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Gookins v. County Materials Corp.

United States District Court, S.D. Indiana, Indianapolis Division

July 18, 2019

RYAN GOOKINS, RICHARD RECTENWAL, INDIANA PRECAST, INC., Plaintiffs,
v.
COUNTY MATERIALS CORP., CENTRAL PROCESSING CORP., Defendants.

          REPORT AND RECOMMENDATION

          MARK J. DINSMORE JUDGE

         This matter is before the Court on a Motion to Dismiss for Failure to State a Claim, filed by County Materials Corp. and Central Processing Corp. (“Defendants”). [Dkt. 36.] Defendants ask this Court to dismiss all three claims brought by Ryan Gookins, Richard Rectenwal, and Indiana Precast, Inc. (“Plaintiffs”). [Dkt. 37 at 1-2.] On June 19, 2019, District Court Judge James Patrick Hanlon designated the undersigned Magistrate Judge to issue a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). [Dkt. 53.] For the reasons set forth below, the Magistrate Judge recommends Defendants' Motion to Dismiss for Failure to State a Claim be GRANTED IN PART and DENIED IN PART. Also before the Court is Plaintiff's Motion for Leave to Supplement Plaintiffs' Response [Dkt. 49], which was not opposed. The Court GRANTS Plaintiffs' Motion [Dkt. 49] and has considered the supplemental filing in resolving Defendants' Motion to Dismiss for Failure to State a Claim.

         I. Background

         This is an action to recover damages incurred by Plaintiffs for defending prior litigation in a lawsuit filed by Defendants. In the previous suit, Defendants filed a Complaint in this Court on June 14, 2016. [See No. 1:16-cv-01456-TWP-MJD, Dkt. 1 (S.D. Ind. June 14, 2016).] The suit asserted five claims, including: (1) breach of Gookins' confidentiality agreement; (2) breach of Rectenwal's confidentiality and non-competition agreements; (3) breach of fiduciary duty of loyalty owed to employer (against Gookins); (4) tortious interference with contractual relationships (against all Defendants); and (5) tortious interference with business relationships (against all Defendants). However, the Complaint was dismissed without prejudice on forum non conveniens grounds because of forum selection clauses in Defendants' contracts with Gookins and Rectenwal. [Dkt. 37. at 5.] In response, Defendants then filed the same Complaint in Hancock County on February 3, 2017. [Dkt. 37. at 6.] The case proceeded to trial, and Plaintiffs received favorable jury verdicts as to each of Defendants' claims. [Dkt. 37. at 7.] Defendants appealed the court's decision on February 4, 2019. [Dkt. 37 at 7.]

         Next, Plaintiffs filed post-judgment motions for attorneys' fees, which were granted but subsequently vacated on April 26, 2019, after the court determined that it lacked jurisdiction to grant the fees. [Dkt. 37 at 7-8.] In response, Plaintiffs filed a Motion to Dismiss Appeal or, in the Alternative, to Stay Appeal and Remand for Further Proceedings on April 30, 2019. [Dkt. 49-1 at 2.] On May 31, 2019, the Indiana Court of Appeals granted Plaintiffs' Motion and dismissed Defendants' appeal without prejudice and remanded to the trial court to resolve the fee orders. [Dkt. 49-1 at 13-14.] Lastly, on June 7, 2019, Plaintiffs filed a Verified Motion to Reinstate the Fee Orders. [Dkt. 49-1 at 15.]

         As a result of the February 3, 2017 lawsuit, Plaintiffs filed the present suit on February 1, 2019 in the Hancock Superior Court before it was removed to this Court on February 28, 2019. [Dkt. 1.] Plaintiffs allege three Counts in the Amended Complaint filed on April 25, 2019: (1) abuse of process under Indiana common law; (2) civil damages under Indiana's Crime Victims' Relief Act allegedly arising from Defendants' commission of criminal deception; and (3) two separate causes of action under common law conversion and criminal conversion under I.C. § 35-43-5-3(a)(2). [Dkt. 29.]

