Franklin v. Pinnacle Entertainment, Inc.

Filing 70

MEMORANDUM AND ORDER NUNC PRO TUNC IT IS HEREBY ORDERED that the Memorandum and Order of August 9, 2012 is vacated. [Doc. 68] IT IS FURTHER ORDERED that defendants amended motion to dismiss is GRANTED in part, DENIED in part as moot, and DENIED in part; the motion is GRANTED as to Counts I, II, IV, V and VIII, DENIED as moot as to Count VII, and DENIED as to Counts III and VI. [Doc. 43] Signed by District Judge Charles A. Shaw on 8/9/2012. (NCL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

DIANE FRANKLIN, et al.,
Plaintiffs,
v.
PINNACLE ENTERTAINMENT, INC.,
Defendant.

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No. 4:12-CV-307 CAS

MEMORANDUM AND ORDER NUNC PRO TUNC
This matter is before the Court on defendant Pinnacle Entertainment, Inc.’s (“defendant”)
amended motion to dismiss plaintiffs’ First Amended Petition (“Complaint”) pursuant to Rule
12(b)(6), Federal Rules of Civil Procedure. Plaintiffs oppose the motion and it is fully briefed. For
the following reasons, the motion will be granted in part and denied in part.
Background
This action was filed in the Circuit Court of the City of St. Louis, State of Missouri, on
November 18, 2011, by sixty-seven plaintiffs asserting state law claims for breach of contract,
employment discrimination in violation of the Missouri Human Rights Act, Mo. Rev. Stat.
§§ 213.010, et seq., and negligent and intentional infliction of emotional distress. The case arises
out of the plaintiffs’ layoff from employment at defendant’s now-closed President Casino.
Defendant removed the action to this Court pursuant to 28 U.S.C. §§ 1332 and 1441. Plaintiffs
subsequently sought and were granted leave to file their Complaint, which adds several parties to
the action and asserts additional claims for breach of contract and fraudulent and negligent
misrepresentation. Defendant moves to dismiss all counts of the Complaint for failure to state a
claim upon which relief may be granted.

Legal Standard
The purpose of a motion to dismiss for failure to state a claim is to test the legal sufficiency
of the complaint. “To survive a motion to dismiss, a claim must be facially plausible, meaning that
the ‘factual content . . . allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.’” Cole v. Homier Dist. Co., Inc., 599 F.3d 856, 861 (8th Cir. 2010)
(quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). To determine whether a claim is facially
plausible, a court must “‘accept the allegations contained in the complaint as true and draw all
reasonable inferences in favor of the nonmoving party.’” Id. (quoting Coons v. Mineta, 410 F.3d
1036, 1039 (8th Cir. 2005)). If a court “can infer from those factual allegations no more than a
‘mere possibility of misconduct,’ the complaint must be dismissed.” Id. (quoting Iqbal, 129 S. Ct.
at 1950)).
The principle that a court must accept as true all of the allegations contained in a complaint
is inapplicable to legal conclusions. Iqbal, 129 S. Ct. at 1949-50 (stating “[t]hreadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not suffice”).
Although legal conclusions can provide the framework for a complaint, they must be supported by
factual allegations. Id. at 1950. A complaint “must contain either direct or inferential allegations
respecting all the material elements necessary to sustain recovery under some viable legal theory.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 562 (2007) (quoted case omitted).
Discussion
A. Count 1 - Breach of Contract1

1

The Complaint does not contain a count specifically labeled as “Count I.” Plaintiffs’ claim
for breach of contract begins on page 2 of the Complaint, immediately under the heading “Plaintiffs’
First Amended Petition.” It is followed by Count II, labeled as such, on page 3.
2

Count I alleges that defendant breached an oral contract to transfer the plaintiffs to a different
facility, or to rehire them, in return for their agreement to continue working at the President Casino
until it closed. Defendant moves to dismiss Count I on the basis that it is devoid of the factual
allegations necessary to establish a breach of contract claim, and instead merely recites the elements
of such a claim. Defendant states that the Complaint fails to allege who made the agreement with
plaintiffs and what its specific terms were, and asserts that plaintiffs’ mere reference to an employee
handbook is insufficient to establish the terms essential to an employment contract. Defendant also
argues that even if it is assumed plaintiffs adequately pleaded the existence of an oral contract, the
claim must still fail because the alleged oral contract as pleaded contains no definite term and alleges
nothing more than a promise for continued at-will employment, which may be terminated at any
time. Defendant relies on Morsinkhoff v. DeLuxe Laundry & Dry Cleaning Co., 344 S.W.2d 639,
642 (Mo. Ct. App. 1961), and Bethea v. Levi Strauss & Co., 827 F.2d 355, 359-60 (8th Cir. 1987).
Plaintiffs respond that their Complaint was modeled on the allegations in the case Jennings
v. SSM Health Care St. Louis, 355 S.W.3d 526 (Mo. Ct. App. 2011), and that under Jennings,
Missouri courts recognize a cause of action for breach of an oral contract in circumstances similar
to the instant case. Plaintiffs assert that their Complaint alleges “what the promise consisted of,
when it [was] made and broken, what consideration and reliance were given and the injury that was
sustained.” Pls.’ Response at 2. Without further analysis, plaintiffs conclude, “Like in Jennings,
this is all it takes to plead a cause of action for breach of a unilateral promise or contract.” Id.2

