MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any May 31 2017, 9:01 am
court except for the purpose of establishing
CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEES
Benjamin D. Fryman Paula E. Neff
Valparaiso, Indiana William J. Emerson
Lucas, Holcomb & Medrea LLP
Merrillville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
The Catholic Diocese of Gary May 31, 2017
and St. Joseph Catholic School, Court of Appeals Case No.
Appellants-Defendants, 45A04-1610-PL-2342
Appeal from the Lake Superior
v. Court
The Honorable Diane Kavadias
Douglas N. Crawley and Patricia Schneider, Judge
Crawley, Trial Court Cause No.
Appellees-Plaintiffs 45D11-1207-PL-64
Vaidik, Chief Judge.
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Case Summary
[1] Douglas Crawley was hired by the Catholic Diocese of Gary to work at St.
Joseph Catholic School in August 2005. He was hired as a part-time worker
but became a full-time employee before the end of 2005. The Diocese offered
health-insurance benefits to full-time employees, but Douglas was not made
aware that he was eligible. In late 2006 Douglas was hospitalized. At the time,
he was listed on his wife’s insurance plan. After he was released from the
hospital, his wife’s insurance company denied payment of Douglas’s medical
and hospital bills, claiming that Douglas was eligible for health insurance
through the Diocese.
[2] A health-care-collection agency sued the Crawleys for payment of Douglas’s
medical bills, and the Crawleys filed a third-party complaint against the
Diocese. The Crawleys asserted four claims: breach of contract, actual fraud,
constructive fraud, and violations of the Employment Retirement Income
Safety Act (ERISA). Five years later, the Diocese moved for summary
judgment. The trial court granted the Diocese’s motion only on the ERISA
claim. The Diocese was granted an interlocutory appeal and challenges the
trial court’s denial of summary judgment on the three remaining claims.
Concluding that the Diocese was entitled to summary judgment on the
remaining claims, we reverse.
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Facts and Procedural History
[3] Douglas began working for the Diocese at St. Joseph Catholic School in August
2005. At the time, Douglas worked part-time and was not eligible for the
Diocese’s health-insurance plan. Eventually, Douglas began working forty
hours or more each week at the school and became a full-time employee eligible
for health-insurance coverage. However, Douglas was not informed that he
was eligible to participate in the Diocese’s plan. Douglas was listed as an
insured person through his wife’s employer’s insurance plan. His wife, Patricia,
was employed at St. Catherine Hospital. The hospital’s plan required spouses
of employees to participate in their own employers’ insurance plans, if offered,
as the primary insurer and then to use the hospital’s insurance as secondary
coverage. If coverage was not available to spouses through their employers,
then the hospital’s plan would serve as the sole insurer for them.
[4] In October 2006, Douglas was hospitalized, and the costs of his medical
procedures were billed to St. Catherine Hospital’s insurance provider. Six
months later, in April 2007, Pat Mason, a human-resources representative with
St. Catherine Hospital, contacted the Diocese regarding Douglas’s health-
insurance coverage. After her conversation with the Diocese, Mason and the
hospital’s insurer determined that Douglas was, in fact, eligible for insurance
through the Diocese. Accordingly, the hospital’s insurance provider denied
Douglas’s claims, and Mason notified the Crawleys that Douglas’s claims were
denied.
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[5] Shortly thereafter, Douglas was approached by the principal of St. Joseph
Catholic School. The principal presented Douglas with a form titled
“Voluntary Waiver of Health Insurance Benefits.” Appellants’ App. Vol. III p.
64. The form stipulated that Douglas had been notified that he was eligible for
health-insurance coverage through the Diocese but waived that coverage. The
form was back-dated to January 3, 2006. Douglas kept the form and never
signed it.
