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Miller v. Central Ind. Cmty. Found., Inc.

Court of Appeals of Indiana

June 11, 2014

JEFFREY M. MILLER, and CYNTHIA S. MILLER, Appellants-Plaintiffs,
v.
CENTRAL INDIANA COMMUNITY FOUNDATION, INC., and BRIAN PAYNE, Appellees-Defendants

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[Copyrighted Material Omitted]

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APPEAL FROM THE MARION SUPERIOR COURT. The Honorable Michael D. Keele, Judge. Cause No. 49D07-1003-PL-14761.

ATTORNEYS FOR APPELLANTS: KEVIN W. BETZ, SANDRA L. BLEVINS, JAMIE A. MADDOX, Betz Blevins, Indianapolis, Indiana.

ATTORNEYS FOR APPELLEES: JAMES S. STEPHENSON, IAN L. STEWART, Stephenson Morow & Semler, Indianapolis, Indiana.

BRADFORD, Judge. RILEY, J., and ROBB, J., concur.

OPINION

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BRADFORD, Judge.

CASE SUMMARY

From 1994 until his retirement in 2008, Appellant-Plaintiff Jeffrey Miller (" Miller" ) was the president of Junior Achievement of Central Indiana (" JACI" ). After his retirement, Miller acted as president of the Experiential Learning and Entrepreneurship Federation (" ELEF" ), which is separate from but works with JACI. From approximately August of 2009 until late January or early February of 2010, Miller negotiated with the City of Indianapolis (the " City" ) regarding a potential employment opportunity in the Mayor's Office. Miller was subsequently notified that he would not be offered the negotiated position.

On March 31, 2010, Miller, along with his wife, Appellant-Plaintiff Cynthia Miller (" Cynthia" ), filed suit against numerous parties, including Appellees-Defendants the Central Indiana Community Foundation, Inc. (" CICF" ) and Brian Payne (" Payne" ), whom they sued both individually and in his capacity as President and CEO of CICF, alleging, among other things, defamation and tortious interference with a business relationship. The instant appeal concerns only Miller's and Cynthia's (collectively " the Millers" ) claims against CICF and Payne. CICF and Payne filed a motion for summary judgment. Following a hearing on CICF's and Payne's motion, the trial court granted summary judgment in favor of CICF and Payne. On appeal, the Millers contend that the trial court erred in granting summary judgment in favor of CICF and Payne. We affirm.

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FACTS AND PROCEDURAL HISTORY

A. Relevant Facts

1. Facts Relating to CICF and the Indianapolis Foundation

CICF is a collaborative effort between the community foundations serving Marion and Hamilton Counties. CICF focuses on overall foundation governance and operations, acting as a " holding company" for its family of funds. Appellants' App. p. 197. The Indianapolis Foundation is a public charity and an affiliate of CICF. Payne is the President and CEO of both CICF and the Indianapolis Foundation.

The Indianapolis Foundation has six trustees. Two trustees are appointed by the Mayor of Indianapolis, two are appointed by the Marion County Circuit Court Judge, and two are appointed by the United States District Court which presides in Indianapolis. CICF's board of directors is comprised of the trustees of the Indianapolis Foundation, three Legacy Fund officers, and twelve members that are self-elected by the CICF board of directors.

2. Facts Relating to Miller's Involvement with JACI, ELEF, and Performance Professionals

Miller was the President and CEO of JACI from September of 1994 until he retired on December 31, 2008. In 1994, Miller became President of the Foundation for Economic Literacy. The Foundation for Economic Literacy subsequently changed its name to the Junior Achievement of Central Indiana Foundation. While known as the Junior Achievement of Central Indiana Foundation, the entity's purpose was to benefit JACI, and many of the members of its board of directors overlapped with JACI's board of directors.

On August 28, 2003, under Miller's leadership, the Junior Achievement of Central Indiana Foundation changed its name to ELEF. This was done in order to separate the entity from JACI. At the same time, there was a change in ELEF's articles of incorporation expanding ELEF's purpose from solely promoting JACI to the more general purpose of promoting education programs. After 2003, ELEF had its own independent and separate board of directors which no longer overlapped with JACI's board of directors. Under the 2003 changes, ELEF was no longer tied exclusively to JACI. Throughout 2009, Miller continued to further separate any connection between ELEF and JACI. Miller remained President of ELEF until he retired from the position in February of 2010.

Performance Professionals, Inc. is an Indiana corporation formed and incorporated in January of 2009. At all times relevant to this appeal, Miller owned fifty percent of Performance Professionals. Cynthia owned the other fifty percent of Performance Professionals. In 2009, ELEF was Performance Professionals' only client.

