In Re: ClassicStar Mare Lease Litigation MDL No. 1877

Filing 2574

MEMORANDUM OPINION & ORDER: (1) (90 in 5:08-cv-00017-JMH-REW, 1627 in 5:07-cv-00353-JMH-REW) MOTION to Withdraw by GeoStar Corporation, Geostar Equine Energy, Inc. Motion to Withdraw Deemed Admissions GRANTED; (2) (1605 in 5:07-cv-00353- JMH-REW, 80 in 5:08-cv-00017-JMH-REW) MOTION for Summary Judgment by Dumar Horses, L.C. DENIED; (3) (1626 in 5:07-cv-00353-JMH-REW, 89 in 5:08-cv-00017-JMH-REW) MOTION to Strike (1607 in 5:07-cv-00353-JMH-JBT) Affidavit in Support of Motion, by GeoStar Corporation, Geostar Equine Energy, Inc. DENIED AS MOOT. Signed by Judge Joseph M. Hood on 4/11/2014.Associated Cases: 5:07-cv-00353-JMH-REW, 5:08-cv-00017-JMH-REW(STC)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON

IN RE CLASSICSTAR MARE LEASE
LITIGATION

)
)
)
MDL No. 1877
)
)
)
Master File:
) Civil Action No. 5:07-cv-353-JMH
)
)
)
Civil Action No. 08-17-JMH
)
) MEMORANDUM OPINION AND ORDER
)
)
)

and
DUMAR HORSES, L.C.,
Plaintiff,
v.
CLASSICSTAR, LLC, et al.,
Defendants.

**

This

matter

**

**

is

before

the

**

Court

**

upon

three

motions:

Plaintiff’s Motion for Summary Judgment [DE 80; see also DE 81, 82,
83, and 84] and Defendants GeoStar Corporation and Geostar Equine
Energy,

Inc.’s

(“GeoStar”

and

“GEEI”)

Motion

to

Strike

the

Declaration of Duane Shaw in Support of Plaintiff’s Motion for
Summary Judgment [DE 89] and Motion to Withdraw Deemed Admissions
[DE 90].

Responses [DE 88, 93, 94] and Replies [DE 91, 92, 96, and

97] have been filed.

These motions have been considered by the

Court and are resolved as follows.
I.

Motion to Withdraw Deemed Admissions
Defendants GeoStar and GEEI seek to withdraw deemed admissions

because Dumar, when propounding discovery requests to Defendants,
served those requests by hand-delivery to Defendants’ attorneys at
Snell & Wilmer, listed as counsel of record for Defendants, but
failed to serve the discovery requests electronically as part of a
master list of discovery requests as directed by the Court’s
previous orders [DE 25, 334, and 689].

Defendants ultimately

proffered responses to the requests for admissions, albeit five
days after learning that they had been served and eleven days after
they were due.

Plaintiff explains (1) that it never assented to

those late responses and, in fact, only told Defendants that it
might accept them depending on what Defendants’ responses were and
(2) that it never, ultimately, agreed to late-made responses.
Under Rule 36(a)(3), it is clear that the requests were deemed
admitted since Defendants failed to respond to the requests for
admission within thirty days of service.

Defendants concede that

they did not respond within the required time and that, thus,
Plaintiff has grounds upon which to claim the admissions.

This

Court, however, has discretion to permit withdrawal or amendment of
admissions, and the withdrawal of alleged admissions is allowed (1)
“when

the

subserved

presentation
thereby”

and

of
(2)

the

merits

when

the

of

the

party

action

who

will

obtained

be
the

admission fails to demonstrate to the court that the withdrawal or
amendment will prejudice that party “in maintaining the action or
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defense on the merits.” Kerry Steel, Inc. v. Paragon Indus., Inc.,
106 F.3d 147, 154 (6th Cir. 1997) (quoting Amer. Auto Ass’n v. AAA
Legal Clinic of Jefferson Crooke, P.C., 930 F.2d 1117, 1119 (5th
Cir. 1991)).
Here, upholding the alleged admissions would be tantamount to
eliminating any and all defenses to Dumar’s claims.
first prong of the test is met.

Thus, the

See Riley v. Kurtz, Case No. 98-

1077, 1999 WL 801560 (6th Cir. 1999) (quoting Hadley v. United
States, 45 F.3d 134, 1348 (9th Cir. 1995); Dynasty Apparel Indus.
Inc. v. Rentz, 206 F.R.D. 596, 602 (S.D. Ohio 2001).

Further,

there is no real issue concerning prejudice to Plaintiff since
Defendants almost immediately (and before the filing of the Motion
for Summary Judgment) made their (according to Plaintiff, late)
responses.

See Chancellor v. City of Detroit, 454 F. Supp.2d 645

(E.D. Mich. 2006) (citing Gutting v. Falstaff Brewing Co., 710 F.2d
1309, 1313 (8th Cir. 1983)).

