Burks v. Rushmore, 41S04-8903-CV-209

• Decision Date: 09 March 1989
• Docket Number: No. 41S04-8903-CV-209,41S04-8903-CV-209
• Citation: 534 N.E.2d 1101
• Parties: James E. BURKS, Appellant (Plaintiff Below), v. C.H. RUSHMORE, Appellee (Defendant Below).
• Court: Indiana Supreme Court

Page 1101

534 N.E.2d 1101

James E. BURKS, Appellant (Plaintiff Below), v. C.H. RUSHMORE, Appellee (Defendant Below).

No. 41S04-8903-CV-209.

Supreme Court of Indiana.

March 9, 1989.

David S. McCrea, McCrea & McCrea, Bloomington, for appellant.

David S. Allen, Locke Reynolds Boyd & Weisell, and A. David Stippler, Indianapolis, for appellee.

DICKSON, Justice.

In this defamation action, defendant C.H. Rushmore obtained a summary judgment based upon the expiration of the applicable statute of limitations. The Court of Appeals reversed, applying a discovery rule "in situations in which the defamation is published in a manner in which it is likely to be concealed from its plaintiff." Burks v. Rushmore (1986), Ind.App., 499 N.E.2d 762, 764. Rushmore seeks transfer, alleging conflict between the opinion of the Court of Appeals in this case and its prior opinions in Chacharis v. Fadell (1982), Ind.App., 438 N.E.2d 1032, and Kaletha v. Bortz Elevator Co., Inc. (1978), 178 Ind.App. 654, 383 N.E.2d 1071. Transfer is granted to address this issue.

Plaintiff James E. Burks was an employee of Indiana Bell Telephone Company, Inc. in 1981. As Medical Director for Indiana Bell, Rushmore was responsible for maintenance and supervision of the employee disability leave programs. On November 9, 1981, Rushmore wrote and circulated to three Indiana Bell employees a memorandum and attachments relating to Burks, who was then on disability leave from his job. Burks's complaint alleged that he was thereafter ordered to take a new job assignment, which he refused because of "the increased risk to his handicap." The complaint did not allege a date of termination of employment, but in his opposition to the motion for summary judgment, plaintiff submitted to the trial court documents that allege his termination date was April 30, 1982. Burks first learned of the memorandum on November 3, 1982. On December 3, 1982, Indiana Bell refused Burks's request for a copy of the memorandum. His complaint for defamation was filed on November 1, 1984, but Burks did not obtain a copy of the memorandum until May 10, 1985, in the course of the ensuing litigation. Alleging that the Rushmore memorandum caused Indiana Bell to fail to "accommodate the plaintiff with his handicap," Burks's complaint seeks damages for lost income and benefits and for damage to his reputation within Indiana Bell.

The portion of the general statute of limitations applicable to defamation actions, Ind.Code Sec. 34-1-2-2(1), provides:

The following actions shall be commenced within the periods herein prescribed after the cause of action has accrued, and not afterwards:

(1) For injuries to person or character, ... within two (2) years.

Citing Chacharis and Kaletha as primary supporting authority, Rushmore contends that a cause of action for defamation accrues, and the statute of limitations thus begins to run, upon the publication of the allegedly defamatory material, not upon the discovery of the publication by the person allegedly defamed.

The cause of action in Kaletha alleged the intentional infliction of emotional distress by defamatory conduct. Plaintiff's complaint was filed more than two years after the publication of the alleged defamatory letter, but within two years after plaintiff became aware of its contents. The Court of Appeals held that the statute of limitations began to run upon the date of publication. Kaletha, at 660, 383 N.E.2d at 1075. Similarly, the Court of Appeals in Chacharis held that the statute of limitations in an action for defamation by pleading commences to run upon publication, rather than upon a judicial determination that the matter is not privileged. 438 N.E.2d at 1033. Both decisions preceded Barnes v. A.H. Robins Co., Inc. (1985), Ind., 476 N.E.2d 84, which Burks claims should control. In Barnes, this Court recognized a discovery rule to determine when the statute of limitations begins to run where the claimed injury was "caused by a disease which may have been contracted as a result of a protracted exposure to a foreign substance." 476 N.E.2d at 87.

The sole issue before us is the interpretation to be given the phrase "after the cause of action accrued" in the general statute of limitations, Ind.Code Sec. 34-1-2-2. ¹ In enacting this statute, the legislature designated the reasonable time for bringing an action and left to the courts the responsibility of determining when the cause accrues. Barnes, 476 N.E.2d at 86-87.

Prior to Barnes, a degree of divergence could be found in the decisions of this Court interpreting and applying statutes of limitation. Numerous cases recognized that the statute of limitations begins to run upon the occurrence of damage capable of ascertainment. The rule was stated in Montgomery v. Crum (1928), 199 Ind. 660, 678-679, 161 N.E. 251, 258-59, as follows:

Many authorities have been cited in support of the well-settled rule that 'for injuries to person or character,' the statute of limitations begins to run from the time a cause of action accrues, but the accrual of a cause of action, it must be remembered, depends upon the uniting of at least two elements--injury and damages.... The two-year statute of limitations will not begin to run as a shield against the consequences of wrongful acts until the wrongdoer thereby accomplishes an injury to the person of another, for which the law allows indemnity in the form of damages, that is to say, damages susceptible of ascertainment, for not until then would the cause of action accrue to invoke the statute.

The "uniform rule" was restated in Marengo Cave Co. v. Ross (1937), 212 Ind. 624, 636, 10 N.E.2d 917, 922:

[T]he statute of limitations does not begin to run until the injured party discovers, or with reasonable diligence might have discovered, the facts constituting the injury and cause of action.

Other cases supporting this view include City of North Vernon v. Voegler (1885), 103 Ind. 314, 2 N.E. 821, and Board of Commissioners of Wabash County v. Pearson (1889), 120 Ind. 426, 22 N.E. 134.

In contrast, this Court refused to apply the "susceptible of ascertainment" rule to determine when an action accrues in Craven v. Craven (1913) 181 Ind. 553, 103 N.E. 333, and Shideler v. Dwyer (1981), 275 Ind. 270, 417 N.E.2d 281. Dicta found in Guy v. Schuldt (1956) 236 Ind. 101, 108, 138 N.E.2d 891, 895, recited that "[a] cause of action normally accrues when the injurious action occurs although the plaintiff may not learn of the injurious act until later."

Any inconsistency was resolved in Barnes, wherein this Court declared:

[T]he rule in Indiana has been generally understood to be that a cause of action accrues when the resultant damage of a negligent act is ascertainable or by due diligence could be ascertained,....

476 N.E.2d at 86.

Because it was addressing the uncommon situation of disease resulting from protracted exposure to foreign substance, the Barnes court noted that "the question still remained as to how ascertainable a particular injury was and what standard would be applied as to what is reasonably ascertainable." Id. This Court then held that in such cases the standard to be applied was that the statute of limitations commences to run "from the date plaintiff knew or should have discovered that she suffered an injury or impingement, and that it was caused by the product or act of another." Id. at 87-88. In Barnes, this Court expressly declined the...