       RECOMMENDED FOR FULL-TEXT PUBLICATION
            Pursuant to Sixth Circuit Rule 206            2    The Andersons, Inc. v. Consol, Inc.          No. 02-3417
    ELECTRONIC CITATION: 2003 FED App. 0385P (6th Cir.)
                File Name: 03a0385p.06                    James R. Miller, DICKIE, McCAMEY & CHILCOTE,
                                                          Pittsburgh, Pennsylvania, for Appellee.
UNITED STATES COURT OF APPEALS                                                _________________
              FOR THE SIXTH CIRCUIT                                               OPINION
                _________________                                             _________________

 THE ANDERSONS, INC.,            X                           KENNEDY, Circuit Judge. Plaintiff The Andersons, Inc.
                                  -                       (plaintiff) appeals the district court’s award of summary
         Plaintiff-Appellant,                             judgment for defendant Consol, Inc. (defendant) on plaintiff’s
                                  -
                                  -  No. 02-3417          claims of unjust enrichment, promissory estoppel, and
           v.                     -                       intentional and/or negligent misrepresentation on the ground
                                   >                      that genuine issues of material fact exist to support such
                                  ,                       claims. Because we find that, taking plaintiff’s factual
 CONSOL, INC.,                    -
          Defendant-Appellee. -                           allegations as true, no genuine issues of material fact exist to
                                                          support any of those claims, we affirm the district court’s
                                 N                        award of summary judgment to defendant.
     Appeal from the United States District Court
      for the Northern District of Ohio at Toledo.                 I. Jurisdiction and Procedural History
     No. 00-07290—James G. Carr, District Judge.
                                                            Plaintiff filed this action against defendant in the Lucas
                 Argued: July 31, 2003                    County Court of Common Pleas. Defendant removed the
                                                          case to the United States District Court for the Northern
         Decided and Filed: October 31, 2003              District of Ohio based on diversity jurisdiction. Plaintiff’s
                                                          complaint alleged claims of breach of commitments and
 Before: KENNEDY, GILMAN, and GIBBONS, Circuit            understandings, unconscionable conduct, unjust enrichment,
                    Judges.                               reasonable reliance/promissory estoppel, and intentional
                                                          and/or negligent misrepresentation arising out of the parties’
                  _________________                       negotiations for defendant’s lease of rail cars from plaintiff.
                                                          On January 25, 2002, the district court granted defendant’s
                       COUNSEL                            renewed motion for summary judgment on all of plaintiff’s
                                                          claims. Plaintiff appeals the grant of summary judgment only
ARGUED: James R. Jeffery, SPENGLER NATHANSON,             with respect to its claims of unjust enrichment, promissory
Toledo, Ohio, for Appellant. Rodger L. Puz, DICKIE,       estoppel, and intentional and/or negligent misrepresentation.
McCAMEY & CHILCOTE, Pittsburgh, Pennsylvania, for
Appellee. ON BRIEF: James R. Jeffery, SPENGLER
NATHANSON, Toledo, Ohio, for Appellant. Rodger L. Puz,


                            1
No. 02-3417         The Andersons, Inc. v. Consol, Inc.        3    4     The Andersons, Inc. v. Consol, Inc.          No. 02-3417

                           II. Facts                                PEPCO. In early November of 1998, defendant learned that
                                                                    it had received the PEPCO contract. On November 18, 1998,
  The following is plaintiff’s version of the facts in support      Dillon sent Brown a letter confirming defendant’s intent to
of its claims. Defendant is currently a publicly-held               lease 131 specified rail cars from plaintiff for a term of six
corporation that mines, processes, and markets coal from            years at a rental rate of $389 per rail car per month, with an
various locations throughout the United States. During the          option to end the lease after three years. However, in that
relevant period for purposes of this litigation, defendant was      same letter of intent, Dillon expressly conditioned any such
a privately-held corporation. Plaintiff is a publicly-held          lease transaction upon PEPCO’s formal execution of its
corporation that, among other business activities, sells, leases,   agreement with defendant, giving rise to defendant’s need to
and repairs railroad cars.                                          lease the rail cars, and “upon the successful negotiation of a
                                                                    definitive lease agreement containing terms and conditions
  NationsBank, a lender of plaintiff, notified plaintiff of         . . . [that] are acceptable to” defendant’s senior management.
defendant’s need to lease rail cars. On July 21, 1998,              At this point, Dillon still retained plaintiff’s standard, full-
plaintiff’s representatives met with James Dillon, defendant’s      service lease agreement and rider. Plaintiff began to prepare
employee, to discuss defendant’s possible lease of plaintiff’s      for placing the rail cars into defendant’s service. Dillon
rail cars. Dillon informed plaintiff’s representatives that         declined plaintiff’s offer to allow defendant to inspect the rail
defendant was interested in lease pricing for up to 240 rail        cars at their storage site in Indiana. Per Dillon’s request,
cars because defendant wished to bid on a coal requirements         plaintiff sent some rail cars to a shop in Altoona,
contract with Potomac Electric Power Company (PEPCO),               Pennsylvania to repair them before they went into service.
