Gonzalez et al v. ADT Security Services Inc et al

Filing 30

OPINION AND ORDER: The Plaintiff's 20 Motion to Remand is DENIED. The ADT Defendants Motion to Dismiss 6 is GRANTED IN PART AND DENIED IN PART. All claims against defendant Eric Hardisty are dismissed without prejudice. The claims of negli gent misrepresentation and fraud against the ADT Defendants are also dismissed without prejudice. With respect to the rest of the complaint, the Motion to Dismiss is denied. Plaintiffs will be given thirty days to file an amended complaint to address the shortcomings of the complaint outlined in this opinion. Signed by Chief Judge Philip P Simon on 2/9/16. (jld)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
MARIA GONZALEZ, Individually
and as the Natural Guardian of
NELSON ROMERO, a Minor, and
SALMA GONZALEZ,
Plaintiffs,
v.
ADT LLC,
ADT SECURITY SERVICES, INC.,
ADT SECURITY SERVICES, LLC,
ADT SECURITY SYSTEMS, INC.,
TYCO INTEGRATED SECURITY LLC,
and ERIC HARDISTY,
Defendants.

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No. 3:15CV290-PPS/CAN

OPINION AND ORDER
Maria Gonzalez and her children were assaulted during a robbery at their home.
Gonzalez contends that the security system sold to her and installed by ADT did not
function as promised. She has sued ADT and a number of its affiliates as well as an
individual named Eric Hardisty, an ADT salesman who sold her the system. This case
was originally brought in state court and removed here by ADT. Gonzalez now asks
for the case to be remanded to state court for a lack of federal subject matter jurisdiction
because both she and Hardisty are Indiana citizens. [DE 20.] The Defendants argue
that Hardisty should be dismissed because he was fraudulently joined. More broadly,
ADT argues, among other things, that this action should be dismissed in its entirety

because it is time-barred by a contractual provision. [DE 6 at 1.] On November 30, 2015,
I held a hearing on the pending motions.
Because I agree that Eric Hardisty is fraudulently joined, the Motion to Remand
is denied, and the Motion to Dismiss Eric Hardisty is granted. But because this case was
originally filed in state court, Plaintiffs will be given an opportunity to amend their
complaint against Hardisty (and ADT) to try to cure the deficiencies in the complaint
outlined in this opinion.
Factual Background
The facts come from the complaint which I accept as true at this point. In October
2010, Plaintiff Maria Gonzalez met with Eric Hardisty, an ADT salesman, about
purchasing a home security system. [DE 4 at 2.] Both Gonzalez and Hardisty are
Indiana residents. [Id. at 1, 2.] ADT is a Delaware corporation with its principal place
of business in Florida. [DE 1 at 3.] Gonzalez told Hardisty that her home had been
burglarized in the past; Hardisty responded by telling Gonzalez that she lived in a highcrime area and that she needed a security system. [DE 4 at 2.] Naturally, as an ADT
salesman, Hardisty recommended an ADT system. [Id. at 2-3.] That same day, Gonzalez
signed a contract for the installation and monitoring of an ADT system. [Id. at 3.]
The nature and physical makeup of the contract that Gonzalez signed is in
dispute. ADT claims Gonzalez signed a six-page contract, which included, in paragraph
10 on page four, a provision requiring Gonzalez to file any lawsuit against ADT or its
employees within one year from the date of the event that resulted in the injury. [DE 7-1
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at 5.] Gonzalez disputes this; she says the contract she was given consisted of only three
pages, and that it did not contain the one-year time limitation. [DE 4 at 3.] Both parties
have submitted copies of the contract they say Gonzalez signed. The three-page
document Gonzalez submitted appears to be the first three pages of the six-page
document ADT submitted. In both documents, each page is labeled as page “x of 6",
and in both documents Gonzalez’s signature appears at the bottom of page 1 under text
that reads, in part, “[Y]ou understand all the terms and conditions of this contract,
including, but not limited to, paragraphs 5, 6, 7, 8, 9, 10, and 22.” [DE 7-1 at 2.] On the
three-page document Gonzalez submitted, there are no paragraphs or sections
numbered 10 or 22, though paragraphs so numbered do appear on the six-page
document ADT submitted. [DE 4 at 14-16.] Pages four through six of the document
ADT submitted do not bear Gonzalez’s signature, initials, or any other mark or
acknowledgment that she was provided those pages. [DE 7-1 at 5-7.]
