Ron Shoemaker v. Indiana State Police Department , 62 N.E.3d 1242 ( 2016 )

FILED
Nov 02 2016, 7:55 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Ryan P. Sink Gregory F. Zoeller
Indianapolis, Indiana Attorney General of Indiana
Aaron T. Craft
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Ron Shoemaker, November 2, 2016
Appellant-Plaintiff, Court of Appeals Case No.
49A02-1604-PL-879
v. Appeal from the Marion Superior
Court
Indiana State Police The Honorable Gary L. Miller,
Department, Judge
Appellee-Defendant. Trial Court Cause No.
49D03-1408-PL-26357
Altice, Judge.
Case Summary
[1] Ronald Shoemaker, a law enforcement officer with the Indiana State Police
Department (ISP) for well over twenty years, was demoted in rank and pay in
2013 shortly after a new Superintendent of ISP was appointed. Shoemaker
believes that the demotion was the result of a whistleblower report he filed with
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his supervisor about four years earlier. Pursuant to Ind. Code § 4-15-10-4, the
Whistleblower Law (the WBL), Shoemaker initiated an administrative appeal
of his demotion. After his action was dismissed by the administrative law judge
(the ALJ) for being untimely filed, Shoemaker did not pursue judicial review of
the administrative decision. He filed the instant breach of contract action
instead. ISP sought summary judgment on the ground that Shoemaker failed to
exhaust his administrative remedies and could not bring an action for breach of
contract under the WBL.1 The trial court granted ISP’s motion for summary
judgment, and Shoemaker appeals.
[2] We affirm.
Facts & Procedural History
[3] Shoemaker began his employment with ISP in 1989 and steadily climbed the
ranks from trooper, to senior trooper, to master trooper, to sergeant (his last
merit rank), to spot captain, and to spot major over the entire Criminal
Investigation Division (the CID).2 In 2008, when he was a sergeant in the Drug
Enforcement Section of the CID, Shoemaker authored and submitted a written
report to his direct supervisor concerning issues he had observed in the Drug
Enforcement Section, including ghost employment, overtime, and possible
1
ISP also argued that it was entitled to summary judgment on the merits. We need not delve into the merits
of the breach of contract claim because we find the procedural issues dispositive.
2
There are two types of rank within ISP. Merit rank is the last permanent rank that a person competitively
applied for and achieved. An appointed rank, also known as spot rank, is captain or above and such ranks
are appointed at the discretion of the ISP Superintendent.
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misrepresentations by law enforcement officers to the court. The report was
then provided to Superintendent Paul Whitesell.
[4] As a result of the report, Superintendent Whitesell promoted Shoemaker to
captain of the CID in 2009 (replacing Michael Snider) and then to major of the
CID in 2012 (replacing Larry Turner). Superintendent Whitesell moved Snider,
Turner, and Lori Petro out of the CID at different points after the report, which
Turner referred to as Shoemaker’s manifesto.
[5] In January 2013, Doug Carter was appointed by Governor Mike Pence to
replace Whitesell as Superintendent of ISP. On April 15, 2013, Superintendent
Carter demoted Shoemaker from major to his last permanent rank of sergeant
and transferred him out of the CID. This change in rank reduced Shoemaker’s
rate of pay. On that same day, in addition to other personnel changes,
Superintendent Carter replaced Shoemaker with Snider as major of the CID,
promoted Petro to captain of the CID, and brought Turner back to the CID as
third in command.
[6] On January 29, 2014, more than nine months after his demotion, Shoemaker
initiated an appeal pursuant to the State Employee Appeals Commission
(SEAC) procedure outlined in Ind. Code § 4-15-2.2-42. Shoemaker alleged that
he was demoted in retaliation for engaging in protected activity under the
WBL. Acknowledging the late filing, he argued that the SEAC’s thirty-day
statute of limitations should be stayed based on equitable tolling and fraudulent
concealment.
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[7] On July 15, 2014, the ALJ entered the SEAC’s final order dismissing the
action. Specifically, the ALJ concluded that Shoemaker’s complaint was
untimely filed and that equitable tolling based on a theory of fraudulent
concealment was not applicable to save his action. The order advised
Shoemaker that he could seek judicial review within thirty days.
