RED BARN MOTORS, INC. et al v. NEXTGEAR CAPITAL, INC. et al

Filing 185

ORDER ON PLAINTIFFS' MOTION FOR LEAVE TO FILE SURREPLY - Upon close review of the parties' briefing, the Court determines that the Defendants' Reply Brief did not inject new evidence, arguments, or issues into the Motion to Dismiss. Instead, the Reply Brief provided the Defendants' response to the arguments advanced by the Plaintiffs in their Response Brief. The limited circumstances for allowing a surreply--to address new arguments or evidence raised in the reply bri ef--are not present in this case, and as a result, the Court DENIES the Plaintiffs' Motion for Leave to File Surreply in Opposition to Defendants' Motion to Dismiss (Filing No. 137 ). (See Order.) Signed by Judge Tanya Walton Pratt on 3/27/2017. (JLS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
RED BARN MOTORS, INC.,
PLATINUM MOTORS, INC.,
MATTINGLY AUTO SALES, INC., and
YOUNG EXECUTIVE MANAGEMENT &
CONSULTING SERVICES, INC.,
individually and on behalf of other members of
the general public similarly situated,
Plaintiffs,
v.
NEXTGEAR CAPITAL, INC. f/k/a DEALER
SERVICES CORPORATION,
COX ENTERPRISES, INC.,
COX AUTOMOTIVE, INC., and
JOHN WICK,
Defendants.

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Case No. 1:14-cv-01589-TWP-DKL

ORDER ON PLAINTIFFS’ MOTION FOR LEAVE TO FILE SURREPLY
This matter is before the Court on a Motion for Leave to File Surreply in Opposition to
Defendants’ Motion to Dismiss filed by Plaintiffs Red Barn Motors, Inc., Platinum Motors, Inc.,
Mattingly Auto Sales, Inc., and Young Executive Management & Consulting Services, Inc.
(collectively “Plaintiffs”) (Filing No. 137).
The “purpose for having a motion, response and reply is to give the movant the final
opportunity to be heard and to rebut the non-movant’s response, thereby persuading the court that
the movant is entitled to the relief requested by the motion.” Lady Di’s, Inc. v. Enhanced Servs.
Billing, Inc., 2010 U.S. Dist. LEXIS 29463, at *4 (S.D. Ind. Mar. 25, 2010). However, “new
arguments and evidence may not be raised for the first time in a reply brief. Reply briefs are for
replying, not raising new arguments or arguments that could have been advanced in the opening

brief.” Reis v. Robbins, 2015 U.S. Dist. LEXIS 23207, at *5 (S.D. Ind. Feb. 26, 2015) (citations
omitted). “[T]his serves to prevent the nonmoving party from being sandbagged.” Id. (citation
omitted). Courts allow a surreply only in limited circumstances to address new arguments or
evidence raised in the reply brief or objections to the admissibility of the evidence cited in the
response. See, e.g., id.; Miller v. Polaris Labs., LLC, 2014 U.S. Dist. LEXIS 18161 (S.D. Ind. Feb.
12, 2014).
In 2009 and 2011, the Plaintiffs entered into agreements with Defendant NextGear Capital,
Inc., formerly known as Dealer Services Corporation. These agreements provided lines of credit
for financing the Plaintiffs’ used car dealership operations. When the Plaintiffs discovered that
they had been charged fees and interest on money that had not yet actually been loaned, they
initiated this litigation, asserting claims for breach of contract, constructive fraud, tortious
interference with business relationships, unjust enrichment, violation of the Racketeer Influenced
and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and RICO conspiracy. The
Defendants—NextGear Capital, Inc., Cox Enterprises, Inc., Cox Automotive, Inc., and John
Wick—moved to dismiss the Plaintiffs’ Amended Complaint.
The Defendants asserted numerous bases for dismissal, but their primary argument was
that the terms of the contracts allowed the Defendants to charge fees and interest at the time that
they did actually charge fees and interest. The Plaintiffs responded that the language of the
contracts did not permit the early assessment of fees and interest, and if nothing else, there is an
ambiguity in the contracts that prohibits termination of the case at the motion to dismiss stage. The
Defendants replied to this argument, and the Plaintiffs sought leave to file a surreply brief,
asserting that the Defendants’ Reply Brief raised a new issue regarding contract interpretation
(Filing No. 137-1).

