ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEES:
JAMES P. FENTON MARK E. GIAQUINTA
COURT OF APPEALS OF INDIANA
ALAN L. VERPLANCK
ROBERT W. EHERENMAN
EILBACHER SCOTT, P.C. HALLER & COLVIN, P.C.
Fort Wayne, Indiana Fort Wayne, Indiana
CATHLEEN M. SHRADER
BARRETT & MCNAGNY
Fort Wayne, Indiana
CITY OF NEW HAVEN, )
vs. ) No. 90A02-9904-CV-247
PENNY (BRADTMUELLER ) REICHHART )
and CHEMICAL WASTE MANAGEMENT )
OF INDIANA, L.L.C., )
APPEAL FROM THE WELLS CIRCUIT COURT
The Honorable David L. Hanselman, Sr., Judge
Cause No. 90C01-9202-CP-25
June 8, 2000
OPINION FOR PUBLICATION
STATEMENT OF THE CASE
The City of New Haven (the City) appeals from the dismissal of its
malicious prosecution claim against Penny Reichhart (Reichhart) and Chemical Waste Management of Indiana,
L.L.C. (CWMI). The City presents several issues for our review, which we
consolidate and restate as whether the City failed to state a claim upon
which relief can be granted under Indiana Trial Rule 12(B)(6).
FACTS AND PROCEDURAL HISTORY
This court has previously stated the facts of this case in Reichhart v.
City of New Haven,
674 N.E.2d 27 (Ind. Ct. App. 1996), trans. denied.
We quote from that opinion as follows:
CWMI operates a hazardous waste disposal facility outside the municipal boundaries of New
Haven. CWMI planned to expand the facility. The City and its
Mayor, Lynn Shaw, opposed the planned expansion. On November 26, 1991, a
special New Haven Common Council meeting was held to consider annexing territory that
included CWMIs landfill in order to gain regulatory control of the property, and
an ordinance was introduced to that effect. The next day, landfill manager
Doug Clark told Reichhart, who owned property in New Haven and was an
employee of CWMI, about the Citys action and raised the possibility of Reichhart,
as a taxpayer of the City of New Haven, filing a lawsuit against
the City with CWMIs assistance. Reichhart contacted Leonardo Robinson, CWMIs in-house counsel
in Chicago, and Robinson arranged for CWMIs Indianapolis counsel, Plews & Shadley, to
represent Reichhart at CWMIs expense.
On December 10, 1991, Plews filed a two-count complaint on Reichharts behalf in
Allen Superior Court. Under Count I, Reichhart alleged that the City had
violated the Open Door Law in introducing the annexation ordinance and sought to
enjoin the City from considering the ordinance until it complied with the Open
Door Law. Reichhart also sought attorney fees under Count I. Under
Count II, Reichhart brought a citizen taxpayer challenge, seeking a declaration that the
annexation was unlawful and prohibiting the City from proceeding with the annexation.
The complaint did not mention that Reichhart was an employee of CWMI or
that CWMI was supplying the legal representation.
After a hearing, the trial court granted Reichharts petition for a TRO on
the condition that Reichhart post a $100,000 bond. CWMI posted the bond
on Reichharts behalf. Upon granting the TRO, the trial court stated:
I would tell you, and I specifically want to direct my comments to
Mr. Miller and Mr. Harper, because I did not enter this order lightly,
and its [a] very narrowly drafted and defined order only prohibiting Council action
on the ordinance in question, based on its introduction at the November 26th
special session meeting. You can do whatever you want with regard to
that ordinance from here on out. I am not restraining you from
considering that ordinance from an ab initio standpoint from the start, and I
want to make that clear to you, as counsel, for the City of
New Haven. . . . I dont want to leave anyone with
the impression that you cannot consider annexation of this property. Youre welcome
to do that, you just need to start from the beginning and do
it.. . .
On December 17, 1991, the City withdrew its annexation ordinance. An ordinance
for the annexation of the land had not been reintroduced as of the
date of the filing of [this] appeal.
On February 6, 1992, CWMI filed a petition with the Common Council of
the City of Fort Wayne for the voluntary annexation of its real estate
by the City of Fort Wayne. On February 24, 1992, the City
filed its Counter-Claim and Third-Party Complaint claiming abuse of process. . . .
