                                                                                       FILED
                                                                                   Jan 23 2018, 7:40 am

                                                                                       CLERK
                                                                                   Indiana Supreme Court
                                                                                      Court of Appeals
                                                                                        and Tax Court




ATTORNEYS FOR APPELLANTS                                       ATTORNEY FOR APPELLEES
Robert J. Palmer                                               Patrick D. Murphy
Wendell W. Walsh                                               Murphy Rice, LLP
May Oberfell Lorber                                            South Bend, Indiana
Mishawaka, Indiana
Jonathan S. Quinn
Andrew G. May
Neal, Gerber & Eisenberg LLP
Chicago, Illinois



                                               IN THE
     COURT OF APPEALS OF INDIANA

CRIT Corp. and Peoplelink,                                     January 23, 2018
LLC,                                                           Court of Appeals Case No.
Appellants-Plaintiffs,                                         71A03-1705-PL-982
                                                               Appeal from the
         v.                                                    St. Joseph Superior Court
                                                               The Honorable
William J. Wilkinson, Hoosier                                  Jenny Pitts Manier, Judge
Investments, LLC, Peter G.                                     Trial Court Cause No.
Trybula, and Barnes &                                          71D05-1607-PL-240
Thornburg LLP,1
Appellees-Defendants.




1
  The claims against William J. Wilkinson (“Wilkinson”) and Hoosier Investments, LLC were dismissed by
the trial court. However, pursuant to Indiana Appellate Rule 17(A), “[a] party of record in the trial court . . .
shall be a party on appeal.”

Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018                                 Page 1 of 17
      Kirsch, Judge.


[1]   CRIT Corp. and Peoplelink, LLC (together, “Peoplelink”) appeal the trial

      court’s orders dismissing their complaint against attorney Peter G. Trybula and

      his employer Barnes & Thornburg LLP (together, “B&T”) for breach of

      fiduciary duty and for legal malpractice. Peoplelink raises the following

      restated issues for our review:


              I.       Whether the trial court erred in dismissing Peoplelink’s
                       initial complaint, which alleged breach of fiduciary duty
                       arising from an alleged conflict of interest; and


              II.      Whether the trial court erred in dismissing Peoplelink’s
                       second amended complaint, which alleged legal
                       malpractice, fraud, and constructive fraud arising from the
                       same alleged conflict of interest.


[2]   We affirm.


                                  Facts and Procedural History
[3]   Peoplelink is a nationwide staffing solutions business based in South Bend,

      Indiana that matches temporary employees with companies in need of short-

      term labor. CRIT Corp. is a holding company that wholly owns Peoplelink.

      From 2001 to 2011, Peoplelink was privately owned by the Wilkinson family.

      In 2011, the Wilkinson family sold a controlling interest to CRIT, but William

      Wilkinson (“Wilkinson”) continued to serve as Peoplelink’s President and

      Chief Executive Officer until December 31, 2015. Peter G. Trybula (“Trybula”)

      is an attorney with the law firm of B&T. When Wilkinson decided to part ways

      Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 2 of 17
      with Peoplelink, Trybula and B&T represented Wilkinson and acted on his

      behalf in connection with the written agreements, including the non-compete

      between Wilkinson and Peoplelink, whereby Wilkinson separated from the

      company and transferred his interest in Peoplelink to CRIT. Peoplelink and

      CRIT were represented by their own legal counsel (not by B&T) in this “highly

      negotiated transaction that involved sophisticated parties and counsel.”

      Appellants’ App. Vol. II at 172.


[4]   After Wilkinson’s departure, Peoplelink agreed to continue using B&T and

      Trybula as one of its key company counsel. Id. at 178. B&T “continued to be

      actively involved in Peoplelink’s legal affairs, advising Peoplelink on a variety

      of significant matters, including a possible M&A transaction, a dispute

      regarding a prior M&A transaction, the renewal of an existing banking facility,

      and other ordinary course matters.” Id. B&T simultaneously represented

      Wilkinson in connection with his “proposed acquisition” of Ohio-based

      companies, Just in Time and HR Business (together, “JIT”). Id. at 181. Upon

      Wilkinson’s request, B&T acted “on behalf of Wilkinson” and as his attorney in

      connection with his effort to acquire JIT. Id. at 173, 182.


