Court Opinion

ID: 3210363
Source: CourtListenerOpinion
Date Created: 2016-06-08 15:04:42.956538+00
Date Added: 2024-06-11T14:45:52.352766
License: Public Domain

FILED
                                                                Jun 08 2016, 8:14 am

                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court

ATTORNEY FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Rosemary L. Borek                                          Mickey J. Lee
Stephenson Morow & Semler                                  Maurice Wutscher LLP
Indianapolis, Indiana                                      Indianapolis, Indiana
                                                           George W. Pendygraft
                                                           George W. Pendygraft, P.C.
                                                           Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

City of Lawrence Utilities                                 June 8, 2016
Service Board, City of Lawrence,                           Court of Appeals Case No.
Indiana, and Mayor Dean                                    49A02-1506-CT-699
Jessup, Individually and in His                            Appeal from the Marion Superior
Official Capacity,                                         Court
Appellants-Defendants,                                     The Honorable Timothy W.
                                                           Oakes, Judge
        v.                                                 Trial Court Cause No.
                                                           49D02-1212-CT-48783
Carlton E. Curry,
Appellee-Plaintiff

Baker, Judge.

Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016                  Page 1 of 17
[1]   An Indiana statute clearly provides that a utility service board may terminate a

      superintendent for cause after providing an opportunity for a hearing. The

      question with which we are confronted is whether this is the exclusive manner

      in which a utility superintendent may be terminated. We find that it is not.

[2]   The City of Lawrence (the City), the City of Lawrence Utilities Services Board

      (the USB), and Mayor Dean Jessup (collectively, the Government) appeal the

      trial court’s order, which granted summary judgment in favor of Carlton Curry

      on Curry’s wrongful discharge claim and denied the Government’s summary

      judgment motion on Curry’s claim for intentional interference with

      employment relationship. Curry cross-appeals, arguing that the trial court

      erroneously granted summary judgment in favor of the Government on his

      claim under the Wage Payment Statute.

[3]   We find as follows: (1) the mayor had authority to terminate Curry’s

      employment; (2) as such, Curry has no right to prevail on an intentional

      interference with employment relationship claim; and (3) Curry is not entitled

      to recover under the Wage Payment Statute. We reverse the judgment of the

      trial court with respect to the wrongful discharge and intentional interference

      with employment relationship claims and remand with instructions to enter

      summary judgment in the Government’s favor on those two counts. We affirm

      the trial court’s order with respect to the Wage Payment Statute count.

      Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016    Page 2 of 17
                                                          Facts      1

[4]   In May 2006, Lawrence voters passed a referendum authorizing the creation of

      the USB, which placed utility management under municipal control. The City

      Council then passed an ordinance creating the USB with an effective date of

      January 1, 2008. The ordinance provides that the USB consists of five

      members, three of whom are appointed by the mayor and two of whom are

      appointed by the council. The ordinance does not discuss the utility head

      position. At a March 12, 2008, USB meeting, the title of the utility head

      position was changed from “director of utilities” to “director/superintendent.”2

      Appellants’ App. p. 176, 190-92.

[5]   The USB requires mayoral approval to issue bonds, incur debts, or raise rates.

      Therefore, it is important for the mayor to be on board with USB’s major policy

      initiatives. Utilities are financed through water and sewage usage fees and

      utility employees are paid through the City, though the USB has a budget that

      is separate from the City’s general fund.

[6]   In 2009, then-Mayor of Lawrence Paul Ricketts approached Curry about

      becoming USB superintendent, and Curry agreed to take the position. At the

      August 12, 2009, USB meeting, Mayor Ricketts recommended Curry for the

      position, and—with no discussion—board members voted unanimously in

      1
       We held oral argument in Indianapolis on April 27, 2016. We thank the attorneys for their able written and
      oral presentations.
      2
          For simplicity’s sake, we will refer to the position throughout as “superintendent.”

      Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016                         Page 3 of 17
      favor of appointing Curry. During Curry’s tenure, he worked closely with

      Mayor Ricketts regarding the direction of the USB and all major policy

      initiatives. One USB initiative that both Curry and Mayor Ricketts advocated

      for strongly was the construction of a wastewater treatment plant for Lawrence.

[7]   In November 2011, Mayor Ricketts was defeated in the general election by

      Dean Jessup. Mayor-elect Jessup’s transition team sent correspondence to all

      department heads, including Curry, inviting them to submit a resume and letter

      of interest if they wished to remain in their positions. Curry submitted a letter

      of interest and resume, met with the transition team’s utility committee, and

      gave a presentation. Curry also communicated directly with Mayor-elect

      Jessup.

