Nasso v. Seagal, CV-03-0443(CPS).
| Decision Date | 11 April 2003 |
| Docket Number | No. CV-03-0443(CPS).,CV-03-0443(CPS). |
| Citation | 263 F.Supp.2d 596 |
| Parties | Julius R. NASSO, etc. Plaintiff, v. Steven SEAGAL et ano. Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Robert Jay Hantman, Hantaan & Associates, Daniel C. Marotta, Dowd & Marotta, New York City, for Plaintiff.
Sung-Hee Suh, Schulte Roth & Zabel LLP, New York City, for Defendants.
Plaintiff Julius R. Nasso, individually and derivatively as a shareholder of Seagal-Nasso Productions, Inc. ("Productions"), brings this action against Steven Seagal and Steamroller Productions, Inc. ("Steamroller"), alleging breach of contract, breach of fiduciary duty, seizure of corporate opportunities, misrepresentation, conversion, and unjust enrichment. Defendants move to dissolve orders entered by the state court from which this action was removed and to dismiss the complaint pursuant to Rules 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure for lack of personal jurisdiction and failure to state a claim, respectively. Plaintiffs cross-move for a remand of this action to the state court. For the reasons set forth below, the motions to dismiss are denied in part and granted in part and the cross-motion for remand is denied.
The following facts are taken from the papers submitted by the parties in connection with the present motions and, except as otherwise noted, are undisputed.
Steamroller, a California corporation with its principal place of business in California, is a "loan out" company, which employs Seagal, its sole shareholder, and provides his services as an actor. (Am. Compl.¶ 21.)
In early 1987, Nasso, a producer, met Seagal through a mutual acquaintance. Both of them were residents of Staten Island at the time.2 On July 12, 1990, after Nasso and Seagal had worked together on several films, they organized Productions, a New York corporation with its principal place of business in Brooklyn, for the purpose of developing, producing, owning, and distributing motion pictures. Each of them owns half of the shares and serves as an officer of the corporation.
The amended complaint states that, sometime in 1997, Seagal-Nasso Distribution LLC (the "LLC") was organized for the purpose of distributing Productions' films and collecting foreign licensing fee advances, and Seagal-Nasso Films Inc. ("Films") was incorporated in California for the purpose of funding the activities of the LLC.3 Both entities maintained their principal places of business in Los Angeles.
In November 1997, Nasso and Seagal "agreed that [Productions] would develop, produce and market television and film projects." (Am.Compl.¶ 32.) They agreed that Nasso would develop, produce, and distribute films, that Seagal would star in them, and that Productions would own them. They also agreed that Nasso would be paid a production fee of $250,000 for each film and that Seagal would be paid the market value of his services.
According to the amended complaint, Seagal promised to "star" in four "feature films"—"Blood on the Moon," "Genghis Khan," "Smash and Grab," and "Prince of Central Park"—which were to be released as part of a package deal.4 (Am. Compl.¶¶ 1-3, 41, 72-75, 87, 89, 91, 93.) As a result of these promises, Nasso spent at least three years and approximately $2.4 million acquiring literary rights, hiring employees, obtaining options for talent, paying for scripts, and attending film festivals to pre-sell foreign distribution rights for these films. In May 1998 and May 1999, he placed ten advertisements in different trade journals, which confirmed Seagal's participation in the four films. The LLC, "through Phillip Goldfine, as the agent, representative or employee of Seagal, or his related companies, entered into at least [thirty-one] foreign license agreements with the consent, knowledge and approval of Seagal, all of which stated that he (Seagal), was to be the star of the particular movie." (Am.Compl.¶ 63.) Productions, Films, and the LLC (collectively, the "Nasso-Seagal Entities") incurred costs of at least $1.45 million in connection with the four films.5
On or about October 15, 1999, Nasso loaned $500,000 to Seagal to help Seagal satisfy his tax obligations. The loan was payable on demand. Nasso later demanded payment, but Seagal failed to make it. Seagal also entered or caused others to enter false entries in the accounting records of the Nasso-Seagal Entities concerning the respective contributions of Nasso and Seagal.
Seagal failed to appear in the four films. As a result, the Nasso-Seagal Entities lost between $21 million and $39 million in anticipated profits. Instead of appearing in these films, "Seagal, while working under the Seagal-Nasso Productions banner, and with the help of Nasso, who personally approached and had ... meeting[s] with Avi Lerner of Nu-Image Productions, Inc." and Joel Silver of Warner Brothers, appeared in "Ticker" and "Exit Wounds." (Am.Compl.¶ 108.) Seagal never shared with Nasso or the Nasso-Seagal Entities any of the $12.5 million in compensation that he received for his work on these two films.
