The plaintiffs Briarpatch Limited, L.P. ("Briarpatch") and Gerard F. Rubin ("Rubin") (collectively the "Plaintiffs") have moved for partial summary judgment under Rule 56, Fed.R.Civ.P., to dismiss the affirmative defenses in the answer of defendants Phoenix Pictures, Inc. ("Phoenix") and Morris "Mike" Medavoy ("Medavoy") (collectively the "Defendants") and for partial summary judgment to declare Briarpatch the owner of the "The Thin Red Line" screenplay and related rights. The Defendants have moved for summary judgment under Rule 56, Fed.R.Civ.P., to dismiss the Plaintiffs' First Amended Complaint ("FAC") in its entirety as to the Defendants. For the reasons set forth below, the Plaintiffs' motions are denied, and the Defendants' motion is granted.

The Parties

Rubin is a successful businessman with a degree with a major in accounting and finance from Spring Hill College, Mobile, Alabama, and a Masters in Business Administration from New York University. He has been a corporate officer with Kaufman Holdings, Hatco, Jones Apparel, and Kenar Enterprises, Inc. Rubin has made investments in the entertainment business.

Briarpatch is a New York limited partnership formed as of January 1, 1994. Its sole limited partner was Rubin, and the general partners were Briarpatch Construction Corp., Briarpatch Film Corp., Briarpatch Releasing Corp., Briarpatch Theatre Corp., and Sansho Company, Inc. The general partners were owned and controlled by Geisler and Roberdeau. Of the five named general partners of the partnership, three, (Briarpatch Film Corp. and two others) were dissolved by the New York Secretary of State prior to the partnership's January 1, 1994 effective date; the other two, (Briarpatch Releasing Corp. and Sansho Company, Inc.) were dissolved by the Secretary of State in 1995 and 1997.

Phoenix is a Delaware corporation incorporated in 1995. It is engaged in the business of development, acquisition, production, and exploitation of feature motion pictures. Among its founders, shareholders, and officers are Medavoy and Arnold Messer ("Messer"). In January of 1997, Phoenix incorporated a wholly-owned, single-purpose company, Thin Red Line Productions, Inc. ("TRL Productions") in California, to serve as the production entity for the production of "The Thin Red Line" motion picture,

Medavoy has had a career in the motion picture business as a casting director, and the head of production for United Artists. In 1978, he was one of the founders of Orion Pictures and continued with that organization until 1990. In 1990, Medavoy became chairman of TriStar Pictures, and in 1995, he started Phoenix. Medavoy has been involved with production of such motion pictures as "Rocky," "One Flew Over the Cuckoo's Nest," "Platoon," "Amadeus," "The Terminator," "Philadelphia," "The People vs. Larry Flynt," and "The Sixth Day." Of the films Medavoy has been involved with, sixteen have been nominated for Best Picture Oscars and seven have won.

Prior Proceedings

The prior proceedings in this action and the litigation relating to Briarpatch in the federal courts were described inBriarpatch Limited L.P. and Gerard F. Rubin v. Geisler Roberdeau, Inc., et al., No. 99 Civ. 9623(RWS), 2002 WL 31426207 (S.D.N.Y. Oct. 30, 2002) (the "October 30 Opinion"), granting summary judgment to the Defendants.

That judgment was the subject of Briarpatch Limited L.P., Gerard F. Rubin v. Phoenix Pictures, Inc., et al., 373 F.3d 296 (2d Cir. 2004) (the "Court of Appeals Opinion"), which vacated the dismissal of the complaint, the grant of summary judgment in favor of the Defendants, and the dismissal of the claims against Geisler Roberdeau, Inc. ("GRI"), and affirmed the denial of remand to the state court and the dismissal of the unjust enrichment and declaratory judgment claims "for reasons different from those the district court relied upon." Id. at 309-10. The Court of Appeals Opinion concluded that dismissal of GRI was in error, that this Court has copyright jurisdiction over the unjust enrichment and declaratory judgment claims against Phoenix, and that it has power under 28 U.S.C. § 1367(a) to hear the claims over which it lacks copyright jurisdiction if it exercises its jurisdiction under 28 U.S.C. § 1367(c). Id. at 309. The Court of Appeals Opinion also barred this Court from relying on the October 30 Opinion unless it determines that the Plaintiffs' access to evidence was not hindered by the erroneous dismissal of GRI. Id.

GRI is a corporation incorporated in the State of New York in 1994 and dissolved by proclamation of the Secretary of State of New York, published on September 23, 1998. Geisler and Roberdeau are the sole shareholders, officers, and directors of GRI. GRI was never a partner in Briarpatch.

The Court of Appeals mandate was filed on November 5, 2004. On November 1, 2005, the Court granted the Plaintiffs' motion to amend their complaint and listed certain state court actions and federal actions in which Briarpatch was involved. Briarpatch Ltd. L.P. Gerard F. Rubin v. Geisler Roberdeau, Inc., et al., No. 99 Civ. 9623(RWS), 2005 WL 2861604 (S.D.N.Y. Nov. 1, 2005) (the "November 1 Opinion"). Given the docket entry of March 3, 2000, it was assumed that GRI was no longer a party and that further action by the Plaintiffs would be required to join GRI. Id. at *2.

The First Amended Complaint ("FAC"), dated April 19, 2005, was served and entered on the docket on November 14, 2005. It alleges six causes of action: (1) conspiracy to breach fiduciary duty against all defendants (FAC ¶¶ 131-139); (2) aiding and abetting a breach of fiduciary duty against all defendants (FAC ¶¶ 140-147); (3) trover and conversion against GRI (FAC ¶¶ 148-151); (4) unjust enrichment against GRI (FAC ¶¶ 152-154); (5) declaratory judgment against Phoenix (FAC ¶¶ 155-167); and (6) copyright infringement against Phoenix (FAC ¶¶ 168-181). The primary difference between the FAC and the original complaint filed in this action is that the Fifth and Sixth Causes of Action have now been brought under federal copyright law, rather than as state law claims for declaratory judgment and unjust enrichment.

Discovery proceeded, and the instant motions were made and marked submitted after argument on September 20, 2006.

The Facts

The extensive factual submissions of the Plaintiffs have not altered the facts found in the October 30 Opinion which are adopted herein.

The October 30 Opinion contained a typographical error as to the date of the recording of the option agreement which occurred on October 23, 1996, and the incorporation of Phoenix which occurred in 1995.

Additional facts are contained in the Plaintiffs' Rule 56.1 Statement, the Defendants' Rule 56.1 Statement, the Defendants' Supplemental Rule 56.1 Statement, the Plaintiffs' Response to Local Rule 56.1 Statement of Defendants, and the Counter Rule 56.1 Statement of the Defendants, and are not in dispute except as noted.

Given the extended discovery conducted by the Plaintiffs, it is concluded that the Plaintiffs' access to evidence has not been hindered by the prior dismissal of GRI. Plaintiffs have indicated that they obtained "important" "new testimony and other evidence" "after reinstatement of Geisler Roberdeau, Inc. as a defendant and service of plaintiffs' First Amended Complaint. . . ." (Pls.' Reply Mem., Sept. 12, 2006 ("Pls.' Reply Mem."), 9-10.)

During the 1980's, Rubin met Geisler and Roberdeau and funded a stageplay they had developed. From January 1986 through September 1993, Rubin invested $6,250,000 with Geisler and Roberdeau. Of the $6,250,000, $750,000 was invested by Rubin specifically with respect to the development expenses incurred by Geisler and Roberdeau to acquire the right to produce a motion picture based on the novel "The Thin Red Line," including: (1) $325,000 for acquisition of the rights to the underlying James Jones novel; (2) $250,000 for Terrence Malick ("Malick") to write the draft screenplay; and (3) $31,250 for payment of Writers Guild of America ("WGA") fringes for Malick.

Briarpatch Film entered into the agreements for the underlying James Jones novel and the agreement with Malick for the screenplay, and acquired the Malick screenplay for the "The Thin Red Line" project solely in its own name. Specifically, Briarpatch Film acquired the motion picture derivative rights to the novel "The Thin Red Line" through a written contract dated May 1, 1989, with the estate of James Jones and a written contract dated April 1, 1990, with Philip Yordan. (Defs.' Exs. 18 20.) Briarpatch Film owned the Malick screenplay based upon the novel "The Thin Red Line" pursuant to a written contract dated January 1, 1989, with Malick. (Defs.' Ex. 22.) Evidence of Briarpatch Film's ownership of the "The Thin Red Line" motion picture rights was properly recorded in the Copyright Office in 1990 and 1992 (Defs.' Exs. 19 21), and evidence of Briarpatch Film's ownership of the Malick screenplay was properly recorded in the Copyright Office in 1997 (Defs.' Ex. 25) (referred to collectively as the "TRL Motion Picture Rights"). According to the Defendants, additional motion picture derivative rights to that novel and screenplay were obtained directly by Phoenix after its acquisition of the TRL Motion Picture Rights from Briarpatch Film.

1. The Limited Partnership Agreement

Prior to January 1, 1994, Rubin had not entered into any written agreements with respect to the $6,250,000 he had given to Geisler and Roberdeau during the prior seven years. In late 1993, Rubin decided that he would no longer invest any additional funds with Geisler and Roberdeau.

In March 1994, Rubin, Geisler and Roberdeau finally entered into a written limited partnership agreement (the "Limited Partnership Agreement"). The Limited Partnership Agreement was drafted by the law firm of Paul, Weiss, Rifkind, Wharton, Garrison LLP ("Paul Weiss"), counsel for Geisler and Roberdeau and their companies, and set forth their respective obligations and rights regarding Rubin's prior investment in various entertainment projects. Rubin was the sole limited partner. The only general partners were five corporations owned by Geisler and Roberdeau, including Briarpatch Film Corp. ("Briarpatch Film"), Briarpatch Construction Corp., Briarpatch Theater Corp., Briarpatch Releasing Corp., and Sansho Company, Inc.

The recitals of the Limited Partnership Agreement stated as follows:

WHEREAS, the parties heretofore have worked together to produce, develop and present certain entertainment-related projects (each a "Project" and, collectively, the "Projects"); and

WHEREAS, the parties now desire to formalize the terms of their relationship and to operate their business as a limited partnership of which Briarpatch will be the sole general partner and Rubin will be the sole limited partner (the "Partnership").

(Pls.' Ex. 14 at 1.)

The first sentence of Section 2 of the Limited Partnership Agreement stated:

The parties hereto hereby form the Partnership to develop, produce and present the Projects and to exploit any and all other rights in the Projects.

(Id. ¶ 2.)

The Limited Partnership Agreement also contained the following terms:

3. Decisions; Contracts.

3.1. [General Partner] shall have the complete, exclusive and unqualified control of all aspects of the business of the Partnership, including over the development, production, presentation, distribution, exhibition, exploitation and other disposition of any Projects, directly or by any other party in all media throughout the world, in perpetuity, in accordance with such sales methods, policies, terms and conditions as [General Partner] in its sole business judgment may determine proper.

3.2. [General Partner] shall have the unrestricted right to sell or assign, and to pledge, mortgage or otherwise hypothecate, any Project, either in whole in part, without obtaining the consent of Rubin.

4. Rights; Copyright.

4.1. Rubin acknowledges and agrees that, except as expressly set forth in this Agreement, he does not and shall not have any right, title or interest of any kind whatsoever in or to any Project (including, without limitation, any copyrights or any income derived therefrom).

