Plaintiff asserts that settlement discussions took place throughout this time period, but settlement discussions are not the sort of extraordinary circumstance that justify Plaintiff's failure to bring the instant action in a timely manner or to continue prosecuting the 1991 lawsuit, absent evidence of any misrepresentations from the relevant entities or any other type of egregious misconduct at any time during the relevant period."
Poindexter v. Warner/Chappell Music Inc., 2/23/09 N.Y.L.J. "Decision of Interest" (S.D.N.Y. Feb. 9, 2009)
[Procedural note: the Court converted Defendant's 12(b)(6) motion to dismiss to a Rule 56 motion for summary judgment, pursuant to Rule 12(d), "because both parties referenced and submitted materials beyond the scope of the complaint." The parties were permitted to make additional submissions.]
The court granted Plaintiff record producer leave to amend his complaint to add an additional cause of action for breach of a third-party beneficiary contract between defendant Sony and Willie Nelson in 1983. Producer argued the 1983 contract surfaced during settlement discussions, and stated that he would receive $225,000 advance royalty payment on his services for CBS Records for co-producing a single Nelson album. Sony argued the 1983 contract was merely a Letter of Direction (LOD) and was not an "open mutual account." It also argued the six year statute of limitations period expired on the claim. The court rejected Sony's argument that the breadth of a 1990 judgment audit of the CBS books and records would have also encompassed royalties from the 1983 LOD. The court noted that Producer claimed he was unaware of the 1983 LOD until 2007 when his current attorney and manager received a copy from Sony.
Plaintiff Yngwie Malmsteen ("plaintiff") asserted claims against defendants Berdon, LLP ("Berdon"), Michael Mitnick, James Lewis and James Lewis Entertainment ("JLE") for, inter alia, breach of contract and breach of fiduciary duty. Plaintiff is a professional musician who employed defendant Lewis as his personal manager and defendant Mitnick as his business manager in the 1990s and until early 2000. Plaintiff claimed that Lewis embezzled millions of dollars from him between approximately 1995 and 2000 and that defendants Mitnick and Berdon (collectively, "defendants") enabled Lewis to do so. Plaintiff alleged that defendants acted with fraudulent intent or, alternately, in violation of their contractual and fiduciary duties.
A trial was held in mid-2008. At the close of plaintiff's case, defendants moved for judgment as a matter of law under Rule 50(a) on all of plaintiff's claims. The Court granted the motion with respect to the fraud claim but allowed the breach of contract and breach of fiduciary duty claims to go forward. At the end of the trial, the jury returned a verdict for plaintiff on both of his claims. The special verdict form completed by the jury indicated that plaintiff was entitled to zero dollars on his breach of contract claim, $450,000 in damages on his breach of fiduciary duty claim, and zero dollars in punitive damages on the breach of fiduciary duty claim.
Defendants filed the instant motion seeking (i) judgment as a matter of law pursuant to Rule 50(b) (ii) a new trial pursuant to Rule 59(a), or (iii) denial of the motion for a new trial conditional on plaintiff's acceptance of a remittur on damages.
After outlining the standards for Rules 50 and 59, and remittur, the Court held:
- A reasonable jury Could Have Concluded That Lewis Embezzled Money From Plaintiff
- Plaintiff's Breach of Contract Claim is Not Time-Barred
- A Reasonable Jury Could Have Concluded That Defendants Breached Their Contract With Plaintiff
- The Jury's Failure to Award Damages for Plaintiff's Breach of Contract Claim Did Not Require Vacatur of the Jury's Finding on Liability
- A Reasonable Jury Could Have Concluded That Defendants Breached Their Fiduciary Duty to Plaintiff
- The Jury's Damages Award Was Not Excessive
- Plaintiff's Summation Did Not Warrant a New Trial
For the foregoing reasons, the Court denied defendant's motions for judgment as a matter of law, for a new trial, and for remittur.
Plaintiff sued for over $100 mil. based on six counts: breach of joint venture agreement, breach of fiduciary duty, joint venture accounting, unjust enrichment, promissory estoppel, and quantum meruit. Defendant moved to dismiss pursuant to CPLR 3211(a)(5) ("...the cause of action may not be maintained because of ... statute of frauds ..."), contending that New York's General Obligations Law prohibits a plaintiff from recovering a finder's fee or other compensation based on services rendered in connection with a corporate acquisition in the absence of a written agreement. (G.O.L. sec. 5-701(a)(10).)
The court disagreed, finding that the statute of frauds provision (id.) does not apply to an oral joint venture agreement "which involves two or more individuals pooling their respective efforts to create and/or operate a business venture as opposed to one person assisting or facilitating another to do so." (See Freedman v. Chemical Const. Corp., 43 N.Y.2d 260 (1977) and other cases cited herein.) Here, plaintiff was not a mere finder or intermediary -- "plaintiff functioned as more than just a broker assisting defendant in a limited and transitory manner".
Nonetheless, plaintiff's claims relating to the joint venture were dismissed because the alleged oral joint venture was too vague to support a joint venture agreement. Though plaintiff alleged that the parties had agreed he would receive a "fair and equitable" share of an amount of money from the alleged oral joint venture, the court found it too uncertain. (Citing Varney v. Ditmars, 217 N.Y. 223 (1916), and Freedman v. Pearlman, 271 A.D.2d 301 (1st Dep't 2000).) "The alleged contract in question is affected by too many facts that are in themselves indefinite and uncertain such that the intention of the parties is pure conjecture." Thus, after finding that the action was "ripe for dismissal" at the pleadings stage, the joint venture claims (and the promissory estoppel claim) were dismissed for vagueness. **
However, the unjust enrichment and quantum meruit claims survived. Based on a legal presumption of a promise to pay a "reasonable value", the court found that whether plaintiff can establish some value for any services actually rendered "must await discovery." Therefore, plaintiff had 20 days to file an answer to the unjust enrichment and quantum meruit claims.
** The court did not clarify under which provision of the CPLR it was granting dismissal of the joint venture and promissory estoppel claims. Although the portions of the decision relating to the statute of frauds clearly relate to defendant's motion under CPLR 3211(a)(5), it appears that dismissal of these counts was based on plaintiff's failure to state a cause of action. Can the court convert a 3211(a)(5) motion into a 3211(a)(7) motion sua sponte, assuming defendant's motion papers were brought only under 3211(a)(5)?