Gonzalez denies ADT ever gave her anything beyond the three pages she
submitted along with her complaint. [DE 4 at 3.] ADT argues that the physical
construction of the contract makes that claim impossible. According to ADT, the sixpage contract was not six individual pages, but instead three double-sided pages
attached on the sides so that all six pages were connected. [DE 23 at 2.] But at the
November 30 hearing, ADT could not provide the court with the original, physical copy
of the contract that ADT claims Gonzalez signed.

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Sometime between October 5, 2010, and June 10, 2013, Gonzalez contacted ADT
and spoke with an unidentified ADT employee. [DE 4 at 3.] She informed the employee
that she was going to cancel her traditional home phone service, and rely just on her cell
phone. She asked what she needed to do to ensure continued monitoring of her
security system by ADT . [Id. at 3-4.] According to the Complaint, the employee told
Ms. Gonzalez that she was already “all set” to have her home monitored via cellular
coverage. [Id. at 4.] In other words, the system would still work without a land line and
there was nothing for her to do.
On June 10, 2013, there was a break-in at Gonzalez’s home by “multiple
assailants.” [Id.] Gonzalez and her children were assaulted and robbed. [Id.] Because the
security system was only set up to work with a land line, not via cellular technology,
the system did not sound an alarm in the house at the time of the break-in, nor did it
notify law enforcement. [Id.] So, in fact, Gonzalez was not “all set” when she cancelled
her land line.
On June 8, 2015, Gonzalez filed this action in an Indiana state court, alleging
multiple claims of negligence, gross negligence, willful and wanton conduct, and fraud
against ADT and its salesman, Eric Hardisty. [DE at 4-10.] There is a problem with how
the complaint is drafted. It does not enumerate counts against ADT and Eric Hardisty
separately, but instead makes a series of claims against all “defendants” collectively so
that every claim and nearly every allegation is made against all defendants. That makes
the parsing of the complaint for each individual defendant especially challenging. In
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any event, the defendants removed the case to this court, arguing that Eric Hardisty
was fraudulently joined in this action, and that without him, complete diversity exists
and this court has jurisdiction. [DE 1.]
ADT has also moved to dismiss arguing that the case is time-barred because
Gonzalez did not file the lawsuit within one year of the break-in and attack as required
by the version of the contract that ADT claims Gonzalez signed. [DE 7 at 6-7.] ADT also
argues that the negligence claims against it should be dismissed because ADT did not
owe Gonzalez a common-law duty to perform the duties they are alleged to have
breached, that the fraud claims should be dismissed because they are really breach of
contract claims and, in any event, Plaintiffs have failed to plead fraud with the
specificity required by Fed.R.Civ.P. 9(b).
Gonzalez seeks to have the case remanded back to Indiana state court, arguing
that Eric Hardisty was properly joined, that complete diversity does not exist, and that
this court therefore does not have jurisdiction to hear this case. [DE 20.]
Discussion
When a lawsuit is removed to federal court on the basis of diversity of
citizenship, “the district court should verify the existence of subject-matter jurisdiction
at the outset of the litigation . . .” Allen v. Ferguson, 791 F.2d 611, 615 (7th Cir. 1986). To
ensure this court has subject-matter jurisdiction to hear this case, I will first examine the
Motion to Remand before turning to the Motion to Dismiss.

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Motion to Remand
The question presented is whether Eric Hardisty was fraudulently joined in an
effort to keep this lawsuit in Indiana state court. [DE 1.] The term “fraudulent joinder”
is a bit of a misnomer. It does not necessarily indicate that false statements have been
made regarding jurisdictional facts. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.
