Appeals court tosses former Christkindlmarkt board chair’s defamation suit

The Indiana Court of Appeals has upheld the dismissal of a defamation lawsuit filed by a former Carmel Christkindlmarkt board member against Carmel Mayor Sue Finkam and the city.

The unanimous decision concluded that public comments Finkam made about Sue McDermott’s role in managing the market’s finances and recordkeeping were not defamatory as a matter of law.

“Because Mayor Finkam’s comments do not, on their face, attribute wrongdoing to McDermott and are as consistent with mistake or incompetence as with misconduct, we conclude as a matter of law that they do not constitute defamation per se,” Judge Nancy Vaidik wrote in the court’s ruling. “We therefore affirm the trial court.”

McDermott, who served as board chair of Carmel Christkindlmarkt Inc. from January to October 2024, claimed Finkam defamed her by saying McDermott delayed and withheld financial documents related to the market’s operations during two Carmel City Council meetings and in comments to the media.

McDermott resigned from her role — to which she had been appointed by Finkam — amid the mayor’s shakeup of the city-controlled nonprofit’s organizational structure.

The case was initially dismissed in November 2025 by Hamilton County Superior Court Judge Jonathan Brown, who at the time found the complaint failed to “sufficiently allege a communication with a defamatory imputation” when Finkam was addressing concerns about Christkindlmarkt’s operations.

“We are pleased with the results of the Court of Appeals,” Erin Murphy, director of marketing and community communications for the city, said in an emailed statement.

Tony Paganelli, an attorney for McDermott, also did not return a voicemail Monday.

Carmel Christkindlmarkt was established in 2017 as the brainchild of former Mayor Jim Brainard and has become a holiday tradition in Hamilton County. Each year, it draws hundreds of thousands of visitors to Carter Green.

The city-owned nonprofit is operated by a CEO and overseen by a three-member board.

Since 2017, Carmel has contributed more than $8.5 million to the market. Since taking office, Finkam has pushed to make the market less financially reliant on the city. The market operated at a loss for the first time in 2024 after taking in $1.06 million from the city and reimbursing just below $300,000.

Earlier this month, the Carmel City Council imposed a 30-day deadline for investigation into the market that was authorized last year.