[6] The Crawleys were unable to pay Douglas’s hospital bills, and in March 2009, a
collection agency, Argent Healthcare Financial Services, Inc., filed suit against
them. A year later, the Crawleys filed a third-party complaint against the
Diocese, alleging four claims: breach of contract, actual fraud, constructive
fraud, and ERISA violations. They also sought recovery for their attorney’s
fees. As part of their fraud allegations, the Crawleys claimed that the Diocese
misrepresented that Douglas “was not eligible” for coverage under the
Diocese’s insurance plan at the time of his hospitalization, when in fact he was
eligible at that time. Appellants’ App. Vol. II pp. 43-45.
[7] The Diocese later obtained copies of Douglas’s unpaid medical bills. It paid
out all the claims to “healthcare providers and their assignees for balances owed
for medical services provided to Douglas Crawley” for the time that he worked
for the Diocese but was not on its health insurance. Appellees’ App. Vol. II p.
4. The total amount paid was $48,914.45. Id. Argent’s suit against the
Crawleys was dismissed.
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[8] In October 2015, five years after the third-party complaint was filed, the
Diocese moved for summary judgment on all claims. In their response to the
Diocese’s motion, the Crawleys offered the affidavit of Pat Mason, which stated
that she spoke with an unidentified employee at the Diocese in April 2007.
According to Mason, the Diocese employee informed Mason that Douglas was
eligible for health insurance but had declined coverage. The Crawleys
contended that the misrepresentation underlying their fraud claims was not that
Mason was told that Douglas “was not eligible” for health insurance but that
Mason was falsely told that Douglas had declined his health insurance through
the Diocese. Appellants’ App. Vol. III p. 45 (“The essence of the Crawleys’
complaint is that the Diocese falsely represented to Mrs. Crawley’s employer that
Mr. Crawley was offered and declined benefits from the Diocese.”). The
Diocese responded, stating that the Crawleys introduced a different theory for
their fraud claims than what was alleged in their complaint. It argued that this
different theory was the exact opposite of what was pled in the Crawleys’
complaint. In other words, the complaint alleged that the Diocese had
misrepresented that Douglas was not eligible for health insurance, but the
Crawleys’ response to the motion for summary judgment claimed that the
Diocese had misrepresented that Douglas was eligible but had declined
coverage.
[9] The trial court granted summary judgment for the Diocese on the ERISA claim
because both parties agreed that the Diocese’s plan was a “church plan” and
not covered by ERISA’s provisions. See id. at 87; see also 29 U.S.C. § 1003(b)(2)
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(stating that church plans are not covered under ERISA); 29 U.S.C. §
1002(33)(A) (defining church plan). The court denied the Diocese’s motion on
the remaining claims, stating that the Diocese had failed to show that no
genuine issue of material fact existed. Appellants’ App. Vol. III p. 87. The trial
court then granted the Diocese’s request that this issue be certified for
interlocutory appeal. We accepted jurisdiction, and this appeal ensued.
Discussion and Decision
[10] The Diocese contends that there are no genuine issues of material fact on the
remaining claims—breach of contract, actual fraud, and constructive fraud1—
and that the trial court erred when it did not grant summary judgment in its
favor. We review a trial court’s summary-judgment decision de novo. Hughley
v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). All reasonable inferences are drawn
in favor of the non-moving party. Id. “The moving party bears the burden of
making a prima facie showing that there are no genuine issues of material fact
and that the movant is entitled to judgment as a matter of law[.]” Doe v. Adams,
53 N.E.3d 483, 494 (Ind. Ct. App. 2016), trans. denied. If the moving party
establishes its prima facie case, “the burden then shifts to the non-moving party
to designate and produce evidence of facts showing the existence of a genuine
1
In their response to the Diocese’s appeal, the Crawleys introduce three new theories of recovery—
counterfeiting, forgery, and insurance fraud. Because the Crawleys did not raise these issues to the trial
court, they are waived. See Celadon Trucking Srvs., Inc. v. Wilmoth, 70 N.E.3d 883, 840-41 (Ind. Ct. App.
2017).
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issue of material fact.” Id. The party appealing “has the burden of persuading
this Court that the grant or denial of summary judgment was erroneous.” Id.