4.2. The copyrights in the Projects shall be registered in the name of [General Partner], or such party as [General Partner] in its sole business judgment may determine proper.

(Id. ¶¶ 3, 4.)

Rubin read and understood these provisions and was represented by counsel at that time.

Rubin's investment was contributed to the Partnership. He had the contractual right to be reimbursed for the applicable project development expenses he financed from any "development expense reimbursements" received by any general partner with respect to any project, including "The Thin Red Line" ("TRL"). In addition, Rubin was to receive a percentage of all "distributable cash" derived from any of the projects, including TRL. (Id. ¶¶ 6.2, 7.1, 7.2.)

Geisler testified that, as of the January 1, 1994 effective date of the Limited Partnership Agreement, the TRL became a "Project" of the Partnership. Whether Briarpatch became the beneficial owner of the TRL project is an issue of law.

Section 11 of the Limited Partnership Agreement provided:

The parties agree that within ten business days of receipt by [General Partner] of a written request from Rubin, one or more of the Partners hereto (or their designee) shall purchase all of Rubin's right, title and interest hereunder with respect to any Project identified in such request for $10.

(Id. ¶ 11.)

The second sentence of Section 13 of the Limited Partnership Agreement stated:

No party hereto shall have the right to assign this Agreement or any of its rights hereunder or herein without the prior written consent of the other parties; provided, however, that each party shall have the right to assign its right to receive revenues hereunder.

(Id. ¶ 13.)

Section 14 of the Limited Partnership Agreement stated:

This contract is made in the State of New York and shall be construed in accordance with, and governed by, the laws of that state applicable to contracts made and performed entirely therein.

(Id. ¶ 14.)

Section 18.3 of the Limited Partnership Agreement stated:

This Agreement constitutes the entire understanding between the parties hereto and replaces all prior understandings and agreements between the parties with respect to the Projects. It may not be modified except by a written instrument signed by all of the parties.

(Id. ¶ 18.3.)

Rubin never signed any written instrument modifying the Limited Partnership Agreement. No "written consent" was obtained from Rubin for any assignment of the Limited Partnership Agreement or any rights under or in the Limited Partnership Agreement. Rubin did not sell, and Geisler and Roberdeau's companies did not purchase, Rubin's interest in the TRL project under the Limited Partnership Agreement. Roberdeau sent Rubin an April 4, 1994 letter "re: Briarpatch Film/Theatre Corp." in which Roberdeau acknowledged "Under our Limited Partnership Agreement, it is my duty from time to time to report on the condition of our projects." (Pls.' Ex. 16.)

GRI did not become a general partner of the Limited Partnership Agreement.

Briarpatch Film was a New York corporation dissolved by the Secretary of State of New York by proclamation in March 1993. (FAC Ex. 4.)

In December 1998, Rubin, the sole limited and sole remaining partner of Briarpatch was designated the sole winding up partner and then filed a state court action on December 17, 1998, against Geisler and Roberdeau (the "original New York action").

2. The Phoenix TRL Acquisition Agreement

Phoenix was established in 1995 and began negotiating with Geisler, Roberdeau, Briarpatch Film, and GRI (the "Geisler/Roberdeau Parties" or "RG/JR") with respect to the TRL Motion Picture Rights. The Geisler/Roberdeau Parties were represented by two law firms and one theatrical agency during these negotiations.

The negotiations between the Geisler/Roberdeau Parties and Phoenix were concluded in August 1996 by an agreement dated as of April 1, 1996 (the "Phoenix TRL Acquisition Agreement"). The Phoenix TRL Acquisition Agreement granted Phoenix an option only to acquire rights from RG/JR and only "to the extent such screenplays and/or scripts are owned, controlled or developed by all or any of RG/JR." (Defs.' Ex. 2.) The Phoenix TRL Acquisition Agreement was drafted by Lindsey Bayman ("Bayman"), who was then a vice president and the in-house counsel of Phoenix. Bayman testified that the phrase "to the extent such screenplays/and or scripts are owned . . . by all or any of RG/JR," as used in the Phoenix TRL Acquisition Agreement, was "quitclaim language." (Pls.' Ex. 50 at 142:11-17.) The option in the Agreement was only for a "quitclaim" of rights of RG/JR and did not purport to grant any rights of Briarpatch, which is not a party to the Agreement nor referred to by name.

Pursuant to the Phoenix TRL Acquisition Agreement, Phoenix agreed to pay $800,000 to acquire the TRL Motion Picture Rights and $600,000 for producer fees, and to forgive repayment of a $100,000 loan Medavoy had made pursuant to an earlier agreement with the Geisler/Roberdeau Parties. (Defs.' Ex. 2 at 2-4.) Pursuant to the terms of the Phoenix TRL Acquisition Agreement, Phoenix timely paid the "option fee/purchase price," as defined in that agreement, and acquired ownership of the TRL Motion Picture Rights, including the Malick screenplay. Phoenix further paid in full, on or about July 18, 1997, the fixed "producer fees" compensation as defined in that agreement. On October 23, 1996, Phoenix recorded in the Copyright Office a copy of the Short Form Option Agreement, Exhibit A to the Phoenix TRL Acquisition Agreement, signed by Geisler and Roberdeau individually, GRI, and Briarpatch Film. (Defs.' Ex. 11.) The Short Form Option Agreement referred to the motion picture and other rights to the James Jones novel, TRL; to the 1989 agreement between the estate of Jones and Briarpatch Film; to the agreement dated April 1, 1990, between Yordan and Briarpatch Film; and to the Malick screenplays.

GRI was the entity that directly received payments from Phoenix in connection with Phoenix's acquisition of the TRL Motion Picture Rights and the production of the TRL movie. In August 1996, GRI transferred $200,000 of the $300,000 received from Phoenix to a Briarpatch Film account in London. (Defs.' Ex. 35.) In June 1997, GRI also transferred $195,000 of the $277,000 it received from Phoenix to a Briarpatch Film account in London. (Defs.' Ex. 36.) According to the Plaintiffs, the payments by Phoenix made to GRI evidence a conspiracy with Geisler and Roberdeau to breach their fiduciary duty.

According to the Plaintiffs, Bayman testified that unless Phoenix paid to Briarpatch Film the purchase price under Section 2(c) of the Phoenix TRL Acquisition Agreement, Phoenix would not acquire the rights thereunder. The Defendants deny this. Plaintiffs also contend that the New York courts adjudicated that all agreements, screenplays, and other documents relating to the TRL project "belong to and are the property of the Partnership." The Defendants deny this as well.

The adjudications so filed by the Plaintiffs with the Copyright Office include:

(i) the July 12, 1999 Findings of Fact, Conclusions of Law, and Decision of the New York Supreme Court in the action entitled Briarpatch Limited, L.P. and Gerard F. Rubin v. Robert Geisler and John Roberdeau, Index No. 606156/98 (the "original New York action");

(ii) the Order and Judgment entered and docketed October 14, 1999, in the original New York action on October 18, 1999, page 242; and

(iii) the May 2006 Judgment and Order in the action entitled Briarpatch Limited, L.P. and Gerard F. Rubin v. D.M. Thomas, D.M. Thomas Ltd., Briarpatch Film Corp., Robert M. Geisler, Verner Simon, P.C., Paul W. Verner, and Night Hawk Limited, Index No. 603364/01 (the "2006 Judgment"), filed with the United States Copyright Office on June 8, 2006.

(Pls.' Exs. 1.8, 1.9, 51.)
The 2006 Judgment corrected the Referee's February 2, 2006 Report to read as follows:

As this Court has previously adjudicated The Thin Red Line Project was acquired and became owned by the Partnership as of January 1, 1994. Neither Geisler, nor Roberdeau, nor Geisler Roberdeau, Inc. was ever a partner of the Partnership. Briarpatch Film Corp. had been dissolved prior to 1994; upon its dissolution ceased to be a general partner of the Partnership; and so by 1994 had ceased to be a general partner of the Partnership. Nonetheless, non-partners Geisler, Roberdeau, Geisler Roberdeau, Inc., and Briarpatch Film Corp. entered into an Option Agreement with Phoenix Pictures, Inc. dated as of April 1, 1996 pursuant to which they purported to grant Phoenix Pictures, Inc. an option to purchase a quitclaim of their rights (if any) in The Thin Red Line screenplay and Project for $800,000 and also arranged for themselves to be paid a purported producer fee of $600,000, plus deferred and contingent compensation, and expense reimbursements. As neither Geisler, Roberdeau, Geisler Roberdeau, Inc., nor Briarpatch Film Corp. was a general partner of the Partnership, that Option Agreement did not grant, and none of them (neither Geisler, Roberdeau, Geisler Roberdeau, Inc., nor Briarpatch Film Corp.) assigned to Phoenix Pictures, Inc., any of the screenplays or agreements or other rights of the Partnership (whether for The Thin Red Line Project or otherwise); rather, as this Court adjudicated, those "screenplays, . . . agreements, . . . and other documents, . . . belong to and are the property of the Partnership". . . .

(Pls.' Ex. 51 (internal citations omitted).)

Some time prior to June 13, 1997, Rubin had knowledge that the Geisler/Roberdeau Parties had made an agreement with Phoenix with respect to the TRL Motion Picture Rights and that Phoenix intended to produce a motion picture based upon the exercise of those intangible rights from having read newspapers, magazines, and from his son, an actor living in Los Angeles.

On June 13, 1997, Howard Justvig of Becker Ross Stan DeStefano Klein ("Justvig"), as counsel to Rubin, wrote to Geisler and Roberdeau's former attorney at Paul Weiss to seek an accounting of Briarpatch. (Pls.' Ex. 24.) Geisler received a June 16, 1997 letter from John F. Breglio ("Breglio") of Paul Weiss with the June 13, 1997 letter from Justvig attached. Justvig also sent to Geisler, and Geisler received, both an October 10, 1997, and January 23, 1998 letter "Re: Briarpatch Limited, L.P." requesting accountings. (Pls.' Exs. 26 28.) Finally, Justvig sent Geisler and Roberdeau, and Geisler and Roberdeau received, an August 20, 1998 letter threatening legal action in the absence of an accounting. (Pls.' Ex. 30.)

Rubin was not provided an accounting for the period from January 1, 1994, through December 1998 with respect to the TRL project or Briarpatch. Through December 15, 1998, Geisler and Roberdeau did not disclose to Rubin that Geisler and Roberdeau or any of their affiliates had entered into any agreement with Phoenix and Medavoy, the terms of any such agreement, or the receipt of funds from Phoenix. On December 15, 1998, Rubin verified his complaint in the original New York action which alleged that Geisler and Roberdeau had assigned the TRL Motion Picture Rights to Phoenix. (Pls.' Ex. 34.)

3. The Buyout Agreement

A dispute arose between the Geisler/Roberdeau Parties and Phoenix regarding further personal services in connection with the development and production of TRL. As a result, the parties entered into an agreement dated July 18, 1997 (the "Buyout Agreement"), by which it was agreed that Geisler and Roberdeau would not render any further personal services in connection with the development and production of the TRL motion picture, and that Phoenix would immediately pay the balance of $430,000, plus certain expenses, owed to the Geisler/Roberdeau Parties. (Pls. Ex. 2.) Phoenix made these payments on July 18, 1997. In the Buyout Agreement, the Geisler/Roberdeau Parties acknowledged and agreed that Phoenix had paid the acquisition price and had acquired the TRL Motion Picture Rights as provided in the Phoenix TRL Acquisition Agreement. (Id.)

