UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

MUNSTER STEEL CO., INC., ) 

) 

Plaintiff, ) 

) 

vs. ) No. 2:16-CV-345 

) 

CRANE 1 SERVICES, INC., ) 

) 

Defendant. ) 

OPINION AND ORDER 

This matter is before the Court on Defendant’s Motion to 

Dismiss Count V of Plaintiff’s Complaint, filed by the defendant, 

Crane 1 Services, Inc., on September 16, 2016. (DE #13.) For the 

reasons set forth below, the motion is GRANTED; however, Count V 

is dismissed without prejudice. 

 

BACKGROUND 

The plaintiff, Munster Steel Co., Inc. (“Munster Steel”), 

filed its complaint on July 26, 2016. (DE #1.) The complaint, 

which is premised upon diversity jurisdiction, lists the following 

claims against the defendant, Crane 1 Services, Inc. (“Crane 1”): 

Count I, Breach of Contract; Count II, Breach of Implied Warranty 

of Merchantability – I.C. 26-1-2-314; Count III, Breach of Implied 

Warranty of Fitness for a Particular Purpose – I.C. 26-1-2-315; 

Count IV, Negligence; Count V, Fraudulent Misrepresentation; and 
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Count VI, Negligent Misrepresentation. (Id.) Crane 1 filed the 

instant motion to dismiss on September 16, 2016, arguing that Count 

V of the complaint should be dismissed with prejudice because 

Munster Steel failed to plead fraud with the requisite 

particularity as required under the Federal Rules of Civil 

Procedure. (DE #13.) Crane 1 also filed an answer that same day. 

(DE #15.) Munster Steel filed a response to the motion to dismiss 

on September 30, 2016. (DE #16.) Crane 1 filed its reply on 

October 7, 2016. (DE #17.) The motion is ripe for adjudication. 

 

DISCUSSION 

Relevant Facts

 Munster Steel is an Indiana corporation in the business of 

fabricating structural steel. (DE #1, p. 1.) As part of its 

operations, Munster Steel utilizes heavy duty cranes that must be 

able to withstand repetitive picks, speed requirements, and length 

of life or load requirements. (Id. at. 2.) When it sold its old 

facility in November of 2011 and ultimately moved to a new facility 

in August of 2014, Munster Steel sought to purchase “Class D” 

cranes specifically designed for heavy duty applications. (Id. 

at 2-3.) Munster Steel solicited a proposal from Crane 1, a 

Delaware corporation in the business of supplying and servicing 

cranes and hoists, to design, supply, and install heavy duty “Class 
3 

D” cranes at its new facility; in connection with the negotiation 

of the proposal, Crane 1 visited Munster Steel’s old facility and 

took measurements and photographs of the existing cranes in order 

to ensure that the new cranes would be of like kind. (Id. at. 1, 

3.) On March 19, 2013, Crane 1 submitted a proposal to Munster 

Steel in which it proposed to “furnish, install and provide all 

required start-up testing for each system referenced within this 

proposal” including cranes “designed to meet or exceed CMAA service 

class “D” requirements with each crane utilizing the same hoist to 

minimize required parts inventory and ease of maintenance” (the 

“Proposal”). (Id. at 3-4; see also DE #1-1.) The Proposal 

“articulated the details of how the cranes would be designed and 

constructed.” (DE #1, p. 20.) Crane 1 “knowingly represented 

that the cranes would meet all the specifications and standards 

identified in the Proposal.” (Id.) On October 1, 2013, Munster 

Steel accepted the Proposal and signed a purchase order in the 

amount of $1,290,000.00 for the equipment detailed in the Proposal 

(the “Purchase Order”); because the Purchase Order incorporated 

the terms and specifications of the Proposal, the two documents 

formed the basis of the agreement between Munster Steel and Crane 

1 (collectively, the “Agreement”). (Id. at 4; see also DE #1-2.) 

At the time the Agreement was formed, Crane 1 “knew Munster Steel 

would rely upon the representations made . . . regarding the manner 
4 

in which the cranes were to be designed, constructed and 

installed.” (DE #1, p. 20.) Munster Steel relied on the 

representations made by Crane 1 when it entered into the Agreement 

and ultimately paid Crane 1 in full for the equipment and service 

provided. (Id. at 22.) However, Munster Steel alleges that Crane 

1 “knowingly and intentionally designed and constructed the cranes 

in a manner that failed to meet the requirements” of the Agreement. 

(Id.) Specifically, the cranes delivered to Munster Steel were 

not “Class D” and Crane 1 failed to fabricate and construct them 

in a workmanlike manner. (Id. at 4-15.) Additionally, Crane 1 

failed to provide as-built drawings or other documentation related 

to the crane specifications, despite the fact that it had 

represented that it would do so. (Id. at 4-15, 20-21.) 

