Court Opinion

ID: 2762380
Source: CourtListenerOpinion
Date Created: 2014-12-18 16:03:37.649021+00
Date Added: 2024-06-11T10:43:42.501178
License: Public Domain

FOR PUBLICATION                                    Dec 18 2014, 8:39 am

ATTORNEYS FOR APPELLANT:                      ATTORNEYS FOR APPELLEES:

EDWARD P. GRIMMER                             JOHN E. HUGHES
DANIEL A. GOHDES                              LAUREN K. KROEGER
Edward P. Grimmer, P.C.                       Hoeppner Wagner & Evans LLP
Crown Point, Indiana                          Merrillville, Indiana

                             IN THE
                   COURT OF APPEALS OF INDIANA

DAWN DUTY,                                    )
                                              )
      Appellant-Plaintiff,                    )
                                              )
             vs.                              )        No. 64A03-1407-PL-255
                                              )
BOYS AND GIRLS CLUB OF PORTER                 )
COUNTY and CHUCK LEER,                        )
                                              )
      Appellees-Defendants.                   )

                    APPEAL FROM THE PORTER SUPERIOR COURT
                         The Honorable William E. Alexa, Judge
                            Cause No. 64D02-1309-PL-8059

                                   December 18, 2014

                              OPINION - FOR PUBLICATION

NAJAM, Judge
                                STATEMENT OF THE CASE

      Dawn Duty appeals the trial court’s dismissal of her complaint against Boys and

Girls Club of Porter County (“BGC”) and Charles R. Leer for failure to state a claim

upon which relief can be granted. Duty presents a single issue for our review, namely,

whether the trial court erred when it dismissed her complaint.

      We affirm in part, reverse in part, and remand for further proceedings.

                         FACTS AND PROCEDURAL HISTORY

      Duty and Leer were both employed by BGC.1 At some point, Duty

      reported [to someone at BGC regarding the] financial practices of then[-]
      President Charles R. Leer and the financial officer of [BGC,] which
      violated good accounting practices, policy[,] and recommendations of the
      national Boys and Girls Clubs, and transparency as to all income and where
      it is in [BGC’]s accounts, which reported practice was criticized in audit
      thereafter.

Appellant’s App. at 74. Leer’s employment with BGC ended in April 2013. And in July

2013, BGC terminated Duty’s employment.

      On September 10, 2013, Duty filed a complaint against BGC and Leer alleging

wrongful discharge (against BGC) and tortious interference with a business relationship

(against Leer). In particular, Duty alleged that BGC had violated its own policy to

protect employees “from any adverse consequence or retaliation for reporting under the

‘Whistleblower’ policy” as set out in BGC’s employee handbook, which, Duty alleged,

created a “quasi-contract.” Id. at 10. And Duty alleged that Leer, a former BGC

employee, had persuaded the interim Chief Executive Officer of BGC to terminate

Duty’s employment.

      1
          The complaint does not state when each of the parties began their employment with BGC.
                                                  2
       The “Whistleblower Policy” included in BGC’s employee handbook, relevant

portions of which were attached to Duty’s complaint, states in relevant part as follows:

       If an employee believes that any employee of [BGC] may be acting in
       violation of [any federal, state, or local laws and regulations that apply to
       BGC and its business operations,]—or in violation of a [BGC] policy—the
       employee has a duty to report the perceived violation to their [sic]
       supervisor or to the Director of Operations as soon as possible or
       reasonable under the circumstances. . . .

                                            ***

              Whistleblower protections are provided in two important areas—
       confidentiality and against retaliation. . . . This includes, but is not limited
       to, protection from retaliation in the form of an adverse employment action
       such as termination, compensation decreases, or poor work assignments
       and threats of physical harm. . . .

Id. at 47.

