MARTEN et al v. OFFICE OF THE INDIANA ATTORNEY GENERAL et al

Filing 50

ENTRY on 39 Motion to Dismiss - Defendants' Motion to Dismiss (Dkt. 39) is GRANTED. This action is DISMISSED with prejudice. Signed by Judge Tanya Walton Pratt on 6/20/2013. (JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
JANICE S. MARTEN and
CHRISTOPHER MARTEN,
Plaintiffs,
v.
ANDREW W. SWAIN, RICK ALBRECHT,
and STATE OF INDIANA,
Defendants.

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) Case No. 1:12-cv-00195-TWP-TAB
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ENTRY ON MOTION TO DISMISS
This matter is again before the Court on Defendants’, Andrew Swain (“Mr. Swain”), Rick
Albrecht (“Mr. Albrecht”), and the State of Indiana (“the State”) (collectively, “Defendants”),
Motion to Dismiss (Dkt. 39). On October 22, 2012, the Court dismissed Plaintiffs’, Janice and
Christopher Marten’s (“the Martens”), federal and several state claims finding they were barred
by the statute of limitations. The Martens, however, were granted leave to file an amended
complaint with respect to their malicious prosecution claim against Defendants. A second
amended complaint was filed on October 26, 20121 and it, along with the exhibit filed May 17,
2013, establishes that the Martens complied with the Indiana Tort Claims Act (“ITCA”) before
bringing their claim of malicious prosecution against Defendants. Now fully addressing the
merits of the claim, Defendants’ motion (Dkt. 39) is GRANTED.
I. BACKGROUND
Janice Marten owned J.S. Marten, Inc., a jewelry business, located in Hamilton County,
Indiana. In 2007, the Indiana Department of Revenue (“Department”) began an audit of the

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Defendants have objected to the Second Amended Complaint (Dkt 37) as being filed without leave. The Court
accepts the Martens’ explanation that the First Amended Complaint (Dkt. 36) was inadvertently filed.

business. Mr. Albrecht, an agent of the Department, conducted the audit and initiated civil
proceedings against Ms. Marten and the business in 2008. In connection to the audit, the
Martens gave depositions without having an attorney present. Prior to the depositions, Mr.
Albrecht sought a search warrant from the Hamilton County Circuit Court for the Martens’ home
and business. Mr. Albrecht’s affidavit in support of the search warrant contained misleading, if
not false, statements. On July 10, 2008, Mr. Swain executed a search warrant at the Martens’
home and business.

Shortly thereafter, the Department levied tax assessments against the

business and sought a judgment totaling approximately $900,000.00. On October 10, 2008, the
Martens negotiated a settlement on sales tax issues and tendered a $100,000.00 escrow deposit.
On October 23, 2008, the Martens were arrested on charges of failure to pay taxes, tax evasion,
and falsification of tax records. On January 25 and March 7, 2011, all charges against the
Martens were dismissed with prejudice after a judge in the Hamilton Superior Court found that
the audit was the basis for the criminal charges and that the Department had withheld documents
from the Martens. The Martens then served Defendants with notice under the ITCA and filed the
original action on February 15, 2012.
II. LEGAL STANDARD
When reviewing a 12(b)(6) motion, the Court takes all well-pleaded allegations in the
complaint as true and draws all inferences in favor of the plaintiff. Bielanski v. Cnty. of Kane,
550 F.3d 632, 633 (7th Cir. 2008) (citations omitted). However, the allegations must “give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests” and the
“[f]actual allegations must be enough to raise a right to relief above the speculative level.”
Pisciotta v. Old Nat’l Bancorp, 499 F.3d 629, 633 (7th Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). Stated differently, the complaint must include “enough

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facts to state a claim to relief that is plausible on its face.” Hecker v. Deere & Co., 556 F.3d 575,
580 (7th Cir. 2009) (citations omitted). To be facially plausible, the complaint must allow “the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
III. DISCUSSION
As an initial matter, the Martens request that the Court remand this action to the Hamilton
Superior Court, noting that no federal claims remain in the lawsuit. However, the Martens filed
this original action in federal court and not in state court. The Court is therefore unable to
remand it to Hamilton Superior Court, because the case did not originate there. Moreover,
although it was not expressly stated, the Court chose to exercise discretionary jurisdiction over
the remaining state malicious prosecution claim in the October 22, 2012 dismissal. Under 28
U.S.C. § 1367(a), district courts have supplemental jurisdiction over all claims, such as state law
claims lacking diversity, “that are so related to claims in the action within such original
jurisdiction that they form part of the same case or controversy under Article III of the United
States Constitution.” However, district courts may decline to exercise supplemental jurisdiction
over a claim if it “has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. §
1367(c)(3). The Seventh Circuit has held that “[n]ormally, when all federal claims are dismissed
before trial, the district court should relinquish jurisdiction over pendent state-law claims rather
than resolving them on the merits.” Sharp Elec. Corp. v. Metro. Life Ins. Co., 578 F.3d 505, 514
(7th Cir. 2009) (internal quotation marks omitted). There are three exceptions to the rule:
(1) the statute of limitations has run on the pendent claim, precluding the filing of
a separate suit in state court; (2) substantial judicial resources have already been
committed, so that sending the case to another court will cause a substantial
duplication of effort; or (3) when it is absolutely clear how the pendent claims can
be decided.

