author: FRIEDLANDER, Judge.

text:
    Amy and Steven W. CERAJEWSKI, Appellants, v. Erin and Robert KIEFFNER, Appellees.
    No. 82A01-1109-SC-401.
    Court of Appeals of Indiana.
    April 5, 2012.

      Christopher D. Lee, Rebecca Ness Rhymer, Kahn, Dees, Donovan & Kahn, LLP, Evansville, IN, Attorneys for Appellants.
    Craig Goedde, Goedde Law Office, P.C., Evansville, IN, Attorney for Appellees.
   OPINION

FRIEDLANDER, Judge.

Steven and Amy Cerajewski bring this interlocutory appeal of the Vanderburgh County small claims court’s denial of their motion to correct venue.

We dismiss.

On or about March 6, 2010, the Cerajewskis, as sellers, and Robert and Erin Kieffner, as buyers, entered into a purchase agreement for the sale of a home located in Posey County, Indiana (the Real Estate). Although Erin was, of the four, apparently the only resident of Vander-burgh County at the time, both parties enlisted the services of real estate agents out of Vanderburgh County. Closing for the Real Estate took place on or about May 12, 2010, and the Kieffners assumed possession on or about May 21, 2010. Thereafter, the Cerajewskis moved to Michigan, and the Kieffners moved to the Real Estate in Posey County.

On October 13, 2010, the Kieffners filed the instant small claims action in Vander-burgh County, alleging breach of contract and fraud resulting from the transaction for the sale of the Real Estate. The Cera-jewskis appeared by phone and subsequently, on January 10, 2011, filed a motion to transfer venue, relying upon Trial Rule 75 and arguing that Vanderburgh County was not a preferred venue for this action. On January 12, the small claims court set the matter for trial on March 29 and noted that the Cerajewskis’ motion to transfer was taken under advisement. Thereafter, on February 4, Steven Cera-jewski telephoned the court, and court personnel once again advised him of the trial date and that the motion to transfer had been taken under advisement. The day-before the scheduled trial, the Cerajewskis filed a motion to order plaintiffs’ payment of filing costs for refiling case in defendants’ county of residence.

The Cerajewskis did not appear on the March 29 trial date. Robert Kieffner appeared in person and by counsel and presented evidence in support of the Kieff-ners’ claim. Accordingly, the small claims court entered a default judgment against the Cerajewskis in the amount of $1250 plus costs, interest, and attorney fees.

On April 29, 2011, the Cerajewskis filed a motion to correct error, or in the alternative, motion for relief from default judgment. The small claims court held a hearing on the motion on July 12, 2011, at which the Cerajewskis asked the court to set aside the default judgment and transfer venue from Vanderburgh County. With respect to venue, both parties asserted arguments based upon T.R. 75, although the Cerajewskis’ counsel did (for the first time) briefly address Ind. Small Claims Rule 12. On July 22, the small claims court issued an order denying the Cerajewskis’ motion. As part of its written order, the court stated: “Vanderburgh County is a county of preferred venue under Trial Rule 75 for the reason that Plaintiff Erin Kieffner was a resident of Vanderburgh County, Indiana during the time the cause of action arose”. Appellants’ Appendix at 9.

On August 2, 2011, the Cerajewskis filed a motion for the small claims court to reconsider its decision to refuse to set aside the default judgment and to transfer venue. In their motion, the Cerajewskis referred specifically to S.C.R. 12 when addressing their venue argument. The small claims court granted the motion to reconsider with respect to the default judgment only. Accordingly, the court vacated the entry of default on August 10, 2011. The court, however, refused to transfer venue to Posey County.

On September 9, 2011, the Cerajewskis initiated this interlocutory appeal to obtain review of the small claims court’s venue determination only. We note that the Cerajewskis did not request certification of the order from the trial court nor seek acceptance of jurisdiction from this court. Rather, they proceed as if this is an interlocutory appeal as a matter of right under Ind. Appellate Rule 14(A). It is not.

App. R. 14(A) sets forth the exclusive list of interlocutory orders that may be appealed as a matter of right by the filing of a notice of appeal within thirty days of the entry of the interlocutory order:

(1) For the payment of money;
(2) To compel the execution of any document;
(8) To compel the delivery or assignment of any securities, evidence of debt, documents or things in action;
(4) For the sale or delivery of the possession of real property;
(5) Granting or refusing to grant, dissolving, or refusing to dissolve a preliminary injunction;
(6) Appointing or refusing to appoint a receiver, or revoking or refusing to revoke the appointment of a receiver;
(7) For a writ of habeas corpus not otherwise authorized to be taken directly to the Supreme Court;
(8) Transferring or refusing to transfer a case under Trial Rule 75; and
(9) Issued by an Administrative Agency that by statute is expressly required to be appealed as a mandatory interlocutory appeal.

Id. (emphasis supplied). See also Rowe v. Ind. Dep’t of Correction, 940 N.E.2d 1218 (Ind.Ct.App.2011), trans. denied.

We may dismiss appeals sua sponte upon discovering that we do not have jurisdiction. Moser v. Moser, 888 N.E.2d 532 (Ind.Ct.App.2005), trails, denied. An appeal from an interlocutory order, as in the instant case, is not allowed unless specific authority is granted by the Indiana Constitution, statutes, or the rules of court. Id. Moreover, any such express authorization is strictly construed. Id.

In the instant case, the Cerajewsk-is rely upon App. R. 14(A)(8) in pursuing this interlocutory appeal as a matter of right. Under that provision, a party may immediately appeal an order refusing to transfer a case under T.R. 75. At first blush, one could argue that is the precise order being appealed here, as the parties and the trial court all discussed preferred venue requirements under T.R. 75.

The reality, however, is that T.R. 75 is inapplicable. It is well established that venue in small claims proceedings is not governed by T.R. 75 “but rather is governed exclusively by Indiana Small Claims Rule 12.” Dreyer & Reinbold, Inc. v. Leib, 811 N.E.2d 858, 861 (Ind.Ct.App.2004). S.C.R. 12 provides in pertinent part:

(A) Proper Venue. Proper venue for a case filed in the small claims docket of a Circuit, Superior, or County Court shall be in the county where the transaction or occurrence actually took place or where the obligation was incurred or is to be performed, or where one of the defendants resides or has his or her place of employment at the time the complaint is filed.

(B) Motion to Correct Venue.

When it appears that the county in which the action is pending is not the proper place for the hearing of such action, the court shall, on the motion of a party or upon its own motion, determine the correctness of the venue. If the venue is incorrect the judge shall, at the option of the plaintiff, order the action to be transferred or dismissed without prejudice unless the defendant appears and waives the venue requirement.

“Thus, venue in a small claims proceeding is proper: (1) where the transaction or occurrence actually took place; (2) where the obligation was incurred or is to be performed; or (3) where one of the defendants resides or has his or her place of employment at the time the complaint is filed.” Dreyer & Reinbold, Inc. v. Leib, 811 N.E.2d at 860-61.

The respective venue considerations under T.R. 75 and S.C.R. 12 are markedly different, with the provisions of T.R. 75 being much more involved. Moreover, unlike S.C.R. 12, T.R. 75(E) expressly provides for an interlocutory appeal as a matter of right. This right is also reiterated in App. R. 14(A)(8). Given our strict construction of the list of authorized interlocutory appeals as a matter of right, we cannot say that App. R. 14(A)(8) applies to all venue determinations, whether under T.R. 75 and S.C.R. 12. Accordingly, we conclude that the small claims court’s refusal to transfer venue is not an interlocutory order appealable as a matter of right.

The Cerajewskis were required to request a discretionary appeal pursuant to the procedures set out in App. R. 14(B). They failed to do this. Because no basis exists for an inlerlocutory appeal as a matter of right pursuant to App. R. 14(A), we dismiss the Cerajewskis’ appeal for lack of jurisdiction.

Appeal dismissed.

BARNES, J.. and MAY, J., concur.

      . The appellants’ last name was improperly captioned as "Cerojewski” at the trial court level but has been changed on appeal to reflect the proper spelling.

      . In conjunction with the Kieffners’ appellate brief, they filed an appendix containing the affidavit of Erin Kieffner. In said affidavit, Erin averred that the closing took place in Vanderburgh County. Though certainly relevant to the issue at hand, we observe that this evidence was not presented below. Therefore, it is not properly before us and will not be considered in this appeal. See generally Ind. Appellate Rule 50(A)(1) (purpose of an appendix is to include those parts of the record on appeal that are necessary for the appellate court to decide the issues presented). In further proceedings, however, the Kieffners would be well advised to introduce said evidence. Finally, we observe that the Kieffners’ request for attorney fees pursuant to Ind. Appellate Rule 66(E) is based entirely upon the "facts” supplied in their appendix, which we cannot consider.

      . The simplicity of S.C.R. 12, as compared to T.R. 75, is due to the nature of small claims proceedings, which are "informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law". S.C.R. 8(A). Further, in small claims cases, the parties "shall not be bound by the statutory provisions or rules of practice, procedure, pleadings or evidence except provisions relating to privileged communications and offers of compromise.” Id.