       BGC and Leer filed a joint motion to dismiss Duty’s complaint, and Duty moved

the trial court for leave to file an amended complaint. In her first amended complaint,

Duty alleged two additional counts against Leer, namely, tortious interference with a

contractual relationship and “disparagement.” Id. at 41. On March 5, 2014, the trial

court issued an order stating in relevant part as follows:

       Defendants’ Motion to Dismiss under Indiana Trial Rule 12(B)(6) is
       GRANTED for Plaintiff’s Count I. Defendants’ Motion to Dismiss under
       Indiana Trial Rule 12(B)(6); [sic] and, for Plaintiff’s Count II, III, and IV is
       DENIED in part as to dismissal of the action; and is GRANTED in part so
       far as it is treated as a Motion for a More Definite Statement under Indiana
       Trial Rule 12(E).

Id. at 69.

       On March 13, Duty filed her second amended complaint. And on March 28, BGC

and Leer filed a joint motion to dismiss Duty’s second amended complaint for failure to

                                              3
state a claim upon which relief can be granted. Following a hearing, the trial court

granted the defendants’ motion to dismiss with prejudice. This appeal ensued.

                            DISCUSSION AND DECISION

       Our review of a trial court’s grant of a motion to dismiss under Trial Rule

12(B)(6) is de novo and requires no deference to the trial court’s decision. Sims v.

Beamer, 757 N.E.2d 1021, 1024 (Ind. Ct. App. 2001). “A motion to dismiss under Rule

12(B)(6) tests the legal sufficiency of a complaint: that is, whether the allegations in the

complaint establish any set of circumstances under which a plaintiff would be entitled to

relief.” Trail v. Boys & Girls Clubs of NW Ind., 845 N.E.2d 130, 134 (Ind. 2006).

“Thus, while we do not test the sufficiency of the facts alleged with regards to their

adequacy to provide recovery, we do test their sufficiency with regards to whether or not

they have stated some factual scenario in which a legally actionable injury has occurred.”

Id. When reviewing a Trial Rule 12(B)(6) motion to dismiss, we accept the facts alleged

in the complaint as true and view the pleadings in a light most favorable to the

nonmoving party and with every reasonable inference in the nonmoving party’s favor.

Id. We view motions to dismiss under Trial Rule 12(B)(6) “with disfavor because such

motions undermine the policy of deciding causes of action on their merits.” McQueen v.

Fayette Cnty. Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct. App. 1999), trans. denied.

       Further, under Indiana’s notice pleading system, a pleading need not adopt a

specific legal theory of recovery to be adhered to throughout the case. Shields v. Taylor,

976 N.E.2d 1237, 1244 (Ind. Ct. App. 2012).          However, although Indiana’s notice

pleading rules do not require the complaint to state all elements of a cause of action, the

                                             4
plaintiff must still plead the operative facts necessary to set forth an actionable claim.

State v. Am. Family Voices, Inc., 898 N.E.2d 293, 296 (Ind. 2008).

        Duty contends that the trial court erred when it dismissed her complaint because it

states claims upon which relief can be granted, namely, wrongful discharge, tortious

interference with a business relationship, and tortious interference with a contractual

relationship.2 We address the sufficiency of each of Duty’s claims under Trial Rule

12(B)(6) in turn.

                                         Wrongful Discharge

        As our supreme court explained in Orr v. Westminster Village North, Inc., 689

N.E.2d 712, 717-18 (Ind. 1997):

              If there is no definite or ascertainable term of employment, then the
        employment is at-will, and is presumptively terminable at any time, with or
        without cause, by either party.

                                                  ***

               This Court has recognized only three ways to avoid or rebut the
        presumption of at-will employment, or stated another way, three exceptions
        to the employment-at-will doctrine. First, if an employee establishes that
        “adequate independent consideration” supports the employment contract,
        the Court generally will conclude that the parties intended to establish a
        relationship in which the employer may terminate the employee only for
        good cause. . . .

               Second, we have recognized a public policy exception to the
        employment-at-will doctrine if a clear statutory expression of a right or
        duty is contravened. . . .

