Court Opinion

ID: 4112108
Source: CourtListenerOpinion
Date Created: 2016-12-29 17:06:31.898174+00
Date Added: 2024-06-11T09:20:45.563633
License: Public Domain

FILED
                                                                            Dec 29 2016, 9:01 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

      ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
      Mary Jane Lapointe                                        Gregory F. Zoeller
      Daniel Lapointe Kent                                      Attorney General of Indiana
      Lapointe Law Firm, P.C.
      Indianapolis, Indiana                                     Andrea E. Rahman
                                                                Deputy Attorney General
                                                                Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Suzanne E. Esserman,                                      December 29, 2016
      Appellant-Plaintiff,                                      Court of Appeals Case No.
                                                                49A02-1605-PL-1129
              v.                                                Appeal from the Marion Superior
                                                                Court
      Indiana Department of                                     The Honorable Cynthia J. Ayers,
      Environmental Management,                                 Judge
      Appellee-Defendant.                                       Trial Court Cause No.
                                                                49D04-1509-PL-32140

      Najam, Judge.

                                        Statement of the Case
[1]   Suzanne E. Esserman appeals the trial court’s dismissal of her complaint

      against the Indiana Department of Environmental Management (“IDEM”), in

      which Esserman alleged that IDEM had unlawfully terminated her

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016                  Page 1 of 9
      employment, in violation of Indiana’s False Claims Act, Ind. Code §§ 5-11-5.5-

      1 to -18 (2016), in retaliation for her reporting alleged misuse of State funds by

      certain IDEM officers. Esserman raises two issues for our review:

              1.       Whether the trial court erred when it concluded that
                       sovereign immunity barred the court from having subject
                       matter jurisdiction over Esserman’s complaint against
                       IDEM.

              2.       Whether the trial court erred when it concluded that
                       Esserman had failed to state a claim upon which relief can
                       be granted.

[2]   We reverse and remand for further proceedings.

                                  Facts and Procedural History
[3]   In her complaint against IDEM, Esserman alleged the following facts to be

      true:

              5.    At all times during her [nearly 25 years of] employment
              with IDEM, Esserman performed her job duties in a satisfactory
              manner.

              6.    During the course of her employment, Esserman
              discovered that certain individuals at IDEM were engaged in
              misuse of State funds.

              7.    Esserman made numerous objections to misuse of State
              funds and was terminated in retaliation for those objections.

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016   Page 2 of 9
              8.     Esserman objected to approval of some claims made by
              applicants for dispersal of State funds from the Excess Liability
              Trust Fund (ELTF), which pays for various projects including
              the remediation of contamination caused by leaking underground
              storage tanks. The ELTF is funded in large measure by tax
              dollars generated from the State tax on gasoline sales.

              9.     On many occasions, Esserman found that applicants had
              not properly documented their claims[] and therefore the claims
              were not “reasonable and cost effected [sic],” as required for
              ELTF funds under IC § 13-23-9-2 and its implementing
              regulations.

              10. Esserman could not legally approve claims without
              reviewing them, and when she actually reviewed them, she was
              disciplined for working too slowly, despite the fact that she found
              numerous instances in which the applicants should not legally
              have been paid for all costs invoiced.

      Appellant’s App. Vol. II at 8. In light of those facts, Esserman claimed that

      IDEM had unlawfully terminated her employment in retaliation for reporting

      the alleged misuse of State funds.

[4]   In response, IDEM moved for the trial court to dismiss Esserman’s complaint

      on two grounds. First, IDEM asserted that the State had not waived its right to

      sovereign immunity from suit for claims of retaliation under the False Claims

      Act and, as such, Esserman’s complaint did not invoke the subject matter of the

      trial court. Second, IDEM asserted that the facts alleged in Esserman’s

      complaint failed to state a claim upon which relief can be granted. The trial

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016   Page 3 of 9
      court agreed with both of IDEM’s arguments and dismissed Esserman’s

      complaint accordingly. This appeal ensued.

                                     Discussion and Decision
                                             Standard of Review

[5]   The trial court dismissed Esserman’s complaint without holding an evidentiary

      hearing. Where, as here, the trial court’s judgment under Trial Rules 12(B)(1)

      and 12(B)(6) was based on facts not in dispute, we review the trial court’s

      dismissal of the complaint de novo. Thornton v. State, 43 N.E.3d 585, 587 (Ind.