At the Citys request, the action was venued to Wells Circuit Court.
Thereafter, Reichhart filed an amended complaint. The City filed a counterclaim against
Reichhart and a third-party claim against CWMI alleging in both that the TRO
and the amended complaint were filed in order to delay the legitimate exercise
of the Citys legislative and civil powers and constituted an abuse of process.
Reichhart and CWMI filed a motion for summary judgment on the Citys
abuse of process claim, which the court denied. After several Court of
Appeals opinions addressed the subject of abuse of process, Reichhart and CWMI submitted
a renewed request for summary judgment which the court again denied. The
trial court certified its ruling for interlocutory appeal and this court accepted jurisdiction
on January 11, 1996.
DISCUSSION AND DECISION
Id. at 29-30. We reversed the trial courts denial of Reichhart and
CWMIs motion for summary judgment on their abuse of process claim and remanded
with instructions to grant the motion. Id. at 34.
In the meantime, Reichhart had voluntarily moved to dismiss her taxpayers challenge
See footnote (Count
II of her complaint) without prejudice. The City opposed that motion since
its motion for summary judgment on that count was still pending. The
trial court dismissed Reichharts taxpayers action with prejudice and found the Citys cross-motion
for summary judgment moot.
On September 2, 1997, the City filed an amended counter-claim and cross-claim, in
which the City averred that the filing of the taxpayers action constituted malicious
prosecution. Reichhart and CWMI filed a motion to dismiss the Citys amended
claims for failure to state a claim upon which relief can be granted.
After a hearing, the trial court dismissed the Citys malicious prosecution claim
pursuant to Trial Rule 12(B)(6).See footnote
Standard of Review
A complaint may not be dismissed for failure to state a claim upon
which relief can be granted unless it appears to a certainty on the
face of the complaint that the complaining party is not entitled to any
relief. McQueen v. Fayette County Sch. Corp., 711 N.E.2d 62, 65 (Ind.
Ct. App. 1999), trans. denied. In ruling on a motion to dismiss
for failure to state a claim, the trial court is required to view
the complaint in a light most favorable to the non-moving party and with
every intendment in his favor. Id. The court may only look
to the complaint, and well-pleaded material must be taken as admitted. Id.
On appeal, this court views motions to dismiss for failure to state a
claim with disfavor because such motions undermine the policy of deciding causes of
action on their merits. Hill v. Beghin, 644 N.E.2d 893, 895 (Ind.
Ct. App. 1994), trans. denied. We will affirm the trial court's
grant of a motion to dismiss when a complaint states a set of
facts which, even if true, would not support the relief requested in that
complaint. Garage Doors of Indianapolis, Inc. v. Morton, 682 N.E.2d 1296, 1301
(Ind. Ct. App. 1997), trans. denied. Further, we will affirm a successful
motion to dismiss if it is sustainable on any theory or basis found
in the record. Id.
In its order dismissing the Citys malicious prosecution claim, the trial court did
not indicate on what ground it granted the motion to dismiss. In
their appellate briefs, the parties address, therefore, three possible grounds for the trial
courts ruling. As we have noted, we will affirm a successful motion
to dismiss if it is sustainable on any theory or basis found in
the record. Id.
Law of the Case
Reichhart and CWMI contend that the law of the case doctrine operates to
bar the Citys malicious prosecution claim in light of our decision in Reichhart
v. City of New Haven, 674 N.E.2d 27 (Ind. Ct. App. 1996), trans.
denied. That doctrine requires a trial court to apply the law as
laid down by the appellate court. Riggs v. Burell, 619 N.E.2d 562,
564 (Ind. 1993) (quoting Dodge v. Gaylord, 53 Ind. 365, 369 (1876)).
The doctrine, however, cannot be invoked, except as to such questions as have
been actually considered and determined in the first appeal. Egbert v. Egbert,
235 Ind. 405, 415, 132 N.E.2d 910, 915 (1956) (quoting Alerding v. Allison,
170 Ind. 252, 258-59, 83 N.E. 1006, 1009 (1908)). Furthermore, the doctrine
cannot be invoked unless what was first decided . . . clearly appear[s]
to be the only possible construction of the opinion. Egbert, 235 Ind.
at 417, 132 N.E.2d at 916. In other words, questions not conclusively
decided in a prior appeal do not become the law of the case.
