KATZ-CRANK v. HASKETT et al

Filing 91

ORDER granting 79 Motion to Dismiss for Failure to State a Claim. The Court finds that the facts as alleged by Katz-Crank show that the actions giving rise to her claims were taken within the scope of Defendants' employment and do not suppo rt the allegations that they were acting with malice, willfully or wantonly, or for personal gain. Further, the claims against the Defendants are statutorily barred by the Indiana Tort Claims Act. Having permitted Katz-Crank to plead her claims ag ainst Defendants twice, it appears that there are no set of facts under which she can prove that she is entitled to relief. Accordingly, Defendants' motion to dismiss (Filing No. 79) is GRANTED, and the Amended Complaint is DISMISSED with prejudice. Final judgment will issue in a separate entry. **SEE ENTRY** Signed by Judge Tanya Walton Pratt on 3/18/2015. (AH)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
SHERRY KATZ-CRANK a Michigan
resident,

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Plaintiff,
vs.
KIMBERLY HASKETT,
CHARLIE WILLIAMS,
TODD ROKITA, and
THOMAS TRATHEN
Defendants.

Case No. 1:13-cv-00159-TWP-DML

ENTRY ON JOINT MOTION TO DISMISS
This matter is before the Court on a Joint Motion to Dismiss Amended Complaint filed by
Defendants, Kimberly Haskett (“Haskett”), Charlie Williams (“Williams”), Todd Rokita
(“Rokita”), and Thomas Trathen (“Trathen”). (collectively, “Defendants”) (Filing No. 79).
Defendants seek to dismiss the Amended Complaint filed by Plaintiff, Sherry Katz-Crank (“KatzCrank”), which was filed in response to the Court’s dismissal of two of the claims in Katz-Crank’s
original complaint without prejudice and with leave to re-file. For the reasons set forth below,
Defendants’ motion to dismiss is GRANTED.
I.

BACKGROUND

The facts of this case are set forth in detail in the Court’s entry on the Defendants’ first
motion to dismiss and motion for judgment on the pleadings (Filing No. 72), and thus will only be
summarized here. Katz-Crank is an attorney licensed in the state of Michigan. In 2004 she
operated her own law firm known as Corporate legal Counsel in East Lansing, Michigan, and in
2006 she formed a management company for the purpose of providing for the management of trust

services to cemeteries. Beginning in 2004, Katz-Crank represented a client, Robert Nelms
(“Nelms”), in the purchase of cemeteries and funeral homes in Michigan and Indiana. In 2008,
Nelms was arrested and charged with embezzling money from the cemeteries’ trust funds. In July
2008, Katz-Crank was arrested and charged in Marion County, Indiana for felony theft in
connection with the embezzlement by Nelms. Katz-Crank alleges that she was subjected to
deplorable conditions in the Marion County processing center, and then was subjected to a two
and one-half year delay before receiving a jury trial. She further alleges that Defendants failed to
provide exculpatory evidence to her and the grand jury, contacted her former clients and informed
them about the criminal charges against her, and published information about the criminal
allegations online. Nevertheless, in December 2010, Katz-Crank was found not guilty following
a trial by jury. Katz-Crank alleges that her wrongful arrest resulted in the loss of her business, her
reputation in the community and her profession, as well as caused her emotional and physical
harm.
In her original Complaint (Filing No. 1), Katz-Crank asserted claims against a number of
defendants in both their official and individual capacities, including Kimberly Haskett and Charlie
Williams, investigators in the Securities Division of the Secretary of State’s Office for Indiana;
Todd Rokita, the former Indiana Secretary of State; Carl Brizzi, the former Prosecutor for Marion
County, Indiana; Mary Hutchison and Barbara Crawford, former deputy prosecutors for Marion
County, Indiana; and Thomas Trathen, Chief Investigator for Marion County, Indiana. The Court
dismissed with prejudice all claims against Carl Brizzi, Mary Hutchinson, and Barbara Crawford
under prosecutorial immunity; dismissed with prejudice all claims asserted against Defendants in
their official capacities under the Eleventh Amendment; and dismissed with prejudice all of KatzCrank’s federal claims. However, the Court dismissed Katz-Crank’s state law claims of malicious

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prosecution and intentional infliction of emotional distress brought against Haskett, Williams,
Rokita and Trathen in their individual capacities without prejudice, allowing her to replead within
21 days of the Court’s entry. The Court found that Katz-Crank had not adequately plead facts
showing that any of the factors found in Ind. Code § 34-13-3-5(c) applied such that the Indiana
Tort Claims Act, Ind. Code § 34-13-3-3 (“ITCA”), would not serve to bar her claims against these
state employees and subject them to personal liability. Katz-Crank timely filed an Amended
Complaint (Filing No. 73) asserting claims for malicious prosecution and intentional infliction of
emotional distress (“IIED”) against the remaining Defendants in their individual capacities.
II.

