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UNIVERSAL TV DISTRIBUTION HOLDINGS LLC v. WALTON

United States District Court, S.D. New York


December 8, 2004.

UNIVERSAL TV DISTRIBUTION HOLDINGS LLC, Plaintiff,
v.
MARK WALTON, INDIVIDUALLY AND D/B/A ONYX MEDIA GROUP INTERNATIONAL Defendant.

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

MEMORANDUM OPINION & ORDER

Plaintiff Universal TV Distribution Holdings LLC ("Universal") brings this suit to seek recovery of amounts due and owing pursuant to a license agreement entered into by defendant Mark Walton d/b/a Onyx Media Group International ("Walton") for the television series New York Undercover ("the NYU Agreement") in 2002. Plaintiff moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. The motion is unopposed and for the reasons stated below, the motion is granted.

I. FACTS

  Defendant Walton executed the NYU Agreement on or about October 10, 2002, signing on behalf of "Onyx Media Group International." (Pl.'s Statement of Facts ¶ 2-3.) Plaintiff alleges that defendant has failed to pay $1.1 million dollars of license fees owed under that agreement, failed to pay residuals in the amount of $178,885.55, and failed to reimburse plaintiff for $12,240.00 of costs incurred in making a Spanish track version of the programs. Plaintiff seeks a total amount of $1,291,125.50, not including interest and attorneys' fees. Under the terms of the NYU Agreement, defendant was granted a limited license to sublicense fifty-two programs of the series New York Undercover to over-theair television stations in the United States for telecast between January 10, 2003, and January 4, 2004, and to sell the commercial time in the programs. (Compl. ¶ 9.) In addition to the licensing fee, defendant agreed to pay to Universal the full costs of residuals attributable to defendant's exercise of his rights under the NYU Agreement. (Pl.'s Statement of Facts ¶ 6.) The NYU Agreements permitted defendant to sublicense versions of the programs with a Spanish language track created by Universal at defendant's sole cost. (Pl.'s Statement of Facts ¶ 9.) Universal incurred costs of at least $12,240 for creating and providing Spanish tracks for defendant. (Pl.'s Statement of Fact ¶ 10.)

  Plaintiff failed to make any license fee payments, failed to pay any of the costs associated with the creation of Spanish tracks, and paid only a portion of the residual obligation. (Pl.'s Statement of Facts 4-11.) After notice of default and opportunity to cure, Universal proceeded to terminate the NYU Agreement effective September, 15, 2003. (Pl.'s Statement of Facts ¶ 12-21.) Pursuant to the NYU Agreement, all amounts under the agreement were immediately due and payable upon termination. Id.

  II. Discussion

  Under Rule 56(c) summary judgment shall be rendered forthwith if the pleadings, depositions, answers, interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitle to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Anderson v. Liberty Lobby, 477 U.S. 242, 250 (1986). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party." Id. at 248. "At the summary judgment stage, there is no issue unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id. at 243.

  The moving party has the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. V. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

  If the moving party meets its burden, the burden then shifts to the non-moving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). When, however, the adverse party does not respond to a motion for summary judgment, "summary judgment, if appropriate, shall be entered against the adverse party." Id.; see also United States Liab. Ins. Co. v. P. Mahoney Contracting Corp., 1998 U.S. Dist. LEXIS 19858, at *3 (S.D.N.Y. December 21, 1998) (even when summary judgment motion is unopposed, "judgment should not be granted in circumstances contrary to law"). In an unopposed motion for summary judgment, plaintiff's recitation of the facts is assumed to be true. See Mason Tenders Dist. Council Welfare Fund v. Asturias, Inc., 2003 U.S. Dist. LEXIS 1003, at *3 (D.N.Y., January 23, 2003); see also I.B.E.W. Local No. 910 Welfare, Annuity, and Pension Funds v. Dexelectrics, Inc., 98 F. Supp. 2d 265, 270 (N.D.N.Y. 2000). Pursuant to Local Rule 56.1(c), in a motion for summary judgment, "[a]ll material facts set forth in the statement [of material facts annexed to the motion] required to be served by the moving party will be deemed to be admitted unless controverted by the statement [included with the opposition to the motion] required to be served by the opposing party."

