United States District Court, N.D. Illinois, Eastern Division
For Isaac Pardo, Individually, Plaintiff: Michael A. Abramson, LEAD ATTORNEY, Thomas P. Yardley, Arnstein & Lehr, LLP, Chicago, IL; SIMON ROSEN, LEAD ATTORNEY, Law Office of Simon Rosen, Philadelphia, PA.
For Mecum Auction, Inc., a Delaware Corporation, Defendant: Jonathan Michael Mraunac, LEAD ATTORNEY, Foran Glennon Palandech Ponzi & Rudloff, Chicago, IL; Douglas J. Palandech, Foran, Glennon, Palandech Ponzi & Rudloff PC, Chicago, IL.
For William Mullis, individually also known as Bill Mullis, Jan Mullis, individually, Defendants: Daniel M. Purdom, LEAD ATTORNEY, Hinshaw & Culbertson, Lisle, IL; Brian Richard Zeeck, Hinshaw & Culbertson LLP, Lisle, IL.
John J. Tharp, Jr., United States District Judge.
For the reasons stated below, defendant Mecum Auction's motion to dismiss  is granted in part and denied in part. The fraud and misrepresentation claims (Counts I, III, and IV) are dismissed with prejudice. The motion to dismiss the breach of contract and rescission claims (Counts II and VI) is denied. A status hearing is set for 1/28/15 at 9:00 a.m.
According to the Second Amended Complaint (" SAC" ), the factual allegations of which are accepted as true, plaintiff Isaac Pardo purchased a black 1967 Corvette coupe at Mecum's Bloomington Gold Corvette Auction on June 25, 2011. The subject
Corvette had been billed as one of 23 cars in the " Black Collection," a group of rare and valuable Corvettes produced in the 1950s and 1960s, when few black Corvettes were made. The Black Collection was previously owned by defendant William Mullis. After placing the high bid, Pardo learned that his was in fact a 1964 Corvette doctored and painted to look like a black 1967 model. According to the complaint, " [t]he 1967 Corvette Coupe owned by Mullis was, however, a fraudulent amalgamation of Corvette parts from various model years, placed on a damaged 1964 Corvette frame, with fraudulent vehicle identification numbers and tags added to the vehicle, with the vehicle then cosmetically altered and painted black in order to appear to be a 1967 Corvette Coupe."
Mecum created and distributed various advertising materials before the June 2011 auction. The purported 1967 black coupe was identified as Auction Lot Number S41. " Prior to the Bloomington Gold Auction, Mecum, for its own benefit and as agent for Mullis, purchased and displayed in Illinois a sealed certificate from the National Corvette Restorers Society ('NCRS'), which certified that the 1967 Corvette Coupe was a 1967 Corvette, with a vehicle identification number ('VIN') of 1943775111042, and a production date of February 27, 1967." SAC, Dkt. # 101 ¶ 10.
Pardo relied on the advertising material in deciding to attend the auction and bid on the 1967 coupe. When viewing the vehicle in person, he observed the NCRS certificate prominently displayed in the windshield. " In reliance on representations made at the Bloomington Gold auction -- both in materials placed on the 1967 Corvette Coupe and in oral representations made by Mecum on its own behalf and as agent for Mullis -- Pardo bid on the 1967 Corvette Coupe at the auction." SAC, Dkt. # 101 ¶ 15. He was the high bidder for the 1967 Corvette Coupe; with a bid of $68,500, plus an auctioneer's commission to Mecum of $4,110.
Pardo began to question the legitimacy of the black coupe shortly after placing the winning bid, because Corvette experts at the auction told him that his car was not actually a 1967 Corvette. When Pardo made inquiries with Mecum Auction, he claims that he was assaulted and threatened with a breach-of-contract lawsuit. Pardo therefore paid for the Corvette and for shipping to his home in New York. He later confirmed that the vehicle was a worthless counterfeit.
Thereafter, " Mecum, after learning that Pardo was aware of the counterfeit nature of the 1967 Corvette Coupe, refused to provide Pardo with a title to the car, despite Pardo's repeated demands. Mecum and Mullis were both aware that if they delivered a fraudulent title for a counterfeit car that they sold in Illinois, they would be guilty of a criminal felony. Mecum and Mullis thus went into a stall in delivering the title to Pardo as they tried to determine what to do with their fraud scheme gone awry." ...