ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEES:
JOHN R. PRICE ROBERT B. CLEMENS
BRUCE A. STUARD GEORGE T. PATTON, JR.
John R. Price & Associates BRYAN H. BABB
Indianapolis, Indiana Bose McKinney & Evans LLP
FREDERICK T. BAUER
Bauer & Duffy
Terre Haute, Indiana
COURT OF APPEALS OF INDIANA
SANDRA K. KELLEY, Ph.D., )
vs. ) No. 84A01-0308-CV-293
VIGO COUNTY SCHOOL CORPORATION; )
DANIEL T. TANOOS, as Superintendent of )
Said School Corporation and, Individually; )
JOHN V. ORR, Director of Personnel of )
said School Corporation, and Individually; )
C. MYTRON LISBY, Director of Secondary )
Education of said School Corporation, )
and Individually, )
APPEAL FROM THE VIGO CIRCUIT COURT
The Honorable Robert J. Lowe, Special Judge
Cause No. 84D03-9909-CP-1607
April 22, 2004
OPINION FOR PUBLICATION
STATEMENT OF THE CASE
Sandra K. Kelley appeals the trial court's denial of her motion for leave
to file a third amended complaint in her action against the Vigo County
School Corporation and three of its employees (Daniel T. Tanoos, John V. Orr,
and C. Mytron Lisby) in their official and individual capacities. The defendants
(collectively, "the School") cross-appeal the trial court's denial of their motion for attorney
fees and also seek appellate attorney fees.
We affirm the trial court but remand for entry of an award of
appellate attorney's fees.
1. Did the trial court abuse its discretion when it denied Kelley's
motion for leave to file a third amended complaint?
2. Did the trial court err when it denied the School's motion
for attorney fees that were incurred when Kelley continued to litigate her claim
after completion of post-remand discovery?
Is the School entitled to an award of its appellate attorney fees?FACTS
Kelley served as principal of a middle school in the Vigo County School
Corporation beginning in 1992. In March of 1999, TanoosSee footnote met with Kelley
to discuss complaints that had been received about her. In August of
1999, LisbySee footnote evaluated Kelley's performance and found it unsatisfactory in a number of
areas. Kelley began to forcefully question middle school staff about whether negative
statements about her were being circulated. Receiving complaints about Kelley's actions in
this regard, Orr,See footnote Lisby, and others were charged with investigating on behalf of
the School Corporation. A series of complaints about Kelley's professional conduct were
reviewed. The investigation report recommended that Kelley be reassigned. Tanoos followed
the recommendation and reassigned Kelley to a position where she received salary at
the same level and for the same term as provided in her contract.
On September 28, 1999, Kelley filed a "Complaint for Injunctive Relief and Damages"
against Vigo County School Corporation ("the School Corporation") and Tanoos, Orr, and Lisby
("the School Officials") in their official and individual capacities. The complaint began
with a 27 paragraph "factual background," followed by Count I for breach of
contract; Count II for injunctive relief; Count III for defamation of character; and
Count IV for malicious interference with a contractual relationship. (School's App. 35).
On October 4, 1999, the School filed an answer that generally denied
Kelley's allegations, argued that there was no basis for injunctive relief, and asserted
that Kelley had failed to comply with the notice requirements of the Indiana
Tort Claims Act. On October 4, 1999, the School also moved for
judgment on the pleadings.
On October 8, 1999, Kelley moved for leave to file her first amended
complaint. Before the trial court ruled thereon, Kelley filed a motion on
October 15, 1999, for leave to file her second amended complaint. The
trial court granted the motions to amend on October 22, 1999. The
School again filed an answer with denials and affirmative defenses.
On January 18, 2000, the trial court entered partial judgment on the pleadings.
The trial court granted judgment on the pleadings to the School as
to the claims for injunctive relief, defamation of character, and tortious interference with
a contractual relationship. Subsequently, both parties moved for summary judgment on the
remaining breach of contract claim against the School Corporation. On July 28,
2000, the trial court granted summary judgment in favor of the School Corporation
on the remaining claim for breach of contract.
On August 3, 2000, Kelley filed her praecipe and pursued an appeal.
On July 30, 2001, this court issued its memorandum opinion.
Vigo County Sch. Corp., No. 84A01-0011-CV-372 (July 30, 2001).
