Jack A. Sheets v. A Progressive Realty, Inc., d/b/a Myers Trust and David Myers (mem. dec.) ( 2017 )


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  • MEMORANDUM DECISION
    Pursuant to Ind. Appellate Rule 65(D),
    FILED
    this Memorandum Decision shall not be
    regarded as precedent or cited before any                              Nov 15 2017, 7:57 am
    court except for the purpose of establishing                                CLERK
    Indiana Supreme Court
    the defense of res judicata, collateral                                    Court of Appeals
    and Tax Court
    estoppel, or the law of the case.
    ATTORNEY FOR APPELLANT                                  ATTORNEYS FOR APPELLEES
    Patrick F. O’Leary                                      Bradford R. Shively
    Elkhart, Indiana                                        Jonathan R. Slabaugh
    Sanders Pianowski, LLP
    Elkhart, Indiana
    IN THE
    COURT OF APPEALS OF INDIANA
    Jack A. Sheets,                                         November 15, 2017
    Appellant-Plaintiff,                                    Court of Appeals Case No.
    20A03-1701-PL-161
    v.                                              Appeal from the Elkhart Superior
    Court
    A Progressive Realty, Inc.,                             The Honorable Evan S. Roberts,
    d/b/a Myers Trust and David                             Judge
    Myers,                                                  Trial Court Cause No.
    Appellees-Defendants.                                   20D01-1305-PL-139
    Robb, Judge.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017         Page 1 of 20
    Case Summary and Issue
    [1]   Jack Sheets appeals the trial court’s entry of summary judgment in favor of
    David Myers and A Progressive Realty, Inc. (“Progressive”), in his action
    alleging tortious interference with an at-will employment contract. Sheets raises
    only one issue for our review which we restate as: whether the trial court erred
    in entering summary judgment in favor of Myers and Progressive. Concluding
    the trial court did not err, we affirm.
    Facts and Procedural History
    [2]   In 1976, Interra Credit Union (“Interra”)1 hired Sheets to serve as an assistant
    to the chief executive officer. Nine years later, Sheets was selected to replace
    his former boss and serve as the CEO and president of Interra. Sheets’ tenure
    lasted until 2013, during which time he helped grow Interra from “six
    employees and a few thousand members” to “150 employees [and] over 45,000
    members . . . .” Appellant’s Brief at 5.
    [3]   In November 2007, Myers was asked to join Interra’s board of directors. Myers
    was a longtime veteran of the real estate industry, having founded Progressive2
    in 1985. Myers maintains a majority ownership of Progressive and serves as its
    president. Myers’ son, Andrew Myers, works for Progressive as an independent
    1
    Interra Credit Union originally opened its doors as Elkhart County Farm Bureau Cooperative Association
    Credit Union in 1932. Then, for what we can only assume are reasons of brevity, it changed its name to
    Elkhart County Farm Bureau Credit Union before becoming Interra Credit Union in 2008.
    2
    A Progressive Reality d/b/a Myers Trust deals in both commercial and residential real estate.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017             Page 2 of 20
    contractor. In becoming a member of Interra’s board of directors, Myers
    became subject to Interra’s bylaws, Interra’s code of ethics, and Indiana Code
    section 28-7-1-31.3(a)(b).3
    [4]   In January 2008, both Sheets and Myers attended Interra’s planning meeting in
    Indianapolis. After presentations about potential expansion locations, the
    board of directors identified a location in Elkhart as a likely candidate. The
    board of directors instructed Sheets to proceed with planning the expansion and
    Sheets delegated the responsibility to Sanford Miller, Interra’s Vice President of
    Branch Administration and a member of the senior management team.4 Myers
    told Miller that his son, Andrew, could assist Miller in compiling demographic
    data about the possible expansion locations. Miller followed up with Andrew
    and acquired the relevant information. Andrew told Miller that he would not
    charge Interra for the data if they chose Progressive as their real estate broker.
    Myers also discussed possible expansion locations with Miller and visited
    Miller at Interra to discuss real estate prospects.
    3
    Indiana Code section 28-7-1-31.3 provides, in relevant part:
    (a) As used in this section, “official” means an individual who is or who was a director,
    committee member, officer, or employee of a credit union.
