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Jaclinn Pullman v. Alpha Media Publishing

July 31, 2012

JACLINN PULLMAN,
PLAINTIFF,
v.
ALPHA MEDIA PUBLISHING, INC. : (FORMALLY KNOWN AS) DENNIS PUBLISHING, INC., ALPHA MEDIA GROUP, INC., QUADRANGLE GROUP, LLC, STEPHEN COLVIN, PETER EZERSKY, AND DOES 1-20, DEFENDANTS.



The opinion of the court was delivered by: James C. Francis IV United States Magistrate Judge

(ECF)

MEMORANDUM : AND ORDER

The plaintiff, Jaclinn Pullman, proceeding pro se, brings this action against Alpha Media Publishing, Inc. and Alpha Media Group Inc. (collectively "Alpha Media") as well as other defendants, alleging common law fraud and violation of the New Jersey Consumer Fraud Act stemming from the branding and sale of timeshares in a resort in the Dominican Republic. Ms. Pullman now moves to disqualify Alpha Media's attorney, Marc Rachman, and his law firm, Davis & Gilbert LLP ("Davis & Gilbert"), for violation of Rules 3.1 and 3.3 of the New York Rules of Professional Conduct.

For the reasons set forth below, Ms. Pullman's motion is denied.

Background

A. The Underlying Action This dispute arises out of the failure of two resorts in the Dominican Republic, referred to by Ms. Pullman as "Maxim Cofresi" and "Maxim JD" (Complaint ("Compl."), ¶ 1), but identified by Alpha Media as "Sun Village Cofresi" and "Sun Village Juan Dolio" (the "Resorts"), respectively. (Defendants' Memorandum of Law in Opposition to Plaintiff's Motion to Disqualify Marc Rachman and Davis & Gilbert LLP as Counsel for Alpha Media Publishing, Inc. and Alpha Media Group Inc. ("Def. Memo.") at 2). In 2007, Alpha Media (formerly known as Dennis Publishing), the publisher of Maxim magazine (Compl., ¶¶ 21, 23), entered into a licensing agreement with the developer of the Resorts, Elliot Management, Inc. ("EMI") and related entities, to brand the Resorts with the Maxim name. (Defs. Memo. at 2). Induced by the Maxim branding, the plaintiff purchased two timeshares in the Cofresi resort for a total price of $124,620. (Compl., ¶¶ 5-6, 138). Despite large investments, the Resorts were never completed, and EMI defaulted on its mortgages, triggering a foreclosure of the properties. (Compl., ¶¶ 16-18). Due to the foreclosure, Ms. Pullman lost her investment, and in the underlying action she seeks to recover damages. (Compl., ¶¶ 17, 229, 276, 319, 323).

B. Previous Litigation The failure of the Resorts has spawned much litigation. While Ms. Pullman was not a party to any of these earlier lawsuits (Declaration of Marc J. Rachman dated June 20, 2012 ("Rachman Decl."), ¶ 4), the conduct of Mr. Rachman in three prior proceedings serves, in large part, as the basis of her motion. (Memorandum of Law in Support of Defendants' [sic] Motion to Disqualify Marc Rachman and Davis and Gilbert LLP as Counsel for Alpha Media Publishing, Inc. and Alpha Media Group Inc. ("Pl. Memo.") at 1-2).*fn1 Thus, an overview of those actions is warranted.

1. EMI Action In 2008, Alpha Media sued EMI in this district in a matter captioned Alpha Media Group Inc. v. EMI Resorts (S.V.G.) Inc., No. 08 Civ. 7944, over the use of the Maxim name to brand the Resorts (the "EMI Action"). (Rachman Decl., ¶¶ 5-6). In that case, Alpha Media, represented by Mr. Rachman, sought to enjoin EMI from continuing to use the Maxim name in connection with the Resorts due to violations of the trademark license agreement between Alpha Media and EMI (the "EMI Trademark License"). (Rachman Decl., ¶¶ 5-7). As part of its defense, EMI brought a motion to dismiss or alternatively for summary judgment, asserting that the EMI Trademark License was subject to the New York State Franchise Act (the "Franchise Act"), which would have allowed EMI to continue to use the Maxim mark. (Rachman Decl., ¶ 8). For its part, Alpha Media claimed the EMI Trademark License qualified for an exemption to the Franchise Act. (Rachman Decl., ¶ 8). The case was presided over by the Honorable Shira A. Scheindlin, U.S.D.J., who denied EMI's motions, and held that the EMI Trademark License did indeed qualify for an exemption. (Rachman Decl., ¶¶ 5, 12; Pl. Memo. at 9). Eventually, the case was voluntarily dismissed, and EMI agreed to refrain from further use of the Maxim marks. (Rachman Decl., ¶ 12).

