Illini State Trucking, Inc. a/k/a IST Holdings, LLC, and RLB International, LLC. v. Navistar, Inc. (mem. dec.) ( 2017 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before FILED
any court except for the purpose of Jun 02 2017, 8:46 am
establishing the defense of res judicata, CLERK
collateral estoppel, or the law of the Indiana Supreme Court
Court of Appeals
and Tax Court
case.
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR
Beth L. Brown APPELLEES/CROSS APPELLANTS
Kelly Law Offices NAVISTAR, INC. AND RUSH
Crown Point, Indiana TRUCK CENTERS OF INDIANA,
INC.
Lawrence R. Lassiter
Miller Weisbrod, LLP Timothy V. Hoffman
Dallas, Texas Sanchez Daniels & Hoffman LLP
Chicago, Illinois
Clayton J. Callen
Jeffrey S. Patterson
Harline Dacus Barger Dreyer LLP
Dallas, Texas
ATTORNEY FOR
APPELLEES/CROSS APPELLANTS
CHICAGO INTERNATIONAL
TRUCKS, LLC and CIT, INC.
Daniel J. Offenbach
Leahy, Eisenberg & Fraenkel, Ltd.
Chicago, Illinois
IN THE
COURT OF APPEALS OF INDIANA
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Illini State Trucking, Inc. a/k/a June 2, 2017
IST Holdings, LLC, and RLB Court of Appeals Case No.
International, LLC, 45A03-1608-PL-1860
Appellants-Plaintiffs/Cross Appellees, Appeal from the Lake County
Superior Court
v. The Honorable Calvin D. Hawkins,
Judge
Navistar, Inc., Rush Truck Trial Court Cause No.
Centers of Indiana, Inc. f/k/a 45D02-1505-PL-39
Chicago International Trucks,
LLC, Chicago International
Trucks, LLC, and CIT, Inc.
d/b/a Chicago International
Trucks,
Appellees-Defendants/Cross Appellants
Vaidik, Chief Judge.
Case Summary
[1] Illini State Trucking, Inc. and RLB International, LLC (collectively, “Illini”)
appeal the trial court’s dismissal of their claims of fraud and fraudulent
concealment against Navistar, Inc. (Navistar), Chicago International Trucks,
LLC and CIT, Inc. (collectively, “Chicago International”), and Rush Truck
Centers of Indiana, Inc. (Rush). Navistar and Chicago International cross-
appeal the trial court’s denial of their motions to dismiss Illini’s claims of
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breach of express warranty, breach of implied warranty, and breach of contract.
We affirm the decision of the trial court in all respects.1
Facts and Procedural History
[2] These appeals arise from the trial court’s order on motions to dismiss Illini’s
Third Amended Complaint (Complaint) against Navistar, Chicago
International, and Rush. Illini is a trucking company, Navistar is a truck
manufacturer, and Chicago International and Rush are truck sellers and
servicers. The factual allegations in the Complaint, which we must accept as
true for purposes of the defendants’ motions to dismiss, can be summarized as
follows.
[3] Navistar set out to develop engines that would comply with the EPA’s 2010
emission standards in a unique way. According to Illini, “other” manufacturers
use a combination of “SCR” (selective catalytic reduction), which entails
injecting a urea-based compound into exhaust gas after it leaves the engine, and
“EGR” (exhaust gas recirculation), in which exhaust gas is recirculated into the
engine to be re-combusted. Appellants’ App. Vol. IV pp. 6-7 (¶¶ 27-31).
Navistar, however, sought to become the only North American manufacturer to
use an EGR-only system, which it claimed would achieve better “fluid
economy” by eliminating the need for the urea-based after-treatment. Id. at 7
1
We held oral argument in this matter on May 18, 2017. We thank counsel for their presentations.
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(¶¶ 32-33). Illini alleges that Navistar’s EGR-only system not only failed to
comply with EPA emission standards but also left the engines prone to
breakdowns because of the amount of exhaust gas being recirculated. Illini
contends that Navistar was aware of these facts but nonetheless proceeded to
put the trucks on the market through its network of dealers, including Chicago
International and Rush.
