United States District Court, S.D. Indiana, Indianapolis Division
ORDER GRANTING SUMMARY JUDGMENT (ECF NO. 69)
R. SWEENEY II, JUDGE
matter is before the Court pursuant to its diversity
jurisdiction. Plaintiff is an Indiana citizen (ECF No. 11
¶ 3(a)), Defendants are each a citizen of both Delaware
and Maryland (id. ¶ 3(b)-(c)), and the amount
in controversy exceeds $75, 000, exclusive of interests and
costs (2d Am. Compl. ¶ 65, ECF No. 55). See 18
U.S.C. § 1332. Defendants' Motion for Summary
Judgment (ECF No. 69) is fully briefed and ripe for
decision. Having considered the motion, response, reply,
evidence, and applicable law, the Court concludes that the
motion should be GRANTED for the following reasons.
purporting to be “Dr. Douglas Schultz, ” a
Beverly Hills cardiologist, charged $99, 600 to six different
credit cards over three separate transactions to purchase
Super Bowl tickets from Plaintiff Bullseye Event Group LLC
(“Plaintiff” or “Bullseye”), a ticket
broker. (L. Kinnett Dec. ¶ 6, ex. D-1, ECF No.
81-5 at 2-4; 2d Am. Compl. ¶ 48.) Bullseye does not
ordinarily sell tickets over the phone, especially to a new
customer on such a large scale. (K. Kinnett Dep. Tr. 103:2-8,
ECF No. 81-2 at 13.) But Schultz had a reservation
at The Ritz-Carlton San Francisco, indicating to
Bullseye's president that Schultz was “a qualified
buyer.” (Nichols Dep. Tr. 34:4- 35:16, ECF No. 81-3
at 5; K. Kinnett Dep. Tr. 169:5-170:9, ECF No. 81-2
process a credit card order, Bullseye typically requires,
inter alia, images of the credit card and of the
customer's photo identification. (Pl.'s Interrog.
Answers at 4- 5, ECF No. 70-5 at 5-6.) Nevertheless,
Bullseye took Schultz's orders over the phone, requiring
neither images of the credit cards nor an image of
Schultz's identification. Instead, Bullseye's
president, Kyle Kinnett, verified with a concierge at The
Ritz-Carlton that Schultz was a “registered
guest” of the hotel and that the concierge had seen
Schultz and Schultz's identification. The concierge
assured Kinnett there was “nothing to worry
about.” (Pl.'s Mem. at 5, ECF No. 81.)
Once the credit card transactions were processed, Bullseye
delivered the tickets to the concierge for Schultz.
week later, Schultz charged $43, 000 to four different credit
cards-for a grand total of nine different credit cards among
the relevant transactions-to purchase tickets to the NBA
All-Star Game from Bullseye. (L. Kinnett Dec. ¶ 6, ex.
D-1, ECF No. 81-5 at 2-4; K. Kinnett Dep. Tr.
181:25-182:13, ECF No. 81-2 at 8.) Schultz told
Bullseye he was staying at the Courtyard Marriott in Toronto,
and a hotel employee confirmed that Schultz had a reservation
but had not checked in. (Nichols Dep. Tr. 34:8-12.) Schultz
never picked up the tickets, and all of Bullseye's
transactions with Schultz ultimately resulted in
chargebacks-for the total amount of the transac-tions-from
the various credit card companies.
alleges California state-law claims against Defendant The
Ritz-Carlton Hotel Company, L.L.C. and its parent, Defendant
Marriott International, Inc., for deceit and negligent
misrepresentation. (2d Am. Compl. ¶¶ 69-88, ECF
No. 55 at 12-15.) The parties agree that California
substantive law applies to this diversity case. (ECF No. 53
at 5 n.2.) To prevail on either claim, Plaintiff must prove
that it justifiably relied on Defendants'
representations. See Small v. Fritz Companies,
Inc., 65 P.3d 1255, 1258 (Cal. 2003) (deceit);
Nat'l Union Fire. Ins. Co. v. Cambridge Integrated
Servs. Grp., 89 Cal.Rptr.3d 473, 483 (Cal.Ct.App. 2009)
(negligent misrepresentation). Whether a plaintiff's
reliance was justifiable is ordinarily a question of fact
unless “reasonable minds can come to only one
conclusion based on the facts.” Guido v.
Koopman, 2 Cal.Rptr.2d 437, 440 (Cal.Ct.App. 1991).
Defendants argue that Plaintiff's claims fail for lack of
justifiable reliance. (Defs.' Mem. at 6, ECF No.
70.) Plaintiff responds that “Defendants'
concierge's own, affirmative representations would have
led any reasonable merchant to conclude that Schultz's
credit cards were valid and issued in his name and that
Schultz was a viable buyer.” (Pl.'s Mem. at 20,
ECF No. 81.)