  Having examined the NYU Agreement, accepted plaintiff's recitation of the facts as true, and taken defendant's defenses into consideration, the motion for summary judgment is granted. Defendant has not denied the allegations and has not opposed the motion for summary judgment. However, he had raised two defenses to the action in his answer which are addressed in plaintiff's motion for summary judgment. First, defendant Walton claims that the NYU Agreement was entered into between plaintiff and Onyx Media Group International, Inc., not Onyx Media Group International. He argues, therefore, that the corporation is responsible and that he has no personal liability. (Answer ¶ 3.) Second, defendant challenges the subject matter jurisdiction of the court by claiming that diversity jurisdiction does not exist by stating, "defendant's principal place of business is in the State of New York and there is therefore no diversity jurisdiction." (Answer ¶ 4.)

  Defendant claims that the obligation entered into in the NYU Agreement is a corporate obligation on behalf of Onyx Media Group International, Inc., thereby absolving him of personal liability. Plaintiff disputes this contention, arguing that Walton signed the NYU Agreement on behalf of Onyx Media Group International. The NYU Agreement, attached as exhibit A, clearly shows that defendant Walton executed the NYU Agreement on behalf of Onyx Media Group International, not Onyx Media Group International, Inc. (Notice of Mot. for Summ. J Ex. A.) However, defendant's argument lacks merit even if it were true. Even if he had executed the NYU Agreement on behalf of Onyx Media Group International, Inc., Walton would still be liable. Under New York case law, an individual who does business as a nonexistent corporation is personally liable in suits brought against the "corporation." See Animazing Entm't, Inc. v. Louis Lofredo Assocs., 88 F. Supp. 2d 265, 271 (S.D.N.Y. 2000); see also Poritzky v. Wachtel, 27 N.Y.S.2d 316, 317 (1941). The court in Animazing stated, "it would be inequitable to allow individuals who form contracts on behalf of nonexistent corporations to avoid liability because their misrepresentations resulted in a contractual defect." Id.; see also D&W Central Stations Alarm Co. v. Copymasters, Inc., 471 N.Y.S.2d 464, 467 (1983) ("A court cannot allow a litigant to take advantage of its own wrong — the nonpayment of its own franchise taxes."). Onyx Media Group International, Inc. was dissolved in March of 2001 for failure to pay franchise fees. (Mot. for Summ. J. at 2.) The NYU Agreement was entered into in 2002. Therefore, Walton would be liable for the debts he incurred on behalf of the corporation after its dissolution even if Onyx Media Group International, Inc. was the contracting party in the NYU Agreement as defendant claims. Defendant's first defense does not raise any genuine issue of material fact.

  Defendant also challenges the Court's subject matter jurisdiction over this action. Subject matter jurisdiction under diversity exists when the "matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332(a)(1). "Diversity jurisdiction does not exist unless each defendant is a citizen of a different state from each plaintiff." Owen Equip. & Erection Co. v. Kroger, 473 U.S. 373 (1978). For purposes of diversity, "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c)(1). Defendant Walton challenges diversity by simply stating that his "principal place of business is in the State of New York and there is therefore no diversity jurisdiction." (Answer ¶ 4.) This statement does not controvert plaintiff's assertion of diversity jurisdiction. Plaintiff does not deny Walton's presence in New York. (Pl.'s Statement of Facts ¶ 28.) In a motion for summary judgment, pursuant to Local Rule 56.1(c), "material facts sets forth in the statement . . . served by the moving party will be deemed to be admitted, unless controverted by the statement required to be served by the opposing party." Plaintiff's motion for summary judgment is unopposed and Walton has failed to contend the assertion of diversity with any specificity. Upon examination of all of the evidence on record, plaintiff's assertion of diversity jurisdiction is uncontroverted. Diversity therefore exists to support his Court's jurisdiction.

  For the forgoing reasons, plaintiff's unopposed motion for summary judgment is granted.

  SO ORDERED.

20041208

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