Brazauskas v. Fort Wayne-South Bend Diocese, Inc.

• Decision Date: 07 September 2001
• Docket Number: No. 71A03-0102-CV-55.,71A03-0102-CV-55.
• Citation: 755 N.E.2d 201
• Parties: Beverly M. BRAZAUSKAS, Appellant-Plaintiff, v. FORT WAYNE-SOUTH BEND DIOCESE, INC., Sacred Heart Parish, and Jose Martelli, Appellees-Defendants.
• Court: Indiana Appellate Court

755 N.E.2d 201

Beverly M. BRAZAUSKAS, Appellant-Plaintiff, v. FORT WAYNE-SOUTH BEND DIOCESE, INC., Sacred Heart Parish, and Jose Martelli, Appellees-Defendants.

No. 71A03-0102-CV-55.

Court of Appeals of Indiana.

September 7, 2001.

Stephen M. Terrell, Landman & Beatty, Indianapolis, IN, Attorney for Appellant.

William T. Hopkins, Jr., Michael A. Scheer, Barnes & Thornburg, Fort Wayne, IN, Attorneys for Appellees.

OPINION

SHARPNACK, Chief Judge.

Beverly M. Brazauskas appeals the trial court's dismissal of her claims against Fort Wayne South Bend Diocese, Inc. ("the Diocese"), Sacred Heart Parish ("the Parish"), and Father Jose Martelli (collectively, "the Diocese defendants"). Brazauskas raises four claims, which we consolidate and restate as whether the trial court erred when it granted the Diocese defendants' motion to dismiss. We affirm.¹

The relevant facts follow. The Parish is part of the Diocese and is located in South Bend on the campus of the University of Notre Dame ("Notre Dame").² Brazauskas had been employed at the Parish as a Pastoral Associate since 1987. However, Fr. Martelli, the Parish's pastor, dismissed Brazauskas on August 7, 1992. On February 26, 1993, Brazauskas filed suit against the Diocese defendants, alleging, among other claims, tortious interference with a business relationship.

While the suit was pending, a Notre Dame committee sought applicants to fill the position of Acting Director for Notre Dame's Program for Church Leaders ("PCL"). Brazauskas applied for the job. After interviewing her, the committee conducting the search for an Acting Director unanimously recommended Brazauskas for the position on June 4, 1993. At some point between June 4 and June 18, 1993, Father Edward Malloy, the President of Notre Dame, was informed that Brazauskas was the recommended candidate for Acting Director of the PCL. Fr. Malloy rejected Brazauskas's candidacy because she was suing the Diocese, including its Bishop, John D'Arcy, and he concluded that hiring her would harm the relationship between the Diocese and Notre Dame. Furthermore, Fr. Malloy expressed surprise that the PCL was still in existence because he thought that it had been dissolved. The PCL was subsequently phased out.

Brazauskas believed that the Diocese defendants had contacted Notre Dame officials and induced them to avoid hiring her, even if they had to eliminate the PCL to do so. Accordingly, on August 5, 1993, she filed an amended complaint in which she amended her claim of tortious interference with a business relationship to include an allegation that the Diocese defendants had interfered with Notre Dame's hiring process. On September 7, 1995, Brazauskas further amended her complaint by accusing the Diocese defendants of blacklisting her.

In five separate motions, the Diocese defendants moved for summary judgment on all of Brazauskas's claims. The trial court granted summary judgment on all of Brazauskas's claims except her claims for tortious interference with a business relationship and blacklisting. Brazauskas appealed the trial court's grant of partial summary judgment, and we affirmed in part, vacated in part, and remanded for further proceedings.³See Brazauskas v. Fort Wayne-South Bend Diocese, 714 N.E.2d 253, 264 (Ind.Ct.App.1999),trans. denied ("Brazauskas I").

On remand, the Diocese defendants moved to dismiss Brazauskas's tortious interference and blacklisting claims on January 5, 2001. On February 7, 2001, after a hearing, the trial court granted the Diocese defendants' motion.

The sole issue is whether the trial court erred when it granted the Diocese defendants' motion to dismiss. In its order, the trial court provided that dismissal was appropriate "for the reason that this Court lacks subject matter jurisdiction to hear those claims." Appellant's App., p. 25. Consequently, we shall review the trial court's ruling as a dismissal for lack of subject matter jurisdiction pursuant to Ind. Trial Rule 12(B)(1).⁴

When ruling on a motion to dismiss for lack of subject matter jurisdiction, the trial court may consider not only the complaint and motion but also any affidavits or evidence submitted in support. GKN Co. v. Magness, 744 N.E.2d 397, 400 (Ind.2001). In Magness, our supreme court clarified the standard of review for appellate review of a trial court's ruling on a motion to dismiss for lack of subject matter jurisdiction. The court provided:

A review of the case authority shows that the standard of appellate review for Trial Rule 12(B)(1) motions to dismiss is indeed a function of what occurred in the trial court. That is, the standard of review is dependent upon: (i) whether the trial court resolved disputed facts; and (ii) if the trial court resolved disputed facts, whether it conducted an evidentiary hearing or ruled on a `paper record.'