    (b) An official of a credit union shall discharge the duties of the official’s position in good faith
    and with the degree of diligence, care, and skill that an ordinarily prudent person would
    exercise under similar circumstances in a like position . . . .
    4
    Sheets’ responsibility as CEO and president included supervising four vice-presidents composing Interra’s
    senior management team.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017                 Page 3 of 20
    [5]   On February 14, 2008, Miller, Myers, and Andrew visited a property on
    Verdant Drive in Elkhart.5 Myers testified that he brought Miller to the Verdant
    Drive location on Andrew’s request. As Miller prepared to present to the board
    of directors his proposal for the Verdant Drive location, Andrew emailed the
    site’s listing agent, Robert Letherman, to determine Progressive’s commission
    for delivering a buyer. In his email, Andrew stated that Myers was behind the
    inquiry:
    Rob,
    My clients are bringing the property on Verdant before the their
    [sic] board tomorrow night. Hopefully you can wait on us.
    Two things my father instructed me I have to get for our office
    file: (and I am sorry he is a stickler)
    1. Property profile sheet from your office containing the price
    and if there are any additional terms
    2. Letter indicating the buyer brokerage policy for this particular
    property
    Thanks so much and I am sorry my father told me I had to get
    those two items, and well for now he is the boss[.]
    Appellant’s Corrected Appendix, Volume 3 at 124. Letherman responded he
    did not have a profile sheet for the property but advised that the price was
    $525,000. Andrew reminded Letherman that he had previously quoted a price
    of $495,000, and Letherman agreed, saying “I got 3 people looking at this lot.
    You are getting the best price. Good thing you got in early.” Id., Vol. 4 at 182.
    5
    Miller testified at a deposition that Andrew brought “a number of properties to consider” and that he did
    not remember how many he, Myers, and Andrew visited. Appellant’s Corrected Appendix, Volume 4 at
    165.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017          Page 4 of 20
    Letherman also informed Andrew that the buyer brokerage policy was ten
    percent.6 Andrew later emailed Miller and informed him that he did not believe
    any attempts to negotiate the price with the seller would be worthwhile.
    [6]   On March 20, 2008, Miller presented his recommendation to Interra’s board of
    directors. The board of directors voted in favor of Miller’s proposal and offered
    $495,000 for the property on Verdant Drive. Myers abstained from the vote.7
    Interra’s offer was made conditional upon obtaining the Indiana Department of
    Financial Institutions’ approval to construct a service office on the property.
    Interra’s application for such approval, signed on July 23, 2008, provided:
    I, [Jack A. Sheets], President of Interra Credit Union . . . do
    hereby attest to the best of my knowledge, that Mr. David Myers,
    Board member, owns [Progressive], and that his son, Mr. Andy
    Myers, is employed by [Progressive], and that Andy Myers
    represented Interra Credit Union in the purchase of the land for
    the new branch. Andy Myers and [Progressive] will receive a
    normal 10% commission from the seller from the purchase of this
    land. Mr. David Myers abstained from the vote approving the
    purchase of this land. I am not aware of any other credit union
    official, or member of a credit union officials [sic] family, who
    will profit directly in any way from the transaction that is
    contemplated by this application.
    6
    Letherman provided, “Broker Policy-10% commission paid to broker at closing.” Appellant’s Corrected
    App., Vol. 4 at 180.
    7
    Myers also maintains that he “disclosed that he had an interest in the Verdant Drive transaction to Interra’s
    board of directors.” Brief of Appellees at 13.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017           Page 5 of 20
    Id., Vol. 5 at 29. The Indiana Department of Financial Institutions
    subsequently approved Interra’s application.
    [7]   On July 23, 2008, a week before closing, Andrew informed Miller about the
    commission percentage. Andrew stated:
    Sanford,
    I was thinking last night and thought that the [Department of
    Financial Institutions] may need to know what the commission
    is. Which is 10% as set by the seller which he set for his amount
    for vacant land. If we need to I can get a letter to that affect [sic].
    In addition, we want to make it very clear that we were not
    engaged in this transaction based on commissions we have
    responsibility to the credit union, we submitted 7 sites and did
    not push any over the other based on commission.
    Id., Vol. 3 at 118.
