In the

United States Court of Appeals

For the Seventh Circuit

No. 08-1390

DONALD A. BREGIN,

Plaintiff-Appellant,

v.

LIQUIDEBT SYSTEMS, INC. and SIRVA, INC.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Indiana, Fort Wayne Division.

No. 1:06-CV-23—Theresa L. Springmann, Judge.

ARGUED SEPTEMBER 25, 2008—DECIDED NOVEMBER 19, 2008

Before POSNER, FLAUM, and EVANS, Circuit Judges.

EVANS, Circuit Judge. After Donald A. Bregin was

discharged from his employment at Liquidebt Systems,

Inc. (LSI) he filed this lawsuit, contending that his discharge was in retaliation for his refusal to participate

in illegal accounting practices or, alternatively, for being

a whistle-blower, and that SIRVA, Inc. (in conspiracy

with LSI) tortiously interfered with his employment.

The district court granted summary judgment for both
2 No. 08-1390

companies, and Bregin appeals. Our review is de novo.

Alexander v. Wis. Dep’t of Health and Family Servs., 263 F.3d

673 (7th Cir. 2001).

SIRVA provides relocation and moving services; North

American Van Lines, Inc. (NAVL) is its subsidiary. Until

the late 1990s Bregin worked at NAVL doing, primarily,

the collecting of accounts receivable. He than was a

subcontractor for LSI and, later, he worked as a consultant for SIRVA. At SIRVA his job was to identify ways

SIRVA could improve its collections procedures. Near

the end of his time as a consultant, he provided a “To-Do

List” for SIRVA. In preparing the list he reported that

internal financial documents were incorrect in that

SIRVA included, in accounts receivable, money that

should have been refunded to customers.

Also during this period NAVL decided to outsource

its collection efforts. At this point LSI entered the picture.

It negotiated with NAVL to provide collection services. As

a consultant to NAVL’s parent, SIRVA, Bregin was involved in the negotiations that resulted in a contract

between NAVL and LSI, which the parties refer to as

the LSI/SIRVA contract. Bregin was also involved in

determining the benchmark for evaluating LSI’s performance under the contract.

LSI expressed an interest in hiring Bregin to oversee

the SIRVA account. SIRVA liked the idea because of

Bregin’s familiarity with SIRVA and its employees. So it

happened that Bregin became LSI’s vice-president of

operations and was considered the project manager on

the SIRVA account. He no longer had an employment

relationship of any kind with SIRVA or NAVL.
No. 08-1390 3

As part of LSI’s responsibility for collecting SIRVA’s

outstanding customer accounts, LSI employees were to

contact SIRVA’s customers as soon as an invoice was

past due. Payments were made directly to SIRVA. LSI

was not involved in either calculating SIRVA’s accounts

or handling refunds and credits.

To evaluate LSI’s performance, SIRVA measured how

quickly receivables were collected, referred to as the

days sales billed (DSB). Under the contract, LSI’s performance goal—or “benchmark”—was to improve collection of SIRVA’s accounts receivable by 10 percent

during 2003. The 2003 DSB would be compared to the

2002 DSB to see whether LSI met the benchmark. The

maximum incentive for LSI to exceed the benchmark

was a payment of $150,000; the maximum penalty for

failing to meet it was also $150,000.

SIRVA regularly reviewed LSI’s performance. During

the spring and summer of 2003, LSI failed to lower the

DSB, causing officials at SIRVA to express concern about

the job LSI was doing. Bregin believed that because of

certain accounting practices (for instance, including

customer overpayments in accounts receivable), the

DSB did not accurately reflect LSI’s performance. Bregin

did not think the numbers for the two years—2002 and

2003—were comparable and believed that the manner

in which the 2003 figures were calculated made it impossible for LSI to improve its performance. He repeatedly

discussed his concerns with James Drolshagen, the president and sole shareholder of LSI, and with Tom McKenna,

LSI’s director of client relations. Bregin requested
4 No. 08-1390

that SIRVA recalculate the DSB. Throughout this time

period, SIRVA continued to doubt whether LSI could

meet the contract goals, and Bregin continued to

believe that it was SIRVA’s accounting that created a

perception that LSI was not performing adequately.

In the fall, it became clear to Drolshagen that LSI was

not meeting its performance goals under Bregin’s leadership. He called it a “monumental failure.” But because

Bregin continued to blame the problem on SIRVA’s

treatment of its accounts receivable, Drolshagen asked

McKenna to independently evaluate Bregin’s complaints.

If McKenna found that the complaints were wellfounded, Drolshagen intended to demand relief from

the penalty provisions in the contract. But, instead, what

McKenna concluded was that LSI’s performance was so

poor that the company would be subject to a penalty

even if SIRVA made the changes Bregin requested.