which would require defendant to furnish the rail cars              Plaintiff also moved some rail cars to various shops
necessary for coal transportation. On August 13, 1998,              throughout Ohio and Pennsylvania.
plaintiff sent defendant a lease proposal for 240 rail cars at a
rental rate of $395 per rail car per month. On September 2,            At defendant’s request, plaintiff agreed to allow defendant
1998, per Dillon’s request, Thomas Connolly, plaintiff’s            to inspect the rail cars at the Altoona repair shop. Dillon
employee, sent Dillon a copy of plaintiff’s standard, full-         testified that defendant desired this inspection before the rail
service lease agreement and rider. In reviewing the lease           cars’ repair because PEPCO and defendant were concerned
agreement to determine if it contained any provisions that          that the rail cars would be in poor condition. On December
would affect the coal’s transportation, Gerald Rutka,               11, 1998, plaintiff leased an airplane, flew to Pittsburgh,
defendant’s employee, found none. Rutka used the pricing            Pennsylvania to pick up defendant’s representatives, and then
information in plaintiff’s lease agreement to calculate             flew to Altoona. During the inspection, plaintiff first learned
defendant’s requirements regarding the lease of the rail cars       that defendant intended to rotary dump the rail cars rather
for the PEPCO bid. In mid-September of 1998, Dillon                 than unload them from the bottom–a process that would
informed Charles Brown, plaintiff’s employee, that defendant        require plaintiff to bolt the bottoms of the rail cars shut.
had not received the PEPCO bid but that defendant intended          Although plaintiff reasonably believed that the rail cars only
to bid on another PEPCO coal contract requiring up to 131           needed patching, defendant demanded that plaintiff re-sheet
rail cars.                                                          the rail cars, a repair which is considerably more expensive
                                                                    than patching. Plaintiff ultimately agreed to bolt the bottoms
 Plaintiff submitted a new lease rate of $389 per rail car per      and re-sheet the rail cars without raising defendant’s lease
month, which defendant used in formulating its second bid to
No. 02-3417         The Andersons, Inc. v. Consol, Inc.        5    6       The Andersons, Inc. v. Consol, Inc.                No. 02-3417

rate. Because of this work, defendant agreed to extend the          all of those that defendant requested. After being unable to
lease’s start date from January 1, 1999 to March 1, 1999.           reach Dillon to discuss these revisions, Connolly left Dillon
                                                                    a message that the department was closing at noon on
   While plaintiff and defendant were working through the           December 24, 1998, but provided his home phone number so
“mechanical issues” regarding the 131 rail cars, they were          that Dillon could reach him. On December 24, 1998, after
negotiating a written lease. On November 23, 1998, Dillon           4:00 pm, Dillon left a message in Connolly’s voice mail that
sent plaintiff defendant’s requested changes to the standard,       a deal no longer existed due to plaintiff’s December 23, 1998
full-service lease and rider. On December 10, 1998, after           version of the lease that left several of its provisions still in
reviewing these proposed changes, plaintiff sent Dillon “a          dispute. Four of the lease provisions that defendant disputed
revised lease incorporating a number of those [requested]           involved OT-5 approval,1 tax liability indemnification,
changes which were acceptable to” plaintiff. Dillon and             property and liability insurance, and change in defendant’s
Connolly spoke over the telephone concerning the December           ownership. According to plaintiff, defendant fabricated these
10, 1998 lease revisions. In mid-December of 1998,                  issues, which should not have been in dispute at all, by
defendant learned that the Public Utility of New Hampshire,         misrepresenting and withholding facts so as to “frustrate any
Bow Terminal, was not renewing its contract with defendant          reasonable chance to reach agreement between the parties.”
and, consequently, that the 100 rail cars that defendant leased
from GATX at the rate of $315 per car per month for coal                                        III. Analysis
transportation to the public utility would become available on
December 31, 1998. According to plaintiff, when defendant             We review the district court’s order granting summary
learned that 100 rail cars were available at a cheaper lease rate   judgment de novo. Williams v. Mehra, 186 F.3d 685, 689
from GATX, defendant no longer desired to lease the 131 rail        (6th Cir. 1999). Summary judgment is proper “if the
cars from plaintiff and, thus, frustrated and then unilaterally     pleadings, depositions, answers to interrogatories, and
terminated its on-going lease negotiations with plaintiff. To       admissions on file, together with affidavits, if any, show that
accomplish this alleged end, Dillon faxed a letter dated            there is no genuine issue of material fact and that the moving
December 18, 1998 to plaintiff stating:                             party is entitled to a judgment as a matter of law.” Fed. R.
