author: Mathias, Judge.

text:
    DESTINATION YACHTS, INC., and Sheldon Graber, Appellants-Defendants, v. Shirley PIERCE and Al Burnham, Appellees-Plaintiffs.
    Court of Appeals Case No. 18A-CT-1057
    Court of Appeals of Indiana.
    FILED October 19, 2018 Rehearing denied December 31, 2018
    Attorneys for Appellants: Clay W. Havill, Francis X. Mattingly, L. Katherine Boren, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, Indiana
    Attorneys for Appellees: James D. Johnson, Blair M. Gardner, Jackson Kelly, PLLC, Evansville, Indiana
   Mathias, Judge.

[1] Shirley Pierce ("Pierce") and Al Burnham ("Burnham") (collectively "the Purchasers") bought a houseboat manufactured and sold by Destination Yachts, Inc. ("DYI"). Thereafter, the Purchasers filed a complaint in Daviess Circuit Court against DYI and its president, Sheldon Graber ("Graber") (collectively "the Defendants"), alleging various contract and tort claims arising out of their purchase of the houseboat. The Defendants subsequently filed a motion to dismiss the Purchasers' claims, arguing inter alia that the purchase agreement was subject to a mandatory, binding arbitration clause. The trial court granted the motion to dismiss with prejudice. The parties then proceeded to arbitration, but before the arbitration could occur, the Defendants filed a motion with the arbitrator claiming that the trial court's order dismissing the Purchasers' claims with prejudice was a judgment on the merits that acted to bar any subsequent claim, including arbitration. The Purchasers then returned to the trial court and filed a motion to correct error or, in the alternative, for relief from judgment arguing that the earlier dismissal with prejudice did not bar arbitration. The trial court agreed and granted the motion. The Defendants appeal and present two issues, which we restate as: (1) whether the trial court erred by granting the Purchasers' motion to correct error/motion for relief from judgment, and (2) whether Graber is a party to the contract and therefore properly subject to any arbitrable claims.

[2] We affirm.

Facts and Procedural History

[3] The Purchasers met with Graber at DYI's Washington, Indiana location on April 24, 2014, to discuss the purchase of a houseboat. After some discussion, the Purchasers and DYI entered into a Contract and Purchase Agreement ("the Agreement") which provided that the Purchasers agreed to buy a custom-built houseboat for a price of $314,909.19. Included in this Agreement, which was drafted by DYI, was an arbitration clause that provides:

SECTION THREE
RESOLUTION OF PROBLEMS
It is understood and agreed that any problems arising during the construction of the boat can best be resolved by maintenance of a close liaison between Builder and Purchaser, and that the parties will make every good-faith effort to avoid and resolve any problems and disputes by maintaining such close liaison between Builder and Purchaser. All disputes, complaints, problems and objections relating to the terms, conditions and obligations of the within Purchase Agreement, unless resolved directly between Builder and Purchaser, shall be submitted to binding arbitration in the matter set forth in Sections Seven and Twelve below.
* * *
SECTION SEVEN
INSPECTION
All work-in-process at Builder's plant shall be subject to inspection by Purchaser, and Builder shall grant Purchaser access to Builder's premises for such inspection at all reasonable times and upon prior notice by Purchaser.
Prior to the completion of the boat, Purchaser and/or a representative of Purchaser and Builder and/or a representative of Builder shall carry out a final inspection of the boat, at the conclusion of which Purchaser shall be entitled to submit in writing, to Builder, such changes, complaints and/or objections, if any, as Purchaser may have with respect to the construction of the boat within seven (7) days of inspection. Any valid complaints or objections so stated shall be corrected or remedied by Builder as soon as practical thereafter.
In the event purchaser does not inspect boat prior to shipping any changes will be at the expense of the purchaser. Builder will make every effort to take pictures and keep purchaser informed but can not be responsible in the event purchaser wants changes after shipment, purchaser waives any remedy as to cosmetic and/or mechanical changes in the event no inspection is made.
Any dispute as to the validity of such complaints or objections, or as to the parties' respective responsibilities concerning same or the within Purchase Agreement, shall be settled by arbitration. Should arbitration become necessary either party may serve upon the other notice requiring the matter to be arbitrated and such notice shall set out the name of the arbitrator appointed by the party giving such notice. Within seven (7) days of the receipt of such notice the other party shall either agree to the arbitrator appointed by the party giving the notice or appoint its own arbitrator and notify the first party of the name of same. In the event the two arbitrators so appointed cannot agree as of the resolution of the complaint or objection, then the two arbitrators shall select a third arbitrator and shall thereupon proceed with all due diligence to settle the matter. The decision of the majority of the arbitrators shall be final and binding upon the parties. Each party shall be responsible for the cost and fees of the arbitrator selected by that party. The costs and fees of the third arbitrator, if necessary, shall be borne equally by the parties. In the event the two arbitrators selected as hereinabove provided cannot agree upon a third arbitrator, then the third arbitrator, if necessary, shall be appointed by the Daviess Circuit Court, Daviess County, Indiana, upon petition by either party.
* * *
SECTION TWELVE
GOVERNING LAW AND VENUE
It is agreed that this agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Indiana. Purchaser and Builder agree that in the event any type of litigation should result from the within Purchase Agreement, then the exclusive venue of such litigation shall be with the Daviess Circuit Court, Daviess County, Indiana.

Appellants' App. Vol. 2, pp. 48-51 (emphases added). Graber signed the Agreement as President of DYI. Id. at 53.

[4] After the houseboat was built and delivered to the Purchasers, they found a number of alleged defects. The parties attempted to resolve these concerns, and even attempted mediation in 2016, but were unable to come to an agreement.

[5] Despite the clear language of the Agreement requiring arbitration of any claims, the Purchasers filed suit against the Defendants on June 7, 2017 in Daviess Circuit Court. The complaint set forth eight counts against the Defendants. The counts against DYI were: breach of contract, breach of a written warranty, breach of the implied warranty of merchantability, and breach of the implied warranty of fitness for a particular purpose. The counts against both DYI and Graber were: fraud in the inducement to enter into the Agreement, negligent misrepresentation, rescission, and unjust enrichment. Appellants' App. Vol. 2, pp. 13-20.

[6] On August 22, 2017, the Defendants filed a motion to dismiss the Purchasers' complaint. The Defendants argued first and foremost that the entire controversy was subject to mandatory, binding arbitration and that the trial court should dismiss the case with an order to compel arbitration. Appellants' App. Vol. 2, p. 36. The Defendants also argued that the integration clause in the Agreement prevented any claim based on Graber's oral statements regarding the houseboat; that the claim alleging a breach of the written warranty failed to state a claim upon which relief could be granted; that the Purchasers' claims against Graber were improper and should be dismissed because they were based on oral statements and sought to hold Graber personally liable for the alleged faults of DYI; that the Purchasers' claims for fraud in the inducement, negligent misrepresentation, rescission, and unjust enrichment failed to state valid claims for relief; that the demand for attorney fees should be dismissed; and that the Defendants should instead be awarded attorney fees. Id. at 37-46. Attached to their motion, the Defendants submitted a proposed order dismissing the Purchasers' claims with prejudice. After the Purchasers filed a response to this motion, the Defendants filed a surreply.

[7] The trial court held a hearing on the motion to dismiss on November 13, 2017. At this hearing, counsel for the Defendants repeated the claims made in their motion: that the entire suit was subject to arbitration and, in the alternative, that the Purchasers' claims failed as a matter of law. With regard to the claims against Graber personally, defense counsel argued:

Now further, we also believe this arbitration agreement applies to Sheldon Graber as an individual as President of DYI at all times. As the arbitration provision, sorry, as the arbitration provisions of the agreement should require that all claims in this matter against DYI be heard in arbitration, so should all Claims against Sheldon Graber , because Sheldon has been acting as President of DYI, and interacting with the plaintiffs. He was acting as President of DYI, during any discussions about the construction of this houseboat. Because the plaintiffs and DYI have intended to arbitrate disputes between them, for the a, sorry, between them the arbitration agreement should also extend to plaintiffs['] claims against Graber's actions as they allege he took those actions and did not allege that he took those actions in any capacity other than as President of DYI. If such agents, such as a President of a company that has entered into an arbitration agreement are not extended the benefit of the arbitration provisions, then it would be all too easy for crafty litigants to feed and [sic] arbitration agreement by naming non signatories as parties. By naming non signatories in their individual capacity only, plus all defendants in both their official and individual capacities must have the benefit of the arbitration clause that they entered into. Per the integration provisions of this agreement also of our plaintiffs['] claims, we believe that the arbitration agreement alone in the arbitration provisions should cause this matter to be dismissed , but if the Court finds otherwise I believe the integration provisions of this agreement bar any claims based on an alleged promise of a ride high boat...

