MI Reply1

Case 1:18-cv-02797-WTL-DML Document 33 Filed 04/11/19 Page 1 of 20 PageID #: 389
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LARRY AND LESLIE KAY MCLESKEY; )

DEEPAK NEELAGIRI AND REENA )
GADAGOTTU; ALANANN PROPERTIES, )
LLC; CARLOS HUERTA HOMES IN, LLC; )
LEJ MANAGEMENT, LLC; BN INVEST, )
LLC; GALVESTON, LLC; BKS IN )
PROPERTIES, LLC; DL3 PROPERTIES, )
LLC IN1801; COVENANTAL CORP.; )
1446 MOUNT, LLC; 300 REAL ESTATE )
INVESTMENTS, LLC; FINNLEY INVEST, )
LLC; and AR FINANCIALS, LLC )
)
Plaintiffs, )
)
v. ) Case No. 1:18-cv-02797-WTL-DML
)
MORRIS INVEST and CLAYTON MORRIS, )
)
Defendants. )
MORRIS INVEST’S AND CLAYTON MORRIS’S

REPLY BRIEF IN SUPPORT OF MOTION TO DISMISS
Morris Invest and Clayton Morris (collectively “Morris Defendants”) moved to
dismiss the entirety of Counts II, III, IV, V, VI, and portions of Count I of Plaintiffs’
Amended Complaint with prejudice. See Dkt 26 (“Morris Defendants’ Brief”). The
Plaintiffs filed a response brief, see Dkt. 29 (“Plaintiffs’ Response”), arguing that their
claims should survive. But, for the reasons here and in the Morris Defendants’ Brief,
the Court should grant the Morris Defendants’ Motion to Dismiss the Amended
Complaint. Dkt. 25.

ARGUMENT1
1. The Plaintiffs’ breach-of-contract claims fail for multiple reasons.
1.1. Eight of the Plaintiffs’ breach-of-contract claims fail as a matter

of law.
Eight of the contracts at issue expired by their terms because the properties
did not close before the Closing Date. Morris Defendants’ Brief at 7-8. The Plaintiffs
concede the Closing Date is a condition subsequent but argue this is beside the point.
Plaintiffs’ Response at 19-20. The Plaintiffs argue that they alleged the elements of a
breach in their Amended Complaint, and that even if the contracts terminated, the
contracts were either revived or new contracts were created by the action of the
parties in consummating the transactions. Id.
The Plaintiffs’ argument fails for several reasons. First, all the Purchase
Agreements contain written provisions providing that if the sale did not occur before
the Closing Date, there would be no extension of the contract without a writing.2 See,
e.g., Morris Defendants’ Brief, Exh 1, ¶7 (If not sold by the Closing Date, then “this
Agreement shall terminate unless an extension of time is mutually agreed to in
writing.”). The Plaintiffs have not alleged such a writing. Second, all the Purchase
Agreements contain a separate, integration clause providing that the Purchase
Agreement is the only contract dealing with this transaction and that the Purchase
1Although the Plaintiffs addressed the Morris Defendants’ arguments in a non-sequential order, this
Brief will address arguments in the order presented by the Amended Complaint.
2 The Morris Defendants argued the Purchase Agreements are the operative contracts, and the
Plaintiffs have not disputed this point.
2
Agreement cannot be changed without the parties’ written consent.3 Thus, without
the parties’ written consent, the contracts cannot be extended and no new contracts
can be formed dealing with the subject of the contracts—the sale of property. See
Autohaus Brugger, Inc. v Saab Motors, Inc., 567 F.2d 901, 915 (9th Cir. 1978) (holding
that the parties’ actions did not create an implied contract when the express terms of
the contract prevented an extension or renewal).
Third, the case Plaintiffs cite provides no help. In JKL Components Corp. v.
Insul-Reps, Inc., 596 N.E.2d 945 (Ind. Ct. App. 1992), the issue was whether under
California law, when the term of a contract expired yet the parties believed and acted
like it was still in effect, the court could properly conclude there was an implied
contract between the parties. Id. at 950-951. The Amended Complaint shows that the
parties did not continue acting as though a written contract were in effect, as the
Plaintiffs allege that Oceanpointe and Indy Jax—not Clayton Morris—sold the
properties. Am. Compl. ¶¶32, 37. Thus, unlike in JKL, the original signatories to the
Purchase Agreements did not complete the transactions. Further, not only is the
conduct distinguishable from JKL, but the contract in JKL did not contain the same
provisions here that prohibit changes to the terms without written consent. See JKL,
3 See, e.g., Morris Defendants’ Brief, Exh. 1, ¶21.I (“This Agreement constitutes the sole and only
agreement of the parties and supersedes any prior understandings or written or oral agreements
between the parties respecting the transaction and cannot be changed except by their written
consent.”) (emphasis added). “Generally, where the parties to an agreement have reduced the
agreement to a written document and have stated in an integration clause that the written document
embodies the complete agreement between the parties, the parol evidence rule prohibits courts from
considering parol or extrinsic evidence for the purpose of varying or adding to the terms of the written
contract.” I.C.C. Protective Coatings, Inc. v. A.E. Staley Mfg. Co., 695 N.E.2d 1030, 1035 (Ind. Ct. App.
1998).
3
596 N.E.2d at 953 (quoting the entirety of the contract’s term provision, with no
language prohibiting changes without written consent).
1.2. The Plaintiffs cannot use a word not found in the contracts—
turnkey—to create obligations outside the scope of the written,
integrated agreements.
The Plaintiffs concede that none of the Purchase Agreements contain
provisions about Tenant Services, Property Management Services, and, for 12 of the
23 Purchase Agreements, Rehab Services. Plaintiffs’ Response at 21. Yet despite this,
the Plaintiffs argue their “turnkey” allegations in the Amended Complaint save them,
as it is possible the parties entered into contracts with such terms at some point.
Plaintiffs’ Response at 21-22.
The Plaintiffs face two fatal obstacles. First, the Plaintiffs are attempting to
embellish the contract obligations in the Purchase Agreements with the use of the
word “turnkey.”4 Yet the word “turnkey” is not found in any of the contracts. The
Amended Complaint’s “turnkey” allegation must give way to the actual terms of the
Purchase Agreements the Morris Defendants submitted. Bogie v. Rosenberg, 705 F.3d
603, 609 (7th Cir. 2013) (“When an exhibit incontrovertibly contradicts the
allegations in the complaint, the exhibit ordinarily controls, even when considering a
motion to dismiss.”). Second, as explained above, the Purchase Agreements’
integration clauses bar any argument that, absent a writing, a separate agreement
4 The Amended Complaint cannot be amended by the Plaintiffs’ Response to supplement these
allegations. See Malone v. Securitas Sec. Servs., No. 13 C 8747, 2015 WL 5177549, at *2 (N.D. Ill. Sept.
3, 2015), aff’d sub nom. Malone v. Securitas Sec. Servs. USA, Inc., 669 F.App’x 788 (7th Cir. 2016)
(“Plaintiff may not attempt to cure deficiencies inherent in a complaint by asserting new facts for the
first time in opposition to a motion to dismiss.”); Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101,
1107 (7th Cir. 1984) (“[I]t is axiomatic that the complaint may not be amended by the briefs in
opposition to a motion to dismiss.”).
4
between these parties could be entered into at a different point in time related to
these transactions. Thus, regardless when the alleged turnkey statements arose,
either before or after the Purchase Agreements were executed, no new terms could be
added without a writing.
2. The Plaintiffs failure to plead their promissory-estoppel claims with

