ELC ELEC., INC. v. INDIANA DEPT. OF LABOR, 49A02-0410-CV-844.

• Decision Date: 29 March 2005
• Docket Number: No. 49A02-0410-CV-844.,49A02-0410-CV-844.
• Citation: 825 N.E.2d 16
• Parties: E.L.C. ELECTRIC, INC., Appellant-Plaintiff, v. INDIANA DEPARTMENT OF LABOR, Appellee-Defendant.
• Court: Indiana Appellate Court

825 N.E.2d 16

E.L.C. ELECTRIC, INC., Appellant-Plaintiff, v. INDIANA DEPARTMENT OF LABOR, Appellee-Defendant.

No. 49A02-0410-CV-844.

Court of Appeals of Indiana.

March 29, 2005.

Michael L. Einterz, Indianapolis, IN, Attorney for Appellant.

Steve Carter, Attorney General of Indiana, Maureen Ann Bartolo, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.

Neil E. Gath, Geoffrey S. Lohman, Fillenwarth Dennerline Groth & Towe, Indianapolis, IN, Amicus Curiae Attorney.

OPINION

BAKER, Judge.

Appellant-plaintiff E.L.C. Electric, Inc. (ELC) appeals from the trial court's entry of summary judgment for appellee-defendant Indiana Department of Labor (Department) on ELC's complaint alleging defamation and seeking damages and injunctive relief. ELC contends that the Department committed defamation by: 1) including ELC on its website listing as a "Common Construction Wage Violator" (CCW Violator), 2) contacting ELC's employees to notify them of ELC's failure to comply with the Common Construction Wage Act (CCWA),¹ and 3) informing a school corporation of ELC's status as a CCW Violator. Specifically, ELC urges that the Department's enforcement of the CCWA is preempted by ERISA,² that the Department's statements were not subject to privilege or immunity, and that the statements "could be interpreted by a trier of fact to be defamatory." Appellant's Br. p. 20. Finding that ERISA does not preempt the Department's enforcement of the CCWA, and the Department is entitled to absolute immunity from the defamation lawsuit, we affirm the trial court's entry of summary judgment in favor of the Department.

FACTS

Sometime prior to August 2001, the Department undertook an audit to determine whether, on public works projects, ELC was in compliance with the CCWA. The Department concluded that ELC was not in compliance. ELC failed to fully cooperate with the investigation inasmuch as ELC required that inspections take place "only on Thursdays[ ]" and "was unresponsive to requests for records that are routinely provided by employers pursuant to [the Department's] authority to inspect employer's records (IC 22-1-1-8 to — 17)." Appellant's App. p. 28.

Further, after the Department commenced its audit and preliminarily concluded that ELC was not in compliance with the CCWA, it invited ELC to submit any additional records that could substantiate ELC's compliance. ELC did not provide additional documentation. Instead, in August 2001, ELC's counsel sent a letter to the Department advising that it believed that the onus was upon the Department to provide more details with regard to fringe benefit calculations³ and warning the Department that it would pursue legal action against it if the Department informed ELC's "affected employees of their rights to file a proof of claim to recover any wages that may be due them." Appellant's App. p. 8.

The Department sent letters so informing ELC employees on September 4, 2001.⁴ In a letter dated February 12, 2002, the Department responded to an inquiry from an assistant superintendent for Westfield-Washington Schools. In the Westfield letter, the Department included its list of CCW Violators. The list included ELC. The Westfield letter also noted that the CCWA requires that "any bids received by any of the contractors on this list should be verified as being responsive to the applicable Common Construction Wage."⁵ Appellant's App. p. 9. The West-field letter further noted that "violations of Indiana's Common Construction Wage Law may be prosecuted as a Class B misdemeanor."⁶ Appellant's App. p. 9.

Also, by affidavit, the Department's Deputy Commissioner, A. Peter Rimsans, explained, inter alia, that the Department's procedures did not require a particular form of payment to employees in order to comply with the CCWA. In fact, the payments could take the form of cash, contributions to benefit plans, and alternative compensation "such as vacations or paid holidays."⁷ Appellant's App. p. 110. ELC sought to include overhead costs, i.e., the costs of doing business, and pension benefits to its executives "as constituting a portion" of the fringe benefit payments to its employees in order to comply with the CCWA. Appellant's App. p. 63. Without additional information that ELC had paid its employees in accordance with the CCWA, the Department continued to consider ELC a CCW Violator.

On September 12, 2001, ELC served its tort claim notice alleging a tort claim against the Department. The claim was denied.