1992). Instead, the more common scenario for fraudulent joinder is one that “involves a
claim against an in-state defendant that simply has no chance of success, whatever the
plaintiff's motives.” Poulos, 959 F.2d at 73. A defendant attempting to prove fraudulent
joinder faces a “heavy burden.” Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 764
(7th Cir. 2009). To establish fraudulent joinder, the defendant, must show that “after
resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish
a cause of action against the in-state defendant.” Poulos, 959 F.2d at 73. Any doubts I
may have about removal are to be “resolved in favor of the plaintiff's choice of forum in
state court.” Morris v. Nuzzo, 718 F.3d 660, 668 (7th Cir. 2013).
If the defendant can meet this burden, I can “disregard, for jurisdictional
purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a
case, dismiss the nondiverse defendants, and thereby retain jurisdiction.” Schur, 577
F.3d at 763 (quoting Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999).) I must look to
state law to determine if the Plaintiffs have any “reasonable possibility of success”
against the allegedly fraudulently joined defendant. Schur, 577 F.3d at 764.

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As I alluded to earlier, because the complaint makes claims against the
defendants collectively, it does not specifically delineate which tortious acts were
allegedly performed by Eric Hardisty. For example, the complaint does not specifically
allege that Eric Hardisty had anything to do with the installation or monitoring of the
security system, nor does the complaint allege that Eric Hardisty was the ADT
employee who told Maria Gonzalez she was “all set” when she called several years after
the installation and wanted to know if she was fine to drop her land line. [DE 4.]
Under the facts as presently alleged in the complaint, Eric Hardisty’s
involvement appears to be limited to the sale of the security system. [Id.] As such, the
only negligence claims in the complaint that could conceivably be directed towards
Hardisty are those alleging that the defendants committed “deceptive and
unconscionable sales acts in its dealings” with the Plaintiff; that the defendants failed or
refused to provide Gonzalez “with a completed copy of a residential service
contract;”and that the defendants exerted unequal bargaining power over Gonzalez
with respect to the service contract. [Id. at 6-7.] And the only fraud claim that could be
directed towards Hardisty is that he made “material representations to...Maria
Gonzalez, that defendants would install an appropriate and adequate security system
fit for Plaintiffs’ particular residence and one that would allow the Defendants to
provide customer monitoring center signal receiving and notifications service for
burglary, manual fire and manual police emergency.” [Id. at 9.]

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The complaint against Hardisty, as it is presently pled, has no reasonable chance
of success. Even accepting the facts they allege as true, those facts do not support the
claims made against Hardisty. I will discuss each one individually.
Plaintiffs’ claims of deceptive and unconscionable sales acts, unequal bargaining,
and duress with respect to the service contract lack factual support. Under Indiana law,
a contract may be declared unconscionable when it is the product of a great disparity in
bargaining power between the parties and that leads the party with less power to sign
“unwillingly and unaware of its terms.” Pinnacle Computer Servs., Inc. v. Ameritech Pub.,
Inc., 642 N.E.2d 1011, 1017 (Ind. Ct. App. 1994). Additionally, “the contract must be one
that no sensible person not under delusion, duress or in distress would make, and one
that no honest and fair person would accept.” Id.
For a contract to be voided because of duress, “there must be an actual or
threatened violence or restraint of a man's person contrary to law, to compel him to
enter into a contract or discharge one.” Carrasco v. Grubb, 824 N.E.2d 705, 711 (Ind. Ct.
App. 2005). In determining whether a contract was signed under duress, “the ultimate
fact to be determined is whether or not the purported victim was deprived of the free
exercise of his own will. Mere threats, which fall short of subverting the will, cannot
constitute duress.” Raymundo v. Hammond Clinic Ass'n, 449 N.E.2d 276, 283 (Ind. 1983).
The facts as alleged in the complaint do not meet these standards. According to
the complaint, Hardisty informed Gonzalez that there were a lot of break-ins in her
area, that she needed security, and then recommended she purchase an ADT system.