         II. Legal Standard

         A motion to dismiss pursuant to Rule 12(b)(6) challenges the viability of a complaint by arguing that it fails to state a claim upon which relief may be granted. To survive a Rule 12(b)(6) motion, the complaint must provide enough factual information to state a claim for relief that is plausible on its face and “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint is facially plausible “when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). At the 12(b)(6) stage, all of the “factual allegations contained in the complaint” must be “accepted as true.” Twombly, 550 U.S. at 572. Furthermore, well-pled facts are viewed in the light most favorable to the non-moving party. See Ashcroft, 556 U.S. at 678; United Cent. Bank v. Davenport Estate LLC, 815 F.3d 315, 318 (7th Cir. 2016). But “legal conclusions and conclusory allegations merely reciting the elements of a claim are not entitled to this presumption of truth.” McCauley v. City of Chi., 671 F.3d 611, 616 (7th Cir. 2011). Moreover, the Court is not required to accept as true “a legal conclusion couched as a factual allegation.” Bonte v. U.S. Bank, Nat'l Ass'n, 624 F.3d 461, 465 (7th Cir. 2010).

         III. Discussion

         A. Statute of Limitations

         Defendants argue that both Counts I and II (Plaintiffs' abuse of process and deception claims) are barred by the applicable statutes of limitations. [Dkt. 37 at 9.] First, Indiana common law claims for abuse of process have a two-year statute of limitations under I.C. § 34-11-2-4. See, e.g., Yoost v. Zalcberg, 925 N.E.2d 763, 771 (Ind.Ct.App. 2010). Second, civil damages under Indiana's Crime Victims' Relief Act (“CVRA”) also have a two-year statute of limitations. See, e.g., In re Rose, 585 F.3d 306, 309 (7th Cir. 2009). Further, under Indiana law, a claim for abuse of process accrues when the act complained of is committed. Strutz v. McNagny, 558 N.E.2d 1103, 1106 (Ind.Ct.App. 1990). Therefore, Defendants assert that Plaintiffs' filing the original suit in federal court on June 17, 2016 started the statute of limitations period. As a result, the lawsuit is barred by the statute of limitations. Alternatively, Defendants argue that “assuming arguendo that Indiana's discovery rule applies on the facts of this case, Plaintiffs' abuse-of-process claim accrued when each became aware of Defendants' claims in the Federal Court Lawsuit, which occurred sometime before August 4, 2016, when Plaintiffs jointly moved to dismiss the Federal Court Lawsuit for forum non conveniens.” [Dkt. 37 at 11.] Lastly, Defendants assert that Count II began at the latest August 4, 2016, when Plaintiffs jointly moved to dismiss the Federal Court Lawsuit for forum non conveniens. [Dkt. 37 at 16.]

         In response, Plaintiffs argue that “each lawsuit is a separate process.” [Dkt. 45 at 3.] In addition, Plaintiffs provide examples of similar situations to the one at hand to show that the new suit is not a continuation, but rather a separate and independent event giving rise to separate and independent claims. [Dkt. 45 at 3.]

         While “a claim for abuse of process accrues when the act complained of . . . is committed” the underlying issue in the present case is Defendants' filing of the suit in Hancock County on February 3, 2017. Strutz, 558 N.E.2d at 1106. Although the original action was filed in federal court on June 17, 2016, the action was dismissed without prejudice on forum non conveniens grounds. Significantly, the case was not remanded, but rather was dismissed. Therefore, the filing of the new suit in Hancock County started the statute of limitations period for claims arising out of the new lawsuit.

         Importantly, Seventh Circuit cases have held that “a dismissal without prejudice is treated for statute of limitations purposes as if suit had never been filed.” SeeMuzikowski v. Paramount Pictures Corp., 322 F.3d 918, 923 (7th Cir. 2003). While Muzikowski deals with a litigant who originally filed suit within the statute of limitations period, but whose case was later dismissed and was consequently barred from re-asserting the same claim because of the statute of limitations, the basic principle is applicable to the case at hand. Id. It does not make sense to this ...


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