[4] Between March 2011 and June 2012, Illini purchased nineteen International
ProStar on-highway semi-trucks with EGR-only MaxxForce engines, made by
Navistar, at Chicago International dealerships in Indiana and Illinois. The
trucks quickly began breaking down, forcing Illini to take them in for servicing
by Chicago International and Rush. Illini claims that Navistar, Chicago
International, and Rush concealed the defects and sometimes actively
misrepresented the condition of the trucks, both when marketing and selling the
trucks and when servicing them after breakdowns (Illini’s claims against Rush
are limited to the post-purchase servicing).
[5] Illini’s Complaint asserts claims of breach of express warranty (against
Navistar), breach of implied warranty (against Chicago International), breach
of contract (against both Navistar and Chicago International), fraud (against all
defendants), and fraudulent concealment (against all defendants). The
defendants filed motions to dismiss all the claims pursuant to Indiana Trial
Rule 12(B)(6) (and also Rule 9(B) with regard to the fraud-based claims). After
a short hearing, the trial court issued a one-page order granting the motions in
part and denying them in part, dismissing the fraud-based claims but allowing
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the breach-of-warranty and breach-of-contract claims to proceed. Illini sought
and received permission to file an interlocutory appeal of the dismissal of its
fraud-based claims, and Navistar and Chicago International have cross-
appealed the denial of their motions as to the remaining claims.
[6] We will address Illini’s appeal before turning to the cross-appeals. We review
motions to dismiss de novo, accepting as true the facts alleged in the complaint,
considering the complaint in the light most favorable to the plaintiff, and
drawing every reasonable inference in favor of the plaintiff. Veolia Water
Indianapolis, LLC v. Nat’l Tr. Ins. Co., 3 N.E.3d 1, 4-5 (Ind. 2014), aff’d on reh’g,
12 N.E.3d 240 (Ind. 2014).
Illini’s Appeal
[7] Illini appeals the dismissal of its claims of fraud and fraudulent concealment,
both of which it asserted against all three defendants. The Indiana Rules of
Trial Procedure set out the requirements for pleading in this state. Generally, a
complaint must provide only “a short and plain statement of the claim[.]” Ind.
Trial Rule 8(A)(1). Fraud claims, however, must be pled with greater
particularity. Trial Rule 9(B) provides that “[i]n all averments of fraud . . ., the
circumstances constituting fraud . . . shall be specifically averred.” The
purposes of this specificity requirement include “providing adequate notice to
the alleged perpetrator and preventing potentially damaging accusations
without some concrete description of what is being alleged.” Cont’l Basketball
Ass’n, Inc. v. Ellenstein Enters., Inc., 669 N.E.2d 134, 138 (Ind. 1996). To serve
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these purposes, the plaintiff must allege with particularity what the
representations were, who made them, and when or where they were made.
McKinney v. State, 693 N.E.2d 65, 73 (Ind. 1998); see also Dutton v. Int’l Harvester
Co., 504 N.E.2d 313, 318 (Ind. Ct. App. 1987) (“The circumstances constituting
fraud include the time, the place, the substance of the false representations, the
facts misrepresented, and the identification of what was procured by fraud.”),
reh’g denied, trans. denied.
I. Fraud
[8] The elements of a fraud claim are (1) a material misrepresentation of past or
existing fact which (2) was untrue, (3) was made with knowledge of or in
reckless ignorance of its falsity, (4) was made with the intent to deceive, (5) was
rightfully relied upon by the complaining party, and (6) which proximately
caused the injury or damage complained of. Kesling v. Hubler Nissan, Inc., 997
N.E.2d 327, 335 (Ind. 2013).
A. Navistar
[9] Illini maintains that it has made several viable allegations of fraud against
Navistar. We disagree.