particularity mandates dismissal, and the Plaintiffs have not properly
pleaded this claim in the alternative.
2.1. The Plaintiffs’ promissory-estoppel claim fails under Rule 9(b).
The Morris Defendants argued in their opening brief that Plaintiffs’
promissory-estoppel claims sounded in fraud and were subject to Rule 9(b)’s
heightened pleading standard. Morris Defendants’ Brief at 11-12. Purporting to
address this, the Plaintiffs reference the six-page table in their response, and say this
shows the particularized allegations. Plaintiffs’ Response at 16. This table does not
contain direct or inferential allegations, let along those made with particularity, of
the material elements for a promissory-estoppel claim. See Precision Cam, Inc. v. Fox
& Fox, No. 1:14-cv-00452, 2015 WL 803552, at *6 (S.D. Ind. Feb. 24, 2015).5 The
Plaintiffs’ table fails to show how the Amended Complaint details the promises to
each Plaintiff, that these were made with the expectation of reliance, that the
Plaintiffs reasonably relied on the promises,6 that the promises were of a definite and
5 The elements of a promissory-estoppel claim are: (1) “ promise by the promissor; (2) made with the
expectation that the promisee will rely thereon; (3) which induces reasonable reliance by the promisee;
(4) of a definite and substantial nature; and (5) injustice can be avoided only by enforcement of the
promise.” Turner v. Nationstar Mortg., LLC, 45 N.E.3d 1257, 1265 (Ind. Ct. App. 2015).
6 The Plaintiffs have alleged that based on certain representations, some Plaintiffs took action. See
Plaintiffs’ Response at 11. But these allegations fail to plausibly show reasonable reliance. For
instance, Plaintiff BN Invest alleges that at some point before April 2017, someone called him about
“hot” properties that required same-day action. Am. Compl. ¶57. BN Invest’s Purchase Agreements,
5
substantial nature, and that injustice can only be avoided by enforcing the promise.
Neither did their pleading. Accordingly, the promissory-estoppel claims fail for lack
of particularity.
2.2. The Plaintiffs did not plead in the alternative.
The Plaintiffs’ breach-of-contract claims bar their attempt to
contemporaneously bring promissory-estoppel, fraud, conversion, and negligence
claims. Morris Defendants’ Brief at 13-14, 20-21, 22, 25. Despite the Plaintiffs’
argument that they are allowed to plead in the alternative, the Amended Complaint
shows that the Plaintiffs made no attempt to do so.
The Seventh Circuit holds that although plaintiffs “need not use particular
words to plead in the alternative, they must use a formulation from which it can be
reasonably inferred that this is what they were doing,” such as the use of “either-or”
or “if-then” language. Holman v. Indiana, 211 F.3d 399, 407 (7th Cir. 2000) (citing 5
Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure §1282 at 525
(2d ed. 1990)). Claims are not properly pleaded in the alternative if the claim
reasserts all previous allegations. See Llames v. JP Morgan Chase & Co., No. 11 CV
5899, 2012 WL 1032910, at *5 (N.D. Ill. Mar. 23, 2012) (“[A] quasi-contract claim is
not properly pled in the alternative if the claim reasserted all allegations previously
stated, including those alleging the existence of a contract.”); cf. Prudential Ins. Co.
of Am. v. Clark Consulting, Inc., 548 F.Supp.2d 619, 623 (N.D. Ill. 2008) (discussing
Morris Defendants’ Brief, Exhs. 11 & 12, show that BN Invest signed these agreements in May 2017
and April 2018. It is implausible to suggest reasonable reliance on a statement that something requires
same-day action if an action is taken a year after the statement. This analysis is merely representative
of the Plaintiffs’ failures in pleading promissory estoppel.
6
that a party properly pleaded an alternative theory when the words “in the
alternative” were used and when the alternative count “does not refer to, or
incorporate by reference other allegations referring to, the contract between the
parties”).
The Plaintiffs assert that they have properly pleaded their promissory-
estoppel, negligence, fraud, and conversion claims in the alternative, but nowhere in
the Amended Complaint do the Plaintiffs reference an “either-or” pleading or assert
something “alternatively.” Instead, the first paragraph of every count begins with the
same 13 words: “Plaintiffs incorporate the foregoing paragraphs as if set forth in their
entirety herein.” Am. Compl. ¶¶66, 75, 81, 90, 99, 105. This shows that the Plaintiffs
“did not attempt to plead in the alternative; they clearly pleaded in tandem.” Holman,
211 F.3d at 407. Absent proper alternative pleading, the Plaintiffs’ claims cannot
survive.
3. The Plaintiffs’ Response highlights the pleading deficiencies in

Plaintiffs’ fraud claims.
3.1. The Plaintiffs have not pleaded the required elements of their
fraud claims with 9(b)’s required particularity.
A fair reading of the Plaintiffs’ six-page table highlights the problems with
Plaintiffs’ fraud claims. Every Plaintiff’s entry in this table shows that the “when”
and “where” elements have been inadequately pleaded. Rule 9(f) provides that “[a]n
allegation of time or place is material when testing the sufficiency of a pleading.” Fed.
R. Civ. P. 9(f). Here, the alleged “where” element of each Plaintiff’s fraud claim is the
address of the home(s) that individual purchased. See Morris Defendants’ Brief, Exhs.
7
1-23. Not only are these allegations nowhere in the Amended Complaint,7 a literal
reading shows the implausibility of the Plaintiffs’ contention that they were deceived
about the state of a home when they allege they were physically present and could
see it. As for the “when” element, the Plaintiffs have only identified general time
periods, i.e., “Oct. or Nov. 2017,” “Jan. 2018,” “March 2018” and “Late 2017.”
Plaintiffs’ Response at 9-10. With time and place allegations being material to their
claims, they are required to plead them with particularity; they have not done so.
Accord State ex rel. Harmeyer v. Kroger Co., 114 N.E.3d 488, 494 (Ind. Ct. App. 2018)
(“[A]verring the time of the fraud is not a low hurdle, but rather requires the same
level of specificity as any other element required for a fraud allegation.”).
As for the “what” element, every Plaintiff focuses on the Morris Defendants’
offering of “turnkey” properties.8 See Am. Compl. ¶¶52-65. But reading this “what”
element in conjunction with the Plaintiffs’ Amended Complaint establishes the
Plaintiffs knew the properties’ original conditions, that rehabilitation was needed,
and that tenant and property-management services would happen in the future.
Indiana law does not allow fraud claims premised on future conduct. E.g., Sachs v.
Blewell, 185 N.E.856, 858 (Ind. 1933).
7 Again, the Plaintiffs attempt to improperly embellish and amend their Amended Complaint with
their response to the Morris Defendants’ motion to dismiss. The Plaintiffs cannot do this. See n.4,
supra.
8 Plaintiffs use “turnkey” as a shortcut for three paragraphs in their Amended Complaint: that each
Plaintiff purchased property to be used to generate passive income; that the rental property “would be
rehabbed by Morris Invest using the purchase funds”; and that either Clayton Morris or Morris Invest
“would find, screen, and secure tenants for each of the Rental Properties.” Am. Compl. ¶40, 38-39
(emphases added). As discussed in Section 3.2, infra, this turnkey argument focuses on the future
conduct of the Morris Defendants—what the Morris Defendants would do—and cannot be the basis
for fraud.
8
Also, four Plaintiffs do not allege “how” they received the misrepresentations.
Alanann Properties, LLC; BN Invest, LLC; Galveston, LLC; and 300 Real Estate
Investments, LLC generally allege representations, but they do not specify “how”
these were made. The other Plaintiffs’ “how” elements also generally allege that a
Morris Defendant (or a representative) made a representation via either phone,
email, podcast, Facebook, or appointment. Such general allegations do not plead the
“how” element with particularity. See Winforge, Inc. v. Coachmen, Indus., Inc., No.
1:06-cv-619-SEB-JMS, 2007 WL 854025, at *5 (S.D. Ind. 2007) (noting that without
specifics, the defendants could not be expected to parse through all communications
with Plaintiffs to find what could be considered a misrepresentation).
3.2. The Amended Complaint shows the Morris Defendants alleged