I. Breach of Contract
[11] The Crawleys contend that the Diocese had “a contractual obligation to
inform” Douglas that he was eligible for health insurance and that the Diocese
breached this obligation. Appellants’ App. Vol. II p. 46. The Diocese contends
that no contract ever existed, and, therefore, the Crawleys’ breach-of-contract
claim fails. To have a legally binding contract there must be an offer,
acceptance, and consideration. Ind. Dep’t of State Revenue v. Belterra Resort Ind.,
LLC, 935 N.E.2d 174, 179 (Ind. 2010). If the contract is in writing, Indiana
Trial Rule 9.2(A) requires the plaintiff to attach the original or a copy to his
pleading.
[12] The only document the Crawleys attached to their third-party complaint is the
Anthem Benefit Booklet. See Ex. A; Appellant’s App. Vol. II pp. 51-136. At
the close of discovery, the booklet remained as the only alleged source of a
contract. Section five of the booklet discusses eligibility for enrollment in an
Anthem health-insurance plan, but it clearly states, “For more specific eligibility
information you should see your Human Resources or benefits department.”
Appellant’s App. Vol. II p. 85. The booklet makes no offer of benefits but
rather serves as an educational tool; it is not the source of a contract between
the Diocese and Douglas.
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[13] On appeal, the Crawleys claim that they will “offer evidence at trial to show
[the Diocese’s] policy provision of health insurance benefits to its employees.”
Appellees’ Br. p. 35. They continue that at trial they will bring “documents,
including policies and forms of documentation” to support their claim of breach
of contract. Id. at 36. But this is precisely why we have summary judgment; it
provides the court an opportunity to review the evidence that is to be presented
at trial in support of each party’s case to determine what, if any, claims proceed
to trial. The party moving for summary judgment has the burden to make a
prima facie showing that there are no genuine issues of material fact and that it
is entitled to judgment as a matter of law. Doe, 53 N.E.3d at 494. The burden
then shifts to the non-moving party “to designate and produce evidence of facts
showing the existence of a genuine issue of material fact.” Id. Regardless of
whether the alleged contract was written or oral, the Crawleys must do more
than generically state that they will present evidence of a contract at trial. They
have failed to meet their burden. We therefore conclude that the trial court
erred when it denied summary judgment for the Diocese on the Crawleys’
breach-of-contract claim.
II. Fraud2
[14] The Diocese next contends that the Crawleys have failed to prove that there is a
genuine issue of material fact as to their claims of actual and constructive fraud.
2
The Crawleys’ complaint asserts claims of actual and constructive fraud. Both claims allege the same set of
facts, so we will address these arguments together.
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To prevail on a claim of actual fraud (also referred to as common-law fraud),
the plaintiff must show:
(1) a material misrepresentation of past or existing fact which (2)
was untrue, (3) was made with knowledge of or in reckless
ignorance of its falsity, (4) was made with the intent to deceive,
(5) was rightfully relied upon by the complaining party, and (6)
which proximately caused the injury or damage complained of.
Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327, 335 (Ind. 2013). The elements of
constructive fraud vary slightly from those of actual fraud:
(1) a duty owing by the party to be charged to the complaining
party due to their relationship; (2) violation of that duty by the
making of deceptive material misrepresentations of past or
existing facts or remaining silent when a duty to speak exists; (3)
reliance thereon by the complaining party; (4) injury to the
complaining party as a proximate result thereof; and (5) the
gaining of an advantage by the party to be charged at the expense
of the complaining party.
Sheaff Brock Inv. Advisors, LLC v. Morton, 7 N.E.3d 278, 288 (Ind. Ct. App. 2014),
trans. denied.
[15] The Crawleys claimed that the Diocese engaged in fraudulent activity because:
(1) the Diocese had a duty to disclose to Douglas that he was eligible for health-
insurance benefits; (2) the Diocese attempted to have Douglas sign a back-dated
form that waived his health-insurance benefits; and (3) the Diocese told Pat
Mason, who worked for St. Catherine Hospital, that Douglas was not eligible
for health-insurance benefits. Appellants’ App. Vol. II pp. 41-46.
