Estate of Mayer v. Lax, Inc., No. 37A03–1207–PL–323.

Docket NºNo. 37A03–1207–PL–323.
Citation998 N.E.2d 238
Case DateOctober 07, 2013
CourtCourt of Appeals of Indiana

998 N.E.2d 238

The ESTATE OF Richard A. MAYER, and Spangler, Jennings & Dougherty, Appellants–Defendants.
v.
LAX, INC., and David Lasco, Appellees–Plaintiffs.

No. 37A03–1207–PL–323.

Court of Appeals of Indiana.

Oct. 7, 2013.


[998 N.E.2d 242]


Lyle R. Hardman, Hunt Suedhoff Kalamaros, LLP, South Bend, IN, Attorney for Appellant.

Michael Riley, Rensselaer, IN, Attorney for Appellee.


OPINION

BARNES, Judge.
Case Summary

The Estate of Richard Mayer (“the Estate”) and the law firm of Spangler, Jennings & Dougherty, P.C. (“Spangler Jennings”) appeal the trial court's denial of their motion for summary judgment against Lax, Inc., and David Lasco. We affirm in part, reverse in part, and remand.

Issues

The dispositive issues we address are:

I. whether statements made by Mayer in counterclaims filed against Lax and Lasco were absolutely privileged and thus cannot support Lax and Lasco's claims for defamation, abuse of process, malicious prosecution, negligent supervision and/or retention, tortious interference with a business relationship, and tortious interference with a contract;

II. whether Lax and Lasco's claim against Spangler Jennings for malicious prosecution survives Mayer's death;

III. whether there are any genuine issues of material fact precluding summary judgment in favor of the Estate and Spangler Jennings on Lax and Lasco's abuse of process claim; and

IV. whether Lax and Lasco may seek punitive damages against the Estate and/or Spangler Jennings.

Facts

This case has its origins in litigation and construction disputes from the 1990s. Lasco is the principal owner of Lax, which specializes in real estate development in northern Indiana. Lax hired a company called J. Metro Excavating (“JME”) to

[998 N.E.2d 243]

perform work on a project, but JME walked off the job in 1998 without completing its work. Litigation ensued; Lax sued JME for breach of contract and intentional interference with a prospective economic advantage, while JME filed a counterclaim alleging breach of contract and fraud by Lax (“the first lawsuit”). On April 26, 2004, a jury returned a verdict of $667,041 in favor of Lax on its complaint and a verdict of $47,198 in favor of JME on its counterclaim. JME initiated an appeal from this judgment but did not pursue it, and the appeal was dismissed.

Lax and Lasco subsequently began proceedings supplemental to recover its net judgment against JME, but discovered that JME's assets had previously been entirely transferred to a new entity, Metro Excavating Corporation (“MEC”), which was owned by the sons of the JME owner. On October 22, 2004, Lax and Lasco sued JME and MEC and the owners of those companies, alleging that they had committed fraud and violations of Indiana's RICO and Bulk Sales Acts, and that MEC was a mere instrumentality of JME (“the second lawsuit”). On December 29, 2004, Mayer prepared and filed an answer on behalf of JME and MEC.1 Mayer was an attorney and shareholder in Spangler Jennings. The answer included a counterclaim against Lax and Lasco, which stated:

1. The plaintiff, David Lasco, hereinafter referred to as the “counterdefendant” on behalf of himself and Lasco [sic], Inc., and his other entities and partners entered into and developed a scheme, plan and conspiracy to default [sic] the defendant. The counterdefendants solicited the aid of his engineer, lawyers, and other individuals to perpetrate a fault [sic] upon the Court, a jury, and the defendant with the specific intent of extracting monetary compensation from the defendant.

2. Counterdefendant, through his conduct and the conduct of co-conspirators perpetrated a series of transactions that violated the Indiana Law Act, including the Indiana RICO Act.

3. The counterdefendant with the aid of others developed a pattern of action during the trial of Lax, Inc. against J. Metro Excavating, Inc. so as to falsely present evidence and testimony that work on the Double Tree site, which was the subject matter of the litigation, was performed in accordance with a 1996 grading plan when in fact the counterdefendants and co-conspirators knew that the work was done in accordance with a new plan that included work not agreed upon by J. Metro Excavating, Inc. This fraudulent scheme and practice was perpetrated for the sole purpose of obtaining a judgment against J. Metro Excavating, Inc., which was predicated upon fraud, perjury, false testimony and false facts.