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The complaint does not allege that Hardisty exerted pressure on Gonzalez such that she
signed the contract unwillingly, nor does it claim the contract she signed was one that
no sensible person would enter. So there is nothing in the complaint that would
suggest that Hardisty engaged in an unconscionable act with regard to the contract. Nor
does the complaint allege that Hardisty threatened or restrained Gonzalez such that she
lost the ability to exercise free will.
In their opposition to the Motion to Dismiss, Plaintiffs defend their claims of
undue influence, unequal bargaining power, duress, and unconscionable and deceptive
sales acts by reliance on the assertion that Gonzalez has “limited English-speaking and
comprehension skills,” and that she was “under considerable duress” to have a security
system installed because her home had been broken into in the past. [DE 19 at 16.] The
problem with this argument is that those allegations do not appear in the complaint.
Plaintiffs also maintain that Defendants owed Maria Gonzalez a duty to provide
her with a completed copy of the contract, a duty they say Defendants breached. [DE 4
at 6-7.] The Plaintiffs are adamant throughout their filings that this, and other duties in
and around the alarm service, give rise to claims that sound in tort. [DE 4, 19.]
However, the Plaintiffs do not provide any authority that the duty to provide a copy of
the contract exists in tort. The closest Plaintiffs seem to come is their argument that
Defendants’ failure to provide Gonzalez with a copy of the contract is indicative of
Defendants’ attempt to fraudulently conceal the one-year statute of limitations they
claim the contract contains. [DE 19 at 9.] Plaintiffs claim that Defendants’ failure to
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provide Gonzalez with a complete copy of the service contract “prevented her from
knowing that she was required to file her claim for personal injury in a shorter period of
time than allowed by” the Indiana personal injury statute of limitations, and was
therefore an instance of fraudulent concealment. [DE 19 at 9.]
But fraudulent concealment does not create its own cause of action. Instead,
fraudulent concealment is an equitable exception to the statute of limitations. Doe v.
United Methodist Church, 673 N.E.2d 839, 844 (Ind. Ct. App. 1996). Under the Indiana
fraudulent concealment statute, “If a person liable to an action conceals the fact from the
knowledge of the person entitled to bring the actions, the action may be brought at any
time within the period of limitation after the discovery of the cause of action.” Ind.
Code. § 34-11-5-1. Where such concealment exists, the statute tolls the statute of
limitation “until the plaintiff discovers the wrong.”Alldredge v. Good Samaritan Home,
Inc., 9 N.E.3d 1257, 1261 (Ind. 2014). So, while I make no decision today on whether the
fraudulent concealment doctrine in any way affects the one-year limitation ADT says
the contract contains, I can say that it does not bear at all on whether a common-law
duty to provide a copy of the contract exists in tort. Because the Plaintiffs provide no
support for their claim that Eric Hardisty’s failure to provide Maria Gonzalez with a
copy of the contract exists in tort, they cannot succeed on this claim.
Plaintiffs’ rightly point out that “ in a contract for work, there is an implied duty
to do the work skillfully, carefully, and in a workmanlike manner,” and that failure to
do so can be a tort. [DE 19 at 13.] Hagerman Construction, Inc. v. Copeland, 697 N.E.2d 948,
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958 (Ind. Ct. App. 1998) (“Negligent failure to do so is a tort, as well as a breach of
contract.”). However, their claim that Eric Hardisty breached such a duty is not
supported by the facts as pled. Such a duty exists only after a contract is executed.
Homer v. Burman, 743 N.E.2d 1144, 1147 (Ind. Ct. App. 2001). Yet, as previously
mentioned, the Plaintiffs have not pled that Eric Hardisty had any involvement at all
once the contract was executed. Because they do not plead any post-contract work on
his part, Eric Hardisty cannot be said to have breached a duty to perform such work
skillfully.
Plaintiffs’ fraud claim against Eric Hardisty is similarly unsupported by the facts.
