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Central Indiana Podiatry, P.C. v. Barnes & Thornburg, LLP

Court of Appeals of Indiana

March 2, 2017

Central Indiana Podiatry, P.C., Northwest Surgery Center, LLC, d/b/a Foot & Ankle Surgery Center, f/k/a Foot & Ankle Surgery Center, LLC and Anthony E. Miller, D.P.M., Appellants-Plaintiffs,
v.
Barnes & Thornburg, LLP, Appellee-Defendant.

         Appeal from the Marion Superior Court The Honorable Cynthia J. Ayers, Judge Trial Court Cause No. 49D04-1210-PL-41939

          ATTORNEY FOR APPELLANT James A. Knauer Steven E. Runyan Kroger, Gardis & Regas, LLP Indianapolis, Indiana

          ATTORNEYS FOR APPELLEE Forrest Bowman, Jr. Jennifer K. Bowman Bowman & Bowman Mark Crandley Barnes & Thornburg, LLP Indianapolis, Indiana

          OPINION ON REHEARING

          May, Judge.

         [¶1] Central Indiana Podiatry, P.C., Northwest Surgery Center, LLC d/b/a Foot & Ankle Surgery Center f/k/a Foot & Ankle Surgery Center, LLC ("FASC"), and Anthony Miller, D.P.M. ("Miller") (collectively, "the Miller Parties") petition for rehearing of our decision dated October 19, 2016, in which we affirmed the trial court's grant of summary judgment in favor of Barnes & Thornburg ("B&T") based on our holding sua sponte the Miller Parties were precluded from advancing fraud-related arguments because they did not do so as part of a pleading. Central Indiana Podiatry, P.C., et. al. v. Barnes & Thornburg, LLP, 62 N.E.3d 440, 447 (Ind.Ct.App. 2016).[1] We grant rehearing to acknowledge and adopt our Indiana Supreme Court's holding in Nichols v. Amax Coal Co., 490 N.E.2d 754, 755 (Ind. 1986), reh'g denied, and affirm the trial court's grant of summary judgment on grounds different than those expressed in our earlier opinion.

         [¶2] Before the trial court, the Miller Parties alleged "B&T's actions in procuring the Release Agreement constituted fraudulent inducement and fraudulent concealment, and B&T engaged in constructive fraud." Id. at 447. The Miller Parties raised those allegations of fraud for the first time in their response to B&T's motion to dismiss, in which B&T argued the Miller Parties' action was precluded by the Fee Release, as that Release included a clause releasing B&T from relevant liability. We held the Miller Parties improperly presented their claims of fraud before the trial court because they did not "state a claim of fraud as required by [Indiana Trial Rule] 9(B)." Id. at 448.

         Application of Nichols and Indiana Trial Rules

         [¶3] In their petition for rehearing, the Miller Parties argue our holding "runs afoul, " (Reh'g Br. of Appellant at 2), of our Indiana Supreme Court's decision in Nichols v. Amax Coal Co., 490 N.E.2d 754, 755 (Ind. 1986), reh'g denied. In that case, Nichols filed a breach of contract action against Amax, Inc., asserting the company violated her oral contract of employment. In their motion for summary judgment, Amax argued Nichols' action was barred by the statute of limitations. In her response to summary judgment, Nichols claimed Amax engaged in fraudulent concealment. The trial court ruled in favor of Amax on summary judgment, and our court affirmed, holding:

[F]raud and concealment must be specifically pleaded. Nichols failed to allege fraud or concealment in her complaint or in any response to the answer filed by Amax Coal Company and Amax, Inc. Because Nichols failed to plead fraud or concealment as required by T.R. 9(B), the statute of limitations was not tolled. Nichols v. Amax Coal Co., 481 N.E.2d 1103, 1105 (Ind.Ct.App. 1985) (internal citations omitted), reh'g denied with dissenting opinion at 482 N.E.2d 776 (Ind.Ct.App. 1985), vacated on transfer by Nichols v. Amax Coal Co., 490 N.E.2d 754 (Ind. 1986), reh'g denied. When our court denied rehearing, Judge Ratliff wrote an opinion dissenting from that decision.

         [¶4] On transfer, our Indiana Supreme Court adopted the reasoning of Judge Ratliff's dissent and held:

Initially, a plaintiff need not anticipate a statute of limitations defense and plead matter[s] in avoidance in the complaint. If the complaint shows on its face that the statute of limitations has run, the defendant may file a T.R. 12(B)(6) motion. Plaintiff may then amend to plead the facts in avoidance. On the other hand, if the defendant simply answers the complaint setting up the statute of limitations, the plaintiff may, but does not have to, file a reply in avoidance. The defendant may seek summary judgment, in which event it becomes incumbent upon the plaintiff to present facts raising a genuine issue in avoidance of the statute of limitations. If the case goes to trial, the plaintiff must establish the facts in avoidance of the statute of limitations.

Nichols, 490 N.E.2d at 755 (emphasis added).

         [¶5] While it appears at first blush that Nichols would create an exception to Trial Rule 9(B) that applies only to fraudulent concealment claims raised in response to a defendant raising a statute-of-limitations affirmative defense, such defense is among a long, non-exhaustive list of affirmative defenses set forth in Trial Rule 8(C). Willis v. Westerfield, 839 N.E.2d 1179, 1185 (Ind. 2006) (noting the non-exhaustive nature of T.R. 8(C)). B&T's defense of release is also listed in Rule 8(C). That the Nichols case refers by name only to the statute of limitations affirmative defense does not require we limit the holding to that defense: Judge Ratliff's reasoning directly and explicitly applied the principles of notice pleading, and did not rely upon some special feature of a statute of limitations defense or a fraudulent concealment claim pleaded in response. See Nichols v. Amax Coal Co., 482 N.E.2d 776 (Ind.Ct.App. 1985) (Ratliff, J., dissenting), vacated on transfer by Nichols v. Amax Coal Co., 490 N.E.2d 754 (Ind. 1986), reh'g denied.

         [¶6] Moreover, the Nichols case is in a very similar procedural posture to the case at bar. Nichols did not plead the fraud in anticipation of a statute of limitation affirmative defense, but Amax ultimately asserted the statute-of-limitation defense. Nichols then responded by alleging that Amax had engaged in fraudulent concealment that tolled the limitation period. Likewise, here, the Miller Parties' complaint did not include their allegations of the fraudulent creation of a Fee Release Agreement. B&T answered the Miller Parties' complaint by raising the Fee Release as an affirmative defense, and then B&T filed both a motion to dismiss and a motion for summary judgment based on the Fee Release. The Miller Parties did not respond to B&T's answer, but instead argued in response to B&T's motion to dismiss and motion for summary judgment that the Fee Release was obtained by fraud. Pursuant to Nichols, this was a procedurally appropriate manner in which to respond without waiving the claim of fraud. See Nichols, 490 N.E.2d at 755 (When the defendant answers with an affirmative defense, "the plaintiff may, but does ...


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