Susan S. McDermott v. Sue Finkam

Opinion

FILED Jul 27 2026, 8:51 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

IN THE

Court of Appeals of Indiana Susan S. McDermott, Appellant-Plaintiff

v.

Sue Finkam and City of Carmel, Indiana, Appellees-Defendants

July 27, 2026 Court of Appeals Case No. 25A-PL-3144 Appeal from the Hamilton Superior Court The Honorable Jonathan M. Brown, Judge Trial Court Cause No. 29D02-2504-PL-4705

Opinion by Judge Vaidik Judges Altice and Foley concur.

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 1 of 11 Vaidik, Judge.

Case Summary [1] Susan S. McDermott filed a complaint for defamation per se against the City of

Carmel (“the City”) and its mayor, Sue Finkam (“Mayor Finkam”), for

comments Mayor Finkam made at two Carmel City Council meetings about

financial documents the City had requested from McDermott when she was the

board chair of Carmel Christkindlmarkt, Inc. (“CCI”). The trial court dismissed

the complaint under Indiana Trial Rule 12(B)(6), and McDermott now appeals.

Because Mayor Finkam’s comments do not, on their face, attribute wrongdoing

to McDermott and are as consistent with mistake or incompetence as with

misconduct, we conclude as a matter of law that they do not constitute

defamation per se. We therefore affirm the trial court.

Facts and Procedural History [2] The factual allegations in the complaint, which we accept as true for purposes

of a Trial Rule 12(B)(6) motion to dismiss, can be summarized as follows.

McDermott is a longtime Carmel resident with a decades-long career as a

financial professional for multiple nonprofit organizations. Mayor Finkam has

served as the City’s mayor since January 2024. Shortly after taking office,

Mayor Finkam appointed McDermott to the three-member board of directors

of CCI, a 501(c)(3) charitable organization and 509(a)(3) supporting

organization of the City. McDermott accepted the appointment in February

2024, and her fellow board members later elected her chair of the CCI board.

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 2 of 11 [3] Following her appointment, McDermott and the rest of the CCI board

undertook efforts to improve the organization’s governance, including revising

CCI’s bylaws, reviewing its compensation practices, and retaining new legal

counsel. At the same time, the City—through Mayor Finkam and the

corporation counsel, Samantha Karn—began working with CCI toward a new

operating agreement between the two entities.

[4] On July 3, 2024, Karn emailed McDermott requesting a current profit-and-loss

statement and an employee salary study for CCI. McDermott, who was on

vacation, responded the same day and said she would provide the records upon

her return; she supplied both documents on July 8. On July 11, Karn separately

asked CCI’s legal counsel for the same materials and was told they had already

been furnished by McDermott three days earlier. The complaint alleges that no

City representative thereafter requested any additional CCI financial

information from McDermott or followed up on what she had provided.

[5] Negotiations over the proposed operating agreement continued through the late

summer and into the fall of 2024. On September 11, McDermott received a

voicemail from Mayor Finkam stating that she wanted the operating agreement

finalized by September 30 and that she would not authorize the City’s street

department to install the Christkindlmarkt “until a new operating agreement

was finalized.” Appellant’s App. Vol. 2 p. 28. On September 17, CCI received a

proposed operating agreement from Karn, which, among other things,

contained a provision that the City “owned” “the Christkindlmarkt Festival and

the intellectual property of” CCI. Id. The next week, on September 24,

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 3 of 11 McDermott, CCI’s chief executive officer, Mayor Finkam, and Karn met and

agreed to terms for financial reimbursement for that year’s festival. But the next

day, Karn advised CCI that the City was unwilling to proceed with the

operating agreement unless CCI agreed to all of the City’s terms, including that

the City “owns” the festival. Id. at 29. On September 30, CCI sent a

“compromise operating agreement” to the City agreeing to the ownership term

demanded by the City while seeking to protect CCI’s nonprofit status. Id.