[10] First, Illini characterizes its Complaint as including an allegation that, during a
November 2009 event at a Navistar test track in Ohio, several Navistar
representatives (named in the Complaint) “specifically stated that with the
MaxxForce Trucks and engines, there would be better fuel economy, and
Navistar had ‘solved the problem’ of urea.” Appellants’ Br. pp. 28-29 (quoting
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Appellants’ App. Vol. IV pp. 20-21 (¶ 100)). But that is not what the Complaint
says. While it alleges that the representations were made, and that there was a
November 2009 event, it does not allege that the representations were made
during the November 2009 event. Rather, the Complaint states that the
representations were made during the “time period of 2009-2010.” Appellants’
App. Vol. IV pp. 20-21 (¶ 100). Illini makes no argument that alleging that a
misrepresentation was made at some point during a two-year period is sufficient
to satisfy the heightened pleading standard for fraud.
[11] Similarly, Illini maintains that it has alleged that “[i]n 2009 and 2010 (every few
months during this time period), Navistar held dealer events” in Chicago and
that at those events “the above-named Navistar representatives made
misrepresentations regarding the MaxxForce Trucks and their engines,
including misrepresentations regarding fuel economy and the EGR-Only
system.” Appellants’ Br. p. 29 (citing Appellants’ App. Vol. IV pp. 20-21)). But
again, that is not what the Complaint says. Illini does not actually allege that
the named Navistar representatives were at the Chicago events; it alleges only
that they were at the Ohio test-track event in November 2009 or at “meetings
which occurred on a similar timeframe.” Appellants’ App. Vol. IV p. 20 (¶
100). Nor has Illini actually claimed that any misrepresentations were made at
the Chicago events; it alleges only that misrepresentations were made “[d]uring
this time period of 2009-2010,” generally. Id. at 21 (¶ 100). Most importantly,
Illini does not identify in its Complaint when specific Chicago events were held,
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what representations were made at particular events, or who made
representations at particular events.
[12] Illini’s also asserts that its Complaint includes a claim that Navistar made
“multiple misrepresentations” in “various trade publications” during “2009 and
2010.” Appellants’ Br. pp. 29-30. It cites pages 20-21 of its Complaint
(Appellants’ App. Vol. IV pp. 21-22), which include numerous alleged
misrepresentations, but nowhere on those pages does Illini identify specific
publications or specific publication dates.
[13] The trial court did not err in dismissing Illini’s fraud claim against Navistar.
B. Chicago International
[14] Regarding Chicago International, Illini tells us that its Complaint alleges that
“its representatives attended an event in November of 2009 at a Navistar test
track in Ohio” and that “[a]t that event, Bob Stokes from Chicago
International/CIT ‘specifically stated that with the MaxxForce Trucks and
engines, there would be better fuel economy, and Navistar had ‘solved the
problem’ of urea.’” Appellants’ Br. pp. 33-34 (quoting Appellants’ App. Vol. IV
pp. 20-21 (¶ 100)). But while Illini’s Complaint makes reference to the
November 2009 event, see Appellants’ App. Vol. IV p. 20 (¶ 100), it does not
actually claim that Stokes made the alleged misrepresentations during that
event; rather, Illini claims more generally that Stokes made the
misrepresentations at some point during the “time period of 2009-2010,” id. at
21 (¶ 100). Again, Illini does not argue that alleging that fraud was committed
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at some point during a two-year period is sufficient to survive a motion to
dismiss.2 Illini has not convinced us that the trial court erred by dismissing its
fraud claim against Chicago International.
C. Rush
[15] Illini contends that the alleged misrepresentations by Rush “are laid out in
detail in the Third Amended Complaint,” Appellants’ Br. p. 35, but it does not
identify any specific misrepresentations. Instead, it directs us to pages 8, 21,
and 22 of the Complaint (Appellants’ App. Vol. IV pp. 9, 22, 23). On those
pages, however, Illini only generally alleges that Rush “relayed much of the
above-described representations directly to Plaintiffs” and “did, in fact, make
the Misrepresentations to Plaintiffs regarding the trucks.” Appellants’ App.