Appellants' App. Vol. 3, pp. 43-44 (emphases added). At the conclusion of the hearing, the trial court took the matter under advisement.

[8] On November 15, 2017, the trial court granted the motion to dismiss, using the order submitted by the Defendants, which provided:

This matter, having come before the Court upon Defendants' Motion to Dismiss Complaint and the Court GRANTS the same.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED, that this cause of action is dismissed with prejudice .

Appellants' App Vol. 2, p. 92 (emphasis added).

[9] On January 12, 2018, the Purchasers filed a notice of arbitration claim. Both parties then proceeded with the selection of the arbitrators, and participated in a conference call on January 29, 2018, during which the parties agreed to certain procedures and scheduling for the arbitration, and the arbitration was set to take place on June 18-22 of that year. See id. at 108. Pursuant to this agreed-upon schedule, the Purchasers filed an arbitration complaint on February 7, 2018, presenting claims substantially similar to the ones it presented in their complaint with the trial court, except that the count alleging unjust enrichment was replaced with a count seeking to pierce the corporate veil.

[10] On February 22, 2018, the Defendants filed with the arbitrators a motion to dismiss the arbitration proceedings, arguing for the first time that the trial court's order dismissing the Purchasers' claims with prejudice was a judgment on the merits that barred further litigation on the issues. Also on February 22, Graber filed a motion objecting to the arbitrator's jurisdiction over him. In direct contradiction with his arguments to the trial court that the claims against him were subject to arbitration, Graber now claimed that the arbitrators had no jurisdiction to hear any complaints against him because he was not a party to the Agreement. The arbitrators denied these motions on March 16, 2018.

[11] In the meantime, the Purchasers, on March 8, 2018, filed in the trial court a motion to correct error or, in the alternative, a motion for relief from judgment. The Purchasers argued that the trial court order dismissing their complaint with prejudice was improper because the trial court should have either stayed the proceedings or dismissed the complaint without prejudice. The Defendants countered that the trial court's dismissal order was a final judgment on the merits, that the time had passed to timely file a motion to correct error, and that the Purchasers had not shown grounds for relief under Trial Rule 60. After briefing by both parties, the trial court entered an order granting the Purchasers' motion, which provided in relevant part:

This matter is before the Court on Plaintiffs' Motion to Correct Error or In the Alternative, for Relief from Order. The Court, being duly advised, finds as follows:
1. The Plaintiffs filed their complaint herein on June 7, 2017 alleging several theories of recovery. In the "Prayer for Relief" they sought the following:
(a) Judgment in Plaintiffs' favor and against Defendants for rescission and damages in the amount sufficient to compensate Plaintiffs for damage sustained;
(b) Return of all monies paid or, in the alternative, all applicable damages pursuant to 2-714 of the Commercial Code and all incidental and consequential damages;
(c) Incurred and need cost of repairs;
(d) All attorneys' fees, witness fees, expenses, court costs and other fees incurred by Plaintiffs; and
(e) Any and all other just and proper relief in the premises.
2. Plaintiffs did not specifically request relief in the form of an order requiring the parties to participate in binding arbitration.
3. It is the trial court's opinion that Plaintiffs are not entitled to any relief from the trial court other than an order requiring the parties to participate in binding arbitration. In essence, the trial court does not have jurisdiction to address the merits of the case or grant relief thereon. Pursuant to the terms of the contract, the relief previously requested by Plaintiffs can only be awarded through arbitration.
4. For this reason the trial court granted Defendants['] Motion to Dismiss with Prejudice, essentially determining that the trial court could not, pursuant to the terms of the contract itself, address any of the issues raised by the Complaint on their merits. In essence, the Plaintiffs' sole remedy under the contract was to seek binding arbitration in accordance with the terms of the contract to address the merits.
5. The Defendants have apparently misinterpreted the Court's order assuming that it was a judgment in their favor on the merits. It was not. It was intended merely to dismiss the legal action assuming that the parties would thereafter participate in binding arbitration to resolve the matter on the merits as required by the contract . Defendants, instead, apparently asserted their position that the dismissal of the law suit was a determination on the merits and have made it known that they do not intend to participate in arbitration.
6. Defendants['] decision to refuse to participate in binding arbitration, if that is their intention, is made at their own risk.
7. In order to be clear, and so as to not prejudice either party by any misunderstanding that may have been created as a result of the trial court entering an order that did not clearly state all of the above, the court will grant Plaintiffs' motion for relief from the judgment as set forth below.
8. Justice requires that this relief be granted.
IT IS THEREFORE ORDERED that Plaintiffs are granted relief from the judgment herein as follows:
1. The order dismissing the matter with prejudice dated November 15, 2017 is set aside.
2. In its place the trial court orders as follows:
The Plaintiffs Shirley Pierce and/or Al Burnham shall have thirty days from the date of this order to amend the "Prayer for Relief" in their complaint to seek the sole remedy available to them through the trial court, that is an order requiring the parties to participate in binding arbitration. If Plaintiffs do not amend the complaint accordingly in the time permitted then the Court shall enter an order dismissing the complaint.

Appellants' App. Vol. 2, pp. 9-10.

[12] On April 26, 2018, the Defendants filed a motion to stay the arbitration pending appeal, which the trial court denied on May 2, 2018. The Defendants then filed a notice of appeal on May 7, 2018, and subsequently filed a motion to stay with this court. The motions panel of this court granted the motion to stay by order issued on May 29, 2018. This appeal ensued.

Discussion and Decision

[13] The Defendants claim that the trial court erred in several respects when it granted the Purchasers' motion to correct error/motion for relief from judgment. First, they argue the trial court could not have properly granted the motion under Trial Rule 59 because the time limit for filing a motion to correct error had passed. Second, they argue that the trial court could not have properly granted the motion under Trial Rule 60(A) because the alleged problems with the trial court's dismissal order were not clerical, but substantive. The Defendants next argue that the Purchasers did not establish any grounds for relief under Trial Rule 60(B). Lastly, the Defendants argue that the Purchasers' claims against Graber are not subject to arbitration. Assuming arguendo that we agree with the Defendants with regard to their arguments regarding Trial Rule 59 and Trial Rule 60(A), we nevertheless believe that the trial court was within its discretion to grant relief from its earlier order under Trial Rule 60(B). We also conclude that the Defendants, having expressly argued before the trial court that the claims against Graber were subject to arbitration, cannot now be heard to argue otherwise.

I. Indiana Policy Favors Arbitration

[14] Before turning to the merits of the parties' arguments, we first note that Indiana has long recognized a strong policy favoring the enforcement of arbitration agreements. Koors v. Steffen , 916 N.E.2d 212, 215 (Ind. Ct. App. 2009) ; see also MPACT Const. Grp., LLC v. Superior Concrete Constructors, Inc. , 802 N.E.2d 901, 905 (Ind. 2004) (citing PSI Energy, Inc. v. AMAX, Inc. , 644 N.E.2d 96, 98 (Ind. 1994) (writing that "Indiana was surely among the first jurisdictions to sanction arbitration as a means of dispute resolution," referring to a territorial statute enacted prior to statehood in 1816 authorizing and regulating arbitrations) ).

[15] The current statute controlling orders to arbitrate provides in relevant part:

(a) On application of a party showing an agreement described in section 1[ ] of this chapter, and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration . Ten (10) days notice in writing of the hearing of such application shall be served personally upon the party in default. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue raised without further pleading and shall order arbitration if found for the moving party; otherwise, the application shall be denied.
(b) On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. Ten (10) days notice in writing of the hearing of the application shall be served personally upon the party in default. Such an issue, when in substantial and bona fide dispute, shall be forthwith summarily determined without further pleadings and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration.
(c) If an issue referable to arbitration under the alleged agreement is involved in an action or proceeding pending in a court having jurisdiction to hear applications under subsection (a), the application shall be made in that action or proceeding. Otherwise and subject to section 17[ ] of this chapter, the application may be made in any court with jurisdiction.
(d) Any action or proceeding involving an issue subject to arbitration shall be stayed if an order for arbitration or an application for an order for arbitration has been made under this section ..., or, if the issue is severable, the stay may be with respect to the issue only. When the application is made in such an action or proceeding, the order for arbitration must include such a stay.
(e) An order for arbitration shall not be refused on the ground that the claim in issue lacks merit or bona fides or because any fault or grounds for the claim sought to be arbitrated have not been shown.
(f) If the court determines that there are other issues between the parties that are not subject to arbitration and that are the subject of a pending action or special proceeding between the parties and that a determination of such issues is likely to make the arbitration unnecessary, the court may delay its order to arbitrate until the determination of such other issues or until such earlier time as the court specifies.
(g) On application the court may stay an arbitration proceeding on a showing that the method of appointment of arbitrators is likely to or has resulted in the appointment of a majority of arbitrators who are partial or biased in some relevant respect. The court shall then appoint one (1) or more arbitrators as provided in section 4[ ] of this chapter.

