In the
United States Court of Appeals
For the Seventh Circuit
No. 08-4060
MMG F INANCIAL C ORPORATION,
Plaintiff-Appellee,
v.
M IDWEST A MUSEMENTS P ARK , LLC,
K AL G RONVALL, D R. R.C. S AMANTA R OY
INSTITUTE OF S CIENCE AND T ECHNOLOGY,
INC. and U.S. A CQUISITIONS & O IL, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 06-C-929—William C. Griesbach, Judge.
A RGUED A PRIL 16, 2010—D ECIDED JANUARY 5, 2011
Before E ASTERBROOK, Chief Judge, FLAUM , Circuit Judge,
and H IBBLER, District Judge.
H IBBLER, District Judge. A tangled web of corporate
relationships and oral promises lies at the center of this
The Honorable William J. Hibbler, District Judge for the
Northern District of Illinois, sitting by designation.
2 No. 08-4060
contract dispute. In short, Midwest Amusements Park,
LLC (Midwest) purchased 24 go-karts from Team Hurri-
cane, Inc. (Team Hurricane), which MMG Financial
Corporation (MMG) financed. When the go-karts did not
meet Midwest’s expectations, it refused to pay for them.
This litigation followed.
I.
In early 2005, Kal Gronvall attended a go-kart trade
show in Chicago on Midwest’s behalf.1 At the show,
Gronvall met a salesman of Team Hurricane, Lorne
Kelly. Team Hurricane was a joint venture between
Cameron Motorsports, Inc. (Cameron Motorsports) and
MMG.2 Kelly promoted go-karts branded by Cameron
1
Gronvall operated Midwest’s racetrack, USA International
Raceway. Midwest’s sole member is the Dr. R.C. Samanta
Roy Institute of Science and Technology (SIST), another of
the Defendants. MMG added SIST (and also U.S. Acquisitions
& Oil, Inc. (USAO)) in an amended complaint, fearing that
Midwest had fraudulently transferred some of its assets.
When Gronvall and Midwest filed this appeal, MMG had
moved for default judgment against SIST and USAO, but the
district court had not yet ruled on the motion. Finding no
just reason to delay Gronvall’s and Midwest’s appeal, the
district court certified the entry of final judgment against
Gronvall and Midwest pursuant to Fed. R. Civ. P. 54(b).
2
The trial testimony makes clear that while Malcolm
McMaster and Bob Cameron, MMG’s and Cameron Motorsports’
(continued...)
No. 08-4060 3
Motorsports, which were manufactured by CRG Spa
(CRG), an Italian Corporation. Thus, Cameron branded
the go-karts, Team Hurricane sold the go-karts, and
MMG financed Team Hurricane’s customers’ purchases.
Shortly after the trade show, Kelly traveled to Midwest’s
racetrack in Shawano, Wisconsin, in hopes of selling go-
karts to Midwest. Malcolm McMaster, MMG’s president
and sole shareholder, traveled with Kelly. McMaster,
however, attended the Wisconsin meeting as a represen-
tative of Team Hurricane, unaware that Midwest
intended to finance its purchase.
Kelly touted the “arrive and drive” program, in which
the go-karts sold by Team Hurricane would be available
for customers to test their racing skills on Midwest’s
racetrack. Additionally, Kelly implied that as part of the
arrive and drive program, Cameron Motorsports would
completely assemble the go-karts, break-in the go-karts’
engines, supply training materials for Midwest’s staff,
and provide service for the go-karts. At the conclusion
of the meeting, Midwest indicated to Kelly and McMaster
that it might be interested in short-term financing for
the purchase it would later make.
2
(...continued)
respective sole shareholders, once embraced the Team
Hurricane partnership, they had a significant falling-out. Their
dispute revolves around the handling of Team Hurricane’s
finances, with each believing that the other had improperly
diverted money from Team Hurricane’s accounts.
