Court Opinion

ID: 9929955
Source: CourtListenerOpinion
Date Created: 2024-02-05 20:04:37.037557+00
Date Added: 2024-06-11T10:58:07.019354
License: Public Domain

FILED
                         IN THE                                 Feb 05 2024, 1:56 pm

    Indiana Supreme Court
                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court

             Supreme Court Case No. 24S-MI-46

State of Indiana by and through its Department of
                Natural Resources,
                           Appellant

                              –v–

   Kailee M. Leonard and Jeffrey S. McQuary,
                           Appellees

     Argued: September 21, 2023 | Decided: February 5, 2024

            Appeal from the Marion Superior Court
                   No. 49D01-1706-MI-23427
          The Honorable David J. Dreyer, Senior Judge

    On Petition to Transfer from the Indiana Court of Appeals
                        No. 22A-MI-685

                Opinion by Chief Justice Rush
       Justices Massa, Slaughter, Goff, and Molter concur.
Rush, Chief Justice.

   As captured by Lord Byron’s “Epitaph to a Dog,” the death of man’s
best friend often prompts a visceral response—perhaps none more so than
the one here, where a dog’s death triggered over a decade of litigation in
both state and federal courts. That litigation has culminated in a case
involving the intersection of a successful Section 1983 federal action and
Indiana’s public-employee indemnification statute. Under the statute, a
public employee is entitled to indemnification if their actions were
noncriminal and within the scope of employment.

   Here, a federal jury found a state conservation officer liable for false
arrest based on his actions after a driver hit and killed his dog. The officer
then assigned his indemnification rights against the State to the driver and
her attorney. After a bench trial in state court, a judge ordered the State to
indemnify the officer and pay the federal judgment. The State argues the
court erred because the officer’s actions constituted a criminal act.

   We affirm the trial court. In reaching that conclusion, we clarify both
the meaning of “noncriminal” and the parties’ relative burdens under the
public-employee indemnification statute. And we ultimately hold that the
evidence establishes the officer’s actions were noncriminal.

Facts and Procedural History
   In December 2012, Kailee Leonard was driving to her boyfriend’s house
when, while passing the home of Department of Natural Resources
Conservation Officer Scott Johnson, she hit and killed the family’s pet
Border Collie, Gypsy. Realizing she had hit the dog, Leonard initially
stopped but continued driving about a mile to her boyfriend’s house so
that he could return with her to the accident scene. Leonard’s boyfriend
then drove the couple in his vehicle to Officer Johnson’s home, where
Leonard spoke with the officer, apologized for hitting the dog, and
removed a few pieces of her car from the roadway.

   Officer Johnson later questioned whether Leonard’s actions “would be
classified as a . . . misdemeanor violation.” And so, a few months after the

Indiana Supreme Court | Case No. 24S-MI-46 | February 5, 2024        Page 2 of 11
accident, Officer Johnson, while on duty and in uniform, spoke with
Hancock County’s Chief Deputy Prosecutor. Officer Johnson asked
whether leaving the scene of an accident involving a pet and returning
“over an hour later” in a different vehicle “would meet the elements of
leaving the scene of an accident.” On the prosecutor’s advice, Officer
Johnson relayed “the basics about the incident” to an investigator.
Sometime later, the investigator told Officer Johnson “that he found
probable cause” to charge Leonard but conveyed he wasn’t going to file
“charges at that time.” Officer Johnson subsequently spoke on the phone
with the Hancock County Prosecutor about potential charges against
Leonard.

   Then, in June 2013, Leonard received in the mail a criminal summons
charging her with Class B misdemeanor failure to stop after an accident.
Leonard hired an attorney and answered the summons, but she was never
arrested. About a year later, after Officer Johnson asked for the charges to
be dropped, the State dismissed the case.