Ind. Code § 34-57-2-3 (emphases added).

[16] Accordingly, once the court is satisfied that the parties contracted to submit their dispute to arbitration, the court is required by statute to compel arbitration. Capitol Const. Servs., Inc. v. Farah, LLC, 946 N.E.2d 624, 628 (Ind. Ct. App. 2011) (citing Ind. Code § 34-57-2-3(a) ). "However, [ Indiana Code section 34-57-2-3 ] does not specify the proper disposition of the litigation upon such a determination." Indiana CPA Society, Inc. v. GoMembers, Inc. , 777 N.E.2d 747, 750 (Ind. Ct. App. 2002) ; accord Koors , 916 N.E.2d at 215.

[17] In GoMembers , we noted that Indiana courts had historically either stayed or dismissed litigation subject to arbitration under such circumstances without explaining why either course was appropriate. Id. at 752 (citing Albright v. Edward D. Jones & Co. , 571 N.E.2d 1329, 1334 (Ind. Ct. App. 1991) (noting that trial court stayed litigation), trans. denied ; Northwestern Mut. Life Ins. Co. v. Stinnett , 698 N.E.2d 339, 343 (Ind. Ct. App. 1998) (holding that trial court should have granted motion to dismiss where issue was subject to arbitration); Wilson Fertilizer & Grain, Inc. v. ADM Mill. Co. , 654 N.E.2d 848, 849 (Ind. Ct. App. 1995) (holding that trial court properly dismissed action and ordered parties to proceed to arbitration), trans. denied ). In GoMembers we concluded:

Both of the analytical approaches developed by other courts have merit and may in fact often lead to the same result. However, we find that a superior resolution is to allow trial courts to exercise their discretion to either stay or dismiss litigation based on the nature of the contested issues that should first be submitted to arbitration. By utilizing this discretion, courts may examine the facts and circumstances of each case to determine the most prudent course of action. Factors which the trial court may wish to consider include whether court intervention will be necessary to compel discovery, whether the arbitration award will be enforced through the court, whether the entire controversy is arbitrable, which state's substantive law will be applicable to the controversy, and the location of the parties and the evidence.

Id. at 752 (emphasis added).

II. Trial Court Should Not Have Dismissed the Complaint With Prejudice

[18] Here, the Defendants argue that the trial court's action of dismissing the Purchasers' complaint with prejudice acted as a judgment on the merits that bars any attempt at arbitration. To be sure, it is well settled that a dismissal with prejudice is generally a dismissal on the merits, and as such it is conclusive of the rights of the parties and res judicata as to the questions which might have been litigated. Lakeshore Bank & Tr. Co. v. United Farm Bureau Mut. Ins. Co. , 474 N.E.2d 1024, 1027 (Ind. Ct. App. 1985) (opinion on rehearing). Thus, by entering an order dismissing the Purchasers' claims with prejudice, the trial court effectively ended the dispute between the parties.

[19] However, the trial court, as indicated in its ruling on the Purchasers' motion to correct error/motion for relief from judgment, did not intend for the controversy to be ended by its dismissal order. Rather, the trial court intended that the case proceed to arbitration. Indeed, the parties, including the Defendants initially, proceeded to prepare for arbitration. Pursuant to Indiana Code section 34-57-2-3(d), the proper course of action under these circumstances would have been for the trial court to have stayed the action pending the outcome of the arbitration, or dismiss the action without prejudice. See GoMembers , 777 N.E.2d at 752. The trial court instead dismissed the complaint with prejudice. The Defendants argue that, regardless of the trial court's intentions, the trial court could not undo its previous dismissal with prejudice by way of a motion to correct error or a motion for relief from judgment.

[20] Assuming arguendo that the Defendants are correct that the trial court could not grant relief under Trial Rule 59 or Trial Rule 60(A), we agree with the Purchasers that the trial court was within its discretion to grant relief under Trial Rule 60(B)(1).

III. The Trial Court Did Not Abuse Its Discretion in Granting Relief from Judgment Under Trial Rule 60(B)(1)

[21] Indiana Trial Rule 60(B) provides in pertinent part:

Mistake - Excusable neglect - Newly discovered evidence - Fraud, etc . On motion and upon such terms as are just the court may relieve a party or his legal representative from a judgment, including a judgment by default, for the following reasons:
(1) mistake, surprise, or excusable neglect;
* * *
The motion shall be filed within a reasonable time for reasons (5), (6), (7), and (8), and not more than one year after the judgment, order or proceeding was entered or taken for reasons (1), (2), (3), and (4). A movant filing a motion for reasons (1), (2), (3), (4), and (8) must allege a meritorious claim or defense. A motion under this subdivision (B) does not affect the finality of a judgment or suspend its operation. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order or proceeding or for fraud upon the court....

[22] The burden is on the movant to establish grounds for Trial Rule 60(B) relief. In re Paternity of P.S.S. , 934 N.E.2d 737, 740 (Ind. 2010). A motion made under Trial Rule 60(B) is addressed to the "equitable discretion" of the trial court. Id. at 740-41. Accordingly, the grant or denial of a Trial Rule 60(B) motion will be disturbed only when that discretion has been abused. Id. at 741. A trial court abuses its discretion only when its action is clearly against the logic and effect of the facts before it and the inferences which may be drawn therefrom. Id. An abuse of discretion will not have occurred so long as there exists even slight evidence of mistake, surprise, or excusable neglect. See Stemm v. Estate of Dunlap , 717 N.E.2d 971, 974 (Ind. Ct. App. 1999).

[23] In the present case, the Defendants do not dispute that the Purchasers' motion was filed within the required one-year timeframe or that the Purchasers have alleged a meritorious defense. Thus, the only question before us is whether the trial court was within its discretion to conclude that the Purchasers established grounds for relief for the reasons of mistake, surprise, or excusable neglect.

[24] Under the facts and circumstances of the present case, we conclude that the trial court was well within its discretion to grant the Purchasers relief from the dismissal order pursuant to Trial Rule 60(B)(1), i.e., for the reason of "mistake, surprise, or excusable neglect." Here, it is apparent that all of the parties, at least initially, understood the trial court's dismissal order as not precluding arbitration, otherwise there would have been no reason for the parties to proceed with the arbitration process and go as far as to select the arbitrators. When the Defendants claimed that the arbitration was precluded by the trial court's dismissal order, it is clear that the Purchasers (and the trial court) were, at the least, surprised by the sudden reversal in course.

[25] The Defendants argue that if there was a mistake in the trial court's order, it was a mistake on the part of the trial court, and that the proper method of addressing such a mistake was to file a direct appeal. See Kretschmer v. Bank of Am., N.A. , 15 N.E.3d 595, 600 (Ind. Ct. App. 2014) (noting that a Trial Rule 60(B)(1) motion is not a substitute for a direct appeal and does not attack the substantive, legal merits of a judgment, but rather addresses the procedural, equitable grounds justifying the relief from the finality of a judgment), trans. denied (citing In re Paternity of P.S.S. , 934 N.E.2d at 740 ). Here, the issue is not so much a mistake on the part of the trial court, but the surprise in how the Defendants initially treated the trial court's order as not precluding arbitration for weeks, only to claim the exact opposite and argue that it did preclude arbitration. Certainly, the trial court was within its equitable discretion to consider the totality of the circumstances before it and conclude that its earlier order should be modified to clarify that its order of dismissal did not intend to preclude arbitration. For these reasons, we cannot say that the trial court abused its considerable discretion in such matters when it granted the Purchasers' motion for relief from judgment and ordered the parties to proceed with arbitration. See 4 William F. Harvey, Indiana Practice, Rules of Procedure Annotated § 60.1 (3d ed. 1999) (noting that the equitable power of a court of general jurisdiction is "very substantial.").

IV. Graber Cannot Now Argue That the Claims Against Him Are Not Subject to Arbitration

[26] Graber argues that the trial court erred to the extent that it ordered the claims against him to proceed to arbitration. Graber claims that he was not a party to the Agreement and that the arbitration clause thereof should not apply to him. Unfortunately for Graber, this is exactly the opposite of what his counsel argued before the trial court in the motion to dismiss. As noted above, Graber's counsel explicitly argued that the claims against Graber had to be dismissed in the trial court because of the arbitration clause of the Agreement:

[W]e also believe this arbitration agreement applies to Sheldon Graber as an individual as President of DYI at all times. As the arbitration provision, sorry, as the arbitration provisions of the agreement should require that all claims in this matter against DYI be heard in arbitration, so should all Claims against Sheldon Graber[.]

