National Artists Management Co., Inc. v. Weaving

• Decision Date: 09 May 1991
• Docket Number: No. 91 Civ. 1501 (KC).,91 Civ. 1501 (KC).
• Citation: 769 F. Supp. 1224
• Parties: NATIONAL ARTISTS MANAGEMENT COMPANY, INC. and Kolmar Luth Booking Company, Inc. d/b/a Namco Booking, an unincorporated division of National Artists Management Company, Inc., Plaintiffs, v. Susan WEAVING and Richard Martini, Defendants.
• Court: U.S. District Court — Southern District of New York

769 F. Supp. 1224

NATIONAL ARTISTS MANAGEMENT COMPANY, INC. and Kolmar Luth Booking Company, Inc. d/b/a Namco Booking, an unincorporated division of National Artists Management Company, Inc., Plaintiffs, v. Susan WEAVING and Richard Martini, Defendants.

No. 91 Civ. 1501 (KC).

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

May 9, 1991.

Gerald Singleton, Frankfurt, Garbus, Klein & Selz, Jay Goldberg, New York City, for plaintiff Nat. Artists Management Co., Inc.

Judd Burstein, Judd Burstein, P.C., New York City, for plaintiff Kolmar Luth Booking Co., Inc.

Brian E. Maas, Beldock Levine & Hoffman, New York City, for defendant Susan Weaving.

Daniel J. Kornstein, Kornstein Veisz & Wexler, New York City, for defendant Richard Martini.

MEMORANDUM AND ORDER

CONBOY, District Judge:

Through its unincorporated division known as NAMCO Booking, plaintiff National Artists Management Company, Inc. ("NAMCO") is engaged in the business of representing and booking in-house talent and productions and independent theatrical productions throughout the United States. In the last five years, under the direction of its former president, defendant Susan Weaving, NAMCO Booking has become one of the premiere booking agencies in the United States. NAMCO's roster of theatrical Broadway and Broadway-bound productions has included "Phantom of the Opera", "The Piano Lesson", "The Magic of David Copperfield", "South Pacific", "A Chorus Line", Penn & Teller, the Moscow Circus, "The Flying Karamazov Brothers", and "Fiddler on the Roof".

On January 30, 1991, with eleven months remaining on the term of her employment contract with NAMCO, Weaving terminated her employment with NAMCO and refused to return to work. Since Weaving's departure, NAMCO has lost several of its customers and clients, including "A Chorus Line", Penn & Teller, "The Flying Karamazov Brothers", the Moscow Circus, and "The Piano Lesson," accounting for a substantial portion of NAMCO's booking revenues. NAMCO fears further losses and damage to its reputation and goodwill. According to NAMCO, Weaving's departure followed upon the heels of disputes between Weaving and NAMCO's principals, including Barry and Fran Weissler, the sole shareholders of NAMCO, and Brad Krassner and Joe Marsh, about plans for future expansions and operating procedures at NAMCO. Affidavit of Barry Weissler, sworn to on March 1, 1991 ("Weissler Aff."), ¶¶ 46-50. Weaving, on the other hand, has advised NAMCO and others that she was forced to terminate her relationship with NAMCO because of certain illegal and improper business practices engaged in by certain of NAMCO's principals. Affidavit of Susan Weaving, sworn to on March 6, 1991 ("SW Aff."), ¶ 2.

In February 1991, Weaving's husband, Richard Martini, one of three producers of "A Chorus Line", terminated his show's booking arrangement with NAMCO. He has told presenters and promoters in the theatre industry that he and his fellow producers of "A Chorus Line" terminated their use of NAMCO because "we didn't think we were going to be adequately represented." Deposition of Richard Martini, taken on March 6, 1991 ("RM Dep."), at 80-81. In addition, he has told NAMCO customers that there "were certain improprieties by the NAMCO partners." Id. at 42.

In this action, NAMCO seeks to enjoin Weaving from establishing and engaging in any business competing with NAMCO during the unexpired term of her exclusive employment agreement with NAMCO Booking, which she has allegedly wrongfully repudiated. NAMCO also seeks enforcement of certain specific restrictive covenants and noncompete provisions in Weaving's employment agreement. In addition, NAMCO seeks to enforce restrictive covenants and noncompete provisions in an asset acquisition agreement signed by Martini when NAMCO acquired Kolmar-Luth Entertainment, Inc., a theatre booking company of which Martini was formerly president and major shareholder. Finally, NAMCO seeks to enjoin Weaving and Martini both from making false and disparaging statements about plaintiffs concerning the alleged improprieties that assertedly forced Weaving to leave NAMCO, and from soliciting plaintiffs' clients.

