Illini State Trucking, Inc. a/k/a IST Holdings, LLC, and RLB International, LLC. v. Navistar, Inc. (mem. dec.)
45A03-1608-PL-1860
| Ind. Ct. App. | Jun 2, 2017Background
- Illini State Trucking and RLB International ("Illini") purchased 19 International ProStar trucks equipped with Navistar MaxxForce EGR-only engines (2011–2012) that allegedly suffered repeated breakdowns.
- Illini sued Navistar (manufacturer), Chicago International and CIT (dealers/sellers), and Rush Truck Centers (service dealer) asserting breach of express and implied warranties, breach of contract, fraud, and fraudulent concealment; Rush was sued only for post-sale servicing.
- Defendants moved to dismiss under Trial Rules 12(B)(6) and 9(B) (fraud specificity). The trial court dismissed Illini’s fraud and fraudulent-concealment claims but allowed the warranty and contract claims to proceed; interlocutory appeals followed.
- On appeal, the court reviewed pleadings de novo, accepting alleged facts as true but requiring heightened particularity for fraud under Trial Rule 9(B).
- The appellate court affirmed dismissal of all fraud-based claims for failure to plead time, place, speaker, and specific misrepresentations with required particularity; it affirmed denial of motions to dismiss the breach-of-warranty and breach-of-contract claims, finding Illini’s alternative agency and warranty allegations sufficient at the pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of fraud pleadings under TR 9(B) (Navistar, Chicago Int'l, Rush) | Alleged numerous misrepresentations (e.g., fuel economy, EGR-only performance) made 2009–2010 and at dealer/test events; statements to Illini and in trade publications | Pleadings too general: fail to identify who made which statements, when, where, or in what publication — two-year window insufficient for fraud specificity | Affirmed dismissal: fraud claims lacked the particularity required by TR 9(B) |
| Fraudulent concealment (Navistar, Chicago Int'l, Rush) | Defendants knowingly withheld material defects and testing failures; had duty to disclose | No specific allegations that Illini made inquiries (Kesling standard) or that defendants knew and failed to disclose particular defects; allegations too general about "Known Defects" | Affirmed dismissal: no specific duty/disclosure facts pled to support concealment claims |
| Breach of express warranty and breach of contract (Navistar cross-appeal) | Navistar represented trucks were "free from defects," provided service network; Illini alleges agency (dealers acted for Navistar) and repair-warranty breaches | Navistar: no agency established; warranty/contract documents not attached as required by TR 9.2(A) | Denial of dismissal affirmed: alleged apparent authority (dealer materials/signage) sufficient at pleading stage; trial court may permit later compliance with TR 9.2 under its discretion; repair-warranty allegations also survive |
| Breach of implied warranty and breach of contract (Chicago Int'l cross-appeal) | Illini alleged Chicago Int'l gave implied assurances trucks were merchantable and fit and alternatively pled agency for Navistar | Chicago Int'l: as Navistar's agent cannot be liable for principal's warranty absent separate warranty; also points to an appended buyer's order disclaiming warranties (outside complaint) | Denial of dismissal affirmed: alternative pleading permitted; warranty disclaimer attached to motion not considered on Rule 12(B)(6) motion; factual issues for later stages |
Key Cases Cited
- Veolia Water Indianapolis, LLC v. Nat’l Tr. Ins. Co., 3 N.E.3d 1 (Ind. 2014) (standard of review for motions to dismiss)
- Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327 (Ind. 2013) (elements of fraud and buyer inquiry duty for concealment)
- Cont’l Basketball Ass’n, Inc. v. Ellenstein Enters., Inc., 669 N.E.2d 134 (Ind. 1996) (purpose of TR 9(B) fraud particularity requirement)
- McKinney v. State, 693 N.E.2d 65 (Ind. 1998) (fraud pleadings must identify representations, who made them, and when/where)
- Dutton v. Int’l Harvester Co., 504 N.E.2d 313 (Ind. Ct. App. 1987) (fraud circumstances include time, place, substance)
- Pepkowski v. Life of Ind. Ins. Co., 535 N.E.2d 1164 (Ind. 1989) (apparent authority doctrine)
- Brenneman Mech. & Elec., Inc. v. First Nat’l Bank of Logansport, 495 N.E.2d 233 (Ind. Ct. App. 1986) (trial court discretion under TR 9.2(F) for noncompliance)
- Brown v. Guinn, 970 N.E.2d 192 (Ind. Ct. App. 2012) (noncompliance with TR 9.2(A) not per se fatal)
- Murphy Breeding Lab., Inc. v. W. Cent. Conservancy Dist., 828 N.E.2d 923 (Ind. Ct. App. 2005) (courts generally cannot consider matters outside pleadings on motion to dismiss)
- Carlson Wagonlit Travel, Inc. v. Moss, 788 N.E.2d 501 (Ind. Ct. App. 2003) (agent of disclosed principal generally not personally bound absent contrary allegation)
- Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008) (permissive pleading in the alternative)