The Court has considered Plaintiff’s

rationale for their belated response and concludes that their
explanation is reasonable.
Perhaps Defendants could have been more timely in their
response.

Perhaps

Plaintiff

could

indicated by the Court’s order.

have

served

everything

as

Regardless, Plaintiff was not

prejudiced by Defendants’ failure to respond on the due date except
insofar as they did not ultimately obtain the admissions they
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desired.

That

is

not

enough

to

warrant

relief.

Plaintiff

demonstrated a willingness to waive their objection to the manner
of service so long as the response to the request for admissions
was accepted.

Clearly, some sort of administrative oversight

occurred and, somehow, the requests for admissions did not make
their way into the queue of work to be done within the thirty day
period, whoever was to undertake those efforts on behalf of
Defendants.

That is forgiveable.

Plaintiff’s objection is not

because it or Plaintiff’s counsel would be somehow prejudiced or,
for that matter, inconvenienced by the seven extra days it took for
Plaintiff to respond because of the communication issue.

The

reality is that Plaintiff decided it would not forgive the lateness
because it did not like Defendants’ responses when they declined to
admit what Plaintiff had requested – which is too coy by far.
Accordingly, the Court will permit the withdrawal of the deemed
admissions and, further, will deem the responses made by Defendants
timely.
The court, then considers, what this means for Plaintiff’s
Motion for Summary Judgment, and the answer is clear: it is fatal
to the Motion as explained below.

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II.

Motion for Summary Judgment
A.

Applicable Standards of Review: the Burdens of Proof and
Persuasion for a Motion for Summary Judgment

The standard for summary judgment mirrors the standard for
directed verdict.
251 (1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

A grant of summary judgment is proper “if the

pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law.”

Fed. R. Civ. P.

56(c).
The moving party bears the initial burden to show the absence
of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477

U.S. 317, 323 (1986). Once that burden is met, the nonmoving party
must “come forward with some probative evidence to support its
claim.”

Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir.

1994).

A material fact is one that may affect the outcome of the

issue at trial, as determined by substantive law.

See Niemi v. NHK

Spring Co., Ltd., 543 F.3d 294, 298 (6th Cir. 2008).

There is a

genuine dispute as to a material fact if the evidence shows “that
a reasonable jury could return a verdict for the nonmoving party.”
Anderson, 477 U.S. at 249; Summers v. Leis, 368 F.3d 881, 885 (6th

-5-

Cir. 2004).
The judge’s function is not to weigh the evidence, but to
decide whether there are genuine issues for trial.

Anderson, 477

U.S. at 249; Multimedia 2000, Inc. v. Attard, 374 F.3d 377, 380
(6th Cir. 2004).

The evidence should be construed in the light

most favorable to the nonmoving party when deciding whether there
is enough evidence to overcome summary judgment.

Anderson, 477

U.S. at 255; Summers, 368 F.3d at 885.
B.

Discussion

At its heart, this individual matter is a contract action with
a twist, because Dumar asserts that GeoStar is the alter ego of
GEEI and ClassicStar, and that it is , thus, liable for the others’
debts to Dumar.

There are also several contracts, including

guaranties by GeoStar, at bar. Dumar contends that it entered into
a Purchase Agreement with ClassicStar, L.C., in 2004, under which
Dumar would sell to ClassicStar its interest in certain equine
breeding and ownership rights in exchange for an installment note,
which was executed by ClassicStar, and payments in accordance with
that note’s provisions.

Plaintiff contends that ClassicStar did

not meet its obligations and is in default on that note. Plaintiff
also avers and intends to demonstrate that GeoStar executed and
failed to honor a Guaranty Agreement – agreeing to pay the note in
the event that ClassicStar would not or could not pay – which it
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made in order to induce Dumar to enter into the Purchase Agreement
and accept the note as payment.
Dumar also agreed to purchase units offered by First Equine
Energy Partners, L.L.C. (“FEEP”), as part of offerings conducted in
2003 and 2004, which provided Dumar with a put option under which
FEEP agreed to repurchase those units if the option was exercised.
Dumar contends that it exercised those put options in a timely
fashion but that FEEP failed to pay for the repurchase of the
units.

That same transaction was the subject of a guaranty by

Geostar, the parent corporation of FEEP’s manager, GeoStar Equine
Energy, Inc. (“GEEI”), which GeoStar has – according to Dumar –
failed to honor.

Finally, Dumar contends that it entered into a

2004 Mare Lease and Breeding Agreement with ClassicStar, pursuant
to which Dumar was to receive eight horses for breeding purposes,
and which ClassicStar breached by providing only eight horses.
In support of these claims, Dumar relies on the admissions,
now withdrawn, of the defendants, and the Declaration of Duane
Shaw, its principal.