4 No. 08-4060
In April 2005, Midwest ordered 24 go-karts at a
purchase price of $89,502.12. Shortly thereafter, Gronvall
contacted MMG to discuss financing the purchase. Ac-
cording to MMG, McMaster and Gronvall agreed to a
contract to finance the purchase. MMG sent Gronvall a
“conditional sales agreement” that documented the
parties’ oral agreement. That sales agreement identifies
Gronvall and USA International Raceway (the name
under which Midwest did business) as the buyers, MMG
as the finance company, and Team Hurricane as the
dealer. The sales agreement specifies a purchase price
of $89,502.12, and calls for Midwest to make 24
monthly payments of $4,468.31, which amounts to a
steep 24% annual percentage rate.
Gronvall never signed the agreement. Nevertheless, the
go-karts arrived directly from CRG several months later.
Soon after Midwest received the go-karts, Gronvall
voiced several complaints. He complained to Cameron
Motorsports and CRG that the go-karts did not perform
as expected. Gronvall informed the companies that some
of the go-karts “blew-up” upon first being driven and
others no longer worked. Cameron Motorsports only
grudgingly responded to Gronvall’s complaints. Gronvall
also complained to MMG that the previously agreed
upon interest rate was too onerous.
Gronvall and MMG dickered over a revised interest
rate. Gronvall requested that MMG lower the annual
percentage rate. MMG responded that it might lower
the annual percentage rate to 18% if Midwest caught up
on missed payments. Gronvall eventually created and
No. 08-4060 5
signed a sales agreement that called for a 12% annual
percentage rate and conditioned payments on a portion
of Midwest’s revenue from USA International Race-
way. MMG never signed the agreement created by
Gronvall, and neither Gronvall nor Midwest made
any payments to MMG.
By June 2006, Midwest still had not made any pay-
ments to MMG. MMG filed suit, alleging a breach of
contract, naming Midwest and Gronvall as co-defendants.
Midwest filed a counterclaim, in which it alleged that
MMG had breached the finance agreement by failing
to pay Cameron Motorsports for the go-karts. Midwest
also claimed that MMG breached both express and
implied warranties because the go-karts did not
function properly. Midwest did not file a third-party
complaint against Cameron Motorsports, Team Hur-
ricane, or CRG raising the same breach of warranty
claims. The district court granted MMG’s motion for
summary judgment on Midwest’s counterclaim, and
MMG’s claim proceeded to the jury.
At trial, Midwest and Gronvall denied that they had
agreed to any contract with MMG. In the alternative,
Midwest raised an affirmative defense, arguing that it
was entitled to a set-off because MMG had failed to
pay Cameron Motorsports for the go-karts, which in
turn caused Cameron Motorsports to refuse to service
the malfunctioning go-karts. The parties presented testi-
mony, mostly from McMaster and Gronvall, regarding
the details of Midwest’s and MMG’s agreement (or
the absence thereof). Midwest also elicited testimony
from Bob Cameron in an attempt to persuade the jury
6 No. 08-4060
to award it a set-off of any amount it owed to MMG.
During Cameron’s testimony, Midwest sought to intro-
duce an e-mail that Cameron Motorsports had re-
ceived from CRG purporting to demonstrate that the go-
karts that had been shipped to Midwest had not been
paid for. The district court excluded the e-mail, con-
cluding that it constituted hearsay. At the end of the
trial, the jury credited MMG’s evidence and found that
the parties had orally agreed on a contract with a 24%
annual percentage rate.
Midwest raises five arguments on appeal.3 First,
Midwest argues that the district court erred in granting
MMG summary judgment on its counterclaim. Second,
Midwest argues that the district court erred in refusing
to admit the e-mail from CRG to Cameron Motorsports
that summarized outstanding invoices. Third, Midwest
argues that the district court erred in failing to give a
statute of frauds or usury instructions. Fourth, Midwest
argues that the district court’s special verdict was
flawed. Fifth, Midwest argues that the jury’s verdict
was against the manifest weight of the evidence.
II.
A. Summary Judgment Order
We first address the district court’s entry of summary
judgment in favor of MMG on Midwest’s counterclaim.