    [8]   On July 31, 2008, the day of closing, Miller presented Sheets with a copy of a
    settlement statement filed with the U.S. Department of Housing and Urban
    Development. Sheets stated this was the first time he became aware that
    Progressive was to receive all the commission paid on the transaction.8 Sheets
    stated that he was “bewilder[ed]” and “distressed” by the disclosure and that
    Andrew did not disclose the commission in the Purchase Agreement. Id., Vol.
    8
    By the time Sheets learned the entire commission would be paid to Progressive, “Interra had already paid a
    $49,500.00 deposit that would be forfeited if Interra refused to close on July 31st.” Appellant’s Corrected
    App., Vol. 3 at 71.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017        Page 6 of 20
    3 at 71. Sheets also stated that Myers did not disclose the commission to the
    board of directors. Id.
    [9]    At closing, Progressive’s commission of $49,500 was paid by the seller. Miller
    testified that he was not concerned by Progressive’s involvement in the
    transaction because the commission was paid by the seller and because he had
    evaluated several real estate properties and negotiated the purchase price.
    Nevertheless, Sheets was concerned by a possible conflict of interest and
    instructed Miller to use a different real estate broker, Phil Hahn, for upcoming
    branch expansions in Nappanee and Shipshewana. A property in Nappanee
    was purchased in November 2008.
    [10]   In January 2011, Sheets began a four-month medical leave as the result of a
    cerebral hemorrhage. Sheets returned to work without restrictions in August
    and Interra’s board of directors retained an outside management consulting
    firm to help Sheets transition back into his role. In September, the board of
    directors officially restored Sheets to his office of CEO and president.
    [11]   In April 2012, Myers and two other board members issued a report on Sheets’
    job performance. The report stated Sheets’ job performance was “excellent”
    and “outstanding.” Id., Vol. 6 at 47. Soon thereafter, the board of directors,
    including Myers, voted to increase Sheets’ annual salary by $25,000. In August
    2012, the board of directors voted to give Sheets tickets to see his favorite
    baseball team, the Chicago White Sox, and to pay for his travel to the game.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 7 of 20
    [12]   On August 17, 2012, Interra’s Vice-President David Birky placed a call to
    Interra’s confidential compliance hotline and reported that Sheets was
    cognitively impaired and thus mentally unfit to lead Interra. The board
    retained a local retired circuit court judge to investigate the claim but it could
    not be substantiated.
    [13]   Interra resumed its search for possible expansion locations in late 2012. Myers
    proposed four additional sites to Miller, stating that he wanted to make sure
    Miller knew that the properties may be available. A property known as “Open
    Range” was among those suggested by Myers and he recommended that Miller
    have a site plan prepared for the location. Myers admitted to having
    communicated with the owner of Open Range sometime between October and
    December 2012.9 Sheets and the senior management team reviewed the
    additional properties and unanimously recommended a different property on
    Berkshire Drive to Interra’s board of directors. The board of directors
    authorized Sheets to proceed in acquiring the Berkshire Drive property on
    November 15, 2012.
    [14]   At some point after the November meeting, Myers began discussing Sheets’
    mental competence with Birky. Birky prepared a written memorandum
    detailing his concerns with Sheets’ mental competence and presented the
    memorandum to the board of directors.
    9
    Sheets does not allege that Myers or Progressive had a financial interest in Open Range.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017        Page 8 of 20
    [15]   In January 2013, the board of directors conducted an executive session to
    review Sheets’ performance. Myers “questioned whether the goal was to work
    to retain President Sheets or whether the goal was to change leadership.” Id.,
    Vol. 6 at 85. After polling the board members, they agreed to make a change—
    unanimously voting to transition Sheets out of his role as CEO and president.
    A board member suggested Myers be the board spokesperson during the
    meeting with Sheets because “he already seemed to have an explanation for the
    decision.” Id., Vol. 6 at 86.
