The Estate of Richard A. Mayer, and Spangler, Jennings & Dougherty v. Lax, Inc., and David Lasco
2013 Ind. App. LEXIS 485
| Ind. Ct. App. | 2013Background
- In 2004–2006 litigation, attorney Richard Mayer (Spangler Jennings shareholder) filed two inflammatory counterclaims accusing Lax, Inc. and David Lasco of RICO, fraud, bribery, perjury, and related misconduct; the counterclaims were dismissed/subject to summary judgment and later sealed. Mayer later died (2008).
- Lax and Lasco sued Mayer, his estate (the Estate), and Spangler Jennings alleging defamation, malicious prosecution, abuse of process, negligent supervision/retention, and tortious interference, and sought punitive damages.
- The trial court granted summary judgment to the Estate on defamation and malicious prosecution but denied summary judgment to Spangler Jennings on those claims and denied summary judgment on abuse of process, negligent supervision/retention, and tortious interference claims; it allowed punitive damages claims against Spangler Jennings and the Estate.
- The Estate and Spangler Jennings appealed interlocutorily, arguing the counterclaims were absolutely privileged and thus barred many tort claims; Lax and Lasco argued many claims survived because they alleged malicious or abusive use of process.
- The Court of Appeals considered (1) whether absolute privilege bars the asserted claims, (2) whether malicious prosecution survives Mayer’s death as to the firm, (3) whether genuine fact issues exist on abuse of process, and (4) whether punitive damages are available against the Estate or firm.
Issues
| Issue | Plaintiff's Argument (Lax/Lasco) | Defendant's Argument (Estate/Spangler Jennings) | Held |
|---|---|---|---|
| Whether Mayer’s statements in the counterclaims are absolutely privileged and bar the tort claims | The counterclaims were legally deficient, dismissed, sealed, and thus not protected; privilege should not bar related torts | Statements made in judicial proceedings are absolutely privileged if relevant/pertinent to the litigation | Court: The counterclaim allegations were within privilege scope; absolute privilege bars claims for defamation, negligent supervision/retention, tortious interference with business relationship, and tortious interference with contract |
| Whether malicious prosecution claim survives Mayer’s death as to Spangler Jennings (vicarious/direct liability) | Malicious prosecution can proceed against the firm either vicariously (respondeat superior) or directly (firm liable for attorney acts or ratification) | Survival statute bars malicious prosecution claims against a deceased individual (Mayer) but firm argues it cannot be vicariously/respondeat-superior liable once agent’s claim is barred; firm denies direct liability/ratification | Court: Survival statute bars claim against Estate, but respondeat superior claim may proceed against Spangler Jennings; no direct-firm liability established on the record |
| Whether abuse of process claim fails on summary judgment | The counterclaims’ procedural/substantive deficiencies, dismissal, and their conceivably improper purpose (harm Lasco’s casino opportunity) create factual disputes on ulterior motive and improper use of process | Counterclaims were procedurally authorized; no admissible evidence of improper motive or misuse of process | Court: Genuine issues of material fact exist as to abuse of process (denied summary judgment) for both Estate and Spangler Jennings |
| Whether punitive damages are available against Estate and/or Spangler Jennings | Plaintiffs sought punitive damages from both the Estate and the firm | Defendants argued punitive damages are unavailable against a deceased tortfeasor’s estate; firm argued punitive damages cannot be vicariously imposed absent managerial complicity/ratification | Court: Punitive damages not recoverable from the Estate (reversed as to punitive claim against Estate); punitive damages may be pursued against Spangler Jennings only if evidence shows managerial ratification, recklessness in hiring/retention, managerial capacity of agent, or other complicity (genuine fact issues remain) |
Key Cases Cited
- Hartman v. Keri, 883 N.E.2d 774 (Ind. 2008) (absolute privilege protects statements made in judicial proceedings when pertinent)
- Miller v. Reinert, 839 N.E.2d 731 (Ind. Ct. App. 2005) (relevancy/pertinence of judicial statements is a legal question; courts favor finding relevance)
- National City Bank, Indiana v. Shortridge, 689 N.E.2d 1248 (Ind. 1997) (attorneys not absolutely immune from claims like abuse of process when fraud, collusion, or tortious conduct exists)
- Crosson v. Berry, 829 N.E.2d 184 (Ind. Ct. App. 2005) (elements of malicious prosecution; malicious-prosecution can be based on a counterclaim filing)
- Crabtree ex rel. Kemp v. Estate of Crabtree, 837 N.E.2d 135 (Ind. 2005) (Indiana does not permit recovery of punitive damages from the estate of a deceased tortfeasor)
- Orkin Exterminating Co. v. Traina, 486 N.E.2d 1019 (Ind. 1986) (analysis of punitive damages against employers and need for evidence of managerial culpability)