      . We acknowledge that other cases from this court have entertained interlocutory appeals of S.C.R. 12 orders. See Dreyer & Reinbold, Inc. v. Leib, 811 N.E.2d 858; Ind. State Dist. Council of Laborers & Hod Carriers Welfare Fund v. Med First Med. Ctr., 744 N.E.2d 542 (Ind.Ct.App.2001); Monroe Heating & Cooling, Inc. v. Rider, 450 N.E.2d 1056 (Ind.Ct.App.1983). It is not clear in those cases whether the interlocutory appeal was taken under App. R. 14(A) or (B).


source: Caselaw Access Project

author: BAKER, Judge.

license: Public Domain

text:
    James GAGAN, Fred Wittlinger, Jack Allen and Eugene Deutsch, Appelants-Plaintiffs, v. C. Joseph YAST, Appellee-Defendant.
    No. 45A05-1107-CT-377.
    Court of Appeals of Indiana.
    April 5, 2012.

      Harold Abrahamson, Jonathan E. Halm, Abrahamson, Reed & Bilse, Hammond, IN, Brian Custy, Merrillville, IN, Attorneys for Appellants.
    Karl L. Mulvaney, Nana Quay-Smith, Bingham Greenebaum Doll LLP, Indianapolis, IN, F. Joseph Jaskowiak, Lauren K. Roeger, Kevin G.L. Kerr, Hoeppner, Wagner & Evans, Valparaiso, IN, Natalie Vangel Shrader, Burke, Costanza & Car-berry LLP, Merrillville, IN, Attorneys for Appellee.
   OPINION

BAKER, Judge.

Today we decide that the appellee-de-fendant attorney’s alleged defamatory statements that he made against his former clients, the appellants-plaintiffs, were protected on the grounds of qualified privilege.

Appellants-plaintiffs James Gagan, Fred Wittlinger, Jack Allen, and Eugene Deutsch (collectively, Gagan) appeal the trial court’s grant of summary judgment in favor of appellee-defendant C. Joseph Yast, on their claim against Yast for defamation. Specifically, Gagan argues that the trial court erred in determining, as a matter of law, that the alleged defamatory statements that Yast made were protected on the grounds of qualified privilege. Ga-gan maintains that the doctrine of privilege does not apply in these circumstances and, therefore, a genuine issue of material fact remains and the matter should be remanded for trial. Concluding that the trial court properly granted Yast’s motion for summary judgment, we affirm.

FACTS

Gagan founded United Consumers Club (Consumers Club), the parent company for DirectBuy, Inc. (DirectBuy), in 1971. DirectBuy ultimately became a very successful multi-million dollar franchising business. Gagan’s efforts to develop DirectBuy were aided by Deutseh, Wittlinger and Allen, who were long-time business associates of his. Wittlinger joined the company in 1973, and Deutseh, who initially served as DirectBuy’s accountant, joined the company in 1993. Allen became associated with the company in 1974.

Deutseh, Wittlinger, and Allen became minority shareholders in DirectBuy, while Gagan remained the primary shareholder. When the company was sold in 2007, Deutseh was an officer of the corporation, and all four served as directors.

Jamie is Gagan’s adult son and the owner of ThinkTank Software Development Company (ThinkTank). Although Gagan urged Jamie to join DirectBuy, Jamie declined because he had some conflicts with his father, whom he described as “a strong individual” with a “temper.” Appellants’ App. p. 339, 349, 352. Jamie founded ThinkTank and became the sole owner of the company.

Yast is an attorney and was close friends with the Gagan family for nearly thirty years. Yast represented the Gagans and their various businesses in numerous lawsuits during a twenty-year period. Sometime in 2006, Gagan offered Yast a position as DirectBuy’s vice president and general counsel, and Yast accepted the position. Yast’s employment contract permitted— but did not require — that he work on some additional projects. However, Deutseh told Yast that he should continue to represent ThinkTank in various litigation matters.

When Gagan was negotiating the sale of DirectBuy, he insisted that Yast still represent ThinkTank while serving as general counsel for the new company. There is no dispute that Gagan and Deutseh participated in litigation involving ThinkTank, that Yast reported to Gagan and Deutseh, and that Gagan retained Yast and was paying his attorney’s fees.

On November 30, 2007, Gagan, Deutseh, Allen and Wittlinger sold all of their interest in DirectBuy to Trivest, a holding company, for $550 million. At the time of the sale, Yast was DirectBuy’s vice president and general counsel, but not a shareholder. Yast was not involved in the merger negotiations because Gagan was represented by legal counsel from Chicago. The merger agreement specifically permitted Yast to continue representing ThinkTank. Gagan also insisted that DirectBuy’s officers should be permitted to invest in the company by purchasing stock after the sale. Gagan advised Yast to invest in the new company. Yast followed that advice and purchased $500,000 in DirectBuy stock. Other officers, including Scott Powell, DirectBuy’s president, and Bart Fesperman, an executive officer, also purchased stock in DirectBuy.

The merger agreement also provided that Gagan and the other sellers, in addition to receiving the purchase price of $550 million, were also entitled to receive all “excess cash” in the company. Appellants’ App. p. 266, 270, 717. After the agreement was signed, but before closing, Ga-gan and the other sellers declared a “dividend” to themselves of approximately $75 million, based on Deutsch’s calculation of “estimated excess cash.” Id. at 209-10.

Gagan admitted that $17 million of this dividend did not constitute company earnings or retained profits. Rather, these funds were member merchandise money that DirectBuy was holding as a “purchasing agent.” Id. at 181-82, 210-16. While Gagan and thé other sellers acknowledged that they were not entitled to this money when it was entered on DirectBuy’s books as a “member merchandise deposit,” they nonetheless claimed that the $17 million constituted “excess cash” under the merger agreement because an accounting journal entry designated this money as an “accounts payable” once the merchandise shipped and DirectBuy received the manufacturer’s invoice.

After closing the deal, Trivest determined that Gagan had taken $17 million in member merchandise money that had been held in accounts payable to pay for merchandise. As a result, Trivest disputed Gagan’s right to take this money as “excess cash” under the merger agreement and sought unsuccessfully to resolve the issue with Gagan and the other sellers.

After learning that Gagan and the others had taken $17 million of member merchandise money as a dividend and that Trivest was challenging that withdrawal under the merger agreement, Yast, Powell, and Fesperman, who were DirectBuy’s three highest-ranking officers, decided to contact Gagan and explain their concerns. Yast and the other officers did not base their concerns on the terms of the merger agreement. Rather, they believed that Gagan’s withdrawal of the money was inconsistent with DireetBu/s core values and would destroy their personal relationships. Thus, Powell, Yast, and Fesperman each sent letters to Gagan and the other sellers in an effort to open a dialogue about the issue.

Their letters dated March 20, 2008, expressed the officers’ disappointment with Gagan’s decision to withdraw the money in light of the company’s longstanding practice of treating member merchandise money as “sacred.” Appellants’ App. p. 878-85. The letters challenged Gagan’s contention that accounting entries which moved members’ merchandise deposits from one liability account to another made those funds available for shareholder distribution. The officers’ position was based on two grounds:

The Sellers’ actions would never be accepted if a franchisee attempted it. Once a franchisee accepted member merchandise money, those funds could only be used by DirectBuy to pay the supplier for the product or to refund the member.
These funds were not longer available to use for their intended purpose, which was to pay for the members’ merchandise.

Appellants’ App. p. 878-85.

These letters pointed out that twenty-six current employees had invested in the company, and that DirectBuy, through its investors, would have to repay the missing merchandise deposits. The letters also advised Gagan and the other sellers to reconsider their decision because it would damage the long-standing relationships between them and the officers. However, Gagan and the other sellers did not respond.

On April 18, 2008, members of Trivest and Gagan and the other sellers met in a final attempt to resolve the matter. The meeting was unsuccessful and the matter proceeded to arbitration on June 11, 2008. In August 2008, the arbitrator ordered the sellers to repay $5 million of the dividends, but approved the withdrawal of $17 million in member merchandise money on the basis that funds designated as “accounts payable” satisfied the agreement’s definition of “excess cash.” Appellants’ App. p. 226, 270, 877.

In light of the ongoing dispute, Yast determined that he had a conflict of interest in continuing to represent Gagan in a federal court judgment collection action. Yast recognized that as an officer and shareholder of DirectBuy, his personal and professional interests in recovering the $17 million conflicted with Gagan’s interests in retaining this money. Moreover, Yast believed that this dispute was not likely to be resolved without arbitration. As a result, Yast decided that he had a duty to inform Gagan of the effect of this dispute on their attorney-client relationship.

