Batistatos v. Lake Cnty. Convention & Visitors Bureau
| Docket Number | 2:22-CV-254-JVB-JEM |
| Decision Date | 08 August 2023 |
| Parties | SPEROS A. BATISTATOS, Plaintiff, v. LAKE COUNTY CONVENTION AND VISITORS BUREAU d/b/a SOUTH SHORE CONVENTION AND VISITORS AUTHORITY, CITY OF HAMMOND, LEFT OF CENTER MEDIA, LLC, THOMAS M. MCDERMOTT, JR. in his official and individual capacity, KEVIN C. SMITH in his official and individual capacity, BRENT BRASHIER in his official and individual capacity, MATTHEW MALONEY in his official and individual capacity, ANDREW E. QUNELL in his official and individual capacity, THOMAS P. DABERTIN in his official and individual capacity, and MATTHEW M. SCHUFFERT in his official and individual capacity. Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
This matter is before the Court on a Motion to Dismiss [DE 49] filed by Defendants Thomas M. McDermott, Jr. and the City of Hammond (“Hammond”) on January 19, 2023, and on a Motion to Strike [DE 65] filed by Defendants McDermott and Hammond on March 23, 2023. Responses and replies to both motions were filed.
Plaintiff Speros A. Batistatos initiated this lawsuit by filing a complaint in this Court on August 29, 2022. His claims center around the termination of his employment contract with the Lake County Convention and Visitors Bureau, doing business as South Short Convention and Visitors Authority (SSCVA), as its President and CEO. After Defendants filed an initial round of motions to dismiss, Batistatos filed an Amended Complaint on December 5, 2022. Batistatos brings claims against McDermott and Hammond for tortious interference with contractual and business relationships, defamation per se and per quod injurious falsehoods, and a claim for damages based on concerted action. McDermott and Hammond argue that the claims should be dismissed under either Federal Rule of Civil Procedure 12(b)(6) or Indiana's Anti-SLAPP[1]Act.
Batistatos responded in opposition to the motion to dismiss on March 1 2023, and attached a declaration to his response. McDermott and Hammond filed a reply on March 23, 2023, and also moved to strike portions of the declaration on the same date. Batistatos opposed the motion to strike on April 14, 2023, and McDermott and Hammond replied in support on April 21, 2023.
1. Legal Standard
The purpose of a motion to dismiss under Rule 12(b)(6) for failure to state a claim is to test the sufficiency of the pleading, not to decide the merits of the case. See Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). However, “recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 661, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). As the Supreme Court has stated, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. Rather, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). A complaint is facially plausible if a court can reasonably infer from factual content in the pleading that the defendant is liable for the alleged wrongdoing. Id. (citing Twombly, 550 U.S. at 570).
The Seventh Circuit has synthesized the standard into three requirements. See Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). Id. 2. Tortious Interference
Under Indiana law, the claims of tortious interference with a business relationship and tortious interference with a contractual relationship are similar. A claim for tortious interference with a business relationship requires: “(1) the existence of a valid relationship; (2) the defendant's knowledge of the existence of the relationship; (3) the defendant's intentional interference with that relationship; (4) the absence of justification; and (5) damages resulting from defendant's wrongful interference with the relationship.” McCollough v. Noblesville Sch., 63 N.E.3d 334, 344 (Ind.Ct.App. 2016). The elements of a claim for tortious interference with a contractual relationship are: “(1) that a valid and enforceable contract exists; (2) the defendant's knowledge of the existence of the contract; (3) defendant's intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant's wrongful inducement of the breach.” Duty v. Boys & Girls Club of Porter Cnty., 23 N.E.3d 768, 774 (Ind.Ct.App. 2014).
McDermott and Hammond argue that Batistatos has not sufficiently alleged the intent and lack of justification elements of the claims. They also assert that the business relationship claim requires illegal action, which they maintain Batistatos has not alleged. They do not contest the other elements.
Batistatos counters that he alleged that McDermott and Hammond induced SSCVA to terminate Batistatos's employment and stop negotiating for a new employment contract with him by offering to drop a pending lawsuit if Batistatos's employment was terminated. See (Am. Compl. ¶¶ 204-05, ECF No. 40). The allegation that McDermott and Hammond offered a benefit (dismissal of a lawsuit) to SSCVA if they terminated Batistatos is sufficient to show intentional inducement of breach of contract. McDermott and Hammond do not challenge this conclusion in their reply, instead relying on their alternative argument to dismiss this count under the Anti-SLAPP Act.
As for the justification element, however, Batistatos has only conclusorily stated that McDermott and Hammond “wrongfully” bribed or exchanged an “unlawful” quid pro quo with the SSCVA. Absence of justification “is established only if the interferer acted intentionally, without a legitimate business purpose, and the breach is malicious and exclusively directed to the injury and damage of another.” Bilimoria Comput. Sys., LLC v. Am. Online, Inc., 829 N.E.2d 150, 156-57 (Ind.Ct.App. 2005). Batistatos fails to allege sufficient factual matter to plead absence of justification as explained in Bilimoria to the plausibility standard required by Twombly and Iqbal, so the Court dismisses the tortious interference claim against McDermott and Hammond under Rule 12(b)(6).
3. Concerted Action
Under Indiana law, a concerted action claim (also known as a civil conspiracy claim) is not an independent cause of action but rather a cause of action for damages that must be alleged with an underlying tort.[2] Gordon v. Bank of New York Mellon Corp., 964 F.Supp.2d 937, 942 (N.D. Ind. 2013). A civil conspiracy is “a combination of two or more persons, by concerted action, to accomplish an unlawful purpose or to accomplish some purpose, not in itself unlawful, by unlawful means.” Huntington Mortg. Co. v. Debrota, 703 N.E.2d 160, 168 (Ind.Ct.App. 1998).
McDermott and Hammond argue that, because all the other claims Batistatos brings against them fail, the claim for damages from concerted action must also be dismissed. However, as discussed below, the Court is not dismissing the other claims against McDermott and Hammond at this time, so this claim is supported by underlying torts and therefore survives.
The Court, sitting in diversity for claims covered by the Anti-SLAPP motion, follows the substantive law of Indiana and the procedural law of the federal system. Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). Under Indiana law, when a person files a motion to dismiss under the Anti-SLAPP Act, the Court treats the motion as a motion for summary judgment. Ind. Code § 34-7-7-9(a)(1). There is no conflict with federal law here in treating the motion as one for summary judgment because federal rules permit the conversion of a motion to dismiss to a motion for summary judgment where, as is the case here, matters outside of the pleadings have been presented to the Court. Fed.R.Civ.P. 12(d). So, for the arguments brought under the Anti-SLAPP Act, the Court is able to convert the motion to one for summary judgment under Rule 12(d) and apply Federal Rule of Civil Procedure 56. However, as will be shown below, the Court determines that, in light of the striking of certain provisions of Batistatos's declaration, dismissal without prejudice is appropriate to allow a reasonable opportunity to present the pertinent material as required by Federal Rule of Civil Procedure 12(d).
When used to support or oppose a motion for summary judgment, a declaration “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the . . . declarant is competent to testify on the matters stated.” Fed.R.Civ.P. 56(c)(4). Legal arguments are not admissible evidence in affidavits or declarations. Chen v. Mayflower Transit, Inc., 315 F.Supp.2d 886, 923 (N.D. Ill. 2004); see also Pfeil v. Rogers, 757 F.2d 850, 862 (7th Cir. 1985) ()
McDermott and the City of Hammond ask the Court to strike portions of Batistatos's declaration submitted with the response to the motion to dismiss, arguing that the contested portions “consist of rank hearsay,...
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