KS&E Sports v. Runnels

• Decision Date: 24 April 2017
• Docket Number: No. 49S02-1606-CT-349,49S02-1606-CT-349
• Parties: KS&E SPORTS and Edward J. Ellis, Appellants (Defendants below), v. Dwayne H. RUNNELS, Appellee (Plaintiff below).
• Court: Indiana Supreme Court

72 N.E.3d 892

KS&E SPORTS and Edward J. Ellis, Appellants (Defendants below),

v.Dwayne H. RUNNELS, Appellee (Plaintiff below).

No. 49S02-1606-CT-349

Supreme Court of Indiana.

April 24, 2017

Attorneys for Appellant : Vincent P. Antaki, Reminger Co., LPA, Indianapolis, Indiana, Christopher Renzulli, Renzulli Law Firm, LLP, White Plains, New York

Attorneys for Amicus Curiae National Shooting Sports Foundation : Terence M. Austgen, Elizabeth M. Bezak, James B. Vogts, Burke Costanza & Carberry LLP, Merrillville, Indiana

Attorneys for Appellee : Roger L. Pardieck, Karen M. Davis, The Pardieck Law Firm, PC, Seymour, Indiana, Michael D. Schissel, Arnold & Porter LLP, New York, New York, Jonathan E. Lowy, Brady Center to Prevent Gun Violence, Legal Action Project, Washington, D.C.

On Petition to Transfer from the Indiana Court of Appeals, No. 49A02-1501-CT-42

Slaughter, Justice.

Under Indiana law, "a person may not bring an action against a firearms ... seller for ... recovery of damages resulting from the criminal or unlawful misuse of a firearm ... by a third party." We agree with the parties that this statute is unambiguous. By its plain terms, the statute immunizes a firearms seller from a damages suit for injuries caused by another person's misuse of a firearm, regardless of whether the sale was lawful. Having previously granted transfer, we hold that Plaintiff's claims for damages must be dismissed, but his claim seeking a non-damages remedy survives. We affirm in part and reverse in part.

Factual and Procedural History

Demetrious Martin, now deceased, was a convicted felon who could not legally purchase or possess a firearm. KS&E Sports, which is located in Indianapolis, sells firearms. In October 2011, Martin and Tarus Blackburn went to KS&E to browse. Martin had his eye on a Smith & Wesson .40 caliber handgun. In front of Blackburn and a KS&E employee, Martin identified the Smith & Wesson as a handgun he liked. The two customers eventually left the store without making a purchase.

Later that same day, Blackburn returned to KS&E and bought the Smith & Wesson Martin had identified. As the buyer of record, Blackburn completed the required paperwork and paid $325 for the gun. Just outside the store in KS&E's parking lot, Blackburn transferred the gun to Martin for $375.

Two months later, in December 2011, Martin used that same handgun to shoot Indianapolis Metropolitan Police Department officer Dwayne Runnels during a traffic stop. Officer Runnels had stopped a maroon Chevrolet Impala matching the description of a vehicle connected to a recent armed robbery and shooting. As Runnels approached the Impala, Martin got out of the car with the handgun and fired two shots at Runnels. Although Runnels sustained a gunshot wound

to the hip, he was able to return fire and killed Martin. As a result of the shooting, Runnels suffered serious physical injuries and financial damages.

In May 2012, Blackburn was charged with, and later pleaded guilty to, one count of making a false and fictitious written statement in acquiring a firearm—i.e. , being a "straw" purchaser—in violation of 18 U.S.C. § 922(a)(6).

In December 2013, just days shy of the shootout's two-year anniversary, Runnels filed an eight-count complaint in the Marion Superior Court naming as defendants KS&E Blackburn, who made the "straw purchase" for the firearm—that is, he posed as the buyer (the straw or middleman) of a firearm actually intended for Martin; and Edward J. Ellis, a KS&E officer, director, and shareholder. The complaint asserts various claims for negligence, conspiracy, and public nuisance.

The gist of Runnels's allegations is that KS&E proximately caused him harm by its negligent, reckless, and unlawful sale of the Smith & Wesson handgun to Blackburn, the straw buyer, and by the negligent entrustment of that firearm to Blackburn and ultimately Martin, who used it to shoot and injure Runnels. Runnels also seeks to pierce the corporate veil and hold Ellis personally liable for KS&E's wrongdoing.

KS&E and Ellis moved for judgment on the pleadings under Indiana Trial Rule 12(C), arguing Indiana Code section 34-12-3-3(2) granted them immunity and required "immediate dismissal". The statute in effect at the time of the shooting stated:

Sec. 3. Except as provided in section 5(1) or 5(2) of this chapter, a person may not bring an action against a firearms or ammunition manufacturer, trade association, or seller for:

(1) recovery of damages resulting from, or injunctive relief or abatement of a nuisance relating to, the lawful:

(A) design;

(B) manufacture;

(C) marketing; or

(D) sale;

of a firearm or ammunition for a firearm; or

(2) recovery of damages resulting from the criminal or unlawful misuse of a firearm or ammunition for a firearm by a third party.

