Court Opinion

ID: 3162574
Source: CourtListenerOpinion
Date Created: 2015-12-15 16:04:23.46721+00
Date Added: 2024-06-11T11:51:03.323325
License: Public Domain

Dec 15 2015, 7:11 am

ATTORNEYS FOR APPELLANTS                            ATTORNEYS FOR APPELLEE STEVE
Karl L. Mulvaney                                    DYBWAD
Joshua J. Burress                                   Brian P. Nally
Bingham Greenebaum Doll LLP                         Martin T. Galvin
Indianapolis, Indiana                               Reminger Co., L.P.A.
Laura Richards Sherry                               Cleveland, Ohio
The Harris Firm                                     ATTORNEYS FOR APPELLEES CRONIN
Dallas, Texas
                                                    INSURANCE SERVICES, INC., AND THE
                                                    ASSOCIATION OF SMALL, CLOSELY-
                                                    HELD BUSINESS ENTERPRISES
                                                    Connie M. Anderson
                                                    Lewis Brisbois Bisgaard & Smith LLP
                                                    Los Angeles, California
                                                    Kari H. Halbrook
                                                    Lewis Brisbois Bisgaard & Smith LLP
                                                    Chicago, Illinois
                                                    ATTORNEYS FOR APPELLEE
                                                    GREENWALT CPAS, INC., F/K/A
                                                    GREENWALT SPONSEL & CO.
                                                    Michael E. Brown
                                                    Crystal G. Rowe
                                                    Kightlinger & Gray, LLP
                                                    Indianapolis, Indiana
                                                    Thomas F. Falkenberg
                                                    Williams, Montgomery & John
                                                    Chicago, Illinois
                                                    ATTORNEYS FOR APPELLEE JONIGIAN
                                                    & FOX, INC., D/B/A FOX & FOX
                                                    Scott B. Cockrum
                                                    Patrick Devine
                                                    Hinshaw & Culbertson LLP
                                                    Schererville, Indiana

Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015                Page 1 of 54
                                                    James Harbert
                                                    Hinshaw & Culbertson LLP
                                                    Chicago, Illinois
                                                    ATTORNEY FOR APPELLEE MARK
                                                    LIGHT
                                                    Paul D. Vink
                                                    Bose McKinney & Evans LLP
                                                    Indianapolis, Indiana
                                                    ATTORNEYS FOR APPELLEE
                                                    WASHINGTON TRUST BANK
                                                    Michael A. Maurer, pro hac vice
                                                    Lukins & Annis, P.S.
                                                    Spokane, Washington
                                                    Steven E. Runyan
                                                    Kroger Gardis & Regas, LLP
                                                    Indianapolis, Indiana
                                                    ATTORNEYS FOR APPELLEE WESTERN
                                                    RESERVE LIFE ASSURANCE CO. OF
                                                    OHIO
                                                    John R. Carr, III
                                                    Michael R. Franceschini
                                                    Thomas B. Bricker
                                                    Ayers Carr & Sullivan, P.C.
                                                    Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Seema Kapoor; Shiv Kapoor;                                December 15, 2015
Performance Support                                       Court of Appeals Cause No.
Consulting, LLC; Matt Judson;                             49A04-1410-CT-492
and Regional Construction                                 Appeal from the Marion Superior
Services, Inc.,                                           Court
                                                          The Honorable John F. Hanley,
Appellants/Plaintiffs,                                    Judge
        v.                                                Cause No. 49D11-1309-CT-35196

Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015             Page 2 of 54
      Steve Dybwad; Cronin Insurance
      Services, Inc.; Mark Light;
      Greenwalt CPAs, Inc., f/k/a
      Greenwalt Sponsel & Co.;
      Association of Small, Closely-
      Held Business Enterprises;
      Washington Trust Bank;
      Jonigian & Fox, Inc., d/b/a Fox
      & Fox; and Western Reserve
      Life Assurance Co. of Ohio,
      Appellees/Defendants.

      Bradford, Judge.

                                          Case Summary                   1

[1]   Appellants/Plaintiffs Seema Kapoor; Shiv Kapoor; Performance Consulting;

      LLC (collectively, “the Kapoor Plaintiffs”); Matt Judson; and Regional

      Construction Services, Inc. (collectively, “the Judson Plaintiffs”), appeal from

      the trial court’s grant of a motion to dismiss in favor of Appellees/Defendants

      Steve Dybwad; Cronin Insurance Services, Inc.(“CIS”); Mark Light; Greenwalt

      CPAs, Inc., f/k/a Greenwalt Sponsel & Co. (“Greenwalt”); Association of

      Small, Closely-Held Business Enterprises (“ASBE”); Washington Trust Bank

      (“WTB”); Jonigian & Fox, Inc., d/b/a Fox & Fox (“Fox & Fox”); and

      1
        We held oral argument in this case on November 5, 2015. We would like to commend counsel for
      the high quality of their preparation and oral advocacy.

      Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015            Page 3 of 54
      Western Reserve Life Assurance Co. of Ohio (“WRL”). Defendants fulfilled

      various roles in assisting Plaintiffs to establish welfare benefit programs for the

      employees of their companies, programs which involved the purchase of cash

      value life insurance policies. These plans were initially known as the Cronin

      Insured Secured Program (“Cronin ISP Plan”) and, later, the Cronin Group

      Term Life Insurance Program (“Cronin GTLP Plan”). For several years,

      Plaintiffs made premium payments and deducted the contributions on their tax

      returns.

[2]   In 2012 and 2013, the Plaintiffs received deficiency notices from the IRS,

      indicating that it had disallowed the deductions taken for contributions to the

      Cronin ISP and GTLP Plans. As a result, Plaintiffs incurred costs for back

      taxes, penalties, and interest. All Defendants were sued by various Plaintiffs

      (the Kapoor Plaintiffs, the Judson Plaintiffs, or all Plaintiffs) for fraud, fraud by

      omission, negligent misrepresentation, negligence, unjust enrichment, money

      had and received, and constructive fraud. The trial court granted Defendants’

      motion to dismiss for failure to state a claim under which relief may be granted.

[3]   On appeal, Plaintiffs argue that (1) Defendants’ alleged misrepresentations are

      actionable as a matter of law, (2) Plaintiffs’ fraud allegations were pled with

      requisite specificity, (3) Defendants had a duty to Plaintiffs, (4) the economic

      loss doctrine does not bar their negligence claim against Fox & Fox, (5)

      Plaintiffs were not required to attach certain “writings” in order to sustain a

      cause of action against Fox & Fox, (6) the trial court erred in dismissing the

      Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 4 of 54
      Judson Plaintiffs’ fraud claim against WRL, and (7) the trial court erred in

      dismissing the Judson Plaintiffs’ negligence claim against Greenwalt.

[4]   CIS and ASBE contend that (1) Plaintiffs do not have a viable cause of action

      because it is inherently unreasonable to rely on predictions regarding future tax

      consequences and (2) Plaintiffs’ fraud claims were not pled with sufficient

      specificity. Greenwalt argues that the Judson Plaintiffs’ (1) negligence claims

      against them are time-barred, (2) fraud claims were not pled with sufficient

      specificity, and (3) the constructive fraud claim did not allege the necessary

      unconscionable advantage. Fox & Fox contends that (1) allegations of fraud

      against it fail to state a claim, (2) fraud claims were not pled with sufficient

      specificity, (3) the constructive fraud claim was properly dismissed due to a lack

      of duty, and (4) the negligence claim was properly dismissed pursuant to the

      economic loss doctrine and for a lack of duty. WTB contends that (1)

      Washington state law governs its relationships with various Plaintiffs, (2) it had

      no legal duty to provide tax or financial advice to Plaintiffs and (3) any claims

      based on a breach of duty must therefore fail. WRL contends that (1) the

      Judson Plaintiffs’ fraud allegations were not pled with sufficient specificity and

      (2) the Judson Plaintiffs pled no facts supporting a material misrepresentation.

      Light contends that all of the Judson Plaintiffs’ claims against him fail as a

      matter of law. Because we conclude that the trial court erred in dismissing

      several fraud, constructive fraud, and negligence claims against various

      defendants, we reverse the judgment of the trial court in part and remand for

      further proceedings.

      Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 5 of 54
                            Facts and Procedural History
                        I. Background—Section 419(e) Plans
[5]   Generally, Title 26, Section 419 of the United States Code provides for the

      establishment of “welfare benefit funds” by employers for employees, with

      employer contributions deductible under certain circumstances. Section 419(e)

      defines the term “welfare benefit fund” as “any fund … which is part of a plan

      of an employer, and … through which the employer provides welfare benefits to

      employees or their beneficiaries.” “The amount of the deduction allowable …

      for any taxable year shall not exceed the welfare benefit fund’s qualified cost for

      the taxable year.” 26 U.S.C § 419(b).

[6]   As far back as 1995, the Internal Revenue Service announced its position

      concerning some arrangements purporting to comply with Section 419, stating

      that such arrangements involving welfare benefit funds that invested in variable

      life or universal life insurance contracts on the lives of the employees did not

      provide the deductions claimed by their promoters. The IRS, inter alia, took the

      position that arrangements that invested in variable life for universal life

      Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 6 of 54
      contracts may actually be providing deferred compensation, which would not

      provide for the same tax-deduction opportunities for the employer.2

[7]   In late 2007, the IRS issued Notices 2007-83 and 2007-84 and Revenue Ruling

      2007-65. Notice 2007-83 was entitled “Abusive Trust Arrangements Utilizing

      Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits”

      and informed taxpayers that “the tax benefits claimed for these arrangements

      are not allowable for federal tax purposes.” Appellant’s App. p. 926. Notice

      2007-83 also indicated that the IRS intended to challenge the claimed tax

      benefits related to premiums for cash value life insurance policies. Inter alia,

      Notice 2007-84 indicated the IRS’s intention to challenge “purported welfare

      plans that, in form, provide post-retirement medical and life insurance to

      employees on a non-discriminatory basis, but that, in operation, will primarily

      benefit the owners or other key employees of the businesses.” Appellant’s App.

      p. 934. Revenue Ruling 2007-65 indicated that “if the benefit provided through

      the fund is life insurance coverage, premiums paid on cash value life insurance

      policies by the fund are not included in the fund’s qualified direct cost whenever

      2
        Title 26, Section 162 of the United States Code limits business deductions to expenses that are
      ordinary and necessary. The deductibility of life insurance expenses has been interpreted to be limited
      to the cost of term life insurance acquired for a legitimate business reason. See, e.g., V.R. Deangelis
      M.D.P.C. v. C.I.R., 94 T.C.M. (CCH) 526 (T.C. 2007) (“While employers are not generally prohibited
      from funding term life insurance for their employees and deducting the premiums on that insurance as a
      business expense under section 162(a), employees are not allowed to disguise their investments in life
      insurance as deductible benefit-plan expenses when those investments accumulate cash value for the
      employees personally.”).

      Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015                 Page 7 of 54
       the fund is directly or indirectly a beneficiary under the policy” and are

       therefore not deductible. Appellant’s App. p. 950.

                                         II. The Defendants
[8]    Lawrence Cronin was an insurance broker who operated CIS. Cronin

       developed the Cronin ISP Plan and, later, the Cronin GTLP Plan. The Cronin

       ISP Plan was purportedly set up in compliance with Section 419(e), while the

       Cronin GTLP Plan was purportedly set up in compliance with U.S. Tax Code

       Sections 79 and 83. All Plaintiffs bring claims against CIS.

[9]    Fox & Fox operated as a third-party administrator of the Cronin ISP and GTLP

       Plans. Fox & Fox collected money from the Plaintiffs for investment in the

       Plans and administrative fees, and their invoices instructed the Plaintiffs

       regarding how much money to deduct as “qualified costs” on their tax returns.

       All Plaintiffs bring claims against Fox & Fox.

[10]   WTB was trustee for the Cronin ISP Plans. WTB acquired a security interest in

       each policy’s proceeds and required covered employees to execute assignments.

       WTB became the beneficiary of the policies and, in the event of a covered

       employee’s death, collected policy proceeds and disburse them pursuant to

       Cronin ISP documents. WTB collected money from Plaintiffs, which it then

       used to pay the premiums for the policies on the lives of the Plaintiffs. WTB

       received administrative fees for its role in administering the Cronin ISP Plans.

       All Plaintiffs bring claims against WTB.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 8 of 54
[11]   ASBE, successor to the Science and Technology Council of Maryland

       (“SATCOM”), purportedly acted as “trustee” for the Cronin GTLP Plans.

       ASBE collected money from plan participants, deposited that money into its

       bank accounts, and then made payments to the various insurance providers for

       the premiums on the life insurance policies. ASBE received payment for these

       services. All Plaintiffs bring claims against ASBE.

[12]   WRL devised the insurance policies to be used in the Judson Plaintiffs’ plans.

       WRL provided its agents, including Cronin and Light, with illustrations and

       other marketing materials. WRL paid Cronin and Light commissions. Only

       the Judson Plaintiffs bring claims against WRL.

[13]   Dybwad was the Kapoor Plaintiffs’ financial and insurance advisor who had

       serviced their needs since 1999. Only the Kapoor Plaintiffs bring claims against

       Dybwad.

[14]   Light was the Judson Plaintiffs’ financial advisor who had served in that

       capacity since 2002. During the third quarter of 2008, the Judson Plaintiffs

       retained Greenwalt as their financial and tax advisor. Greenwalt provided tax

       advice to the Judson Plaintiffs from 2008 through 2012. Only the Judson

       Plaintiffs bring claims against Light and Greenwalt.

                                        III. The GTLP Plan
[15]   In December of 2007, Cronin created the Cronin GTLP Plan, which he

       marketed as a Section 79/83 plan. Although the Cronin GTLP Plan purports

       not to be a welfare benefit plan pursuant to Section 419(e), the language of the
       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 9 of 54
       plan document is “virtually identical” to that of the Cronin ISP plan document.

       Appellant’s App. p. 973. One of the few differences between the Cronin ISP

       Plan and the Cronin GTLP Plan is that the word “Trust” in the former has

       been replaced with “Association” in the latter. Appellant’s App. p. 973.

       Shortly after the publication of IRS Notice 2007-83, approximately 139

       employees covered by the Cronin ISP Plan were rolled over into the Cronin

       GTLP Plan.

                                   IV. The Kapoor Plaintiffs
[16]   Seema and Shiv Kapoor operate Performance Support Consulting, LLC, in

       Indiana. In late 2006, Dybwad approached the Kapoor Plaintiffs to solicit their

       participation in the Cronin ISP Plan. Dybwad told the Kapoors that the Cronin

       ISP Plan was an IRS-approved plan that would provide more insurance for

       them and allow them to take a full deduction for their contributions. Dybwad

       also represented to the Kapoors that the Cronin ISP Plan had a guaranteed rate

       of return of between 5% and 15%, their principal investment would be

       protected, the plan was a legitimate retirement plan, and they could access their

       money at any time through tax-free loans.

[17]   The Kapoor Plaintiffs invested $100,000.00 in the Cronin ISP Plan in 2006 and

       took the corresponding tax deduction. In 2007, after the IRS issued its notices

       regarding Section 419(e) plans, Dybwad, in conjunction with Fox & Fox,

       transferred the Kapoor Plaintiffs to the Cronin GTLP Plan. Dybwad allegedly

       told the Kapoors that there had been changes in IRS regulations and that the

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 10 of 54
       transfer was necessary to ensure compliance. Dybwad allegedly also told the

       Kapoors that contributions to the Cronin GTLP Plan were tax-deductible, they

       would see a guaranteed return on their investment, and they would still have

       access to loans from the policies. The Kapoors made further investments in

       2007, 2008, 2009, 2010, and 2011 of $100,000.00 per year in the Cronin GTLP

       Plan, taking the corresponding tax deductions for every year except 2011.

[18]   On May 18, 2012, the Kapoors received a deficiency notice from the IRS, in

       which the IRS notified the Kapoor Plaintiffs that it had disallowed the tax

       deductions they had taken for contributions to the Cronin ISP and GTLP

       Plans. After negotiations with the IRS, the Kapoor Plaintiffs agreed to pay

       back taxes of $75,715.27, accuracy-related penalties of $24,073.67, and interest

       of $9623.84 for 2007-2010. Additionally, the IRS assessed 6707A penalties

       against the Kapoors individually of $41,232.00 and against Performance

       Support of $40,000.00. The Kapoor Plaintiffs bring claims against CIS, ASBE,

       Dybwad, WTB, and Fox & Fox.

                                     V. The Judson Plaintiffs
[19]   Judson is presumably married to Jackie Judson and operates Regional

       Construction Services, Inc. (“RCS”), incorporated in Indiana in April of 2002.

       In 2002, the Judson Plaintiffs engaged Light to be their financial advisor. In

       October or November of 2004, Light approached the Judson Plaintiffs to solicit

       their participation in the Cronin ISP Plan. Light allegedly told the Judson

       Plaintiffs that the Cronin ISP Plan was designed to benefit RCS’s long-term

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 11 of 54
       employees and help retain them. As part of the Cronin ISP Plan, the Judson

       Plaintiffs deposited money into an “escrow account” to be used to pay the

       annual insurance premiums. Appellant’s App. 861. Light allegedly told the

       Judson Plaintiffs that the Cronin ISP Plan was in full compliance with IRS

       regulations, the plan allowed investors to take a full deduction, their principal

       investment was protected, and they could access the money after a few years via

       tax-free loans.

[20]   On December 21, 2004, the Judson Plaintiffs made a $30,000.00 contribution to

       the Cronin ISP Plan, a contribution amount repeated in 2005 and 2006. From

       2004 to 2006, the Judson Plaintiffs paid $8750.00 in administrative costs.

[21]   In November of 2006, Light approached the Judson Plaintiffs about amending

       the Cronin ISP Plan. After Light allegedly told the Judson Plaintiffs that they

       would need to obtain a second life insurance policy on Matt Judson, the Judson

       Plaintiffs contributed an additional $30,000.00 in 2006. Also in December of

       2006, the Judson Plaintiffs contributed $310,000.00 to WTB to be held in the

       escrow account. Also in 2006, the Judson Plaintiffs paid $2075.00 in

       administrative costs.

[22]   In October of 2008, Light contacted the Judson Plaintiffs to discuss their Cronin

       ISP Plan, allegedly telling them that they needed to transfer to the Cronin

       GTLP Plan. Light allegedly told the Judson Plaintiffs that the Cronin GTLP

       Plan was IRS-approved, they could take deductions for their contributions, and

       they would still see a guaranteed return on their investment. The Judson

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 12 of 54
       Plaintiffs paid a $300.00 termination fee to WTB and made contributions to the

       Cronin GTLP of $60,000.00 in 2008 and $27,000.00 in each of 2009, 2010, and

       2011 and paid approximately $4625.00 in administrative costs to ASBE and

       Fox & Fox.

[23]   In March of 2013, the Judson Plaintiffs received a deficiency notice from the

       IRS. The IRS had determined that the Cronin ISP and GTLP Plans were

       noncompliant and that the Judson Plaintiffs were not entitled to take

       deductions equal to the amount of their contributions. The Judson Plaintiffs

       have been assessed the following: back taxes of $254,963.00, accuracy-related

       penalties of $84,480.38, interest of $42,085.22, and 6707A penalties of

       $30,000.00 against RCS and $60,624.00 against the Judson Plaintiffs

       individually. The Judson Plaintiffs bring claims against CIS, Light, Greenwalt,

       ASBE, WTB, and Fox & Fox.

                                      VI. Procedural History
[24]   On September 13, 2013, the Plaintiffs filed their original complaint for

       damages. Plaintiffs sued Defendants for fraud, fraud by omission, negligent

       misrepresentation, negligence, unjust enrichment, money had and received, and

       constructive fraud. Defendants filed motions to dismiss pursuant to Indiana

       Trial Rule 12(B)(6), which motions the trial court granted on March 18, 2014.

       On March 28, 2014, Plaintiffs filed their first amended complaint (“FAC”). All

       defendants were sued by various Plaintiffs (the Kapoor Plaintiffs, the Judson

       Plaintiffs, or all Plaintiffs) for fraud, fraud by omission, negligent

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 13 of 54
       misrepresentation, negligence, unjust enrichment, money had and received, and

       constructive fraud.

[25]   Defendants Dybwad, ASBE, Greenwalt, WTB, Light, Fox & Fox and WRL

       again filed motions to dismiss Plaintiffs FAC pursuant to Trial Rules 12(B)(6)

       and 9(B). On August 26, 2014, after hearing argument on Defendants’ motions

       to dismiss, the trial court granted the various motions without elaboration. On

       September 24, 2014, the trial court ordered that its order granting Defendants’

       motions to dismiss be made final and appealable.