    [16]   At a special board meeting on February 15, 2013, Myers informed Sheets of the
    board’s decision. A few months later, on May 8, the Interra board of directors
    presented Sheets with a letter outlining the reasons for their decision. The
    board’s letter included the following:
    a.     That there were significant shortcomings in the
    development of good working relationships between the
    President and staff, management, and the Board with even an
    attitude of fear and worries about retaliation or retribution if
    people said or did anything which was contrary to your
    perspective or ideas;
    b.    That you were resistant to change, stubborn, inflexible,
    and not open-minded, even with respect to Board direction;
    c.    That you were excessively controlling and dominating of
    the agenda to the extent of hampering decision-making;
    d.    That you demonstrated a lack of organization and
    preparation at times in response to Board requests for
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 9 of 20
    information as well as in Board meetings and planning sessions
    only to focus on minor issues, stray to unrelated subjects, and
    waste Board and management time with items not on the
    agenda.
    e.    That your representation of the Credit Union was not
    always what it should be with times you were late to meetings,
    missing at functions, might interject inappropriate jokes or
    comments, make uninvited appearances, etc.
    Id., Vol. 5 at 91-92.
    [17]   Soon thereafter, Sheets commenced three separate lawsuits.10 In the present
    action, Sheets alleged that Myers, individually and as an agent of Progressive
    committed the tort of intentional interference with an at-will employment
    contract. Myers denied the allegations and filed a counterclaim, claiming the
    action was frivolous and seeking attorneys’ fees. On March 6, 2015, Sheets
    filed a motion for partial summary judgment. Myers responded and filed his
    own motion for summary judgment.
    [18]   On September 8, 2015, the trial court granted Myers’ motion for summary
    judgment finding he acted within the scope of his official duties as a member of
    the Interra board of directors. Sheets promptly filed a notice of appeal, but,
    upon Myers’ motion, this court dismissed Sheets’ attempted interlocutory
    appeal because there was no final judgment as Myers’ counterclaim remained
    10
    See Sheets v. Birky, 
    54 N.E.3d 1064
     (Ind. Ct. App. 2016).
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 10 of 20
    unresolved. In December 2016, the parties filed a joint stipulation for dismissal
    of Myers’ counterclaim without prejudice, thus bringing the litigation to an end
    in the trial court. Sheets now appeals.
    Discussion and Decision
    I. Standard of Review
    [19]   When reviewing a trial court’s ruling on summary judgment, we apply the same
    standard as the trial court. Manley v. Sherer, 
    992 N.E.2d 670
    , 673 (Ind. 2013).
    Summary judgment is appropriate only when there are no genuine issues of
    material fact and the moving party is entitled to a judgment as a matter of law.
    Ind. Trial Rule 56(C). A genuine issue of material fact exists where facts
    concerning an issue that would dispose of the litigation are in dispute or where
    the undisputed material facts are capable of supporting conflicting inferences on
    such an issue. Poznanski ex rel. Poznanski v. Horvath, 
    788 N.E.2d 1255
    , 1258
    (Ind. 2003). The party appealing the trial court’s grant of summary judgment
    has the burden of persuading the court that the grant of summary judgment was
    erroneous. Diversified Invs., LLC v. U.S. Bank, NA, 
    838 N.E.2d 536
    , 539 (Ind. Ct.
    App. 2005), trans. denied.
    [20]   Where, as here, the defendant is the moving party, the defendant must show
    that the undisputed facts negate at least one element of the plaintiff’s cause of
    action or that the defendant has a factually unchallenged affirmative defense
    that bars the plaintiff’s claim. Skyline Roofing & Sheet Metal Co., Inc. v. Ziolkowski
    Constr., Inc., 
    26 N.E.3d 1024
    , 1028-29 (Ind. Ct. App. 2015). This standard is
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 11 of 20
    more onerous than its federal counterpart in that the movant must affirmatively
    negate an opponent’s claim. Hughley v. State, 
    15 N.E.3d 1000
    , 1003 (Ind. 2014).
    We also “give careful scrutiny to assure that the losing party is not improperly
    prevented from having its day in court.” Siner v. Kindred Hosp. Ltd. P’rship, 
    51 N.E.3d 1184
    , 1187 (Ind. 2016). Indeed, “Indiana consciously errs on the side
    of letting marginal cases proceed to trial on the merits, rather than risk short-
    circuiting meritorious claims.” Hughley, 15 N.E.3d at 1004.
    II. Tortious Interference with Employment
    [21]   Indiana has historically recognized two basic forms of employment: (1)
    employment for a definite or ascertainable term; and (2) employment at-will.
