Wild Bunch, SA v. Vendian Entertainment, LLC

256 F. Supp. 3d 497, 2017 WL 2733790, 2017 U.S. Dist. LEXIS 97934
CourtDistrict Court, S.D. New York
DecidedJune 25, 2017
Docket17 Civ. 1383 (JSR)
StatusPublished
Cited by23 cases

This text of 256 F. Supp. 3d 497 (Wild Bunch, SA v. Vendian Entertainment, LLC) 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
Wild Bunch, SA v. Vendian Entertainment, LLC, 256 F. Supp. 3d 497, 2017 WL 2733790, 2017 U.S. Dist. LEXIS 97934 (S.D.N.Y. 2017).

Opinion

MEMORANDUM

JED S. RAKOFF, U.S.D.J.

In this action, Wild Bunch, SA (“Wild Bunch”) claims that defendants Vendían Entertainment, LLC (“Vendían”) and Michael Bassick (Vendian’s president) duped it into entering a cluster of financing contracts for the movie “Snowden” in reliance on defendants’ representations that they could and would provide Wild Bunch with $3 million of the financing. On this basis, Wild Bunch alleges both a breach of contract claim and two fraud claims. By “bottom-line” order dated June 9, 2017, the Court denied defendants’ joint motion to dismiss Wild Bunch’s fraud claims. See Order dated June 9, 2017, ECF No. 27. This Memorandum explains the reasons for those rulings.

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In reviewing a motion to dismiss, the Court “aceept[s] the complaint’s factual allegations as true and draw[s] all reasonable inferences in the plaintiffs favor.” Brown [501]*501Media Corp. v. K&L Gates, LLP, 854 F.3d 150, 156-57 (2d Cir. 2017).

The pertinent allegations are as follows. Wild Bunch is a film distribution company-headquartered in Paris, Prance. Amended Complaint (“Am. Compl.”), ECF No. 19, ¶ 9. Vendian, which is based in New York, finances and produces films. Id. ¶ 10. Michael Bassick is Vendian’s president. Id. ¶11.

In 2014, Wild Bunch sought to gain an interest in the forthcoming movie “Snow-den” (also sometimes referred to as “the Picture”) by, inter alia, seeking to arrange so-called “gap financing” for the movie. Id. ¶ 12. To this end, in mid-2014,1 Wild Bunch principal Vincent Maraval began discussing with Michael Bassick and non-party Christopher Woodrow (Vendian’s CEO at the time) the possibility that Vendian would provide Wild Bunch with up to $3 million for the gap financing, which would be drawn on only if there were financing shortfalls. Id. ¶¶ 12-13, 16. Maraval told Vendian that Wild Bunch would only work with Vendian if Vendian itself had sufficient funds and ability to provide the gap financing if called upon to do so. Id. ¶¶ 14. Woodrow and Bassick repeatedly represented that Vendian already had the ability to provide such financing without further approvals or contingencies. Id. ¶¶ 15-16. These statements, and later ones like it, were allegedly false because, in fact, non-party John Bassick (Michael Bassick’s father) was the undisclosed source of Ven-dian’s funds and Vendian’s independent ability to fund its contractual commitments was entirely contingent on John Bassick’s unilateral, after-the-fact approval of Vendi-an’s commitments,; a fact not disclosed to plaintiff. Id. ¶¶ 24, 42., 67. In other words, Vendian, contrary to the representations of Michael Bassick and his associates, had no actual funds to help finance the Picture at the time.

On November 3, 2014, Woodrow sent an email to Wild Bunch stating, inter alia, “Lets [sic] offer to gap $0-3 million for principal plus 20%.” See Ex. 2 to Am. Compl. (the “November 2014 Email”); Am. Compl. ¶ 17. in February 2015, Wild Bunch, allegedly relying on the November 2014 Email and Vendian’s oral assurances of its ability and intent to enter the gap financing contract without further contingencies, entered into a Sales Agency Agreement (the “SAA”) with non-party production company Sacha, Inc. (“Sacha”) in which Wild Bunch agreed to provide $13 million in financing for “Snowden” in exchange for certain rights to distribute the film. Am. Compl. ¶¶ 25-28. In doing so, and as intended by Vendian, Wild Bunch disclosed to Sacha Vendian’s planned (but not yet finalized) role in providing up to $3 million in gap financing. Id. ¶¶ 19-21, 28.