3
Gronvall joins in Midwest’s arguments. For convenience’s
sake, we hereafter refer to the appellants collectively as Mid-
west.
No. 08-4060 7
In opposition to MMG’s motion for summary judg-
ment, Midwest argued that MMG failed to pay
Cameron Motorsports for the go-karts and therefore
breached the financing agreement. In support of this
argument, Midwest relied entirely on two letters it re-
ceived from Cameron Motorsports in which Cameron
Motorsports claimed it had not been paid for the go-karts
and deposition testimony from its employees con-
taining similar assertions. The district court excluded
Midwest’s evidence on hearsay grounds. The district
court further held that MMG had presented evidence—in
the form of testimony from McMaster and receipts at-
tached to a declaration—that it had paid Cameron
Motorsports for the go-karts. The district court con-
cluded that Midwest had failed to offer proof that
MMG had breached the financing agreement and
granted MMG’s motion for summary judgment.
When a district court’s grant of summary judgment is
premised upon an evidentiary finding, we use a com-
bined standard of review. Gunville v. Walker, 583 F.3d 979,
985 (7th Cir. 2009). We review the district court’s determi-
nation that a particular statement is inadmissable as
hearsay for abuse of discretion. Id. We then review the
grant of summary judgment de novo and construe all
facts in the light most favorable to the non-moving party.
Id.; Trade Fin. Partners, LLC v. AAR Corp., 573 F.3d 401,
406 (7th Cir. 2009). To survive summary judgment, a
party must point to specific facts showing that there is a
genuine issue for trial. Trade Fin. Partners, LLC, 573 F.3d
at 406-07.
8 No. 08-4060
A party may not rely on inadmissible hearsay to
avoid summary judgment. Eisenstadt v. Centel Corp., 113
F.3d 738, 742 (7th Cir. 1997). The evidence Midwest
offered to establish that MMG had failed to pay
Cameron Motorsports for the go-karts is classic hearsay.
Rather than offer the sworn testimony of a Cameron
Motorsports employee (the declarant), Midwest in-
stead offered only the testimony of its own employees
repeating what Cameron Motorsports had told them.
Similarly, Midwest offered an unsworn statement, in the
form of the letter, from the declarant. Midwest offered
these statements to prove the truth of the matter
asserted, namely that MMG had not paid Cameron
Motorsports for the go-karts shipped to Midwest. The
district court correctly points out that the sworn testi-
mony of a Cameron employee would have been easy to
obtain if Midwest’s assertions were true. Midwest
makes no discernable argument that the district court’s
evidentiary ruling was incorrect, and the district court
correctly excluded the evidence.
Nonetheless, Midwest argues that the district court
erred in granting MMG summary judgment on Midwest’s
breach-of-contract claim. Midwest makes a curious argu-
ment that the evidence it presented at trial demonstrates
that the grant of summary judgment was in error. Our
review of the district court’s summary judgment order,
however, is limited to the record presented to the
district court at that time. Joseph P. Caulfield & Assoc., Inc.
v. Litho Prod., Inc., 155 F.3d 883, 888 (7th Cir. 1998).
Midwest also attacks the evidence MMG submitted
in support of its claim that it fulfilled the terms of its
No. 08-4060 9
contract. Midwest suggests that to succeed on summary
judgment MMG must “demonstrate that the monies
were paid to [Cameron Motorsports].” Midwest, however,
conflates the burden MMG bears in proving its own
breach-of-contract claim, which was not decided on
summary judgment, with its burden as the party
moving for summary judgment on Midwest’s breach-of-
contract counterclaim. A party seeking summary judg-
ment bears an initial burden of proving there is “no
material question of fact with respect to an essential
element of the non-moving party’s case.” Delta Consulting
Grp., Inc. v. R. Randle Constr., Inc., 554 F.3d 1133, 1137
(7th Cir. 2009). MMG met this burden by pointing
to the absence of any evidence to establish that it had
materially breached the parties’ finance agreement, an
essential element of Midwest’s breach-of-contract claim.