On April 16, 2008, Yast sent a letter to Gagan and enclosed a consent form to withdraw from the federal litigation. Yast advised Gagan that his position on the $17 million withdrawal of member merchandise money constituted a conflict of interest. Yast reasoned that his investment in DirectBuy was seriously harmed and that two or three years of company growth would be diminished. Yast’s letter also informed Gagan that there would be a similar conflict of interest in representing ThinkTank if the dispute continued.

When Trivest and Gagan and the other sellers were unable to reach an agreement at their final meeting on April 18, 2008, Yast withdrew life appearance for Gagan in the federal litigation. Yast also determined that his conflict with Gagan created a conflict of interest in continuing to represent ThinkTank. Yast based his conclusion on the fact that Gagan and Deutsch were directly involved with the litigation in federal court, that Gagan directed and controlled that litigation, that Yast reported to Gagan as a client representative for Think-Tank, and that Gagan paid his fees. As a result, Yast determined that he had a duty to inform Jamie that he should withdraw from the ThinkTank litigation.

On April 23, 2008, Yast informed Jamie that he had a conflict of interest and the Rules of Professional Conduct required him to withdraw as ThinkTank’s legal counsel. Although Yast and Jamie agreed that the only subject discussed during the call involved Yast’s conflict of interest and his intention to withdraw, Yast also claimed that he told Jamie that he should withdraw from representing ThinkTank because Gagan’s decision to keep the $17 million in membership merchandise money was causing financial harm to Yast. Yast explained that he had a substantial investment in DirectBuy and that Gagan’s decision eliminated almost three years of the company’s growth.

Thereafter, the sellers described this conversation as a threat by Yast to withdraw as a device to use Jamie as leverage in Yast’s dispute with Gagan. However, Yast claimed that his purpose in calling was only to inform Jamie that his conflict of interest would prevent him from continuing to represent ThinkTank.

On August 1, 2008, and again on August 20, 2008, attorneys from Mayer Brown notified Yast that they were representing the Gagan family in their various business interests, including the ThinkTank litigation. Yast subsequently sent Jamie a written ten-day notice of his intent to withdraw from ThinkTank’s representation in accordance with the Porter Superior Court Local Rules. Yast then filed a motion to withdraw as counsel for ThinkTank on October 17, 2008, which advised the court of the same conflict of interest that Yast described in his telephone call with Jamie. The trial court subsequently granted Yast’s motion to withdraw.

On December 10, 2008, Gagan filed suit against Yast for uttering “a series of false and defamatory statements regarding [Ga-gan].” Appellants’ App. p. 38. Gagan asserted that Yast had falsely accused Gagan and “his accomplices” of stealing “millions of dollars from the DirectBuy members.” Id. Yast was also accused of referring to Gagan as a “liar,” a “manipulator,” and an “evil person.” Id. The sellers also contend that Yast demonstrated malice by allegedly referring to Gagan as a manipulator during a casual discussion with Jamie’s wife.

Two days later, Jamie filed a disciplinary grievance against Yast, challenging the manner in which Yast withdrew his representation. Jamie argued that Yast’s disclosure of his conflict of interest in their telephone call on April 23, 2008, was inappropriate because Yast’s purpose was to leverage his withdrawal to force Gagan to capitulate in his dispute with Trivest. Jamie also alleged that Yast’s motion to withdraw contained false statements and revealed confidential information. Finally, Jamie alleged that Yast was angry about the effect that the sellers’ actions had on his investment in DirectBuy and was using the dispute to manufacture a conflict with Think Tank. After receiving Yast’s response to these allegations and the supporting documentation, the Disciplinary Commission determined that Jamie’s grievance did not raise a substantial question of misconduct and dismissed the matter on April 1, 2010.

Discovery in the case commenced, and the sellers took thirteen depositions, including former and current officers of DirectBuy, as well as its employees, and business manager. Counsel for the sellers asked each witness whether Yast had ever said anything derogatory about Jamie, Gar gan or the other sellers, whether Yast had referred to them as thieves, whether Yast claimed that they stole money, causing a loss of his investment, or if they had committed a crime. Every witness testified that they had never heard Yast say any of those things, or anything derogatory about the sellers or the Gagans.

On April 11, 2011, Yast filed a motion for summary judgment seeking dismissal of Gagan’s defamation per se claim on the grounds of absolute privilege, qualified privilege, and other defenses. More particularly, Yast alleged that the telephone call that was the subject of the defamation action was an attorney-client communication that was protected by absolute privilege that affords complete immunity. Yast also asserted that his alleged comments were protected by qualified privilege, and that Gagan’s reputation was not affected. In fact, Yast pointed out that Gagan believed that the comments were “crazy” and he did not believe him, and that there was no damage to anyone’s reputation. Appellants’ App. p. 80.

Following a hearing, the trial court entered findings of fact and conclusions of law on June 22, 2011, denying Yast’s motion for summary judgment on the grounds of absolute privilege, but granting Yast’s motion on the grounds of qualified privilege. In particular, the trial court determined:

Taking into consideration the extent of Defendant’s involvement with the entire Gagan family, his business relationship with the other Plaintiffs and his substantial financial interest in the Trivest matter, it was not unreasonable for Defendant to consider his financial stake in the Trivest matter a potential conflict of interest in any ease involving the Gagan family. The Court finds that Defendant had an ethical duty to notify his client of a potential conflict of interest and his concerns with his continued representation of that client in the future. The qualified privilege would protect the communication even if the comments were false and defamatory.
There was no evidence identified to suggest there was an excessive publication of the defamatory statements by the Defendant. Further the evidence is undisputed that Defendant, even to this day, believes that the Plaintiffs were wrong in their characterization of the account in question. Defendant’s position regarding the legal entitlement of this account was ultimately determined to be incorrect. Further, Plaintiffs may be correct that Defendant had no personal knowledge of the contract terms to form any such beliefs. But in his capacity as attorney for UCC and DireetBuy Defendant had experienced the day-today operations of the business. He was aware of the characterization and use of the account in question. He was aware of how this particular account had been handled in the past. Defendant had some grounds for his belief Therefore, Plaintiffs evidence does not support a finding that Defendant’s comments were made without belief or grounds for the belief in its truth.
Plaintiffs contend Defendant’s actions were motivated by ill will, thus there was an abuse of the privilege and he should be liable for the damages that resulted from his defamatory statements. According to Plaintiffs, Defendant’s motive was for his own financial gain. They contend Defendant wrongfully wanted the seventeen million to stay with the new company so Defendant’s stock would increase in value. So his plan was to threaten to withdraw from Jamie’s case in hopes that Jamie would convince his father and the other three Plaintiffs to give up on their claim to the seventeen million dollar account. If Jamie refused, Defendant would withdraw from the case and Jamie would have to get a new attorney. This could delay resolution of the ThinkTank case and possibly result in a negative outcome for Jamie Gagan. In Jamie’s words, he, the Defendant, “was going to try to leverage my father’s affection for me.”
There is no direct evidence to support this supposition. Jamie never said that Defendant asked him to do anything. The worst case scenario, based on Jamie’s recollection of the statements, was that Defendant told Jamie of the potential conflict based on his personal belief that the Plaintiffs were stealing money that belongs to the membership. As a direct result, Defendant’s stock or interest in the new company would be diminished. If the matter was not resolved, Defendant felt he would have no choice but to withdraw from the ThinkTank case because of the conflict. Jamie’s interpretation of the comments, and the Plaintiffs’ suspicions of an ulterior motive are speculative at best. Taking into consideration the comments as recalled by Jamie Gagan, there is insufficient evidence to find that Defendant was motivated by ill will.
The Court finds that Plaintiffs have failed to designate sufficient material to establish that Defendant abused his qualified privilege. The comments made by Defendant to Jamie Gagan in April 2008, even if defamatory, are entitled to immunity under the qualified privilege. Judgment is entered in favor of ... Yast and against ... Gagan.

Appellants’ App. p. 32-38 (emphasis added). Gagan now appeals.

DISCUSSION AND DECISION

Gagan argues that the trial court erred in granting Yast’s motion for summary judgment because it erroneously made a factual determination that Yast’s purportedly defamatory utterances were made in good faith. Gagan asserts that the designated evidence establishes that Yast’s explanations for allegedly asserting false charges against Gagan were not made in good faith and, therefore, this matter should not have been resolved at the summary judgment stage. Gagan also asserts that genuine issues of material fact remained as to whether Yast’s statements were “made with ill will or improper purpose, as well as whether Yast’s defamatory utterance was made without belief, or grounds for belief, in its truth.” Appellant’s Br. p. 1.

I. Standard of Review

A party is entitled to summary judgment upon demonstrating the absence of any genuine issue of fact as to a determinative issue unless the non-moving party comes forward with contrary evidence showing an issue of fact for trial. Williams v. Tharp, 914 N.E.2d 756, 761-62 (Ind.2009). An appellate court reviewing a trial court summary judgment ruling likewise construes all facts and reasonable inferences in favor of the non-moving party and determines whether the moving party has shown from the designated evi-dentiary matter that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Funston v. Sch. Town of Munster, 849 N.E.2d 595, 598 (Ind.2006). The trial court’s grant of summary judgment is clothed with a presumption of validity and the appellant bears the burden of demonstrating that the trial court erred. Rosi v. Business Furniture Carp., 615 N.E.2d 431, 434 (Ind.1993).