According to the Defendants, prior to July 18, 1997, neither Medavoy nor Phoenix nor any Phoenix employee or executive, ever knew of the existence of either Rubin or Briarpatch, nor of any fiduciary duties that might have been owed by Briarpatch Film, Geisler, Roberdeau, or anyone else to Rubin or Briarpatch. According to the Plaintiffs, Medavoy was told by Geisler that prior funding of the TRL project was done by a person who withdrew from the partnership.

According to the Defendants, neither Medavoy nor Phoenix, nor any employee or executive of Phoenix, has ever: (1) entered into any agreement with Briarpatch Film, Geisler, Roberdeau, or any of their affiliates or with any of them, to breach any fiduciary duties as may have been owed by Briarpatch Film, Geisler, Roberdeau, their affiliates or any of them to Plaintiffs or either of them; (2) provided any assistance to Briarpatch Film, Geisler, Roberdeau, or their affiliates, or any of them, to breach any fiduciary duty that they may have owed at any time to Rubin or Briarpatch; nor (3) done or committed any overt act to assist Briarpatch Film, Geisler, Roberdeau, or their affiliates, or any of them, to breach any fiduciary duties they may have owed at any time to Rubin or Briarpatch.

Medavoy and Phoenix received, not later than September 1, 1998, a copy of the letters that Justvig had sent to Geisler and/or Roberdeau, including the October 10, 1997, and the January 23 and August 20, 1998 letters. In September 1998, Geisler and Roberdeau's attorney, Thomas Selz of Frankfurt Garbus Klein Selz ("Selz"), advised Phoenix and Medavoy in writing that Rubin was not owed any money and that Rubin's attorney acknowledged that Rubin's claims had nothing to do with Phoenix.

While Plaintiffs' Rule 56.1 Statement uses the date of October 24, it is presumed that Plaintiffs are referring to the October 10, 2007 letter.

4. Production of the Motion Picture "The Thin Red Line"

Principal photography for the TRL motion picture commenced in Australia on or about June 23, 1997. Phoenix reviewed the chain of title regarding the TRL Motion Picture Rights as did Phoenix's outside counsel, the attorneys for City National Bank, and attorneys for Fox. These reviews did not disclose any interest, or any claimed interest, by Plaintiffs in the TRL Motion Picture Rights.

TRL was initially released in theaters in the United States in December 1998 pursuant to an agreement between Phoenix and Twentieth Century Fox Film Corporation ("Fox"). The copyright to the motion picture was recorded in December 1998. (Defs.' Ex. 24.) The motion picture "The Thin Red Line" received substantial critical acclaim and was nominated for seven Academy Awards, including Best Picture.

According to the Defendants, the motion picture of the TRL was created by Phoenix with the consent of the former owners of the TRL Motion Picture Rights; neither Medavoy nor Phoenix violated or infringed any intangible right or interest owned by Rubin or Briarpatch by producing that film. The Plaintiffs deny this conclusion.

5. The Original New York Action

On December 18, 1998, Phoenix received a fax of the complaint and restraining order in the original New York action. After a five day trial in the action, the July 12, 1999 decision was entered. Plaintiffs recorded the decision in the United States Copyright Office during August 1999. (FAC Ex. 8.)

Rubin, in connection with matters relevant to this litigation, has been represented by an accountant John Daus, by attorney Art Chianese of Zager, Fuchs, Kauff Needle, and by Justvig of Beeker Ross Stone DeStefano Klein.

Rubin and Briarpatch obtained a $1,500,000 judgment against Geisler and Roberdeau in the original New York action for, inter alia, breach of fiduciary duty. During the state court proceedings, Rubin obtained a temporary restraining order against Geisler/Roberdeau dated December 17, 1998. A five-day trial was held in May and June 1999, and the state court issued a thirty-one page Findings of Fact, Conclusions of Law, and Decision dated July 12, 1999, which held that Geisler and Roberdeau had breached their fiduciary duties to Briarpatch and Rubin and committed fraud, fraudulent concealment, conversion, misappropriation, and other misconduct.

The state court entered an order and judgment against Geisler and Roberdeau, which declared that TRL was one of the Projects of the partnership, adjudicated the rights of the partnership and Rubin in TRL and other Projects, and ordered Geisler and Roberdeau to immediately deliver to the partnership and Rubin "all screenplays, treatments, agreements, . . . and other documents . . . since they belong to and are the property of the Partnership." The order and judgment were entered by the County Clerk, New York County, on October 14, 1999.

The state court made findings of fact including the following:

38. By letter of their then counsel, Frankfurt Garbus Klein Selz dated September 9, 1998, defendants represented to third party Phoenix Productions, Inc. that under the Partnership Agreement "Mr. Rubin's investment was reduced on a dollar-for-dollar basis by whatever income tax deductions he took as losses on his investment" and that "Mr. Rubin has in fact deducted all of his investments so that nothing further is owed to Mr. Rubin".

39. Those representations by or on behalf of defendants were false and were known [by] defendants to be false . . .

40. Those misrepresentations by or on behalf of defendants were made intentionally to conceal and prevent discovery of their misappropriation of the rights and remuneration of the Partnership and of Rubin.

***

45. On or about August 23 or 24, 1996, defendants Geisler and Roberdeau entered into an Agreement with Phoenix Pictures, Inc. dated as of April 1, 1996.

46. Pursuant to that April 1, 1996 Agreement, defendants agreed to sell to Phoenix Pictures all rights to The Thin Red Line for $800,000 and also arranged for themselves to be paid a purported producers fee of $600,000, plus deferred and contingent compensation, and expense reimbursements.

47. Phoenix Pictures did in fact pay defendants' company Geisler Roberdeau, Inc. that sum of $1,400,000 by check or wire transfer in 1996 and 1997 for The Thin Red Line (except that $100,000 of that $1,400,000 was withheld by Phoenix Pictures to offset the $100,000 April 1996 borrowing by defendants Geisler and Roberdeau from Phoenix Pictures).

48. In accordance with the instructions of defendants, all $1.5 million paid by Medavoy and by Phoenix [(]consisting of $100,000 paid by Medavoy and the $1,400,000 paid by Phoenix) with respect to The Thin Red Line was paid to, and deposited in bank accounts of, Geisler Roberdeau, Inc.

(FAC Ex. 8 at 7-9, ¶¶ 38-40 45-48.)

In the original New York action, the court made conclusions of law including the following:

6. Remuneration payable by defendants Geisler and Roberdeau and their affiliates to the Partnership specifically includes without limitation:

(i) The $1,500,000 received from Michael Medavoy and his company Phoenix Pictures for The Thin Red Line (whether characterized as loans forgiven, payments for film rights, producer fees, or otherwise);. . . .

(Id. at 24, ¶ 6.)

The $1.5 million judgment in favor of Plaintiffs in the original New York action was based, in part, upon the New York court's finding of the fact that Briarpatch Film, Geisler, and Roberdeau had deceived Medavoy and Phoenix by advising Medavoy and Phoenix in September 1998 that Rubin was not entitled to be paid any monies with respect to the exploitation of the TRL Motion Picture Rights.

6. Malick

Malick, the director of the TRL, only recalled meeting Rubin at a 1992 party given by Geisler and Roberdeau at their home in Greenwich Village, New York. Malick had no recollection of any substantive conversations with Rubin at that time, including no recollection of any conversation regarding the proposed motion picture to be made based upon the TRL novel.

Although Malick was aware that Rubin, and other small investors, provided funds to Geisler and Roberdeau to help finance their activities in developing the TRL motion picture project, Malick knew very little about Geisler and Roberdeau's relationship with Rubin and he did not know of any details of Rubin's financial arrangements with Geisler and Roberdeau. Geisler and Roberdeau did not talk to Malick about the details of their relationship with Rubin. Geisler could not recall discussing with Malick any of the details of the financial arrangements between Rubin, on the one hand, and Geisler and Roberdeau on the other.

7. Geisler

After May 1994, Geisler believed that he and Roberdeau had bought Rubin out of the Briarpatch partnership at Rubin's specific request and that Rubin had no interest in the Briarpatch partnership thereafter. At the time Geisler and Roberdeau entered into the Phoenix TRL Acquisition Agreement with Phoenix, dated April 1996, Geisler and Roberdeau "genuinely believed" that Rubin no longer had any interest in the Briarpatch Partnership, and thus had no claim to any proceeds derived from the sale to Phoenix of the TRL Motion Picture Rights. (Defs.' Ex. 33 at 158:14-159:11, 187:14-17, 444:9-14.) Geisler and Roberdeau did not pay to Rubin, and did not provide Rubin with any accounting of, any funds received from Phoenix in connection with the acquisition of the TRL Motion Picture Rights because Geisler and Roberdeau thought that Rubin was out of the Briarpatch partnership and that Geisler and Roberdeau did not have any obligation to provide any accounting to Rubin. According to the Plaintiffs, this belief was not held in good faith.

At the time of entering into the various agreements with Phoenix regarding the Phoenix TRL Acquisition Agreement, Geisler believed that Briarpatch Film was still a legal entity and he assumed that when he and Roberdeau signed agreements on behalf of Briarpatch Film, "that Briarpatch Film was in force and in fact valid." (Id. at 546:19 — 547:17.)

Geisler was extremely unhappy with the behavior of Phoenix and Medavoy during the negotiations of the Phoenix TRL Acquisition Agreement and believed that Medavoy "wasn't on the level" with him in connection with negotiating the Phoenix TRL Acquisition Agreement. (Id. at 230:20-231:3.) Geisler also believed that he and Roberdeau were being extorted by Phoenix to give up "more and more and more unfair concessions to both Medavoy and Malick." Geisler and Roberdeau felt that they were being "blackmailed." (Id. at 239:13-240:5.)

Discussion 1. The Summary Judgment Standard

Pursuant to Rule 56, summary judgment may be granted only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); SCS Communications. Inc. v. Herrick Co., 360 F.3d 329, 338 (2d Cir. 2004). The court will not try issues of fact on a motion for summary judgment, but rather, will determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

Summary judgment is appropriate where the moving party has shown that "little or no evidence may be found in support of the nonmoving party's case. When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Servs., Ltd. P'ship, 22 F.3d 1219, 1223-24 (2d Cir. 1994) (internal citations omitted). The moving party has the burden of showing that there are no material facts in dispute, and the court must resolve all ambiguities and draw all reasonable inferences in favor of the party opposing the motion.Bickhardt v. Ratner, 871 F. Supp. 613 (S.D.N.Y. 1994) (citingCelotex, 477 U.S. 317).

2. The Copyright Claims Against Defendant Phoenix Are Dismissed

The FAC's Fifth and Sixth Causes of Action (FAC ¶¶ 155-181) allege two federal copyright claims against Phoenix that are based upon the same facts as the two state law claims in the original complaint that this Court, and the Second Circuit, found subject to complete preemption by the federal Copyright Act. When moving to amend the complaint, Plaintiffs admitted that the FAC copyright claims "do not raise substantially new theories of recovery" that might differ from their original complaint. (Pls.' Mem. in Supp. of Motion to Amend, Apr. 20, 2005, 12.) Plaintiffs indicated that their purpose in filing the FAC was "to assert under the Copyright Act their declaratory judgment claims as to screenplays and other property . . . [and] to convert their prior 'unjust enrichment' claim into a 'copyright infringement' claim on the same facts and occurrences and for similar relief as that previously pleaded. . . ." (Pls.' Reply Mem., June 1, 2005, 1.)