      2015); Berry v. Crawford, 990 N.E.2d 410, 414 (Ind. 2013). Thus, we afford no

      deference to the trial court’s judgment. S.C. v. S.B. (In re M.B.), 51 N.E.3d 230,

      233 (Ind. 2016). “This Court views motions to dismiss . . . with disfavor

      because such motions undermine the policy of deciding causes of action on

      their merits.” McQueen v. Fayette Cty. Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct.

      App. 1999), trans. denied.

                                     Issue One: Sovereign Immunity

[6]   We first consider the trial court’s judgment that IDEM is entitled to common

      law sovereign immunity from claims of unlawful retaliation under the False

      Claims Act. As our supreme court has repeatedly recognized:

              More than forty years ago, a series of judicial decisions almost
              entirely abolished common law immunity for government
              entities and activities in this state. Campbell v. State, 259 Ind. 55,
              63, 284 N.E.2d 733, 737-38 (1972) (abrogating immunity for the
              state); Klepinger v. Bd. of Comm’rs of Miami Cnty., 143 Ind. App.
              178, 198-202, 239 N.E.2d 160, 172-73 (1968) (abrogating
      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016     Page 4 of 9
              immunity for counties), trans. denied; Brinkman v. City of
              Indianapolis, 141 Ind. App. 662, 666-69, 231 N.E.2d 169, 172-73
              (1967) (abrogating immunity for municipalities), trans. denied.
              Under Indiana common law, with very limited exception,
              governmental entities are thus subject to liability under
              traditional tort theories.[1] See Benton v. City of Oakland City, 721
              N.E.2d 224, 227 (Ind. 1999) (noting the three limited
              circumstances in which common law sovereign immunity still
              exists: crime prevention, appointments to public office, and
              judicial decision-making).

      F.D. v. Ind. Dep’t of Child Servs., 1 N.E.3d 131, 135-36 (Ind. 2013). As

      Esserman’s complaint against IDEM does not invoke any of “the three limited

      circumstances in which common law sovereign immunity still exists,” id.,

      IDEM is not entitled to common law sovereign immunity.

[7]   Nonetheless, IDEM argues that this court recently held that common law

      sovereign immunity might apply on behalf of the State in some circumstances.

      In particular, IDEM relies on Skillman v. Ivy Tech Community College, in which

      this court stated “the general principle” that “[a] state may not be sued in its

      own courts unless it has waived its sovereign immunity by expressly consenting

      to such suit through a ‘clear declaration’ of that consent.” 52 N.E.3d 11, 16

      (Ind. Ct. App. 2016) (quoting Oshinski v. N. Ind. Commuter Transp. Dist., 843

      N.E.2d 536, 539-40 (Ind. Ct. App. 2006)), trans. denied. But the State’s reliance

      1
        IDEM expressly concedes that the Indiana Tort Claims Act is not an issue for our review on appeal.
      Appellee’s Br. at 17 n.5 (stating that the Tort Claims Act does not apply here because Esserman has alleged a
      “statutory claim of retaliatory discharge . . . rather than a tort claim of retaliatory discharge”) (emphases
      removed). As IDEM concedes that the Tort Claims Act does not apply, we do not consider it.

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016                      Page 5 of 9
      on Skillman and Oshinski is misplaced. Those cases can easily be distinguished

      because both involved suits against the State under federal law, and sovereign

      immunity in such cases is a question under the Eleventh Amendment to the

      United States Constitution, not a question under Indiana’s common law. See

      U.S. Const. amend. XI. Nothing about Esserman’s suit against IDEM in the

      Marion Superior Court under Indiana Code Section 5-11-5.5-8 implicates the

      Eleventh Amendment. Accordingly, we conclude that IDEM is not entitled to

      common law sovereign immunity and hold that the trial court erred when it

      dismissed Esserman’s complaint under Indiana Trial Rule 12(B)(1) for lack of

      jurisdiction.

                                  Issue Two: Failure to State a Claim

[8]   We thus turn to the alternative basis for the trial court’s dismissal of Esserman’s

      complaint, namely, that she had failed to state a claim upon which relief can be

      granted. Esserman filed her complaint for unlawful retaliatory discharge under

      Indiana Code Section 5-11-5.5-8(a), which provides:

              An employee who has been discharged, demoted, suspended,
              threatened, harassed, or otherwise discriminated against in the
              terms and conditions of employment by the employee’s employer
              because the employee:

                       (1) objected to an act or omission described in section 2 of
                       this chapter; or

                       (2) initiated, testified, assisted, or participated in an
                       investigation, an action, or a hearing under this chapter;

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016    Page 6 of 9
              is entitled to all relief necessary to make the employee whole.

