Robert Hrezo v. City of Lawrenceburg

FILED
08/22/2017, 10:42 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
Corinne R. Finnerty Susan M. Salyer
McConnell Finnerty PC Patsfall, Yeager & Pflum
North Vernon, Indiana Cincinnati, Ohio
IN THE
COURT OF APPEALS OF INDIANA
Robert Hrezo and Hrezo August 22, 2017
Engineering, Inc., Court of Appeals Case No.
15A01-1612-CT-2957
Appellants-Plaintiffs,
Appeal from the Dearborn/Ohio
v. Circuit Court
The Honorable Jon W. Webster,
Special Judge
City of Lawrenceburg,
Cause No. 15C01-0607-CT-23
Appellee-Defendant.
Bradford, Judge.
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Case Summary
[1] Appellants-Plaintiffs Hrezo Engineering, Inc. (“HEI”), and Robert Hrezo
(collectively, “Appellants”) appeal from the judgment entered in favor of
Appellee-Defendant the City of Lawrenceburg (“the City”). Robert established
HEI in 1983 and, from at least 1997 until 2005, HEI worked on several
construction projects for the City and/or its agencies, billing several million
dollars over that period. In 2003, Tom Steidel began his tenure as City
Manager, charged with assisting the mayor and the City’s government.
[2] Over the next couple of years, issues developed with HEI’s work for the City,
and several projects were terminated or suspended. Among the issues were
concerns about possible overbilling and overstaffing and substandard work. In
March of 2005, City Manager Steidel prepared a memorandum summarizing
his concerns about HEI’s work and distributed it to the Mayor, the City
Council, the City’s Clerk-Treasurer, and the City’s Board of Works. Later in
2005, the decision was made to stop using HEI for City projects.
[3] In 2006, Appellants sued the City, alleging tortious interference, defamation,
interference with prospective business advantage, and violations of Indiana’s
RICO statutes. Ultimately, the trial court granted summary judgment in favor
of the City on the tortious interference, interference with prospective business
advantage, RICO, and defamation per se claims, leaving defamation per quod the
only claim remining for trial. Following trial, the jury returned a verdict in
favor of the City, and the trial court denied Appellants’ motion to correct error.
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[4] Appellants contend that the trial court erred in (1) granting summary judgment
in favor of the City on Appellants’ defamation per se claim, (2) granting
summary judgment in favor of the City on Appellants’ tortious interference
claim, (3) excluding proffered testimony regarding Appellants’ alleged damages,
(4) refusing to deliver Appellants’ proposed jury instruction on publication, and
(5) refusing to include several allegedly defamatory statements on a verdict form
given to the jury. Because we conclude that Appellants’ claims are without
merit, we affirm.
Facts and Procedural History
[5] Robert is the sole owner of HEI, which he established in 1983 and whose
operations he oversees. In 1997, Robert was appointed City Engineer for the
City, and HEI worked on approximately ninety-five projects for the City from
1997 to 2005, including such projects as the Lawrenceburg Police Station, three
swimming pools, and work on the Lawrenceburg levy system. Altogether, HEI
billed the City over $3.5 million from 1997 to 2005. During this time,
Appellants also worked with Mel Davis, the City’s utilities director.
[6] On January 1 or 2, 2003, City Manager Steidel began his tenure. City Manager
Steidel’s job was to bring a “professional management process as a proponent
to the City [and] assist the Mayor, and the Council[.]” Tr. Vol. II p. 136. City
Manager Steidel was supposed to “manage contracts that the City was engaged
in and in some cases develop contracts that the City would enter into.” Tr. Vol.
II p. 136. In November of 2003, William Cunningham was elected Mayor of
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the City and took office on January 1, 2004. On the first day of Mayor
Cunningham’s tenure, City Manager Steidel decided that he was terminating or
putting on hold fifteen of HEI’s thirty-three to thirty-five ongoing projects.