        2
          In her brief on appeal, Duty states that “the trial court’s dismissal of [the disparagement count
in her second amended complaint] is not assigned as error, but the [court’s order] should not preclude
disparagement as an element of damages subject to the burden of proof.” Appellant’s Br. at 12.
Accordingly, we need not address whether the trial court erred when it dismissed Count IV of Duty’s
second amended complaint.
                                                    5
             Third, this Court has recognized that, in certain instances, an
       employee may invoke the doctrine of promissory estoppel. . . .

       Duty contends that, while an at-will employee generally has no cause of action for

wrongful discharge, her claim against BGC falls under an additional exception to that

general rule as stated in Orr, namely, a “mandatory procedures” exception. In particular,

Duty maintains that “a mandatory provision, i.e. [BGC’s Employee] Handbook creates a

right in [BGC] by creating a duty in the employee, because of the whistleblower

provision, to act. The corollary to the mandatory action required of the employee is

[BGC’s] representation there will be no retaliation.” Appellant’s Br. at 10. In sum, Duty

asserts that “the [Employee] Handbook creates mutual obligations and rights and

therefore would come under the Orr exception (‘mandatory procedures’).” Id.

       But Duty mischaracterizes our supreme court’s holding in Orr. In that case, the

court explicitly declined the plaintiffs’ invitation to recognize “a broad new exception to

the at-will doctrine for employee handbooks.” Orr, 689 N.E.2d at 719. Rather, in dicta,

our supreme court stated as follows:

       [P]laintiffs urge us to establish a broad new exception to the at-will doctrine
       for employee handbooks. We are aware that there has been substantial
       criticism of the at-will doctrine and a significant amount of commentary
       and litigation regarding whether employee handbooks constitute valid
       contracts and, if so, under what circumstances. We are also aware that this
       Court has not expressly addressed and resolved the question of whether
       unilateral contracts in the employment context always require adequate
       independent consideration and whether an employee handbook can ever
       constitute a unilateral contract serving to modify the otherwise at-will
       employment relationship. See Wior v. Anchor Industries, Inc., 669 N.E.2d
       at 175-78, n.6; Streckfus v. Gardenside Terrace Co–Op., Inc., 504 N.E.2d at
       276. Nevertheless, we decline plaintiffs’ invitation to use this case as a
       vehicle for resolving these questions.

                                             6
               Even if we were to conclude that an employee handbook, under
        some circumstances, can constitute a valid unilateral contract in the absence
        of adequate independent consideration—and we do not do so today—
        Westminster’s Handbook could not constitute such a unilateral contract
        and, in fact, cannot meet the requirements set forth in Duldulao v. Saint
        Mary of Nazareth Hosp. Center, 115 Ill.2d 482, 106 Ill.Dec. 8, 12, 505
        N.E.2d 314, 318 (1987), upon which plaintiffs primarily rely while urging
        the Court to create a handbook exception to the employment-at-will
        doctrine.

               Under the Duldulao rule, an employee handbook may constitute a
        unilateral contract and bind the employer if the following three criteria are
        met: (1) the language of the employee handbook must contain “a promise
        clear enough that an employee would reasonably believe that an offer had
        been made;” (2) the employee handbook must be disseminated to the
        employee in such a manner that the employee is aware of its contents and
        reasonably believes it to be an offer; and (3) the employee must accept the
        offer by commencing or continuing work after learning of the terms of the
        employee handbook. Id. . . .

                . . . [But] the [Westminster] Handbook also contains a disclaimer,
        which is placed towards the front of the Handbook and which clearly states
        that the Handbook is not a contract and that its terms can be changed at any
        time. A similar disclaimer is included in the Personnel Handbook
        Statement which accompanied, and was referenced in, the Handbook and
        which Westminster required plaintiffs to sign. Again, even under the
        Duldulao rule, an employee handbook bearing or accompanied by such
        disclaimers, particularly when the employee signs one of the disclaimers,
        generally, as a matter of law, does not create a unilateral contract.

Id. at 719-21 (emphases added).