misrepresentations are all future conduct.
Indiana law does not allow fraud claims premised on representations of future
conduct. Sachs v. Blewell, 185 N.E. 856, 858 (Ind. 1933); see Morris Defendants’ Brief
at 18-20. The Plaintiffs argue they have not alleged misstatements promising future
conduct, but statements the Morris Defendants knew were false when they made
them. Plaintiffs’ Response at 17.
The Plaintiffs do not address the argument that allegations of what a person
would or should do are not properly within fraud claims, see, e.g., Maynard v. 84
Lumber Co., 657 N.E.2d 406, 409 Ind. Ct. App. 1992), or that “actionable fraud cannot
be predicated upon a promise to do a thing in the future although there may be no
intention of fulfilling the promise.” Sachs, 185 N.E at 858; see also Tesler v
Miller/Howard Investments, Inc., No. 1:16-cv-000640-TWP-MPB, 2017 WL 2840839,
9
at *5 (S.D. Ind. July 3, 2017). The only thing Plaintiffs do here is embellish their
Amended Complaint by accusing the Morris Defendants of materially
misrepresenting the nature of an investment product. Plaintiffs’ Response at 17.9
Even taking that argument as true, this is a repackaged “turnkey” argument, which
focuses exclusively on future conduct and cannot be the basis for fraud.
The Plaintiffs reliance on IOM Grain, LLC v. Ill. Crop Improvement Ass’n, Inc.,
No. 1:10-cv-337-TLS, 2015 WL 195988 (N.D. Ind. Jan. 2015); Reginald Martin
Agency, Inc. v. Conseco Med. Ins. Co., 478 F.Supp.2d 1076 (S.D. Ind. 2007); and Ello
v. Brinton, No. 2:14-cv-299-TLS, 2015 WL 7016462 (N.D. Ind. Nov. 10, 2015), is
misplaced, and the cases are distinguishable.
Both IOM Grain, LLC and Reginald Martin Agency, Inc. were decided at the
summary-judgment stage. And the question at summary judgment is not whether the
plaintiff has pleaded a sufficient claim but whether there is a genuine dispute of any
material fact. F.R.C.P. 56(a). In both, the courts found that there was sufficient
evidence to create genuine issues of material fact when the defendants made
unqualified guarantees regarding their present financial conditions and abilities to
perform contracts. IOM Grain, LLC, 2015 WL 195988, at *7-8; Reginald Martin
Agency, Inc., 478 F.Supp.2d at 1090-91. IOM Grain, LLC and Reginald Martin
focused on existing facts, but the Plaintiffs’ allegations against the Morris Defendants
involve future conduct.
9 As shown in footnote 4, the Plaintiffs’ Response cannot embellish or add to the Amended Complaint.
10
The Plaintiffs also cite Ello v. Brinton, in which the Court denied the motion
to dismiss the plaintiffs’ fraud allegations where the plaintiffs alleged
“misrepresentations concerning past or existing facts—namely, [the business’s]
financial condition and business credentials at the time of the contract negotiations.”
Ello, 2015 WL 7016462, at *3.10
Here, the alleged misrepresentations by the Morris Defendants are premised
on future conduct, not a past or existing fact susceptible to exact knowledge. See
Reginald Martin Agency, Inc., 478 F.Supp.2d at 1089 (noting that a past or existing
fact does not include “statements of opinion, intent, or promises of future conduct”).
Because the Plaintiffs’ claims are founded on future conduct, they cannot survive.
3.3. The Plaintiffs concede they have not alleged fraud claims
distinct or separate from their breach-of-contract claims, and
they have not properly pleaded this claim in the alternative.
The Morris Defendants argued the Plaintiffs’ fraud claims were not distinct or
independent from their breach-of-contract allegations and, thus, could not survive.
Morris Defendants’ Brief at 20-21. Nowhere in the Plaintiffs’ Response is this
argument addressed.11 The only argument Plaintiffs posit is that the fraud claim has
been properly been pleaded in the alternative. See Plaintiffs’ Response at 22-23. As
shown in Section 2.2, though, that’s not the case.
10The Ello court noted that past or existing facts are those which “at the time they are uttered are
susceptible to exact knowledge.” Ello, 2015 WL 7016462, at *3 (quoting Reginald Martin Agency, Inc.,
478 F.Supp.2d at 1089).
11By failing to address this, the Plaintiffs have waived the argument. See Firestone Fin. Corp. v. Meyer,
796 F.3d 822, 825 (7th Cir. 2015) (“[A] party generally forfeits an argument or issue not raised in
response to a motion to dismiss.”); Goodwin v. Teamsters General Local Union No 200, Case Nos. 17-
CV-1377 & 17-CV-1378, 2018 WL 1175168, at *4 (E.D. Wis. Mar. 6, 2018) (collecting and quoting case
law on waiver).
11
4. The Amended Complaint and Plaintiffs’ Response show that a contract

