Thomas N. Eckerle v. Katz & Korin, P.C. and Michael W. Hile , 81 N.E.3d 272 ( 2017 )

FILED
Aug 09 2017, 5:34 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
APPELLANT PRO SE ATTORNEYS FOR APPELLEES
Thomas N. Eckerle Douglas D. Church
Carmel, Indiana Alexander P. Pinegar
Kevin S. Smith
Church Church Hittle & Antrim
Noblesville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Thomas N. Eckerle, August 9, 2017
Appellant-Plaintiff, Court of Appeals Case No.
49A02-1608-CT-1894
v. Appeal from the Marion Superior
Court
Katz & Korin, P.C. and Michael The Honorable James B. Osborn,
W. Hile, Judge
Appellees-Defendants Trial Court Cause No.
49D14-1510-CT-35444
May, Judge.
[1] Thomas N. Eckerle (“Eckerle”) appeals the trial court’s grant of partial
summary judgment in favor of Katz & Korin, P.C. (“Katz”) and Michael W.
Hile (“Hile”) (collectively, “Law Firm”). He presents several issues for our
review, one of which we find dispositive: whether the trial court erred when it
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determined Law Firm was immune from liability under the absolute privilege
doctrine for any statements made about Eckerle. We affirm.
Facts and Procedural History
[2] This action was born of a more-than-a-decade-long series of claims centered
around a failed utility company, the history of which is required to understand
the defamation issues raised herein. In 1995, Newland Resources, LLC
(“Newland”) and Branham Corp. (“Branham”) entered into an agreement to
form Boone County Utilities, LLC (“BCU”), a “small sewer/water utility to
service real estate developments in the southeastern corner of Boone County,
Indiana.” (Br. of Appellant at 17.) BCU was subject to enforcement
proceedings before the Indiana Utility Regulatory Commission (“IURC”) and
subsequently filed for bankruptcy in 2003.
[3] Eckerle is an attorney licensed to practice law in Indiana and represented one of
BCU’s investors, White River Venture Partners, LLC (“White River”) in
BCU’s bankruptcy proceedings. The bankruptcy court ordered and
consummated the sale of BCU’s utility assets to the Town of Whitestown and
confirmed BCU’s liquidation plan. The liquidation plan “called for BCU’s
creditors to be paid 100% of their allowed claims and for the distribution of $3.0
million to Newland, BCU’s sole member, per its allowed equity interest.” (Id.)
[4] Branham filed bankruptcy in 2004. Eckerle represented Newland in those
bankruptcy proceedings. At the same time, Branham sued Newland and
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various defendants related to the BCU transaction, including Eckerle, in Boone
County, alleging conversion, conspiracy, and breach of contract (“Claim 517”).
The claims alleging conversion and conspiracy were dismissed, and Branham
was awarded approximately $390,000 from Newland on its breach of contract
claims.
[5] In 2011, Branham, represented by Stewart & Irwin (“S&I”), sued Newland and
thirty-one other defendants, including Eckerle, in Boone County (“Claim 001”),
asserting criminal offenses related to distribution of certain BCU-related funds
as part of BCU’s bankruptcy proceedings, from which Branham claimed it was
entitled to treble damages under the Indiana Crime Victim’s Recovery Act
(“ICVRA”) and Indiana’s Racketeer Influenced and Corrupt Organizations Act
(“RICO”) statutes. Via a Proceedings Supplemental, Branham also sought to
collect from the defendants in Claim 517, including Eckerle. 1 Branham was not
successful in any of its actions in Claim 001 or the Proceedings Supplemental to
Claim 517.
[6] On April 12, 2012, BCU reopened its bankruptcy action and filed a complaint
(“AP-128”) against Branham and S&I, asking the bankruptcy court to declare
its rulings in the BCU bankruptcy had a preclusive effect relating to the claims
set forth in Claim 517 and Claim 001. In May 2012, Law Firm entered its
appearance for S&I and, in June 2012, filed a motion to dismiss S&I from the
1
It is unclear why Eckerle was named as a defendant in Claim 517, as the record does not include a copy of
the order in that case.