On January 22, 2009, ELEF entered into a contract with Performance Professionals. Under the terms of the contract, Miller retained the title of President and CEO of ELEF. Miller's role was to help transition JACI to a new President and CEO, help coordinate the Business Hall of Fame, oversee a catering service, and to work on a project involving the Ivy Tech Culinary Arts and Hospitality Program (the " Ivy Tech Culinary Project" ). The contract was for one year and provided that Performance Professionals would be paid $23,400 per month for the first six months and $11,000 per month for the second six months. Miller drafted the ELEF/Performance Professionals contract.

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JACI was not a party to the contract and did not sign the contract.

3. Facts Relating to the Ivy Tech Culinary Project

In November of 2007, Miller made a proposal on behalf of JACI to the Glick Company and the Glick Foundation to solicit two million dollars in funding for the Ivy Tech Culinary Project. On May 21, 2008, the Glick Fund issued a two million dollar grant to JACI for the sole purpose of construction of a building to be used for the Ivy Tech Culinary Arts Project. The Glick Fund is a fund of CICF that was established by Gene and Marilyn Glick (collectively, the " Glicks" ) in 1998 to support a variety of causes in central Indiana.

Initially, the grant awarded by the Glick Fund (the " Glick grant" ) was a one-to-one matching grant that had a two-step process for release of funds, requiring (1) a building expense, and (2) a matching donation from a separate entity. JACI was to send reports to CICF evidencing the pledges received. Before construction of the building began, Miller requested to have the Glick grant funds released quarterly based only on when matching pledges were received, and on September 17, 2008, the Glick grant was amended to reflect that request. Funds for the building project from the Glick grant were thereafter released only upon CICF receiving evidence of matching pledges.

On September 29, 2008, Miller submitted JACI's first request for the release of funds from the Glick grant in the amount of $275,000. Among the matching pledges submitted to unlock the Glick grant payment was a pledge from ELEF in the amount of $65,000. On October 9, 2008, CICF made the first Glick grant payment with a $275,000 check made out to JACI. Upon receipt of the money, Miller authorized the transfer of the funds from JACI's bank account to ELEF's bank account.[1]

JACI and ELEF had separate bank accounts. ELEF did not have a separate bank account for the Ivy Tech Culinary Project. Once transferred, the Glick grant funds went into ELEF's general bank account. Of the original $275,000 payment from the Glick grant, roughly $136,000 was used to pay bills associated with the Ivy Tech Culinary Project and roughly $140,000 remained in ELEF's general bank account.

On December 29, 2008, Miller submitted JACI's next request for the release of funds from the Glick grant in the amount of $113,000. Among the matching pledges submitted to unlock the Glick grant payment was a pledge from ELEF in the amount of $5000. However, ELEF never paid JACI the $5000, which instead remained in ELEF's general bank account. On February 5, 2009, CICF made the second Glick grant payment with a $113,000 check made out to JACI. Upon receipt of the funds, the $113,000 was transferred from the JACI bank account to ELEF's general bank account. Miller authorized this transfer despite the fact that he no longer held a position with JACI.[2]

On March 31, 2009, Miller submitted JACI's third request for the release of funds from the Glick grant in the amount of $40,000. By this point, $246,503.08 of the $388,000 previously received from the Glick fund had been paid out for construction costs. There were no outstanding bills, and $141,496 of the funds received pursuant to the Glick grant remained in ELEF's general bank account. On April

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23, 2009, CICF made the third Glick grant payment with a $40,000 check made out to JACI. Miller authorized the $40,000 check to be transferred from JACI to ELEF. Miller does not recall whether he ever discussed the transfer of the funds from JACI to ELEF with JACI's new President and CEO, Jennifer Burk.

From April to July 2009, Burk repeatedly told Miller that she did not want the Ivy Tech Culinary Project to proceed. By June 15, 2009, Miller sought to remove the matching funds requirement from the Glick grant. Miller wanted the Glicks to agree to sign a pledge agreement for the remaining $1,572,000. Miller also wanted the proposed pledge agreement to bear the date of June 30, 2009, in order to show income on the balance sheets before the end of ELEF's and JACI's fiscal years because doing so would allegedly help with bond financing.

On August 19, 2009, Miller submitted two invoices from Performance Professionals to CICF. Both invoices were personally prepared by Miller. The first invoice, dated April 1, 2009, was for $56,160 and claimed to be for work performed in September through December of 2008. However, Performance Professionals did not exist in 2008 as it was not formed until 2009. The second invoice, dated June 30, 2009, was for $84,240.

On August 25, 2009, CICF notified Miller that it did not consider the expenses from Performance Professionals to be reimbursable expenses. Miller subsequently informed CICF that he would remove the Performance Professional expenses from the submitted invoices. However, when Miller made a later request for a release of funds from the Glick grant, his request showed that he had used earlier Glick grant payments to pay the two Performance Professionals invoices. By September 30, 2009, $140,400 of the funds received from the Glick grant had been paid to Performance Professionals.

