Smith v. State

          Appeal from the Marion Superior Court The Honorable Heather A. Welch, Judge Trial Court Cause No. 49D01-1706-MI-23427

          Attorney for Appellants Jeffrey S. McQuary Brown Tompkins Lory Indianapolis, Indiana

          Attorneys for Appellee Curtis T. Hill, Jr. Attorney General of Indiana Abigail R. Recker Deputy Attorney General Indianapolis, Indiana

          MAY, JUDGE.

         [¶1] Kailee M. Smith^[1] and Jeffrey S. McQuary (collectively, "Appellants") appeal the trial court's grant of summary judgment in favor of the State on an indemnification claim Kailee and McQuary filed against the State ("Indemnification Claim"). Appellants present three issues for our consideration, which we restate as:

1. Whether the trial court erred when it found the dismissal of Kailee's state law action in Hancock County ("State Claim") resulted in collateral estoppel that prohibited Appellants from arguing Officer Scott Johnson was acting within the scope of his employment as a DNR Conservation Officer when he took the actions alleged herein;

2. Whether the trial court erred when it found Appellants did not designate sufficient evidence to demonstrate Officer Johnson acted within his scope of employment during the relevant events; and

3. Whether the trial court erred when it concluded there were not issues of material fact regarding whether Officer Johnson's actions were not noncriminal.

         We reverse and remand.

         Facts and Procedural History ^[2]

         [¶2] On December 18, 2012, Kailee struck and killed Johnson's dog. Kailee stopped her car, examined the damage, determined the dog was dead, and drove to her fiancé's house nearby. Kailee and her fiancé drove back to Johnson's house, knocked on his door, and told Johnson what happened. Kailee called police to report the accident. Police responded a few hours later, investigated, and wrote a report on the incident.

         [¶3] Sometime in February 2013, Johnson visited the office of the Hancock County Prosecutor, which he regularly visited in the course of his duties as a Conservation Officer for the Department of Natural Resources of Indiana. He visited the office in uniform. At that time, Johnson spoke to the Chief Deputy Prosecutor of Hancock County, Tammi Phillips, and told her that Kailee had struck and killed his dog. He then indicated he thought Kailee might have committed Class B misdemeanor failure to stop after an accident causing property damages other than to a vehicle. Phillips told Johnson to speak with Stephen Banks, an investigator with the Hancock County Prosecutor's Office, to prepare a probable cause affidavit.

         [¶4] On June 28, 2013, the Hancock County Prosecutor's Office charged Kailee with Class B misdemeanor failure to stop after an accident causing property damage other than to a vehicle. The charges were dismissed on May 29, 2014, after Johnson admitted in a deposition that Kailee had informed him of the incident on the night of the accident.

         [¶5] On October 15, 2014, Kailee filed a tort claim under Indiana law ("State Claim") in Hancock County Circuit Court, in which she alleged, under Indiana law:

18. Johnson's actions in procuring [Kailee's] prosecution constitute false arrest and malicious prosecution, negligence and intentional infliction of emotional distress under Indiana law.

19. The State of Indiana was negligent in its supervision of Johnson by permitting him to use his police authority to prosecute a groundless case.

20. The State of Indiana is liable for Johnson's acts and omissions under the principle of respondeat superior.

(Appellee's App. Vol. II at 77.) Kailee alleged that "[w]hen procuring the prosecution of [Kailee, ] Johnson acted within the scope of his employment by the Indiana Department of Natural Resources." (Id.)

         [¶6] On October 16, 2014, Kailee filed a §1983 claim in the U.S. District Court in the Southern District of Indiana ("Federal Claim") alleging, "Johnson's actions in procuring [Kailee's] prosecution constitute false arrest and malicious prosecution in violation of the Fourth Amendment." (Id. at 96.) Unlike in the State Claim, Kailee did not allege in the Federal Claim that Johnson acted within the course of his employment; instead she alleged, "When procuring the prosecution of [Kailee, ] Johnson acted under the color of Indiana law." (Id.)

         [¶7] On December 10, 2014, the State filed a motion to dismiss the State Claim, asserting the claim was barred by the Indiana Tort Claims Act and the State could not be held liable under the doctrine of respondeat superior for Officer Johnson's actions because "Johnson was reporting the incident as a victim of a crime and not as a law enforcement officer." (Appellee's App. Vol. II at 86.) In addition, the State argued that even if Officer Johnson's actions were taken within the scope of his employment, "All of [Kailee's] alleged damages result from the initiation of a judicial proceeding - that is, a criminal proceeding pertaining to a citation for leaving the scene of an accident." (Id.) Therefore, the State claimed, because Johnson gave a verbal statement to prompt the investigation but did not participate in the investigation, he, and thus the State, could not be held liable for the damages Kailee alleged. (Id.) The trial court granted the State's motion to dismiss Kailee's State Claim with prejudice the same day. (Id. at 90.)