Where, as here, the trial court makes findings in rendering summary judgment, those findings aid in appellate review, but are not binding on this court. Althaus v. Evansville Courier Co., 615 N.E.2d 441, 444 (Ind.Ct.App.1993). Thus, findings that accompany a grant of summary judgment do not alter the nature of our review. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind.1996). Rather, we will affirm a summary judgment order if it is sustainable upon any theory or basis found in the record. Savieo v. City of New Haven, 824 N.E.2d 1272, 1274 (Ind.Ct.App.2005).

II. Gagans’ Contentions

In addressing the issue as to whether the trial court erred in granting summary judgment for Yast, we note that the common interest qualified privilege “applies to communications made in good faith on any subject matter in which the party making the communication has an interest or in reference to which he has a duty, either public or private, either legal, moral, or social, if made to a person having a corresponding interest or duty.” Schrader v. Eli Lilly & Co., 639 N.E.2d 258, 262 (Ind.1994). Where there is no genuine issue of material fact regarding the nature of a lawyer’s privileged communication with his client, this qualified privilege should be applied as a matter of law. Conwell v. Beatty, 667 N.E.2d 768, 779 (Ind.Ct.App.1996).

Our Supreme Court recently affirmed a grant of summary judgment based on qualified privilege in Dugan v. Mittal Steel USA Inc., 929 N.E.2d 184 (Ind.2010). Du-gan involved an employee’s defamation claim against her employer and supervisor after the supervisor told other employees “that the plaintiff was stealing time ...” in an “attempt to defraud the company,” and had stolen an air compressor. Id. at 186. The trial court’s grant of summary judgment for the employer and supervisor based on the common interest qualified privilege was affirmed because the intra-company communications were part of an internal investigation. Id. at 189.

This case involves a single, private, attorney-client communication which not only involved a common interest, but was a disclosure the lawyer had a duty to make under Indiana Rule of Professional Conduct 1.7. Indeed, Yast not only had a common interest with Jamie in the Think Tank Litigation, but an absolute duty to communicate with Jamie about the reasons for his conflict of interest. Ind. R.Prof.Conduct 1.7.

The Rule required Yast to fully disclose to Jamie the nature of his conflict of interest, the reasons for the conflict, and the fact that Yast’s professional judgment could be affected by the conflict. The scope of Yast’s ethical duty to make this required disclosure is not limited by the nature of the conflict or by the type of conduct that gave rise to the conflict. Accordingly, Yast is not at liberty to circumscribe his disclosure on the possibility that Jamie might consider it defamatory. As a result, the trial court correctly determined that Yast’s communication with Jamie was made pursuant to a common interest or duty under this qualified privilege.

Gagan and the other sellers also admit that Yast had a conflict of interest because Yast’s personal interest in preserving his investment in DirectBuy conflicted with Gagan’s interest in keeping the $17 million in member merchandise money. However, Gagan and the Sellers’ contention that Yast’s personal conflict did not extend to his representation of ThinkTank simply because Jamie owned it ignores the undisputed evidence, the decision of the Disciplinary Commission, and the very purpose of Rule 1.7.

Yast testified that Gagan was directly involved in the ThinkTank litigation; that Gagan had hired, fired, and rehired him; that Yast reported to Gagan and Deutsch as ThinkTank’s representatives; and that Gagan paid his fees for this engagement. The fact that Yast had an actual conflict of interest with representing ThinkTank was confirmed by the Indiana Supreme Court Disciplinary Commission.

The designated evidence shows that Yast truthfully and correctly believed that he had to disclose his conflict to Jamie. Yast then acted upon his belief by making the required disclosure and withdrawing from the litigation. Yast’s testimony, his actions, and the decision of the Disciplinary Commission all establish that Yast made his disclosure in good faith as a matter of law.

Notwithstanding the above, Ga-gan and the sellers point out that a communication protected by a qualified privilege can lose its privileged status if the plaintiff proves that the privilege has been abused. Bals v. Verduzco, 600 N.E.2d 1353, 1356 (Ind.1992). A privilege is abused when there is proof that (1) the communicator was primarily motivated by ill will in making the statement; (2) there was excessive publication of the defamatory statement; or (3) the statement was made without belief or grounds for belief in its truth. Id.

In this case, there is absolutely no evidence that Yast’s disclosure was primarily motivated by ill will, in that the statement did not go beyond the scope of the purpose of this privilege. Holcomb v. Walter’s Dimmick Petroleum, Inc., 858 N.E.2d 103, 106-07 (Ind.2006). Indeed, the evidence shows that Yast made a private phone call to inform Jamie that Yast had a conflict of interest and had to withdraw. Appellant’s App. p. 568-70; 575-80. Yast used this privilege for its intended purpose, namely to inform his client of a matter that affected their common interest, and to make a disclosure that he was ethically required to make. Because Yast’s actions did not go beyond the scope of the privileged occasion there can be no showing of ill will or “actual malice.” Williams v. Tharp, 914 N.E.2d 756, 764 (Ind.2009).

Even more compelling, the evidence establishes that Yast’s “primary motivation” in speaking to Jamie was to comply with Rule 1.7 by informing Jamie of the conflict of interest and the reasons for the withdrawal from the matters. Moreover, Yast’s lack of ill will is clearly established by the host of witnesses who testified that Yast never said anything derogatory about Gagan or the other sellers.

We also cannot say that the letters Yast sent to Gagan amounted to evidence of ill will. The letters only established that Yast and Gagan had a developing conflict that ultimately required Yast to withdraw from his representation. Moreover, the evidence does not support the notion that Yast’s statements were made without belief or grounds for belief in their truth. Yast testified unequivocally that he believed he had an obligation to withdraw from the ThinkTank litigation based upon his conflict of interest, and that Rule 1.7 required him to fully disclose the reasons for his withdrawal.

Indeed, Yast held a good faith belief that the Gagan and the sellers improperly withdrew $17 million of member merchandise money from DirectBuy. The sellers admittedly took member merchandise money that had previously been used for other purposes, and they admitted that DirectBuy had terminated franchisees on occasion that took member merchandise money because the sellers considered it to be theft. In short, Yast knew that Gagan and the others sellers’ withdrawal of members’ merchandise money violated a fundamental “bedrock” principle of DirectBuy, that the other officers believed it was improper, and that Trivest contended it was unauthorized under the merger agreement.

Finally, we note that Gagan and the other sellers have set forth no designated evidence demonstrating that they have suffered any reputational harm or actual damage from Yast’s statements to Jamie during the telephone call. In sum, there is no evidence that Yast abused his qualified common interest privilege, and we conclude that the trial court properly granted Yast’s motion for summary judgment on this basis.

The judgment of the trial court is affirmed.

KIRSCH, J., and BROWN, J., concur.

      . DirectBuy is a franchisor of membership-based buying centers in over 100 locations across the United States and Canada. Direct-Buy’s members pay a fee to belong to the club, and have the ability to purchase a broad selection of merchandise from manufacturers at wholesale prices.

      . Because we have determined that the trial court properly entered summary judgment for Yast on this basis, we need not consider whether the trial court should also have granted Yast’s motion on the grounds of absolute privilege.


author: KIRSCH, Judge. BRADFORD, Judge,

text:
    Anthony WADE, Appellant-Plaintiff, v. TEREX-TELELECT, INC., Appellee-Defendant.
    No. 29A05-1101-CT-72.
    Court of Appeals of Indiana.
    April 11, 2012.

      W. Scott Montross, Montross Miller Muller, Mendelson & Kennedy, LLP, John F. Townsend, III, Townsend & Townsend, Indianapolis, IN, Attorneys for Appellant.
    Julia Blackwell Gelinas, Kevin C. Sehi-ferl, Maggie L. Smith, Frost Brown Todd LLC, Indianapolis, IN, Attorneys for Ap-pellee.
   OPINION

KIRSCH, Judge.

This appeal originates from a complaint alleging that Terex-Telelect, Inc. (“Terex”) was negligent under the Indiana Product Liability Act in the design of the liner of an aerial passenger bucket attached to a truck from which Anthony Wade (“Wade”) fell and was rendered a quadriplegic. Wade appeals from a jury verdict in favor of Terex and asserts that the trial court erred when it denied his partial motion for directed verdict and instructed the jury regarding the rebuttable presumption under Indiana Code section 34-20-5-1 that the product was not defective. Wade raises the following restated and consolidated issue: whether the trial court erred in instructing the jury because no evidence was presented to show that the liner was state of the art or in compliance with government standards.

We reverse and remand.