2

In the body of their opposition memorandum, plaintiffs request leave to amend their
complaint by interlineation to allege that the promise was made by defendant’s then-Director of
Human Resources, Walter Robinson. The Court does not allow amendment by interlineation. See
Order of March 13, 2012 at 1 [Doc.16]. Even if this amendment were allowed, plaintiffs would still
be unable to state a claim for breach of contract.
3

Defendant replies that even if plaintiffs have sufficiently pleaded the “absolute minimum”
required to state a claim, they fail to acknowledge that the contract as alleged is for employment for
an indefinite period of time which may be terminated at any time for any reason under Missouri law,
and therefore their breach of contract claim must fail.
As a threshold matter, the Court notes that plaintiffs argue their Complaint adequately states
a claim because a similar claim was permitted to proceed in a state court decision, Jennings.
Plaintiffs fail to recognize that the first issue before the Court is not whether a claim for breach of
an oral employment contract is potentially viable under state law, but rather whether plaintiffs have
adequately pleaded such a claim under the federal pleading standards set forth in the Supreme
Court’s Iqbal and Twombly decisions. Plaintiffs’ response states that their case was removed to
federal court, implying that their pleading is adequate under state pleading standards, but plaintiffs
have previously been advised that federal pleading standards, not state pleading standards, apply to
civil actions removed from state court. Christiansen v. West Branch Community Sch. Dist., 674
F.3d 927, 938-39 (8th Cir. 2012).3 The Missouri Court of Appeals’ Jennings decision does not
address federal pleading standards. Also, plaintiffs amended their Complaint following removal,
so there should be no doubt that federal standards apply.
The Complaint alleges in pertinent part that on March 10, 2010, defendant orally advised
plaintiffs that the President Casino would be closing and they would be out of work, but if they
continued to work they would be transferred and rehired at defendant’s new facilities. Complaint
at 2, ¶ 4. Defendant “is [sic] making its promise referred to [the] employee handbook regarding how
the lay offs who [sic] be handled and the lay off procedures written therein.”

3

See Order Concerning Removal of April 16, 2012 at 15, n.12 [Doc. 47].
4

Id., ¶ 5.

Approximately six weeks later, on or about April 21, 2010, defendant advised plaintiffs they were
being laid off and no retention would be offered for them to transfer to defendant’s new facilities.
Id., ¶ 6. Plaintiffs were told they could apply at defendant’s other casinos as new employees, with
no assurance of being hired and with no pay or seniority assurances. Id., ¶ 7. Plaintiffs demanded
that defendant offer them their same positions at the new facilities, with the same salary, benefits
and seniority. Id.,¶ 8. Plaintiffs assert that as a result of defendant’s breach of the oral contract, they
have each been damaged in an amount in excess of $10,000 for lost wages and benefits.
The Court finds that plaintiffs’ breach of contract claim must fail, because plaintiffs do not
allege that the parties agreed on the terms of continued employment and, more crucially, on a term
for the duration of continued employment or limited the reasons for which plaintiffs could be
discharged. Thus, at most, defendant only promised at-will employment which could be terminated
at any time. In Missouri, “a valid employment contract must either specify the duration of
employment or limit the reasons for which the employee may be discharged.” Clark v. Washington
Univ., 906 S.W.2d 789, 791 (Mo. Ct. App. 1995) (citing cases); see also Luethans v. Washington
Univ., 894 S.W.2d 169, 172 (Mo. 1995) (en banc) (“Without a statement of duration, an employment
at will is created which is terminable at any time by either party with no liability for breach of
contract.”), abrogated on other grounds, Keveney v. Missouri Military Acad., 304 S.W.3d 98, 10203 (Mo. 2010) (en banc). “An employer may terminate an at-will employee ‘for any reason or for
no reason.’” Margiotta v Christian Hosp. Northeast Northwest, 315 S.W.3d 342, 345 (Mo. 2010)
(en banc) (quoting Crabtree v. Bugby, 967 S.W.2d 66, 70 (Mo. 1998) (en banc)).
Plaintiffs’ allegations of a promise of employment at defendant’s other facilities are
comparable to the facts of the Morsinkhoff case cited by defendant, 344 S.W.2d at 640-62. In
Morsinkhoff, defendant DeLuxe Laundry orally agreed and promised to hire Morsinkhoff, with
5

employment to begin approximately one month later. In reliance on that promise, plaintiff quit his
existing job, but DeLuxe then refused to hire him. Plaintiff sued DeLuxe for breach of contract on
the theory that DeLuxe had made an oral agreement to employ him. The Missouri Court of Appeals
held that because the contract was oral and for an indefinite period, it could be terminated at will by
either party at any time, for any reason, without incurring liability. Id. at 642. This was so even
though Morsinkhoff quit his job in reliance on DeLuxe’s promise. Id. at 644-45.4 Based on the
principles articulated in Morsinkhoff and the Missouri decisions cited above concerning the at-will
employment doctrine, plaintiffs’ breach of contract claim in Count I fails as a matter of law.
Plaintiffs’ vague reference to unspecified layoff provisions of defendant’s employee
handbook is not a factual allegation sufficient to create an enforceable employment contract. First,
Missouri courts have consistently held that issuance of an employee handbook does not create an
exception to the at-will employment doctrine or constitute a contractual offer. See Johnson v.
McDonnell Douglas Corp., 745 S.W.2d 661, 661-62 (Mo. 1988) (en banc); West Cent. Mo. Regional
Lodge No. 50 v. Board of Police Comm’rs of Kansas City, Mo., 939 S.W.2d 565, 567 (Mo. Ct. App.
1997) (citing cases). This is because employee handbooks normally lack the traditional prerequisites
of a contract – offer, acceptance, and consideration. Patterson v. Tenet Healthcare, Inc., 113 F.3d
832, 835 (8th Cir. 1997). Second, plaintiffs fail to make any factual allegations about the terms of