Vol. IV pp. 9 (¶ 45), 23 (¶ 105). Illini does not specify the representations Rush
allegedly made, who allegedly made them, how they were made, or when they
were made. Given this lack of specificity, the trial court did not err by
dismissing Illini’s fraud claim against Rush.3
2
Illini also argues that it has identified “other specific misrepresentations made to [it] by Stokes, including
representations regarding fuel economy,” Appellants’ Reply Br. p. 33, but it does not direct us to any
particular allegations in the Complaint.
3
Illini asserts that “[i]t is also not necessary for allegations against Rush to be pled separately,” Appellants’
Br. p. 36, but it does not tell us what it means by this.
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II. Fraudulent Concealment
[16] As a corollary to its claim that the defendants made certain false representations
about the condition of the trucks, Illini alleges that the defendants had a duty to
disclose the actual facts and that they failed to do so.
A. Navistar
[17] Illini identifies a number of facts that Navistar allegedly knew but failed to
disclose: (1) the trucks would never meet the EPA’s 2010 emission standards,
(2) the trucks “had severe technical problems that would lead to engine
performance and quality issues, including heat, soot, and condensation issues,”
and (3) “its engine testing had been inadequate and truncated, late in starting,
causing late design changes, immature designs and increased warrant risk.” Id.
at 25 (¶¶ 113-115). Illini relies on our Supreme Court’s holding that “when a
buyer makes inquiries about the condition, qualities, or characteristics of
property, the seller must fully declare any and all problems associated with the
subject of the inquiry.” Kesling, 997 N.E.2d at 335. The problem is that Illini
does not direct us to any specific allegation in the Complaint that it made any
“inquiries” of Navistar, let alone describe the subject matter of any such
inquiries. As such, Illini’s reliance on Kesling is misplaced, and we cannot say
that the trial court erred by dismissing its fraudulent-concealment claim against
Navistar.
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B. Chicago International
[18] Illini contends that its fraudulent-concealment claim against Chicago
International should be allowed to proceed because it has alleged that Chicago
International “deliberately withheld the information about the Known Defects
associated with the MaxxForce ProStars when [it] had a duty to disclose the
information to Plaintiffs.” Appellants’ App. Vol. IV p. 26 (¶ 118). But Illini has
failed to specifically identify what “information” Chicago International
allegedly possessed and failed to disclose. The Complaint defines “Known
Defects” as “inherent performance and reliability problems,” id. at 24 (¶ 112),
but at no point in the fraudulent-concealment portion of the Complaint does
Illini allege with particularity the “problems” of which Chicago International
was allegedly aware, see id. at 24-27 (¶¶ 111-122). The trial court did not err by
dismissing Illini’s fraudulent-concealment claim against Chicago International.
C. Rush
[19] Illini’s fraudulent-concealment claim against Rush suffers from the same flaw as
its claim against Chicago International. As with Chicago International, Illini
relies on its allegation that the defendants “deliberately withheld the
information about the Known Defects associated with the MaxxForce
ProStars[.]” Id. at 26 (¶ 118). But, again, the Complaint defines “Known
Defects” very generally as “inherent performance and reliability problems,” id.
at 24 (¶ 112), and nowhere in the fraudulent-concealment portion of the
Complaint does Illini specifically identify the “problems” of which Rush was
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allegedly aware. Id. at 24-27 (¶¶ 111-122). Illini has failed to show that the trial
court erred by dismissing its fraudulent-concealment claim against Rush.
Navistar’s Cross-Appeal
[20] Navistar cross-appeals the trial court’s denial of its motion to dismiss the other
claims against it: breach of express warranty and breach of contract.
I. Breach of Express Warranty
[21] In its breach-of-express-warranty claim against Navistar, Illini alleges that
Navistar represented that the trucks “were of a particular quality when, in fact,
they were not.” Id. at 14 (¶ 73). Illini claims that Navistar “made the above
described representations through its agent, Chicago International[.]” Id. at 15
(¶ 76). In addition, Illini alleges that Navistar “expressly assured” it that the
trucks were “free from defects” and “suitable to perform the duties for which
they were manufactured and sold.” Id. (¶ 77). Illini also claims that it was
“expressly assured” that Navistar “had an extensive network of service centers
that would promptly provide parts and trained technicians needed to fix any
problems” experienced by Illini, that it “repeatedly notified” Navistar of
defects, and that Navistar “failed and/or refused to make repairs sufficient to
correct the defects.” Id. (¶¶ 78, 80).
