the Andersons, Inc. v. Consol, Inc.

1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0385P (6th Cir.)
File Name: 03a0385p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
THE ANDERSONS, INC.,
Plaintiff-Appellant,
v.
CONSOL, INC.,
Defendant-Appellee.
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No. 02-3417
Appeal from the United States District Court
for the Northern District of Ohio at Toledo.
No. 00-07290—James G. Carr, District Judge.
Argued: July 31, 2003
Decided and Filed: October 31, 2003
Before: KENNEDY, GILMAN, and GIBBONS, Circuit
Judges.
_________________
COUNSEL
ARGUED: James R. Jeffery, SPENGLER NATHANSON,
Toledo, Ohio, for Appellant. Rodger L. Puz, DICKIE,
McCAMEY & CHILCOTE, Pittsburgh, Pennsylvania, for
Appellee. ON BRIEF: James R. Jeffery, SPENGLER
NATHANSON, Toledo, Ohio, for Appellant. Rodger L. Puz,
2 The Andersons, Inc. v. Consol, Inc. No. 02-3417
James R. Miller, DICKIE, McCAMEY & CHILCOTE,
Pittsburgh, Pennsylvania, for Appellee.
_________________
OPINION
_________________
KENNEDY, Circuit Judge. Plaintiff The Andersons, Inc.
(plaintiff) appeals the district court’s award of summary
judgment for defendant Consol, Inc. (defendant) on plaintiff’s
claims of unjust enrichment, promissory estoppel, and
intentional and/or negligent misrepresentation on the ground
that genuine issues of material fact exist to support such
claims. Because we find that, taking plaintiff’s factual
allegations as true, no genuine issues of material fact exist to
support any of those claims, we affirm the district court’s
award of summary judgment to defendant.
I. Jurisdiction and Procedural History
Plaintiff filed this action against defendant in the Lucas
County Court of Common Pleas. Defendant removed the
case to the United States District Court for the Northern
District of Ohio based on diversity jurisdiction. Plaintiff’s
complaint alleged claims of breach of commitments and
understandings, unconscionable conduct, unjust enrichment,
reasonable reliance/promissory estoppel, and intentional
and/or negligent misrepresentation arising out of the parties’
negotiations for defendant’s lease of rail cars from plaintiff.
On January 25, 2002, the district court granted defendant’s
renewed motion for summary judgment on all of plaintiff’s
claims. Plaintiff appeals the grant of summary judgment only
with respect to its claims of unjust enrichment, promissory
estoppel, and intentional and/or negligent misrepresentation.

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 3
II. Facts
The following is plaintiff’s version of the facts in support
of its claims. Defendant is currently a publicly-held
corporation that mines, processes, and markets coal from
various locations throughout the United States. During the
relevant period for purposes of this litigation, defendant was
a privately-held corporation. Plaintiff is a publicly-held
corporation that, among other business activities, sells, leases,
and repairs railroad cars.
NationsBank, a lender of plaintiff, notified plaintiff of
defendant’s need to lease rail cars. On July 21, 1998,
plaintiff’s representatives met with James Dillon, defendant’s
employee, to discuss defendant’s possible lease of plaintiff’s
rail cars. Dillon informed plaintiff’s representatives that
defendant was interested in lease pricing for up to 240 rail
cars because defendant wished to bid on a coal requirements
contract with Potomac Electric Power Company (PEPCO),
which would require defendant to furnish the rail cars
necessary for coal transportation. On August 13, 1998,
plaintiff sent defendant a lease proposal for 240 rail cars at a
rental rate of $395 per rail car per month. On September 2,
1998, per Dillon’s request, Thomas Connolly, plaintiff’s
employee, sent Dillon a copy of plaintiff’s standard, full-
service lease agreement and rider. In reviewing the lease
agreement to determine if it contained any provisions that
would affect the coal’s transportation, Gerald Rutka,
defendant’s employee, found none. Rutka used the pricing
information in plaintiff’s lease agreement to calculate
defendant’s requirements regarding the lease of the rail cars
for the PEPCO bid. In mid-September of 1998, Dillon
informed Charles Brown, plaintiff’s employee, that defendant
had not received the PEPCO bid but that defendant intended
to bid on another PEPCO coal contract requiring up to 131
rail cars.
Plaintiff submitted a new lease rate of $389 per rail car per
month, which defendant used in formulating its second bid to
4 The Andersons, Inc. v. Consol, Inc. No. 02-3417
PEPCO. In early November of 1998, defendant learned that
it had received the PEPCO contract. On November 18, 1998,
Dillon sent Brown a letter confirming defendant’s intent to
lease 131 specified rail cars from plaintiff for a term of six
years at a rental rate of $389 per rail car per month, with an
option to end the lease after three years. However, in that
same letter of intent, Dillon expressly conditioned any such
lease transaction upon PEPCO’s formal execution of its
agreement with defendant, giving rise to defendant’s need to
lease the rail cars, and “upon the successful negotiation of a
definitive lease agreement containing terms and conditions
. . . [that] are acceptable to” defendant’s senior management.
