ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Richard P. Busse Michael D. Sears
Valparaiso, Indiana Jacquelyn S. Pillar King
Singleton, Crist, Austgen & Sears, LLP
Munster, Indiana
______________________________________________________________________________
In the
FILED
Indiana Supreme Court Jun 17 2010, 3:02 pm
_________________________________
CLERK
of the supreme court,
No. 45S05-1002-CV-121 court of appeals and
tax court
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CHRISTINE DUGAN, Appellant (Plaintiff below),
v.
MITTAL STEEL USA INC., AND
JAY KOMOROWSKI, IN HIS INDIVIDUAL AND OFFICIAL CAPACITIES,
Appellees (Defendants below).
_________________________________
Appeal from the Lake Superior Court, No. 45D05-0609-CT-180
The Honorable William E. Davis, Judge
The Honorable Noah Holcomb, Judge pro tem
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On Transfer from the Indiana Court of Appeals, No. 45A05-0902-CV-69
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June 17, 2010
Dickson, Justice.
In this action for defamation per se and intentional infliction of emotional distress, the
plaintiff appeals from the grant of summary judgment for the defendants. The Court of Appeals
reversed in part. Dugan v. Mittal Steel USA, Inc., 911 N.E.2d 692 (Ind. Ct. App. 2009). We
granted transfer and now affirm the grant of summary judgment, concluding that the material
facts are not in dispute and that a qualified privilege applies to preclude the defamation action.
The plaintiff, Christine Dugan, was working for Mittal Steel in 2004 when the defendant
Jay Komorowski, a supervisor at Mittal Steel, made statements about the plaintiff to other Mittal
Steel employees. Mittal Steel eventually discharged the plaintiff, and she then filed a grievance.
In the ensuing arbitration, Mittal Steel was ordered to reinstate her with back pay. Appellant's
App'x at 77. After her reinstatement, the plaintiff instituted this action against Komorowski and
Mittal Steel. The defendants sought summary judgment, which the trial court granted, finding
(a) that neither statement constituted defamation per se, (b) that both statements were protected
by a qualified privilege and there was no evidence of abuse of privilege, and (c) that the claim of
intentional infliction of emotional distress was not supported. The plaintiff appealed only as to
the defamation claims.
A party is entitled to summary judgment upon demonstrating the absence of any genuine
issue of fact as to a determinative issue unless the non-moving party comes forward with con-
trary evidence showing an issue of fact for trial. Williams v. Tharp, 914 N.E.2d 756, 761–62
(Ind. 2009); Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269–70 (Ind. 2009).
An appellate court reviewing a trial court summary judgment ruling likewise construes all facts
and reasonable inferences in favor of the non-moving party and determines whether the moving
party has shown from the designated evidentiary matter that there is no genuine issue as to any
material fact and that it is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Funston
v. Sch. Town of Munster, 849 N.E.2d 595, 598 (Ind. 2006); Coca-Cola Co. v. Babyback's Int'l,
Inc., 841 N.E.2d 557, 561 (Ind. 2006). But a de novo standard of review applies where the dis-
pute is one of law rather than fact. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 39 (Ind. 2002).
1. Defamation per se
In her appeal, the plaintiff first challenges the trial court's conclusion that the alleged de-
famatory statements were not defamation per se. She argues that the statements accused her of
both illegal activity and misconduct in her occupation and that they were false. In response, the
defendants assert that the statements alleged by the plaintiff fail to support a claim for defama-
tion per se because they do not impute criminal conduct or occupational misconduct without
resort to extrinsic evidence.
2
To establish a claim of defamation, a "plaintiff must prove the existence of 'a communi-
cation with defamatory imputation, malice, publication, and damages.'" Trail v. Boys & Girls
Clubs of N.W. Ind., 845 N.E.2d 130, 136 (Ind. 2006) (quoting Davidson v. Perron, 716 N.E.2d
29, 37 (Ind. Ct. App. 1999), trans. denied). A statement is defamatory if it tends "to harm a per-
son's reputation by lowering the person in the community's estimation or deterring third per-
sons from dealing or associating with the person." Kelley v. Tanoos, 865 N.E.2d 593, 596 (Ind.
2007) (internal citation omitted). One type of defamation action, alleging defamation per se,
arises when the language of a statement, without reference to extrinsic evidence, constitutes an
imputation of (1) criminal conduct, (2) a loathsome disease, (3) misconduct in a person's trade,
profession, office, or occupation, or (4) sexual misconduct. Id.; see also Rambo v. Cohen, 587
N.E.2d 140, 145 (Ind. Ct. App. 1992), trans. denied; Elliott v. Roach, 409 N.E.2d 661, 683 (Ind.
Ct. App. 1980), trans. not sought. In contrast, if the words used are not defamatory in them-
selves, but become so only when understood in the context of extrinsic evidence, they are consi-
dered defamatory per quod. McQueen v. Fayette County Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct.
