Opinion
1:02CV918
June 13, 2003
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter comes before the court on Norman's motion [Doc. #23] for leave to amend complaint. TradeWinds has responded in opposition to the amendment, alleging that the amendment would be futile because it would, like the previous complaint, be subject to dismissal. The court agrees.
I. Amendment Standard
Although Rule 15 states that "leave shall be freely given when justice so requires," leave to amend is not automatic and is within the sound discretion of the court. Foman v. Davis. 371 U.S. 178, 182 (1962) (citing FED.R.CIV.P. 15(a)). If a pleading, as amended, could not survive a motion to dismiss, the amendment should be denied as futile.Perkins v. United States. 55 F.3d 910, 917 (4th Cir. 1995). Because the court finds, as discussed below, that Norman's proposed complaint fails to state a claim upon which relief could be granted, the amendment should be denied as futile.
II. Alleged Facts and Claims
Norman's proposed Second Amended Complaint [hereinafter "proposed complaint"] follows the same outline of his previous complaint, and includes many identical factual allegations. As was noted in his previous complaint, Norman is a citizen of Florida, and TradeWinds is a corporation with its headquarters in Greensboro, North Carolina. (Proposed Compl., ¶ 1). In September 2000, TradeWinds interviewed Norman in Florida for a pilot position. (Id, ¶ 3). During the interview process, Norman was given a copy of the TradeWinds "Flight Deck Crew Policy Handbook" ["Handbook"] and an attached Memorandum dated April 25, 2000 [hereinafter "April 2000 Memorandum" or "attached Memorandum"]. (Id., ¶¶ 3-4; 16). The April 2000 Memorandum states, in part:
In considering Norman's complaint on a motion to dismiss standard, the court assumes the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations. See Hishon v. King Spalding. 467 U.S. 69, 73 (1984); Conley v. Gibson. 355 U.S. 41, 45-46 (1957); Mylan Labs. Inc. v. Matkari. 7 F.3d 1130, 1134 (4th Cir. 1993). Nevertheless, while the court must take the facts in the light most favorable to the plaintiff, the court need not accept the legal conclusions drawn from the facts [or] . . . unwarranted inferences, unreasonable conclusions, or arguments."Eastern Shore Mkts. Inc. v. J.D. Assocs. Ltd. P'ship. 213 F.3d 175, 180 (4th Cir. 2000). In addition, the court need not accept as true any allegations in the complaint that are directly contradicted by the exhibits attached to the complaint. See Fayetteville Investors v. Commercial Builders. Inc. 936 F.2d 1462, 1465 (4th Cir. 1991).
To: All Cockpit Crewmembers. . . .
This handbook will be the basis on which a flight deck crewmember's day-to-day interaction with the company will be managed
The company . . . appreciates the dynamic nature of its current situation. Especially in light of the negative effects its prior financial performance has had on its overall financial strength, [sic] The policies in this initial copy of the handbook may be revised from time to time as dictated by the operational needs of the company.
(Ex.1).
As was noted in the previous complaint, the Handbook itself outlines, inter alia, an "Off-Day" pay policy (Ex. 1, Handbook, p. 4); a "Hot Reserve" pay credit policy for each full day of "Hot Reserve Duty" (id, p. 5); a priority policy for awarding "Open Time" (id, p. 5); and a seniority policy for assigning captain positions (Proposed Compl., ¶ 19). The Handbook also outlines "Standby Pay" and other upgrading and seniority policies or procedures. (Ex. 1, Handbook, p. 10). In addition, the Handbook includes a "Progressive Discipline Policy" which provides guidelines under which a Chief Pilot or Director will take disciplinary action "if a crewmember commits an offense warranting disciplinary action." (id, p. 14). These guidelines provide for a three-step warning process for most offenses, followed by suspension or termination. (Id.). "In cases of major offenses," however, "disciplinary action may start at any level of this progressive discipline program." (id).
New to the proposed complaint is a description of certain oral representations made by TradeWinds during the interview process. In particular, Norman alleges that "TradeWinds never disclosed, during the employment process, any hint of not being bound by the terms and conditions of crewmember employment described in the Memorandum and Handbook." (Proposed Compl., ¶ 27). "In fact," he writes, "just the opposite occurred, TradeWinds represented, orally, the Memorandum and Handbook described the terms and conditions of employment for employees." (14, (syntax as in original)). TradeWinds explained during the interview process that the prospective crewmember should read the Handbook "so the crewmember would have a clear understanding as to how the work environment at TradeWinds would be, questions could be asked for clarification, and there would be no doubts later on should the prospective crewmember be hired." (Id., ¶ 3). TradeWinds1 use of the Handbook, the April 2000 Memorandum, and these oral representations, created "the appearance of a favorable employment package to recruit pilots." (Id., ¶ 29).