[6] On October 3, 2024, McDermott and other CCI representatives met at city hall

with Karn and Mayor Finkam’s chief of staff, Rebecca Carl; Mayor Finkam did

not attend. The complaint alleges that the meeting’s stated purpose—finalizing

the operating agreement—was a ruse, and that its true purpose was to replace

two of CCI’s three board members with appointees who would execute an

operating agreement on the City’s terms. See id. at 30. At the meeting, Karn and

Carl told the CCI representatives that Mayor Finkam was removing those two

board members, effective immediately, though McDermott was invited to

remain. Later that day, McDermott learned that the newly appointed board

members had called a special board meeting to execute an operating agreement

on the City’s terms. Upon learning this, McDermott submitted her resignation

from the CCI board.

[7] On October 7, 2024, four days after McDermott resigned, Mayor Finkam

addressed the Carmel City Council about her administration’s work with CCI.

According to McDermott, Mayor Finkam made the following statement (which

we quote exactly as it appears in the complaint): “we have repeatedly requested

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 4 of 11 comprehensive financials from the market leader, the attorney and the Board

chair [McDermott] for five (5) months…. [we] received some but not all [of the

financial information] …This is problematic.” Id. at 31-32. At a subsequent

Carmel City Council meeting on October 21, McDermott alleges that Mayor

Finkam made the following statement (which, again, we quote exactly as it

appears in the complaint): “The Board chair [McDermott] did give our attorney

the financial information the one time she was asked–it wasn’t everything

needed and she is still waiting for information.” Id. at 32. 1 Mayor Finkam

subsequently posted videos of both statements to her personal social media

account, the City’s social media account, and the City’s newsletter, and the

statements were also reported by several news outlets.

[8] In April 2025, McDermott filed suit against the City and Mayor Finkam, in

both her official and personal capacities, asserting a single count of defamation

per se. The defendants moved to dismiss under Indiana Trial Rule 12(B)(6).

During oral argument on the motion, McDermott withdrew her claim against

Mayor Finkam in her official capacity, leaving only the claims against Mayor

Finkam personally and against the City. In November 2025, the trial court

granted the motion and dismissed McDermott’s complaint.

[9] McDermott now appeals.

1 As McDermott recognizes, Mayor Finkam’s statements referred only to “the Board chair.” See Appellant’s App. Vol. 2 p. 41 nn. 2-3. McDermott’s complaint added “[McDermott]” after “the Board chair”— “apparently to clarify that ‘the Board chair’ referred to her.” Id. at 10 n.1.

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 5 of 11 Discussion and Decision [10] McDermott appeals the trial court’s dismissal of her complaint. Under Indiana

Trial Rule 12(B)(6), a civil action may be dismissed for “failure to state a claim

upon which relief can be granted.” A 12(B)(6) motion “tests the legal

sufficiency of the plaintiff’s claim, not the facts supporting it.” Residences at Ivy

Quad Unit Owners Ass’n v. Ivy Quad Dev., LLC, 179 N.E.3d 977, 981 (Ind. 2022)

(quotation omitted). To overcome a 12(B)(6) motion, the complaint must allege

facts that show the “possibility of relief.” Id. at 980. We review a 12(B)(6)

motion de novo, taking the facts alleged in the complaint as true, considering all

allegations in the light most favorable to the nonmoving party, and drawing

every reasonable inference in that party’s favor. Id. at 981.

[11] Although the defendants sought dismissal of McDermott’s complaint on five

grounds, the trial court dismissed the complaint based on “one clearly

dispositive argument.” Appellant’s App. Vol. 2 p. 13. That is, the court

concluded, “as a matter of law,” that Mayor Finkam’s statements about

McDermott’s disclosure of financial records “do not constitute defamation per

se.” Id. at 14. We do the same. 2

[12] To state a claim for defamation per se, a plaintiff must allege a communication

that, “without reference to extrinsic evidence,” imputes (1) criminal conduct,

(2) a loathsome disease, (3) misconduct in the plaintiff’s trade, profession,

2 Although our review is de novo, we commend the trial court on its thorough, well-reasoned order.

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 6 of 11 office, or occupation, or (4) sexual misconduct. Trail v. Boys & Girls Clubs of Nw.