        Here, we likewise decline Duty’s invitation to recognize a mandatory procedures

exception to the employment at-will doctrine. And, like the handbook in Orr, the BGC

employee handbook3 includes the following disclaimer:

        NOTHING CONTAINED WITHIN THIS EMPLOYEE HANDBOOK IS
        INTENDED TO CREATE A CONTRACT FOR EMPLOYMENT,
        EXPRESS OR IMPLIED, NOR A GUARANTEE OF CONTINUED

        3
           Duty attached to her complaint portions of BGC’s employee handbook as Exhibit 1. Under
Trial Rule 10(C), “[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for
all purposes.”
                                                     7
       EMPLOYMENT FOR A SPECIFIC DURATION. THE EMPLOYEE
       AGREES THAT EMPLOYMENT WITH THE CLUB IS AT-WILL. THE
       CLUB MAY DISCHARGE AN EMPLOYEE AT ANY TIME, FOR ANY
       REASON WHATSOEVER, WITH OR WITHOUT CAUSE, AND WITH
       OR WITHOUT NOTICE. NOTHING WITHIN THIS HANDBOOK OR
       WITH THE CLUB’S POLICIES, PRACTICES, OR PROCEDURES IS
       INTENDED TO CREATE A CONTRACT FOR EMPLOYMENT,
       EXPRESS OR IMPLIED, OR A GUARANTEE O[F] CONTINUED
       EMPLOYMENT FOR A SPECIFIC DURATION.

Appellant’s App. at 46 (emphasis original). Thus, even under Duldulao, which is not

binding precedent in Indiana, the BGC employee handbook does not create a unilateral

contract.

       Duty has not demonstrated that the factual scenario alleged in her complaint

correlates to a claim under an exception to the employment at will doctrine. See Trail,

845 N.E.2d at 134. The trial court did not err when it dismissed that claim.

                  Tortious Interference with a Contractual Relationship

       Duty next contends that the trial court erred when it dismissed her claim alleging

that Leer tortiously interfered with her contractual relationship with BGC. “‘Indiana has

long recognized that intentional interference with a contract is an actionable tort, and

includes an intentional, unjustified interference by third parties with an employment

contract.’” Drake v. Dickey, 2 N.E.3d 30, 34 (Ind. Ct. App. 2013) (quoting Winkler v.

V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1234 (Ind. 1994)), summarily aff’d in relevant

part, 12 N.E.3d 875 (Ind. 2014). This tort reflects the public policy that contract rights

are property and, under proper circumstances, are entitled to enforcement and protection

from those who tortiously interfere with those rights. Id. Tortious interference with a

contractual relationship consists of the following elements:        (1) that a valid and

                                            8
enforceable contract exists; (2) the defendant’s knowledge of the existence of the

contract; (3) defendant’s intentional inducement of breach of the contract; (4) the absence

of justification; and (5) damages resulting from defendant’s wrongful inducement of the

breach. Id. Further, our supreme court has held that

       [a]n employee with an at[-]will employment contract must be able to expect
       that his continued employment depends on the will of his employer and not
       upon the whim of a third party interferer. . . . [T]herefore[,] . . . a claim for
       tortious interference with an employment relationship can be maintained
       upon a contract terminable at will.

Bochnowski v. Peoples Fed. Sav. & Loan, 571 N.E.2d 282, 285 (Ind. 1991).

       Here, the trial court found in relevant part that Duty’s complaint “is not specific

enough to know whether the conduct was wrongful for any type of tortious interference.”

Appellant’s App. at 7. But Duty maintains that she alleged each element of this claim

with sufficient specificity. In particular, Duty’s second amended complaint includes the

following allegations:

       30.    At all relevant times up to and including the date her employment
       contract with [BGC] was terminated, Plaintiff had a valid and enforceable
       employment contract with [BGC].

       31.    At all relevant times up to and including the date her employment
       contract with [BGC,] Charles R. Leer knew of and was aware of that
       employment relationship between Dawn Duty and [BGC].

