Argued: January 16, 2019
from the United States District Court for the Western
District of Kentucky at Louisville. No. 3:14-cv-00036-David
J. Hale, District Judge.
B. Maddox, FULTZ MADDOX DICKENS PLC, Louisville, Kentucky,
Celeste Creswell, KABAT CHAPMAN & OZMER LLP, Atlanta,
Georgia, for Appellee/Cross-Appellant.
B. Maddox, FULTZ MADDOX DICKENS PLC, Louisville, Kentucky,
Mary E. Eade, NEMES EADE PLLC, Louisville, Kentucky, for
Celeste Creswell, Joseph W. Ozmer II, KABAT CHAPMAN &
OZMER LLP, Atlanta, Georgia, Todd B. Logsdon, Megan R.
U'Sellis, Raymond C. Haley, FISHER & PHILLIPS LLP,
Louisville, Kentucky, for Appellee/Cross-Appellant.
Before: MERRITT, GIBBONS, and NALBANDIAN, Circuit Judges.
NALBANDIAN, CIRCUIT JUDGE.
case is about promises made, promises broken, and disclaimers
signed. And it is a reminder that not every broken promise
occasions a legal remedy.
Plaintiffs sued Time Warner after it
allegedly failed to make good on oral promises of continued
employment and better pay. The problem for Plaintiffs is that
these promises conflicted with written disclaimers that each
had signed. Through these disclaimers, Plaintiffs
acknowledged they were at-will employees and would remain so
unless they entered into written employment agreements.
Plaintiffs now appeal the district court's grant of
summary judgment to Time Warner on their claims of fraud,
negligent misrepresentation, and promissory estoppel. Time
Warner cross-appeals the district court's order
sanctioning it under Rule 37(c)(1) for its untimely
production of documents.
affirm the grant of summary judgment and reverse the
first worked as "multi-dwelling unit" sales
representatives ("MDU Reps") for Insight
Communications, Inc., a provider of cable, internet, and
phone services. In that role, Plaintiffs sold Insight's
services to apartment and condominium complexes in
Louisville, Kentucky. It was a privileged role. All other
sales representatives were "single-dwelling unit"
sales representative ("SDU Reps"). Unlike MDU Reps,
SDU Reps had to split their time going door-to-door, selling
Insight's services to individual homeowners. These
clients were less lucrative for Insight, which generally paid
SDU Reps less than MDU Reps.
change was coming. In 2011, Time Warner announced it was
acquiring Insight. Plaintiffs claim that Time Warner induced
them to stay in their jobs even though troubling developments
at the company would have otherwise caused them to leave.
Among these developments were the "elimination of
numerous jobs and whole departments," increased market
competition, and customer service issues. (Pls.' Opening
Br. at 3-4.) According to Plaintiffs, Time Warner promised
them that they would keep their positions and receive better
pay (or at least not less pay) while working for Time Warner.
Warner acquired Insight in March 2012, and it allegedly
reiterated its promises to Plaintiffs at various meetings it
held with them the next year. So Plaintiffs claim they were
shocked to learn in October 2013 that their workforce was
being cut in half and that they would need to reapply if they
wished to keep their positions. Those who could not keep
their positions would be offered jobs as "Sweep
Representatives," which Plaintiffs regarded as an
inferior, less well-paid position. Plaintiffs allege that
Time Warner knew these changes would occur, even while it
promised Plaintiffs better pay and continued employment.
Warner challenges this narrative by pointing out that it made
no changes to Plaintiffs' employment or compensation plan
for more than eighteen months after the acquisition. It also
notes that Plaintiffs electronically acknowledged and
accepted three different at-will employment disclaimers on or
before the acquisition date. And it paints a very different
picture of what it told Plaintiffs during the meetings it
held with them the next year.
to Time Warner, it informed Plaintiffs at these meetings that
they could lose their jobs and that their compensation could
decrease. At a meeting in August 2013, for example, Time
Warner provided each Plaintiff a copy of a compensation plan
that overhauled how they would earn commission going forward.
The plan caused some Plaintiffs to complain that they would
make less money and that Time Warner would need to reduce the
number of MDU Reps. The plan also contained an at-will
disclaimer that reminded Plaintiffs of their at-will status
and cautioned that the plan "in no way implie[d] or
guarantee[d] continued employment." (See R.
143-3, Commission Plan at PageID #4865.)
each eventually quit working for Time Warner after it told
them that they would need to reapply to keep their positions.
They later filed this lawsuit, alleging that Time Warner had
unlawfully broken its promises of better pay and continued
employment. Their first amended complaint asserted several
claims, including fraud, negligent misrepresentation, and
promissory estoppel. Plaintiffs later moved for summary
judgment on their promissory-estoppel claim, and Time Warner
moved for summary judgment on all of Plaintiffs' claims.
then filed a motion for sanctions. Through that motion,
Plaintiffs sought to exclude certain documents that, they
argued, Time Warner had failed to timely disclose. These
documents were Plaintiffs' job offer letters. And they
included one of the three types of at-will disclaimers that
Plaintiffs electronically acknowledged on or before the
acquisition date. Plaintiffs also sought attorneys' fees
and expenses as an alternative sanction.
the magistrate judge concluded that the disclosure was
untimely, she denied Plaintiffs' motion because she found
the belated disclosure harmless. Plaintiffs filed objections
to the magistrate judge's decision, and the district
court sustained those objections. As a remedy, the district
court excluded the documents and awarded Plaintiffs their
attorneys' fees and costs related to the sanctions
motion. Notwithstanding this order, the district court
eventually granted Time Warner summary judgment on all of
now appeal the district court's grant of summary judgment
to Time Warner on their claims of fraud, negligent
misrepresentation, and promissory estoppel. And Time Warner
cross-appeals the court's sanctions order.