On June 17, 2002, ELC filed its "Complaint for Defamation and Injunctive Relief." Appellant's App. p. 1. ELC alleged that the Department committed defamatory acts by accusing ELC "of criminal conduct by violating I.C. 5-16-7 [the Act] and accus[ing] E.L.C. of not paying its employees as required by law." Appellant's App. p. 1. ELC alleged that the defamation occurred on September 4, 2001 and thereafter through publication 1) on a website listing of employers not in compliance with the common wage requirements, 2) in correspondence to ELC employees, and 3) in correspondence to the Westfield School Corporation. ELC asserted that the Department knew the statements to be false. ELC requested $900,000 in damages for the loss of two contracts and projected damages from the publication of the information. Further, ELC requested, inter alia, that the Department be enjoined from: 1) maintaining a listing on any website of the CCW Violators "unless such violators have been established by a Court of law[ ]"; 2) disseminating information that ELC is a CCW Violator unless ELC is determined to be so by a court; 3) disseminating any information to past or present employees of ELC or to prospective customers of ELC "relating in any way to compliance of or violation of the Common Wage Act"; and 4) "[v]iolating the due process rights of E.L.C., its owners and officers." Appellant's App. p. 4.

After the Department answered, raising thirteen affirmative defenses, the Department moved for summary judgment. In large part, the Department's summary judgment motion was based upon the truth of the statements, as well as privilege and immunity provisions.

ELC responded to the Department's request for summary judgment by asserting: 1) the Department had committed defamation per se by noting that the CCW Violators are subject to criminal penalties; 2) the Department's determination as to whether ELC was in compliance with the CCWA is preempted by federal ERISA law; 3) the Department failed to demonstrate that its statements were true;⁸ and 4) the Department's statements were not protected by privilege or immunity.

On September 7, 2004, the trial court entered summary judgment for the Department. This appeal ensued.

DECISION AND DISCUSSION

I. Standard Of Review

We begin our discussion by setting forth the relevant standard of review. As we stated in Little Beverage Co., Inc. v. DePrez, 777 N.E.2d 74, 77-78 (Ind.Ct.App.2002), trans. denied:

[S]ummary judgment is appropriate when no designated genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. . . . A party appealing the denial of summary judgment carries the burden of persuading this court that the trial court's decision was erroneous. The movant must demonstrate the absence of any genuine issue of fact as to a determinative issue and only then is the non-movant required to come forward with contrary evidence. This court may not search the entire record but may only consider the evidence that has been specifically designated. All pleadings, affidavits, and testimony are construed liberally and in a light most favorable to the nonmoving party.

Additionally, the trial court's order granting or denying a motion for summary judgment is cloaked with the presumption of validity. Pedraza v. City of East Chicago, 746 N.E.2d 94, 99 (Ind.Ct.App.2001). And the purpose of summary judgment is to terminate litigation about which there can be no factual dispute and which may be determined as a matter of law. Hermann v. Yater, 631 N.E.2d 511, 513 (Ind.Ct.App.1994).

II. ELC's Claim

Initially, we note that to the extent that ELC's argument asserts that ERISA preempts the Department's role in enforcing the common wage statutes, the decision in California Div. of Labor Standards Enforcement v. Dillingham Constr., Inc., 519 U.S. 316, 328, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997) is instructive. There, the United States Supreme Court determined that ERISA did not preempt a state's prevailing wage law that allowed payment of lower apprenticeship wages to employees participating in state-approved programs because the prevailing wage statute did not affect ERISA. Id.

Relying in large part upon Dillingham, this court recently put to rest the issue of preemption in Burgess et al. v. E.L.C. Electric, Inc., No. 49A02-0406-CV-504, 825 N.E.2d 1, 2005 WL 646371 (Inc.Ct.App. Mar. 22, 2005). In Burgess, we concluded that "the CCWA, and the Employees' claims based thereon, are neither `connected with' nor `refer to' ERISA in such a manner as to warrant application of ERISA's preemption provision." 825 N.E.2d at 15, 2005 WL 646371 at *12. In light of such a pronouncement, both Dillingham and Burgess lead us to conclude that Indiana's common wage statutes and the Department's enforcement of the statutes are not preempted by ERISA.

We turn to ELC's substantive claims. ELC argues that the entry of summary judgment for the Department was erroneous because genuine issues of material fact "could" exist as to whether the Department's statements were defamatory and because the Department's statements were not subject to privilege or immunity. Here, the Department's claim of immunity under the Indiana Tort Claims Act (ITCA), Indiana Code section 34-13-3-1 through section 34-13-3-25, is dispositive.

By way of general background, we set out the statutory provisions regarding the CCWA and the Department in these circumstances. In relevant part, the...