fraud plead with the particularly required by this court and now contained in the Second Amended Complaint and supported by the supplemental affidavit of DuSesoi. Second, the court in its prior opinion referred to a purported "agreement" between the parties and it is not now disposed to make a second finding that would include the word "representation" in its finding that no "agreement" was reached until after the Warren meeting. The court anticipates defendants' response that had Logan made such a representation as to a three year term of employment then surely an agreement would have existed. We do not agree. Moreover, whether certain representations were made at the Warren meetings is not proved or disproved either by the parties success or failure at reaching an agreement, or by Logan's silence about the term of employment in his letter of June 25, 1980. This court will bind itself to the letter of its prior finding, which, we reiterate, does not include a finding as to alleged misrepresentations, and which finding was made without the benefit of DuSesoi's supplemental affidavit.
Defendants, in another line of argument, assert that even if Logan had misrepresented the term of DuSesoi's employment at the Warren meetings, in the absence of an actual agreement between the parties, DuSesoi would not be justified in relying on such a representation since he received Logan's letter two weeks later which was silent as to the term of employment. Justifiable reliance is required to sustain a cause of action for fraud under both Pennsylvania and Missouri law. See, e.g., Shane v. Hoffmann, 227 Pa.Super. 176, 324 A.2d 532 (1974); American Metal Fabricators Co. v. Goldman, 227 Pa.Super. 284, 323 A.2d 891 (1974); Oshia v. E.A. Strout Realty Agency, Inc., 418 S.W. 2d 99 (Mo. 1967); Hereford v. Unknown Heirs of Tholozan, 315 S.W. 2d 412 (Mo. 1958); Restatement, Second, Torts § 537 (1977). We do not feel, however, that the letter of June 25th standing alone forecloses the possibility that DuSesoi could rely on alleged representations made at an earlier time. Representations may have been made to DuSesoi and not included in Logan's letter. The court cannot decide this issue, as the defendants would urge, on the basis of plaintiff's likely interpretation of omissions in a letter written by the defendants. The nature and extent of DuSesoi's reliance, in any event, is a question of fact that cannot be determined as a matter of law at this time.
A stronger argument against DuSesoi's reliance might be found in the contents of Logan's July 15th letter which expressly forecloses any possibility of a stated term of employment. Defendants, however, sedulously avoid such reference since, accepting plaintiff's allegations, the point of DuSesoi's most significant reliance occurred at the time of his resignation at Hudson Petroleum and his acceptance of employment at United, both of which occurred prior to the July 15th letter. The letter of July 15th might, nevertheless, serve to limit damages traceable to reliance on the alleged misrepresentations; this, however, is not presently before the court.
Finally, as to this claim of fraud, the defendants argue that this portion of Count I is but a re-hash of arguments already rejected by the court concerning an alleged oral contract. We disagree with this line of argument. This court previously ruled that it would treat this count of plaintiff's complaint as a misrepresentation claim. The court previously concluded that under both Missouri and Pennsylvania law it is the coupling of a promise with an intent to disavow that promise which forms the foundation of a claim of fraudulent misrepresentation. DuSesoi v. United Refining Co., 540 F. Supp. 1260, 1274 (W.D.Pa. 1982). After defendants argued vigorously for the application of Missouri law to this fraud claim, the court determined that Missouri law, far from absolutely barring claims of fraud which rest on an intention to perform an act, "distinguish[es] between mere promises and knowing representations of one's intentions." Id. at 1274. Defendants still maintain that Pennsylvania and Missouri follow the majority rule and that they would prohibit a fraud action based on such a promise. For the reasons set forth more fully in the prior opinion of this court, we cannot agree.
Defendant next argues that once the court has held that the Texas Statute of Fraud applies it would be "inconsistent to permit plaintiff to evade this holding by pleading his case on fraud when a Texas court would not do so." Defendants argument is unacceptable; first, it presumes Texas law applies to a misrepresentation claim referencing events which occurred in Warren, Pennsylvania, and second, it fails to recognize the distinction this court has drawn between plaintiff's fraud claim and its breach of contract claim.
