Bross Enterprises Inc v. Chesterton Town of et al
OPINION AND ORDER Chestertons motion for summary judgment DE # 20 is GRANTED in part and DENIED in part. Pursuant to 28 U.S.C. § 636(b)(1)(A), Fed. R. Civ. P. 72(a), and Local Rule 72-1(b), the court ORDERS that this case be referred to Magistrate Judge John Martin for purposes of holding a settlement conference within 60 days of the date of this order. The court will set a trial date under separate order. Signed by Senior Judge James T Moody on 9/29/16. (kjp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
BROSS ENTERPRISES, INC.,
TOWN OF CHESTERTON, et al.,
No. 2:13 CV 217
OPINION AND ORDER
This matter is before the court on a motion for summary judgment filed by the
defendants. who are the Town of Chesterton and two of its officials, Dave Novak and
Emerson Delaney, in both their official and individual capacities (for convenience,
collectively referred to as “Chesterton”). Briefly, and merely to describe the dispute for
contextual purposes, not as a summary of disputed or undisputed facts, the plaintiff,
Bross Enterprises, Inc. (“Bross”), is a corporation which operates a climate-controlled
self-storage business in a building near downtown Chesterton. It alleges that Chesterton
harassed it in a number of ways, such as selective enforcement of town ordinances and
delaying issuance of building permits. Chesterton’s possible motive is not entirely clear,
but the complaint and Bross’s argument suggests one reason is that defendant Emerson
Delaney is a “close personal friend” (DE # 1 at 2, ¶ 6) of an adjacent business owner
who wants to buy Bross’s property, at a low price.
In its complaint Bross pleads six counts based on Chesteron’s alleged
harassment: 1) a Fifth Amendment violation for the taking of its property; 2) an Equal
Protection violation because of discriminatory enforcement of town ordinances;
3) tortious interference with business relationships; 4) intentional infliction of emotional
distress;1 5) negligent supervision; and 6) negligent training. Chesterton has moved for
summary judgment on all six claims/legal theories.
Summary judgment must be granted when “there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” FED. R.
CIV. P. 56(a). When considering the motion, the court must construe all of the evidence
and the reasonable inferences to be drawn therefrom in the light most favorable to the
non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505,
91 L. Ed. 2d 202 (1986); Chaib v. Geo Group, Inc., 819 F.3d 337, 340–41 (7th Cir. 2016). In a
case involving cross-motions for summary judgment, that means that each party
receives the benefit of all reasonable inferences drawn from the record when
considering the opposing party’s motion. See Tegtmeier v. Midwest Operating Engineers
Pension Trust Fund, 390 F.3d 1040, 1045 (7th Cir. 2004); Hendricks-Robinson v. Excel Corp.,
154 F.3d 685, 692 (7th Cir. 1998).
Defendant’s motion for summary judgment will be DENIED because genuine
issues of material fact remain for trial as to Count II, alleging discriminatory
enforcement of town ordinances. Briefly, Chesterton argues that Bross is pursuing a
“class of one” equal protection claim which requires a plaintiff to show that: 1) a state
The complaint uses the word “intimidation,” and Chesterton argued that no such tort
exists in Indiana. Plaintiff responded that it actually pleads intentional infliction of emotional
distress, and Chesterton accepted that in its reply memorandum.
actor intentionally treated it differently than others similarly-situated; and 2) there is no
rational basis for the difference in treatment. Vill. of Willowbrook v. Olech, 528 U.S. 652
(2000). Chesterton analogizes to Reget v. City of LaCrosse, 595 F.3d 691 (7th Cir. 2010), in
which the plaintiff alleged that the city had selectively enforced its “junk-dealer”
ordinance against his auto-body shop business. The court held that the plaintiff’s claim
failed because he had no evidence showing that a similarly-situated ordinance violator
was not cited. Chesterton argues that Bross also has no evidence that Chesterton
ignored some similarly-situated ordinance violator.
It is undisputed that Bross was cited on August 10, 2012, for violating Section
15-1 of Chesterton’s ordinances, for creating a nuisance of standing water on an
adjacent property, caused by run-off from Bross’s parking lot. Ironically, the issue was
caused by construction to improve drainage in the parking lot, a project undertaken
because a business owner adjacent to Bross named Hopkins (who is the adjacent owner
whom Bross alleges is a personal friend of defendant Delaney) had done work which
(taking the facts in the light most favorable to non-movant Bross) caused water to flood
Bross’s property. Hopkins had raised the level of drains in his parking area (to which
Bross had access via an easment) and because water wasn’t draining as quickly as
before, it backed up into Bross’s parking area. (DE #22-1 at 16-17.)2 Hopkins was not
Citations herein to deposition pages reference the page number(s) assigned by the
CM/ECF system, not the actual deposition page.
cited for creating a nuisance. Bross argues that Chesterton’s treatment of Hopkins
shows that a similarly-situated violator of the ordinance was treated more favorably.
