Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 1 of 12 

### MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

A TTORNEY FOR A PPELLANTS Benjamin D. Fryman Valparaiso, Indiana A TTORNEYS FOR A PPELLEES Paula E. Neff William J. Emerson Lucas, Holcomb & Medrea LLP Merrillville, Indiana



### IN THE 

# COURT OF APPEALS OF INDIANA

The Catholic Diocese of Gary and St. Joseph Catholic School, A

ppellan t s-Defendants,

v. 

### Douglas N. Crawley and Patricia Crawley, A

ppelle e s-Plaintiffs May 31, 2017 Court of Appeals Case No. 45A04-1610-PL-2342 Appeal from the Lake Superior Court The Honorable Diane Kavadias Schneider, Judge Trial Court Cause No. 45D11-1207-PL-64

Vaidik, Chief Judge.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 2 of 12 

# Case Summary

[1] Douglas Crawley was hired by the Cathol ic 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 200 6 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 Doug las was eligible for health insurance through the Diocese.

[2] A health-care-collection agen cy sued the Crawleys fo r payment of Douglas’s medical bills, and the Crawleys file d a third-party complaint against the Diocese. The Crawleys asserted four cl aims: breach of contract, actual fraud, constructive fraud, and violations of the Employment Retirement Income Safety Act (ERISA). Five years la ter, the Diocese moved for summary judgment. The trial court granted the Diocese’s motion only on the ERISA claim. The Diocese was granted an in terlocutory appeal and challenges the trial court’s denial of summary judgme nt on the three remaining claims. Concluding that the Dioc ese was entitled to su mmary judgment on the remaining claims, we reverse.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 3 of 12 

# Facts and Procedural History

[3] Douglas began working for the Diocese at St. Joseph Catholic School in August 2005. At the time, Douglas worked pa rt-time and was not eligible for the Diocese’s health-insurance plan. Ev entually, Douglas b egan working forty hours or more each week at the school and became a full-time employee eligible for health-insurance coverage. Howeve r, Douglas was not informed that he was eligible to participate in the Dioc ese’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 availabl e to spouses through their employers, then the hospital’s plan would serv e as the sole insurer for them.

[4] In October 2006, Douglas was hospital ized, and the costs of his medical procedures were billed to St. Catherin e 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 healthinsurance coverage. After her conversa tion with the Diocese, Mason and the hospital’s insurer determined that Dougla s 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.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 4 of 12 [5] Shortly thereafter, Douglas was approa ched by the principal of St. Joseph Catholic School. The principal pres ented Douglas with a form titled “Voluntary Waiver of Health Insurance Be nefits.” Appellants’ App. Vol. III p. 64. The form stipulated th at Douglas had been notified that he was eligible for health-insurance coverage th rough the Diocese but waiv ed that coverage. The form was back-dated to Ja nuary 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 Financ ial Services, Inc., filed suit against them. A year later, the Crawleys fi led a third-party complaint against the Diocese, alleging four claims: breach of contract, actual fr aud, constructive fraud, and ERISA violations. They also sought recovery for their attorney’s fees. As part of their fraud allegations , the Crawleys claime d 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. Appella nts’ App. Vol. II pp. 43-45.

[7] The Diocese later obtained copies of Doug las’s unpaid medical bills. It paid out all the claims to “health care providers and their as signees 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.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 5 of 12 [8] In October 2015, five years after the third-party complaint was filed, the Diocese moved for summary judgment on a ll claims. In their response to the Diocese’s motion, the Crawleys offered th e affidavit of Pat Mason, which stated that she spoke with an unidentified em ployee at the Diocese in April 2007. According to Mason, the Diocese empl oyee informed Mason that Douglas was eligible for health insurance but ha d declined coverage. The Crawleys contended that the misrepre sentation underlying their fraud claims was not that Mason was told that Douglas “was not el igible” 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 Dioc ese 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 introduc ed 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 co mplaint alleged that the Diocese had misrepresented that Douglas was not el igible for health insurance, but the Crawleys’ response to the motion fo r summary judgment claimed that the Diocese had misrepresented that Doug las 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 Di ocese’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)Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 6 of 12 (stating that church plans are no t 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 Di ocese’s request that this issue be certified for interlocutory appeal. We accepted juri sdiction, and this appeal ensued.