    Orr v. Westminster Vill. North, Inc., 
    689 N.E.2d 712
    , 717 (Ind. 1997). In the
    absence of a definite or ascertainable term of employment, employment at-will
    is presumptively terminable at any time, with or without cause,11 by either
    party. Wior v. Anchor Indus., Inc., 
    669 N.E.2d 172
    , 175 (Ind. 1996). Despite a
    general lack of protections, an at-will employee “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.” Bochnowski v. Peoples Fed. Sav. & Loan Ass’n,
    
    571 N.E.2d 282
    , 285 (Ind. 1991).
    11
    On rare occasions, narrow exceptions have been found. Meyers v. Meyers, 
    861 N.E.2d 704
    , 706 (Ind. 2007).
    These exceptions include discrimination and retaliatory discharge. Whirlpool Corp. v. Vanderburgh Cty.-City of
    Evansville Human Relations Comm’n, 
    875 N.E.2d 751
    , 757-58 (Ind. Ct. App. 2007).
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017         Page 12 of 20
    [22]   In order to prevail on a claim of tortious interference with an employment
    contract, a plaintiff must establish: (1) the existence of a valid relationship; (2)
    the defendant’s knowledge of the existence of the relationship; (3) the
    defendant’s intentional interference with that relationship; (4) the absence of
    justification; and (5) damages resulting from defendant’s wrongful interference
    with the relationship. Bradley v. Hall, 
    720 N.E.2d 747
    , 750 (Ind. Ct. App. 1999).
    An at-will employee may bring a claim of tortious interference if, in addition to
    the standard elements of the tort, he or she can demonstrate “that the defendant
    interferer acted intentionally and without a legitimate business purpose.”
    Bochnowski, 571 N.E.2d at 285.
    [23]   Directors or officers are only personally liable for tortious interference with the
    corporation’s contracts where they act outside the scope of their official duties
    in causing the breach. Trail v. Boys and Girls Clubs of Nw. Indiana, 
    845 N.E.2d 130
    , 138 (Ind. 2006). Our supreme court explained the tort in Trail:
    That an officer or director of a corporation possesses limited
    immunity from most charges of tortious interference with the
    corporation’s contracts stems from both their role as agents of the
    corporation and the nature of the tort. A party cannot “interfere”
    with its own contracts, so the tort itself can be committed only by
    a third party. In the case of a corporation, the legal entity acts
    through its directors and officers. Thus, when officers or
    directors act in their official capacity as agents of the corporation,
    they act not as individuals but as the corporation itself. In doing
    so, they are not acting as a third party, but rather as a party to the
    contract and cannot be personally liable for tortious interference
    with the contract.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 13 of 20
    Conversely, when directors or officers act outside the scope of
    their official capacity, they no longer act as agents of the
    corporation and therefore act as a third party. Directors and
    officers who act outside the scope of their official duties therefore
    can be held personally liable for tortious interference with a
    contract.
    
    Id.
     (internal citations omitted). Sheets alleges that the trial court erred by
    awarding summary judgment to Myers and maintains that there is a factual
    dispute as to whether Myers was acting outside the scope of his official duties
    when he: 1) engaged in a pattern of self-dealing which made Sheets’ job
    performance more burdensome; and 2) when he retaliated against Sheets for
    preventing Myers’ attempts at self-dealing, resulting in Sheets’ discharge.
    A. Improper Motivation
    [24]   Sheets invites us to use this case to “clarify the rule regarding director liability
    for acting purely in pursuit of personal advantage[,]” Appellant’s Br. at 19, and
    relies on the following language from our supreme court’s decision in Trail v.
    Boys and Girls Clubs of Northwest Indiana:
    Trail has not alleged that the actions taken by the defendants
    were prompted by a legally improper motivation. In his complaint,
    Trail alleged that the defendant's improper motivation was his
    refusal to defer to them on matters of corporate control. At oral
    argument, Trail asserted that the defendants’ improper
    motivation was their desire to increase their own control over the
    operation of the Boys and Girls Clubs. However, in the
    unreported case which Trail himself cites, the court held that
    “[a]n increase in corporate control is not personal advantage” of
    the sort that takes a director or officer’s actions outside the scope
    [of] their authority for the purposes of a tortious interference
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 14 of 20
    claim. Nothing in Trail’s complaint suggests that the “personal
    advantage” sought by the defendants was anything other than
    larger influence over the direction of the enterprise.
