The opinion of the court was delivered by: GOETTEL
Although two defendants are named in this suit, only one, Twentieth Century-Fox Television Division of Twentieth Century-Fox Film Corporation ("Fox"), has been served. Four causes of action have been interposed thus far against Fox, with a fifth apparently forthcoming. Before the Court are Fox's motions to dismiss various aspects of the amended complaint that charge it with wrongdoing.
The amended complaint alleges the following facts which we deem true for the purpose of evaluating the motions to dismiss. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).
Plaintiff International Television Productions Ltd. ("ITP") is a Bermuda corporation with its principal place of business in London, England. On June 17, 1980, ITP entered into a joint venture with defendant Jerry Harrison & Associates ("Harrison"),
a New York corporation. The joint venture was to produce a series of television programs entitled "The Roots of Rock 'N Roll."
On October 27, ITP and Harrison (collectively "the joint venture") finalized a written distribution agreement ("the distribution agreement") with defendant Fox. The joint venture promised to produce and deliver six one-hour television programs to Fox. In return, Fox, which received the exclusive right to distribute the programs, promised, inter alia, to distribute the programs world-wide and to account to the joint venture for the proceeds. Fox also agreed to pay $100,000 to the joint venture after the delivery of each show. Another plaintiff, Harold M. Cerra ("Cerra"), agreed to advance Harrison substantial sums to finance its share of the production costs. In exchange, Harrison agreed to repay Cerra from the revenues remitted by Fox. According to the amended complaint, Fox had actual or constructive knowledge of the joint venture agreement and of the Harrison-Cerra agreement.
ITP and Cerra allegedly met all of their obligations under the various agreements,
and Fox accepted delivery of six programs from the joint venture. The programs were originally broadcast in 1981 and subsequently licensed abroad and rebroadcast. Nevertheless, Fox, in purported violation of its agreement with the joint venture, refused to pay $300,000 of the $600,000 called for in the distribution agreement as an advance against ultimate royalties. Fox has also allegedly failed to account accurately for the proceeds and profits from the distribution of the program.
The amended complaint is a mass of legalisms, interspersed with facts that do little to inform the reader. As best we can interpret this conundrum, it appears to set forth four claims for relief. The first is that Fox was obligated to pay $600,000 to the joint venture (in $100,000 installments after the delivery of each program) yet only paid half of this amount. The second claim is that ITP did not receive its share of $250,000 that Fox paid the joint venture. There are also two fraud claims. The plaintiffs allege that Fox misrepresented certain financial projections in a September 1981 letter to Harrison, as agent for the joint venture. The joint venture and plaintiff Cerra allegedly relied on the letter to their detriment. Fox allegedly perpetrated a second fraud when it delivered certain false accounting statements to ITP. These statements misstated the proceeds and profits from the program's distribution, thereby preventing ITP from obtaining its rightful share of the distribution revenue. The plaintiffs seek compensatory and punitive damages for these frauds.
The plaintiffs derive five causes of action from these four claims. The first claim, for breach of contract, is set forth in the first cause of action along with the claim of failure to account for proceeds under the distribution agreement. The plaintiffs seek $275,000 in damages for this claim, but we do not understand how this amount is arrived at. The second claim is set forth as the second cause of action, against Harrison only, seeking $275,000 in damages. (Again, we do not understand how the $275,000 damage demand for this cause of action was arrived at.) The two fraud claims are jointly set forth in the third cause of action. The plaintiffs seek $400,000 in compensatory damages jointly for the two frauds. They also demand punitive damages on these claims. Finally, the plaintiffs contend that the previously mentioned four claims together constitute a restraint of trade that violates the antitrust laws of the United States (the fourth cause of action) and of New York (the fifth cause of action).
The plaintiffs commenced this action in state court by serving Fox, which then removed the action to this Court pursuant to 28 U.S.C. § 1446 (1982).
Fox then moved to dismiss; the plaintiffs amended their complaint in response; and Fox brought another motion to dismiss. Before the Court is Fox's second motion against the amended complaint, pursuant to Fed. R. Civ. P. 12(b)(6), to dismiss the first, fourth, and fifth claims and the punitive damage aspect of the third claim, for failure to state a claim on which relief can be granted. It also moves, pursuant to Fed. R. Civ. P. 12(e), for a more definite statement of the damages sought on the third claim.
A. Motion to Dismiss the First Claim
Fox asserts that the rules of law applicable to joint ventures preclude both plaintiffs from maintaining their first cause of action. Paragraphs 20 and 21 of the amended complaint are the heart of that claim. These paragraphs respectively state, "Fox ... has failed and refused to advance to the Joint Venture not less than $300,000 of the $600,000 called for in the Production-Distribution Agreement," Amended Complaint P 20, and "Fox . . . has failed and continues to fail to account accurately for the proceeds and profits of the distribution of the Programs," Amended Complaint P 21.
Fox correctly points out that these claims belong to the joint venture. Neither ITP nor Cerra may assert them individually, yet this is what they attempt.
The rules of law applicable to partnerships also govern joint ventures.
D'Ippolito v. Cities Service Co., 374 F.2d 643, 647 (2d Cir. 1967); 16 N.Y. Jur. 2d § 1594 at 274 (1981). Fallone v. Misericordia Hospital, 23 A.D.2d 222, 226, 259 N.Y.S.2d 947 (1st Dep't 1965), aff'd, 17 N.Y.2d 648, 216 N.E.2d 594, 269 N.Y.S.2d 431 (1966). A partner who seeks to recover a debt due the partnership, must sue in the partnership's name or on its behalf. Kirschbaum v. Merchants Bank, 272 A.D. 336, 71 N.Y.S.2d 79 (1st Dep't 1946). A partner who seeks an accounting must do the same. Stevens v. St. Joseph's Hospital, 52 A.D.2d 722, 381 N.Y.S.2d 927 (4th Dep't 1976). The same rules apply to joint ventures.
These rules mandate the dismissal of the first claim, which seeks the precise relief -- recovery of a joint venture's debt and an accounting on its behalf -- that the courts have held to belong solely to the venture. ITP, a member of the venture, may not assert these claims in its individual capacity. Cerra, who is neither a member of the venture nor a party to an agreement with the venture, may not assert either claim. The claims of both plaintiffs in the first cause of action are, therefore, dismissed.
The plaintiffs claim that the agreement between Fox and Harrison pursuant to which Harrison allegedly breached the joint venture agreement violates section 1 of the Sherman Antitrust Act, which makes illegal "[e]very contract, combination . . ., or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations. . . ." 15 U.S.C. § 1 (1982). Fox interposes a variety of objections to this claim. According to Fox, the plaintiffs have not properly alleged a contract, combination, or conspiracy; they do not have standing to assert their claims, and they have not alleged "antitrust injury." These arguments are ...