James DeOreo, Appellant-Plaintiff v. Theodore Dudzinski and The Roman Catholic Diocese of Lafayette-in-Indiana, Inc., Appellees-Defendants (2025)

MEMORANDUM DECISION

[1] James DeOreo, a Catholic priest, appeals the trial court's dismissal of his complaint against The Roman Catholic Diocese of Lafayette-in-Indiana, Inc. (“Diocese”) and Father Theodore Dudzinski. In his complaint, DeOreo alleged that the Diocese had committed defamation when it publicly stated that DeOreo had been suspended from his ministry based on an allegation of inappropriate conduct with a minor. And he alleged that Dudzinski had committed fraud when Dudzinski made various misrepresentations or false statements to damage DeOreo's reputation.

[2] The trial court dismissed DeOreo's complaint under Indiana Trial Rule 12(B)(6) on the theory that DeOreo's claims would require the court to interject itself into purely ecclesiastical matters. We need not reach that question, however, as we may affirm the grant of a motion to dismiss on any theory, and, here, DeOreo's claims are legally insufficient on their face.

[3] Accordingly, we affirm the trial court's dismissal of DeOreo's complaint.

Facts and Procedural History

[4] The posture of this appeal requires this Court to accept as true the allegations made by DeOreo in his complaint. According to DeOreo, throughout 2021 he was employed by the Diocese in Hamilton and Boone Counties. During that time, Dudzinski, who also worked for the Diocese, “harbored significant ill-will toward DeOreo.” Appellant's App. Vol. 2, p. 13. Dudzinski met with a minor parishioner who blamed DeOreo for an eating disorder, and Dudzinski sought to “prey[ ] upon” the parishioner's “desire for vengeance” against DeOreo. Id. To do so, Dudzinski created a “false impression” with the parishioner that DeOreo was not permitted by the Diocese to be around minors and that, if the parishioner were to levy “allegations of sexual abuse” by DeOreo, DeOreo “would be held responsible and punished.” Id. at 13-14.

[5] In early October, the parishioner “made false allegations that DeOreo had abused him by ‘sexual harassment and grooming.’ ” Id. at 14. The parishioner's written accusation clarified that “at no point was there any sexual contact.” Id. at 15. The Diocese immediately began an investigation but concluded that there was “no evidence to substantiate the allegations.” Id. at 16. Nonetheless, Dudzinski “operated to hide, obfuscate, or destroy” the investigation's findings and to “create the false impression” among the Diocese's leadership that the parishioner's allegations “were credible, actionable, or otherwise harmful to the Diocese.” Id. at 16-17.

[6] In November, the parishioner sent a “distraught email” to the Diocese “complaining about DeOreo's presence at a service with children present.” Id. Dudzinski leveraged that email “to misconstrue the veracity” of the parishioner's allegations, which resulted in the Diocese issuing a private decree on November 19, 2021, in which it acknowledged that it had received information regarding possible sexual abuse “by a cleric with a minor.” Id. at 17. Under the November Decree, DeOreo was restricted from public ministry with youth.

[7] Rather than investigate matters further, the Diocese instead entered into settlement negotiations with the parishioner's family. During those negotiations, Dudzinski “misrepresented” to the parishioner's family “the substance of the November Decree” by “suggesting that DeOreo was prohibited from contact at all with minors and/or that DeOreo was entirely suspended.” Id. at 18. Based on those alleged misrepresentations, on March 7, 2022, the parishioner's mother complained to the Diocese about DeOreo's presence at a high school swim meet. Dudzinski, in turn, “leveraged” that complaint to “create[ ] a false impression in Diocesan leadership that DeOreo had intentionally violated the terms of the November Decree ․” Id. at 19. On March 11, the Diocese suspended DeOreo.

[8] On March 13, the Diocese published a statement to its parishioners and local media outlets. In that March Statement, the Diocese stated that it had suspended DeOreo based on “allegations of inappropriate conduct with a minor.” Id. at 28. The March Statement further noted that the matter had been reported to Child Protective Services, a “preliminary investigation is ongoing,” “precautionary measures are in place according to Canon 1722 of the Code of Canon Law,” and DeOreo “should be treated with the presumption of innocence.” Id. The March Statement also encouraged anyone who was aware of “any misconduct during” DeOreo's ministry to report that misconduct. Id. And, according to DeOreo, the reference to Canon 1722 necessarily implied some investigative measures by the Diocese that had resulted in a basis of knowledge that the allegations “at least seem[ ] true.” Id. at 21.