On September 2, 2009, Miller sent emails to CICF and Burk expressing his opinion that it was inappropriate for Burk to have conversations with CICF regarding the Ivy Tech Culinary Project. On September 8, 2009, Miller requested to pick up the next Glick grant payment in person at CICF instead of having it mailed to JACI. Also on September 8, 2009, CICF released a Glick grant payment in the amount of $204,538.45 to Miller. The payment was in the form of a check made payable to JACI. The check was endorsed with instructions for the check to be deposited in ELEF's bank account. Miller subsequently admitted that the handwritten endorsement on the check " could" be his handwriting. Appellants' App. p. 282.

On September 8, 2009, CICF issued a letter modifying the Glick grant. This modification removed the matching funds requirement, but the Glick grant still required that there be qualified construction/project expenses incurred and owed, evidence of sufficient funds for the completion of the Ivy Tech Culinary Project, and completion of the project in the time agreed to by Ivy Tech for a release of funds.

On September 30, 2009, Miller sent an email to the Glicks and CICF directing them to send all future correspondence to ELEF. In making this request, Miller indicated that he perceived that there was confusion on the part of CICF as to which entity it should be dealing with on the Ivy Tech Culinary Project. This was the first request by Miller that correspondence be sent to ELEF. As of that date, CICF had not addressed any correspondence to ELEF.

On or about September 30, 2009, Miller submitted a request for the release of

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funds from the Glick grant in the amount of $132,921.96. Miller again requested that all future correspondence be addressed to ELEF. Miller also requested to pick up the check in person from the CICF offices rather than having it mailed. CICF advised Miller that the funds could be transferred more quickly by electronic transfer, but, because the grant went to JACI, Burk would have to sign the necessary forms for the electronic transfer. CICF further advised that the check would be mailed if Burk did not sign the necessary forms.

Miller responded, stating that the funds should instead go to the Junior Achievement Endowment Fund, care of ELEF; that the Glick grant should be placed in ELEF's name; and that all future correspondence should go to ELEF. This was the first time that Miller reported to CICF that the Glick grant funds should be paid directly to ELEF. CICF informed Miller that a new grant application would need to be submitted if there was a desire to change the organization name on the Glick grant.

On October 7, 2009, ELEF conducted a board meeting. During this meeting, it decided that ELEF and JACI would further separate the organizations by separating the accounting between the two organizations. The further separation was sought because of trust issues that had arisen between ELEF and JACI.

On October 9, 2009, CICF made a Glick grant payment to Burk with a $132,921.96 check made payable to JACI. The check was deposited directly into JACI's bank account. Miller never saw the check and does not know if it was transferred to ELEF or remained in JACI's bank account.

On November 10, 2009, Miller wrote an email to the Glick Foundation and CICF to attempt to clear up confusion about the relationship between ELEF and JACI. Miller attached a letter to the email that was purported to have been written on June 1, 2008, from Miller to Gary Aletto, the chairman of the ELEF board of directors. The letter stated that JACI was transferring the funds received from the Glick Fund to ELEF, where they would become assets of an irrevocable fund owned and managed by ELEF.

Miller did not produce the Aletto letter to the Glick Foundation or CICF until November of 2009. Miller never asked permission from the Glick Foundation or CICF before he transferred the control of the Glick grant payments from JACI to ELEF, and he received no formal approval from the Glicks, the Glick Foundation, or CICF to do so. In addition, the JACI board of directors never voted to affirm the transfer of the Glick grant to ELEF. Because of the transfer, JACI had no control over whet ELEF did with the Glick grant funds.

Also on November 10, 2009, Payne, acting in his capacity as President of CICF, informed Miller and ELEF that all grant payments for the Ivy Tech Culinary Project were going to be withheld until after a meeting during which the interested parties would provide CICF with a better understanding of the relationship between ELEF and JACI. On November 25, 2009, CICF notified JACI by letter that it was suspending payments on the Ivy Tech Culinary Project. The November 25, 2009 letter outlined CICF's concerns which included:

(a) CICF made the grant to JACI but, at some point after the grant was awarded and without CICF's approval, the grant funds and the underlying activities for the project were transferred to ELEF;

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(b) JACI reported to CICF that JACI's board of directors did not approve JACI's original acceptance of the Grant award and had not approved JACI's transfer of the grant funds and underlying activities to ELEF;
(c) JACI reported to CICF that its board of directors was not in control of the Grant funds and was not receiving regular or satisfactory reports from ELEF regarding the status of the [Ivy ...

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