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proceedings. On October 4, 2012, the bankruptcy court granted S&I’s motion
to dismiss without prejudice, subject to BCU’s right to later seek sanctions
against S&I.
[7] BCU filed an amended complaint in bankruptcy court on August 5, 2013. On
October 7, 2013, Law Firm filed an appearance for “Stewart & Irwin, PC,
unnamed Defendant.” (Appellee’s App. Vol. III at 66.) Law Firm also filed a
motion to dismiss BCU’s amended complaint. On October 21, 2013, Eckerle
moved to intervene as a plaintiff in AP-128. In his motion to intervene, Eckerle
alleged:
One other cause for my intervention in this AP relates directly to
Mr. Hile’s defamatory, despicable and completely unfounded
charges of bankruptcy fraud leveled against me during the
August 22, 2012 Hearing before this Court. At that hearing, Mr
Hile stated that, “What occurred respecting Newland” should be
characterized as “monkeyshines.” The context of that statement
clearly reveals that, included in the “monkeyshines,” which
occurred concerning Newland, were the actions “of the
professionals who appeared in this Court [the bankruptcy
court],” referencing me specifically. Mr. Hile followed that
“monkeyshines” characterization with the following unabashed
statement with respect to the real reason I was allegedly hired by
Newland:
Mr. Hile: ... They [the Eckerle Defendants] were
professionals retained by Newland to assist it in, pardon
my liberal description of its terms, its fraudulent transfer of
assets. “Intentional fraudulent transfer of assets.”
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Mr. Hile’s per se defamation of me is actionable and will be the
subject of future litigation against Mr. Hile and his firm. The
relevance of Mr. Hile’s statements to this AP is that they
represent yet another assault on this Court’s May 16, 2005 Order,
which authorized me to perform the services, which Mr. Hile
now characterizes as “monkeyshines” and participation in
“intentional fraudulent transfer of assets.” At the time that
Branham had sought to disqualify my representation of Newland
and its members in connection with the claims allowance
proceeding, Branham had argued that my actions as Newland’s
attorney were merely “in violation of the Adversary Stay, in
violation of Branham’s due process rights and in callous
disregard for Newland’s lack of standing.” (See Docket 337,
paragraph no. 8.) Judge Metz’s May 16, 2005 Order completely
rejected these charges. In defiance of Judge Metz’s May 16, 2005
Order, Mr. Hile is essentially renewing Branham’s objections to
my participation in the Branham’s claims allowance proceedings,
while now upping the ante by claiming “monkeyshines” and
actual fraud. My intervention will allow Branham, Stewart &
Irwin, Katz & Korin, Mr. Wray and Mr. Hile to prove their
fiendish allegations against me and to explain why these
allegations do not contradict this Court’s May 16, 2005 Order.
(Appellant’s App. Vol. V at 171-2) (errors and emphasis in original). Eckerle
also filed a third-party complaint on October 21, 2013, further discussing his
claims of defamation and requesting sanctions against Law Firm.
[8] On November 4, 2013, Law Firm filed S&I’s response to Eckerle’s Motion to
Intervene (“November 4 Document”). On November 12, 2013, the bankruptcy
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court denied Eckerle’s Motion to Intervene and his third-party complaint. 2
Eckerle subsequently filed a motion to strike a footnote in the November 4
Document, and on November 27, 2013, the bankruptcy court entered an order
striking the November 4 Document “since it was filed by an entity not a party
to this adversary proceeding.” (Appellant’s App. Vol. VI at 181.) 3
[9] On October 26, 2015, Eckerle filed the action against Law Firm that is at issue
in this appeal. In that complaint, he alleged multiple counts of defamation, one
count of invasion of privacy, and one count of abuse of process. Eckerle alleged
the following statements, made by Law Firm as part of the November 4
Document, were libelous:
(a) “To be clear, counsel’s statements in this adversary
proceeding have always been aimed at explaining to this Court . .
. that probable cause exists for all allegations contained therein. .
..“
(b) “The point of this discourse was to establish that probable
cause existed for Branham, through its counsel Stewart & Irwin,
to state the claims in Boone County . . . ”
2
On November 27, 2013, the bankruptcy court vacated its order dismissing Eckerle’s third party complaint
after Eckerle explained to the court the filing was meant to be an exhibit to his Motion to Intervene.