                                                                    Civ. P. 56(c). We must believe the non-moving party’s
  On two occasions, CONSOL has had phone                            evidence, and draw all justifiable inferences in his favor.
  conversations with The Andersons to elaborate on one              Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986).
  another’s positions rectifying some points but leaving            Moreover, we must view the inferences that we draw from
  CONSOL with the impression that The Andersons will                those underlying facts in the light most favorable to the non-
  not acceptably alter or remove several provisions to              moving party. Matsushita Elec. Indus. Co. v. Zenith Radio
  which CONSOL will not agree.                                      Corp., 475 U.S. 574, 587 (1986). A “material” fact is one
  If this impression is correct, we need to recognize this          “that might affect the outcome of the suit.” Anderson, 477
  fact, part company and go our separate ways. If this
  impression is not correct, we need to come to agreement
  by December 24, 1998.                                                 1
                                                                          As a prerequisite to running rail cars on interstate railways, the
On December 23, 1998, Connolly faxed Dillon a revised               railroads require that the operators of such rail cars o btain the ir OT -5
                                                                    app roval, which depends upon the operators demo nstrating that they have
version of the lease, incorporating additional changes, but not     sufficient track storage capacity for the rail cars when they are idle.
No. 02-3417          The Andersons, Inc. v. Consol, Inc.         7    8     The Andersons, Inc. v. Consol, Inc.          No. 02-3417

U.S. at 248. A “genuine” issue exists if “the evidence is such        plaintiff], it would be unconscionable for the . . . [defendant]
that a reasonable jury could return a verdict for the                 to retain the benefit.” Id. (internal quotation marks omitted).
nonmoving party.” Id.
                                                                         Plaintiff claims that genuine issues of material fact exist as
  In diversity cases, the district court is to apply the choice of    to whether: 1) plaintiff conferred the benefit of securing the
law rules of the state in which the court sits. Klaxon Co. v.         PEPCO contract on defendant when plaintiff gave defendant
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). The                 a lease rate for 131 rail cars because defendant needed that
district court held that Ohio law governs plaintiff’s claims.         rate to calculate its PEPCO bid; and 2) plaintiff has superior
Plaintiff does not appeal this determination.                         equity rendering defendant’s retention of that benefit
                                                                      unconscionable because defendant had declined plaintiff’s
                    A. Unjust Enrichment                              request for defendant to inspect the rail cars in Indiana;
                                                                      plaintiff, at defendant’s request, sent some of the rail cars to
   To recover for unjust enrichment under Ohio law, a                 Altoona, Pennsylvania, for repair; plaintiff picked up the
plaintiff must prove that: (1) the plaintiff conferred a benefit      defendant’s representatives in Pittsburgh in its chartered
upon the defendant; (2) the defendant knew of such benefit;           airplane so that defendant could conduct its requested
and (3) the defendant retained the benefit “under                     inspection in Altoona; and, lastly, plaintiff, per defendant’s
circumstances where it would be unjust to do so without               demands, agreed to bolt the bottom of and re-sheet the rail
payment.” Brown-Graves Co. v. Obert, 648 N.E.2d 1379,                 cars without raising defendant’s lease rate–an undertaking
1383 (Ohio Ct. App. 1994). The plaintiff must show that the           that cost $78,300.00. In short, plaintiff argues: “Consol took
substantial benefit to the defendant is “causally related” to the     Andersons’ lease rate and negotiated a sales contract for coal
substantial detriment to the plaintiff. Gaier v. Midwestern           with PEPCO, then dumped Andersons when it learned it
Group, 601 N.E.2d 624, 627 (Ohio Ct. App. 1991). In                   could lease rail cars for a cheaper rate, leaving Consol with a
determining whether a defendant received an unjust or                 windfall of profit and Andersons with a pile of damages.”