Appellants' App. Vol. 3, p. 43.

[27] Graber argues that the statements of counsel cannot alter the provisions of the Agreement. That much is true, but Graber cannot now be heard to argue that the claims against him cannot be heard by the arbitrators, as that is precisely what he requested from the trial court. Whether viewed in terms of invited error or judicial estoppel, we cannot say that the trial court erred in ordering the claims against Graber to proceed to arbitration.

[28] This is not to say that the arbitrators must conclude that Graber is liable for the actions of DYI. Our holding is limited to only require the claims against Graber to be heard by the arbitrators. See Wilson Fertilizer & Grain , 654 N.E.2d at 853 n.4 ("Once the [trial] court determines that a dispute is subject to arbitration, all additional concerns, including issues regarding the merits of the underlying claim or procedural arbitrability, are for the arbitrator.").

Conclusion

[29] When the trial court determined that the arbitration provisions of the Agreement required the Purchasers' claims to be subject to mandatory, binding arbitration, the court should have ordered the parties to proceed with arbitration and either stayed the proceedings or dismissed the claims without prejudice. Instead, the trial court dismissed the claims with prejudice. Despite this fact, however, the parties proceeded with the arbitration process to the point of selecting the arbitrators. It was only after this point that the Defendants argued for the first time that the trial court's earlier order dismissing the Purchasers' claims with prejudice was a final judgment on the merits that barred arbitration of these claims. Under these particular facts and circumstances, the trial court was within its equitable discretion to grant the Purchasers relief from its earlier order under Trial Rule 60(B)(1). Moreover, because Graber explicitly argued to the trial court that the claims against him should be dismissed and subject to arbitration, he cannot now be heard to argue the exact opposite. Accordingly, the judgment of the trial court is affirmed.

[30] Affirmed.

Bailey, J., and Bradford, J., concur.

      Compare Appellants' App. Vol. 2, p. 60 with id. at 92.

      The arbitrators selected were: D. Timothy Born of Terrell, Baugh, Salmon & Born, LLP; Richard A. Young of Kightlinger Gray, LLP; and Richard L. Norris of Norris Choplin Schroeder, LLP.

      The Defendants also filed a motion to expedite this appeal, which our motions panel denied.

      See The Laws of Indiana Territory, ch. XXXII (1807) ("An Act authorising and regulating arbitrations.").

      Section 1 generally provides that "[a] written agreement to submit to arbitration is valid, and enforceable, an existing controversy or a controversy thereafter arising is valid and enforceable, except upon such grounds as exist at law or in equity for the revocation of any contract." Ind. Code § 34-57-2-1(a).

      Section 17 provides, "The term 'court' means any circuit or superior court. The making of an agreement described in section 1 of this chapter providing for arbitration in Indiana confers jurisdiction on the court to enforce the agreement under and to enter judgment on an award thereunder." Ind. Code § 34-57-2-17.

      Section 4 provides that, if the arbitration agreement does not specify the method of appointing arbitrators, and if the parties cannot agree upon such appointment, or if the agreed method fails, or if the appointed arbitrator fails to act or is unable to act, the trial court has the duty and power to appoint arbitrators. Ind. Code § 34-57-2-4.

      In referring to the dismissal of litigation, we presume that the GoMembers court was referring to a dismissal without prejudice, as a dismissal with prejudice would generally constitute a judgment on the merits that would bar any further litigation by way of the doctrine of res judicata. See infra .

      The Purchasers also argue that they were entitled to relief from judgment under Trial Rule 60(B)(3). Since we agree with them that they are entitled to judgment under Trial Rule 60(B)(1), we need not address their argument under Rule 60(B)(3).

      Under the doctrine of invited error, which is grounded in estoppel, a party may not take advantage of an error that she commits, invites, or which is the natural consequence of her own neglect or misconduct. Witte v. Mundy ex rel. Mundy , 820 N.E.2d 128, 133 (Ind. 2005).

      "Judicial estoppel is a judicially created doctrine that seeks to prevent a litigant from asserting a position that is inconsistent with one asserted in the same or a previous proceeding." Morgan Cty. Hosp. v. Upham , 884 N.E.2d 275, 280 (Ind. Ct. App. 2008), trans. denied .

      We also decline the Purchasers' request to award appellate attorney fees under Appellate Rule 66(E). Even though we affirm the trial court, the Defendants' appellate arguments are far from being "permeated with meritlessness, bad faith, frivolity, harassment, vexatiousness, or purpose of delay." Thacker v. Wentzel , 797 N.E.2d 342, 346 (Ind. Ct. App. 2003).


source: Caselaw Access Project

author: Brown, Judge.

license: Public Domain

text:
    STATE of Indiana, Appellant-Plaintiff, v. Justin CRAGER, Appellee-Defendant.
    Court of Appeals Case No. 18A-CR-671
    Court of Appeals of Indiana.
    FILED October 25, 2018
    Attorneys for Appellant: Curtis T. Hill, Jr., Attorney General of Indiana, Angela N. Sanchez, Assistant Section Chief, Criminal, Appeals Indianapolis, Indiana
    Attorney for Appellee: John M. Haecker, Squiller & Hamilton, LLP, Auburn, Indiana
   Brown, Judge.

[1] The State appeals the trial court's order granting a motion to suppress filed by Justin Crager. The State raises one issue which we revise and restate as whether the trial court erred in granting Crager's motion to suppress. We reverse and remand.

Facts and Procedural History

[2] On July 24, 2017, the State charged Crager with: Count I, dealing in methamphetamine as a level 4 felony; Count II, possession of methamphetamine as a level 6 felony; and Count III, possession of paraphernalia as a class C misdemeanor and alleged that he had a prior conviction that would enhance the offense to a class A misdemeanor.

[3] On January 27, 2018, Crager filed a motion to suppress and alleged that evidence was obtained in violation of the Fourth, Fifth, Sixth, and Fourteenth Amendments to the United States Constitution and Article 1, Section 11 of the Indiana Constitution.

[4] On February 21, 2018, the court held a hearing on Crager's motion. Garrett Police Sergeant Kyle LaMotte testified that he was on routine patrol on July 21, 2017, was aware that Crager had an active arrest warrant as "at some point [he] was on [his] computer and saw the active warrant," observed Crager operating a motorcycle, and stopped him for the warrant. Transcript at 8. He testified that when he was in the process of stopping Crager, he radioed central communications to confirm the warrant and advise that he was with Crager. He further testified that Crager was going to park at a gas station as he pulled in behind Crager.

[5] According to Sergeant LaMotte's testimony, Crager "got off his motorcycle and started walking towards the door of the gas station" with a backpack on his back. Id. at 10. Sergeant LaMotte yelled Crager's name, and Crager stopped and went to him. Sergeant LaMotte asked Crager to place his backpack on the ground, Crager did so, and Sergeant LaMotte placed him in handcuffs for the active arrest warrant. When asked if he had confirmed the warrant at that point, Sergeant LaMotte answered: "I, I'm unsure at what point they came back with that." Id. Sergeant LaMotte indicated that he arrested Crager based on his belief that he had an active warrant.

[6] Sergeant LaMotte determined the backpack had a locked compartment and asked Crager for the key. Crager did not want to give him the key but told him that the key was on a key ring. He testified that if Crager had not given him the key then he would have broken the lock. When asked why he would have broken the lock, he answered:

Because for one it was a search incident to arrest and he had it on his back at the time that I had encountered him. And for two, he was under arrest. He was gonna be in my patrol car along with the book bag. So not only for the search incident to arrest but officer safety purposes, I had no way of knowing what the book bag contents were. You know, there could have been a bomb in there for all I know. I don't know. It was going to be going into a secure facility, the DeKalb County Jail so I felt it was my responsibility to make sure there was nothing dangerous in the bag as well.

Id. at 11-12. Sergeant LaMotte unlocked the backpack and found two separate bags of crystal methamphetamine, a bag of clean and unused ziplock bags, a jar that contained a white liquid which he believed likely contained methamphetamine, a meth pipe, a digital scale, a cell phone, and a syringe.

[7] Sergeant LaMotte testified that the stop was recorded by his in-car video and audio camera, and that there was full audio but the visual part could not be seen due to the angle of the vehicles. He testified that an inventory search was conducted on the towed motorcycle and no evidence was discovered relating to the case.