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Id. at 514–15 (internal quotation marks omitted). In this case, it is clear how the malicious
prosecution claim can be decided.

Furthermore, at this stage of the case, the statute of

limitations has run and the suit could not be—as of this date—re-filed in state court.
It bears noting, however, that if the Martens, after the Court’s dismissal on October 22,
2012, had wanted their state law claim to be heard in state court they were free to forego filing an
amended complaint in this Court. The statute of limitations on their malicious prosecution claim
did not run until January and March 2013. Yet, the Martens chose to continue pursuing their
claim in this Court, so the Court will address the remaining claim on its merits.
There are four elements to a claim of malicious prosecution: “(1) the defendant instituted
or caused to be instituted an action against the plaintiff; (2) the defendant acted maliciously in so
doing; (3) the defendant had no probable cause to institute the action; (4) the original action was
terminated in the plaintiff’s favor.” 19 Ind. Law Encyc. Malicious Prosecution § 1. The ITCA
provides that “a governmental entity or an employee acting within the scope of his employment
is not liable if a loss results from” the “initiation of a judicial or administrative proceeding.” Ind.
Code § 34-13-3-3(6).
The Martens allege that at all times relevant, “Swain and Albrecht were purporting to act
as agents and within the scope of their employment for the [Office of the Attorney General
(“AG”)] and Department, respectively, but were in fact acting outside the scope of their
employment and acted maliciously in their wrongdoing.” Dkt. 37 at 2. In other words, it
appears that the Martens contend that due to Mr. Swain’s and Mr. Albrecht’s malicious intent,
their actions were outside the scope of their employment, which if true, would defeat ITCA
immunity.

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In the second amended complaint, the Martens state that Mr. Albrecht gave misleading, if
not false, statements to the Hamilton Circuit Court, that Mr. Swain did not provide an accurate
inventory of items seized from the Martens’ home and business, that both “used their civil
powers to gain a tactical advantage in the State’s criminal prosecution” and “illegally
masqueraded its criminal prosecution as a civil enforcement proceeding,” Dkt. 37 at 5, ¶24, and
acted in bad faith. Yet, the Martens do not set forth any facts that support their claim that at any
time Mr. Swain or Mr. Albrecht acted outside the scope of their employment. The conduct
described, while perhaps in bad faith, occurred because of and within the scope of employment.
Under Indiana law, “the presence of bad faith cannot remove the conduct from the very
protection envisioned by the Act.” Clifford v. Marion Cnty. Prosecuting Attorney, 654 N.E.2d
805, 809 (Ind. Ct. App. 1995).
For example, in Butt v. McEvoy, 669 N.E.2d 1015 (Ind. Ct. App. 1996), the defendant in
his role as deputy town marshal, knowingly provided false and malicious information to law
enforcement. As a result, the plaintiff was arrested and charged, though all charges were
eventually dropped and the plaintiff brought a malicious prosecution action against the
defendant. Id. at 1016. The court explained that the ITCA’s grant of immunity for malicious
prosecution is designed to protect public officers from harassment in the performance of their
duties to investigate crime and institute criminal proceedings. Id. at 1017. “To assure this
freedom of action it is deemed best to make that assurance positive and definite by securing him
against even actions based upon a malicious abuse of his official power.” Id. (quoting Livingston
v. Consol. City of Indianapolis, 398 N.E.2d 1302, 1306 (Ind. Ct. App. 1979)). The court
clarified in Butt that “even assuming bad faith, it is clear that acting maliciously does not
preclude application of immunity under” the ITCA. Id. at 1018. “If the activity is one in which

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the individual may engage, i.e., if it is within the individual’s general scope of authority, it is
‘authorized’ within the meaning of the Tort Claims Act, regardless of whether it was done
negligently or with improper motive.” Id.
Taking the facts in the amended complaint as true, the Court will assume that Mr. Swain
and Mr. Albrecht acted in bad faith or maliciously. However, the Martens have not pleaded facts
supporting their contention that Mr. Swain and Mr. Albrecht acted outside the scope of their
employment. Therefore, the Court finds that the ITCA affords Mr. Swain and Mr. Albrecht
immunity. The Martens were not without all recourse for the alleged wrongs, as they could
have, and did, try to bring 42 U.S.C. § 1983 claims against Mr. Swain and Mr. Albrecht—but
their claims were untimely. Additionally, there can be no claim against the State, as the State has
not consented to suit. Accordingly, Defendants’ motion to dismiss is GRANTED.
IV. CONCLUSION
For the reasons set forth above, Defendants’ Motion to Dismiss (Dkt. 39) is GRANTED.
This action is DISMISSED with prejudice.

SO ORDERED.

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

06/20/2013
Date: _______________

DISTRIBUTION:
Robert A. Garelick
COHEN GARELICK & GLAZIER
[e-mail]

Kenneth Lawson Joel
INDIANA ATTORNEY GENERAL
[e-mail]

Steven Michael Crell
COHEN GARELICK & GLAZIER
[e-mail]

Grant E. Helms
OFFICE OF THE ATTORNEY GENERAL
[e-mail]

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