Kelley argued on appeal that the trial court erred in granting judgment on
the pleadings in favor of Tanoos, Orr, and Lisby as to the defamation
count. We held that the School Officials' alleged defamatory statements about Kelley's
professional competence (statements which Kelley alleged were made within the scope of their
employment) fell squarely within the scope of their employment, thereby invoking the Tort
Claims notice requirements,
See footnote and were protected by the qualified privilege of common interest.
However, as to Kelley's allegation that false statements made "by persons not
yet completely and fully known" to her had been made to the effect
that she had engaged in an extramarital affair, we found that in "the
context and procedural posture of a motion for judgment on the pleadings, we
[were] constrained to assume that these unnamed persons could include Tanoos, Orr, or
Lisby." Slip Op. at 9, n. 3. However, because "allegations of
an extramarital affair [were] outside the scope of employment" of the School Officials,
id. at 10, we reversed the grant of judgment on the pleadings as
to the defamation count and remanded for further proceedings.
See footnote In a rehearing
order, we clarified that the remand was for further proceedings "limited to the
allegation that unknown persons made false statements about Kelley's involvement in an extramarital
Kelley on reh'g. (Oct. 17, 2001) at 2.
While Kelley's petition for transfer of our memorandum decision was pending, on November
1, 2001, Kelley filed a motion with the trial court seeking leave to
file a third amended verified complaint. This proposed third amended complaint repeated
the defamation allegation that false statements about Kelley being "involved in an extramarital
affair" had been "made to others, by persons not yet completely and fully
known to" Kelley. Appellees' Br. at 50. But the proposed third
amended complaint would have added allegations that the School Officials had (1) falsely
accused her of theft; (2) alleged her falsification of grants and grant information;
(3) accused her of bribery; (4) released to the media and the public
her personnel file containing known falsehoods; (5) encouraged the possible filing of an
unfair labor practice complaint by the union; and (6) damaged her professional reputation;
and (7) that Tanoos had stated other falsehoods. On the School's motion,
the trial court stayed any ruling on Kelley's motion to again amend her
complaint (the proposed third amended complaint) until appellate action was final. On
April 26, 2002, our supreme court denied Kelley's petition for transfer. Shortly
thereafter, on May 9, 2002 according to the CCS, the trial court denied
Kelley's motion to file a third amended complaint.
The parties engaged in extensive discovery as to the defamation allegation about an
extramarital affair. On April 14, 2003, the School moved for summary judgment,
asserting that Kelley had never identified a person who could testify that one
of the School Officials published such an allegation and that she had failed
to prove the essential element of a defamatory statement having been published.
After oral argument on the matter, on June 30, 2003, the trial court
granted the School's motion for summary judgment based on Kelley's "failure to establish
a prima facie defamation case against Defendants for lack of Publication." (Appellee's
App. 19). Kelley does not appeal this ruling by the trial court.
On July 18, 2003, the School petitioned the trial court for an award
of attorney fees incurred after Kelley's "filing and continued pursuit of frivolous, unreasonable,
and groundless claims." (Appellees' App. 199). The School asserted Kelley's defamation
claim was ungrounded "from the outset," or "at least" from the time she
continued it after her answers to interrogatories and her own deposition indicated that
she was unable to identify a single witness who could testify that the
School Officials had spoken of an extramarital affair involving Kelley. Id. at
210. In response, Kelley filed a motion "for sanctions, under Trial Rule
Id. at 261. On August 4, 2003, the trial court
denied both motions.
Kelley now appeals the trial court's denial of her motion to file a
third amended complaint. The School cross-appeals the trial court's denial of its
motion for an award of attorney's fees. The School also seeks an
award of appellate fees.
1. Denial of Motion for Leave to File Third Amended Complaint
Indiana Trial Rule 15(A) provides that after a responsive pleading has been filed
to an initial complaint, the complaining party may then amend that complaint "only
by leave of the court or by written consent of the adverse party."
However, the Rule further provides that "leave shall be given when justice
so requires." Id. Whether to permit or deny amendments to the
pleadings lies within the broad discretion of the trial court, and we will
reverse only upon a showing of abuse of discretion. Hendrickson v. Alcoa
Fuels, Inc., 735 N.E.2d 804, 818 (Ind. Ct. App. 2000). "An abuse
of discretion is an erroneous conclusion and judgment, clearly against the logic and
effect of the facts and circumstances before the court or the reasonable deductions
to be drawn therefrom." Id.
Kelley argues that because her additional allegations of defamatory conduct were "similar in
nature to the surviving claim of defamation on remand, the trial court abused
its discretion when it denied [her] motion for leave to amend her complaint."