Ind., 845 N.E.2d 130, 136 (Ind. 2006); Kelley v. Tanoos, 865 N.E.2d 593, 596

(Ind. 2007). Because a plaintiff pursuing a per se theory receives the benefit of

presumed damages, the imputation must be obvious on the face of the

statement—it must constitute “a serious charge of incapacity or misconduct in

words so obviously and naturally harmful that proof of their injurious character

can be dispensed with.” In re Ind. Newspapers Inc., 963 N.E.2d 534, 549-50 (Ind.

Ct. App. 2012) (quotation omitted). “The offensiveness of the statements

cannot be determined by how the plaintiff views the statement; the defamatory

nature must be present in the nature of the words without any additional facts

or circumstances to give context.” Id. at 550. A plaintiff has “a high bar to

meet” to show that a communication unambiguously accuses her of

professional misconduct. Ducker v. Amin, No. 1:12-CV-01596, 2014 WL

1018050, at *8 (S.D. Ind. Mar. 14, 2014) (citing Levee v. Beeching, 729 N.E.2d

215, 220 (Ind. Ct. App. 2000)).

[13] Because the sufficiency of a defamation per se claim depends on the words

themselves rather than on facts outside the complaint, Indiana courts routinely

resolve the question at the pleading or summary-judgment stages. See, e.g., Trail,

845 N.E.2d at 137-38 (Supreme Court affirming a Trial Rule 12(B)(6)

defamation dismissal); Columbus Specialty Surgery Ctr. v. Se. Ind. Health Org., Inc.,

22 N.E.3d 665 (Ind. Ct. App. 2014) (Court of Appeals affirming a Trial Rule

12(B)(6) defamation dismissal); Baker v. Tremco Inc., 917 N.E.2d 650 (Ind. 2009)

(Supreme Court affirming grant of summary judgment to defendant on

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 7 of 11 defamation per se claim); Hrezo v. City of Lawrenceburg, 81 N.E.3d 1146 (Ind. Ct.

App. 2017) (Court of Appeals affirming grant of summary judgment to

defendant on defamation per se claim). We now turn to the statements at issue.

[14] McDermott’s complaint quotes two statements Mayor Finkam made at Carmel

City Council meetings in October 2024. The first, made on October 7, reads:

“we have repeatedly requested comprehensive financials from the market

leader, the attorney and the Board chair [McDermott] for five (5) months….

[we] received some but not all [of the financial information] …This is

problematic.” The second, made on October 21, reads: “The Board chair

[McDermott] did give our attorney the financial information the one time she

was asked–it wasn’t everything needed and she is still waiting for information.”

[15] Taking the statements on their face—without the interpretive gloss

McDermott’s complaint and briefing supply—we conclude they do not

obviously and unambiguously impute misconduct to anyone. The first

statement reports that three people associated with CCI—“the market leader,

the attorney and the Board chair [McDermott]”—were asked for records over a

period of months and that the City “received some but not all” of what it

sought, which Mayor Finkam described as “problematic.” This is, at most, a

report that a request to multiple people went partially unfulfilled. It does not say

why the records were incomplete, does not attribute fault to any particular

person, and does not suggest that the omission was wrongful or improper as

opposed to merely mistaken or incompetent. The second statement, if anything,

cuts in McDermott’s favor: it credits McDermott with providing information

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 8 of 11 “the one time she was asked” and identifies no wrongdoer for the information

that remained outstanding. Indeed, McDermott had already resigned from the

CCI board by the time either statement was made—four days before the first

statement and more than two weeks before the second—and so she could no

longer supply whatever CCI information remained outstanding.

