Northern Indiana Public Service Co. v. Dabagia

721 N.E.2d 294, 15 I.E.R. Cas. (BNA) 1785, 1999 Ind. App. LEXIS 2205, 1999 WL 1257642
CourtIndiana Court of Appeals
DecidedDecember 27, 1999
Docket46A03-9802-CV-51
StatusPublished
Cited by25 cases

This text of 721 N.E.2d 294 (Northern Indiana Public Service Co. v. Dabagia) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northern Indiana Public Service Co. v. Dabagia, 721 N.E.2d 294, 15 I.E.R. Cas. (BNA) 1785, 1999 Ind. App. LEXIS 2205, 1999 WL 1257642 (Ind. Ct. App. 1999).

Opinions

OPINION

SHARPNACK, Chief Judge

Northern Indiana Public Service Company (“NIPSCO”) appeals a judgment in favor of Hassan Dabagia on his claims for defamation and breach of an implied covenant of good faith and fair dealing. NIP-[297]*297SCO raises the following issues that we consolidate and restate as:

1) Whether the trial court erred when it denied NIPSCO’s motion for summary judgment on Dabagia’s claim for breach of an implied covenant of good faith and fair dealing;
2) Whether the trial court erred when it denied NIPSCO’s motion for summary judgment on one of Dabagia’s claims for defamation; and
3) Whether the trial court erred when it entered judgment for Dabagia on his other claims for defamation.

We reverse and remand.

The relevant facts follow. NIPSCO is a public utility company that furnishes gas and electric services to customers in northern Indiana. Dabagia was employed by NIPSCO from June 1, 1981, until he was fired on April 28, 1994. Dabagia worked for NIPSCO in a number of positions, but at the time of his discharge he was a sales representative. His responsibilities included contacting NIPSCO customers, assessing their gas and electric needs, and suggesting the installation of new equipment which would increase the customers’ energy efficiency.

In 1992, NIPSCO began a sales incentives program to generate greater electrical and gas revenues. Sales representatives who participated in the program negotiated with their supervisors annually to set monetary goals for the amount of sales events they would generate during the year. A sales event occurred when a customer notified NIPSCO that it wanted to add new equipment or modify existing equipment, thereby resulting in an increase in the customer’s energy usage. The salesperson would then record the information provided by the customer on a sales event form. Salespersons participating in the sales incentive program were required to perform extra work in addition to their normal duties. If a salesperson met or exceeded his or her monetary goal for the year, then he or she would receive a percentage of NIPSCO’s projected new income from the customer’s increased energy usage as a bonus.

In 1993, Dabagia negotiated a sales incentive agreement with his supervisor in which he set á sales goal of $650,000, the highest goal among all NIPSCO sales representatives in his district. Dabagia completed 133 sales event forms for the program in 1993, and he exceeded his sales goal for the year. As a result, he earned $72,072.72 in incentive pay and a quarterly bonus of $3,315 from the program in addition to his base salary.

In early 1994, NIPSCO’s management discovered a discrepancy between the projected increased energy usage reported during the 1993 sales incentive program and actual energy usage. NIPSCO’s internal audit department began a review of the 1993 incentive sales program to identify the causes of the discrepancy. NIP-SCO auditors Ed Stood and Jim Cook called approximately 100 of the customers who had participated in the 1993 sales program and asked them if equipment had actually been installed or modified as described on their sales event forms. During the course of the audit, the auditors determined that eight of Dabagia’s 1993 sales event forms projected extra energy usage by the customers, but the extra energy usage never occurred. On each of the eight forms, Dabagia claimed that the customer had installed new equipment which would result in increased energy usage. In each case, however, the equipment was not installed as described on the form, and the equipment had either never been installed or had been installed years before Dabagia contacted the customer.

The auditors contacted Dabagia in late March 1994 and scheduled a meeting with him to discuss the audit. Dabagia met with Ed Stood and David Vajda, both NIP-SCO auditors, on April 6, 1994. They questioned Dabagia about his job and his perceptions of the 1993 sales event program. Vajda and Stood then asked Daba-[298]*298gia about each of the eight sales event forms and told him that all of the forms contained inaccurate information about equipment installation. Dabagia stated that he had relied on the customers’ assertions that the work was going to be done when he filled out the forms.