                                      VII. Claims on Appeal
[26]   Plaintiffs contend that the trial court erred in granting Defendants’ motion to

       dismiss. Specifically, Plaintiffs argue that (1) Defendants’ alleged

       misrepresentations are actionable as a matter of law, (2) Plaintiffs’ fraud

       allegations were pled with the requisite specificity, (3) Defendants had a duty to

       Plaintiffs, (4) the economic loss doctrine does not bar its negligence claim

       against Fox & Fox, (5) Plaintiffs were not required to attach certain “writings”

       in order to sustain a cause of action against Fox & Fox, (6) the trial court erred

       in dismissing the Judson Plaintiffs’ fraud claim against WRL, and (7) the trial

       court erred in dismissing the Judson Plaintiffs’ negligence claim against

       Greenwalt.

[27]   CIS and ASBE contend that (1) Plaintiffs do not have a viable cause of action

       because it is inherently unreasonable to rely on predictions regarding future tax

       consequences and (2) Plaintiffs’ fraud claims were not pled with sufficient

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 14 of 54
       specificity. Greenwalt argues that the Judson Plaintiffs’ (1) negligence claims

       against them are time-barred, (2) fraud claims were not pled with sufficient

       specificity, and (3) constructive fraud claim did not allege the necessary

       unconscionable advantage. Fox & Fox contends that (1) allegations of fraud

       against it fail to state a claim, (2) fraud claims were not pled with sufficient

       specificity, (3) the constructive fraud claim was properly dismissed due to a lack

       of duty, and (4) the negligence claim was properly dismissed pursuant to the

       economic loss doctrine and for a lack of duty. WTB contends that (1)

       Washington state law governs its relationships with various Plaintiffs, (2) it had

       no legal duty to provide tax or financial advice to Plaintiffs, and (3) any claims

       based on a breach of duty must fail. WRL contends that (1) the Judson

       Plaintiffs’ fraud allegations were not pled with sufficient specificity and (2) the

       Judson Plaintiffs pled no facts supporting a material misrepresentation. Light

       contends that all of the Judson Plaintiffs’ claims against him fail as a matter of

       law.

                                  Discussion and Decision
                                            Standard of review
[28]   Plaintiffs are appealing from the grant of several of the Defendants’ motions to

       dismiss filed pursuant to Indiana Trial Rule 12(B)(6). “We review de novo the

       trial court’s grant or denial of a motion based on Indiana Trial Rule 12(B)(6).”

       Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122 (Ind. 2010)

       (citing Babes Showclub v. Lair, 918 N.E.2d 308, 310 (Ind. 2009)).

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 15 of 54
        A motion to dismiss under Rule 12(B)(6) tests the legal
        sufficiency of a complaint: that is, whether the allegations in the
        complaint establish any set of circumstances under which a
        plaintiff would be entitled to relief. See Kitco, Inc. v. Corp. for Gen.
        Trade, 706 N.E.2d 581 (Ind. Ct. App. 1999). Thus, while we do
        not test the sufficiency of the facts alleged with regards to their
        adequacy to provide recovery, we do test their sufficiency with
        regards to whether or not they have stated some factual scenario
        in which a legally actionable injury has occurred.

        A court should “accept[] as true the facts alleged in the
        complaint,” Minks v. Pina, 709 N.E.2d 379, 381 (Ind. Ct. App.
        1999), and should not only “consider the pleadings in the light
        most favorable to the plaintiff,” but also “draw every reasonable
        inference in favor of [the non-moving] party.” Newman v. Deiter,
        702 N.E.2d 1093, 1097 (Ind. Ct. App. 1998). However, a court
        need not accept as true “allegations that are contradicted by other
        allegations or exhibits attached to or incorporated in the
        pleading.” Morgan Asset Holding Corp. v. CoBank, ACB, 736
        N.E.2d 1268, 1271 (Ind. Ct. App. 2000) (citations omitted).
        Indiana Trial Rule 8(A), this state’s notice pleading provision,
        requires only “a short and plain statement of the claim showing
        that the pleader is entitled to relief.” Although the plaintiff need
        not set out in precise detail the facts upon which the claim is
        based, she must still plead the operative facts necessary to set
        forth an actionable claim. Miller v. Mem. Hosp. of South Bend, Inc.,
        679 N.E.2d 1329 (Ind. 1997). Under notice pleading, we review
        the granting of a motion to dismiss for failure to state a claim
        under a stringent standard, and affirm the trial court’s grant of
        the motion only when it is “apparent that the facts alleged in the
        challenged pleading are incapable of supporting relief under any
        set of circumstances.” McQueen v. Fayette County Sch. Corp., 711
        N.E.2d 62, 65 (Ind. Ct. App. 1999).

Trail v. Boys & Girls Clubs of Nw. Ind., 845 N.E.2d 130, 134-35 (Ind. 2006).

Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015    Page 16 of 54
[29]   Additionally, in the FAC, Plaintiffs made several claims of fraud by various

       Defendants. Indiana Trial Rule 9(B) requires that “[i]n all averments of fraud

       or mistake, the circumstances constituting fraud or mistake shall be specifically

       averred.”

               In order to allege fraud sufficiently, the pleadings must state the
               time, the place, the substance of the false representations, the
               facts misrepresented, and identification of what was procured by
               fraud. Rogers v. R.J. Reynolds Tobacco Co. (1990) Ind. App., 557
               N.E.2d 1045, 1055, reh’g denied. The word “fraud” need not
               necessarily be alleged, if the facts alleged show either actual or
               constructive fraud. Employers Ins. of Wausau v. Commissioner of
               Dep’t of Ins. (1983) Ind. App., 452 N.E.2d 441, 447. A pleading
               which fails to comply with the special requirements of T.R. 9(B)
               does not state a claim upon which relief can be granted or a
               sufficient defense. Cunningham v. Associates Capital Serv. Corp.
               (1981) Ind. App., 421 N.E.2d 681, 683 n. 2.

       Abbott v. Bates, 670 N.E.2d 916, 922 n.3 (Ind. Ct. App. 1996).

          I. Whether Plaintiffs may Maintain Cause of Action
          Against Defendants for Actual Fraud or Constructive
                                 Fraud
[30]   Plaintiffs note that the main issues addressed in the FAC are those of actual

       fraud and constructive fraud. The Plaintiffs contend that they may maintain

       causes of action against all Defendants for actual fraud and constructive fraud.

       Various Defendants argue (on various grounds) that Plaintiffs may not maintain

       causes of action for actual fraud or constructive fraud against any of the

       Defendants.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 17 of 54
                                             A. Actual Fraud3
[31]           The elements of actual fraud are: (i) material misrepresentation
               of past or existing facts by the party to be charged (ii) which was
               false (iii) which was made with knowledge or reckless ignorance
               of the falseness (iv) was relied upon by the complaining party and
               (v) proximately caused the complaining party injury.

       Rice v. Strunk, 670 N.E.2d 1280, 1289 (Ind. 1996).

                          1. Whether it Is Unreasonable to Rely on Alleged
                               Predictions of Future Tax Treatment

[32]   CIS and ASBE argue that Plaintiffs failed to rebut their argument below that it

       was inherently unreasonable to rely on any person’s prediction of the future tax

       treatment of a welfare benefits plan. CIS and ASBE rely on Berry v. Indianapolis

       Life Insurance Co., 600 F. Supp. 2d 805 (N.D. Texas 2009), which held as much.

       Plaintiffs argue that (1) the Indiana case of Scott v Bodor, Inc., 571 N.E.2d 313

       (Ind. Ct. App. 1991), holds that such statements can, in fact support a claim of

       actual fraud and (2) Berry is distinguishable from the instant case in that

       Defendants made various statements that were not merely predictive in nature.

       3
         Plaintiffs argue only that the trial court wrongfully dismissed their actual fraud claims against CIS,
       ASBE, Fox & Fox, WRL, Dybwad, and Light. On appeal, it is the appellants’ burden to formulate a
       cogent argument for the issues they raise. See Ind. Appellate Rule 46(A)(8)(a). Because Plaintiffs have
       not provided a cogent argument that their actual fraud claims against WTB and Greenwalt were
       wrongfully dismissed, we consider those claims to be abandoned.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015                  Page 18 of 54
                                                     i. Berry

[33]   In Berry, the plaintiffs were, in general, professional individuals and the

       companies they operated who participated in certain defined-benefit plans that

       were ostensibly designed and marketed by defendants as being compliant with

       Title 26, Section 412 of the United States Code. Berry, 600 F. Supp. 2d at 807.

       Various statements were made by defendants to plaintiffs regarding the plans,

       including that

               1. The life insurance policies were appropriate for use in funding
               the plan as a qualified 412(i) plan;
               2. The life insurance policies provided a permissible death
               benefit under the plan;
               3. The premiums to be paid for the policies qualified as federal
               income tax deductions; and
               4. The plan and the insurance policies used to fund it complied
               with all federal tax laws and regulations.
               ….
               1. That their defined benefit plans would be “a fully insured
               qualified plan under Section 412(i) of the Internal Revenue
               Code”;
               2. That each defined benefit plan “satisfies each of the [ ]
               requirements” of Section 412(i);
               3. That contributions to the defined benefit plans “are tax
               deductible to the business, and non-taxable to the participant”;
               4. That each individual plaintiff could eventually “purchase the
               policy from the plan for its net case value” and “report the
               policy’s net cash value as the taxable income”; and
               5. That the Consultant Defendants had “secured a letter opinion
               of ‘more likely than not’ from the international firm of Bryan
               Cave LLP” with respect to the viability of this arrangement.”

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 19 of 54
       Id. at 809, 810. As is happened, by 2005 the IRS began nationwide audits

       directed at 412(i) plans and had either commenced audits of plaintiffs or was

       likely to when plaintiffs sued defendants under various theories, including

       common law fraud. Id. at 810.

[34]   The Berry court granted defendant Indianapolis Life’s motion to dismiss on the

       ground that the plaintiffs failed to plead actual fraud with sufficient

       particularity. Specifically, the court concluded that plaintiffs failed to allege

       that various statements regarding the insurance plans at issue were false at the

       time they were made. Id. at 817.

[35]   Additionally, the Berry court concluded that

               To the extent that Plaintiffs are alleging that any of the
               statements listed in paragraphs 78 and 86 are forward-looking or
               are opinions as to how the IRS would treat 412(i) plans at any
               time after Dr. Young and Mr. Berry funded their plans with
               Indianapolis Life insurance policies in 2001-02, the Court finds
               those opinions as to future events unactionable as the basis for a
               fraud claim under these circumstances. Each statement allegedly
               made by Mssrs. West and Hartstein is a statement regarding
               federal income tax law or policy, including the policies of a third
               party government agency-the IRS. As a matter of law, any
               representation or prediction by any alleged Indianapolis Life
               agent as to how the IRS would treat the 412(i) plans, and the
               funding thereof, in the future is either an unactionable opinion or
               was unjustifiably relied upon.

