Robert Hrezo and Hrezo Engineering, Inc., Appellants-Plaintiffs,
City of Lawrenceburg, Appellee-Defendant.
from the Dearborn/Ohio Circuit Court No. 15C01-0607-CT-23 The
Honorable Jon W. Webster, Special Judge
Attorney for Appellants Corinne R. Finnerty McConnell
Finnerty PC North Vernon, Indiana
Attorney for Appellee Susan M. Salyer Patsfall, Yeager &
Pflum Cincinnati, Ohio
Appellants-Plaintiffs Hrezo Engineering, Inc.
("HEI"), and Robert Hrezo (collectively,
"Appellants") appeal from the judgment entered in
favor of Appellee-Defendant the City of Lawrenceburg
("the City"). Robert established HEI in 1983 and,
from at least 1997 until 2005, HEI worked on several
construction projects for the City and/or its agencies,
billing several million dollars over that period. In 2003,
Tom Steidel began his tenure as City Manager, charged with
assisting the mayor and the City's government.
Over the next couple of years, issues developed with
HEI's work for the City, and several projects were
terminated or suspended. Among the issues were concerns about
possible overbilling and overstaffing and substandard work.
In March of 2005, City Manager Steidel prepared a memorandum
summarizing his concerns about HEI's work and distributed
it to the Mayor, the City Council, the City's
Clerk-Treasurer, and the City's Board of Works. Later in
2005, the decision was made to stop using HEI for City
In 2006, Appellants sued the City, alleging tortious
interference, defamation, interference with prospective
business advantage, and violations of Indiana's RICO
statutes. Ultimately, the trial court granted summary
judgment in favor of the City on the tortious interference,
interference with prospective business advantage, RICO, and
defamation per se claims, leaving defamation per
quod the only claim remining for trial. Following trial,
the jury returned a verdict in favor of the City, and the
trial court denied Appellants' motion to correct error.
Appellants contend that the trial court erred in (1) granting
summary judgment in favor of the City on Appellants'
defamation per se claim, (2) granting summary
judgment in favor of the City on Appellants' tortious
interference claim, (3) excluding proffered testimony
regarding Appellants' alleged damages, (4)refusing to
deliver Appellants' proposed jury instruction on
publication, and (5)refusing to include several allegedly
defamatory statements on a verdict form given to the jury.
Because we conclude that Appellants' claims are without
merit, we affirm.
and Procedural History
Robert is the sole owner of HEI, which he established in 1983
and whose operations he oversees. In 1997, Robert was
appointed City Engineer for the City, and HEI worked on
approximately ninety-five projects for the City from 1997 to
2005, including such projects as the Lawrenceburg Police
Station, three swimming pools, and work on the Lawrenceburg
levy system. Altogether, HEI billed the City over $3.5
million from 1997 to 2005. During this time, Appellants also
worked with Mel Davis, the City's utilities director.
On January 1 or 2, 2003, City Manager Steidel began his
tenure. City Manager Steidel's job was to bring a
"professional management process as a proponent to the
City [and] assist the Mayor, and the Council[.]" Tr.
Vol. II p. 136. City Manager Steidel was supposed to
"manage contracts that the City was engaged in and in
some cases develop contracts that the City would enter
into." Tr. Vol. II p. 136. In November of 2003, William
Cunningham was elected Mayor of the City and took office on
January 1, 2004. On the first day of Mayor Cunningham's
tenure, City Manager Steidel decided that he was terminating
or putting on hold fifteen of HEI's thirty-three to
thirty-five ongoing projects.
Among the projects HEI worked on for the City was Todd-Creech
Park, which was a drainage basin that was to be converted
into a recreational area. At the time, Mario Todd was an
independent contractor working with HEI. Todd served as an
inspector on the Todd-Creech project along with another
inspector from HEI. City Manager Steidel told Robert that he
only wanted one inspector on the Todd-Creech jobsite,
because, in City Manager Steidel's view, the park was not
large enough to require two inspectors and there were "a
lot of days I went over there, there was very little going
on." Tr. Vol. II p. 142. City Manager Steidel also told
Hrezo to begin bringing one representative to Todd-Creech
construction meetings when he had been bringing up to five.
Director of engineering for the City Michael Clark noted
later that there had been problems with HEI's work on the
Todd-Creech project, including "major de-watering
issues" caused by a breached aquifer and baseball field
that would not drain properly because it had been designed
"table top flat[.]" Tr. Vol. II p. 119.
In 2004, Todd was working with HEI performing inspections on
City building projects, including those worked on by a
company called Fortune Management, which was working with the
City's redevelopment commission to rehabilitate and sell
older structures. In early 2004, it came to Todd's
attention that there were questions about one particular
project that HEI had approved. HEI had issued an American
Institute of Architects ("AIA") document for a
house on 19 Williams Street in the City indicating that new
windows and cabinets had been installed. The address,
however, was an empty lot. When Todd confronted Robert and
his son Mike about the AIA document, Robert told him that
City Manager Steidel had told him to sign it. Todd resigned
from HEI that day and was later hired by the City to perform
On March 3, 2005, in anticipation of an executive session
meeting at which Robert was expected to complain about his
mounting issues with the City, City Manager Steidel issued a
memorandum to Mayor Cunningham, the City Council, the
City's Clerk-Treasurer, and the Board of Works ("the
Steidel Memo"), which provides, in relevant part, as
To: Mayor & City Council, Clerk-Treasurer, Bd. Of Works
From: Tom Steidel, City Manager
Date: March 3, 2005
Subject: Hrezo Engineering Billing Issues
I must apologize for being absent for Tuesday night's
X-session but the beaches call. Mr. Hrezo is appearing before
Council & The Board of Works to protest what he says is
my refusal to pay his firm for services rendered. That is not
exactly the case. I have called in to question several of his
bills to the city while promptly paying others. I have asked
him to consider amending some of his billings to reflect
problems on the job that his firm has some responsibility
for. So far he has failed to do so.
