Jackson v. Iris.Com

• Decision Date: 19 December 2007
• Docket Number: No. 1:07CV961.,1:07CV961.
• Citation: 524 F.Supp.2d 742
• Parties: Curtis James JACKSON III, p/k/a 50 Cent, Plaintiff, v. IRIS.COM, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

524 F.Supp.2d 742

Curtis James JACKSON III, p/k/a 50 Cent, Plaintiff, v. IRIS.COM, Defendant.

No. 1:07CV961.

United States District Court, E.D. Virginia, Alexandria Division.

December 19, 2007.

Anne Madeline Devens, Richard Dean Holzheimer, Jr., Reed Smith LLP, Falls Church, VA, for Plaintiff.

Barbara Susan Wahl, Karen Ellis Carr, Arent Fox LLP, Washington, DC, for Defendant.

OPINION AND ORDER

ROBERT G. DOUMAR, District Judge.

On May 15, 2007, Iris.com ("Defendant" or "Iris") filed a Demand for Arbitration with the American Arbitration Association ("AAA") against Curtis James Jackson III, p/k/a 50 Cent, ("Plaintiff' or "Jackson"). On August 30, 2007, Jackson filed a Complaint to Stay the Arbitration and for Declaratory Judgment. On October 11, 2007 Jackson filed a Motion for a Preliminary Injunction to Stay Arbitration. The arbitration is scheduled for January 21-23, 2008. On December 5, 2007, this Court notified the parties of its intent to consider entering summary judgment sua sponte for the Defendant and advised the Plaintiff to submit any additional evidence. For the reasons set forth herein, the Court hereby DECLARES that the claims against the Plaintiff are subject to arbitration, GRANTS summary judgment sua sponte for the Defendant, and DISMISSES the case without prejudice to any claims presented in arbitration.

DISCUSSION

I. FACTUAL AND PROCEDURAL BACKGROUND

The essential facts of this case are not in dispute and are contained in affidavits and exhibits accompanying the parties' various filings. Iris was responsible for producing the "Night of Music" concert series, an event scheduled to take place on July 15, 2006, in Libreville, Gabon, Africa. (Walker Aff. ¶ 3-4.) On February 22, 2006, Iris entered into two separate contracts with G*Town Entertainment, Inc. ("G*Town") whereby G*Town agreed to "furnish the services of performers Jackson and Melissa Arnette Elliot, p/k/a Missy Elliot ("Elliot") at the July 15, 2006, concert. (Pl.'s Comp. Ex. Al, A2.) Iris paid a total of $550,000 to G*Town in exchange for the performances: $350,000 pursuant to the contract for Jackson ("G*Town Contract") and $200,000 pursuant to the contract for Elliot. (Walker Aff. ¶ 9.) The G*Town Contract contains an arbitration provision, which states:

Any claim or dispute arising out of or relating to the Agreement or the breach thereof shall be settled by arbitration in Virginia. Virginia [sic] in accordance with the rules and regulations than [sic] obtaining of the American Arbitration Association governing three-member panels. The parties hereto agree to be bound by the award in such arbitration and judgment upon the award rendered by the arbitration may be entered in any court having jurisdiction thereof.

(Def. Opp. Ex. 1B ¶ 13.) The G*Town Contract also contains a liquidated damages provision which states that the $350,000 "payment shall be deemed a nonrefundable deposit if [Iris] breeches the terms of the agreement or if [Jackson] breeches the terms of this agreement [Iris] will be refunded his/her deposit minus an [sic] (five percent) 5% commission." (Def. Opp. Ex. 1B ¶ a.) Pursuant to the contracts, G*Town paid $450,000 to American Talent Agency ("ATA"), a booking agent for Jackson and Elliot, in two installments: $45,000 on May 24, 2006, and $405,000 on June 8, 2006. (Pl.'s Nov. 30 Sub. Ex. 1.) G*Town allegedly retained the remaining $100,000 as a commission. (Def.'s Opp. n. 2.) ATA then paid $150,000 to Jackson on June 28, 2006, and $75,000 to Elliot on June 30, 2006. (Pl.'s Nov. 30 Sub. Ex. 1.) Plaintiff has allegedly been unable to locate the remaining $225,000 paid to ATA. (Pl.'s Nov., 30 Sub. ¶ 4.)

While the above essential facts are fairly straightforward, the facts regarding the breakdown in negotiations between the parties are somewhat more complex. As a threshold matter, the parties do not dispute that ATA was Jackson's booking agent. Violator Management ("Violator"), Jackson's manager, admits that it "engaged" ATA to negotiate for Jackson's performance in Africa. (Lighty Aff. ¶ 6.) In addition, negotiations between Iris and Jackson over Jackson's performance in Africa appear to have proceeded in two distinct stages; The first stage involved Iris indirectly negotiating with ATA using G*Town as an intermediary, whereas the second stage involved Iris directly negotiating with ATA.

At the first stage, Iris entered into the contract with G*Town containing the arbitration provision at issue, and G*Town proceeded to negotiate with ATA for Jackson's performance. G*Town's negotiations with ATA are memorialized in several documents submitted by the parties including:

1. A May 14, 2006, letter from ATA to G*Town discussing G*Town's offer of $300,000 for Jackson's performance. (Def.'s Opp. Ex. 2.)