In August 2015, Wild, Bunch entered into an agreement with Vendian (the “2015 Agreement”) in which Vendian'. agreed to set aside $3 million to fund “Snowden,” in exchange for producer credits and the possibility of a $150, 000 “kill fee.” Id. ¶¶ 32-33. Vendian thereafter continued to represent to Wild Bunch that it was willing and able to fund its commitment. Id, ¶39. In early 2016, Wild Bunch told Vendian that the $3 million in gap financing was needed. Id. ¶40. On June 24, 2016, Vendian and [502]*502Wild Bunch entered into an agreement (the “2016 Contract”) that superseded the 2015 Contract, in which Yendian promised to actually pay the $3 million.' Id. ¶2; see also 2016 Contract, Ex. 1 to Am. Compl. To date Vendían has not paid the amount due, allegedly because John Bassick cut off its funding. See, e.g., Am. Compl. ¶¶ 54, 58, 66-67.

On February 24, 2017, Wild Bunch instituted the instant action, bringing a claim against Vendían of breach of contract (Count I) and claims of fraud (Count II) and fraudulent inducement (Count III) against both Vendían and Michael Bassick. See Complaint, ECF No. 1, ¶¶ 58-100. The fraud claims appear to differ in that Count II alleges that Wild Bunch was duped into entering the SAA (in which Wild Bunch committed to Sacha to invest $13 million in the Picture), whereas Count III alleges that Wild Bunch was duped into entering the 2015 Contract and the 2016 Contract (in which Vendían committed to Wild Bunch to invest up to $3 million in the Picture). See id. ¶¶ 80, 95. On April 6,2017, defendants moved to dismiss the fraud claims. See Memorandum of Law in Support of Defendants’ Motion to Dismiss the Complaint, ECF No. 15. On April 21, 2017, Wild Bunch, in lieu of opposing the motion to dismiss, filed an amended complaint bringing the same claims as the original complaint. (Count II is now styled as a claim for “fraudulent concealment,” but nothing turns on this new label.) See Am. Compl. ¶¶ 75-120.

On May 5, 2017, defendants moved to dismiss the fraud claims in the amended complaint. See Memorandum of Law in Support of Defendants’ Motion to Dismiss Count II (Fraudulent Concealment) and Count III (Fraudulent Inducement) of Plaintiffs Amended Complaint (“Def. Mem.”), ECF No. 21. On May 19, 2017, Wild Bunch, filed answering papers. See Plaintiffs Memorandum of Law in Opposition to Defendants’ Motion to Dismiss Count II and Count III of the Amended Complaint (“Plf. Mem.”), ECF No. 24. On May 26, 2017, defendants filed reply papers. See Reply Memorandum of Law in Support of Defendants’ Motion to Dismiss Count II (Fraudulent Concealment) and Count III (Fraudulent Inducement) of Plaintiffs Amended Complaint (“Def. Reply”), ECF No. 25. The Court heard oral argument on June 2, 2017,. and, as noted, denied defendants’ motion by bottom-line order on June 9,2017.

Defendants principally argue that Wild Bunch’s fraud claims are imper-missibly duplicative of its breach of contract claim. Under New York law,2 “a misrepresentation [that] is merely a statement of intent to perform under the contract! ] cannot constitute fraud .... ” Manning v. Utils. Mut. Ins. Co., Inc., 254 F.3d 387, 401 (2d Cir. 2001), To maintain a fraud claim based on such misrepresentations, á plaintiff must do one of the following:

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Bluebook (online)
256 F. Supp. 3d 497, 2017 WL 2733790, 2017 U.S. Dist. LEXIS 97934, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wild-bunch-sa-v-vendian-entertainment-llc-nysd-2017.