The proposed complaint provides a few further details regarding the place and time of the employment steps. In a March 20, 2001, letter addressed to Norman's home address in Florida, TradeWinds congratulated Norman on being selected to become a TradeWinds Airlines flight crewmember, and notified him that he needed to be in Greensboro, North Carolina, on March 26, 2001, to commence a training program. (Proposed Compl., Ex. 2). Norman states that he "was hired by TradeWinds and began pilot training on or about March 26, 200[1]." (Proposed Compl., ¶ 6). By Norman's own admission, no oral or written statement in any document received by Norman included "a clause for employment for a definite period of time." (Id., ¶ 5)
In the text of the proposed complaint, he writes that he was hired and began pilot training "on or about March 26, 2002." (Proposed Compl., ¶ 6) (emphasis added). It appears certain that the date "2002" is a typographic error and that the correct date for the hire and commencement of the training was "2001," based on the TradeWinds letter provided in Exhibit 2. (Ex. 2 (showing selection for position dated March 20, 2001 and stating "training will begin on Monday March 26, 2001")). If Norman wishes to assert that he was hired on March 26, 2002, he must provide further details which would override the evidence in the exhibits provided. See Fayetteville Investors. 936 F.2d at 1465.
After Norman began employment with TradeWinds, the company issued a Memorandum on April 10, 2001, [hereinafter "UTC Memorandum"], that revised the discipline procedures for crewmembers who are considered "unable to be contacted (UTC)." (Id, ¶ 16). Specifically, the UTC Memorandum indicates that when the TradeWinds scheduling department is "Unable to Contact (UTC)" a crewmember, sanctions will occur. (Proposed Compl., Ex. 3). One UTC results, inter alia, in a write up; a second UTC results in a meeting with the Chief Pilot in Greensboro, North Carolina; and, a third UTC results in a further meeting with the Chief Pilot in Greensboro and possible discontinuation of employment. (Ex. 3, p. 2).
As the previous complaint also provided, while employed with TradeWinds, Norman was required to travel from his home in Florida to his base of operations in Dayton, Ohio, each time he began a work shift. (Proposed Compl., ¶ 7). This travel time to reach the point of origination for the flights assigned was uncompensated. (Id.). During the course of Norman's employment, TradeWinds did not apply the "Hot Reserve," or "Open Time," policy outlined in the Handbook. (id, ¶¶ 17-18). Additionally, TradeWinds "unilaterally instituted a system of `V-T-O days' in which a crewmember was expected to be in a `standby' status," without compensation, and without guidelines as to required pilot availability on these days, (Id, ¶ 17). TradeWinds also failed to follow other upgrading and seniority procedures outlined in the Memoranda and Handbook, (id., ¶ 19).
As noted in the previous complaint, Norman's employment was terminated by a letter, dated August 15, 2002. (First Am. Compl., ¶ 7, Ex.3). The termination letter, from Bruce Clamp, Chief Pilot, stated, in part,
This letter is to serve you notice that in response to your failure to be available for an assignment, therefore missing a trip sequence, you are hereby terminated. . . .
It was very apparent in our conversation that you purposefully and willfully avoided contact with the Crew Scheduling Department. Numerous calls had been placed to your home with messages left, and emails had also been sent. . . .
Your attitude toward your responsibility to the schedule that was duly awarded to you in the bidding process is unacceptable and falls well short of what we expect and need from our employees [W]e do not have the luxury of being able to risk the possibility of canceling or delaying a flight because of an adverse attitude of one of our employees.