   Leonard then filed a federal lawsuit against Officer Johnson under 42
U.S.C. § 1983 (“Section 1983”), claiming that his “actions in procuring
[her] prosecution constitute[d] false arrest” in violation of her
constitutional rights. Leonard alleged Officer Johnson “falsely” told the
investigator that she “left the scene of the accident and did not return until
the following day.”

   Officer Johnson requested the State represent him in the federal
lawsuit, but the State eventually declined, believing his alleged “conduct
was not within the scope of [his] duties.” Officer Johnson proceeded pro
se, drafting and filing an unsuccessful motion to dismiss. He eventually
hired an attorney, and the case proceeded to trial. The jury found Leonard
“was falsely arrested by” Officer Johnson and awarded her $10,000 in
damages. The federal court then approved Leonard’s request for $52,462
in attorney’s fees and costs, resulting in a $62,462 judgment.

   Unable to pay the full amount, Officer Johnson assigned his
indemnification rights against the State to Leonard and her attorney,
Jeffrey McQuary (collectively “Leonard” hereafter). Leonard sued the
State, seeking a declaratory judgment that the State had a duty to

Indiana Supreme Court | Case No. 24S-MI-46 | February 5, 2024       Page 3 of 11
indemnify Officer Johnson and pay the judgment under Indiana’s public-
employee indemnification statute.

   After the State’s ultimately unsuccessful motion for summary
judgment, see Smith v. State, 122 N.E.3d 991, 993–94 (Ind. Ct. App. 2019),
the case proceeded to a bench trial. There, the parties disputed the
indemnification statute’s two requirements: whether Officer Johnson’s
actions were noncriminal and whether they were within the scope of his
employment. The trial court found in Leonard’s favor and ordered the
State to pay the $62,462 judgment. The court’s order, however, identified
the only issue as whether Officer Johnson acted within the scope of
employment—concluding he did. Yet the court made one finding related
to whether his actions were noncriminal: “Johnson falsely maintained that
Leonard had left the scene and returned the next day – not shortly after
the accident, as had actually happened.” Pointing to this finding, the State
moved to correct error, arguing Officer Johnson was not entitled to
indemnification because the court found his “actions were not
noncriminal.” That motion was deemed denied after the trial court failed
to rule on it within 45 days. Ind. Trial Rule 53.3(a).

   The State appealed, challenging only whether Officer Johnson’s actions
were “noncriminal.” Our Court of Appeals reversed, holding the trial
court effectively found that Officer Johnson committed the crime of false
informing, and his conduct was therefore not noncriminal as required by
statute. State ex rel. Dep’t of Nat. Res. v. Smith, 202 N.E.3d 1105, 1112–13
(Ind. Ct. App. 2023).

  Leonard petitioned for transfer, which we now grant, vacating the
Court of Appeals’ opinion. Ind. Appellate Rule 58(A). 1

1We summarily affirm the portion of the Court of Appeals’ opinion holding that the State did
not waive its challenge to the noncriminality of Officer Johnson’s actions. See App. R. 58(A)(2).

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Standard of Review
   Though the State appeals from the denial of its motion to correct error,
we apply the standard of review for the underlying judgment. Luxury
Townhomes, LLC v. McKinley Props., Inc., 992 N.E.2d 810, 815 (Ind. Ct. App.
2013), trans. denied. The trial court here issued findings of fact and
conclusions of law sua sponte. We review issues covered by the findings by
determining whether the evidence supports the findings and, if so,
whether those findings support the judgment. T.R. 52(A); Steele-Giri v.
Steele, 51 N.E.3d 119, 123 (Ind. 2016). For issues not covered by the
findings, we apply our general judgment standard, meaning we “should
affirm based on any legal theory supported by the evidence.” Steele-Giri,
51 N.E.3d at 123–24; see also T.R. 52(D).