 Because the cranes were not in accordance with the 

specifications of the Agreement, Munster Steel has been “unable to 

fully utilize the cranes to perform its structural steel 

fabrication and has lost significant revenue as a result.” (Id. 

at 15.) Munster Steel also incurred costs to investigate the 

deficiencies. (Id. at 22.) As of the date the complaint was 

filed, Crane 1 has “failed to take full responsibility and refuses 

to replace the defective equipment or complete all repair work.” 

(Id. at 15.) 
5 

Standard 

Federal Rule of Civil Procedure 12(b)(6) allows a complaint 

to be dismissed if it fails to “state a claim upon which relief 

can be granted.” Fed. R. Civ. P. 12(b)(6). Allegations other 

than fraud and mistake are governed by the pleading standard 

outlined in Federal Rule of Civil Procedure 8(a), which requires 

a “short and plain statement” that the pleader is entitled to 

relief. However, fraud and constructive fraud claims are subject 

to heightened pleading standards; under Rule 9(b), a party must 

“state with particularity the circumstances constituting fraud or 

mistake. Malice, intent, knowledge, and other conditions of a 

person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). 

Cincinnati Life Ins. Co. v. Grottenhuis, No. 2:10-cv-00205-LJMWGH, 2011 WL 1107114, at *8 (S.D. Ind. Mar. 23, 2011) (it is 

“undisputed that the constructive and actual fraud claims are 

subject to heightened Rule 9(b) pleading standards.”). 

In order to survive a Rule 12(b)(6) motion, the complaint 

“must contain sufficient factual matter, accepted as true, to 

‘state a claim to relief that is plausible on its face’.” Ashcroft 

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544, 570 (2007)). All well-pleaded facts must 

be accepted as true, and all reasonable inferences from those facts 

must be resolved in the plaintiff’s favor. Pugh v. Tribune Co., 
6 

521 F.3d 686, 692 (7th Cir. 2008). However, plaintiffs may plead 

themselves out of court if the complaint includes allegations that 

show they cannot possibly be entitled to the relief sought. 

McCready v. eBay, Inc., 453 F.3d 882, 888 (7th Cir. 2006). 

Analysis 

A federal court sitting in diversity must apply federal 

procedural law and the appropriate state substantive law. First 

Nat. Bank and Trust Corp. v. Am. Eurocopter Corp., 378 F.3d 682, 

689 (7th Cir. 2004). Here, it is undisputed that Indiana 

substantive law controls this dispute. To sustain a cause of 

action for fraudulent misrepresentation in Indiana, a plaintiff 

must allege: 

(1) that the defendant made false statements 

of past or existing material facts; (2) that 

the defendant made such statements knowing 

them to be false or recklessly without 

knowledge as to their truth or falsity; (3) 

that the defendant made the statements to 

induce the plaintiff to act upon them; (4) 

that the plaintiff justifiably relied and 

acted upon the statements; and (5) that the 

plaintiff suffered injury. 

Dickerson v. Strand, 904 N.E.2d 711, 715 (Ind. Ct. App. 2009) 

(citing Verrall v. Machura, 810 N.E.2d 1159, 1162 (Ind. Ct. App. 

2004). With regard to the false statements, “fraud may not be 

based on representations regarding future conduct, or on broken 
7 

promises, unfulfilled predictions or statements of existing intent 

which are not executed.” Biberstine v. New York Blower Co., 625 

N.E.2d 1308, 1315 (Ind. Ct. App. 1993). Moreover, when a plaintiff 

alleges both a breach of contract claim and a fraud claim, the 

tort of fraud must be “separate and independent” from the contract 

claim, and the injury sustained from the tort must be “distinct” 

from the injury suffered as a result of the breach of contract. 

JPMCC 2006–CIBC14 Eads Parkway, LLC v. DBL Axel, LLC, 977 N.E.2d 

354, 364 (Ind. Ct. App. 2012) (citing Dean V. Kruse Found., Inc. 

v. Gates, 932 N.E.2d 763, 768 (Ind. Ct. App. 2010)). 

 An analysis of the factors above requires application of the 

procedural standards set forth in Federal Rule of Civil Procedure 

9(b) to determine whether a claim for fraudulent misrepresentation 

has been properly stated. Rule 9(b) requires a plaintiff to allege 

“the identity of the person making the misrepresentation, the time, 

place, and content of the misrepresentation, and the method by 

which the misrepresentation was communicated to the plaintiff.” 

Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 737 (7th 

Cir. 2014) (citation omitted). Plaintiffs are required to plead 

the “who, what, where, and when of the alleged fraud” because, in 

doing so, they must “conduct a precomplaint investigation in 

sufficient depth to assure that the charge of fraud is responsible 

and supported, rather than defamatory and extortionate.” Ackerman 
8 

v. N.W. Mut. Life Ins. Co., 172 F.3d 467, 469 (7th Cir. 1999). 

Moreover, claims of fraud must sufficiently allege fraudulent 

intent on the part of the defendant. Graue Mill Dev. Corp. v. 

Colonial Bank & Tr. Co. of Chicago, 927 F.2d 988, 992 (7th Cir. 

1991). As noted by the Seventh Circuit Court of Appeals: 

Cryptic statements suggesting fraud are not 

enough; mere allegations of fraud . . ., 

averments to conditions of mind, or references 

to plans and schemes are too conclusional to 

satisfy the particularity requirements. 

Rather, pleadings must state the specific 

content of the false representations as well 

as the identities of the parties to the 

misrepresentation.” 

Id. at 992–93 (internal citations, quotation marks, and brackets 

omitted). 

 Here, Crane 1 argues that Munster Steel failed to allege the 

elements of fraudulent misrepresentation with particularity, 

failed to properly allege that Crane 1 acted with fraudulent 

intent, and failed to properly allege a separate and independent 

tort for fraud with injuries distinct from those resulting from 

the breach of contract. Munster Steel responds by arguing that 

its claim is pled with sufficient particularity, that it is not 

based on future promises, and that it has properly alleged distinct 

contract and tort claims. 
9 

 As to Rule 9(b)’s particularity requirement,1 the “who” in 

this case is generally alleged to be representatives of Crane 1. 

While the specific identity of the Crane 1 employee or employees 

responsible for the fraud is not mentioned in the complaint, there 

is some precedent for the notion that the “institutional identity” 

will suffice at the motion to dismiss stage. See e.g. MDG Intern., 

Inc. v. Australian Gold, Inc., No. 1:07CV1096-SEB-TAB, 2008 WL 

3982072, at *3 (S.D. Ind. Aug. 22, 2008) (citing Blaz v. Michael 

Reese Hosp. Found., 191 F.R.D. 570, 574 (N.D. Ill. 1999)). 

Similarly, the “when” can be inferred to be sometime between 

November of 2011 (the time Munster Steel sold its old facility) 

and August of 2014 (the time the new facility was substantially 

completed) during which Munster Steel solicited and received the 

Proposal from and entered into the Agreement with Crane 1.2 

 However, the remaining elements are insufficiently pled. The 

complaint does not refer to “where” the alleged misrepresentations 

occurred. Munster Steel’s old facility and new facility are 

mentioned, but not in connection with any specific 

 

1 Although the parties separate their arguments regarding “particularity” 

and “unfulfilled future promises,” the analysis overlaps and will be 

addressed accordingly by the Court. 

 

2 Specifically, Munster Steel alleges that it solicited the Proposal from 

Crane 1 “prior to [the new facility’s] completion” (DE #1, p. 3), that the 

Proposal was submitted on March 19, 2013 (Id.; see also DE #1-1), and that 

the Agreement was entered into on October 1, 2013 (DE #1, p. 4; see also DE 

#1-2). 
10 

representations. More importantly, Munster Steel fails to 

adequately allege “what” specific false statements of past or 

existing material facts Crane 1 purportedly made. In its response 

brief, Munster Steel argues that it has met the particularity 

requirements with regard to this issue because it “specifically 

alleged Crane 1 represented that it could provide Class D cranes 

to Munster Steel in its 2013 [P]roposal after it had visited 

Munster Steel’s facility,” that “Crane 1 made the representation 

knowing that Munster Steel would not enter the [A]greement without 

that representation,” that “Crane 1 knowingly designed and 

constructed the cranes contrary to what it had represented,” and 

that “despite the fact that Crane 1 knew the cranes were not Class 

D, it led Munster Steel to believe that it had provided Class D 

cranes.” (DE #16, pp. 5-6.) However, as pointed out by Crane 1, 

the complaint itself only alleges that Crane 1 made representations 

as to future conduct and promises. For example, the complaint 

alleges that Crane 1 proposed to furnish, install and provide 

specific equipment to Munster Steel and that the Proposal 

articulated the details of how the cranes “would be designed and 

constructed.” It alleges that Crane 1 knowingly represented that 

the cranes “would meet all the specifications and standards 

identified in the Proposal.” These facts are distinguishable from 

those in Pain Ctr. of SE Indiana, LLC v. Origin Healthcare 
11 

Solutions LLC, No. 1:13-CV-00133-RLY, 2014 WL 6750042 (S.D. Ind. 