[5]   On July 1, 2016, the President and Chief Operating Officer of Peoplelink, Jay

      Mattern (“Mattern”), received an e-mail from Trybula. The e-mail was

      intended to be sent to Wilkinson and concerned the acquisition of an Ohio-

      based staffing solutions company located just 250 miles from Peoplelink’s

      headquarters in South Bend. Trybula immediately attempted to recall the email

      he had unintentionally sent to Mattern. Attached to the e-mail that Trybula

      Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 3 of 17
      inadvertently sent to Mattern were draft copies of the transaction documents for

      the acquisition of JIT by an investment vehicle owned and controlled by

      Wilkinson. The transaction documents reflected that JIT -- like Peoplelink itself

      – provided temporary staffing solutions. Id. at 65, 78-144. Trybula’s e-mail was

      sent less than seven months after Wilkinson -- while represented by B&T --

      agreed to refrain from engaging in the staffing services industry.


[6]   On July 13, 2016, Peoplelink filed a complaint against Wilkinson for

      anticipatory breach of contract, alleging that Wilkinson breached his non-

      compete agreements by pursuing a proposed acquisition of JIT.2 Peoplelink

      also filed a complaint against B&T, alleging breach of fiduciary duty related to

      its representation of Wilkinson in his proposed acquisition of JIT. The

      complaint specifically alleged that B&T was liable for breaching its fiduciary

      duty by “concurrently representing Peoplelink and Wilkinson in matters in

      which . . . B&T [has] a conflict of interest.” Appellants’ App. Vol. II at 73. B&T

      moved to dismiss the fiduciary duty claim pursuant to Indiana Trial Rules

      12(B)(1) and 12(B)(6). After a hearing, the trial court entered an order on

      November 21, 2016, granting dismissal under both rules. In the order, the trial

      court noted that, “in considering the impropriety of the alleged conduct at issue,

      Peoplelink itself [made] reference to the standard articulated in Rule 1.7” of the




      2
       The trial court dismissed CRIT Corp. and Peoplelink, LLC’s (“Peoplelink”) declaratory judgment claims
      against Wilkinson and Hoosier Investments, LLC and granted summary judgment for Hoosier Investments,
      LLC on the remaining contract claims against it. Appellees’ App. Vol. II at 105. After Wilkinson filed a
      motion to dismiss the remaining claims against him for anticipatory breach of contract, Peoplelink settled
      with Wilkinson, and the claims against him were dismissed. Id. at 106-11.

      Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018                     Page 4 of 17
      Indiana Rules of Professional Conduct, which concerns lawyer conflicts of

      interest. Id. at 18. At the hearing on the motion to dismiss, Peoplelink had

      argued that “there has been a violation of Rule 1.7” and that “Rule 1.7

      prohibits this precise conduct.” Hrg. Tr. Vol. II at 19, 31.


[7]   After the dismissal of its fiduciary duty claim based on an alleged conflict of

      interest, Peoplelink filed a second amended complaint in which it alleged B&T

      had a conflict of interest and breached a fiduciary duty and, therefore, was

      liable for legal malpractice, fraud, and constructive fraud. The complaint

      alleged B&T violated “fiduciary and ethical obligations” and breached a

      “fiduciary duty,” which “misconduct also violated Rule 1.7 of the Indiana

      Rules of Professional Conduct.” Appellants’ App. Vol. II at 187-88, 191. The

      second amended complaint was based on “the same operative facts” as the

      initial complaint. Hrg. Tr. Vol. II at 47, 64, 74.


