In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 16‐2788 and 16‐2839
ANDY MOHR TRUCK CENTER, INC.,
Plaintiff‐Appellee, Cross‐Appellant,
v.
VOLVO TRUCKS NORTH AMERICA, a division of Volvo Group
North America, LLC.,
Defendant‐Appellant, Cross‐Appellee.
____________________
Appeals from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
No. 1:12‐cv‐00448 — William T. Lawrence, Judge.
____________________
ARGUED APRIL 5, 2017 — DECIDED AUGUST 28, 2017
____________________
Before WOOD, Chief Judge, and FLAUM and HAMILTON, Cir‐
cuit Judges.
WOOD, Chief Judge. Volvo Trucks makes heavy‐duty
trucks, and Andy Mohr Truck Center was one of its dealers.
The dealership agreement governing their business dealings
was negotiated and concluded in early 2010. Relations be‐
tween them, unfortunately, soured quickly. Before too long,
Volvo and Mohr were suing one another in separate federal
2 Nos. 16‐2788 and 16‐2839
lawsuits, which were consolidated later in the district court.
When all was said and done, Mohr won a verdict of $6.5 mil‐
lion, and it prevailed on Volvo’s claim that it breached a com‐
mitment to build a new facility. Volvo staved off Mohr’s claim
against it based on Volvo’s failure to award Mohr a Mack
Truck franchise. We now have before us Volvo’s appeal and
Mohr’s cross‐appeal, but before we delve into the merits, we
turn to some of the nuances of heavy‐duty truck sales.
I
In the United States, federal agencies classify trucks with
a gross weight of more than 33,001 pounds as class 8, heavy‐
duty trucks. See Greenhouse Gas Emissions Standards and
Fuel Efficiency Standards for Medium‐ and Heavy‐Duty En‐
gines and Vehicles, 76 Fed. Reg. 57,106, 57,114–15
(Sept. 15, 2011). The American heavy‐duty truck sector
“spans a wide range of vehicles” with “unique form[s] and
function[s],” including the tractor‐trailer semis familiar to
many drivers. Id. at 57,114. Class 8 trucks are primarily used
for freight transportation over long distances. Id. at 57,115.
Unlike passenger cars, most class 8 trucks are specially or‐
dered based on customers’ business requirements and speci‐
fications. When a customer wants to order a truck or a fleet of
trucks, she generally approaches one or more dealers with her
specifications to get a price quote. The dealer then communi‐
cates with the manufacturer in order to negotiate a price at
which the manufacturer is willing to sell the truck(s) to the
dealer. Based upon this price, the dealer is able to set the price
at which it will offer to sell the truck(s) to the customer. In
other words, for each sale, the dealer must negotiate two sep‐
arate transactions—an upstream deal with the manufacturer
and a downstream deal with the customer.
Nos. 16‐2788 and 16‐2839 3
During the time at issue in this case, Volvo maintained list
prices for various models of trucks with various options. But
Volvo also offered all its dealers a standard concession (i.e., a
percentage discount off the net price), which varied slightly
by truck model. On top of this, Volvo operated a program
called Retail Sales Assistance (RSA), through which dealers
could submit requests for additional concessions. To partici‐
pate in the RSA program, dealers submitted two‐page request
forms detailing relevant information about each customer’s
potential order: the model, cab, engine, and transmission
types; the quantity of trucks; and the competition (other offers
or truck types a customer was considering). Volvo evaluated
these requests on a case‐by‐case basis and awarded conces‐
sions based on a variety of factors, including the price offered
by other manufacturers, the quantity of trucks requested, the
truck specifications, Volvo’s production capacity, and the cus‐
tomer’s purchase history. According to Volvo, where two of
its dealers were bidding for the same transaction (i.e., the
same customer, date, and specifications), Volvo offered each
dealer the exact same concession. Based on the concession of‐
fered by Volvo to the dealer, the dealer could then negotiate a
price quote with the customer.
