Rams v. Cordish Operating Ventures, LLC et al

Filing 46

MEMORANDUM OPINION AND ORDER by Judge David J. Hale on 3/2/2017 - Defendants Cordish Operating Ventures, LLC and RC Venture, LLC's motion for summary judgment 31 is GRANTED. Cordish Operating Ventures, LLC and RC Venture, LLC are dismissed as Defendants. Defendants Entertainment Consulting International, Entertainment Holdings, and Southern Lounge Ky, LLC's motion for leave to file a third-party complaint 35 is GRANTED. The Clerk is directed to file the third-party complaint.cc: Counsel(DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
SCOTT RAMS,

Plaintiff,

v.

Civil Action No. 3:16-cv-233-DJH-CHL

CORDISH OPERATING VENTURES, LLC,
et al.,

Defendants.

* * * * *
MEMORANDUM OPINION AND ORDER
Plaintiff Scott Rams fell from a second-story balcony after being served alcoholic
beverages at a bar known as “PBR” in Louisville, Kentucky.1 (Docket No. 1-1, PageID # 9–10)
Rams filed suit against PBR, Cordish Operating Ventures, LLC, RC Ventures, Inc., American
Services, Inc., Entertainment Holding, Entertainment Consulting International, and Unknown
Defendants, alleging dram shop liability and negligent security. (D.N. 1-1) Defendants Cordish
Operating Ventures, LLC and RC Ventures, LLC have filed a motion for summary judgment,
claiming that they do not own or operate PBR and that the plaintiff has failed to state a plausible
alter ego theory of liability. (D.N. 31-1) In addition, Defendants Entertainment Consulting
International, Entertainment Holdings, and PBR have filed a motion for leave to file a third-party
complaint. (D.N. 35) Because the Court finds that the plaintiff has not demonstrated a genuine
dispute as to Cordish Operating Venture and RC Venture’s control over PBR, the motion for
summary judgment will be granted. The Court will also grant the motion for leave to file a thirdparty complaint since the claims exceed the “obviously unmeritorious” standard and a third-party
complaint will not prejudice the plaintiff.

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PBR stands for Professional Bullriders, Inc. and both are trade names for Defendant Southern
Lounge Ky, LLC. (D.N. 1-1)
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I.

BACKGROUND
On the night of March 28, 2015, Plaintiff Scott Rams went to PBR, a restaurant and bar

in Louisville’s 4th Street Live! entertainment area. (D.N. 1-1, PageID # 9–10) Rams states that
PBR served him alcoholic beverages and that during the evening, security personnel “were called
on several occasions to address altercations between Plaintiff and other patrons of PBR.” (D.N.
1-1, PageID # 10) Rams states that he was “allowed to leave [PBR] intoxicated with a blood
alcohol concentration that greatly exceeded the legal limit.” (Id.) Shortly after leaving PBR,
Rams fell from a second-story balcony that was “immediately outside of Defendant PBR’s
premises.” (Id.)
On March 17, 2016, Rams filed suit against Defendants Cordish Operating Ventures,
LLC, RC Ventures, Inc., Southern Lounge KY, LLC d/b/a PBR Louisville, American Services,
Inc., Entertainment Holding, Entertainment Consulting International, and Unknown Defendants
in Jefferson Circuit Court, alleging dram shop liability and negligent security. (Id., PageID #
11–14) The defendants removed the case to this court. (D.N. 1)
In his complaint, Rams alleges that the defendants are all alter egos of Cordish Operating
Ventures, LLC. (D.N. 1-1, PageID # 9–10) For support, Rams states that the defendants “share
substantially the same owners/members, directors/officers, and/or employees” and operate at the
direction of Reed Cordish, Vice President of Cordish Operating Ventures, LLC. (Id.)
Defendants Cordish Operating Ventures, LLC and RC Ventures, Inc. have filed a motion
for summary judgment, claiming that they did not “own or operate the subject premises or PBR”
and thus cannot be liable for the plaintiff’s injuries. (D.N. 31-1, PageID # 132) Additionally,
these defendants argue that Rams has failed to state a plausible alter ego theory of liability. (Id.,
PageID # 136–40) In response, Rams contends that the motion for summary judgment should be

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denied because the ownership of the premises is disputed, creating a genuine issue of material
fact. (D.N. 34, PageID # 162–64)
Additionally,

Defendants

Entertainment

Consulting

International,

Entertainment

Holdings, and PBR have filed a motion for leave to file a third-party complaint against Federal
Building Services. (D.N. 35-1, PageID # 176) These defendants state that American Service
Industries, Inc. and Federal Building Services provided security for PBR and thus have potential
liability pursuant to the terms of the Protective Services Agreement (PSA). (Id.) The plaintiff
did not respond, and the matter is ripe for adjudication.
II.