[8]   B&T moved to dismiss the second amended complaint pursuant to Indiana

      Trial Rules 9(B), 12(B)(1), and 12(B)(6). A hearing was held, and on March 22,

      2017, the trial court entered an order dismissing the second amended complaint

      and stating in part: “After a great deal of consideration and review of the

      materials filed and case law and other authority cited, the Court now Grants the

      Motion to Dismiss filed by [B&T].” Appellants’ App. Vol. II at 20. On April 4,

      2017, the trial court entered Final Judgment for B&T pursuant to Trial Rule

      54(B). Peoplelink now appeals.




      Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 5 of 17
                                        Discussion and Decision
[9]    A motion to dismiss for failure to state a claim tests the legal sufficiency of the

       claim, not the facts supporting it.3 Magic Circle Corp. v. Crowe Horwath, LLP, 72

       N.E.3d 919, 922 (Ind. Ct. App. 2017). Our review of a trial court’s grant or

       denial of a motion based on Indiana Trial Rule 12(B)(6) is de novo. Id. When

       reviewing a motion to dismiss, we view the pleadings in the light most favorable

       to the nonmoving party, with every reasonable inference construed in the

       nonmovant’s favor. Id. Motions to dismiss are properly granted only “when

       the allegations present no possible set of facts upon which the complainant can

       recover.” Id. at 922-23 (quotations omitted).


                                            I.       Initial Complaint
[10]   Peoplelink argues that its initial complaint stated a viable claim for breach of

       fiduciary duty against B&T, and the trial court erred when it dismissed the

       initial complaint. Peoplelink claims that B&T had a conflict of interest in

       representing Peoplelink and, at the same time, providing legal advice to

       Wilkinson on a matter that was adverse to Peoplelink’s interests. Peoplelink

       asserts that, in dismissing the initial complaint, the trial court misapplied our

       Supreme Court’s case of Sanders v. Townsend, 582 N.E.2d 355 (Ind. 1991) and

       that Sanders does not preclude claims for breaches of fiduciary duty merely




       3
        We note that the trial court dismissed Peoplelink’s complaint pursuant to Indiana Trial Rules 12(B)(1) and
       12(B)(6). However, in its Appellants’ Brief, Peoplelink only discusses the standard of review for a dismissal
       under Trial Rule 12(B)(6). We, therefore, also only refer to the standard of review for that rule.

       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018                        Page 6 of 17
       because they violate a rule of professional conduct. Peoplelink alleges that its

       allegation of a breach of fiduciary duty is based on an independent common

       law basis, and under Liggett v. Young, 877 N.E.2d 178 (Ind. 2007), its claim is

       not barred.


[11]   In Sanders v. Townsend, an attorney was sued by his clients, who alleged that he

       “breached his fiduciary duties to them by coercing them into a settlement they

       considered inadequate,” in violation of the Indiana Rules of Professional

       Conduct. Id. at 358-59. On appeal after summary judgment was granted in

       favor of the attorney, our Supreme Court affirmed the trial court, holding “that

       to subject attorneys to suit for constructive fraud based on a violation of the

       fiduciary duties that are regulated under the Rules of Professional Conduct . . .

       would create unreasonable, unwarranted, and cumulative exposure to civil

       liability.” Id. at 359. In reaching its decision, the Supreme Court relied in part

       on the preamble to the Rules of Professional Conduct and stated that the

       preamble makes it “clear that [the Rules] provisions do not purport to create or

       describe any civil liability” and they “are not designed to be a basis for civil

       liability.” Id. The Supreme Court also asserted its exclusive jurisdiction to

       investigate, process, and apply “its Rules through its Disciplinary

       Commission.” Id.