FACTS AND PROCEDURAL HISTORY

Terex is the manufacturer of buckets and booms used by utilities and construction companies to access elevated work areas. The buckets and booms allow linemen to work on utility lines and equipment that could not be reached from standing on the ground. A bucket is attached by a retractable boom to a truck, and the bucket is cradled on top of the truck for transport. When cradled, the bucket is approximately twelve feet above the ground.

In 1994, Richmond Power & Light (“Richmond Power”) purchased a double-man bucket truck (“Truck 32”). After reviewing brochures regarding the products available, Richmond Power prepared detailed specifications for the type of truck desired. A bid was submitted by a distributor that complied with the specifications and included an aerial lift and bucket manufactured by Terex. This distributor was ultimately awarded the contract. Richmond Power specified that the bucket in Truck 32 contain a polypropylene dielectric/insulating liner. The use of a dielectric liner is very important for utility companies purchasing bucket trucks because of the danger of a lineman being electrocuted by power lines. To maintain dielectric integrity, holes or openings in the liner are avoided because they would expose the occupant to electrical contact.

Richmond Power’s specifications included an exterior step, and the bucket produced to meet these specifications had a molded exterior step with an interior recess that extended into the hollowed out portion of the exterior step. Richmond Power’s specifications did not include an interior step for the bucket or the liner. The interior recess for the exterior step was completely covered by the dielectric liner requested by Richmond Power. A molded interior step or a portable interior step were available options, but Richmond Power did not specify that it desired either.

On August 25,1997, Wade was employed by Richmond Power as an apprentice lineman. As part of his employment, Wade installed various types of equipment for Richmond Power, which sometimes involved the use of a bucket truck. When working in the bucket, linemen were attached to the bucket through the use of a lanyard and harness. The reason for wearing the lanyard is to ensure that the lineman does not fall to the ground if he were to lose his balance and fall. On the date at issue, Wade was working on the installation of a transformer approximately thirty feet off the ground. He was working from inside a double-man bucket attached to Truck 32. After finishing the installation, the bucket was lowered to the cradling position on top of the truck, with the top of the bucket approximately twelve feet above the ground. When the bucket was cradled, Wade replaced his tools in a tool apron that hung inside the bucket, removed his safety goggles, detached his lanyard, and prepared to exit the bucket. While attempting to exit the bucket, Wade missed the exterior step completely and fell twelve feet to the ground. As a result of this fall, Wade was rendered quadriplegic.

On July, 9, 1999, Wade filed a complaint against Terex and Dueco, Inc. (“Dueco”), a distributor of Terex products, alleging that Terex was negligent under the Indiana Product Liability Act in the design of the bucket, which injured Wade. Wade contended that the interior recess for the exterior step was in fact an interior step and that the lack of a molded interior step on the insulating dielectric liner caused this interior step to be covered up, which led to his fall. Wade alleged that, because Terex had sold liners with molded interior steps to other customers, Terex should not have allowed the sale of an insulating dielectric bucket liner that contained no molded interior step.

A jury trial commenced on June 16, 2010. At trial, Terex presented evidence that, in providing an insulating dielectric bucket liner without an interior step, it was complying with Richmond Power’s specifications for the product desired. Evidence was presented that it was common in the industry for an entity specifying and purchasing such equipment to require that the aerial lift and bucket be manufactured to meet the American National Standards Institute (“ANSI”) Standard A92.2 (“ANSI A92.2”). Appellant's App. at 581. ANSI is an independent entity that works in conjunction with the United States government, serves as the official representative of the United States to the International Standards Organization, and accredits various committees, which draft standards that are then approved and published as ANSI standards. Id. at 567. ANSI A92.2 applies to vehicle-mounted elevating and rotating aerial devices, commonly referred to as bucket trucks. Id. at 568. The evidence showed that the primary objective of this standard is to provide users, operators, manufacturers, sellers, inspectors, and others with instruction as to how the machines are to be manufactured, used, and maintained. Id. Any aerial device manufactured after January 2, 1990 must follow the requirements of the standard to be compliant with the 1990 version of ANSI A92.2. Truck 32 was manufactured during the relevant time period covered by the 1990 version.

Forest Carr (“Carr”), a board-certified safety professional, stated at trial that he had reviewed ANSI A92.2 and the applicable Occupational Safety and Health Administration (“OSHA”) regulations and that, in his opinion, the bucket on Truck 32 complied with the standards. TV. at 1268, 1276-77, 1290. He also testified that he believed that buckets without interior steps were perfectly safe. Id. at 1290. Carr further expressed concern that, if an interior step was introduced to the bucket, it would be available not only when the bucket is cradled, but also when linemen are in the air and doing work, which could put lineman at more risk of falling out of bucket. Id. at 1298,1327.

Norman Hargreaves (“Hargreaves”), an engineer and a former director of product safety for Terex from 1992 to 2006, testified that he had inspected the design of the bucket on Truck 32, which did not contain an interior step, and that, in his opinion, an individual could safely enter and exit the bucket. Id. at 865. He further testified that he believed that the Terex design with no interior step used in Truck 32 was a safe design and not unreasonably dangerous to linemen in 1995. Id. at 871-72.

Gary Alexander (“Alexander”), a longtime member of ANSI and the immediate past chairman of the subcommittee that drafted ANSI A92.2, testified that the bucket on Truck 32 met all of the dimensional requirements contained within ANSI A92.2 and also complied with the standard in all other respects. Appellant’s App. at 572. He also stated that the design utilized by Terex on Truck 32 was used by other manufacturers during the time period from 1981-1995 and that ANSI A92.2 did not dictate a design for ingress or egress that must be used by the manufacturers. Id. at 572-73.

At the conclusion of the evidence, Wade made a motion for directed verdict, contending that there was a lack of any evidence to support Terex’s claim that its product was in conformity with the generally recognized state of the art applicable to the safety of the product. The trial court overruled the motion. Wade also objected to Terex’s tendered final jury instruction pertaining to the rebuttable presumption associated with the product being state of the art and in compliance with government standards. This objection was overruled, and the trial court adopted Terex’s tendered instruction as Final Instruction 26. It stated as follows:

Terex has alleged that its bucket was manufactured in conformity with the state of the art and that the bucket complied with applicable codes. Terex has the burden of proving these allegations. If you find that Terex has proved by a preponderance of the evidence that before Terex sold the bucket it:
(1) was in conformity with the generally recognized state of the art applicable to the safety of the bucket at the time the product was designed, manufactured, packaged, and labeled; or
(2) the bucket complied with applicable codes, standards, regulations, or specifications established, adopted, promulgated, or approved by the United States or Indiana, or by an agency of the United States or Indiana,
then you may assume the bucket was not defective or that Terex was not negligent and find for the Defendant. However, if Plaintiff has introduced evidence tending to disprove the above proposition, then you may, but are not required to, find the product was defective.

Appellant’s App. at 291. At the conclusion of the trial, the jury returned a verdict that allocated zero fault to Terex, zero fault to Dueco, and 100% fault to Wade. Wade now appeals.

DISCUSSION AND DECISION

The Indiana Product Liability Act provides for a rebuttable presumption that a product is not defective if it was manu-factored in conformity with the state of the art or if it complied with governmental standards:

In a product liability action, there is a rebuttable presumption that the product that caused the physical harm was not defective and that the manufacturer or seller of the product was not negligent if, before the sale by the manufacturer, the product:
(1) was in conformity with the generally recognized state of the art applicable to the safety of the product at the time the product was designed, manufactured, packaged, and labeled; or
(2) complied with applicable codes, standards, regulations, or specifications established, adopted, promulgated, or approved by the United States or by Indiana, or by an agency of the United States or Indiana.

Ind. Code § 34-20-5-1.

Wade argues that the trial court erred in instructing the jury as to the rebuttable presumption under Indiana Code section 34-20-5-1. When determining whether error resulted from the giving of an instruction, we use the following three-prong test: (1) whether the tendered instruction correctly states the law; (2) whether there is evidence in the record to support giving the instruction; and (3) whether the substance of the instruction is covered by other instructions which are given. R.R. Donnelley & Sons Co. v. N. Texas Steel Co., 752 N.E.2d 112, 139 (Ind.Ct.App.2001), trans. denied (2002). The decision to give a particular instruction rests within the trial court’s sound discretion. Id. We review this decision only for an abuse of that discretion. Id. The giving of instructions will be reversed only if the instructions given, as a whole, failed to advise the jury of the applicable law or misled the jury. Id. We note that a trial court may be justified in giving an instruction if there is any evidence to support the instruction. Id.