4

The Court notes that in Bower v. AT&T Technologies, Inc., 852 F.2d 361, 364 (8th Cir.
1988), the Eighth Circuit concluded that Morsinkhoff would permit an award of damages based not
on contract, but rather on the plaintiff’s reasonable reliance on the defendant’s promise. Shortly
thereafter, the Missouri Court of Appeals sharply disagreed, finding Bower to be “in direct conflict”
with the holding of Morsinkhoff. See Rosatone v. GTE Sprint Communications, 761 S.W.2d 670,
672-73 (Mo. Ct. App. 1988) (“[T]he statement in Bower that Morsinkhoff does not preclude an
award of damages based on reliance clearly misconstrues the holding therein.”). On remand from
the Eighth Circuit in Bower, this Court, Judge Noce presiding, determined that Morsinkhoff and
Rosatone were the “most authoritative statements of Missouri law” relating to the matter. Bower
v. AT&T Techs., Inc., 1989 WL 251280, at *1 (E.D. Mo. Jan. 31, 1989).
6

the employee handbook and how it is relevant to their claims. As a result, the general rule of
Missouri law that there is no “handbook exception” to the at-will employment doctrine applies here.
Defendant’s motion to dismiss Count I should therefore be granted.
B. Counts II and V - Fraudulent Misrepresentation5
Count II of the Complaint alleges that defendant made false representations that it would
transfer and rehire plaintiffs at defendant’s new facilities if they continued to work at the President
Casino until it closed. Count V alleges that defendant made false representations that it would pay
the plaintiffs severance packages, sick leave and bonuses if they continued to work at the casino
until it closed.
Defendant moves to dismiss Counts II and V on the basis that plaintiffs fail to meet the
heightened pleading standard of Rule 9(b), Fed. R. Civ. P., applicable to a claim of fraudulent
misrepresentation. Defendant states that under Rule 9(b), a plaintiff must plead the time, place and
contents of the false representation and the identity of the person making the misrepresentation, and
that plaintiffs fail to do so.

Defendant asserts that plaintiffs fail to plead who made the

misrepresentations, where they occurred, and exactly what was represented, and fail to allege facts
suggesting that defendant made the alleged misrepresentations with the present intent not to perform.
Plaintiffs’ response discusses only their reliance on defendant’s promise to rehire or transfer
them to the new casinos, and/or to pay them severance packages, and their right to rely. Plaintiffs
state that they knew defendant was opening two other casinos, defendant promised to rehire them

5

The counts of the Complaint are not titled or named. In their opposition memorandum,
plaintiffs describe Counts II and V as being for “intentional misrepresentation.” Pls.’ Response at
3. Fraudulent misrepresentation and intentional misrepresentation are synonymous under Missouri
law and include the same elements. See BMK Corp. v. Clayton Corp., 226 S.W.3d 179, 193 (Mo.
Ct. App. 2007).
7

and had the capacity to keep its promise, so the failure to hire them “in light of these new casinos
as promised was not known to them but only to defendant.” Pls.’ Response at 4.
Defendant replies that plaintiffs have not pleaded the necessary element of defendant’s intent
not to perform at the time it made the alleged promise, and that their Complaint provides nothing
more than the alleged subsequent breach to support the theory that the alleged original promise was
fraudulent. Defendant asserts that “Missouri courts have stated on numerous occasions that the
necessary intent cannot be established merely by pointing to the defendant’s subsequent breach.”
Cole, 599 F.3d at 874.
Under Rule 9(b), “In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Rule 9(b), Fed. R. Civ. P. Rule 9(b)’s “particularity
requirement demands a higher degree of notice than that required for other claims.” United States
ex rel. Costner v. URS Consultants, Inc., 317 F.3d 883, 888 (8th Cir. 2003) (cited case omitted).
“Under Rule 9(b), a plaintiff must plead such matters as the time, place and contents of false
representations, as well as the identity of the person making the misrepresentation and what was
obtained or given up thereby. In other words, the party must typically identify the ‘who, what,
where, when, and how’ of the alleged fraud.” BJC Health Sys. v. Columbia Cas. Co., 478 F.3d 908,
917 (8th Cir. 2007) (internal quotation marks and quoted cases omitted).
The elements of an action for fraudulent misrepresentation under Missouri law are: “1) a
representation; 2) its falsity; 3) its materiality; 4) the speaker’s knowledge of its falsity or his
ignorance of its truth; 5) the speaker’s intent that it should be acted on by the person and in the
manner reasonably contemplated; 6) the hearer’s ignorance of the falsity of the representation; 7)
the hearer’s reliance on the representation being true; 8) the right to rely thereon; and, 9) the hearer’s
consequent and proximately caused injury.” Heberer v. Shell Oil Co., 744 S.W.2d 441, 443 (Mo.
8

