Carlone v. Lion & Bull Films, Inc.

• Decision Date: 30 April 2012
• Docket Number: No. 10 Civ. 6275(JPO).,10 Civ. 6275(JPO).
• Citation: 861 F.Supp.2d 312
• Court: U.S. District Court — Southern District of New York
• Parties: Deborah S. CARLONE, Plaintiff, v. The LION & THE BULL FILMS, INC. et al., Defendants.

861 F.Supp.2d 312

Deborah S. CARLONE, Plaintiff,

v.The LION & THE BULL FILMS, INC. et al., Defendants.

No. 10 Civ. 6275(JPO).

United States District Court, S.D. New York.

April 30, 2012.

Brian D. Caplan, Jonathan James Ross, Caplan & Ross, LLP, New York, NY, for Plaintiff.

Ariel Luna, Bronx, NY, pro se.

MEMORANDUM AND ORDER

J. PAUL OETKEN, District Judge:

Plaintiff Deborah Carlone filed a complaint against The Lion & The Bull Films, Inc. (“L & B Films”) and Vladimir Flener for breach of contract and against Ariel Luna for fraudulent inducement. Ms. Carlone also seeks to pierce the corporate veil and hold Mr. Luna personally liable for L & B Films' alleged breach of contract. Presently before the Court is Ms. Carlone's motion for summary judgment against the individual defendants, Ariel Luna and Vladimir Flener, filed on January 20, 2012, and her motion for default judgment against L & B Films, filed on January 23, 2012.

For the reasons set forth below, the motion for default judgment is granted, and the motion for summary judgment is granted in part and denied in part.

I. Background¹A. Facts

Defendant Ariel Luna is a principal officer, director, and 50–percent shareholder of Defendant L & B Films. (Defendant's 56.1 Statement (“Def. 56.1 Stmt.”) ¶ 1.) L & B Films was incorporated in New York on or about September 29, 2009, allegedly for the purpose of making a motion picture entitled “179th Street” (the “Film”). (Deposition of Ariel Luna, dated Sept. 26, 2011 (“Luna Dep.”) 17:6–9; Def. 56.1 Stmt. ¶ 1.)

Before they began shooting the Film, Mr. Luna, together with his two partners, Mr. Nelson Pereyra and Defendant Mr. Vladimir Flener, set out to procure funding for their project. In May 2009, Mr. Luna was introduced to Mr. Furqaan Clover, who promised to help secure a stand-by letter of credit for the Film project. (Luna Dep. 80:16–81:22.) On or about November 9, 2009, L & B Films entered into a written agreement with Mr. Clover's company, Indie Film Exchange Holdings, Inc. (“Indie Film”), dated October 5, 2009 (the “Financing Agreement”) purportedly to procure financing for the Film. (Financing Agreement, Ex. B to Carlone Decl.; Luna Dep. 31:18–32:8). The Financing Agreement provided that L & B Films would receive $15 million from Indie Film, but required L & B Films to make an initial investment of $115,000. Id.

Plaintiff Deborah S. Carlone is a citizen and a resident of the State of Florida. Ms. Carlone and Mr. Luna's mother, Emma Luna, had been good friends for many years prior to the incidents described in this lawsuit. (Pl. 56.1 Stmt. ¶ 9; Carlone Decl. ¶ 3; Luna Dep. 26:19–20.) Ms. Carlone and Mr. Luna had also known each other for many years, and Mr. Luna considered Ms. Carlone to be a good family friend. Id. In 2008, Ms. Carlone was in an accident which left her wheelchair bound for some period of time. (Carlone Decl. ¶ 4.) On or about September 25, 2008, Plaintiff received a settlement check for $123,680 as a result of a personal injury lawsuit stemming from the accident. ( Id.) Thereafter, Mr. Luna's mother accompanied Ms. Carlone when she went to pick up the settlement check and when she went to deposit the check in her bank account.

On or about November 8, 2009, after his mother's visit to New York, Mr. Luna called Ms. Carlone and asked her for a short term “bridge loan” of $115,000 to fund production of the Film until additional financing arrived. (Pl. 56.1 Smt. ¶ 14; Carlone Decl. ¶¶ 2, 7, 18; Luna Dep. 26:17–27:4.) Mr. Luna also promised Plaintiff that, in return for an initial loan of $115,000 (the “Loan Amount”), Plaintiff would receive the Loan Amount plus an additional $185,000, a sum of $300,000 (the “Repayment Amount”), within 30 days. (Pl. 56.1 Smt. ¶ 15; Carlone Decl. ¶ 7; Luna Dep. 110:18–25.) Mr. Luna did not disclose to Ms. Carlone the existence of the Financing Agreement with Indie Film. (Carlone Decl. ¶ 17.)

Soon after, Mr. Luna emailed Ms. Carlone a written agreement memorializing the terms discussed in their phone conversation (the “Agreement”). (Agreement, Ex. A to Carlone Decl.; Carlone Decl. 9; Pl. Smt. ¶ 18.) The Agreement provided that Ms. Carlone was to provide L & B Films $115,000 within 24 hours and that L & B Films would repay Ms. Carlone a total sum of $300,000 within 30 days of receipt of the original loan. (Agreement ¶¶ 1, 3.) The Agreement also guaranteed Ms. Carlone one percent of the net United States box office receipts of the Film. (Agreement ¶ 4.) Mr. Flener agreed to secure and collateralize the Loan Amount with his 401(k) account. (Agreement ¶ 2.)