3
In 2014, Eckerle filed an action against Branham and S&I for malicious prosecution (“Claim 683”). The
parties settled those issues on January 13, 2015.
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(c) “[P]robable cause existed for all claims asserted by Branham
in Boone County.”
(Appellant’s App. Vol. III at 105) (emphasis in original omitted). For each
defamation, Eckerle provided “the meanings ascribed to them by context.” (Id.)
For example, Eckerle incorporated language from Claim 001 and Claim 517
wherein Branham accused the defendants in each action of theft, conversion,
receiving stolen property, fraud, deception, ICVRA liability, and RICO activity.
The “context” statements generally referenced “the defendants,” (e.g., id. at
106), in the individual claim and not Eckerle by name, though Eckerle was a
defendant in each claim.
[10] Eckerle also alleged Law Firm committed libel when it stated, as part of the
November 4 Document:
[C]ounsel stated that . . . Newland had undertaken ‘Monkey
shines’ to rid it of all of its assets (nearly $2.4 million transferred
from BCU) and left Newland bereft to pay Branham as a
judgment creditor. Counsel further advised . . . that professionals
were retained and paid by Newland, Newland intentionally
fraudulently transferred all of its assets to, among others, its
insiders and the Boone County Complaint asserted all possible
claims that could derive from those facts.
(Id. at 113) (footnotes omitted). Eckerle explained the quote was a “re-
publication by Mr. Hile of his defamatory statement at the August 22, 2012
Hearing, albeit with greater specificity[.]” (Id.) That entire exchange, as quoted
by the trial court in its order, included the statements:
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MR. HILE: Your honor, if you read the [Claim 001] complaint
fully --
THE COURT: Yes, okay.
MR. HILE: -- I will grant you that in the one particular
paragraph there are some real quotable quotes but it’s in the
context of three or four paragraphs before that where it talks
about distributions to Newland, which Newland then spun off to
third parties and then it says such distributions, in that final
phrase which catches the eye and goes whoa. It says such
distribution. If you look at all the parties named here --
THE COURT: Well, some of the garnishee defendants that
apparently are being -- they’re having to answer for the monies
that were paid, were they paid pursuant to the court order in this
bankruptcy?
MR. HILE: Your Honor, I do not believe that is the case at all.
They were professionals retained by Newland to assist it in,
pardon my liberal description of its terms, its [sic] fraudulent
transfer of assets. Intentional fraudulent transfer of assets.
(Appellant’s App. Vol. II at 17.)
[11] Finally, Eckerle alleged Law Firm committed libel when it stated in a footnote
of the November 4 Document:
Mr. Eckerle asserts that payments were made to ‘his firm’
(Henderson Daily Withrow & Devoe) and he only received funds
from ‘his firm.’ In its due diligence, however, Branham
discovered a 1099 made out to Thomas N. Eckerle for his work
post-petition after the closure of Henderson Daily Withrow &
Devoe, a copy of which is attached as Exhibit 2.
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(Appellant’s App. Vol. III at 115.)
[12] Law Firm filed its response, raising ten affirmative defenses, including absolute
privilege. On April 12, 2016, the parties filed cross motions for partial
summary judgment. The trial court heard oral argument on the cross motions
on July 25, 2016. On August 16, 2016, the trial court entered an order granting
Law Firm’s motion for partial summary judgment and denying Eckerle’s
motion for partial summary judgment. 4
Discussion and Decision
[13] Our standard of review for summary judgment is well-established:
We review summary judgment de novo, applying the same
standard as the trial court: “Drawing all reasonable inferences in
favor of . . . the non-moving parties, summary judgment is
appropriate ‘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 judgment as a matter of law.’” Williams v.
Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
fact is ‘material’ if its resolution would affect the outcome of the
case, and an issue is ‘genuine’ if a trier of fact is required to
resolve the parties’ differing accounts of the truth, or if the
4
The trial court granted summary judgment on Eckerle’s defamation and invasion of privacy claims, but did
not decide his abuse of process claim against Law Firm. However, the trial court stated in its order, pursuant
to Indiana Trial Rule 54(B): “[F]inding no reason for delay, the Court directs entry of final judgment in [Law
Firm’s] favor on [Eckerle’s] defamation and invasion of privacy claims.” (Appellant’s App. Vol. II at 13.)
Therefore, we have jurisdiction over the appeal. See Indiana Rules of Appellate Procedure 5(A) (the Court of
Appeals has jurisdiction over appeals from final judgments).
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undisputed material facts support conflicting reasonable
inferences.” Id. (internal citations omitted).
The initial burden is on the summary-judgment movant to
“demonstrate the absence of any genuine issue of fact as to a
determinative issue,” at which point the burden shifts to the non-
movant to “come forward with contrary evidence” showing an
issue for the trier of fact. Id. at 761-62 (internal quotation marks
and substitution omitted). And “[a]lthough the non-moving
party has the burden on appeal of persuading us that the grant of
summary judgment was erroneous, we carefully assess the trial
court’s decision to ensure that he was not improperly denied his
day in court.” McSwane v. Bloomington Hosp. & Healthcare Sys.,
916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks
omitted).
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Therefore, for the trial court
to properly grant summary judgment, the movants must have “made a prima
facie showing that their designated evidence negated an element of the
nonmovants’ claims, and, in response, the nonmovants must have failed to
designate evidence to establish a genuine issue of material fact.” Cox v.
Mayerstein-Burnell Co., Inc., 19 N.E.3d 799, 804 (Ind. Ct. App. 2014). We will
affirm a trial court’s decision on summary judgment if it is sustainable on any
theory or basis found in the evidentiary matter designated to the trial court.
United Rural Elec. Membership Corp. v. Ind. Mich. Power Co., 648 N.E.2d 1194,
1196 (Ind. Ct. App. 1995), trans. denied.
[14] The trial court granted summary judgment in favor of Law Firm because it
concluded Law Firm was immune from liability under the absolute privilege
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doctrine and the statements made were not per se defamatory. As the trial
court’s conclusion regarding absolute privilege is dispositive, we address only
that issue.
[15] The absolute privilege doctrine applies to defamation claims, torts related to
defamation, and torts relying upon defamatory statements as proof of
wrongdoing. Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 247 (Ind. Ct. App.
2013), trans. denied. Our Indiana Supreme Court explained in Hartman v. Keri:
Indiana law has long recognized an absolute privilege that
protects all relevant statements made in the course of a judicial
proceeding, regardless of the truth or motive behind the
statements. Wilkins v. Hyde, 142 Ind. 260, 261, 41 N.E. 536, 536
(1895); Van Eaton v. Fink, 697 N.E.2d 490, 494 (Ind. Ct. App.
1998). “The reason upon which the rule is founded is the
necessity of preserving the due administration of justice,”
Wilkins, 142 Ind. at 261, 41 N.E. at 536, by providing actors in
judicial proceedings with the freedom to participate without fear
of future defamation claims. Van Eaton, 697 N.E.2d at 494
(citing Briggs v. Clinton County Bank & Trust Co., 452 N.E.2d 989,
997 (Ind. Ct. App. 1983)).
883 N.E.2d 774, 777 (Ind. 2008).
[16] Regarding immunity because of absolute privilege, the trial court found and
concluded:
18. The Defendants’ statements were made in a judicial
proceeding, namely an adversary proceeding in the Boone
County Utilities LLC (“BCU”) Chapter 11 Bankruptcy, which
was filed in the U.S. Bankruptcy Court for the Southern District
of Indiana with the caption Boone County Utilities, LLC v. The
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Branham Corporation, under cause number 12-50128 (“AP-128”).
Def. Ex. 1.
19. The Defendants’ statements were made in AP-128 on behalf
of a client, Steward & Irwin, P.C. See Def. Ex. 1 at docket entries
#10, #30, #49, #59; Def. Ex. 5; Def. Ex. 14.