[12]   Liggett v. Young, involved a contract dispute arising from Liggett’s construction

       of a private residence for his attorney, defendant Young and, therefore,

       concerned “the common law prohibition against attorney-client transactions,”

       involving transactions between a lawyer and client “in which the lawyer does

       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 7 of 17
       not render legal services.” Id. at 179, 184. Our Supreme Court reaffirmed

       Sanders and held that liability against an attorney “may not be predicated on a

       claimed violation of a specific professional conduct rule relating to fiduciary

       duties.” Id. at 183. It further held that Indiana law allows a client to “seek

       damages if the attorney’s conduct constitutes a breach of fiduciary duty at

       common law,” but only when there exists an “independent common law basis”

       that is “apart from” a violation of the Rules of Professional Conduct. Id. The

       Liggett court then noted that, apart from the Rules of Professional Conduct,

       Indiana common law has long recognized that such “separate attorney-client

       transactions” that are “entered into during the existence of a fiduciary

       relationship are presumptively invalid as the product of undue influence.” Id. at

       183-84. The Supreme Court acknowledged a long line of Indiana cases

       supporting this presumption and additionally cited to a section of the

       Restatement of The Law Governing Lawyers, all of which addressed the precise

       behavior alleged to be a breach of fiduciary duty in Liggett, and which

       constituted an independent common law basis apart from the violation of the

       Rules of Professional Conduct. Id. at 184.


[13]   Here, in its initial complaint, Peoplelink raised one claim against B&T, alleging

       that B&T “breached [its] fiduciary duties by, among other things, concurrently

       representing Peoplelink and Wilkinson in matters in which Trybula and B&T

       [had] a conflict of interest” and in doing so “elevated the interests of Wilkinson

       above the interest of Peoplelink to the detriment of Peoplelink.” Appellants’

       App. Vol. II at 73. An Indiana attorney’s duty to not represent a client if the

       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 8 of 17
       representation involves a concurrent conflict of interest is found in Rules 1.7

       and 1.8 of the Indiana Rules of Professional Conduct. Peoplelink’s allegation

       of breach of fiduciary duty, therefore, was based on a violation of the fiduciary

       duties regulated by the Rules of Professional Conduct, which both Sanders and

       Liggett preclude.


[14]   While Peoplelink urges that its allegation has an independent common law

       basis apart from the violation of Rules 1.7 and 1.8, as Liggett requires, we find

       that Peoplelink’s initial complaint did not establish an independent common

       law basis for its claim against B&T. In support of its position, Peoplelink relies

       on Blasche v. Himelick, 140 Ind. App. 255, 210 N.E.2d 378 (1965) and Bell v.

       Clark, 653 N.E.2d 483 (Ind. Ct. App. 1995) as supporting an independent

       common law basis for its allegation against B&T. However, both of those cases

       involved attorney self-dealing, which is not the basis of Peoplelink’s allegation

       of breach of fiduciary duty against B&T. See Bell, 653 N.E.2d at 490 (finding

       legal malpractice based on claim by general partner against attorney for

       partnership -- where attorney was also a limited partner in the partnership, had

       adverse financial interests, and double-billed the general partner and

       partnership for attorney fees – based on common law that provides, “A lawyer

       commits a breach of trust going to the very essence of the attorney-client

       relationship when he takes a position adverse to that of his client, or former

       client, in a business transaction. Attorneys must not allow their private interests

       to conflict with those of their client.” (citations omitted)); Blasche, 140 Ind. App.

       at 257-58, 210 N.E.2d at 379-80 (involving action by heirs of deceased grantor


       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 9 of 17
       “attacking the validity of a certain deed by reason of fraud and undue

       influence” where the defendant-attorney prepared and procured the deed

       transferring the real estate to himself instead of the client-grantor’s heirs).

       Peoplelink also cites to Price Waicukauski & Riley, LLC v. Murray, 47 F. Supp. 3d

       810 (S.D. Ind. 2014) for support of an independent common law basis, but in

       that case no breach of fiduciary duty claim was alleged, and therefore, the

       district court did not analyze any such claim either based in the common law or

       on a violation of the Rules of Professional Conduct and did not have the

       opportunity to determine if any such claim fit into the exception carved out in

       Liggett. Price, 47 F. Supp. 3d at 824.