(Id.). In his proposed complaint, Norman provides several additional details regarding the events leading up to his termination. Norman talked with Chief Pilot Clamp during the evening of August 13, 2002, about an "upgrade to Captain that Norman had been promised for many months." (Proposed Compl., ¶ 11). The issue of availability during the V-T-0 days was also discussed at that time, and Norman thought that the issue was resolved, (id). During the afternoon of August 14, Norman was called by TradeWinds crew scheduling personnel and alerted for a flight from Dayton, Ohio, early in the morning of August 16, 2002. (id, ¶ 12). "Norman left his home in Florida early in the morning of August 15, 2002, and proceeded to Dayton, Ohio." (Id, ¶ 13). Then, after his arrival at the crew hotel in Dayton, "Norman made statements advocating the need for organized labor on the TradeWinds property." (id, ¶ 14). He "was terminated from employment at TradeWinds approximately one and a half hours later," on August 15, 2002. (id). Norman was dismissed without having first received three recorded infractions, in the manner described in the Handbook "Progressive Discipline Policy," or in the manner described in the UTC Memorandum, (id, ¶¶ 16 20).
As he alleged in his previous complaint, Norman claims (in Count One of his proposed complaint) that the Handbook and April 2000 Memorandum stated the "promises, conditions and rules" of his employment. (id., ¶ 16). He now broadens his contract claim, however, stating "the April 2000 Memorandum and the Handbook created a written contractual agreement that was incorporated into the oral contract initiated during the initial interview process." (id.) (emphasis indicating new material). He alleges that TradeWinds' failure to follow the procedures in the Handbook, the April 2000 Memorandum, and the UTC Memorandum "represents a breach of the employment agreement by Defendant." (Id, ¶¶ 16, 20 21).
As in his previous complaint, Norman also alleges (in Count Two of his proposed complaint) that, "by using the Handbook and Memorandum as promises of the details of the employment opportunity offered," TradeWinds "fraudulently induced" Norman to enter into employment with the company. (Id, ¶ J22). In particular, Norman alleges that TradeWinds "created, with the Handbook, Memorandum and oral promises the appearance of a favorable employment package to recruit pilots." (ld., ¶ 29). Furthermore he alleges that that TradeWinds knew of "intended or possible changes in the employment conditions" and knew "that it did not intend to be bound by the Memorandum and Handbook," but failed to inform Norman of this knowledge at the time of employ, (Id, ¶¶ 22 30). As such, "TradeWinds committed fraud by concealing information that was material to the employment transaction." (Id., ¶ 30).
Finally, Norman adds a separate Count Three of his proposed complaint for promissory estoppel. He states that TradeWinds
should have reasonably expected that its use of the Handbook and attached Memorandum with the statements contained therein would induce Plaintiff to accept employment with TradeWinds instead of considering other pilot employment opportunities. Plaintiff did rely on the representations of the offered documents to accept employment with TradeWinds based on the benefits and security of employment indicated. TradeWinds is responsible for losses of income and damages to Plaintiff based on the theory of promissory estoppel under both Florida and Ohio law.
(Id., ¶ 31).
III. Discussion
A. Choice of Law
Norman asks the court to apply Florida and Ohio law to his contract, fraud and promissory estoppel claims, (id, ¶¶ 2 31). First, concerning his contract and promissory estoppel claims, the court agrees that Florida law should apply, but finds Ohio law inapplicable, based on the allegations in Norman's proposed complaint. Under North Carolina's choice of law rules, the interpretation of a contract is governed by the law of the place where the alleged contract was made. Rhone-PoulencAgro S.A. v. Monsanto Co., 73 F. Supp.2d 554, 556 (M.D.N.C.1999) (quoting Tanglewood Land Co. v. Byrd, 261 S.E.2d 655, 656 (N.C. 1980)). In his proposed complaint, Norman indicates that his employment was terminated in Ohio, (Proposed Compl., ¶ 1), but Norman has made no allegation that indicates that Ohio was where any alleged contract or promises were made. Instead, Norman claims that he and TradeWinds entered into an "oral contract initiated during the interview process." (id, ¶ 16). He claims that, "during the employment process . . . TradeWinds represented, orally, the Memorandum and Handbook described the terms and conditions of employment for employees." (Id, ¶ 27 (syntax as in original)). He also alleges that he was given the Handbook and Memorandum during the interview process and "did rely on the representations of the offered documents to accept employment with TradeWinds." (Id., ¶ 31). Given that Norman's home address is in Florida, and given that he did not travel to North Carolina until after the interview process was complete, Florida was thus the location of the alleged oral contract formation, and the location where the alleged promises were made regarding the employment opportunity. Therefore, any contract and promissory estoppel claims based on these events must be analyzed pursuant to the law of Florida.
