City of Gary ex rel. King v. Smith & Wesson Corp.

• Decision Date: 20 September 2002
• Docket Number: No. 45A03-0105-CV-155.,45A03-0105-CV-155.
• Parties: CITY OF GARY, Indiana, by its Mayor, Scott L. KING, Appellant-Plaintiff, v. SMITH & WESSON CORP., Beretta U.S.A., Corp., Colt's Mfg. Co., Inc., Browning Arms Corp., Glock Corp., Charter Arms Corp., Hi-Point Firearms Corp., Navegar Inc., d/b/a/ Intratec U.S.A., Corp., B.L. Jennings Inc., Bryco Arms Corp., Phoenix Arms Corp., Lorcin Engineering Corp., Sturm, Ruger & Co., Corp., Taurus Firearms Corp., Davis Industries, Inc., Ameri-Pawn of Lake Station, Inc., Blythe's Sport Shop, Inc., Cash Indiana, Inc., Jack's Loan, Inc., Jim Shema's Outdoor Sports, Westforth Sports, Inc., and Does 1-225, Appellees-Defendants.
• Court: Indiana Appellate Court

776 N.E.2d 368

CITY OF GARY, Indiana, by its Mayor, Scott L. KING, Appellant-Plaintiff, v. SMITH & WESSON CORP., Beretta U.S.A., Corp., Colt's Mfg. Co., Inc., Browning Arms Corp., Glock Corp., Charter Arms Corp., Hi-Point Firearms Corp., Navegar Inc., d/b/a/ Intratec U.S.A., Corp., B.L. Jennings Inc., Bryco Arms Corp., Phoenix Arms Corp., Lorcin Engineering Corp., Sturm, Ruger & Co., Corp., Taurus Firearms Corp., Davis Industries, Inc., Ameri-Pawn of Lake Station, Inc., Blythe's Sport Shop, Inc., Cash Indiana, Inc., Jack's Loan, Inc., Jim Shema's Outdoor Sports, Westforth Sports, Inc., and Does 1-225, Appellees-Defendants.

No. 45A03-0105-CV-155.

Court of Appeals of Indiana.

September 20, 2002.

W. Anthony Walker, Lukas I. Cohen, James B. Meyer, Meyer & Wyatt, P.C., Gary, IN, Attorneys for Appellant.

James P. Dorr, Sarah L. Olsen, Wildman, Harrold, Allen & Dixon, Chicago, IL, Terence M. Austgen, Elizabeth Bezak, Singleton, Crist, Austgen & Sears, Munster, IN, Attorneys for Manufacturer Appellees.

Richard A. Mayer, Spangler, Jennings & Dougherty, PC, Merrillville, IN, Attorney for Appellees Browning Arms Co., Glock, Inc., and Hi-Point Firearms.

John Renzulli, Leonard Rosenbaum, Renzulli & Rutherford, LLP, New York, NY, Attorneys for Appellees Glock, Inc. and Hi-Point Firearms.

William M. Griffin, III, Friday, Eldredge & Clark, Little Rock, AR, Attorney for Appellee Browning Arms Co.

John Walter Mead, Mead, Mead & Clark, P.C., Salem, IN, Stacia L. Yoon, Kopko, Genetos & Retson LLP, Merrillville, IN, Michael C. Hewitt, Bruinsma & Hewitt, Costa Mesa, CA, Attorneys for Appellee Bryco Arms Corp.

Thomas E. Fennell, Michael L. Rice, Jones Day Reavis and Pogue, Dallas, TX, Robert F. Parker, Burke, Costanza & Cuppy, Merrillville, IN, Attorneys for Appellee Colt's Manufacturing Company, Inc.

Renee J. Mortimer, Hinshaw Culbertson, Munster, IN, Timothy A. Baumann, Budd, Larner, Gross, Rosenberg, Greenberg & Sade, Atlanta, GA, Attorneys for Appellee Taurus International Manufacturing, Inc.

Timothy Atwood, Shelton, CT, Attorney for Appellees Charter Arms Co. and Interarms, Inc.

Michael Zomcik, Michael Branisa, Tarics & Carrington, Houston, TX, Attorneys for Appellee Phoenix Arms.

David C. Jensen, John M. McCrum, Eichhorn & Eichhorn, Hammond, IN, Lawrence S. Greenwald, Catherine A. Bledsoe, Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, Baltimore, MD, Attorneys for Appellee Beretta U.S.A. Corp.

David W. Pera, Buoscio, Pera & Kramer, Merrillville, IN, Jeffrey S. Nelson, Shook, Hardy & Bacon, Kansas City, MO, Attorneys for Appellee Smith & Wesson Corp.

Kenneth D. Reed, John P. Reed, Abrahamson & Reed, Hammond, IN, Attorneys for Appellees Blythe's Sport Shop, Inc. and Jack's Loan, Inc.

John E. Hughes, Hoeppner, Wagner & Evans LLP, Merrillville, IN, Attorney for Appellee Cash Indiana, Inc.

Stephen E. Scheele, Goodman, Katz, Scheele & Bauswell, Highland, IN, Ihor A. Woloshansky, Merrillville, IN, Attorneys for Appellee Westforth Sports, Inc.

OPINION

BROOK, Chief Judge.

Case Summary¹

Appellant-plaintiff City of Gary, Indiana, by its Mayor, Scott L. King ("the City"), appeals the trial court's dismissal of its suit against various handgun manufacturers, a handgun distributor, and various handgun dealers (collectively, "Appellees"). We affirm in part and reverse and remand in part.

Issues

The City raises eight issues for our review, which we consolidate and restate as the following three:

I. whether the trial court properly dismissed the City's public nuisance claim;

II. whether the trial court properly dismissed the City's negligence claims; and

III. whether the trial court properly struck a proposed settlement agreement between the City and one of the Appellees from the City's first amended complaint.