[7] Among the projects HEI worked on for the City was Todd-Creech Park, which
was a drainage basin that was to be converted into a recreational area. At the
time, Mario Todd was an independent contractor working with HEI. Todd
served as an inspector on the Todd-Creech project along with another inspector
from HEI. City Manager Steidel told Robert that he only wanted one inspector
on the Todd-Creech jobsite, because, in City Manager Steidel’s view, the park
was not large enough to require two inspectors and there were “a lot of days I
went over there, there was very little going on.” Tr. Vol. II p. 142. City
Manager Steidel also told Hrezo to begin bringing one representative to Todd-
Creech construction meetings when he had been bringing up to five. Director
of engineering for the City Michael Clark noted later that there had been
problems with HEI’s work on the Todd-Creech project, including “major de-
watering issues” caused by a breached aquifer and baseball field that would not
drain properly because it had been designed “table top flat[.]” Tr. Vol. II p.
119.
[8] In 2004, Todd was working with HEI performing inspections on City building
projects, including those worked on by a company called Fortune Management,
which was working with the City’s redevelopment commission to rehabilitate
and sell older structures. In early 2004, it came to Todd’s attention that there
were questions about one particular project that HEI had approved. HEI had
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issued an American Institute of Architects (“AIA”) document for a house on 19
Williams Street in the City indicating that new windows and cabinets had been
installed. The address, however, was an empty lot. When Todd confronted
Robert and his son Mike about the AIA document, Robert told him that City
Manager Steidel had told him to sign it. Todd resigned from HEI that day and
was later hired by the City to perform in-house inspections.
[9] On March 3, 2005, in anticipation of an executive session meeting at which
Robert was expected to complain about his mounting issues with the City, City
Manager Steidel issued a memorandum to Mayor Cunningham, the City
Council, the City’s Clerk-Treasurer, and the Board of Works (“the Steidel
Memo”), which provides, in relevant part, as follows:
To: Mayor & City Council, Clerk-Treasurer, Bd. Of
Works
From: Tom Steidel, City Manager
Date: March 3, 2005
Subject: Hrezo Engineering Billing Issues
I must apologize for being absent for Tuesday night’s X-session
but the beaches call. Mr. Hrezo is appearing before Council &
The Board of Works to protest what he says is my refusal to pay
his firm for services rendered. That is not exactly the case. I
have called in to question several of his bills to the city while
promptly paying others. I have asked him to consider amending
some of his billings to reflect problems on the job that his firm
has some responsibility for. So far he has failed to do so.
Mr. Hrezo and I have been having discussions for quite some
time about his billing tendencies. First he bills quarterly instead
of monthly and only recently has submitted time cards.
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Unfortunately, the review of the time cards only reinforces my
view that he deploys way more employees to our jobs than is
warranted. Todd[-]Creech Park is a classic example where he
has insisted on deploying two inspectors day after day after day.
The park just isn’t big enough to warrant that level of coverage
nor was a lot of work being done. Sometimes there was none at
all but the inspectors were there.
Mr. Hrezo bills out his inspectors at $55 per hour I believe and
pays approximately $25 per hour. For two inspectors at those
rates Hrezo Engineering would collect $60 for every hour the two
inspectors were deployed. In addition, he has continued to bring
as many as five (5) persons to our construction meetings. I have
discussed these issues with Mr. Hrezo on numerous occasions
and I guess his most common response is that he needs these
resources to get his work done.
We have paid Hrezo engineering a total of $335,029 during 2004
including a December bill for $86,141 for work on Todd-Creech
Park. We now have a February bill for $51,577. The make up of
those bills is as follows:
December Billing
Principal Engineer 179.50 hrs @ $85 Hr. $15,257.50
Chief Engineer 397.50 hrs. @$75 Hr. $29,812.50
Engineer 2 150 hrs. @$65 Hr. $9750.00
Senior Field Tech 477.5 hrs. @355 Hr. $26262.50
Technician 2 51 hrs. @$50 Hr. $2550.00
Structural Consult 22.50 hrs. @5595 HI. $2,137.50
Structural Consult 3 hrs. @$113 Hr. $339.00
UPS Charges $32.40
Total $86,141.40
As I analyze this I have to wonder why we are still paying these
huge engineering and design charges ($57,295) when the design
was done a year ago. This billing period was for 82 days.