Riggs, 619 N.E.2d at 564.
Reichhart and CWMI argue that the trial court was required to dismiss the
Citys malicious prosecution claim in light of our decision in Reichhart to overturn
the trial courts denial of their motion for summary judgment on the Citys
abuse of process claim. The elements of a malicious prosecution claim are:
(1) the defendant instituted or caused to be instituted an action against
the plaintiff; (2) the defendant acted with malice in doing so; (3) the
defendant had no probable cause to institute the action; and, (4) the original
action was terminated in the plaintiffs favor. Trotter v. Indiana Waste Systems,
632 N.E.2d 1159, 1164 (Ind. Ct. App. 1994). Reichhart and CWMI contend
that our determination that Reichharts taxpayer challenge was procedurally and substantively proper and
authorized by statute and thus legitimate shows conclusively that Reichhart had probable cause
to bring the taxpayer challenge. Reichhart, 674 N.E.2d at 32. We
Probable cause for the filing of a suit exists if, upon reasonable inquiry,
a reasonable, intelligent, and prudent person would be induced to bring the action.
Trotter, 632 N.E.2d at 1164. We characterized Reichharts claim as authorized,
legitimate, and procedurally and substantively proper, which suggests that a finding of probable
cause might well have been justified. But in Reichhart, we neither addressed
nor decided the issue of probable cause, and we cannot say now that
the only possible construction of that opinion supports a determination that the law
of the case applies here. See Riggs, 619 N.E.2d at 564.
We cannot insinuate probable cause into our ruling in Reichhart.
Reichhart and CWMI contend that, on the facts of this case, the Citys
malicious prosecution claim was subsumed by its abuse of process claim and that,
in effect, our opinion in Reichhart disposed of both. While abuse of
process and malicious prosecution are related, they are independent torts. Here, the
City had not moved to amend its cross-claim to include malicious prosecution when
the trial court ruled on its abuse of process claim. Thus, malicious
prosecution was not at issue when the trial court certified its ruling for
interlocutory appeal. We decline to read into Reichhart, after the fact, an
issue that was not before the trial court and that we did not
consider in the first appeal. The resolution of an issue is not
the law of the case unless both the court and the parties were
aware or should have been aware that the issue was under adjudication.
The law of the case doctrine is not, therefore, a valid basis on
which to sustain the trial courts dismissal of the Citys malicious prosecution claim.
Right of Petition
Reichhart and CWMI contend, in the alternative, that the Citys malicious prosecution claim
failed to state a claim upon which relief can be granted because Reichhart
had an absolute right of petition under the United States and Indiana Constitutions.
The City responds that the right of petition is qualified and that
no authority precludes its malicious prosecution claim. We conclude that the trial
court properly granted Reichhart and CWMIs motion to dismiss the Citys malicious prosecution
claim pursuant to the right of petition under the First Amendment.
we traditionally foreswear deciding a constitutional question, where no non-constitutional grounds present themselves
for resolving the case under consideration we are constrained to pass on the
constitutional issue. Citizens Nat. Bank of Evansville v. Foster, 668 N.E.2d 1236,
1241 (Ind. 1996). Such is the case here.
Indiana Code Section 34-14-1-2
provides that a taxpayer can challenge the validity of
a municipal ordinance and obtain a declaration of rights, status or other legal
relations thereunder. It is clear that Reichhart was within her statutory rights
as a New Haven taxpayer in bringing her challenge to the Citys proposed
A citizens right to petition a governmental entity for redress of legitimate grievances
is protected by the First Amendment to the United States Constitution. As
the Supreme Court has recognized, the rights to assemble peaceably and to petition
for redress of grievances are among the most precious of liberties safeguarded by
the Bill of Rights. These rights, moreover, are intimately connected, both in
origin and in purpose, with the other First Amendment rights of free speech
and free press. United Mine Workers of Am., Dist. 12 v. Illinois
Bar Assn, 389 U.S. 217, 222 (1967).