unconscionable benefit, we must consider whether “the
defendant was the party responsible for the plaintiff’s                  Even taking all of plaintiff’s factual allegations as true, we
detrimental position.” U.S. Health Practices, Inc. v. Blake,          find that plaintiff’s unjust enrichment claim fails as a matter
No. 00AP-1002, 2001 WL 277291, at *2 (Ohio Ct. App.                   of law. Assuming arguendo that defendant’s ability to secure
March 22, 2001) (holding that the plaintiff’s responsibility for      the PEPCO bid were a cognizable benefit that plaintiff had
his detrimental position breaks the requisite causal connection       conferred on defendant by giving it a lease rate, plaintiff has
between the defendant’s benefit and the plaintiff’s loss).            not demonstrated the requisite causal connection between this
“The doctrine of unjust enrichment provides an equitable              benefit and any alleged detriment to plaintiff. Rather, the
remedy imposed to prevent injustice.” Giles v. Hanning, No.           only detriment that plaintiff establishes is the expenses that it
2001-P-0073, 2001 WL 1173512, at *2 (Ohio Ct. App.                    incurred in preparing to lease its rail cars to defendant; yet,
May 31, 2002). Thus, the plaintiff must show enrichment that          such a detriment stems from defendant’s failure ultimately to
is unjust. Id. It is insufficient for the plaintiff to prove          enter into a lease agreement with plaintiff, not from
merely that he conferred a benefit upon the defendant. Katz           defendant’s use of plaintiff’s tendered lease rate in its PEPCO
v. Banning, 617 N.E.2d 729, 735 (Ohio Ct. App. 1992).                 bid. If, after plaintiff had incurred these expenses, defendant
Rather, the plaintiff must prove that, under the circumstances,       had actually entered into a lease agreement with plaintiff in
the plaintiff has a “superior equity so that, as against . . . [the   executing its PEPCO contract, defendant’s use of plaintiff’s
No. 02-3417         The Andersons, Inc. v. Consol, Inc.      9    10       The Andersons, Inc. v. Consol, Inc.              No. 02-3417

lease rate would not have harmed plaintiff. As the requisite         As to the first element, plaintiff contends that, as of
causal chain between the alleged benefit that plaintiff           November 18, 1998, plaintiff and defendant had agreed that
conferred on defendant and plaintiff’s alleged detriment is       defendant would lease from plaintiff 131 specified rail cars at
absent, plaintiff’s unjust enrichment claim necessarily fails.    a rate of $389 per car per month, with defendant’s ability to
 Alternatively, we note that it is hardly unconscionable or       end the lease after three years and with the anticipated lease
“unjust” for a company to secure a third-party requirements       start date of January 1, 1999.2 In support of this argument,
contract by using the estimate that a supplier provided           plaintiff simply cites to Dillon’s letter of intent, which
without compensating that supplier for such an estimate. See      plaintiff received on November 18, 1998 and which informs
W.F. Holt Co. v. A&E Elec. Co., Inc., 665 S.W.2d 722, 738         plaintiff of defendant’s intention to lease the 131 cars under
(Tenn. Ct. App. 1983) (A subcontractor to which a general         the above-mentioned terms. Revealing the on-going and
contractor did not award a bid is not “entitled to                uncertain outcome of such negotiations, however, Dillon, in
compensation in quantum meruit for its efforts in assisting       that same letter, states that defendant is “in the process of
. . .[that] general contractor prepare a price on a negotiated    reviewing” plaintiff’s lease form and that defendant “will
project” because it “would unfairly hamstring general             provide . . . [its] comments and suggestions for . . .
contractors and owners” in their negotiation of contracts and     [plaintiff’s] consideration shortly.” The intent letter explicitly
their solicitation of subcontractors’ proposals; rather, the      conditions defendant’s entrance into a lease agreement on
subcontractor’s efforts are merely an attempt to obtain           “successful” negotiation of a “definitive” lease agreement.
business and its incurred costs “are merely costs of doing        The word successful means “having the desired effect.”
business . . .[that] may or may not result in the subcontractor   Webster’s Third New International Dictionary 2282 (1986).
obtaining the contract.”).                                        Thus, the broad and amorphous condition of “successful
                                                                  negotiation” would presumably allow defendant to abandon
                  B. Promissory Estoppel                          negotiations if defendant no longer desired to enter into a
                                                                  lease agreement with plaintiff. At that point, any negotiations
    Under Ohio’s promissory estoppel doctrine, a promise that     with plaintiff would no longer have defendant’s “desired
the promisor “should reasonably expect to induce action or        effect.” Moreover, by the letter’s express terms, defendant
forbearance on the part of the promisee or a third person and     need not have entered into a lease agreement with plaintiff if
. . . [that] does induce such action or forbearance is binding”   the proposed lease contained a term or condition that
if one can avoid injustice only by enforcing the promise.         defendant’s senior management deemed unacceptable. The
McCrosky v. Ohio, 456 N.E.2d 1204, 1205 (Ohio 1983)               word definitive means “serving to supply a final answer,
(adopting Restatement (Second) of Contracts § 90 (1973))          solution, or evaluation and to end an unsettled, unresolved
(internal quotation marks omitted). To establish a claim of       condition.” Webster’s at 592. The condition of a “definitive
promissory estoppel, the plaintiff must prove: “[1] a promise,    lease agreement” suggests that defendant’s intention to enter
clear and unambiguous in its terms; [2] reliance [on the          into the specified lease agreement, per the intent letter, was
promise] by the party to whom the promise is made; [3] that
the reliance was reasonable and foreseeable; and [4] that the
party claiming estoppel was injured by the reliance.” Rigby            2
v. Fallsway Equip. Co., Inc., 779 N.E.2d 1056, 1061 (Ohio               Plain tiff argues that defendant promised to enter into a lease
Ct. App. 2002); Connolly v. Malkamaki, No. 2001-L-124,            agreement, not that any lease agreemen t actually existed; as the district
                                                                  court aptly noted, plaintiff likely makes this novel distinctio n so as to
2002 WL 31813040, at *3 (Ohio Ct. App. Dec. 13, 2002).            avoid statute-of-frauds issues.
No. 02-3417         The Andersons, Inc. v. Consol, Inc.       11    12   The Andersons, Inc. v. Consol, Inc.          No. 02-3417

not yet settled, resolved, or final–it was not, itself, the         simply setting out the minimum physical requirements that
“definitive lease agreement” towards which the parties were         any rail cars must meet for defendant to desire to lease them.
to negotiate. Because defendant’s intent letter, at a minimum,      Plaintiff had the choice of whether to accommodate
is ambiguous as to whether defendant promised to enter into         defendant’s demands so as to generate good will and/or
a lease agreement with plaintiff, any such promise is not           further the execution of any definitive lease agreement.