* * * * *

If the facts before the trial court are in dispute, then our standard of review focuses on whether the trial court conducted an evidentiary hearing. Under those circumstances, the court typically engages in its classic fact-finding function, often evaluating the character and credibility of witnesses. Thus, where a trial court conducts an evidentiary hearing, we give its factual findings and judgment deference. And in reviewing the trial court's factual findings and judgment, we will reverse only if they are clearly erroneous. Factual findings are clearly erroneous if the evidence does not support them, and a judgment is clearly erroneous if it is unsupported by the factual findings or conclusions of law.

However, where the facts are in dispute but the trial court rules on a paper record without conducting an evidentiary hearing, then no deference is afforded the trial court's factual findings or judgment because under those circumstances a court of review is `in as good a position as the trial court to determine whether the court has subject matter jurisdiction.' Thus, we review de novo a trial court's ruling on a motion to dismiss where the facts before the court are disputed and the trial court rules on a paper record.

Magness, 744 N.E.2d at 401 (citations omitted).

Here, there are several disputes of fact. However, the trial court did not conduct an evidentiary hearing. Instead, it "held oral argument" on the Diocese defendants' motion to dismiss. Appellant's App., p. 25. Thus, we conclude that the trial court ruled upon a paper record without an evidentiary hearing, and we shall review its ruling under a de novo standard. See Magness, 744 N.E.2d at 401. In so doing, we will affirm the judgment of the trial court on any legal theory that the evidence of record supports. Id.

The central issue in this case is whether the First Amendment to the United States Constitution bars Brazauskas's remaining claims against the Diocese defendants. The First Amendment, applicable to the states through the Fourteenth Amendment, prohibits courts from resolving doctrinal disputes or determining whether a religious organization acted in accordance with its canons and bylaws. See Konkle v. Henson, 672 N.E.2d 450, 454 (Ind.Ct.App.1996) (citing Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696, 713, 96 S.Ct. 2372, 2382, 49 L.Ed.2d 151 (1976), reh'g denied, 429 U.S. 873, 97 S.Ct. 191, 50 L.Ed.2d 155 (1976)). Even where a dispute presented to the court is one that, if presented by any other set of litigants, would clearly be justiciable, if the resolution of that dispute between the litigants at hand would require the court to adjudicate matters of church doctrine or governance, or to second-guess ecclesiastical decisions made by a church body created to make those decisions, the matter falls outside the court's authority. Downs v. Roman Catholic Archbishop, 111 Md. App. 616, 683 A.2d 808, 811 (1996), reconsideration denied.

The First Amendment does not entirely prohibit courts from opening their doors to religious organizations. Konkle, 672 N.E.2d at 455. Instead, a court can apply neutral principles of law to churches without violating the First Amendment. Id. However, the application of neutral principles of law to a church defendant has occurred only in cases involving church property or in cases where a church defendant's actions could not have been religiously motivated. See Brazauskas I, 714 N.E.2d at 262. For example, in Konkle, a priest-defendant molested the plaintiff and his superiors may have known about prior molestations but failed to act, and we concluded that the First Amendment did not bar the plaintiff's claims. See Konkle, 672 N.E.2d at 456.

As this precedent indicates, if, in resolving Brazauskas's claims of tortious interference with a business relationship and blacklisting, we would be required to interpret Catholic precepts and procedures to determine whether the allegedly tortious behavior was undertaken in compliance with religious teaching, then the First Amendment bars our inquiry, and the trial court did not err when it dismissed the claims. If, on the other hand, review of the claims would not require any inquiry into religious doctrine or practice, but rather involves application of secular standards to secular conduct, the First Amendment does not prevent Brazauskas from proceeding with her suit. See Konkle, 672 N.E.2d at 456. We will address each of Brazauskas's claims in turn.

I.

In Indiana, blacklisting is governed by statute. Ind.Code § 22-5-3-1 provides, in relevant part, "A person who, after having discharged any employee from his service, prevents the discharged employee from obtaining employment with any other person commits a Class C infraction and is liable in penal damages to the discharged employee to be recovered by civil action;...." Furthermore, Ind.Code § 22-5-3-2 provides:

If any railway company or any other company, partnership, limited liability company, or corporation in this state shall authorize, allow or permit any of its or their agents to black-list any discharged employees, or attempt by

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