Seagal states in an affidavit that on July 31, 2000, he sold his residence and another property in Staten Island to Nasso, that he has never resided in New York or owned property there since that time, and that he now resides in California.6 In or around October 2000, Seagal closed the Los Angeles offices of Films and the LLC without the consent of Nasso or Productions. In the process, "Seagal, his agent, employees or representatives" removed or destroyed Nasso's personal items and corporate records of the Nasso-Seagal Entities. (Am. Compl.¶ 18.) In spite of repeated demands by Nasso and the Nasso-Seagal Entities, Seagal has not returned these records or items.
On March 20, 2002, Nasso commenced the present action in the New York Supreme Court for Richmond County on his own behalf and on behalf of the Nasso-Seagal Entities. In his amended complaint, Nasso alleges on behalf of the Nasso-Seagal Entities that Seagal7 (1) breached his contractual obligations to the Nasso-Seagal Entities by failing to star in the four films, (2) breached the fiduciary duty of good faith and fair dealing by failing to star in the four films, (3) seized corporate opportunities by appearing in "Ticker" and "Exit Wounds," and (4) converted corporate documents. Nasso alleges on his own behalf that Seagal (1) converted Nasso's personal items, (2) misrepresented the respective contributions of Nasso and Seagal by entering false entries in the accounting records of the Nasso-Seagal Entities, (3) was unjustly enriched when he accepted Nasso's services in connection with the four films without giving Nasso the expected compensation, (4) breached the fiduciary duty of good faith and fair dealing that he owed to Nasso as a business partner and equal shareholder by failing to star in the four films and by refusing to share the compensation he received in exchange for his work on "Ticker" and "Exit Wounds," (5) breached the partnership agreement he entered with Nasso, in which the two promised to work together to develop, produce, market, and distribute television and film projects and to collect licensing fee advances, and (6) breached the loan agreement he entered with Nasso, in which he promised to repay the sum of $500,000 on demand.8
In an order dated September 26, 2002 (the "September Order"), the Supreme Court denied defendants' motion to dismiss for lack of personal jurisdiction and for failure to state a cause of action.9 Defendants sought leave to reargue part of their dismissal motion and appealed the September Order to the Appellate Division of the Supreme Court.10 In an order dated December 23, 2002 (the "December Order"), the Supreme Court denied the dismissal motion in its entirety, except that it dismissed the claims asserted on behalf of Films and the LLC because both were foreign corporations not authorized to conduct business in New York.11 Defendants received the December Order on December 30, 2002. Nasso never appealed the December Order. On January 27, 2003, defendants filed a notice of removal with this Court.
Defendants move to dissolve the order dated September 26, 2002, and to dismiss all of the claims asserted in the amended complaint for lack of personal jurisdiction and for failure to state a claim. Nasso argues in response that reconsideration of September Order by this Court is precluded by the Rooker-Feldman doctrine and 28 U.S.C. § 1738, is prohibited under state procedural rules, would preempt adjudication of the appeal by the appellate division, would reopen issues of state law already decided by a state court, would encourage forum-shopping, would frustrate the goal of efficiency that underlies the Federal Rules of Civil Procedure, and is unlikely to result in dismissal of the entire complaint. Even if reconsideration is proper, he argues, this Court should deny the motion because it has general jurisdiction over the defendants, as well as specific jurisdiction over them with respect to each of the claims, and because the amended complaint states valid claims upon which relief can be granted.
Nasso cross-moves to remand the action to state court on the grounds that defendants' filing of the notice of removal was untimely and that the dismissal of Films12 in the December Order was improper. Defendants argue in response that the notice of removal was filed in a timely manner and that the dismissal was proper.
This Court has jurisdiction over the subject matter of this action because complete diversity exists and because the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332.
Nasso moves to remand this action, arguing that its removal was untimely and that this Court lacks subject...
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...such duality does not limit or impair the rights of third parties or the functioning of the corporation. See, e.g., Nasso v. Seagal, 263 F.Supp.2d 596, 618 (E.D.N.Y. 2003) ("when parties form a corporation to carry out the business of the partnership, they cease to be partners.") (citing Ne......
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Firestone v. Berrios, 12–cv–0356 (ADS)(ARL).
...is because “[t]he orders entered by the state court are treated as though they had been entered by the federal court.” Nasso v. Seagal, 263 F.Supp.2d 596, 608 (E.D.N.Y.2003); see, e.g., In re Diet Drugs, 282 F.3d 220, 231–32 (3d Cir.2002) (“After removal, interlocutory orders of the state c......
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Firestone v. Berrios, 12–cv–0356 ADSARL.
...because “[t]he orders entered by the state court are treated as though they had been entered by the federal court.” Nasso v. Seagal, 263 F.Supp.2d 596, 608 (E.D.N.Y.2003) ; see, e.g., In re Diet Drugs, 282 F.3d 220, 231–32 (3d Cir.2002) (“After removal, interlocutory orders of the state cou......
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