LEGAL STANDARD

Pursuant to Federal Rules of Civil Procedure 12(b)(6), the Court must take the facts alleged
in the complaint as true and draw all reasonable inferences in favor of the plaintiff. Mosley v.
Klincar, 947 F.2d 1338, 1339 (7th Cir. 1991). The complaint must contain only “a short and plain
statement of the claim showing that the pleader is entitled to relief,” (Fed. R. Civ. P. 8(a)(2)), and
there is no need for detailed factual allegations. Pisciotta v. Old Nat’l Bancorp, 499 F.3d 629, 633
(7th Cir. 2007) (citation omitted). Nevertheless, the statement 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.” Id. (citations and quotations omitted).
“Although this does ‘not require heightened fact pleading of specifics,’ it does require the
complaint to contain ‘enough facts to state a claim to relief that is plausible on its face.’”
Killingsworth, 507 F.3d at 618 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Only a complaint that states a plausible claim for relief survives a motion to dismiss. Id.

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III.

DISCUSSION

Defendants argue that Katz-Crank failed to comply with the ITCA because she did not
timely submit a tort claim notice, thus her claims are procedurally barred. Pursuant to Ind. Code
§ 34-13-3-8, “a claim against a political subdivision is barred unless notice is filed with . . . the
governing body of that political subdivisions . . . within one hundred eighty (180) days after the
loss occurs.” The failure to provide notice under the ITCA entitles a defendant to a dismissal. Ind.
Dept. of Correction v. Hulen, 582 N.E.2d 380 (Ind. 1991). The notice requirement applies equally
to the government entity and its employees. Poole v. Clase, 476 N.E.2d 828, 831-32 (Ind. 1985).
Defendants also argue that they cannot be held liable because they were acting within the
scope of their employment. In Indiana, governmental employees acting within the scope of their
employment are immune from liability for losses resulting from initiation of a judicial proceeding
and for enforcement of a law. I.C. § 34-13-32-3(6) and (8); Serino v. Hensley, 735 F.3d 588, 59395 (7th Cir. 2013) (Indiana Tort Claims Act grants broad immunity to Indiana government units
and employees from malicious prosecution and IIED actions). However, a plaintiff may bring an
action against a government employee in his or her personal capacity if the employee acted outside
the scope of his or her employment. I.C. § 34-13-3-5(b). The ITCA provides that a complaint
filed against an employee personally must contain a reasonable factual basis supporting allegations
that the act or omission of the employee that caused the loss was “(1) criminal; (2) clearly outside
the scope of the employee’s employment; (3) malicious; (4) willful and wanton; or (5) calculated
to benefit the employee personally.” I.C. § 34-13-3-5(c). “Where the plaintiff elects to sue the
governmental employee in her individual capacity, notice is required only if the act or omission
causing the plaintiff’s loss is within the scope of the defendant’s employment.” Bienz v. Bloom,
674 N.E.2d 998, 1004 (Ind. Ct. App. 1996).

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Katz-Crank argues that the ITCA does not apply to her claims because she alleges that
Defendants were acting outside the scope of their employment, thus she was not required to submit
a tort claim notice and Defendants are not immune under state law.1 “[I]n order for an employee’s
act to fall ‘within the scope of employment,’ the injurious act must be incidental to the conduct
authorized or it must, to an appreciable extent, further the employer’s business.” Barnett v. Clark,
889 N.E.2d 281, 283 (Ind. 2008). “[T]o be incidental . . . [an act] must be one which is subordinate
to or pertinent to an act which the servant is employed to perform.” Celebration Fireworks, Inc. v.
Smith, 727 N.E.2d 450, 453 (Ind. 2000) (quoting Restatement (Second) Agency § 229 cmt. b
(1958)). Even tortious acts may fall within the scope of employment “if [the employee’s] purpose
was, to an appreciable extent, to further his employer’s business.” Id. (quoting Kemezy v. Peters,
622 N.E.2d 1296, 1298 (Ind. 1993)).
While Katz-Crank’s Amended Complaint repeatedly states that the Defendants were acting
outside the scope of their employment, the other facts alleged in the Amended Complaint do not
support her assertion that the ITCA does not apply. “A plaintiff’s complaint cannot merely allege
wrongdoing in order to defeat the protections afforded under the ITCA but must assert a reasonable
factual basis supporting any allegations of the aforementioned acts [under I.C. § 34-13-3-5].”
Perrey v. Donahue, 703 F. Supp. 2d 839, 857 (N.D. Ind. 2010). Thus, the remainder of the facts
pled in Katz-Crank’s Amended Complaint must support the allegation that the Defendants acted
in a manner that was criminal, clearly outside the scope of the employee's employment, malicious,
willful and wanton, or calculated to personally benefit the Defendants.