[9]   Indiana Code Section 5-11-5.5-2(b) provides:

              A person who knowingly or intentionally:

                       (1) presents a false claim to the state for payment or
                       approval;

                       (2) makes or uses a false record or statement to obtain
                       payment or approval of a false claim from the state;

                       (3) with intent to defraud the state, delivers less money or
                       property to the state than the amount recorded on the
                       certificate or receipt the person receives from the state;

                       (4) with intent to defraud the state, authorizes issuance of
                       a receipt without knowing that the information on the
                       receipt is true;

                       (5) receives public property as a pledge of an obligation on
                       a debt from an employee who is not lawfully authorized to
                       sell or pledge the property;

                       (6) makes or uses a false record or statement to avoid an
                       obligation to pay or transmit property to the state;

                       (7) conspires with another person to perform an act
                       described in subdivisions (1) through (6); or

                       (8) causes or induces another person to perform an act
                       described in subdivisions (1) through (6);

      Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016    Page 7 of 9
                is . . . liable to the state for a civil penalty of at least five thousand
                dollars ($5,000) and for up to three (3) times the amount of
                damages sustained by the state. In addition, a person who
                violates this section is liable to the state for the costs of a civil
                action brought to recover a penalty or damages.

[10]   In her complaint, Esserman alleged that IDEM terminated her employment in

       retaliation for her having made “numerous objections” about certain IDEM

       officials misusing state funds. Appellant’s App. Vol. II at 8. As such,

       Esserman’s complaint plainly stated a cause of action under Section 8(a).2

[11]   Still, IDEM asserts that Esserman has failed to state a claim for two reasons.

       First, IDEM argues that she has not stated a claim because other parts of the

       False Claims Act limit the ability of citizens to bring qui tam actions3 on behalf

       of the State for the recovery of funds. See I.C. § 5-11-5.5-4. But Esserman has

       not stated a qui tam action under Section 4. Accordingly, IDEM’s argument on

       this point must fail.

[12]   Second, IDEM asserts that the word “employer” in Section 8, while not defined

       in the Indiana Code, must be interpreted to mean only private employers

       because some other statutes scattered throughout the Indiana Code suggest

       Esserman might have other remedies against a public employer for retaliatory

       2
         We reject IDEM’s argument on appeal that Esserman’s complaint is not sufficient under our notice
       pleading requirements.
       3
         A qui tam action is “[a]n action brought under a statute that allows a private person to sue for a penalty,
       part of which the government or some specified public institution will receive.” Black’s Law Dictionary 1444
       (10th ed. 2014).

       Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016                        Page 8 of 9
       discharge. See Appellee’s Br. at 21 (citing I.C. §§ 4-15-10-4, 22-5-3-3, 36-1-2-13,

       and 36-1-8-8). But there is nothing ambiguous about the word “employer” in

       Indiana Code Section 5-11-5.5-8 in the first instance and, as such, we have no

       authority to look elsewhere for interpretive guidance on the meaning of that

       statute. See, e.g., Jackson v. State, 50 N.E.3d 767, 772 (Ind. 2016); see also Andy

       Mohr West v. Ind. Sec’y of State, 54 N.E.3d 349, 354 (Ind. 2016) (“Proper

       construction of a statute is best driven by the plain language and structure of the

       specific statute at issue.”). Section 8 speaks for itself. As such, insofar as

       IDEM was in fact Esserman’s employer as she has alleged, she has stated a

       claim under Section 8. The trial court erred when it dismissed Esserman’s

       complaint for failure to state a claim upon which relief can be granted.

                                                    Conclusion

[13]   In sum, none of the three limited circumstances in which our supreme court has

       recognized that common law sovereign immunity still exists applies here. See

       Benton, 721 N.E.2d at 227. And Esserman’s complaint states a claim upon

       which relief can be granted under Indiana Code Section 5-11-5.5-8.

       Accordingly, the trial court erred when it dismissed Esserman’s complaint

       pursuant to Indiana Trial Rules 12(B)(1) and 12(B)(6). We reverse the trial

       court’s dismissal of Esserman’s complaint and remand for further proceedings.

[14]   Reversed and remanded.

       Bailey, J., and May, J., concur.

       Court of Appeals of Indiana | Opinion 49A02-1605-PL-1129 | December 29, 2016   Page 9 of 9