    845 N.E.2d at 140-41 (emphasis added). Specifically, Sheets relies on the
    phrase “legally improper motivation,” and alleges that our supreme court was
    unwilling to foreclose the possibility of director liability where such legally
    improper motivation is shown. See Appellant’s Br. at 19.
    [25]   We disagree. In Trail, the plaintiff climbed the ranks of his not-for-profit
    corporation for almost twenty years before serving as its executive director.
    Plaintiff alleged that several members of the executive committee became
    unhappy with him for personal reasons and contrived a biased report to cast
    him in a negative light and justify asking him to resign. Reviewing plaintiff’s
    claim for tortious interference with an at-will employment contract, our
    supreme court explained that:
    basic corporation law affords the directors authority to engage in
    the activity at issue. Because [the plaintiff] has not alleged any
    fact that overcomes the presumed and implied powers of the
    directors, we cannot agree with [the plaintiff’s] assertion that the
    defendants acted outside the scope of their official duties in
    evaluating his work.
    845 N.E.2d at 139. In affirming the dismissal of the plaintiff’s claim, the court
    held that “no action can lie against the individual members of that group for
    exercising their rightful authority.” Id. at 141.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 15 of 20
    [26]   Our supreme court made clear in Trail that improper motive is irrelevant for the
    purposes of a claim of tortious interference with an at-will employment contract
    as long as a director or officer was acting within the scope of their official
    duties. Applied here, any alleged improper motivation by Myers is irrelevant if
    his actions were within the scope of his official duties as a member of Interra’s
    board of directors. Therefore, we turn to the question of whether Myers’
    actions were within the scope of his official duties.
    B. Scope of Official Duties
    [27]   The scope of a director or officer’s official duties is dependent upon the scope of
    their express or implied authority. See Trail, 845 N.E.2d at 139. Express
    authority can be conferred by statute, the articles of incorporation, bylaws, or a
    resolution from the board of directors. Blairex Labs., Inc. v. Clobes, 
    599 N.E.2d 233
    , 235-36 (Ind. Ct. App. 1992), trans. denied. Implied authority includes that
    “incidental authority necessary, usual, and proper to effectuate the main
    authority expressly conferred.” Indiana Dep’t of Pub. Welfare v. Chair Lance Serv.,
    Inc., 
    523 N.E.2d 1373
    , 1377 (Ind. 1988).
    [28]   Sheets contends that, “[a]part from the fact that Myers held the title of director
    during this time period, Myers designated nothing else in way of facts or
    evidence” from which a jury could conclude that his acts were within his
    official capacity as a director of the credit union. Appellant’s Br. at 18. We
    disagree. First, Myers designated Interra’s bylaws to outline a member of the
    board of directors’ express authority. The bylaws provide:
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 16 of 20
    Section 3. Powers and Duties of the Board. The Board of Directors
    shall have the general management of the affairs, funds, and
    records of the Credit Union together with such other powers and
    duties as are prescribed in [the Indiana Credit Union Act]. The
    supervision of the Board over the business of the Credit Union
    shall be such as will enable them at all times to know its general
    financial condition and to provide reasonable assurance that
    imprudent or dishonest conduct of any of its officers or officials
    will be checked or prevented. The Directors are agents of the
    Credit Union and may be held personally liable for losses and
    waste of money and property occurring through the violation of
    their duties and/or the law.
    Appellant’s Corrected App., Vol. 5 at 6. Myers also designated the Indiana
    Credit Union Act, Indiana Code section 28-7-1 et seq. Relevant here, Indiana
    Code section 28-7-1-16 provides:
    (b) The board may appoint officers of the credit union.
    ***
    (d) The board of directors shall have the general management of
    the affairs, funds, and records of the credit union and shall meet
    at least monthly . . .
    ***
    (i) The board of directors by a majority vote may suspend or
    remove any officer from the officer’s duties as an officer.
