31/07/2026
Grooms' suit against Miss Madison seeks more than $600K
By BOB DEMAREE
Madison Courier
A lawsuit filed by Charlie and Nancy Grooms against Miss Madison Inc. seeking more than $600,000 is likely headed to a jury trial.
In May, Special Judge Justin B. Brown, the Floyd Circuit Court Judge, issued an order in Jefferson Circuit Court ruling in favor of Miss Madison Inc. to denying Grooms’ injunction in the lawsuit.
On July 1, Charlie and Nancy Grooms responded by requesting a jury trial. No date has been set for the trial.
Grooms, a past president of Miss Madison Inc. and former member of the board of directors, had been involved with the racing team since 1977. On Feb. 10, 2025, Madison Mayor Bob Courtney announced the removal of Grooms and four other board members after two hydroplane boats and all other race team assets were sold.
In the hearing on the preliminary injunction, Charlie Grooms testified that he and Nancy Grooms had made 84 loans to Miss Madison between 2009 and 2024, and had been repaid $442,000 through 38 separate payments. They claimed an outstanding loan balance of $599,306.67, along with three additional claims: $30,205 for uncashed crew-bonus checks, $6,257.89 for uncashed approved expense checks, and $2,000 for an uncashed reimbursement check issued to Nancy Grooms. The total Grooms claim is $637,769.56.
Charlie Grooms testified he had signed the bonus, expense and repayment checks payable to himself, and did not present those checks for payment because he was aware the racing team did not have sufficient funds and that depositing the checks could compromise the team’s ability to meet its racing-contract obligations.
Nancy Grooms testified that her $2,000 claim represented a payment she had made to transport the boat and truck back to Madison following the death of the crew chief, and that she did not previously attempt to cash the reimbursement check because she understood the racing team lacked funds.
At the hearing in the preliminary injunction, counsel for Miss Madison Inc. told the court that the racing team is holding $500,000 in escrow.
Judge Brown stated in his decision to deny the preliminary injunction that he is “not unsympathetic to the plaintiffs’ position. Charles and Nancy Grooms appear to have extended substantial support to Miss Madison over many years, and the court appreciates their genuine concern that the funds available to satisfy their claims may diminish as the defendant continues to operate in an expensive and demanding sport. That concern, however earnestly held, is not the measure of whether extraordinary equitable relief may issue. The question before the court is not whether the plaintiffs’ worry is understandable, but whether the facts presented satisfy the demanding requirements for a preliminary injunction.”
In the defendant’s defenses for Miss Madison Inc. (MMI) that followed the Grooms’ request for a jury trial, it claimed breach of fiduciary duty, unjust enrichment, lack of internal controls, conversion, and gross negligence. Relative to the breach of fiduciary duty, it stated the Grooms “voluntarily provided funds, payments or financial assistance to MMI without formal documentation and without any clear agreement regarding repayment terms, interest, conditions or purpose.”
It also stated Grooms became treasurer and president of MMI on or around 2015 and began managing MMI’s financial transactions. “After assuming this role, Mr. Grooms exercised financial control over the organization and ignored any attempts for oversight from his fellow board members.” Further, it stated Grooms “breached his fiduciary duties of loyalty, good faith, care and honesty by unilaterally making decisions that personally benefited him rather than acting in the best interests of the corporation.”
In the plaintiff's counterclaim on breach of fiduciary duty, Grooms stated the “allegations are denied to the extent that they allege responsibilities and obligations beyond that required by law.”
Mayor Courtney said Miss Madison Inc. “will defend itself against the Grooms claim and pursue justice on behalf of Miss Madison, her supporters and the hydroplane sport.”