20. The Defendants’ statements in their November 4, 2013,
Response, see Def. Ex. 14, were “relevant and pertinent” to the
litigation as that standard is applied under Indiana law, including
the authorities set out above. The Defendants’ statements
addressed issues that were raised by Plaintiff’s Motion to
Intervene in AP-128 and the proffered Third Party Complaint he
filed in AP-128. See Def. Ex. 12; Def. Ex. 13. They also
addressed issues raised in BCU’s Amended Complaint, see Def.
Ex. 8, and in the Defendants’ motion to dismiss “Stewart &
Irwin, PC, unnamed Defendant” from BCU’s Amended
Complaint. See Def. Ex. 11.
21. Similarly, Defendants’ statements during the August 22,
2012, hearing before the Bankruptcy Court, see Def. Ex. 5, were
relevant and pertinent. They addressed issues raised in BCU’s
original complaint, see Def. Ex. 2, and Defendants’ motion to
dismiss Stewart & Irwin, PC, from the original complaint, which
was the motion the Bankruptcy Court heard on August 22, 2012.
See Def. Ex. 1 at docket entry #30; Def. Ex. 3; Def. Ex. 5.
22. Plaintiff argues the Defendants’ November 4, 2013, written
statements were not protected by absolute privilege because, he
contends, at that time Stewart & Irwin, PC, was not a party to
AP-128. Based on the undisputed evidence, the Court concludes
that based on the procedural history and context of AP-128 the
Defendants were “actors” in AP-128 as of November 4, 2013. Cf.
Hartman, 883 N.E.2d at 777 (stating absolute privilege protects
“actors in judicial proceedings”).
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23. Plaintiff argues the Defendants’ November 4, 2013,
statements were not protected by absolute privilege because, he
contends, they were not within the parameters set out by the
Bankruptcy Court in its October 4, 2012 order. See Def. Ex. 7.
However, that order did not define the parameters of absolute
privilege for this case. Furthermore, the Court concludes the
Defendants’ statements were legitimately related to the subject
matter of AP-128 and that they may have become the subject of
inquiry in AP-128. See Briggs, 452 N.E.2d at 997.
24. Plaintiff argues the Defendants’ November 4, 2013,
statements were not protected by absolute privilege because they
were subsequently struck by the Bankruptcy Court and, he
contends, Defendants should have filed a motion for leave to
respond to his motion to intervene. However, undisputed
Indiana law holds absolute privilege is not lost because a
statement was deemed unnecessary to the litigation or struck if
the statement “otherwise satisfied the requirement of
nontechnical relation to the subject of the controversy.” Id.; see
also Estate of Mayer, 998 N.E.2d at 249 (stating absolute privilege
applied even though defendant had “used an incorrect procedural
vehicle”).
25. In sum, in its determination of whether absolute privilege
applies, which is a question of law, the Court concludes the
Defendants’ statements could not be deemed “so palpably
irrelevant to the subject matter of the case that no reasonable
person could doubt their irrelevancy and impropriety.” Id. at
247. That is standard to apply under Indiana law, and therefore,
absolute privilege applies to the Defendants’ statements, barring
Plaintiff’s defamation claims.
26. Plaintiff argues for a change in the law regarding absolute
privilege. The Court concludes that Plaintiff has not articulated
justifications that persuade this Court that Indiana’s long-
standing absolute privilege doctrine should be modified.
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27. Defendants are entitled to summary judgment on Plaintiff’s
defamation claims on the grounds of absolute privilege.
28. It is undisputed that Plaintiff’s invasion of privacy claim is
derivative of his defamation claims and based on statements
made in court proceedings. See, e.g., Complaint ¶ 29 (“The facts
supporting [the invasion of privacy] claim are identical to those
supporting Mr. Eckerle's defamation claims.”); ¶ 131 (“[M]r.
Eckerle’s false light claim is, as the term ‘false’ suggests, based
upon defamatory statements, which are untrue.”). Therefore,
absolute privilege bars Plaintiff’s invasion of privacy claim.
Defendants are entitled to summary judgment on Plaintiff’s
invasion of privacy claims on the grounds of absolute privilege.