App. pp. 616–17. The counterclaim sought compensatory and punitive damages against Lax and Lasco. On August 5, 2005, the trial court dismissed this counterclaim under Indiana Trial Rule 12(B)(6) on the basis that it was “an impermissible collateral attack upon the judgment of the Lake Superior Court in a different action pending between the parties.” Id. at 619.

On August 17, 2005, Mayer filed an amended counterclaim on behalf of JME and MEC, which stated:

1. That the Plaintiff, David Lasco, hereinafter referred to as “Counter Defendant” for a period of some years to

[998 N.E.2d 244]

the present, engaged in the development and execution of a scheme, plan and conspiracy to commit, and to conspire to commit, aid and abet in bribery, perjury, obstruction of justice, intimidation, and business corruption and influence.

2. That Counter Defendant did attempt and/or did develop a pattern of racketeering activities for the purposes of perpetrating bribery, perjury, false testimony, intimidation, obstruction of justice, and business corruption upon third parties, including J. Metro Excavating, Inc.

3. That Counter Defendant, through a scheme of enterprises, including corporations, partnerships, and limited partnerships, attempted and/or created a pattern of racketeering activity by acquiring or maintaining either directly or indirectly an interest or control in such enterprises.

4. That Counter Defendant employed or associated with such enterprises knowingly or intentionally conducted or otherwise participated in activities which the enterprise developed in a pattern of racketeering activities.

5. That Counter Defendant knowingly or intentionally received proceeds directly or indirectly derived from a pattern of racketeering activities and used or invested those proceeds in properties acquired by Counter Defendant or established and operated enterprises acquired by Counter Defendant.

6. That Counter Defendant abused the judicial process and laws of Indiana in the promoting of his enterprises and activities. Through intimidation, bribery, false statements, perjury, and treats [sic], Counter Defendant committed harm and damage to third parties, including the Counter Claimant.

7. That Lasco, [sic] Inc., Counter Defendant, was just one of the enterprises developed and used by David Lasco for the promotion of his racketeering and wrongful activities, in violation of Indiana law and the Indiana RICO act.

Id. at 621–22. Again, this counterclaim sought compensatory and punitive damages against Lax and Lasco.


On May 18, 2006, the trial court granted Lax and Lasco's summary judgment motion with respect to the amended counterclaim, concluding that it was barred by res judicata because its arguments could have been raised and litigated in the prior lawsuit. The trial court also found there was no evidence of any recoverable damages as a result of any alleged racketeering activity by Lax and Lasco. There was no appeal from this ruling. Lax and Lasco's claims against JME and MEC remained pending until April 2008, when the case was settled. On January 7, 2009, upon Lax and Lasco's motion, the trial court ordered both the original and amended counterclaims sealed and prohibited from public access because of the damaging allegations they contained.

At roughly the same time as Lax and Lasco were embroiled in the litigation with JME and MEC, Lasco was pursuing an opportunity to construct a casino in northwest Indiana on behalf of the Miami Tribe of Oklahoma (“MTO”). Lasco dealt with the MTO through a separate entity created specifically for the casino project, Northwest Indiana Consultants, LLC (“NIC”). NIC entered into a consulting contract with the MTO on January 26, 2006. At some point, Lasco withdrew from involvement with the casino project. Lasco claims his interest in managing the casino project, if it came to fruition, was worth $13 million. Lasco contends he withdrew from the project because of damage to his reputation caused by the counterclaims filed by Mayer.

