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Jones v. Oakland City University Founded By General Baptists, Inc.

Court of Appeals of Indiana

April 18, 2019

Grady B. Jones and Susan R. Lockwood, Appellants-Plaintiffs,
v.
Oakland City University Founded by General Baptists, Inc. and Ray G. Barber, Appellees-Defendants.

          Appeal from the Gibson Superior Court The Honorable Robert R. Aylsworth, Special Judge Trial Court Cause No. 26D01-1712-PL-1876

          ATTORNEY FOR APPELLANTS Joseph G. Striewe Indianapolis, Indiana

          ATTORNEYS FOR APPELLEES Patrick A. Shoulders Wm. Michael Schiff L. Katherine Boren Ziemer, Stayman, Weitzel & Shoulders, LLP Evansville, Indiana

          NAJAM, JUDGE.

         Statement of the Case

         [¶1] Grady B. Jones and Susan R. Lockwood appeal the trial court's judgment on the pleadings in favor of Oakland City University Founded by General Baptists, Inc. ("OCU") and Ray G. Barber. Jones and Lockwood raise three issues for our review, which we restate as the following three issues:

1. Whether the trial court erred when it entered judgment on the pleadings on two counts of fraud in the inducement, which judgment the court based on integration clauses in the parties' contracts.
2. Whether the trial court erred when it entered judgment on the pleadings on a count of retaliatory discharge, which count was premised on OCU's termination of Jones' and Lockwood's employment after they had orally reported on the misuse of public funds by OCU officers.
3. Whether the trial court erred when it entered judgment on the pleadings on various theories of at-will employment.

         [¶2] Although we disagree with the trial court's reliance on the integration clauses on the first issue, we nonetheless reach the same conclusion on that issue because the pleadings show that the alleged misrepresentations relied on by Jones and Lockwood were statements of current intentions made by OCU officers during their contract negotiations. As a matter of Indiana law, such statements do not establish a basis for fraud. Accordingly, we affirm the trial court's judgment on the first issue. We also affirm the trial court's judgment on the other issues in this appeal.

         Facts and Procedural History[1]

         [¶3] On December 8, 2017, Jones and Lockwood filed their complaint against OCU and Barber, which Jones and Lockwood later supplemented and amended. On August 28, 2018, Jones and Lockwood filed their supplemented second amended complaint, which provided in relevant part as follows:

Count I Fraud in the Inducement . . .: Jones
1. On or about March 2, 2017, Jones was contacted with regard to potential future employment by [Barber, ] President of OCU.
2. Between March 13, 2017[, ] and June 5, 2017, Jones engaged in discussions with regard to employment by OCU as its Vice President for Advancement ("VPA") addressing the terms and conditions of employment with representatives of OCU, including, but not limited to:
A. [Barber], its President;
B. C. William Blackburn . . ., its Chairman of the OCU Board of Trustees;
C. John Dunn . . ., its Special Advisor to the OCU Board of Trustees.
3. On or about May 18, 2017, during discussions referenced herein, Barber, Blackburn, and Dunn orally represented to Jones that his employment would be contingent on his agreement to serve as VPA for a period of five years, during which time his duties would include preparing his prospective successor to accede to VPA upon his retirement.
4. Prior to accepting the VPA position at OCU, Jones orally advised Barber that he had been selected to fill the position of Associate Vice Chancellor for Advancement at Troy University, in Troy, Alabama.
5. On or about May 31, 2017, Jones and Barber executed a Provisionary Administrative Member Agreement ("Employment Agreement"), whereby the parties agreed to a salary and specific duration of employment commencing June 5, 2017[, ] and ending May 31, 2018.
9. The terms of the Employment Agreement do not contemplate employment of Jones for five years.
10. The terms of the Employment Agreement are inconsistent with the representations made to Jones by Barber, Blackburn, and Dunn during the hiring process.
13. The Employment Agreement states[:] "Either party may terminate this Agreement for any reason without cause upon thirty (30) days prior written notice to the other party." [("Termination Clause.")]
14. The contents . . . of the Employment Agreement describe an at-will relationship.
15. The [Termination Clause] . . . is inconsistent with the oral representations of Barber, Blackburn, and Dunn during the hiring process of Jones with regard to the specific duration of employment.
24. The Employment Agreement states[:] "Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and it supersedes all prior oral or written agreements[, ] commitments or understandings with respect to the matters provided for herein . . . ." ("Integration Clause").
32. Barber intended that Jones' nature of employment be at-will.
33. On October 2, 2017, Barber hand-delivered written 30-day notice to Jones that Jones' employment was terminated "without cause" ("Termination Notice").
34. Jones is an alumnus of OCU.
35. Jones was 64 years of age at the time of the transaction described herein.
36. Barber is a clergyman in the General Baptist Church.
37. Jones was acquainted with Barber in his capacity as a clergyman of the General Baptist Church in excess of 40 years.
38. Jones reposed a confidence in Barber that Barber's actions would be consistent with his oral representations and assurances regarding the specific duration of Jones' employment made during [the] hiring process.
41. Jones was induced to execute the Employment Agreement by the oral representations and assurances of Barber, Blackburn[, ] and Dunn to accept employment of specific duration for a period of not less than five years as VPA.
42. Jones relied on the oral representations [and] assurances of Barber, Blackburn[, ] and Dunn and agreed to accept employment consistent with the terms and conditions of employment represented, which induced him to believe he would be employed by OCU in the capacity of VPA for a period of five years.
43. Jones had a right to rely on the oral representations of Barber, Blackburn, and Dunn made prior to the execution of the Employment Agreement[] with regard to the term of his employment . . . .
44. Based on the oral representation . . . Jones advised representatives of Troy University that he was accepting OCU's offer of employment.
45. The actions of Barber described herein constitute fraud in ...

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