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The February bill for Todd-Creech, covering only 64 days is
$51,577. This bill contains 420 hours of Senior Field Inspection
and 40.75 hours of Technician 2 time. Engineering services
appear to cost $26,439. I remind [you] that this is a project that
was basically designed in 2003 and supposed to be constructed in
2004. Here we are in 2005 still paying for engineering services. I
suspect that many of these engineering hours are to re-engineer,
correct, add to, or amend his original plan. If that is true, Hrezo
Engineering should take some responsibility for these expenses.
In addition to the above bills Hrezo Engineering also billed the
contractor for an additional $8000 for capping the w[e]lls at
Todd-Creech Park. The contractor has refused to pay the bill
and I assume it will fall to us if it is not paid. There were
engineers with the well-capping companies and H.C. Nutting
was the engineer in charge. I’m not exactly sure what Hrezo
Engineering was doing for $8000.
The Fire Station is another project that I asked Mr. Hrezo for
clarification. Our bill for the December billing was $7141.75 of
which $6333 was for engineering services and $440 for
inspection. The February bill was for $2462 all of which appear
to be engineering services. I had returned the December bill and
asked Mr. Hrezo to critically review it. As you know we have
some construction issues at this location. Problems such as the
truss welds which I believe we are being charged to have Hrezo
inspect when we have previously paid his inspector to been the
site, and inspecting, the truss installation. We should not have to
pay again.
There were several other December bills that I questioned which
have since been paid.
Recently I received a bill for $18,492.94 for the Ivy Tech
Retaining Wall. This invoice covers the period from 1/5/04 thru
2/10/05. This billing is unusually [sic] since it covers 13 months
as opposed to the normal quarterly billing cycle. This project
was finished as of 12/31/03 when I told both the contractor Roy
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A. Miller and Mr. Hrezo that work must stop as the project
appeared to be finished.
Since that time you may know that there are problems with the
wall. I did not authorize Hrezo Engineering to do $18,492 worth
of work on this project and have no clue what they accomplished
except to throw the blame for the wall problems on others. It is a
fact that the wall is failing to some degree and Hrezo Engineering
was the principle [sic] representative of the City of
Lawrenceburg. For him to fail to accept some measure of
responsibility for this problem seems odd.
Lately what I have asked Mr. Hrezo is to try to explain to me
what work he has done that actually accomplishes objectives for
the city. On all three of these projects, there is difficulty seeing
any real production for the amount of money we are paying. The
Fire Station continues to be a problem. Todd-Creech Park
speaks for itself and the Ivy Tech wall problem could dwarf the
other two issues in financial impact.
Finally, I am ending our association with Hrezo Engineering on
the Rte. 50 Gateway project. A review of the plans indicate that
the project scope has gotten larger than what is appropriate.
Therefore, after in-house discussion with Mike Clark, Mario
Todd and Mel Davis, we have decided to handle the project in-
house. Hrezo Engineering will be paid for the work they have
done up to this point.
I would suggest that any further work with Hrezo Engineering be
assigned in writing and be very task and objective oriented. I
would also put “not to exceed numbers” into the contract to
guard against the kind of problems we are having on the three
jobs outlined above. I have asked for additional, subjective
information regarding these three projects and as of yet I haven’t
been given anything that would change my mind that the
numbers submitted are too high[.]
Appellant’s App. Vol. II 137–39.
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[10] In July of 2005, City Manager Steidel allegedly stated in a City Council meeting
that HEI did “bad work.” Tr. Vol. I p. 205. In August of 2005, after a
development deal with the City for the renovation of a City-owned building fell
through, Robert filed an unrelated complaint against the City. At that point,
Clark decided to stop using HEI for any City projects.
