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Pardo v. Mecum Auction Inc.

United States District Court, N.D. Illinois, Eastern Division

March 31, 2017

ISAAC PARDO, Plaintiff,


          John J. Tharp, Jr. United States District Judge.

         This case gives lie to that common adage of abductive reasoning that if it looks like a duck, swims like a duck, and quacks like a duck, then it's a duck. The “duck” in this case is a “highly prized, rare classic Corvette”-a 1967 black coupe-that looked like exactly that to the plaintiff, Isaac Pardo, a New York resident and Corvette enthusiast. So he bid on and won the car at defendant Mecum Auction's Bloomington Gold Auction in St. Charles, Illinois. Upon discovering that the dream machine was, in reality, “an inferior red 1964 Corvette” in disguise, Pardo sued the former owners of the vehicle-who are no longer parties to this lawsuit-and Mecum, which Pardo contends is no better than the proverbial used-car salesman unscrupulously seeking to pass off a lemon as a limousine. His theories of relief sounded in fraud and breach of contract.

         Pardo's First Amended Complaint was partially dismissed upon the individual defendants' motion (ECF No. 31), for failure to adequately plead the fraud claims, which are subject to the heightened pleading standard of Federal Rule of Civil Procedure 9(b). Mem. Op. & Order, ECF No. 84 (February 18, 2014). Pardo filed a Second Amended Complaint (ECF No. 101), as to which this Court partially granted Mecum's motion to dismiss (ECF No. 112), holding that the contractual non-reliance clause found in his bidder's agreement foreclosed his claims for fraud and misrepresentation against Mecum. Order, ECF No. 124 (Dec. 29, 2014). The dismissal was with prejudice because of the futility of re-pleading the dismissed claims. The Court denied Mecum's motion to dismiss as to the contract claims.

         Pardo moved for reconsideration of the Court's ruling on his fraud claims. See Mot., ECF No. 126 (Jan. 23, 2015). The Court denied the motion, concluding that even if Pardo had timely made the arguments he raised in that motion (he had not), it would have dismissed the fraud claims because under Illinois law, if a purchaser signs an agreement containing a clause that disclaims reliance on any oral representations by the seller, then the purchaser cannot maintain a claim of common-law fraud. See Order, ECF No. 130 (Jan. 29. 2015). The Court further held that absent any proffered reason the clause was unconscionable or unenforceable as a matter of law, it was appropriate to hold Pardo to his disclaimer of reliance in this arms-length transaction.

         Following discovery, Mecum moved for summary judgment as to the only remaining claim. See Mot., ECF No. 159. Pardo then moved, once again, to vacate the Court's earlier dismissal of his fraud claims, in addition to opposing Mecum's summary-judgment motion on the breach of contract and rescission claims; further, Pardo also moved for summary judgment on those claims himself. See Mot., ECF No. 165. Mecum was permitted to fully brief Pardo's later-filed motions along with its own motion. See Response and Reply Br., ECF No. 171. Pardo's motions are denied. Mecum's motion for summary judgment is granted.


         A. Plaintiff's Second Motion for Reconsideration

         Pardo says that his second motion to reconsider is brought pursuant to Federal Rule of Civil Procedure 60(a), “Corrections Based on Clerical Mistakes; Oversights, and Omissions, ” which allows the district court to “correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record.” This rule is plainly inapplicable in the context of Pardo's argument, which is that, in light of what discovery has uncovered, the Court's dismissal of his fraud claims was a substantive error of fact and law, in that he cannot be held to the contractual non-reliance clause that, he says, does not protect the seller from fraud or warranty claims. Mem. 18-19, ECF No. 167. In other words, Pardo is seeking to vacate an interlocutory ruling based on its merits, which if anything brings his motion under the ambit of Rule 60(b), which allows relief from an order for any justifiable reason, not Rule 60(a). But of course, a court always has broad discretion to reconsider its interlocutory rulings. Peirick v. Indiana Univ.-Purdue Univ. Indianapolis Athletics Dep't, 510 F.3d 681, 694 n.5 (7th Cir. 2007).

         No matter; the motion is meritless. For starters, its premise is that the Court erred in dismissing the fraud claims based on the contractual non-reliance clause because, Pardo says, that clause applies only to Mecum as auctioneer, and not as the owner of the vehicle. Pardo claims that it is only through recent discovery that he learned that Mecum owned the vehicle at the time of the auction. That is simply not correct. Pardo made the very same argument in his original motion to reconsider: “But here, however, Mecum was the owner of the Corvette, having purchased the car on June 8, 2011, more than two weeks before the June 25 auction …. Mecum therefore was not acting as an unknowing or uninformed Auction Company, as it held out in the Agreement, but was actually the owner and seller of the Corvette.” See Mem. 6-7, ECF No. 127. The Court expressly addressed this argument, holding that the non-reliance provision would operate equally against seller and auctioneer:

Finally, Pardo's argument that the non-reliance clause shields only fraud claims against Mecum as Auctioneer versus Mecum as seller of the putative 1967 Corvette is unpersuasive, both because the non-reliance clause refers to both the auctioneer and the seller, and because in any event the agreement runs to Mecum Auctions, Inc., the defendant in this case, whatever hat it may have on. Mecum conditioned its assent to Pardo's participation in the auction on Pardo's acknowledgment that he was relying solely on his own examination and inspection of any automobile on which he bid. Having provided that representation to Mecum, Pardo cannot now claim that he relied on representations by Mecum in bidding on the (allegedly) ersatz black 1967 Corvette coupe.

         Order 3, ECF No. 130.

