Attorneys for Appellant Attorneys for Appellees
James R. Fisher Janet A. McSharar
Debra H. Miller Indianapolis, Indiana
Thomas Schulte Rockville, Indiana
Amicus Curiae, United Seniors Action Indianapolis, Indiana
George Clyde Gray
Daniel L. Robinson
Appeal from the Parke Circuit Court, No. 61C01-9805-CP-102
The Honorable Ronda R. Brown, Judge
On Petition to Transfer from the Indiana Court of Appeals, No. 61A01-0108-CV-286
June 29, 2004
Mark Passmore, Mrs. Passmores son and personal representative, believes that the bruise was
the product of an assault by Parke Countys maintenance supervisor Charles Richardson.
He sued Parke County and Richardsons former employer Lee Alan Bryant Nursing Care
Facilities, Inc. (Lee Alan).
Before going to work at Parke County, Richardson was a maintenance worker for
Lee Alan. Lee Alans residential supervisor of psychiatric patients, Beth Bratcher, had
received several reports from residents who were Alzheimers patients alleging misconduct between Richardson
and some of the female residents in the nursing home. These were
not formal complaints, but Bratcher looked into various reports and rumors; ultimately, she
was unable to verify them. Bratcher informed the facility administrator, but never
conducted a formal investigation or generated a written report.
Richardson was interested in a higher paying job, and he applied for a
supervisory position at Parke County. Parke County sent Lee Alan a pre-printed
reference form. Lee Alan administrator Susan Hein filled out the form by
indicating Richardson would be eligible for re-hire at Lee Alan and checking boxes
reflecting that he had generally performed his job adequately. Hein and William
Collins, Richardsons direct supervisor, later stated they never heard accusations that Richardson was
ever sexually involved with a Lee Alan resident while he was employed.
Parke County subsequently closed and reopened as Parke County Residential Care Center.
There were rumors about Richardson at Parke County, but again nothing particularly tangible.
Passmores daughter worked at Parke County and heard stories about Richardson, but
was not moved to act. Parke County later fired Richardson for having
sexual relations with a mentally infirm resident. (Passmore App. at 152-155.)
The Parke Circuit Court granted summary judgment in favor of Lee Alan.
The Court of Appeals affirmed, stating that Indiana does not recognize conscious or
Passmore v. Lee Alan Bryant Health, 765 N.E.2d 625 (Ind.
Ct. App. 2002). We granted transfer. Ind. Appellate Rule 58.
Passmore asks this Court to hold that a regulated nursing facility owes a
duty to third persons not to misrepresent material facts which describe qualifications and
character of a former employee. He says that Sections 310 and 311
of the Restatement (Second) of Torts should apply. These allow for the
recovery of damages for physical harm that results from a reasonable reliance on
conscious or negligent misrepresentation.
Indiana has recognized liability for the tort of negligent misrepresentation, where there is a direct relationship between the plaintiff and defendant. Darst v. Illinois Farmers Ins. Co., 716 N.E.2d 579 (Ind. Ct. App. 1999); See Eby v. York-Division, Borg Warner, 455 N.E.2d 623 (Ind. Ct. App. 4 Dist. 1983) (applied negligent misrepresentation under Restatement (Second) of Torts § 552 (1977)). We have declined several opportunities to extend that liability, but we are persuaded that this occasion warrants doing so.
Restatement (Second) of Torts, Section 310, Comment (a)
We think the formulation of § 310 fits well for allegations such as those in this case, as it did in Randi W. v. Muroc Joint Unified School Dist., 14 Cal.4th 1066, 929 P.2d 582 (1997), when the California Supreme Court applied §310 to employment recommendations. There, a former employer who knew that the employee had committed certain offensive sexual acts gave a letter of recommendation that vouched for him without reservation. The California court said:
Although policy considerations dictate that ordinarily a recommending employer should not be held accountable to third persons for failing to disclose negative information regarding a former employee, nonetheless liability may be imposed if, as alleged here, the recommendation letter amounts to an affirmative misrepresentation presenting a foreseeable and substantial risk of physical harm to a third person.
