Mays v. Trump Indiana, Inc.

255 F.3d 351 (2001)

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Mays v. Trump Indiana, Inc.

United States Court of Appeals for the Seventh Circuit
255 F.3d 351 (2001)

Facts

In 1993, Indiana enacted legislation allowing riverboat gambling in certain areas of the state. The legislature authorized the Indiana Gaming Commission (the commission) to award two gambling licenses for facilities in the city of Gary. Gary officials wanted a say in the licensing process and gave license applicants a list of demands that an applicant needed to meet before the officials would endorse the applicant’s license proposal to the commission. One demand was that an applicant must have 15 percent local ownership. Donald Trump and Trump-affiliated entities (collectively, Trump) (defendants) wanted a Gary license. In an effort to secure Gary’s endorsement, Trump agreed to make 15 percent of the equity from Trump’s riverboat venture available to local investors. Gary ultimately endorsed two non-Trump applicants. However, Trump wanted the chance to work with Gary officials if the commission ever awarded a third Gary license, so Trump continued searching for local investors. Trump eventually chose Indianapolis businessman William Mays and lawyer Louis Buddy Yosha (plaintiffs), along with several Gary residents. Trump identified the local investors in the license application submitted to the commission. In February 1994, Trump’s attorneys sent Mays and Yosha a letter explaining that the local investors would collectively own 7.5 percent of the Gary project, with another 7.5 percent owned by a charitable trust. Trump’s attorneys also sent Mays and Yosha information regarding the proposed deal, including that Trump would loan the investors the money for their investment in the project and repay the loan from Trump’s own cash distributions or dividends. The material terms of the loan were not specified. Trump’s attorneys told Mays and Yosha that further meetings and discussions were needed regarding the proposed deal, but the parties never finalized the terms. Trump also proposed placing Mays and Yosha on the board of a newly created charitable foundation to serve Indiana charitable causes. In late 1994, Trump decided that having local investors was not helping him acquire a license, so Trump stopped working with the local investors and restructured the proposed development. The commission ultimately issued Trump a license, and Trump’s Gary project moved forward. Mays and Yosha sued Trump for breach of contract, asserting that Trump had not made Mays and Yosha minority partners in the riverboat venture and placed them on the charitable foundation’s board as promised. A jury found for Mays and Yosha and awarded them $1.4 million. The parties cross-appealed.

Rule of Law

Issue

Holding and Reasoning (Evans, J.)

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