Facts and Procedural History

Appellees either manufacture, distribute, or sell handguns. The City originally filed suit against Appellees in Lake County Superior Court, alleging public nuisance against all Appellees; negligent distribution, marketing, and failure to warn against all Appellees; and negligent design against manufacturer Appellees. The City sought compensatory damages, injunctive relief, and punitive damages. On September 29, 1999, Appellees filed a notice of removal to federal court. On April 17, 2000, the federal court determined that there were no issues of federal law in the City's claims and remanded the case to the trial court. In May and June of 2000, Appellees filed motions to dismiss under Indiana Trial Rule 12(B)(6) for failure to state claims upon which relief could be granted. On January 12, 2001, the trial court granted Appellees' motions and dismissed all the City's claims in an order reading in relevant part as follows:

JUDGMENT OF DISMISSAL

....

The parties defendant have been segregated by plaintiff's Complaint into the following categories, which identification said defendants seem to have accepted:

Manufacturers: Smith & Wesson Corp F.I.E. Corp.² Beretta U.S.A. Corp. Glock Corp. Charter Arms Corp. Savage Arms Corp.[*] Interarms Corp.[*] Harrington & Richardson Corp.[*] Hi-Point Firearms Corp. Sigarms Corp.[*] Navegar, Inc. d/b/a Intratec USA Corp. Bryco Arms Corp. Kel-Tec Cnc, Corp.[*] Phoenix Arms Corp. Lorcin Engineering Corp. St[ur]m, Ruger & Co. Corp. Sundance Industries Corp.[*] Taurus Firearms Corp. Dealers: Ameri-Pawn of Lake Station, Inc. Blythe[`]s Sport Shop, Inc. Cash Indiana, Inc. Fetla[`]s Bargain Center, Inc.[*] Jim Shema's Outdoor Sports Westforth Sports, Inc. Distributor: B.L. Jennings, Inc. Miscellaneous John Does:

It has been conceded that, basically, Manufacturers sell handguns to Distributors, who in turn sell to Dealers, who in turn sell to the general public. Manufacturers are precluded by law from selling direct to members of the general public. This lawsuit applies only to the sale and distribution of handguns; not long guns (rifles and/or shot guns).

During the course of proceedings, the City settled with defendant, Fetla[`]s Bargain Center, Inc., and they are no longer a party. In addition, the City unilaterally filed with the Court a copy of an unexecuted, but proposed written Settlement Agreement between defendant Smith & Wesson Corp. and the City. There is no evidence that such Agreement was ever entered into, and Smith & Wesson Corp. remains a party defendant in this litigation. Defendant objected and moved to strike out the filing. The City did not object or otherwise respond. During the course of the second day of arguments, City referred to the Agreement, and defendants reiterated their objection. The Court sustained defendants['] objection and granted their Motion to Strike the document from the Court's records, as irrelevant, under Rule of Evidence 401, and as a purported agreement of settlement and compromise under Rule of Evidence 408. It should be noted that efforts were made to remove this cause to the United States District Court, for the Northern District of Indiana, Hammond Division, sitting at Hammond. Many months elapsed, during which pleadings and papers were filed in the Federal Clerk's Office, before the Federal Court declined removal, and remanded the cause to state court.

The defendants' respective Motion(s) to Dismiss are predicated upon Ind. Trial Rule 12(B)(6) which provides, in substance, for a dismissal of a pending cause if the well-pleaded allegations of the pending complaint, when taken as true, fail to state a claim upon which any relief can be granted, even when all inferences and intendments are taken, and viewed, in a light most favorable to plaintiff. Donahue v. St. Joseph County, 720 N.E.2d 1236 (Ind.Ct.App.1999), and City of New Haven v. Reichart, 729 N.E.2d 600 (Ind.Ct.App.2000).

The Court Finds, Concludes, Adjudges and Decrees that each and all of the respective defendants', manufacturers['], distributor['s] and dealers['] separate and several motions to dismiss should be, and the same hereby are, GRANTED, and this cause should be, and the same is hereby, DISMISSED, as to each and all of the remaining captioned defendants, for the following separate and several reasons, and upon the following separate and several grounds, to-wit:

....

The common law requirements for public nuisance claims in Indiana are very clear. First, public nuisance claims must arise from an unreasonable use of property. Deller v. Hofferberth, 26 N.E. 889 (Ind.1[89]1), or a violation of a specific statute, Whittington v. State of Indiana, 669 N.E.2d 1363 (Ind.1996). Second, to be liable for a public nuisance, one must be in control of the offending item or activity at the time of injury to plaintiff. See, e.g. Brown v. Powell, 176 N.E. 241, 243 (Ind.Ct.App.1931). Third, because public nuisance describes a form of harm rather than a free-standing tort theory of liability, plaintiffs must plead an actionable basis in tort for such a claim. Restatement (Second) of Torts § 821B, cmt. e. Fourth, a legislative body cannot authorize conduct on one hand, and seek to punish it through public nuisance actions on the other, particularly where a comprehensive regulatory scheme already governs the challenged conduct. Sopher v. State, 81 N.E. 913 (Ind.1907). Plaintiff's Complaint does not satisfy any of these requirements. Plaintiff's Complaint fails to bring the City's public nuisance claim within the limits set by Indiana common law.

Arguing that it need not plead an underlying tort in order to claim relief for the harm produced by a public nuisance, the City departs once again from common law, which requires that a defendant's interference with a public right involve conduct which is "intentional or unintentional and otherwise actionable under the principles controlling liability for negligent or reckless conduct or for abnormally dangerous activities." Restatement § 821B, cmt. e. In other words, public nuisance claims must arise from conduct which is actionable, not merely any conduct for which liability would not

...