Mr. Hrezo and I have been having discussions for quite some
time about his billing tendencies. First he bills quarterly
instead of monthly and only recently has submitted time
Unfortunately, the review of the time cards only reinforces
my view that he deploys way more employees to our jobs than
is warranted. Todd[-]Creech Park is a classic example where
he has insisted on deploying two inspectors day after day
after day. The park just isn't big enough to warrant that
level of coverage nor was a lot of work being done. Sometimes
there was none at all but the inspectors were there.
Mr. Hrezo bills out his inspectors at $55 per hour I believe
and pays approximately $25 per hour. For two inspectors at
those rates Hrezo Engineering would collect $60 for every
hour the two inspectors were deployed. In addition, he has
continued to bring as many as five (5) persons to our
construction meetings. I have discussed these issues with Mr.
Hrezo on numerous occasions and I guess his most common
response is that he needs these resources to get his work
paid Hrezo engineering a total of $335, 029 during 2004
including a December bill for $86, 141 for work on
Todd-Creech Park. We now have a February bill for $51, 577.
The make up of those bills is as follows:
@ $85 Hr.
Senior Field Tech
analyze this I have to wonder why we are still paying these
huge engineering and design charges ($57, 295) when the
design was done a year ago. This billing period was for 82
The February bill for Todd-Creech, covering only 64 days is
$51, 577. This bill contains 420 hours of Senior Field
Inspection and 40.75 hours of Technician 2 time. Engineering
services appear to cost $26, 439. I remind [you] that this is
a project that was basically designed in 2003 and supposed to
be constructed in 2004. Here we are in 2005 still paying for
engineering services. I suspect that many of these
engineering hours are to re-engineer, correct, add to, or
amend his original plan. If that is true, Hrezo Engineering
should take some responsibility for these expenses.
In addition to the above bills Hrezo Engineering also billed
the contractor for an additional $8000 for capping the
w[e]lls at Todd-Creech Park. The contractor has refused to
pay the bill and I assume it will fall to us if it is not
paid. There were engineers with the well-capping companies
and H.C. Nutting was the engineer in charge. I'm not
exactly sure what Hrezo Engineering was doing for $8000.
The Fire Station is another project that I asked Mr. Hrezo
for clarification. Our bill for the December billing was
$7141.75 of which $6333 was for engineering services and $440
for inspection. The February bill was for $2462 all of which
appear to be engineering services. I had returned the
December bill and asked Mr. Hrezo to critically review it. As
you know we have some construction issues at this location.
Problems such as the truss welds which I believe we are being
charged to have Hrezo inspect when we have previously paid
his inspector to been the site, and inspecting, the truss
installation. We should not have to pay again.
There were several other December bills that I questioned
which have since been paid.
Recently I received a bill for $18, 492.94 for the Ivy Tech
Retaining Wall. This invoice covers the period from 1/5/04
thru 2/10/05. This billing is unusually [sic] since it covers
13 months as opposed to the normal quarterly billing cycle.
This project was finished as of 12/31/03 when I told both the
contractor Roy A. Miller and Mr. Hrezo that work must stop as
the project appeared to be finished.
Since that time you may know that there are problems with the
wall. I did not authorize Hrezo Engineering to do $18, 492
worth of work on this project and have no clue what they
accomplished except to throw the blame for the wall problems
on others. It is a fact that the wall is failing to some
degree and Hrezo Engineering was the principle [sic]
representative of the City of Lawrenceburg. For him to fail
to accept some measure of responsibility for this problem
Lately what I have asked Mr. Hrezo is to try to explain to me
what work he has done that actually accomplishes objectives
for the city. On all three of these projects, there is
difficulty seeing any real production for the amount of money
we are paying. The Fire Station continues to be a problem.
Todd-Creech Park speaks for itself and the Ivy Tech wall
problem could dwarf the other two issues in financial impact.
Finally, I am ending our association with Hrezo Engineering
on the Rte. 50 Gateway project. A review of the plans
indicate that the project scope has gotten larger than what
is appropriate. Therefore, after in-house discussion with
Mike Clark, Mario Todd and Mel Davis, we have decided to
handle the project in-house. Hrezo Engineering will be paid
for the work they have done up to this point.
I would suggest that any further work with Hrezo Engineering
be assigned in writing and be very task and objective
oriented. I would also put "not to exceed numbers"
into the contract to guard against the kind of problems we
are having on the three jobs outlined above. I have asked for
additional, subjective information regarding these three
projects and as of yet I haven't been ...