[11] On July 3, 2006, Appellants filed suit against the City, alleging tortious
interference, defamation, interference with prospective business advantage, and
violations of Indiana’s RICO statutes. On September 30, 2009, the City moved
for summary judgment. On June 30, 2011, the trial court granted summary
judgment in favor of the City on the tortious interference, interference with
prospective business advantage, and RICO claims. On January 13, 2012, the
City filed a second summary judgment motion. On March 9, 2012, the trial
court granted the City’s summary judgment motion as it pertained to
Appellants’ claim of defamation per se, leaving defamation per quod the only
claim remining for trial.
[12] On March 19, 2012, the City filed a motion in limine seeking to exclude
testimony concerning the amount of HEI’s damages based on past income
received from the City. On September 6, 2016, the trial granted the City’s
motion in limine in part “to the extent Plaintiffs intend to present evidence,
written and oral, from anyone other than Mr. Robert Hrezo.” Appellant’s App.
Vol. IV p. 196.
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[13] Jury trial was held on September 19, 20, 22, 23, and 26, 2016. During trial,
Appellants made an offer of proof of testimony and a report prepared by CPA
John Race regarding Appellants’ claimed damages. Appellants also tendered a
proposed verdict form, which included nineteen allegedly defamatory
statements for consideration by the jury. The trial court omitted ten of the
nineteen statements from the verdict form. Appellants also tendered an
instruction on publication which the trial court declined to give. On September
26, 2016, the jury returned a verdict in favor of the City, finding that none of
the communications about which it had been instructed were defamatory. The
jury indicated its findings on the verdict form by circling “NO” for each of the
communications:
If you decide in favor of Hrezo Engineering, Inc., indicate the
specific find to communications that you be defamatory by
circling YES to indicate that you do find the communication to
be defamatory or NO to indicate that you do not find the
communication to be defamatory:
YES NO 1. March 3, 2005 Memo (“memo”): “I have asked
him to consider amending some of his billings to
reflect problems on the job that this firm has some
responsibility for. So far he has failed to do so.”
YES NO 2. Memo: “Unfortunately, the review of the time
cards only reinforces my view that he deploys way
more employees to our jobs than is warranted.
Todd Creech Park is a classic example where he has
insisted on deploying two inspectors day after day
after day. The park just isn’t big enough to warrant
that level of coverage nor was a lot of Work being
done. Sometimes there was none at all but the
inspectors were there.”
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YES NO 3. Memo: “Problems such as the truss welds which
I believed we are being charged to have Hrezo
inspect when we have previously paid his inspector
to be on the site, and inspecting, the truss
installation. We should not have to pay again.”
YES NO 4. Memo: “On all three of these projects, there is
difficulty seeing any real production for the amount
of money we are paying. The Fire Station continues
to be a problem. Todd-Creech Park speaks for itself
and the Ivy Tech wall problem could dwarf the
other two issues in financial impact.”
YES NO 5. Tom Steidel reported $1,517,432.28 in additional
charges at the December 13, 2004 MDF budget
work session regarding the Ludlow Hill Street
project.
YES NO 6. March 3, 2005 Memo: “As I analyze this I have
to wander why we are still paying these huge
engineering and design charges ($57,295) when the
design was done a year ago. The billing period was
for 82 days.”
YES NO 7. In a July 5, 2005 meeting of the City Council
Tom Steidel stated in the presence of other Council
members that Hrezo Engineering did bad work.
YES NO 8. Hrezo Engineering was accused of calling
FEMA. Hrezo denies making the call.
YES NO 9. Mario Todd, Tom Steidel and Mel Davis all
accused Hrezo Engineering of performing bad work
at Todd-Creech Park. Hrezo denies this accusation.
[14] Appellant’s App. Vol. II p. 42. On October 25, 2016, Appellants filed a motion
to correct error, which the trial court denied on November 30, 2016.
Discussion and Decision
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[15] Appellants contend that the trial court erred in (1) granting summary judgment
in favor of the City on Appellants’ defamation per se claim, (2) granting
summary judgment in favor of the City on Appellants’ tortious interference
claim, (3) excluding Race’s testimony regarding Appellants’ alleged damages,
(4) refusing to deliver Appellants’ proposed jury instruction on publication, and
(5) refusing to include several allegedly defamatory statements on the verdict
form.