[998 N.E.2d 245]

On December 21, 2006, Lax and Lasco filed the present suit against JME, Mayer, and Spangler Jennings, raising various claims related to the counterclaims Mayer had filed in the second lawsuit. Mayer died in November 2008. Lax and Lasco subsequently filed two amended complaints. The second amended complaint sued only the Estate and Spangler Jennings, there being no allegation or evidence that JME was involved with or had in any way approved Mayer's filing of the counterclaims. This complaint listed the following claims against the Estate and Spangler Jennings combined: defamation; abuse of process; malicious prosecution; tortious interference with a contract; and tortious interference with a business relationship. The complaint also stated claims against Spangler Jennings for negligent supervision and/or retention of Mayer, and alleged that Spangler Jennings was both directly liable for the counterclaim filings and liable under agency principles for Mayer's conduct. The complaint sought compensatory and punitive damages against both the Estate and Spangler Jennings.

On September 3, 2010, the Estate and Spangler Jennings moved for summary judgment. Lax and Lasco filed a response and the trial court held a hearing on the matter. On April 19, 2012, the trial court entered its order on the motion. It granted summary judgment to the Estate only on Lax and Lasco's claims for defamation and malicious prosecution, but it denied summary judgment to Spangler Jennings as to those claims. The trial court also rejected the Estate and...

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37 practice notes
  • United Tactical Sys., LLC v. Real Action Paintball, Inc., Case No. 14-cv-04050-MEJ
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 10, 2015
    ...or motive, and (2) a willful act in the use of process not proper in the regular conduct of a proceeding. Estate of Mayer v. Lax, Inc. , 998 N.E.2d 238, 250 (Ind.App.2013). For an abuse of process claim, ‘[i]f a party's ‘acts are procedurally and substantively proper under the circumstances......
  • Heckler & Koch, Inc. v. German Sport Guns GmbH, No. 1:11–cv–01108–SEB–TAB.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • December 24, 2014
    ...tort of defamation, we are aware of no case in which they have ventured far beyond this core rationale. Cf. Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind.Ct.App.2013) ; Rain, 626 F.3d at 378 (“[T]he question [is] whether applying the litigation privilege in this case would promote ......
  • Borden v. Malone, 1190327
    • United States
    • Supreme Court of Alabama
    • November 25, 2020
    ...actions based on absolute privilege also bars the plaintiffs’ negligence actions for the same reason."); Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind. Ct. App. 2013) ("Other torts related to defamation, or relying upon defamatory statements as proof of wrongdoing, may also be barr......
  • Borden v. Malone, 1190327
    • United States
    • Supreme Court of Alabama
    • November 25, 2020
    ...actions based on absolute privilege also bars the plaintiffs' negligence actions for the same reason."); Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind. Ct. App. 2013) ("OtherPage 53 torts related to defamation, or relying upon defamatory statements as proof of wrongdoing, may also ......
  • Request a trial to view additional results
37 cases
  • Heckler & Koch, Inc. v. German Sport Guns GmbH, No. 1:11–cv–01108–SEB–TAB.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • December 24, 2014
    ...tort of defamation, we are aware of no case in which they have ventured far beyond this core rationale. Cf. Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind.Ct.App.2013) ; Rain, 626 F.3d at 378 (“[T]he question [is] whether applying the litigation privilege in this case would promote ......
  • United Tactical Sys., LLC v. Real Action Paintball, Inc., Case No. 14-cv-04050-MEJ
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 10, 2015
    ...or motive, and (2) a willful act in the use of process not proper in the regular conduct of a proceeding. Estate of Mayer v. Lax, Inc. , 998 N.E.2d 238, 250 (Ind.App.2013). For an abuse of process claim, ‘[i]f a party's ‘acts are procedurally and substantively proper under the circumstances......
  • Borden v. Malone, 1190327
    • United States
    • Supreme Court of Alabama
    • November 25, 2020
    ...actions based on absolute privilege also bars the plaintiffs’ negligence actions for the same reason."); Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind. Ct. App. 2013) ("Other torts related to defamation, or relying upon defamatory statements as proof of wrongdoing, may also be barr......
  • Borden v. Malone, 1190327
    • United States
    • Supreme Court of Alabama
    • November 25, 2020
    ...actions based on absolute privilege also bars the plaintiffs' negligence actions for the same reason."); Estate of Mayer v. Lax, Inc., 998 N.E.2d 238, 249 (Ind. Ct. App. 2013) ("OtherPage 53 torts related to defamation, or relying upon defamatory statements as proof of wrongdoing, may also ......
  • Request a trial to view additional results

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