1988) (en banc). The failure to establish any one of the elements is fatal to a fraud claim. Dolan v.
Rabenburg, 231 S.W.2d 150, 154 (Mo. 1950). “When fraud is alleged the burden of proof as to each
element falls on the party asserting the fraud and fraud is never presumed.” Magna Bank of
Madison County v. W.P. Foods, Inc., 926 S.W.2d 157, 162 (Mo. Ct. App. 1996).
In addition, “It is well-settled that an unkept promise does not constitute actionable fraud
unless it is accompanied by a present intent not to perform, in which case it constitutes a
misrepresentation of a present state of mind—itself an existent fact.” Thoroughbred Ford, Inc. v.
Ford Motor Co., 908 S.W.2d 719, 732 (Mo. Ct. App. 1995) (citing cases). Further, “The fact that
the party did not ultimately perform is not enough, without more, to show that the promisor did not
intend to perform when the promise was made.” Urologic Surgeons, Inc. v. Bullock, 117 S.W.3d
722, 726 (Mo. Ct. App. 2003) (citing Thoroughbred Ford, id.).
Counts II and V of plaintiffs’ Complaint allege that (1) defendant orally represented to them
in March 2010 that plaintiffs would be rehired or transferred to defendant’s new casinos, and/or
would be paid severance packages, sick pay and bonuses, if they continued to work at the President
Casino until it closed; (2) these representations were false; (3) the representations were rescinded
in April 2010; (4) the representations were material because they induced plaintiffs to remain
employed at the President Casino until it closed; (5) defendant knew the representations were false
or did not know the representations were false at the time they were made but continued to make
them; (6) plaintiffs relied on the representations “without knowing of it [sic] validity;” and (7)
plaintiffs were damaged as a result.
The Court agrees with defendant that plaintiffs have failed to plead their fraudulent
misrepresentation claims with sufficient particularity to meet Rule 9(b)’s requirements. Plaintiffs
do not plead the “who, what, when, where and why” of the alleged fraud. Plaintiffs do not allege
9

any facts concerning the place of the representations or the name of the person or persons making
them. Nor do plaintiffs allege facts concerning whether the representations were made to them
individually or as a group, and whether the same person or persons made the representation to each
plaintiff.6 Plaintiffs allege generally that they were promised employment at defendant’s new
casinos if they remained at the President Casino until it closed, but allege no specific facts
concerning the nature and scope of the promise – i.e., were they promised the same jobs at the new
facilities, with the same pay, benefits and seniority as their old jobs?7 Plaintiffs also allege generally
that they were promised severance packages, sick pay and bonuses if they remained at the President
Casino until it closed, but allege no specific facts concerning the nature and scope of the promise
– i.e., the amount of the severance packages, sick pay and bonuses.
Plaintiffs also fail to allege any facts, as opposed to mere conclusions, tending to suggest that
defendant made the alleged misrepresentations with the present intent not to perform consistently
with its statements. “[A]bsent such an inconsistent intent there is no misrepresentation of fact or
state of mind but only a breach of promise or failure to perform.” Cole, 599 F.3d at 862 (quoted
case omitted; applying Missouri law). Plaintiffs’ allegations that defendant made the promises and
then rescinded them a month later tends to suggest that defendant made the promises with a present
intent to perform. Plaintiffs’ allegations “are just as consistent with a present intent to perform as

6

In their Response, plaintiffs seek leave to amend their Complaint by interlineation to state
that Walter Robinson, then defendant’s Director of Human Resources, made the promises regarding
rehiring and severance packages. Even if the Court permitted amendment by interlineation, which
it does not, see Order of March 13, 2012 at 1, this allegation is not enough to save plaintiffs’
fraudulent misrepresentation claims, which are deficient for the additional reasons discussed above.
7

The Complaint alleges that plaintiffs demanded that defendant hire them at the new casinos
for their same stations/jobs, with the same pay, benefits and seniority, but it does not allege that
defendant had ever promised it would do this.
10

they are with fraud,” Cole, 599 F.3d at 863, and do no more than suggest that defendant, for one
reason or another, changed its mind as to how it wished to staff its new casinos or compensate the
plaintiffs. See Cole, 599 F.3d at 864. This is insufficient as a matter of law to state a claim for
fraud. Id. See also Restatement (First) of Torts § 530 cmt. a (1938) ( “[O]ne who acts in justifiable
reliance upon another’s honest statement of his then existing intention cannot maintain an action for
the loss caused by the disappointment of his expectations if the other for any reason, good or bad,
changes his mind and fails” to perform.).
For these reasons, defendant’s motion to dismiss Counts II and V should be granted.
C. Counts III and VI - Negligent Misrepresentation
In Count III, plaintiffs incorporate their allegations from Counts I and II that defendant
promised it would rehire or transfer them to its new casinos if they continued to work at the
President Casino until it closed, but allege instead that defendant “did not know the representations
were false but continue[d] to make the representations so Plaintiff[s] would rely.” Complaint at 4.
Similarly, in Count VI, plaintiffs incorporate their allegations that defendant promised it would pay
them severance packages, sick pay and bonuses if they continued to work at the President Casino
until it closed, but allege that defendant “did not know the representations were false but continue[d]
to make the representations so Plaintiff[s] can rely.” Complaint at 7.
The elements of negligent misrepresentation under Missouri law are: (1) the speaker
supplied or omitted information in the course of its business; (2) due to the speaker’s failure to
exercise reasonable care, the information was false; (3) the speaker provided this information in a
particular business transaction; (4) the listener justifiably relied on the information; and (5) as a
result of the listener’s reliance on the statement, he or she suffered a pecuniary loss. Jennings, 355
S.W.3d at 537-38.
11