Ms. Pullman makes a series of allegations in connection with the EMI Action. Among them are claims that Mr. Rachman made misrepresentations to Judge Scheindlin, suppressed critical documents, and submitted false declarations. (Pl. Memo. at 1). In particular, Ms. Pullman alleges that three declarations filed in the EMI Action, those of Alpha Media executives Barry Pincus and Mark Barak, and that of Stephen Colvin, a defendant here, lack proper affirmations and contain false statements upon which Judge Scheindlin relied when she denied EMI's Motion to Dismiss. (Pl. Memo. at 5-7, 18). Ms. Pullman also claims that Mr. Rachman concealed the ownership structure of the Resorts, further coloring Judge Scheindlin's ruling regarding the applicability of the Franchise Act. (Pl. Memo. at 10; Plaintiff's Reply Memorandum of Law in Support of Plaintiff's Motion to Disqualify Marc Rachman and the Davis and Gilbert Firm as Counsel for Alpha Media Defendants ("Pl. Reply") at 8). Essentially, Ms. Pullman claims that Judge Scheindlin's ruling was incorrect, and that Mr. Rachman's alleged misrepresentations were responsible for the error.

Additionally, she alleges that the EMI Action was a "collusive" one and that the purported misrepresentations were made with the goal of "placing misinformation in the public realm in order to 'prove' that Maxim was a mere 'passive licensor' of the Maxim brand and not an active participant in the fraud." (Pl. Memo. at 1, 3, 11-14). Ms. Pullman contends that this misinformation thwarts subsequent lawsuits against Alpha Media, including the present action. (Pl. Reply at 3, 7).

Defendants counsel summarily deny Ms. Pullman's allegations and point out that the court in the EMI action found them responsible for no wrongdoing. (Def. Memo. at 4).

2. Jamili Action Also in 2008, a plaintiff named Fely Jamili sued Alpha Media in the Superior Court of the State of California in connection to a timeshare interest she had purchased in one of the Resorts (the "Jamili Action"). (Def. Memo. at 4; Rachman Decl., ¶ 9). Ms. Pullman was not a party to the Jamili Action, but she did submit a declaration on behalf of the plaintiff. (Def. Memo. at 4). With respect to the Jamili Action, Ms. Pullman alleges that Mr. Rachman submitted a declaration by David Simcox, Alpha Media's General Counsel and Secretary, that contains statements contrary to statements in various declarations submitted in the EMI Action. (Pl. Memo. at 14). Counsel for the defendants also deny any wrongdoing during the Jamili Action. (Rachman Decl., ¶ 10).

3. Trademark Application On May 13, 2008, Mary Luria, a partner at Davis & Gilbert, submitted a filing with United States Patent and Trademark Office ("USPTO") on behalf of Alpha Media to register the mark "Maxim Hotel and Resort" (the "the Trademark Application"). (Rachman Decl., ¶ 9 & Exh. 1). The filing has since been abandoned. (Rachman Decl., ¶ 11). Ms. Pullman contends that Alpha Media was, in fact, contractually obligated to register this mark, an obligation which Mr. Rachman allegedly concealed from Judge Scheindlin. (Pl. Memo. at 14). She further alleges that Alpha Media intentionally did not fulfill this obligation in order to allow Derek Elliot, the head of EMI, to register the mark. (Pl. Memo. at 14). Mr. Elliot's registration of the mark could then serve as basis for the trademark infringement claims that Alpha Media filed against EMI in the (allegedly collusive) EMI Action. (Pl. Memo. at 14; Pl. Reply at 9). Counsel for the defendants deny any wrongdoing with respect to the Trademark Application. (Rachman Decl., ¶ 10).

On these facts Ms. Pullman seeks to disqualify Mr. Rachman and Davis & Gilbert, and asks the Court to refer the matter to the New York Bar for disciplinary action and to the New York Attorney General's office ...


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