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Oddly, however, the heading of Count I of Katz-Crank’s Amended Complaint states that it is “pursuant to Indiana’s
Tort Claims Act, Sec. 34-13-32-3 [sic],” and paragraph 84 alleges that Defendants’ actions “violated Indiana’s Tort
Claims Act, I.C. Sec. 34-13-32-3 [sic].” (Filing No. 73, at ECF pp. 13-14). The heading for Count II also states that
it is “pursuant to Indiana’s Tort Claims Act I.C. Sec. 34-13-3-5.” (Filing No. 73, at ECF p. 16). However, the Court
will analyze the substance of Katz-Crank’s Amended Complaint.

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In her briefing, Katz-Crank argues that Defendants were acting outside the scope of their
employment, but the facts stated in her Amended Complaint indicate that their alleged wrongful
actions were consistent with the duties they were employed to perform. Katz-Crank alleges that
she contacted the Indiana Secretary of State’s Office and offered to provide assistance and respond
to inquiries they may have had regarding the investigation into her former client, Robert Nelms.
Although the failure to respond and accept her assistance may support that Defendants did a poor
job in their investigation, it does not support the argument that Defendants were acting outside the
scope of their employment. Katz-Crank’s amended complaint alleges numerous acts that fall
directly within the scope of the purpose and duties of the Secretary of State, including investigating
and instituting criminal proceedings. (Filing No. 73, at ECF pp. 14-15). Rokita, as Secretary of
State, had the duty to investigate and prosecute individuals suspected of violating securities laws.
With respect to Katz-Crank’s assertion that “Defendants assisted or caused to be published
statements in the press” regarding her alleged criminal activity, Indiana courts have held that public
officials have the duty to apprise the public of their actions. See Am. Dry Cleaning & Laundry v.
State, 725 N.E.2d 96 (Ind. Ct. App. 2000) (Attorney General statutorily immune from calling
plaintiff a “public enemy”); Foster v. Pearcy, 387 N.E.2d 446 (Ind. 1979) (Deputy Prosecuting
Attorney act of calling plaintiff a heroin dealer in the newspaper covered by statutory immunity).
Publishing articles about the investigation of Katz-Crank and her prosecution was well within
Rokita’s job as an elected public official, regardless of whether it ultimately had an impact on his
career.
Katz-Crank also alleges facts that fall within the scope of employment of Haskett and
Williams as investigators with the Secretary of State’s Office. She alleges that the investigators
failed to consider exculpatory evidence; failed to testify “as to how the investigation proceeded or

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what evidence they discovered;” had reason to know of the use of false testimony; contacted
former clients “in the process of investigating;” and “assisted in instituting a criminal proceeding.”
(Filing No. 73, at ECF pp. 14-15). These are all acts that Haskett and Williams performed in their
roles as investigators in furtherance of the Secretary of State’s business, which is to investigate
and prosecute suspected violations of securities laws. Likewise, Trathen’s position as Chief
Investigator for Marion County is also for the purpose of investigating suspected criminal activities
and assisting with the prosecution of suspects. Moreover, no specific acts are alleged to have been
committed by Trathen. There are no facts alleged in the Amended Complaint that show that any
of the acts alleged giving rise to Katz-Crank’s claims occurred outside of the scope of one or more
of the Defendants’ employment.
The assertion that the Defendants’ actions were taken “with malice, willfully and wantonly,
and were calculated to benefit the Defendants personally” is also not supported by the factual
allegations in the Amended Complaint. Katz-Crank alleges the following: during the investigation
Defendants contacted clients and regulatory agencies, failed to disclose exculpatory evidence,
provided and relied on false testimony, requested five felony counts be filed, failed to tell the jury
of others involved who did not object or report thefts and failed to advise the jury that the payment
to Katz-Crank for legal services was supported by a signed retention agreements with normal
hourly rates and detailed descriptions of the services rendered. Each of these alleged acts is an act
the Defendants committed in the course and scope of their employment as investigators and
regulators.
Moreover, Katz-Crank’s Amended Complaint essentially takes the factual allegations in
her original complaint and adds “abstract recitations of the elements of a cause of action” which
“merely parrot the statutory language of the claims that [she is] pleading.” Brooks v. Ross, 578