Defendant moves to dismiss Counts III and VI on the basis that Missouri law precludes
recovery under negligent misrepresentation for statements of future intent, citing Hoag v. McBride
& Son Investment Co., Inc., 967 S.W.2d 157, 174 (Mo. Ct. App. 1998). Plaintiffs respond that they
relied on defendant’s promises, knowing that it was opening two other casinos and had the capacity
to keep its promise, and continued to work at the President Casino keeping it operable until it closed.
Plaintiffs cite the Missouri Court of Appeals’ Jennings decision as supporting the existence of a
negligent misrepresentation claim under the circumstances of this case.
Defendant is correct that “a negligent misrepresentation claim cannot arise from a statement
regarding the speaker’s future intent.” Hoag, 967 S.W.2d at 174. This is because “it is impossible
to be negligent in failing to ascertain the truth or falsity of one’s own future intentions.” Id. (quoting
Jacobs Mfg. Co. v. Sam Brown Co., 792 F. Supp. 1520, 1528 (W.D. Mo. 1992)). Thus, “a claim for
negligent misrepresentation generally cannot be based on unfulfilled promises or statements as to
future events.” City of St. Joseph, Mo. v. Southwestern Bell Tel., 439 F.3d 468, 478 (8th Cir. 2006)
(citation omitted). However, “if ‘the statement is a representation of the speaker’s present intention
or concerns matters within the speaker’s control,’ a cause of action for negligent misrepresentation
exists. Wellcraft Marine v. Lyell, 960 S.W.2d 542, 547 (Mo. Ct. App. 1998) (quoting 37 C.J.S.
Fraud § 59).” City of St. Joseph, 439 F.3d at 478. “Under this rule, there is liability for negligent
misrepresentation as to a future event only if the event was under the speaker’s control.” Wellcraft,
960 S.W.2d at 547.
Viewing the Complaint’s factual allegations in the light most favorable to plaintiffs, the
Court finds that defendant’s argument is unpersuasive. Plaintiffs allege that in March 2010,
defendant promised the plaintiffs they would be transferred and rehired at defendant’s new casino
facilities, and/or would be paid severance packages, sick pay and bonuses, if they continued to work
12

at their current positions at the President Casino until it closed. Plaintiffs allege that they continued
to work at the casino, but a month later defendant advised them they would be laid off and would
not be transferred to defendant’s other facilities after all, and it refused to pay them the promised
severance packages, sick pay and bonuses. Finally, plaintiffs allege that defendant did open two
new facilities, but did not offer any positions to the plaintiffs as transferees or rehires.
These allegations are sufficient to suggest that when the promise was made in March 2010,
defendant had the present intention to transfer or rehire the plaintiffs at its new facilities and/or to
pay them severance packages if they would continue to work at the President Casino until it closed,
and that doing so was a matter within defendant’s control. Cf. Mounger Constr., LLC v. Fibervision
Cable Servs., LLC, 2012 WL 1745543, at *4 (E.D. Mo. May 16, 2012) (denying motion to dismiss
negligent misrepresentation claim where complaint alleged that defendant represented it was
procuring signage and plaintiff would be able to begin construction within one week, as this
allegation suggested that defendant had the present intention to procure signage and doing so was
within its control). In addition, the allegation that plaintiffs continued to work at the President
Casino tends to show plaintiffs’ reliance on defendant’s promise. Cf. Jennings, 355 S.W.3d at 538
(allegation that plaintiff remained employed during transition period as a result of defendant’s
promise to pay severance pay indicated plaintiff’s reliance on the promise). The Court therefore
finds that plaintiffs have stated claims for negligent misrepresentation in Counts III and VI and this
aspect of defendant’s motion to dismiss should be denied.
D. Count IV - Breach of Contract
Count IV alleges that defendant breached an oral contract to pay plaintiffs severance
packages, sick pay and bonuses, in return for their agreement to continue to work at the President
Casino until it closed. Plaintiffs allege that they relied on this promise and continued to work at the
13

President until it closed, but defendant did not pay the severance packages, sick pay and bonuses as
promised.
Defendant moves to dismiss Count IV on the basis that it fails to allege the elements of a
claim for promissory estoppel, because plaintiffs fail to allege the existence of a contract with
respect to the alleged promise for severance packages, sick pay and bonuses. Defendant also asserts
that the alleged promise was not sufficiently definite to support a claim of breach of contract, and
that plaintiffs fail to articulate how much each plaintiff is allegedly owed or how the severance, sick
pay and bonuses would be calculated for each employee. Defendant also asserts that plaintiffs fail
to adequately allege detrimental reliance because they do not allege that they turned down other
employment opportunities or otherwise detrimentally relied on the alleged promise. Finally,
defendant states that any reliance on the alleged promise could not be expected, because plaintiffs
also allege that defendant rescinded the promise one month later.
Plaintiffs respond that defendant misinterpreted the Complaint, as Count IV asserts a claim
for breach of an oral contract to pay them severance packages and other benefits if they continued
to work at the President Casino until it closed. Plaintiffs assert that as in the Jennings case, they
have alleged the breach of a unilateral contract because they plead that they continued to work at
the President Casino until it closed, in reliance on defendant’s promise.
Defendant’s reply addresses Count IV as a breach of contract claim, and asserts that plaintiffs
fail to state a claim for breach of contract because they fail to articulate the essential terms of the
alleged contract, specifically how much the plaintiffs are allegedly owed and how the severance,
sick pay and bonuses would be calculated for each employee. Defendant also argues that even if
the specific terms of the severance, sick pay and bonuses were to be determined at a later date,
plaintiffs’ claims must fail because under Missouri law “an oral contract will not be found unless
14