In November 2003, Drolshagen removed Bregin from

the SIRVA account but kept him on the payroll at $110,000

per year. Drolshagen told Bregin that if “he could bring

in some customers for us, that would be a way of him

maintaining his position.” Bregin failed to draw in

new clients, and in December his employment was terminated. LSI did not meet the benchmark in 2003 and

was assessed the $150,000 penalty.

Bregin filed this lawsuit under Indiana law, contending,

in part, that LSI terminated his employment in retaliation for his reporting SIRVA’s illegal financial practices,

for refusing to engage in those practices, or for being a

whistle-blower. Given the undisputed facts, the claim

must fail.
No. 08-1390 5

Recently, the Indiana Supreme Court reaffirmed the

Indiana employment-at-will doctrine which “permits

both the employer and the employee to terminate the

employment at any time for a ‘good reason, bad reason,

or no reason at all.’” Meyers v. Meyers, 861 N.E.2d 704, 706

(Ind. 2007), quoting Montgomery v. Bd. of Trustees of

Purdue Univ., 849 N.E.2d 1120, 1128 (Ind. 2006). The

court stated that on “rare occasions, narrow exceptions

have been recognized.” Meyers, at 706. On one “rare”

occasion a “narrow” exception was found in McClanahan v.

Remington Freight Lines, Inc., 517 N.E.2d 390 (Ind. 1988).

McClanahan was a truck driver who was permitted to

pursue a cause of action against an employer who

fired him for refusing to haul a load that exceeded

the weight limits on Illinois highways. He could have

been personally liable for a violation. A narrow exception

to at-will employment was recognized in that case to

avoid encouraging criminal conduct. A second exception

is set out in Frampton v. Central Indiana Gas Co., 297 N.E.2d

425 (Ind. 1973). The court found a cause of action for

retaliatory discharge based on explicit language in a

statute—the Indiana Worker’s Compensation Act. The

court said that “under ordinary circumstances, an employee at will may be discharged without cause. However,

when an employee is discharged solely for exercising

a statutorily conferred right an exception to the general

rule must be recognized.” At 428. The narrowness of

this exception was made clear, however, in Wior v. Anchor

Industries, Inc., 669 N.E.2d 172 (Ind. 1996), when the

court refused to allow a claim brought by a manager

who was terminated for refusing to follow a supervisor’s
6 No. 08-1390

order to fire an employee who filed a worker’s compensation claim.

Bregin acknowledges that he has no statutory basis for

his claim; he relies on the exception in McClanahan—that

he was fired for refusing to commit an illegal act for

which he could be personally responsible. He seems to

contend that SIRVA’s accounting practices were illegal

and that he could not lawfully stay silent about them. In

an affidavit, he refers to “financial mismanagement,”

“overstating income,” and “failure to pay customer

refunds and overpayments.” But he does not offer specifics. And he does not identify any illegal act which he is

being asked to commit—or for that matter to condone.

What he says is that

[t]here are numerous laws governing tax returns,

securities, banking, conspiracy, and abandoned property that SIRVA may have violated. Appellant directly

or indirectly, would have been facilitating these acts

in his role at LSI and, thus, personally liable.

His major complaint involves the way the benchmark

data was calculated. But the benchmark data is specific

to the contract, and Bregin does not explain how these

calculations have significance to, say, tax or securities

laws. Furthermore, he admitted in his deposition that

he was never in a position where he was required to

authenticate or verify any of SIRVA’s financial statements.

Given Indiana’s reluctance to allow for even rare and

narrow exceptions, we would be far out of line to find

that some speculative accounting violation on SIRVA’s

part, for which Bregin had no responsibility, could qualify

as an exception to Indiana’s employment-at-will doctrine.
No. 08-1390 7

Undeterred, Bregin also urges us to find a new exception. He says that he is a “whistle blower” and that “as a

‘whistle blower’ under 18 U.S.C. § 1514A [the SarbanesOxley Act], he was afforded certain protections against

wrongful discharged [sic] under state law.” In a footnote

he explains that he did not file a claim under SarbanesOxley and is not claiming that he is protected under the

administrative scheme set out in the Act. What he claims

is that he “nevertheless is protected under the Whistle

Blower Act as a person that cannot be retaliated against

under state law.” On the other hand, he also says, quite

correctly, that in Indiana whistle-blowers “are not included

in the public policy exception to at-will terminations . . . .”

His argument is that they “should be.” This case, he says,

should establish such protection.

We cannot agree. As we just discussed, Bregin does

not pinpoint any law that has been violated. He says

because SIRVA was in the process of issuing an initial

public offering (IPO), the company did not want any

irregularities to come to light. But, again, the irregularities

he is talking about are vague. We cannot conclude that,

contrary to what the Indiana courts have repeatedly

said, they would now decide—especially based on the

facts before us—that whistle-blowing is an exception to

the employment-at-will doctrine. That they would not is

clear from Campbell v. Eli Lilly & Co., 413 N.E.2d 1054 (Ind.