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F.3d 574, 581 (7th Cir. 2009). She adds the language from Ind. Code § 34-13-3-5(c) to her
Amended Complaint in an attempt to assert personal claims against Defendants, but there are no
additional or revised factual allegations to support these assertions. As a result, the factual
allegations are “so sketchy or implausible that they fail to provide sufficient notice to defendants
of the plaintiff’s claim” and do not provide a “showing” required under Rule 8. Id. In determining
whether a complaint states a plausible claim for relief is a context-specific task that requires the
reviewing court to draw on its judicial experience and common sense. Ashcroft v. Iqbal, 556 U.S.
662, 664 (2009). In keeping with these principles a court considering a motion to dismiss can
choose to begin by identifying pleadings that, because they are no more than conclusions, are not
entitled to the assumption of truth. Id. While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations. Id. When there are well-pleaded factual
allegations, a court should assume their veracity and then determine whether they plausibly give
rise to an entitlement to relief. Id. Here, the Amended Complaint fails to satisfy the plausibility
standard set forth in Iqbal, and the Court need not accept these amended factual assertions as true.
Thus, the Court concludes that, based upon the factual allegations in the Amended
Complaint, Katz-Crank has not sufficiently supported her allegations that Defendants were acting
outside of the scope of their employment, and Katz-Crank has not met the plausibility standard for
her allegations that the Defendants were acting with malice, willfully and wantonly, or for their
personal benefit. Therefore, the Court finds that the ITCA does apply to Katz-Crank’s claims,
which accordingly are barred by statutory immunity.2
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The fact that Katz-Crank did not submit a tort claim notice under the ITCA is not dispositive on this motion to
dismiss. The failure to submit a tort claim notice is an affirmative defense to be pleaded by the Defendants, and the
omission of this fact from a plaintiff’s complaint, which would ultimately defeat an affirmative defense, does not
justify dismissal. Taleyarkhan v. Purdue Univ., 837 F. Supp. 2d 965, 968 (N.D. Ind. 2011) (“[P]laintiff'’s silence on
the ITCA in his complaint is not dispositive.”). Nevertheless, Katz-Crank would have ultimately been required to
timely submit a tort claim notice in order to proceed with claims against the Defendants in this case. Because KatzCrank’s complaint is insufficient under Rule 12(b)(6), however, this issue is moot.

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IV.

CONCLUSION

For the forgoing reasons, the Court finds that the facts as alleged by Katz-Crank show that
the actions giving rise to her claims were taken within the scope of Defendants’ employment and
do not support the allegations that they were acting with malice, willfully or wantonly, or for
personal gain. Further, the claims against the Defendants are statutorily barred by the Indiana Tort
Claims Act. Having permitted Katz-Crank to plead her claims against Defendants twice, it appears
that there are no set of facts under which she can prove that she is entitled to relief. Accordingly,
Defendants’ motion to dismiss (Filing No. 79) is GRANTED, and the Amended Complaint is
DISMISSED with prejudice. Final judgment will issue in a separate entry.
SO ORDERED.
Date: 3/18/2015

Distribution:
Derek S. Wilczynski
BLANCO WILCZYNSKI, PLLC
[e-mail]
Nicole L. Coroiu
BLANCO WILCZYNSKI, PLLC
[e-mail]
Orlando L. Blanco
BLANCO WILCZYNSKI, PLLC
[e-mail]
R. Eric Sanders
CITY OF INDIANAPOLIS, CORPORATION COUNSEL
[e-mail]

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Beth Ann Garrison
OFFICE OF CORPORATION COUNSEL
[e-mail]
Amanda J. Dinges
OFFICE OF CORPORATION COUNSEL
[e-mail]
David A. Arthur
OFFICE OF THE ATTORNEY GENERAL
[e-mail]

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