[15]   Additionally, Peoplelink cites to several cases from other jurisdictions as

       support for an independent common law basis for its claim. The first is

       Maritrans GP, Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992), which

       is a case that was handed down prior to Liggett and involved a denial of

       injunctive relief against attorneys for misuse of a former client’s confidences

       while representing another client in “substantially related” matters. Id. at 1279,

       1283-84, 1285. In contrast, in the present case, Peoplelink never alleged in its

       initial complaint that B&T misused client confidences received from Peoplelink,

       or that B&T represented Peoplelink and Wilkinson in substantially related

       matters. See Appellants’ App. Vol. II at 73-74. Additionally, Liggett did not

       involve a request for injunctive relief, but instead, held that Indiana law allows

       a client to “seek damages if the attorney’s conduct constitutes a breach of

       fiduciary duty at common law,” but only when an independent common law


       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 10 of 17
       basis, apart from a violation of the Rules of Professional Conduct, exists.

       Liggett, 877 N.E.2d at 183 (emphasis added). Peoplelink next relies on Airgas,

       Inc. v. Cravath, Swaine & Moore LLP, No. 10-612, 2010 WL 3046586 (E.D. Pa.

       Aug. 3, 2010), which involved a law firm representing one client in a possible

       merger with a second client and also representing the first client in a lawsuit

       against the second client when the hostile takeover failed. Id. at *1. That case

       is distinguishable from the present case because, here, Peoplelink did not allege

       that B&T represented Wilkinson in a lawsuit or any other matter brought

       against Peoplelink. Lastly, Peoplelink cites to Ulico Cas. Co. v. Wilson, Elser,

       Moshowitz, Edelman & Dicker, 843 N.Y.S.2d 749 (N.Y. Sup. Ct. 2007), aff’d as

       modified by 56 A.D.3d 1 (N.Y. App. Div. 2008), but cites to the portion of the

       opinion that was subsequently modified on appeal; specifically, on appeal, the

       court granted defendant’s motion for partial summary judgment to the extent of

       dismissing the claim of breach of fiduciary duty. Additionally, that case dealt

       with the law firm’s dual representation of two clients in claims that implicated

       insurance policies issued by both clients, id. at *8; here, there was no allegation

       that B&T represented both Peoplelink and Wilkinson in the same matter.


[16]   In support of its argument, Peoplelink also points to the language in the

       Preamble of the Rules of Professional Conduct that states, “[A] lawyer’s

       violation of a Rule may be evidence of breach of the applicable standard of

       conduct.” Peoplelink asserts that the trial court ignored this language in its

       dismissal of its initial complaint. However, although this language does appear

       in the Preamble, the text also states that “[v]iolation of a Rule should not itself


       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 11 of 17
       give rise to a cause of action against a lawyer” and “[the Rules] are not

       designed to be a basis for civil liability.” Ind. Professional Conduct Rule

       Preamble 20. Even though the Preamble states that a violation of a Rule may

       be used as evidence of breach of standard of conduct, pursuant to Liggett, an

       independent common law basis separate from the rule violation must be shown.


[17]   In this case, Peoplelink’s allegation of breach of fiduciary duty was only based

       on a violation of the Rules of Professional Conduct, and no independent

       common law basis apart from the rule violation was shown to exist for

       Peoplelink’s allegation. We, therefore, conclude that the trial court did not err

       when it dismissed Peoplelink’s initial complaint alleging breach of fiduciary

       duty.


                                  II.     Second Amended Complaint
[18]   Peoplelink next asserts that, in its second amended complaint, it stated a viable

       claim for legal malpractice on the basis that B&T’s professional competency fell

       below the standard of care possessed by members of the legal profession by

       rendering legal services when they were precluded from doing so due to a

       conflict of interest and that the trial court erred when it dismissed its second

       amended complaint for failure to state a claim. Peoplelink asserts that claims

       for legal malpractice may be premised on circumstances where a lawyer

       breaches his duty of loyalty to a client by representing an interest adverse to his

       client. It further contends that it adequately alleged causation and damages for

       its legal malpractice claim. Peoplelink also argues that the trial court erred in


       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 12 of 17
       dismissing Peoplelink’s claims of fraud and constructive fraud because they

       were pled with sufficient particularity. We disagree.


