ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
SUPREME COURT OF INDIANA
Casey D. Cloyd Martin D. Hoke
Muncie, Indiana Natalie Shrader
CELEBRATION FIREWORKS, INC., )
Appellant (Plaintiff Below ), ) Cause No. 50S03-9712-CV-657
) in the Supreme Court
) Cause No. 50A03-9612-CV-462
WAYNE SMITH, ) in the Court of Appeals
Appellee (Defendant Below ). )
APPEAL FROM THE MARSHALL CIRCUIT COURT
The Honorable Bruce C. Embrey, Special Judge
Cause No. 50C01-9406-CP-54
May 1, 2000
SHEPARD, Chief Justice.
Celebration Fireworks, Inc. filed a defamation suit against the City of Plymouths fire
chief after the chief made statements about Celebration while conducting an inspection at
the premises of its prospective landlord. The trial court granted summary judgment
for the chief, ruling that the suit was barred because Celebration did not
comply with the notice provisions of the Indiana Tort Claims Act. It
also held that the chiefs remarks were protected by qualified privilege.
The Indiana Court of Appeals reversed. Celebration Fireworks, Inc. v. Smith, 682
N.E.2d 569 (Ind. Ct. App. 1997). We grant transfer. Ind. Appellate
The Events Themselves
Celebration Fireworks once rented property within the city limits of Plymouth, and it
had disputes with the city over the sale of fireworks. At one
point, Plymouth sought injunctive relief against Celebration. Celebration contracted to rent space
at George Kendalls motorcycle dealership because his building is one block outside the
city limits. Kendalls shop is, however, within the Plymouth Fire Departments service
In the midst of the busy fireworks season on July 2, 1993, Plymouth
Fire Chief Wayne Smith went to conduct a safety inspection at Kendalls dealership,
where Celebration was setting up shop. According to Celebrations complaint, Smith, in
his capacity as fire chief, told the lessor that [t]hese people do not
pay their bills. (R. at 20.)
He urged Kendall to [g]et your
money in advance, and said, These people are gypsies. (R. at 5.)
In a deposition, Kendall said he knew Smith in his capacity as fire
chief because Smith had been conducting fire inspections of Kendalls motorcycle business for
about fifteen years. He testified that Smith told him he was in
the shop in his capacity as city fire chief. Kendall recalled that
Smith spent about five minutes in his shop and looked around some before
he left. He said Smith appeared upset that Celebration would be renting
space from him. (R. at 51-52.) During the visit Smith told
him that a firewall would have to be constructed to separate the fireworks
sale area from the rest of the motorcycle shop.
Celebration asserts Smith was attempting to talk Kendall out of leasing the space
in an effort to keep Celebration out of Marshall County. Celebration also
alleges it had to pay additional rent as a result of those statements.
The Notice and the Lawsuit
Celebration filed a notice under the Indiana Tort Claims Act on January 3,
1994, in an attempt to preserve any potential claim against the City of
Plymouth. Celebration Fireworks, 682 N.E.2d at 571. Celebration later filed suit
against Smith on June 3, 1994.
In his answer to the suit, Smith denied he ever made the statements
attributed to him. He also asserted Celebrations complaint was governed by the
Tort Claims Act. Ind. Code Ann.
§ 34-4-16.5-1 (West 1983).
If so, it was barred because Celebration had
not filed notice of the claim within 180 days of the alleged tort,
as required by Ind. Code § 34-4-16.5-7 and Ind.
Code § 34-4-16.5-9. Smith also claimed he was immune from liability under
Ind. Code § 34-4-16.5-3(13).
In a motion for summary judgment, Smith asserted that a January 3, 1994
letter from Celebrations attorneys to the Mayor of Plymouth that contained the notation
Tort Claims Notice was intended to serve as a tort claims notice required
by Ind. Code § 34-4-16.5-7 and Ind. Code § 34-4-16.5-9. (R. at
13-14.) As such, that notice was due on or before December 29,
1993, Smith argued.
In granting Smiths motion for summary judgment, the trial court determined Smith was
acting within the scope of his employment as fire chief when he inspected
Kendalls store. Any statements he made were either within the scope of
his employment or made in good faith and protected by qualified privilege.
Further, the trial court determined that a tort claim against the City of
Plymouth had not been filed in time.
On appeal, the Court of Appeals focused on two issues. The first
was whether Smiths conduct was within the scope of employment, so as to
trigger the Tort Claims Act.
His statements about Celebrations bill-paying history, it said, were made on his own
initiative and not in service to his employer. Celebration Fireworks, 682 N.E.2d at
572. Because the statements were made outside the sphere of his employment,
the Court of Appeals concluded, the notice provision of the Tort Claims Act
did not apply and operate to bar Celebrations claim. Id.
The Court of Appeals also reviewed Smiths claim of qualified privilege. It
held that conflicting inferences over whether Smiths statements were motivated by ill will
precluded a grant of summary judgment on the issue of qualified privilege.
In light of these conclusions, the Court of Appeals reversed the trial courts
grant of summary judgment. Id.
Scope of Employment
The Tort Claims Act governs lawsuits against political subdivisions like the City of
Plymouth and against their employees. It requires early notice that a claim exists,
and it provides
substantial immunity for conduct within the scope of the employees' employment.
"The purpose of immunity is to ensure that public employees can exercise their
independent judgment necessary to carry out their duties without threat of harassment by
litigation or threats of litigation over decisions made within the scope of their
employment." Indiana Dept. of Correction v. Stagg, 556 N.E.2d 1338, 1343 (Ind.
Ct. App. 1990), trans. denied. The Tort Claims Act bars suits for
which timely notice has not been given.