At issue here is whether a private citizen, like Reichhart, who exercises her
constitutional right to petition the government is amenable to a malicious prosecution action.
In considering this issue of first impression, we look to other precedents
for guidance. We find the Supreme Courts treatment of so-called sham litigation
under the Sherman Anti-Trust Act
instructive. The Court regard[s] as sham private
action that is not genuinely aimed at procuring favorable government action, as opposed
to a valid effort to influence government action. Professional Real Estate Investors,
Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 58 (1993) (quoting Allied
Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 500 n.4
(1988)). But, the Court has repeatedly reaffirmed that evidence of anticompetitive intent
or purpose alone cannot transform otherwise legitimate activity into a sham. Id.
at 59. In other words, an objectively reasonable effort to litigate cannot
be sham regardless of subjective intent. Id. at 57 (emphasis added).
In extending that reasoning to claims of unfair labor practices, the Court held
that even an improperly motivated lawsuit may not be enjoined under the National
Labor Relations Act as an unfair labor practice unless such litigation is baseless.
Id. at 59 (quoting Bill Johnsons Restaurants, Inc. v. NLRB, 461 U.S.
731, 743-744 (1983)). We find the Supreme Courts consistent refusal to consider
a petitioners motivation in pursuing legitimate claims under the right of petition persuasive
here. As the Court has stated:
The right of the people to inform their representatives in government of their
desires with respect to the passage or enforcement of laws cannot properly be
made to depend upon their intent in doing so. It is neither
unusual nor illegal for people to seek action on laws in the hope
that they may bring about an advantage to themselves and a disadvantage to
their competitors. . . . Indeed, it is quite probably people with
just such a hope of personal advantage who provide much of the information
upon which governments must act.
Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 139
Thus, in the context of the Sherman Act and the National Labor Relations
Act, it is settled that the First Amendment protects a citizens right of
petition regardless of intent. The same principle applies to the right of
petition under the circumstances presented in this appeal. We conclude that where,
as here, a qualified petitioner brings a legitimate claim against a governmental entity
in the manner prescribed by law, that entity is prohibited from pursuing a
malicious prosecution claim against the petitioner regardless of her motivation in bringing the
In her verified complaint, Reichhart alleged that the proposed annexation ha[d] caused or
threaten[ed] to cause a waste of public funds and that it [was] clearly
and patently illegal and represent[ed] a clear abuse of discretion. Record at
20. We have previously considered the appropriate grounds for bringing a taxpayers
challenge to a proposed annexation ordinance and find that analysis instructive here:
The action of the common council of a city to annex lands must
be considered a proper subject of a taxpayer suit if wastage of public
funds is evident or certain to occur as a result of annexation.
Wastage in the sense of unauthorized expenditures for services to the annexed area
would be certain if the council acted without jurisdiction over the subject matter.
For example, according to both statutory and decisional law in this state,
the council would lack jurisdiction to act . . . where notice of
impending annexation is lacking or improperly given the affected landowners. Attackable wastage
in the sense hereinabove used would also occur where the annexation was clearly
or patently illegal. Annexation can no longer be considered a purely discretionary
act of the common council of the city. Ind.Ann.Stat. s 48701 (Burns
1963) required that there be publication of the annexation ordinance for two consecutive
weeks after its passage. Ind.Ann.Stat. s 48-702 (Burns 1963) prohibited further annexation
attempts by the council for two years after a successful remonstrance. If
in a given situation these or other illegal acts taint the annexation, wastage
under the ordinance would be present or certain to occur. Wastage in
the same sense would occur where the annexation decision constitutes a patent abuse
Montagano v. City of Elkhart, 149 Ind.App. 283, 290-92, 271 N.E.2d 475, 480
(1971) (citations omitted). Here, the trial court issued a temporary restraining order
prohibiting action on the proposed annexation ordinance because the City had failed to
provide notice of the ordinance. The New Haven Common Council, therefore, lacked
jurisdiction to act on the ordinance, and wastage was certain to occur.
Reichhart had both standing and grounds to bring the taxpayers challenge, and, as
we concluded in Reichhart, her claim was authorized by statute and thus legitimate.