[22] Navistar offers two arguments for dismissal of this claim. First, Navistar notes
Illini’s allegation that Navistar made the purported representations “through its
agent, Chicago International” and argues that Illini has failed to plead facts that
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would support a finding of agency. We disagree. Illini does not contend that
Chicago International had “actual authority” to act on Navistar’s behalf, but
“apparent authority” can be established by some communication, direct or
indirect, by the principal (here, Navistar) to a third party (here, Illini) that
instills a reasonable belief in the mind of the third party that the agent (here,
Chicago International) is authorized to act on the principal’s behalf. See
Pepkowski v. Life of Ind. Ins. Co., 535 N.E.2d 1164, 1166-67 (Ind. 1989). Here,
Illini has alleged that Navistar “regularly provided authorized dealers with
International and MaxxForce branded literature, signage, and training
materials for use in promoting, selling and financing the purchase of their
Trucks to customers.” Appellants’ App. Vol. IV p. 4 (¶ 13). This allegation,
while generally stated, is sufficient as a matter of notice pleading to survive a
motion to dismiss.4
[23] In the alternative, Navistar argues that the trial court should have dismissed
Illini’s claim because Illini failed to attach the alleged “free from defects”
warranty to its Complaint. As Illini explained in the Complaint, it has “not yet
been able to locate” what it believes to be “the actual contract (or express
warranty),” and it attached “an example of a typical warranty contract for
similar Navistar products.” Id. at 14 (¶ 73). Illini says that it has “requested
4
Navistar cites two Indiana cases in which signage and literature were found to be insufficient to establish
apparent authority, but neither of those cases was decided on a motion to dismiss. See Drake v. Maid-Rite Co.,
681 N.E.2d 734, 738 (Ind. Ct. App. 1997) (summary judgment), reh’g denied; Leon v. Caterpillar Indus., Inc., 69
F.3d 1326, 1333-37 (7th Cir. 1995) (directed verdict).
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copies of these documents from defendants in discovery and if [it] obtains the
actual documents, [it] will promptly provide as attachment [sic] to the
Complaint at that time.” Id.
[24] Navistar directs us to Indiana Trial Rule 9.2(A), which provides, in part,
“When any pleading allowed by these rules is founded on a written instrument,
the original, or a copy thereof, must be included in or filed with the pleading.”
Navistar contends that failure to comply with Rule 9.2(A) “means dismissal of
the warranty claim is proper.” Navistar/Rush Reply Br. p. 5. However,
Navistar fails to mention subsection (F) of the rule, which grants our trial courts
discretion in addressing noncompliance with Rule 9.2(A). Rule 9.2(F)
provides, in part:
Non-compliance with the provisions of this rule requiring a
written instrument or an Affidavit of Debt to be included with the
pleading may be raised by the first responsive pleading or prior
motion of a party. The court, in its sound discretion, may order
compliance, the reasons for non-compliance to be added to the
pleadings, or allow the action to continue without further
pleading.
(Emphasis added). We have explained that Rule 9.2(F) “affords the trial court
broad discretion in ordering compliance or permitting an action to proceed
without amendment of the pleadings.” Brenneman Mech. & Elec., Inc. v. First
Nat’l Bank of Logansport, 495 N.E.2d 233, 241 (Ind. Ct. App. 1986) (emphasis
added), reh’g denied, trans. denied; see also Brown v. Guinn, 970 N.E.2d 192, 195
(Ind. Ct. App. 2012) (“[I]t is well established that non-compliance with Rule
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9.2(A) is not a per se bar to the action.”). In short, the fact that Illini did not
attach a “free from defects” warranty to its Complaint is not fatal to its breach-
of-express-warranty claim.