At this point, Dillon still retained plaintiff’s standard, full-
service lease agreement and rider. Plaintiff began to prepare
for placing the rail cars into defendant’s service. Dillon
declined plaintiff’s offer to allow defendant to inspect the rail
cars at their storage site in Indiana. Per Dillon’s request,
plaintiff sent some rail cars to a shop in Altoona,
Pennsylvania to repair them before they went into service.
Plaintiff also moved some rail cars to various shops
throughout Ohio and Pennsylvania.
At defendant’s request, plaintiff agreed to allow defendant
to inspect the rail cars at the Altoona repair shop. Dillon
testified that defendant desired this inspection before the rail
cars’ repair because PEPCO and defendant were concerned
that the rail cars would be in poor condition. On December
11, 1998, plaintiff leased an airplane, flew to Pittsburgh,
Pennsylvania to pick up defendant’s representatives, and then
flew to Altoona. During the inspection, plaintiff first learned
that defendant intended to rotary dump the rail cars rather
than unload them from the bottom–a process that would
require plaintiff to bolt the bottoms of the rail cars shut.
Although plaintiff reasonably believed that the rail cars only
needed patching, defendant demanded that plaintiff re-sheet
the rail cars, a repair which is considerably more expensive
than patching. Plaintiff ultimately agreed to bolt the bottoms
and re-sheet the rail cars without raising defendant’s lease

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 5
rate. Because of this work, defendant agreed to extend the
lease’s start date from January 1, 1999 to March 1, 1999.
While plaintiff and defendant were working through the
“mechanical issues” regarding the 131 rail cars, they were
negotiating a written lease. On November 23, 1998, Dillon
sent plaintiff defendant’s requested changes to the standard,
full-service lease and rider. On December 10, 1998, after
reviewing these proposed changes, plaintiff sent Dillon “a
revised lease incorporating a number of those [requested]
changes which were acceptable to” plaintiff. Dillon and
Connolly spoke over the telephone concerning the December
10, 1998 lease revisions. In mid-December of 1998,
defendant learned that the Public Utility of New Hampshire,
Bow Terminal, was not renewing its contract with defendant
and, consequently, that the 100 rail cars that defendant leased
from GATX at the rate of $315 per car per month for coal
transportation to the public utility would become available on
December 31, 1998. According to plaintiff, when defendant
learned that 100 rail cars were available at a cheaper lease rate
from GATX, defendant no longer desired to lease the 131 rail
cars from plaintiff and, thus, frustrated and then unilaterally
terminated its on-going lease negotiations with plaintiff. To
accomplish this alleged end, Dillon faxed a letter dated
December 18, 1998 to plaintiff stating:
On two occasions, CONSOL has had phone
conversations with The Andersons to elaborate on one
another’s positions rectifying some points but leaving
CONSOL with the impression that The Andersons will
not acceptably alter or remove several provisions to
which CONSOL will not agree.
If this impression is correct, we need to recognize this
fact, part company and go our separate ways. If this
impression is not correct, we need to come to agreement
by December 24, 1998.
On December 23, 1998, Connolly faxed Dillon a revised
version of the lease, incorporating additional changes, but not
6 The Andersons, Inc. v. Consol, Inc. No. 02-3417
1As a prerequisite to running rail cars on interstate railways, the
railroads require that the operators of such rail cars o btain their OT -5
app roval, which depends upon the operators demo nstrating that they have
sufficient track storage capacity for the rail cars when they are idle.
all of those that defendant requested. After being unable to
reach Dillon to discuss these revisions, Connolly left Dillon
a message that the department was closing at noon on
December 24, 1998, but provided his home phone number so
that Dillon could reach him. On December 24, 1998, after
4:00 pm, Dillon left a message in Connolly’s voice mail that
a deal no longer existed due to plaintiff’s December 23, 1998
version of the lease that left several of its provisions still in
dispute. Four of the lease provisions that defendant disputed
involved OT-5 approval,1 tax liability indemnification,
property and liability insurance, and change in defendant’s
ownership. According to plaintiff, defendant fabricated these
issues, which should not have been in dispute at all, by
misrepresenting and withholding facts so as to “frustrate any
reasonable chance to reach agreement between the parties.”