       32.    Charles R. Leer engaged in statements and conduct with his purpose
       and intention to persuade and induce [BGC], and particularly the individual
       who replaced him as interim chief executive officer[,] to terminate this
       Plaintiff as an employee of [BGC]. Plaintiff retains the right through
       discovery process to discover evidence in proof of the actions, words[,] and
       influence undertaken by Charles Leer in interference with Plaintiff’s
       employment relationship with [BGC] and asserts she has a reasonable basis
       for these allegations. Plaintiff asserts her right to conduct discovery to
       develop and solidify by discovery her allegations.

                                              9
       33.    The actions of Charles Leer were his knowing interference with the
       employment relationship he knew existed between Plaintiff and [BGC] and
       were done without justification and in retaliation for Plaintiff’s invocation
       of the Whistleblower policy of [BGC] with the intention to induce [BGC]
       to terminate its employment of Plaintiff.

       34.    Charles Leer lacked justification for his interference with the
       relationship and contract between [BGC] and Plaintiff.

       35.    The actions of Charles R. Leer were vindictive against Plaintiff for
       what he thought were damaging [sic] to his reputation and tortious
       interference with Plaintiff’s advantageous employment relationship.

       36.   Dawn Duty has been damaged by these wrongful actions of Charles
       R. Leer.

Appellant’s App. at 77-78 (emphases added).

       In their brief on appeal, BGC and Leer maintain that Duty “failed to specify the

wrongful conduct” by Leer and made only a conclusory statement that Leer lacked

justification for his alleged conduct, which, they contend, is insufficient. Appellees’ Br.

at 21. BGC and Leer do not allege that Duty’s claim is insufficient with respect to any of

the other elements of her claim. BGC and Leer are correct that a plaintiff must state more

than a mere assertion that the defendant’s conduct was unjustified. See Morgan Asset

Holding Corp. v. CoBank, ACB, 736 N.E.2d 1268, 1272 (Ind. Ct. App. 2000). To satisfy

the element of lack of justification, the breach must be malicious and exclusively directed

to the injury and damage of another. Id. (citing Winkler, 619 N.E.2d at 600-01).

       But our reading of Duty’s allegations reveals that they are sufficiently specific

regarding Leer’s alleged wrongful and unjustified conduct. First, paragraph 32 of Duty’s

second amended complaint alleges that Leer “engaged in statements and conduct with

[the] purpose and intent[] to persuade and induce [BGC] . . . to terminate [Duty] as an

                                            10
employee of [BGC].” Appellant’s App. at 77. Under notice pleading, Duty does not

have to describe those statements and conduct with more specificity than that. See Trail,

845 N.E.2d at 134. Moreover, Duty alleges that Leer’s statements and conduct were “in

retaliation for [her] invocation of the Whistleblower policy of [BGC] with the intent[] to

induce [BGC] to terminate its employment of [Duty]” and that Leer’s actions were

“vindictive against [Duty] for what he thought were damaging [sic] to his reputation[.]”

Id. at 77-78. Vindictiveness is, by its nature, malicious. Thus, Duty has pleaded facts

sufficient to show that the alleged breach was malicious and exclusively directed to the

injury and damage of Duty. See Morgan, 736 N.E.2d at 1272. Applying the standard

when reviewing a motion to dismiss under Trial Rule 12(B)(6), we hold that Duty has

stated a claim upon which relief can be granted for tortious interference with a

contractual relationship.4

                                              Conclusion

        The trial court did not err when it dismissed Duty’s claim against BGC alleging

wrongful discharge. But the trial court erred when it dismissed Duty’s claim against Leer

alleging tortious interference with a contractual relationship. Duty may proceed with that

claim on remand.

        Affirmed in part, reversed in part, and remanded for further proceedings.

MATHIAS, J., and BRADFORD, J., concur.

        4
            In her brief on appeal, Duty states that, should we reverse the trial court’s dismissal of her
tortious interference with a contractual relationship claim, “dismissal [of her tortious interference with a
business relationship claim] as an alternate theory could be considered moot.” Appellant’s Br. at 19.
Thus, we do not address that claim.

                                                    11