was in place and that the money at issue is not a special chattel.
4.1. The Plaintiffs’ do not dispute a contract was in place.
Indiana does not allow conversion claims alongside breach-of-contract claims.
See Morris Defendants’ Brief at 22. The Plaintiffs say this argument is not fatal as
they have properly pleaded their claims in the alternative. Plaintiffs’ Response at 22-
23. As shown in Section 2.2, supra, that is not the case.
4.2. The money at issue here is not a special chattel.
The Plaintiffs’ allegations in the Amended Complaint do not show determinate
sums that were entrusted to the Morris Defendants for the purpose of rehabilitation,
as the Plaintiffs only alleged general figures for the properties’ purchases. Morris
Defendants’ Brief at 22-23.
Plaintiffs argue that the Amended Complaint properly pleads the elements of
a special chattel, Plaintiffs’ Response at 24, and that the “Plaintiffs also pleaded the
precise dollar amount converted by Defendants.” Id. (citing Am. Compl. at ¶¶52-65).
The Plaintiffs’ conversion claims are based on the alleged funds for rehabilitation.
Am. Compl. ¶92. The Amended Complaint does not give “the precise dollar amount”
for rehabilitation, but generally alleges the purchase price of each property and that
this figure is “inclusive of rehab costs.” See Am. Compl. ¶¶52-65. Thus, rehabilitation
costs are a portion of each property’s purchase price, but Plaintiffs fail to identify that
12
exact, determinate portion. Without the elements of a special chattel alleged, the
Plaintiffs’ conversion claims must be dismissed.12
5. The Plaintiffs have not pleaded a source of duty such that the Morris
Defendants could be liable for negligence, and the Plaintiffs’
negligence claims are barred by the economic-loss doctrine.
5.1. The Plaintiffs have not pleaded a source of the Morris

Defendants’ alleged duties.
It is “well settled that absent a duty, there can be no breach.” Rogers v. Martin,
63 N.E.3d 316, 321 (Ind. 2016). And “whether a duty exists is a question of law for
the court to decide.” Id. Here, the Plaintiffs have merely posited conclusory
allegations that the Morris Defendants owed the Plaintiffs a whole host of duties. See
Am. Compl. ¶¶100, 102. The Morris Defendants argued that these allegations were
properly read as claiming negligent retention, hiring, and supervision, and that the
Plaintiffs’ claim could not succeed because it failed to allege an employer-employee
relationship. See Morris Defendants’ Brief at 24-25. The Plaintiffs said this failed to
take into account certain alleged duties. Plaintiffs’ Response at 25-26.
The Plaintiffs fail to alleged facts sufficient to create a duty. In fact, the
Plaintiffs here argue that “[t]he facts alleged . . . support an inference that Defendants
owed a duty to Plaintiffs to take steps to ensure that Plaintiffs received that which
12The Plaintiffs’ case law does not change this pleading failure. In Desert Buy Palm Springs, Inc. v.
DirectBuy, Inc., No. 2:11-CV-132 RLM, 2012 WL 2130558 (N.D. Ind. June 12, 2012), the Plaintiff did
not plead an abstract figure as the basis of its conversion claim. Id. at *4. The plaintiff pleaded precise,
exacts amounts—down to the number of cents—that the defendant had converted: $129,293.01;
$13,464.52, $22,258.53, and a specific sum what of determinate renewal fees. Id. And in Dayton v. Fox
Rest. Venture, LLC, No:1:16-CV-02109-LJM-MJD, 2017 WL 286788 (S.D. Ind. Jan. 23, 2017), the court
did not analyze whether the tips that were allegedly converted were a determinate sum, instead it
only looked at whether the tips were entrusted for a certain purpose. Id. at *3-4. As the Desert Buy
plaintiff pleaded specific figures and the Dayton court did not analyze whether this tip amount was a
determinate sum, the Plaintiffs’ case law has no application here.
13
they purchased from Defendants[.]” Plaintiffs’ Response at 25. If this truly is
Plaintiffs’ argument, it fails for the reasons in Section 5.2, infra, as the negligence
claim would be barred by the economic-loss doctrine.
To the extent that the Plaintiffs rely on Tri-Professional Realty, Inc. v.
Hillenburg, 669 N.E.2d 1064 (Ind. Ct. App. 1996), for the proposition that the Morris
Defendants owed the Plaintiffs a duty, that argument is misplaced. In Tri-
Professional Realty, Inc., the question was whether a real-estate broker owed a duty
to a third-party buyer in a real-estate transaction to not misrepresent the land at sale
and the broker’s authority to sell. See id. at 1067-69. In holding that the real-estate
broker had a duty to the third party, the court noted that “[t]he profession’s own code
of ethics and standards provides that realtors shall not offer for sale or advertise
property without authority,” and so a duty here was foreseeable. Id. at 1068. The
Morris Defendants are not real-estate brokers, and the Morris Defendants were not
alleged to be real-estate brokers. The Plaintiffs have not alleged facts which give rise
to a duty.
5.2. The economic-loss doctrine bars negligence claims where the

plaintiff is seeking damages involving the benefit of the bargain.
The Plaintiffs contend that because the Morris Defendants have argued that
the Purchase Agreements do not contain provisions obligating them to “rehabilitate
the properties, identify tenants, screen tenants, secure tenants, manage the rental
properties, and provide rent checks to Plaintiffs,” the Morris Defendants are
14
judicially estopped from raising the economic-loss doctrine.13 Despite Plaintiffs’
contention, judicial estoppel does not apply. Rather, the Morris Defendants are forced
to respond to the Plaintiffs’ ever-shifting arguments about the source of the
contractual obligations. On the one hand, the Plaintiffs allege these obligations arise
from the Purchase Agreements. Am. Compl. ¶¶67-68. But, on the other hand, the
Plaintiffs concede these obligations are not in the Purchase Agreements and now
argue that they are turnkey obligations without identifying the contract which gives
rise to the obligations. Plaintiffs’ Response at 20-21. No matter the source, the
Plaintiffs allege that these are contract obligations; thus, the economic-loss doctrine
applies.
The economic-loss doctrine states that “damage from a defective product or
service may be recoverable under a tort theory if the defect causes personal injury or
damage to other property, but contract law governs damage to the product or service
itself and purely economic loss . . . .” Indianapolis- Marion County Pub. Library v.
Charlier Clark & Linard, P.C., 929 N.E.2d 722, 728 (Ind. 2010). Put differently
“contract is the sole remedy for the failure of a product or service to perform as
expected.” KB Home Ind. Inc. v. Rockville TBD Corp., 928 N.E.2d 297, 304 (Ind. Ct.
App. 2010). If the plaintiff is seeking damages involving the benefit of the bargain, or
other matters governed by contract law, the economic loss doctrine will bar a
negligence claim, id. at 305, as “[a] buyer’s desire to enjoy the benefit of his bargain
is not an interest that tort law traditionally protects.” Id.
13The Plaintiffs also argue they have properly pleaded the negligence claim in the alternative. As
shown in Section 2.2, that’s not the case.
15
To the extent there is any doubt that Plaintiffs are seeking the benefit of the
bargain through their negligence claim, the Plaintiffs put that to rest in their
response brief. The Plaintiffs say that the facts they have alleged “support an
inference that Defendants owed a duty to Plaintiffs to take steps to ensure that
Plaintiffs received that which they purchased from Defendants. . . . Defendants wholly
failed to deliver to Plaintiffs the benefit of their bargain.” Plaintiffs’ Response at 25-
26 (emphasis added). The Plaintiffs are seeking a contractual remedy, and that is not
recoverable under a negligence theory. The negligence claim is barred by the
economic-loss doctrine.
6. The Plaintiffs’ Response attempts to impermissibly embellish the

