TicketNetwork, Inc. v. Darbouze

• Decision Date: 22 September 2015
• Docket Number: CASE NO. 3:15-cv-237 (VAB)
• Citation: 133 F.Supp.3d 442
• Parties: TicketNetwork, Inc., Plaintiff, v. Yves Darbouze doing business as Charged.fm, Defendant.
• Court: U.S. District Court — District of Connecticut

133 F.Supp.3d 442

TicketNetwork, Inc., Plaintiff,

v.Yves Darbouze doing business as Charged.fm, Defendant.

CASE NO. 3:15-cv-237 (VAB)

United States District Court, D. Connecticut.

Signed September 22, 2015

Brian J. Wheelin, Robinson & Cole LLP, Stamford, CT, Jennifer Laporte, Edward J. Heath, Robinson & Cole, Hartford, CT, for Plaintiff.

David D. Lin, Justin Mercer, Lewis and Lin LLC, Brooklyn, NY, Neyah K. Bennett, Aeton Law Partners LLP, Middletown, CT, for Defendant.

RULING ON PLAINTIFF'S MOTION TO ADD PARTY AND DEFENDANTS' MOTION TO DISMISS

Victor A. Bolden, United States District Judge

Plaintiff, TicketNetwork, Inc. ("TicketNetwork"), has filed this case against "Yves Darbouze doing business as Charged.fm" ("Yves Darbouze" or "Mr. Darbouze") alleging that Mr. Darbouze owes TicketNetwork $2,163,958.85. Notice of Removal 14, Compl., ECF No. 1. In the Complaint, initially filed in Connecticut Superior Court, TicketNetwork claims that Mr. Darbouze owes this sum because Charged.fm breached a contract that he signed on its behalf. Id. TicketNetwork takes the position that Charged.fm is not a legal entity and has no relationship with any corporation or other legal entity; thus, Mr. Darbouze is personally responsible for the debt.¹ Opp. Br. to Mot. to Dismiss 5, ECF No. 24. The contract at issue in this case also contains an arbitration clause, under which TicketNetwork has commenced an arbitration action against Mr. Darbouze to recover the sum allegedly owed. Mot. to Add Plot Commerce, Ex. A, TicketNetwork Data Sharing Agreement for Mercury Web Services, ECF No. 17-1; Mot. to Dismiss Br., Ex. A, American Arbitration Association ("AAA"), Online Filing Acknowledgement, ECF No. 20.

In this action, TicketNetwork seeks a prejudgment remedy² , and other related relief, to assist with the arbitration it has commenced. Before the Court can examine these requests, it must first address the structure of the case by deciding TicketNetwork's Motion to Cite in Non-Party Plot Commerce, ECF No. 17, and Mr. Darbouze's Motion to Dismiss, ECF No. 19. First, TicketNetwork filed a motion to add Plot Commerce to this litigation under Federal Rule of Civil Procedure 20

, claiming that the resolution of this case requires the addition of this entity as a party.³ Next, Mr. Darbouze asked the Court to dismiss the case for lack of personal jurisdiction over him and for failure to state a claim under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6) respectively.

In his motion to dismiss, Mr. Darbouze argues that TicketNetwork has sued the wrong party and that Plot Commerce, a Nevada corporation that uses the alias Charged.fm, is the proper defendant. The motion also asks that the Court "enjoin" the arbitration that TicketNetwork commenced against Mr. Darbouze, because he is not the proper party to the arbitration and is not individually liable to TicketNetwork under the contract.

For the reasons that follow, the Court GRANTS the Motion to Add Plot Commerce as a Defendant, ECF No. 17. It also GRANTS the Motion to Dismiss, ECF No. 19. Accordingly, the Court dismisses Mr. Darbouze from the lawsuit and hereby enjoins TicketNetwork from continuing its arbitration against Mr. Darbouze in his individual capacity.

I. FACTUAL ALLEGATIONS

TicketNetwork alleges that it is a software company that "provides, among other things, an online secondary marketplace for tickets to live entertainment events." Notice of Removal 14, Compl. ¶3, ECF No. 1. It claims that, on April 28, 2014, it entered into the "TicketNetwork Data Sharing Agreement for Mercury Web Services with Charged.fm." Id. ¶4. It has attached the agreement to several of the currently pending motions. See e.g. , Mot. to Add Plot Commerce, Ex. A, TicketNetwork Data Sharing Agreement for Mercury Web Services, ECF No. 17-1.⁴

Mr. Darbouze signed this agreement as the "CEO" of Charged.fm and held himself out to be the "main point[ ] of contact" for Charged.fm under the contract. Id. Charged.fm is defined in the contract as "a Nevada [blank]" (meaning the name of the legal entity is not provided but simply left blank), with its "principal place of business" at a location in Brooklyn, New York. Id. It is not otherwise defined, as a legal entity or individual, and the words "Plot Commerce" do not appear anywhere in the document. Id.