[8] Instead of exhausting the administrative appeals process by seeking judicial
review of the SEAC’s final order, Shoemaker chose to file the instant breach of
contract action on August 7, 2014. His claim was based on ISP’s alleged
violation of the WBL. On January 22, 2016, ISP filed a motion for summary
judgment, along with designated evidence and a memorandum in support.
Following additional filings and a hearing on the motion, the trial court granted
summary judgment in favor of ISP on April 8, 2016. Shoemaker now appeals.
Discussion & Decision
[9] When reviewing a summary judgment ruling, we apply the same standard as
the trial court. David v. Kleckner, 9 N.E.3d 147, 149 (Ind. 2014). “Summary
judgment may be granted, or affirmed on appeal, only ‘if the designated
evidentiary matter shows that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.’” Id.(quoting Ind. Trial Rule 56(C)). The facts and reasonable inferences established
by the designated evidence are to be construed in favor of the non-moving
party. Id.Court of Appeals of Indiana | Opinion 49A02-1604-PL-879 | November 2, 2016 Page 4 of 15
[10] The party appealing a grant of summary judgment has the burden of persuading
this court that the ruling was erroneous. See Perkins v. Stesiak, 968 N.E.2d 319,
321 (Ind. Ct. App. 2012), trans. denied. The appellant also bears the burden of
presenting a complete record with respect to the issues raised on appeal. Finke
v. N. Ind. Pub. Serv. Co., 862 N.E.2d 266, 272-73 (Ind. Ct. App. 2006) (“We
cannot review a claim that a trial court erred in granting a motion for summary
judgment when the appellant does not include in the record all the evidence
designated to the trial court and before it when it made its decision.”), trans.
denied; see also Lenhardt Tool & Die Co., Inc. v. Lumpe, 703 N.E.2d 1079, 1084
(Ind. Ct. App. 1998), trans. denied.
[11] Shoemaker wholly failed in his obligation to provide an adequate record on
appeal. The appendix he filed includes only the CCS, the summary judgment
order, and sixteen exhibits that we suppose, though we do not know for certain,
constitute the evidence he designated below. Shoemaker does not include ISP’s
motion for summary judgment, the memoranda filed in support of and in
opposition to the motion, or ISP’s designated evidence. Thus, we would be
well within our discretion to conclude that Shoemaker, as the appealing party,
failed to present us with a record sufficient to conclude that the trial court erred
in granting summary judgment to ISP. See Finke, 862 N.E.2d at 273. Still, we
prefer to decide cases on their merits whenever possible. Omni Ins. Group v.
Poage, 966 N.E.2d 750, 753 (Ind. Ct. App. 2012), trans. denied. Our review,
though significantly hampered, is possible only because ISP filed the omitted
portions of the record in its appendix.
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[12] We turn first to the provisions of the WBL:
(a) Any employee may report in writing the existence of:
(1) a violation of a federal law or regulation;
(2) a violation of a state law or rule;
(3) a violation of an ordinance of a political subdivision (as
defined in IC 36-1-2-13); or
(4) the misuse of public resources;
to a supervisor or to the inspector general.
(b) For having made a report under subsection (a), the employee
making the report may not:
(1) be dismissed from employment;
(2) have salary increases or employment related benefits
withheld;
(3) be transferred or reassigned;
(4) be denied a promotion the employee otherwise would
have received; or
(5) be demoted.
(c) Notwithstanding subsections (a) and (b), an employee must
make a reasonable attempt to ascertain the correctness of any
information to be furnished and may be subject to disciplinary
actions for knowingly furnishing false information, including
suspension or dismissal, as determined by the employee’s
appointing authority, the appointing authority’s designee, or the
ethics commission. However, any state employee disciplined under this
subsection is entitled to process an appeal of the disciplinary action under
the procedure as set forth in IC 4-15-2.2-42.
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(d) An employer who violates this section is subject to criminal
prosecution under IC 35-44.2-1-1.
Ind. Code § 4-15-10-4 (emphasis supplied).