Now considering these claims under this Court's copyright jurisdiction, summary judgment is again granted in favor of the Defendant, and the claims are dismissed. Accordingly, Plaintiffs' motion for partial summary judgment declaring Briarpatch the owner of the Malick screenplay and other related rights to TRL is denied.

a. The Declaratory Judgment Claim Is Dismissed for Failure of Proof

Plaintiffs have again asserted a declaratory judgment claim to have Briarpatch named the owner of the Malick screenplay and related rights in TRL. Both Plaintiffs and Defendants have effectively moved for summary judgment on this claim. Granting summary judgment to the Defendants on the prior claim, albeit asserted under different jurisdiction, the October 30 Opinion concluded that "neither Briarpatch nor Rubin was the legal owner of the motion picture derivative rights to 'The Thin Red Line' novel and screenplay at the time Phoenix entered into and fully performed the Phoenix TRL Acquisition Agreement, which was negotiated in 1995 and 1996." Briarpatch Ltd., 2002 WL 31426207, at *12.

Plaintiffs have not presented any law or facts that would cause this conclusion to be altered. Instead, Plaintiffs assert a series of arguments similar to those made previously, all of which are unavailing.

i. Plaintiffs Were Never the Legal Owner of the TRL Motion Picture Rights Prior to the Phoenix TRL Acquisition Agreement

First, although Plaintiffs have conceded that Briarpatch Film acquired the TRL Motion Picture Rights, including rights to the Malick screenplay (Pls.' Resp. to Defs.' Local Rule 56.1 Statement ¶¶ 6-10), they nevertheless contend that Briarpatch Film conveyed those rights to the Briarpatch partnership when it entered into the Limited Partnership Agreement in March 1994. This contention is without merit.

Prior to Phoenix entering into the Phoenix TRL Acquisition Agreement, Briarpatch Film was the legal owner of the TRL Motion Picture Rights and had owned those rights since 1989. See 17 U.S.C. §§ 201(d), 204. As previously established, Briarpatch Film acquired the motion picture rights to the TRL novel through a written contract dated May 1, 1989, with the estate of James Jones and a written contract dated April 1, 1990, with Philip Yordan. Briarpatch Film owned the Malick screenplay based upon the TRL novel pursuant to a written contract with Malick dated January 1, 1989. See id.

Furthermore, Briarpatch Film had recorded its ownership of those TRL Motion Picture Rights with the United States Copyright Office in 1990 and 1992. Therefore, since 1990, Briarpatch Film had ownership of the TRL Motion Picture Rights and Rubin had constructive notice from the Copyright Office records that Briarpatch Film owned the TRL Motion Picture Rights. See id. § 205(c).

Rubin, Briarpatch Film, and the other four Geisler/Roberdeau companies entered into the Limited Partnership Agreement in March 1994. The Limited Partnership Agreement set forth the partners respective obligations and rights. Rubin was the sole limited partner, and the general partners were the five Geisler and Roberdeau entities, including Briarpatch Film.

In the Limited Partnership Agreement, Rubin expressly agreed that he had no "right, title or interest of any kind whatsoever in or to any Project (including, without limitation, any copyrights or any income derived therefrom)." Rubin expressly agreed that the general partners would have "the unrestricted right to sell or assign, and to pledge, mortgage or otherwise hypothecate, any Project either in whole or in part, without obtaining the consent of Rubin." The Limited Partnership Agreement expressly provided that "the copyrights in the Projects shall be registered in the name of [any general partner] or such party as [any general partner] in its sole business judgment may determine proper." Under the Limited Partnership Agreement, Rubin had the right to be reimbursed for the applicable project development expenses he financed from any "development expense reimbursements" received with respect to any Project, including the TRL. In addition, Rubin was to receive a percentage of all "distributable cash" derived from any of the Projects, including the TRL.

Plaintiffs assert that through correspondence and testimony, the Geisler/Roberdeau Parties acknowledge and confirm that after the January 1, 1994 effective date of the Limited Partnership Agreement, the TRL Project and related rights were owned by the partnership and that such an acknowledgment is binding against Phoenix. (Pls.' Mem. In Supp. 17-18.) Specifically, Plaintiffs point to the Limited Partnership Agreement, Roberdeau's April 1994 letter to Rubin (Pls.' Ex. 16), the May 1994 buyout offer to Rubin (Pls.' Ex. 17), and Geisler's deposition testimony (Pls.' Ex. 52 at 139:17-25 141:16-142:10). Upon examination, however, none of the documents or testimony to which the Plaintiffs refer acknowledges the partnership's ownership of the TRL Motion Picture Rights. At most, they acknowledge the Limited Partnership Agreement and Geisler and Roberdeau's fiduciary duty to the Plaintiffs created by that agreement.

Therefore, based on the evidence presented, there is no issue of material fact as to whether Rubin or Briarpatch was ever an owner of the TRL Motion Picture Rights prior to execution of the Phoenix TRL Acquisition Agreement.

ii. No Court Has Determined that Plaintiffs Ever Owned Legal Title to the TRL Motion Picture Rights

Next, Plaintiffs contend that in the original New York action, the court determined that plaintiff Briarpatch was and is the owner of the TRL screenplay and other related rights. At best, however, the 1999 judgment of Justice Tompkins determined that plaintiff Briarpatch had a "beneficial interest" in the TRL Motion Picture Rights and, therefore, was entitled to share in the proceeds derived by Geisler, Roberdeau, GRI, and Briarpatch Film from the exploitation of those rights by assignment to Phoenix. (Defs.' Exs. 27 28.) Furthermore, the decisions of the New York courts upon which Plaintiffs' assertions are based are not binding on either Phoenix or Medavoy, as neither was a party to any of these actions. The October 30 Opinion reached these same conclusions. See Briarpatch Ltd., 2002 WL 31426207, at *12.

In the original New York action, the court awarded damages in the sum of $1,500,000 because such sum was "converted by [Geisler and Roberdeau] from the proceeds paid by Phoenix Pictures for 'The Thin Red Line'. . . ." (Pls.' Ex. 1.8 at 28 ¶ 3.) It referred expressly to the beneficial right, title, and interest, not to any legal right or title: "as of January 1, 1994, all beneficial right, title and interest" in and to, among others, "The Thin Red Line" "belonged to and was owned by" plaintiff Briarpatch. (Id. at 27 ¶ 1.) The legislative history accompanying the Copyright Act indicates that a "beneficial owner" may be someone who has given up exclusive rights to use or license the use of copyright assets in exchange for the right to receive future remuneration from the exploitation of the copyright involved. See Cortner v. Israel, 732 F.2d 267, 271 (2d Cir. 1984) (citing H.R. Rep. No. 1476, 94th Cong., 2d Sess. 159, reprinted in 1976 U.S. Code Cong. Ad. News 5659, 5775).

Specifically, the New York State Supreme Court determined:

that as between, on the one hand, the [Briarpatch] Partnership and, on the other hand, Defendants Geisler and Roberdeau and their affiliates . . . (i) all remuneration in connection with the Projects [including "The Thin Red Line"] belong to and should have been . . . paid directly to the [Briarpatch] Partnership; and (ii) insofar as Defendants Geisler and Roberdeau and their affiliates may have acquired, held or hold any right, title, or interest in any of the Projects [including "The Thin Red Line"] or remuneration in connection with the Projects all such right, title and interest is hereby transferred to and vested, effective immediately in the [Briarpatch] Partnership.

(Pls.' Ex. 1.8 at 27-28 ¶ 2.)

The date of the state court order was October 14, 1999. (Defs.' Ex. 27.) By that date, the TRL Motion Picture Rights had been conveyed to Phoenix pursuant to the Phoenix TRL Acquisition Agreement. In addition, the TRL motion picture produced by Phoenix based upon those rights had been produced and released ten months earlier, in December 1998. Accordingly, Justice Tompkins referred to "remuneration" in the order so as to reflect the prior assignment of the TRL Motion Picture Rights to Phoenix.

Subsequent to the 1999 decision in the original New York action, a special referee's report in the "Night Hawk Litigation," Briarpatch Ltd. LP Gerard F. Rubin v. D.M. Thomas, et al. (Index No. 603364/2001), recognized that Phoenix is "the entity now controlling" TRL and that the $1,500,000 paid by Phoenix for the TRL Motion Picture Rights was "converted" by Geisler and Roberdeau. Briarpatch Ltd., 2002 WL 31426207, at *12. The matters before Referee Crespo in the Night Hawk Litigation were limited to the accounting and damage issues related solely to the "White Hotel" and "Peter Pan/The Boy Castaways" projects. Referee Crespo's summary of Justice Tompkins' 1999 findings with respect to the transfer of all of the TRL Motion Picture Rights to Phoenix, was consistent with Rubin's verified allegation in the original New York action that "Geisler, Roberdeau, and their affiliates (including without limitation Geisler/Roberdeau Incorporated) secretly assigned as of August 26, 1996, the rights in and to The Thin Red Line to Phoenix Pictures, Inc., which later assigned the rights in The Thin Red Line to Twentieth Century Fox Film Corporation." (Defs.' Ex. 29 ¶ 36.)

In February 2006, counsel for the Plaintiffs asked Justice Moskowitz to amend what counsel for the Plaintiffs represented to be "certain erroneous and unsupported findings of fact" made by Referee Crespo. (Pls.' Ex. 51.) The effect of Plaintiffs' proposed changes was to characterize Justice Tompkins' findings to be that "neither Geisler, Roberdeau, Geisler Roberdeau, Inc., nor Briarpatch Film Corp.[] assigned to Phoenix Pictures, Inc. any of the screenplays or agreements or other rights of the Partnership (whether for The Thin Red Line project or otherwise). . . ." (Id.) This request by counsel for the Plaintiffs was unopposed, and therefore Justice Moskowitz entered an order making the requested changes to Referee Crespo's report. (Id.)

There is no reason, however, that Justice Moskowitz's mischaracterization in the court's 2006 Judgment and Order of Justice Tompkins' findings should in anyway supersede Justice Tompkins' actual findings in the original New York action.

Regardless, as was concluded in the October 30 Opinion, the findings in either of these state court actions are not binding upon Phoenix and Medavoy. A court's determination of law or fact can have preclusive effect in another action only against a party to the first action and those in privity with such a party.N.L.R.B. v. Thalbo Corp., 171 F.3d 102, 109 (2d Cir. 1999); Ryan v. New York Telephone Co., 467 N.E.2d 487, 490 (N.Y. 1984). For a prior decision to have preclusive effect in a new action, the party against whom preclusion is sought must have had "a fair and full opportunity to contest the decision" in the first action.Metromedia Co. v. Fugazy, 983 F.2d 350, 365 (2d Cir. 1992), cert. denied, 508 U.S. 952 (1993); Kaufman v. Eli Lilly and Co., 65 N.Y.2d 449, 455-56 (N.Y. 1985). Neither Medavoy nor Phoenix was a party to either the original New York action or the Night Hawk Litigation.