Standard of Review for Denial of Motion to Correct Error
[1] Appellants appeal from the trial court’s denial of their motion to correct error.
In general, we review a trial court’s ruling on a motion to correct
error for an abuse of discretion. Hawkins v. Cannon, 826 N.E.2d
658, 661 (Ind. Ct. App. 2005), trans. denied. However, to the
extent the issues raised by the City are purely questions of law,
our review is de novo. See Ind. BMV v. Charles, 919 N.E.2d 114,
116 (Ind. Ct. App. 2009) (“Although rulings on motions to
correct error are usually reviewable under an abuse of discretion
standard, we review a case de novo when the issue … is purely a
question of law.”)[.]
[2] City of Indpls. v. Hicks, 932 N.E.2d 227, 230 (Ind. Ct. App. 2010), trans. denied.
Standards of review applicable to Appellants’ specific claims will be noted in
the appropriate section.
Standard of Review for Issues I and II
[3] In issues I and II, Appellants contend that the trial court erred in granting
summary judgment in favor of the City.
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When reviewing a grant or denial of a motion for summary
judgment our standard of review is the same as it is for the trial
court. Kroger Co. v. Plonski, 930 N.E.2d 1, 4 (Ind. 2010). The
moving party “bears the initial burden of making a prima facie
showing that there are no genuine issues of material fact and that
it is entitled to judgment as a matter of law.” Gill v. Evansville
Sheet Metal Works, Inc., 970 N.E.2d 633, 637 (Ind. 2012).
Summary judgment is improper if the movant fails to carry its
burden, but if it succeeds, then the nonmoving party must come
forward with evidence establishing the existence of a genuine
issue of material fact. Id. In determining whether summary
judgment is proper, the reviewing court considers only the
evidentiary matter the parties have specifically designated to the
trial court. See Ind. Trial R. 56(C), (H). We construe all factual
inferences in the non-moving party’s favor and resolve all doubts
as to the existence of a material issue against the moving party.
Plonski, 930 N.E.2d at 5. The fact that the parties have filed
cross-motions for summary judgment does not alter our standard
for review, as we consider each motion separately to determine
whether the moving party is entitled to judgment as a matter of
law. Hardy v. Hardy, 963 N.E.2d 470, 473 (Ind. 2012).
Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012).
I. Defamation
[4] Appellants argue that the trial court erred in granting summary judgment in
favor of the City on their claim of defamation per se.
To establish a claim of defamation, a “plaintiff must prove the
existence of ‘a communication with defamatory imputation,
malice, publication, and damages.’” Trail v. Boys & Girls Clubs of
N.W. Ind., 845 N.E.2d 130, 136 (Ind. 2006) (quoting Davidson v.
Perron, 716 N.E.2d 29, 37 (Ind. Ct. App. 1999), trans. denied). A
statement is defamatory if it tends “to harm a person’s reputation
by lowering the person in the community’s estimation or
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deterring third persons from dealing or associating with the
person.” Kelley v. Tanoos, 865 N.E.2d 593, 596 (Ind. 2007)
(internal citation omitted). One type of defamation action,
alleging defamation per se, arises when the language of a
statement, without reference to extrinsic evidence, constitutes an
imputation of (1) criminal conduct, (2) a loathsome disease, (3)
misconduct in a person’s trade, profession, office, or occupation,
or (4) sexual misconduct. Id.; see also Rambo v. Cohen, 587 N.E.2d
140, 145 (Ind. Ct. App. 1992), trans. denied; Elliott v. Roach, 409
N.E.2d 661, 683 (Ind. Ct. App. 1980), trans. not sought. In
contrast, if the words used are not defamatory in themselves, but
become so only when understood in the context of extrinsic
evidence, they are considered defamatory per quod. McQueen v.
Fayette County Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct. App. 1999),
trans. denied. In actions for defamation per se, damages are
presumed, but in actions for defamation per quod, a plaintiff must
prove damages. Rambo, 587 N.E.2d at 145–46.