DISCUSSION
A. Motion for Summary Judgment
1. Legal Standard
To grant a motion for summary judgment, the Court must find that there is no genuine

dispute as to any material fact and that the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a). The moving party bears the initial burden of identifying the basis for
its motion and those portions of the record that “it believes demonstrate the absence of a genuine
issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party
satisfies this burden, the non-moving party must point to specific facts demonstrating a genuine
issue of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
In considering a motion for summary judgment, the Court must review the evidence in
the light most favorable to the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986), but “the judge’s function is not himself to weigh the evidence
and determine the truth of the matter but to determine whether there is a genuine issue for trial.”
Anderson, 477 U.S. at 249. The non-moving party must present specific facts demonstrating that

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a genuine issue of fact exists by “citing to particular parts of materials in the record” or by
“showing that the materials cited do not establish the absence . . . of a genuine dispute.” Fed. R.
Civ. P. 56(c)(1).
2. Dram Shop Act
Kentucky’s Dram Shop Act provides:
(1) The General Assembly finds and declares that the consumption of intoxicating
beverages, rather than the serving, furnishing, or sale of such beverages, is the
proximate cause of any injury, including death and property damage, inflicted by
an intoxicated person upon himself or another person.
(2) Any other law to the contrary notwithstanding, no person holding a permit
under KRS Chapters 241 to 244, nor any agent, servant, or employee of the
person, who sells or serves intoxicating beverages to a person over the age for the
lawful purchase thereof, shall be liable to that person or to any other person or to
the estate, successors, or survivors of either for any injury suffered off the
premises including but not limited to wrongful death and property damage,
because of the intoxication of the person to whom the intoxicating beverages were
sold or served, unless a reasonable person under the same or similar
circumstances should know that the person served is already intoxicated at the
time of serving.
(3) The intoxicated person shall be primarily liable with respect to injuries
suffered by third persons.
Ky. Rev. Stat. § 413.241. Therefore, as the defendants point out, based on the plain language of
the statute, to be liable under Kentucky law, a party must “hold[] a permit under KRS Chapters
241 to 244” or be an “agent, servant, or employee of the” party holding the permit. Id. Robert
Fowler, an agent of Cordish Operating Ventures, LLC and RC Ventures, Inc., states in his
affidavit that neither Cordish Operating Ventures nor RC Ventures hold a permit under these
chapters or sell and serve alcoholic beverages. (D.N. 31-2, PageID # 144)
3. Alter Ego Theory
The plaintiff acknowledges that Cordish Operating Ventures and RC Ventures do not
hold these permits, and instead argues that they are liable under an alter ego theory. (D.N. 1-1;
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D.N. 34) According to the plaintiff, there is considerable overlap in the addresses and listed
ownership of the Cordish companies; therefore, it is “highly likely that Cordish Operating
Ventures, LLC possesses interest and/or ownership in PBR.” (Id., PageID # 163) For support,
the plaintiff states that on PBR’s Alcoholic Beverage License and Renewal Application, it lists
“Louisville Galleria LLC Cordish Company,” located at 601 E Pratt St, 6th Floor, Baltimore, MD
21202, as its owner. (D.N. 34, PageID # 162) According to the plaintiff, Cordish Operating
Ventures provided the same address to the Kentucky Secretary of State as the location of its
principal office. (Id.) The plaintiff also notes that Louisville Galleria has registered the same
address with the Secretary of State and lists Jonathan Cordish as its manager. (Id., PageID #
163) Finally, the plaintiff states that the only “Cordish” company that is “active and in good
standing with the Secretary of State is Cordish Operating Ventures, LLC.” (Id.)
Under Kentucky law, “[i]n general, a corporation is treated as a legal entity separate and
apart from its shareholders. However, when the corporation is used to justify wrong, protect
fraud or defend crime, the law regards the corporation as an association of persons.” § 14:16.50.
Abuse of corporate purpose—Shareholder liability, 4A Ky. Prac. Methods of Prac. § 14:16.50
(2016) (citing Dare To Be Great, Inc. v. Com. ex rel. Hancock, 511 S.W.2d 224, 227 (Ky.
1974)). The shareholders of a corporation can be held responsible for corporate liabilities under
an “alter ego theory” if the plaintiff can prove: “(1) that the corporation is not only influenced by
the owners, but also that there is such unity of ownership and interest that their separateness has
ceased; and (2) that the facts are such that treatment of the corporation as a separate entity would
sanction a fraud or promote injustice.” Id. Factors to consider when evaluating the first element
include:
(1) whether the corporation is inadequately capitalized, (2) whether the owners
observe corporate formalities, (3) whether the corporation issues stock or pays
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dividends, (4) whether it operates without a profit, (5) whether there is a
commingling of corporate and personal assets, (6) whether the owners use
corporate assets as their own, or in general deal with the corporation at arms
length, (7) whether there are non-functioning officers or directors, (8) whether the
corporation is insolvent at the time of the transaction, (9) whether corporate
records have been maintained, and (10) whether others pay or guarantee debts of
the corporation. No single factor is dispositive.
Id. (citing Bear, Inc. v. Smith, 303 S.W.3d 137 (Ky. Ct. App. 2010)).
Rams argues that the overlap in addresses and listed managers, suggests that Cordish
Operating Ventures and RC Ventures have an ownership interest in PBR. (D.N. 34, PageID #
163)