Although Volvo and its dealers share a common interest
in making the sale, their interests diverge—at least poten‐
tially—when it comes to the share of profit each one receives
from a given sale. For any final price to the customer, one
component represents Volvo’s share, and the other the
dealer’s share. The lower the concession Volvo gives to the
dealer, the greater its share of that final price (if we assume
that the price to the final customer is driven by market supply
and demand). The higher the concession—i.e. the more the
dealer reaps for its services—the greater the dealer’s profit
4 Nos. 16‐2788 and 16‐2839
from the sale, at Volvo’s expense. These competing motiva‐
tions can cause discord.
II
The legal rough patch between Mohr and Volvo began in
April 2012, when Volvo sought a declaratory judgment that it
was entitled to terminate Mohr’s dealership agreement
because Mohr had misrepresented a material fact in
connection with its dealer application. During the course of
the negotiations, Mohr supposedly had promised Volvo that
it would build a new long‐term facility for the dealership if
Volvo awarded the contract to Mohr. After the agreement was
final, however, Mohr failed to make good on that promise. We
refer to this as the “new‐facility claim.” Mohr had its own
beef: it complained that Volvo had violated the Indiana
Franchise Disclosure Act, Ind. Code 23‐2‐2.5 (IFDA), and the
Indiana Deceptive Franchise Practices Act (IDFPA), Ind.
Code 23‐2‐2.7. This violation stemmed from a promise Volvo
allegedly made to award Mohr a Mack Truck dealership
franchise—something within Volvo’s power because Mack
Truck is part of the Volvo Group. See Mack Trucks, About
Mack, https://www.macktrucks.com/about‐mack/ (last visited
Aug. 28, 2017). The Mack line would have justified Mohr’s
investment in the new facility, and this promise (Mohr said)
induced it to enter into the Volvo dealer agreement. But Volvo
gave the Mack franchise to another company. We refer to this
as the “Mack claim.” Finally, Mohr accused Volvo of
providing more favorable concessions on truck pricing to
other franchise dealerships through its RSA program than it
gave to Mohr. Mohr contended that this violated a provision
of the IDFPA that prohibits a franchisor from
Nos. 16‐2788 and 16‐2839 5
“[d]iscriminating unfairly among its franchisees … .” Ind.
Code § 23‐2‐2.7‐2(5).
The district court consolidated the two actions, and the
case dragged on for over three years. During that time, the
district court granted summary judgment for Mohr on Volvo’s
declaratory judgment claim, holding that the integration
clause in the dealer agreement barred the new‐facility claim.
On the negative side for Mohr, the same integration clause
doomed its Mack claim. The district court allowed Mohr’s
claim for unfair discrimination under the IDFPA to move for‐
ward. It held a trial in which the jury ruled for Mohr and
awarded it $6.5 million. Volvo then moved for judgment as a
matter of law under Federal Rule of Civil Procedure 50(b), but
the district court denied the motion. Mohr’s appeal and
Volvo’s cross‐appeal followed.
III
We turn first to Volvo’s challenge to the district court’s
denial of its Rule 50(b) motion for judgment as a matter of law
on Mohr’s claim of discrimination under the IDFPA. We give
de novo consideration to this decision, taking the evidence in
the light most favorable to the non‐moving party. Baugh v.
Cuprum S.A. de C.V., 845 F.3d 838, 848 (7th Cir. 2017). The jury
concluded that Volvo had discriminated unfairly against
Mohr, in violation of Indiana law. We will reverse only if no
rational jury could have found in Mohr’s favor. Id. at 848–49.
At trial, Mohr presented evidence of 13 transactions that
formed the basis of the jury’s finding that Volvo had discrim‐
inated against Mohr with respect to price concessions. One
instance would be enough to sustain the finding of liability,
though a greater number would affect damages. For each of
6 Nos. 16‐2788 and 16‐2839
the 13 transactions in question, Mohr compared the conces‐
sion it received from Volvo with the concessions that Volvo
awarded to other franchisee‐dealers in various states, each of
which had the same terms in their dealer agreements and the
same access to the RSA process. The quotes in question were
for the same model and year of truck, and for a quantity of
more than ten trucks. Each of the concession quotes was lim‐
ited to comparisons within a three‐month window. Mohr pre‐
pared exhibits for the jury that showed that Mohr received
less favorable quotes for concessions than at least some of the
comparators did for each deal. Mohr’s industry expert testi‐
fied that he had reviewed all of the RSA data and comparator
transactions, and that Volvo had no process to compare price
concessions and made no effort to equalize them. Mohr’s sales
manager also testified about receiving less favorable price
concessions on large fleet transactions. He asserted that Mohr
would have made certain sales if it had been given more fa‐
vorable concessions.