Discussion and Decision
   The circumstances surrounding Gypsy’s death bring us to the
intersection of a successful Section 1983 federal action and Indiana’s
public-employee indemnification statute. Section 1983 provides
individuals a cause of action for civil rights violations arising from a
government employee’s reckless or deliberate conduct. See, e.g., Mannoia v.
Farrow, 476 F.3d 453, 458 (7th Cir. 2007). When a public employee is found
liable, the indemnification statute requires the State to pay the judgment if
(1) the violation occurred due to a “a noncriminal act or omission” that
was (2) “within the scope of the public employee’s employment.” Ind.
Code § 34-13-4-1. As the State has conceded that Officer Johnson was
acting within the scope of his employment, the dispute turns only on
whether his conduct was noncriminal.

   The trial court did not explicitly conclude that Officer Johnson’s actions
were noncriminal, but it implicitly made this determination by ordering
the State to indemnify him. The State argues the trial court erred, pointing
to its finding that Officer Johnson “falsely maintained that Leonard had
left the scene and returned the next day – not shortly after the accident, as
had actually happened.” In the State’s view, this falsehood finding reveals
the court concluded Officer Johnson committed the crime of false

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informing, which occurs when a person knowingly gives either “a false
report of the commission of a crime” or “false information to a law
enforcement officer that relates to the commission of a crime.” I.C. § 35-
44.1-2-3(d)(1). And the State maintains the finding is supported by
Leonard’s federal false-arrest complaint and the resulting jury verdict,
both of which were admitted into evidence. We disagree.

   Leonard’s federal false-arrest complaint and corresponding jury verdict
do not establish that Officer Johnson committed a criminal act and do not
support the trial court’s falsehood finding. In reaching that conclusion, we
clarify that the party seeking indemnification has the initial burden to
show that the loss occurred because of a noncriminal act or omission. The
burden then shifts to the State to rebut that showing by producing
evidence establishing a prima facie case of criminal conduct. Here,
Leonard demonstrated that Officer Johnson’s conduct was noncriminal,
and the State failed to establish a prima facie case that he committed the
crime of false informing. And though we hold the trial court’s falsehood
finding is clearly erroneous, the evidence supports the court’s judgment.
We therefore affirm.

I. The public employee seeking indemnification
   must show that the loss occurred because of a
   noncriminal act or omission, but the State can
   rebut that showing.
   We first determine the meaning of “noncriminal” in the public-
employee indemnification statute and the parties’ burdens on this
requirement. Because the statute does not define the term, we consider its
“plain, or ordinary and usual, sense.” I.C. § 1-1-4-1(1). A criminal act
subjects the actor to criminal prosecution. Crime, Merriam-Webster’s
Dictionary, https://www.merriam-webster.com/dictionary/crime (last
visited Feb. 5, 2024) (defining “crime” as “an illegal act for which someone
can be punished by the government”); Act, Black’s Law Dictionary (11th
ed. 2019) (defining “criminal act” as an “unlawful act that subjects the
actor to prosecution under criminal law”). And for a person to be subject

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to criminal prosecution, the State must have a prima facie case. I.C. § 35-
34-1-2(a), (e). Thus, a noncriminal act or omission is one for which the
State cannot establish a prima facie showing of criminal conduct.

   As the statute unambiguously mandates indemnification only when a
loss occurs due to a public employee’s noncriminal conduct, the party
seeking indemnification must first satisfy this requirement. The burden
then shifts to the State to rebut the showing by producing evidence that
establishes a prima facie case of criminal conduct. A prima facie case is
essential because employee misconduct that results in civil liability does
not necessarily result in criminal liability. As is relevant here, civil liability
can be imposed in a Section 1983 action for false arrest based on reckless
conduct, see Mannoia, 476 F.3d at 458, but criminal liability often requires a
more culpable mens rea, such as knowing or intentional conduct. Thus,
depending on the proffered criminal act, the State may need to produce
evidence other than an employee’s civil liability to make the requisite
prima facie showing. Since many civil rights violations can be framed as
crimes with overlapping elements, solidifying this liability distinction
preserves the indemnification statute’s functionality. Mindful of these
principles, we now apply them here.