“clear and unambiguous” for purposes of promissory
estoppel.                                                             Plaintiff underscores that defendant sabotaged the parties’
                                                                    lease negotiations so as to avail itself of the lower lease rate
   Presumably, given this conditional, intent-to-lease letter,      from GATX, and that defendant’s senior management did not
plaintiff contends that defendant’s conduct created a genuine       genuinely find the lease’s terms unacceptable. This is
issue of material fact as to whether defendant clearly and          tantamount to an argument that defendant, in promising to
unambiguously promised to lease 131 rail cars from plaintiff.       enter into the lease agreement subject only to specified
As evidence, plaintiff asserts that it had to “move the rail cars   conditions, thereby promised to negotiate in good faith and
from storage to rail shops for repair and then into Consol’s        not to fabricate the existence of one of these conditions
service” so as to meet the lease’s starting date, and that          nullifying such entrance into the agreement. The district
plaintiff, in complying with defendant’s demands, used              court rejected plaintiff’s claim of bad-faith negotiations, upon
defendant’s preferred repair shop and made costly repairs,          which plaintiff’s claim for breach of commitments and
which plaintiff believed unnecessary. According to plaintiff,       understandings hinged, on the ground that plaintiff had not
this reveals that “Consol did not act as if its promise to lease    shown that Ohio recognizes such a cause of action and that,
the rail cars from Andersons was conditional until Consol did       in any event, plaintiff’s amended complaint did not allege
not need to consummate the lease with Andersons.” Yet, in           such a claim. Plaintiff did not appeal from the dismissal of
its brief, plaintiff argues that it relied on defendant’s           that claim. Consequently, we will not entertain plaintiff’s
“promise in beginning to prepare the rail cars for lease”–by        promissory estoppel claim sounding in good-faith
moving, re-sheeting, and storing the rail cars–and incurred         negotiations, regardless of whatever merits it may have under
injury via such reliance. However, plaintiff’s submission to        Ohio law.
defendant’s demands cannot serve as the requisite clear and
unambiguous promise on which plaintiff relied in submitting           Even if we were to construe plaintiff’s promissory estoppel
to such demands in the first place as, following that logic,        claim to be that, per the intent letter, defendant made a clear
plaintiff’s alleged reliance would precede any such promise.        and unambiguous promise to enter into the lease agreement
Alternatively, defendant’s demands that plaintiff bolt and re-      subject only to specified conditions and that those conditions
sheet the rail cars and that plaintiff use defendant’s preferred    never, in fact, occurred because PEPCO executed its contract
repair shop cannot constitute a clear and unambiguous               and defendant’s senior management truthfully found
promise that defendant would enter into a lease agreement           acceptable the lease’s contested “terms and conditions,” such
with plaintiff, especially given the context of the conditional     a promissory estoppel claim would still fail. In incurring
letter of intent expressly disclaiming any such per se promise.     preparatory expenses without securing defendant’s
Rather, such demands simply reflect that the parties were, in       indemnification, plaintiff could not have reasonably relied on
fact, in the process of negotiating toward their possible           any promise by defendant to enter into a lease agreement
entrance into a lease agreement. For example, in demanding          subject only to specified conditions given the possibility that
that plaintiff bolt and re-sheet the rail cars, defendant was       defendant’s senior management could have genuinely found
No. 02-3417             The Andersons, Inc. v. Consol, Inc.             13     14    The Andersons, Inc. v. Consol, Inc.          No. 02-3417

unacceptable at least one term or condition that plaintiff                     action for fraud/intentional misrepresentation may lie “not
would be unwilling to modify.3 See Nilavar v. Osborn, 711                      only as a result of affirmative misrepresentations, but also for
N.E.2d 726, 737 (Ohio Ct. App. 1998) (concluding that where                    negative ones, such as the failure of a party to a transaction
the defendant made a clear and unambiguous promise to                          . . . fully [to] disclose facts of a material nature where there
submit a bid of employment to a hospital on behalf of                          exists a duty to speak.” Textron Fin. Corp. v. Nationwide
plaintiff and other doctors, plaintiff, as a matter of law, did                Mutual Ins. Co., 684 N.E.2d 1261, 1269 (Ohio Ct. App.