Next, concerning Norman's fraud claim, the court finds that only Ohio law should apply. Under North Carolina choice of law rules, when analyzing tort actions, such as fraud, the law of the "place of the wrong" controls. See Rhone-Poulenc Agro S.A., 73 F. Supp.2d at 556 (quoting Boudreau v. Baughman. 322 N.C. 331, 335, 368 S.E.2d 849, 854 (1988)). Because Norman explicitly alleges that the "wrong" in this case was his termination, (see Doc. #22), and that this occurred in Dayton, Ohio, the court will analyze his fraud claim pursuant to Ohio law.
Conceivably, the "place of the wrong" in this case could have also been in Florida or North Carolina if other wrongs besides the termination occurred as a result of TradeWinds' alleged fraudulent acts.(See, e.g. Proposed Compl., ¶ 22 (noting that Norman received a "substantial deterioration in the quality of the financial and professional returns that Plaintiff Norman reasonably expected" from TradeWinds)). Nonetheless, because Norman has specifically stated that the place of his termination determined the place of the wrong in this case, (see Doc. #22), the court will, based on these allegations, apply only Ohio law to his fraud claim. In any event, as noted in this court's earlier recommendation, the law regarding fraudulent inducement claims in Ohio, Florida and North Carolina is not materially different. (See Recommendation [Doc. #20] pp. 33-35).
B. Contract Claim
Under Florida law, unless a definite term of employment is agreed upon, employment is terminable at the will of either the employer or employee.Caster v. Hennessey. 727 F.2d 1075, 1077 (11th Cir. 1984); McConnell v. Eastern Air Lines. Inc. 499 So.2d 68, 69 (Fla.Dist.Ct.App. 1986). Policy statements in employment manuals or other executive memoranda do not constitute the terms of a contract of employment unless language in the employee manual or memoranda "expressly provides" that the manual constitutes a separate employment agreement, or the parties otherwise mutually and explicitly agree to that effect. Quaker Oats Co. v. Jewell. 818 So.2d 574, 578-79 (Fla. Dist.Ct.App. 2002); see McConnell. 499 So.2d at 69 (applying rule to letters, memoranda, as well as manuals or guidelines issued by employer); Webster v. Royal Caribbean Cruises. Ltd. 124 F. Supp.2d 1317, 1326 (S.D. Fla. 2000) (finding that, under Florida law, policy statements by an employer, given to the plaintiff either orally or in handbook form, did not give rise to enforceable contract rights of employees without the parties' explicit mutual agreement); LaRocca v. Xerox Corp., 587 F. Supp. 1002, 1004 (S.D. Fla. 1984) (holding that no claim based on terms of manual is possible "lacking any language in the policy expressly providing that the manual is to constitute a separate employment contract"); see also Susanno v. Lee County Bd. of County Com'rs. 852 F. Supp. 980, 985 (M.D. Fla. 1994) (finding no binding contract under Florida law with employee handbook that, inter alia, outlined grievance procedures); Lozano v. Marriott Corp. 844 F. Supp. 740, 742 (M.D. Fla. 1994) (rejecting argument that discharge in violation of the progressive discipline policy in the Handbook gave rise to enforceable contract claim).
In this case, neither the Handbook nor the April 2000 Memorandum includes language which "expressly provides" that the manual constitutes a separate employment agreement. First, there is no provision in the Handbook indicating that the Handbook constitutes a contractually binding agreement between TradeWinds and any employee, much less Norman in particular. (See Ex. 1). The "Forward" of the Handbook expresses the need for flexibility and cooperation, and does not contain language expressly providing that the Handbook is a binding employment agreement. It states, in part,
The TradeWinds Airlines Flight Deck Crew Policy Handbook is the source of administrative policies and procedures utilized to manage cockpit crewmembers. Policies specified in the Handbook are supplemental to the policies and procedures set forth in the company's General Operations Manual and Company Flight Manual. The provisions of this Handbook are applicable to all cockpit crewmembers in the employ of TradeWinds Airlines unless specifically indicated otherwise . . . .
Availability of the crewmember is a key part of the operational capability and ultimately affects the success of an air carrier whose business is wholly or partially dependent upon charter activities. The scheduling policies have been written to provide crewmembers with a means to plan their lives and at the same time allow the company the flexibility to solicit new business and back up scheduled flights. The policies contained in this Handbook are designed to promote and encourage cooperation between crewmembers and scheduling.
