Music Mix Mobile, LLC v. Newman (In re Stage Presence Inc.)

555 B.R. 166, 2016 Bankr. LEXIS 2639
CourtUnited States Bankruptcy Court, S.D. New York
DecidedJuly 19, 2016
DocketCase No. 12-10525 (MEW); Adv. Pro. No. 15-01392 (MEW)
StatusPublished

This text of 555 B.R. 166 (Music Mix Mobile, LLC v. Newman (In re Stage Presence Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy 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
Music Mix Mobile, LLC v. Newman (In re Stage Presence Inc.), 555 B.R. 166, 2016 Bankr. LEXIS 2639 (N.Y. 2016).

Opinion

MEMORANDUM DECISION DISMISSING CERTAIN CLAIMS AND DENYING MOTIONS TO DISMISS OTHER CLAIMS

MICHAEL E. WILES, UNITED STATES BANKRUPTCY JUDGE

Before the Court is the motion to dismiss filed by Debtor Stage Presence Incorporated and by individual defendants Allen Newman and Matthew Weiner. For the reasons set forth below the Court will dismiss some claims but will allow others to proceed.

Background

This case arises out of a televised program that was held in May 2010 to benefit a charity named Childhelp. Plaintiffs allege that they were not paid for the audio, editing, teleprompter, music mixing and other services they provided in connection with the program. The defendants include Stage Presence Incorporated (the chapter 11 debtor), another entity named One for Each Island Ltd. (“OFEI”) and the three individual producers of the benefit program: Allen Newman, Matthew Weiner and Gregory Marquette. Complaint ¶¶ 11-26.1

[171]*171Plaintiffs allege that OFEI may never have actually existed, but that in early 2010 OFEI entered into a contract with Childhelp under which OFEI agreed to “provide the services” of Marquette, Newman and Weiner “as Producers” for the benefit program. ■ Weiner signed the agreement on behalf of OFEI and listed his title as “Producer.” OFEI also entered into a letter agreement with BET Event Productions LLC that outlined terms for the production and telecast of the benefit program. The letter agreement was on the letterhead of BET and was addressed to Newman and Weiner “c/o One From Each Island, Ltd.” Weiner signed the letter agreement on behalf of OFEI, again listing his title as “Producer.” Id. ¶¶ 34-36, 43-45 and Exhibits 17, 20.

Newman owns substantially all (if not all) of the equity in Stage Presence. How and why Stage Presence got involved in the production arrangements is not clear. Plaintiffs allege that Stage Presence hired Plaintiffs to provide services in connection with the benefit program. Id. ¶¶ 17-26. Stage Presence does not dispute that it has contractual liabilities to some or all of the Plaintiffs, though the details and amounts are yet to be decided.

Plaintiffs have asserted three separate theories of contract liability against OFEI, Newman, Weiner and Marquette. The first theory is that Newman, Marquette, Weiner, OFEI and Stage Presence are jointly liable for the contract liabilities of Stage Presence on a “partnership by es-toppel” theory. The second theory is that Plaintiffs are third party beneficiaries of certain provisions in the Childhelp contract and the BET letter agreement. The third theory is that OFEI, Newman, Weiner and Marquette should jointly share in the contract liabilities of Stage Presence on “alter ego” grounds.

Plaintiffs also accuse Newman and Weiner of fraud, and accuse Weiner of aiding and abetting fraud. They further contend that Newman was unjustly enriched and breached fiduciary duties when Newman caused post-bankruptcy business opportunities to be pursued by other companies that Newman controlled instead of being pursued by Stage Presence. Finally, two individual Plaintiffs (Weuis Baraka Chapman and Lloyd Jordan) allege that Stage Presence, Newman and Weiner were statutory “employers” with liability for wages that are owed to them. Plaintiffs have abandoned a separate claim alleging tortious interference with contract.

Newman, Weiner and Stage Presence have moved to dismiss. There is no affidavit of service on file with respect to OFEI and Marquette, and the certificate of service of the revised amended complaint indicates that Stage Presence, Newman and Weiner were the only defendants who were served with that pleading. See Docket No. 23. Plaintiffs’ counsel confirmed on July 14 that she has not yet made efforts to complete service on OFEI. Counsel informed the Court that Marquette may have received a discharge in a personal bankruptcy case.

Jurisdiction and Ability to Render a Final Decision

Plaintiffs, Stage Presence, Newman and Weiner agree that this Court has “core” jurisdiction over claims against Stage Presence. 28 U.S.C. § 157(c)(2). They do not agree as to whether other claims raise “core” issues, but they agree that the claims are at least “related to” the pending bankruptcy case, and they have consented to a final determination of the claims by this Court. See Docket Nos. 39, 40, 41, 43. These consents are sufficient as a statutory and constitutional matter to permit this Court to render a final decision. 28 U.S.C. § 157(c)(2); Wellness International Net[172]*172work, Ltd., et al. v. Sharif, 575 U.S. -, 135 S.Ct. 1932, 191 L.Ed.2d 911 (2015).

Pleading Standards

Rule 7012 (b) of Federal Rules of Bankruptcy Procedure, which incorporates Federal Rule of Civil Procedure 12(b)(6), permits a bankruptcy court to dismiss an adversary proceeding if a complaint fails to state a claim upon which relief may be granted. See Fed. R. Bankr. P. 7012(b). In reviewing a motion to dismiss the court accepts the factual allegations of the complaint as true and draws all reasonable inferences in the plaintiffs’ favor. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); E.E.O.C. v. Staten Island Sav. Bank, 207 F.3d 144, 148 (2d Cir.2000). However, the factual allegations in a complaint must be supported by more than mere eonclusory statements. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. The allegations must be sufficient “to raise a right to relief above the speculative level” and provide more than a “formulaic recitation of the elements of a cause of action.” Id. (citations omitted). “[0]nly a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955).

“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678, 129 S.Ct. 1937 (citations and internal quotation marks omitted). “[Wjhere the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct,” a complaint is insufficient under Fed.R.Civ.P. 8(a) because it has merely “alleged” but not “show[nj ... that the pleader is entitled to relief.” Id. at 679, 129 S.Ct. 1937; see also id. at 682, 129 S.Ct.

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Bluebook (online)
555 B.R. 166, 2016 Bankr. LEXIS 2639, Counsel Stack Legal Research, https://law.counselstack.com/opinion/music-mix-mobile-llc-v-newman-in-re-stage-presence-inc-nysb-2016.