       Id. at 819.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 20 of 54
                                                     ii. Scott

[36]   In Scott, plaintiff Bodor, Inc., implemented a supplemental income plan

       presented to it by defendants John Scott and Thomas Brown. 571 N.E.2d at

       316. The plan was funded by the purchase of whole life insurance, and Scott

       and Brown told Bodor employees that Bodor could deduct any contributions to

       the plan and that funds could be retrieved as needed. Id. at 317. At some point,

       Bodor discovered that the $370,000.00 it had invested in the plan was not, in

       fact, tax deductible. Id. at 318.

[37]   We ultimately concluded that “the defendants’ representations concerning

       Bodor’s ability to retrieve funds from the plan were representations concerning

       past or existing facts—the present features or terms of the proposed plan—and

       not mere statements of opinion or promises of future action.” Id. at 320. We

       further stated that

               [h]ere, plaintiff produced evidence that defendants claimed the
               funds placed in the plan were tax deductible, that the funds were
               immediately recoverable, and that the plan was not primarily
               funded by life insurance. All these statements were misrepresentations
               as to the features of the plan at the time it was offered to the plaintiff.

       Id. at 320-21 (emphasis added).

                                                   2. Analysis

[38]   CIS and ASBE argue that any representations made regarding the Cronin Plans

       by any defendant were no more than opinions as to how the IRS might treat the

       Plans in the future and therefore unactionable pursuant to Berry. Plaintiffs

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015       Page 21 of 54
       argue that several of the alleged representations are statements regarding

       present features of the plans pursuant to Scott.

[39]   In the end, we do not believe Berry’s approach to be persuasive enough to

       convince us to depart from Scott’s approach. “[W]hile federal district court

       decisions may be persuasive, they are not binding authority on state courts.”

       Plaza Grp. Props., LLC v. Spencer Cnty. Plan Comm’n, 877 N.E.2d 877, 894 (Ind.

       Ct. App. 2007), trans. denied. While we believe that the Berry court’s basic

       reasoning is consistent with relevant Indiana law, we take issue with the court’s

       characterization of some statements as merely predictive when they seem to us

       to clearly be statements of existing or past fact. For example, statements such

       as “[t]he premiums to be paid for the policies qualified as federal income tax

       deductions [and t]he plan and the insurance policies used to fund it complied

       with all federal tax laws and regulations” cannot be fairly described as

       predictions; they are, quite simply, statements of purported fact. Berry, 600 F.

       Supp. 2d at 809.

[40]   We have little hesitation concluding that our approach in Scott is the better-

       reasoned. From the perspective of the prospective investor, a statement such as

       “contributions to this plan are tax-deductible” is a statement of fact rather than

       a prediction regarding how the IRS will treat the plan in the future. With that

       approach in mind, the following subsections detail the specific allegations made

       against each Defendant in the FAC as they relate to a claim of actual fraud.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 22 of 54
                                                    i. Dybwad

[41]   The Kapoor Plaintiffs alleged in the FAC that Dybwad told them in the last

       quarter of 2006 the following regarding the Cronin ISP Plan: it would provide

       them with more insurance than they had currently with an additional tax

       savings, it was IRS-approved and allowed a full tax deduction for contributions,

       it provided a guaranteed return, and their principal investment would always be

       protected. These alleged representations all involve statements of past or

       existing facts which do not involve any predictions about how the IRS would

       treat the Cronin ISP Plan. In particular, the allegation that Dybwad told the

       Kapoor Plaintiffs that the Cronin ISP Plan was IRS-approved strongly implies

       that the IRS evaluated the Cronin ISP Plan and found it compliant. Moreover,

       allegations that Dybwad claimed that the Cronin ISP was IRS-approved, when

       he knew that it was not, clearly satisfy the requirement of a false statement of

       past or existing fact. Under Scott, the Kapoor Plaintiffs have made allegations

       that can support a claim of actual fraud.

                                                     ii. Light

[42]   The Judson Plaintiffs alleged in the FAC that Light told them that (1) the

       Cronin ISP Plan was in total compliance with all IRS regulations, (2) the plan

       allowed investors to deduct the contribution amount, (3) their principal

       investment was safe, (4) the plan was a legitimate retirement plan, and (5) they

       could take tax-free loans from the Cronin ISP Plan at any time. Under Scott, all

       of these alleged statements could support an actual fraud claim. In Scott, we

       found similar statements about an investor’s ability to retrieve funds from an

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 23 of 54
       insurance-funded plan to be “representations concerning past or existing facts—

       the present features or terms of the proposed plan—and not mere statements of

       opinion or promises of future action.” 571 N.E.2d at 320. The Judson

       Plaintiffs have made allegations against Light that could support a claim of

       actual fraud.

                                                     iii. WRL

[43]   The Judson Plaintiffs allege in the FAC that WRL (1) received marketing

       materials from Cronin along with documents demonstrating the IRS’s

       unfavorable treatment of welfare benefit plans, (2) paid Cronin and Light

       commissions on the sale of its life insurance products to the Judson Plaintiffs,

       (3) knew that Cronin and Light sold its life insurance to fund the Cronin Plans,

       (4) knew that Cronin and Light used their positions as their clients’ trusted

       advisor to facilitate life insurance sales, and (5) provided Cronin and Light with

       marketing materials showing how investments in the Cronin Plans were

       expected to perform. None of the above involves statements made directly to

       any of the Judson Plaintiffs, which precludes actual fraud claims by the Judson

       Plaintiffs against WRL.

                   iv. Additional allegations against Light, Cronin, and ASBE

[44]   The Judson Plaintiffs allege that (1) Light and Cronin advised them to deposit

       money into an “escrow” account in the event they were able to make future

       plan contributions; (2) the Judson Plaintiffs deposited a total of $415,510.00

       into this account, which was originally held by Arrowhead Trust but was

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 24 of 54
       transferred first to WTB and then ASBE; (3) the Judson Plaintiffs were

       informed in 2013 by Cronin’s widow that the account had a balance of

       $313,135.00, none of which has been returned to them. None of the above

       allegations involve statements by the Defendants in question of past or existing

       fact. Consequently, none of the additional allegations support a claim of actual

       fraud against Light, Cronin (or CIS), or ASBE.

                                        B. Constructive Fraud4
[45]   Plaintiffs also contend that the trial court erred in dismissing their constructive

       fraud claims, which, for the most part, are based on the Defendants’ alleged

       failures to disclose the IRS’s position on welfare benefit plans involving cash-

       value insurance policies.

               The elements of constructive fraud are: (i) a duty owing by the
               party to be charged to the complaining party due to their
               relationship; (ii) 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; (iii) reliance thereon by the
               complaining party; (iv) injury to the complaining party as a
               proximate result thereof; and (v) the gaining of an advantage by
               the party to be charged at the expense of the complaining party.

       Rice, 670 N.E.2d at 1284.

       4
         Plaintiffs contend that the trial court wrongfully dismissed their constructive fraud claims against only
       WTB, ASBE, Dybwad, Light, CIS, Fox & Fox, and WRL. Because Plaintiffs have not provided a
       cogent argument that their constructive fraud claims against Greenwalt were wrongfully dismissed, we
       consider those claims to be abandoned. See App. R. 46(A)(8)(a).

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015                    Page 25 of 54
[46]   “Constructive fraud is a breach of legal or equitable duty which, irrespective of

       the moral guilt of the fraud feasor, the law declares fraudulent because of its

       tendency to deceive others, to violate public or private confidence, or to injure

       public interests.” Budd v. Bd. of Comm’rs of St. Joseph Cnty., 216 Ind. 35, 39, 22

       N.E.2d 973, 975 (1939). “Neither actual dishonesty nor intent to deceive is an

       essential element of constructive fraud. An intent to deceive is an essential

       element of actual fraud. The presence or absence of such an intent

       distinguishes actual fraud from constructive fraud.” Daly v. Showers, 104 Ind.

       App. 480, 486, 8 N.E.2d 139, 142 (1937).

[47]   Moreover, regarding constructive fraud claims,

               It is well-settled that although an oral promise as to future
               conduct will not support an ordinary fraud action, such promise
               may form the basis of a constructive fraud action if it induces one
               to place himself in a worse position than he would have been in
               had no promise been made and if the party making the promise
               derives a benefit as a result of the promise.…
               ….
               The very essence of a constructive fraud action based on the
               existence of a fiduciary relationship is that one party places a
               special trust and confidence in a dominant party and, therefore, it
               is presumed that a transaction entered into during such a
               relationship is not an arms length transaction, wherein each party
               would be bound to closely examine the terms of the contract to
               protect his or her interests rather than relying on a fiduciary’s
               representations.

       Strong v. Jackson, 777 N.E.2d 1141, 1149 (Ind. Ct. App. 2002), trans. denied.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 26 of 54
[48]   Indiana courts have recognized that a constructive fraud claim may also arise

       when the relationship between the parties is that of a buyer and seller.

               However, the existence of a fiduciary relationship is not the only
               basis for a claim of constructive fraud. Rather, our courts have
               consistently held that a constructive fraud may also arise where
               the relationship between the parties is that of buyer and seller.
               Kirkpatrick v. Reeves (1889), 121 Ind. 280, 22 N.E. 139; Scott v.
               Bodor, Inc. (1991), Ind. App., 571 N.E.2d 313 (where a seller
               makes unqualified statements in order to induce another to make
               a purchase, the buyer relies on those statements, and the seller
               has professed knowledge of the truth of the statements, a
               constructive fraud occurs); Coffey v. Wininger (1973), 156 Ind.
               App. 233, 296 N.E.2d 154; Smart & Perry Ford Sales, Inc. v. Weaver
               (1971), 149 Ind. App. 693, 274 N.E.2d 718. The law recognizes
               that in a buyer-seller relationship one party may be in the unique
               possession of knowledge not possessed by the other and may
               thereby enjoy a position of superiority over the other. The
               relationship is therefore one which invokes a duty of good faith
               and fair dealing.

       Mullen v. Cogdell, 643 N.E.2d 390, 401 (Ind. Ct. App. 1994) (footnote omitted).

                                                      1. Duty

[49]   Plaintiffs argue that all Defendants had a duty to disclose material facts to

       Plaintiffs. Light, CIS, ASBE, WTB, and Fox & Fox argue that Plaintiffs failed

       to establish that they owed any such duty to Plaintiffs.

