Vinson & Elkins Secures Fifth Circuit Victory for Client Steve Hart Restoration and Race Preparation, Ltd.

On September 12, the Fifth Circuit upheld summary judgment dismissal of fraud and Texas Deceptive Trade Practice Act (“DTPA”) claims against Vinson & Elkins’ client, Steve Hart Restoration and Race Preparation, Ltd. (“Hart Racing”).

The firm represented Hart Racing in both the trial court and the Fifth Circuit proceedings. The V&E team in the Fifth Circuit consisted of partner Pat Mizell, and associates Brooke Noble and Ethan Nutter.

In 2006, Kenneth Dougherty shipped Hart Racing a few pieces of a car and asked it to build a 1959 Maserati Birdcage Tipo 60/61. Hart Racing built the car in England and shipped the car back to Dougherty in Houston.

While Hart Racing was building the Birdcage, Dougherty requested that it be stamped with the chassis number 2459. Birdcage No. 2459 was a famous racecar that literally crashed and burned in Daytona in 1962. The driver survived and continued racing, but the car was destroyed.

After Dougherty received the Birdcage, Dougherty attempted to sell the Birdcage as the restored original Birdcage No. 2459. When Steve Hart learned of this in 2011, he posted on an internet forum and stated that the car had no connection to the original Birdcage No. 2459. Dougherty immediately saw the post and contacted Hart. However, Dougherty waited until 2016 to bring his lawsuit. In his lawsuit, Dougherty alleged that Hart Racing disparaged the Birdcage by calling it a replica when it was a restored car, or, alternatively defrauded him and misrepresented its services by promising to build a restored car when it actually built a replica. Dougherty argued that Hart Racing concealed its fraud by signing a letter in 2011, thereby tolling the statute of limitations.

After argument by Noble in 2019, Judge Lee Rosenthal dismissed the disparagement claim on personal jurisdiction grounds. Then, in 2021, Judge Rosenthal granted V&E’s motion for summary judgment as to the fraud and DTPA claims based on the respective statutes of limitations. Dougherty appealed to the Fifth Circuit.

On September 12, a Fifth Circuit panel consisting of Judges Davis, Smith, and Dennis ruled in V&E’s favor by affirming Judge Rosenthal’s “careful” opinion.

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