[8] When asked on cross-examination if, at the point the stop occurred, he had reviewed a warrant for Crager's arrest approximately an hour before the arrest, Sergeant LaMotte answered: "Approximately, yeah." Id. at 19. He indicated that he had asked Crager if there were drugs in the backpack, and Crager stated that he was not giving consent to search. He testified that he asked Crager to place the backpack on the ground so that he could effectively handcuff him. He stated: "At the time that I said, Justin, come to me, I knew that he had the warrant, meaning that he was not free to go. At that time, he was wearing the book bag." Id. at 24. He indicated that Crager had to go to jail when he observed him and knew that he had a warrant. Crager's counsel then asked: "So that was [the] decision that you knew right from the get-go?" Id. at 29. Sergeant LaMotte answered: "Yeah. He had to go to jail. He had a warrant." Id. He testified that he could not have left the backpack with the motorcycle because it was his responsibility to protect Crager's property and secure his possessions.

[9] On redirect examination, Sergeant LaMotte testified that he was previously a confinement officer and booked people in at the DeKalb County jail, that he would thoroughly search a backpack, that if it was locked he would break it open, and that he was positive that the backpack would have been searched if he had not searched it at the scene.

[10] On March 1, 2018, the trial court granted Crager's motion to suppress. Specifically, the order states:

The State seeks to justify the warrantless search as a search incident to a lawful arrest. But the circumstances here do not support the claim that the backpack was in control of Mr. Crager at the time of the arrest. Mr. Crager complied with the officer's request to place the backpack on the ground, and put his hands behind his back to be handcuffed. As such, there was no concern for officer safety or destruction of the contents of the backpack at the time of the search.
Nor did the State show any other justification for the warrantless search of the backpack, i.e., consent or written policy regarding inventory searches. The contents of the backpack were seized in violation of the Fourth Amendment and Article I, Section 11 of the Indiana Constitution and are suppressed.

Appellant's Appendix Volume II at 112.

Discussion

[11] The issue is whether the trial court erred in granting Crager's motion to suppress. "In reviewing a trial court's motion to suppress, we determine whether the record discloses 'substantial evidence of probative value that supports the trial court's decision.' " State v. Renzulli , 958 N.E.2d 1143, 1146 (Ind. 2011) (quoting State v. Quirk , 842 N.E.2d 334, 340 (Ind. 2006) ). "We do not reweigh the evidence, but consider 'conflicting evidence most favorably to the trial court's ruling.' " Id. (quoting Quirk , 842 N.E.2d at 340 ). "When the State appeals from a negative judgment, as here, it 'must show that the trial court's ruling on the suppression motion was contrary to law.' " Id. (quoting State v. Washington , 898 N.E.2d 1200, 1203 (Ind. 2008), reh'g denied ). "[T]he ultimate determination of the constitutionality of a search or seizure is a question of law that we consider de novo." Carpenter v. State , 18 N.E.3d 998, 1001 (Ind. 2014).

[12] The State raises arguments under: (A) the Fourth Amendment of the United States Constitution; and (B) Article 1, Section 11 of the Indiana Constitution.

A. Fourth Amendment

[13] The State argues that the backpack was a part of Crager's person and there was no need for additional justification beyond the fact of arrest to search the backpack pursuant to the search incident to arrest exception. Crager argues that the search of his backpack was not a search incident to arrest because the search occurred while he was detained in handcuffs prior to his arrest on the warrant. He argues that he was handcuffed when the search occurred, there is a lack of evidence that the backpack was in his reach, and any search of the backpack would not have revealed any further evidence of the offense for which the warrant had been issued.

[14] The Fourth Amendment to the United States Constitution provides in pertinent part: "The right of people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated ...." U.S. CONST. amend. IV. If a search is conducted without a warrant, the State bears the burden to show that one of the well-delineated exceptions to the warrant requirement applies. M.O. v. State , 63 N.E.3d 329, 331 (Ind. 2016).

[15] We begin with a review of cases from the United States Supreme Court. In Riley v. California , --- U.S. ----, 134 S.Ct. 2473, 2482, 189 L.Ed.2d 430, (2014), the Court stated that "[a]s the text makes clear, 'the ultimate touchstone of the Fourth Amendment is "reasonableness." ' " (quoting Brigham City v. Stuart , 547 U.S. 398, 403, 126 S.Ct. 1943, 164 L.Ed.2d 650 (2006) ). The Court addressed whether the police may, without a warrant, search digital information on a cell phone seized from an individual who had been arrested, and reviewed three related precedents that set forth the rules governing searches incident to arrest. 134 S.Ct. at 2483-2484. Specifically, the Court stated:

The first, Chimel v. California , 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969), laid the groundwork for most of the existing search incident to arrest doctrine. Police officers in that case arrested Chimel inside his home and proceeded to search his entire three-bedroom house, including the attic and garage. In particular rooms, they also looked through the contents of drawers. Id. , at 753-754, 89 S.Ct. 2034.
The Court crafted the following rule for assessing the reasonableness of a search incident to arrest:
"When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape. Otherwise, the officer's safety might well be endangered, and the arrest itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on the arrestee's person in order to prevent its concealment or destruction.... There is ample justification, therefore, for a search of the arrestee's person and the area 'within his immediate control'-construing that phrase to mean the area from within which he might gain possession of a weapon or destructible evidence." Id. , at 762-763, 89 S.Ct. 2034.
The extensive warrantless search of Chimel's home did not fit within this exception, because it was not needed to protect officer safety or to preserve evidence. Id. , at 763, 768, 89 S.Ct. 2034.
Four years later, in United States v. Robinson , 414 U.S. 218, 94 S.Ct. 467, 38 L.Ed.2d 427 (1973), the Court applied the Chimel analysis in the context of a search of the arrestee's person. A police officer had arrested Robinson for driving with a revoked license. The officer conducted a patdown search and felt an object that he could not identify in Robinson's coat pocket. He removed the object, which turned out to be a crumpled cigarette package, and opened it. Inside were 14 capsules of heroin. Id. , at 220, 223, 89 S.Ct. 2034.
The Court of Appeals concluded that the search was unreasonable because Robinson was unlikely to have evidence of the crime of arrest on his person, and because it believed that extracting the cigarette package and opening it could not be justified as part of a protective search for weapons. This Court reversed, rejecting the notion that "case-by-case adjudication" was required to determine "whether or not there was present one of the reasons supporting the authority for a search of the person incident to a lawful arrest." Id. , at 235, 89 S.Ct. 2034. As the Court explained, "[t]he authority to search the person incident to a lawful custodial arrest, while based upon the need to disarm and to discover evidence, does not depend on what a court may later decide was the probability in a particular arrest situation that weapons or evidence would in fact be found upon the person of the suspect." Ibid. Instead, a "custodial arrest of a suspect based on probable cause is a reasonable intrusion under the Fourth Amendment; that intrusion being lawful, a search incident to the arrest requires no additional justification." Ibid.
The Court thus concluded that the search of Robinson was reasonable even though there was no concern about the loss of evidence, and the arresting officer had no specific concern that Robinson might be armed. Id. , at 236, 89 S.Ct. 2034. In doing so, the Court did not draw a line between a search of Robinson's person and a further examination of the cigarette pack found during that search. It merely noted that, "[h]aving in the course of a lawful search come upon the crumpled package of cigarettes, [the officer] was entitled to inspect it." Ibid. A few years later, the Court clarified that this exception was limited to "personal property ... immediately associated with the person of the arrestee." United States v. Chadwick , 433 U.S. 1, 15, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977) (200-pound, locked footlocker could not be searched incident to arrest), abrogated on other grounds by California v. Acevedo , 500 U.S. 565, 111 S.Ct. 1982, 114 L.Ed.2d 619 (1991).
The search incident to arrest trilogy concludes with [ Arizona v. Gant , 556 U.S. 332, 129 S.Ct. 1710, 173 L.Ed.2d 485 (2009) ], which analyzed searches of an arrestee's vehicle. Gant , like Robinson , recognized that the Chimel concerns for officer safety and evidence preservation underlie the search incident to arrest exception. See 556 U.S. at 338, 129 S.Ct. 1710. As a result, the Court concluded that Chimel could authorize police to search a vehicle "only when the arrestee is unsecured and within reaching distance of the passenger compartment at the time of the search." 556 U.S. at 343, 129 S.Ct. 1710. Gant added, however, an independent exception for a warrantless search of a vehicle's passenger compartment "when it is 'reasonable to believe evidence relevant to the crime of arrest might be found in the vehicle.' " Ibid. (quoting Thornton v. United States , 541 U.S. 615, 632, 124 S.Ct. 2127, 158 L.Ed.2d 905 (2004) (Scalia, J., concurring in judgment) ). That exception stems not from Chimel , the Court explained, but from "circumstances unique to the vehicle context." 556 U.S. at 343, 129 S.Ct. 1710.

Riley , 134 S.Ct. at 2483-2484. The Court held that "[m]odern cell phones, as a category, implicate privacy concerns far beyond those implicated by the search of a cigarette pack, a wallet, or a purse." Id. at 2488-2489.