the parties have reached an understanding as to all the essential terms of the agreement.” Middleton
Enters., Inc. v. Churm, 618 F. Supp. 477, 480 (E.D. Mo. 1985); see also Dancin Dev., L.L.C. v. NRT
Missouri, Inc., 291 S.W.3d 739, 745 (Mo. Ct. App. 2009) (where parties reserved essential terms
for future determination, there could be no breach of contract claim as no contract had been formed).
The essential elements of a contract in Missouri are: “(1) competency of the parties to
contract; (2) subject matter; (3) legal consideration; (4) mutuality of agreement; and (5) mutuality
of obligation.”8 Dancin Dev., 291 S.W.3d at 745 (quoted case omitted). Defendant’s motion to
dismiss argues that the Complaint does not indicate the presence of mutuality of agreement because
essential terms of the contract are not pleaded. “Mutuality of agreement is determined by looking
to the intentions of the parties as expressed or manifested in their words or acts.” Ketcherside v.
McLane, 118 S.W.3d 631, 636 (Mo. Ct. App. 2003). “If the parties have reserved the essential terms
of the contract for future determination, there can be no valid agreement.” Harrell v. Mercy Health
Services Corp., 229 S.W.3d 614, 619 (Mo. Ct. App. 2007) (quoted case omitted).
The Court agrees that plaintiffs have failed to plead sufficient facts necessary to establish the
existence of an oral contract, as there are no allegations concerning essential terms including how
much the plaintiffs are allegedly owed and how the severance, sick pay and bonuses would be
calculated for each plaintiff. Defendant’s motion to dismiss Count IV should therefore be granted.
E. Count VII - Age Discrimination
Defendant moved to dismiss Count VII, in which fifteen plaintiffs assert claims of age
discrimination in violation of the Missouri Human Rights Act, but withdrew this portion of its

8

“Technically speaking, there is no ‘mutuality of obligation’ when discussing unilateral
contracts.” Ketcherside v. McLane, 118 S.W.3d 631, 635 n.1 (Mo. Ct. App. 2003) (citing
Underwood Typewriter Co. v. Century Realty Co., 119 S.W. 400, 404 (Mo. 1909)).
15

motion in its reply memorandum. Accordingly, defendant’s motion to dismiss Count VII should be
denied as moot.
F. Count VIII - Negligent and Intentional Infliction of Emotional Distress
Defendant moves to dismiss Count VIII, which asserts claims for negligent and intentional
infliction of emotional distress, on the basis that plaintiffs fail to provide factual allegations to
establish the elements of either cause of action. Defendant asserts that plaintiffs fail to state a claim
for intentional infliction of emotional distress because they fail to allege that any of defendant’s
conduct was extreme or outrageous, or went beyond that which may take place during the normal
course of an employer/employee relationship. Defendant states that all of plaintiffs’ emotional
distress claims are based on its alleged failure to rehire them or pay them severance packages and
benefits, which does not rise to the level of extreme and outrageous conduct under Missouri law.
With respect to negligent infliction of emotional distress, defendant asserts that plaintiffs fail to
allege facts to show that defendant should have realized its conduct involved an unreasonable risk
of causing distress, and plaintiffs’ conclusory statement concerning their “medically diagnosable”
condition is insufficient to establish a ground for recovery.
Plaintiffs respond by requesting leave to amend their Complaint to allege that defendant’s
conduct was “extreme and outrageous.” Plaintiffs state that their emotional distress claims are based
on defendant’s promises to rehire them and pay them severance packages, which it never intended
to honor. Plaintiffs assert, “Promising employees future work opportunity and pay only to entice
them to waive their rights to seek other employment goes without saying would cause emotional
distress. Plaintiffs would argue this [is] especially true in these economic times.” Pls.’ Response
at 6. Plaintiffs also assert that emotional distress “can be implied where there is [an] employer and
employee relationship,” citing Boes v. Deschu, 768 S.W.2d 205 (Mo. Ct. App. 1989).
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Defendant replies that plaintiffs’ proposed amendment to add the words “extreme and
outrageous” to their Complaint is futile because plaintiffs will be unable to establish that defendant’s
conduct was sufficiently extreme and outrageous to survive a motion to dismiss.
1. Intentional Infliction of Emotional Distress
The Missouri Supreme Court has explained the elements of the tort of intentional infliction
of emotional distress as follows:
To state a claim for intentional infliction of emotional distress, a plaintiff
must plead extreme and outrageous conduct by a defendant who intentionally or
recklessly causes severe emotional distress that results in bodily harm. K.G. v.
R.T.R., 918 S.W.2d 795, 799 (Mo. banc 1996). The conduct must have been “so
outrageous in character, and so extreme in degree, as to go beyond all possible
bounds of decency, and to be regarded as atrocious, and utterly intolerable in a
civilized community.” Warrem v. Parrish, 436 S.W.2d 670, 673 (Mo. 1969). The
conduct must be “intended only to cause extreme emotional distress to the victim.”
K.G., 918 S.W.2d at 799.
Gibson v. Brewer, 952 S.W.2d 239, 249 (Mo. 1997) (en banc). Under Missouri law, “It is for the
court to determine, in the first instance, whether the defendant’s conduct may be reasonably
regarded as so extreme and outrageous as to permit recovery.” St. Anthony’s Med. Ctr. v. H.S.H.,
974 S.W.2d 606, 611 (Mo. Ct. App. 1998) (cited case omitted).
After careful review of the Complaint, the Court finds that plaintiffs fail to state a claim for
intentional infliction of emotional distress (“IIED”) as a matter of law. Even if plaintiffs were
granted leave to amend their Complaint to allege that defendant’s conduct was extreme and
outrageous, such an allegation would be a mere legal conclusion, not a fact entitled to be accepted
as true.9 When the Complaint’s factual allegations are accepted as true and all reasonable inferences