Accordingly, the New York State Supreme Court determinations have no preclusive effect on the instant action and, at best, determined that plaintiff Briarpatch was entitled to share in the proceeds derived from the exploitation of the TRL Motion Picture Rights as an owner of a "beneficial interest" in those rights.

iii. Plaintiffs Are Estopped from Denying the Assignment to Phoenix

Finally, as was concluded in the October 30 Opinion, the Plaintiffs are estopped from arguing that the TRL Motion Picture Rights were not assigned to Phoenix because in the verified complaint in the original New York action, Plaintiffs alleged that those rights had been assigned in August 1996 to Phoenix.Briarpatch Ltd., 2002 WL 31426207, at *13. Specifically, in the original New York action brought by Plaintiffs against Geisler and Roberdeau, Rubin stated in his verified complaint that "Geisler, Roberdeau, and their affiliates . . . secretly assigned . . . the rights in and to The Thin Red Line to Phoenix Pictures, Inc.. . . ." (Pls.' Ex. 34 ¶ 36.) Accordingly, Plaintiffs are estopped from denying the assignment. See New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001); Uzdavines v. Weeks Marine, Inc., 418 F.3d 138, 147 (2d Cir. 2005) (citing New Hampshire v. Maine, 532 U.S. at 749, 750-51).

The doctrine of judicial estoppel contains the following three factors: (1) the party against whom estoppel is asserted must have argued an inconsistent position in a prior proceeding; (2) the prior inconsistent position must have been adopted by the court in some manner; and (3) the party against whom estoppel is asserted would derive an unfair advantage or impose an unfair detriment on the opposite party if not estopped.New Hampshire v. Maine, 532 U.S. at 750-51; Uzvanides, 418 F.3d at 147 (quoting New Hampshire v. Maine, 532 U.S. at 750-51).

In the instant action, Plaintiffs seek to recover from Phoenix on the basis that the TRL Motion Picture Rights were not assigned to Phoenix. In the original New York action, however, Plaintiffs persuaded the New York State Supreme Court to accept their contrary position that the TRL Motion Picture Rights had been conveyed to Phoenix. This resulted in the court's decision that the proceeds derived from the transfer of those rights had been converted when they were not shared with the Plaintiffs. The Plaintiffs obtained the benefit of a money judgment against Geisler, Roberdeau, and their affiliates, recovering $1,500,000 on the basis that the TRL Motion Picture Rights had been assigned to Phoenix.

Although the Plaintiffs contend that judicial estoppel should not be applied (Pls.' Mem. in Opp'n, Aug. 22, 2006 ("Pls.' Mem. in Opp'n"), 12-15), their arguments are unavailing.

With regard to the inconsistency, Plaintiffs assert that their previous position of the TRL Project rights being "secretly assigned" to the Defendants can be reconciled with their position in the current litigation that only a quitclaim was assigned to the Defendants. See Simon v. Safelite Glass Corp., 128 F.3d 68, 73 (2d Cir. 1997) (citing AXA Marine Aviation Ins. (UK) Ltd. v. Seajet Indus. Inc., 84 F.3d 622, 628 (2d Cir. 1996); In re Brody, 3 F.3d 35, 39 (2d Cir. 1993);Desjardins v. Van Buren Cmty. Hosp., 37 F.3d 21, 23 (1st Cir. 1994)) ("If the statements can be reconciled there is no occasion to apply an estoppel."). Plaintiffs' quitclaim argument is being asserted, however, in an effort to show that the TRL Motion Picture Rights were not assigned to Phoenix, and this is clearly inconsistent with the position taken by the Plaintiffs in the original New York action. Nor have the Plaintiffs satisfactorily shown that the inconsistency is the result of an unintentional error or good faith mistake. See Safelite Glass Corp., 128 F.3d at 73 (citing Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 362 (3d Cir. 1996); John S. Clark Co. v. Faggert Frieden, P.C., 65 F.3d 26, 29 (4th Cir. 1995); Konstantinidis v. Chen, 626 F.2d 933, 939-40 (D.C. Cir. 1980)).

As to the adoption of Plaintiffs' prior inconsistent position, despite Plaintiffs' continued contention that the court in the original New York action concluded that plaintiff Briarpatch was and is the owner of the TRL Motion Picture Rights, it has been determined that, at best, the 1999 judgment determined that Plaintiff Briarpatch had only a "beneficial interest" in the TRL Motion Picture Rights. Where, as here, Plaintiffs assert a position clearly inconsistent with a previously held position upon which the Plaintiffs obtained the benefit of a money judgment, application of judicial estoppel is appropriate.

Finally, because Plaintiffs did obtain a money judgment in the original New York action, they would derive an unfair advantage if they were allowed to pursue follow-on litigation based on a clearly inconsistent factual assertion.

Accordingly, Plaintiffs are estopped from making the contrary argument here that the TRL Motion Picture Rights were not assigned to Phoenix.

For all the foregoing reasons, Plaintiffs' Fifth Cause of Action for declaratory judgment is dismissed.

b. The Copyright Infringement Claim Is Dismissed for Failure of Proof

Plaintiffs' Sixth Cause of Action is against defendant Phoenix for copyright infringement. A motion picture based upon a preexisting literary work, whether a novel or a screenplay, is a derivative work separately copyrightable. 17 U.S.C. §§ 101, 103(a). The right to produce such a motion picture based upon a prior existing work is considered a motion picture derivative right. 17 U.S.C. § 106(2). Plaintiffs have alleged that they own the TRL Motion Picture Rights and assert that because Phoenix has produced and exploited the TRL motion picture, that Phoenix has violated or infringed the TRL Motion Picture Rights that Plaintiffs came to own. This is a classic copyright claim and asserts that Phoenix has created and exploited an unauthorized derivative work. 2 Nimmer on Copyrights § 8.09[B] at 8-142 (2002).

A plaintiff must prove two elements in order to establish copyright infringement: "(1) ownership of a valid copyright, and (2) copying of constituent elements of that work that are original." Feist Publ'ns, Inc. v. Rural Telephone Serv. Co., 499 U.S. 340, 361 (1991); see also Laureyssens v. Idea Group. Inc., 964 F.2d 131, 129 (2d Cir. 1992) (stating second element as "infringement by unauthorized copying"). The Plaintiffs cannot prove facts sufficient to establish either of the elements of this claim.

First, based on the foregoing analysis of the ownership of the TRL Motion Picture Rights, the Plaintiffs were never and are not now the owners of those rights.

Second, even if Plaintiffs were considered to be "beneficial owners" of the TRL Motion Picture Rights for the purpose of bringing this claim, the TRL film developed by Phoenix was not an unauthorized derivative work. Although Plaintiffs have asserted that the TRL Motion Picture Rights were not effectively transferred to Phoenix in the Phoenix TRL Acquisition Agreement, Plaintiffs' assertions in this regard are unavailing.

Under the Copyright Act, a beneficial owner may bring a claim for copyright infringement. See 17 U.S.C. § 501(b); Cortner, 732 F.2d at 271. It is not clear, however, that a party like plaintiff Briarpatch that was never the owner of legal title to a copyright or any exclusive right protected by copyright would be considered a "beneficial owner" for the purposes of standing under the Copyright Act, regardless of any economic interest Briarpatch may have with respect to the exploitation of that right. See, e.g., Moran v. London Record, Ltd., 827 F.2d 180, 182-83 (7th Cir. 1987) (declining to extend concept of "beneficial owner" to an employee in a work made for hire situation); Cortner, 732 F.2d at 271 (citing example of an author who had parted with legal title in exchange for royalties or license fees).

Having already determined that the TRL Motion Picture Rights did not become the property of plaintiff Briarpatch as a result of Briarpatch Film's entering into the Limited Partnership Agreement, the contention that Briarpatch Film did not own or have the requisite authority to convey the rights to Phoenix will not be readdressed here.

Furthermore, as previously established, on October 23, 1996, Phoenix recorded in the Copyright Office a copy of the Short Form Option Agreement, signed by Geislier, Roberdeau, GRI, and Briarpatch Film, which referred to the TRL Motion Picture Rights, including rights to the Jones novel and the Malick screenplay. In addition, on December 22, 1998, Twentieth Century Fox Film Corporation filed in the Copyright Office a registration form for the TRL motion picture.

Understanding the TRL Motion Picture Rights to have been transferred to and recorded by Phoenix, an analysis of Plaintiffs' assertions as to the ineffectiveness of any such transfer follows.

i. The Dissolution of Briarpatch Film Has No Effect

Without citing any authority, the Plaintiffs contend that because Briarpatch Film was administratively dissolved in 1993, it could not assign the TRL Motion Picture Rights to Phoenix in 1996-1997. Yet Plaintiffs also assert that post-dissolution, Briarpatch Film entered into the Limited Partnership Agreement in March 1994 and thereby transferred the same TRL Motion Picture Rights to the partnership. In addition to being illogical, Plaintiffs' contentions regarding the impact of Briarpatch Film's dissolution are faulty on several grounds.

First, the assets of a dissolved corporation go to its shareholders. Briarpatch Ltd., 2002 WL 31426207, at *10 (citingIn re Ivan Boesky Sec. Litig., 825 F. Supp. 623, 636 (S.D.N.Y. 1993) ("corporate assets [] ultimately belong to shareholders as equity owners of the corporation"), aff'd, 36 F.3d 255 (2d Cir.)). The sole shareholders of Briarpatch Film were Geisler and Roberdeau. They are not partners in Briarpatch nor signatories to the Limited Partnership Agreement. They did, however, join in the assignment of the TRL Motion Picture Rights to Phoenix by entering into the Phoenix TRL Acquisition Agreement.

In addition, under the Limited Partnership Agreement, Rubin expressly gave the general partners, including Briarpatch Film:

the complete, exclusive and unqualified control of all aspects of the business of the partnership, including over the . . . exploitation and other disposition of any Projects, directly, or by any other party . . . in accordance with such . . . terms and conditions as [any general partner] in its sole business judgment may determine proper.

(Defs.' Ex. 23 ¶ 3.1 (emphasis added)).

Second, although the Plaintiffs have sought to rely upon Briarpatch Film's status as a "dissolved" corporation, Rubin, Geisler, Roberdeau, and Phoenix all treated Briarpatch Film as a valid, qualified corporation at all times. For example, Rubin entered into the Limited Partnership Agreement with Briarpatch Film in 1994, even after Briarpatch Film had been dissolved. "New York law recognizes that a corporation which carries on its affairs and exercises corporate powers as before dissolution is a de facto corporation . . . and, ordinarily, no one but the State may question its corporate existence." Bowditch v. 57 Laight Street Corp., 443 N.Y.S.2d 785, 788 (N.Y.Sup.Ct. 1981); accord Garzo v. Maid of the Mist Steamboat Co., 303 N.Y. 516, 524 (N.Y. 1952).

Third, under applicable New York law, a corporation dissolved for failure to pay franchise taxes, like Briarpatch Film, must wind up its affairs and transfer its assets to shareholders or to others. Briarpatch Ltd., 2002 WL 31426207, at *9 (citing172 East 122 St. Tenants Ass'n v. Schwarz, 73 N.Y.2d 340, 349 (1989));Bowditch, 443 N.Y.S. 2d at 787-88; see also Garzo, 303 N.Y. at 524. Although the Plaintiffs now assert that the conveyance of the TRL Motion Picture Rights to Phoenix was beyond the power of the dissolved Briarpatch Film, acts of dissolved corporations have been upheld by the New York courts. For example, "dissolution does not effect either the right of a corporation to collect and distribute its assets or to sue in its corporate name." Bowditch, 443 N.Y.S.2d at 788. Indeed, the Bowditch court specifically acknowledged that "a contract entered into after dissolution had been held enforceable" by the New York state courts. Id.