Dec. 1, 2014), a case upon which Munster Steel relies heavily. In 

Origin, the false statements at issue included “affirmative 

misrepresentations” given by a sales representative during a 

business presentation that induced the plaintiffs to later enter 

into a contract to purchase software and related services. Id. 

at *1-4. Specifically, the plaintiffs alleged that they were 

“falsely assured” that the defendant “had installed dozens of these 

systems without error,” that its sales representatives and support 

staff “had been extensively trained,” and that the particular 

software package the plaintiffs were considering did not have any 

“glitches.” Id. at *1. The district court found that the 

plaintiffs had adequately alleged a claim for fraud, in part, 

because the defendants had made the aforementioned “misleading 

representations regarding the characteristics and services 

associated with [the] software” prior to the signing of the 

contracts at issue. Id. at 3. The additional cases upon which 

Munster Steel relies are similarly distinguishable because, in 

each, the district court determined that false material 

representations as to past or existing facts had been adequately 

alleged. See ABN Amro Mortg. Group, Inc. v. Maximum Mortg., Inc., 

429 F. Supp. 2d 1031, 1039–41 (N.D. Ind. 2006) (finding the 

plaintiff had sufficiently pled a fraudulent mortgage scheme where 
12 

the “creation of the false appearance” was based on the allegation 

that the defendant had provided the plaintiff with false 

information on existing loan documents, had falsely represented 

that there were existing mortgages on the properties at issue, and 

had falsely represented to the plaintiff that he was entitled to 

a payoff on the existing mortgages); DNET Services, LLC v. Digital 

Intelligence Sys. Corp., No. 1:08-CV-0252-DFH-JMS, 2009 WL 

1259375, at *4 (S.D. Ind. May 5, 2009) (finding fraud was pled 

with particularity because the plaintiff had alleged “detailed 

certain written and oral communications” regarding representations 

that “may have concerned past or existing facts”). Here, however, 

Munster Steel has not alleged that Crane 1 made any representations 

as to its past or existing work, performance, expertise, skill, or 

any other material fact; rather all of the alleged 

misrepresentations concern what Crane 1 agreed it would do for 

Munster Steel.3 This failure dooms its claim for fraudulent 

 

3 Munster Steel points to the fact that Crane 1 submitted the Proposal after 

it had toured the old facility and had reviewed and observed Munster Steel’s 

crane operations. However, the complaint simply states that Munster Steel 

had invited Crane 1 to tour its facility “to gain an understanding of Munster 

Steel’s operations,” was provided an “extensive review” of the cranes being 

used, and that Crane 1 “took measurements and photos of the existing cranes 

to ensure the new cranes would be of like kind.” (DE #1, p. 3.) It does not 

reference any discussions or representations made regarding Crane 1’s past or 

existing crane projects or technical abilities. Munster Steel also argues 

that its claim survives because it has alleged that Crane 1 did not provide 

as-built drawings or documentation of the cranes’ specifications after their 

delivery as it had agreed to do; however, these allegations again concern 

unfulfilled promises rather than past or existing material 

misrepresentations. 
13 

misrepresentation because “[i]t is well-settled that fraud may not 

be premised upon “representations of future conduct, on broken 

promises, or on representations of existing intent that is not 

executed.” See e.g. Strodtman v. Integrity Builders, Inc., 668 

N.E.2d 279, 283 (Ind. Ct. App. 1996) (finding that plaintiffs 

failed to allege a claim of fraud because any misrepresentations 

made in connection with the contract involved future conduct that 

the defendant had agreed, yet ultimately failed, to perform); 

Biberstine, 625 N.E.2d at 1315 (representations that the plaintiff 

would be allowed to keep his stock pertained to future conduct 

rather than past or existing facts); Comfax Corp. v. N. Am. Van 

Lines, Inc., 587 N.E.2d 118, 125 (Ind. Ct. App. 1992) 

(counterclaimants failed to allege actual fraud because 

counterdefendant’s only representations involved future actions on 

which the counterclaimants had relied). 

 Because the Court has found that Munster Steel has failed to 

state a claim for fraudulent misrepresentation due to the lack of 

any allegation that Crane 1 made false statements of past or 

existing material facts, Crane 1’s remaining arguments need not be 

addressed. 
14 

CONCLUSION 

For the reasons set forth above, the motion to dismiss (DE 

#13) is GRANTED; however, Count V is dismissed without prejudice. 

DATED: January 30, 2018 /s/ RUDY LOZANO, Judge 

 United States District Court