I. State of the Art

Under subsection (1), manufacturers such as Terex are entitled to a rebuttable presumption that their product was not defective, and they were not negligent, if their product was manufactured in conformity with the generally recognized state of the art. Ind.Code § 34-20-5-1(1). Although the statute does not define state of the art, Indiana courts have defined the term to mean “the best technology reasonably feasible” at the time the defendant designed, manufactured, packaged, and/or labeled the product at issue. Indianapolis Athletic Club, Inc. v. Alco Standard Corp., 709 N.E.2d 1070, 1074 (Ind.Ct.App.1999). State of the art is not a legal term of art meaning industry custom and practice. Id. (citing Montgomery Ward & Co. v. Gregg, 554 N.E.2d 1145, 1155 (Ind.Ct.App.1990), trans. denied (1991)). “Rather, the courts have ‘embraced the concept of technological advancement’ in defining state of the art.” Id. (citing Phillips v. Cameron Tool Corp., 950 F.2d 488, 490 (7th Cir.1991)). Evidence of the existing level of technology, industry standards, the lack of other advanced technology, the product’s safety record, and the lack of prior accidents may be presented in order to prove that a product is state of the art. Weller v. Mach Trucks, Inc., 570 N.E.2d 1341, 1343 (Ind.Ct.App.1991).

Wade argues that no evidence was presented to support the giving of the jury instruction on the rebuttable presumption under Indiana Code section 34-20-5-1. He contends that no evidence was presented to show that the liner manufactured by Terex without an interior step to facilitate egress from the bucket was either state of the art or that it complied with applicable government standards. Specifically, Wade alleges that none of Terex’s witnesses presented evidence that the liner with no interior step was the best technology reasonably feasible tc show that it was state of the art. Further, he claims that Terex did not present sufficient evidence that the liner at issue complied with any applicable government standards because neither of the standards cited by Terex was applicable to egress out of buckets or interior steps in buckets. Wade therefore asserts that the trial court abused its discretion in instructing the jury as to the rebuttable presumption under Indiana Code section 34-20-5-1. We agree.

To claim the benefit of the statutory presumption, the defendant manufacturer must show that its product is the best technology reasonably feasible at the time it was manufactured. Indianapolis Athletic Club, 709 N.E.2d at 1074. In the present case, Terex presented evidence that, at the time that the liner at issue was manufactured, the liner was the best technology reasonably feasible in terms of its capacity for dielectric insulation and that almost all of the buckets with dielectric/insulating liners used by utility companies utilized the same technology as the liner in Truck 32 and that the same design concept had been used by basically all utility companies for years. Tr. at 864-65; 910.

While such evidence may well have established that the liner was state of the art for dielectric insulation, it was irrelevant to the issue before! the court. Wade was not electrocuted. He fell. Wade made no claim that the dielectric insulation was defective or unreasonably dangerous. Rather, he claimed that the product was unreasonably dangeious and defective because the liner blocked the interior recess in the bucket that provided a step to facilitate egress from the bucket.

State of the art evidence must be relevant to the risk at issue. The fact that a product may be in conformity with the generally recognized state of the árt applicable to a particular risk does not make it state of the art for all purposes. Thus, while the braking system on an automobile may be state of the art in terms of its ability to stop a car travelling at a designated rate of speed within a designated distance from the time the brakes are applied, such evidence would not be relevant in a products liability case where the braking system caused a fire in the vehicle.

Terex’s attempts to prove lack of other advanced technology by arguing concerns regarding electrocution are greater .than concerns regarding falls similarly do not show that a liner without an interior step was the best technology reasonably feasible. While dielectric insulation is important in the utility industry, it was not relevant to the issue of egress out of the bucket. Here, the defect at issue was that the liner failed to provide a safe means of egress out of bucket, not its insulating capabilities.

Terex presented the testimony of several of its experts, namely Hargreaves, Carr, and Alexander, that they deemed the bucket design without an interior step to be safe for ingress and egress and not unreasonably dangerous. Id. at 871-72, 878-79,1290; Appellant’s App. at 573. No evidence was presented that there was a lack of other advanced technology to support that the liner at issue was the best technology reasonably feasible at the time it was manufactured. Indeed, evidence was presented that, at the time that the liner at issue was manufactured, Terex also manufactured a liner that contained an interior step, and that other products available in the market that incorporated an interior step to aid workers when exiting buckets. These included a liner with an interior step included in the bottom corner and hanging steps that could be added to a bucket. PI. Exs. 20-23. The fact that Terex manufactured a liner with an interior step at the time that the liner at issue was manufactured shows that there was other advanced technology available.

There was no testimony that liners without interior steps are safer than those with such steps. Although Terex presented testimony by their experts that, if an interior step was included in the liner, it could possibly pose a risk that linemen could fall out of the bucket while working in the air, none of these experts testified that an interior step was actually less safe. Tr. at 1327; Appellant’s App. at 576. There was no evidence that a liner without an interior step is the best technology reasonably feasible for ingress into and egress out of the bucket.

Terex introduced no evidence regarding the product’s safety record and the lack of prior accidents pertaining to the buckets with the liner at issue because it was not able to meet the trial court’s evidentiary foundational requirement of demonstrating that a satisfactory investigation had been conducted regarding whether and to what extent prior accidents involving the product had occurred. It did present anecdotal evidence that the same technology had been used for almost thirty years and that it had sold approximately 40,000 buckets with the same liner and had not heard of a report of anyone falling while entering or exiting the bucket as Wade did. Tr. at 864, 878, 913. Evidence was also presented of studies done by the National Safety Council that contained instances of accidents involving falls occurring when exiting buckets; although some of the recounts of accidents did not contain many details to show they involved the same situation as the present case, they could still support an inference that other similar accidents have occurred previously.

We conclude that there was not sufficient evidence presented to support Te-rex’s contention that the liner at issue was “in conformity with the generally recognized state of the art applicable to the safety of the product at the time [it] was designed, manufactured, packaged, and labeled.” Ind.Code § 34-20-5-1(1). As a result, the trial court erred in instructing the jury that it could “assume the bucket was not defective or that Terex was not negligent” if it found that the product was in conformity with the generally recognized state of the art. Appellant’s App. at 291.

II. Compliance with Government Regulations

Terex also contended that it was entitled to the rebuttable presumption that its product was not defective and was not negligent under subsection (2) of Ind.Code § 34-20-5-1, because its product “complied with applicable codes, standards, regulations, or specifications established, adopted, promulgated, or approved by the United States or by Indiana, or by an agency of the United States or Indiana.” Ind.Code § 34-20-5-1(2). Specifically, Te-rex claimed that its design without an interior step was in compliance with ANSI A92.2, which was a standard that applied to any truck with an aerial device, such as Truck 32.

Although ANSI standards are not government standards or regulations, at all relevant times for this case, OSHA regulations provided, “Unless otherwise provided in this section, aerial devices acquired on or after July 1,1975, shall be designed and constructed in conformance with the applicable requirements of ... [ANSI A92.2] ..., including appendix, which is incorporated by reference as specified in § 1910.6.” 29 C.F.R. § 1910.67(b)(1). The referenced section 1910.6 stated, “The standards of ... organizations which are not agencies of the U.S. Government which are incorporated by reference in this Part, have the same force and effect as other standards in this Part.” 29 C.F.R. § 1910.6(a)(1). Thus, because OSHA regulations require compliance with ANSI standards for lift trucks, Terex argues that it is entitled to the statutory presumption. We do not agree.

As was the case above regarding state of the art evidence, for evidence of compliance with governmental standards to be relevant, the standard itself must relate to the risk or product defect at issue. Here, it does not. While there was testimony that the primary objective of ANSI A92.2 was to prevent accidents associated with the use of buckets and to provide guidance as to how to safely manufacture, use, and maintain such buckets, this standard did not address the design issue in this case, namely, the egress out of buckets and the necessity of interior steps inside buckets to facilitate. Appellant’s App. at 524, 568. Nowhere in either the OSHA regulations or ANSI A92.2 is there a requirement for or prohibition of an interior step in buckets or liners. Rather, the standards are silent regarding interior steps. As a result, there was no relevant evidence presented regarding any government standard applicable to interior steps in buckets or bucket liners. Therefore, there was not sufficient evidence presented to support Terex’s contention that the liner at issue complied with applicable government regulations. We conclude that the trial court erred in instructing the jury as to the rebuttable presumption under Indiana Code section 34-20-5-1.

Having determined that there was insufficient evidence to support the instruction, we must next decide whether the instruction was prejudicial to Wade. “Although a jury instruction may have been given in error, the error is not reversible unless the complaining party was prejudiced thereby.” Indianapolis Athletic Club, 709 N.E.2d at 1073 (citing Spirito v. Temple Corp., 466 N.E.2d 491, 493 (Ind.Ct.App.1984), trans. denied (1985)). “Moreover, where an instruction presents a correct statement of law, but no evidence supports it, the objecting party is generally unharmed by the instruction.” Id. Here, the instruction in this case was not harmless. By its specific language, the instruction allowed the jury to presume that Terex’s product was not defective and that Terex was not negligent if the bucket liner was manufactured in conformity with state of the art or compliance with government regulations. This instruction was erroneous because it was unsupported by relevant evidence and went to the very heart of this case. Wade was prejudiced by instructing the jury as to the rebuttable presumption under Indiana Code section 34-20-5-1. We reverse the trial court’s judgment and remand for a new trial.

Reversed and remanded.

VAIDIK, J., concurs.