               Confidential relationships as a matter of law include fiduciary
               relationships such as “attorney and client, guardian and ward,
               principal and agent, pastor and parishioner … [and] parent and
               child,” although this list is not exhaustive. [Callaway v. Callaway,
               932 N.E.2d 215, 223 (Ind. Ct. App. 2010) (quoting Carlson v.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 27 of 54
               Warren, 878 N.E.2d 844, 851 (Ind. Ct. App. 2007))]. In the
               alternative, a confidential relationship in fact may arise where the
               facts of a given case “show a relation of trust and confidence
               justifying one in relying thereon,” even where there is no legal
               presumption of such trust. Id. at 223-24 (quoting Carlson, 878
               N.E.2d at 852). This Court has recognized that, while a
               “‘relationship of trust and confidence’ on the particular facts of
               the case has not been succinctly defined,” it exists “‘when
               confidence is reposed by one party in another with resulting
               superiority and influence exercised by the other.’” Id. at 225
               (quoting [Kalwitz v. Estate of Kalwitz, 822 N.E.2d 274, 281 (Ind.
               Ct. App. 2005), trans. denied]).

       McKibben v. Hughes, 23 N.E.3d 819, 827 (Ind. Ct. App. 2014), trans. denied.

                                                      i. WTB

[50]   Plaintiffs contend that WTB had a duty to speak as “trustees” of the Plans.

       WTB counters that (1) Washington state law governs its relationships with

       Plaintiffs and (2) the relevant documents limit the duties it owed Plaintiffs. As

       an initial matter, Plaintiffs argue that WTB has relied upon material that was

       not included in the pleadings, therefore converting WTB’s motion to dismiss

       into a motion for summary judgment:

               when matters outside the pleadings are submitted in support of a
               TR. 12 motion for judgment on the pleadings, the motion “shall
               be treated” as a TR. 56 motion for summary judgment, with or
               without a motion by a party to that effect. In other words, the
               TR. 12 motion which is supported by matters outside the
               pleadings is automatically converted into a motion for summary
               judgment.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 28 of 54
       Tanasijevich’s Estate v. City of Hammond, 383 N.E.2d 1081, 1083 (Ind. Ct. App.

       1978).

[51]   As WTB notes, the documents on which it bases its argument were attached to

       the FAC by Plaintiffs. WTB also argues that the documents were central to

       Plaintiffs’ claims. See Bd. of Comm’rs of Delaware Cty. v. Evans, 979 N.E.2d 1042,

       1046 (Ind. Ct. App. 2012) (quoting Levenstein v. Salafsky, 164 F.3d 345, 347 (7th

       Cir. 1998), for the proposition that “‘documents attached to a motion to dismiss

       are considered part of the pleadings if they are referred to in the plaintiff’s

       complaint and are central to his [or her] claim’”). While the documents in

       question are certainly central to WTB’s defense, WTB does not explain, and we

       do not see, how the attached documents were central to Plaintiffs’ claims

       against WTB. Consequently, we shall treat WTB’s Rule 12(B)(6) motion to

       dismiss Plaintiffs’ claims as though it had been a motion for summary

       judgment.

[52]   When reviewing the grant or denial of a summary judgment motion, we apply

       the same standard as the trial court. Merchs. Nat’l Bank v. Simrell’s Sports Bar &

       Grill, Inc., 741 N.E.2d 383, 386 (Ind. Ct. App. 2000). Summary judgment is

       appropriate only where the evidence shows there is no genuine issue of material

       fact and the moving party is entitled to a judgment as a matter of law. Id.; Ind.

       Trial Rule 56(C). All facts and reasonable inferences drawn from those facts

       are construed in favor of the nonmoving party. Merchs. Nat’l Bank, 741 N.E.2d

       at 386. To prevail on a motion for summary judgment, a party must

       demonstrate that the undisputed material facts negate at least one element of

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 29 of 54
       the other party’s claim. Id. Once the moving party has met this burden with a

       prima facie showing, the burden shifts to the nonmoving party to establish that

       a genuine issue does in fact exist. Id. The party appealing the summary

       judgment bears the burden of persuading us that the trial court erred. Id.

[53]   “Indiana choice-of-law provisions generally favor contractual stipulations as to

       governing law.” Kentucky Nat. Ins. Co. v. Empire Fire & Marine Ins. Co., 919

       N.E.2d 565, 575 (Ind. Ct. App. 2010). As WTB points out, both the Kapoor

       Plaintiffs and Judson Plaintiffs contracted with WTB that Washington state law

       was to govern all aspects of the relevant trusts and Plans. The Judson Trust

       Agreement provided, in part, that “[t]his Trust Agreement shall be deemed to

       be a binding Agreement and shall in all respects be construed and regulated by

       the laws of the State of Washington except where such laws are superseded by

       federal laws.” Appellant’s App. p. 1618. The Kapoor Trust Agreement

       provided that “[e]xcept to the extent pre-empted by federal law, the provisions

       of the Plan shall be interpreted in accordance with the Laws of the State of

       Washington.” Appellant’s App. p. 1667. Pursuant to the terms of the relevant

       trust instruments, WTB is correct that claims against it should be evaluated

       under Washington law.

[54]   Under Washington law,

               A trustee’s power comes from the express provisions of the trust
               agreement. Monroe v. Winn, 16 Wash. 2d 497, 133 P.2d 952, 956
               (1943). The trust document controls even if its terms conflict
               with statutory obligations. RCW 11.97.010. Where the
               instrument vests discretion in the trustee, the court will not

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 30 of 54
               interfere with that discretion and only reviews for abuse of that
               discretion. Austin v. U.S. Bank of Wash., 73 Wash. App. 293, 869
               P.2d 404, 410 (1994). A trustee abuses his or her discretion only
               when they act “arbitrarily, in bad faith, maliciously, or
               fraudulently.” Id.

       Vaughn v. Montague, 924 F. Supp. 2d 1256, 1264 (W.D. Wash. 2013).

[55]   Moreover, as the Washington Supreme Court has stated,

               It is quite possible for the parties expressly to agree in advance
               that the defendant is under no obligation of care for the benefit of
               the plaintiff, and shall not be liable for the consequences of
               conduct which would otherwise be negligent. There is in the
               ordinary case no public policy which prevents the parties from
               contracting as they see fit, as to whether the plaintiff will
               undertake the responsibility of looking out for himself.

       Wagenblast v. Odessa Sch. Dist. No. 105-157-166J, 758 P.2d 968, 970 (Wash. 1988).

[56]   Both the Judson and Kapoor Trust Agreements, which were attached as

       exhibits to WTB’s motion to dismiss and will therefore be treated as designated

       evidence, contain the following provisions:

                    “The adopting Employer understands and acknowledges
                     that the Trustee is acting solely in the capacity of a
                     nondiscretionary custodian of assets for the adopting
                     Employer to the direction of the Contract Administrator.”

                    “The Trustee undertakes to only such duties as are
                     specifically set forth in this Trust Agreement and in the
                     Plan, and no implied covenants or obligations shall be
                     read into these documents against the Trustee.”

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 31 of 54
       Appellant’s App. pp. 1603, 1615, 1630, 1641.

[57]   Additionally, the designated fee agreements associated with the Trust

       Agreements contain the following language: “IMPORTANT NOTICE:

       Employer must have all legal, tax and financial aspects of the Plan reviewed by its

       legal counsel and other professionals. [WTB] does not provide any legal, tax or

       financial advice or opinions whatsoever concerning this Plan or any aspect thereof.”

       Appellant’s App. pp. 1621, 1681 (emphases in originals).

[58]   “Under Indiana law, a person is presumed to understand the documents which

       he signs and cannot be released from the terms of a contract due to his failure to

       read it.” Clanton v. United Skates of Am., 686 N.E.2d 896, 899-00 (Ind. Ct. App.

       1997). The above provisions clearly absolve WTB of any duty to Plaintiffs to

       provide tax, legal, or financial advice. Due to the lack of any duty to advise

       Plaintiffs, entry of judgment in favor of WTB on Plaintiffs’ constructive fraud

       claims is appropriate.

[59]   Plaintiffs argue that because they have alleged that they were fraudulently

       induced to sign the Trust Agreements, we must assume in this procedural

       context that the Trust Agreements are void and without effect. “Fraudulent

       inducement occurs when a party is induced through fraudulent

       misrepresentations to enter into a contract.” Brumley v. Commonwealth Bus. Coll.

       Educ. Corp., 945 N.E.2d 770, 776 (Ind. Ct. App. 2011) (citing Lightning Litho,

       Inc. v. Danka Indus., Inc., 776 N.E.2d 1238, 1241 (Ind. Ct. App. 2002)). “‘If a

       party’s manifestation of assent is induced by either a fraudulent or a material

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 32 of 54
       misrepresentation by the other party upon which the recipient is justified in

       relying, the contract is voidable by the recipient.’” Id. (quoting RESTATEMENT

       (SECOND) OF CONTRACTS § 164(1) (1981)). As subsection § 164(2) and

       associated comments and illustrations make clear, however, the standard to be

       applied is different when the misrepresentations are made by one who is not a

       party to the contract:

               If a party’s manifestation of assent is induced by either a
               fraudulent or a material misrepresentation by one who is not a
               party to the transaction upon which the recipient is justified in
               relying, the contract is voidable by the recipient, unless the other
               party to the transaction in good faith and without reason to know
               of the misrepresentation either gives value or relies materially on
               the transaction.

       Id. § 164(2).

[60]   Here, whatever the alleged misrepresentations were that might have induced

       Plaintiffs to sign the Trust Agreements were not made by WTB, as Plaintiffs

       have not alleged that WTB made any representations to them. In order to fall

       under subsection § 164(2), Plaintiffs would have had to allege that WTB knew,

       or had some reason to know, of material misrepresentations to Plaintiffs, which

       they have not done. Plaintiffs’ reliance on the doctrine of fraudulent

       inducement is unavailing.

                                                     ii. ASBE

[61]   Plaintiffs argue that ASBE had a duty to speak to them but failed to do so,

       thereby subjecting ASBE to a claim of constructive fraud. As alleged, however,

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 33 of 54
       ASBE and Plaintiffs did not have the sort of relationship that would impose a

       duty to disclose on ASBE. Plaintiffs allege only that ASBE (or its predecessor

       SATCOM) received money from them and then made payments to various

       insurance providers for premiums. These facts do not establish a fiduciary duty

       on ASBE’s part. Additionally, there are no allegations that would tend to

       establish a buyer-seller relationship between Plaintiffs and ASBE. Plaintiffs

       have failed to allege facts that would support a constructive fraud claim against

       ASBE.5

                                            iii. Dybwad and Light

[62]   Plaintiffs argue that Dybwad and Light owed a duty to Plaintiffs because they

       were Plaintiffs’ fiduciaries. The Kapoor Plaintiffs note that Dybwad had served

       their financial and insurance needs as far back as 1999, and the Judson

       Plaintiffs note that Light began advising them in 2002, when he established

       their 401(k) plan. Light notes that the general rule in Indiana is that “an

       insurance agent or broker who undertakes to procure insurance for another is

       an agent of the proposed insured, and owes the principal a duty to exercise

       reasonable care, skill, and good faith diligence in obtaining the insurance.”