2. A June 9, 2006, letter from ATA to G*Town discussing ATA's business partnership with G*Town. (Def.'s Opp. Ex. 5.)

3. Two drafts of an unexecuted contract between G*Town and Jackson on ATA letterhead for Jackson's performance on July 15, 2006, dated June 6, 2006 (Def.'s Opp. Ex. 4) and July 6, 2006 (Pl.'s Mem. Ex. 1B).

The negotiations between G*Town and ATA apparently broke down, and Jackson failed to perform on July 15, 2006. Iris argues that Jackson breached the G*Town Contract by failing to perform. (Def.'s Opp. 5.) G*Town argues that Iris breached the G*Town Contract by failing to provide agreed-upon travel arrangements. (Def.'s Opp. Ex. 4.) Jackson argues that he was never a party to the G*Town Contract. (Pl.'s Mem. 2.) However, as discussed further below, it is unnecessary for the Court to entangle itself in this factual dispute because the only issue presently before the Court is whether Jackson is subject to the G*Town Contract's arbitration provision.

At the second stage, Sedlmayr & Associates; PC ("Sedlmayr"), counsel for Jackson, negotiated for Jackson's performance directly with Arent Fox, PLLC ("Arent Fox"), counsel for Iris. In fact; ATA and Sedlmayr allegedly took over negotiations with Iris prior to the original July 15, 2006, performance date. (Ferretti Aff. ¶ 10.) When negotiations broke down regarding the July 15, 2006, performance date, Sedlmayr and Arent Fox began negotiations for an alternative performance date of August 12, 2006. Id. These negotiations are similarly memorialized in several documents submitted by the parties, including:

1. An email thread dated July 6-10, 2006, between Iris, ATA, and Violator regarding concert details. (Def.'s Opp. Ex. 1D.)

2 A July 18, 2006, letter from Violator to Iris suggesting possibility of "do over of the Gabon date." (Def.'s Opp. Ex. 7.)

3. Two drafts of an unexecuted contract between Iris and Jackson on ATA letterhead for Jackson's performance on August 12, 2006, dated July 24, 2006 ("Draft Contract"). (Pl.'s Mem. Ex. 1C, 1D.)

4. An August 3, 2006, letter from ATA to Arent Fox and cc-ed to Violator and Sedlmayr confirming that the original July 15, 2006, concert date was contracted with G*Town. (Def.'s Opp. Ex. 6.)

5. An email thread dated August 2-3, 2006, between Sedlmayr and Arent Fox indicating failure of Jackson and Iris to reach an agreement. (Pl.'s Mem. Ex. 1E.)

The Draft Contract between Iris and Jackson does not contain an arbitration provision. Rather, it requires all disputes to be litigated in state or federal courts in New York City. (Pl.'s Mem. Ex. 1C, 1D ¶ 19.) The Draft Contract also provides for liquidated damages in the event of default:

3. COMPENSATION

PURCHASER [Iris] agrees to pay FURNISHER [Jackson] Three Hundred Thousand and 00/100 U.S. Dollars ($300,000.00) for the show (the "Compensation") free of all foreign taxes (such as box office, admission, license, franchise, property or other similar taxes) and without deductions of any kind, provided, however, that FURNISHER acknowledges that purchaser has previously paid and shall receive a credit of $150,000 against the Compensation, leaving a sum of One Hundred Fifty Thousand and 00/100 U.S. Dollars ($150,000.00) to be paid.

Deposits are to be paid to ATA o/b/o FURNISHER as follows (it being agreed by FURNISHER that all payments be made to FURNISHER hereunder shall be made to ATA and that payments made to ATA shall be deemed payments made to FURNISHER for all purposes of this Agreement).

16. REMEDIES

In the event that PURCHASER fails to fulfill in any material respect of any of PURCHASER'S obligations hereunder, on or before the dates and terms specified above or otherwise defaults in performing its obligations under this Agreement, in such event FURNISHER shall be entitled to collect/retain the Compensation as liquidated damages, whereupon this Agreement shall be terminated.

(Pl.'s Mem. Ex. 1D ¶¶ 3, 16.) (emphasis added). Similarly, a July 18, 2006, email from Violator to Arent Fox stated:

Fee as agreed upon and as follows: 50% of fee already paid shall serve as nonrefundable forfeited deposit. The remaining 50% of initial payment to serve as front end for new date with $150K balance on [Jackson] and $75K balance on [Elliot] due and payable immediately.

(Def.'s Opp. Ex. 7.) From these two documents, it is clear that the Draft Contract contemplated putting a portion of the $450,000 that Iris already paid to ATA pursuant to the G*Town Contract toward the alternative August 12, 2006, concert date. However, the parties do not allege that this Draft Contract, or any other contract besides the G*Town Contract, was ever actually executed by the parties. Nevertheless, Jackson argues, without citing any authority, that the above provisions of the Draft Contract entitled him to retain the $150,000 paid by Iris as a "kill fee" to compensate him for his preparation once the deal fell through. (Pl.'s Mem. 6-7.)

On May 15, 2007, once the deal fell through, Iris filed a Demand for Arbitration with the AAA against Jackson, G*Town, and Elliot pursuant to the arbitration provision in the G*Town Contract. On August 30, 2007, Jackson filed a Complaint to Stay Arbitration...