In its reply Chesterton argues that Hopkins was treated differently because the
town engineer, Mark O’Dell, concluded that Hopkins’s raising of the parking lot drains
did not cause the problem. The evidence cited for this “conclusion,” however, is not
compelling. It is one sentence in O’Dell’s deposition. Asked what the “substance” was
of his investigation of the flooding on Bross’s property, he answered “it looked like a
low spot in their [Bross’s] parking lot.” (DE # 21-4 at 3-4.) Compared to Bross’s version
of the facts, that his parking lot had never flooded before but did two days after
Hopkins raised the drains (DE #22-1 at 20-21), there is a question of fact as to whether
or not Hopkins caused Bross’s standing-water problem. More to the point, there is an
issue of fact whether O’Dell’s purported conclusion was a rational reason not to cite
Hopkins or the true reason, which points Chesterton has not addressed.
The court does find that Bross’s other five claims do not present questions of fact
that require submission to a jury. Because this case is going forward and may be
resolved with or without a trial, the court gives a cursory explanation why it believes
that Chesterton’s motion for summary judgment on the other five claims is correct,
removing those claims from further consideration in this action.
First, as to Bross’s Fifth Amendment taking claim, an unconstitutional taking
occurs when governmental regulations are applied in such an onerous and burdensome
way that an owner is deprived of substantially all economically viable use of his/her
property. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538-39 (2005). Whether such a
diminution in value amounts to a regulatory taking requires consideration of the nature
of the government action, the economic impact of the regulation, and the degree of
interference with the owner’s reasonable investment-based expectations. Penn Central
Transpt. Co. v. City of New York, 438 U.S. 104 (1978); Bettendorf v. St. Croix Cty., 631 F.3d
421, 430 (7th Cir. 2011).
Bross contends that there is a question fo fact as to whether there was a great
economic impact on is business. It argues that Chesterton “required” it to install a
“Hancor” drainage system at a cost of $50,000, but the evidence it cites shows only that
Bross was told “our only option . . . to get it done fast was to go with a Hancor
Underground Storage System,” (DE # 22-11 at 37). Thus, it does not suggest that
Chesterton required Bross to install that system. Other than that, Bross’s evidence shows
only that it suffered some construction delays and may have lost a few prospective
customers. This is not enough of an economic impact to present a jury question on the
As to Bross’s claim for tortious interference with business relationships, an
element of the tort is interference with an existing relationship. Felsher v. Univ. of
Evansville, 755 N.E.2d 589, 598 n.21 (Ind. 2001). Chesterton argues that Bross shows only
that it may have lost some prospective, not existing, customers. Bross’s response is:
“Some jurisdictions . . . recognize claims for tortious interference with a prospective
business relationship,” and so it “requests that this Court entertain an action for tortious
interference of a prospective business relationship.” (DE # 22 at 12-13.) In its reply
Chesterton states that Indiana does not recognize the tort, and even if it did (but no
authority is cited for the point), Bross would have to identify a specific prospective
business relationship that was impacted, which it has not done.
Both parties seem unaware that Indiana recognizes the tort of interference with
prospective advantage, which appears to be essentially the same. Brazauskas v. Fort
Wayne-S. Bend Diocese, Inc., 796 N.E.2d 286, 289 n.2 (Ind. 2003); Kiyose v. Trustees of
Indiana Univ., 166 Ind. App. 34, 43, 333 N.E.2d 886, 891 (1975) (“The development of the
tort of interference with prospective advantage has been parallel to that of interference
with contractual relations.”). However, even for this tort, the plaintiff must show “that a
valid business relationship existed, of which the defendant knew” and intentionally
interfered with causing plaintiff damage. Flintridge Station Assoc. v. Am. Fletcher
Mortgage Co., 761 F.2d 434, 440 (7th Cir. 1985).
The evidence Bross cites is that it knows it lost customers because it had to turn
away “people that would just walk up to us and ask” to rent space. (DE # 22-1 at 24.)