Kelley's Br. at 5. Kelley cites McCarty v. Hospital Corp. of
Am., 580 N.E.2d 228 (Ind. 1991), as "explain[ing] what 'conduct, transaction or occurrence'
means" when the claim in an amended pleading will be found to relate
back to the date of the original pleading under Trial Rule 15(C),
See footnote and
she contends that her additional claims meet this explanation of an amendment that
will relate back.
McCarty declared that when "the factual circumstances that gave rise to the original
claims, the general injuries sustained, and the general conduct causing those injuries," the
amended complaint would "relate back" under Trial Rule 15(C). 580 N.E.2d at
231. Accordingly, McCarty instructed, "it is these factual circumstances that must be
examined to determine whether relation back is proper." Id. McCarty suggests
that "[o]ne guide to conducting" the requisite factual circumstances inquiry "is to determine
whether evidence tending to support the facts alleged in the amended complaint could
or would naturally have been introduced under the former pleading to support the
original complaints." Id.
According to the complaint that Kelley sought to amend,
See footnote her initial claim was
of false defamatory statements about her involvement in an extramarital affair by persons
who were not known to her at the time. Indeed, after her
first appeal, we had remanded to the trial court for further proceedings "limited
to the allegation that unknown persons made false statements about Kelley's involvement in
an extramarital affair."
Kelley on reh'g (Oct. 17, 2002) at 2.
Kelley's proposed amended claim alleging that the School Officials talked with the local
police about a missing school computer would not adduce evidence bearing on her
original complaint's allegation of defamatory statements about an extramarital affair. Likewise, Kelley's
proposed amended claim alleging that the School Officials had reported that she had
falsified some grants would not result in evidence to support the original complaint.
Evidence to support Kelley's proposed amended claim that she was falsely accused
of bribing students with candy would not be evidence relating to or supporting
her original claim about an alleged extramarital affair. Also, Kelley's proposed amended
claim that information from her personnel file was improperly released does not appear
to be evidence that would support her original claim regarding an alleged extramarital
affair. Similarly, her proposed amended claim about encouraging the union to file
an unfair labor practice complaint would not seem likely to involve evidence supporting
her original claim. As to her proposed amended claim about false statements
by Tanoos "not limited to the falsehoods concerning an extra marital [sic] affair,"
(School's App. 49), evidence of those alleged false statements about other matters would
not be evidence of false statements regarding the extramarital affair. Finally, it
does not appear that evidence of false statements of an alleged extramarital affair
"would naturally . . . be introduced" as evidence to support Kelley's proposed
amended claim about damage to her professional reputation. 580 N.E.2d at 231.
Therefore, under McCarty's reasoning, Kelley's proposed amended claims were not such that
the claims would "relate back" under Trial Rule 15(C).
Further, it is not an abuse of discretion for the trial court to
deny a motion to amend a pleading where such an amendment would be
futile. Bank of Am. Bank v. Northwest Bank, 765 N.E.2d 149, 152
(Ind. Ct. App. 2002), trans. denied. As the School correctly observes,
the statute of limitations for a defamation claim in Indiana is two years.
The proposed amended claims would not be found to "relate back" pursuant
to the application of McCarty; thus, such an amendment would have been outside
the statute of limitations and would have been futile. Therefore, the trial
court's denial of her motion to amend would not be held to be
an abuse of discretion on that basis. See Id.
Moreover, our original opinion held that claims in Kelley's original complaint involving statements
by the School Officials "about Kelley's 'competence as a career educational administrator' or
'past behavior as a career educational administrator'" fell squarely within the scope of
their employment with the School Corporation, and that various evaluation action "was clearly
to 'further [their] employer's business.'" Kelley (July 30, 2001) at 9.
We also found that such statements were within the scope of the School
Officials' employment, rendering Kelley's failure to file a notice under the Indiana Tort
Claims Act fatal. We further held that allegations of poor job performance
by Kelley "plainly f[e]ll within the qualified privilege of common interest" of their
employment. Id. at 10. It appears that each of the proposed
new claims would suffer the same infirmities. Therefore, Kelley's proposed amendment of
her complaint would have been futile. See Bank of America Bank, 765
N.E.2d at 152.
We do not find that the trial court's denial of Kelley's motion to
file a third amended complaint was clearly against the logic and effect of
the facts and circumstances before the court or the reasonable deductions to be
drawn therefrom. Hendrickson, 735 N.E.2d at 818. Accordingly, the trial court
did not abuse its discretion when it denied Kelley's motion.