App. 1980). In that case the court rejected a claim by

an employee who was terminated after complaining to

his superiors about a drug manufacturer’s failure to

acknowledge that its products caused adverse reactions. A

lengthy dissent vigorously sets forth the case for
8 No. 08-1390

allowing an exception to the employment-at-will

doctrine for whistle-blowers. But that view did not

carry the day. At this time, whistle-blowing simply does

not form the basis for an exception to Indiana’s employment-at-will doctrine.

Bregin also claims that SIRVA tortiously interfered

with his employment at LSI. He says SIRVA and LSI

conspired to terminate him because of his constant reporting that the SIRVA accounting practices were illegal. We will begin our discussion with the few things that

are clear about this claim: one is the elements of the claim

under Indiana law. They are

(1) the existence of a valid relationship; (2) the defendant’s knowledge of the existence of the relationship;

(3) the defendant’s intentional interference with

that relationship; (4) the absence of justification; and

(5) damages resulting from defendant’s wrongful

interference with the relationship.

Bradley v. Hall, 720 N.E.2d 747, 750 (Ind. App. 1999). Also,

under Indiana law a party to a contract can conspire

with another to tortiously interfere with the contractual

relationship. Winkler v. V.G. Reed & Sons, Inc., 638

N.E.2d 1228, 1234 (Ind. 1994). It is clear that Bregin meets

the first two elements of a tortious interference claim. He

had an employment relationship with LSI, and SIRVA

knew it. Beyond that, it is difficult to articulate exactly

what Bregin is claiming and even more difficult to determine exactly what evidence he is relying on to support

his claim.

He seems to say that after he was removed from the

SIRVA account, SIRVA pressured LSI to terminate his
No. 08-1390 9

employment to “silence” him. SIRVA allegedly wanted

him silenced so that he would not somehow jinx SIRVA’s

IPO. But, as we have said, it is entirely unclear exactly

what Bregin knew that would have an effect on the

IPO. Furthermore, it is hard to see how terminating

his employment would silence him. It could have quite

the opposite effect. Neither can it be said that terminating

his employment would cut him off from information

about what was going on at SIRVA. He was, after all,

already off the SIRVA account.

Bregin also sees shenanigans somehow involved in the

$150,000 penalty and the way it was paid—or not paid.

Here is Bregin’s argument on this point—word-for-word,

bracket-by-bracket:

 Under the Contract, Appellant has presented

evidence in support of his argument that SIRVA

conspired with LSI “under the guise of enforcing the

penalty clause of the contract and through manipulation of the numbers and scheme by SIRVA alleging

poor performance while actually rewarding LSI

with additional cash every month in fees”. [R. 92]

S. App. 2.

Bregin contends that Drolshagen terminated four

other employees as a cost saving measure to offset

the penalty. The terminations saved in excess of

$350,000 and thus were not necessary to pay the

penalty, and were simply a “perpetuat[ion] of the

conspiracy.” [R.92] S. App. 2. The increase contract

fees were received five (5) days later, after Bregin’s

removal shows SIRVA’s influence over LSI to terminate Bregin’s employment.
10 No. 08-1390

We must admit that we are not sure what Bregin means.

Does Bregin claim that LSI fired four employees in

addition to him to facilitate the conspiracy? If so, what

is the proof? We have nothing but Bregin’s conjecture.

Not for the first time, we decline to construct a party’s

argument. See Spath v. Hayes Wheels Int’l-Indiana, Inc.,

211 F.3d 392 (7th Cir. 2000).

The one salient fact in the record relevant to the claim

of tortious interference is that Drolshagen (who, we

repeat, is LSI’s president) testified that no one at SIRVA

requested that Bregin be removed from its account,

much less that he be fired. Drolshagen said that he,

and only he, made the decision to terminate Bregin’s

employment.

Finally, even though Bregin has shown that SIRVA

complained about him to LSI, he cannot show that the

complaint was unjustified. Indiana courts look to a

number of factors to determine whether a defendant’s

conduct is justified, one of which is the defendant’s

motive. Winkler, 638 N.E.2d at 1235. Here, the evidence

shows that LSI was not meeting the established goals

under the contract. SIRVA had concerns about LSI’s

attentiveness, lack of leadership, poor work product, and

unprofessional conduct. For instance, SIRVA’s Anne

Loesch, who was manager of the SIRVA/LSI relationship,

had trouble getting information and responses from

Bregin. Bregin himself understood that Loesch’s perception was that LSI managers did not have a sense of

urgency about the account. A complaint to LSI under

those circumstances would be justified. For all these

reasons, the claim of tortious interference cannot stand.
No. 08-1390 11

Accordingly, the decision of the district court is

AFFIRMED. 

11-19-08