(Ex. 1). Furthermore, the April 2000 Memorandum attached to the Handbook does not alter the status of the Handbook as a non-contractual policy document. While the Memorandum indicates that the "handbook will be the basis on which a flight deck crewmembers day-to-day interaction with the company will be managed," it makes clear that "thepolicies in this initial copy of the handbook may be revised from time to time as dictated by the operational needs of the company." (Ex. 1) (emphasis added). Therefore, the exact nature of the scheduling, seniority and discipline policies in the Memorandum are not dependent on any mutual agreement between TradeWinds and employees, but rather are dependent solely on the "operational needs of the company." As such, neither the Memorandum nor the Handbook has language which expressly provides that the policies therein constitute a separate, binding, employment contract or agreement.
Furthermore, considering the alleged facts and exhibits in this case, the oral representations made by TradeWinds could not have amounted to an "explicit agreement" that TradeWinds be contractually bound to follow the policies in the Handbook. Norman claims that TradeWinds "represented, orally, the Memorandum and Handbook described the terms and conditions of employment for employees." (Proposed Compl., ¶ 27) (syntax as in original). But, even if TradeWinds did represent that the Memorandum and Handbook "described the terms and conditions of employment," this does not explicitly show that TradeWinds meant for the Handbook to comprise the mutually binding, contractual terms and conditions of employment. State and federal courts in Florida have long stressed that policies stated in employment manuals will only become mutually binding terms of the employment contract where the mutuality and other parameters of such obligations are expressly stated by the employer:
We would have serious reservations as to the advisability of relaxing the requirements of definiteness in employment contracts considering the concomitant uncertainty which would result in employer-employee relationships. A basic function of the law is to foster certainty in business relationships, not to create uncertainty by establishing ambivalent criteria for the construction of those relationships. [Other jurisdictions] convert policy to contractual obligation in the interests of providing employee job security. "Policy" may be defined as an "overall plan embracing . . . general goals" If policy, as so defined, were to govern legal relationships, the law would cease to fulfill the foregoing basic function which includes providing meaningful criteria for predictable consequences.Caster. 727 F.2d at 1077(quoting Muller v. Stromberg Carlson Corp., 427 So.2d 266, 270 (Fla.Dist.Ct.App. 1983)) (internal citations omitted).
Here, it is not enough that TradeWinds1 oral representations about the Handbook could be understood to imply a mutually binding contract. Rather, there needs to be some statement explicitly providing for a mutually binding contract. Such a statement is not alleged here. The oral representations about the Handbook do not explicitly indicate any mutual obligation on the part of TradeWinds, nor do they indicate any intent to hold themselves contractually bound by the terms in the Handbook.
Moreover, the effect of the oral representations is further limited by TradeWinds1 unconditional written statement that "the policies in this initial copy of the handbook may be revised from time to time as dictated by the operational needs of the company." (Ex. 1). The court cannot, at the same time, accept the clear written statement that "policies in . . . the handbook . . . may be revised," and recognize TradeWinds1 obligation to be bound by these same policies throughout Norman's term of employment. In other words, assuming arguendo that the Handbook and attached Memorandum constitute a written agreement between TradeWinds and Norman, the written term allowing revision of the policies conflicts directly with the alleged spoken terms of the alleged oral contract. Norman is prevented by the parole evidence rule from asserting that the conflicting oral terms override the written term in the contract.Ungerleider v. Gordon. 214 F.3d 1279, 1284 (11th Cir 2000) (applying Florida law) ("[P]arol evidence may not contradict the terms of the written agreement.") Matthews v. Drew Chemical Corp., 475 F.2d 146, 149 150 (5th Cir. 1973) (applying Florida law) (not allowing use of conflicting parole evidence to alter written terms of employment contract).
In sum, under the facts alleged, the policies communicated through the Handbook and Memorandum, alone or in conjunction with other oral representations, did not constitute a contract binding on TradeWinds. Therefore, Norman has failed to state a claim for breach of contract under Florida law.