2. Attorney Fees
Whether to award attorney fees is a matter that lies within the "sound
discretion" of the trial court. Malachowski v. Bank One, 682 N.E.2d 530,
533 (Ind. 1997). "[I]n the absence of an affirmative showing of error
or abuse of discretion," we must affirm the trial court. Id.
On cross-appeal, the School argues that the trial court incorrectly denied its motion
for fees it incurred when Kelley "continued to litigate her defamation claim after
the post-remand discovery established that her claim would fail for lack of evidentiary
support." School's Br. at 13. Specifically, the School asserts that it
was required to incur the expense of "an unnecessary, costly, and successful summary
judgment proceeding" after Kelley "could not discover anyone able to testify with personal
knowledge that Tanoos, Orr, or Lisby had published a statement about Kelley's involvement
in an alleged marital infidelity." Id.
The School's motion for summary judgment argued that it had "negated the element
of 'publication' which is essential to Plaintiff's defamation claim" and provided designated evidence
from discovery in that regard. The School's brief in support of its
petition for attorney's fees cited Kelley's answers to interrogatories and Kelley's own
deposition to assert that during discovery "it became clear" that neither Kelley nor
any of her potential witnesses "possessed any admissible first-hand knowledge linking the [School
Officials] to the rumor about the affair." (Appellee's App. 203).
In Kelley's memorandum opposing summary judgment, she argued that the designated evidence left
"no doubt that there is a genuine issue of material fact in this
case concerning whether the defendants defamed the plaintiff." (Appellee's App. 185).
Kelley cited designated evidence indicating three persons verified to her that they were
aware of the rumor and that Lisby had acknowledged to her having heard
the rumor. This, she argued, "demonstrates that, at the very least, there
is a genuine issue of fact concerning whether plaintiff can prove that defendants
published the defamatory statements." (Appellee's App. 187). In her memorandum opposing
the School's petition for attorney's fees, she again argued that this evidence "arguably
demonstrated that, at the very least, there was a genuine issue of fact
concerning whether plaintiff could prove that defendants published the defamatory statements." (Appellee's
Kelley's arguments to the trial court are weak, given that defeating a motion
for summary judgment requires more from the nonmovant than the assertion that she
may be able to prove the matter of law at issue. See
T.R. 56(C). Nevertheless, the trial court had before it the submissions of
both the School and Kelley. It apparently concluded that the evidence adduced
during post-remand discovery did not clearly and equivocally signal to Kelley that she
should cease pursuit of her defamation claim, and that the resulting School's motion
for summary judgment did not impose such an unnecessary and costly burden as
to warrant the award of attorney fees. The School cites Garza v.
Lorch, 705 N.E.2d 468, 475 (Ind. Ct. App. 1998), but Garza affirmed the
trial court's award of attorney fees. Thus, we do not read Garza
itself to constitute "an affirmative showing of error or abuse of discretion" on
the part of the trial court in this case. Malachowski, 682 N.E.2d
at 532. Therefore, we do not find the trial court's denial of
the School's petition for an award of attorney fees to be error.
3. Appellate Attorney Fees
Indiana Appellate Rule 66(E) provides that we "may assess damages if an appeal
. . . is frivolous or in bad faith." It is within
our discretion to award such damages, which "may include" attorney fees. Id.
Despite this authority, we must bear in mind that the discretion to
award appellate attorney fees under the Rule is limited to instances where the
appeal "is permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of
delay." Orr. V. Turco Mfg. Co.¸ 512 N.E.2d 151, 152 (Ind. 1997).
We have categorized claims for appellate attorney fees into "substantive" and "procedural" bad
faith claims. Boczar v. Meridian St. Fdtn., 749 N.E.2d 87, 95 (Ind.
Ct. App. 2001). To prevail on a substantive bad faith claim, the
party must "show that the 'appellant's contentions and argument are utterly devoid of
all plausibility.'" Id. (quoting Orr, 512 N.E.2d at 153). Procedural bad
faith occurs when a party flagrantly disregards the form and content requirements of
the rules of appellate procedure, omits and misstates relevant facts appearing in the
record, and files briefs written in a manner calculated to require the maximum
expenditure of time both by the opposing party and by the reviewing court.
Boczar, 749 N.E.2d at 95-96.