       Craven v. State Farm Mut. Auto. Ins. Co., 588 N.E.2d 1294, 1296 (Ind. Ct. App.

       1992) (citation omitted). “In this state, however, the agent’s duty extends to the

       provision of advice only upon a showing of an intimate long term relationship

       5
         At oral argument, Plaintiffs claimed that ASBE was an “alter ego” of Cronin. A fair reading of the
       sections of the FAC cited to by Plaintiffs, however, does not support this assertion.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015                Page 34 of 54
       between the parties or some other special circumstance.” Id. at 1297.

       “[S]omething more than the standard insured-insurer relationship is required to

       create a special relationship obligating the insurer to advise the insured about

       coverage.” Am. Family Mut. Ins. Co. v. Dye, 634 N.E.2d 844, 848 (Ind. Ct. App.

       1994), trans. denied. “[I]t is the nature of the relationship, not its length, that

       invokes the duty to advise.” Id.

[63]   The Judson Plaintiffs have alleged that Light was not a mere insurance agent

       but, rather, their trusted financial advisor, advising them since 2002 and

       establishing a 401(k) plan. The Judson Plaintiffs also allege that Light sold the

       Cronin ISP Plan to them much more as an investment vehicle and a way to

       retain valuable employees than as an insurance product. Given these

       allegations, we conclude that Light should be treated more as a general

       financial advisor than an insurance agent.

[64]   The question for both Dybwad and Light, then, is whether a financial advisor in

       their position has a fiduciary relationship with his advisees. “Where a

       relationship of trust and confidence exists between parties, equity will act to

       protect it and to prevent the party owing the duty from profiting by its breach.”

       Peoples Trust Bank v. Braun, 443 N.E.2d 875, 879 (Ind. Ct. App. 1983).

               Although the existence of a confidential relationship depends
               upon the facts of each case, it can be generally stated that a
               confidential relationship exists whenever confidence is reposed
               by one party in another with resulting superiority and influence
               exercised by the other. Shapiro v. Rubens, (7th Cir. 1948) 166
               F.2d 659. Not only must there be confidence by one party in the

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 35 of 54
               other, the party reposing the confidence must also be in a
               position of inequality, dependence, weakness, or lack of
               knowledge. Koenig v. Leas, [240 Ind. 449, 165 N.E.2d 134
               (1959)]; Koehler v. Haller, (1915) 62 Ind. App. 8, 112 N.E. 527.
               Furthermore, it must be shown that the dominant party
               wrongfully abused this confidence by improperly influencing the
               weaker so as to obtain an unconscionable advantage. Westphal v.
               Heckman, (1966) 185 Ind. 88, 113 N.E. 299.

       Hunter v. Hunter, 152 Ind. App. 365, 372, 283 N.E.2d 775, 779-80 (1972)

       “Whether such relationship exists is essentially a question of fact.” Paulson v.

       Centier Bank, 704 N.E.2d 482, 490 (Ind. Ct. App. 1998), trans. denied.

[65]   We have little trouble concluding that the allegations in the FAC can support a

       finding that Light had a fiduciary duty to the Judson Plaintiffs. As their alleged

       financial advisor, Light would have been in a superior position, and the Judson

       Plaintiffs might well be expected to have had confidence in his advice regarding

       the Cronin ISP Plan. We reach the same conclusion about Dybwad’s

       relationship with the Kapoor Plaintiffs. Dybwad had allegedly served the

       Kapoor Plaintiffs since 1999 as their financial advisor, on whose advice the

       Kapoor Plaintiffs acted to their detriment. The FAC contains allegations

       concerning Light and Dybwad that, if true, could support a finding that they

       had a fiduciary duty to Plaintiffs.

[66]   Additionally, as alleged, the Judson Plaintiffs and Light and the Kapoor

       Plaintiffs and Dybwad had buyer-seller relationships, which could also support

       claims of constructive fraud. “Our courts previously have held that a

       constructive fraud may arise in the absence of a confidential relationship where:

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 36 of 54
       1) a seller makes unqualified statements in order to induce another to make a

       purchase; 2) the buyer relies upon the statements; and 3) the seller has professed

       to the buyer that he has knowledge of the truth of the statements.” Scott, 571

       N.E.2d at 324. Both Light and Dybwad allegedly made unequivocal statements

       regarding the Cronin Plans that induced the various Plaintiffs to invest in them.

       Light’s and Dybwad’s belief in the knowledge of the truth of those alleged

       statements was at least strongly implied. We conclude that Plaintiffs have

       alleged facts that, if true, could support a claim of constructive fraud against

       Light and Dybwad, on either the theory of breach of fiduciary duty or based on

       a buyer-seller relationship.

                                      iv. CIS, Fox & Fox, and WRL

[67]   Plaintiffs argue that CIS, Fox & Fox, and WRL all had a duty to speak because

       they all proclaimed “special knowledge” regarding the Cronin ISP and GTLP

       Plans and were selling products and/or services to Plaintiffs. Plaintiffs also

       argue that they were in a buyer-seller relationship with CIS, Fox & Fox, and

       WRL, a relationship that can support a constructive fraud claim. Plaintiffs

       argue that Cronin, by and through CIS, drafted the Plans and prepared all

       documentation to implement the Plans and also prepared compilation of

       documents entitled “Legal Resource Guide: Single Employer Welfare Benefit

       Plans,” which included marketing materials, prior IRS notices, revenue rulings,

       and tax court cases involving welfare benefit plans. Plaintiffs allege that Fox &

       Fox marketed itself as specializing in serving the employee-benefit needs of the

       small-to-medium employer, advertised that it offered consulting services related

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 37 of 54
       to all facets of employee benefits, marketed its alleged credentials by claiming

       that it was staffed with individuals who had worked in all facets of employee-

       benefit administration, and boasted that it had taken the lead in implementing

       innovative benefit programs.

[68]   Plaintiffs argue that the facts of this case are similar enough to those in American

       United Life Insurance Co. v. Douglas, 808 N.E.2d 690, 693 (Ind. Ct. App. 2004),

       for that case’s holding to apply here. In Douglas,

               The plaintiffs were employees of Computer Business Services,
               Inc. (“CBSI”). In 1994, representatives of CBSI and Edward
               Miller, who occasionally acted as a broker for [American United
               Life (“AUL”)] annuity and other financial products, met with
               Michael Schneider, AUL’s Manager for Group Sales, about
               establishing a retirement plan for CBSI employees. CBSI
               decided to fund a 401(k) plan using an AUL group annuity
               contract as recommended by AUL. In November 1994, many
               CBSI employees began directing portions of their salaries to the
               401(k) plan.

               CBSI’s 401(k) plan was terminated in 1997 when the company
               went bankrupt. AUL distributed the balance of the employees’
               accounts to them, less an eight percent surrender penalty. The
               balances were less than employees had anticipated, and in
               investigating why, they discovered that the 401(k) plan was
               funded with an insurance product. Peter Douglas, Matthew
               Douglas, and Sharon Phillips then instituted a proposed class
               action lawsuit against AUL.

       Id. at 693.

[69]   We affirmed the trial court’s denial of AUL’s summary judgment motion which

       AUL based on an alleged lack of duty:
       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 38 of 54
               In this case, AUL presented a “Group Retirement Plan Proposed
               Especially For [CBSI].” The first page of the proposal contains
               the following heading: “AUL—Retirement Savings Plan
               Specialists.” Appellee’s Appendix at 48. The proposal states that
               “AUL will add value to your retirement savings plan by—
               Tailoring your retirement savings plan to your needs.…” Id. at
               49. The proposal notes that “AUL offers a comprehensive range
               of retirement savings plan services so that you will not have to be
               a retirement plan expert.… AUL pension consultants meet with
               prospective plan sponsors to tailor a retirement plan to meet each
               company’s needs and philosophy.” Id. at 54. Consultants assess
               “types of contributions that can be used to best achieve the
               desired plan results.” Id. AUL held itself out as a “specialist” in
               retirement savings plans and promised to tailor the plan to the
               individual needs of the investor by assessing the appropriate
               types of contributions. We do not have here the kind of
               affirmative statements made in Scott, but this case is based
               primarily on omissions made by AUL. CBSI representatives
               have alleged that they relied on AUL’s self-proclaimed expertise
               in choosing a retirement plan and believed that AUL’s
               recommendation was “categorically appropriate for 401(k) plan
               investing.” Affidavit of Andrew Douglas[], Appellee’s Appendix
               at 43. If they had known the true nature of the investment, CBSI
               representatives would not have funded the plan with a deferred
               annuity product. Id. at 44. AUL has the kind of superior
               knowledge of the subject which invokes a duty of good faith and
               fair dealing with the purchaser of its products, including the duty
               to disclose the nature of the investment especially when it knew
               that it was selling a product for placement in a 401(k) plan.
               AUL’s argument that it owed no duty to the plaintiffs must
               therefore fail.

       Douglas, 808 N.E.2d at 702-03.

[70]   We reach the same conclusion as the Douglas court. Plaintiffs have alleged that

       Cronin, by and through CIS, prepared and distributed a “Legal Resource

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 39 of 54
       Guide: Single Employer Welfare Benefit Plans” to various agents, including

       WRL and Fox & Fox. The materials, inter alia, stated unequivocally that

       employer contributions to the Plans designed by Cronin were tax-deductible

       and provided what was purportedly legal authority for this proposition. Cronin

       received compensation based on Plaintiffs’ participation in his Plans.

[71]   Plaintiffs have also alleged that Fox & Fox marketed itself as specializing in

       serving the employee-benefit needs of the small-to-medium employer,

       advertised that it offered consulting services related to all facets of employee

       benefits, marketed its alleged credentials by claiming that it was staffed with

       individuals who had worked in all facets of employee-benefit administration,

       and boasted that it had taken the lead in implementing innovative benefit

       programs. Fox & Fox received compensation for services provided related to

       Plaintiffs’ participation in the Plans.

[72]   The Judson Plaintiffs have alleged that WRL reviewed the Cronin Plan

       documents and the Legal Resource Guide before allowing its policies to be used

       in the Plans, knew that its agents used positions of trust to facilitate sales of its

       insurance products, and provided Light and Cronin with materials which were

       used to explain to the Judson Plaintiffs how their investments would perform.