Reichhart, 674 N.E.2d at 32. On these facts, regardless of Reichharts
motivation, the Citys malicious prosecution claim against Reichhart and CWMI cannot stand.
Reichharts First Amendment right of petition prohibits the City from maintaining its malicious
prosecution claim. We conclude, therefore, that the City has failed to state
a claim upon which relief can be granted against Reichhart and CWMI.
The trial court did not err when it dismissed the Citys malicious prosecution
claim pursuant to Trial Rule 12(B)(6).
FRIEDLANDER, J., and RILEY, J., concur.
That appeal involved the Citys abuse of process claim against Reichhart
and CWMI arising out of the same litigation.
See Ind. Code § 34-14-1-2.
We heard oral argument on May 15, 2000.
Footnote: This court has sometimes mischaracterized the doctrine of the law of
the case. We have stated that All issues decided directly
in a prior decision are binding in all subsequent portions of the same
case. See, e.g., City of New Haven v. Chemical Waste Management of
Indiana, 701 N.E.2d 912, 919 (Ind. Ct. App. 1998), trans. denied (emphasis added).
Our supreme court, however, has not held that the law of the
case applies to issues decided implicitly. To the contrary, the court has
consistently noted that only issues directly or conclusively addressed by the court on
appeal are binding. See, e.g., Riggs, 619 N.E.2d at 564; Closson Lumber
Co., Inc. v. Wiseman, 507 N.E.2d 974, 977 (Ind. 1987); Matter of Lemond,
274 Ind. 505, 510, 413 N.E.2d 228, 232 (1980); Egbert, 235 Ind. at
415, 417, 132 N.E.2d at 915-916.
The parties cursory arguments with reference to the Indiana Constitution do
not warrant consideration here, especially since the primary arguments made on both sides
are overwhelmingly grounded in the United States Constitution and we resolve the issue
with a First Amendment analysis.
Footnote: Previously codified at
Ind. Code § 34-4-10-2.
Sham litigation is evident where a petition, ostensibly directed toward influencing
governmental action, is a mere sham to cover what is actually nothing more
than an attempt to interfere directly with the business relationships of a competitor.
Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127,
15 U.S.C. § 1
et seq. (1890).
We find additional support for our conclusion in the following:
the censorial power is in the people over the Government, and not in
the Government over the people. It would give public servants an unjustified
preference over the public they serve, if critics of official conduct did not
have a fair equivalent of the immunity granted to the officials themselves.
New York Times Co. v. Sullivan, 376 U.S. 254, 282-83 (1964) (quoting James
Madison, 4 Annals of Congress, 934 (1794)). Pursuant to Indiana Code Section
34-13-3-3(5), governmental entities, such as the City, are immune from suits for malicious
prosecution. See also Butt v. McEvoy, 669 N.E.2d 1015 (Ind. Ct. App.
1996). It follows, then, that private citizens should have a fair equivalent
of that immunity in light of their censorial power over the government.
The City contends that
McDonald v. Smith, 472 U.S. 479 (1985), justifies its
malicious prosecution claim against Reichhart and CWMI. There, the Court ruled that
petitioners enjoy only a qualified immunity under the right of petition where they
express libelous and damaging falsehoods in petitions to Government officials. Id. at
479. The City urges us to equate Reichhart and CWMIs intent in
filing Reichharts petition with libelous intent. We see a clear distinction, however,
between committing libel and pursuing a legitimate claim, however motivated, under the right
of petition. Whereas libel is inherently baseless, petitions to the government are
not deemed baseless solely because of the petitioners bad intentions. See Bill
Johnsons Restaurants, Inc., 461 U.S. at 743-44. The federal sham litigation analyses
Footnote: We do not agree with Reichharts broad assertion that she had
an absolute privilege to maintain a taxpayer challenge without risking a malicious prosecution
claim. It is more accurate to say that her taxpayer challenge was
privileged because she was a qualified petitioner who brought her claim against the
City in the manner prescribed by law.
We do not address the parties arguments on the issue of
a governmental entitys right to pursue punitive damages as we do not find
that issue relevant to the 12(B)(6) motion.