not reasonably rely on the defendant’s submission of the bid                   1996).        Under Ohio’s distinct claim of negligent
given that the “bid might have been rejected”); CSX Transp.,                   misrepresentation,
Inc. v. Occidental Chem. Corp., 130 F. Supp. 2d 936, 947-49
(S.D. Ohio 2001) (granting summary judgment for plaintiff as                     [o]ne who, in the course of his business, profession, or
no genuine issue of reasonable reliance existed).                                employment, or in any other transaction in which he has
                                                                                 a pecuniary interest, supplies false information for the
    C. Intentional and/or Negligent Misrepresentation                            guidance of others in their business transactions . . . is
                                                                                 subject to liability for pecuniary loss caused to them by
   “The law of misrepresentation protects a plaintiff’s interest                 their justifiable reliance upon the information, if he fails
in ‘formulating business judgments without being misled by                       to exercise reasonable care or competence in obtaining or
others into making unwise decisions . . . [that] result in                       communicating the information.
financial loss.’” Carpenter v. Scherer-Mountain Ins. Agency,
733 N.E.2d 1196, 1205 (Ohio Ct. App. 1999). To establish                       Delman v. City of Cleveland Heights, 534 N.E.2d 835, 838
a claim for intentional misrepresentation/fraud under Ohio                     (Ohio 1989) (internal quotation marks and original emphasis
law, the plaintiff must show:                                                  omitted). As with a fraud claim, the plaintiff must also show
                                                                               that the misrepresentation on which he justifiably relied was
  (a) a representation or, where there is a duty to disclose,                  material. Gem Sav. Ass’n v. Aqua Sportsman, Inc., No. C-
  concealment of a fact, (b) which is material to the                          910361, 1992 WL 192500, *2 (Ohio Ct. App. Aug. 12, 1992).
  transaction at hand, (c) made falsely, with knowledge of                     Unlike a fraud claim, however, a negligent misrepresentation
  its falsity, or with such utter disregard and recklessness                   claim only lies for an affirmative false statement, not an
  as to whether it is true or false that knowledge may be                      omission. Leal v. Holtvogt, 702 N.E.2d 1246, 1253 (Ohio Ct.
  inferred, (d) with the intent of misleading another into                     App. 1998).
  relying upon it, (e) justifiable reliance upon the
  representation or concealment, and (f) a resulting injury                      Plaintiff contends that defendant made certain
  proximately caused by the reliance.                                          misrepresentations and omissions that “were critical to the
                                                                               lease transactions” between the parties. Plaintiff clarifies that
Id. at 1204 (internal quotation marks omitted) (observing that                 such misrepresentations were material to the “lease
the existence of fraud is generally a question of fact). An                    negotiations.” As damages resulting from defendant’s alleged
                                                                               misrepresentations and omissions, plaintiff points to its “lost
                                                                               profit or rental income” as well as the costs of travel,
    3
      W e note that plaintiff has not alleged and no evidence shows that       “resheeting the rail cars to satisfy . . . [defendant’s]
defendant mad e a clea r and unam biguo us pro mise that defendant would       requirements, freight and switching to move the rail cars to
bear plaintiff’s preparatory expen ses, should the parties fail to execute a
definitive lease agreem ent.
No. 02-3417           The Andersons, Inc. v. Consol, Inc.          15     16   The Andersons, Inc. v. Consol, Inc.          No. 02-3417

the repair facilities, [and] storage . . . of the rail cars as a result   misrepresented the unacceptability of the OT-5 provision
of . . . [defendant’s] failure to enter into the lease.”                  when it was, in truth, a non-issue, plaintiff’s negligent
                                                                          misrepresentation claim must fail since, as explained above,
  First, plaintiff claims that defendant failed to disclose that          plaintiff has not shown that plaintiff ever relied on such a
defendant had received verbal OT-5 approval to run the rail               misrepresentation.
cars on the railroad where the rail cars where to be in service.
According to plaintiff, defendant wanted to delete the lease                Second, plaintiff cursorily contends that defendant failed
provision that required defendant to obtain such OT-5                     “to accept lease provisions similar to [those of] other rail
approval. Yet, plaintiff took the position that, although                 equipment lessors of” defendant. For purposes of plaintiff’s
plaintiff was responsible for the rail cars’ mechanical                   negligent and/or intentional misrepresentation claims, we
conditions, only defendant, not plaintiff, was able to                    infer from this argument the allegation that defendant
demonstrate to the railroad granting OT-5 approval that                   misrepresented the unacceptability of such lease provisions.
defendant had track storage capacity for out-of-service rail              Yet, even taking plaintiff’s factual allegations as true, such
cars–a necessary requirement for obtaining and retaining OT-              negligent and/or intentional misrepresentation claims
5 approval. Plaintiff claims that, in any event, defendant had            necessarily fail because, as with the OT-5 claim, plaintiff has
obtained verbal OT-5 approval from the railroad before                    not shown that plaintiff relied on any of these alleged
defendant unilaterally terminated lease negotiations with                 misrepresentations to its detriment. For example, plaintiff
plaintiff. However, even assuming that defendant failed to                asserts that defendant rejected the lease provision requiring
inform plaintiff that defendant had received verbal OT-5                  defendant to indemnify plaintiff from any tax liability that
approval where it had a duty to do so, plaintiff’s negligent              plaintiff would suffer due to defendant’s use of the rail cars
and/or intentional misrepresentation claims concerning such               outside of the continental United Stated during the lease term.