[16] We next review Garcia v. State , 47 N.E.3d 1196 (Ind. 2016), a decision in which the Indiana Supreme Court discussed the search incident to arrest exception. The Court held that the opening of a pill container during the course of a patdown search incident to arrest constituted a reasonable search. Garcia , 47 N.E.3d at 1197. The Indiana Supreme Court stated:

We continue to be persuaded by Robinson regarding the degree of suspicion necessary to conduct a search incident to arrest. The United States Supreme Court set out a clear standard in Robinson . "A custodial arrest of a suspect based on probable cause is a reasonable intrusion ... that intrusion being lawful, a search incident to the arrest requires no additional justification." 414 U.S. at 235, 94 S.Ct. 467. We similarly conclude that it is "the lawful arrest which establishes the authority to search." Id.

Id. at 1200.

[17] To the extent Crager asserts that the backpack was not in his control at the time of his arrest, which he claims occurred when the warrant was confirmed, we disagree. Sergeant LaMotte testified that he was aware that Crager had an active arrest warrant, that he had reviewed an arrest warrant for Crager approximately an hour before the arrest, that he stopped Crager for the warrant, that at the time he ordered Crager to approach he knew that Crager had an arrest warrant, and that he arrested Crager based on the active warrant. The timing of when Sergeant LaMotte received confirmation of the warrant from central communications does not determine when Crager was under arrest.

[18] The record reveals that Crager was wearing the backpack at the time Sergeant LaMotte stopped him and initiated an arrest. Sergeant LaMotte asked Crager to place the backpack he was wearing on the ground. Sergeant LaMotte searched the backpack at the time or very near to the time of Crager's arrest. We also note Sergeant LaMotte's testimony that he could not have left the backpack with the motorcycle because it was his responsibility to protect Crager's property and secure his possessions. We conclude that the backpack was immediately associated with Crager and that the search was reasonable under the circumstances and did not violate Crager's rights under the Fourth Amendment. See Northrop v. Trippett , 265 F.3d 372, 379 (6th Cir. 2001) (holding that a duffle bag was lawfully searched incident to arrest where the defendant removed the bag from his shoulder and placed it at his feet, an officer stopped the defendant near the bag and then placed the defendant under arrest at that same location, and the bag was searched almost immediately), reh'g en banc denied , cert. denied , 535 U.S. 955, 122 S.Ct. 1358, 152 L.Ed.2d 354 (2002) ; State v. Mercier , 883 N.W.2d 478, 492-493 (N.D. 2016) (upholding a search where the defendant had the backpack in his actual possession immediately preceding his lawful arrest); State v. Brock , 184 Wash.2d 148, 355 P.3d 1118, 1123 (2015) (holding that the search incident to arrest exception applied when the defendant wore a backpack at the very moment he was stopped by an officer); People v. Cregan , 381 Ill.Dec. 593, 10 N.E.3d 1196, 1209 (Ill. 2014) (holding that officers were allowed to search a bag pursuant to a search of the person incident to arrest where the bag was in the actual physical possession of defendant at the time of his arrest and was a personal effect immediately associated with his person), reh'g denied , cert. denied , --- U.S. ----, 135 S.Ct. 410, 190 L.Ed.2d 298 (2014).

B. Article 1, Section 11

[19] Article 1, Section 11 of the Indiana Constitution provides:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable search or seizure, shall not be violated; and no warrant shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the person or thing to be seized.

[20] Although its text mirrors the federal Fourth Amendment, we interpret Article 1, Section 11 of our Indiana Constitution separately and independently. Robinson v. State , 5 N.E.3d 362, 368 (Ind. 2014). "When a defendant raises a Section 11 claim, the State must show the police conduct 'was reasonable under the totality of the circumstances.' " Id. (quoting State v. Washington , 898 N.E.2d 1200, 1205-1206 (Ind. 2008), reh'g denied ). Generally, "[w]e consider three factors when evaluating reasonableness: '1) the degree of concern, suspicion, or knowledge that a violation has occurred, 2) the degree of intrusion the method of the search or seizure imposes on the citizen's ordinary activities, and 3) the extent of law enforcement needs.' " Id. (quoting Litchfield v. State , 824 N.E.2d 356, 361 (Ind. 2005) ).

[21] Applying the factors articulated in Litchfield , we first consider "the degree of concern, suspicion, or knowledge that a violation has occurred." Litchfield , 824 N.E.2d at 361. In analyzing this factor, the Indiana Supreme Court has recently held that it had "previously recognized that 'once a lawful arrest has been made, authorities may conduct a "full search" of the arrestee for weapons or concealed evidence. No additional probable cause for the search is required, and the search incident to arrest may "involve a relatively extensive exploration of the person." ' " Garcia , 47 N.E.3d at 1200 (quoting Edwards v. State , 759 N.E.2d 626, 629 (Ind. 2001) (citing Robinson , 414 U.S. at 227, 235, 94 S.Ct. 467 ) (internal quotation and citation omitted) ). The record reveals that Sergeant LaMotte was aware that Crager had an active arrest warrant at the time he stopped Crager and at that time Crager was wearing the backpack.

[22] Regarding the degree of intrusion, Crager was under arrest and had placed the backpack he was wearing on the ground. Sergeant LaMotte searched Crager's backpack and opened a lock using a key to access a compartment of the backpack. We cannot say the degree of intrusion was high.

[23] With respect to the extent of law enforcement needs, the Indiana Supreme Court has held:

When the pill container was discovered on Garcia's person, it is insignificant that Officer Robinett acknowledged that the container could contain legal or illegal substances or that he did not subjectively view Garcia or the container as dangerous. First, we have continually reiterated that "[a] search incident to a valid arrest is lawful regardless of what it reveals." Farrie [v. State ], [255 Ind. 681, 683, 266 N.E.2d 212, 214 (1971) ]. Second, the objective reasonableness of the search is controlling, not Officer Robinett's subjective views. Even under a brief stop and frisk, it is well established that the reasonableness of an officer's suspicion turns upon whether "the totality of the circumstances presented a particularized and objective basis for the officer's belief ...." State v. Keck , 4 N.E.3d 1180, 1184 (Ind. 2014) (internal citation and quotation omitted) (emphasis added). Under an objective standard, we agree that "unknown physical objects may always pose risks, no matter how slight, during the tense atmosphere of a custodial arrest." Riley v. California , --- U.S. ----, 134 S.Ct. 2473, 2485, 189 L.Ed.2d 430 (2014). In fact, these risks continue to some extent into the ensuing time thereafter the arrest. For example, a risk may still exist while police are transporting an arrestee to a secure location and during booking of that individual at the police station. See Chambers v. State , 422 N.E.2d 1198, 1203 (Ind. 1981) (upholding the validity of a search incident to arrest, regardless of the fact that the search did not occur at the exact time and place of the arrest, but occurred once the police arrived at the police station with the defendant.)

47 N.E.3d at 1203. The Court also stated: "we see no basis in the present circumstances why an independent warrant should be required to search an item already lawfully seized." Id. The Court further stated: "When taking an individual into custody, officer safety is a primary concern. Small and seemingly innocuous items have the potential to pose a threat. We see no reason to delay the officer's ability to inspect such items once they have already been lawfully seized." Id. This factor weighs in favor of finding the search to be reasonable.

[24] Under the totality of the circumstances, we conclude that the search of the backpack was reasonable and did not violate Crager's rights under Article 1, Section 11 of the Indiana Constitution.

Conclusion

[25] For the foregoing reasons, we reverse the trial court's grant of Crager's motion and remand for proceedings consistent with this opinion.

[26] Reversed and remanded.

Altice, J., and Tavitas, J., concur.

      On cross-examination, Sergeant LaMotte testified about the jar and stated: "It was found with other meth so I mean it leads one to believe it contained meth but I, again, I wasn't for sure." Transcript at 34.

      Crager cites Kennebrew v. State , 299 Ga. 864, 792 S.E.2d 695 (2016), and Huff v. State , 346 Ga.App. 120, 816 S.E.2d 304 (2018). In Kennebrew , the appellant "had already been handcuffed and removed from the dorm room when the police seized his backpacks, and they were not searched until six days later, far away in both time and place from [the appellant's] arrest." 792 S.E.2d at 701. The court held that trial counsel's failure to pursue suppression of evidence found in backpacks based on his misunderstanding of the search incident to arrest doctrine was deficient performance. Id. at 702. In Huff , the officers removed a backpack from the defendant immediately prior to Huff's arrest, took the backpack outside despite Huff's request that another person give the backpack to his sister, and maintained it in their exclusive possession as they carried it to the patrol car where it was ultimately searched. 816 S.E.2d at 307. The court agreed with the defendant that Kennebrew demanded a ruling in the defendant's favor. Here, the backpack was searched contemporaneously with Crager's arrest. We find Kennebrew and Huff distinguishable.


author: Riley, Judge.

text:
    Denny Alan NEFF, Appellant-Plaintiff, v. WAL-MART STORES EAST, LP, Appellee-Defendant.
    Court of Appeals Case No. 18A-PL-421
    Court of Appeals of Indiana.
    FILED October 25, 2018 Rehearing Denied December 17, 2018
    Attorney for Appellant: Gregory W. Black, Plainfield, Indiana
    Attorneys for Appellee: Thomas L. Davis, Matthew R. King, Darren A. Craig, Frost Brown Todd, LLC, Indianapolis, Indiana
   Riley, Judge.