Dugan v. Mittal Steel USA Inc., 929 N.E.2d 184, 186 (Ind. 2010). “Whether a
communication is defamatory is a question of law for the court, unless the
communication is susceptible to either a defamatory or non-defamatory
interpretation-in which case the matter may be submitted to the jury.” Baker v.
Tremco Inc., 917 N.E.2d 650, 657 (Ind. 2009).
[5] Appellants argue that designated statements, including many drawn from the
Steidel Memo, are per se defamatory. Appellants, however, do not identify any
specific statements in their argument, noting only that “[t]he statements made
by Steidel and others all related to Hrezo’s work for the City and falsely accused
Hrezo of overcharging; using more workers than were necessary; being
responsible for problems with the Ivy Tech wall; inappropriately expanding the
scope of the Gateway project and doing unnecessary work.” Appellant’s Br. p.
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28. Even assuming that such statements were made and that Appellants
accurately characterize them, none of the above amounts to defamation per se.
Put another way, none of the above constitutes an allegation of misconduct on
its face, as all of it could just as easily have been caused by mistake or
incompetence. Put another way, Appellants would have to depend on extrinsic
evidence to establish that any of the above was defamatory, rendering it, at best,
defamation per quod. The trial court did not err in this respect.
II. Tortious Interference
[6] Appellants also contend that the trial court erred in entering summary judgment
in favor of the City on their tortious interference claim. Specifically, they argue
that a utility service board is a separate entity from a municipality under
Indiana law, they did work for the City’s utility service board, and several City
agents interfered with that work.
The elements of an action for tortious interference with a
contract are: (1) the existence of a valid and enforceable contract;
(2) 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.
Levee v. Beeching, 729 N.E.2d 215, 221 (Ind. Ct. App. 2000). However, “[a]
party cannot ‘interfere’ with its own contracts, so the tort itself can be
committed only by a third party.” Trail, 845 N.E.2d at 138.
[7] The City argues that Appellants raise this issue for the first time on appeal. It is
well-settled that “[i]ssues not raised before the trial court on summary judgment
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cannot be argued for the first time on appeal and are waived.” Dunaway v.
Allstate Ins. Co., 813 N.E.2d 376, 387 (Ind. Ct. App. 2004). Appellants’ claim
that they did work for the City’s utility service board was not raised or litigated
below and is consequently waived for appellate consideration.
III. Exclusion of Expert Testimony
[8] Appellants contend that the trial court abused its discretion in excluding the
testimony of Race regarding their claimed damages.
The admission and exclusion of evidence falls within the sound
discretion of the trial court, and this court reviews those decisions
only for an abuse of that discretion. See Wilson v. State, 765
N.E.2d 1265, 1272 (Ind. 2002). An abuse of discretion occurs
when the trial court’s decision is against the logic and effect of
the facts and circumstances before the court. Carpenter v. State,
786 N.E.2d 696, 702–03 (Ind. 2003). When we review for an
abuse of discretion, we do not reweigh the evidence. K.S. v.
Marion County Dep’t of Child Servs., 917 N.E.2d 158, 162 (Ind. Ct.
App. 2009).
Brightpoint, Inc. v. Pedersen, 930 N.E.2d 34, 38 (Ind. Ct. App. 2010), trans. denied.
[9] We conclude that any error the trial court may have made in excluding Race’s
evidence was harmless. “An error is harmless when the probable impact of the
erroneously admitted or excluded evidence on the factfinder, in light of all the
evidence present, is sufficiently minor so as not to affect a party’s substantial
rights.” Kimbrough v. Anderson, 55 N.E.3d 325, 334 (Ind. Ct. App. 2016), trans.
denied. Quite simply, the question of damages was rendered moot by the jury’s
finding that none of statements alleged to be defamatory by Appellants were, in
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fact, defamatory. Without defamation, there can be no damages, rendering any
evidence relating to the question, which would have included Race’s testimony
and report, irrelevant.
IV. Jury Instructions
[10] Appellants contend that the trial court abused its discretion in declining to give
a tendered jury instruction on publication.