         In light of the above-quoted passage, Pardo's assertion that “[t]he December 29, 2014 dismissal order was premised on the ‘as-is' clause in the parties' contract protecting Mecum from liability as auctioneer” inaccurately describes the ruling, and any doubt on that score should have been settled by the Court's further explanation in response to Pardo's first reconsideration motion.[1] And given Pardo's argument in January 2015 that the fraud claims were well-pled because Mecum owned the Corvette, his current claim that he newly discovered this information (at a deposition in September 2015), which requires the Court to correct an error its prior ruling is, frankly, bizarre. This Court noted as far back as its February 18, 2014 opinion dismissing the claims against the Mullis defendants that “the complaint (which includes its exhibits) shows that ‘the Mecum Collection, ' not the Mullises, sold the car to Pardo.” ECF No. 84 at 10. In addition, Mecum sets forth in detail many more previous occasions on which Pardo alleged or received actual notice that Mecum was the seller. Resp. 2-3, ECF No. 171. Furthermore, Pardo fails to explain why accepting his argument would help him, as his complaint alleges that the auction company made misrepresentations in that capacity, in service of drawing a high bid. See, e.g., SAC ¶¶ 10, 12, 15, 23, 28, 32, 43-44, ECF No. 102. Given Pardo's erroneous recounting of the circumstances purportedly warranting reconsideration and the inconsistency of his current factual allegations with the complaint, [2] there is no reason to (re-)revisit the dismissal ruling, and the fraud and warranty counts will not be reinstated.

         B. Motions for Summary Judgment

         Cross-motions for summary judgment require a district court to “take the motions one at a time” and to construe the evidence and make all reasonable inferences in favor of the party against whom the motion under consideration is made. Black Earth Meat Mkt., LLC v. Vill. of Black Earth, 834 F.3d 841, 847 (7th Cir. 2016); Rickher v. Home Depot, Inc., 535 F.3d 661, 664 (7th Cir. 2008). Summary judgment should be granted if the admissible evidence considered as a whole shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law, even after all reasonable inferences are drawn in the non-movant's favor. Fed.R.Civ.P. 56(a); Dynegy Mktg. & Trade v. Multiut Corp., 648 F.3d 506, 517 (7th Cir. 2011). The existence of cross-motions for summary judgment does not imply that there are no genuine issues of material fact. R.J. Corman Derailment Servs., LLC v. Int'l Union of Operating Engineers, Local Union 150, AFL-CIO, 335 F.3d 643, 647 (7th Cir. 2003). “Parties have different burdens of proof with respect to particular facts; different legal theories will have an effect on which facts are material; and the process of taking the facts in the light most favorable to the non-movant, first for one side and then for the other, may highlight the point that neither side has enough to prevail without a trial.” Id.

         Both parties move for summary judgment on the breach of contract claim, in which Pardo contends that Mecum “wrongfully transferred title to the Corvette to Billy Bob's without Pardo's consent, then refused to remove Billy Bob's from the title, thereby breaching its contract, which required Mecum to deliver title to Pardo within 14 days of the sale.” Reply 3, ECF No. 173. Pardo adds that Mecum has never transferred the title to Pardo.[3] Mecum, on the other hand, argues that it timely performed its contractual requirement under the Agreement to process title, and further that there is no evidence that Pardo incurred any damages arising out of any alleged violation of the title-processing provision.

         Based on Pardo's pleadings and argument, the Court previously defined the breach of contract claim not as one that Mecum delivered to Pardo a car other than the one he bid on, but that “Mecum has failed to deliver legally sufficient title to the car that he did bid on, in violation of the Bidder's Agreement.” Pardo has not taken issue with this characterization (again, he says the provision “required Mecum to deliver title to Pardo within 14 days of the sale”). Because of the limited scope of the contract claim-whether Mecum breached an obligation to timely process and transfer negotiable title in Pardo's name-the universe of material facts is relatively small, despite the parties' long recounting of the circumstances of the disputed sale.

         1. Fact Summary

         The fact summary is derived from the parties' statements of undisputed material facts, response statements, and statements of additional facts, see Local Rule 56.1(a)(3), (b)(3), to the extent the proffered facts are supported by admissible evidence and are material to the issue at hand or useful for context.

         Pardo bought what he believed to be a black 1967 Chevrolet Corvette with Vehicle Identification Number 194377S111042 at Mecum's Bloomington Gold Auction, in St. Charles, Illinois, on June 25, 2011. The car was part of the so-called “Black Collection” marketed by Mecum. From 1988 to 1998, the car was registered in Virginia as a black 1967 model year Chevrolet with VIN 194377S111042. Former defendant Bill Mullis bought the car bearing VIN 194377S111042 in 2000. Thereafter the car was registered in Florida as a black 1967 Chevrolet. On June 8, 2011, Mullis sold and transferred title of the car bearing VIN 194377S111042 to The Mecum Collection Inc. (undisputedly, an alter ego of Mecum Auction). Weeks later, on June 25, Mecum Auction sold the car at its Bloomington Gold auction. Mecum Collection paid an entry fee and seller's commission to Mecum Auction for the Black Collection's auction sale, on a car-by-car basis. Mecum Auction did not disclose that its alter ego was the seller.

         As auctioneer, Mecum advertised the car as a black 1967 Corvette Coupe before the auction. The advertisement stated, however, that Mecum Auction “does not verify, warrant, or guarantee this information, ” and that “[t] he decision to purchase should be based solely on the buyer's personal inspection of the lot at the auction site prior to the auction.” Pardo had “reviewed” the advertisement for the car before attending the auction. He travelled to Illinois from New York intending to bid on that car or another in the collection. The day before the auction, Pardo executed the Gold Bidder ...

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