STATEMENT OF THE CASE

[1] Appellant-Plaintiff, Denny Alan Neff (Neff), appeals the trial court's summary judgment in favor of Appellee-Defendant, Wal-Mart Stores East, L.P. (Wal-Mart), on Neff's allegations sounding in negligence and tort and derived from his arrest and termination by Wal-Mart.

[2] We affirm.

ISSUES

[3] Neff presents us with six issues on appeal, which we restate as follows:

(1) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for breach of employment contract and wrongful termination when Neff was an employee at-will;
(2) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for false arrest, criminal confinement, tortious confinement, trespass against person, and false imprisonment when Wal-Mart detained Neff pursuant to the Shoplifting Detention Act;
(3) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for negligent infliction of emotional distress;
(4) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for intentional infliction of emotional distress;
(5) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for defamation; and
(6) Whether the trial court properly entered summary judgment for Wal-Mart on Neff's claim for invasion of privacy.

FACTS AND PROCEDURAL HISTORY

[4] In September 2014, Neff worked as a service writer in the tire and lube express department at Wal-Mart, located in Greencastle, Indiana. When he entered his employment on July 25, 2013, Neff had received Wal-Mart's written employee handbook setting forth the company's policies. On September 24, 2014, Neff and service manager Anthony Brackett (Brackett) removed tires, described by Neff as "outdated and deleted," from the service area. (Appellant's App. Vol. III, p. 145). Service manager Travis Wilbur (Wilbur) then authorized the sale of those tires for ten dollars or one dollar each, depending on the tire. The actual retail price of the tires was at least five to ten times the discounted price. Wilbur claimed that assistant manager, Dana Lyday, had approved the discount. Neff, Brackett, and another Wal-Mart associate purchased the tires at the discounted price and they rang up the transactions for each other at the cash register.

[5] The following day, September 25, 2014, Wal-Mart's asset protection manager, Randall Spannuth (Spannuth), received his daily report reflecting any discounts greater than fifty dollars and noticed the steep discounts involved in the tire sale. Investigating the sale more closely, Spannuth pulled the receipts in the system, the electronic journal, and store videos. Based on this information, he identified the cashiers and talked to their managers about the "extremely discounted" price for the tires. (Appellant's App. Vol. III, p. 38). Spannuth concluded "there was an issue" because the "tires were being sold for under what the retail price was," and the "associates were discounting for each other." (Appellant's App. Vol. III, pp. 38-39). Spannuth determined that Neff had not followed Wal-Mart's written Associate Purchase Policy which limits the merchandise its associates may purchase to merchandise "which is available to all Customers/Members." (Appellant's App. Vol. III, p. 177). Furthermore, the policy provides that "[o]nly salaried members of management can authorize the point-of-sale markdown," and "[d]efective or damaged merchandise must have been marked down and offered to the public at a lower price for at least one day before any associate, or salaried member of management, including the Facility Manager, can purchase it." (Appellant's App. Vol. III, pp. 177-78). Pursuant to this policy, neither Neff nor Wilbur had authority to set the discounted price without prior managerial approval. When questioning the store managers, both managers informed Spannuth that they had not authorized the discounts or transactions. Because Spannuth determined that it was not reasonable for Neff to assume that he had properly purchased the tires, Spannuth concluded that Neff had intended to commit a theft of the tires.

[6] At the close of the investigation and after consulting with his supervisor, Spannuth arranged for interviews with Wilbur, Brackett, and Neff. Neff's interview occurred in an office in the back of the store. Following the interviews, Wal-Mart decided to report the three employees to the police for theft. After having been provided with a copy of Wal-Mart's asset protection records, the video surveillance disk, and internal investigation, the police officers spoke with Neff, arrested him, and escorted him to jail. Wal-Mart terminated Neff's employment.

[7] On June 5, 2015, Neff filed a Complaint against Wal-Mart, the City of Greencastle, and the Greencastle police department, in which he asserted thirteen causes of action. On June 26, 2017, the City of Greencastle and the Greencastle Police Department filed a motion for summary judgment which was granted by the trial court on December 7, 2017. Neff did not appeal. Subsequently, on June 20, 2018, the trial court dismissed the City of Greencastle and the Greencastle police department.

[8] On September 14, 2017, Wal-Mart filed its motion for summary judgment, memorandum of law, and designation of evidence. On September 19, 2017, Neff filed his reply to Wal-Mart's motion for summary judgment, together with a designation of evidence. On December 7, 2017, after a hearing, the trial court granted Wal-Mart's motion and entered summary judgment in its favor. On January 2, 2018, Neff filed a motion to correct error, which was deemed denied on February 16, 2018.

[9] Neff now appeals. Additional facts will be provided if necessary.

DISCUSSION AND DECISION

I. Standard of Review

[10] In reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley , 891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied . Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. Id. at 607-08. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. Id. at 608. A fact is 'material' for summary judgment purposes if it helps to prove or disprove an essential element of the plaintiff's cause of action; a factual issue is 'genuine' if the trier of fact is required to resolve an opposing party's different version of the underlying facts. Ind. Farmers Mut. Ins. Grp. v. Blaskie , 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's ruling was improper. First Farmers Bank & Trust Co. , 891 N.E.2d at 607. When the defendant is the moving party, the defendant must show that the undisputed facts negate at least one element of the plaintiff's cause of action or that the defendant has a factually unchallenged affirmative defense that bars the plaintiff's claim. Id. Accordingly, the grant of summary judgment must be reversed if the record discloses an incorrect application of the law to the facts. Id.

II. Wrongful Termination

[11] Neff first contends that the trial court erred when it granted summary judgment in favor of Wal-Mart on his claim of wrongful termination. Neff maintains that "[he], Wal-Mart, [h]ad a [d]eal. Though at Will, Wal-Mart [r]etained a [d]uty of [f]airness." (Appellant's Br. p. 32).

[12] Indiana follows the doctrine of employment at-will, under which employment may be terminated by either party at-will, with or without reason. Baker v. Tremco Inc ., 917 N.E.2d 650, 653 (Ind. 2009). There is a strong presumption that employment in Indiana is at-will. Harris v. Brewer , 49 N.E.3d 632, 639 (Ind. Ct. App. 2015), trans. denied . Here, the designated evidence clearly establishes that Neff himself acknowledged that his employment was for an indefinite duration and was at-will. Accordingly, Wal-Mart's termination of Neff did not breach any employment contract.

[13] However, as pointed out by Neff, "[i]f an employment contract for an ascertainable term of employment does not exist, an exception to the employment-at-will doctrine may apply." Id. at 640. Our supreme court has recognized three exceptions to the employment-at-will doctrine: (1) if an employee establishes that adequate independent consideration supports the employment contract; (2) if a clear statutory expression of a right or duty is contravened; and (3) if the doctrine of promissory estoppel applies. Id. Relying on the promissory estoppel doctrine, Neff must plead "the doctrine with particularity, demonstrating that the employer made a promise to the employee, the employee relied on the promise to his detriment, and the promise otherwise fits within the Restatement test for promissory estoppel." Id. at 644. Besides a cursory mention that he is invoking the promissory estoppel exception, Neff fails to carry his burden of proof. See Ind. Appellate Rule 46(A)(8)(a). Therefore, the trial court properly granted summary judgment to Wal-Mart on Neff's claim.

III. Shoplifting Detention Act

[14] Next, Neff brings a host of allegations arising from his detention by Wal-Mart, to which Wal-Mart defends by relying on the probable cause provision of the Shoplifting Detention Act. Claiming that Wal-Mart had no probable cause to detain him on a suspicion of theft, Neff contends that the trial court erred by issuing summary judgment to Wal-Mart on his claims of false arrest, criminal confinement, tortious confinement, trespass against person, and false imprisonment.