C. Promissory Estoppel Claim
Under Florida law, in order to create a binding promise under the doctrine of promissory estoppel, "the promisor must make a promise which he should reasonably expect to induce action or forbearance of a substantial character on the part of the promisee." Golden v. Complete Holdings. Inc., 818 F. Supp. 1495, 1498 (M.D. Fla. 1993) (quoting Mt. Sinai Hospital of Greater Miami. Inc. v. Jordan. 290 So.2d 484, 486 (Fla. 1974)); Lozano v. Marriott Corp. 844 F. Supp. 740, 743 (M.D. Fla. 1994) (quoting Restatement (Second) of Contracts § 90 (1979)). Under Florida law, a promise of employment, terminable at the will of the employer, is not a promise which should reasonably expect to induce action or forbearance. Leonard! v. City of Hollywood. 715 So.2d 1007, 1009-10 (Fla.Dist.Ct.App. 1998). Likewise, a promise relating to a contract for employment that is otherwise not "definite in time or term" cannot serve to create a binding contract under the doctrine of promissory estoppel. W.R. Grace and Co. v. Geodata Services. Inc., 547 So.2d 919. 924-25 (Fla. 1989): see Argonaut Dev. Group. Inc. v. SWH Funding Corp., 150 F. Supp.2d 1357, 1364 (S.D. Fla. 2001) (where "terms and time" of the promise are "indefinite," promissory estoppel does not apply) (citingHygema v. Markley. 187 So.373, 380 (Fla. 1939)); see also Maguire v. American Family Life Assur. Co., 442 So.2d 321, 323 (Fla. Dist.Ct.App. 1983) (finding that "mere expectations," even where encouraged by the employer's actions, are insufficient to create binding employment contract terms).
In this case, Norman's claim must fail because the promise upon which he allegedly relied is lacking in the definiteness required to assert a claim for promissory estoppel. Norman argues that statements made in the Handbook, Memorandum and interviews amounted to a promise that TradeWinds would provide the benefits and job security indicated in the Handbook. (Proposed Compl., ¶ 31). The terms of the Handbook and Memorandum show, however, that such a promise lacked any definiteness in duration or terms. As noted before, the April 25, 2000, memorandum provided that the "the policies in th[e] initial copy of the handbook may be revised from time to time as dictated by the operational needs of the company." (Ex. 1). Moreover, even as written in the Handbook, TradeWinds was not required to follow the three-step progressive disciplinary procedure, in the event of an undefined "major" infraction. (Ex. 1, Handbook, p. 14). The seniority policies, too, were not definite. (See Id., p. 10 ("Normally, the seniority of a pilot shall be assigned by the company upon successful completion of Basic Indoctrination training[.]") (emphasis added)). Finally, insofar as Norman alleges that oral representations made at the time of the interview amounted to statements that the procedures of the Handbook were binding on TradeWinds during thefull term of his employment, these statements could not serve to create a binding contract under the Florida statute of frauds.Tanenbaum v. Biscayne Osteopathic Hospital. Inc. 190 So.2d 777, 779, (Fla. 1966) (stating that promissory estoppel will not serve to enforce an oral promise that would otherwise be unenforceable as a long-term oral contract under the Florida statute of frauds).
Under these circumstances, any promise of continued employment according to pay rules, seniority rules, or progressive discipline rules on the part of TradeWinds was entirely indefinite, subject to alteration at the will of the company at any time. Thus, the promise of benefits and security which Norman may have perceived on the basis of the Handbook, Memorandum and other oral representations was, because of its indefiniteness, insufficient to support a claim of promissory estoppel under Florida law.
D. Fraud Claim
As he alleged in his previous complaint, Norman claims that TradeWinds "fraudulently induced" him to enter into employment because TradeWinds promised to abide by the procedures in the Handbook, but then unilaterally altered these policies. (Proposed Compl., ¶¶ 22, 27). In support of this claim, Norman alleges that "TradeWinds had knowledge that it did not intend to be bound by the Memorandum and Handbook." (Proposed Compl., ¶ 30).
As an initial matter, Norman's claim must fail because the allegations in the proposed complaint show that TradeWinds never made any "promise" to follow only the enumerated procedures outlined in the Handbook for the term of Norman's employment. Norman alleges in his proposed complaint that TradeWinds assured that "the Memorandum and Handbook described the terms and conditions of employment for employees." (Proposed Compl., ¶ 27). On its face, this statement carries with it no promise of whether the policies in the Memorandum and Handbook would be followed by the employer in the future. As such, although TradeWinds may have promised to use the Memorandum and Handbook in determining the conditions of employment for employees, it made no express promise that those procedures would remain in effect for any period of time. Thus TradeWinds' eventual "unilateral elimination" of the policies in the Handbook, (Proposed Compl., ¶ 23), could not amount to a breach of any promise made at the time of Norman's hiring.