[9] In March 2024, DeOreo filed his complaint against the Diocese and Dudzinski. He attached the March Statement to his complaint and alleged that the Diocese had committed defamation per se in that statement by imputing criminal conduct and sexual misconduct against him. DeOreo further made clear that his claim of defamation was not a request for the judiciary to “invade the province of the Diocese to adjudicate its own internal norms and regulations, including Canon Law” but, instead, were “based solely upon the damage to his reputation wrought by the false, published March Statement ․” Id. at 25.

[10] DeOreo separately alleged that Dudzinski had engaged in criminal and common-law fraud as follows:

Dudzinski, with the intent to cause [the minor parishioner] to obtain property, knowingly or intentionally made a false or misleading statement to [the minor parishioner] and to the Diocese; created a false impression in [the minor parishioner] and the Diocese; caused [the minor parishioner] to present a claim to the Diocese that contained a false or misleading statement and created a false or misleading impression in the Diocese regarding DeOreo's behavior or conduct. Dudzinski made known misrepresentations of past and existing facts to [the minor parishioner] and the Diocese to the detriment of DeOreo.

Id. at 26. DeOreo appears to allege that Dudzinski's conduct caused DeOreo damage to his reputation, as the complaint does not identify any other injury to DeOreo. Because of Dudzinski's alleged fraud, DeOreo sought additional relief under Indiana's Crime Victims’ Compensation Act, Ind. Code § 34-24-3-1.

[11] On April 29, the Diocese and Dudzinski jointly moved to dismiss DeOreo's complaint under Indiana Trial Rule 12(B)(6) for failing to state a claim upon which relief can be granted.¹ According to the Diocese and Dudzinski, DeOreo's claims against them were barred under the First Amendment's church autonomy doctrine and ministerial exception. After hearing oral argument from the parties, the trial court agreed with the Diocese and Dudzinski and dismissed DeOreo's complaint.

[12] This appeal ensued.

Standard of Review

[13] DeOreo appeals the trial court's dismissal of his complaint under Indiana Trial Rule 12(B)(6). As our Supreme Court has explained:

Appellate review of a ruling on a Trial Rule 12(B)(6) motion is de novo. A motion to dismiss under Rule 12(B)(6) tests the legal sufficiency of a complaint: that is, whether the allegations in the complaint establish any set of circumstances under which a plaintiff would be entitled to relief. Appellate courts do not test the sufficiency of the facts alleged regarding their adequacy to provide recovery but test the sufficiency of whether a legally actionable injury has occurred in a plaintiff's stated factual scenario. The appellate court accepts the alleged facts as true, drawing every reasonable inference in favor of the non-moving party. An order to dismiss is affirmed when it is apparent that the facts alleged in the challenged pleading are incapable of supporting relief under any set of circumstances.

Safeco Ins. Co. v. Blue Sky Innovation Grp., 230 N.E.3d 898, 901-02 (Ind. 2024) (citations and quotation marks omitted). Notably, “we may affirm the grant of a motion to dismiss if it is sustainable on any theory.” McPeek v. McCardle, 888 N.E.2d 171, 174 (Ind. 2008).

1. The March Statement is not defamatory as a matter of law.

[14] On appeal, we first consider DeOreo's defamation claim against the Diocese. Our Supreme Court has made clear that

defamation is one of those few well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem, because such utterances are no essential part of any exposition of ideas[ ] and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality. In fact, the common law has, since the late-sixteenth century, afforded a cause of action for damage to a person's reputation by the publication of false and defamatory statements.

Love v. Rehfus, 946 N.E.2d 1, 14 (Ind. 2011) (cleaned up). Further:

To establish a claim of defamation, a plaintiff must prove the existence of a communication with defamatory imputation, malice, publication, and damages. A statement is defamatory if it tends to harm a person's reputation by lowering the person in the community's estimation or deterring third persons from dealing or associating with the person. One type of defamation action, alleging defamation per se, arises when the language of a statement, without reference to extrinsic evidence, constitutes an imputation of (1) criminal conduct, (2) a loathsome disease, (3) misconduct in a person's trade, profession, office, or occupation, or (4) sexual misconduct. ․ In actions for defamation per se, damages are presumed ․

Dugan v. Mittal Steel USA Inc., 929 N.E.2d 184, 186 (Ind. 2010) (cleaned up).