[73]   Plaintiffs have alleged sufficient facts to support a conclusion that CIS, Fox &

       Fox, and WRL were holding themselves out as experts in the field of employer

       investment plans, or at the very least strongly implying as such. The marketing

       materials allegedly prepared by CIS and relied upon by Fox & Fox and WRL

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 40 of 54
       stated unequivocally that Plaintiffs’ contributions to the Cronin Plans would be

       tax-deductible, representations relied upon by Plaintiffs. Plaintiffs have also

       alleged that CIS, Fox & Fox, and WRL financially benefited from their

       representations. The facts of this case cannot be distinguished from those of

       Douglas. Plaintiffs may bring constructive fraud claims against CIS, Fox & Fox,

       and WRL based on their alleged buyer-seller relationships.

                      III. Specificity of Pleading Fraud Claims
[74]   CIS and ASBE, Greenwalt, Fox & Fox, WRL, and Light contend that Plaintiffs

       failed to plead their fraud-based claims against them with sufficient specificity.

       As previously mentioned,

               Indiana Trial Rule 9(B) states that all averments of fraud must be
               pled with specificity as to the “circumstances constituting fraud.”
               In order to meet this burden, the party alleging fraud must
               specifically allege the elements of fraud, the time, place, and
               substance of false reports, and any facts that were
               misrepresented, as well as the identity of what was procured by
               fraud. Continental Basketball Association, Inc. v. Ellenstein
               Enterprises, 669 N.E.2d 134, 138 (Ind. 1996). Failure to comply
               with the rule’s specificity requirements constitutes a failure to
               state a claim upon which relief may be granted; thus, any
               pleading which fails to satisfy the requirements fails to raise an
               issue of material fact. Cunningham v. Associates Capital Services
               Corp., 421 N.E.2d 681, 683 n.2 (Ind. Ct. App. 1981). These
               requirements are not limited to common law fraud but extend to
               all actions that “sound in fraud.” McKinney v. Indiana, 693
               N.E.2d 65, 71 (Ind. 1998).

       Payday Today, Inc. v. Hamilton, 911 N.E.2d 26, 33-34 (Ind. Ct. App. 2009).

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 41 of 54
[75]   As the United States Court of Appeals for the Seventh Circuit has stated, “[i]t is

       enough to show, in detail, the nature of the charge, so that vague and

       unsubstantiated accusations of fraud do not lead to costly discovery and public

       obloquy.” U.S. ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 854-55 (7th Cir.

       2009). The Seventh Circuit has also noted that

               [w]e have read this rule to require “describing the ‘who, what,
               when, where, and how’ of the fraud.” AnchorBank, FSB v. Hofer,
               649 F.3d 610, 615 (7th Cir. 2011). We have noted that the
               purpose of this particularity requirement is “to discourage a ‘sue
               first, ask questions later’ philosophy.” Pirelli Armstrong Tire Corp.
               Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441 (7th
               Cir. 2011). “Heightened pleading in the fraud context is required
               in part because of the potential stigmatic injury that comes with
               alleging fraud and the concomitant desire to ensure that such
               fraught allegations are not lightly leveled.” Id. at 442. We have
               also cautioned, however, that “the exact level of particularity that
               is required will necessarily differ based on the facts of the case.”
               Hofer, 649 F.3d at 615.

               …. [W]hile we require a plaintiff claiming fraud to fill in a fairly
               specific picture of the allegations in her complaint, we “remain
               sensitive to information asymmetries that may prevent a plaintiff
               from offering more detail.” [Pirelli, 631 F.3d at 443].

       Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 948 (7th Cir. 2013).

                                                     A. CIS
[76]   Plaintiffs alleged in the FAC that Cronin, through CIS, drafted the Plan

       documents, the adoption agreements, and all other documentation related to

       the Plans. Cronin also drafted and distributed the “Legal Resource Guide,” a

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 42 of 54
       compilation of marketing materials and documents related to prior IRS notices,

       revenue rulings, and tax court cases. Plaintiffs allege that the materials stated

       that contributions were tax-deductible and also provided purported legal

       authority for this proposition. Plaintiffs allege that Cronin distributed the

       materials with the intent that they would be seen by potential participants in the

       Cronin Plans and that they contained representations that employer

       contributions were deductible under the Cronin ISP Plan and created no

       taxable income for the employee. Plaintiffs also allege that they participated in

       the Plans based on representations made by CIS and incurred expenses for back

       taxes, penalties, and interest as a result. Cronin allegedly received

       compensation based on Plaintiffs’ participation in his Plans.

                                                1. Actual Fraud

[77]   Plaintiffs have not alleged that CIS made any misrepresentations of existing or

       past fact. In the absence of an alleged misrepresentation, Plaintiffs have not

       pled an actual fraud claim against CIS, much less pled it with sufficient

       specificity.

                                            2. Constructive Fraud

[78]   As previously mentioned, Plaintiffs have made allegations that may sustain a

       constructive fraud claim against CIS, and we conclude that they pled such a

       claim with sufficient specificity, detailed enough to support a claim based on a

       buyer-seller relationship. Plaintiffs have made allegations regarding specific

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 43 of 54
       representations made in marketing materials used by agents to induce them to

       participate in the Cronin Plans to Plaintiffs’ detriment.

                                                   B. ASBE
[79]   As previously mentioned, Plaintiffs have not alleged facts sufficient to sustain

       claims of fraud or constructive fraud against ASBE, much less with sufficient

       specificity.

                                               C. Fox & Fox
[80]   Plaintiffs have alleged that, as early as 2004, Fox & Fox marketed itself as

       specializing serving the employee-benefit needs of the small-to-medium

       employers; offering consulting services related to employee benefits; and

       administering qualified, non-qualified, and flexible compensation programs for

       clients across the country. Plaintiffs have alleged that Fox & Fox marketed its

       credentials on a website by claiming that it was staffed by individuals who have

       worked in all facets of employee benefits consultation and administration.

                                                1. Actual Fraud

[81]   Plaintiffs have not alleged that Fox & Fox made any misrepresentations to

       them directly. Consequently, Plaintiffs have failed to plead an actual fraud

       claim against Fox & Fox, much less plead it with sufficient specificity.

                                            2. Constructive Fraud

[82]   We have already concluded that Plaintiffs have alleged facts sufficient to find

       that Fox & Fox had a seller-buyer relationship with them, one that could

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 44 of 54
       support a constructive fraud claim. We further conclude that, under the

       circumstances of this case, the constructive fraud claim against Fox & Fox has

       been pled with sufficient specificity. Given the buyer-seller relationship that has

       been pled, which included marketing materials viewed on a website, it is not

       surprising that the “when” and “where” of Plaintiffs’ constructive fraud claim

       are not pled with the same specificity that the affirmative misrepresentations in

       an actual fraud claim would require.

                                                   D. WRL
[83]   The Judson Plaintiffs allege, essentially, that WRL, who issued the life

       insurance policies at issue, allowed their agents Light and Cronin to market the

       Plans. The Judson Plaintiffs also allege that WRL incurred independent

       liability to them by reviewing marketing materials and Cronin ISP Plan

       documents and failing to attempt to correct misrepresentations of Light and

       Cronin. The Judson Plaintiffs also allege that WRL provided with Light and

       Cronin with materials used to explain how their investments would perform.

                                                1. Actual Fraud

[84]   Again, Plaintiffs fail to allege that WRL made any direct misrepresentations to

       them, meaning that their actual fraud claim has not been sufficiently pled,

       much less with the required specificity.

                                            2. Constructive Fraud

[85]   As with CIS and Fox & Fox, we conclude that the Judson Plaintiffs have pled

       constructive fraud based on a buyer-seller with sufficient specificity. The

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 45 of 54
       Judson Plaintiffs have alleged specifically which documents WRL received

       from Cronin and reviewed and the specifics of the illustrations WRL provided

       to Light and Cronin for marketing purposes, illustrations it reasonably would

       have expected to be seen by prospective purchasers. The Judson Plaintiffs, not

       being directly involved in these alleged events, can be forgiven for not pleading

       them with more specificity.

                                                    E. Light
[86]   The Judson Plaintiffs have alleged that Light was not a mere insurance agent

       but, rather, their trusted financial advisor, advising them since 2002 and

       establishing a 401(k) plan. The Judson Plaintiffs also allege that Light sold the

       Cronin ISP Plan to them much more as an investment vehicle and a way to

       retain valuable employees than as an insurance product.

[87]   The Judson Plaintiffs alleged that Light approached them in October or

       November of 2004 and made several verbal representations regarding the

       Cronin ISP Plan including telling them that it was in total compliance with IRS

       regulations and they could take tax deductions for the amounts of their

       contributions. Light allegedly touted the Cronin ISP Plan as a legitimate

       retirement plan and assured the Judson Plaintiffs that their principle investment

       would always be protected, their investment would grow at a minimum rate of

       return, and they could access their money through tax-free loans. The Judson

       Plaintiffs alleged that in reliance on these representations, they invested

       $30,000.00 in each of 2004, 2005, and 2006, paid $8750.00 in administrative

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 46 of 54
       fees; and made a $90,000.00 payment in December of 2004 to the trustee before

       WTB.

[88]   The Judson Plaintiffs also allege that Light approached them in November of

       2006 about amending their Cronin ISP Plan to add an additional $400,000.00

       in contributions. Light advised the Judsons that they would need second life

       insurance policy to amend the Cronin ISP Plan, and the Judsons made a 2006

       contribution of $30.000.00 to that end. The Judsons also contributed

       $310,000.00 to WTB, contributed $60,000.00 to the Cronin ISP Plan in 2007,

       paid $2075.00 in administrative fees, and took tax deductions for the years 2004

       through 2007, as instructed by Cronin and Light.

[89]   The Judson Plaintiffs also allege that Light contacted the Judsons in October of

       2008 to discuss the Cronin ISP Plan and informed them that they would need

       to transfer to the Cronin GTLP Plan. Light told the Judsons that the Cronin

       GTLP Plan was IRS-approved that would still allow them tax deductions for

       their contributions and would provide a guaranteed return. The Judsons

       transitioned to the Cronin GTLP Plan; contributed $60,000.00 in 2008,

       $27,000.00 in 2009, $27,000.00 in 2010, and $27,000.00 in 2011; paid

       approximately $4625.00 in administrative fees; and took corresponding tax

       deductions for 2008 through 2010.

