with Eddies prospective employment;
See footnote (4) defamation; and (5) loss of consortium.
The Trails appeal the trial courts dismissal of their complaint.
A complaint may not be dismissed under Ind. Trial Rule 12(B)(6) for failure
to state a claim upon which relief can be granted unless it appears
to a certainty on the face of the complaint that the complaining party
is not entitled to any relief.See footnote
McQueen v. Fayette County Sch. Corp.,
711 N.E.2d 62, 65 (Ind. Ct. App. 1999), trans. denied. In ruling
on a motion to dismiss for failure to state a claim, the trial
court is required to view the complaint in a light most favorable to
the nonmoving party and with every reasonable inference in his favor. Id.
The trial court may only look to the complaint, and well-pleaded material
must be taken as admitted. Id.
Ind. Trial Rule 8(A) requires only a short and plain statement of the
claim showing that the pleader is entitled to relief. Under such notice
pleading, a plaintiff is only required to plead the operative facts involved in
the litigation. Id. The rules of notice pleading do not require
that the complaint recite in detail all the facts upon which the claim
is based. Obremski v. Henderson, 497 N.E.2d 909, 910 (Ind. 1986), rehg
denied. Thus, a complaint is sufficient if it states any set of
allegations, no matter how unartfully pleaded, upon which the trial court could have
granted relief. McQueen, 711 N.E.2d at 65. Stated differently, the plaintiff
is required to provide a clean and concise statement that will put the
defendants on notice as to what has taken place and the theory that
the plaintiff plans to pursue. Id. (quoting Impink v. City of Indianapolis,
Bd. of Pub. Works, 612 N.E.2d 1125, 1127 (Ind. Ct. App. 1993)).
We view motions to dismiss for failure to state a claim with disfavor
because such motions undermine the policy of deciding causes of action on their
merits. Id. When reviewing a trial courts grant of a motion
to dismiss, we view the pleadings in a light most favorable to the
nonmoving party, and we draw every reasonable inference in favor of that party.
Id. We will not affirm a dismissal under Ind. Trial Rule
12(B)(6) unless it is apparent that the facts alleged in the challenged pleading
are incapable of supporting relief under any set of circumstances. Id.
Id. (footnote omitted).
Here, the Trails complaint alleged that Eddies employment contract with the Club expired
on December 31, 2001. In January 2002, the Executive Committee voted to
retain Eddie and give him a raise and a bonus, but the parties
did not agree to a new employment contract for a definite or ascertainable
period of time. Thus, when Eddie was allegedly terminated in June 2002,
he was not subject to an employment contract for a definite or ascertainable
term. As for the application of an exception to the employment-at-will doctrine,
the trial court found that the Trails had failed to plead any exception
to the employment at-will doctrine, and, on appeal, the Trails do not argue
that any of the above exceptions are applicable. Consequently, according to the
facts pleaded in the complaint, Eddie was an at-will employee of the Club
and was terminable at any time, with or without cause.
The Trails argue only that they state a claim because, even if Eddie
was an at-will employee, implied terms from the Clubs Articles of Incorporation and
the Clubs standard practices were enforceable before Eddie could be terminated. Specifically,
the Trails argue that only the Board of Directors had the authority under
the Articles of Incorporation to terminate Eddie and that the Board was not
presented with the issue of whether to terminate Eddie. However, we note
that the Trails complaint never specifically alleged that Eddie was terminated or forced
to resign by the Executive Committee. Further, the only authority that the
Trails cite to demonstrate that Eddie states a claim upon which relief can
be granted is Streckfus v. Gardenside Terrace Co-op., Inc., 504 N.E.2d 273 (Ind.
1987). The Trails do not explain how Streckfus is applicable to this
matter and state only that our supreme court has suggested that an employer
may be required to comply with contractual provisions such as these. Appellants
Brief at 10.
In Streckfus, the employee was the Resident Manager of a housing development.
Streckfus, 504 N.E.2d at 274. She was an at-will employee but had
an employment agreement with the developments management company. Id. at 274-275.
Her employment agreement referenced a management contract between the development and the management
company, and the management contract provided procedures by which the management company could
terminate a Resident Manager. Id. Our supreme court held that as
a matter of law, the Employment Agreement did not contain any job security
provision which altered the employment at will relationship . . . .
See footnote
Id. at 276. The Trails fail to demonstrate that Eddie states a
claim upon which relief could be granted based upon the Clubs Articles of
Incorporation or the Clubs standard practices. See also Orr, 689 N.E.2d at
719-720 (holding that an employee handbook did not constitute a valid unilateral contract
between the employee and employer in the absence of adequate independent consideration).
