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BANGKOK CRAFTS CORP. v. CAPITOLO DI SAN PIETRO IN VATICANO

July 6, 2005.

BANGKOK CRAFTS CORPORATION, Plaintiff/Counterclaim Defendant,
v.
CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant. CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant, v. TREASURES OF ST. PETER'S IN THE VATICAN LTD., et al., Additional Counterclaim Defendants.



The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

The defendant/counterclaimant Capitolo di San Pietro ("Capitolo") has moved under Rule 56, Fed.R.Civ.P., for summary judgment on its unjust enrichment claim against plaintiff Bangkok Crafts Corporation ("BCC") and counterclaim defendant Treasures of St. Peter's in the Vatican ("TSV"). BCC and TSV have moved under Rule 56 and Rules 12(c) and 9(b) to dismiss the unjust enrichment claim, Lanham Act claims, and New York unfair competition claim of Capitolo. For the reasons set forth below, the motion of Capitolo for partial summary judgment is granted, and the motion of BCC and TSV is denied in part.

  Prior Proceedings

  The prior proceedings in this action have been set forth in the companion order and opinion of this date, familiarity with which is assumed.

  The instant motions were heard and marked fully submitted on February 9, 2005. The Facts

  The facts are set forth in the statements of the parties and are not in dispute except as noted below.

  On or about May 8, 1996, representatives for BCC and Capitolo executed a license agreement under which Capitolo granted to BCC an exclusive right and license, effective as of February 8, 1996, to manufacture and sell reproductions of Capitolo's works of art (the "Reproductions"). (See Declaration of David Dunn dated January 24, 2005 ("Dunn Decl."), at Ex. A) (the "1996 License").

  BCC conducted its sublicensing activities through its affiliate company Treasures Of St. Peter's In The Vatican, Ltd. ("TSV"). TSV is a separate legal entity owned by BCC principal John Loata ("Loata"), to which BCC purported to assign certain rights under the 1996 License.

  On or about August 28, 2000, BCC allegedly obtained Capitolo's agreement to a new, vastly expanded license agreement with a term renewable at BCC's election for up to forty-five years (the "2000 License"). This 2000 license authorized the marketing and manufacturing of reproductions of works of art owned by the Capitolo and located in the Vatican Treasury Museum. The term of the 2000 Agreement was fifteen years with two fifteen-year options to renew, for a total of forty-five years. BCC has also contended that representatives of Capitolo requested and received cash payments in connection with the supposed negotiation and execution of the 2000 License. BCC alleges that it delivered the sum of $580,000 to Capitolo in exchange for the rights provided by the 2000 License. On two occasions, BCC allegedly wired funds to a bank in Rome, and on both occasions, Virgilio Noe (Archpriest of Capitolo) ("Noe") was offered a bank check, once in the amount of $500,000, and once in the amount of $480,000. These contentions are challenged by Capitolo. In granting Capitolo's motion for partial summary judgment on its claims against BCC and TSV for declaratory judgment and breach of contract, this Court concluded that "[t]here is no competent evidence of any payments to Capitolo on behalf of BCC in order to obtain the alleged 2000 License, or any request or demand for such payments from Capitolo. Loata's testimony is entirely hearsay." See Bangkok Crafts Corp. v. Capitolo di San Pietro in Vaticano, No. 03 Civ. 0015 (RWS), 2004 WL 1406076, at *5 (S.D.N.Y. June 23, 2004) (the "June 23 Opinion").

  During the period surrounding the execution of the 2000 License, Loata corresponded with Mr. Vittorio Caporale and Mr. Giuseppe Guarino, both of whom represented that they were authorized to deal with BCC on behalf of Capitolo with respect to the issuance of the 2000 License and the renewal of the 1996 License. This Court has previously concluded that BCC has failed to submit any admissible evidence to support its claim that individuals acting on its behalf undertook negotiations with respect to the 2000 License. See id.

  The 2000 License was executed by Loata on behalf of BCC and Loata submitted certified sales reports on or about June 30, 2000, December 7, 2000, February 9, 2001, and March 30, 2001.

  The signatures of Noe and Monsignor Giuseppe Bordin (then Camerlengo Maggiore), the individuals that have been alleged to have signed the 2000 License on behalf of Capitolo, have been determined to be forgeries and the 2000 License has been declared void ab initio. Id. at *6.

  BCC allegedly received a letter dated January 2, 2001, from Cardinal Angelo Sodano ("Sodano"), who was and is currently the Secretary of State of the Vatican and the second highest ranking member of the government of Vatican City. The letter represented that the 2000 License was valid and that it ended in 2045. It also stated that the 2000 License would commence upon the expiration of the 1996 License on June 21, 2001.

  BCC received a letter dated January 8, 2001 from Cardinal Camillo Ruini ("Ruini"), the Vicar of the Diocese of Rome, which stated that there were unresolved issues within the Vatican with respect to the 2000 License. The letter advised BCC to continue to operate under the 1996 License through June 21, 2001, at which time the 2000 License would be operative.

  By letter dated February 2, 2001, Loata informed Sodano that per Sodano's instructions, BCC would continue to operate under the 1996 License. Loata's letter acknowledged Sodano's statement in his letter of January 2, 2001 that the 1996 License would remain in effect until June 21, 2001, at which time the 2000 agreement would supersede the 1996 License and remain in effect until 2045.

  By letter dated February 2, 2001, BCC informed Ruini that per Ruini's advice, BCC would continue to operate under the 1996 License pending resolution of the issues concerning the 2000 License. BCC apparently relied on Ruini's apparent authority with respect to the propriety of continuing to operate pursuant to the terms of the 1996 License. The authenticity of Ruini's signature has not been verified.

  On February 7, 2001, the 1996 License terminated at the end of its initial five-year term. See Bangkok Crafts, 2004 WL 1406076, at *6. The June 23 Opinion determined that Capitolo properly terminated the 1996 License as a result of BCC's repeated material breaches of the agreement. Id. at *7-8.

  BCC and TSV continued their sublicensing activities notwithstanding the termination of the 1996 License on February 7, 2001. Since September 2000, BCC and TSV have received royalty payments and fees from purported sublicenses for sales activities that took place both before and ...


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