App. 1999), trans. denied. In actions for defamation per se, damages are presumed, but in ac-
tions for defamation per quod, a plaintiff must prove damages. Rambo, 587 N.E.2d at 145–46.
At issue in this appeal are the following allegedly defamatory statements as asserted in
the plaintiff's complaint:
6. In April, 2004, Defendant Komorowski told Kevin Vana, chief of security
at Mittal, that the plaintiff was stealing time by working on Sundays on a "core ex-
change" scheme with her boss, Albert Verdusco, allegedly an attempt to defraud the
Company. Defendant Komorowski also accused plaintiff of stealing an air compres-
sor from the Company.
7. On or about September 9, 2004, Defendant Komorowski told Jim McClain
and Zigmund Gorroll, employees of the Company, that plaintiff was working on a
"core exchange" (theft) of welding machines with her boss, Albert Verdusco.
Appellant's App'x at 28 (punctuation in original). Rhetorical paragraphs 5, 6, 7, and 11 of the
plaintiff's complaint alleged statements critical of the plaintiff that were made by Komorowski to
other co-employees. The plaintiff argues on appeal that the evidence on summary judgment es-
tablishes several instances of defamatory communications. Seeking to limit the plaintiff's claims
3
to those asserted in her complaint, the defendants assert that the plaintiff's counsel stipulated by
his express statement during the plaintiff's deposition that the plaintiff is "stipulating" that her
claim for defamation "is specifically limited to what is set forth in the complaint." Appellees'
App'x at 140. And the defendants further argue that the plaintiff's actions before the trial court
operated to waive any claims of defamation per se under paragraphs 5 and 11. In response, the
plaintiff does not dispute these claims, and her Reply Brief presents no claims as to paragraphs 5
or 11, nor as to any other statements in the summary judgment materials, but rather asserts only
that "[t]he trial court mistakenly granted summary judgment to Mittal because paragraphs 6. and
7. of Dugan's complaint do support a claim for defamation per se." Appellant's Reply Br. at 5.
We thus treat the plaintiff's appeal as challenging summary judgment only as to the allegations in
paragraphs 6 and 7 of her complaint.
On the issue of whether defamation per se is raised by the plaintiff's complaint, the Ap-
pellees' Brief defends the summary judgment determination only as to the statements in para-
graph 7. And in oral argument, counsel for the defendants conceded that the April 2004 state-
ments alleged in paragraph 6 did amount to defamation per se but maintained that the September
2004 statements alleged in paragraph 7 did not.
In paragraph 6, the plaintiff alleges that defendant Komorowski stated to other employees
that the plaintiff was "stealing time," working on a "scheme with her boss . . . allegedly an at-
tempt to defraud the Company," and "stealing an air compressor from the Company." Appel-
lant's App'x at 28. As statements imputing criminal conduct or occupational misconduct, these
alleged statements clearly qualify for consideration as defamation per se.
As to paragraph 7 of the complaint, the plaintiff argues that the per se defamatory nature
of the September 2004 statement alleged therein is established by the criminal imputation of the
phrase "(theft) of welding machines." Appellant's Reply Br. at 3. It is only the word "theft,"
however, that suggests criminal activity, and this word appears in parentheses, expressing that it
was not expressly communicated but rather inserted by the complaint drafter as an editorial at-
tempt to attribute meaning and to place in context the statement "working on a 'core exchange.'"
This insert, however, is a resort to extrinsic evidence and thus cannot constitute defamation per
4
se. Because defamatory imputation does not exist in the words "core exchange," or elsewhere in
the statements alleged in paragraph 7, its allegations cannot be the basis for a claim of defama-
tion per se. The trial court was correct on this point.
Therefore, as to the trial court's conclusion that "the stipulated statements at issue do not
constitute defamation per se as a matter of law," we agree only as to the statements alleged in
paragraph 7 of the plaintiff's complaint. Appellant's App'x at 16. As to the statements alleged in
paragraph 6, however, which may constitute defamation per se, we turn to the trial court's alter-
native findings in support of summary judgment—that the "statements at issue are protected by
qualified privilege, and there is no evidence to support an abuse of the privilege." Id.
2. Qualified Privilege
The plaintiff contends that summary judgment is not appropriate on grounds of qualified
privilege because of the existence of disputed issues of fact. The plaintiff claims that because
defendant Komorowski did not personally witness any actual wrongdoing by the plaintiff, Ko-
morowski acted recklessly and "a jury could view Komorowski's statements as made without
grounds for belief in the truth." Appellant's Br. at 17.