Under Indiana law, the first element of a fraud claim is that the defendant made a “false
statement of past or existing material facts.” Epperly v. Johnson, 734 N.E.2d 1066, 1073
(Ind. Ct. App. 2000). Implicit in the first element of fraud is that actual fraud may not be
based on “representations regarding future conduct.” Maynard v. 84 Lumber Co., 657
N.E.2d 406, 409 (Ind. Ct. App. 1995). The facts alleged against Eric Hardisty cannot meet
the elements of actual fraud. Hardisty’s limited involvement consisted of
recommending an ADT security system and telling Gonzalez that such a system would
be installed. As a promise of future conduct, such a statement cannot be the basis for
actual fraud. What’s more, the system was in fact installed. What Hardisty is alleged to
have said could not constitute a false statement, let alone a false statement about past or
existing facts. If, by contrast, Hardisty was alleged to have told Gonzalez that the
system to be installed would work with both land lines and cellular technology, when
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in fact Hardisty knew that the system only worked with a land line, that would be a
material misrepresentation about an existing fact. But the complaint is devoid of this
kind of allegation. Thus, the fraud claims have no chance of succeeding under the
complaint as it is currently drafted.
Because Plaintiffs have not pled facts that could support the negligence or fraud
claims they have asserted against Eric Hardisty, they cannot establish a cause of action
against him. As such, Eric Hardisty has been fraudulently joined and he will dismissed,
albeit without prejudice. The Plaintiffs will be given an opportunity to file an amended
complaint to address the problems with their claims against Hardisty identified in this
order. If the Plaintiffs choose to file an amended complaint they are encouraged to
specifically identify what each defendant did or did not do and avoid making
allegations against the “defendants” collectively. Setting out different causes of action
in separately enumerated counts would also contribute greatly to the pleading’s clarity.
Motion to Dismiss
With my jurisdiction now secure, I can turn to the ADT defendants’ Motion to
Dismiss. But because I am giving the Plaintiffs leave to file an amended complaint I will
only briefly address these arguments. To survive a motion to dismiss, a complaint must
“state a claim to relief that is plausible on its face,” which in turn requires factual
allegations sufficient to permit a reasonable inference that the defendant is liable for the
misconduct alleged. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007). See also
Ashcroft v. Iqbal, 556 U.S. 662 (2009). In deciding a motion to dismiss, I must construe
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the complaint in the light most favorable to the Plaintiffs, accepting as true all
well-pleaded facts Plaintiffs alleged and drawing all permissible inferences in their
favor. Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011).
Defendants argue the lawsuit should be dismissed in its entirety because
Gonzalez failed to file this action within one year of the home invasion, pursuant to the
time limitation in the disputed portion of the contract. [DE 7 at 6.] The parties disagree
sharply over whether Gonzalez was delivered and signed a three- or six-page service
contract. ADT claims Gonzalez received a six-page contract containing the one-year
limitation. [DE 23 at 2.] What’s more, they argue that even if she did not, her signature
on page one of the contract confirming she had read the entire agreement, “including,
but not limited to paragraphs 5, 6, 7, 8, 9, 10, and 22" binds her to the limitation anyway.
[DE 7 at 3, 6.] Gonzalez claims she received only three pages, and that the one-year
limitation did not appear within them. [DE 19 at 8.] Gonzalez also points out that she
did not sign, initial, or otherwise mark on pages 4-6 to indicate she received them. [DE
19 at 7.] Plaintiffs also argue the attempted enforcement of the one-year provision is an
attempt to add terms to their agreement, and that the one-year limitation would not
apply to Gonzalez’s children, anyway, since they were not parties to the contract. [Id. at
11-13.]
The statute of limitations is an affirmative defense. United States v. N. Trust Co.,
372 F.3d 886, 888 (7th Cir. 2004). See Fed.R.Civ.P. 8(c). The plaintiff is not required to
plead around defenses. N. Trust Co., 372 F.3d at 888. The argument that ADT is making
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is better left for summary judgment when I will be dealing with facts, not allegations.