(Appellant’s App. Vol II at 19-21.) 5
[17] Eckerle attacks the trial court’s decision regarding absolute privilege on a
number of fronts, including relevance, non-party status, and filing status of
certain documents. We address each of these arguments below.
Relevance
[18] For immunity from liability to exist based on absolute privilege, the statement
in question must be “relevant and pertinent to the litigation or bear some
relation thereto.” Estate of Mayer, 998 N.E.2d at 247 (quoting Stahl v. Kincade,
135 Ind. App. 699, 707, 192 N.E.2d 493, 497 (1963)). Eckerle argues the
5
The trial court made extremely detailed findings regarding this matter and it has greatly assisted our review
of this case. We commend the trial court for its efforts.
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alleged defamatory statements were not relevant to AP-128. However, Eckerle
states in his complaint the alleged defamatory statements
were published by the Defendants in a document entitled
“Stewart & Irwin, P.C.’s Response in Opposition to Thomas N.
Eckerle’s Motion to Intervene as Party Plaintiff in The Adversary
Proceeding” (the “Defamatory Document”), which the
Defendants authored and filed electronically in AP-128 on
November 4, 2013, . . . the full context of each of the Defendants’
defamatory statements in the Defamatory Document, as quoted
in the counts below, include (a) the Defamatory Document in
AP-128; (b) “all” [sic] of the allegations of the Court 001
Complaint for Damages (which was an exhibit to New-BCU’s
Amended Complaint in AP-128); (c) “all” [sic] of the allegations
in the “Motion for Proceedings Supplemental” in Cause 517
(which was an exhibit to New-BCU’s Amended Complaint in
AP-128); Mr. Eckerle’s Motion to Intervene in AP-128; and, (e)
the transcript of the August 22, 2012 Hearing in AP-128. All
such documents are intrinsic parts of AP-128 and constitute the
full context of the Katz Firm’s and Mr. Hile’s defamatory
statements in AP-128.
(Appellant’s App. Vol. III at 99-100) (emphasis in original omitted). In his
motion for partial summary judgment and response to Katz and Hile’s motion
for partial summary judgment, Eckerle attempts to parse and remold the
language of the law to fit his argument that the alleged defamatory statements,
were not related to AP-128, despite asserting in his complaint that they were
“intrinsic parts” of AP-128. Eckerle cannot have it both ways.
[19] In his attempt to narrow the definition of relevancy as it pertains to absolute
privilege, Eckerle stated in his April 12, 2016, motion:
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The “relevance and pertinence” requirements have been watered
down to such a degree that the rule now is that the defamatory
statement “must be so palpably irrelevant to the subject matter of
the controversy that no reasonable man can doubt its irrelevancy
and impropriety.” Nonetheless, to qualify for the privilege, the
statement must be “legitimately related” to the case and
“pertinent” enough that it may become the subject of inquiry in
the court of the trial.
(Appellant’s Supp. App. Vol. II at 105 n.70.) For that statement, Eckerle relies
on Stahl, 192 N.E.2d at 496-7, 135 Ind. App. at 706-7, in which we held the
defamatory statements made during the proceedings were not protected by
absolute privilege because they were not relevant to the matter before the court.
Stahl is distinguishable.
[20] In Stahl, the plaintiff, Stahl, sought to enjoin the Pettys from locating and
operating a basketball court on the Pettys’ property adjacent to Stahl’s property.
The complaint and associated pleadings alleged there were also noise violations
and trespassing issues. The Pettys counterclaimed, alleging Stahl was in an
adulterous relationship with a local policeman and such behavior “constitute[d]
a private and public nuisance and depreciate[d] the value of property in the
neighborhood.” Id. at 494, 702. The Pettys requested the trial court enjoin
Stahl “from further adulterous entertainment of said married man.” Id.
[21] Stahl moved to have the Pettys’ counterclaim stricken from the record, which
the trial court granted. The Pettys again filed a counterclaim alleging the Pettys
“erected the basketball court and encouraged its use by the youth of the
neighborhood in order to distract their attention from [Stahl’s] activities and
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prevent further depreciation of the morality of said children[.]” Id. The trial
court struck the counterclaim from the record. Stahl amended her complaint to
include a libel claim based on the Pettys’ allegations in their counterclaims.
