MMG FINANCIAL CORP. v. MIDWEST AMUSEMENTS PARK (January 5, 2011)
Cameron Motorsports entered into a joint venture called Team Hurricane with MMG Financial. Go-karts made in Italy are branded by Cameron and sold by Team Hurricane, while MMG provides financing to the purchasers. Midwest Amusements Park operated a go-cart racetrack in Shawano, Wisconsin. Team America represented to Midwest that Cameron would assemble and break-in the go-karts, as well as supply training materials. Midwest ordered 24 go-karts. MMG sent Midwest a document purporting to represent its oral agreement to finance the purchase. The agreement reflected a 24% annual percentage rate. Midwest never signed the documents. The go-karts were nevertheless delivered. Soon thereafter, Midwest began complaining about the go-karts and about the proposed interest rate. Midwest eventually sent MMG a document reflecting a 12% rate -- MMG never signed that document. Meanwhile, Midwest never made a payment. In mid-2006, MMG sued Midwest for breach of contract. Midwest counterclaimed on the grounds that MMG never paid Cameron and that MMG breached warranties because the go-karts did not work properly. Judge Griesbach (E.D. Wis.) granted summary judgment to MMG on the counterclaim. MMG's breach of contract case went to trial. The jury found for MMG, concluding that there was an oral contract with a 24% interest rate. Midwest appeals.
In their opinion, Chief Judge Easterbrook, Circuit Judge Flaum, and District Judge Hibbler affirmed. The Court first addressed Midwest's challenge to the court’s award of summary judgment on its counterclaim. The Court agreed with the district court that Midwest's evidence -- statements of its employees describing the statements of Cameron employees -- was "classic hearsay" and properly excluded. Since this was the only evidence Midwest relied on, summary judgment for MMG was proper. Next, the Court addressed Midwest’s affirmative defense that it was entitled to a set off because MMG failed to pay Team Hurricane for the go-karts. Midwest’s theory was that MMG’s failure to pay Team Hurricane resulted in Team Hurricane not addressing the many problems Midwest was having with the go-karts. The problem with Midwest's position is that it relied exclusively on an e-mail from CRG to Cameron. The Court never addressed whether the district court properly excluded that evidence. Instead, it concluded that the e-mail was irrelevant because it bore no relation to MMG's payment of its obligations. Finally, the Court summarily rejected Midwest's arguments regarding the jury instructions, the verdict form, and its motion for a new trial.