[25] In any event, even if we were to conclude that Illini’s claim about a “free from
defects” warranty is deficient, Illini also claims that Navistar breached one or
more “repair” warranties by either failing to make necessary repairs or by
failing to do so in a reasonable time. Appellants’ Reply Br. pp. 27-28. Illini
argues that this allegation, alone, is sufficient to avoid dismissal of the breach-
of-express-warranty claim. Navistar offers no response to this argument, and
we will not develop one for it.
[26] The trial court did not err by declining to dismiss this claim.
II. Breach of Contract
[27] Navistar also challenges the trial court’s denial of its motion to dismiss Illini’s
breach-of-contract claim. In that claim, Illini alleges that Chicago International
and Navistar “entered into a valid, enforceable contract” with Illini to provide
trucks “free from defects” and then failed to do so. Appellants’ App. Vol. IV
pp. 18-19 (¶¶ 92-96). Illini does not assert that it contracted with Navistar
directly but alleges that Chicago International was acting as an “agent” of
Navistar when it sold the trucks to Illini. Id. at 18 (¶ 93).
[28] Navistar first argues that Illini has failed to allege facts that would support a
finding of agency. We rejected this argument above, in relation to Illini’s
breach-of-express-warranty claim against Navistar, and we do so again here.
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[29] Also as with Illini’s breach-of-express-warranty claim, Navistar asserts that
Illini’s breach-of-contract claim must fail because Illini did not attach the
alleged contract to its Complaint, as required by Indiana Trial Rule 9.2(A). In
the Complaint, Illini admits that it does “not have full copies of the Agreements
in [its] possession” but notes that it has attached as Exhibit B “the portions of
the Agreements” in its possession, that it has “requested full copies of the
Agreements from Defendants,” that it believes that “once discovery is
completed Defendants will produce full copies of these Agreements,” and that it
will “promptly attach the full Agreements to the Complaint at that time.” Id. at
19 (¶ 94). Navistar takes issue with this promise of future compliance with Rule
9.2(A), but again, Rule 9.2(F) grants our trial courts discretion to allow a case
to proceed even when there is noncompliance with Rule 9.2(A), see Brenneman
Mech. & Elec., Inc., 495 N.E.2d at 241, and the trial court apparently chose to
exercise that discretion here.5
[30] The trial court did not err by denying Navistar’s motion to dismiss Illini’s
breach-of-contract claim.
5
Navistar makes no argument that the trial court abused its discretion in this regard.
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Chicago International’s Cross-Appeal
[31] Chicago International cross-appeals the trial court’s denial of its motion to
dismiss the other claims against it: breach of implied warranty and breach of
contract.
I. Breach of Implied Warranty
[32] In its breach-of-implied-warranty claim against Chicago International, Illini
alleges that Chicago International represented that the trucks “were of a
particular quality when, in fact, they were not.” Appellants’ App. Vol. IV p. 16
(¶ 82). Illini first claims that “Navistar, through its agent, Chicago
International, made the above described representations,” id. (¶ 84), and then
adds that Chicago International “impliedly assured” Illini that the trucks were
“free from defects,” “suitable to perform the duties for which they were
manufactured,” and “merchantable,” id. (¶¶ 85-86). Illini also claims that it
ultimately discovered that the trucks had “significant problems” (listed in the
Complaint), that it “repeatedly notified” Chicago International of the defects,
and that Chicago International “failed and/or refused to make repairs sufficient
to correct the defects.” Id. at 16-17 (¶¶ 87, 89).
[33] Chicago International first argues that it cannot be liable on this claim “because
it is alleged to have acted solely as Navistar’s authorized agent.” Chicago
International Br. p. 23. It cites the decision of the U.S. District Court for the
Northern District of Indiana in LDT Keller Farms, LLC v. Brigitte Holmes Livestock
Co., 722 F. Supp. 2d 1015, 1026 (N.D. Ind. 2010), for the proposition that
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absent an agreement to the contrary, an agent of a disclosed principal cannot be
held liable for the principal’s breach of warranty.
