State v. Alvarez

• Decision Date: 10 June 2020
• Docket Number: Court of Appeals Case No. 19A-CT-587
• Parties: STATE of Indiana, Indiana Department of Environmental Management, Indiana State Department of Health, et al., Appellants-Defendants, v. Cristobal ALVAREZ, C.A. BY NEXT FRIEND Cristobal ALVAREZ, et. al., Appellees-Plaintiffs
• Court: Indiana Appellate Court

150 N.E.3d 206

STATE of Indiana, Indiana Department of Environmental Management, Indiana State Department of Health, et al., Appellants-Defendants,

v.Cristobal ALVAREZ, C.A. BY NEXT FRIEND Cristobal ALVAREZ, et. al., Appellees-Plaintiffs

Court of Appeals Case No. 19A-CT-587

Court of Appeals of Indiana.

FILED June 10, 2020

Attorneys for Appellants: Natalie F. Weiss, Deputy Attorney General, Indianapolis, Indiana, Frances Barrow, Deputy Attorney General, Indianapolis, Indiana

Attorneys for Appellee: Eric S. Pavlack, Colin E. Flora, Pavlack Law, LLC, Indianapolis, Indiana

May, Judge.

[1] The State of Indiana, the Indiana Department of Environmental Management ("IDEM"), and the Indiana State Department of Health ("ISDH") (collectively, "State Defendants") appeal the trial court's order denying their motion for judgment on the pleadings. State Defendants raise four issues for our review, which we restate as the following three issues:

i. Whether the Indiana Tort Claims Act immunizes the State Defendants;

ii. Whether Plaintiffs' claims are barred by the statute of limitations; and

iii. Whether Plaintiffs pled facts sufficient to state a claim for intentional infliction of emotional distress.

We affirm.

Facts and Procedural History¹

[2] In the late-1960s, the City of East Chicago decided to build a large-scale public housing complex that became the West Calumet Housing Complex ("Complex"). The City built the Complex in an industrial area. The land was formerly occupied by the Anaconda Lead Products Company and surrounded by other lead smelting operations. Carrie Gosch Elementary School, which the City built in 1958 on land formerly occupied by U.S. Smelter and Lead Refinery, Inc., was located near the Complex. In the late 1990s, the City constructed a new building for Carrie Gosch Elementary on land behind the site of the original building.

[3] In 1985, IDEM found lead contaminated soil near the Complex, and ISDH learned that children who lived at the Complex had high levels of lead in their blood. ISDH and IDEM performed further testing and sampling in 1997, which also revealed lead contaminated soil around the Complex and elevated levels of lead in the blood of children living in the Complex. However, none of the State Defendants notified the residents of the Complex or the parents of students at Carrie Gosch Elementary of the elevated lead levels.

[4] In 1985, the Environmental Protection Agency ("EPA") began testing the land on which the Complex and Carrie Gosch Elementary were built and addressing contamination. In 1993, the EPA entered into an administrative order of consent with U.S. Smelter and Lead Refinery, Inc, designating the area as a Superfund site² in need of environmental remediation. On September 3, 2014, the United States and the State of Indiana filed a complaint against the Atlantic Richfield Company ("Richfield") and the E.I. Du Pont De Nemours and Company ("Du Pont"), two entities that either operated or were successors in interest to companies that operated on or around the land where the Complex was built. The government filed a proposed consent decree on the same day it filed the lawsuit. On or about October 28, 2014, the EPA reached a $26 million settlement with the companies to provide cleanup costs.

[5] On July 6, 2016, the EPA sent a flyer to Complex residents notifying them that high levels of lead had been found in yards in the Complex. On July 25, 2016, East Chicago Mayor Anthony Copeland sent a letter to residents of the Complex advising them that the land was contaminated with lead. The letter directed residents to move as soon as possible. On December 4, 2017, Cristobal Alvarez and over three hundred other former residents of the Complex ("Plaintiffs") filed suit against the City of East Chicago, the East Chicago Housing Authority, the East Chicago Department of Public and Environmental Health, and the School City of East Chicago (collectively, "City Defendants"), and the State Defendants. Count III of the complaint alleges negligence.³ It states the State Defendants and the East Chicago Department of Public & Environmental Health "owed a duty of reasonable care to the Plaintiffs, including without limitation the duty to warn the Plaintiffs of known risks to their health that had the potential to cause serious, life-altering injuries." (App. Vol. III at 73.) Further, Count III alleges:

112. These Defendants each knew that the soil and air in and around the Complex and Carrie Gosch Elementary School were contaminated with dangerous levels of lead, arsenic, and/or other hazardous substances.

* * * * *

119 These Defendants took no action to inform the Plaintiffs or otherwise to safeguard them from the dangerous condition.

120. Each Defendant actually knew or should have known that lead and other hazardous particles have the potential to cause serious harm to the Plaintiffs.