Volvo offers three reasons why no rational jury could have
found that it discriminated unfairly against Mohr: first, that
the evidence did not support an inference of unfair discrimi‐
nation; second, that the evidence was insufficient to demon‐
strate causation; and third, that the limitation of remedies pro‐
vision in the dealer agreement precluded Mohr’s claim for
damages. We agree with Volvo on its first point, and so we
have no need to address causation or remedies.
Volvo supports its evidentiary challenge to the inference
of discrimination with three sub‐arguments: (1) that the com‐
parators were not similarly situated in the relevant respects;
(2) that the data that purported to show the discrimination
was “cherry‐picked”; and (3) that the IDFPA applies only
Nos. 16‐2788 and 16‐2839 7
within the state of Indiana, and only to discrimination among
Indiana dealers. Mohr defends the jury’s verdict on each of
these points: it says the comparators were similar; the cherry‐
picking argument was untimely; and the extraterritorial point
was waived and in any event lacks merit.
There is a dearth of Indiana precedent that might shed
light on the meaning of discrimination for purposes of the
IDFPA. As best we can tell, Indiana’s courts have not clarified
what is meant by “unfair discrimination” in the statute, nor
what would be sufficient to make such a showing. At various
times, the parties and district court refer to the claim in
question as one of “price discrimination” under the statute.
That is not helpful. Price discrimination is both an economic
concept that refers to the ability to charge each customer the
price that reflects that customer’s demand, and a legal concept
that appears in the Robinson‐Patman Act, 15 U.S.C. § 13. The
Robinson‐Patman Act makes it unlawful to charge different
prices to different purchasers of like commodities, unless one
of the statutory defenses applies (such as meeting competition
or cost justification). 15 U.S.C. § 13(a). Because the purpose of
Robinson‐Patman is ostensibly to promote competition, it
does not ban all price differences charged to different
purchasers of similar commodities; it reaches only those that
threaten to injure competition. Volvo Trucks N. Am., Inc. v.
Reeder‐Simco GMC, Inc., 546 U.S. 164, 176–77 (2006).
Indiana’s statute, on the other hand, is not concerned with
competition at all. Rather, it is intended to protect franchisees.
It prohibits coercive, fraudulent, and deceptive behavior to‐
ward franchisees, and limits the types of clauses that may be
included in the franchise agreements. See Ind. Code 23‐2‐2.7.
8 Nos. 16‐2788 and 16‐2839
The statute makes it unlawful for a franchisor who has en‐
tered into an agreement with a franchisee who resides or op‐
erates in Indiana to engage in certain acts and practices “in
relation to the agreement.” Id. § 2. For our purposes, the rele‐
vant practice is “[d]iscriminating unfairly among its fran‐
chisees or unreasonably failing or refusing to comply with
any terms of a franchise agreement.” Id. § 2(5).
Although no reported Indiana case elucidates what Mohr
needed to establish in order successfully to maintain a claim
of unfair discrimination, we have held that “[d]iscrimination
among franchisees means that as between two or more simi‐
larly situated franchisees, and under similar financial and
marketing conditions, a franchisor engaged in less favorable
treatment toward the discriminatee than toward other fran‐
chisees.” Canada Dry Corp. v. Nehi Beverage Co., Inc. of Indian‐
apolis, 723 F.2d 512, 521 (7th Cir. 1983). In order to prove dis‐
crimination, plaintiffs must therefore make a showing of “ar‐
bitrary disparate treatment among similarly situated individ‐
uals or entities.” Id. That approach still strikes us as a good
reflection of the law, and so we will continue to follow it.
As this background suggests, we should begin with the
question whether the comparators were similarly situated.