[19]   Peoplelink’s second amended complaint alleged B&T had a conflict of interest

       and breached a fiduciary duty and, therefore, was liable for legal malpractice,

       fraud, and constructive fraud. The complaint alleged B&T violated “fiduciary

       and ethical obligations” and breached a “fiduciary duty,” which “misconduct

       also violated Rule 1.7 of the Indiana Rules of Professional Conduct.”

       Appellants’ App. Vol. II at 187-88, 191. The second amended complaint was

       based on “the same operative facts” as the initial complaint. Hrg. Tr. Vol. II at

       47, 64, 74. B&T moved to dismiss this second complaint, and the trial court

       granted the dismissal.


[20]   As to the legal malpractice allegation, Peoplelink claimed that B&T was (1)

       “obligated to exercise the degree of knowledge, skill, and competence ordinarily

       possessed by members of the legal profession, including with respect to the

       exercise of [its] duties of loyalty and independent judgment,” (2) and by failing

       to disclose the conflict of interest regarding Wilkerson’s negotiations with JIT,

       and by continuing to represent Wilkinson in such efforts, B&T fell short of

       those obligations and, thus, breached its fiduciary duty of loyalty to Peoplelink.

       Appellants’ App. Vol. II at 187-88. Peoplelink claimed this failure by B&T caused

       Peoplelink to continue its attorney-client relationship with B&T, when

       Peoplelink would have otherwise terminated the relationship and to continue to

       pay for the services of a conflicted and disloyal lawyer. As such, Peoplelink

       contends it should have been entitled to disgorgement of all fees it paid to B&T

       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 13 of 17
       during B&T’s representation of Wilkinson in his efforts to acquire JIT. Id. at

       188.


[21]   To prove a legal malpractice claim, the plaintiff-client must show: (1)

       employment of the attorney (the duty); (2) failure of the attorney to exercise

       ordinary skill and knowledge (the breach); (3) proximate cause (causation); and

       (4) loss to the plaintiff (damages). Beal v. Blinn, 9 N.E.3d 694, 700 (Ind. Ct.

       App. 2014), trans. denied. To establish causation and the extent of harm in a

       legal malpractice case, the client must show that the outcome of the underlying

       litigation would have been more favorable but for the attorney’s negligence. Id.


[22]   Indiana’s notice pleading provision requires only “a short and plain statement

       of the claim showing that the pleader is entitled to relief.” Indiana Trial Rule

       8(A). The plaintiff need not set out in precise detail the facts upon which the

       claim is based, but he must plead the operative facts necessary to set forth an

       actionable claim. Bd. of Comm’rs of Union Cnty. v. McGuinness, 80 N.E.3d 164,

       167 (Ind. 2017) (citing Trail v. Boys & Girls Club of Nw. Ind., 845 N.E.2d 130, 135

       (Ind. 2006)). To establish legal malpractice, a plaintiff is required to allege both

       proximate cause and actual damages. In its second amended complaint,

       Peoplelink did not make any claim that B&T’s alleged malpractice, which was

       based on a conflict of interest, caused Peoplelink to suffer any actual damages.

       See Appellants’ App. Vol. II at 187-89. Instead, Peoplelink’s legal malpractice

       claim sought the disgorgement of attorney fees paid to B&T while B&T was

       representing Wilkinson in his efforts to acquire JIT. Id. at 188-89. “Disgorging

       an agent of all compensation received during a period of employment in which

       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 14 of 17
       the agent was also breaching a fiduciary duty to the principal, without a

       requirement for the principal to demonstrate financial loss, is an equitable, not

       legal remedy.” Wenzel v. Hopper & Galliher, P.C., 830 N.E.2d 996, 1001 (Ind. Ct.

       App. 2005). Peoplelink did not allege any actual damages resulting from B&T’s

       alleged malpractice.4 The trial court properly granted dismissal as to

       Peoplelink’s claim of legal malpractice.