However, even assuming these companies own PBR, the plaintiff has not provided

sufficient facts to support an alter ego theory of liability.
Even if Cordish Operating Ventures and RC Ventures have an ownership interest in PBR,
the plaintiff still must establish that these entities had such unity of ownership and interest that
their corporate separateness has ceased and treating them as separate entities “would sanction a
fraud or promote injustice.” 4A Ky. Prac. Methods of Prac. § 14:16.50. The plaintiff has not
provided any facts to suggest that this is the case. Instead, without citing anything in the record
for support, the plaintiff states that “the degree of control Cordish exerted over PBR is [a]
genuine issue of material fact precluding summary judgment.” (D.N. 34, PageID # 164) This
conclusory statement without citing any factual support is not sufficient to survive a motion for
summary judgment. See Anderson, 477 U.S. at 249.
B. Motion for Leave to File Third-Party Complaint
Rule 14(a)(1) provides that “[a] defending party may . . . serve a summons and complaint
on a nonparty who is or may be liable to it for all or part of the claim against it. But the thirdparty plaintiff must, by motion, obtain the court’s leave if it files the third-party complaint more
than 10 days after serving its original answer.” Fed. R. Civ. P. 14(a)(1). “[T]imely motions for

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leave to implead third parties should be freely granted . . . unless to do so would prejudice the
plaintiff, unduly complicate the trial, or would foster an obviously unmeritorious claim.” In re
Yamaha Motor Corp. Rhino ATV Prod. Liab. Litig., No. 3:09-MD-2016-JBC, 2009 WL
2241599, at *2 (W.D. Ky. July 24, 2009) (alteration in original) (citing Trane U.S. Inc. v.
Meehan, 250 F.R.D. 319, 322 (N.D. Ohio 2008)).
The defendants’ claims against Federal Building Services are not “obviously
unmeritorious” and the plaintiff did not argue that he would be prejudiced in any way. Id.
Therefore, the Court will grant the defendant’s motion for leave to file a third-party complaint.
III.

CONCLUSION
For the reasons explained above, and the Court being otherwise sufficiently advised, it is

hereby
ORDERED as follows
(1)

Defendants Cordish Operating Ventures, LLC and RC Venture, LLC’s motion for

summary judgment (D.N. 31) is GRANTED.

Cordish Operating Ventures, LLC and RC

Venture, LLC are dismissed as Defendants in this matter.
(2)

Defendants Entertainment Consulting International, Entertainment Holdings, and

Southern Lounge Ky, LLC’s motion for leave to file a third-party complaint (D.N. 35) is
GRANTED. The Clerk is directed to file the third-party complaint attached to defendants’
motion.
March 2, 2017

David J. Hale, Judge
United States District Court

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