Split COA affirms for Hamilton Co. Convention Center owner in defamation case

Judgment for the Hamilton County Convention Center’s owner was upheld by a divided appeals panel Thursday in a former employee’s defamation suit. It’s the latest chapter in a long-running litigation saga involving cross-claims of unpaid wages and employee theft.

A majority of an Indiana Court of Appeals affirmed in part summary judgment for convention center owner Hassan Shanehsaz in a case brought by Lee Johnson, who worked for Shanehsaz in 2010-11. Johnson resigned, claiming Shanehsaz owed her more than $10,000 in wages.

She ultimately sued him, the convention center and related entities and was awarded more than $46,000 in actual and liquidated damages and $25,000 in attorney fees, a ruling that was affirmed on appeal in 2016.

That same year, Shanehsaz’s brother, Ali, sued Johnson in federal court, alleging she had stolen several Iranian notes he had entrusted to Shanehsaz. The parties then entered into a settlement agreement and general release “from any and all manner of actions, causes of action, suits, accounts, contracts, debts, claims and demands whatsoever, at law or in equity, arising out of claims that that were asserted, or could have been asserted in the Lawsuit by any of the Parties. … But, this release shall have no effect upon conduct in connection with or based upon a federal lawsuit known as Shanehsaz v. Johnson, currently pending in the U.S. District Court for the Southern District of Indiana.”

Shanehsaz paid Johnson $50,000 plus the balance on a secured promissory note, as well as attorney fees and costs as part of the settlement.

This case then arose in 2017 after Shanehsaz had been in discussions with prospective restaurateur Jacquie Bols, whose Jacquie’s Cafe & Gourmet Catering in Carmel had catered functions at venues he owned. Johnson claimed that Shanehsaz’s communication to “Ali and statements made to law enforcement officials in April of 2015 accusing her of theft were defamatory per se,” Judge Robert Altice wrote. Bols became concerned about potentially becoming entangled litigation, the opinion says, and terminated any restaurant plans with Shanehsaz.

Shanehsaz argued Johnson’s suit was barred by the 2016 agreement and counterclaimed he was entitled to damages for lost profits from the failed restaurant venture. The Hamilton Superior Court granted Shanehsaz judgment on Johnson’s defamation claim, rejected his cross claim and awarded him attorney fees of $27,981.

Altice and Judge L. Mark Bailey largely affirmed the trial court in Lee Johnson v. Hassan Shanehsaz, 19A-PL-2866, but Judge Terry Crone dissented. The panel divided on whether the meaning of the terms in the agreement barred Johnson’s claim.

“Although the dissent maintains that it is without dispute that the alleged defamatory statements constituted conduct in connection with the federal lawsuit, we must conclude that the ‘in connection with or based upon’ the federal lawsuit language in the Agreement cannot be read to encompass acts or omissions prior to the commencement of the federal litigation,” the majority wrote in a footnote. “The harmonious reading of the Agreement is that the language therein contemplates the existence of the referenced federal lawsuit. Put another way, to read those phrases independently to include the alleged 2015 defamation would not give those words their plain and ordinary meanings in their connection to the federal litigation.”

Crone read the agreement differently. “In my view, it cannot reasonably be disputed that Shanehsaz’s allegedly defamatory statements to Ali regarding Johnson’s alleged theft of the notes constitute ‘conduct in connection with’ the federal lawsuit.” In his own footnote, the dissenting judge wrote, “In concluding otherwise, the majority reads ‘in connection with’ out of the Agreement.”

The majority also found that the trial court had improperly awarded Shanehsaz attorney fees for 1.8 billed hours for unrelated litigation and remanded for a revised order on attorney fees.

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