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Foundation, President Not Liable For Defamation of Grantee’s Former Exec

Foundation, President Not Liable For Defamation of Grantee’s Former Exec

Court finds no evidence that president said anything untrue about former executive of agency being audited on grant

A community foundation and its board president have been dismissed from a suit by a former executive of a grantee who claimed that their defamation caused him to lose a job in the office of the Mayor of Indianapolis.  An appellate court in Indiana has affirmed a trial court finding that the president’s factual comments were true and could not be the basis for defamation or other claims.  (Miller v. Central Indiana Community Foundation, Ct. of App., IN, No. 49A04-1309-PL-451, 6/11/14.)

Jeffrey Miller was the president and CEO of Junior Achievement of Central Indiana (“JACI”) from 1994 until he retired on December 31, 2008.  He also served as president of the Experiential Learning and Entrepreneurship Foundation (“ELEF”), which was separate from JACI but supported JACI, and continued in that position after his retirement from JACI until he retired from ELEF in February, 2010.  In 2009, he created an organization called Performance Professionals owned jointly with his wife, and entered into a $200,000 one-year consulting contract with ELEF to assist the new president of JACI and work on construction for a new culinary arts project of JACI.  He had previously obtained a commitment for a $2 million grant to JACI from the Glick Fund, a fund at the Central Indiana Community Foundation.

The Court’s opinion cites a series of transactions and a breakdown of relations between JACI and ELEF that raised questions at the foundation.  Ultimately, the foundation withheld further payments on the grant and initiated an audit of the expenditures.

In August, 2009, Miller initiated conversations with the Mayor’s chief-of-staff about the possibility of working in the Mayor’s office.  While the talks were ongoing, the chief-of-staff’s wife told him that she had heard that Miller was telling people he was going to work in the Mayor’s office and that she had heard about a potential audit of JACI.  Talks about the job were put on hold.

Following a meeting on a different project on March 9, 2010, the chief-of-staff asked Brian Payne, the president of the foundation, about the situation.  In a conversation said to be about one minute long, the president confirmed that JACI was being audited because of concerns that the grant had not been spent as required.  The chief-of-staff testified, however, that Payne never indicated that Miller might be involved in improper action and said specifically that he had “nothing bad to say about Jeff Miller.”

Following newspaper publicity about the audit on March 18 and 19, and following an “awkward” conversation with Miller on March 19, the chief-of-staff confirmed his prior decision not to offer Miller a job in the Mayor’s office.

Miller sued numerous parties, including the foundation and Payne personally.  He alleged defamation, invasion of privacy, intentional infliction of emotional distress, tortious interference with a business relationship, and conspiracy.  On a motion for summary judgment, the trial court dismissed all counts against the foundation and Payne, and the Court of Appeals has affirmed.

To establish a defamation case, the Court said, a plaintiff must prove that a defamatory statement is false and made with malice.  The only allegedly defamatory statement that had been properly raised in the case was Payne’s one-minute conversation with the chief-of-staff.  Payne’s statement that the foundation had requested an audit was true.  Payne did not mention Miller as a suspect in wrongdoing, and in fact had said he had nothing bad to say about Miller.  Such evidence, the Court agreed, could not support a claim for defamation.

Invasion of privacy by “false light” requires publicity that unreasonably places the plaintiff in a false light before the public, the Court said.  But like defamation, the plaintiff cannot succeed if the communication is accurate or true.  Since there was no allegation of an untrue statement, the Court dismissed this claim also.

Intentional infliction of emotional distress requires “extreme and outrageous” conduct, the Court said.  Miller claimed that Payne’s comments were outrageous because he “continued his defamation campaign after learning from the procedural review/audit that there was no missing money.”  But the Court said that the evidence showed that the audit was on-going when Payne spoke with the chief-of-staff and that preliminary results had revealed potential inconsistencies in the materials submitted for audit.  Therefore, there was no basis for this claim either.

On tortious interference with a business relationship, the Court said it did not have to determine whether Miller actually had a business relationship with the Mayor’s office.  It was sufficient to find there was no evidence that Payne had acted intentionally, without a legitimate business purpose, and in a manner that was malicious and exclusively directed to the injury of another.

Finally, the Court said a claim for conspiracy is not an independent cause of action but must be based on a concerted action to accomplish an unlawful purpose or a legitimate purpose by unlawful means.  Because the claims of underlying misconduct had all been dismissed, the Court said, there was no basis for a claim of conspiracy.


This case, on the facts cited by the Court, seems to be an extraordinary stretch by the plaintiff and it is not at all surprising to see a victory by the foundation and its president.  But it is a good reminder that litigation is always possible and that insurance is important to pay the costs of defending against even the most unreasonable claims.

Ct. of Appeals IN

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