Eby v. York-Division, Borg-Warner

CourtCourt of Appeals of Indiana
Citation455 N.E.2d 623
Docket NumberA,No. 4-582A112,BORG-WARNE,YORK-DIVISIO,4-582A112
PartiesLarry EBY and Rhonda Eby, Appellants (Plaintiffs Below), v.ppellee (Defendant Below).
Decision Date07 November 1983

Page 623

455 N.E.2d 623
Larry EBY and Rhonda Eby, Appellants (Plaintiffs Below),
YORK-DIVISION, BORG-WARNER, Appellee (Defendant Below).
No. 4-582A112.
Court of Appeals of Indiana,
Fourth District.
Nov. 7, 1983.

Page 625

Jon R. Pactor, Indianapolis, for appellants.

Norman T. Funk, Hill, Fulwider, McDowell & Funk, Indianapolis, for appellee.

MILLER, Judge.

Larry Eby and his wife, Rhonda, seek reversal of the summary judgment in favor of York Division of Borg-Warner Corporation (Borg-Warner) which thereby denied the Ebys recovery on their claim for expenses incurred when they moved from Indiana to Florida in pursuit of employment. The Ebys assert that Borg-Warner offered Larry a job in Florida, but that after having moved, they discovered no job was actually available. The trial court granted Borg-Warner's motion for summary judgment on the Ebys' complaint which they contend asks for damages on the basis of (1) breach of contract, (2) promissory estoppel, (3) actual fraud, (4) constructive fraud, and (5) negligent misrepresentation. Summary judgment was inappropriate in the presence of a claim sounding in promissory estoppel and negligent misrepresentation, and we reverse and remand. 1


In early 1980, Larry was employed by Borg-Warner in Indianapolis but had begun to seek a position with the same employer in Tampa, Florida. After a period of negotiations, including interviews in Florida, the Borg-Warner facility in Tampa allegedly offered Larry a job over the telephone, to begin May 19, 1980. The Ebys put their Indianapolis home on the market and moved their belongings to an apartment in Florida. Upon reporting to work, Borg-Warner supervisors informed Larry the man who hired him was no longer with the company and that there was no job for Larry. The Ebys now allege they are entitled to reimbursement for their moving expenses, wages lost while preparing to move (but not wages lost for lack of the job itself), and various sundry expenses allegedly occasioned by their reliance on Borg-Warner's promise of employment.


The skeletal facts above are the essential allegations contained in the Ebys' one-paragraph complaint. From them, they assert five theories of recovery, a perfectly appropriate approach to pleading. See, e.g., Finley v. Chain, (1978) 176 Ind.App. 66, 374

Page 626

N.E.2d 67, overruled on other grounds. These five theories are (1) breach of contract, (2) promissory estoppel, (3) constructive fraud, (4) actual fraud, and (5) negligent misrepresentation. Each of these relies on certain additional facts, which will be included in the individual discussions and will reflect the same tenor as the facts recited above, pursuant to our standard of review for summary judgment: We must accept as true those facts alleged by the nonmovants, the Ebys. See Bond v. Peabody Coal Co., (1983) Ind.App., 450 N.E.2d 542.

It is also imperative that we resolve the choice of whether to use Florida or Indiana's law in our decision. We have been presented with two types of legal theories for recovery, contract (breach, promissory estoppel) and tort (fraud, misrepresentation). Our consideration of both these choice of law problems leads us to the conclusion that Indiana law is more appropriate.

In contract actions, Indiana's choice of law rule is the application of the "most intimate contacts" approach. Suyemasa v. Myers, (1981) Ind.App., 420 N.E.2d 1334. As formulated by our supreme court, the rule has been succinctly stated as follows:

"The court will consider all acts of the parties touching the transaction in relation to the several states involved and will apply as the law governing the transaction the law of that state with which the facts are in most intimate contact."