In addition, even if TradeWinds' oral statement could be understood as a promise that it would abide by the policies set forth in the Handbook, such a promise is in conflict with the term of the Memorandum providing that policies in the Handbook could be changed. (Ex. 1). "It is well established that Ohio law does not allow a party to prove fraud by claiming that the inducement to enter into an agreement was a promise which is squarely contradicted by the written terms of that agreement."See Nat'l City Bank v. Facilities Asset Mgt. 762 N.E.2d 1060, 1064 (Ohio Ct App. 2001). Accordingly, in this case, Norman cannot prove fraud by claiming an oral promise which squarely contradicts the written statement in the Memorandum.
Finally, even if the court assumes that TradeWinds promised to follow the procedures in the Handbook but then failed to abide by this promise, Norman has not alleged any additional facts which show that TradeWinds never intended to follow the procedures in the Handbook. Norman argues that TradeWinds
never intended to comply with the Progressive Discipline Policy as evidenced by their reckless procedure in the termination of Plaintiff Norman. TradeWinds never intended to comply with the handbook used as bait for prospective pilots as evidenced by its reckless disregard of the promises of the handbook. . . . TradeWinds1 actual performance demonstrates that they never intended to be bound by the things that they held out to recruit Plaintiffs employment.
(Resp., ¶ 12) (emphasis added). Such an argument misses the crucial point, that in order to be liable for fraud, the promissor must do something more than just disregard or break its promises. Under Ohio law, the mere allegation of non-performance is insufficient to sustain a cause of action for fraud. Wall v. Firelands Radiology, Inc. 666 N.E.2d 235, 243 (Ohio Ct.App. 1995) (quotingLightning Lube. Inc. v. Witco Corp., 4 F.3d 1153, 1186 (3rd Cir. 1993); International Travel Arrangers v. NWA. Inc., 991 F.2d 1389, 1403 (8th Cir. 1993);Murray v. Xerox Corp., 811 F.2d 118, 122, (2nd Cir. 1987)). To survive dismissal, a plaintiff seeking to raise a claim for fraudulent inducement must allege facts, beyond non-performance, which are sufficient to permit the inference that the promissor had a specific intent not to perform at the time a promise was made. Wali, 666 N.E.2d at 243; see International Travel Arrangers. 991 F.2d at 1403 (stating that to support an action for promissory fraud the plaintiff must allege "`affirmative evidence' that the promisor had no intention to perform"); Craighead v. E.F. Mutton Co. 899 F.2d 485, 489-90 (6th Cir. 1990) (to survive motion to dismiss on fraud claim the plaintiff must plead a particular statement of facts upon which his belief of fraudulent intent is based); FED.R.CIV.P. 9(b) ("In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity."); see also Strum v. Exxon Co., USA, 15 F.3d 327, 331 (4th Cir. 1994) (applying Rule 9(b), and holding that in evaluating a claim of fraudulent inducement, where a plaintiff does "nothing more than assert that [a promissor] never intended to honor its obligations under [an] agreement," dismissal as a matter of law is appropriate).
For example, a plaintiff may allege "that at the time of the promises [Defendant] would have been unable to perform them or had already taken action that was inconsistent with its commitments, such as having entered into arrangements with [third parties]." 991 F.2d at 1403 (emphasis added).
In this case, simply because TradeWinds disregarded and failed to follow the outlined policies is not evidence that TradeWinds knew it never intended to follow the policies. Rather, it is only evidence that they did, in fact, ultimately disregard the policies. See Wall, 666 N.E.2d at 243. Norman's bald allegation that TradeWinds acted "recklessly" only begs the question as to what facts, beyond the mere fact that TradeWinds failed to comply with its policies, support the claim that TradeWinds acted "recklessly" or with specific intent to defraud in this case. In sum, Norman has failed to allege any facts with particularity that, if accepted as true, would support a claim that TradeWinds never intended to abide by promises made at the time of Norman's employment. Accordingly, his fraudulent inducement claim is subject to dismissal.
Conclusion
Given that Norman's proposed complaint, like his First Amended Complaint, fails to state a claim for breach of contract, promissory estoppel, or fraudulent inducement, Norman's motion to amend should be denied as futile. IT IS THEREFORE RECOMMENDED that Norman's motion [Doc. #231 for leave to amend complaint be DENIED.