# Discussion and Decision

[10] The Diocese contends that th ere are no genuine issues of material fact on the remaining claims—breach of contract, ac tual fraud, and constructive fraud 1

— 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 ar e 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 ca se, “the burden then shifts to the non-moving party to designate and produce evidence of fa cts 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).Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 7 of 12 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 Dioces e had “a contractual obligation to inform” Douglas that he was eligible fo r health insurance and that the Diocese breached this obligation. Appellants’ App. Vol. II p. 46. The Diocese contends that no contract ever existed, and, th erefore, the Crawleys ’ breach-of-contract claim fails. To have a legally bindin g 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 Craw leys attached to their th ird-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 rema ined as the only alleged source of a contract. Section five of the booklet di scusses 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.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 8 of 12 [13] On appeal, the Crawleys claim that they will “offer evidence at trial to show [the Diocese’s] policy prov ision of health insurance be nefits to its employees.” Appellees’ Br. p. 35. They continue th at at trial they will bring “documents, including policies and forms of documenta tion” 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 opport unity 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 ther e 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 Crawle ys must do more than generically state that th ey will present evidence of a contract at trial. They have failed to meet their burden. We therefore conclude th at the trial court erred when it denied summary judgme nt for the Diocese on the Crawleys’ breach-of-contract claim.


## II. Fraud 2

[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 actu al and constructive fraud.

2 The Crawleys’ complaint asserts claims of actual and cons tructive fraud. Both claims allege the same set of facts, so we will addre ss these arguments together.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 9 of 12 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 ma de with the intent to deceive, (5) was rightfully relied upon by th e complaining party, and (6) which proximately caused the in jury 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 mi srepresentations of past or existing facts or remaining silent when a duty to speak exists; (3) reliance thereon by the complain ing party; (4) injury to the complaining party as a proximat e result thereof; and (5) the gaining of an advantage by the part y 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 fraudu lent activity because: (1) the Diocese had a duty to disclose to Douglas that he was eligible for healthinsurance benefits; (2) the Diocese attemp ted to have Douglas sign a back-dated form that waived his heal th-insurance benefits; and (3) the Diocese told Pat Mason, who worked for St. Catherine Ho spital, that Douglas was not eligible for health-insurance benefits. A ppellants’ App. Vol. II pp. 41-46.Court of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 10 of 12 [16] The Diocese first disputes that it committed fraud by not informing Douglas that he was eligible for health insura nce. 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 breac h of contract and a fraud claim must prove that (1) the breachin g party committed the separate and independent tort of fraud; and (2) the fraud resulted in inju ry 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 disc losure. 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 a llegations making up his fraud claim amount to a series of misr epresentations stemming fr om and about the contract itself. At best, such evidence me rely establishes that Ruman and RCH breached the oral contract . . . .”). A dditionally, 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 in juries from the alleged fraud. We agree with the Diocese: this fraud allegation is a repackaged version of the breach-ofcontract claim. The alleged duty to disclose, if any, would arise from the alleged contractual relationship between the Diocese and Douglas. But, asCourt of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 11 of 12 already discussed, the Crawleys have fa iled to present an y evidence that a contract existed between Do uglas 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-ins urance 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 esta blish 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 Crawle ys have not satisf ied this burden. Douglas’s injury—his medical and hospit al bills—occurred six months before the Diocese approached him with the ba ck-dated form. The Crawleys cannot claim that they detrimentally relied on the Diocese’s request to sign the backdated form. The Diocese’s actions do no t amount to actual or constructive fraud.

[19] The Diocese also challenges the Crawleys’ third allegati on that it fraudulently misrepresented Douglas’s benefits eligibility to Pat Mason. The Crawleys present two different theori es of what was told to Mason—either Douglas was not eligible for health-ins urance coverage, or Dougla s waived his coverage. Regardless of the statement that was actu ally made to Mason, the Diocese did not engage in actual or cons tructive fraud for the same reasons the back-dated form did not constitute fraud. In her a ffidavit, Mason stated that she spoke toCourt of Appeals of Indiana | Memorandum Decision 45A04-1610-PL-2342 | May 31, 2017 Page 12 of 12 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-ins urance 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 Cr awleys cannot now claim detrimental reliance on a statement made after the medical and hospital bills began accruing. We conclude that the trial co urt 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 “Cla im for Damages.” Appellant ’s App. Vol II. p. 40. Because recovery of damages is contingent upon the breach-of-contract or frau d counts surviving summary judgment, the Diocese is also entitled to summary judgment on Count I.