W.H. Barber Co. v. Hughes, (1945) 223 Ind. 570, 63 N.E.2d 417, 423; Clow Corp. v. Ross Township School Corp., (1979) 179 Ind.App. 125, 384 N.E.2d 1077. As formulated by the RESTATEMENT (SECOND) OF CONFLICT OF LAWS Sec. 188 (1971), the following contacts are representative of the factors to consider:

"(a) the place of contracting,

(b) the place of negotiation of the contract,

(c) the place of performance,

(d) the location of the subject matter of the contract, and

(e) the domicil, residence, nationality, place of incorporation and place of business of the parties."

We believe Indiana to have the more significant relationship to the contract-type behavior which evolved here. Larry was in Indiana when he accepted the job offer over the telephone. The negotiations were begun in Indiana and progressed over the telephone in Indiana and by personal appearance in Florida. Indiana was the location where the Ebys performed the alleged consideration, in promissory estoppel fashion, to support the job offer although Florida was the location of the actual subject matter, the job itself. Lastly, the Ebys resided in Indiana when Larry accepted the job while he was working at one of Borg-Warner's facilities. We deem these contacts sufficiently intimate with this state to warrant applying Indiana law to the contract theories.

Indiana's choice of law rule with respect to actions sounding in tort is the rule of lex loci delicti. According to that rule, the law of the place where the tort was committed is the law of the resulting litigation. Lee v. Lincoln National Bank & Trust Co., (1982) Ind.App., 442 N.E.2d 1147; Maroon v. State, (1980) Ind.App., 411 N.E.2d 404. In claims for fraud and misrepresentation, the tort is considered to have been committed in the state where the loss occurred, typically because that is where the last event necessary to create liability has taken place. Doody v. John Sexton & Co., (1st Cir.1969) 411 F.2d 1119 (misrepresentation); Rekeweg v. Federal Mutual Insurance Co. (7th Cir.1963) 324 F.2d 150, cert. denied (1964) 376 U.S. 943, 84 S.Ct. 798, 11 L.Ed.2d 767 (fraud). In the case here, the majority of the Ebys' losses--wages, moving expenses--happened in Indiana. Therefore, the Ebys' entire case is governed by Indiana law.

Breach of Contract

Foremost in the discussion of this theory of recovery must be the realization

Page 627

that nowhere was there ever any express agreement that Borg-Warner would pay the Ebys' expenses for moving to Florida to take the job. The Ebys, in fact, admit as much. They instead argue that the agreement to employ Larry necessarily implied repayment of these costs. Other than wrongful discharge cases, the Ebys have cited us to no authority for this proposition, and it is not the natural inference from a mere promise of employment. In addition, we do not perceive the move to be consideration for the promise of a job inasmuch as the move had to be made in order to take advantage of the offer. This, we do not believe, is consideration for the promise itself. Cf. Ohio Table Pad Co. of Indiana, Inc. v. Hogan, (1981) Ind.App., 424 N.E.2d 144 (moving expenses not consideration to support permanent employment contract). Thus, in both instances the Ebys have failed to establish the elements of a contract. There was neither an implied nor an express agreement to repay, and the promise of employment is not enforceable for want of consideration even if such a term were included in it. Thus, the Ebys have no breach of contract action. See The Herald Telephone v. Fatouros, (1982) Ind.App., 431 N.E.2d 171 (legally binding contract requires offer, acceptance, consideration). Summary judgment was proper as a matter of law on this theory.

Promissory Estoppel

Although they cannot recover on a breach of contract action, the Ebys could possibly recover on the different equitable contractual claim of promissory estoppel wherein a substitute for the missing consideration is supplied. Promissory estoppel is appropriate in actions such as these where a party takes certain steps to his detriment in order to avail himself of promised employment. Pepsi-Cola General Bottlers, Inc. v. Woods, (1982) Ind.App., 440 N.E.2d 696. The question here is whether the Ebys'...

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