[23]   As to the claim of actual fraud, Peoplelink alleged that, “Trybula and B&T

       concealed or failed to disclose one or more material facts within their

       knowledge by failing to inform Peoplelink about: (a) Wilkinson’s efforts to

       acquire [JIT], and (b) Trybula and B&T’s representation of Wilkinson in

       connection with Wilkinson’s efforts to acquire [JIT].” Appellants’ App. Vol. II at

       189. “The elements of actual fraud are: (i) material misrepresentation of past

       or existing facts by the party to be charged (ii) which was false (iii) which was

       made with knowledge or reckless ignorance of the falseness (iv) was relied upon

       by the complaining party and (v) proximately caused the complaining party

       injury.” Kapoor v. Dybwad, 49 N.E.3d 108, 121 (Ind. Ct. App. 2015) (citing Rice

       v. Strunk, 670 N.E.2d 1280, 1289 (Ind. 1996)), trans. denied. Fraud is not limited

       only to affirmative representations; the failure to disclose all material facts can



       4
         Peoplelink also requested punitive damages in its second amended complaint. However, “Indiana courts
       have long held that punitive damages are not freestanding and that an award of actual damages is a
       prerequisite to an award of punitive damages.” Best Formed Plastics, LLC v. Shoun, 51 N.E.3d 345, 355 (Ind.
       Ct. App. 2016). Accordingly, “punitive damages may not be awarded exclusively and must be ‘in addition
       to’ actual damages.” Id. Therefore, because Peoplelink’s second amended complaint did not request actual
       damages, the request for punitive damages fails.



       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018                     Page 15 of 17
       also constitute actionable fraud. Lawson v. Hale, 902 N.E.2d 267, 275 (Ind. Ct.

       App. 2009). However, under the Rules of Professional Conduct, “[a] lawyer

       shall not reveal information relating to representation of a client unless the

       client gives informed consent. . . .” Prof. Cond. R. 1.6(a). The information that

       Peoplelink asserts should have been disclosed by B&T was obtained by B&T as

       part of its representation of Wilkinson, and therefore, B&T had no duty to

       disclose, and in fact, was prohibited by the Rules of Professional Conduct from

       disclosing, this information related to its representation of Wilkinson. The trial

       court properly dismissed Peoplelink’s claim of fraud in its second amended

       complaint.


[24]   As to constructive fraud, Peoplelink alleged that “Trybula and B&T concealed

       or failed to disclose one or more material facts within their knowledge by failing

       to inform Peoplelink about: (a) Wilkinson’s efforts to acquire [JIT]; and (b)

       Trybula and B&T[’s] representation of Wilkinson in connection with

       Wilkinson’s efforts to acquire [JIT][,]” and that Trybula and B&T had a duty to

       disclose these material facts to Peoplelink as a result of [their] fiduciary

       relationship with Peoplelink.” Appellants’ App. Vol. II at 191. Peoplelink’s

       constructive fraud claim was pled “in the alternative” to the actual fraud claim

       and was based on the same alleged “duty to disclose.” Id. As previously

       discussed in reference to actual fraud, B&T had no duty to disclose information

       learned through its representation of Wilkinson, and was actually prohibited

       under the Rules of Professional Conduct from disclosing such information that

       had been gleaned from the representation of a client. See Prof. Cond. R. 1.6(a).


       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 16 of 17
       The trial court properly dismissed Peoplelink’s claim of constructive fraud in its

       second amended complaint.


[25]   Based on this, we conclude that the trial court did not err in granting B&T’s

       motion to dismiss Peoplelink’s second amended complaint. We, therefore,

       affirm the trial court’s dismissal of both the initial complaint and the second

       amended complaint.


[26]   Affirmed.


       Najam, J., and Brown, J., concur.




       Court of Appeals of Indiana | Opinion 71A03-1705-PL-982 | January 23, 2018   Page 17 of 17