Even viewing the Trails breach of contract claim in a light most favorable
to them, we conclude that under the facts alleged in their complaint Eddie
was an at-will employee and that the Trails provide no authority to demonstrate
that the facts alleged in the complaint are capable of supporting a breach
of contract action against the Club. Further, the Trails do not allege
or argue that Eddie had a contract with the members of the Executive
Committee in their official capacity or the Individual Defendants. Consequently, the trial
court did not err by dismissing the Trails breach of contract claim.
See, e.g., Bee Window, 716 N.E.2d at 502 (holding that the trial
court should have dismissed the employees breach of contract claim).
(a) A director shall, based on facts then known to the director, discharge
duties as a director, including the directors duties as a member of a
committee, as follows:
In good faith.
With the care an ordinarily prudent person in a like position would exercise
under similar circumstances.
In a manner the director reasonably believes to be in the best interests
of the corporation.
With most people the Defendants have refused to say anything about the report.
They know that with the national organization of Boys and Girls Clubs
this would be taken erroneously to mean that [Eddie] had been found to
have committed grave personal improprieties with the children they serve or financial misdeeds
such as embezzlement. Members of the Board of Directors and other officials
of the Club already have drawn these false conclusions from the Defendants silence.
Eddie Trail has suffered emotional pain and suffering and mental distress, loss of
earnings, and damage to his reputation from the Defendants actions. . . .
The actions of the individual Defendants were intentional and malicious. . . .
Appellants Appendix at 18-20. The trial court found that these assertions do
not support a claim of defamation and the Trails provided no evidence of
a communication with defamatory imputation, malice or special damages resulting from the defamation.
Appellants Appendix at 15.
To establish a claim of defamation, a plaintiff must prove the following elements:
(1) a communication with defamatory imputation, (2) malice, (3) publication, and (4)
damages. Davidson v. Perron, 716 N.E.2d 29, 37 (Ind. Ct. App. 1999),
trans. denied. A statement is defamatory if it tends to harm the
reputation of another so as to lower him in the estimation of the
community or to deter third persons from associating or dealing with him.
Gatto v. St. Richard Sch., Inc., 774 N.E.2d 914, 923 (Ind. Ct. App.
2002). The publication element requires the plaintiff to show that the defamatory
matter was published, that is, communicated to a third person or persons.
Mart v. Hess, 703 N.E.2d 190, 194 (Ind. Ct. App. 1998).
The Trails allege that the Defendants released some of the reports contents that
were highly negative about Eddie to various individuals. Appellants Appendix at 19.
In reviewing the complaint in the light most favorable to Eddie and
drawing every reasonable inference from the facts alleged, we conclude that Eddie has
stated a claim upon which relief can be granted. As previously noted,
under notice pleading, Eddie is only required to plead the operative facts involved
in the litigation. The complaint alleged operative facts relating to each element
of a defamation action: (1) a communication with defamatory imputation, i.e., [t]he Defendants
have released to a few individuals the alleged contents of part of the
report highly negative about [Eddie]; (2) malice, i.e., [t]he actions of the individual
Defendants were intentional and malicious; (3) publication, i.e., [t]he Defendants have released to
a few individuals the alleged contents of part of the report highly negative
about [Eddie]; and (4) special damages, i.e., [Eddie] has suffered . . .
loss of earnings . . . from the Defendants actions.
See footnote Appellants Appendix
at 19-20. Thus, the complaint is sufficient to defeat an Ind. Trial
Rule 12(B)(6) motion to dismiss. Although unartfully pleaded, the complaint placed the
Defendants on notice as to the theory of Eddies defamation claim and its
underlying facts and is capable of supporting a defamation claim. Accordingly, we
reverse the trial courts dismissal of this defamation claim and remand the case
for further proceedings consistent with this opinion.
See, e.g., McQueen, 711 N.E.2d
at 67 (holding that the trial court erred by dismissing the plaintiffs defamation
claim).
If, on a motion, asserting the defense number (6), to dismiss for failure
of the pleading to state a claim upon which relief can be granted,
matters outside the pleading are presented to and not excluded by the court,
the motion shall be treated as one for summary judgment and disposed of
as provided in Rule 56. In such case, all parties shall be
given reasonable opportunity to present all material made pertinent to such a motion
by Rule 56.
Although the Defendants submitted affidavits to the trial court in support of their
motion to dismiss, we find no indication that the trial court found it
necessary to use these affidavits or that the affidavits were relevant to the
issues.
See, e.g., Dixon v. Siwy, 661 N.E.2d 600, 603 (Ind. Ct.
App. 1996) (holding that a trial court is not required to convert a
motion to dismiss to a motion for summary judgment where external evidence is
submitted if the external evidence is irrelevant to the issue). Moreover, neither
the Trails, the Defendants, nor the trial court contend that the motion to
dismiss was converted to a motion for summary judgment. Consequently, we will
review the motion as a motion to dismiss.