The giving of jury instructions is a matter within the sound
discretion of the trial court, and we review the trial court’s refusal
to give a tendered instruction only for an abuse of that discretion.
See Control Techniques, Inc. v. Johnson, 737 N.E.2d 393 (Ind. Ct.
App. 2000), trans. pending. Such an abuse of discretion occurs
only when: 1) the instruction correctly states the law; 2) the
evidence supports the instruction; and 3) the substance of the
instruction is not covered by other instructions. Id. Further,
even if refusal of a tendered instruction is error, we will not
reverse unless the failure to give the instruction substantially and
adversely affected the party’s substantial rights so as to likely
have affected the result. Epperly v. Johnson, 734 N.E.2d 1066
(Ind. Ct. App. 2000).
Merida v. Cardinal, 749 N.E.2d 605, 607 (Ind. Ct. App. 2001).
[11] Appellants proffered the following jury instruction on publication:
The communication within the scope of his employment by one
(1) agent to another agent of the same principal is a publication
by the principal. Evaluation information communicated within
the City of Lawrenceburg to management personnel may be
considered published for purposes of this action.
Tr. Vol. III pp. 70–71.
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[12] While we agree with Appellants that publication (for purposes of defamation)
can occur between agents of the same principal, see, e.g., Bals v. Verduzco, 600
N.E.2d 1353, 1355 (Ind. 1992) (“When intracompany communications injure
an employee’s occupational reputation, the result may be among the most
injurious of defamations.”), that does not help them here. As mentioned, the
jury specifically found that none of the statements submitted to it were
defamatory, so it matters little who communicated them to whom. Even if we
assume, arguendo, that the proffered instruction was proper, any error the trial
court may have committed in this regard can only be considered harmless. See,
e.g., Kimbrough, 55 N.E.3d at 334.
V. Allegedly Defamatory Statements
[13] Appellants contend that the trial court abused its discretion in refusing to
include six additional, allegedly defamatory statements on the verdict form,
which, as given to the jury, contained nine.
It is a question of law for the court to decide whether a statement
considered in its entirety is capable of possessing a defamatory
meaning or implication. [Woods v. Evansville Press Co., 791 F.2d
480, 485 (7th Cir. 1986)] (citing Rose v. Indianapolis Newspapers,
Inc., 213 F.2d 227, 229 (7th Cir.1954)). If a statement is
susceptible to both defamatory and non-defamatory meanings,
the matter of interpretation should be left to the jury. Id. In
order to impose liability for defamation, the United States
Constitution requires a false statement of fact. [Heeb v. Smith, 613
N.E.2d 416, 421 (Ind. Ct. App. 1993) (citing Hustler Magazine v.
Falwell, 485 U.S. 46, 108 S. Ct. 876, 99 L. Ed. 2d 41 (1988)), trans.
denied.]
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Journal-Gazette Co. v. Bandido’s, Inc., 712 N.E.2d 446, 457 (Ind. 1999). We
address the allegedly defamatory statements in turn.
A. Statement #3
[14] 3. Memo: Ivy Tech retaining wall; [“]I did not authorize
Hrezo Engineering to do $18,492 worth of work on this project
and have no clue what they accomplished except to throw blame
for the wall problems on others.”…. Memo: “For him to fail to
accept some measure of responsibility for this problem seems
odd.”
Appellant’s App. Vol. II pp. 68.
[15] Robert himself testified that City Manager Steidel told him to stop work on the
Ivy Tech wall but that he did not. Robert also testified that he learned at some
point that another company who issued an incorrect report on pressures exerted
on the wall from soil was felt to be responsible for design problems with the
wall and admitted that he brought that to the City’s attention. In other words,
Appellants did, in fact, “throw blame” on others for problems with the wall.
Robert also admitted that he did not accept responsibility for problems with the
wall, testifying that “[w]e had no[] responsibility for those failures.” Tr. Vol. I
p. 188. Steidel’s statement that this refusal seemed “odd” is an opinion that is
not capable of being false.