This usually is a question of fact for the jury, assuming that
the plaintiff has produced enough evidence to reach trial and
survive judgment as a matter of law. Coleman v. Donahoe,
667 F.3d 835, 846–47 (7th Cir. 2012). In other contexts, such as
Title VII, we have said that precise equivalence is not re‐
quired; the parties must be comparable, not clones. Chaney v.
Plainfield Healthcare Ctr., 612 F.3d 908, 916 (7th Cir. 2010). “So
long as the distinctions between the plaintiff and the pro‐
posed comparators are not ‘so significant that they render the
Nos. 16‐2788 and 16‐2839 9
comparison effectively useless,’ the similarly‐situated re‐
quirement is satisfied.” Coleman, 667 F.3d at 846 (citation omit‐
ted).
In Canada Dry, we reversed a jury verdict where a franchi‐
see had “introduced no evidence of more favorable treatment
of similar bottlers under similar marketing conditions” with
regard to the bases for its claim under the IDFPA. 723 F.2d at
521–22 (emphases in original). Here, in contrast, Mohr pre‐
sented at least some evidence of comparable entities, includ‐
ing evidence that other franchisees operated under the same
sales and marketing policies; comparator transactions for the
same truck model existed; the market for large “fleet transac‐
tions” was national; and the franchisees operated under
nearly identical form dealer agreements. While Volvo argues
that there were a host of other relevant competitive circum‐
stances, such as differences among the initial concession re‐
quests, the question of how much weight to put on these dif‐
ferences was properly reserved for the jury. We have no rea‐
son to upset its determination.
The question whether the 13 transactions in question re‐
vealed that Volvo was “discriminating unfairly” for purposes
of the IDFPA gives us more cause for concern. Volvo argues
that the transactions in which Mohr received a worse conces‐
sion were “cherry‐picked” from data that—because of the na‐
ture of the RSA program—could have been manipulated to
show almost any conclusion. Volvo contends, for example,
that the underlying data showed that Mohr received an equal
or greater percentage concession than 79% of the compara‐
tors. More fundamentally, Volvo argues that mere variations
in dealings between franchisors and franchisees do not neces‐
sarily show unfair discrimination.
10 Nos. 16‐2788 and 16‐2839
Mohr begins with a procedural riposte: Volvo waived this
argument, it says, by presenting it for the first time in a
Rule 50(b) renewed motion for judgment as a matter of law.
See FED. R. CIV. P. 50(b). Ordinarily, a party seeking a pre‐ver‐
dict judgment as a matter of law must spell out the basis on
which that judgment might be rendered. Wallace v. McGlothan,
606 F.3d 410, 418 (7th Cir. 2010) (quoting FED. R. CIV. P. 50(a)(2)
committee note (1991 amend.)). If the court denies the Rule
50(a) motion, that party may renew its earlier motion under
Rule 50(b), but it may raise only the grounds it advanced in
the pre‐verdict 50(a) motion. Id. (citing FED. R. CIV. P. 50(b)
committee note (2006 amend.)). “Thus, if a party raises a new
argument in its Rule 50(b) motion that was not presented in
the Rule 50(a) motion, the non‐moving party can properly ob‐
ject.” Id.
In its response to Volvo’s Rule 50(b) motion, Mohr objected
to Volvo’s inclusion of the “cherry‐picking” argument. The
district court, however, understood Volvo as merely advanc‐
ing a new argument in support of a ground that appeared in
its original 50(a) motion: that the evidence was insufficient.
The court reached the merits of that argument when it denied
Volvo’s 50(b) motion, noting that Volvo’s reliance on Reeder‐
Simco, a Robinson‐Patman case, was misplaced because (as we
have said) that statute is concerned with price discrimination
that results in competitive injury, not with unfair discrimina‐
tion among franchisees.
It is true that the thrust of Volvo’s 50(a) and 50(b) motions
was slightly different. Volvo’s 50(a) motion focused on the suf‐
ficiency of the evidence to show unfair discrimination based
on the similarities (or lack thereof) between the transactions,
whereas the 50(b) motion also attacked the sufficiency of the
Nos. 16‐2788 and 16‐2839 11
evidence as “cherry‐picked” and too easily manipulated to
show discrimination. But these all add up to the same thing:
Volvo’s contention that Mohr’s evidence (the 13 transactions
in question) was a legally insufficient basis upon which to in‐
fer discrimination under the IDFPA. The district court reason‐
ably found that Volvo was not trying to slip a new point into
the case at that late hour.
