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Tony Marks Racing, LLC v. VR-12, LLC

United States District Court, N.D. Ohio, Western Division

April 11, 2017

Tony Marks Racing, LLC, Plaintiff
v.
VR-12, LLC, et al., Defendants

          ORDER

          James G. Carr Sr. U.S. District Judge

         This is a breach-of-contract suit arising out of an agreement to sponsor a racecar.

         The plaintiff, Tony Marks Racing, LLC (TMR), is the owner of the “Number 12” Dodge racecar, which competed in the Automobile Racing Club of America's (ARCA) 2011 racing series.

         TMR alleges that it entered a sponsorship agreement with the defendants - VR-12, LLC, which produces a radiator coolant additive called VR-12; Freezetone Products, Inc., the company that distributes VR-12; and Louis Latour, a Florida resident who owns VR-12 and Freezetone. According to TMR, the defendants agreed to pay TMR $50, 000 per race - for a total of $950, 000 over the nineteen-race season - in exchange for TMR making VR-12 and Freezetone the “lead sponsor” of the Number 12 racecar. TMR also claims that Latour personally guaranteed his companies' obligation to TMR.

         After the defendants allegedly breached the contract by paying TMR only $50, 000, TMR sued for breach of contract, equitable accounting, and promissory estoppel.

         Jurisdiction is proper under 28 U.S.C. § 1332(a)(1). (Doc. 19 at ¶¶1-12).

         Pending are the defendants' motions for summary judgment. (Docs. 40, 44, 47). For the reasons that follow, I grant Freezetone's motion in its entirety, grant Latour's motion in part and deny it in part, and grant VR-12's motion in part and deny it in part.[1]

         Background

         A. Origins and Terms of the Sponsorship Agreement

         The parties have offered conflicting accounts of both the origins of the sponsorship agreement and its terms. It is these conflicts that prevent entry of judgment as a matter of law for Latour and VR-12.

         1. Plaintiff's Evidence

         According to the affidavit of Tony Marks, an Ohio resident who owns TMR, “Latour came to Ohio in January of 2011 to discuss the sponsorship arrangement[.]” (Doc. 19-1 at 21-22).

         During that visit, Marks and Latour, who at the time was acting “in his personal, and representative capacity on behalf of Freezetone and VR-12, ” “agreed upon and concluded a sponsorship agreement.” The agreement, plaintiff alleges, provided that “TMR was to be paid $50, 000 per race for the entire 201119 race ARCA race season[.]” (Id. at 22).

         The agreement required TMR to use its best efforts to persuade ARCA to announce the sponsorship at an upcoming race in Daytona, Florida. (Id.). But ARCA refused to make the announcement unless Latour would meet with ARCA representatives and “confirm his understanding and backing of the magnitude of this sponsorship commitment.” (Id.). When Latour met with the ARCA representatives, he “confirmed . . . that he, Freezetone and VR-12 were committed as primary sponsors or [sic] the Tony Marks Racing # 12 ARCA race car for the full 19-race” season. (Id. at 23).

         Marks told a rather different story at his deposition.

         He testified that he first spoke with Latour by telephone in December, 2010. (Doc. 57-18 at 76). Marks and Latour then had multiple phone conversations about doing “future business together[.]” (Id. at 77).

         In mid-January, 2011, Marks met Latour in Daytona, Florida, but they did not really discuss doing business together. (Id. at 69, 70). Rather, all talk about a potential sponsorship was between Latour and Rick Bailey, then the Vice-President of Sales and Marketing for Tony Marks Trucking, Inc., an affiliate of TMR. (Id. at 69, 72; Doc. 41-3 at ¶3).

         Shortly after Marks's trip to Daytona, Latour traveled to Napoleon, Ohio, where TMR's facilities are located. (Doc. 57-18 at 82). Latour toured the grounds with Marks and Bailey, but they did not come to an agreement. (Id. at 83).

         Marks made a second trip to Daytona in February, 2011, where he attended the inaugural race of the 2011 ARCA racing series. Before arriving in Florida, however, Marks and Latour had reached “an agreement . . . for a primary sponsor, VR-12, for the entire season.” (Id. at 85). Marks explained that he and Latour had made the agreement “by phone and also confirmation in person in Daytona by Luis.” (Id.).

         Marks later clarified that it was not he but Bailey who had negotiated the contract:

Q: [I]s it your testimony that the negotiation of the sponsorship agreement was primarily between Rick Bailey and Mr. Latour?
A: Yes.
Q: And the communications that were had were then communicated to you by Mr. Bailey?
A: Yes.
Q: So the information that you had with regard to the terms of the sponsorship agreement came from Mr. Bailey?
* * * The Witness: Yes

(Id. at 88).[2]

         According to Marks, the sponsorship agreement concerned the “title sponsor” or “primary sponsor” of the Number 12 racecar. (Doc. 57-18 at 41-42).

         He explained that those interchangeable terms refer to the entity that “covers the operating expenses of a race team . . . for an agreed term.” (Id. at 42). In exchange for its financial support, the sponsor (usually a corporate entity promoting its brand or a specific product) gets to place its logo on the racecar, the driver's uniform, pit-row banners, and other gear and equipment. (Id. at 44-45).

         As a result of the sponsorship agreement, Marks testified, VR-12 became TMR's “primary sponsor” for the full 2011 ARCA racing season. (Id. at 42).

         2. Defendants' Evidence

         Latour agreed that he visited Ohio in January, 2011, but he maintained that “the oral Sponsorship Agreement was not reached” on that occasion. (Doc. 41-2 at ¶13). Latour made a second visit to Ohio (he did not specify when), but the purpose of that second trip was “to visit a racetrack, ” not negotiate a sponsorship. (Id. at ¶19).

         Latour denied that he entered into any agreement on behalf of himself, VR-12, and/or Freezetone with TMR “prior to February 12, 2011[.]” (Id. at ¶14). He also testified that he, personally, “was not a party to the oral sponsorship agreement[.]” (Id. at ¶6).

         Latour and the other defendants concede, however, that there was a sponsorship agreement between TMR and VR-12.[3]

         According to the defense, “the extent of VR-12's financial commitment to Plaintiff was to pay a total of $50, 000 for its sponsorship role.” (Doc. 48 at ¶6). This sponsorship was to last only for the first seven races (the first race was on February 12 and the seventh was on June 11), rather than the entire racing season. (Doc. 57-3 at 45-46). In support, defendants point to a letter that Bailey, purportedly acting on behalf of TMR, prepared and Dated: January 20, 2011. (Doc. 48-2 at 1). According to Bailey's letter:

• the only parties to the sponsorship agreement were TMR and VR-12;
• the sponsorship would last for only seven races, “unless extended prior to the ending date”; and
• VR-12 would pay TMR $50, 000.

(Id.).[4]

         B. Performance

         According to the defense, “VR-12 paid [TMR] $25, 000 on February 4, 2011[.]” (Doc. 48 at ¶10). On March 4, VR-12 made a second payment of $25, 000 to TMR. (Id.).

         In February, 2011, Marks and Latour made a joint appearance at the Daytona International Raceway to announce VR-12's sponsorship of TMR. (Doc. 57-3 at 118-21; Doc. 58-18 at 46-47). Moreover, TMR affixed the VR-12 logo to the Number 12 car and its drivers' uniforms. (Docs. 57-6, 57-7, 57-8, 57-9, & Doc. 57-10). The Number 12 car displayed the VR-12 logo for races on April 15, May 15, May 22, June 4, June 11, June 17, and July 16. (Doc. 48 at ¶16).

         In contrast, it is undisputed that Latour's name never appeared on the ...


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