[8]   Mayor-elect Jessup learned about the proposed wastewater treatment plant,

      which would cost approximately $150 to $200 million. Mayor-elect Jessup had

      concerns about the cost of the project and was not convinced that it was a good

      plan. Curry advocated strongly for the project, and Mayor-elect Jessup believed

      that if Curry was retained as USB superintendent, there would be frequent

      conflict if the mayor decided to forego the wastewater treatment plant project.

      Mayor-elect Jessup wanted a USB superintendent who would implement his

      goals and objectives and give balanced advice rather than advance his own

      point of view.

[9]   When Mayor Jessup took office on January 1, 2012, he asked for the

      resignations of all mayoral appointees on every city board. The three mayoral

      Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 4 of 17
       appointments on the USB complied and were replaced with Mayor Jessup’s

       appointees. Curry continued to advocate strongly for the wastewater treatment

       plant. Mayor Jessup felt that he was being given a sales pitch, and his concerns

       about his working relationship with Curry increased. Mayor Jessup decided to

       replace Curry with John Solenberg. Curry was notified by letter and in person

       on January 19, 2012, that his employment would end on January 20. Mayor

       Jessup submitted a recommendation for Solenberg as the new USB

       superintendent, and the USB approved Solenberg unanimously.

[10]   On December 21, 2012, Curry filed a complaint against the Government,

       asserting both federal and state law claims. The case was removed to federal

       court; on March 3, 2014, the district court granted summary judgment in favor

       of the Government on all of Curry’s federal claims and remanded the case to

       state court for consideration of Curry’s remaining claims based in state law.

       The remaining claims are as follows: Count I, Wrongful Discharge; Count III,

       Defamation; Count IV, Intentional Interference with Employment

       Relationship; and Count V, Wage Payment Statute Claim.

[11]   On October 22, 2014, Curry filed a motion for partial summary judgment on

       Count I, and on November 25, 2014, the Government filed a motion for

       summary judgment on all counts. Following briefing and a hearing, on April 6,

       2015, the trial court granted summary judgment in favor of Curry on Count I

       (wrongful discharge), granted summary judgment in favor of the Government

       on Counts III (defamation) and V (Wage Payment Statute), and denied

       summary judgment on Count IV (intentional interference). The Government

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 5 of 17
       now brings this interlocutory appeal of the trial court’s order with respect to the

       wrongful discharge and intentional interference claims, and Curry cross-appeals

       with respect to the Wage Payment Statute claim.

                                     Discussion and Decision
                                       I. Standard of Review
[12]   Our standard of review on summary judgment is well established:

               We review summary judgment de novo, applying the same
               standard as the trial court: “Drawing all reasonable inferences in
               favor of . . . the non-moving parties, summary judgment is
               appropriate ‘if the designated evidentiary matter shows that there
               is no genuine issue as to any material fact and that the moving
               party is entitled to judgment as a matter of law.’” Williams v.
               Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
               fact is ‘material’ if its resolution would affect the outcome of the
               case, and an issue is ‘genuine’ if a trier of fact is required to
               resolve the parties’ differing accounts of the truth, or if the
               undisputed material facts support conflicting reasonable
               inferences.” Id. (internal citations omitted).

       Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). We apply a de novo

       standard of review to questions of statutory interpretation. E.g., State v. Int’l

       Bus. Machs. Corp., 964 N.E.2d 206, 209 (Ind. 2012).

                                    II. Government’s Appeal
[13]   The Government argues that the trial court erred by granting summary

       judgment in Curry’s favor on the wrongful discharge claim and by denying

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016      Page 6 of 17
       summary judgment on the intentional interference with employment

       relationship claim.

                                      A. Wrongful Discharge
[14]   Curry’s wrongful discharge claim relies on Indiana Code section 8-1.5-3-5,

       which applies to municipal utility superintendents. Section 5(d) provides that

       “[t]he superintendent may be removed by the board for cause at any time after

       notice and a hearing.” It is undisputed that Curry was not removed for cause

       and did not receive notice or a hearing.