III. Analysis
We review the district court’s order granting summary
judgment de novo. Williams v. Mehra, 186 F.3d 685, 689
(6th Cir. 1999). Summary judgment is proper “if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with affidavits, if any, show that
there is no genuine issue of material fact and that the moving
party is entitled to a judgment as a matter of law.” Fed. R.
Civ. P. 56(c). We must believe the non-moving party’s
evidence, and draw all justifiable inferences in his favor.
Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986).
Moreover, we must view the inferences that we draw from
those underlying facts in the light most favorable to the non-
moving party. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). A “material” fact is one
“that might affect the outcome of the suit.” Anderson, 477

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 7
U.S. at 248. A “genuine” issue exists if “the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” Id.
In diversity cases, the district court is to apply the choice of
law rules of the state in which the court sits. Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). The
district court held that Ohio law governs plaintiff’s claims.
Plaintiff does not appeal this determination.
A. Unjust Enrichment
To recover for unjust enrichment under Ohio law, a
plaintiff must prove that: (1) the plaintiff conferred a benefit
upon the defendant; (2) the defendant knew of such benefit;
and (3) the defendant retained the benefit “under
circumstances where it would be unjust to do so without
payment.” Brown-Graves Co. v. Obert, 648 N.E.2d 1379,
1383 (Ohio Ct. App. 1994). The plaintiff must show that the
substantial benefit to the defendant is “causally related” to the
substantial detriment to the plaintiff. Gaier v. Midwestern
Group, 601 N.E.2d 624, 627 (Ohio Ct. App. 1991). In
determining whether a defendant received an unjust or
unconscionable benefit, we must consider whether “the
defendant was the party responsible for the plaintiff’s
detrimental position.” U.S. Health Practices, Inc. v. Blake,
No. 00AP-1002, 2001 WL 277291, at *2 (Ohio Ct. App.
March 22, 2001) (holding that the plaintiff’s responsibility for
his detrimental position breaks the requisite causal connection
between the defendant’s benefit and the plaintiff’s loss).
“The doctrine of unjust enrichment provides an equitable
remedy imposed to prevent injustice.” Giles v. Hanning, No.
2001-P-0073, 2001 WL 1173512, at *2 (Ohio Ct. App.
May 31, 2002). Thus, the plaintiff must show enrichment that
is unjust. Id. It is insufficient for the plaintiff to prove
merely that he conferred a benefit upon the defendant. Katz
v. Banning, 617 N.E.2d 729, 735 (Ohio Ct. App. 1992).
Rather, the plaintiff must prove that, under the circumstances,
the plaintiff has a “superior equity so that, as against . . . [the
8 The Andersons, Inc. v. Consol, Inc. No. 02-3417
plaintiff], it would be unconscionable for the . . . [defendant]
to retain the benefit.” Id. (internal quotation marks omitted).
Plaintiff claims that genuine issues of material fact exist as
to whether: 1) plaintiff conferred the benefit of securing the
PEPCO contract on defendant when plaintiff gave defendant
a lease rate for 131 rail cars because defendant needed that
rate to calculate its PEPCO bid; and 2) plaintiff has superior
equity rendering defendant’s retention of that benefit
unconscionable because defendant had declined plaintiff’s
request for defendant to inspect the rail cars in Indiana;
plaintiff, at defendant’s request, sent some of the rail cars to
Altoona, Pennsylvania, for repair; plaintiff picked up the
defendant’s representatives in Pittsburgh in its chartered
airplane so that defendant could conduct its requested
inspection in Altoona; and, lastly, plaintiff, per defendant’s
demands, agreed to bolt the bottom of and re-sheet the rail
cars without raising defendant’s lease rate–an undertaking
that cost $78,300.00. In short, plaintiff argues: “Consol took
Andersons’ lease rate and negotiated a sales contract for coal
with PEPCO, then dumped Andersons when it learned it
could lease rail cars for a cheaper rate, leaving Consol with a
windfall of profit and Andersons with a pile of damages.”
Even taking all of plaintiff’s factual allegations as true, we
find that plaintiff’s unjust enrichment claim fails as a matter
of law. Assuming arguendo that defendant’s ability to secure
the PEPCO bid were a cognizable benefit that plaintiff had
conferred on defendant by giving it a lease rate, plaintiff has
not demonstrated the requisite causal connection between this
benefit and any alleged detriment to plaintiff. Rather, the
only detriment that plaintiff establishes is the expenses that it
incurred in preparing to lease its rail cars to defendant; yet,
such a detriment stems from defendant’s failure ultimately to
enter into a lease agreement with plaintiff, not from
defendant’s use of plaintiff’s tendered lease rate in its PEPCO
bid. If, after plaintiff had incurred these expenses, defendant
had actually entered into a lease agreement with plaintiff in
executing its PEPCO contract, defendant’s use of plaintiff’s

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 9
lease rate would not have harmed plaintiff. As the requisite
causal chain between the alleged benefit that plaintiff
conferred on defendant and plaintiff’s alleged detriment is
absent, plaintiff’s unjust enrichment claim necessarily fails.