an omission necessarily fail.           Plaintiff’s intentional           Plaintiff claims that this dispute was actually a “non-issue”
misrepresentation claim cannot lie because plaintiff has not              because defendant never intended to use the rail cars outside
shown that plaintiff ever relied on defendant’s alleged                   of the continental United States and defendant had previously
omission concerning OT-5 approval. Per plaintiff’s own                    agreed to “this same or similar” provision with another rail
concession, at issue is defendant’s unreasonable refusal “to              car lessor. Thus, plaintiff’s claim is that defendant acted to
accept . . . [plaintiff’s] proposed lease language concerning             plaintiff’s detriment by misrepresenting the unacceptability of
OT-5” approval.           In essence, plaintiff’s intentional             the tax indemnification provision so as to frustrate and,
misrepresentation claim is not that plaintiff relied on this              ultimately, to terminate negotiations. Because plaintiff would
omission by acting to its detriment, but that defendant acted             not have done anything differently had defendant not
to plaintiff’s detriment in perpetrating this omission so as to           misrepresented the unacceptability of the tax indemnification
frustrate and, ultimately, to terminate negotiations. In other            provision, plaintiff could not have detrimentally relied on
words, because plaintiff would not have done anything                     such a misrepresentation.
differently had defendant disclosed its verbal OT-5 approval,
plaintiff could not have detrimentally relied on such an                    Third, plaintiff asserts that defendant misrepresented that it
omission. Because it is based on an alleged omission,                     was completely self-insured and failed to disclose to plaintiff
plaintiff’s negligent misrepresentation claim cannot lie. Yet,            that defendant carried commercial property and liability
even if we were to construe plaintiff’s negligent                         insurance with large deductibles. Defendant objected to the
misrepresentation claim to allege that defendant affirmatively            lease provision that required defendant to maintain
No. 02-3417         The Andersons, Inc. v. Consol, Inc.     17    18       The Andersons, Inc. v. Consol, Inc.                No. 02-3417

commercial property and liability insurance during the lease         Plaintiff’s intentional and negligent misrepresentation
term. Plaintiff’s negligent and intentional misrepresentation     claims concerning defendant’s commercial liability insurance
claims with respect to either property insurance or liability     also fail as a matter of law. Plaintiff’s intentional
insurance fail as a matter of law, even assuming, arguendo,       misrepresentation claims based on defendant’s alleged
that defendant misrepresented that it was completely self-        misrepresentation that it carried no commercial liability
insured and that it had a duty to disclose its insurance          insurance and defendant’s failure to disclose its commercial
coverage. See Blon v. Bank One, Akron, 519 N.E.2d 363, 367        liability insurance must fail because plaintiff did not
(Ohio 1988) (A party to a business transaction may have a         detrimentally rely on either this alleged misrepresentation or
duty of full disclosure “where such disclosure is necessary to    omission and, alternatively, neither the misrepresentation nor
dispel misleading impressions that” a “partial revelation of      the omission was material to the lease negotiations.
the facts” created or might have created.) (internal quotation    Plaintiff’s unsubstantiated assertions that defendant’s liability
marks omitted).                                                   insurance coverage “should have been a factor in lease
                                                                  negotiations” or “could have resolved the parties’ dispute” are
   Concerning defendant’s property insurance, plaintiff’s         insufficient to establish plaintiff’s requisite reliance.