B. Statement #5
[16] 5. Memo: “In addition to the above bills Hrezo Engineering
also billed the contractor for an additional $8,000 for capping the
w[e]lls at Todd-Creech Park.[”]
Appellant’s App. Vol. II pp. 68.
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[17] Robert testified that he did, in fact, bill this amount for capping the wells at
Todd-Creech Park, saying, “We turned the bill over to the contractor who
refused to pay it.” Tr. Vol. I p. 177. Robert conceded that this statement was
not false.
C. Statement #9
[18] 9. Memo: re: Gateway; “A review of the plans indicate that
the project scope has gotten larger than what is appropriate.”
Appellant’s App. Vol. II pp. 68.
[19] We conclude that this statement is far too vague to be defamatory. It is
sufficient to note that it does not identify a cause for the enlargement of the
Gateway project’s scope, much less attempt to blame Appellants.
D. Statements #17 and #18
[20] 17. July 11, 2005 minutes of the meeting of the Lawrenceburg
Redevelopment Commission. Page 3, Tom Steidel represents to
the Commission and others at the meeting that Bob Hrezo has
“no absolute plans”, that he “keeps changing his deals” and that
“he was okay with $21,000.00 for the roof repair and now he
wants more.” Bob Hrezo will testify that those representations
were false and that Mr. Steidel was well aware of their falsity.
18. July 27, 2005 minutes of the meeting of the Lawrenceburg
Redevelopment Commission, Page 4, Mr. Steidel once again
misrepresented concerning the roof at McCullough Drug
Building and the $21,000.00 cost for the roof repair. Bob Hrezo
was present at the meeting when this was presented to the
Commission.
Appellant’s App. Vol. II pp. 69.
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[21] The above apparently relates to the redevelopment project that gave rise to the
unrelated lawsuit Appellants filed against the City in 2005. See Hrezo v. City of
Lawrenceburg, 934 N.E.2d 1221, 1226 (Ind. Ct. App. 2010), trans. denied. As the
City points out, however, the minutes of the City’s Redevelopment
Commission were not entered into evidence during this trial. The only evidence
at all relating to a $21,000 payment for roof repair was the following exchange
during Robert’s testimony:
[Appellants’ Counsel]. The issue was with regard to the roof and
in one (1) of the statements that Mr. Steidel made about the roof
during a meeting of the LRC (Lawrenceburg redevelopment)[.]
[W]hat was false about that statement that he made in that public
meeting?
[Robert]. That the twenty-one thousand ($21,000) dollars for the
roof had been on all the development agreements to this point,
which was incorrect, it only came up on the development
agreement.
Tr. Vol. I p. 209. This evidence falls far short of supporting the inclusion of
statements 17 and 18 on the verdict form.
E. Statement #19
[22] 19. Memo from Tom Steidel to Bob Hrezo dated September
16, 2005. Mr. Steidel questions an invoice for Roy A. Miller &
Sons, dated January, 2004. Mr. Steidel states the following:
“I am not sure why you would approach us at this late
date to pay this amount. In addition, you have billed us
for $127.50 which I assume relates to preparing this bill.
That sum cannot be paid either since the work cannot be
verified.”
Appellant’s App. Vol. II pp. 69.
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[23] Put simply, the proffered statement indicates that it is taken from a
memorandum from City Manager Steidel to Robert, and there is no evidence
that anyone else received it. Because there is no evidence of publication,
inclusion of the statement was not supported by the record. Appellants have
failed to establish that the trial court erred in refusing the include the six
proffered statements on the verdict form.
Conclusion
[24] We conclude that the trial court did not err in granting summary judgment in
favor of the City on Appellants’ tortious interference and defamation per se
claims. We further conclude that the trial court did not abuse its discretion in
disallowing Race’s proffered evidence on damages and that any error it may
have committed in instructing the jury on publication can only be considered
harmless. Finally, we conclude that the trial court did not err in refusing the
include six allegedly defamatory statements on the verdict form distributed to
the jury.
[25] We affirm the judgment of the trial court.
May, J., and Barnes, J., concur.
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