                                                1. Actual Fraud

[90]   The Judson Plaintiffs allege that they were fraudulently induced to execute the

       Plan documents by Light’s representations. The allegations made are

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 47 of 54
       sufficiently specific to satisfy the specificity requirements for pleading actual

       fraud. Although the Judson Plaintiffs have not alleged ultra-specific times or

       places for Light’s various statements to them, it is worth keeping in mind that

       some of the alleged statements were made over ten years ago. Under the

       circumstances, the Judsons can be forgiven for not recalling whether a certain

       statement was made in their living room or kitchen on October 13 or 15. That

       said, the Judson Plaintiffs have alleged several specific statements regarding the

       Cronin ISP and GTLP Plans, which they also allege were false, upon which

       they relied to their detriment. This is sufficient to satisfy the particularity

       requirement of Trial Rule 9(B).

                                            2. Constructive Fraud

[91]   We further conclude that the Judson Plaintiffs have alleged constructive fraud

       against Light with sufficient specificity. The Judson Plaintiffs have alleged that

       Light had been their financial advisor since 2002 and had set up their 401(k)

       plan. We note that the heart of the constructive fraud claim which is based on a

       fiduciary duty is non-disclosure, which is not an event that can be pled with

       specificity. It is therefore sufficient simply to plead that the disclosure did not

       occur.

                                                 F. Dybwad
[92]   The Kapoor Plaintiffs alleged that Dybwad approached them in the last quarter

       of 2006 and told them that the Cronin ISP Plan was IRS-approved, would

       provide more insurance than they currently had, and would allow a full

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 48 of 54
       deduction for contributions. Dybwad also allegedly told the Kapoor Plaintiffs

       that the Cronin ISP Plan provided a guaranteed rate of return of 5% to 15%,

       their principal was protected, the Cronin ISP Plan was a legitimate retirement

       plan, and they could access their money at any time through tax-free loans.

       The Kapoor Plaintiffs also alleged that Dybwad later represented that the

       Cronin GTLP Plan would afford all of the benefits of the ISP Plan. The

       Kapoor Plaintiffs alleged that as a result of these representations, they invested

       a total of $600,000.00 in the Cronin ISP and GTLP Plans, taking tax

       deductions for $500,000.00, and were fraudulently induced into executing the

       various plan documents.

                                                1. Actual Fraud

[93]   As with the Judson Plaintiffs and their allegations against Light, the Kapoor

       Plaintiffs’ allegations are sufficiently specific, given the time elapsed since the

       alleged misrepresentations were made. The Kapoor Plaintiffs have alleged

       several specific statements regarding the Cronin ISP and GTLP Plans, which

       they also allege were false, upon which they relied to their detriment. This is

       sufficient to satisfy the particularity requirement of Trial Rule 9(B).

                                            2. Constructive Fraud

[94]   The Kapoor Plaintiffs allege that Dybwad had served their financial and

       insurance needs as far back as 1999 and that he was a trusted financial advisor.

       As we have concluded, these allegations are sufficient to support a finding of a

       fiduciary duty. Moreover, we conclude that the elements of constructive fraud,

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 49 of 54
       including a duty, have been pled with sufficient specificity. The Kapoor

       Plaintiffs have pled specific facts that could establish a fiduciary relationship,

       detrimental reliance on Dybwad’s silence, and an advantage gained by Dybwad

       in the form of commissions.

           III. Arguments Related to Plaintiffs’ Negligence Claims                                         6

[95]   “In order to prevail on a claim of negligence the plaintiff must show: (1) duty

       owed to plaintiff by defendant; (2) breach of duty by allowing conduct to fall

       below the applicable standard of care; and (3) compensable injury proximately

       caused by defendant’s breach of duty.” Williams v. Cingular Wireless, 809

       N.E.2d 473, 476 (Ind. Ct. App. 2004), trans. denied.

            A. Whether the Economic Loss Doctrine Bars Plaintiffs’
                   Negligence Claims Against Fox & Fox
[96]   Plaintiffs argue that the trial court erred in dismissing their negligence claims

       against Fox & Fox because the economic loss doctrine has no applicability in

       this case and therefore does not bar the tort action. In general,

               the economic loss rule reflects that the resolution of liability for
               purely economic loss caused by negligence is more appropriately
               determined by commercial rather than tort law. As noted at the
               very outset of this Discussion supra, the economic loss rule
               provides that a defendant is not liable under a tort theory for any

       6
         Although Plaintiffs brought negligence claims against all Defendants, they only present arguments
       based on the dismissal of their negligence claims against Fox & Fox and Greenwalt. Because Plaintiffs
       have not provided a cogent argument that their negligence claims against all other Defendants were
       wrongfully dismissed, we regard the claims abandoned. See App. R. 46(A)(8)(a).

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015               Page 50 of 54
               purely economic loss caused by its negligence (including, in the
               case of a defective product or service, damage to the product or
               service itself)—but that a defendant is liable under a tort theory
               for a plaintiff’s losses if a defective product or service causes
               personal injury or damage to property other than the product or
               service itself.

       Indpls.-Marion Cty. Pub. Library v. Charlier Clark & Linard, P.C., 929 N.E.2d 722,

       729 (Ind. 2010).

[97]   Plaintiffs rely on Douglas, in which the plaintiffs sought recovery from AUL,

       who sold them an employee-benefit package that underperformed. 808 N.E.2d

       at 693. Plaintiffs sued, not for losses caused to the purchased product by the

       product itself, but, rather, for “recovery of their losses due to the alleged

       misrepresentations or omissions by AUL.” Id. at 705. We agreed that the

       economic loss doctrine did not apply, noting that “[t]his is not a case seeking

       recovery for losses caused to the product by the product [and a]s the trial court

       found, it is not a ‘failure to perform’ case.” Id. at 705.

[98]   We agree with Plaintiffs that, pursuant to Douglas, the economic loss doctrine

       does not bar their negligence claim against Fox & Fox. Plaintiffs do not allege

       that Fox & Fox’s alleged negligence caused damage to the product by the

       product or that Fox & Fox failed to perform, but, rather, that Fox & Fox’s

       alleged negligence resulted in damages in the form of back taxes, penalties, and

       interest. We conclude that Plaintiffs’ negligence claim against Fox & Fox is not

       barred by the economic loss doctrine. Id.

       Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 51 of 54
          B. Whether the Accountant Statute of Limitations Bars the
           Judson Plaintiffs’ Negligence Claim Against Greenwalt
[99]    Greenwalt contends that Indiana Code section 25-2.1-15-2 bars the Judson

        Plaintiffs’ negligence claim against it. Indiana Code section 25-2.1-15-2, which

        governs that statute of limitations for claims against accountants, provides as

        follows:

                An action under this chapter must be commenced by the earlier
                of the following:
                    (1) One (1) year from the date the alleged act, omission, or
                    neglect is discovered or should have been discovered by the
                    exercise of reasonable diligence.
                    (2) Three (3) years after the service for which the suit is
                    brought has been performed or the date of the initial issuance
                    of the accountant’s report on the financial statements or other
                    information.

                                                  1. Subsection 1

[100]   The Judson Plaintiffs contend that the one-year time period began to run

        against them when they received their notice of deficiency from the IRS on

        March 6, 2013. Greenwalt contends that the one-year time period for bringing

        a negligence suit against it began to run in 2011, when the Judson Plaintiffs

        received notice that they were being audited.

[101]   Greenwalt relies on this court’s decision in KPMG, Peat Marwick, LLP v. Carmel

        Financial Corp., 784 N.E.2d 1057, 1059 (Ind. Ct. App. 2003), for the proposition

        that the year began to run in 2011, not 2013. In 1997, the plaintiff discovered

        what both parties agreed was negligent accounting performed in 1996, but did

        Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 52 of 54
        not file suit until 2001. Id. at 1059, 1061. Plaintiff argued that the limitations

        period did not begin to run until the IRS had made its final determination as to

        the amount owed, so that plaintiff could plead a specific amount of damages.

        Id. at 1061. We rejected plaintiff’s argument, noting that Indiana Code section

        25-2.1-15-2 refers to the discovery of the “act, omission or neglect” (both parties

        agreed that the negligence was discovered in 1997), not the amount of damages

        or cause of action. Id.

[102]   KPMG, however, does not help Greenwalt. Here, as opposed to KPMG, there

        is no agreement that Greenwalt’s alleged negligence was discovered in 2011.

        The Judson Plaintiffs argue that the allegedly negligent nature of Greenwalt’s

        acts was not clear until the IRS issued its notice of deficiency in March of 2013,

        a proposition with which we agree. It would be unreasonable to start the clock

        upon notice of an IRS audit, as many audits, after all, do not result in findings

        of deficiency. Without a deficiency, there is no tenable lawsuit. To accept

        Greenwalt’s argument on this point would encourage early lawsuits, some—or

        many—of which would turn out to be premature and meritless. The Judson

        Plaintiffs’ negligence claims against Greenwalt are not barred by subsection 1.

                                                  2. Subsection 2

[103]   Greenwalt contends that any claims by the Judson Plaintiffs relating to conduct

        occurring before September 13, 2010, are barred by Indiana Code section 25-

        2.1-15-2(2). The Judson Plaintiffs do not contest this assertion. The Judson

        plaintiffs may not pursue claims against Greenwalt based on conduct allegedly

        occurring before September 13, 2010.
        Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 53 of 54
                                                 Conclusion
[104]   We conclude that the trial court erred in dismissing the following actual fraud

        claims: (1) the Kapoor Plaintiffs against Dybwad and (2) the Judson Plaintiffs

        against Light. We conclude that the trial court erred in dismissing the following

        constructive fraud claims: (1) the Kapoor Plaintiffs against Dybwad, (2) the

        Judson Plaintiffs against Light, (3) all Plaintiffs against CIS, (4) all Plaintiffs

        against Fox & Fox, and (5) all Plaintiffs against WRL. The trial court erred in

        dismissing the following negligence claims: (1) all Plaintiffs against Fox & Fox

        and (2) the Judson Plaintiffs against Greenwalt. The Judson Plaintiffs,

        however, may not base a claim of negligence on Greenwalt’s part for any

        conduct occurring before September 13, 2010. We affirm the judgment of the

        trial court in all other respects. Specifically, we affirm the trail court’s dismissal

        of the following claims: (1) any and all fraud by omission, negligent

        misrepresentation, unjust enrichment, and money had and received claims

        brought by any Plaintiffs against any Defendants; (2) all actual fraud claims

        against CIS, ASBE, Fox & Fox, WRL, WTB, and Greenwalt; (3) all

        constructive fraud claims against ASBE, WTB, and Greenwalt; and (4) all

        negligence claims against Dybwad, Light, CIS, ASBE, WRL, and WTB.

[105]   We affirm the judgment of the trial court in part, reverse in part, and remand

        for further proceedings consistent with this opinion.

        May, J., and Crone, J., concur.

        Court of Appeals of Indiana | Opinion 49A04-1410-CT-492 |December 15, 2015   Page 54 of 54