[34] Illini does not dispute this point of law, nor does it dispute that it has alleged
that Chicago International acted as Navistar’s agent. However, it argues that it
has also alleged that Chicago International gave warranties on its own behalf,
not only on behalf of Navistar as Navistar’s agent. Illini cites its allegations that
Chicago International “impliedly assured” Illini that the trucks were “free from
defects,” “suitable to perform the duties for which they were manufactured,”
and “merchantable.” Appellants’ App. Vol. IV p. 16 (¶¶ 85-86). This is
sufficient to survive Chicago International’s motion to dismiss. Our trial rules
specifically allow “pleading in the alternative.” Ind. Trial Rule 8(E)(2); Cent.
Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 733 (Ind. 2008).
[35] Chicago International also contends that dismissal is appropriate because it
“effectively disclaimed any and all implied warranties.” Chicago International
Br. p. 24. It directs us to a “Buyers Order” form that was attached as Exhibit B
to its motion to dismiss, which it says was provided to Illini when it ordered
each of the trucks. Chicago International’s App. Vol. II pp. 48-49. The second
page of the document is captioned “LIMITED WARRANTY, WARRANTY
DISCLAIMER AND LIMITATION OF SELLER’S LIABILITY” and
includes what appears to be a fairly comprehensive warranty disclaimer. Id. at
49. As Illini notes, however, this document is not part of the Complaint.
Therefore, it cannot be considered for purposes of a motion to dismiss. See
Murphy Breeding Lab., Inc. v. W. Cent. Conservancy Dist., 828 N.E.2d 923, 926
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(Ind. Ct. App. 2005) (“Murphy correctly asserts that because a motion to
dismiss tests the legal sufficiency of the complaint, the trial court was foreclosed
from considering matters outside the pleadings.”).6
[36] The trial court properly denied Chicago International’s motion to dismiss
Illini’s breach-of-implied-warranty claim.
II. Breach of Contract
[37] Chicago International also joins Navistar in arguing that the trial court should
have dismissed Illini’s breach-of-contract claim. Its first argument is the same
as one made by Navistar: that dismissal is appropriate because Illini failed to
attach the alleged contract(s) to its Complaint, as required by Trial Rule 9.2(A).
In light of the discretion afforded to our trial courts by Trial Rule 9.2(F), we
rejected that contention above and do so again here.
[38] In the alternative, Chicago International contends that the breach-of-contract
claim against it cannot stand because Illini specifically alleged that Chicago
International was acting as Navistar’s agent when it entered into the contract(s).
We have held that an agent generally is not personally bound by a contract
where the agent “discloses the identity of his principal and does not exceed his
authority when contracting on the principal’s behalf.” Carlson Wagonlit Travel,
6
When matters outside the pleadings are presented to and not excluded by the court, a motion to dismiss is
treated as one for summary judgment. Murphy Breeding Lab., Inc., 828 N.E.2d at 926. Chicago International
does not argue that this is what happened in this case.
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Inc. v. Moss, 788 N.E.2d 501, 503 (Ind. Ct. App. 2003). However, Illini’s
Complaint can also be read, under our liberal rules of notice pleading, to state a
breach-of-contract claim against Chicago International directly. Illini alleges
that both Chicago International and Navistar “failed to provide Trucks free
from defects in accordance with the terms of the agreement.” Appellants’ App.
Vol. IV p. 18 (¶ 92). It also claims that “[t]he aforementioned contract
obligated . . . Defendants to provide the Trucks free from defects.” Id. (¶ 94)
(emphasis added). Finally, Illini alleges that “Defendants breached the
Agreement by failing to provide Trucks that were free from defects in
accordance with the terms of the Agreement.” Id. (¶ 96) (emphasis added).
Again, while Illini’s assertion that Chicago International was not acting as
Navistar’s agent is directly at odds with its assertion, discussed earlier, that
Chicago International was contracting on behalf of Navistar, our trial rules
specifically allow for this sort of “pleading in the alternative.” T.R. 8(E)(2);
Cent. Ind. Podiatry, P.C., 882 N.E.2d at 733.
[39] The trial court did not err by denying Chicago International’s motion to dismiss
Illini’s breach-of-contract claim.
[40] Affirmed.
Robb, J., and Sharpnack, S.J., concur.
Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017 Page 20 of 20