Amended Complaint in a futile attempt to bring it within the Indiana
Deceptive Consumer Sales Act’s grasp, but it fails.
6.1. The Plaintiffs do not address the argument that the transactions
were not for one of the statute’s enumerated categories.
The Plaintiffs allege that “[e]ach purchase and sale of a Rental Property is a
‘consumer transaction’ within the meaning of the Indiana Deceptive Consumer Sales
Act.” Am. Compl. ¶106. The Morris Defendants argued that the transactions here
were not primarily for personal, familial, charitable, agricultural, or household
purposes; thus, they were not “consumer transactions.” Morris Defendants’ Brief at
26. Instead of addressing this argument, the Plaintiffs argue that “Defendants have
not pointed this Court to any authority providing that the purchaser of an investment
property or investment program is not a consumer, as defined by the statute.”
16
Plaintiffs’ Response at 28.14 Because the Plaintiffs failed to identify which statutorily
enumerated purpose they are invoking, they have waived the issue.15
The Plaintiffs cite Watkins v. Alvey, 549 N.E.2d 74 (Ind. Ct. App. 1990), for the
proposition that “plaintiffs, who had been persuaded by defendants to invest in what
later turned out to be a pyramid scheme, could properly bring suit under the IDCSA.”
Plaintiffs’ Response at 29. But the question in Watkins was not whether the
transactions in question were “consumer transactions,” but whether the promotor of
a pyramid scheme could be a statutory “supplier.” Watkins, 549 N.E.2d at 77.
Here, the Morris Defendants focus on the “consumer transaction” alleged in
the Amended Complaint. Am. Compl. ¶106. The Plaintiffs’ Response does not address
this argument. And, because “the purchase and sale of a Rental Property” is the only
consumer transaction the Plaintiffs have alleged in their Amended Complaint (¶106),
the alleged conduct does not fall within the Indiana Deceptive Consumer Sales Act.
6.2. In addition, the real property transactions here are exempt from
the IDCSA.
The statute specifically exempts these types of real-property transactions from
a private right of action under the statute. Morris Defendants’ Brief at 26-27. Instead
of addressing the alleged transactions here—the “purchase and sale of a Rental
Property,” Am. Compl. ¶106—the Plaintiffs focus on the alleged deceptive acts. The
Plaintiffs argue that “[t]he deceptive act at issue under this claim is not the sale of
14This is not the question here, as “consumer” is not a defined term in the Indiana Deceptive Consumer
Sales Act. See Ind. Code §24-5-0.5-2. The question, as raised in the Morris Defendants’ Brief, is whether
the alleged transaction here is a statutorily defined “consumer transaction.”
See n.11, supra, for case law on forfeiting or waiving an argument not raised in response to a
15
motion to dismiss.
17
the property itself. . . . Instead, the alleged deceptive act is Defendants’ sale to Plaintiff
[sic] of a ‘turnkey’ investment product.” Plaintiffs’ Response at 29-30. Again, this does
not respond to the Morris Defendants’ transaction-based argument. To the extent the
Plaintiffs attempt to say that the transactions for “rehabilitation of the properties,
location of tenants, and provision of property management services” bring their claim
under the IDCSA’s scope, this impermissibly embellishes the allegations in their
Amended Complaint.16 See Plaintiffs’ Response at 30.
Lastly, the Plaintiffs argue that the Rehab Services, Tenant Services, and
Property Management Services are akin to construction contracts. Plaintiffs’
Response at 30. The Plaintiffs cite three cases for the proposition that construction
contracts are within the scope of the IDCSA, see id. at 30-31, and all three are
distinguishable. In McKinney v. State, 693 N.E.2d 65 (Ind. 1998), Pierce v. Drees, 607
N.E.2d 726 (Ind. Ct. App. 1993) and Captain & Co. v. Stenberg, 505 N.E.2d 88 (Ind.
Ct. App. 1987), the courts were addressing whether pure construction contracts were
“transactions in real property” as defined by the statute.17
In McKinney, the Indiana Supreme Court held that construction contracts
were not “transactions in real property”; thus, construction-contract claims could be
brought under the statute. McKinney, 693 N.E.2d at 70-71 (discussing Pierce and
Stenberg, and noting neither case involved the purchase of real estate). In holding
this, the McKinney court noted that the construction contracts at issue did not involve
16 See n.4, supra for cases discussing that a plaintiff may not embellish or amend the complaint in
response to a motion to dismiss.
17 See McKinney, 693 N.E.2d at 70; Pierce, 607 N.E.2d at 727; Stenberg, 505 N.E.2d at 92 for
descriptions of the contracts at issue.
18
existing structures but new builds. Id. at 71.The Court said that unlike with the sale
of existing structures, in “which a consumer is at liberty to inspect for defects, the
promise to build a structure forces consumers to rely on a variety of representations
that the builder is far more capable of evaluating.” Id. The Court then held that the
“sale of an existing structure” will normally be a “transaction in real property,”
exempting it from the statute. Id. at 70-71.
Here, the alleged “consumer transactions” are the purchases and sales of
existing structures. Am. Compl. ¶106. As shown in Section 1.2, supra, none of the
Purchase Agreements contained Tenant Services, Property Management Services,
and, for 12 of the 23, Rehab Services. These are pure real-property transactions and
exempted from the statute. And, to the extent the remaining 11 Purchase Agreements
contain Rehab Services, these are not obligations to build or reconstruct a new house
or structure like in McKinney, Pierce, and Stenberg;18 these are obligations to
renovate already-existing structures. Such transactions are “transactions in real
property” and exempted from the IDCSA. McKinney, 693 N.E.2d at 70-71.
6.3. The Plaintiffs’ claim fails to meet 9(b)’s particularity standard.
The Morris Defendants noted that McKinney holds that certain claims brought
under the Indiana Deceptive Consumers Act were subject to heightened pleading
requirements. See Morris Defendants’ Brief at 26 n.14. For the reasons described in
Part 3 of the Morris Defendants’ Brief and in Sections 2.1 and 3.1 here, the Plaintiffs
have failed to plead their claim with the requisite particularity.
18 McKinney, 693 N.E.2d at 70; Pierce, 607 N.E.2d at 727; Stenberg, 505 N.E.2d at 92.
19
CONCLUSION
For the above reasons and the reasons set forth in the Morris Defendants’ Brief,
this Court should dismiss the entirety of Counts II, III, IV, V, and VI, and portions of
Count I of Plaintiffs’ Amended Complaint with prejudice.
Respectfully submitted,
/s/ David J. Hensel