Alternatively, we note that it is hardly unconscionable or
“unjust” for a company to secure a third-party requirements
contract by using the estimate that a supplier provided
without compensating that supplier for such an estimate. See
W.F. Holt Co. v. A&E Elec. Co., Inc., 665 S.W.2d 722, 738
(Tenn. Ct. App. 1983) (A subcontractor to which a general
contractor did not award a bid is not “entitled to
compensation in quantum meruit for its efforts in assisting
. . .[that] general contractor prepare a price on a negotiated
project” because it “would unfairly hamstring general
contractors and owners” in their negotiation of contracts and
their solicitation of subcontractors’ proposals; rather, the
subcontractor’s efforts are merely an attempt to obtain
business and its incurred costs “are merely costs of doing
business . . .[that] may or may not result in the subcontractor
obtaining the contract.”).
B. Promissory Estoppel
Under Ohio’s promissory estoppel doctrine, a promise that
the promisor “should reasonably expect to induce action or
forbearance on the part of the promisee or a third person and
. . . [that] does induce such action or forbearance is binding”
if one can avoid injustice only by enforcing the promise.
McCrosky v. Ohio, 456 N.E.2d 1204, 1205 (Ohio 1983)
(adopting Restatement (Second) of Contracts § 90 (1973))
(internal quotation marks omitted). To establish a claim of
promissory estoppel, the plaintiff must prove: “[1] a promise,
clear and unambiguous in its terms; [2] reliance [on the
promise] by the party to whom the promise is made; [3] that
the reliance was reasonable and foreseeable; and [4] that the
party claiming estoppel was injured by the reliance.” Rigby
v. Fallsway Equip. Co., Inc., 779 N.E.2d 1056, 1061 (Ohio
Ct. App. 2002); Connolly v. Malkamaki, No. 2001-L-124,
2002 WL 31813040, at *3 (Ohio Ct. App. Dec. 13, 2002).
10 The Andersons, Inc. v. Consol, Inc. No. 02-3417
2Plain tiff argues that defendant promised to enter into a lease
agreement, not that any lease agreemen t actually existed; as the district
court aptly noted, plaintiff likely makes this novel distinctio n so as to
avoid statute-of-frauds issues.
As to the first element, plaintiff contends that, as of
November 18, 1998, plaintiff and defendant had agreed that
defendant would lease from plaintiff 131 specified rail cars at
a rate of $389 per car per month, with defendant’s ability to
end the lease after three years and with the anticipated lease
start date of January 1, 1999.2 In support of this argument,
plaintiff simply cites to Dillon’s letter of intent, which
plaintiff received on November 18, 1998 and which informs
plaintiff of defendant’s intention to lease the 131 cars under
the above-mentioned terms. Revealing the on-going and
uncertain outcome of such negotiations, however, Dillon, in
that same letter, states that defendant is “in the process of
reviewing” plaintiff’s lease form and that defendant “will
provide . . . [its] comments and suggestions for . . .
[plaintiff’s] consideration shortly.” The intent letter explicitly
conditions defendant’s entrance into a lease agreement on
“successful” negotiation of a “definitive” lease agreement.
The word successful means “having the desired effect.”
Webster’s Third New International Dictionary 2282 (1986).
Thus, the broad and amorphous condition of “successful
negotiation” would presumably allow defendant to abandon
negotiations if defendant no longer desired to enter into a
lease agreement with plaintiff. At that point, any negotiations
with plaintiff would no longer have defendant’s “desired
effect.” Moreover, by the letter’s express terms, defendant
need not have entered into a lease agreement with plaintiff if
the proposed lease contained a term or condition that
defendant’s senior management deemed unacceptable. The
word definitive means “serving to supply a final answer,
solution, or evaluation and to end an unsettled, unresolved
condition.” Webster’s at 592. The condition of a “definitive
lease agreement” suggests that defendant’s intention to enter
into the specified lease agreement, per the intent letter, was

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 11
not yet settled, resolved, or final–it was not, itself, the
“definitive lease agreement” towards which the parties were
to negotiate. Because defendant’s intent letter, at a minimum,
is ambiguous as to whether defendant promised to enter into
a lease agreement with plaintiff, any such promise is not
“clear and unambiguous” for purposes of promissory
estoppel.
Presumably, given this conditional, intent-to-lease letter,
plaintiff contends that defendant’s conduct created a genuine
issue of material fact as to whether defendant clearly and
unambiguously promised to lease 131 rail cars from plaintiff.
