Calloway ex rel. LMN Productions, Inc. v. Marvel Entertainment Group

110 F.R.D. 45, 1986 U.S. Dist. LEXIS 28854
CourtDistrict Court, S.D. New York
DecidedFebruary 26, 1986
DocketNo. 82 Civ. 8697 (RWS)
StatusPublished
Cited by9 cases

This text of 110 F.R.D. 45 (Calloway ex rel. LMN Productions, Inc. v. Marvel Entertainment Group) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Calloway ex rel. LMN Productions, Inc. v. Marvel Entertainment Group, 110 F.R.D. 45, 1986 U.S. Dist. LEXIS 28854 (S.D.N.Y. 1986).

Opinion

SWEET, District Judge.

This action for copyright infringement was scheduled for trial on February 10, 1986, after several years of pretrial proceedings and numerous previous opinions on pretrial motions. Those opinions, dated March 17, 1983, 564 F.Supp. 107 (S.DiN.Y. 1983), June 30, 1983, December 22, 1983, July 3, 1984, October 15, 1984, January 16, 1985, January 29, 1985, 603 F.Supp. 810 (S.D.N.Y.1985), and August 21, 1985, fully set forth the parties, the factual circumstances and the legal claims arising therefrom. On January 31, 1986, all parties, Northern J. Calloway (“Calloway”), the plaintiff; The Marvel Entertainment Group (“Marvel”), James Galton (“Galton”), Al Brodax (“Brodax”), Michael S. Klein (“Klein”), Luis Quiros (“Quiros”), the defendants and third-party plaintiffs; and The Shukat Company, Ltd. (“SCL”), Scott Shukat (“Scott”) and Peter Shukat (“Peter”), the third-party defendants, sought pretrial relief. Each of these motions shall be decided individually below.

Calloway’s Motion to Add State Law Ci ' ns

Calloway moved for leave to amend his complaint in order to reinstate several state law claims against third-party defendants Peter and Scott Shukat and SCL. These claims were originally asserted in [47]*47Calloway’s amended complaint dated July 29, 1983. However, the opinion dated December 22, 1983 granted defendants’ motion to dismiss, holding that Calloway had not stated any basis for copyright liability as to Peter, Scott and SCL and, upon dismissal of the federal claim, all state law claims were dismissed under the guiding principles of pendent jurisdiction. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

Peter, Scott and SCL returned to the action as third-party defendants when the defendants/third-party plaintiffs filed third-party complaints dated January 18 and January 27, 1984. In essence, these third-party complaints restated the same state law claims relating to fraud, misrepresentation and breach of an escrow agreement as were originally asserted by the plaintiff. By opinion dated January 29, 1985, some of these third-party claims were dismissed due to the lack of privity between the third-party opponents with regard to the escrow agreement. See January 29, 1985, 603 F.Supp. at 812.

Discovery has now been completed and on the eve of trial, Calloway now seeks to reinstate all his state law claims against Peter and Scott Shukat and SCL.

Calloway’s state law claims against Peter, Scott and SCL may be adjudicated only through the exercise of pendent jurisdiction. Pendent jurisdiction requires an extension of a federal court’s power beyond the statutory restrictions on federal jurisdiction enacted by Congress and thus may be exercised only upon satisfaction of a two-part test regarding whether this court has the power to hear the state law claim and, if so, whether such an exercise of pendent jurisdiction would be a wise exercise of judicial power. See Independent Bankers Association v. Marine Midland Bank, 757 F.2d 453 (2d Cir.1985); Leathers Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 809 (2d Cir.1971).

As for the first part, the judicial power to exercise pendent jurisdiction depends upon a “common nucleus of operative fact.” Gibbs, supra, 383 U.S. at 725, 86 S.Ct. at 1138. While the third-party complaints initially arose out of the same allegations that were presented by Calloway’s dismissed claims, that common nucleus has been altered by the intervening decision of January 29, 1985 which dismissed portions of the third-party claims. Thus, Calloway’s present motion seeks to add far broader allegations and factual matters which are not now within the ambit of the third-party claims. Specifically, the third-party complaint included both a fraud claim against Peter, Scott and SCL for their alleged participation in forging Calloway’s signature on an agreement dated June 8, 1981 and in misrepresenting Calloway’s execution of that agreement and also a breach of contract claim regarding the violation of an escrow agreement dated February 8, 1982. The third-party claim on the alleged escrow agreement was dismissed since any such agreement would only have been between Calloway and Peter, not between Peter and the third-party plaintiffs. Therefore, the third-party plaintiffs were not entitled to damages for any breach of contract,

In addition, the third-party complaint never contemplated litigation on the facts underlying several of the state law claims now sought to be reinstated by Calloway. As asserted in his fifth and sixth causes of action, Calloway alleged that Peter was liable for malpractice in his representation of Calloway during this period and that Scott and SCL were liable for breach of their fiduciary duty in their advisory capacity as Calloway’s personal managers. Each of these claims involves legal issues and facts which extend well beyond those addressed by the third-party complaint.

Pendent jurisdiction will be exercised only over Calloway’s claim against Peter, Scott and SCL for fraud and misrepresentation in connection with the June 8, 1981 option agreement because only with respe^ to this claim does there exist the requisite common nucleus of facts. Since the facts regarding the fraud claim of Calloway and that of third-party plaintiffs against Peter, Scott and SCL are practically identical and since these issues have [48]*48been fully developed by discovery on the third-party complaint, there will be no prejudice to the third-party defendants in permitting the reinstatement of this particular claim. Moreover, the similarity of these claims indicate that judicial economy would be well served by allowing this particular fraud claim to be litigated as a part of this action. Thus the factors which guide this court’s discretion to exercise jurisdiction over Calloway’s claim for fraud — “judicial economy and convenience, fairness to the parties and the degree of uncertainty in the relevant state law” — favor the adjudication of Calloway’s fraud claim. Independent Bankers, supra, 757 F.2d at 464. Delay alone is not reason to deny Calloway’s motion. See State Teachers Retirement Board v. Fluor Corp., 654 F.2d 843 (2d Cir.1981).

With regard to Calloway’s remaining state law claims, pendent jurisdiction will not be exercised because of the lack of common nucleus of facts and the circumstances of this case. As noted above, after a long pretrial period, this case is now ready for trial. Depositions and other discovery have been conducted without regard for the issues of malpractice, breach of fiduciary duty and breach of the escrow agreement. Judicial economy and convenience would not be served by reopening the discovery to allow for the renewal of these state law claims. Therefore, Calloway’s motion to amend will be granted only insofar as it seeks to reinstate the pendent state claim of fraud and misrepresentation in connection with the June 8, 1981 option agreement.

Defendants’ Motion to Amend Answers

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Cite This Page — Counsel Stack

Bluebook (online)
110 F.R.D. 45, 1986 U.S. Dist. LEXIS 28854, Counsel Stack Legal Research, https://law.counselstack.com/opinion/calloway-ex-rel-lmn-productions-inc-v-marvel-entertainment-group-nysd-1986.