Collins v. University of Notre Dame Du Lac

Filing 115

OPINION AND ORDER granting in part and denying in part 103 Motion to Amend Complaint. The motion is granted with respect to Plaintiffs constructive fraud claim. It is denied with respect to his additional breach of contract and promissory estoppel claims and his claim under the Indiana Wage Claim and Wage Payment Statutes. Plaintiff shall file an amended complaint consistent with this opinion by 2/9/2015. Signed by Judge Joseph S Van Bokkelen on 2/2/2015. (rmc)

United States District Court
Northern District of Indiana
OLIVER COLLINS,
Plaintiff,
v.
UNIVERSITY OF NOTRE DAME
DU LAC,
Defendant.

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Civil Action No. 3:10-CV-281 JVB

OPINION AND ORDER
This matter is before the Court on Plaintiff Oliver Collins’s motion for leave to file an
amended complaint (DE 103).

A.

Background
Oliver Collins was a tenured professor at Defendant University of Notre Dame until he

was terminated as of June 2, 2010. Collins sued Notre Dame for breach of contract. On crossmotions for summary judgment the Court ruled that, in dismissing Collins, Notre Dame had
breached Collins’s contract because the membership of the Hearing Committee that was
convened to decide whether there was serious cause for his dismissal did not comport with Notre
Dame’s Academic Articles (DE 59). The case was stayed pending resolution of federal criminal
charges against Collins. Those charges were resolved when Collins pleaded guilty to a felony
charge involving misuse of federal grant money. The Court then set the case for trial on the
issue of damages and reopened discovery on damages alone. In December 2013, Notre Dame
conducted a do-over of its termination hearing, this time dismissing Collins because he had been
convicted of a felony. The University made the termination effective as of June 2, 2010.

Collins now asks leave to amend his complaint to add to his breach of contract claim
allegations of procedural defects in the second termination process and to add claims for
promissory estoppel, constructive fraud, and violation of the Indiana Wage Claims and Wage
Payment Statutes. Notre Dame opposes the amendments on the grounds that they are futile.

B.

Legal Standard
Federal Rule of Civil Procedure 15(a) provides that leave to amend a pleading shall be

freely given when justice so requires. However, if the amendments would be futile, denial of a
motion to amend is warranted. Proposed amendments are futile if they would not survive a
motion to dismiss. Gandhi v. Sitara Capital Mgmt., LLC, 721 F.3d 865, 869 (7th Cir. 2013).

C.

Discussion

(1)

New Contract Claim
After Notre Dame terminated Collins’s contract effective on June 2, 2010, it amended its

Academic Articles to change the procedure for terminating a tenured professor and initiated a
new termination process against Collins using the new procedure. Collins’s proposed
amendments relating to breach of contract center around the fact that Notre Dame applied these
post-dismissal amendments to him and failed to pay him between the first and second
termination proceedings.
Amending Collins’s complaint to assert the invalidity of the second termination
proceedings is unnecessary. On June 2, 2010, Notre Dame terminated Collins’s contract,
effective immediately. The Court determined that the termination was in breach of his contract

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because of a flaw in the procedure required by Notre Dame’s Academic Articles, which were
incorporated into the contract by reference. After the Court’s ruling, Notre Dame did not
reinstate Collins, but nonetheless conducted proceedings to terminate his contract a second time,
once again making the termination effective as of June 2, 2010. His contract could be terminated
only once. Collins does not need to amend his complaint to present evidence and argument as to
whether the second termination proceedings cut off the damages flowing from the breach of his
employment contract. Accordingly his motion to amend his complaint with respect to the
contract claim is denied.

(2)

Promissory Estoppel
The elements of promissory estoppel are: (1) a promise by the promisor; (2) made with

the expectation that the promisee will rely on it; (3) which induces reasonable reliance by the
promisee; of a definite and substantial nature; (5) where injustice can be avoided only by
enforcing the promise. Hinkel v. Sataria Distrib. & Packaging, Inc., 920 N.E.2d 766, 771 (Ind.
Ct. App. 2010). However, in the employment context, a promissory estoppel claim “may be
asserted only in the absence of a valid and enforceable employment contract.” Sweet v.
Indianapolis Jet Ctr., Inc., 918 F.Supp.2d 801, 808 (S.D. Ind. 2013). Here it is undisputed that
Collins had a valid and enforceable employment contract with Notre Dame. Accordingly, his
promissory estoppel claim is futile and his motion to amend with respect to that claim is denied.

(3)

Constructive Fraud
The elements of a claim for constructive fraud are (1) a duty owing by the defendant to

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the plaintiff as a result of their relationship; (2) violation of that duty by making deceptive
material misrepresentations of past or existing facts; (3) reliance on the misrepresentations by the
plaintiff; (4) injury to the plaintiff caused by the misrepresentations; and (5) the gaining of an
advantage by the defendant at the expense of the plaintiff. Rice v. Strunk, 670 N.E.2d 1280,
1284 (Ind. 1996). Notre Dame maintains that Collins does not state a claim for constructive
fraud because there is no fiduciary relationship between them, his reliance was not the proximate
cause of his criminal conviction, and because it gained no unconscionable advantage at his
expense.
With regard to the existence of a fiduciary relationship, Collins alleges in his proposed
amended complaint that the Notre Dame Office of Research advertises to the faculty that it is
expert in the rules that govern purchases under grants and that it encourages faculty members to
come to it with questions and to follow its recommendations about grant purchases. This is
sufficient to satisfy the first element of constructive fraud. With regard to the second element,
Collins alleges that Notre Dame’s Office of Research advised him that purchases not in the NSF
grant budget required only University approval, not NSF approval and that equipment bought
under NSF grants could be used for other projects without restriction, as long as the use did not
interfere with the grant use. Collins alleges that he relied on these representations in making the
grant purchase. The Court cannot say, as a matter of law, that Collins’s reliance on Notre
Dame’s alleged representations was not the cause of his criminal conviction. Finally, the
proposed amended complaint alleges facts that support the existence of the fifth element of
constructive fraud: that Notre Dame gained an advantage at Collins’s expense. Collins claims in
the proposed amended complaint that the unfair advantage Notre Dame gained through its

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misrepresentations was the use of his conduct in reliance on those misrepresentations as grounds
for his termination. He has adequately stated a claim for constructive fraud so that allowing the
amendment to add this claim would not be futile.

(4)

Claims under the Indiana Wage Claim and Wage Payment Statutes
Collins concedes that this Court denied his attempt to amend his complaint pursuant to

the Indiana Wage Payment and Wage claim statutes in its order of November 4, 2013, but has
reasserted them to preserve the issue for appeal and in the hope that the Court might reconsider
its previous ruling. The Court declines to change its previous ruling. Accordingly, the Court
denies Collins’s motion insofar as it seeks to add claims under these statutes.

D.

Conclusion
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART

Plaintiff’s motion to file an amended complaint (DE 103). The motion is granted with respect to
Plaintiff’s constructive fraud claim. It is denied with respect to his additional breach of contract
and promissory estoppel claims and his claim under the Indiana Wage Claim and Wage Payment
Statutes. Plaintiff shall file an amended complaint consistent with this opinion by February 9,
2015.
SO ORDERED on February 2, 2015.

s/ Joseph S. Van Bokkelen
Joseph S. Van Bokkelen
United States District Judge
Hammond Division

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