   A. Leonard produced evidence that Officer Johnson’s
      conduct was noncriminal.
   Leonard alleged in her complaint that the State was “required to pay
the judgment, costs, and attorney fees assessed against” Officer Johnson
under the indemnification statute. And she presented evidence during the
bench trial demonstrating that Officer Johnson did not knowingly give
either “a false report of the commission of a crime” or “false information
to a law enforcement officer that relates to the commission of a crime.” I.C.
§ 35-44.1-2-3(d)(1).

   Indeed, Officer Johnson consistently testified that he truthfully told
prosecutors and the investigator that Leonard returned on the night of the
accident. And his statements are supported by the other three witnesses
who testified. Leonard stated that she “didn’t know” whether it was
Officer Johnson’s or someone else’s actions that led to her being charged.

Indiana Supreme Court | Case No. 24S-MI-46 | February 5, 2024           Page 7 of 11
Officer Johnson’s supervisor also testified, explaining that the DNR
investigates and potentially disciplines officers for being untruthful with
law enforcement. But he stated that Officer Johnson was never
investigated for lying. And the supervisor had no information that Officer
Johnson “was untruthful regarding the incident.” Finally, an investigator
with the Hancock County Prosecutor’s Office testified that no records
reflected the office ever “considered filing charges” against Officer
Johnson. Thus, all the uncontradicted testimony established that Officer
Johnson did not commit the crime of false informing.

   Accordingly, Leonard met her burden under the indemnification
statute by producing evidence that Officer Johnson did not commit a
criminal act. We now consider whether the State rebutted that showing.

   B. The State failed to rebut the evidence establishing a
      noncriminal act.
   The State points to Leonard’s federal false-arrest complaint and
subsequent jury verdict as evidence that Officer Johnson committed the
crime of false informing. We disagree, as the federal complaint and the
jury verdict do not establish a prima facie case that Officer Johnson
knowingly lied to law enforcement.

   We acknowledge Leonard alleged in her federal complaint that Officer
Johnson “falsely told [an investigator] that [Leonard] left the scene of the
accident and did not return until the following day.” But the complaint
was admitted only to establish the allegations against Officer Johnson, not
for the truth of those allegations. Because the complaint was admitted for
this limited purpose, it cannot “constitute evidence of the facts alleged.”
State v. Sanders, 596 N.E.2d 225, 227 (Ind. 1992). As for the verdict, the jury
could have found Officer Johnson liable if he recklessly made false
statements that led to Leonard being charged. See, e.g., Lawson v. Veruchi,
637 F.3d 699, 705 (7th Cir. 2011). But recklessness cannot impose criminal
liability for false informing—there must be evidence that Officer Johnson
acted knowingly. I.C. § 35-44.1-2-3(d)(1). Because the transcript from the
federal trial was not offered into evidence, we cannot speculate as to
whether the evidence presented to the jury matched the facts alleged in

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the complaint or the standard on which the jury was instructed to find
Officer Johnson liable.

   For these reasons, the federal complaint and jury verdict do not
establish that Officer Johnson knowingly lied to law enforcement—a
requirement to make a prima facie showing for the crime of false
informing. To conclude otherwise would have broad implications,
precluding indemnification anytime a civil rights violation is framed as a
crime that does not impose liability based on recklessness. But because the
trial court made a factual finding inconsistent with its conclusion, we now
determine whether that finding is clearly erroneous.

II. Although the trial court’s falsehood finding is
    clearly erroneous, the evidence supports the court’s
    judgment.
   In determining the State was required to indemnify Officer Johnson, the
trial court necessarily concluded that his conduct was noncriminal. But
the court seemingly determined that Officer Johnson committed false
informing in finding that he “falsely maintained that Leonard had left the
scene and returned the next day – not shortly after the accident, as had
actually happened.” We first note that the trial court made this finding in
the context of determining only whether Officer Johnson was “acting
within the scope of his employment.” It is therefore unclear whether the
court intended for this falsehood finding to address the indemnification
statute’s noncriminal requirement. But because the finding contradicts the
court’s judgment, we determine whether the finding is clearly erroneous.
And our standard of review compels us to hold that it is.