[15] “A statement is not defamatory unless it conveys a defamatory imputation of fact ․” Brewington v. State, 7 N.E.3d 946, 960 (Ind. 2014) (emphasis in original). Whether a statement conveys a defamatory imputation of fact is determined under a “reasonable-person inquiry” and presents a question of law for the court. Id. at 960-61; see also Journal-Gazette Co. v. Bandido's, Inc., 712 N.E.2d 446, 457 (Ind. 1999) (“It is a question of law for the court to decide whether a statement considered in its entirety is capable of possessing a defamatory meaning or implication.”). “If a statement is susceptible to both defamatory and non-defamatory meanings, the matter of interpretation should be left to the jury.” Bandido's, 712 N.E.2d at 457.

[16] We conclude that no reasonable person could read the March Statement in its entirety to convey a defamatory imputation of fact. The March Statement reads as follows:

On Friday, March 11, Father James De Oreo[2] was suspended from public ministry in the Diocese of Lafayette-in-Indiana. The diocese received allegations of inappropriate conduct with a minor that violates the Essential Norms and the Diocesan Code of Conduct for Clergy. This was reported to Indiana Child Protective Services. A preliminary investigation is ongoing, and precautionary measures are in place according to Canon 1722 of the Code of Canon Law. During the investigation, Father De Oreo should be treated with the presumption of innocence.

If you are aware of any misconduct during Father De Oreo's ministry as a priest or seminarian, we encourage you to report the incident in the following manner:

1. Make a report to Child Protective Services ․ or local law enforcement.

2. Call Jackie Montrie M.A., LMFT, LMHC Victim Assistance Coordinator of the Diocese ․

The safety and wellbeing of our children and young people are of the utmost importance. We all share a commitment to be part of the Church's mission to respect and protect people of every age. We invite you to join us in prayer for the healing guidance of the Holy Spirit on behalf of all who have been victims of abuse.

Appellant's App. Vol. 2, p. 28.

[17] There is no dispute that the March Statement was factually correct when it stated that the Diocese had received an allegation of inappropriate conduct between DeOreo and a minor. There is no dispute that the March Statement was factually correct when it stated that DeOreo had been suspended from the ministry, and, likewise, that precautionary measures had been implemented, following that allegation. There is no dispute that the March Statement was factually correct when it stated that a report had been made with Child Protective Services. And, while DeOreo does not address it, it is notable that the March Statement expressly states that, despite the allegations and the Diocese's precautions, DeOreo should continue to be “treated with the presumption of innocence.” Id.

[18] DeOreo instead contends that the March Statement is defamatory because it implies that he was suspended because of the minor parishioner's allegations when in fact he was suspended for violating the private November Decree. This argument is a nonstarter, however. The November Decree was itself issued based at least in part on the allegations of the minor parishioner. DeOreo's attempt to attribute a defamatory imputation to the March Statement on this point is therefore unreasonable.

[19] DeOreo also contends that the March Statement is defamatory because it asserts that “certain protocols and procedures under Catholic Canon Law had been followed when they had not,” which, in turn, created a “false impression that a quasi-judicial investigation had occurred and that DeOreo had been found culpable for sexual misconduct or abuse.” Appellant's Br. at 18. He likewise asserts that the March Statement “created a false impression ․ that either criminal charges were pending against DeOreo or that an independent investigation had established culpability.” Id.

[20] We categorically disagree with DeOreo's characterization of the facts recited in the March Statement. While the March Statement does reference certain protocols and procedures under Catholic Canon Law, DeOreo goes unreasonably far when he takes from that reference a purported imputation of culpability. DeOreo's own complaint states that the reference to Canon 1722 implied only that the allegations “at least seem[ ] true,” which is a far cry from DeOreo's claim that the March Statement suggested that he “had been found culpable.” Id. at 18; see Appellant's App. Vol. 2, p. 21. And the March Statement says only that a report to Child Protective Services had been made; nothing in that statement reasonably implies pending criminal charges.