Mr. Luna told Ms. Carlone that speed was very important, and there was no time to have her lawyer review the Agreement before she signed it. Ms. Carlone states that it was partly because of Mr. Luna's urgency to receive the money that he offered such attractive terms. (Carlone Decl. ¶ 9; Pl. 56.1 Smt. ¶ 19.) On November 11, 2009, Ms. Carlone signed the Agreement without making any changes to it; Mr. Luna and Nelson Pereyra signed the Agreement for L & B Films, and Mr. Flener signed the Agreement as guarantor of the original Loan Amount. (Agreement, Ex. A, Carlone Decl.)

On November 12, 2009, pursuant to the Agreement, Ms. Carlone wired $115,000 into the bank account of L & B Films. (Carlone Decl. ¶ 12.) On the same day, Mr. Luna caused these funds to be transferred to an attorney, Mr. Richard A. Portale, Esq., who in turn transferred the money to Mr. Wolfgang Zulauf pursuant to the terms of the Financing Agreement with Indie Film. (Def. 56.1 Stmt. ¶ 6; TD Bank Statements, Ex. A; Luna Dep. 121:5–11).

Mr. Luna asserts that immediately after the money was transferred to Indie Film, Mr. Clover stopped taking his phone calls. (Luna Dep. 12–17.) Mr. Luna maintains that with the exception of Mr. Portale, the parties involved in the Financing Agreement disappeared, along with the $115,000 that Ms. Carlone had provided to L & B Films. Mr. Luna alleges that he was the victim of a scam perpetrated against him by Mr. Clover, Mr. Portale, and Indie Film. ( See Third Party Complaint, Dkt. No. 17.) Ms. Carlone has not received the $300,000, as provided by the Agreement, nor has her original $115,000 loan been refunded. (Carlone Decl. ¶ 16.)

B. Procedural History

Plaintiff filed her complaint on August 20, 2010. Mr. Luna and Mr. Flener, appearing pro se, answered the complaint on September 17, 2010. L & B Films also attempted to answer the complaint, pro se, on September 17, 2010. By order dated November 15, 2010, Judge Laura Taylor Swain, to whom this case was previously assigned, informed Defendants that L & B Films, an artificial entity, is not permitted to proceed pro se. (Dkt. No. 8.) Judge Swain granted L & B Films 30 days from the date of the order to appear by counsel and answer the complaint. ( Id.) During a conference on November 10, 2010, Judge Swain granted L & B Films an additional period of time, until January 14, 2011, to appear by counsel. ( See Dkt. No. 14.) To date, L & B films has not retained counsel.

On April 21, 2011, Mr. Luna and Mr. Flener filed a third party complaint against Mr. Furquaan Clover, Mr. Richard Portale, Indie Film, and Citibank, NA. (Dkt. No. 17.) On August 1, 2011, Judge Swain endorsed the parties' stipulation to dismiss Citibank, NA from the action with prejudice. (Dkt. No. 22.)

The matter was reassigned to the undersigned on October 13, 2011. Counsel for Plaintiff, as well as Mr. Luna and Mr. Flener, appeared for a pre-motion conferencebefore the Court on November 29, 2011. Plaintiff moved for summary judgment against Mr. Luna and Mr. Flener on January 20, 2012, and moved for default judgment against L & B Films on January 23, 2012. (Dkt. Nos. 27, 34.)

In an order dated February 14, 2012, the Court warned the third-party plaintiffs that they must file proof of service of the third-party complaint by February 22, 2012 or the third-party complaint would be dismissed for failure to prosecute pursuant to Fed.R.Civ.P. 41(b). (Dkt. No. 38.) On February 22, 2012, third-party plaintiffs filed an affidavit of service of the third-party complaint on Mr. Portale, dated October 13, 2011. (Dkt. No. 40.) Counsel for Plaintiff, as well as Mr. Luna and Mr. Flener, again appeared for a conference before the Court on February 29, 2012. During the conference, Mr. Luna explained that he had been unable to serve Mr. Clover and Indie Films. (Transcript dated February 29, 2012 (“Tr.”), at 32.) During the conference, the Court dismissed the third-party complaint against Mr. Clover and Indie Film without prejudice. ( Id. at 33.)

II. Discussion

A motion for summary judgment may not be granted unless all of the submissions taken together show “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see El Sayed v. Hilton Hotels Corp., 627 F.3d 931, 933 (2d Cir.2010). “The moving party bears the burden of establishing the absence of any genuine issue of material fact.” Zalaski v. City of Bridgeport Police Dep't, 613 F.3d 336, 340 (2d Cir.2010). “In deciding a motion for summary judgment, a court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.” Brod v. Omya, Inc., 653 F.3d 156, 164 (2d Cir.2011) (internal citations omitted).

A. Breach of Contract

Plaintiff alleges that Defendants L & B Films and Mr. Flener breached the Agreement. It is undisputed that New York law governs the Agreement. ( See the Agreement ¶ 6.) To make out a breach of contract claim under New York law, a plaintiff must show (1) the existence of a contract between the plaintiff and the defendant; (2) performance of the plaintiff's obligations under the contract; (3) breach of the contract by the defendant; and (4) damages to the plaintiff caused by the defendant's breach. Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 52 (2d...