BRADFORD, J., concurs in part and dissents in part with separate opinion.

BRADFORD, Judge,

concurring in part and dissenting in part.

Although I agree that Terex was not entitled to a “state of the art” instruction and so would remand for retrial in any event, I cannot agree that the trial court abused its discretion in instructing the jury regarding the rebuttable presumption that a product is non-defective if it conforms to applicable governmental regulations. Consequently, I respectfully dissent in part.

Terex produced evidence that its bucket complied with ANSI A92.2, the standard applicable to trucks with aerial devices, and the plain language of Indiana Code section 34-20-5-1(2) supports the giving of a regulatory compliance instruction under such circumstances. To deny a manufacturer a regulatory compliance instruction because the regulations do not specifically address the risk at issue would, in my view, run counter to clear legislative intent. I agree with the Tennessee Supreme Court’s observation on that state’s similar provision that such statutes are designed “ ‘to give refuge to the manufacturer who is operating in good faith and [in] compliance of what the law requires him to do.’ ” Flax v. DaimlerChrysler Corp., 272 S.W.3d 521, 536 (Tenn.2008) (quoting Tuggle v. Raymond Corp., 868 S.W.2d 621, 625 (Tenn.Ct.App.1992)) (brackets in Tuggle ). Terex introduced evidence that it manufactured the bucket up to ANSI A92.2 standards and so is entitled to a regulatory compliance instruction.

This is not to say, however, that Instruction 26 should have directed a verdict for Terex based on regulatory compliance, and, in fact, it did not. Wade was free to attempt to counter evidence of compliance, as Final Instruction 26 clearly provided, with evidence that the bucket either did not actually comply with ANSI A92.2 or was defective despite its compliance. In other words, Wade was given the opportunity to prove that a reasonable manufacturer would have installed an interior step in the bucket whether ANSI A92.2 mandated it or not. As the Colorado Supreme Court has stated,

a product may be in a defective condition unreasonably dangerous to the user or consumer notwithstanding the supplier’s compliance with a safety regulation related to that product. While undoubtedly compliance constitutes evidence that the product was not defective at the time of sale, it by no means is conclusive on the issue of defect.

Blueflame Gas. Inc. v. Van Hoose, 679 P.2d 579, 591-92 (Colo.1984). On retrial, I would hold that Terex is entitled to instruct the jury on regulatory compliance, assuming, of course, that it presents the same or similar evidence on that question.

Because I believe that the trial court properly instructed the jury on regulatory compliance, I respectfully dissent in part.

      . On January 19, 2012, we held oral argument in this matter at Purdue University’s Krannert Graduate School of Management. We extend many thanks. First, we thank counsel for the quality of the oral and written arguments, for participating in post-argument discussions with the audience, and for commuting from Indianapolis. We especially thank the Krannert Executive MBA Program for their accommodations and the students in the audience for their thoughtful post-argument questions.

      . In 2006, Dueco settled with Wade and was dismissed from the lawsuit; Terex subsequently named Dueco as a non-party defendant.

      . The trial court had granted a motion in limine to exclude evidence of the lack of prior accidents unless Terex was able to “establish a foundation that a satisfactory investigation [had] been performed to ascertain whether and to what extent prior accidents [had] occurred." Appellant’s App. at 94.

      . My interpretation of ANSI A92.2 is that it is entirely possible that ANSI considered the safety of ingress and egress in general and interior steps in particular in crafting the standard. The bucket specifications, particularly the requirement that the bucket walls be thirty-nine to forty-five inches high, seem to be an attempt to strike a balance between walls high enough to reduce the risk of falling out and low enough to allow for generally safe ingress and egress. Defendant’s Ex. M p. 28. I believe ANSI recognized that no one bucket design could be completely safe for both purposes, however, as reflected in the provision that "[d]uring operation of the aerial device the operator shall wear a body belt or harness and be connected to the aerial device with a lanyard at the platform position.” Defendant’s Ex. M p. 22. As for interior steps, it seems entirely possible that ANSI considered them but rejected them as unsafe, given the following provision: “The operator shall not use railings, planks, ladders or any other device in or on the work platform for achieving additional working height or reach.” Defendant’s Ex. M p. 22 (emphasis added).

      . Tennessee Code section 29-28-104(a) provides as follows:
      Compliance by a manufacturer or seller with any federal or state statute or administrative regulation existing at the time a product was manufactured and prescribing standards for design, inspection, testing, manufacture, labeling, warning or instructions for use of a product, shall raise a rebuttable presumption that the product is not in an unreasonably dangerous condition in regard to matters covered by these standards.

      . Colorado’s regulatory compliance statute provides, in relevant part, as follows:
      (1) In any p-oduct liability action, it shall be rebuttably presumed that the product which caused the injury, death, or property damage was not defective and that the manufacturer or seller thereof was not negligent if the produc':
      (a) Prior to sale by the manufacturer, conformed to the state of the art, as distinguished from industry standards, applicable to such product in existence at the time of sale; or
      (b) Complied with, at the time of sale by the manufacturer, any applicable code, standard, or regulation adopted or promulgated by the United States or by this state, or by any agency of the United States or of this state.
      Colo.Rev.Stat. § 13-21-403.


author: BAILEY, Judge.

text:
    Jarrad L. MASTIN, Appellant-Defendant, v. STATE of Indiana, Appellee-Plaintiff.
    No. 18 A02-1109-CR-890.
    Court of Appeals of Indiana.
    April 12, 2012.

      L. Ross Rowland, Public Defender’s Office, Muncie, IN, Attorney for Appellant.
    Gregory F. Zoeller, Attorney General of Indiana, Michael Gene Worden, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellee.
   OPINION

BAILEY, Judge.

Case Summary

Jarrad L. Mastín (“Mastín”) appeals his convictions and sentence for three counts of Child Molesting, one as a Class A felony and two as Class B felonies. We affirm.

Issues

Mastín presents five issues for review, which we consolidate and restate as the following four issues:

I. Whether the admission of hearsay testimony was fundamental error;
II. Whether there is sufficient evidence to support the child molesting convictions based upon sexual intercourse;
III. Whether he was denied a fair trial because of prosecutorial misconduct; and
IV. Whether his sentence is inappropriate.

Facts and Procedural History

Mastin’s daughter, K.M., was born on July 15, 2004, and placed in the guardianship of her maternal grandmother, Diana Winans (“Winans”). In 2009, K.M. began experiencing severe problems using the bathroom. According to Winans, K.M. was “peeing blood” and screaming, so Win-ans took K.M. to the hospital. (Tr. 78.)

K.M. was examined and found to have blisters on her labia and rectum. She was originally diagnosed with canker sores; however, test results later confirmed that K.M. had been infected with Type II genital herpes. In an interview with City of Muncie police officers, Mastín confessed to having engaged in sexual contact with K.M.

On January 28, 2010, the State charged Mastín with eight counts of child molesting. Five counts were dismissed and, on July 18, 2011, Mastín was brought to trial before a jury on the remaining three counts (two alleging sexual intercourse and one alleging deviate sexual conduct). He was convicted as charged. On August 30, 2011, Mastín was given consecutive sentences of twenty years for each Class B felony conviction and fifty years for his Class A felony conviction, providing for an aggregate sentence of ninety years. He now appeals.

Discussion and Decision

I. Hearsay Testimony

K.M. did not testify at Mastin’s trial. During Winans’ testimony, the prosecutor questioned Winans as to whether “something happened” during the ride home from the nurse practitioner examination. (Tr. 82.) Winans responded, “[K.M.] asked me why the lady,” whereupon Mas-tín interrupted and successfully lodged a hearsay objection. (Tr. 82.)

After the State’s offer of-proof and argument regarding a hearsay exception for medical diagnosis or treatment, the trial court reversed its ruling. Winans was ultimately permitted to testify that K.M. had begun to talk about “why the lady stuck a Q-tip down there and rub[bed] it,” wondered aloud if Winans was “mad at her” and stated, “well my daddy plays secret games with me.” (Tr. 84.) Because Mastín did not contemporaneously object, he now couches his argument in terms of fundamental error. He contends that the admission of KM.’s statement regarding secret games denied him a fair trial because her statement was not made for purposes of obtaining a medical diagnosis or treatment and because the trial court failed to conduct a hearing regarding K.M.’s treatment as a protected person.

The defendant’s failure to lodge a contemporaneous objection at the time evidence is introduced at trial results in waiver of the error on appeal. Brown v. State, 929 N.E.2d 204, 207 (Ind.2010), reh’g denied. “The purpose of this rule is to allow the trial judge to consider the issue in light of any fresh developments and also to correct any errors.” Id. A claim that has been thus waived can be reviewed on appeal if the íeviewing court determines that a fundamental error occurred. Id. The fundamental error exception is “ ‘extremely narrow, and applies only when the error constitutes a blatant violation of basic principles, the harm or potential for harm is substantial, and the resulting error denies the defendant fundamental due process.’ ” Id. (quoting Mathews v. State, 849 N.E.2d 578, 587 (Ind.2006)). The exception is avalable only in ‘“egregious circumstances.’ ” Id. (quoting Brown v. State, 799 N.E.2d 1064, 1068 (Ind.2003)).