Because we have determined that only the April 2004 statement alleged in paragraph 6
suffices for consideration as defamation per se, the issue is thus whether the defendants have es-
tablished from the designated materials on summary judgment that there is no genuine issue of
material fact as to their claim of qualified privilege in connection with the alleged April 2004
statement. The plaintiff alleges in paragraph 6 that defendant Komorowski stated to Mittal Steel
security chief Kevin Vana that the plaintiff was "stealing time by working on Sundays on a 'core
exchange' scheme with her boss, . . ., allegedly an attempt to defraud the Company," and that
Komorowski "accused plaintiff of stealing an air compressor from the Company." Appellant's
App'x at 28. The defendants assert that the April 2004 statement was made by Komorowski, at
Vana's request, to assist in an internal investigation that resulted in criminal charges and thus are
protected by qualified privilege pursuant to Schrader v. Eli Lilly & Co., 639 N.E.2d 258 (Ind.
1994).
5
In Schrader, which involved a complaint alleging defamatory intracompany communica-
tions, we affirmed the trial court's grant of summary judgment and recognized the qualified privi-
lege of common interest that "applies to communications made in good faith on any subject mat-
ter in which the party making the communication has an interest or in reference to which he has a
duty, either public or private, either legal, moral, or social, if made to a person having a corres-
ponding interest or duty." Id. at 262 (internal citation omitted).
As to the claim of qualified privilege for the alleged defamation in April 2004, the desig-
nated material presented to the trial court as shown in the appellate record is not extensive. It
shows that Mittal Steel employee Jay Komorowski had, over a period of several years, become
concerned with the suspicious disappearance of company machinery and tools associated with
concerted activities of several Mittal Steel supervisors and workers, including the plaintiff. Ko-
morowski personally believed that at least one of them was stealing equipment from the compa-
ny and that the plaintiff was somehow involved in the process. In April 2004 Komorowski ex-
pressed these concerns to Vana, Mittal Steel's Security Chief. It is Komorowski's statements
during this discussion that are referred to in paragraph 6 of the plaintiff's complaint. At Vana's
suggestion, Komorowski wrote a letter detailing his concerns to the president of the company.
This letter provided details including not only reports of others who witnessed various thefts of
Mittal Steel equipment but also his own personal observation of multiple welding machines be-
ing placed into trucks and then disappearing "never to return." Appellant's App'x at 67. The
company thereafter engaged North American Security Solutions, Inc. to investigate an alleged
"theft ring" involving the plaintiff's department.
The plaintiff argues that the defendants are not protected by qualified privilege because
Komorowski made the statements to Vana "while having no basis for the truth of the statements
other than what he heard from others" and that "[n]either Mittal or its employees have a common
interest in rumors." Appellant's Reply Br. at 7.
The defendants, as the parties seeking summary judgment, claim that the designated evi-
dence establishes the absence of any genuine issue of material fact as to the applicability of qual-
6
ified privilege to the April 2004 statements by Komorowski to Vana. In response, the plaintiff,
as the non-moving party, does not dispute such facts but challenges the application of the privi-
lege by arguing that Komorowski was also relying on information received from others and that
he had not personally witnessed any stealing by the plaintiff, and thus his statement was made
without grounds for belief in its truth.
It is unreasonable and contrary to sound policy for the common interest qualified privi-
lege for intracompany communications about theft of company property to apply only for state-
ments made on personal knowledge and to exclude the reporting of information received from
others. Furthermore, to defeat application of the privilege, the evidence must show that the
speaker "lacked any grounds for belief as to the truth of the statements." Bals v. Verduzco, 600
N.E.2d 1353, 1357 (Ind. 1992). See also Williams, 914 N.E.2d at 765–66. The designated evi-
dence here clearly establishes that Komorowski's statements were based on an accumulation of
several years of careful personal observations and gathering of information from others with
first-hand knowledge and that his resulting concerns and opinions were expressed to the security
chief in good faith. The plaintiff fails to identify any designated evidence showing that Komo-
rowski lacked grounds for his belief in the truth of his statements.
We conclude that the defendants have demonstrated the absence of any genuine issue of
material fact relating to their defense of qualified privilege and that the undisputed facts show
that the alleged statement of Komorowski to Vana was made in good faith and without abuse re-
garding theft of company machinery and tools, a subject on which they both shared a common
interest and duty. The statements thus fall within the qualified privilege as to the allegation of
defamation per se presented in rhetorical paragraph 6 of the plaintiff's complaint.
Conclusion
Of the two alleged occasions of defamation per se at issue, the one asserted in paragraph
7 of the plaintiff's complaint does not constitute defamation per se. Although the statement al-
leged in paragraph 6 of the complaint qualifies as defamation per se, there is no genuine issue of
fact undermining the defendants' claim of qualified privilege. Summary judgment for the defen-
7
dants is affirmed.1
Shepard, C.J., and Sullivan, Boehm, and Rucker, JJ., concur.
1
As part of its order granting the defendants' motion for summary judgment, the trial court also
entered a full final judgment against the plaintiff. Appellant's App'x at 17. The plaintiff's appeal does not
challenge this entry by presenting any claim that, even if the language of her rhetorical paragraphs fails to
constitute defamation per se, the trial court should have entered only partial summary judgment on the
issue of defamation per se, not final summary judgment on all claims.
8