At this stage of the case, I must construe the facts and inferences regarding the contents
of the contract in favor of the Plaintiffs. It is the Plaintiffs’ version of the contract that
controls at this point and that version does not contain the one-year limitation. So that
portion of the Defendants’ Motion to Dismiss is denied. See Nickens v. Tyco Integrated
Sec., LLC, No. 3:14CV11-RLY, 2014 WL 3378676, at *2 (S.D. Ind. July 9, 2014), on
reconsideration in part, No. 3:14CV11-RLY, 2014 WL 6910463 (S.D. Ind. Nov. 25, 2014)
(where the parties disagreed on which version of the contract was the actual one, court
considered plaintiff’s to be the true contract, consistent with the dismissal standard).
Defendants also argue that Plaintiffs’ negligence claims are actually breach of
contract claims, since the duties allegedly breached arose solely out of the service
contract. [DE 7 at 7-9.] As earlier discussed, under Indiana law an injury that arises “in
the context of a contract, can give rise to an action both in contract and tort.” INS
Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566, 577 (Ind. Ct. App. 2003). “As a general
rule, there is implied in every contract for work or services a duty to perform it
skillfully, carefully, diligently, and in a workmanlike manner, and a negligent failure to
observe any of these conditions is a tort, as well as a breach of contract.” Id. at 577. In
Racquet v. Thompson, the Indiana Court of Appeals held that a claim sounded in tort
rather than contract when a land surveyor produced the survey he was contracted for,
but was found to have performed the work negligently. 693 N.E.2d 969, 971 (Ind. Ct.
App. 1998). See also Strayer v. Covington Creek Condo. Ass'n, 678 N.E.2d 1286, 1288 (Ind.
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Ct. App. 1997) (In Indiana, a plaintiff has the option of suing in tort or in contract for the
negligent performance of a contractual duty).
Gonzalez alleges that ADT was negligent in installing, servicing, maintaining,
operating, and/or monitoring the security system. [DE 20 at 4.] When her home was
broken into, she alleges this negligence resulted in the security system malfunctioning,
failing both to sound in the house and to notify local law enforcement. [DE 4 at 8-9.] As
a result, Gonzalez and her children were assaulted and injured. Under Indiana law,
these facts are sufficient to make Gonzalez’s claims plausible on their face. Therefore,
the portion of the Motion to Dismiss pertaining to these negligence claims is denied.
ADT argues that the claims premised on negligent hiring, supervision, and
retention are not properly pled because they do not assert that an employee acted
outside the scope of his or her employment. [DE 7 at 7.] Negligent retention and
supervision may result in an employer’s liability when an employee “steps beyond the
recognized scope of his [or her] employment to commit a tortious injury upon a third
party.” Scott v. Retz, 916 N.E.2d 252, 257 (Ind. Ct. App. 2009). Additionally, negligent
retention may be found when an employer “negligently retained an employee knowing
that the employee was in the habit of misconducting himself.” Chivers v. Cent. Noble
Cmty. Sch., 423 F. Supp. 2d 835, 855 (N.D. Ind. 2006) (applying Indiana law). Neither
scenario finds factual support in the complaint, which does not allege that any ADT
employee acted outside the scope of his or her employment, nor that ADT knew of any
employee’s habit of misconduct. Because the factual allegations the Plaintiffs make do
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not support a claim of negligent hiring, supervision, training, retention, that portion of
ADT’s Motion to Dismiss will be granted, and that claim will be dismissed without
prejudice.
I have already addressed Gonzalez’s claims regarding undue influence, unequal
bargaining power, and deceptive acts in the Motion to Remand analysis. Because Eric
Hardisty was the only ADT employee involved in the sale and execution of the service
contract, and because I have already stated that Gonzalez has no chance of success on
these claims against him under the complaint as presently drafted, the portion of ADT’s
Motion to Dismiss dealing with the claims of undue influence, unequal bargaining
power, and unconscionable and deceptive sales acts is granted, and those claims are
dismissed without prejudice.