On the merits, Mohr argues that the IDFPA did not require
it to show that it was treated less favorably than all other sim‐
ilarly situated franchisees, nor that it received worse conces‐
sions on average. Mohr points out that its industry expert tes‐
tified that he reviewed all of the RSA data and comparator
transactions, and that Volvo had no process to compare price
concessions and made no effort to equalize them. Mohr also
notes that Mohr’s sales manager testified that Mohr was re‐
ceiving less favorable prices concessions on large fleet trans‐
actions.
At its heart, this disagreement is about what it takes to
“discriminate unfairly” as the IDFPA uses the term. Is every
instance of arbitrary and less favorable treatment unfairly dis‐
criminatory? Or must individual instances demonstrate a pat‐
tern? Has a manufacturer such as Volvo violated the law vis à
vis someone every time a price varies by as much as a penny?
Under Mohr’s theory, every instance in which it received a
concession that did not match the best concession on a similar
transaction would show discrimination. Under Volvo’s ap‐
proach, the only time a single transaction could be branded as
discriminatory is if Volvo provided different concessions
based on precisely the same customer specifications (i.e., one
in which a customer was shopping around for price quotes
between multiple dealers). Otherwise, a plaintiff must show a
12 Nos. 16‐2788 and 16‐2839
systematic analysis of transactions over time to demonstrate
that its treatment was the disfavored exception.
As we noted above, we have found no Indiana case to
guide us in this determination. We must therefore predict
how Indiana’s highest court would decide the issue.
Edward E. Gillen Co. v. Ins. Co. of the State of Pa., 825 F.3d 816,
818 (7th Cir. 2016). In interpreting a state employment
discrimination statute, the Indiana Supreme Court has
adopted the burden‐shifting approach employed in Title VII
cases, see Ind. Depʹt of Envtl. Mgmt. v. West, 838 N.E.2d 408,
414 (Ind. 2005), and so that seems a fair place to begin.
For purposes of Title VII, one method that a plaintiff can
use to demonstrate discrimination on the basis of a protected
category is to raise a presumption through a prima facie
showing of a violation. To make this prima facie showing, the
employee must show that she belonged to a protected class,
was meeting the employer’s expectations, suffered an adverse
action, and was treated less favorably than those not in her
class. At that point, the burden shifts to her employer to
articulate a legitimate, nondiscriminatory reason. If the
employer does so, the employee may then demonstrate that
the employer’s reasons were pretextual. McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973), as explicated in Tex. Depʹt
of Cmty. Affairs v. Burdine, 450 U.S. 248 (1981); Filter Specialists,
Inc. v. Brooks, 906 N.E.2d 835, 839 (Ind. 2009).
But it is important to note a distinction with a difference
that makes Title VII an imperfect analogy to the question in
our case. Title VII does not prohibit all discrimination, nor
does it prohibit all unfair discrimination. Title VII prohibits
only discrimination on the basis of certain specified catego‐
ries. Indiana’s franchise‐protection statute, on the other hand,
Nos. 16‐2788 and 16‐2839 13
prohibits “unfair” discrimination among franchisees, but is
silent about what exactly that covers (other than that it must
be “in relation to the [franchise] agreement”). To analogize to
the employment context, it would be akin to prohibiting a cor‐
poration from discriminating among its employees unfairly,
without further detail.
Regardless of whether such a law may strike some as be‐
ing overly protectionist or paternalistic, this is what Indiana’s
legislature decided was best for the state. The open‐ended na‐
ture of the rule renders the familiar burden‐shifting frame‐
work less helpful. The McDonnell‐Douglas approach works in
Title VII cases because it enables courts to isolate and control
for a certain type of discrimination (race, sex, national origin,
etc.). In order to employ that framework productively in this
case, we would need to find a way to control for unfair dis‐
crimination.