TicketNetwork alleges that the agreement provides Charged.fm with access to its online database of tickets offered by ticket brokers so that Charged.fm may, in turn, offer access to its customers. Notice of Removal 14, Compl. ¶¶5, 7, ECF No. 1. It claims that, in exchange for access, Charged.fm is required under the agreement to pay TicketNetwork the amount sought by the broker for any tickets purchased by its customers, plus an additional 3% fee. Id. ¶¶6, 7. It contends that Charged.fm profits from this arrangement by charging its customers a mark-up or premium. Id.

TicketNetwork alleges that, as of the filing of its Complaint in January 2015, Charged.fm had failed to pay four invoices, totaling $2,163,958.85. Id. ¶9. It alleges that Charged.fm's failure to pay this sum constitutes a breach of the agreement. Id. ¶14. TicketNetwork also claims that it has paid the brokers for the tickets purchased through Charged.fm. Id. ¶10.

As mentioned briefly above, the contract contains an arbitration clause which provides that "[a]ny controversy or claim arising out of or relating to this contract, or any alleged breach thereof, shall be resolved through binding arbitration in [ ]Hartford County, Connecticut, and administered by the [AAA]." Mot. To Add Plot Commerce, Ex. A, TicketNetwork Data Sharing Agreement for Mercury Web Services, ECF No. 17-1. Under this clause, in January 2015, TicketNetwork commenced an arbitration action against Mr. Darbouze in both his individual capacity and "doing business as Charged.fm." Mot. to Dismiss Br., Ex. A, AAA, Online Filing Acknowledgement, ECF No. 20. TicketNetwork also indicated that it has added Plot Commerce as a party to the arbitration as a respondent after the initial filing. Opp. Br. 9, ECF No. 24.

The agreement indicates that Connecticut law applies. Mot. To Add Plot Commerce, Ex. A, TicketNetwork Data Sharing Agreement for Mercury Web Services, ECF No. 17-1. It also provides, in a forum selection clause, that the "the sole location and venue for any litigation" arising under the contract "shall be an appropriate federal or state court located in Hartford County, Connecticut." Id.

TicketNetwork initially filed its Complaint in Connecticut Superior Court. Mr. Darbouze then removed the case to federal court on diversity grounds in February 2015. Notice of Removal ¶¶4-5, ECF No. 1.

II. MOTION TO ADD DEFENDANT (ECF NO. 17)

TicketNetwork seeks to add Plot Commerce as a party to this case, because Mr. Darbouze has indicated that Charged.fm, the entity that entered into the contract with TicketNetwork, is an alias of Plot Commerce. Memo. In Support of Mot. To Add Plot Commerce 2, ECF No. 17-1. It argues that Plot Commerce's addition is necessary to fully adjudicate any "setoffs, defenses or counterclaims" related to the prejudgment remedy it seeks. Id. It also indicates that a revised complaint will include a breach of contract claim against Plot Commerce. Reply Br. 1-2, 4, ECF No. 26.⁵ Mr. Darbouze opposes this motion because, he argues, TicketNetwork fails to set out specific factual allegations as to why Plot Commerce should be added. Opp. Br. 3, ECF No. 22. He also argues that he will be prejudiced by its addition to the lawsuit, because he should not be a party to the lawsuit. Id. at 4.

TicketNetwork's motion is governed by Rules 20

and 21, regarding the addition of parties to an action, as well as Rule 15 and the standards governing amendment of pleadings articulated by Foman v. Davis , 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). See United States v. Hansel , 999 F.Supp. 694, 697 (N.D.N.Y.1998) (noting that Rule 15 generally governs the amendment of complaints but that in the case of proposed amendments where new defendants are to be added, Rule 21 governs) (citations omitted); Lego A/S v. Best–Lock Constr. Toys, Inc. , 886 F.Supp.2d 65, 71–72 (D.Conn.2012) (applying the Foman standard to a motion to amend the complaint to add a new defendant).

Rule 15(a) provides that the Court "should freely give leave [to amend] when justice so requires." Fed. R. Civ. P. 15(a)(2)

. Foman indicated that, as Rule 15 requires, motions to amend should be granted "[i]n the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." 371 U.S. at 182, 83 S.Ct. 227 ; see also Burch v. Pioneer Credit Recovery, Inc. , 551 F.3d 122, 126 (2d Cir.2008) ("[M]otions to amend should generally be denied in instances of futility, undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, or undue prejudice to the non-moving party.") (citation omitted). Providing leave to amend a complaint is within the discretion of the district court. Foman , 371 U.S. at 182, 83 S.Ct. 227 ; Lego A/S , 886 F.Supp.2d at 71 (noting that Rules 15(a), 20(a) and 21"all leave the decision whether to permit or deny amendment to the district court's discretion") (quoting Oneida Indian Nation of N.Y. State v. Cnty. of Oneida , 199 F.R.D. 61, 72 (N.D.N.Y.2000) ).

Rule 21

provides that a party may be added "at any stage of the action and on such terms as are just." Fed. R. Civ. P. 21. "Since Rule 21 does not provide any standards by which district courts can determine if parties are misjoined, courts have looked to Rule 20 for guidance." Acevedo v. Allsup's Convenience Stores, Inc. , 600 F.3d 516, 521 (5th Cir.2010) (citation omitted). Rule 20 provides for "permissive joinder" of parties and indicates that d...