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Hurlburt v. Bradley Consulting & Management, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

November 2, 2016

John Hurlburt, Plaintiff,
Bradley Consulting & Management, Inc., Defendant.



         Presently pending before the Court in this breach of contract case is Defendant Bradley Consulting & Management, Inc.'s (“Bradley”) Motion to Dismiss Second Amended Complaint. [Filing No. 26.]

         I. Standard of Review

         Federal Rule of Civil Procedure 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). “Specific facts are not necessary, the statement need only ‘give the defendant fair notice of what the…claim is and the grounds upon which it rests.'” Erickson, 551 U.S. at 93 (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)).

         A 12(b)(6) motion to dismiss asks whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). In reviewing the sufficiency of the complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief “to a degree that rises above the speculative level.” Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         II. Background

         The factual allegations in the Second Amended Complaint filed by Plaintiff John Hurlburt, which the Court must accept as true for purposes of ruling on the pending motion, are as follows:

         Mr. Hurlburt began working for Bradley as a Sales Consultant in August 2014, earning an annual salary of $43, 000. [Filing No. 21 at 2.] Mr. Hurlburt met and exceeded Bradley's legitimate work expectations as a Sales Consultant. [Filing No. 21 at 2.] In May 2015, Mr. Hurlburt received an offer of employment from Alpha Review Corporation (“Alpha”) for a permanent position as Sales Representative at a base salary of $73, 000 plus commission (for an estimated annual total of $100, 000 to $110, 000). [Filing No. 21 at 2.] On or about June 1, 2015, Mr. Hurlburt notified Bradley president Eric Bradley that he was going to accept the position with Alpha and that he would be resigning from Bradley effective June 9, 2015. [Filing No. 21 at 2.] Mr. Hurlburt also told Mr. Bradley what his compensation would be in the new position at Alpha. [Filing No. 21 at 2.]

         On or about June 5, 2015, Mr. Bradley emphasized to Mr. Hurlburt in a telephone conversation the importance of Mr. Hurlburt's service at Bradley and convinced Mr. Hurlburt to stay on at Bradley. [Filing No. 21 at 3.] To entice and induce Mr. Hurlburt to stay on at Bradley, Mr. Bradley offered to promote Mr. Hurlburt to Director of Sales and to substantially increase his salary. [Filing No. 21 at 3.] Mr. Hurlburt accepted Mr. Bradley's offer to stay during that telephone conversation. [Filing No. 21 at 3.]

         In a series of email messages that followed the June 5, 2015 telephone conversation, Mr. Bradley offered to beat Alpha's base salary offer by $20, 000.[1] [Filing No. 21 at 3.] Specifically, Mr. Hurlburt's base salary increased by 216.28% from $43, 000 to $93, 000. [Filing No. 21 at 3.] Additionally, the Director of Sales position included a five percent commission based on growth from the previous year. [Filing No. 21 at 3.] During the email message exchange, Mr. Hurlburt was told that his position as Director of Sales would be a permanent position. [Filing No. 21 at 3.]

         The Director of Sales oversaw the individual sales representatives, attended conferences and association meetings, interfaced with prospective and existing clients, and was the “face of the company.” [Filing No. 21 at 3.] Between June 2015 and February 2016, Mr. Hurlburt pursued new clients, maintained existing client accounts, attended conferences and association meetings throughout the country, and was recognized by Bradley clients as the “face” of Bradley. [Filing No. 21 at 3.]

         On February 3, 2016, Bradley terminated Mr. Hurlburt's employment. [Filing No. 21 at 3.] In the meantime, Alpha had hired someone else to fill the position it had offered to Mr. Hurl-burt. [Filing No. 21 at 4.] Mr. Hurlburt has been unemployed since February 3, 2016. [Filing No. 21 at 4.]