The trial court enjoined the Pettys from trespassing on Stahl’s property, but
issued a demurrer denying Stahl’s libel claim, citing absolute privilege.
[22] Stahl appealed, arguing the Pettys’ libelous statements were not protected by
absolute privilege because they were not relevant to the proceedings before the
trial court. Our court agreed, holding the Pettys’ allegations in their
counterclaims were “not relevant or pertinent to the matter in controversy and
had no relation to the matter in controversy . . . . It may be reasonably inferred
from the facts pleaded that [the Pettys] did not have reasonable or probable
cause to believe the matter to be relevant or pertinent.” Id. at 497, 708. In so
holding, our court likened the facts of Stahl to those in a Massachusetts case,
where in his answer to a complaint regarding recoupment of rent, the defendant
accused the plaintiff “of gambling during office hours and allowing a woman of
bad reputation to frequent his office[.]” Id. (citing Barnett v. Loud, 226 Mass.
447, 449, 115 N.E. 767, 768 (1917)). The Barnett court concluded the
accusations in the answer were not relevant or pertinent to the recoupment
action filed.
[23] The facts of this case are distinguishable. Here, the alleged defamatory
statements related directly to litigation Eckerle mentioned in his Motion to
Intervene, as well as litigation underlying AP-128. Unlike in Stahl, the
statements refer to actions which allegedly occurred as part of the related
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litigation, such as the behavior of Eckerle during certain parts of the
proceedings, not a matter outside of the court’s consideration, like the adultery
allegations in Stahl. As is evidenced in our recitation of the facts, Claim 527,
Claim 001, and AP-128 are inextricably linked, as the claims are the result of
BCU’s bankruptcy, from which AP-128 stems. Based on this
interconnectedness and the relationship between the alleged defamatory
statements and actions taken as part of the various legal matters, we conclude
the statements at issue are relevant and pertinent to AP-128, and thus that
prong of the absolute privilege analysis is satisfied. See Chrysler Motors Corp. v.
Graham, 631 N.E.2d 7, 11 (Ind. Ct. App. 1994) (concluding an affidavit
containing alleged defamatory statements filed as part of a request for an
attachment order in a collection case was relevant to collection proceedings for
the purposes of absolute privilege), reh’g denied, trans. denied.
Non-Party Status
[24] Eckerle argues absolute privilege does not apply to the statements made as part
of AP-128 because neither Eckerle or Law Firm were part of a “privileged
class” as described in Wilkins v. Hyde:
It is well settled by many authorities, that there are occasions
upon which words may be spoken or written of a person,
whereby the implication of malice, which ordinarily arises from
the words themselves, is destroyed. Among this privileged class
or occasion is a proceeding in due course of law.
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142 Ind. 260, 261, 41 N.E. 536, 536 (1895). Our Indiana Supreme Court did
not indicate in Wilkins the specific members of this “privileged class” but in that
case the statement was made by the plaintiff, the board of children’s guardians.
Id. at 260, 41 N.E. at 536.
[25] In support of his argument, Eckerle also cites Aafco Heating & Air-Conditioning
Co. v. Northwest Publications, Inc., 162 Ind. App. 671, 321 N.E.2d 580 (1974),
reh’g denied, cert. denied, 424 US. 913 (February 23, 1976), which discusses
absolute privilege in passing dicta, stating absolute privilege “attaches to judges,
attorneys, parties, and witnesses in connection with a judicial proceeding.” Id.
at 674, 321 N.E.2d at 583. The opinion then goes on to discuss the privilege
afforded journalists outside of a judicial proceeding. Additionally, Eckerle cites
Raybestos Products Co. v. Younger, 54 F.3d 1234, 1245 (7th Cir. 1995), which
applied Indiana law and stated Indiana courts have never applied absolute
privilege to “statements made prior to a judicial proceeding, or as in this case,
to trial preparation material.” Id. Finally, Eckerle cites Medical Informatics
Engineering, Inc. v. Orthopaedics Northeast, P.C., 458 F. Supp. 2d 716, 728 (N.D.