56(a) provides that “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). In
considering a motion for summary judgment, the district court
must view the evidence “through the prism of the
substantive evidentiary burden.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). All
justifiable inferences to be drawn from the underlying facts
must be viewed in the light most favorable to the non-moving
party. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). “Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, ” summary judgment
should be granted. Id.
contends that Defendants' concierge misrepresented to
Plaintiff that he had seen Schultz “with his own eyes,
” that he had seen Schultz's identification, that
Schultz was a “registered guest” at The
Ritz-Carlton, and that Plaintiff had “nothing to worry
about.” (Pl.'s Mem. at 4-5, ECF No. 81.)
“Reliance upon a fraudulent misrepresentation is not
justifiable unless the matter misrepresented is material,
” and the matter is material if “a reasonable man
would attach importance to its existence or nonexistence in
determining his choice of action in the transaction in
question.” Restatement (Second) of Torts § 538
(1977). Bullseye could not have justifiably relied on the
alleged misrepresentations of fact-that the concierge had
seen Schultz and his identification and that Schultz was a
registered guest of the hotel- because they are not material
in the absence of another fact: that the credit cards used to
make the purchases were issued to a Dr. Douglas Schultz.
Plaintiff offers no evidence-nor even any allegation-that the
concierge represented that the various credit cards used by
Schultz bore his name. Nor did Plaintiff itself undertake to
determine whether they did. (See L. Kinnett Dec.
¶ 7, ECF No. 81-5 at 2; Pl.'s Interrog.
Answers at 4-5, ECF No. 70-5 at 5-6.) That a person
has been seen by a concierge, has an identification, and has
a hotel reservation-even at a particularly lavish hotel-does
not, in isolation, materially support an inference that the
person will not transact business with stolen credit cards.
likewise could not have justifiably relied upon the
concierge's assurance that Bullseye had “nothing to
worry about.” “In determining whether one can
reasonably or justifiably rely on an alleged
misrepresentation, the knowledge, education, and experience
of the person claiming reliance must be considered.”
Guido, 2 Cal.Rptr.2d at 440-41. “If the
conduct of the plaintiff in the light of his own intelligence
and information was manifestly unreasonable, . . . he will be
denied recovery.” Kruse v. Bank of Am., 248
Cal.Rptr. 217, 226 (Cal.Ct.App. 1988) (quoting Seeger v.
Odell, 115 P.2d 977 (Cal. 1941)). In Guido, a
horseback riding student-who was also a practicing
attorney-signed a release after the instructor told her the
release was “meaningless.” 2 Cal.Rptr.2d at 440.
The attorney-student testified that she used releases in her
law practice, and the court thus held that her reliance on
the instructor's description of the release was not
justifiable. Id. at 440-41. In Gagne v.
Bertran, 275 P.2d 15, 21 (Cal. 1954), by contrast, the
court held that the plaintiffs justifiably relied on the
defendant's statement that they had “nothing to
worry about” because the defendant “held himself
out as an expert, the plaintiffs hired him to supply
information concerning matters of which they were ignorant,
and his unequivocal statement necessarily implied that he
knew facts that justified his statement.”
Bullseye is a sophisticated business with extensive
experience in credit card transactions. Kyle Kinnett,
Bullseye's founder, co-owner, and president, has been a
ticket broker since 1992. (K. Kinnett Dep. Tr. 6:4-24;
8:23-9:7, ECF No. 70-2 at 6- 8.) The “vast
majority of all Super Bowl ticket transactions for Bullseye
are processed via credit card.” (L. Kinnett Dec. ¶
4, ECF No. 81-5.) Indeed, for a single event-its
Super Bowl party-Bullseye sells a thousand tickets online
annually. (K. Kinnett Dep. Tr. 81:15-19, ECF No. 81-2 at
11.) Naturally, given the volume of Bullseye's
credit card transactions, chargebacks are a “cost of
doing business, ” but Bullseye takes “any measure
[it] can” to prevent fraud. (K. Kinnett Dep. Tr.
82:9-15, ECF No. 81-2 at 11.) Its IT Director
educates himself “anytime there's seminars or
products out there” on fraud prevention. (K. Kinnett
Dep. Tr. 82:16-18, ECF No. 81-2 at 11.)
the attorney in Guido, Bullseye's extensive
experience in credit card transactions and fraud prevention
precludes Bullseye from justifiably relying on a hotel
concierge's say-so to process $140, 000 in credit card
transactions over the phone. Hotel concierges are not
bankers, credit rating agencies, or private investigators;
they do not ordinarily possess any special knowledge of a
guest's proclivity for fraud. Hence, unlike the defendant
in Gagne, the concierge was not an expert, Bullseye
did not hire him, and-given Bullseye's experience in
credit card transactions-Bullseye did not rely on him to
“supply information concerning matters of which [it
was] ignorant.” 275 P.2d at 21 (emphasis
short, because Bullseye's conduct “in the light of
[its] own intelligence and information was manifestly
unreasonable, ” Kruse, 248 Cal.Rptr. at 226,
Bullseye's claims miss the mark as a matter of law.
Accordingly, Defendants' Motion for Summary Judgment
(ECF No. 69) is GRANTED, and Plaintiffs claims ...