David J. Hensel, #15455-49
Amanda L.B. Mulroony, #30051-59
Timothy W. Walters, #35401-79
HOOVER HULL TURNER LLP
111 Monument Circle, Suite 4400
PO Box 44989
Indianapolis, IN 46244-0989
Tel: (317) 822-4400
Fax: (317) 822-0234
dhensel@hooverhullturner.com
amulroony@hooverhullturner.com
twalters@hooverhullturner.com
Counsel for Defendants Morris Invest

and Clayton Morris
CERTIFICATE OF SERVICE
I hereby certify that on April 11, 2019, a copy of the above was filed
electronically. Service of this filing will be made on all ECF-registered counsel by
operation of the Court’s electronic-filing system. Parties may access this filing
through the Court’s system.
/s/ David J. Hensel
David J. Hensel
Amanda L.B. Mulroony
Timothy W. Walters
20
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
LARRY AND LESLIE KAY MCLESKEY; )

DEEPAK NEELAGIRI AND REENA )
GADAGOTTU; ALANANN PROPERTIES, )
LLC; CARLOS HUERTA HOMES IN, LLC; )
LEJ MANAGEMENT, LLC; BN INVEST, )
LLC; GALVESTON, LLC; BKS IN )
PROPERTIES, LLC; DL3 PROPERTIES, )
LLC IN1801; COVENANTAL CORP.; )
1446 MOUNT, LLC; 300 REAL ESTATE )
INVESTMENTS, LLC; FINNLEY INVEST, )
LLC; and AR FINANCIALS, LLC )
)
Plaintiffs, )
)
v. ) Case No. 1:18-cv-02797-WTL-DML
)
MORRIS INVEST and CLAYTON MORRIS, )
)
Defendants. )
MORRIS INVEST’S AND CLAYTON MORRIS’S REPLY

IN SUPPORT OF MOTION TO SEVER OR DISMISS
AMENDED COMPLAINT FOR MISJOINDER OF PLAINTIFFS
This Court should correct the Plaintiffs’ improper party joinder. To the extent
that this Court does not dismiss Counts II, III, IV, V, VI, and portions of Count I as
to all Plaintiffs with prejudice,1 the Court should sever or dismiss without prejudice
each remaining Plaintiff in order for that Plaintiff to file an individual complaint for
any remaining claim(s).
1For the reasons stated in Defendants’ Brief in Support of Partial Motion to Dismiss Plaintiffs’
Amended Complaint Pursuant to Rules 12(B)(6) and 9(B) (Dkt. 26) and contemporaneously-filed
Reply in Support of Partial Motion to Dismiss Plaintiffs’ Amended Complaint, the majority of
Plaintiffs’ claims should be dismissed with prejudice.
The Plaintiffs’ “consolidated” lawsuit2 does not comport with the dual
requirements of Rule 20. The Plaintiffs in this lawsuit are four individuals and 12
entities (owned by 22 individuals, without any overlapping ownership), amounting
to sixteen Plaintiffs, or fourteen distinct ownership groups that each purchased 1-2
different properties from three different entities who have not been named as
defendants in this lawsuit. They do not “assert any right to relief jointly, severally,
or in the alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences” nor is there “any question of
law or fact common to all plaintiffs [that] will arise in the action.” Fed. R. Civ. P.
20(a)(1). Furthermore, joinder here does not comport with fundamental fairness and
would result in prejudice to the Morris Defendants.
A. Plaintiffs’ claims do not arise out of the same series of

