Passmore v. Lee Alan Bryant Health Care Facilities, Inc.

765 N.E.2d 625, 2002 Ind. App. LEXIS 461, 2002 WL 461975

• Court: Indiana Court of Appeals
• Decided: March 27, 2002
• Docket: 61A01-0108-CV-286
• Status: Published

Opinions

OPINION

MATHIAS, Judge.

Mark R. Passmore, as Personal Representative of the Estate of Eva L. Pass-more, and individually ("Passmore"), appeals the trial court's grant of summary judgment in favor of Lee Alan Bryant Health Care Facilities, Inc. ("LAB"). Passmore presents five issues for review, which we restate as the following one dis-positive issue: Whether the trial court erred when it found that Indiana does not recognize the torts of conscious and negligent misrepresentation involving the risk of physical harm.¹

We affirm.²

Facts and Procedural History

The facts most favorable to Passmore, as the non-movant, reveal that Passmore's mother, Eva Passmore ("Eva"), began residing at Parke County Nursing Home ("Parke County") in Rockville, Indiana, in late 1994 as an Alzheimer's patient. Br. of Appellant at 3; Appellee's App. p. 46. On November 27, 1997, Eva exhibited signs of pain by making vocal noises when the nurses moved her, especially her lower right extremity. Later that same day, a bruise on Eva's lower abdomen was discovered; it was about one and one-half inches above her pubic bone. Eiva's primary care physician, Passmore, and Parke County's Social Service Director were notified. Nurses were given orders to have the seat-belt on Eva's wheelchair evaluated and repositioned by the Occupational Therapy department. Appellants' App. p. 80.

Three days later, on November 830, 1997, Eva's bruise had spread, and Eva was still exhibiting signs of pain and discomfort. Eva's primary care physician was again notified of the situation, and he ordered a pelvic x-ray for that same day at West Central Community Hospital ("West Central"). On December 1, 1997, the Parke County administrator was notified of the bruise and on December 2, 1997, Parke County called West Central to request a copy of the pelvic x-ray report. The Parke County Administrator and Passmore were notified of the results in the report, and on December 3, 1997, Parke County notified the Indiana Department of Health of the bruise. Appellants' App. pp. 80-81.

Charles Richardson ("Richardson") was the maintenance supervisor at Parke County when Eva's bruise was discovered. Parke County hired Richardson in May of 1994, while he was still working for his previous employer, LAB. Richardson worked at LAB from August 1991 until May 9, 1994. As part of Parke County's hiring process, they mailed a "Request for Employment Reference" form to LAB regarding Richardson's employment history with LAB. Richardson had signed the form, authorizing LAB to release all information regarding his work record and performance.³ Susan Hein, an administrator at LAB in April 1994, completed the form on behalf of LAB. She marked that Richardson had not received workman's compensation for any injuries while employed with LAB, that he was eligible for re-hire, that Richardson's attendance/punctuality was excellent, and that all other categories of his work record were good. Appellants' App. p. 85.

Passmore filed his original complaint in this cause on May 4, 1998, alleging that the injuries Eva suffered were the result of rape, and naming Parke County Nursing Home and Indiana Health Management Corporations as defendants. Passmore filed an Amended Complaint on May 28, 1998, a Second Amended Complaint on July 12, 1999, and a Third Amended Complaint on October 27, 1999. It was only in the Third Amended Complaint that LAB was added as a defendant.

On August 23, 1999 and on September 2, 1999 (after the Second Amended Complaint was filed, but prior to the filing of the Third Amended Complaint, which added LAB as a defendant), depositions were taken of Tammy Bruner, Crista Jenkins, Cynthia Jones, and Sarah Norman, all of whom were employees of Parke County. The depositions of Beth Bratcher, Rose Burnett, Vickie Durnil, Susan Hein, Joan Herrin, Cynthia Jones, Charles Richardson, Nancy Sowers, and Dana Starr were all taken after LAB was a named defendant.⁴

Passmore's Third Amended Complaint in this cause, filed October 27, 1999, alleged that an employee of Parke County, who LAB previously employed, had raped Eva. The Complaint alleged that LAB "affirmatively misled and misrepresented the employee as a good employee[,]" even though, the Complaint alleged, the employee had engaged in improper sexual activity with residents at LAB, and LAB's management and staff were aware of the conduct. Appellee's App. p. 11. The Complaint continued to allege that Parke County relied upon LAB's alleged misrepresentations in making its decision to hire the employee and that LAB made such misrepresentations "with knowledge of the substantial certainty that [the employee's] conduct would continue at Parke County Nursing Home, and with reckless disregard of the near certainty that such conduct would result in harm and injury to female residents of the Parke County Nursing Home facility." Appellants' App. pp. 11-12.