    ***
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 17 of 20
    [29]   These designations were sufficient for the court to determine as a matter of law
    that Myers’ actions were within the scope of his official duties. The board of
    directors is granted the general management of the affairs, funds, and records of
    the credit union by Indiana statute and Interra’s bylaws. This broad grant of
    power is wide enough to encompass Myers’ participation in Interra’s
    expansion.12 Further, Indiana Code section 28-7-1-16(i) grants directors the
    express power to “remove any officer from the officer’s duties as an officer.”
    Myers’ actions surrounding Sheets’ discharge were squarely within the express
    authority provided by statute. And, as our supreme court explained in Trail,
    Myers’ powers were not limited to those express powers:
    Basic corporate agency law indicates that directors enjoy a wide
    range of authorized powers including both those powers
    expressly granted by statute and the articles of incorporation or
    by-laws, and that “incidental authority necessary, usual, and
    proper to effectuate the main authority expressly conferred.”
    Certainly, such incidental authority includes the authority to
    investigate and evaluate the executive employees of the
    enterprise. To say that the directors lacked the authority to carry
    out the inquiry flies against standard corporation law.
    12
    On the issue of Myers’ alleged interference with Interra’s branch expansion, Sheets seemingly admits that
    the board of directors had express authority but argues that the authority rested with the whole board of
    directors, not Myers individually. We find Sheets’ perfunctory argument on this point unconvincing and
    conclude that Sheets has not alleged any fact that overcomes the express or implied powers of Interra’s board
    of directors. See Trail, 845 N.E.2d at 139.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017         Page 18 of 20
    845 N.E.2d at 139 (citation omitted). Similarly, here, Myers had the requisite
    incidental authority to investigate and evaluate Sheets’ performance as the CEO
    and president of Interra. To the extent that any of Myers’ actions fell beyond
    his express authority, we find Myers’ incidental authority broad enough to
    encompass such actions.
    [30]   Sheets also raises the argument that, “As a general proposition, Myers certainly
    must have acted within his official capacity as director on some occasions and
    within his capacity as an agent of [Progressive] on others. However, it cannot
    be said that on every occasion, Myers must have been acting within both,
    simultaneously.” Appellant’s Br. at 17. Notwithstanding Sheets’ intermixing
    of terms, we assume he refers to the relevant doctrine: the scope of Myers’
    official duties. As Sheets himself admits, Myers could have been acting within
    the scope of his official duties as the president of Progressive and a member of
    Interra’s board of directors at the same time and his official duties were
    therefore not mutually exclusive. Having already found that all of Myers’
    relevant activities fell within the scope of his official duties through his express
    or implied authority, we need not specifically address this issue.
    C. Conflict of Interest
    [31]   Finally, Sheets argues that he designated sufficient evidence of Myers’ self-
    dealing that violated Interra’s bylaws, his director’s oath, and his statutory duty
    to act in good faith to raise a question of fact as to whether Myers’ actions were
    outside his official duties. Again, Sheets provides no authority and assumes,
    without explanation or precedent, that simply because an action violated a
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 19 of 20
    statute or Interra’s bylaws that the action was thus outside the scope of Myers’
    official duties. Once more we reiterate that Myers’ actions fell within the scope
    of his official duties.
    [32]   Therefore, having determined that motive is irrelevant for the purposes of
    tortious interference with an at-will employment contract, Sheets’ claims
    regarding Myers’ motives are not material questions of fact. See Williams v.
    Tharp, 
    914 N.E.2d 756
    , 761 (Ind. 2009) (“A fact is ‘material’ if its resolution
    would affect the outcome of the case . . . .”) Accordingly, Sheets has failed to
    meet his burden to convince us that the trial court’s grant of summary judgment
    was erroneous.
    Conclusion
    [33]   The trial court did not err in entering judgment in favor of Myers as to Sheets’
    claims for intentional interference with an at-will employment contract.
    Accordingly, we affirm the trial court’s grant of summary judgment.
    [34]   Affirmed.
    Riley, J., and Pyle, J., concur.
    Court of Appeals of Indiana | Memorandum Decision 20A03-1701-PL-161 | November 15, 2017   Page 20 of 20
    

Document Info

Docket Number: 20A03-1701-PL-161

Filed Date: 11/15/2017

Precedential Status: Precedential

Modified Date: 11/15/2017