As evidence, plaintiff asserts that it had to “move the rail cars
from storage to rail shops for repair and then into Consol’s
service” so as to meet the lease’s starting date, and that
plaintiff, in complying with defendant’s demands, used
defendant’s preferred repair shop and made costly repairs,
which plaintiff believed unnecessary. According to plaintiff,
this reveals that “Consol did not act as if its promise to lease
the rail cars from Andersons was conditional until Consol did
not need to consummate the lease with Andersons.” Yet, in
its brief, plaintiff argues that it relied on defendant’s
“promise in beginning to prepare the rail cars for lease”–by
moving, re-sheeting, and storing the rail cars–and incurred
injury via such reliance. However, plaintiff’s submission to
defendant’s demands cannot serve as the requisite clear and
unambiguous promise on which plaintiff relied in submitting
to such demands in the first place as, following that logic,
plaintiff’s alleged reliance would precede any such promise.
Alternatively, defendant’s demands that plaintiff bolt and re-
sheet the rail cars and that plaintiff use defendant’s preferred
repair shop cannot constitute a clear and unambiguous
promise that defendant would enter into a lease agreement
with plaintiff, especially given the context of the conditional
letter of intent expressly disclaiming any such per se promise.
Rather, such demands simply reflect that the parties were, in
fact, in the process of negotiating toward their possible
entrance into a lease agreement. For example, in demanding
that plaintiff bolt and re-sheet the rail cars, defendant was
12 The Andersons, Inc. v. Consol, Inc. No. 02-3417
simply setting out the minimum physical requirements that
any rail cars must meet for defendant to desire to lease them.
Plaintiff had the choice of whether to accommodate
defendant’s demands so as to generate good will and/or
further the execution of any definitive lease agreement.
Plaintiff underscores that defendant sabotaged the parties’
lease negotiations so as to avail itself of the lower lease rate
from GATX, and that defendant’s senior management did not
genuinely find the lease’s terms unacceptable. This is
tantamount to an argument that defendant, in promising to
enter into the lease agreement subject only to specified
conditions, thereby promised to negotiate in good faith and
not to fabricate the existence of one of these conditions
nullifying such entrance into the agreement. The district
court rejected plaintiff’s claim of bad-faith negotiations, upon
which plaintiff’s claim for breach of commitments and
understandings hinged, on the ground that plaintiff had not
shown that Ohio recognizes such a cause of action and that,
in any event, plaintiff’s amended complaint did not allege
such a claim. Plaintiff did not appeal from the dismissal of
that claim. Consequently, we will not entertain plaintiff’s
promissory estoppel claim sounding in good-faith
negotiations, regardless of whatever merits it may have under
Ohio law.
Even if we were to construe plaintiff’s promissory estoppel
claim to be that, per the intent letter, defendant made a clear
and unambiguous promise to enter into the lease agreement
subject only to specified conditions and that those conditions
never, in fact, occurred because PEPCO executed its contract
and defendant’s senior management truthfully found
acceptable the lease’s contested “terms and conditions,” such
a promissory estoppel claim would still fail. In incurring
preparatory expenses without securing defendant’s
indemnification, plaintiff could not have reasonably relied on
any promise by defendant to enter into a lease agreement
subject only to specified conditions given the possibility that
defendant’s senior management could have genuinely found

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 13
3W e note that plaintiff has not alleged and no evidence shows that
defendant made a clear and unambiguo us pro mise that defendant would
bear plaintiff’s preparatory expenses, should the parties fail to execute a
definitive lease agreem ent.
unacceptable at least one term or condition that plaintiff
would be unwilling to modify.3 See Nilavar v. Osborn, 711
N.E.2d 726, 737 (Ohio Ct. App. 1998) (concluding that where
the defendant made a clear and unambiguous promise to
submit a bid of employment to a hospital on behalf of
plaintiff and other doctors, plaintiff, as a matter of law, did
not reasonably rely on the defendant’s submission of the bid
given that the “bid might have been rejected”); CSX Transp.,
Inc. v. Occidental Chem. Corp., 130 F. Supp. 2d 936, 947-49
(S.D. Ohio 2001) (granting summary judgment for plaintiff as
no genuine issue of reasonable reliance existed).
C. Intentional and/or Negligent Misrepresentation
“The law of misrepresentation protects a plaintiff’s interest
in ‘formulating business judgments without being misled by
others into making unwise decisions . . . [that] result in
financial loss.’” Carpenter v. Scherer-Mountain Ins. Agency,
733 N.E.2d 1196, 1205 (Ohio Ct. App. 1999). To establish
a claim for intentional misrepresentation/fraud under Ohio
law, the plaintiff must show:
(a) a representation or, where there is a duty to disclose,
concealment of a fact, (b) which is material to the
transaction at hand, (c) made falsely, with knowledge of
its falsity, or with such utter disregard and recklessness
as to whether it is true or false that knowledge may be
inferred, (d) with the intent of misleading another into
relying upon it, (e) justifiable reliance upon the
representation or concealment, and (f) a resulting injury
proximately caused by the reliance.