The Plaintiffs further contend that the decision in Noise in the Attic Prods., Inc. v. London Records, 782 N.Y.S.2d 1 (2004), prohibits Briarpatch Film after its dissolution from having the right to receive or administer monies or property. (Pls.' Mem. in Opp'n 8.) Noise in the Attic Productions, Inc. ("NITA"), a record producer, was a dissolved New York corporation that sued to recover unpaid royalties from the sale of records NITA had produced or contracted to produce. Id. at 2-3. The trial court awarded damages to NITA for unpaid royalties and ordered that future royalties were to be paid to NITA, after which NITA was to distribute those royalties in accordance with certain agreements. Id. at 4. The Appellate Division reversed the order directing NITA to collect and administer future royalties because as a dissolved corporation that "indefinite right to receive and administer record royalties . . . is unrelated to the winding up of NITA's business" making reference to N.Y. Business Corporation Law § 1005[a][2] and its "winding up" theory. Id. at 5.

Here, in 1996, Briarpatch Film disposed of what appears from the record in this action to have been its only asset, the TRL Motion Picture Rights. Therefore, the assignment of the TRL Motion Picture Rights to Phoenix, unlike the future royalties inNoise in the Attic Productions, Inc., could be related to the "winding up" of Briarpatch Film.

Accordingly, whether the TRL Motion Picture Rights were transferred to Phoenix by the sole shareholders of the dissolved Briarpatch Film, the de facto Briarpatch Film, or as part of a "winding up" of Briarpatch Film, the dissolution of Briarpatch Film in 1993 does not impact the transfer of the TRL Motion Picture Rights to Phoenix under the Phoenix TRL Acquisition Agreement.

ii. Plaintiffs' Quitclaim Argument Is Unavailing

Next, Plaintiffs contend that the conveyance of the TRL Motion Picture Rights to Phoenix was only a "quitclaim" conveyance of the Geisler/Roberdeau Parties' rights in the TRL Project. However, under the Phoenix TRL Acquisition Agreement, the grantors, including Briarpatch Film, expressly warranted and represented that they owned "all of the Rights" conveyed to Phoenix pursuant to the option granted in that agreement. (Defs.' Ex. 2 ¶ 9(a)(v).) The grantors further warranted and represented in the agreement that they had the full right, power, and authority to convey those rights. (Id. ¶ 9(a)(i).)

Even accepting Plaintiffs' description of the Phoenix TRL Acquisition Agreement as a quitclaim to Phoenix, those rights, including the TRL Motion Picture Rights, were successfully conveyed to Phoenix. It has long been the law that a quitclaim deed is as effective as a "warranty" deed provided that the title of the grantor is not defective. See Fletcher v. Delaware, L W.R. Co., 79 F.2d 306 (2d Cir. 1935); Obrey v. Collins, 200 N.Y.S. 175, 176 (N.Y.Sup.Ct. 1923). "In modern practice, a quitclaim is used when a grantor intends to convey only such interest as he has as opposed to a grant of the fee or other estate with warranty of title, and it is just as effective to pass such title as any other form of conveyance." 43A N.Y. Jur. 2d Deeds, § 228 (2006).

Therefore, regardless of whether the conveyance to Phoenix was of only a quitclaim, because Briarpatch Film or its successors held the title to the TRL Motion Picture Rights, those rights were effectively conveyed to Phoenix.

iii. Plaintiffs' Payment Argument is Without Merit

Finally, Plaintiffs contend that Phoenix did not acquire the TRL Motion Picture Rights pursuant to the Phoenix TRL Acquisition Agreement because in exercising its option under the agreement, Phoenix made payments to GRI, rather than to Briarpatch Films. However, the subsequent Buyout Agreement stipulates:

Pursuant to the April 1996 Agreement, Phoenix purchased all of the "Rights" in and to the "Property" . . . and none of the Geisler/Roberdeau Parties owns or has any right, title or interest in or to the Rights, the Property or the Project except, only in respect of the Project, the right to receive the payments, credits and other consideration expressly provided for in the Letter Agreement as modified herein. . . .

(Defs.' Ex. 2 ¶ C.)

In addition, the Limited Partnership Agreement gave the General Partners "complete, exclusive and unqualified control . . . over the development . . . exploitation and other disposition of any Projects . . . in accordance with such sales methods, policies, terms and conditions as [General Partner] in its sole business judgment may determine to be proper." (FAC Ex. ¶ 1 3.1.) The Limited Partnership Agreement also stipulated that it was not to be construed as creating "a trust or specific fund as to sums which may be due to any of the parties hereto" or preventing or precluding the general partners from commingling income from the Projects with any other funds. (Id. ¶ 8.)

Furthermore, as previously established, GRI did transfer $195,000 of a $277,000 payment it received from Phoenix and $200,000 of a $300,000 it received from Phoenix to a Briarpatch Film account in London.

Accordingly, based on the foregoing analysis, the TRL Motion Picture Rights were effectively conveyed to Phoenix and, as a result, the TRL motion picture as produced by Phoenix was not an unauthorized derivative work.

Therefore, having failed to establish either of the elements of a copyright infringement claim against Phoenix, Plaintiffs' Sixth Cause of Action is dismissed.

3. The Breach of Fiduciary Duty Claims Against Defendants Phoenix and Medavoy Are Dismissed

The Plaintiffs' fiduciary duty claims are reasserted against Phoenix and Medavoy in the FAC's First and Second Causes of Action. (FAC ¶¶ 131-147.) The Plaintiffs allege in the FAC that Phoenix and Medavoy conspired with or aided and abetted Geisler and Roberdeau's breach of fiduciary duty whereby Geisler and Roberdeau failed to account or pay to Rubin or to Briarpatch the $1.5 million received from Phoenix as consideration, inter alia, for the transfer to Phoenix of the TRL Motion Picture Rights from the Geisler/Roberdeau Parties.

In Plaintiffs' response to Defendants' motion for summary judgment, Plaintiffs request to amend the complaint to include a breach of fiduciary duty claim against Phoenix. (Pls.' Mem. in Opp'n 17-18.) The federal courts have interpreted Rule 15, Fed.R.Civ.P., to permit such amendments only when: (1) the party seeking the amendment has not unduly delayed, (2) when that party is not acting in bad faith or with a dilatory motive, (3) when the opposing party will not be unduly prejudiced by the amendment, and (4) when the amendment is not futile. See Foman v. Davis, 371 U.S. 178, 182 (1962); Mackensworth v. S.S. Am. Merchant, 28 F.3d 246, 251 (2d Cir. 1994); Prudential Ins. Co. v. BMC Indus., Inc., 655 F. Supp. 710, 711 (S.D.N.Y. 1987). Furthermore, "it is well established that leave to amend a complaint need not be granted when amendment would be futile."Ellis v. Chao, 336 F.3d 114, 126 (2d Cir. 2003) (citing Foman, 371 U.S. at 182); accord Nowakowski v. Kohlberg, No. 89 Civ. 5621, 1991 WL 3028, at *2 (S.D.N.Y. Jan. 8, 1991).
The Plaintiffs' proposed amendment to the FAC has been unduly delayed. Plaintiffs' prior motion to amend the complaint was granted, Briarpatch Ltd., 2005 WL 2861604, at *2, and the Plaintiffs have filed an amended complaint, to which the pending motions relate.
The Plaintiffs' proposed amendment would also be futile. See,e.g., S.S. Silberblatt, Inc. v. East Harlem Pilot Block, 608 F.2d 28, 42 (2d Cir. 1979); Freeman v. Marine Midland Bank-New York, 494 F.2d 1334, 1338 (2d Cir. 1974). The proposed amendment is based on the theory that Phoenix became a fiduciary to the Plaintiffs when Phoenix acquired the TRL Motion Picture Rights from the Geisler/Roberdeau Parties; in other words, that the fiduciary duty of the Geisler/Roberdeau Parties pursuant to the Limited Partnership Agreement was passed on to Phoenix under the Phoenix TRL Acquisition Agreement. Plaintiffs have not provided any supporting law and are judicially estopped from taking such a position. See supra.
Accordingly, plaintiffs request to amend the complaint is denied.

As already determined by the Court of Appeals, this Court has the power using its supplemental jurisdiction under 28 U.S.C. § 1367(a) to hear the claims relating to breach of fiduciary duty, but must exercise its discretion under 28 U.S.C. § 1367(c) to determine whether to hear such claims. Briarpatch Ltd., 373 F.3d at 308.

Section 1367(a) provides that:

Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. . . .

28 U.S.C. § 1367(a)

Section 1367(c) provides that a district court may decline to exercise supplemental jurisdiction over a state law claim if:

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c).

a. The Court Exercises Supplemental Jurisdiction

The fact that the claims remaining in this action arise under state law does not require automatic dismissal for lack of subject matter jurisdiction. To the contrary, "'the district court may, at its discretion, exercise supplemental jurisdiction over state law claims even where it has dismissed all claims over which it had original jurisdiction, [even though] it cannot exercise supplemental jurisdiction unless there is first a proper basis for original federal jurisdiction.'" Parker v. Della Rocco, 252 F.3d 663, 666 (2d Cir. 2001) (quoting Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996)). The statutory authority for the exercise of such supplemental jurisdiction is found in 28 U.S.C. § 1367(c)(3), according to which a district court "may decline to exercise supplemental jurisdiction over a claim . . . if . . . [it] has dismissed all claims over which it has original jurisdiction," as is the case here. 28 U.S.C. § 1367(c)(3) (emphasis added).

The district court's discretion is not without limit, however. As recently articulated by the Second Circuit:

Once a district court's discretion is triggered under § 1367(c)(3), it balances the traditional "values of judicial economy, convenience, fairness, and comity," Cohill, 484 U.S. at 350, 108 S.Ct. 614, in deciding whether to exercise jurisdiction. See Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 446-47 (2d Cir. 1998).

Kolari v. New York-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006). In addition, the district court is aided by the Supreme Court's guidance in Carnegie-Mellon University v. Cohill, 484 U.S. 343 (1988): "when the federal-law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction by dismissing the case without prejudice." Id. at 350 (citing United Mine Workers v. Gibbs, 383 U.S. 715, 726-27 (1966)). As indicated by the Supreme Court, however, this is not a mandatory rule, but rather recognizes that in the "usual case" in which all federal-law claims have been eliminated prior to trial, the balance of factors will weigh in favor of declining to exercise jurisdiction. Id. at 350 n. 7.

This is not the "usual case," nor is this lawsuit in its "early stages." The case was removed to this Court more than seven years ago, in September 1999. Since that time, there has been extensive discovery in the case. This Court has already rendered decisions on several motions, some of which have already been considered on appeal, and the case remanded to this Court for further proceedings. The Court is already familiar with the state law issues in the case due to prior determinations on summary judgment, and none of the state law claims involve novel questions of law. Accordingly, the interests of judicial economy, convenience, and fairness weigh strongly in favor of exercising supplemental jurisdiction over these state law claims.