A second meeting took place on April 28, 1994. Dabagia, Vajda, and Stood were present, as were John Higley, who was NIPSCO’s Director of Marketing, and Ronald Wilder, an attorney representing NIPSCO. Dabagia was again questioned about the eight sales event forms. Daba-gia insisted that he believed that the information on the forms was correct at the time he recorded it, but he also recognized that the forms contained inaccurate information. The officials told Dabagia to resign or be fired. Dabagia refused to resign, and he was suspended from employment at the end of the meeting.

Later that same day, Dabagia returned all of the incentive pay he had earned in 1993. On May 9, 1994, Mark Maassel, a NIPSCO Vice President, met with Daba-gia and fired him. On May 23, NIPSCO returned most of Dabagia’s 1993 incentive pay. NIPSCO kept $6,745.71 of the bonus money because, according to its calculations, that was the amount of unearned bonus pay that Dabagia had received from the inaccurate sales event forms.

Dabagia filed a complaint on Sept. 13, 1994, alleging breach of an employment contract, breach of an implied covenant of good faith and fair dealing, and defamation. NIPSCO filed a motion for summary judgment on all of Dabagia’s claims, and the trial court denied NIPSCO’s motion. The trial court also decided that the case would be tried before an advisory jury. Trial was held on June 9-13, 1997. At the close of Dabagia’s case, NIPSCO moved for dismissal under Ind. T.R. 41(B) or, in the alternative, judgment on the evidence under Ind. T.R. 50(A). The trial court denied NIPSCO’s motion. 'The jury returned an advisory verdict for NIPSCO on Dabagia’s claim for breach of contract. However, the jury also returned an advisory verdict for Dabagia on his claims for defamation and breach of implied covenant of good faith and fair dealing, and it awarded him $1,877,271.00 in damages.

On July 9, 1997, NIPSCO filed a motion to correct the advisory verdict and a request for findings of fact and conclusions of law. The trial court heard oral argument, and the parties both submitted their proposed findings of fact and conclusions of law on December 18, 1997. The trial court entered judgment on January 9, 1998, in which it adopted the advisory jury verdicts, “except as to the damages,” and adopted Dabagia’s proposed findings of fact and conclusions of law, again “except as to damages.” Record, p. 738. The trial court awarded Dabagia $500,000 for breach of an implied covenant of good faith and fair dealing and $500,000 for defamation.

I.

The first issue is whether the trial court erred when it denied NIPSCO’s motion for summary judgment on Dabagia’s claim for breach of an implied covenant of good faith and fair dealing. NIPSCO contends that Dabagia was an at will employee of NIPSCO and that the sales incentive agreement did not change his employment status. Therefore, NIPSCO claims, no implied covenant was created, and NIPSCO was free to dismiss Dabagia at any time and for any reason.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bowes-Northern v. Patel
N.D. Indiana, 2025
Ruehl v. AM General LLC
N.D. Indiana, 2020
Mimms v. CVS Pharmacy, Inc.
244 F. Supp. 3d 832 (S.D. Indiana, 2017)
David McCollough v. Noblesville Schools and Jeff Bryant
63 N.E.3d 334 (Indiana Court of Appeals, 2016)
Walker v. Trailer Transit, Inc.
1 F. Supp. 3d 879 (S.D. Indiana, 2014)
Newman v. Gagan LLC
939 F. Supp. 2d 883 (N.D. Indiana, 2013)
Eversole v. Spurlino Materials of Indianapolis, LLC
804 F. Supp. 2d 922 (S.D. Indiana, 2011)
Collins v. Purdue University
703 F. Supp. 2d 862 (N.D. Indiana, 2010)
Lessley v. CITY OF MADISON, IND.
654 F. Supp. 2d 877 (S.D. Indiana, 2009)
Board of School Commissioners v. Pettigrew
851 N.E.2d 326 (Indiana Court of Appeals, 2006)
Villas West II of Willowridge v. McGlothin
841 N.E.2d 584 (Indiana Court of Appeals, 2006)
Glasscock v. Corliss
823 N.E.2d 748 (Indiana Court of Appeals, 2005)
Gatto v. St. Richard School, Inc.
774 N.E.2d 914 (Indiana Court of Appeals, 2002)
Manzon v. Stant Corp.
202 F. Supp. 2d 851 (S.D. Indiana, 2002)
Allen v. Great American Reserve Insurance Co.
766 N.E.2d 1157 (Indiana Supreme Court, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
721 N.E.2d 294, 15 I.E.R. Cas. (BNA) 1785, 1999 Ind. App. LEXIS 2205, 1999 WL 1257642, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northern-indiana-public-service-co-v-dabagia-indctapp-1999.