FISCHER v. BEAZER HOMES, INC.

Filing 31

ORDER denying w/o prejudice Pltf's 23 Motion to Amend Complaint (see Order). Signed by Magistrate Judge Tim A. Baker on 8/26/2011. (SWM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LYNN FISCHER,
Plaintiff,
vs.
BEAZER HOMES, INC.,
Defendant.

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1:10-cv-1186-SEB-TAB

ORDER ON PLAINTIFF’S MOTION FOR LEAVE TO AMEND COMPLAINT
Before this Court is Plaintiff’s motion seeking leave to amend the complaint to include a
claim of fraud and misrepresentation. [Docket No. 23.] Federal Rule of Civil Procedure
15(a)(2) provides that when a party can no longer amend their complaint as a matter of course, it
“may amend its pleading only with the opposing party’s written consent or the court’s leave.”
This rule reflects a liberal attitude toward amendments, and a court should freely grant leave
when justice requires. Soltys v. Costello, 520 F.3d 737, 743 (7th Cir. 2008). However, “courts
in their sound discretion may deny a proposed amendment if the moving party has unduly
delayed in filing the motion, if the opposing party would suffer undue prejudice, or if the
pleading is futile.” Id.
Defendant opposes Plaintiff’s motion on the basis that the proposed amendment is futile.
[Docket No. 30.] An amendment is futile if it could not withstand a motion to dismiss. Bower v.
Jones, 978 F.2d 1004, 1008 (7th Cir. 1992). For a fraud claim to survive a motion to dismiss, the
plaintiff must allege “(1) at least one representation of past or existing fact that (2) is false, (3)

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was made with knowledge or reckless disregard of its falsity, and (4) causes reasonable reliance
to the detriment of the person relying upon it.” Bowman v. City of Indianapolis, 133 F.3d 513,
518–19 (7th Cir. 1998) (citing Scott v. Bodor, Inc., 571 N.E.2d 313, 319 (Ind. Ct. App. 1991);
Plymale v. Upright, 419 N.E.2d 756, 760 (Ind. Ct. App. 1981)). Additionally, a plaintiff must
“state with particularity the circumstances constituting the fraud . . . .” Fed. R. Civ. P. 9(b).
“Malice, intent, knowledge and other conditions of a person’s mind may be alleged generally.”
Id.
Plaintiff’s proposed fraud claim centers around three similar statements:

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“I was reassured by the construction managers that although there were cracks in
the walls, Beazer was a large company located in numerous states; and that
Beazer stands by their product and that is why they give you a home warranty.”
[Docket No. 23, Ex. 4 at 1–2.]

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“Beazer assured me that if anything was wrong with the home they would stand
behind their work until it was done to my satisfaction.” [Id.]

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“No matter what happens with the basement, you have an additional warranty to
handle and repair any issues with the home.” [Id.]

Despite these allegations, Plaintiff has not alleged a false representation. First, Plaintiff’s brief
concedes that she received the warranty in December 2005. [Id.] Second, the above statements
do not include any representations about the terms of the warranty. Perhaps Plaintiff is
attempting to allege that Defendant represented that the terms of the warranty will cover the
problems with the home, but such an allegation is not set forth in the proposed amendment.1 See

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It is unreasonable to infer that Defendant intended to “stand behind their work” beyond
their contractual and warranty obligations, especially since the statement references the
warranty. [Docket No. 23, Ex. 4 at 1–2.] See Kaye v. D’Amato, 357 F. App’x 706, 710 (7th Cir.
2009) (“To survive a motion to dismiss, a plaintiff must plead factual content that allows the
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”).
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Trzeciak v. State Farm Fire & Casualty Co., No. 2:10-cv-358-JTM-PRC, 2011 WL 831126, at
*3 (N.D. Ind. Mar. 1, 2011) (explaining that plaintiffs must give defendants adequate notice of
the specific activity of fraud, so that the accused may file an effective response).
In any event, Defendant’s alleged representations deal with the future application of the
warranty or a future promise to repair, which cannot be the basis of a fraud claim since the
representation must be of past or existing fact. Wright-Moore Corp. v. Ricoh Corp., 908 F.2d
128, 141 (7th Cir. 1990) (“[A]ctionable fraud cannot be predicated upon a promise to do a thing
in the future, although there may be no intention of fulfilling the promise.”); Biberstine v. N.Y.
Blower Co., 625 N.E.2d 1308, 1315 (Ind. Ct. App. 1993) (“[A]ctual fraud may not be based on
representations regarding future conduct, or broken promises, unfulfilled predictions or
statements of existing intent which are not executed.”). Indeed, Plaintiff did not even file a reply
brief in response to Defendant’s argument that the proposed amendment only alleges future
promises. [Docket No. 30 at 8–11.]
Furthermore, Plaintiff has completely failed to allege that the statements were made with
knowledge or reckless disregard of their falsity, and has not alleged that she reasonably relied on
any of Defendant’s statements to her detriment.2 Because Plaintiff has failed to sufficiently
allege each element of fraud, Plaintiff’s proposed amendment would not survive a motion to
dismiss and is therefore futile. At bottom, this case is about an alleged breach of contract and an
alleged failure to abide by the terms of a warranty. It is not a case about fraud, or at least

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Plaintiff also claims that she did not receive the warranty until December 2005, and that
she felt pressured into signing the purchase agreement. [Docket No. 23 at 8.] These allegations
are irrelevant to a claim of fraud and are more akin to contractual defenses such as adhesion and
unconscionability. See, e.g., Nw. Nat’l Ins. Co. v. Donovan, 916 F.2d 372, 377 (7th Cir. 1990).
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Plaintiff’s amended allegations are insufficient to bring this case into that realm. Plaintiff’s
motion for leave to amend the complaint [Docket No. 23] is therefore denied without prejudice.

Dated: 08/26/2011
_______________________________
Tim A. Baker
United States Magistrate Judge
Southern District of Indiana

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Copies to:
Monica Renee Brownewell Smith
BARNES & THORNBURG LLP
[e-mail]
Robert David Epstein
EPSTEIN COHEN DONAHOE & MENDES
[e-mail]
Jason A. Flora
EPSTEIN COHEN DONAHOE MENDES & SEIF
[e-mail]
Karoline E. Jackson
BARNES & THORNBURG LLP
[e-mail]

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