Moreover, should Texas law apply, plaintiff has stated a claim that is not barred as a matter of law. The case relied upon by the defendants recognize a distinction when the damages sought are for injuries resulting from reliance on misrepresentation rather than for a failure to fulfill the terms of an oral contract. In Collins v. McCombs, cited by the defendant, plaintiff sought to recover what he would have gained had the promise been performed. 511 S.W.2d 745 (Tex.Civ.App. 1974) (writ ref'd n.r.e.). In the case sub judice, DuSesoi, through his claim of fraud, seeks damages for what he purportedly lost in relying on defendants' alleged misrepresentation. Second Amended Complaint, paras. 27, 28. The court in Collins recognized this distinction that persists in Texas law when it stated:
Our Commission of Appeals, in an opinion adopted by the Supreme Court, has said that a cause of action for fraud, based on a false promise, is "grounded in tort and not in contract", and that "responsibility for the tort committed is not affected by the fact that the false promise was made orally." 511 S.W.2d 745, 747; see also Hastings v. Houston; 596 S.W.2d 142 (Tex. Civ.App. 1979) (writ ref'd n.r.e.); 37 Am. Jur. 2d, Fraud and Deceit, § 70 (1968).
Wherefore, defendants' motion to dismiss the first part of Count I of plaintiff's Second Amended Complaint is denied.
Plaintiff's second fraud allegation, part two of Count I, concerns the alleged misrepresentations made to DuSesoi that United was looking for a back-up to Logan. Defendants' response is that the allegation fails to meet the pleading requirements of Rule 9(b), that it fails to allege the requisite falsity and fails to specify the time and place of the alleged misrepresentation. Plaintiff, in its brief before the court, indicates that the affidavit of DuSesoi provides the necessary particularity lacking in the complaint by setting forth the time and place of misrepresentation.
Some courts have required litigants in a complaint in an action based on fraud, in order to fulfill the requirements of Rule 9(b), to allege all the traditional elements of fraud, which are: 1) false representation of a material fact; 2) knowledge of or belief in its falsity by the person making it; 3) belief in its truth by the person to whom it is made; 4) intent that it should be acted upon; and 5) detrimental reliance upon it by the person claiming to have been deceived. See North Carolina Mut. Life Ins. Co. v. Plymouth Mut. Life Ins. Co., 266 F. Supp. 231 (E.D.Pa. 1967); United States v. Goldberg, 159 F. Supp. 151 (E.D.Pa. 1956). This court has already noted its desire not to so construe the Federal Rules of Civil Procedure as to create a trap for the unwary litigant. Further, the court notes that there is a distinction between the "circumstances" to which Rule 9(b) applies and the traditional elements of fraud referred to above. The plaintiff was given the opportunity to amend his complaint and he has done so. However, in so doing, the plaintiff has not plead with particularity the "circumstances" of the alleged fraud required by Rule 9(b), nor does he note the presence of any of the traditional elements of fraud.
Assuming Logan told DuSesoi that United was looking for a "qualified back-up", it is unclear from plaintiff's amended complaint when and where the statement was made. The purpose of Rule 9(b) is to apprise the defendants of the claim against them and the acts relied upon which constitute the fraud charged. See 5 Wright & Miller, Federal Practice and Procedure § 1297 at 404 (1969). Plaintiff responds that defendants need only look to plaintiff's affidavit to discover the time and place of the fraud set forth in paragraph 5 of that affidavit, which states:
My first meeting with Harry A. Logan, Jr., . . . occurred in Chicago on February 27, 1980. At that time, Logan stated that United Refining Company's (hereinafter referred to as "United") top management was nearing retirement age and that he was looking for a younger qualified back-up man.