   A finding is clearly erroneous only if it is not supported by reasonable
inferences from the evidence. See, e.g., Town of Linden v. Birge, 204 N.E.3d
229, 234 (Ind. 2023). Despite this deferential standard, an inference is not
reasonable if it requires speculation or conjecture. Owens Corning Fiberglass
Corp. v. Cobb, 754 N.E.2d 905, 910 (Ind. 2001). And, in reviewing the
falsehood finding, we must “look to the record only for inferences

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favorable to the judgment.” Town of Fortville v. Certain Fortville Annexation
Territory Landowners, 51 N.E.3d 1195, 1198 (Ind. 2016).

   The federal complaint and the jury verdict do not lead to a reasonable
inference that Officer Johnson lied to law enforcement. As noted above,
the complaint was admitted for a limited purpose and does not constitute
evidence of the facts alleged. Thus, the trial court could not consider the
complaint’s allegations as proof that Officer Johnson lied to law
enforcement. For similar reasons, the jury verdict does not support the
court’s finding. The transcript from the federal trial was not offered into
evidence, and thus the court could not know whether the evidence
presented to the federal jury matched the facts alleged in the complaint or
how the jury was instructed. And the jury could have found Officer
Johnson liable if he recklessly made false statements, which cannot
support a finding that Officer Johnson knowingly lied. Presumably, that is
why the State does not argue the federal jury verdict has any collateral
estoppel effect in this case.

   Simply put, speculation and conjecture are required to find that the jury
relied on the complaint’s allegation that Officer Johnson knowingly lied to
an investigator in reaching its verdict. Thus, the trial court’s inference that
Officer Johnson lied is not reasonable—a conclusion bolstered by the fact
that we must consider only inferences favorable to the judgment. As a
result, the court’s falsehood finding is clearly erroneous.

   Setting that finding aside, the trial court made no findings related to the
noncriminal requirement, and it did not explicitly conclude that Officer
Johnson’s actions were noncriminal. But the court implicitly determined
that his actions were noncriminal because it concluded the State was
required to pay the federal judgment. In reviewing that conclusion, we
apply our general judgment standard and will affirm if the judgment is
supported by the evidence. T.R. 52(D); Steele-Giri, 51 N.E.3d at 123–24.

   For the reasons previously provided, the court’s judgment is supported
by the evidence. Leonard produced uncontradicted testimony that Officer
Johnson’s conduct was noncriminal. And the State did not provide
evidence establishing a prima facie showing that Officer Johnson
knowingly gave either “a false report of the commission of a crime” or

Indiana Supreme Court | Case No. 24S-MI-46 | February 5, 2024       Page 10 of 11
“false information to a law enforcement officer that relates to the
commission of a crime.” I.C. § 35-44.1-2-3(d)(1). Because the evidence
establishes that Officer Johnson’s conduct was noncriminal and because
the State does not dispute the trial court’s conclusion that Officer Johnson
acted within the scope of his employment, the judgment is supported by
the evidence.

Conclusion
   Leonard showed that Officer Johnson’s conduct was noncriminal, and
the State did not rebut that showing. Though the trial court’s falsehood
finding is clearly erroneous, the evidence ultimately supports the court’s
judgment. We therefore affirm.

Massa, Slaughter, Goff, and Molter, JJ., concur.

ATTORNEYS FOR APPELLANT
Theodore E. Rokita
Attorney General of Indiana

Abigail R. Recker
Frances H. Barrow
Deputy Attorneys General

Angela Sanchez
Chief Counsel of Appeals

Benjamin M. Jones
Assistant Section Chief of Civil Appeals
Indianapolis, Indiana

ATTORNEY FOR APPELLEES
Jeffrey S. McQuary
Brown Tompkins Lory
Indianapolis, Indiana

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