Id. at 1204 (internal quotation marks omitted) (observing that
the existence of fraud is generally a question of fact). An
14 The Andersons, Inc. v. Consol, Inc. No. 02-3417
action for fraud/intentional misrepresentation may lie “not
only as a result of affirmative misrepresentations, but also for
negative ones, such as the failure of a party to a transaction
. . . fully [to] disclose facts of a material nature where there
exists a duty to speak.” Textron Fin. Corp. v. Nationwide
Mutual Ins. Co., 684 N.E.2d 1261, 1269 (Ohio Ct. App.
1996). Under Ohio’s distinct claim of negligent
misrepresentation,
[o]ne who, in the course of his business, profession, or
employment, or in any other transaction in which he has
a pecuniary interest, supplies false information for the
guidance of others in their business transactions . . . is
subject to liability for pecuniary loss caused to them by
their justifiable reliance upon the information, if he fails
to exercise reasonable care or competence in obtaining or
communicating the information.
Delman v. City of Cleveland Heights, 534 N.E.2d 835, 838
(Ohio 1989) (internal quotation marks and original emphasis
omitted). As with a fraud claim, the plaintiff must also show
that the misrepresentation on which he justifiably relied was
material. Gem Sav. Ass’n v. Aqua Sportsman, Inc., No. C-
910361, 1992 WL 192500, *2 (Ohio Ct. App. Aug. 12, 1992).
Unlike a fraud claim, however, a negligent misrepresentation
claim only lies for an affirmative false statement, not an
omission. Leal v. Holtvogt, 702 N.E.2d 1246, 1253 (Ohio Ct.
App. 1998).
Plaintiff contends that defendant made certain
misrepresentations and omissions that “were critical to the
lease transactions” between the parties. Plaintiff clarifies that
such misrepresentations were material to the “lease
negotiations.” As damages resulting from defendant’s alleged
misrepresentations and omissions, plaintiff points to its “lost
profit or rental income” as well as the costs of travel,
“resheeting the rail cars to satisfy . . . [defendant’s]
requirements, freight and switching to move the rail cars to

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 15
the repair facilities, [and] storage . . . of the rail cars as a result
of . . . [defendant’s] failure to enter into the lease.”
First, plaintiff claims that defendant failed to disclose that
defendant had received verbal OT-5 approval to run the rail
cars on the railroad where the rail cars where to be in service.
According to plaintiff, defendant wanted to delete the lease
provision that required defendant to obtain such OT-5
approval. Yet, plaintiff took the position that, although
plaintiff was responsible for the rail cars’ mechanical
conditions, only defendant, not plaintiff, was able to
demonstrate to the railroad granting OT-5 approval that
defendant had track storage capacity for out-of-service rail
cars–a necessary requirement for obtaining and retaining OT-
5 approval. Plaintiff claims that, in any event, defendant had
obtained verbal OT-5 approval from the railroad before
defendant unilaterally terminated lease negotiations with
plaintiff. However, even assuming that defendant failed to
inform plaintiff that defendant had received verbal OT-5
approval where it had a duty to do so, plaintiff’s negligent
and/or intentional misrepresentation claims concerning such
an omission necessarily fail. Plaintiff’s intentional
misrepresentation claim cannot lie because plaintiff has not
shown that plaintiff ever relied on defendant’s alleged
omission concerning OT-5 approval. Per plaintiff’s own
concession, at issue is defendant’s unreasonable refusal “to
accept . . . [plaintiff’s] proposed lease language concerning
OT-5” approval. In essence, plaintiff’s intentional
misrepresentation claim is not that plaintiff relied on this
omission by acting to its detriment, but that defendant acted
to plaintiff’s detriment in perpetrating this omission so as to
frustrate and, ultimately, to terminate negotiations. In other
words, because plaintiff would not have done anything
differently had defendant disclosed its verbal OT-5 approval,
plaintiff could not have detrimentally relied on such an
omission. Because it is based on an alleged omission,
plaintiff’s negligent misrepresentation claim cannot lie. Yet,
even if we were to construe plaintiff’s negligent
misrepresentation claim to allege that defendant affirmatively
16 The Andersons, Inc. v. Consol, Inc. No. 02-3417
misrepresented the unacceptability of the OT-5 provision
when it was, in truth, a non-issue, plaintiff’s negligent
misrepresentation claim must fail since, as explained above,
plaintiff has not shown that plaintiff ever relied on such a
misrepresentation.