Defendants ask the Court to strike the

declaration on the grounds that the contracts in question are not
attached and that reliance on such a declaration is prohibited by
the terms of Rule 56(e).

This is not always the case.

See 10A

CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL
PRACTICE AND PROCEDURE, Civil 3d § 2722, at 381 (“testimony
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otherwise

admissible

need

not

be

stricken

simply

because

it

contains evidence that also appears in written documents that are
not attached to the affidavit . . ..”).

For example, where Dumar

contends through Shaw that Defendants have control over original,
fully executed documents and that, as a result, Shaw cannot provide
copies of fully-executed originals, the matter may fall into one of
the evidentiary exceptions set forth in Fed. R. Evid. 1004.

The

reality is, however, that when the declaration of Duane Shaw is
considered, it does not – without more – provide evidence that
Defendants assented to the contracts in question. Accordingly, the
Court need not resolve the issue of the treatment of Declarant’s
statement since Declarant offers no proof of Defendants’ assent to
the various contracts at bar.
He

has

made

an

assertion

of

legal

conclusions

–

that

Defendants entered into the relevant contracts – rather than
declaring facts within his personal knowledge from which the Court
could conclude that enforceable contracts existed (for example,
proof that Plaintiff’s consideration was accepted through evidence
of

cancelled

correspondence

checks
or

or

proof

agreements

which

of

wire

reference

transfers;
or

rely

other
on

the

contracts which are the subject of their claims; statements made by
Defendants from which assent can be implied.).

See, e.g., MAPCO

Alaska Petroleum, Inc. V. Central Nat. Ins. Co. of Omaha, 795

-8-

F.Supp. 941, 948-49 (D. Alaska 1991) (holding that Plaintiff
presented sufficient evidence to establish existence of insurance
policy where it was unable to locate original after good faith
search

but

was

able

to

produce

a

certificate

of

insurance

referencing the policy and a cover letter from an insurance broker
indicating that the policy was in effect, as well as invoices
indicating payment of premiums and other policies which referred to
it, as well as no evidence of cancellation or withdrawal of the
policy).

Of course, Defendants are careful not to say that such

evidence does not exist, but in the absence of that evidence, the
failure to challenge it does not persuade the Court that there is
no genuine dispute, only that is a lacuna – a hole – in the
evidence that must be filled, if it can be filled, at a later time.
For now, there is a lack of evidence as to the enforceability
of the contracts at bar, even if the Court considers Shaw’s
declaration.1

In

the

future,

Plaintiff

1

may

be

able

to

use

Notably Plaintiff has established through Shaw’s
affidavit that the original is not in its possession and that it is
Plaintiff’s belief that the original is in Defendants’ possession.
As well, Plaintiff’s declarant believes that Defendants assented to
the agreement, but based on what evidence? Certainly, Plaintiff’s
declarant has set forth his belief in the legal conclusion that
Defendants assented to the agreement. The Court has no reason to
doubt the sincerity of that belief but, in the absence of something
more to draw the conclusion that Defendants assented to the
contract (for example that Declarant saw the signed contracts, has
personal knowledge from which it can be deduced that Defendants
accepted the consideration, or some other evidence from which the
Court can conclude that Defendants’ assent was given).
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testimony of an individual with adequate knowledge – perhaps even
Shaw – to prove the existence of a contract which is in the
possession of one or more of these Defendants under Fed. R. Evid.
1004.

Since Defendants have not denied the existence of the

contract through evidence presented in response to the Motion for
Summary Judgment and has responded only that the contracts in
question must be in the mountain of discovery turned over to
Plaintiff if they are anywhere, the Court would be surprised if
Fed. R. Evid. 1004 did not come into play.

That will, of course,

be a question for and the subject of findings at the trial in this
matter, and this Court will leave those findings to the transferor
court.

Ultimately, the dispute before this Court gets to the very

heart of the threshold issue in this case – whether the parties
agreed to anything.

That is, in light of Plaintiff’s apparent

inability to produce the contracts in question, one for a fact
finder at trial.
Accordingly, for all of the reasons set forth above, IT IS
ORDERED:
(1)

That Defendants GeoStar Corporation and Geostar Equine
Energy, Inc.’s (“GeoStar” and “GEEI”) Motion to Withdraw
Deemed Admissions [DE 90] is GRANTED;

(2)

That Plaintiff’s Motion for Summary Judgment [DE 80] is
DENIED; and

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(3)

That Defendants GeoStar Corporation and Geostar Equine
Energy, Inc.’s (“GeoStar” and “GEEI”) Motion to Strike
the Declaration of Duane Shaw in Support of Plaintiff’s
Motion for Summary Judgment [DE 89] is DENIED AS MOOT.

This the 11th day of April, 2014.

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