This is too speculative to be evidence of a “valid business relationship.” There are
numerous reasons why the inquiries made by those persons might not have developed
into a business relationship, for example, they might have thought the rate charged by
Bross was too high, or the term of the rental too long; they might have inspected the
storage space and found it unclean or odiferous. Because Bross’s evidence is so
speculative, there is no issue for a jury to decide.3
Count IV of Bross’s complaint, pled as intimidation, is actually meant to be the
tort of intentional infliction of emotional distress, Bross asserts in its reponse and
Chesterton accepts in its reply. The parties focus their argument on whether the conduct
Bross identifies is outrageous enough to establish the tort. In so doing they miss a larger
problem: the only plaintiff in this action is a corporation, and a corporation cannot
suffer mental anguish and so cannot recover in tort for intentional infliction of
emotional distress. See Felsher, 755 N.E.2d at 594–95 (corporations cannot bring privacy
claims because they have no feelings which can be injured); see also F.D.I.C. v. Hulsey, 22
F.3d 1472, 1489 (10th Cir. 1994) (corporation has no emotions and so cannot bring claim
for intentional infliction of emotional distress); Cohlmia v. Ardent Health Servs., LLC, 448
F. Supp. 2d 1253, 1272 (N.D. Okla. 2006) (same); Wolf St. Supermarkets, Inc. v. McPartland,
108 A.D.2d 25, 32, 487 N.Y.S.2d 442, 448 (1985) (corporation cannot suffer humiliation or
mental anguish); Hogan Exploration v. Monroe Engineer Assoc., 430 So.2d 696, 704 (La.
App. 2d Cir. 1983) (corporate plaintiff cannot experience mental anguish).
The court recognizes that because it has raised this issue sua sponte, Bross has had
no opportunity to be heard. The court therefore grants leave to Bross to file a motion for
Even the case Bross cites and asks this court to follow in recognizing tortious
interference with a prospective business relationship, Robles v. Consol. Graphics, Inc., 965 S.W.2d
552, 561 (Tex. App. 1997), states that the plaintiff must show a “reasonable probability” of
entering into a business relationship. Perhaps if Bross were to show how many initial inquiries
about renting space turn into actual rentals, that would be enough.
reconsideration, if it wishes to do so, and the court will not hesitate to revise this ruling
should Bross show the court authority recognizing that corporations can bring a claim
for intentional infliction of emotional distress.
In Count V Bross pleads that Chesterton is liable for negligent failure to
supervise its employees, and in Count VI, for failing to properly train them. Chesterton
argues that both claims are barred by statutory immunity.
As to the claims asserted against defendants Novak and Delaney in their
personal capacities, that statute provides that plaintiff’s complaint must allege that their
acts and/or omissions were “clearly outside the scope” of their employment. Ind. Code
§ 34-13-4-5(c)(2).4 Chesterton argues that the complaint only pleads that Novak and
Delaney were acting within the scope of their employment, and so immunity applies.
The court notes that Bross’s complaint appears to plead Counts V and VI against The
Town of Chestertin only, and plaintiff has not even responded to this argument.
Therefore, summary judgment is granted on any individual-capacity claims that might
exist against Novak and Delaney in Counts V and VI of the complaint.
As to Chesterton itself, it argues that it has immunity from liability for any
“performance of a discretionary function,” Ind. Code Ann. § 34-13-3-3(7), which applies
to the supervision and training of its employees. City of Hammond v. Cataldi, 449 N.E.2d
Although the statute is phrased in the disjunctive and seems to allow individualcapacity claims in other circumstances, for example if criminal or malicious conduct is pleaded,
Indiana holds that if those acts are also incidental to the individual’s employment, immunity
applies. Bushong v. Williamson, 790 N.E.2d 467, 473 (Ind. 2003).
1184, 1185 (Ind. Ct. App. 1983) (allegation that city negligently trained and supervised
employees barred by statutory immunity for discretionary functions). Bross responds,
appropriately, that the ministerial/discretionary approach to determining immunity in
Cataldi has been abandoned and the inquiry now is a planning/operational test that
calls for determining whether policy considerations were involved in the acts on which
a plaintiff attempts to base liability.
The actions of the individual defendants here—deciding whether to issue
building permits and whether to issue a nuisance citation—call for judgment based on
policy considerations, as does any decisions made by individuals above them regarding
their supervision and training. It is also clear that Bross has pointed to no evidence
showing how Chesterton failed to supervise and/or train its employees. Chesterton is
entitled to summary judgment.
For the reasons above, Chesterton’s motion for summary judgment (DE # 20) is
GRANTED in part and DENIED in part. Pursuant to 28 U.S.C. § 636(b)(1)(A), Fed. R.
Civ. P. 72(a), and Local Rule 72-1(b), the court hereby ORDERS that this case be
referred to Magistrate Judge John Martin for purposes of holding a settlement
conference within 60 days of the date of this order. The court will set a trial date under
Date: September 29, 2016
s/James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT
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