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Allgood Entertainment, Inc. v. Dileo Entertainment and Touring

June 29, 2010

ALLGOOD ENTERTAINMENT, INC. AND ALLGOOD CONCERTS, LLC, PLAINTIFFS,
v.
DILEO ENTERTAINMENT AND TOURING, INC., FRANK DILEO, ANSHUTZ ENTERTAINMENT GROUP, AEG LIVE, LLC, AEG LIVE NY, LLC, AND JOHN BRANCA AND JOHN MCCLAIN, SPECIAL ADMINISTRATORS OF THE ESTATE OF MICHAEL JACKSON, DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION & ORDER

This case is about whether or not Michael Jackson, through his alleged manager Frank Dileo, agreed to perform a concert with the plaintiffs, AllGood Entertainment, Inc. and AllGood Concerts, LLC, and then later reneged on this agreement in order to perform a different concert with the defendants Anshutz Entertainment Group, AEG Live, LLC, and AEG Live NY, LLC. Plaintiffs allege breach of contract, promissory estoppel, and fraud by Frank Dileo and his management company, Dileo Entertainment and Touring, Inc., and allege tortious interference of contract on the part of Anshutz Entertainment Group and the other AEG entities; Plaintiffs also seek a permanent injunction. Both sets of defendants have moved to dismiss for failure to state a claim. For the reasons below, the tortious interference, fraud, and permanent injunction claims are DISMISSED.

I. BACKGROUND

Plaintiffs AllGood Entertainment, Inc. and AllGood Concerts, LLC ("Plaintiffs" or "AllGood") are New Jersey corporations that "promote live events, including but not limited to concerts, festivals and personal appearances, featuring internationally known performing artists." Am. Compl. ¶¶ 1-2, 14. Defendants John Branca and John McClain ("Jackson Estate Defendants") are Special Administrators of the Estate of Michael Jackson, the famous musician who died in June of 2009. Id. ¶¶ 5-7. Defendants Anshutz Entertainment Group, AEG Live, LLC, and AEG Live NY, LLC (the "AEG Defendants") are all organized under Delaware law and are located in New York and Los Angeles, California respectively, and are "one of the leading providers of live entertainment and sports in the world." Id. ¶¶ 3-4, 17. Finally, Dileo Entertainment and Touring, Inc. is a Tennessee corporation with an office in Nashville and Frank Dileo, a Tennessee resident, is the CEO of Dileo Entertainment as well as the alleged personal manager, or former manager, of Michael Jackson (together the "Dileo Defendants"). Id. ¶¶ 8-9, 16.

On October 21, 2008, Patrick Allocco, CEO of AllGood, flew to Las Vegas, Nevada for a meeting with Joe Jackson, father of the singer, and spoke to him of AllGood's desire to promote a concert featuring the return of Jackson*fn1, who had not toured in many years, or a potential "Jackson Family"*fn2 reunion concert with Michael Jackson. Am. Compl. ¶¶ 18-19. Joe Jackson allegedly told Allocco to reach out to Frank Dileo, as he was Jackson's manager; Allocco also presumed this to be true based on general industry knowledge of Dileo's representation of the musician. Id. ¶¶ 20-21. On November 20, 2008, Allocco met with Dileo and another Dileo Entertainment representative at a restaurant in Nashville, Tennessee, where he discussed his desire to promote a concert with Jackson and his family. Id. ¶ 24-26. Dileo allegedly confirmed that he was the manager of Michael Jackson, "could make the [e]vent a reality," and said that he already spoke to Jackson about the idea; Jackson was supposedly very interested. Id. ¶¶ 27-28. The next day, Allocco had a second meeting with Dileo, this time at the Dileo Entertainment offices in Nashville. Id. ¶ 29. There, he allegedly asked Dileo if "he had the authority and the power to bind Jackson and/or the Jackson Family to an agreement requiring them to perform," and Dileo claimed that he did. Id. ¶¶ 30-31. AllGood asserts it was never notified by Jackson, Dileo, or any other representative that Dileo was not Michael Jackson's manager or unauthorized to act on his behalf.*fn3 Am. Compl. ¶ 48.

As result of these meetings, Plaintiffs and the Dileo Defendants allegedly entered into two agreements. First, pursuant to the "Binder Agreement," AllGood would promote a concert featuring Jackson and the Jackson Family tentatively titled "The Jackson Family Reunion: A Concert for the World," in consideration for $24 million. Am. Compl. ¶ 50. It was allegedly signed by the Dileo Defendants "on behalf of" Michael Jackson and the Jackson Family. Id. ¶ 50-51. The actual three-page agreement, not attached to either the original nor amended complaint, does not include the aforementioned concert title, and actually states, inter alia, that it is a "letter of intent. as to the essential terms of the Live Performance of the Jackson Family." Decl. of Caroline J. Heller (Heller Decl.), Ex. B at 1.*fn4 It sets out $24 million as the "Artist Price," and required that a $2 million partial payment be made by AllGood to Dileo Entertainment on or before December 31, 2008 "to secure the Jacksons and show good faith," as well as another $400,000 that would be due "immediately upon written confirmation of this deal." Id. ¶ 3(A). The Binder Agreement also provided "120 days to acquirer [sic] written confirmation from all family members involved including Michael Jackson." Id. ¶ 3(B). The Binder Agreement also contains a number of conditions, including "Pre-Closing Covenants," confidentiality and non-competition clauses, and an indemnification clause. It further states "[u]pon receipt of a signed copy of this letter, then we will proceed with full acting contract Agreement at later agreeable date." Id. at 3. It is signed by Allocco for "PURCHASER. AllGood Entertainment Inc.", and by Frank Dileo for "Dileo Enterainment & Touring Inc." Id. at 3. Contrary to the representations in the Amended Complaint, nowhere in the Binder Agreement does it state that Dileo or the Dileo Defendants signed "on behalf of" Michael Jackson or the Jackson Family, but it does state that "[t]his contract constitutes a complete and binding agreement between the PURCHASER and the Jacksons (ARTIST/S)." Id. at 3.