Once MMG met its burden on summary judgment, Mid-
west bore the burden of pointing to evidence raising a
genuine issue of material fact. Trade Fin. Partners, LLC,
573 F.3d at 406-07. Because Midwest had relied solely
on the excluded hearsay evidence to prove that MMG
had materially breached the contract, it did not point to
evidence necessary to stave off summary judgment, and
the district court did not err in granting MMG’s motion.
Midwest also argues that the district court erred
in granting MMG summary judgment on its breach of
warranty claims against MMG. At summary judgment,
Midwest argued that MMG warranted the defective go-
karts. The district court rejected that argument, noting
that Team Hurricane was the dealer that sold Midwest
the go-karts and MMG was the company that financed
10 No. 08-4060
Midwest’s purchase. Midwest raised no rational argu-
ment either before the district court or on appeal that a
finance company warrants the goods that it finances.
Instead, Midwest argues that MMG should be responsi-
ble for Team Hurricane’s breaches of warranty because
they share an ownership interest. MMG and Team Hur-
ricane are distinct corporations, however, and not re-
sponsible for each others’ liabilities merely because
they share a corporate relationship. Wiebke v. Richardson
& Sons, Inc., 83 Wis. 2d 359, 363-64, 265 N.W.2d 571, 573-
74 (Wis. 1978). Midwest offers no reason why we
should disregard the corporate form, and the district
court did not err in granting MMG summary judgment
on Midwest’s breach of warranty claims.
B. CRG E-Mail
During trial, Midwest reanimated its defeated breach
of contract counterclaim, raising it instead as an affirma-
tive defense. Midwest argued that MMG never fulfilled
its obligations to pay Team Hurricane for the go-
karts that it purchased causing Team Hurricane and
Cameron Motorsports to refuse to provide support for
the go-karts when they malfunctioned. Midwest thus
reasoned that it was entitled to a set-off of the amounts
it owed to MMG.
On appeal, Midwest argues that the district court
improperly excluded an e-mail sent by CRG to Cameron
Motorsports that it offered in support of its affirmative
defense. In order to show that it is entitled to relief
No. 08-4060 11
because of the exclusion of evidence, Midwest must not
only show that the district court erred, but also that the
error affected its substantial rights. Buie v. Quad/Graphics,
Inc., 366 F.3d 496, 504 (7th Cir. 2004); Fed. R. Civ. P. 61.
Midwest’s argument revolves around its misapprehen-
sion that MMG and Team Hurricane should be treated
as a single entity merely because they shared common
ownership. Midwest sought to introduce an e-mail that
CRG had sent to Cameron Motorsports, which pur-
ported to indicate that CRG had not received pay-
ment for the go-karts shipped to Midwest. At best, the
CRG e-mail demonstrates that Cameron Motorsports
owed CRG money for the go-karts. Midwest, however,
purchased go-karts from Team Hurricane, thereby incur-
ring a debt to Team Hurricane that MMG agreed to pay.
MMG’s contract with Midwest did not obligate it to
pay Cameron Motorsports’ debt to CRG. Rather, it obli-
gated MMG to pay MMG’s debt to Team Hurricane.
Whether Cameron Motorsports paid its debt to CRG
bears no relation to the question of whether MMG paid
Midwest’s debt to Team Hurricane. The mere fact that
McMaster had an ownership interest in MMG and Team
Hurricane does not alter MMG’s obligations under the
finance agreement. Therefore, the CRG e-mail simply
is not relevant to Midwest’s affirmative defense.
Midwest’s argument seems to find its origin in the
dispute between McMaster and Cameron. As noted
earlier, McMaster and Cameron each believed the other
owed him money. Cameron testified that he believed
that McMaster, perhaps in his role at Team Hurricane or
12 No. 08-4060
as an accountant for Cameron Motorsports, caused
Cameron Motorsports to fail to pay its bill to CRG. But it
does not logically follow that because McMaster
caused Cameron Motorsports to fail to pay its bill to
CRG that MMG did not pay Midwest’s bill to Team
Hurricane.