There have been similar cases in which the Second Circuit has concluded that a district court rightfully exercised its supplemental jurisdiction even after all of the federal-law claims in the action had been dismissed. For example, the Second Circuit upheld the district court's exercise of supplemental jurisdiction after the federal-law claims had been dismissed inRaucci v. Town of Rotterdam, 902 F.2d 1050 (2d Cir. 1990), where discovery had been completed, three dispositive motions had been determined, the case was ready for trial, the state law claims did not involve novel legal questions, and the district court was familiar with the state law issues as a result of prior motions.Id. at 1055; see also Valencia v. Lee, 316 F.3d 299, 305-06 (2d Cir. 2003) (comparing cases).

Accordingly, with due consideration for the concerns of judicial economy, convenience, fairness, and comity, and pursuant to 28 U.S.C. § 1367(c)(3), this Court exercises supplemental jurisdiction over Plaintiffs' breach of fiduciary duty claims.

b. Plaintiffs Had Access to Extensive Discovery

The Second Circuit instructed this Court that, were it to exercise supplemental jurisdiction over these claims, it could not rely on its prior decision to grant summary judgment in favor of the Defendants unless it first determined that the Plaintiffs' access to information had not been hindered by this Court's earlier dismissal of GRI from the litigation. Briarpatch Ltd., 373 F.3d at 309. Given the extended discovery afforded to,Briarpatch Ltd., 2005 WL 2861604, at *2, and conducted by the Plaintiffs in this case (Pls.' Reply Mem. 9-10), it is concluded that the Plaintiffs' access to evidence has not been hindered by the prior dismissal of GRI.

c. The Aiding and Abetting Claim Is Dismissed for Failure of Proof

Under New York law, aiding and abetting a breach of fiduciary duty requires plaintiffs to prove: (1) the existence of a violation committed by the primary (as opposed to the aiding and abetting) party; (2) "knowledge" of this violation on the part of the aider and abettor; and (3) "substantial assistance" by the aider and abettor in achievement of the violation.Briarpatch Ltd., 2002 WL 31426207, at *7 (citing Moll v. U.S. Life Title Ins. Co., 654 F. Supp. 1012, 1030 (S.D.N.Y. 1987);Kolbeck v. LIT Am., Inc., 939 F. Supp. 240, 245 (S.D.N.Y. 1996),aff'd, 152 F.3d 918 (2d Cir. 1998)). Under New York State law, the courts have also sometimes discussed the tort of "participating" in a breach of fiduciary duty. The elements for this tort are similar to the tort of aiding and abetting a breach of fiduciary duty. Id. (citing S K Sales v. Nike, Inc., 816 F.2d 843, 847-48 (2d Cir. 1987) ("[t]he claimant must prove (1) a breach by a fiduciary of obligations to another, (2) that the defendant knowingly induced or participated in the breach, and (3) that the plaintiff suffered damages as a result of the breach.")); see also Whitney v. Citibank, N.A., 782 F.2d 1106, 1115 (2d Cir. 1986); Philip Morris Inc. v. Heinrich, No. 95 Civ. 0328(LMM), 1997 WL 781907, at *12 (S.D.N.Y. Dec. 18, 1997).

With regard to the knowledge requirement, the Second Circuit recently reiterated that "actual knowledge" is one of the three essential elements of the claim of aiding and abetting a breach of fiduciary duty under New York law:

Under New York law, there are three elements to a claim for aiding and abetting a breach of fiduciary duty. The first element is "a breach by a fiduciary of obligations to another," of which the aider and abettor had "actual knowledge." Kaufman v. Cohen, 307 A.D.2d 113, 125, 760 N.Y.S.2d 157, 169 (1st Dept. 2003) ("Although a plaintiff is not required to allege that the aider and abettor had an intent to harm, there must be an allegation that such defendant had actual knowledge of the breach of duty.")

In re: Sharp Int'l Corp., 403 F.3d 43, 49 (2d Cir. 2005); accord Pope v. Rice, No. 04 Civ. 4171 (DLC), 2005 WL 613085, at *12 (S.D.N.Y. Mar. 14, 2005). "Constructive knowledge of the breach of fiduciary duty by another is legally insufficient to impose aiding and abetting liability." Kaufman v. Cohen, 760 N.Y.S.2d 157, 169 (N.Y.App.Div. 1st Dep't 2003) (citing Kolbeck, 939 F. Supp. at 246); accord Pope, 2005 WL 613085, at *12; In re Centennial Textiles, Inc. v. Pennsylvania Textile, Corp., 227 B.R. 606, 612 (Bankr. S.D.N.Y. 1998).

In the instant case, Plaintiffs must show that the Defendants had actual knowledge that Geisler and Roberdeau were breaching their fiduciary duty to the Plaintiffs under the Limited Partnership Agreement. With respect to Phoenix's knowledge, Plaintiffs assert that: (1) there is a reduced knowledge requirement where the defendant was either on notice as to the fiduciary's misconduct or had a financial motive to aid in such misconduct; and (2) "there is now substantial evidence that Phoenix and Medavoy had actual knowledge that Giesler/Roberdeau and their companies were fiduciaries to the limited partnership with Rubin, and that payment of $1.5 million to non-partner Geisler Roberdeau, Inc. was in breach of the Limited Partnership Agreement." (Pls.' Mem. in Opp'n 19.) Plaintiffs have failed, however, to present sufficient evidence of the requisite actual knowledge to support their claim of aiding and abetting.

Plaintiffs' assertion of a decreased knowledge requirement is unsupported. The reliance on Wright v. Bankamerica Corp., 219 F.3d 79 (2d Cir. 2000), to support Plaintiffs' "financial motive" argument is misplaced in that Wright is not discussing a summary judgment standard, but rather whether an amended pleading of scienter would satisfy Federal Rule of Civil Procedure 9(b). Id. at 92. Regardless of whether such a reduced standard would apply, it is unclear how Phoenix would benefit financially from Geisler and Roberdeau's breach of fiduciary duty owed to the Plaintiffs.

Plaintiffs' reliance on Whitney v. Citibank, N.A., 782 F.2d 1106, is also misplaced. In Whitney, the plaintiff had entered into a general partnership with two other individuals. Defendant Citibank engaged in side-dealing with the other two general partners, keeping the plaintiff in the dark as to discussions among the defendant and the other two general partners, withholding documents that had been executed by the defendant and the other two general partners, and backdating documents. Therefore, it was not so much that the defendant was on notice regarding the possible misconduct of the two general partners with which it was dealing, but rather that the defendant's own actions provided additional evidence of Citibank's knowing participation in the misconduct. Whitney, 782 F.2d at 1116-17.

Here, Plaintiffs merely assert that Phoenix had some generalized knowledge of Geisler and Roberdeau's lack of trustworthiness: "Phoenix/Medavoy knew 'red flags were waving' as to suspicious behavior of Geisler/Roberdeau, because they admit knowing Geisler/Roberdeau were 'misrepresenting their involvement in The Thin Red Line' . . . and Geisler/Roberdeau had a history of 'past indiscretions' and were 'charlatans,' 'con' men, 'dishonorable'; 'totally unreliable'; and in financial distress." (Pls.' Mem. in Opp'n 19 (internal citations omitted).) Despite Plaintiffs' contentions to the contrary, such assertions do not amount to Phoenix being on notice that Geisler and Roberdeau were or may have been breaching their fiduciary duty to the Plaintiffs, nor do they trigger a reduced knowledge requirement. In such circumstances, defendants do not have an obligation to make further inquiries. See Briarparch Ltd., 2002 WL 31426207, at *9 (quoting Diduck v. Kaszycki Sons Contractors, Inc., 974 F.2d 270, 283-84 (2d Cir. 1992)) ("the court 'refused to place a duty of inquiry on third parties . . . in an arms-length commercial transaction regular on its face . . . .'"). As the Whitney court stated: "Ordinarily, absent awareness of facts indicating that a partner is acting beyond his real or apparent authority, a third party is not obligated to investigate the matter further or search for some limitation on that partner's authority." Id. at 1115-16.

Plaintiffs' are quoting, in part, Medavoy's deposition testimony, which goes on to elaborate that the misrepresentations of Geisler and Roberdeau's involvement had to do with the shooting of the film and the status of their relationship with Malick, not with respect to any obligations under the Limited Partnership Agreement. (See Pls.' Ex. 47, at 174:19 — 175:13.)

Plaintiffs also cite to Whitney in support of their contention that Phoenix had actual knowledge that it was aiding and abetting Geisler and Roberdeau's breach of fiduciary duty by paying consideration to GRI rather than to the Partnership. (Pls.' Mem. In Opp'n 19.) As accurately cited by the Plaintiffs, Whitney stands for the tenet of partnership law that consideration for partnership property must be paid to the partnership. Whitney, 782 F.2d at 1116. As has already been determined, however, the TRL Motion Picture Rights that were transferred to Phoenix were not owned by the Briarpatch partnership, but rather by Briarpatch Film. Therefore, payment of consideration to GRI did not in any way aid or abet a breach of the Limited Partnership Agreement or the fiduciary duty owed to the Plaintiffs thereunder.

Furthermore, even if Phoenix had the actual knowledge attributed to it by the Plaintiffs, it still would not be sufficient to establish Phoenix's actual knowledge of a breach of fiduciary duty on the part of Geisler and Roberdeau.

First, assuming for the purposes of arguments that Phoenix had actual knowledge of the details of the Limited Partnership Agreement, as is asserted by the Plaintiffs, the Limited Partnership Agreement granted the Geisler and Roberdeau entities the right, without consultation or approval of Rubin, to sell and transfer the TRL Motion Picture Rights. Accordingly, actual knowledge of the details of the Limited Partnership Agreement does not equate to knowledge that Geisler, Roberdeau, or any of their entities intended to breach or did breach any fiduciary duties established in that agreement and owed to the Plaintiffs. Similarly, knowledge of the provisions of the Limited Partnership Agreement does not mean that by agreeing to pay non-partner GRI pursuant to the Phoenix TRL Acquisition Agreement, the Defendants had "actual knowledge" that Geisler and Roberdeau were breaching or intended to breach their fiduciary duties to the Plaintiffs.

Second, Plaintiffs contend that Malick would have known that Geisler and Roberdeau "were paying Gerry [Rubin] and sharing profits with Gerry [Rubin] and so forth . . ." (Pls.' Mem. in Opp'n 20), and that such "knowledge" regarding Rubin's financial involvement must be imputed as the knowledge of Phoenix because Malick, as director of the TRL, had become an employee of Phoenix by early 1997. (Id. at 21.) Even if such knowledge was imputed to Phoenix, however, it does not establish actual knowledge on the part of the Defendants that Geisler and Roberdeau did not intend to perform their fiduciary duties to Rubin or Briarpatch.

As found above and in the October 30 Opinion, Malick did not know the details of any financial arrangements between Rubin and Geisler and Roberdeau. Malick met Rubin once at a cocktail party in 1992, but they did not discuss any financial details regarding the TRL or any other project being worked on by Geisler and Roberdeau. Geisler and Roberdeau did not discuss with Malick the details of their financial arrangements with Rubin. Thus, even if Malick's knowledge were to be imputed to Phoenix, Malick had no knowledge of the financial arrangements among Rubin, Geisler and Roberdeau, and no knowledge that Geisler and Roberdeau intended to breach, or did breach, any fiduciary duties owed to the Plaintiffs.