On August 3, 2000, LAB filed a Motion for Summary Judgment arguing that Pass-more's "claim against Lee Alan Bryant rests on an unprecedented modification of Indiana law" because Passmore "asserted a claim for actual fraud against Lee Alan Bryant based on purported false representations made by Lee Alan Bryant in response to an employment reference inquiry made by [Parke County]." Appellants' App. p. 50. Passmore filed a response on September 20, 2000, and LAB replied on October 2, 2000. Appellee's App. pp. 84, 95. On the same day that LAB filed its reply brief, LAB filed motions to strike several depositions Passmore relied on and attached as affidavits to his response brief.

After a hearing on June 5, 2001 and after granting all of LAB's Motions to Strike, the trial court granted LAB's Motion for Summary Judgment on July 5, 2001. It is from that entry that Passmore now appeals. Additional facts will be provided as necessary.

Standard of Review

Summary judgment is a procedural means to halt litigation when there are no factual disputes and to allow the case to be determined as a matter of law. LeBrun v. Conner, 702 N.E.2d 754, 756 (Ind.Ct.App.1998). Under Indiana Trial Rule 56, the moving party bears the burden of showing that there are no genuine issues of material fact. If the moving party meets its burden, the burden shifts to the non-moving party to set forth facts showing the existence of a genuine issue for trial. Ind. Trial Rule 56(C), 56(E); Oelling v. Rao, 598 N.E.2d 189, 190 (Ind.1992). "A trial court's grant of summary judgment is 'elothed with a presumption of validity, and the appellant bears the burden of demonstrating that the trial court erred." Darst v. Ill. Farmers Ins. Co., 716 N.E.2d 579, 581 (Ind.Ct.App.1999), trans. denied, (citations omitted).

"To prevail on a summary judgment motion in a negligence case, the defendant must demonstrate that the undisputed material facts negate at least one element of the plaintiff's claim or that the claim is barred by an affirmative defense." Ward v. First Ind. Plaza Joint Venture, 725 N.E.2d 134, 135-36 (Ind.Ct.App.2000), trans. denied. This court applies the same standard as the trial court when reviewing a motion for summary judgment, and we resolve questions of fact or inferences drawn therefrom in favor of the nonmov-ing party. Foster v. Evergreen Healthcare, Inc., 716 N.E.2d 19, 28-24 (Ind.Ct.App.1999), trams. denied.

Discussion and Decision

Passmore argues that this court should adopt the principles of conscious misrepresentation and negligent misrepresentation as outlined in Restatement (See-ond) of Torts, Sections 810 and 311. LAB argues and Passmore admits however, that the current state of tort law in Indiana only recognizes the tort of negligent misrepresentation as outlined in Restatement (Second) of Torts, Section 552, and only under very limited cireumstances.

Sections 8310 and 311 allow third parties to recover from a person who has made a misrepresentation inducing action that involves a risk of physical harm. Restatement (Second) of Torts, Section 310, Conscious Misrepresentation Involving Risk of Physical Harm, provides that:

An actor who makes a misrepresentation is subject to liability to another for physical harm which results from an act done by the other or a third person in reliance upon the truth of the representation, if the actor

(a) intends his statement to induce or should realize that it is likely to induce action by the other, or a third person, which involves an unreasonable risk of physical harm to the other, and

(b) knows

(1) that the statement is false, or

(ii) that he has not the knowledge which he professes.

Restatement (Second) of Torts, Section 311, Negligent Misrepresentation Involy-ing Risk of Physical Harm, provides that:

(1) One who negligently gives false information to another is subject to liability for physical harm caused by action taken by the other in reasonable reliance upon such information, where such harm results

(a) to the other, or

(b) to such third persons as the actor should expect to be put in peril by the action taken.

(2) Such negligence may consist of failure to exercise reasonable care

(a) in ascertaining the accuracy of the information, or

(b) in the manner in which it is communicated.