first consider Plaintiffs' summary-judgment appeal, which
we review de novo. Tysinger v. Police Dep't of
Zanesville, 463 F.3d 569, 572 (6th Cir. 2006). Under
this standard, we construe all facts and reasonable
inferences in Plaintiffs' favor. Id. If genuine
issues of material facts remain, then summary judgment was
and Negligent Misrepresentation.
district court construed Plaintiffs' complaint as
asserting both fraudulent misrepresentation and fraudulent
omission. And it granted Time Warner summary judgment on
these claims for the same reason it granted Time Warner
summary judgment on Plaintiffs'
negligent-misrepresentation claim: Plaintiffs had failed to
establish that they "reasonably relied" on Time
agree with the parties and the district court that reasonable
reliance is an element of both fraudulent and negligent
misrepresentation in Kentucky. See Flegles, Inc. v.
TruServ Corp., 289 S.W.3d 544, 549 (Ky. 2009);
Presnell Const. Managers, Inc. v. EH Const., LLC,
134 S.W.3d 575, 580 (Ky. 2004). But we are less certain that
it is an element of fraudulent omission. We put that aside
for now, however, and first explain why Plaintiffs cannot
establish reasonable reliance and so their claims of
negligent and fraudulent misrepresentation must fail.
doing, we rely on the same document that the district court
relied on. It was one of the three documents that informed
Plaintiffs of their at-will statuses on or before the
acquisition date. And it was labeled an "Important
Notice." (R. 142-2, Important Notices at PageID #4579-
88.) It stated: "You will be employed on an at-will
basis unless you are subject to a written employment
agreement signed by a company representative authorized to
enter into an employment agreement." Id.
Plaintiff electronically acknowledged "hav[ing] read and
accepted the terms" of this notice. Id. And it
is undisputed that Plaintiffs did so before they
detrimentally relied on Time Warner's alleged promises of
continued employment and better pay. So the issue here is
whether it was reasonable for Plaintiffs to rely on
Time Warner's promises of better pay and continued
employment even though they had read and accepted this
it was not. On this issue, Kentucky law is clear: "[A]s
a matter of law, a party may not rely on oral representations
that conflict with written disclaimers to the contrary which
the complaining party earlier specifically acknowledged in
writing." Rivermont Inn, Inc. v. Bass Hotels &
Resorts, Inc., 113 S.W.3d 636, 640 (Ky. Ct. App. 2003).
facts of Rivermont illustrate its rule (the
"Rivermont Rule"). Rivermont Inn
("Rivermont") wished to buy a Holiday Inn from MD
Investments ("MD"), but the franchise was not
transferrable. Id. at 639. So Rivermont began
negotiating with Holiday Inn's parent company
("Holiday") to obtain a franchise license.
Id. During the application process, Rivermont
proposed a property-improvement plan costing $1.4 million
that would involve substantial upgrades to the property.
Id. Importantly, it also "acknowledged in
writing several times that Holiday [did] not enter into oral
agreements 'with respect to licenses or matters
pertaining to the granting of a license.'"
Id. "The documents further stated that Holiday
'reserve[d] the sole right to approve or disapprove the
Application for any reason it  determine[d].'"
days before the scheduled closing, Rivermont contacted one of
Holiday's vice presidents, Judy Bloodworth, and asked
whether it should proceed with the closing. Id.
According to Rivermont, "Bloodworth told them that
licensing would be forthcoming and to close on the
property." Id. So Rivermont went through with
the closing. Id. After the closing, however, Holiday
said it would only approve the franchise if Rivermont agreed
to a condition: "[T]he hotel would not be on
Holiday's national network until the
[property-improvement plan] was completed to Holiday's
satisfaction." Id. Rather than accept the
condition, Rivermont sued Holiday, alleging fraud and
promissory estoppel. See id. The trial court granted
summary judgment to Holiday on each of Rivermont's
claims, and the Kentucky Court of Appeals affirmed.
Id. at 640, 643.
Court of Appeals held that Rivermont's fraudulent
misrepresentation claim failed for two reasons. First, it
held that Rivermont could not establish fraudulent
misrepresentation based on all the facts that Rivermont knew
before it went through with the closing. Id. at 640.
This included the fact that Holiday did not enter into oral
agreements about licensing matters as specified in the
written disclaimers. Id. For its second reason, the
court articulated what we now refer to as the Rivermont Rule.
Again, that rule prohibits a party from "rely[ing] on
oral representations that conflict with written disclaimers
to the contrary which the  party earlier specifically
acknowledged in writing." Id. And the court
held that the rule barred Rivermont from relying on
Bloodworth's oral representations as a matter of law.
all the Plaintiffs electronically acknowledged the Important
Notice. The only question that remains is whether the
Important Notice "conflict[ed]" with Time
Warner's oral representations of continued employment and
better pay. Id. We have no doubt that it did.
Kentucky, at-will employees may be discharged "for good
cause, for no cause, or for a cause that some might view as
morally indefensible." Firestone Tire & Rubber
Co. v. Meadows, 666 S.W.2d 730, 731 (Ky. 1983) (citing
Scroghan v. Kraftco Corp., 551 S.W.2d 811 (Ky. Ct.
App. 1977); Production Oil Co. v. Johnson, 313
S.W.2d 411 (Ky. Ct. App. 1958)). Only "a narrow public
policy exception" applies to this rule: An employee may
not be fired "when the discharge is contrary to a
fundamental and well-defined public policy as evidenced by
existing law." Id. No such policy ...