Second, plaintiff cursorily contends that defendant failed
“to accept lease provisions similar to [those of] other rail
equipment lessors of” defendant. For purposes of plaintiff’s
negligent and/or intentional misrepresentation claims, we
infer from this argument the allegation that defendant
misrepresented the unacceptability of such lease provisions.
Yet, even taking plaintiff’s factual allegations as true, such
negligent and/or intentional misrepresentation claims
necessarily fail because, as with the OT-5 claim, plaintiff has
not shown that plaintiff relied on any of these alleged
misrepresentations to its detriment. For example, plaintiff
asserts that defendant rejected the lease provision requiring
defendant to indemnify plaintiff from any tax liability that
plaintiff would suffer due to defendant’s use of the rail cars
outside of the continental United Stated during the lease term.
Plaintiff claims that this dispute was actually a “non-issue”
because defendant never intended to use the rail cars outside
of the continental United States and defendant had previously
agreed to “this same or similar” provision with another rail
car lessor. Thus, plaintiff’s claim is that defendant acted to
plaintiff’s detriment by misrepresenting the unacceptability of
the tax indemnification provision so as to frustrate and,
ultimately, to terminate negotiations. Because plaintiff would
not have done anything differently had defendant not
misrepresented the unacceptability of the tax indemnification
provision, plaintiff could not have detrimentally relied on
such a misrepresentation.
Third, plaintiff asserts that defendant misrepresented that it
was completely self-insured and failed to disclose to plaintiff
that defendant carried commercial property and liability
insurance with large deductibles. Defendant objected to the
lease provision that required defendant to maintain

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 17
commercial property and liability insurance during the lease
term. Plaintiff’s negligent and intentional misrepresentation
claims with respect to either property insurance or liability
insurance fail as a matter of law, even assuming, arguendo,
that defendant misrepresented that it was completely self-
insured and that it had a duty to disclose its insurance
coverage. See Blon v. Bank One, Akron, 519 N.E.2d 363, 367
(Ohio 1988) (A party to a business transaction may have a
duty of full disclosure “where such disclosure is necessary to
dispel misleading impressions that” a “partial revelation of
the facts” created or might have created.) (internal quotation
marks omitted).
Concerning defendant’s property insurance, plaintiff’s
intentional misrepresentation claims based on defendant’s
alleged misrepresentation that it carried no commercial
property insurance and defendant’s failure to disclose its
commercial property insurance must fail because plaintiff did
not detrimentally rely on either the alleged misrepresentation
or the omission. Because plaintiff’s December 23, 1998
version of the lease permitted defendant to self-insure its
entire property insurance obligation despite defendant’s
alleged misrepresentation or omission, plaintiff maintains that
the dispute over that insurance provision was a “non-issue.”
Thus, with respect to the property insurance provision,
plaintiff’s claim is that defendant, not plaintiff, acted to
plaintiff’s detriment by misrepresenting and concealing
defendant’s property insurance coverage so as to frustrate
and, ultimately, to terminate negotiations. Because plaintiff
would not have done anything differently had defendant not
misrepresented or concealed its property insurance coverage,
plaintiff could not have detrimentally relied on such a
misrepresentation or omission. Plaintiff’s negligent
misrepresentation claim based on defendant’s alleged
omission cannot lie. Moreover, plaintiff’s negligent
misrepresentation claim based on defendant’s alleged
misrepresentation fails because plaintiff, as explained above,
did not detrimentally rely on such a misrepresentation.
18 The Andersons, Inc. v. Consol, Inc. No. 02-3417
4W e note that the proper m ateriality standard for a misrepresentation
claim based so lely on negotiations is unclear; muc h of the relevant case
law considers m ateriality in the context of a co ntract. Defendant contends
that the materiality standard set out in Mulvey v. King, 39 Ohio St. 491,
494-95 (1883), governs the m ateriality req uired for bo th plaintiff’s
negligent and intentiona l misrep resentation claims. In that case, the Ohio
Supreme Court held that, to establish materiality in a misrepresentation
action involving “a person [who] claims the benefit of a contract into
which he has induced another to enter by means o f misrepresentations,
however honestly mad e”–an exc eption to the general rule that a
Plaintiff’s intentional and negligent misrepresentation
claims concerning defendant’s commercial liability insurance
also fail as a matter of law. Plaintiff’s intentional
misrepresentation claims based on defendant’s alleged
misrepresentation that it carried no commercial liability
insurance and defendant’s failure to disclose its commercial
liability insurance must fail because plaintiff did not
detrimentally rely on either this alleged misrepresentation or
omission and, alternatively, neither the misrepresentation nor
the omission was material to the lease negotiations.