The second document, the "NDA Agreement," was made on or around November 26, 2008, and allegedly provided for an eighteen month confidentiality and nondisclosure agreement between "AllGood, Dileo and Dileo Entertainment, acting as duly authorized agents and representatives for Jackson and/or the Jackson Family." Am. Compl. ¶ 58. Plaintiffs also allege that it "incorporated and referenced the subject matter of the Binder Agreement" and that "the Dileo Defendants agreed in the NDA Agreement to apply New York law and to submit to the jurisdiction of New York State for purposes of any breach of said agreements." Id. ¶ 59. Like the Binder Agreement, the actual document referenced here was not attached to either complaint.

It is not signed by "AllGood, Dileo and Dileo Entertainment," but rather by Allocco, Dileo, and four other third-party individuals, with no indication that any signed for a particular corporate entity like AllGood or Dileo Entertainment. Heller Decl., Ex. C at 3. Under "SYNOPSIS," the agreement states that "[t]he undersigned individual acknowledges that the information contained in the Dileo Entertainment and Touring Agreement. dated November 25, 2008 by and between AllGood Concerts, LLC. and Dileo Entertainmnet and Touring, Inc. is confidential." Id. ¶ 1. It further states that the "purpose of disclosure" is "presenting the undersigned individual with certain valuable, confidential, and propriety information." Id. ¶ 2. The term is for eighteen months and does appear to include confidentiality and non-compete clauses. See id. ¶¶ 4,11, 16. The agreement states that it will be "governed by and construed in accordance with the laws of the State of New York," and that the Agreement as a whole "supersedes all previous agreements between the parties regarding Confidential Information and Non-Circumvention," but says nothing specifically about incorporation with the Binder Agreement. Id. ¶¶ 13-14.

Plaintiffs claim that, in the months following these agreements, Allocco and AllGood representatives worked to put together the allegedly agreed-upon concert, and incurred significant expenses doing so. Am. Compl. ¶¶ 33-35. During this time, Allocco also claims to have spoken regularly with Dileo and "almost daily" with Mark Lamicka, one of Dileo's business associates and one of the third-party signatories of the NDA Agreement. Id. ¶ 36. Dileo allegedly continued to represent that he was a member of "Jackson's small inner circle of advisors, that Jackson wanted to do a concert, that he would produce Jackson, and that the concert would happen." Id. ¶ 37. Plaintiffs claim that "at some point," it became clear that the Dileo Defendants were not "acting in good faith" and "could or would not follow through on their obligations under the parties' agreements." Id. ¶ 39. Thereafter, AllGood allegedly learned that Jackson and Dileo "secretly teamed up" with the AEG Defendants to produce a concert or series of concerts in London, along with "perhaps" a pay-per-view Jackson Family reunion event. Id. ¶ 40. Plaintiffs claim, "upon information and belief," that AEG knew of a deal between Dileo and AllGood, but due to "dominance and power in the live performance industry, coerced and/or induced Dileo and Jackson to disregard the agreements with AllGood and to work with it instead." Id. ¶ 41.

Based on these allegations, AllGood asserts causes of action for breach of contract, promissory estoppel, fraud, tortious interference with contract, as well as a permanent injunction against any concert by Jackson during the alleged "blackout period." Plaintiff seeks $300 million in compensatory damages, $300 million in punitive damages, and attorneys' fees. The AEG Defendants and the Dileo Defendants have both moved to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

II. DISCUSSION

A. Legal Standard

A complaint will be dismissed under Rule 12(b)(6) if there is a "failure to state a claim upon which relief can be granted." Fed.R.Civ.P.12(b)(6). To survive a motion to dismiss on this ground, a plaintiff must "plead enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A facially plausible claim is one where "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Where the court finds well-pleaded factual allegations, it should assume their veracity and determine whether they "plausibly give rise to an entitlement to relief." Id. at 1950. A court may consider "undisputed documents, such as a written contract attached to, or incorporated by reference in, the complaint," Chapman v. New York State Div. for Youth, 546 F.3d 230, 234 (2d Cir. 2008) (internal citations and quotations omitted); see also Sira v. Morton, 380 F.3d 57, ...


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