Section 552, Restatement (Second) of Torts is similar to Section 311 because both sections impose liability for negligent misrepresentation. However, Section 552 differs from both Sections 310 and 8311 because Section 552 requires a far more direct relationship between the parties involved and remedies pecuniary loss, rather than actual or potential physical harm. Section 552, Information Negligently Supplied for the Guidance of Others, provides that:

(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplied false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

(2) Except as stated in Subsection (8), the liability stated in Subsection (1) is limited to loss suffered

(a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and

(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction.

(3) The liability of one who is under a public duty to give the information extends to loss suffered by any of the class of persons for whose benefit the duty is created, in any of the transactions in which it is intended to protect them.

As mentioned above, Indiana has not recognized the tort of conscious or negligent misrepresentation under Sections 810 or 311, and has only recognized Section 552 under limited cireumstances, which are dissimilar to our case.

Regarding Section 552 liability, our supreme court has held that "there is no question that professionals may be held Hable in tort if they fail to exercise reasonable care in the fulfillment of their contractual duties." Estate of Reasor v. Putnam County, 635 N.E.2d 153, 161 (Ind.1994) (citing Flint & Walling Mfg. Co. v. Beckett, 167 Ind. 491, 498, 79 N.E. 503, 505 (1906); Essex v. Ryon, 446 N.E.2d 368, 371 (Ind.Ct.App.1983) and cases cited therein) (emphasis added). Along with this, usually only those people in privity with the negligent professional or those people that the professional knew would be affected by his negligence, can recover. Vickers v. Henry County Sav. & Loan Ass'n, 827 F.2d 228, 233 (7th Cir.1987) (citing Essex, 446 N.E.2d at 373). In contrast, in the case before us, even though Passmore did not base his negligent misrepresentation claim on Section 552, LAB had no contractual duty to complete the tendered, pre-printed reference form, and neither Passmore nor Eva were in privity with LAB.

Additionally, Indiana has recognized negligent misrepresentation under Section 552 only in the very narrow area of employment law when an employer breaches a duty to an actual or potential employee by making a false representation upon which the employee reasonably relies to his or her detriment. Eby v. York-Div., Borg-Warner, 455 N.E.2d 623, 629 (Ind. Ct. App.1983). Even the Eby court refused to extend employer liability to all foreseeable plaintiffs. Id. Moreover, our case is easily distinguishable from Fby because Passmore has not made an argument under Section 552 that an employee detrimentally relied on false representations of his employer.

We can find no Indiana cases that adopt Restatement (Second) of Torts, Sections 310 or 311, or a rationale under Indiana common law for doing so.

Conclusion

Because Indiana does not currently recognize the torts of conscious and negligent misrepresentation and we decline to adopt such a rule of law today under the facts of this case, we conclude that the trial court properly granted summary judgment to LAB in regard to Passmore's claim of negligent misrepresentation.

Affirmed.

BROOK, C.J., concurs. RILEY, J., dissents with separate opinion.

1 . Because one issue is dispositive in this case, we do not reach the other issues raised by Passmore: whether the trial court erred when it held that circumstantial evidence could not be used to establish a genuine issue of material fact with regard to the identity of the alleged rapist; whether the trial court erred when it sustained LAB's Motion to Strike certain deposition evidence based on the fact that LAB was not made a defendant in this action until after certain depositions had concluded and based on the fact that certain depositions contained hearsay; and, whether the trial court erred when it concluded that Passmore had ample opportunity to take action to protect his mother from her alleged injury because Passmore's daughter worked at the nursing home in which the alleged injury took place and had heard rumors of inappropriate conduct more than three years prior to Passmore's mother's alleged injury. Additionally, Passmore recognizes that his "claim does not come within the traditional elements of a fraud claim," see Br. of Appellant at 9.

2 . Appellants' request for oral argument is denied.

3 . The reference form was pre-printed and requested dates of employment, job responsibilities, reasons for leaving, whether the person had ever received workman's compensation for injuries, and whether the person was eligible for re-hire. The form also listed several descriptions of the person's work record that could be ranked as excellent, good, average, fair, or poor, by placing a check mark in the corresponding column. The listed descriptions were quality, quantity, attendance/punctuality, dependability, character, cooperation with employees, cooperation with supervisor, and initiative/creativity. Appellants' App. p. 85.

4 . Cynthia Jones was deposed twice in this case, once on September 2, 1999, and again on May 17, 2000.