Ozzy Libel Case - UK/US Distinctions

Billboard reported that "Ozzy Osbourne has accepted undisclosed libel damages and an apology over a U.K. newspaper claim that he was ill at the Brit Awards."

For an interesting review of the distinctions between UK and US libel law, and especially New York State's response to "libel tourism" (New York enacted the Libel Terrorism Protection Act a/k/a Rachel's Law - see Laws of New York 2008, Ch. 66 amending CPLR sections 5304 and 302), see Jennifer McDermott and Chaya F. Weinberg-Brodt, "Growth of 'Libel Tourism' in England and U.S. Response", 06/04/08 N.Y.L.J.

'Warner' Oral Joint Venture Claims Dismissed

In Snyder v. Bronfman, No. 105454/07, 5/06/08 N.Y.L.J. "Decision of Interest" (Sup.Ct., N.Y. Co. April 24, 2008), the New York Supreme Court, New York County, dismissed former Simon & Schuster CEO, Richard E. Snyder's claims against Edgar M. Bronfman -- Chairman and CEO of Warner Music -- relating to an alleged oral joint venture between the two.

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)?

Nail and Mail - The Bronx

Warner Bros. Records Inc. v. Berry, No. 07 Civ. 1092-HB, 4/15/08 N.Y.L.J. "Decision of Interest" (S.D.N.Y. decided Apr. 9, 2008).

The court adopted Magistrate Judge's recommendation to deny Plaintiff's default judgment application and dismissed the case.

Plaintiff's alleged that Defendant used KaZaA to download, distribute and make available for distribution the copyrighted recordings of certain artists in violation of the Copyright Act. Over a year before filing the complaint, Plaintiffs served AOL (an ISP), which identified Defendant as the person responsible for the IP address that was using KaZaA. AOL provided Plaintiff's with an address for Defendant in the Bronx, NY. Plaintiffs then hired a process server, whose attempts at service were "unsuccessful"; thereafter, the process server affixed one copy on the property in the Bronx. and depositing a copy of the summons in a first class post paid envelope addressed to the same address.

However, the Court found that service on Defendant was defective and therefore dismissed the complaint. "Here, service was defective under the 'nail and mail' method [CPLR 308(4)] because Plaintiffs' process server both affixed and mailed the summons to Defendant's last known residence."

Though the mailing component of service by "affixing and mailing" may be to the defendant's last known residence, "the 'affixing' component must be to the door of the defendant's actual place of business, dwelling place or usual place of abode, and not to the defendant's last known residence. To blur the distinction between 'last known residence' and 'dwelling place' 'would diminish the likelihood that actual notice will be received by potential defendants.'"

However, the Court did not adopt the Magistrate Judge's recommendation that Plaintiffs be ordered to show cause they they did not violate FRCP 11(b). The Court found that "while Plaintiffs' lawyers should be faulted for failing to keep closer tabs on their process server and for failing to better supervise their paralegal, their actions do not rise to the level of a Rule 11(b) violation. Plaintiffs' lawyers might have been sloppy in their attempts to serve Defendant, but giving them as officers of the Court the benefit of the doubt, all their representations to this Court were...nor for the improper purpose of unnecessary delay."

ODB - In the News, from the Grave

New York Supreme Court, complaint filed:

Jarred Weisfeld; Cherry Jones v. Richard Flanzer; Control Room Productions LLC; Safe Productions Inc.; Icelene Jones individually and as the administrator of the estate of Russell Jones pka ODB; Ol' Dirty Bastard. No.08-601002, filed 4/4/2008

Summons for declaratory judgment, intentional interference with contractual rights, and breach of contract. $500,000.

What The Game's Been Missing

LaRon James (not to be confused with LeBron James ), the performer better known as Def Jam recording artist "Juelz Santana", is being sued in New York Supreme Court in a contract action for failure to pay on a judgment. The plaintiff seeks $1.3 million.

Trivia for NY-admitted attorneys: what provision of the CPLR would such suit be brought under?

[FHE Record Group Inc. v. Juelz Santana aka Leron James; Santana's World Inc.; filed, 1/30/2008; case no. 08-600279]

American Gladiat...Idol!

Ruben Studdard, winner of the second season of American Idol, filed suit yesterday in the Supreme Court of New York against Peachez Inc., who according to their website are a "specialty marketing company that offers strategic concepts in the entertainment industry" (huh?), and related parties. (Defendant's appear to be live-performance promoters.) Unfortunately, details are limited at this point, as the suit was initiated with the mere filing of a summons with notice for breach of contract. (See New York CPLR 304, "An action is commenced by filing a summons and complaint or summons with notice.") Alleged damages: $45,000. Counsel for plaintiff is Pryor Cashman.

[Ruben Studdard v. OIG Inc.; Peachez Inc.; Melvin Childs III individually; filed 1/28/2008; case no. 08-101697].

Fool's Game

A month ago, OTCS reported that Michael Bolton et al. was sued by his money manager for breach of contract.

In a bizarre twist, and with probable implications under New York's Civil Practice Law and Rules (i.e., the CPLR), Michael Bolton (and many of the defendant's from the original action) have filed a summons with notice in New York Supreme Court, New York County -- the very same jurisdiction where the original suit was filed -- against Executive Monetary Management, Plaintiff in the original action, for alleged breach of fiduciary duty, fraud, and fraudulent concealment. Damages alleged are $5 mil.

Why is this being filed as a separate suit, rather than as counterclaims or affirmative defenses in the original action under CPLR 3018(b) and 3019? What are the implications for these claims not being asserted in the Answer of the original action, especially if they arise out of the same transaction? Litigators: this one's for you!

[Stowaways LLC; The Second Time Around LLC; MBO Tours Inc.; MBO Productions Inc.; Passion Realty LLC; MB Swings II LLC; Montaigne Records LLC; Passion Films Inc.; M Bolton Entertainment LLC; Bolton Power Blues LLC; Michael Bolton; Mr. Bolton's Music Inc.; Is Hot Music Ltd.; Passion Music Inc.; Bona Justitia Music Inc. v. Executive Monetary Management Inc. Filed 1/14/2008; Case no. 08-600111]