         Mr. Hurlburt initiated this litigation on March 13, 2016, and filed the operative Second Amended Complaint (the “Complaint”) on June 9, 2016. [Filing No. 21.] He asserts claims for: (1) breach of contract; (2) promissory estoppel; and (3) negligent misrepresentation. [Filing No. 21 at 4-5.] Bradley has moved to dismiss the Complaint in its entirety, [Filing No. 26], Mr. Hurl-burt opposes the motion, [Filing No. 30], and the motion is now ripe for the Court's consideration.

         III. Discussion

         Bradley argues that Mr. Hurlburt has failed to allege that he was not an at-will employee and that, in any event, he has failed to adequately allege claims for breach of contract, promissory estoppel, or negligent misrepresentation. [Filing No. 27 at 4-17.] The Court will consider Brad-ley's arguments in turn.

         At the outset, the Court notes that it is exercising diversity jurisdiction over this matter. [See Filing No. 21 at 1-2 (alleging that Mr. Hurlburt is a citizen of Ohio, Bradley is an Indiana corporation with its principal place of business in Indiana and therefore an Indiana citizen, and the amount in controversy exceeds $75, 000, exclusive of interest and costs).] A federal court sitting in diversity must apply the choice-of-law provisions of the forum state. Storie v. Randy's Auto Sales, LLC, 589 F.3d 873, 879 (7th Cir. 2009) (“Because the district court's subject matter jurisdiction was based on diversity, the forum state's choice-of-law rules determine the applicable substantive law”). The parties rely upon Indiana law in analyzing Mr. Hurlburt's claims. [See, e.g., Filing No. 27 at 10-11 (Bradley citing Indiana law); Filing No. 30 at 5 (Mr. Hurlburt citing Indiana law).] Absent a disagreement, the Court will apply Indiana law. Mass. Bay Ins. Co. v. Vic Koenig Leasing, 136 F.3d 1116, 1120 (7th Cir. 1998); Wood v. Mid-Valley Inc., 942 F.2d 425, 426-27 (7th Cir. 1991) (“The operative rule is that when neither party raises a conflict of law issue in a diversity case, the federal court simply applies the law of the state in which the federal court sits…. Courts do not worry about conflict of laws unless the parties disagree on which state's law applies. We are busy enough without creating issues that are unlikely to affect the outcome of the case (if they were likely to affect the outcome the parties would be likely to contest them)”) (emphasis added). The Court will apply Indiana law in analyzing the pending motion.

         A. At-Will Employment

         Bradley argues that Mr. Hurlburt does not allege that he had anything other than an employment at-will relationship with Bradley, so Bradley could terminate his employment without incurring any liability. [Filing No. 27 at 4.] It contends that Mr. Hurlburt has not alleged that he fell within any of the exceptions to Indiana's employment-at-will doctrine. [Filing No. 27 at 4-5.] Bradley argues further that even if there was an oral employment contract, it was not enforceable because it was not for a definite period of time. [Filing No. 27 at 5.] Bradley asserts that Mr. Hurlburt has not alleged any facts that would convert his at-will employment relationship to a contractual relationship. [Filing No. 27 at 6-7.] It argues that the fact that Mr. Hurlburt turned down an offer of employment to stay on at Bradley is not adequate, independent consideration to create a contract. [Filing No. 27 at 7-8.] Bradley contends that Mr. Hurlburt's attempt to assert a claim for promissory estoppel does not rebut the presumption that his employment with Bradley was at-will, and that he does not assert his promissory estoppel claim with any degree of particularity so he does not fall within the promissory estoppel exception to the employment-at-will doctrine. [Filing No. 27 at 8-10.]

         Mr. Hurlburt responds that he falls within two of the three exceptions to Indiana's employ-ment-at-will doctrine - that there was adequate independent consideration to support an employment contract (here, the fact that he gave up the job at Alpha), and that promissory estoppel applies because Mr. Hurlburt accepted the new position at Bradley with the understanding that it would be permanent. [Filing No. 30 at 3-4.] Accordingly, Mr. ...

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