Mohr argues that this is possible. All a plaintiff would
need to show, it contends, is that for any given price conces‐
sion on a like model, one party received a less generous con‐
cession than another. The disfavored party, it reasons, was the
victim of forbidden discrimination. Once the plaintiff points
to such a case, the franchisor would be required to come up
with a legitimate reason for the difference and, if it could not,
a jury would be entitled to infer that the discrimination was
unfair. Mohr’s approach, however, impermissibly places the
burden of proof on the franchisor. Even in Title VII burden‐
shifting cases, the plaintiff has the ultimate burden of show‐
ing that intentional discrimination on the basis of a protected
category took place.
The IFDA and IDFPA place the burden on the plaintiff—
that is, Mohr—to show that any differences in treatment
14 Nos. 16‐2788 and 16‐2839
among franchisees amounted to unfair discrimination. Mohr
has attempted to do so with its evidence of the 13 individual
transactions. The franchise agreement specified that the deal‐
ers would participate in the RSA program, to which each of
the dealers had access. The program preserved Volvo’s discre‐
tion to grant different concessions for each transaction, with
the caveat that Volvo would grant the same concession to any
dealers bidding on the same requests from the same customer.
Under a normal bidding process, there is bound to be some
variation between similar transactions. Not every unex‐
plained variation in treatment, therefore, can be classified as
unfair disparate treatment. For instance, it could be the case
that the variations eventually equaled out among the fran‐
chisees, or that none of the variations in treatment among the
franchisees was significant enough to be branded unfair.
Imagine, for example, that the terms of the agreement al‐
lowed Volvo to award price concessions randomly upon re‐
quest from its dealers. Under such a plan, one franchisee
might arbitrarily receive a price concession different from that
received by another in similar circumstances. But it would not
follow from that unexplained difference that the treatment
was unfair. The same point applies here. While Mohr can
show that it received an inexplicably inferior concession on
similar transactions, it has not shown why we must equate the
lack of an explanation with unfairness. The discrimination
must be in relation to the franchise agreement, and the agree‐
ment in question allows for such discretion by its very terms.
This is not to say that a franchisee operating under similar
terms could never make a showing of discrimination under
the statute. For instance, a franchisee might be able to show
that it was consistently awarded worse concessions than its
Nos. 16‐2788 and 16‐2839 15
comparators. A franchisee could also show that a franchisor
violated its agreement, offered it worse agreement terms than
other franchisees, or discriminated against it by offering less
favorable terms for the same purchase by the same customer.
But what Mohr offered to the jury did not suffice to permit a
finding of unfair discrimination. At most, the evidence
showed that Volvo offered no reasoned explanation for giving
Mohr a relatively worse concession than it gave to a sample
set of other franchisees on similar transactions. But it did not
show that such treatment was unfair or discriminatory
(i.e., that it was not the norm among franchisees).
We conclude, therefore that the district court erred in
denying Volvo’s motion under Rule 50(b). The 13 transactions
on which Mohr relied showed no more than the fact that
sometimes Mohr received the better concession and
sometimes a competitor did. More is needed to show “unfair”
discrimination. Given this conclusion, we have no need to say
more about “cherry‐picking” of data or about the territorial
reach of Indiana’s statute. Even if, as Mohr argues, it was
permissible to rely on out‐of‐state comparators, that did not
cure the fundamental problem with Mohr’s case. We leave for
another day—we hope in the Indiana courts—further
consideration of the extraterritoriality point. For the record,
we also reject Volvo’s argument that statutory damages for
unfair discrimination under Ind. Code § 23‐2‐2.7‐2(5) could be
restricted by a contractual limit on damages. The remedy for
a statutory violation is provided by Ind. Code § 23‐2‐2.7‐4, not
by general principles of contract law. Moreover, another
Indiana statute governing motor vehicle franchise agreements
provides that it is “an unfair practice for a manufacturer or
distributor to enter into an agreement in which a dealer is
required to waive the provisions of: (1) this chapter; or
16 Nos. 16‐2788 and 16‐2839
(2) IC 23‐2‐2.7.” Ind. Code § 9‐32‐13‐8 (allowing exceptions for
voluntary agreements in which separate consideration is
offered and accepted). If a manufacturer could nullify key
protections of the IDFPA simply by inserting contrary
language in its franchise agreements, the statutory
protections would be worth very little. The point of the statute
is to protect franchisees from unfair contractual terms and
practices.