Much of the caselaw examining the acts of governmental employees has revolved around
various immunities specified in the Tort Claims Act. See, e.g., Foster v.
Pearcy, 270 Ind. 533, 387 N.E.2d 446 (1979) (defamation suit against prosecutor barred
by discretionary function immunity), cert. denied, 445 U.S. 960 (1980); Jacobs v. City
of Columbus, 454 N.E.2d 1253 (Ind. Ct. App. 1983) (defamation suit against police
detectives barred under discretionary function and failure to enforce law immunities).
We have opined, without deciding, that these immunities might be lost when an
employee acts so far out of the scope of his or her employment
as to amount to fraud or criminal conduct. Poole v. Clase, 476
N.E.2d 828, 831 (Ind. 1985). In Seymour Natl Bank v. State, 428
N.E.2d 203, 204 (Ind. 1981), we touched on the same issue by saying
immunity might be lost if conduct were so outrageous as to be incompatible
with the performance of the duty undertaken. Our more recent pronouncements, including
our overruling of Seymour Natl Bank, suggest that governmental employers will not be
broadly immune under some of these provisions. See Quakenbush v. Lackey, 622
N.E.2d 1284 (Ind. 1993) (city where officer drove squad car at night without
using headlights not immune under failure to enforce law).
The threshold question in this case is whether the Tort Claims Act applies
at all to the acts by Smith that gave rise to the suit.
That is, was Smith acting within the scope of his employment?
The Restatement of Agency provides some general guidance for assessing the type of
conduct that is within the scope of employment: "To be within the
scope of the employment, conduct must be of the same general nature as
that authorized, or incidental to the conduct authorized." Restatement (Second) Agency §
The Restatement stresses that [t]o be incidental, however, [an act] must be one
which is subordinate to or pertinent to an act which the servant is
employed to perform. Restatement (Second) Agency § 229 cmt. b (1958).
Even tortious acts may fall within the scope of employment. In Kemezy
v. Peters, 622 N.E.2d 1296 (Ind. 1993), we said an employee's tortious act
may fall within the scope of his employment "if his purpose was, to
an appreciable extent, to further his employer's business." Kemezy, 622 N.E.2d at
1298 (quoting Stropes v. Heritage House Childrens Ctr., 547 N.E.2d 244, 247 (Ind.
The U.S. Supreme Court recently noted that this doctrine has traditionally defined the
scope of employment as including conduct of the kind [a servant] is employed
to perform, occurring substantially within the authorized time and space limits, and actuated,
at least in part, by a purpose to serve the master, but as
excluding an intentional use of force unexpectable by the master. Faragher v.
City of Boca Raton, 524 U.S. 775, 793 (1998) (quoting Restatement (Second) Agency
Plainly, Smith was on public time, performing a function that was central to
the position he held. As the Restatement suggests, this is a pretty
good start, but it may not always be dispositive. The task is thus
to decide whether the fire chiefs statements were incidental to the conduct authorized
as the Restatement puts it, or as our opinion in Kemezy said, to
an appreciable extent to further his employers business.
The VanWalkenburg Formulation
During his service on the Court of Appeals, Justice Rucker provided a helpful
way of answering such a question in VanWalkenberg v. Warner, 602 N.E.2d 1046
(Ind. Ct. App. 1992). Julie VanWalkenberg was a student in a class
taught by Warner at Indiana State University. Upon leaving the courses final
session, held at Warners residence, she fell on the front porch and broke
her ankle. Without filing a tort claim notice on either the university or
Warner, she sued Warner for negligent maintenance of his home. Warner claimed
the protection of the Tort Claims Act, saying he was acting within the
scope of his employment when he conducted the class.
Relying on our opinion in Poole v. Clase, 476 N.E.2d 828 (Ind. 1985),
the VanWalkenberg court held that governmental employment, standing alone, does not trigger the
notice provisions of the Indiana Tort Claims Act. VanWalkenberg, 602 N.E.2d at
1249. Rather, the court said, notice is required only if the act
or omission causing the plaintiffs loss is within the scope of defendants employment.
Id. It concluded that since maintenance of Warners residence was not
a thing he did in service of the university, it was beyond the
scope of his employment.
In this case, the act causing the plaintiffs loss consisted of several statements,
three sentences in all, that were part of a longer discussion between the
fire chief and the owner of a business being inspected prior to the
start of Celebrations tenancy. We think that splitting out these sentences so
as to place Smith outside the scope of his employment puts too fine
a point on the matter and helps neither employees nor claimants.
If employees were easily declared outside the scope of the act for things
they say during the otherwise ordinary course of their employment, the threat to
their independent judgment necessary to carry out their duties, Stagg, 556 N.E.2d at
1343, would be greater. Morever, claimants would more often find themselves limited
to recovery against the private assets of employees rather than those of governments.
This is not to say whether, had notice been given, Celebration might have
been entitled to a judgment or whether the chief might have been entitled
to one of the enumerated immunities of the Act. We conclude only
that Judge Embrey was correct in holding that the chiefs statements were incidental
to an activity that was part of the chiefs duty, inspecting business premises.
Accordingly, we affirm the judgment of the trial court.
Sullivan, Boehm, and Rucker, JJ., concur
Dickson, J., not participating.
In a later deposition, the chief said that Celebrations former landlord, Rick
Miller, told him the fireworks seller had not paid all of its rent.
(R. at 26, 28-29.)
Title 34, including the provisions containing the Tort Claims Act, was repealed and
recodified at Ind. Code § 34-13-3. For clarity, all citations to the Tort
Claims Act in this opinion reflect the applicable statutes at the time of
That section, in relevant part, provides:
A governmental entity or an employee acting within the scope of the employees
employment is not liable if a loss results from: . . .
(13) misrepresentation if unintentional[.]