Because the CRG e-mail is not relevant to Midwest’s
affirmative defense, Midwest cannot demonstrate that
its exclusion affected its substantial rights, and we
need not decide whether the e-mail was hearsay. We
also can put aside the issue of whether the district
court’s factual findings on MMG’s summary judgment
motion precluded Midwest from raising this defense
in the first instance.
C. Jury Instructions and Verdict Form
Midwest’s arguments concerning jury instructions
and the special verdict form merit scant discussion.
Midwest suggests that the district court erred in failing
to provide a usury instruction. But it did not request
such an instruction and has waived any argument that
related to such an instruction. Jabat, Inc. v. Smith, 201
F.3d 852, 857 (7th Cir. 2000) (party who fails to request
jury instruction has waived issue for appeal). Midwest
also argues that the district court erred in failing to
provide a statute of frauds instruction. But the contract
between Midwest and MMG was a finance agreement,
and not one for a sale of goods, so the statute of frauds
is not applicable. See ReMapp Int’l Corp. v. Comfort
Keyboard Co., 560 F.3d 628, 632-33 (7th Cir. 2009)
No. 08-4060 13
(applying Wis. Stat. § 402.21). Midwest argues that the
special verdict form did not contain separate questions
about the elements necessary to form a contract. Midwest
did not object to the special verdict form on these
grounds, and so has waived this argument as well. Orix
Credit Alliance, Inc. v. Taylor Mach. Works, Inc., 125 F.3d
468, 477-78 (7th Cir. 1997) (party who fails to alert judge
to objections to special verdict questions has waived
such objections).
D. Motion for a New Trial
Finally, Midwest presents a cursory argument that the
district court erred in refusing to grant its motion for a
new trial. Midwest devotes less than a single page of
text in its 43-page brief developing this argument.
Federal Rule of Appellate Procedure 28 requires that an
argument consist of more than a generalized assertion
of error, mandating that it contain “contentions and the
reasons for them, with citations to the authorities and
parts of the record on which the appellant relies.” Fed. R.
App. P. 28(a)(9)(A). Midwest’s argument contains no
authority—other than authority to report our standard
of review—and cites to nothing in the record in support
of its argument that the district court should have
granted it a new trial. Rather, Midwest presents only
general (and largely inaccurate) references to testimony
and evidence. Arguably, Midwest has waived the issue
with its cursory treatment. See Vaughn v. King, 167 F.3d
347, 353 (7th Cir. 1999) (cursory arguments with no analy-
sis are waived).
14 No. 08-4060
Even if its cursory treatment of the issue has not
resulted in a waiver, Midwest’s failure to present its
argument to the district court does result in a waiver of
that argument. Brown v. Auto. Components Holdings, LLC,
622 F.3d 685, 691 (7th Cir. 2010). On appeal, Midwest
argues that the manifest weight of the evidence demon-
strated that the jury should have found a contract with
a 12% annual interest rate and not one with a 24%
annual interest rate. In its motion for a new trial before
the district court, however, Midwest argued only that
the manifest weight of the evidence demonstrated that
the parties never agreed to any contract. It cannot change
course on appeal to raise an argument different than
the one it presented to the district court.
III.
Much of Midwest’s arguments are based on the flawed
assumption that Team Hurricane and MMG are inter-
changeable. They are not, and Midwest made no effort
to pierce the corporate veil. Instead, counsel for Midwest
repeatedly suggested at oral argument that her clients
were left holding the bag because the go-karts so
severely malfunctioned. Of course, this is not a reason to
pierce the corporate veil and hold MMG responsible
for another company’s breach of warranty. Nor is it
even an accurate statement. Midwest could have
sought recovery for the defective go-karts from Team
Hurricane, Cameron Motorsports, or CRG. It did not. The
judgment of the district court is A FFIRMED.
1-5-11