Randi W., 992 P.2d at 584 (emphasis in original). The court further
held that the causal link between the employment recommendation and the assault was
Based on the facts alleged in the complaint, defendants could foresee that Livingstons officers would read and rely on defendants letters in deciding to hire Gadams. Likewise, defendants could foresee that, had they not unqualifably recommended Gadams, Livingston would not have hired him. And, finally, defendants could foresee that Gadams, after being hired by Livingston, might molest or injure a Livingston student such as plaintiff.
Id. at 589.
Amicus United States Action correctly observes that residents of a nursing home which
have relied on false information acquired during a hire are foreseeable victims of
the misrepresentation. (Amicus Br. at 3.) It further notes that imposing
liability under such circumstances would be consistent with this Courts earlier holding
about the special care owed nursing home patients. Stropes v. Heritage House
Childrens Ctr., 547 N.E.2d 244 (Ind. 1989).
The facts before the trial court on summary judgment do not reflect that
Lee Alan had any substantial information indicating that Richardson had committed sexual misconduct
with residents at Lee Alan when Hein completed a standard preprinted reference form.
Bratcher had been unable to substantiate what she had heard about Richardson.
This may have constituted negligence, but it was not the stuff of
knowing misrepresentation. Even adopting as we do the rule of § 310,
summary judgment for Lee Alan on this point was warranted.
Imposing liability for negligence in supplying employment recommendations poses rather more complex competing
See Susan Oliver, Opening the Channels of Communication Among Employers, Can
Employers Discard Their No Comment and Neutral Job Reference Policies?, 33 Val. U.L.
Rev. 687 (1999) (discussing employers dilemma of disclosing or omitting negative information in
an employment reference about a former employee.) Recommendations from former employers are
commonly used throughout the American economy as a basis for judging future job
performance and reliability. The free flow of information about performance helps prospective
employees, prospective employers, and the economy in general.
Our approach to this question is informed by our decision concerning intra-employer assessments
of performance. In Bals v. Verduzco, 600 N.E.2d 1353 (Ind. 1992), we
observed that employees do not relinquish their good reputation simply by becoming employees
and are entitled to present defamation claims for falsehoods spread about them.
Id. at 1355. In Bals, a discharged worker had sued his
former supervisor for defamation over a series of adverse employee evaluations. We
held that these reports had been published for purposes of defamation law even
though they had been shared only with appropriate officers inside the company.
Id. at 1356.
On the other hand, we observed that free and open intracompany communications and legitimate human resource management needs play an important role in the economy. Id. at 1356. We held that protect[ing] personnel evaluation information communicated in good faith warranted conferring a qualified privilege on the communication. Id. Absent a factual dispute, whether a statement is protected by a qualified privilege is a question of law. Id.; Lawson v. Howmet Aluminum Corp., 449 N.E.2d 1172, 1175 (Ind. Ct. App. 1983).
A statement protected by a qualified privilege may lose its privileged character upon
a showing of abuse wherein: (1) the communicator was primarily motivated by ill
will in making the statement; (2) there was excessive publication of the defamatory
statements; or (3) the statement was made without belief or grounds for belief
in truth. Bals, 600 N.E.2d at 1356. Indiana precedent teaches that
we prefer broader latitude be given by the qualified privilege than that provided
by the Restatement § 600. Id. at 1356 n. 4. The
defendant has the burden of proving that privilege existed on that particular occasion.
Id. Thereafter, the plaintiff must prove that it has been abused
by excessive publication, by use of the occasion for an improper purpose, or
by lack of belief or grounds for belief in the truth of what
is said. Id. at 1357.
Much the same set of considerations applies to job references provided by one
employer to another. Such recommendations should not be filled with rumors and
innuendo instead of facts. Without substantial evidence, employers would subject themselves to
possible defamation litigation, and rightly so.
On the other hand, we think it rather obvious that declaring employers liable
for negligence in providing employment references will lead universally to employer reluctance to
provide any information other than name, rank, and serial number. Only those
employers dull-witted enough to issue free-wheeling assessments without calling their lawyers would supply
any but the most rudimentary information. A legal policy that discourages providing
assessments to subsequent employers will not make for safer nursing homes, or other
safe workplaces, for that matter. We therefore decline to adopt § 311
as it applies to employment references. It was appropriate to grant judgment
to Lee Alan on Passmores claim of negligent misrepresentation.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.