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James T. Scatuorchio Racing Stable, LLC v. Walmac Stud Management, LLC

United States District Court, E.D. Kentucky, Central Division, Lexington

March 19, 2014

JAMES T. SCATUORCHIO RACING STABLE, LLC, et al., Plaintiffs,
v.
WALMAC STUD MANAGEMENT, LLC, et al., Defendants.

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

This matter is pending for consideration of Defendants Walmac Farm, LLC ("Walmac Farm"), and Walmac Stud Management, LLC's ("Walmac Stud") motion for summary judgment regarding claims of breach of contract and the duty of good faith and fair dealing asserted by Plaintiff Bryan Sullivan. [Record No. 165] The defendants contend that Sullivan's claims pertaining to the Mare Agreement are subject to summary judgment because he did not perform the required obligations set out by that contract. For the reasons discussed below, the Court will deny the defendants' motion.

I.

This action arises from a series of contracts and agreements. Plaintiff James Scatuorchio has been involved in the thoroughbred industry for over a dozen years and is also the sole member of James T. Scatuorchio, LLC. [Record No. 72 ¶¶ 17, 18] Scatuorchio, LLC, and James Scatuorchio's children, Kevin Scatuorchio and Courtney Sullivan, own interest in the stallion Ready's Image. [ Id. ¶ 19] Walmac Farm is a stud farm located in Lexington, Kentucky. It is in the business of boarding, breeding, selling, and marketing the breeding potential of stallions. [ Id. ¶ 24] John T.L. Jones is a member, officer, and employee of Walmac Farm and Walmac Stud. [ Id. ¶ 10]

In 2008, Walmac Farm, Walmac Stud, and John T.L. Jones ("Walmacs") discussed with James Scatuorchio the purchase of an interest in Ready's Image and managing its career as a stud. [ Id. ¶ 20] The Walmacs represented that they could "do everything that was necessary to maximize the likelihood of Ready's Image's success." [ Id. ¶ 27] The Walmacs also claimed that they would expose Ready's Image to a large number of mares in its first breeding season. [ Id. ¶ 28] In response, Scatuorchio, LLC, Kevin Scatuorchio, and Courtney Sullivan sold a twothirds undivided interest in Ready's Image to Walmac Stud for $2.4 million. [ Id. ¶¶ 32, 47]

In 2010, James Scatuorchio, Kevin Scatuorchio, and Bryan Sullivan (the "Mare Plaintiffs") became concerned that not enough had been done to promote Ready's Image. [ Id. ¶ 69] As a result, they entered into a Mare Agreement with Walmac Farm. [ Id. ¶¶ 68-70] Under the agreement, the Mare Plaintiffs would receive the proceeds of any contract for mares they delivered to Walmac Farm for breeding with Ready's Image. [Record No. 72-1] To be entitled to the proceeds, the Mare Plaintiffs had to pay shipping expenses, boarding expenses, and veterinary charges for each mare. [ Id. ] The Mare Plaintiffs delivered at least ten mares to the Walmacs. [Record No. 72 ¶ 83]

The Mare Plaintiffs have asserted claims of breach of the Mare Agreement and of the duty of good faith and fair dealing. [ Id. ¶¶ 97-99, 110-14] They claim that the defendants failed to meet their obligations as set forth in the contract. Additionally, they contend that they have not received any funds from Walmac Farm or Walmac Stud under to the Mare Agreement. [ Id. ¶¶ 73, 76] The defendants have moved for summary judgment regarding the claims asserted by Sullivan under the Mare Agreement. [Record No. 165] They claim that, because Sullivan did not individually pay for the shipping expenses, board expenses, and veterinary charges for any mares, he cannot seek to recover under the Mare Agreement. [ See Record No. 162-1.]

II.

Summary judgment is required when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Chao v. Hall Holding Co., 285 F.3d 415, 424 (6th Cir. 2002). A dispute over a material fact is not "genuine" unless a reasonable jury could return a verdict for the nonmoving party. That is, the determination must be "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

The party moving for summary judgment bears the burden of showing conclusively that no genuine issue of material fact exists. CenTra, Inc. v. Estrin, 538 F.3d 402, 412 (6th Cir. 2008). Once the moving party has met its burden of production, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Sigler v. Am. Honda Motor Co., 532 F.3d 469, 483 (6th Cir. 2008) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). Instead, the nonmoving party must present "significant probative evidence" of a genuine dispute... to defeat the motion for summary judgment. Chao, 285 F.3d at 424. The nonmoving party cannot simply rely upon the assertions in its pleadings; rather, it must come forward with probative evidence, such as sworn affidavits, to support its claims. Celotex, 477 U.S. at 324. In deciding whether to grant summary judgment, the Court views all the facts and inferences drawn from the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587.

III.

Defendants Walmac Farm and Walmac Stud argue that they are entitled to summary judgment regarding Bryan Sullivan's breach of contract claims because he did not perform the required duties set by the Mare Agreement. [Record No. 165-1, pp. 1-4] However, the Sullivan responds that there are genuine issues of material fact that render summary judgment inappropriate.[1] [Record No. 174, pp. 8-19]

The Mare Agreement contains the following relevant terms[2]:

1) The "Original Ready's Image Owners" pay shipping costs from another state to and from Kentucky for a mare... shipped in 2010 to breed to Ready's Image and pay to the board and routine veterinary charges for the ...

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