         [¶8] The State initially entered an appearance on Officer Johnson's behalf in the Federal Claim. However, on March 12, 2015, the State withdrew that representation because "Mr. Johnson has consistently stated that he was acting as a private citizen at the time he spoke with the investigator at the prosecutor's office, and after investigation of the facts, the Attorney General's office has found no evidence to show otherwise." (Id. at 99.) Thus, "the Attorney General [was] precluded by law from representing him." (Id.) The District Court granted the State's motion to withdraw.

         [¶9] On May 11, 2015, Officer Johnson filed a pro se motion to dismiss the Federal Claim because Kailee's claims involved her rights under the United States Constitution and "Johnson was never in a position during the course of Steve Banks['], Hancock County Prosecutor[']s investigator, investigation other than that of a private citizen providing a verbal statement." (Id. at 116.) In addition, Officer Johnson noted the dismissal of Kailee's State Claim in support of his motion to dismiss the Federal Claim. The District Court did not rule on Officer Johnson's motion.

         [¶10] On June 29, 2015, private counsel entered an appearance in District Court on Officer Johnson's behalf. On August 27, 2015, Officer Johnson, via counsel, filed another motion to dismiss. The District Court denied Officer Johnson's August 27 motion to dismiss on December 14, 2015. On September 27, 2016, Officer Johnson's private counsel filed a motion to withdraw, and Officer Johnson filed a motion requesting appointment of counsel. Two days later, the District Court denied both motions as moot.

         [¶11] On November 29, 2016, the parties filed a joint stipulation of facts. The District Court held a jury trial on December 13, 2016. The jury returned a verdict in Kailee's favor, awarding her $10, 000.00 in damages. The District Court subsequently awarded Kailee an additional $422.00 in costs and $52, 040.00 in attorney's fees. Over the next few months, the parties attempted to work out a payment agreement, and they discussed Officer Johnson filing an indemnification claim against the State for the payment of the judgment. In May 2017, Appellants drafted a contract by which Officer Johnson assigned his right to file an indemnification action against the State to Appellants as partial payment for the judgment against him in the Federal Claim. Officer Johnson signed the agreement in May, and Appellants signed it in August 2017.

         [¶12] On June 13, 2017, ^[3] Appellants filed a complaint for damages and declaratory judgment ("Indemnification Claim"), the ruling on which is the subject of this appeal. In the complaint, Appellants gave a brief history of the Federal Claim and indicated Officer Johnson had assigned his indemnification rights to Appellants. Appellants asserted:

17. The State of Indiana is required to pay the judgment, costs, and attorneys['] fees assessed against Johnson pursuant to Ind. Code § 34-13-4-1.

18. The Court should declare the rights of McQuary, [Kailee], and the State of Indiana regarding Johnson's right to indemnification.

(Id. at 5.)

         [¶13] On July 31, 2017, the State filed an answer and asserted nine affirmative defenses, including: (1) the Indemnification Claim was barred by res judicata and issue preclusion based on the earlier dismissal of the State Claim; (2) Officer Johnson's assignment of his indemnification rights was faulty for a variety of reasons; and (3) the Indemnification Claim was barred by the Indiana Tort Claims Act. (Id. at 8-9.) On October 27, 2017, Appellants filed a motion for summary judgment, asserting there were no issues of material fact, Officer Johnson was acting within the scope of his employment when he falsely reported the alleged crime to the Hancock County's Prosecutor's Office, the District Court had found Officer Johnson violated Kailee's Fourth Amendment rights, and the State was required to indemnify Officer Johnson. Appellants also contended the doctrine of res judicata premised on the dismissal of the State Claim did not apply because Kailee did not have an opportunity to fully litigate the issues in that case and finding res judicata would be unfair under the circumstances.

         [¶14] On December 6, 2017, the trial court granted Appellants' motion for summary judgment. On December 7, 2017, the parties filed a joint motion for relief from the December 6 order, as the parties agreed the State had not been given an opportunity to respond to the Appellants' motion for summary judgment and, thus, the decision was premature. The parties asked the court to instead set deadlines for the parties based on a case management plan jointly agreed upon. The trial court granted that joint motion the same day.

         [¶15] On January 2, 2018, the State filed its response to Appellants' motion for summary judgment in conjunction with the State's cross-motion for summary judgment. In its cross-motion for summary judgment, the State argued there existed issues of material fact and Appellants' Indemnification Claim was barred by "claim preclusion/collateral estoppel" based on the dismissal of the State Claim. (I ...