Nevertheless, even if the court should accept the reference urged by the plaintiff, the affidavit as quoted in relevant part combined with plaintiff's bold assertion in its complaint does not state a claim of fraud upon which relief can be granted. It is not so clear from the face of the alleged representation that it is a material fact upon which detrimental reliance could ordinarily be expected. Absent allegations that a representation was made with an intent to induce reliance, that it was made with knowledge of its falsity, and that it was relied upon, a claim of fraud cannot stand. Wherefore, plaintiff's claim that defendants fraudulently misrepresented to DuSesoi that United was looking for a qualified back-up man will be dismissed.
Plaintiff's third allegation of fraud, part three of Count I, its final claim under Count I, concerns an alleged misrepresentation made by Logan to DuSesoi that United would not be sold to Coral Petroleum. Defendant attacks this claim on the following grounds; first, plaintiff's complaint is deficient in its failure to allege a present intent on the part of Logan to defraud, and second, plaintiff's allegations are demonstrably incorrect. Since we believe plaintiff's complaint sufficiently alleges the requisite intent to defraud, and in so much as the correctness of the allegations are a question of fact, we will deny defendant's motion to dismiss this portion of plaintiff's Count I.
Defendant finds the language used in plaintiff's allegation objectionable in its failure to allege the requisite intent to defraud. This court has previously held that an action in fraud will lie only if the defendants made the alleged promise with the simultaneous intention of breaching it. Plaintiff states in paragraph 26 of its amended complaint that Logan "knew or should have known" that representations concerning Coral Petroleum were false. For purpose of defendants' motion, and for later purposes of proof, the court will construe this portion of plaintiff's complaint as an allegation of knowing misrepresentation, and the plaintiff will be so bound for evidentiary purposes.
Defendants rely upon the affidavit of Logan in contending that the allegations of fraud with regard to the sale to Coral, "are demonstrably incorrect." We find the resolution of this issue to be one uniquely suited for the trier of fact. The plaintiff has alleged that a representation concerning Coral was made to him by Logan (See para. 25, Second Amended Complaint), and he has alluded to the same representation in his affidavit before the court (See para. 19, Affidavit of Edward DuSesoi, October 27, 1982). This court recognizes its broad discretion in considering motions for summary judgment, moreover, it is mindful of the prevailing view that where the obligation of the court is to draw all reasonable inferences against the moving party, summary judgment is rarely appropriate where the moving party's state of mind is a material issue. See, e.g., Equal Employment Opportunity Commission v. Home Insurance Company, 672 F.2d 252 (2d Cir. 1982); American Natl. Bank & Trust Co. of Chicago v. Certain Underwriters at Lloyd's London, 444 F.2d 640 (7th Cir. 1971); Associated Hardware Supply Co. v. Big Wheel Distributing Company, 355 F.2d 114 (3d Cir. 1966).
Accordingly, defendants' motion to dismiss this portion of plaintiff's claim will be denied.
In Count II of his Second Amended Complaint the plaintiff alleges breach of an oral agreement to employ the plaintiff for three years. DuSesoi alleges that he relied on this promise when he resigned his employment with Hudson Refinery Company and moved himself and his family to Texas. This court considered plaintiff's oral contract claim in its prior opinion. See DuSesoi v. United Refining Company, 540 F. Supp. 1260, 1268-1272 (W.D. Pa. 1982). After resolving the attending choice of law problem and deciding that Texas law should apply to the breach of contract claim, the court found that plaintiff's original claim was barred by the Texas Statute of Frauds. 540 F. Supp. 1260, 1272. The court recognized that some Texas cases provide that in specific limited instances, partial performance of an oral employment contract may remove that agreement from the bar of the statute of frauds. 540 F. Supp. 1260, 1271 n. 3. Consequently, the court granted the plaintiff leave to amend his pleadings to allege circumstances which would remove this contract from the bar of the statute. We now consider plaintiff's amended version of its pleading in Count II of the Second Amended Complaint.
