Background
Mike Zeller owned and operated Zeller Elevator Company from 1967 to 2018, manufacturing, installing, and servicing elevators across southwestern Indiana. Over a six-year period beginning in 2012, Zeller and four of its employees — Mark Zeller, Louis Zeller III, Andrew Boeglin, and Matthew Boeglin — became embroiled in a series of disputes with the Indiana Fire Prevention and Building Safety Commission, the Indiana Department of Homeland Security, and related state elevator-oversight agencies (collectively, “Agencies”).
The conflicts fell into three clusters. First, in early 2012, Agencies denied annual elevator operating permits because Mike signed renewal forms as both the elevator mechanic and the elevator inspector (the “Signatures Matter”); the Commission later reversed that denial on administrative appeal. Second, Agencies issued an enforcement order requiring Zeller to obtain an alteration permit for work on an elevator at the Jarrett Building, which Zeller maintained was a repair rather than an alteration; a trial court ultimately agreed on judicial review (the “Jarrett Building Matters”). Third, in 2014, Agencies denied reciprocal elevator-mechanic licenses to Zeller’s employees who already held active Kentucky licenses — licenses that were being extended to other similarly situated applicants — prompting an administrative law judge to find that the denial “smacks of vindictiveness” and the Commission to order the licenses issued (the “Reciprocal Licensing Matter”).
In January 2013, Plaintiffs filed suit seeking monetary damages, eventually filing a third amended complaint in 2017 alleging: (Count I) tort claims under the Indiana Tort Claims Act (ITCA); (Count II) due process and due course of law violations under the Fifth Amendment and Article 1, Section 12 of the Indiana Constitution; (Count III) equal protection violations under the Fourteenth Amendment; and (Count IV) tortious interference with contractual and business relationships. The Vanderburgh Circuit Court granted summary judgment to Agencies on Counts I, II, and III. On Count IV it granted Agencies immunity for the Signatures and Jarrett Building Matters but denied immunity for the Reciprocal Licensing Matter, concluding that the ALJ’s vindictiveness finding created a genuine issue of material fact. Plaintiffs appealed the dismissal of Counts II and III, and Agencies cross-appealed the denial of summary judgment on the Reciprocal Licensing Matter.
The Court’s Holding
Affirmed in part, reversed in part, and remanded with instructions to enter summary judgment for Agencies on all claims. Writing for a unanimous panel, Chief Judge Tavitas resolved each issue against Plaintiffs.
On the Indiana constitutional claims, the court reaffirmed that Indiana courts have never recognized a private right of action for monetary damages under the Indiana Constitution. Citing Smith v. Indiana Department of Correction, 871 N.E.2d 975 (Ind. Ct. App. 2007), the court held that because Plaintiffs sought only money damages — not declaratory or injunctive relief — Counts II and III failed as a matter of law regardless of what provisions of the Indiana Constitution were implicated. The court also rejected Plaintiffs’ attempt to reframe Count II as a regulatory takings claim under Article 1, Section 21. The complaint’s “Count II” was captioned as a due process and due course of law claim and cited Article 1, Section 12; it never alleged the operative facts of a regulatory taking — such as deprivation of all or substantially all economic use of property — and a takings theory raised for the first time in a summary judgment reply brief did not satisfy Indiana’s notice pleading requirements.
On the ITCA immunity issues, the court held that Agencies were immune under Indiana Code Section 34-13-3-3(a)(6) (initiation of administrative proceedings), (a)(7) (discretionary function), (a)(8) (enforcement of law), (a)(11) (discretionary licensing authority), and (a)(12) (inspection) for the Signatures Matter and the Jarrett Building Matters. As to the Reciprocal Licensing Matter, the court reversed the trial court and granted summary judgment to Agencies on cross-appeal. Section 34-13-3-3(a)(11) grants immunity for “[t]he issuance, denial, suspension, or revocation of . . . any permit, license, certificate, approval, order, or similar authorization, where the authority is discretionary under the law.” Because Indiana Code Section 22-15-5-12 expressly gives the Commission discretion to determine whether another state’s licensing program is equivalent to Indiana’s, the denial of Kentucky-reciprocity licenses fell squarely within that immunity. The critical holding: once ITCA immunity attaches, “the degree of the Department’s culpability, and the nature of its tortious conduct, are not relevant considerations.” Dep’t of Nat. Res. v. Taylor, 419 N.E.2d 819, 823 (Ind. Ct. App. 1981). Vindictive conduct — however well-documented by an ALJ — does not strip a governmental entity of statutory immunity. The court noted that vindictiveness may bear on personal liability when individual employees are sued in their personal capacities, but Plaintiffs here sued only the Agencies, not any employee individually.
Key Takeaways
- Indiana does not recognize a private cause of action for monetary damages under the Indiana Constitution. Plaintiffs seeking relief for state constitutional violations must pursue declaratory or injunctive remedies; a claim for money damages under the Indiana Constitution will not survive summary judgment.
- A regulatory takings theory that is not pled in the complaint — even as an alternative theory under a count labeled “due process” — is not preserved and will be rejected under Indiana’s notice pleading standard if first raised in a summary judgment reply brief.
- The ITCA’s discretionary licensing immunity provision, Indiana Code Section 34-13-3-3(a)(11), shields governmental agencies from tort liability for denying licenses even when the denial is later found to be unreasonable or retaliatory in administrative proceedings. Immunity assumes negligence or even bad faith but denies liability to the entity regardless. To seek damages for improper licensing decisions, a plaintiff must instead pursue the available remedies through the Administrative Orders and Procedures Act (judicial review and remand), not a civil tort action against the agency.
- Plaintiffs who want to hold individual state employees personally liable for vindictive or malicious conduct must name and sue those employees in their personal capacities. Agency-level ITCA immunity is not defeated by the degree of an employee’s culpability; the employee personal-liability carve-out under Indiana Code Section 34-13-3-5(c) (for criminal, malicious, willful and wanton, or personally beneficial acts) attaches only to the individual, not to the governmental entity.
Why It Matters
Zeller is a useful synthesis of ITCA immunity doctrine for Indiana practitioners who represent either regulated businesses or governmental clients. For businesses challenging agency conduct, the decision underscores the importance of suing individual employees in their personal capacities if the goal is monetary recovery for bad-faith or vindictive regulatory action — suing only the agency itself will fail once any ITCA immunity provision applies. The decision also illustrates a pleading trap: even in a notice-pleading jurisdiction, a complaint that is captioned and briefed as a due process claim and that cites only the due process provision of the Indiana Constitution will not be read to encompass a regulatory takings theory raised years later at the summary judgment stage.
For governmental counsel, Zeller confirms the breadth of ITCA immunity for enforcement and licensing functions. Administrative records — including ALJ findings of vindictiveness — that might seem damaging in a subsequent civil suit do not create a genuine issue of material fact sufficient to defeat entity immunity. So long as the statutory activity falls within one of the enumerated ITCA immunity provisions, the entity’s conduct cannot be challenged through a tort action regardless of how badly it may have behaved.