Ind. Code § 34-12-3-3 (2008 Repl.). After holding a hearing, the trial court denied the 12(C) motion but granted leave to KS&E and Ellis to file an amended answer. KS&E and Ellis moved the court to certify its order denying the 12(C) motion for interlocutory appeal. The trial court obliged, and the Court of Appeals accepted jurisdiction.

The Court of Appeals affirmed in a split decision generating three separate opinions. KS&E Sports v. Runnels , 66 N.E.3d 940 (Ind. Ct. App. 2016). The majority, in an opinion by Judge Riley, held under Rule 12(C) that Runnels's complaint presented valid claims, and that KS&E failed to show "that under the operative facts and allegations made in the Complaint, Runnels cannot in any way succeed" in the trial court. Id. at 949. The Court concluded that Section 34-12-3-3(2)"limits the seller's exposure to liability by barring plaintiffs from holding him accountable for the portion of damages that results from the criminal or unlawful misuse of a firearm by a third party." Id.

Judge Brown joined the Court's opinion but wrote separately to emphasize her view that Section 34-12-3-3 does not "bar actions against firearms sellers relating to their own unlawful activity." Id. at 950.

Judge Altice dissented, disagreeing with what he termed the Court's "strained" reading of the statute. Id. at 954. He characterized the majority opinion as having "relegate[d] [the statute] to a recodification of comparative fault principles". Id. For the dissent, the statute is "a quintessential immunity provision", id. that prohibits even bringing an action and mandates dismissal and an award of defendants' attorney's fees and costs when plaintiffs bring unauthorized actions, see I.C. § 34-12-3-4. The dissent determined that "[u]nder the plain language of the statute, KS&E cannot be found liable for the alleged harm regardless of its degree of fault." 66 N.E.3d at 956. Finally, the dissent addressed Runnels's argument that granting civil immunity to culpable gun sellers making straw sales is bad public policy. "[W]hile the legislature could have—and arguably should have—carved out an exception for straw purchases in subsection (2), it did not. The policy arguments ably advanced by Runnels and the various amici curiae, no matter how valid, should be directed to the legislature, not this court." Id. (footnote omitted).

KS&E and Ellis then sought transfer, which we granted, thereby vacating the Court of Appeals opinion. The central issue presented is whether Section 34-12-3-3(2) immunizes firearms sellers, like KS&E, from civil actions for damages resulting when a third party, like Martin, misuses a firearm. Concluding that it does, regardless of the seller's culpability, we affirm in part, reverse in part, and remand to the trial court for further proceedings.

Standard of Review

A motion for judgment on the pleadings under Trial Rule 12(C) tests the sufficiency of a claim or defense presented in the pleadings and should be granted "only where it is clear from the face of the complaint that under no circumstances could relief be granted." Veolia Water Indianapolis, LLC v. National Trust Ins. Co. , 3 N.E.3d 1, 5 (Ind. 2014) (quoting Murray v. City of Lawrenceburg , 925 N.E.2d 728, 731 (Ind. 2010) ). Because we "base our ruling solely on the pleadings", id. "we accept as true the material facts alleged in the complaint". Id. When, as here, a 12(C) motion essentially argues the complaint fails to state a claim upon which relief can be granted, we treat it as a 12(B)(6) motion. Gregory & Appel, Inc. v. Duck , 459 N.E.2d 46, 49 (Ind. Ct. App. 1984). Like a trial court's 12(B)(6) ruling, we review a 12(C) ruling de novo. Veolia Water, 3 N.E.3d at 5.

This Court likewise reviews issues of statutory interpretation de novo. Ballard v. Lewis , 8 N.E.3d 190, 193 (Ind. 2014). But before interpreting a statute, we consider "whether the Legislature has spoken clearly and unambiguously on the point in question." Basileh v. Alghusain , 912 N.E.2d 814, 821 (Ind. 2009). If a statute is clear and unambiguous, we put aside various canons of statutory construction and simply "require that words and phrases be taken in their plain, ordinary, and usual sense." Id. Indeed, "[c]lear and unambiguous statutes leave no room for judicial construction." Id. We will find a statute ambiguous and open to judicial construction only if it is subject to more than one reasonable interpretation. See Ballard , 8 N.E.3d at 194 ; Adams v. State , 960 N.E.2d 793, 798 (Ind. 2012).

Discussion and Decision

The parties agree that Section 34-12-3-3(2), which lies at the heart of this litigation, is unambiguous, but they disagree on its meaning. We conclude as follows: Section 34-12-3-3(2) unambiguously bestows immunity on KS&E to the extent Runnels seeks damages resulting from Martin's misuse of a firearm; Runnels's negligence, piercing-the-corporate-veil, and civil-conspiracy claims fail Rule 12(C) review because they seek only money damages; and Runnels's public-nuisance claim survives to the extent it seeks equitable relief. Finally, we hold that federal law does not preempt this statute and reject Runnels's constitutional claims.

I. The unambiguous statute operates as a...