[15]   We begin our analysis by focusing on the plain language of the statute. While

       section 5(d) provides that the superintendent “may” be removed by the board

       for cause, it does not say “may only” be removed in that fashion. It is well

       established that we will not add something to a statute that the legislature has

       omitted. E.g., Gresham v. State, 414 N.E.2d 313, 314-15 (Ind. 1980). The clear

       implication of our General Assembly’s decision to omit the word “only” from

       section 5(d) is that this method of employment termination is not the sole way

       in which the superintendent may be terminated. Instead, the statute plainly

       provides that if the USB intends to seek termination of the superintendent for

       cause, the superintendent is entitled to notice and a hearing before the

       termination is complete. The statute is silent as to termination without cause.

       We infer from the legislature’s silence that the authority to terminate a

       superintendent without cause is not vested solely in the USB; similarly, we infer

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016      Page 7 of 17
       that the superintendent is not entitled to notice or a hearing when he is

       terminated without cause.

[16]   This interpretation of section 5(d) has to be correct to avoid an absurd result. If

       we were to find that a utility superintendent may only be terminated for cause,

       then the position would essentially be a lifetime appointment akin to a federal

       judge who retains her seat for life unless she commits an impeachable offense.

       We do not believe that the General Assembly intended to vest such robust job

       security in the position of utility superintendent.

[17]   Furthermore, we agree with the Government that the political ramifications of

       a lifetime utility superintendent would be untenable:

               Jessup won the election, defeating Ricketts. The election of a
               new mayor reflected a desire for a change of city leadership. To
               implement that change, Jessup asked mayoral appointees on city
               boards including the USB for their resignations which resulted in
               three new mayoral appointees to that board. Forcing Jessup to
               accept the utility head chosen by Ricketts would limit his ability
               (and that of the newly constituted USB) to make changes without
               having to contend with a superintendent who is politically hostile
               or who does not share or even obstructs the policy objectives of
               the new leaders.

       Appellants’ Br. p. 13-14. We do not believe that the legislature intended that

       newly elected mayors are required to retain the utility superintendent appointed

       by their predecessors. It necessarily follows that the Mayor has the authority to

       terminate the USB superintendent.

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016      Page 8 of 17
[18]   In our view, one possible purpose of section 5(d) is to act as a check on the

       mayor. If, for example, the mayor’s brother was serving as USB superintendent

       and the mayor refused to fire his brother after the brother committed

       malfeasance, the USB would have the ability to terminate the mayor’s brother

       for cause. This check on the mayor, however, does not remove the mayor’s

       authority to terminate the superintendent because, as noted above, the statute is

       not worded as such.

[19]   At oral argument, counsel for Curry suggested that the applicable Lawrence

       ordinance requires a conclusion that the USB had sole authority to hire and fire

       its superintendent. We disagree. The ordinance at issue provides, in relevant

       part, that “[t]he Council now transfers exclusive control of the City’s

       municipally-owned water utility and sewer utility from the Board of Public

       Works and Safety to the Utility Board.” Lawrence Ordinance § 1-1-3-13(B). In

       other words, this ordinance merely changes control of the utility to the USB

       from the Board of Public Works and Safety. In no way does this ordinance

       limit the mayor’s authority; in fact, it explicitly vests in the mayor the power to

       appoint three of five members on the USB. The ordinance is silent as to the

       superintendent. We do not find that this ordinance curtails the mayor’s

       authority to terminate the USB superintendent.

[20]   Even if we were to accept the argument that the mayor does not have the

       authority to terminate the USB superintendent, our result would be the same.

       The above analysis regarding section 5(d) still stands, meaning that even if the

       USB has the sole authority to terminate its superintendent, it retains the right to

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016    Page 9 of 17
       terminate the superintendent without cause. In this case, the USB did so by

       implication. The Mayor took action by terminating Curry and nominating his

       replacement; the USB acquiesced in that action by unanimously appointing the

       Mayor’s suggested replacement. In other words, the USB exercised its

       oversight. The mere fact that the USB did not explicitly terminate Curry’s

       employment cannot be enough to support a wrongful discharge claim. It would

       elevate form over substance to an untenable degree.

[21]   We were able to find only two cases interpreting section 5(d), and do not find

       that either case changes our analysis. In Morrison v. McMahon, 475 N.E.2d 1174

       (Ind. Ct. App. 1985), the utility board both hired and fired the superintendent

       pursuant to a former version of the statute. In response to the defendants’

       arguments concerning the mayor’s authority to terminate the superintendent at

       will, the Court noted that the mayor was not involved in the firing in that case,

       so the statute was inapplicable. Id. at 1179-80. While the Morrison Court went

       on to examine the language of section 5(d), its analysis is pure dicta given that it

       held that the statute was inapplicable. And in Phillips v. City of Bloomington, this

       Court held that section 5(d) did not apply to Phillips, whose title was “director

       of utilities,” because he had administrative responsibilities for the utility

       department beyond the statutory duties of a superintendent. 869 N.E.2d 1282,

       1282-24 (Ind. Ct. App. 2007). Therefore, the Phillips holding does not apply to

       the instant case, in which we find that section 5(d) applies.

