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DON KING PRODUCTIONS, INC. v. THOMAS

October 2, 1990

DON KING PRODUCTIONS, INC. AND DON KING, PLAINTIFFS,
v.
PINKLON THOMAS, JR., RICHARD GIDRON, ROLAND JANKELSON, ALTHEA JONES AND THE UNITED STATES, DEFENDANTS.



The opinion of the court was delivered by: Haight, District Judge:

MEMORANDUM OPINION AND ORDER

Plaintiffs Don King Productions, Inc. and Don King bring this action for interpleader and injunctive relief pursuant to 28 U.S.C. § 1335 and § 2361. Defendant United States moves for partial summary judgment claiming priority to the interpleader funds. Defendants Gidron and Jones have cross-moved claiming that they have priority to the interpleader funds.

Background

On December 12, 1988, plaintiffs Don King Productions, Inc. ("DKP") and Don King commenced the instant interpleader action, pursuant to 28 U.S.C. § 1335, to obtain a determination of the defendants' rights to money which DKP owed defendant Pinklon Thomas, Jr. ("Thomas"). Thomas had contracted with DKP to receive a purse of $150,000 for participating in a December 9, 1988 boxing match with Evander Holyfield held in Atlantic City, New Jersey (the "Bout"). Between August 15, 1987 and June 26, 1988, DKP allegedly made payments to Thomas totaling $53,340.67 as advances from his purse for the Bout. Pursuant to the alleged terms of the contract, on completion of the Bout DKP was to pay $37,500 directly to Thomas' manager, New Opportunities, Inc.; DKP's co-promoter, Main Events Monitor, was to pay $26,250 directly to Angelo Dundee, Thomas' trainer; and DKP was to pay $32,909.33 to Thomas, representing the remainder of the purse less amounts advanced by DKP to Thomas. DKP was reluctant to pay Thomas the remaining $32,909.33 because DKP was given notice of at least four other conflicting claims to Thomas' purse from the bout. As a result of the conflicting claims, plaintiffs are unsure as to who is entitled to what amount. Thus, DKP and King have paid $32,909.33 into the registry of this Court and have filed the instant interpleader action so that the interpleaded defendants can settle among themselves their rights to the funds.

Defendant Richard Gidron claims priority to the fund by virtue of a stipulation of settlement entered in Gidron v. Pinklon Thomas, Don King and Don King Productions, Inc., No. 15916/84 (New York Supreme Court, Bronx County) in 1985. In that action, Gidron was attempting to collect monies owed to him from a previous management contract between himself and Thomas. The contract was allegedly violated by Thomas when he entered into a new management agreement with Don King and DKP. The Clerk of the Bronx County Court attached and held $140,000 until a settlement was negotiated. According to the terms of the settlement, Thomas agreed to pay Gidron $75,000 from the monies held by the Clerk of Bronx County and $50,000 from the proceeds of each of his next three fights. Pursuant to the terms of the settlement, DKP and Don King agreed that in the event they were the promoter of any of Thomas' next three prize fights, they would withdraw from the proceeds of said fights, prior to distribution to Thomas, the sums due to Gidron. The stipulation of settlement was never reduced to and docketed as a judgment.*fn1 Gidron claims that the settlement agreement was "so ordered" by the court although the document itself was not signed by the judge. The document was signed by Thomas and King but not by Gidron.

Thereafter, Thomas fought Trevor Berbick and King and DKP delivered a check to Gidron for $50,000. Thomas also fought Michael Tyson and after further litigation, an additional $50,000 was paid to Gidron.

In order to make sure that Thomas, DKP and King would pay him $50,000 from the proceeds of Thomas' third fight, Gidron moved for an Order to Show Cause, Index No. 15916/84 in the Supreme Court of New York, Bronx County for a temporary restraining order on the proceeds of the Bout. On December 6, 1988, Judge Lewis Friedman issued an order whereby DKP, King and Thomas were to show cause on December 16, 1988 why "$50,000 and interest, costs and counsel fees thereon should not be payable to [Richard Gidron] from the proceeds of [the Bout] as defendants may have an interest therein . . ." DKP, King and Thomas received notice of the show cause hearing the same day. The Bronx County Order also provided that "pending a hearing of this matter, $50,000 of any monies arising from the [Bout] received by Don King and/or DKP and/or Thomas, their agents and/or attorneys shall be placed into escrow with the Clerk of the Supreme Court, Bronx County . . ." On December 12, 1988, Judge Leval of this Court, to whom the captioned case was originally assigned, enjoined those proceedings by Temporary Restraining Order.