IV
The next claim we address is Volvo’s argument that Mohr
breached the dealership agreement by failing to build a new
facility in accordance with a promise Mohr allegedly made in
the course of negotiations. The district court granted sum‐
mary judgment in Mohr’s favor in this point. Before this court,
Volvo argues that this was wrong.
According to Volvo, while Mohr was in the process of ap‐
plying to become a Volvo truck dealer, Mohr represented that
it would build and relocate to a new and bigger facility within
11 to 13 months. As events unfolded, Mohr did not do so, and
Volvo argues that this broken promise entitled it to terminate
the agreement, because the dealer agreement allows Volvo to
terminate the arrangement for misrepresentation of a material
fact in connection with any application for appointment as a
dealer. The district court found that the integration clause in
the agreement, which provides that the agreement and its at‐
tachments “represent the entire agreement between the Com‐
pany and the Dealer, superseding all prior oral and written
agreements or other communications,” bars this claim.
It is a general principle of Indiana law that “where the par‐
ties to an agreement have reduced the agreement to a written
Nos. 16‐2788 and 16‐2839 17
document and have included an integration clause that the
written document embodies the complete agreement between
the parties … the parol evidence rule prohibits courts from
considering parol or extrinsic evidence for the purpose of var‐
ying or adding to the terms of the written contract.” Krieg v.
Hieber, 802 N.E.2d 938, 943 (Ind. Ct. App. 2004). The mere ex‐
istence of an integration clause, however, does not control
whether a writing was intended to be completely integrated.
Judson Atkinson Candies, Inc. v. Kenray Assocs., Inc., 719 F.3d
635, 639 (7th Cir. 2013) (citing Americaʹs Directories Inc. v.
Stellhorn One Hour Photo, Inc., 833 N.E.2d 1059, 1067 (Ind. Ct.
App. 2005)). The weight to be accorded to an integration
clause will vary on the facts and circumstances of each partic‐
ular case. Franklin v. White, 493 N.E.2d 161, 166–67 (Ind. 1986).
The Indiana Supreme Court has specified that one of the
factors that can affect the significance of an integration clause
is the sophistication of the parties. Where the parties occupy
unequal bargaining positions, “the integration clause may not
accurately express their meeting of the minds … .” Id. at 166.
But where two sophisticated parties have engaged in exten‐
sive preliminary negotiations, the integration clause may be
afforded more weight as a reflection of the final terms of their
agreement. Id.
Volvo and Mohr are both sophisticated parties; both had
experience with franchises and dealer agreements. As the dis‐
trict court noted, if the move to a new facility had been mate‐
rial to the decision to enter into the agreement, it ought to
have been spelled out in the agreement. Moreover, even if
Mohr included plans to build a new facility in its dealer ap‐
plication, those plans could have been foiled for any number
of reasons. Volvo does not argue that Mohr never planned to
18 Nos. 16‐2788 and 16‐2839
construct a new facility. Therefore, even if the integration
clause did not bar the evidence, it would be quite a stretch to
consider the inclusion of the plan to be a misrepresentation of
a material fact, as opposed to the expression of a hope for the
future relationship. We see no reason to disturb the district
court’s grant of summary judgment in Mohr’s favor on this
claim.
V
Finally, we consider Mohr’s cross‐appeal, in which Mohr
challenges the district court’s rejection of its claim under the
IFDA that Volvo intentionally misrepresented that it would
provide Mohr with a Mack Truck franchise in exchange for
operating a Volvo dealership. The district court granted judg‐
ment on the pleadings for Volvo on this claim, finding that
Mohr could not reasonably have relied upon any such repre‐
sentation in light of the existence of the integration clause in
the franchise agreement.
For purposes of this claim, the integration clause is no
longer Mohr’s friend. Mohr resists the implication of incon‐
sistency, however, by noting that Indiana courts do not bar
fraudulent inducement claims on the basis of integration
clauses. It adds that allowing the district court’s decision to
stand would eviscerate the protections of the IFDA. Because
this ruling was a judgment on the pleadings pursuant to Fed‐
eral Rule of Civil Procedure 12(c), we ask whether the plead‐
ings state a claim for relief that is plausible on its face, just as
we do for challenges under Rule 12(b)(6). See Adams v. City of
Indianapolis, 742 F.3d 720, 727–28 (7th Cir. 2014).