This action was filed on March 1, 1991. That same day, plaintiffs moved for a temporary restraining order and preliminary injunction. At a conference held that day, defendant Weaving agreed voluntarily to "not, directly or indirectly, solicit any business from, deal with or have any contact with any customers or clients of plaintiff as of January 30, 1991, until the conclusion of the preliminary injunction proceedings." Order dated March 1, 1991. Because these restrictions, according to Weaving, were unduly broad in that they prevented her from having social contact with friends who are also customers or clients of NAMCO, Weaving asked that the restrictions be modified. Accordingly, at the conclusion of the March 11, 1991, hearing, the voluntary restrictions on Weaving's conduct were limited, upon consent of the parties, to prevent Weaving only from "talking about NAMCO" and "talking about setting up her own business" until the conclusion of the preliminary injunction proceedings. Tr. 167.¹

The Court's sole concern at this stage of the litigation is subject matter jurisdiction. Plaintiffs initially pleaded only diversity jurisdiction, stating claims for, inter alia, breach of contract, breach of fiduciary duty, tortious interference with contract, and conversion of trade secrets. Plaintiffs alleged that plaintiff NAMCO is a New Jersey corporation with its principal place of business in New York, and that plaintiff Kolmar Luth Booking Company, Inc. ("K-L") is a wholly owned subsidiary of NAMCO, organized and existing under the laws of New York, with its principal place of business in New York. Complaint ¶¶ 1-2. As to defendants Weaving and Martini, plaintiffs alleged that they are citizens of the State of Connecticut who maintain a separate residence in New York City.

After defendants challenged diversity jurisdiction, contending that defendants are citizens of the State of New York, plaintiffs filed an amended complaint on March 8, 1991, adding a claim for unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Amended Complaint ¶¶ 39-48. Plaintiffs thus allege that federal question jurisdiction exists pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1338. Defendants have challenged this basis of jurisdiction as well, arguing that plaintiffs have failed to state a claim for unfair competition under the Lanham Act.

On March 11, 1991, the Court held a hearing on the diversity jurisdiction issue. The Court also received further briefing, and held oral argument on March 22, 1991, on the question of Lanham Act jurisdiction.

I. Diversity Jurisdiction

Defendants allege that, although they maintain a secondary residence in Connecticut, they are citizens of New York, and that therefore diversity jurisdiction does not exist. For purposes of diversity jurisdiction, a natural person's citizenship is determined by domicile. Although a person may have more than one residence, she may only have one domicile at any one time. Williamson v. Osenton, 232 U.S. 619, 34 S.Ct. 442, 58 L.Ed. 758 (1914). Domicile requires (1) the party's physical presence in the state; (2) the intent to remain in that state indefinitely. See, e.g., Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 109 S.Ct. 1597, 1608, 104 L.Ed.2d 29 (1989). The second element does not require that the person have an affirmative intent to remain permanently in the state, merely that she has no present intent to move to another state. There is no minimum period of residence necessary to establish domicile.

Domicile has been defined generally as a person's "home" or permanent base of operations. "Home is the place where a person dwells and which is the center of his domestic, social and civil life." Restatement of Conflicts 2d §§ 11, 12 (1971) (quoted in 1 J. Moore, J. Lucas, et al., Moore's Federal Practice ¶ 0.743.-3 at 707.65 n. 21 (2d ed. 1991) (hereinafter "Moore's Federal Practice"). The "domicile of a person is the place where he has his true, fixed home and principal establishment, and to which, whenever he is absent, he has the intention of returning. Domicile therefore, has both a physical and a mental dimension and is more than an individual's residence, although the two typically coincide." 13B C. Wright & A. Miller, Federal Practice and Procedure § 3612 at 526-27 (1984).

Where, as here, there is evidence indicating the party has more than one residence, or the residence is unclear, the court should focus on the intent of the party. Brignoli v. Balch, Hardy & Scheinman, Inc., 696 F.Supp. 37, 41 (S.D.N.Y.1988). "To ascertain intent, a court must `examine the entire course of a person's conduct in order to draw the necessary inferences as to the relevant intent.'" Id. "In ascertaining the intent of the party, that party's entire course of conduct may be taken into account. The party's own statements concerning his intentions are relevant, but they are of slight weight when they come into conflict with other facts that tend to disclose a contrary intent." Bevilaqua v. Bernstein, 642 F.Supp. 1072, 1074 (S.D.N.Y.1986) (Weinfeld, J.). "Although intent is crucial to domicile, mere subjective statements of affiliation with a particular state or of an intent to make it one's home, of course cannot suffice for a finding of state citizenship if such statements are belied by objective indicia of actual residence and intent." Willis v. Westin Hotel Co., 651 F.Supp. 598, 601 (S.D.N.Y.1986).

A "totality of the evidence" approach is called for, and no single factor is conclusive, although the residence of a married person's spouse and children (if the couple has not separated) is given considerable weight. "Among the influential factors are the place where civil and political rights are exercised, taxes paid, real and personal property (such...