[13] In Ogden v. Robertson, 962 N.E.2d 134 (Ind. Ct. App. 2012), trans. denied, the
appellant argued that although subsection (c) provides an administrative
appeals process for violations of the WBL, use of that process was not a
mandatory prerequisite to judicial review. Id. at 144. Our court disagreed and
rejected the appellant’s attempt to raise a common law claim for wrongful
discharge based on the WBL. The court reasoned as follows: “If we were to
hold that a claimant could seek judicial review based on a right derived from
the WBL through common law and, therefore, bypass the exhaustion of
administrative remedies requirement of the WBL, it would make the
exhaustion requirements of the WBL illusory.” Id. at 146. See also Coutee v.
Lafayette Neighborhood Hous. Servs., Inc., 792 N.E.2d 907, 911-12 (Ind. Ct. App.
2003 (observing that the General Assembly has legislated the protection for
certain employees to be able to blow the whistle without retaliation and holding
that the plaintiff’s cause of action, if any, is under the statute, not the common
law), trans. denied.
[14] In an attempt to avoid the exhaustion of remedies requirement, Shoemaker
asserts two independent arguments. He claims that due to futility, inadequacy,
and judicial estoppel, he should be excused from following the administrative
procedure set out in I.C. § 4-15-10-4. Alternatively, citing Whinery v. Roberson,
819 N.E.2d 465 (Ind. Ct. App. 2006), trans. dismissed, Shoemaker contends that
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the statute conferred a contractual right entitling him to bring a breach of
contract action. We will address each argument in turn.
[15] An individual may be exempted from the exhaustion requirement when the
administrative process would be inadequate or futile. Ogden, 962 N.E.2d at
144. To prevail on a claim of futility, “one must show that the administrative
agency was powerless to effect a remedy or that it would have been impossible
or fruitless and of no value under the circumstances.” Id. (quoting Smith v. State
Lottery Comm’n of Ind., 701 N.E.2d 926, 931 (Ind. Ct. App. 1998), trans. denied).
In other words, the exhaustion requirement will be relaxed when there is grave
doubt as to the availability of the administrative remedy. Id. Our Supreme
Court has cautioned that “the exhaustion requirement is much more than a
procedural hoop and that it should not be dispensed with lightly on grounds of
‘futility.’” Town Council of New Harmony v. Parker, 726 N.E.2d 1217, 1224 (Ind.
2000), amended in part on reh’g, 737 N.E.2d 719 (Ind. 2000).
[16] Shoemaker’s futility argument is based on his claim that the administrative
remedy set out in I.C. § 4-15-10-4(c) (an administrative appeal through the
SEAC procedure outlined in I.C. § 4-15-2.2-42) was not available to him
because he is an ISP employee. We observe that this position is directly
contrary to the one he took before the SEAC in his administrative appeal. See,
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e.g., Appellee’s Appendix at 82, 85. For the reasons set out below, we agree with
his original stance regarding that applicability of the SEAC procedure.3
[17] I.C. 4-15-2.2 is a lengthy chapter addressing the State Civil Service System.
Within its fifty-three sections, the chapter deals with, among other things,
hiring, dismissal, demotion, reassignment, and suspension of state employees,
classification of positions based on the authority, duties, and responsibilities of
each position, development of a pay plan, and establishment of performance
standards. I.C. § 4-15-2.2-1 defines the general applicability of the chapter and
expressly excludes ISP.4
3
Shoemaker argues that ISP should not be permitted to change its position on this issue, because it had
previously argued that the SEAC was not the proper forum for Shoemaker’s whistleblower claim. ISP made
alternative arguments to the SEAC: 1) the SEAC was not the proper forum and 2) regardless of the proper
administrative forum, the complaint was untimely filed. The ALJ decided the case on the timeliness ground.
In light of the fact that Shoemaker has the burden of establishing error on appeal and, in this regard, asserts a
position different than he did during the SEAC process, we find his judicial estoppel argument disingenuous.
4
I.C. § 4-15-2.2-1 provides:
(a) Except as provided in subsection (b), this chapter applies to employees of a governmental
entity that exercises any of the executive powers of the state under the direction of the governor
or lieutenant governor.
(b) This chapter does not apply to the following:
(1) The legislative department of state government.
