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



Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017        Page 1 of 20
      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




      Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 2 of 20
      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.


      Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017              Page 3 of 20
      (¶¶ 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

      Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 4 of 20
      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

      Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 5 of 20
       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

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 6 of 20
       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,




       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 7 of 20
       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

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 8 of 20
       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.

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017                   Page 9 of 20
                                 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.




       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 10 of 20
                                      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



       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 11 of 20
       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

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 12 of 20
       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).

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017               Page 13 of 20
       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


       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 14 of 20
       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.
       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 15 of 20
[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.


       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017         Page 16 of 20
                     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

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 17 of 20
       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

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017   Page 18 of 20
       (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.

       Court of Appeals of Indiana | Memorandum Decision 45A03-1608-PL-1860 | June 2, 2017            Page 19 of 20
       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