Ind. 2006), which applied Indiana law and stated: “Although Indiana Courts
recognize the litigation in regards to communications made in the course of
judicial proceedings, they have not extended that privilege to communications
made preliminarily to a proposed judicial proceeding.” Id. (emphasis added).
[26] In their interpretations of Indiana law, Raybestos and Medical Informatics cite
Chrysler Motors, which relies partially on Briggs v. Clinton County Bank & Trust Co.
of Frankfort, Ind., 452 N.E.2d 989, 997 (Ind. Ct. App. 1983), reh’g denied, for an
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explanation of those entitled to invoke the absolute privilege. In Briggs, we
repeated the rule set forth in Aafco concerning those judicial actors who were
privileged to make defamatory statements as part of a judicial proceeding, as
long as those statements were relevant and pertinent to the case. However, we
also added the reason underlying the absolute privilege doctrine is that
public interest in the freedom of expression by participants in
judicial proceedings, uninhibited by the risk of the resultant suits
for defamation is so vital and necessary to the integrity of our
judicial system that it must be made paramount to the right of the
individual to a legal remedy when he has been wronged.
Id. (emphasis added).
[27] In 1998, we revisited the absolute privilege doctrine in Van Eaton v. Fink, 697
N.E.2d 490 (Ind. Ct. App. 1998), reh’g denied. There, we examined absolute
privilege as it related to witnesses and relied upon Restatement (Second) of
Torts Section 588, which states, in relevant part: “As to communications
preliminary to a proposed judicial proceeding, the rule stated in this Section
applies only when the communication has some relation to a proceeding that is
actually contemplated in good faith and under serious consideration by the
witness or possible party to the proceeding.” Id. at cmt. e (emphasis added).
[28] As stated in Briggs, Indiana courts favor a “liberal rule” when applying absolute
privilege. 452 N.E.2d at 997. Here, S&I was originally a party to AP-128, and
was subsequently dismissed without prejudice to allow BCU to pursue
sanctions against S&I for its representation of Branham in the earlier
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bankruptcy action. Law Firm served as counsel for S&I throughout the
proceedings. S&I re-entered AP-128 as a non-party following BCU’s amended
complaint. In his Motion to Intervene, Eckerle indicated he should be able to
intervene in AP-128 to force S&I to prove its “fiendish allegations” against him.
(Appellant’s App. Vol. V at 171-2.) Considering our historically liberal
approach, we conclude relevant and pertinent statements made by an entity
who was first a party, then a non-party who remains eligible for court sanctions,
and who is implicated in another non-party’s motion to intervene, are protected
by absolute privilege. See, e.g., Briggs, 452 N.E.2d at 997 (stating protection
available to “participants,” not just “parties”).
Filing Status
[29] Finally, Eckerle argues the statements made by Law Firm in the November 4
Document are not protected by absolute privilege because they were stricken
from the record following the denial of Eckerle’s motion to intervene. In Briggs,
we stated:
An allegation to which privilege does not extend must be so
palpably irrelevant to the subject matter of the controversy that
no reasonable man can doubt its irrelevancy and impropriety. In
order that matter alleged in a pleading may be privileged, it need
not be in every case material to the issues presented by the
pleadings, but it must be legitimately related thereto, or so
pertinent to the subject of the controversy that it may become the
subject of inquiry in the course of the trial. Irrelevancy is not shown
by the fact that it was unnecessary to plead the offending allegation . . .
and the fact that the alleged libelous matter was stricken from the
pleading as irrelevant has been held not to destroy the privilege . . . where
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it otherwise satisfies the requirement of nontechnical relation to the
subject of the controversy.
452 N.E.2d at 997 (quoting 50 Am.Jur.2d Libel & Slander § 239) (emphasis
added). Thus, we conclude the statements at issue are protected by absolute
privilege despite the fact they were stricken from the record in AP-128.
Conclusion
[30] Law Firm’s statements made as part of the November 4 Document were
protected by absolute privilege because they were relevant and pertinent to AP-
128. Therefore, the trial court did not err when it granted partial summary
judgment in favor of Law Firm.
[31] Affirmed.
Brown, J., and Pyle, J., concur.
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