Plaintiff avers in his Second Amended Complaint that he was well-established socially and financially in Kansas City, Missouri, and with Hudson Refining Company prior to negotiations with United. In reliance upon the alleged promise of a three year minimum employment contract with United, DuSesoi moved himself and his family to Houston, Texas, which resulted in his subsequent financial detriment. It is plaintiff's contention that these "special circumstances" lift the statute of frauds bar to his oral contract claim.
In Texas, to avoid the statute of frauds, a plaintiff must aver and prove facts setting out the equitable circumstances relied upon. Paschall v. Anderson, 127 Tex. 251, 91 S.W. 2d 1050 (1936). In Paschall, the court determined that in order for equities to break through the statute to enforce a parol contract, the case must be such that the nonenforcement of the contract would plainly amount to fraud. 91 S.W. 2d at 1051. The court in Paschall found no such basis to enforce the contract. Plaintiff maintains that because he relied on defendants' promises and moved to Texas, the defendants should be estopped from asserting the Statute of Frauds. Texas courts, however, have made it clear that an oral agreement will not be enforced except in "egregious situations." Mercer v. C.A. Roberts Co., 570 F.2d 1232, 1237 (5th Cir. 1978). The court in Mercer, following Paschall, declined to circumvent the Statute of Frauds, and concluded:
To justify such equitable intervention by the courts in light of a clear statute, there must be something more than a mere wrong or breach of contract. Id.
The Court in Chevalier v. Lane's, Inc., furthermore, interpreted the "circumstances" referred to in Paschall "not merely as equities but also as . . . at least a corroborative fact that the contract was actually made." Chevalier v. Lane's, Inc., 147 Tex. 106, 213 S.W.2d 530, 533 (Tex. 1948) (citing Hooks v. Bridgewater, 111 Tex. 122, 129, 229 S.W. 1114, 1117). To that end, the court looked to the acts of the plaintiff and the purported terms of an alleged contract and found that "every act of plaintiff may be explained quite separate and apart from any alleged oral contract and no act is 'unequivocally referable' thereto." 147 Tex. 106, 213 S.W. 2d 530, 533. In following Chevalier, we conclude that the acts of plaintiff do not in themselves unequivocally refer to, or in any other way tend to prove, the agreement relied upon by the plaintiff in the nature of a three year contract.
Plaintiff further contends that the doctrine of promissory estoppel removes the bar of the Statute of Frauds. We disagree and note that prevailing authority indicates that the bar of the statute will be removed only when a party has misrepresented his intention to reduce an agreement to writing. An oft quoted reference to Williston on this point is worth repeating here:
In applying the principles of promissory estoppel, as represented by Restatement of Contracts § 90, to enforce an oral contract of employment within the Alaska statute of frauds, the court in Alaska Airlines, Inc. v. Stephenson (1954, C.A. 9th Alaska) 217 F.2d 295, stated that § 90, not mentioning promissory estoppel, was addressed not to the statute of frauds but to promissory estoppel as a substitute for consideration, but when one considered the part Professor Williston took in the formulation of the Restatement and examined § 178, comment f of the Restatement of Contracts, one had to conclude that there was an intention to carry promissory estoppel into the statute of frauds, if the additional factor of a promise to reduce the contract to writing was present. The court cited Williston on Contract (1936) § 533a. The above mentioned Comment f of § 178 of the Restatement of Contracts, dealing with the statute of frauds states as follows: "f. Though there has been no satisfaction of the Statute, an estoppel may preclude objection on that ground in the same way that objection to the non-existence of other facts essential for the establishment of a right or a defense may be precluded. A misrepresentation that there has been such satisfaction if substantial action is taken in reliance on the representation, precludes proof by the party who made the representation that it was false; and a promise to make a memorandum, if similarly relied on, may give rise to an effective promissory estoppel if the Statute would otherwise operate to defraud." Annot. 48 A.L.R. 2d 1079-80 (1956).