We first note that at the outset, Kelley's appeal failed to provide the
necessary statement of facts from which we could proceed to consider her claim.
This omission required the expenditure of additional time by both the School,
to provide missing information, and this court, upon which it was incumbent to
verify certain matters.
Of greater import is another omission by Kelley. Kelley's appeal raised only
one issue: whether the trial court erred in denying her motion to amend
her complaint. The thrust of her argument was that the proposed amended
claims were "similar in nature" to her pending complaint's defamation claim to be
considered on remand. Kelley's Br. at 5. Yet Kelley's Appendix failed
to include the complaint that she sought to amend. We find this
omission on Kelley's part to entail both substantive and procedural bad faith.
Without the complaint she proposed to amend, how could a reviewing court possibly
analyze the purported similarity that she argued? And Appellate Rule 50(A) mandates
that the Appendix "shall contain" pleadings "that are necessary for resolution of the
issues raised on appeal." Inclusion of the complaint that she sought to
amend was necessary to resolve the issue she raised.
Further, the complaint that she sought to amend but which she did
not include in her Appendix contained several claims that had been initially
framed as ones that were held to have been finally adjudicated in the
trial court's order partially granting the School's motion for judgment on the pleadings.
Her proposed amended complaint would have recast these claims as a form
of defamation. For example, in the second amended complaint, Kelley had made
allegations concerning (1) a possible unfair labor practices filing; (2) disclosure of false
personnel file information; and (3) damage to her professional reputation. To ask
us to find that the trial court had erred in its consideration of
the pleadings before it when she did not give us the benefit of
having those same pleadings seems, again, to be a blend of both substantive
and procedural bad faith.
We acknowledge Kelley's contention that her arguments as to the application of McCarty
were sincere, and we do not mean to suggest that an unsuccessful argument
is necessarily one made in bad faith. However, we have already held
that even if the trial court had granted Kelley's motion to amend her
complaint, such amendment would have been futile and for naught. Therefore, we
cannot accept Kelley's argument that her appeal cannot be found devoid of all
plausibility. Accordingly, we remand this cause to the trial court with instructions
to calculate the amount of appellate attorney fees that the School is entitled
to recover. See Thacker v. Wentzel, 797 N.E.2d 342, 349 (Ind. Ct.
Affirmed and remanded.
RILEY, J., and BAILEY, J., concur.
The Statement of Facts in an appellate brief "shall describe
the facts relevant to the issues presented for review." Ind. Appellate Rule
46(A)(6). In other words, it should explain "facts" about the case.
Kelley's Statement of Facts begins by telling us that she "filed a complaint"
against the defendants "sounding in contract and in tort." Kelley's App. at
2. This concludes her reference to "facts," as the remainder of the
section details the purely procedural actions on this "complaint." We are unable
to divine the necessary facts from Kelley's submission. Thus, we were left
to resort to our earlier memorandum opinion of 2001 addressing Kelley's first appeal
and to the School's brief in order to portray the facts that follow
facts necessary to understand the appeal before us.
Footnote: Tanoos was Superintendent of the School Corporation.
Footnote: Lisby was the Director of Secondary Education.
Footnote: Orr was Personnel Director for the School Corporation.
Footnote: Therein, we affirmed the trial court's grant of (1) judgment
on the pleadings in favor of Orr as to the tortious interference with
a contract count, and (2) summary judgment in favor of the School Corporation
on her breach of contract claim.
Footnote: According to our memorandum decision, Kelley had filed no tort
claim notice. Slip Op. at 7.
Footnote: After our July 30, 2001 decision, Kelley filed a petition
for transfer on August 28, 2001, and on that same date, the School
petitioned the Court of Appeals for rehearing. After our rehearing order, the
School filed its petition for transfer on November 13, 2001.
Footnote: Indiana Trial Rule 11 concerns signings and verification of pleadings.
However, Rule 11 of the Federal Rules of Civil Procedure includes a
provision for sanctions when an attorney makes an improper representation to the court.
Footnote: Pursuant to Trial Rule 15(C), when a claim in an
amended pleading "arose out of the conduct, transaction, or occurrence set forth .
. . in the original pleading," the claim "relates back to the date
of the original pleading."
Footnote: Kelley failed to provide this complaint, the Second Amended Complaint,
in her Appendix. How Kelley would have us make the analysis pursuant
McCarty without the benefit of this pleading is perplexing. However, the
School did submit the Second Amended Complaint as part of its Appendix.