Third, Plaintiffs contend that the Defendants had derived the requisite knowledge because Rubin had been identified to them as a funder of the TRL Project. Mere knowledge of Rubin's investment in the project again falls far short of actual knowledge that Geisler and Roberdeau intended to or were breaching any fiduciary duty to Rubin. Any knowledge on the part of Phoenix that the Phoenix TRL Acquisition Agreement only assigned a quitclaim similarly falls short.

Finally, although it has been established that no later than September 1, 1998, the Defendants received copies of the letters from Rubin's attorney to Geisler and Roberdeau repeatedly requesting accountings of the Briarpatch partnership and threatening legal action against Geisler and Roberdeau, any resulting "knowledge" would have been acquired subsequent to the Defendants' having fully performed the Phoenix TRL Acquisition Agreement in July 1997.

Therefore, Plaintiffs have failed to establish that defendant Phoenix knew at any time before fully performing under the Phoenix TRL Acquisition Agreement in July 1997 that Geisler and Roberdeau intended not to account to, or pay, Plaintiffs pursuant to the Limited Partnership Agreement.

The Plaintiffs have also failed to establish the substantial assistance element of their aiding and abetting claim. As was concluded in the October 30 Opinion, there is no evidence in the record that Phoenix provided any substantial assistance to further Geisler and Roberdeau's breach of fiduciary duties.

To aid and abet a breach of fiduciary duty, the defendant must have provided "substantial assistance to the primary violator" which only "occurs when a defendant affirmatively assists, helps conceal or fails to act when required to do so, thereby enabling the breach to occur."Kaufman, 760 N.Y.S.2d at 170. Plaintiffs have not established Phoenix's substantial assistance under any of these methods.

First, the Plaintiffs have not shown that Phoenix affirmatively assisted Geisler, Roberdeau, and their entities in the breach of any fiduciary duty owed to the Plaintiffs. Specifically, Geisler did not testify that Phoenix provided any substantial assistance to any breach of fiduciary duty owed to the Plaintiffs. Rather, Geisler testified that he and Roberdeau did not account or pay to Rubin any of the proceeds received from Phoenix because Geisler and Roberdeau believed that since March 1994, Rubin had been "bought out" of the partnership and thereafter had no entitlement to receiving anything from Geisler and Roberdeau's exploitation of the TRL Motion Picture Rights. (Defs.' Ex. 33 at 158:14-159:11, 443:25-444:21, 509:21-510:2, 511:3-10.)

The Plaintiffs have further contended that Phoenix affirmatively assisted in the breach of fiduciary duty by paying the consideration to GRI rather than to Briarpatch Film. (Pls.' Mem. in Opp'n 23.) As already discussed, payment to GRI did not breach the Limited Partnership Agreement. Furthermore, as the holder of the TRL Motion Picture Rights, Briarpatch Film was a party to both the Phoenix TRL Acquisition Agreement and the Buy-Out Agreement and consented to the method of payment of consideration. Indeed, it was confirmed in the Buyout Agreement, to which Briarpatch Film was a signatory, that such consideration had been paid and that the rights had been acquired by Phoenix. (Defs.' Ex. 3 ¶ C.)

Second, Phoenix did not hide its acquisition of the TRL Motion Picture Rights from the Geisler/Roberdeau Parties. Rather, in October 1996, Phoenix recorded the transfer of those rights in the United States Copyright Office, by which action Phoenix gave constructive notice to the world of Phoenix's deal with the Geisler/Roberdeau Parties. See 17 U.S.C. § 205(c). Furthermore, Rubin testified that he knew that Phoenix had acquired those rights and contemplated litigation to stop Phoenix from producing the motion picture, but that he ultimately elected to do nothing. (Defs.' Ex. 32 at 297:16-300:7.)

Third, inaction of an alleged aider and abettor may constitute "substantial assistance" only if the aider and abettor "owes a fiduciary duty directly to the plaintiff." Kaufman, 760 N.Y.S.2d at 170. The Plaintiffs, however, have not established that Phoenix nor Medavoy owed a fiduciary duty to Rubin or Briarpatch.

Based on the foregoing analysis, Defendants have sufficiently shown that there is no issue of material fact that would withstand summary judgment on the Plaintiffs' claim against defendants Medavoy and Phoenix for aiding and abetting a breach of fiduciary duty. Accordingly, the claim is dismissed.

d. The Conspiracy Claim Is Dismissed

New York courts do not recognize an independent tort of civil conspiracy. See, e.g., Kirch v. Liberty Media Corp., 449 F.3d 388, 401 (2d Cir. 2006) (citing Alexander Alexander of New York, Inc. v. Fritzen, 503 N.E.2d 102, 102 (1986)). Since civil conspiracy is a derivative claim under New York law, a claim for conspiracy should be dismissed if the underlying tort claim either is not adequately pleaded or has been dismissed. See,e.q., id. ("since ITTC fails to state causes of action for either of the torts underlying the alleged conspiracy . . . it necessarily fails to state an actionable claim for civil conspiracy."); Crigger v. Fahnstock Co., Inc., 443 F.3d 230, 237 (2d Cir. 2006) (citing Vasile v. Dean Witter Reynolds Inc., 20 F. Supp. 2d 465, 482 (E.D.N.Y. 1998) aff'd, 205 F.3d 1327 (2d Cir. 2000) ("[U]nder New York law, civil conspiracy to commit fraud, standing alone, is not actionable . . . if the underlying independent tort has not been adequately pleaded."); 20 N.Y. Jur.2d, Conspiracy-Civ. Aspects § 1 (2005)); Durante Bros. v. Flushing Nat'l Bank, 755 F.2d 239, 251 (2d Cir. 1985) (citingAhmed v. Nat'l Bank of Pakistan, 572 F. Supp. 550, 554-55 (S.D.N.Y. 1983); Powell v. Kopman, 511 F. Supp. 700, 704 (S.D.N.Y. 1981); ABKCO Indus. v. Lennon, 384 N.Y.S.2d 781, 784 (1st Dep't 1976)) ("Count 7 was properly dismissed . . . as failing to state a claim on which relief may be granted since New York law does not recognize a substantive tort of conspiracy."). Plaintiffs have not alleged a separate claim for breach of fiduciary duty in the FAC.

Despite this general rule, a limited tort of conspiracy has been recognized in a small number of cases. See Sec. Investor Prot. Corp. v. Stratton Oakmont, Inc., 234 B.R. 293, 332 (Bankr. S.D.N.Y. 1999) (naming cases). Such a claim may lie, however, only if the plaintiff alleges, "in addition to conspiracy, independent overt acts undertaken in pursuit of that conspiracy."Id. Additionally, where the acts underlying a claim of conspiracy are the same as those underlying other claims alleged in the complaint, the conspiracy claim is dismissed as duplicative. See,e.g., Durante Bros., 755 F.2d at 251 ("Count 7 was properly dismissed . . . as duplicative of counts 1-6. . . ."); Sec. Investor Prot. Corp., 234 B.R. at 332; Kew Gardens Hills Apartment Owners, Inc. v. Horing Welikson Rosen, P.C., 828 N.Y.S.2d 98, 101 (N.Y.App.Div. 2d Dep't 2006). Here, Plaintiffs' alleged overt acts in support of the conspiracy claim are essentially the same alleged acts that form the basis of the aiding and abetting claim. Therefore, the FAC's First Cause of Action (conspiracy) is duplicative of the Second Cause of Action (aiding and abetting).

Furthermore, "[i]n order to sustain an allegation of civil conspiracy that involves a conspiracy to breach a fiduciary duty, all members of the alleged conspiracy must independently owe a fiduciary duty to the plaintiff." Pope, 2005 WL 613085, at *13 (citing Official Comm. of Unsecured Creditors v. Donaldson, Lufkin Jenrette Sec. Corp., No. 00 Civ. 8688(WHP), 2002 WL 362794, at *13-14 (S.D.N.Y. Mar. 6, 2002)). Plaintiffs here have failed to establish that either of the Defendants owed a fiduciary duty to either of the Plaintiffs.

Notwithstanding all of these shortfalls, the Plaintiffs would be unable to factually support a conspiracy claim. Under New York law, civil conspiracy requires: "(1) the corrupt agreement between two or more persons, (2) an overt act, (3) their intentional participation in the furtherance of a plan or purpose, and (4) the resulting damage." Pope, 2005 WL 613085, at *13 (citing Kashi v. Gratsos, 790 F.2d 1050, 1055 (2d Cir. 1986)); accord Donaldson, Lufkin Jenrette Sec. Corp., 2002 WL 362794, at *13 (citing Kashi, 790 F.2d at 1054-55). The Plaintiffs have not shown that the Defendants deliberately participated in an agreement with Geisler and Roberdeau or their entities to breach their fiduciary duties to the Plaintiffs. See Kashi, 790 F.2d at 1055.

Accordingly, the First Cause of Action is dismissed as against the Defendants.

4. Plaintiffs' Motion for Partial Summary Judgment to Dismiss Defendants' Affirmative Defenses Is Denied

With all of the claims in the FAC against the Defendants having been dismissed, Plaintiffs' motion for partial summary judgment to strike the Defendants' affirmative defenses to the FAC is denied as moot. St. Paul Fire Marine Ins. Co. v. Universal Builders Supply, 317 F. Supp. 2d 336, 339 n. 5 (2d Cir. 2004);Williams v. Bank Leumi Trust Co., No. 96 Civ. 6695(LMM), 2000 WL 343897, at *8 (S.D.N.Y. Mar. 31, 2000).

Conclusion

For the reasons set forth above, the Plaintiffs' motions for partial summary judgment to declare Briarpatch the owner of the TRL screenplay and related rights and to dismiss the Defendants' affirmative defenses are denied. The Defendants' motion for summary judgment to dismiss the FAC as against the Defendants is granted.

Upon notice, judgment is to be submitted to the Court.

It is so ordered.

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Summary

Opinion

OPINION

The Parties

Prior Proceedings

The Facts

1. The Limited Partnership Agreement

2. The Phoenix TRL Acquisition Agreement

3. The Buyout Agreement

4. Production of the Motion Picture "The Thin Red Line"

5. The Original New York Action

6. Malick

7. Geisler

Discussion 1. The Summary Judgment Standard

2. The Copyright Claims Against Defendant Phoenix Are Dismissed

3. The Breach of Fiduciary Duty Claims Against Defendants Phoenix and Medavoy Are Dismissed

4. Plaintiffs' Motion for Partial Summary Judgment to Dismiss Defendants' Affirmative Defenses Is Denied

Conclusion

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Case Details

Citations

Citing Cases

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Summary

Opinion

OPINION

The Parties

Prior Proceedings

The Facts

1. The Limited Partnership Agreement

2. The Phoenix TRL Acquisition Agreement

3. The Buyout Agreement

4. Production of the Motion Picture "The Thin Red Line"

5. The Original New York Action

6. Malick

7. Geisler

Discussion 1. The Summary Judgment Standard

2. The Copyright Claims Against Defendant Phoenix Are Dismissed

3. The Breach of Fiduciary Duty Claims Against Defendants Phoenix and Medavoy Are Dismissed

4. Plaintiffs' Motion for Partial Summary Judgment to Dismiss Defendants' Affirmative Defenses Is Denied

Conclusion

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Briarpatch Limited, L.P. v. Geisler Roberdeau, Inc.

Case Details

CitationsCopy Citation

Citing Cases

Citations