Plaintiff’s unsubstantiated assertions that defendant’s liability
insurance coverage “should have been a factor in lease
negotiations” or “could have resolved the parties’ dispute” are
insufficient to establish plaintiff’s requisite reliance.
Nowhere does plaintiff contend that it relied on either the
misrepresentation or the omission by not modifying the
lease’s liability insurance provision to permit defendant’s
existent liability insurance coverage. In fact, the record
reveals that the reason, if any, that plaintiff did not modify the
liability insurance provision is that it relied on defendant’s
alleged omission regarding its planned IPO, not on
defendant’s alleged misrepresentation or omission regarding
its liability insurance. Alternatively, because the deductibles
on the commercial liability insurance that defendant carried
exceeded plaintiff’s demanded maximum levels for self-
insurance, neither defendant’s alleged misrepresentation nor
its omission regarding its commercial liability insurance was
material to the lease negotiations.4 Plaintiff’s negligent

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No. 02-3417 The Andersons, Inc. v. Consol, Inc. 19
misrepresentation claim requires actual fraud or gross negligence–, one
must only prove that the representation substantially affected “the
identity, value or character of the subject-matter of the contract.” Id. The
application of Mulvey’s materiality standard to an intentional
misrepresentation claim is unclear as Mulvey seems to predicate that
standard on a negligent misrepresentation claim. In any event, we decline
to infer from Mulvey, which involves a contract of sale, that its materiality
standard applies in the context of negotiations, absent a contract. For
purposes of plaintiff’s negligent and/or intentional misrepresentation
claims, we assume that a misrepresentation is material “if it is likely,
under the circumstances, to affect the cond uct of a reasonable person with
reference to the transaction,” including lease ne gotiations. See Leal, 702
N.E.2d at 1253 (internal quotation marks omitted) (an intentional
misrepresentation claim grounded in a contract of sale); W ebster’s Third
New International Dictionary 1514 (1971) (The term negotiation denotes
“a business transaction.”).
misrepresentation claim based on defendant’s alleged
omission cannot lie. As explained above, plaintiff’s negligent
misrepresentation claim fails because plaintiff never
detrimentally relied on this misrepresentation and the
misrepresentation was immaterial to the lease negotiations.
Lastly, plaintiff asserts that defendant failed to disclose its
planned IPO. Because defendant was in the process of
preparing for an IPO, defendant objected to a lease provision
rendering any change in defendant’s ownership an event of
default. According to plaintiff, defendant never informed
plaintiff about its planned IPO. Plaintiff contends that, had it
known about defendant’s planned IPO, it would have
modified the liability insurance and default provisions
because plaintiff’s resultant access to defendant’s financial
information would have assuaged plaintiff’s concerns about
defendant’s duty to provide plaintiff with such information.
Plaintiff’s negligent misrepresentation claim based on an
alleged omission cannot lie. Plaintiff’s intentional
misrepresentation claim fails because defendant had no duty
to disclose its planned IPO to plaintiff. In Federated
Management, Co. v. Coopers & Lybrand, the Ohio Court of
Appeals underscored that an intentional misrepresentation
20 The Andersons, Inc. v. Consol, Inc. No. 02-3417
claim based upon a concealment of fact will lie only if a duty
to disclose exists. 738 N.E.2d 842, 854 (Ohio Ct. App.
2000). In particular, the court held that “a duty to disclose
arises primarily in a situation involving a fiduciary or other
similar relationship of trust and confidence.” Id. at 855.
According to the court, a fiduciary relationship is “a
relationship in which . . . [one reposes] special confidence and
trust . . . in the integrity and fidelity of another,” thereby
creating “a position of superiority or influence, acquired by
virtue of this special trust.” Id. Here, plaintiff has failed to
show that a fiduciary or similar relationship of trust and
confidence existed between plaintiff and defendant. Rather,
both plaintiff and defendant were sophisticated companies
negotiating at arm’s length. We note that defendant may have
desired not to disclose its planned IPO to plaintiff for several
valid reasons, such as issues of confidentiality or concerns
about insider trading. For purposes of the lease negotiations,
it was sufficient for defendant simply to have demanded that
plaintiff remove the provision rendering any change in
ownership an event of default; it need not have divulged the
reason underlying that demand.
In sum, we affirm the district court’s grant of summary
judgment for defendant on plaintiff’s claims of unjust
enrichment, promissory estoppel, and intentional and/or
negligent misrepresentation on the ground that, even taking
plaintiff’s factual allegations as true, no genuine issues of
material fact exist to support such claims. Thus, the district
court did not err in granting defendant summary judgment.

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