Robert Hrezo v. City of Lawrenceburg
2017 Ind. App. LEXIS 360
| Ind. Ct. App. | 2017Background
- Robert Hrezo is sole owner of Hrezo Engineering, Inc. (HEI); HEI provided municipal engineering services to the City of Lawrenceburg from 1997–2005 and billed the City over $3.5 million.
- After Tom Steidel became City Manager in 2003, concerns arose about HEI’s work: alleged overbilling, overstaffing of job sites, and defective work on projects (Todd‑Creech Park, Ivy Tech retaining wall, Fire Station, Gateway project).
- On March 3, 2005 Steidel circulated a memo to City officials criticizing HEI’s billing and work; additional critical statements were allegedly made in City meetings.
- HEI sued the City in 2006 asserting tortious interference, defamation (per se and per quod), interference with prospective business advantage, and RICO violations.
- The trial court granted summary judgment for the City on tortious interference, interference with prospective advantage, RICO, and defamation per se; only defamation per quod proceeded to trial. A jury found none of the communications to be defamatory; the trial court’s rulings were affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statements were defamatory per se | HEI: Steidel’s memo and other City statements falsely accused HEI of overcharging, unnecessary staffing, causing project defects, and expanding scope — constituting defamation per se (misconduct in trade/profession). | City: Statements accused of poor performance/overbilling are at worst opinions or require extrinsic proof (therefore per quod); not actionable as per se defamation. | Court: Affirmed summary judgment for City — statements could be explained by mistake or incompetence and thus were not defamatory per se; at most per quod. |
| Whether City tortiously interfered with HEI’s contracts (including with utility board) | HEI: City agents interfered with contracts and work for the City and its utility service board. | City: A municipality cannot be a third‑party interferer with its own contracts; the utility board argument was not raised below. | Court: Affirmed summary judgment — issue about utility service board was waived for appeal (not litigated below); a party cannot interfere with its own contracts. |
| Admissibility of CPA Race’s damages testimony | HEI: Race’s report/testimony quantified lost profits/damages from alleged defamation and should be admitted. | City: Race’s evidence should be excluded (motion in limine); damages evidence irrelevant if no defamatory finding. | Court: Exclusion not reversible — any error harmless because jury found no defamatory statements (no liability => no damages). |
| Jury instruction on intracompany publication | HEI: Requested instruction that communications between agents of the same principal constitute publication. | City: Instruction unnecessary or duplicative given other instructions and the evidence. | Court: No reversible error — even if instruction would be proper, any error was harmless because jury found statements non‑defamatory. |
Key Cases Cited
- Trail v. Boys & Girls Clubs of N.W. Ind., 845 N.E.2d 130 (Ind. 2006) (elements of defamation and requirement to prove communication, defamatory imputation, malice, publication, and damages)
- Kelley v. Tanoos, 865 N.E.2d 593 (Ind. 2007) (definition of defamatory meaning and categories of defamation per se)
- Dugan v. Mittal Steel USA Inc., 929 N.E.2d 184 (Ind. 2010) (distinguishing defamation per se and per quod and damages presumptions)
- Baker v. Tremco Inc., 917 N.E.2d 650 (Ind. 2009) (whether a communication is defamatory is a question of law unless ambiguous)
- Rambo v. Cohen, 587 N.E.2d 140 (Ind. Ct. App. 1992) (categories of defamation per se)