[16] We find that this case is like Baker and Hrezo. In Baker, our Supreme Court held

that a supervisor’s statement that a salesperson had engaged in “inappropriate”

sales practices was not defamation per se because the word “inappropriate” was

too vague to establish, on its face, that the conduct amounted to misconduct

rather than something more benign. 917 N.E.2d at 658 (“Indeed, it may be

inferred from use of the word ‘inappropriate’ that the sales practice did not

amount to any misconduct.”). Mayor Finkam’s statements suffer from the same

problem: describing a request for records as having been partially fulfilled, and

characterizing that shortfall as “problematic,” conveys no more concrete an

accusation than the word “inappropriate” did in Baker. So too in Hrezo, where

we held that statements reporting performance deficiencies (such as that the

plaintiffs used more workers than necessary, overcharged, and did unnecessary

work) were not defamatory per se because the deficiencies described “could just

as easily have been caused by mistake or incompetence” as by misconduct, such

that a reader would need extrinsic facts to conclude otherwise. 81 N.E.3d at

1156. The same is true of Mayor Finkam’s report that the City received CCI’s

financial records only in part: an incomplete response is just as consistent with

mistake or incompetence as opposed to anything wrongful or improper by

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 9 of 11 McDermott. As the trial court aptly explained in its dismissal order, “Although

a seasoned, respected financial professional might understandably bristle at

Finkam’s comments, ‘[t]he offensiveness of the statements cannot be

determined by how the plaintiff views the statement . . . .’” Appellant’s App. Vol.

2 p. 19 (quoting Ind. Newspapers, 963 N.E.2d at 550). Because Mayor Finkam’s

statements, on their face, are not “so obviously and naturally harmful” as

defamation per se requires, we conclude as a matter of law that they do not

constitute defamation per se.

[17] McDermott resists this conclusion by arguing that her “fiduciary duties” as

CCI’s board chair transform Mayor Finkam’s otherwise vague characterization

into a “serious” charge of misconduct. Appellant’s Br. p. 20. She relies mainly

on Stanley v. Kelley, 422 N.E.2d 663 (Ind. Ct. App. 1981), overruled in part by

Bochnowski v. Peoples Fed. Sav. & Loan Ass’n, 571 N.E.2d 282, 284 (Ind. 1991),

and Glasscock v. Corliss, 823 N.E.2d 748 (Ind. Ct. App. 2005), reh’g denied, trans.

denied. 3 Neither case supports her position. Stanley does not discuss fiduciary

duties at all and, in any event, arose in an ordinary employment setting—not,

as here, a nonprofit board member’s duty to a municipality with which the

nonprofit was independently negotiating. 422 N.E.2d at 669. Glasscock is

likewise inapposite: the statements there specifically accused an employee of

3 McDermott also cites two out-of-state decisions, Stonebridge Health Systems, LLC v. Miller, 416 So. 3d 611 (La. Ct. App. 2025), and Tarter v. Bendt, No. 1 CA-CV 19-0703, 2021 WL 282265 (Ariz. Ct. App. Jan. 28, 2021). Neither applies Indiana law, and neither binds this Court. Tarter, moreover, is not even precedential in Arizona, the jurisdiction that decided it.

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 10 of 11 using company money to purchase gifts for her family and friends for several

years and of discrepancies in her expense reports—concrete, particularized

misconduct far removed from a generalized report that a request for records

went only partially fulfilled. 823 N.E.2d at 753-54. Whatever fiduciary

obligations McDermott owed as a CCI board member, invoking them does not

supply the specificity that Mayor Finkam’s statements, on their face, lack.

[18] The trial court did not err in dismissing McDermott’s complaint under Trial

Rule 12(B)(6).

[19] Affirmed.

Altice, J., and Foley, J., concur.

ATTORNEYS FOR APPELLANT F. Anthony Paganelli Christopher Goff Paganelli Law Group Indianapolis, Indiana

ATTORNEYS FOR APPELLEES Andrew Z. Soshnick Stephanie L. Gutwein Natalie W. Ditzler Faegre Drinker Biddle & Reath LLP Indianapolis, Indiana

Court of Appeals of Indiana | Opinion 25A-PL-3144 | July 27, 2026 Page 11 of 11