9

Plaintiffs have previously been advised that it is insufficient to merely ask for leave to
amend a complaint in the body of a response to a motion to dismiss. “[T]o preserve the right to
amend the complaint, a party must submit the proposed amendment along with its motion.” Clayton
v. White Hall Sch. Dist., 778 F.2d 457, 460 (8th Cir. 1985).” See Order of April 25, 2012 at 2 [Doc.
17

arising therefrom are weighed in plaintiffs’ favor, the Complaint simply does not describe conduct
by the defendant that was so outrageous in character and extreme in degree as to be “beyond all
possible bounds of decency” and “regarded as atrocious and utterly intolerable in a civilized
community.” Plaintiffs allege only that defendant did not keep its promise to rehire them, or to pay
them severance packages and other benefits. For an IIED cause of action to exist, the “defendant’s
conduct must be more than malicious and intentional.” Polk v. INROADS/St. Louis, Inc., 951
S.W.2d 646, 648 (Mo. Ct. App. 1997). Defendant’s conduct as alleged does not rise to that level.
As the Eighth Circuit has stated, “Missouri case law reveals very few factual scenarios
sufficient to support a claim for intentional infliction of emotional distress. Rarely is a defendant’s
conduct sufficiently extreme and outrageous to warrant recovery.” Kansas City Laser, Inc. v. MCI
Telecomms. Corp., 252 F. App’x 100, 104 (8th Cir. 2007) (internal quotation marks and quoted case
omitted); see Bailey v. Bayer CropScience L.P., 563 F.3d 302, 310 (8th Cir. 2009) (same). The
instant case is not one of those rare cases. See, e.g., Morris v. Union Pac. R.R., 825 S.W.2d 911,
916 (Mo. Ct. App. 1992) (plaintiff’s evidence that various of his supervisors threatened to fire him,
laughed at a cartoon depicting him, watched him too closely, placed him on jobs for which he had
no experience, and allowed him to be absent from work but then complained to him about his
absenteeism, was insufficient to permit recovery on a claim of intentional infliction of emotional
distress); Hendrix v. Wainright Indus., 755 S.W.2d 411, 412 (Mo. Ct. App. 1988) (plaintiff who
alleged he was “continuously harassed and threatened with termination” in retaliation for filing a
complaint with the Occupational Safety and Health Administration could not prevail on a claim of
IIED because the defendant’s conduct was not outrageous, although it was “undesirable” and