[15] Wal-Mart invoked immunity under the Shoplifting Detention Act, Indiana Code section 35-33-6-2, against Neff's allegations, which provides, in pertinent part, that:

(a) An owner or agent of a store who has probable cause to believe that a theft has occurred or is occurring on or about the store and who has probable cause to believe that a specific person has committed or is committing the theft
(1) may:
(A) Detain the person and request the person to identify himself;
(B) Verify the identification;
(C) Determine whether the person has in his possession unpurchased merchandise taken from the store;
(D) Inform the appropriate law enforcement officers; and
(E) Inform the parents or others interested in the person's welfare, that the person has been detained.
* * * *
(c) The detention must:
(1) Be reasonable and last only for a reasonable time; and
(2) Not extend beyond the arrival of a law enforcement officer or two (2) hours, whichever occurs first.

The Shoplifting Detention Act "permits the merchant's agent to effect a warrantless arrest or detention where the facts and circumstances known to the agent at the time of the arrest would warrant a person of reasonable caution to believe the arrestee has committed or is committing a theft on or about the store." Dietz v. Finlay Fine Jewelry Corp. , 754 N.E.2d 958, 967 (Ind. Ct. App. 2001). When probable cause to detain is present, detention is lawful. See Ind. Code § 35-33-6-4 ("A civil or criminal action against an owner or agent of a store ... may not be based on a detention which was lawful under section 2 of this chapter.")

[16] At the time of Wal-Mart's detention of Neff, Spannuth had completed his investigation. He had pulled the receipts in the system and viewed the store videos. He had identified the cashiers and spoken with the managers about possible authorization to sell and purchase the steeply discounted tires. Based on this evidence, Spannuth, as Wal-Mart's agent, could reasonably believe that Neff that intentionally sold and purchased the tires at a price less than that approved by Wal-Mart with the intent to deprive Wal-Mart of part of its value. That constitutes probable cause for purposes of the Shoplifting Detention Act. See Dietz , 754 N.E.2d at 968. This alone, however, does not mean the test of reasonableness in manner and time has been met in this case. See I.C. § 35-33-6-2(c)(1)-(2).

[17] Turning to the reasonableness of the manner and time of detention by Wal-Mart, the designated evidence established that Neff's interview occurred in an office in the back of the store, out of view of Wal-Mart's customers. Following the interviews, Wal-Mart decided to report the three employees to the police for theft and contacted the local authorities. Neff acknowledged that he was detained at the store for between sixty and eighty minutes, much less than the two-hour timeframe contemplated by the Act. See I.C. 35-33-6-2(c).

[18] Neff now attempts to avoid the immunity awarded to Wal-Mart by the Shoplifting Detention Act by referencing his continued and repeated assertions of innocence and protestations of belief that Wilbur had authorized the sale. However, the relevant issue is not whether Neff committed the theft, but whether Wal-Mart had probable cause to believe that Neff committed theft. Furthermore, "the fact remains that our legislature has determined that a merchant's property rights must be protected, even at the risk of offending people who are ultimately innocent of any wrongdoing. The boundaries within which merchants must conduct themselves during such detainments and searches are those of reasonableness." Wal-Mart Stores, Inc. v. Bathe , 715 N.E.2d 954, 962 (Ind. Ct. App. 1999), trans. denied . As such, the Act does not immunize a merchant from liability for negligence based upon allegations that it conducted an unreasonable search. Although reasonableness is generally a question for the factfinder to decide, we are of the opinion that if a jury were permitted to decide that Wal-Mart's actions in the instant case were unreasonable, then the immunity provided by the Act would be illusory indeed as any protestation of innocence by the suspected shoplifter would be sufficient to destroy the statutory immunity. See id. Accordingly, as Wal-Mart's actions were reasonable under the Act, the store is immune to any civil claims brought by Neff and we affirm the trial court's summary judgment on these claims. See I.C. § 35-33-6-4.

IV. Negligent Infliction of Emotional Distress

[19] Relying on the modified impact rule, Neff maintains that the trial court erred by granting summary judgment to Wal-Mart on his claim for negligent infliction of emotional distress.

[20] To establish a claim of negligent infliction of emotional distress, a plaintiff must satisfy the requirements of either the modified impact rule or the bystander rule. Atlantic Coast Airlines v. Cook , 857 N.E.2d 989, 998 (Ind. 2006). Under the modified impact rule, a plaintiff may seek damages for negligent infliction of emotional distress if he suffers "a direct impact by the negligence of another and, by virtue of that direct involvement sustains an emotional trauma which is serious in nature and of a kind and extent normally expected to occur in a reasonable person[.]" Shuamber v. Henderson , 579 N.E.2d 452, 456 (Ind. 1991). Thus, a plaintiff who proceeds under the modified impact rule must plead that he suffered a direct physical impact. Atlantic Coast Airlines , 857 N.E.2d at 996. The direct impact referred to by Neff is being "touched by the arm from the store. Police escort from Wal[-]Mart en route to jail." (Appellant's Br. p. 33). However, these actions complained of were taken by Greencastle police officers, and not by Wal-Mart. In fact, Neff cannot point to any direct physical impact by Wal-Mart or its agents. Accordingly, we affirm the trial court's summary judgment in favor of Wal-Mart.

V. Intentional Infliction of Emotional Distress

[21] Besides negligent infliction of emotional distress, Neff also claims intentional infliction of emotional distress. Pointing to Spannuth's refusal to accept his protestations of innocence and offers to return the tires or pay the full price, Neff maintains that "[e]motional damage comes from public arrest, jailing, the ruination of employment prospect, the mental anguish"-"[o]ne would think fellow employees would at least grant a colleague the benefit of the doubt." (Appellant's Br. p. 33).

[22] Intentional infliction of emotional distress is committed by one who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another. Ledbetter v. Ross , 725 N.E.2d 120, 123-24 (Ind. Ct. App. 2000). Liability will only be found where the defendant's conduct has been extreme and outrageous. Branham v. Celadon Trucking Servs., Inc. , 744 N.E.2d 514, 523 (Ind. Ct. App. 2001), trans. denied . It is not enough that the defendant has acted with an intent which is tortious or even criminal, or that his conduct has been characterized by malice or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. See id. Rather, the conduct must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id.

[23] In Dietz , an employee was investigated for giving a customer an unauthorized discount. Dietz , 754 N.E.2d at 963-64. The employee asserted that the security manager who interviewed her accused her of substance abuse, shoplifting, and dishonesty in a gruff and intimidating manner. Id. at 970. We concluded that the employee's claim for intentional infliction of emotional distress failed as a matter of law because the security manager's "actions in this case [did] not constitute outrageous behavior." Id.

[24] Likewise here, we cannot conclude as a matter of law that Spannuth's conduct exceeded "all bounds usually tolerated by a decent society." See id. Wal-Mart acted reasonably as permitted under the Shoplifting Detention Act. It investigated whether a crime was committed, collected the available evidence, and interviewed the persons involved. Only after a thorough investigation was concluded did Wal-Mart inform the suspects that it had probable cause to believe a crime had been committed and that it was calling the local police department. None of these actions constitute the extreme and outrageous conduct necessary to establish a claim for intentional infliction of emotional distress. Therefore, we affirm the trial court's summary judgment on this claim.

VI. Defamation

[25] Next, Neff asserts that there are genuine issues of material fact precluding summary judgment on his defamation claim. Specifically, in a five-line argument Neff contends that Wal-Mart "brought about the newspaper item [Neff] was arrested for theft[.]" (Appellant's Br. p. 31).

[26] To establish a claim of defamation, a plaintiff must establish (1) the existence of a communication with defamatory imputation, (2) malice, (3) publication, and (4) damages. Wartell v. Lee , 47 N.E.3d 381, 384 (Ind. Ct. App. 2015), trans. denied . As the local newspaper published the communication Neff now complains about, Neff cannot bring a defamation claim against Wal-Mart. We affirm the summary judgment.

VII. Invasion of Privacy

[27] Lastly, Neff asserts that Wal-Mart invaded his privacy by unreasonably intruding upon his seclusion and by false light publicity. Besides identifying these two specific "branches" of the general tort of invasion of privacy, Neff supports his claim by maintaining merely that "[f]orcing [Neff] to jail, making known he is arrested for theft, invade privacy when unwarranted circumstances visited on plaintiff falsely are portrayed by tortfeasor." (Appellant's Br. p. 31). As Neff failed to support his argument with cogent reasoning as to the application of the doctrine to the designated evidence, he waived his contention for our review. See Ind. Appellate Rule 46(A)(8)(a).

CONCLUSION

[28] Based on the foregoing, we hold that the trial court properly entered summary judgment in favor of Wal-Mart on Neff's allegations sounding in negligence and tort and based on his arrest and termination by Wal-Mart.

[29] Affirmed.

[30] Vaidik, C. J. and Kirsch, J. concur

      The record reflects that the State declined to bring criminal charges against Neff.