United States District Court, S.D. New York
December 8, 2004.
UNIVERSAL TV DISTRIBUTION HOLDINGS LLC, Plaintiff,
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.
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.
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
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.
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