[22]   In the end, the plain language of the statute must prevail. The statute does not

       state or imply that the exclusive method of termination is by the Board, for

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016     Page 10 of 17
       cause, with notice and a hearing. Here, the Mayor retained the right to

       terminate Curry, but even if he did not, the USB exercised its oversight and

       acceded to his recommendations. We believe that this course of events was

       authorized by section 5(d) and do not believe that Curry has a claim for

       wrongful discharge. Therefore, we reverse and remand with instructions to

       enter summary judgment in favor of the Government on this count.

                                   B. Intentional Interference
[23]   Next, the Government argues that the trial court erred by denying its motion for

       summary judgment on Curry’s claim for intentional interference with his

       employment relationship. The trial court found that “[t]here exists a genuine

       issue of material fact as to whether Defendants intentionally and without a

       legitimate business purpose interfered with Curry’s employment relationship.”

       Appellants’ App. p. 454.

[24]   Any “intentional, unjustified interference with [an employment] contract by

       third parties is actionable.” Bochnowski v. Peoples Fed. Sav. & Loan Ass’n, 571
N.E.2d 282, 285 (Ind. 1991). The claimant, in addition to demonstrating the

       standard elements of the tort, must establish “that the defendant interferer acted

       intentionally and without a legitimate business purpose.” Id.

[25]   We have already found above either that (1) the Mayor had the authority to

       terminate Curry; or (2) the Mayor did not have the authority to terminate

       Curry, but the USB exercised its oversight and agreed with the Mayor’s

       recommendation. If the Mayor had the authority to terminate Curry, then his

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 11 of 17
       decision to do so cannot have been tortious. And even if the Mayor did not

       have authority to terminate Curry, he certainly had the authority to recommend

       that the USB terminate Curry and appoint a different individual. Under no set

       of circumstances or analyses could the Government’s actions in this case have

       risen to a tortious level. Therefore, we reverse and remand with instructions to

       enter summary judgment in the Government’s favor on this count.

             III. Curry’s Cross-Appeal: Wage Payment Statute
[26]   Curry cross-appeals, arguing that the trial court improperly granted summary

       judgment in favor of the Government on his claim under the Wage Payment

       Statute. The trial court held as follows: “While the Court did appreciate

       listening to the unique interpretation of this statute by Plaintiff’s counsel, this

       type of action is clearly not what the statute encompasses, nor does the Court

       find that Plaintiff met any of the prerequisites for recovery under that statute.”

       Appellants’ App. p. 454.

[27]   In relevant part, the Wage Payment Statute provides as follows:

               (a)      Every person, firm, corporation . . . , doing business in
                        Indiana, shall pay each employee at least semimonthly or
                        biweekly, if requested, the amount due the employee. . . .

               (b)      Payment shall be made for all wages earned to a date not
                        more than ten (10) business days prior to the date of
                        payment. . . . However, if an employee voluntarily leaves
                        employment . . . , the employer shall not be required to
                        pay the employee an amount due the employee until the

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016     Page 12 of 17
                        next and usual regular day for payment of wages, as
                        established by the employer. . . .

       Ind. Code § 22-2-5-1. Indiana Code section 22-2-5-2 provides that any

       employer who fails to comply with the foregoing statute owes liquidated

       damages to the employee totaling 10% of the amount due to the employee per

       day it is unpaid.

[28]   To support his argument, Curry must take the position that he has never been

       effectively discharged from employment. According to Curry, his termination

       was a nullity. In other words, he contends he has remained superintendent of

       USB throughout all of these proceedings, and is owed wages and liquidated

       damages for each day he has been unpaid since January 2012.

[29]   We cannot support this unique interpretation of the Wage Payment Statute.

       The purpose of the statute—to prevent employers from profiting from their

       employees’ labor without timely payment—is plainly not implicated in this

       case. Whether or not Curry was “effectively discharged,” it is undisputed that

       he has not, in fact, been working since the termination. His employer has not

       been profiting from his labor without timely payment. Indeed, were Curry to

       recover under this statute, he would receive an undeserved windfall for work

       that he has not performed. We agree with the trial court that summary

       judgment in favor of the Government on this count is proper.