Defendant Althea Jones claims priority to the interpleader funds as a result of a Judgment of Filiation and Order For Support entered by the Oakland County Circuit Court for the State of Michigan on January 6, 1988. On November 15, 1973, Ms. Jones gave birth to Paquana Jones. Pinklon Thomas was the father. In 1986, Ms. Jones commenced a paternity action on behalf of herself and her daughter. In the Judgment of Filiation and Order For Support, Thomas acknowledged that he was the father of Paquana. He was ordered to pay $7,500 in the form of a money judgment to Ms. Jones for all support and maintenance obligations that had accrued from the time of Paquana's birth until November 9, 1987, and to pay $100 per week in support and maintenance of Paquana commencing November 9, 1987 and continuing until she reached the age of her majority or until further order of the Court. Thomas was also ordered to notify Ms. Jones in writing of any professional boxing match in which he was going to participate, and the date, promoter and purse amount of each fight at least 30 days prior to such fight or upon first learning of such fight, whichever was earlier.

The Government claims priority to the interpleader fund as a result of federal tax liens issued and filed against Thomas for unpaid federal income taxes. At present, the government alleges that Thomas is indebted to the government for unpaid income taxes for the years 1986 and 1987 in the amounts of $149,905.90 and $120,361.53, respectively. With interest and penalties, Thomas allegedly owes the government $480,934.91. The IRS filed Notices of Federal Tax Lien on December 5, 1988 in Atlantic County, New Jersey, where the bout was to take place, and on December 8, 1988 in Oakland County, Michigan, the county of Thomas' residence. In addition, on December 9, 1988, a revenue officer of the IRS served a Notice of Levy on DKP regarding the tax liabilities of Thomas.

Thomas and Roland Jankelson were also named as defendants by plaintiffs Don King and DKP since they had possible claims to the interpleader funds. On or about December 7, 1988, DKP and King received notice by receipt of an Order to Show Cause with Temporary Restraining Order issued by Judge Joseph Rodriguez of the United States District Court for the District of New Jersey, in a matter entitled Pinklon Thomas v. Roland Jankelson, Case No. 8304611, directing that plaintiff Thomas show cause on December 13, 1988 why "an order should not be entered ordering the disbursement of one-third (1/3) of the purse from the [Bout] to be paid to [Thomas] by . . . DKP." The order further provided that "DKP be restrained from paying any proceeds of the purse to [Thomas] pending further order of this Court . . ." The Order to Show Cause with Temporary Restraining Order was issued pursuant to Jankelson's affidavit, which claimed that Thomas still owed Jankelson $31,666.99 from a Stipulation of Settlement which was previously approved by the same court. In that action, Jankelson was apparently trying to collect monies owed to him from a management contract between himself and Thomas. Defendants Thomas and Jankelson are no longer parties to this litigation.*fn2

Procedural History

On the day the interpleading plaintiffs filed this action, they moved by order to show cause to enjoin defendants from further prosecuting any of their respective actions described supra, or from instituting any additional proceedings in any State or United States court affecting the obligation of plaintiffs to Thomas until such time as the rival claims to the interpleader funds are resolved. Judge Leval granted a temporary restraining order pending a decision on plaintiffs' motion for injunctive relief and scheduled a hearing for December 15, 1988. At that hearing, Judge Leval ordered that the interpleader action be resolved in two phases. First, the United States would initiate a motion to establish its alleged priority to the interpleader funds; defendants would also submit memoranda of law on the issue of priority. Secondly, after the Court resolved the question of priority, the parties would brief the issue of what additional monies, if any, should be included in the interpleader fund.*fn3

On April 11, 1990, the United States moved for partial summary judgment pursuant to F.R.C.P. 56 on the issue of priority to the interpleader funds, in accordance with the schedule worked out by Judge Leval on December 15, 1988. On May 14, 1990, this case was reassigned to me. The only issue before this Court at present is the ...


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