121. As a direct and proximate result of each Defendant's breaches of its duties, Plaintiffs have suffered and continue to suffer financial, physical, mental, and emotional damages.

(Id. at 74-75.) Count IV alleges the State Defendants committed intentional infliction of emotional distress. Count V alleges negligent infliction of emotional distress.

[6] On July 9, 2018, State Defendants filed a motion for judgment on the pleadings. State Defendants argued that they were immune from suit pursuant to the Indiana Tort Claims Act ("ITCA"), that Plaintiffs' suit was barred by the statute of limitations, and that the Plaintiffs failed to state a claim for intentional infliction of emotional distress. The trial court held a hearing on State Defendants' motion and denied the motion. The trial court certified the order for interlocutory appeal, and we accepted jurisdiction on April 12, 2019.

Discussion and Decision

[7] Our review of a judgment on the pleadings is de novo . Loomis v. Ameritech Corp. , 764 N.E.2d 658, 661 (Ind. Ct. App. 2002), reh'g denied , trans. denied . Such a motion "tests the sufficiency of the complaint to state a redressable claim" and should be granted "only when it is clear from the pleadings that the non-moving party cannot in any way succeed under the facts and allegations therein." Circle Centre Dev. Co. v. Y/G Indiana, L.P. , 762 N.E.2d 176, 178 (Ind. Ct. App. 2002), trans. denied . We look solely to the pleadings and accept all well-pleaded facts as true. Id. The moving party is deemed to have admitted those facts in favor of the non-moving party and we will draw all reasonable inferences in the non-moving party's favor. Id. "When the pleadings present no material issues of fact and the facts shown by the pleadings clearly entitle a party to judgment, the entry of judgment on the pleadings is appropriate." Book v. Hester , 695 N.E.2d 597, 599 (Ind. Ct. App. 1998).

1. Indiana Tort Claim Act

A. Discretionary Function Immunity

[8] In 1974, the Indiana General Assembly passed the ITCA, which "granted absolute immunity to governmental entities in a number of specific circumstances, and codified rules of liability for other areas of governmental activity." Gary Cmty. Sch. Corp. v. Roach-Walker , 917 N.E.2d 1224, 1227 (Ind. 2009). The ITCA immunities are listed in Indiana Code section 34-13-3-3, including an immunity for the performance of discretionary functions. Ind. Code § 34-13-3-3(7) ("A governmental entity or an employee acting within the scope of the employee's employment is not liable if a loss results from the following: ...The performance of a discretionary function[.]").

[9] The Indiana Supreme Court has adopted a planning-operational test to determine if an act qualifies as a discretionary function under the ITCA. Jurich v. Ind. Dep't. of Transp. , 126 N.E.3d 846, 856 (Ind. Ct. App. 2019).

Planning functions involve the formulation of basic policy characterized by official judgment, discretion, weighing of alternatives, and public policy choices. On the other hand, operational functions involve the execution or implementation of already formulated policy.

Lee by & through Estes v. Bartholomew Consol. Sch. Corp. , 75 N.E.3d 518, 526 (Ind. Ct. App. 2017) (internal quotation marks and citations omitted). Planning functions are discretionary and shielded from liability under the ITCA. Id. However, operational functions are not shielded from liability. Id.

[10] Whether an act is discretionary is a question of law. City of Beech Grove v. Beloat , 50 N.E.3d 135, 138 (Ind. 2016). The governmental entity claiming discretionary function immunity bears the burden of demonstrating an act was a planning function as opposed to an operational function. Id. The planning-operational "test is designed to ‘insulate [ ] only those significant policy and political decisions which cannot be assessed by customary tort standards.’ " Id. (quoting Peavler v. Bd. of Comm'rs of Monroe Cty. , 528 N.E.2d 40, 45 (Ind. 1988) ).

[11] State Defendants argue the decision of when and how to warn citizens of possible lead exposure is a discretionary function. The State Defendants note that unlike the placement of traffic signals, which the government is statutorily required to perform pursuant to Indiana Code section 9-21-4-1, there is not a statutory duty "to notify citizens about exposure to toxic waste[.]" (Appellants' Br. at 18.) While there is not an Indiana case determining whether warning citizens about exposure to hazardous chemicals is a discretionary function under the ITCA, State Defendants direct us to a decision interpreting a similar provision of the Federal Tort Claims Act ("FTCA").

[12] In Cisco v. United States , the Seventh Circuit analyzed whether an action brought by homeowners against the EPA regarding the EPA's alleged failure to warn the homeowners that contaminated dirt had been used as residential landfill was barred by the discretionary function exception to the FTCA. 768 F.2d 788, 788 (7th Cir. 1985). The Seventh Circuit held:

In deciding not to warn Cisco about the contaminated landfill and in deciding not to remove

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