49] .
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“illegal”); Comstock v. Consumers Markets, Inc., 953 F. Supp. 1096, 1106 (W.D. Mo. 1996)
(plaintiff’s claims that the epithet “bitch” was written on her time card, and that her supervisor held
her responsible for duties she did not believe were hers, compared her legs to those of a co-worker,
stated that women were meant to be subject to men, and frequently criticized her work, were
“insensitive and unkind, but not outrageous”); cf. Polk, 951 S.W.2d at 648 (plaintiff stated a claim
for IIED where she alleged that in retaliation for her report of a supervisor’s misconduct, defendant
altered company documents to make it appear plaintiff had taken more vacation time than she was
authorized or entitled to take, had plaintiff followed at work (even on trips to the bathroom), made
six prank phone calls to plaintiff’s residence within a four hour period while she was on sick leave,
told plaintiff’s co-workers that plaintiff was to blame for the company’s lack of success, and
demoted her).
Plaintiffs’ claim for IIED claim also fails because plaintiffs have not pleaded facts sufficient
to establish that defendant’s conduct was intended solely to cause them extreme emotional distress,
see Kansas City Laser, 252 F. App’x at 104, or facts from which such an inference could be drawn.
See Gibson, 952 S.W.2d at 249 (affirming dismissal of intentional infliction of emotional distress
claim where plaintiffs’ allegations did not “support the inference that the [defendant’s] sole purpose
in its conduct was to invade the [plaintiffs’] interest in freedom from emotional distress.”).
Defendant’s motion to dismiss plaintiffs’ claims for intentional infliction of emotional distress in
Count VII should therefore be granted.
2. Negligent Infliction of Emotional Distress
“The tort of negligent infliction of emotional distress is a negligence action.” Thornburg v.
Federal Express Corp., 62 S.W.3d 421, 427 (Mo. Ct. App. 2001). “Any action for negligence
requires the plaintiff to establish that the defendant had a duty to protect the plaintiff from injury,
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the defendant failed to perform that duty, and the plaintiff’s injury was proximately caused by the
defendant’s failure.” Jarrett v. Jones, 258 S.W.3d 442, 448 (Mo. 2008) (en banc) (cited case
omitted). Claims seeking recovery of damages for the negligent infliction of emotional distress also
require proof of “two additional elements: (1) the defendant should have realized that his conduct
involved an unreasonable risk of causing distress and (2) the emotional distress or mental injury
must be medically diagnosable and must be of sufficient severity so as to be medically significant.”
Id. (citing Bass v. Nooney Co., 646 S.W.2d 765, 772-73 (Mo. 1983) (en banc)).
Defendant moves for dismissal of this claim on the grounds that (1) plaintiffs have not
alleged that defendant should have realized its conduct involved an unreasonable risk of causing
emotional distress, and (2) plaintiffs fail to state a claim of medically diagnosable emotional distress,
and their conclusory statement concerning their “medically diagnosable” condition is insufficient
to establish a ground for recovery.
Plaintiffs respond that “[e]motional distress can be implied where there is [an] employer and
employee relationship,” citing Boes, 768 S.W.2d 205, and that the Complaint “does allege a
medically diagnosable illness. Depression it is alleged is the mental illness suffered by all.” Pls.’
Response at 6.
Defendant replies that it is unlikely plaintiffs could allege conduct that involved an
unreasonable risk of causing distress as required to support a claim of negligent infliction of
emotional distress because “defendant’s alleged actions were fully within the normal context of the
employer/employee relationship” and therefore fail as a matter of law. Def.’s Reply at 8-9.
In St. Anthony’s Medical Center v. H.S.H., 974 S.W.2d at 611, the Missouri Court of
Appeals held that the following allegations failed to plead an action for negligent infliction of
emotional distress -- “defendant/counterclaimant . . . has been caused to suffer and in the future will
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continue to suffer shame and humiliation and severe emotional distress . . . and has been caused to
incur and in the future will be caused to incur expenses for psychiatric and psychological treatment,
counseling, and medications ….” The court described this as a “conclusory statement that [the
plaintiff] suffered shame and humiliation and severe emotional distress but failed to contain facts
or allegations from which to infer medically diagnosable and medically significant emotional
distress.” Id.
The Complaint in this action alleges that when defendant made promises to the plaintiffs and
then withdrew them, these actions “caused Plaintiffs emotional distress where they were humiliated
and depressed because of the lack of employment or severance to maintain their households all
intended by intentional actions of the Defendant.” Complaint at 8, ¶ 3. The only significant
difference between the Complaint and the allegations in St. Anthony’s Medical Center is that
plaintiffs included the specific term “depression” in their allegations. The next paragraph of
plaintiffs’ Complaint, pleaded in the alternative and without incorporating prior paragraphs of Count
VIII, alleges, “Defendant . . . should have known its actions described in Count I through Count VII
would be accepted and agreed [to] by Plaintiffs as they were Defendant’s employees and that the
withdrawing [of its] promises would cause emotional distress and a mental injury medically
diagnosable.” Id. at 8-9, ¶ 4.
The Court finds that plaintiffs’ factual allegations are insufficient under the Missouri
Supreme Court’s standard in Bass to allege that defendant should have realized its conduct involved
an unreasonable risk of causing distress, and that the emotional distress plaintiffs suffered was both
medically diagnosable and of sufficient severity so as to be medically significant. Liberally
construing plaintiffs’ allegations in their favor, plaintiffs allege they suffered depression that was
medically diagnosable. There are no facts from which it can be inferred, however, that any of the
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plaintiffs’ alleged depression is of such severity as to be “medically significant.” Such an allegation
is a necessary element of a negligent infliction of emotional distress claim. Bass, 646 S.W.2d at
772-73. As a result, the Complaint fails to state a claim for negligent infliction of emotional distress.
Plaintiffs’ reliance on the Missouri Court of Appeals’ Boes decision is misplaced and
misleading. Boes discusses intentional, not negligent, infliction of emotional distress, and states
only that the tort of IIED is typically invoked where there is a preexisting legal relationship between
the parties, such as a employer-employee relationship. 768 S.W.2d at 207-08. Boes did not involve
an employer-employee relationship, and does not state that “[e]motional distress can be implied
where there is [an] employer and employee relationship” as asserted by the plaintiffs.
Defendant’s motion to dismiss plaintiffs’ claims for negligent infliction of emotional distress
in Count VIII should therefore be granted.
Conclusion
For the foregoing reasons, the Court will grant defendant’s motion to dismiss Counts I, II,
IV, V, and VIII, deny the motion to dismiss as moot as to Count VII, and deny the motion to dismiss
as to Counts III and VI. Remaining in this case are plaintiffs’ claims for negligent misrepresentation
in Counts III and VI, and the fifteen plaintiffs’ age discrimination claims under the Missouri Human
Rights Act in Count VII.
Accordingly,
IT IS HEREBY ORDERED that the Memorandum and Order of August 9, 2012 is
vacated. [Doc. 68]
IT IS FURTHER ORDERED that defendant’s amended motion to dismiss is GRANTED
in part, DENIED in part as moot, and DENIED in part; the motion is GRANTED as to Counts

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I, II, IV, V and VIII, DENIED as moot as to Count VII, and DENIED as to Counts III and VI.
[Doc. 43]
An appropriate order of partial dismissal will accompany this Memorandum and Order.

CHARLES A. SHAW
UNITED STATES DISTRICT JUDGE
Dated this 9th day of August, 2012.

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