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In their proposed surreply, the Plaintiffs assert that the Defendants’ interpretation of the
contracts is not supported by the language of the contracts. They explain that no contract provision
has been identified that supports the Defendants’ interpretation, and the Defendants’ reliance on
new “evidence” or “argument”—a definition of “loan” from Black’s Law Dictionary—suggests
that there are ambiguities in the contracts, prohibiting dismissal at this stage of the litigation.
In response to the Plaintiffs’ Motion for Leave to File Surreply, the Defendants explain
that they have argued since their opening brief that the Plaintiffs’ allegations and theories of
recovery contradict the plain language of the parties’ contracts. Thus, the Plaintiffs’ proposed
surreply does not respond to new arguments or issues raised in the Defendants’ Reply Brief.
Rather, the Plaintiffs asserted contract interpretation arguments in their Response Brief, and the
Defendants simply replied to those arguments with legal and secondary authority regarding the
meaning of words in the contracts. The Defendants assert that they added no factual or legal
arguments or evidence extraneous to the parties’ agreements or the Plaintiffs’ own allegations.
Therefore, there is no basis to allow a surreply.
Upon close review of the parties’ briefing, the Court determines that the Defendants’ Reply
Brief did not inject new evidence, arguments, or issues into the Motion to Dismiss. Instead, the
Reply Brief provided the Defendants’ response to the arguments advanced by the Plaintiffs in their
Response Brief. The limited circumstances for allowing a surreply—to address new arguments or
evidence raised in the reply brief—are not present in this case, and as a result, the Court DENIES
the Plaintiffs’ Motion for Leave to File Surreply in Opposition to Defendants’ Motion to Dismiss
(Filing No. 137).
SO ORDERED.
Date: 3/27/2017
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Distribution:
David J. Jurkiewicz
BOSE MCKINNEY & EVANS, LLP
[e-mail]

Catherine E. Lasky
JONES SWANSON HUDDELL &
GARRISON, LLC
[e-mail]

Paul D. Vink
BOSE MCKINNEY & EVANS, LLP
[e-mail]

Gladstone N. Jones
JONES SWANSON HUDDELL &
GARRISON, LLC
[e-mail]

Steven D. Groth
BOSE MCKINNEY & EVANS, LLP
[e-mail]

Kerry A. Murphy
JONES, SWANSON, HUDDELL &
GARRISON, LLC
[e-mail]

Joshua P. Melder
CASSIE FELDER & ASSOCIATES, LLC
[e-mail]

Lynn E. Swanson
JONES, SWANSON, HUDDELL&
GARRISON, LLC
[e-mail]

Kathleen Ann DeLaney
DELANEY & DELANEY LLC
[e-mail]

Matthew M. Coman
SHER GARNER CAHILL RICHTER
KLEIN & HILBERT LLC
[e-mail]

Jason S. McCarter
SUTHERLAND ASBILL & BRENNAN LLP
[e-mail]

Ryan D. Adams
SHER GARNER CAHILL RICHTER
KLEIN & HILBERT LLC
[e-mail]

Tracey K. Ledbetter
SUTHERLAND ASBILL & BRENNAN LLP
[e-mail]

James M. Garner
SHER GARNER CAHILL RICHTER
KLEIN & HILBERT, LLC
[e-mail]

Cassie E. Felder
LUGENBUHL, WHEATON, PECK, RANKIN
& HUBBARD
[e-mail]

Jacob A. Airey
SHER GARNER CAHILL RICHTER
KLEIN & HILBERT, LLC.
[e-mail]

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