(2) The judicial department of state government.
(3) The following state elected officers and their personal staffs:
(A) The governor.
(B) The lieutenant governor.
(C) The secretary of state.
(D) The treasurer of state.
(E) The auditor of state.
(F) The superintendent of public instruction.
(G) The attorney general.
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[18] Also within the chapter is I.C. § 4-15-2.2-42, which addresses the filing of a
complaint by an employee in the state civil service system concerning the
application of a law, rule, or policy to the complainant. Regarding the
complainant’s administrative remedy, I.C. § 4-15-2.2-42 provides in part:
(c) An employee who files a complaint under this section must
initiate the complaint procedure as soon as possible after the
occurrence of the act or condition complained of, and not later
than thirty (30) calendar days after the date the employee became
aware, or by the exercise of reasonable diligence should have
been aware, of the occurrence giving rise to the complaint. An
employee who does not initiate the complaint procedure within
the thirty (30) day period waives the right to file that complaint.
(d) A remedy granted under this section may not extend back
more than thirty (30) calendar days before the complaint was
initiated.
(e) The following complaint procedure is established:
Step I: The complainant shall reduce the complaint to
writing and present the complaint to the appointing authority
or the appointing authority’s designated representative. The
appointing authority or designee shall conduct any
(4) A body corporate and politic of the state created by state statute.
(5) A political subdivision (as defined in IC 36-1-2-13).
(6) An inmate who is working in a state penal, charitable, correctional, or benevolent
institution.
(7) The state police department.
(c) This subsection does not apply to a political subdivision, the ports of Indiana (established by
IC 8-10-1-3), or the northern Indiana commuter transportation district (established under IC 8-5-
15). The chief executive officer of a governmental entity that is exempt from this chapter under
subsection (b) may elect to have this chapter apply to all or a part of the entity’s employees by
submitting a written notice of the election to the director.
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investigation considered necessary and issue a decision, in
writing, not later than fifteen (15) calendar days after the date
the appointing authority receives the complaint.
Step II: If the appointing authority or the appointing
authority’s designated representative does not find in favor of
the complainant, the complainant may submit the complaint
to the director not later than fifteen (15) calendar days after
the date of the appointing authority’s finding. The director or
the director’s designee shall review the complaint and issue a
decision not later than thirty (30) calendar days after the date
the complaint is submitted to the director.
Step III: If the employee is not satisfied with the director’s
decision, the employee may submit an appeal in writing to
the [SEAC] not later than fifteen (15) calendar days after the
date the employee receives notice of the action taken by the
director or the director’s designee. The [SEAC] shall
determine whether all previous steps were completed
properly and in a timely manner, and, subject to subsection
(f), whether the employee and subject of the complaint meet
the jurisdictional requirements. If a procedural or
jurisdictional requirement is not met, the [SEAC] shall
dismiss the appeal. If the procedural and jurisdictional
requirements have been met, the [SEAC] shall conduct
proceedings in accordance with IC 4-21.5-3.
****
(h) Decisions of the [SEAC] are subject to judicial review in
accordance with IC 4-21.5-3.
(i) An employee who is suspended or terminated after a hearing
held by the state ethics commission is not entitled to use the
procedure set forth in this section. An employee who seeks
further review of a suspension or termination imposed by the
state ethics commission must seek judicial review of the state
ethics commission’s decision in accordance with IC 4-21.5-3.
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[19] This administrative remedy is not generally available to ISP employees who
have employment-related complaints, due to I.C. § 4-15-2.2-1(b)(7)’s express
exemption of ISP from the various statutory provisions regulating the state civil
service system. When an ISP employee’s complaint is based on an alleged
violation of the WBL, however, the WBL brings the ISP complainant within
the ambit of SEAC review for this limited purpose. Indeed, I.C. § 4-15-10-4(c)
provides that “any state employee” disciplined for being a whistleblower is
“entitled to process an appeal of the disciplinary action under the procedure as
set forth in IC 4-15-2.2-42.” We conclude that the general exclusions delineated
in I.C. § 4-15-2.2-1(b) do not foreclose this limited application of the SEAC
review process to all state employees bringing a claim under the WBL.5
[20] In this case, Shoemaker completed steps I, II, and III of the SEAC review
process, but did not seek judicial review of the ALJ’s decision that his
complaint was untimely filed. His belated assertion that the SEAC appeal
process was not applicable to him and, therefore, futile is without merit.
