IndyCar Team Dragon Racing Sues Lotus

By JENNA FRYER | May 9, 2012

Dragon Racing has sued Lotus for at least $4.6 million in damages, accusing the engine manufacturer of damaging its reputation by spreading “especially outrageous” falsehoods about the IndyCar team while failing to deliver two chassis and hurting its ability to be competitive.

The lawsuit, filed on Friday in California Superior Court in Los Angeles, is just the latest blow for Lotus. The British manufacturer has just one team left in the IndyCar Series after Dreyer & Reinbold Racing and Bryan Herta Autosport were released from their contracts last month.

Dragon fields cars for Sebastien Bourdais of France and Katherine Legge of England. Owner Jay Penske did not respond to a request for comment on Monday, and representatives from Lotus and the IndyCar Series both said they could not comment.

Dragon’s relationship with Lotus has been shaky all season. The team did not get an engine for Bourdais until the night before the first practice for the season-opening race at St. Petersburg, Florida, and the team was severely restricted in preseason testing because of engine issues.

“Put simply, Dragon has had enough of Lotus’ deceit and wrongdoing,” the lawsuit says. “Dragon has put an end to its ill-fated relationship with Lotus and now seeks recompense for the damages inflicted upon it.”

The suit claims the problems began shortly after Dragon and Lotus reached an agreement on Jan. 8. Dragon claims Lotus was supposed to provide two chassis to the team free of charge, but couldn’t afford to purchase them, forcing Penske to spend about $800,000 to get the cars.

Then, despite already being indebted to Dragon, Lotus refused to deliver engines unless Dragon paid Lotus “substantial sums of money.”

“Lotus even admitted it was indebted to Dragon. Lotus’ demands for payment were outrageous in this context,” the suit says. “Ultimately, Dragon was forced to relent to Lotus’ outrageous and improper demands.”

The suit claims Dragon paid Lotus $200,000 in March toward the engine lease, and paid $300,000 to a third party vendor at Lotus’ request. Lotus continued to insist on further payments, but Penske refused.

Dragon also accused Lotus of defamation with “knowingly false statements to the effect that Dragon was not honoring financial and contractual commitments to Lotus.”

Dragon claims Lotus is in breach of its agreement because the manufacturer failed to disclose it was in the middle of a corporate reorganization at the time it partnered with Dragon. The restructuring meant Lotus lacked the financial ability to meet the obligations of the contract.

Dragon asked the court to declare the agreement with Lotus terminated and no longer valid or enforceable, and declare the engine agreements were never valid.

The suit comes just as Indianapolis Motor Speedway prepares to open for the May 27 Indianapolis 500. The first practice session is on Saturday, but Bourdais has been asked by IndyCar to do a “refresher” test this week because he hasn’t raced on an oval since 2006.

It’s not clear where Dragon will now get its engines. Chevrolet has said it is committed to 15 engines for the Indy 500, but only one is unclaimed at this time. Chevrolet also absorbed former Lotus team Dreyer & Reinbold on Monday.

Honda, which is also down for 15 entries, is expected to absorb Bryan Herta Autosport.

It leaves Lotus with just one official entry – Simona de Silvestro of Switzerland for HVM Racing – for the Indy 500.

Lotus came into IndyCar this year with Chevrolet as the series expanded to include multiple engine manufacturers for the first time in seven years. Each manufacturer was supposed to have an even split of teams, but Lotus has been admittedly behind and began the season with only five cars.

Chevrolet began with 11 full-time entrants, and Honda had 10.

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