The trial court admitted K.M.’s statement pursuant to Indiana Evidence Rule 803(4), which recognizes the following as an exception to the general rule that hearsay is inadmissible evidence:

Statements made by persons who are seeking medical diagnosis or treatment and describing medical history, or past or present symptoms, pain, or sensations, or the inception or general character of the cause or external source thereof insofar as reasonably pertinent to diagnosis or treatment.

The rationale for this hearsay exception is that a declarant has a personal interest in obtaining a medical diagnosis and treatment, and this interest motivates the patient to provide truthful information. Sibbing v. Cave, 922 N.E.2d 594, 598 (Ind.2010). Although the statement need not be made to a physician, it must be made “to advance a medical diagnosis or treatment” to fall -within the purview of Evidence Rule 803(4). In re Paternity of H.R.M., 864 N.E.2d 442, 446 (Ind.Ct.App.2007).

Here, we must agree with Mastín that K.M.’s statement to her grandmother, made after a medical examination had concluded and no health professional was present, was not made to advance her medical diagnosis or treatment. We also recognize that the trial court apparently did not conduct a hearing, as contemplated by Indiana Code Section 35-37-4-6(e), before issuing its ruling that K.M. could be treated as a “protected person” and need not testify in open court.

Nonetheless, the erroneous admission of .evidence will be disregarded unless it affects the substantial rights of a party. Hoglund v. State, 962 N.E.2d 1230, 1238 (Ind.2012). Although K.M.’s statement that “daddy plays secret games” should not have been admitted, there is substantial independent evidence of guilt. (Tr. 84.) In his police interview, Mastín confessed that he had placed his penis in KM.’s mouth, had licked KM.’s vaginal area, and had pushed aside KM.’s underwear and rubbed his penis on her for a few minutes. We are not persuaded that the hearsay reference to secret games deprived Mastín of a fair trial.

II. Sufficiency of the Evidence

Mastín next contends that there is insufficient evidence to support the child molesting convictions premised upon his acts of sexual intercourse with K.M. in July of 2008 and in March of 2009. More specifically, he denies that there is evidence of penetration.

When reviewing the sufficiency of the evidence to support a conviction, appellate courts must consider only the probative evidence and the reasonable infer-enees supporting the verdict. Drane v. State, 867 N.E.2d 144, 146 (Ind.2007). In so doing, we do not assess witness credibility or reweigh the evidence. Id. We will affirm the conviction unless no reasonable fact-finder could find the elements of the crime proven beyond a reasonable doubt. Id.

To prove the Class B felonies, as charged, the State was required to show that Mastín performed sexual intercourse with K.M., a child under fourteen years of age. Ind.Code § 35-42-4-3(a). Sexual intercourse is “an act that includes any penetration of the female sex organ by the male sex organ.” Ind.Code § 35-41-1-26.

The statute defining sexual intercourse does not require that the, vagina be penetrated, only that the female sex organ be penetrated. Short v. State, 564 N.E.2d 553, 559 (Ind.Ct.App.1991). Penetration of the external genitalia, or vulva, is sufficient to support an unlawful sexual intercourse conviction. Id. To sustain a conviction for child molesting or incest, proof of the “slightest penetration” of the female sex organ by the male sex organ is sufficient. Dinger v. State, 540 N.E.2d 39, 40 (Ind.1989). Penetration can be inferred from circumstantial evidence. Pasco v. State, 563 N.E.2d 587, 590 (Ind.1990).

In his police interview, Mastín described in some detail his sexual contact with K.M. He stated that he would lie sideways as K.M. lay lengthwise and on her back. Her legs were apart. Mastín would push aside KM.’s underwear and “rub on” her vagina with his penis. (State’s Ex. 10.)

Holly Renz, a sexual assault nurse-examiner who examined K.M., testified that K.M. had “scars to her genitals” from herpes lesions. (Tr. 134.) She further testified that K.M. had circular areas of scarring on her labia majora and bilateral redness of her labia minora.

This is sufficient evidence from which the factfinder could conclude that Mastin’s sex organ penetrated KM.’s sex organ.

III. Prosecutorial Misconduct

Mastín claims that prosecutorial misconduct denied him a fair trial when, in closing argument, the prosecutor stated: “Why does a man touch a female’s vagina with his penis? Use your common sense and reasoning. Why would he be willing to put his penis in her mouth, but not her vagina?” (Tr. 175.) According to Mastín, the prosecutor invited the jury to engage in speculation.

However, Mastín lodged no objection at trial to any portion of the prosecutor’s closing argument. Thus he preserved no such issue for appeal. See Robinson v. State, 693 N.E.2d 548, 552 (Ind.1998) (clarifying that the proper procedure in the face of alleged improper argument is to request an admonishment, and mistrial if necessary, but that failure to so move results in waiver of the issue).

IV. Appropriateness of Sentence

A person who commits a Class A felony has a sentencing range of between twenty and fifty years, with the advisory sentence being thirty years. Ind.Code § 35-50-2-4. A person who commits a Class B felony has a sentencing range of between six and twenty years, with the advisory sentence being ten years. Ind.Code § 35-50-2-5. Mastín was sentenced to fifty years for one Class A felony and twenty years for each Class B felony. All sentences were consecutive. Accordingly, Mastín received the maximum possible sentence.

Under Indiana Appellate Rule 7(B), this “Court may revise a sentence authorized by statute if, after due consideration of the trial court’s decision, the Court finds that the sentence is inappropriate in light of the nature of the offense and the character of the offender.” In performing our review, we assess “the culpability of the defendant, the severity of the crime, the damage done to others, and myriad other factors that come to light in a given case.” Cardwell v. State, 895 N.E.2d 1219, 1224 (Ind.2008). A defendant ‘must persuade the appellate court that his or her sentence has met th[e] inappropriateness standard of review.’ ” Anglemyer v. State, 868 N.E.2d 482, 494 (Ind.2007) (quoting Childress v. State, 848 N.E.2d 1073, 1080 (Ind.2006)).

The nature of Mastin’s offenses is that he violated a position of trust with his biological daughter. Mastín gained access to K.M. when K.M. visited Mastin’s mother overnight. Mastín warned K.M. not to tell anyone about their “secret games.” The molestations began when K.M. was four years old and continued until KM. was diagnosed with Type II genital herpes and Mastín was arrested.

K.M. suffered an initial outbreak that her grandmother described as “horrible.” (Tr. 90.) K.M. had blisters on her vagina and rectum, and would cry and scream because it was so painful to urinate. Kathryn Joyner, nurse practitioner, observed lesions on K.M.’s buttocks and explained that K.M. “could not pee because of ulcerations and swelling” and that her vulva was “all ulcerated.” (Tr. 116-117.) According to Dr. Christopher Belcher, an infectious disease specialist to whom K.M. was referred after “frequent outbreaks of herpes,” the “underwear genital area” was affected and K.M. was prescribed long-term medication. (Tr. 105.) Although milder and less frequent outbreaks could be anticipated with proper medication, it was not expected that K.M. would ever be cured.

As for the character of the offender, Mastín has had no adult criminal convictions, other than for a misdemeanor trespass offense. Generally, this would militate toward a less than maximum sentence. However, the trial court determines the weight assigned to mitigating circumstances and a lack of criminal history does not automatically outweigh any valid aggravating circumstances. McElroy v. State, 865 N.E.2d 584, 592 (Ind.2007). Here, given the very young age of the victim, the protracted length of time over which the molestations occurred, and the devastating consequences suffered by the victim, we are not persuaded that the trial court imposed upon Mastín an inappropriate sentence.

Conclusion

Mastín has not demonstrated that the trial court’s evidentiary rulings denied him a fair trial. There is sufficient evidence from which the jury could conclude that Mastín committed child molesting by sexual intercourse. His ninety-year sentence is not inappropriate.

Affirmed.

ROBB, C.J., and MATHIAS, J., concur.

      . Ind.Code § 35-42-4-3.

      . The Protected Person statute, Indiana Code Section 35-37-4-6, allows for admission of otherwise inadmissible hearsay evidence relating to specified crimes whose victims are deemed "protected persons." Tyler v. State, 903 N.E.2d 463, 465 (Ind.2009). The trial court must find any videotaped statements to be reliable before admission and the protected person must be available for cross-examination. Id. at 466.

      . He does not challenge the sufficiency of the evidence to suDport his conviction for child molesting by criminal deviate conduct.

      . During his police interview, Mastín admitted to rubbing his penis against K.M. on occasions in July of 2008 and March of 2009. However, he adamantly denied penetration of K.M.'s vagina.

      . Dr. Belcher testified that "some outbreaks stop,” but his expectation was that K.M. would suffer less severe outbreaks with time, as opposed to none. (Tr. 104.)