ADT also argues that Plaintiffs’ negligence claim that is based upon defendants’
misrepresentations fails because it is actually a fraud claim that fails to meet Rule 9(b)’s
heightened pleading standard. [DE 7 at 11.] That claim is located in the “Claims for
Negligence, Gross Negligence, and Willful and Wanton Conduct” section of the
complaint, and it reads like this: “The defendants acted carelessly, negligently, with
gross negligence, in a willful and wanton manner, and in heedless and conscious
disregard for the safety of the plaintiffs by misrepresenting the capabilities of the alarm
system it had installed in the Plaintiffs’ particular residence.” [Id.] Indiana state law
recognizes a tort for negligent misrepresentation only in limited employer-employee
relationships. Darst v. Illinois Farmers Ins. Co., 716 N.E.2d 579, 584 (Ind. Ct. App. 1999).
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Because no such relationship exists between the parties, a claim of negligent
misrepresentation is not plausible on its face.
This claim also fails to meet Rule 9(b)’s heightened pleading standards for
allegations of fraud. “In alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other
conditions of a person's mind may be alleged generally.” Fed. R. Civ. P. 9. To comply
with this standard, plaintiffs must “state the identity of the person who made the
misrepresentation, the time, place and content of the misrepresentation, and the method
by which the misrepresentation was communicated to the plaintiff.” United States v.
Sanford Brown, Ltd., 788 F.3d 696, 705 (7th Cir. 2015) (quoting Vicom, Inc. v. Harbridge
Merchant Services, Inc., 20 F.3d 771, 777 (7th Cir.1994)). “The purpose . . . of the
heightened pleading requirement in fraud cases is to force the plaintiff to do more than
the usual investigation before filing his compliant.”Ackerman v. Nw. Mut. Life Ins. Co.,
172 F.3d 467, 469 (7th Cir. 1999).
In making their claim of misrepresentation, the Plaintiffs do not name the
individual who made the misrepresentation, they do not say when, where, or how it
took place, nor do they state what this misrepresentation was, other than that it related
to the capabilities of the security system. [DE 4 at 8.] Because this claim does not have
the specific factual basis required for negligent misrepresentation in Indiana, and
because it lacks the heightened particularity Rule 9(b) requires, the portion of the

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Motion to Dismiss dealing with it is granted, and the claim will be dismissed without
prejudice.
For the same reason, Plaintiff’s fraud claims must also fail. The complaint makes
three claims of fraud. The first, which deals with the representation to install an
appropriate security system, was a promise of future performance, and therefore not
fraud, as I addressed previously with respect to the Motion to Remand. The second
fraud claim alleges:
“Defendants made material representations to the Plaintiff, Maria
Gonzalez, that Defendants did in fact install an appropriate and adequate
system fit for Plaintiff’s particular residence and one that would allow the
Defendants to provide customer monitoring center signal receiving and
notification service for burglary, manual fire and manual police
emergency.”
[DE 4 at 9-10.] The third fraud claim alleges that “Defendants made material
representations to the Plaintiff, Maria Gonzalez, that she was ‘all set’ and nothing
needed to be done as she was already set up for cellular coverage.” [Id. at 10.] Neither
claim identifies who made the misrepresentations, or when or where they were made.
Because these claims lack the factual detail necessary to stand up to Rule 9(b)’s
heightened pleading requirement, the portion of Defendants’ Motion to Dismiss dealing
with Plaintiff’s fraud complaints is granted. The Plaintiffs claims for fraud are
dismissed without prejudice.

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CONCLUSION
Plaintiffs’ Motion to Remand [DE 20] is DENIED.
The ADT Defendants’ Motion to Dismiss [DE 6] is GRANTED IN PART AND
DENIED IN PART. All claims against defendant Eric Hardisty are dismissed without
prejudice. The claims of negligent misrepresentation and fraud against the ADT
Defendants are also dismissed without prejudice. With respect to the rest of the
complaint, the Motion to Dismiss is denied.
Plaintiffs will be given thirty days to file an amended complaint to address the
shortcomings of the complaint outlined in this opinion.
SO ORDERED.
ENTERED this 9th day of February, 2016.
/s/ Philip P. Simon______________
CHIEF JUDGE

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