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[16] The Diocese first disputes that it committed fraud by not informing Douglas
that he was eligible for health insurance. The Diocese argues that this
allegation is a “repackaging” of the breach-of-contract claim. Appellants’ Br. p.
20. A plaintiff who brings “both a breach of contract and a fraud claim must
prove that (1) the breaching party committed the separate and independent tort
of fraud; and (2) the fraud resulted in injury distinct from that resulting from the
breach.” Sheaff Brock, 7 N.E.3d at 288.
[17] This fraud allegation relies on the same facts underlying the breach-of-contract
claim: the Diocese owed Douglas a duty to disclose his eligibility for health
insurance and failed to make such a disclosure. These allegations amount to a
claim for breach of contract and nothing more. See Tobin v. Ruman, 819 N.E.2d
78, 86 (Ind. Ct. App. 2004) (“[T]he allegations making up his fraud claim
amount to a series of misrepresentations stemming from and about the contract
itself. At best, such evidence merely establishes that Ruman and RCH
breached the oral contract . . . .”). Additionally, the prayers for relief under
these claims are almost verbatim; they seek payment for Douglas’s medical
services while he worked for the Diocese and was eligible for its insurance plan
but was not informed of his eligibility. The Crawleys have not offered any
proof as to how they suffered distinct injuries from the alleged fraud. We agree
with the Diocese: this fraud allegation is a repackaged version of the breach-of-
contract claim. The alleged duty to disclose, if any, would arise from the
alleged contractual relationship between the Diocese and Douglas. But, as
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already discussed, the Crawleys have failed to present any evidence that a
contract existed between Douglas and the Diocese.
[18] The second allegation that the Diocese challenges is that in April 2007, six
months after Douglas was hospitalized and a few days after Mason contacted
the Diocese regarding Douglas’s health-insurance eligibility, the Diocese tried
to get him to sign a back-dated form that said he had waived his benefits
election in January 2006—after he was employed full-time but before he was
hospitalized. But Douglas never signed the form. To establish a prima facie
case under both actual and constructive fraud, the Crawleys are required to
prove that they relied on a material misrepresentation and that reliance caused
them some type of injury. The Crawleys have not satisfied this burden.
Douglas’s injury—his medical and hospital bills—occurred six months before
the Diocese approached him with the back-dated form. The Crawleys cannot
claim that they detrimentally relied on the Diocese’s request to sign the back-
dated form. The Diocese’s actions do not amount to actual or constructive
fraud.
[19] The Diocese also challenges the Crawleys’ third allegation that it fraudulently
misrepresented Douglas’s benefits eligibility to Pat Mason. The Crawleys
present two different theories of what was told to Mason—either Douglas was
not eligible for health-insurance coverage, or Douglas waived his coverage.
Regardless of the statement that was actually made to Mason, the Diocese did
not engage in actual or constructive fraud for the same reasons the back-dated
form did not constitute fraud. In her affidavit, Mason stated that she spoke to
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the Diocese in April 2007 about Douglas’s benefits eligibility. She further
stated that based on this conversation, St. Catherine Hospital determined that
Douglas was not eligible for health-insurance coverage through the hospital,
and his claims from October 2006 were ultimately denied. The Crawleys,
again, have failed to establish a prima facie case for actual or constructive fraud.
The undisputed facts are clear: Mason did not speak with the Diocese until six
months after Douglas’s injury. The Crawleys cannot now claim detrimental
reliance on a statement made after the medical and hospital bills began
accruing. We conclude that the trial court erred when it denied the Diocese’s
motion for summary judgment on the Crawleys’ fraud claims.3
[20] Reversed.
Bailey, J., concurs.
Robb, J., concurs in result without opinion.
3
Count I of the Crawleys’ complaint was captioned “Claim for Damages.” Appellant’s App. Vol II. p. 40.
Because recovery of damages is contingent upon the breach-of-contract or fraud counts surviving summary
judgment, the Diocese is also entitled to summary judgment on Count I.
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