The IFDA makes it illegal:
Nos. 16‐2788 and 16‐2839 19
(1) to employ any device, scheme or artifice to
defraud;
(2) to make any untrue statements of a material
fact or to omit to state a material fact necessary
in order to make the statements made, in the
light of circumstances under which they are
made, not misleading; or
(3) to engage in any act which operates or would
operate as a fraud or deceit upon any person.
Ind. Code § 23‐2‐2.5‐27. Fraud and deceit under the IFDA in‐
clude “any promise or representation or prediction as to the
future not made honestly or in good faith … .” Ind. Code § 23‐
2‐2.5‐1.
As the district court noted, Mohr’s allegations ordinarily
would be sufficient to plead fraud under the IFDA. But Indi‐
ana courts understand the statute to include a requirement
that a plaintiff have reasonably relied upon the misrepresen‐
tation. See Hardeeʹs of Maumelle, Ark., Inc. v. Hardeeʹs Food Sys.,
Inc., 31 F.3d 573, 579 (7th Cir. 1994) (noting that the court
would be inclined to follow holdings of the lower Indiana
courts that the statute requires proof of reasonable reliance).
The district court found that the existence of the integra‐
tion clause rendered any reliance unreasonable as a matter of
law, as it rendered extrinsic evidence pertaining to the agree‐
ment between the parties inadmissible. Mohr argues on ap‐
peal that we ought to find that the integration clause (for these
purposes) is invalid, because it otherwise would eviscerate
the protections conferred by the IFDA. All a manufacturer
need do to avoid liability under Indiana’s statute, according
20 Nos. 16‐2788 and 16‐2839
to Mohr, is to insert a non‐negotiable integration clause in its
agreement with a would‐be franchisee.
But Indiana law already accounts for this potential abuse.
As the Indiana Supreme Court has noted, the parol evidence
rule is not procedural; it is a rule of preference and substan‐
tive law. Franklin, 493 N.E.2d at 165. Integration clauses are
“to be considered as any other contract provision” and should
be interpreted along with other relevant evidence on the ques‐
tion of integration. Id. at 166. As we noted above, some of the
relevant evidence includes the circumstances in which the
parties were contracting. If Mohr had been an unsophisticated
party, or if there had been a greater imbalance in bargaining
power, the integration clause might not bar evidence of an ex‐
trinsic promise and render reliance on it unreasonable. But
those are not the facts before us.
Mohr also argues that the integration clause must be dis‐
regarded because Mohr’s claim sounds in fraudulent induce‐
ment. The district court acknowledged that evidence regard‐
ing fraudulent inducement is not barred by an integration
clause, but it also observed that fraudulent inducement re‐
quires that the material misrepresentation be of a past or ex‐
isting fact and not, as in this case, a promise for the future.
Mohr argues that the district court erred by applying the ex‐
ception for this evidence only to common law fraudulent in‐
ducement claims, and not to claims under the IFDA.
Even if the principle applies to both types of claims, the
problem of reliance remains. The undisputed facts show that
these were sophisticated parties who knew, or should have
known, that any terms or promises that were material to the
Volvo dealership agreement ought to have been included in
their contract. Because the agreement was silent about the
Nos. 16‐2788 and 16‐2839 21
possibility of a future Mack truck dealership, Mohr cannot
claim that it reasonably relied upon such a promise, and this
aspect of its IFDA claim fails.
VI
We therefore REVERSE the denial of judgment as a matter
of law for Volvo, pursuant to Federal Rule of Civil Procedure
50(b), for the unfair discrimination claim that went to trial,
and order that judgment be entered in Volvo’s favor on this
part of the case. We AFFIRM the court’s summary judgment in
Mohr’s favor on the new‐facility claim, and we AFFIRM its
judgment under Rule 12(c) in Volvo’s favor on the Mack claim.
Each party is to bear its own costs on appeal.