[21] Shoemaker next raises a novel argument that he was entitled to avoid the
administrative process and file a breach of contract whistleblower claim
5
There are two other comparable whistleblower statutes – Ind. Code § 22-5-3-3 and Ind. Code § 36-1-8-8,
applicable to employees whose private employer is under public contract and employees of a political
subdivision, respectively. The only material difference between the whistleblower statutes lies in the express
remedies provided by the legislature. I.C. § 36-1-8-8(c) provides for an appeal of the disciplinary action
“under the procedure set forth in any personnel policy or collective bargaining agreement adopted by the
political subdivision.” I.C. § 22-5-3-3(c), on the other hand, provides for an appeal of the disciplinary action
“as a civil action in a court of general jurisdiction.”
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pursuant to I.C. § 4-15-10-4. In support, Shoemaker relies exclusively on
Whinery, 819 N.E.2d 465.
[22] In Whinery, employees of the Indiana Department of Natural Resources
brought a class action against the Director of the State Personnel Department
(SPD), alleging that the SPD failed to comply with a salary statute and, thus,
violated their contractual rights. This court held, in relevant part, that despite
being employed at-will, a state employee
may sue for violation of employment rights in contract, and the
terms and conditions of the employee’s contract include “all
relevant statutory provisions as if such provisions were
specifically set out in the contract.” Foley v. Consol. City of
Indianapolis, 421 N.E.2d 1160, 1163 (Ind. Ct. App. 1981). A
government employee’s relationship with the State, although not
necessarily defined by a written employment contract, is “purely
contractual.” Laws having to do with remuneration become part
of the employment contract, and so attach themselves as an
incident thereof. Thus, the Employees’ state-employee status
establishes a contractual relationship, and the remuneration
provisions of P.L. 70 are an incident thereof.
Whinery, 819 N.E.2d at 473 (some citations omitted). See also Richmond State
Hosp. v. Brattain, 935 N.E.2d 212, 235 (Ind. Ct. App. 2010) (holding that
“relevant state constitutional provisions are part of the state employees’
contractual relationship with the State” and “consider[ing] relevant those
constitutional provisions having to do with remuneration”) (emphasis in
original), summarily aff’d in relevant part, 961 N.E.2d 1010 (Ind. 2012); Marter v.
City of Vincennes, 82 N.E.2d 410, 412 (Ind. Ct. App. 1948) (“Laws having to do
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with tenure and remuneration became a part of that contract…and so attached
themselves to the employment as an incident thereof.”).
[23] We find Whinery distinguishable. The statute at issue in this case – the WBL –
does not address anything along the lines of remuneration or tenure. More
importantly, the WBL provides an express remedy for an alleged violation of
the statute through an SEAC administrative appeal. We do not agree with
Shoemaker that Whinery provides him with the right to avoid the administrative
steps and turn directly to the courts by filing a breach of contract claim based on
an alleged violation of the WBL.
[24] We hold that a state employee seeking redress for an employment action
allegedly taken in retaliation for whistleblowing activity must proceed with, and
only with, the remedy expressly provided in the WBL.6 Shoemaker began his
administrative appeal with the SEAC but did not seek judicial review of the
ALJ’s determination that the administrative appeal was untimely filed.
Accordingly, the trial court properly granted ISP’s motion for summary
judgment in this separate breach of contract action filed by Shoemaker.
[25] Judgment affirmed.
6
In his reply brief, Shoemaker directs us to I.C. § 4-15-10-6 as support for his argument that the WBL does
not provide an exclusive remedy. Though not persuaded, we need not address this argument because
Shoemaker has raised it for the first time in his reply brief. See I.A.E., Inc. v. Hall, 49 N.E.3d 138, 153 (Ind.
Ct. App. 2015) (appellants are not permitted to present new arguments in their reply briefs), trans. denied.
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Bradford, J. and Pyle, J., concur.
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