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Indycar, LLC v. Casey

United States District Court, S.D. Indiana, Indianapolis Division

December 20, 2017

INDYCAR, LLC. Plaintiff,
JOHN CASEY, Defendant.



         This matter is before the Court on Plaintiff IndyCar LLC's (“IndyCar”) Motion for Summary Judgment. (Filing No. 120.) Following the failure of a planned racing event, IndyCar instituted this action against pro se Defendant John Casey (“Casey”). As required by Local Rule 56-1, IndyCar filed a Notice regarding Casey's right to respond to and submit evidence in opposition to the motion for summary judgment (Filing No. 123). Casey did not file a response. For the reasons stated below, the Court grants IndyCar's Motion for Summary Judgment.

         I. BACKGROUND

         The following material facts are not in dispute. Typically courts view the facts in the light most favorable to the non-moving party, “but when a party fails to respond to a motion for summary judgment, its failure ‘constitutes an admission ... that there are no disputed issues of genuine fact warranting a trial.'” Terrell v. Am. Drug Stores, 65 Fed.Appx. 76, 77 (7th Cir. 2003) (quoting Flynn v. Sandahl, 58 F.3d 283, 288 (7th Cir.1995).

         In May 2015, IndyCar and non-party Boston Grand Prix (“Boston GP”) entered into an agreement that Boston GP would promote an IndyCar race event in Boston, Massachusetts (“the Boston Race”) for 2016 and through the year 2020 (“the Event Agreement”). (Filing No. 121 at 2.) Boston GP also had the right to market and sell tickets for the Boston Race, along with the obligation to make necessary refunds and to fulfill any other responsibilities owed to consumers or third parties associated with ticket sales. Id. Boston GP had payment obligations to IndyCar, which were set forth in the Sanction Fee and Payment Sections of the Event Agreement. “The Sanction Fees for the 2016, 2017, 2018, 2019, and 2020 Events are $1, 500, 000, $1, 600, 000, $1, 700, 000, $1, 800, 000, and $1, 900, 000, respectively (each a “Sanction Fee”).” (Filing No. 34-2 at 5.) The Event Agreement also stated that in the event the inaugural 2016 Boston Race was cancelled due to Boston GP's breach, Boston GP shall pay to IndyCar, as an early termination payment, the Sanction Fees for the 2016 and 2017 events. Id. at 4.

         As a condition of entering into the Event Agreement with Boston GP, IndyCar required Casey to personally guarantee payment of the Sanction Fees for 2016 and 2017 (including revenue share)[1] (“the Guaranty”). (Filing No. 34-1.) In addition to the 2016 and 2017 Sanction Fees, the Guaranty also obligated Casey to pay all costs and expenses including reasonable attorney fees incurred by IndyCar in the enforcement or collection of the Event Agreement and Guaranty. Id. at 1. Ultimately, the Boston Race was cancelled after numerous issues from a soured and deteriorating relationship between Boston GP and the City of Boston. (Filing No. 59 at 2.)

         As stated in IndyCar's Statement of Material Facts Not In Dispute and found by this Court on January 4, 2017, the terms of the Guaranty were absolute and unconditional, meaning that IndyCar was not required to pursue any rights or claims against Boston GP before invoking the benefits of the Guaranty. (Filing No. 77.) As such, IndyCar voluntarily dismissed Boston GP and Mark Perrone, manager of Boston GP, from this action in July 2016. (Filing No. 26.) The Guaranty also required Casey to remain liable notwithstanding the dissolution of Boston GP, which is now engaged in bankruptcy proceedings. (Filing No. 35-2 at 2.) After dismissing Boston GP, IndyCar filed its First Amended Complaint on August 10, 2016, for Casey's breach of the obligations contained in the Guaranty and the representations he made thereunder. (Filing No. 34.) Casey's Guaranty was a condition upon which IndyCar entered into the Event Agreement with Boston GP.

         The Guaranty contained a Representations Section which stated that Casey, the guarantor, had “no action or proceeding at law or in equity, or by or before any court or governmental instrumentality or agency, now pending against or, to the knowledge of Guarantor, threatened against the Guarantor that may materially and adversely affect the financial condition of Guarantor.” (Filing No. 35-2 at 2). The Guaranty also stated that the balance sheets, earning statements, and other financial data that Casey furnished to IndyCar fairly represent the financial condition of Casey at the time given and were accurate, correct, and complete. Id.

         IndyCar alleges that the balance sheets and other financial data that Casey produced in connection with the Guaranty contained material misrepresentations and significantly inflated his creditworthiness. IndyCar also alleges other misrepresentations in that Casey had pending litigation or threatened litigation which he did not disclose. These misrepresentations will be discussed in more detail in IndyCar's fraud claim.


         Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Hemsworth v. Quotesmith.Com, Inc., 476 F.3d 487, 489-90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews “the record in the light most favorable to the nonmoving party and draw[s] all reasonable inferences in that party's favor.” Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted). However, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth, 476 F.3d at 490 (citation omitted). “In much the same way that a court is not required to scour the record in search of evidence to defeat a motion for summary judgment, nor is it permitted to conduct a paper trial on the merits of a claim.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citation and internal quotations omitted). Finally, “neither the mere existence of some alleged factual dispute between the parties nor the existence of some metaphysical doubt as to the material facts is sufficient to defeat a motion for summary judgment.” Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir. 1997) (citations and internal quotations omitted).

         Local Rule 56-1(f) provides that the court will assume that “the facts as claimed and supported by admissible evidence by the movant are admitted without controversy to the extent that:” 1) the non-movant specifically controverts the facts with admissible evidence; 2) the movant's facts are not supported by admissible evidence; or 3) the facts alone or in conjunction with other admissible evidence, allow the court to draw reasonable inferences in the non-movant's favor sufficient to preclude summary judgment.


         IndyCar contends that Casey breached the Guaranty in two distinct ways. First, he breached by not fulfilling the obligations under the Guaranty and Event Agreement to pay the Sanction Fees owed when the Boston Race was cancelled due to Boston GP's breach. Second, Casey fraudulently induced IndyCar to enter into the Event Agreement and Guaranty by misrepresenting his financial strength ...

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