Firm must defend deceased lawyer’s ‘inflammatory’ counterclaim

Litigation that has outlived an attorney who filed a counterclaim accusing a northwest Indiana construction company of racketeering, among other things, still could cost the late lawyer’s former firm.

Judge Michael Barnes authored a 46-page opinion that reversed in part, affirmed in part and remanded multiple rulings of Jasper Circuit Judge John D. Potter in The Estate of Richard A. Mayer, and Spangler, Jennings & Dougherty v. Lax, Inc., and David Lasco, 37A03-1207-PL-323. Original litigation between the parties dates to the 1990s.

Attorney Richard A. Mayer died in 2008, but he had filed a claim against Lax Inc. and David Lasco that resulted in Lax and Lasco claiming defamation, abuse of process, malicious prosecution, tortious interference with a contract and tortious interference with a business relationship against Mayer and his former law firm. Lax and Lasco also claimed negligent supervision and/or retention of Mayer by his firm at the time.

The trial court granted the estate summary judgment on the defamation and malicious prosecution claims and denied relief from the other claims. Mayer’s former firm, Spangler, Jennings & Dougherty, were denied summary judgment on those claims at the trial court.

While the panel ruled in favor of the estate and the law firm on most claims, it found some contained genuine issues of material fact for which summary judgment would be improper.

“We reverse the denial of summary judgment to the Estate and Spangler Jennings on the claims for negligent supervision and/or retention, tortious interference with a business relationship, and tortious interference with a contract, and direct that summary judgment be entered in the Estate’s and Spangler Jennings’s favor on those claims,” Barnes wrote.

“We reverse the denial of summary judgment to Spangler Jennings on the defamation claim and direct that summary judgment be entered in its favor on that claim. We also reverse the denial of summary judgment to the Estate regarding Lax and Lasco’s seeking of punitive damages against it and direct that summary judgment be entered in favor of the Estate on that claim. We affirm the granting of summary judgment in the Estate’s favor on the defamation and malicious prosecution claims,” the court held.

“We affirm the denial of summary judgment on the malicious prosecution claim against Spangler Jennings and the denial of summary judgment on the abuse of process claim as to both the Estate and Spangler Jennings. We also affirm the denial of summary judgment in favor of Spangler Jennings on the punitive damages issue. We remand for further proceedings consistent with this opinion.”

The opinion joined by judges Mark Bailey and Edward Najam held that absolute privilege covered statements Mayer made in his counterclaim, but that principle doesn’t preclude the claims of malicious prosecution and abuse of process.

The court also found authority from multiple states that helped shape its holding on liability of a firm for actions of an agent who since has died, where laws forbid actions against the estate for certain claims including defamation.

“In light of the great weight of authority, and in effecting the policy favoring survival of actions when possible, we hold that termination of a cause of action against an alleged agent-tortfeasor because of death does not require termination of a cause of action against the agent’s principal. Such termination does not reflect upon the merits of the case. We see no indication in the Survival Statute that our legislature intended to permit employers or other principals to avoid liability for their employee or agent’s misconduct simply because of the employee or agent’s death.”

Barnes wrote that the trial court also erred in ruling that Lax and Lasco could attempt to recover punitive damages from Mayer’s estate.