[21] And even if a reasonable person might have been unclear on those points, the March Statement expressly adds that DeOreo should continue to receive “the presumption of innocence.” Appellant's App. Vol. 2, p. 28. The March Statement further states that the Diocese's investigation was “preliminary,” and DeOreo's suspension was simply “precautionary.” Id. Those words mean that nothing had been determined and that the Diocese was erring on the side of parishioner safety. No reasonable person, reading the entirety of the March Statement, would come to DeOreo's conclusion that he had been “found culpable” or otherwise had in fact committed anything that had been alleged.

[22] Accordingly, the March Statement is not defamatory as a matter of law, and the trial court properly dismissed DeOreo's claim against the Diocese.

2. DeOreo's complaint does not state a claim for criminal or common-law fraud against Dudzinski.

[23] Neither did the court err when it dismissed DeOreo's claims for criminal and common-law fraud against Dudzinski. Again, in his complaint, DeOreo alleged that Dudzinski had engaged in criminal and common-law fraud as follows:

Dudzinski, with the intent to cause [the minor parishioner] to obtain property, knowingly or intentionally made a false or misleading statement to [the minor parishioner] and to the Diocese; created a false impression in [the minor parishioner] and the Diocese; caused [the minor parishioner] to present a claim to the Diocese that contained a false or misleading statement and created a false or misleading impression in the Diocese regarding DeOreo's behavior or conduct. Dudzinski made known misrepresentations of past and existing facts to [the minor parishioner] and the Diocese to the detriment of DeOreo.

Id. at 26. And DeOreo's only identified injury in his complaint is the alleged injury to his reputation.

[24] Although DeOreo's complaint tracks the statutory definition of criminal fraud as provided in Indiana Code section 35-43-5-4(a)(2) (2021), his alleged injury is to his reputation, and his request for relief for the alleged fraud is under the Crime Victims’ Compensation Act. The Crime Victims’ Compensation Act, in turn, permits a person who has suffered “a pecuniary loss as a result of a violation of IC 35-43” to recover in a civil action an amount up to three times “the actual damages of the person suffering the loss” along with other stated fees and costs. I.C. § 34-24-3-1(1)(A).

[25] DeOreo has not alleged a pecuniary loss. A “pecuniary loss” is “[a] loss of money or of something having monetary value.” Loss, Black's Law Dictionary (12th ed. 2024). And it has long been recognized in Indiana that “injuries to ․ reputation” are “non-pecuniary losses.” Dwyer v. McClean, 133 Ind. App. 454, 458, 175 N.E.2d 50, 52 (1961), trans. denied. Thus, DeOreo has not stated a compensable claim for criminal fraud.

[26] As for DeOreo's purported claim of common-law fraud,³ that cause of action requires, among other things, that the fraud has been “relied upon by the complaining party.” Lawyers Title Ins. Corp. v. Pokraka, 595 N.E.2d 244, 249 (Ind. 1992). Nothing in DeOreo's complaint reasonably suggests that he relied on anything Dudzinski may have said. Accordingly, his complaint does not state a claim for common-law fraud, and the trial court properly dismissed DeOreo's claims against Dudzinski.

Conclusion

[27] For all of these reasons, we affirm the trial court's dismissal of DeOreo's complaint against the Diocese and Dudzinski.

[28] Affirmed.

FOOTNOTES

1.   The Diocese and Dudzinski asserted in the alternative that they were entitled to summary judgment on DeOreo's complaint under Indiana's Anti-SLAPP statutes, Ind. Code §§ 34-7-7-1 to -10 (2024). The trial court did not enter judgment for the Diocese or Dudzinski under that theory, and they do not contend on appeal that the trial court's order may be affirmed under that theory. See Ind. Appellate Rule 46(A)(8)(a).

2.   DeOreo does not add a space in his name in his filings to our Court.

3.   Fraud at the common law may be actual or constructive. Wohlt v. Wohlt, 245 N.E.3d 611, 620 (Ind. 2024). Nothing in DeOreo's complaint suggests constructive fraud. Cf. id. (noting that, among other things, constructive fraud requires that the defendant owed a duty of candor to the plaintiff).

Mathias, Judge.

Judges Brown and Kenworthy concur. Brown, J., and Kenworthy, J., concur.