transactions or occurrences.
In order for Plaintiffs to proceed in a joined action, their claims must arise out
of “the same transaction, occurrence, or series of transactions or occurrences.” Fed.
R. Civ. P. 20(a)(1)(A). If not, joinder is improper and the inquiry ends. See Barner v.
City of Harvey, No. 95 C 3316, 2003 WL 1720027, at *4 (N.D. Ill. Mar. 31, 2003) (court
“need not address” the common question of law or fact requirement where the “first
prong of Fed.R.Civ.P. 20(a) has not been satisfied”). The Plaintiffs here should be
severed because their claims do not arise out of the same series of transactions or
2 The Plaintiffs purport that their suit is “consolidated” pursuant to Federal Rule of Civil Procedure
42, see Dkt. 20 at ¶ 27, yet they have taken it upon themselves to proceed with one complaint and a
single action rather than file separate suits and obtain leave of court to consolidate any or all parts
of the actions.
2
occurrences.
The nature of the Plaintiffs’ claims make clear that each Plaintiff’s allegations
involve different series of transactions: separate-and-distinct real-estate purchases
spanning a year-long timeframe, with unique facts relating to each individual
Plaintiff’s claims and alleged damages. Plaintiffs’ claims do not involve the purchase
of identical products and identical damages. Cf. Monon Tel. Co. v. Bristol, 218 F.R.D.
614, 616 (N.D. Ind. 2003) (permitting joinder of satellite signal piracy claims where
defendants purchased signal theft devices from single distribution center) (Pls. Resp.
at 7). Plaintiffs’ claims revolve around the negotiation, interpretation, execution, and
obligations related to 23 separate contracts for 23 separate real-estate transactions
involving properties purchased from three different entities (none of whom were
named as defendants). See Defs. Br. at 2-4, 6 (Dkt. 28); Am. Compl. ¶ 36, ¶¶ 52-65
(Dkt. 20). There are distinct Purchase Agreements for each transaction, with varying
terms and conditions. Defs. Br. at 6 (Dkt. 28). Some Purchase Agreements contain
terms regarding rehab, others do not. Id. Establishing breach and damages (e.g.
rehab work that was to have been completed and was not) will involve individualized
discovery and proof. Id. at 6-8 (Dkt. 28).
Furthermore, each Plaintiff had separate, individual interactions and
communications with the Morris Defendants leading up to each property purchase
which form the bases for each Plaintiff’s claims. Various Plaintiffs dealt with various
people and via different means of communication. See Am. Compl. ¶¶ 52-65 (Dkt. 20).
The sixteen Plaintiffs have not alleged any single written communication containing
3
a misrepresentation on which they collectively claim to have relied, or alleged that
Morris representatives were directed to make (or did make) a standardized “pitch”
regarding any of the properties eventually purchased by any plaintiff. Cf. McLernon
v. Source Intern., Inc., 701 F. Supp. 1422, 1425-26 (E.D. Wis. 1988) (claims must arise
from a uniform written misrepresentation or plaintiffs must allege that sales persons
were directed to make a standardized misrepresentation in order for joinder to be
proper) (Pls. Resp. at 5).3 Here, Plaintiffs have alleged – without requisite specificity
to survive the pleading requirements of Rule 9(b) – separate, individual
communications with various representatives of Morris Invest spanning a year-long
time period involving at least 23 different pieces of real estate. Am. Compl. ¶¶ 52-65.4
Neither this nor Plaintiffs’ repeated and conclusory use of the words “scheme” or
“Ponzi scheme” in their Amended Complaint is sufficient to join plaintiffs under Rule
20. Insolia v. Philip Morris Inc., 186 F.R.D. 547, 549 (W.D. Wis. 1999) (“Rule 20
demands more than the bare allegation that all plaintiffs are victims of a fraudulent
scheme . . . there must be some indication that each plaintiff has been induced to act
by the same misrepresentation.”); Garner v. Bank of Am. Corp., No. 2:12-CV-02076-
PMP, 2014 WL 1945142, at *4 (D. Nev. May 13, 2014) (“While Plaintiffs here allege
in some detail an overarching conspiracy and coordinated conduct . . . Plaintiffs’
claims nevertheless will entail individualized inquiry, such as what representations
3To the extent the Plaintiffs generally allege individual conversations involving “turnkey” rental
properties, “turnkey” is a non-actionable future event and not a term of any Agreement. See Defs.
Reply in Support of Motion to Dismiss at 8 n.8, 9–11.
4One Plaintiff alleges that he was told at some point that properties required “same-day action.” Am.
Compl. ¶ 57 (Dkt. 20).
4
were made to them by their respective loan officers and whether each Plaintiff
justifiably relied on those alleged misrepresentations.”).
Plaintiffs’ reliance on pattern-and-practice employment law cases where there
are allegations of “company-wide policies” and “systems of decision-making” is also
misplaced. See Rochlin v. Cincinnati Ins. Co., No. IP00-1898CHK, 2003 WL
21852341, at *13 (S.D. Ind. July 8, 2003) (Pls. Resp. at 5-6, 8); Mosley v. General
Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974) (Pls. Resp. at 4, 8); Hohlbein v.
Heritage Mut. Ins. Co., 106 F.R.D. 73, 78–79 (E.D. Wis. 1985) (Pls. Resp. at 7). See
also Delgado v. Directv, Inc., No. 114CV01722SEBDML, 2016 WL 1043725, at *13
(S.D. Ind. Mar. 16, 2016) (FLSA joint employer claims involving identical contracts)
(Pls. Resp. at 6-7). In employment cases, “[a] majority of courts have found that
allegations of a pattern and practice of discrimination are sufficient to satisfy both
the same transaction and common questions requirements of Rule 20(a).” Barner v.
City of Harvey, No. 95 C 3316, 2003 WL 1720027, at *2 (N.D. Ill. Mar. 31, 2003). But
see Elliott v. USF Holland, Inc., No. NA 01-159-C H/H, 2002 WL 826405, at *1 (S.D.
Ind. Mar. 21, 2002) (“Where employees at different facilities allege similar types of
discriminatory acts but at different times and/or by different supervisors, joinder is
often denied.”).
Such is not the case where multiple plaintiffs complaining about misconduct
regarding separate-and-distinct real-estate transactions attempt joinder. Garner v.
Bank of Am. Corp., No. 2:12-CV-02076-PMP, 2014 WL 1945142, at *4 (D. Nev. May
13, 2014) (severing plaintiffs alleging misconduct with respect to distinct loan
5
transactions with different lenders secured by different Nevada properties); Visendi
v. Bank of Am., N.A., 733 F.3d 863, 870 (9th Cir. 2013).5 Nor is the “same transaction
or series of transactions” element met where, as here, causation and damages
evidence will involve individualized inquiries – e.g. what rehab work was promised
but not completed and whether tenants were placed in a property (combined with the
status of each property prior-to and following a tenant’s occupancy). See, e.g., Insolia
v. Philip Morris Inc., 186 F.R.D. 547, 550 (W.D. Wis. 1999).
The Plaintiffs here are not properly joined in a single action because their
claims do not arise out of the same transaction, occurrence, or series of transactions
or occurrences within the meaning of Rule 20. Accordingly, this Court should require
each Plaintiff (or discrete ownership group) to file individual complaints for any
remaining claim(s).
B. Plaintiffs’ claims do not involve common questions of fact or

law.
Joinder is improper not only because Plaintiffs’ claims do not arise out of the
same series of transactions, see generally Defs. Br. at 5-8 and Part A, supra, but also
separately because Plaintiffs’ claims do not involve common questions of fact or law
sufficient to render joinder proper under Rule 20. Although each Plaintiff asserts the
same causes of action against the Morris Defendants, “Rule 20(a) requires more” than
“Plaintiffs merely alleg[ing] that Defendants violated the same laws in comparable
ways.” Visendi, 733 F.3d at 870 (affirming severance of plaintiffs and concluding that
5Plaintiffs incorrectly state that Visendi and Garner involved severance of defendants. Pls. Resp. at
6. Rather, each court concluded that plaintiffs must bring separate suits.
6
Plaintiffs did not present any question of law or fact common to all plaintiffs). Here,
like the Visendi plaintiffs, Plaintiffs claims against the Morris Defendants involve
varied dealings, separate transactions, separate agreements, and separate and
unrelated properties. Id. “Nothing unites all of these Plaintiffs but the superficial
similarity of their allegations and their common choice of counsel.” Id. Further, the
claims that the Plaintiffs assert - e.g. breach of contract, fraud, negligence – each
require particularized factual analysis. Id. (“the three claims that Plaintiffs now
assert – invalid assignment, mistake, and negligence – each require particularized
factual analysis.”). Plaintiffs’ respective claims deal with different pieces of property,
different transactions, different agreements, different interactions with
representatives of Morris Invest, different proof to establish liability, and different
damages. There is no question of law or fact common to all plaintiffs sufficient to meet
the permissive joinder requirement of Rule 20(a)(1)(B).
C. Joinder violates fundamental fairness and results in prejudice