intentional misrepresentation claims based on defendant’s         Nowhere does plaintiff contend that it relied on either the
alleged misrepresentation that it carried no commercial           misrepresentation or the omission by not modifying the
property insurance and defendant’s failure to disclose its        lease’s liability insurance provision to permit defendant’s
commercial property insurance must fail because plaintiff did     existent liability insurance coverage. In fact, the record
not detrimentally rely on either the alleged misrepresentation    reveals that the reason, if any, that plaintiff did not modify the
or the omission. Because plaintiff’s December 23, 1998            liability insurance provision is that it relied on defendant’s
version of the lease permitted defendant to self-insure its       alleged omission regarding its planned IPO, not on
entire property insurance obligation despite defendant’s          defendant’s alleged misrepresentation or omission regarding
alleged misrepresentation or omission, plaintiff maintains that   its liability insurance. Alternatively, because the deductibles
the dispute over that insurance provision was a “non-issue.”      on the commercial liability insurance that defendant carried
Thus, with respect to the property insurance provision,           exceeded plaintiff’s demanded maximum levels for self-
plaintiff’s claim is that defendant, not plaintiff, acted to      insurance, neither defendant’s alleged misrepresentation nor
plaintiff’s detriment by misrepresenting and concealing           its omission regarding its commercial liability insurance was
defendant’s property insurance coverage so as to frustrate        material to the lease negotiations.4 Plaintiff’s negligent
and, ultimately, to terminate negotiations. Because plaintiff
would not have done anything differently had defendant not
misrepresented or concealed its property insurance coverage,           4
plaintiff could not have detrimentally relied on such a                 W e note that the proper m ateriality standard for a misrepresentation
misrepresentation or omission.           Plaintiff’s negligent    claim based so lely on negotiations is unclear; muc h of the relevant case
                                                                  law considers m ateriality in the context of a co ntract. Defendant contends
misrepresentation claim based on defendant’s alleged              that the materiality standard set out in Mulvey v. King, 39 Ohio St. 491,
omission cannot lie.        Moreover, plaintiff’s negligent       494-95 (1883), governs the m ateriality req uired for bo th plaintiff’s
misrepresentation claim based on defendant’s alleged              negligent and intentiona l misrep resentation claims. In that case, the Ohio
misrepresentation fails because plaintiff, as explained above,    Supreme Court held that, to establish materiality in a misrepresentation
did not detrimentally rely on such a misrepresentation.           action involving “a person [who] claims the benefit of a contract into
                                                                  which he has induced another to enter by means o f misrepresentations,
                                                                  however honestly mad e”–an exc eption to the genera l rule that a
No. 02-3417              The Andersons, Inc. v. Consol, Inc.              19     20   The Andersons, Inc. v. Consol, Inc.          No. 02-3417

misrepresentation claim based on defendant’s alleged                             claim based upon a concealment of fact will lie only if a duty
omission cannot lie. As explained above, plaintiff’s negligent                   to disclose exists. 738 N.E.2d 842, 854 (Ohio Ct. App.
misrepresentation claim fails because plaintiff never                            2000). In particular, the court held that “a duty to disclose
detrimentally relied on this misrepresentation and the                           arises primarily in a situation involving a fiduciary or other
misrepresentation was immaterial to the lease negotiations.                      similar relationship of trust and confidence.” Id. at 855.
                                                                                 According to the court, a fiduciary relationship is “a
   Lastly, plaintiff asserts that defendant failed to disclose its               relationship in which . . . [one reposes] special confidence and
planned IPO. Because defendant was in the process of                             trust . . . in the integrity and fidelity of another,” thereby
preparing for an IPO, defendant objected to a lease provision                    creating “a position of superiority or influence, acquired by
rendering any change in defendant’s ownership an event of                        virtue of this special trust.” Id. Here, plaintiff has failed to
default. According to plaintiff, defendant never informed                        show that a fiduciary or similar relationship of trust and
plaintiff about its planned IPO. Plaintiff contends that, had it                 confidence existed between plaintiff and defendant. Rather,
known about defendant’s planned IPO, it would have                               both plaintiff and defendant were sophisticated companies
modified the liability insurance and default provisions                          negotiating at arm’s length. We note that defendant may have
because plaintiff’s resultant access to defendant’s financial                    desired not to disclose its planned IPO to plaintiff for several
information would have assuaged plaintiff’s concerns about                       valid reasons, such as issues of confidentiality or concerns
defendant’s duty to provide plaintiff with such information.                     about insider trading. For purposes of the lease negotiations,
Plaintiff’s negligent misrepresentation claim based on an                        it was sufficient for defendant simply to have demanded that
alleged omission cannot lie.            Plaintiff’s intentional                  plaintiff remove the provision rendering any change in
misrepresentation claim fails because defendant had no duty                      ownership an event of default; it need not have divulged the
to disclose its planned IPO to plaintiff.          In Federated                  reason underlying that demand.
Management, Co. v. Coopers & Lybrand, the Ohio Court of
Appeals underscored that an intentional misrepresentation                          In sum, we affirm the district court’s grant of summary
                                                                                 judgment for defendant on plaintiff’s claims of unjust
                                                                                 enrichment, promissory estoppel, and intentional and/or
                                                                                 negligent misrepresentation on the ground that, even taking
misrepresentation claim requires actual fraud or gross negligence–, one          plaintiff’s factual allegations as true, no genuine issues of
must only prove that the representation substantially affected “the              material fact exist to support such claims. Thus, the district
identity, value or character of the subject-matter of the contract.” Id. The
application of Mulvey’s materiality standard to an intentional                   court did not err in granting defendant summary judgment.
misrepresentation claim is unclear as Mulvey seems to predicate that
standard on a negligent misrepresentation claim. In any event, we decline
to infer from Mulvey, which inv olves a contract of sale, that its materiality
standard applies in the context of negotiations, absent a contract. For
purposes of plaintiff’s negligent and/or intentional misrepresentation
claims, we assume that a misrepresentation is material “if it is likely,
under the circumstances, to affect the cond uct of a reasonable person with
reference to the transaction,” including lease ne gotiations. See Leal, 702
N.E.2d at 1253 (internal quotation marks omitted) (an intentional
misrepresentation claim grounded in a contract of sale); W ebster’s Third
New International Dictionary 1514 (1971) (The term negotiation denotes
“a business transaction.”).