[30]   The judgment of the trial court is affirmed in part, reversed in part, and

       remanded with instructions to enter summary judgment in favor of the

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 13 of 17
Government on Curry’s claims for wrongful discharge and intentional

interference.

May, J., concurs, and Brown, J., concurs in part and dissents in part with
separate opinion.

Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 14 of 17
                                                   IN THE
           COURT OF APPEALS OF INDIANA

       City of Lawrence Utilities                                 Court of Appeals Case No.
       Service Board, City of Lawrence,                           49A02-1506-CT-699
       Indiana, and Mayor Dean
       Jessup, Individually and in His
       Official Capacity,
       Appellants-Defendants,

               v.

       Carlton E. Curry,
       Appellee-Plaintiff.

       Brown, Judge, concurring in part and dissenting in part.

[31]   I concur with the majority’s handling of Curry’s cross-appeal issue regarding his

       claim under the Wage Payment Statute, but I respectfully dissent from the

       majority’s conclusions to reverse the trial court’s decision to grant summary

       judgment in favor of Curry regarding his wrongful discharge claim and to deny

       the Government’s summary judgment claim on Curry’s intentional interference

       with employment relationship claim.

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016                 Page 15 of 17
[32]   This Court has previously examined Ind. Code § 8-1.5-3-5(d) in Morrison v.

       McMahon, 475 N.E.2d 1174 (Ind. Ct. App. 1985), reh’g denied, trans. denied. In

       Morrison, the Court examined that statute, as well as its predecessors, and ruled

       that “it is clear from the statutory history . . . existing essentially unchanged

       from 1913 . . . that the utility service board alone, not the mayor, has the

       specific power to discharge the superintendent.” 475 N.E.2d at 1181. It found

       that “[t]he legislature intended that the mayor have the power to appoint the

       superintendent, subject to the board’s approval . . . but the power to discharge

       the superintendent is vested solely in the board,” and that Ind. Code § 8-1.5-3-5

       “does not confer the power to terminate the superintendent on the mayor.” Id.

       The Court concluded that “[t]hrough scrutiny of the repeated reenactments of

       the language of Section 8-1-2-100,[3] it is clear the legislature never intended that

       the mayor have plenary powers over the utilities. Such powers, i.e., the

       supervision, compensation, and removal of the supervisor, were placed in the

       board.” Id. I agree with the analysis in Morrison.

[33]   To the extent the majority opines that this interpretation leads to an absurd

       result in that the appointment of a utility superintendent “would essentially be a

       lifetime appointment akin to a federal judge . . . unless she commits an

       impeachable offense,” I disagree. Infra at 8. The Government makes a similar

       claim in its brief, suggesting that “[f]orcing Jessup to accept the utility head

       3
        Ind. Code § 8-1-2-100 is the predecessor statute and was repealed on the same date that Ind. Code § 8-1.5-3-
       1 et seq. became effective. Morrison, 475 N.E.2d at 1181.

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016                          Page 16 of 17
       chosen by Ricketts would limit his ability . . . to make changes without having

       to contend with a superintendent who is politically hostile or who does not

       share or even obstructs the policy objectives of the new leaders.” Appellants’

       Brief at 14. However, I believe that in such a scenario, the USB would be able

       to remove the superintendent for cause pursuant to Ind. Code § 8-1.5-3-5(d),

       and that the majority interprets the “for cause” language in the statute too

       narrowly, limiting its scope solely to impeachable offenses.

[34]   The majority also opines that one possible purpose of Ind. Code § 8-1.5-3-5(d) is

       to act as a check on the mayor. I am not persuaded by this interpretation,

       particularly in recognition of the fact that, under Ind. Code § 8-1.5-3-3, the

       mayor appoints a majority of the board members. The statutory scheme

       contained in Chapter 3 can be interpreted as creating a board to assist the

       mayor in implementing his or her agenda related to municipal utilities, and,

       again, a politically hostile superintendent would, in my estimation, be grounds

       for removal for cause. It also vests the authority to remove the superintendent

       in the board.

[35]   I also respectfully dissent from the majority’s decision to reverse the denial of

       the Government’s motion for summary judgment on Curry’s claim for

       intentional interference with his employment relationship because the

       applicable economic realities test involves determinations of fact which are

       inappropriate for summary judgment.

[36]   I would affirm the trial court in all respects.

       Court of Appeals of Indiana | Opinion 49A02-1506-CT-699 | June 8, 2016   Page 17 of 17