to Defendants.
Even where the dual requirements of Rule 20(a) are met, a Court may
nevertheless decline to entertain joinder if it does not “comport with the principles of
fundamental fairness” or if it “would create prejudice, expense or delay[.]” Chavez v.
Ill. State Police, 251 F.3d 612, 632 (7th Cir. 2001) (quotations omitted). See also
Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000) (even if Rule 20’s
requirements are met, a court must examine whether joinder serves the principles of
fundamental fairness). Here, Plaintiffs do not meet the dual requirements of Rule
20(a). Assuming arguendo they did, joinder violates principles of fundamental
7
fairness and would result in prejudice to the Morris Defendants.
First, the Plaintiffs took it upon themselves to present their Complaint and
Amended Complaint to this Court as “consolidated” under Rule 42. See Compl. ¶ 28
(Dkt. 1) and Am. Compl. ¶ 27 (Dkt. 20). In doing so, the Plaintiffs (1) side-stepped the
more-stringent requirements of Rule 20 and ignored the distinction between joinder
and consolidation, (2) ignored that there never were multiple actions over which the
Court exercised its discretion to consolidate,6 and (3) avoided paying requisite filing
fees associated with initiating a civil action in this District Court. The Plaintiffs’
disregard for procedural rules, standards and the cost of the administration of justice
is neither fair to Defendants nor this Court.
Second, Plaintiffs argument regarding hypothetical, alleged duplicative
discovery or discovery disputes does not support permissive joinder. Evidence will
vary with respect to any Plaintiff’s surviving claim(s), and so necessarily will
discovery and discovery responses. Plaintiffs’ counsel may ultimately serve multiple
“identical” discovery requests on Defendants, but relevant information is going to
vary widely for each of the Plaintiffs given the different interactions, different
transactions, different properties, and different alleged liability and damages.
Finally, “[j]udicial resources are wasted, not conserved, when a jury is
subjected to a welter of evidence relevant to some parties but not others. Confusion
can lead to prejudice when there are inadequate assurances that evidence will be
weighed against the appropriate party and in the appropriate context.” Insolia, 186
6 Whether it may be proper to consolidate separate actions under Federal Civil Procedure Rule 42(a)
for any purpose is a hypothetical not presently before the Court.
8
F.R.D. at 551. No limiting instruction will be able to correct the jury confusion and
prejudice to the Morris Defendants that will result from a jury having to parse
through different contracts, different communications between different Plaintiffs
and Morris representatives (and others) leading up to each property closing, different
statuses of home rehabs, and different tenant issues relating to each respective
property. See Coleman, 232 F.3d at 1296 (“even the strongest jury instructions could
not have dulled the impact of a parade of witnesses, each recounting his contention
that defendant [was liable to each]” (quotation omitted)). Here, the prejudice to the
Morris Defendants created by a “parade” of disgruntled homebuyers and the
possibility of factual and legal confusion by the jury clearly outweigh any purported
duplicative discovery. See id. at 1296-97 (plaintiffs’ argument that severing cases led
to duplicative discovery did not outweigh the potential prejudice to defendant created
by the “parade” of disgruntled plaintiff witnesses and the possibility of factual and
legal confusion by the jury).
CONCLUSION
For all the reasons stated in the Morris Defendants’ initial brief and above,
this Court should sever or dismiss without prejudice all claims but those of the first-
named McLesky Plaintiffs, to the extent any Plaintiff’s claim(s) survive the Morris
Defendants’ Motion to Dismiss Pursuant to Rule 12(b)(6) and 9(b).
9
Respectfully submitted,
/s David J. Hensel
David J. Hensel, #15455-49
Amanda L.B. Mulroony, #30051-49
Timothy W. Walters, #35401-79
111 Monument Circle, Suite 4400
PO Box 44989
Indianapolis, IN 46244-0989
Tel: (317) 822-4400
Fax: (317) 822-0234
Counsel for Morris Invest and Clayton Morris
CERTIFCATE OF SERVICE
I hereby certify that on April 11, 2019, a copy of the above was filed
electronically. Service of this filing will be made on all ECF-registered counsel by
operation of the Court’s electronic-filing system. Parties may access this filing
through the Court’s system.
/s David J. Hensel
David J. Hensel
Amanda L.B. Mulroony
Timothy W. Walters
1003782
10

MI Reply1

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

MI Reply1

Transféré par

Droits d'auteur :

Formats disponibles

Case 1:18-cv-02797-WTL-DML Document 33 Filed 04/11/19 Page 1 of 20 PageID #: 389

IN THE UNITED STATES DISTRICT COURT

LARRY AND LESLIE KAY MCLESKEY; )

MORRIS INVEST’S AND CLAYTON MORRIS’S

Morris Invest and Clayton Morris (collectively “Morris Defendants”) moved to

Complaint. Dkt. 25.

1. The Plaintiffs’ breach-of-contract claims fail for multiple reasons.

1.1. Eight of the Plaintiffs’ breach-of-contract claims fail as a matter

parties in consummating the transactions. Id.

Agreement shall terminate unless an extension of time is mutually agreed to in

Agreements contain a separate, integration clause providing that the Purchase

the contract prevented an extension or renewal).

language prohibiting changes without written consent).

The Plaintiffs concede that none of the Purchase Agreements contain

Plaintiffs’ Response at 21-22.

motion to dismiss.”). Second, as explained above, the Purchase Agreements’

added without a writing.

2. The Plaintiffs failure to plead their promissory-estoppel claims with

2.1. The Plaintiffs’ promissory-estoppel claim fails under Rule 9(b).

The Morris Defendants argued in their opening brief that Plaintiffs’

promissory-estoppel claims sounded in fraud and were subject to Rule 9(b)’s

heightened pleading standard. Morris Defendants’ Brief at 11-12. Purporting to

2.2. The Plaintiffs did not plead in the alternative.

The Plaintiffs’ breach-of-contract claims bar their attempt to

contemporaneously bring promissory-estoppel, fraud, conversion, and negligence

shows that the Plaintiffs made no attempt to do so.

the Amended Complaint do the Plaintiffs reference an “either-or” pleading or assert

3. The Plaintiffs’ Response highlights the pleading deficiencies in

level of specificity as any other element required for a fraud allegation.”).

element in conjunction with the Plaintiffs’ Amended Complaint establishes the

Blewell, 185 N.E.856, 858 (Ind. 1933).

Morris Defendant (or a representative) made a representation via either phone,

1:06-cv-619-SEB-JMS, 2007 WL 854025, at *5 (S.D. Ind. 2007) (noting that without

with Plaintiffs to find what could be considered a misrepresentation).

3.2. The Amended Complaint shows the Morris Defendants alleged

them. Plaintiffs’ Response at 17.

be predicated upon a promise to do a thing in the future although there may be no

Miller/Howard Investments, Inc., No. 1:16-cv-000640-TWP-MPB, 2017 WL 2840839,

Amended Complaint by accusing the Morris Defendants of materially

misrepresenting the nature of an investment product. Plaintiffs’ Response at 17.9

misplaced, and the cases are distinguishable.

unqualified guarantees regarding their present financial conditions and abilities to

involve future conduct.

to dismiss the plaintiffs’ fraud allegations where the plaintiffs alleged

“misrepresentations concerning past or existing facts—namely, [the business’s]

Ello, 2015 WL 7016462, at *3.10

Here, the alleged misrepresentations by the Morris Defendants are premised

Morris Defendants’ Brief at 20-21. Nowhere in the Plaintiffs’ Response is this

shown in Section 2.2, though, that’s not the case.

4. The Amended Complaint and Plaintiffs’ Response show that a contract

4.1. The Plaintiffs’ do not dispute a contract was in place.

Indiana does not allow conversion claims alongside breach-of-contract claims.

23. As shown in Section 2.2, supra, that is not the case.

4.2. The money at issue here is not a special chattel.

The Plaintiffs’ allegations in the Amended Complaint do not show determinate

Defendants’ Brief at 22-23.

Plaintiffs’ conversion claims must be dismissed.12

5.1. The Plaintiffs have not pleaded a source of the Morris

Plaintiffs’ claim could not succeed because it failed to allege an employer-employee

take into account certain alleged duties. Plaintiffs’ Response at 25-26.

they purchased from Defendants[.]” Plaintiffs’ Response at 25. If this truly is

claim would be barred by the economic-loss doctrine.

To the extent that the Plaintiffs rely on Tri-Professional Realty, Inc. v.