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Armin Augstein v. Anthony Ryan Leslie A/K/A Ryan Leslie and

October 17, 2012

ARMIN AUGSTEIN, PLAINTIFF,
v.
ANTHONY RYAN LESLIE A/K/A RYAN LESLIE AND NEXTSELECTION, INC., DEFENDANTS.



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

OPINION & ORDER

Armin Augstein brought this action to collect a reward from Ryan Leslie upon the return of Leslie's stolen laptop computer. The laptop was stolen and recovered in Germany and returned to Leslie in New York. The forum was the subject of an earlier Opinion and Order of this Court, familiarity with which is presumed. See Augstein v. Leslie, No. 11 CIV. 7512 HB, 2012 WL 77880 (S.D.N.Y. Jan. 10, 2012). Augstein now moves for summary judgment and for sanctions due to the alleged spoliation of evidence by Leslie. The motion is GRANTED in part and DENIED in part.

Background*fn1

Leslie is a musician and NextSelection a company that owns the trademark to Leslie's name and performances. While on tour in Germany, Leslie's laptop computer, external hard drive, and certain other belongings were stolen. The laptop contained valuable intellectual property, including music and videos related to Leslie's records and performances. In videos, news articles, and online postings, Leslie stated that he would pay $20,000-later increased to $1 million-to anyone who returned his property. After Augstein returned the laptop and hard drive, Leslie refused to pay the reward because, Leslie alleges, the intellectual property for which he valued the laptop was not present on the hard drive when it was returned. Leslie claims that he and several staff members tried to access the data on the hard drive but were unable to do so. Leslie sent the hard drive to the manufacturer, Avastor, which ultimately deleted the information prior to sending Leslie a replacement. The circumstances of the return of the hard drive and the meaning of Leslie's communications with Avastor are disputed. Augstein claims that Leslie, after he received correspondence from Augstein regarding the collection of the reward, caused the hard drive to be erased. Augstein now argues the Court should grant him summary judgment on the issues of the validity of the offer and of the reward and its subsequent acceptance and performance by Augstein when he returned the laptop to the police in Germany. In connection with this motion, Augstein moves pursuant to Rule 37 of the Federal Rules of Civil Procedure for the Court to, among other things, preclude certain affirmative defenses due to Leslie's alleged spoliation of the evidence on the hard drive.

Discussion

Augstein argues that Leslie made an offer of a reward for the return of his property and that Augstein accepted and fully performed when he presented the property to the police in Germany. Leslie responds that a reasonable person would not have understood the mention of the reward to be an offer of a unilateral contract, but instead would have understood it to be an advertisement-in essence, an invitation to negotiate. And even if it was an offer, Leslie continues, Augstein did not perform because he did not return the intellectual property, only the physical property. Whether or not the external hard drive, which was subsequently destroyed by Avastor, contained Leslie's intellectual property is a heavily disputed issue in this case. Augstein attempts to obviate the question through his request for sanctions against Leslie, specifically, that Leslie be precluded from arguing that the hard drive did not contain the data in question.

I.Summary Judgment

A district court may not grant summary judgment if there exists a genuine issue of material fact. See Cotarelo v. Vill. of Sleepy Hollow Police Dep't, 460 F.3d 247, 251 (2d Cir. 2006) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322--23 (1986)). "For summary judgment purposes, a 'genuine issue' exists where the evidence is such that a reasonable jury could decide in the non-moving party's favor." Cambridge Realty Co., LLC v. St. Paul Fire & Marine Ins. Co., 421 F. App'x 52, 53 (2d Cir. 2011) (internal citations omitted). "An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." Restatement (Second) of Contracts § 24 (1981). To evaluate the legitimacy of this offer, the court should consider "what an objective, reasonable person would have understood [Leslie's conduct] to convey." Leonard v. Pepsico, Inc., 88 F. Supp. 2d 116, 127 (S.D.N.Y. 1999).

Leslie mentioned the $20,000 reward for the return of his property in a YouTube video on October 24, 2010. Pl's 56.1 ¶ 13; Def's 56.1 ¶ 13. In the video, Leslie says, "I am offering a reward of $20,000." Id.; see also hoogtmz6, Ryan Leslie Gets His Laptop Stolen in Germany! Offering $20,000 Reward, YouTube (Oct. 26, 2010), http://www.youtube.com/watch?v= YvVPjZ-wvkE. He also implied that the lost property was worth much more than $20,000. Pl's 56.1 ¶ 13; Def's 56.1 ¶ 13. On November 6, 2010, a video was posted increasing the reward to $1,000,000. Pl's 56.1 ¶¶ 23, 24; Def's 56.1 ¶¶ 23, 24. At the end of the video, a message reads, "In the interest of retrieving the invaluable intellectual property contained on his laptop & hard drive, Mr. Leslie has increased the reward offer from $20,000 to $1,000,000 USD." RyanLeslieTV, Ryan Leslie-European Tour and Reward Announcement, YouTube (Nov. 6, 2010), http://www.youtube.com/watch?v=F8Jf0huEyNU. The increase of the reward was publicized on Leslie's Facebook and Twitter accounts, including a post on Twitter which read, "I'm absolutely continuing my Euro tour I raised the reward for my intellectual property to $1mm" and included a link to the video on YouTube. Pl's 56.1 ¶¶ 28, 31; Def's 56.1 ¶¶ 28, 31. News organizations also published reports on Leslie's reward offer, both in print and online. Pl's 56.1 ¶¶ 32, 33, 35; Def's 56.1 ¶¶ 32, 33, 35. Finally, Leslie was interviewed on MTV on November 11, 2010, and reiterated the $1,000,000 reward, saying "I got a million dollar reward for anybody that can return all my intellectual property to me." Pl's 56.1 ¶¶ 37; Def's 56.1 ¶¶ 37.

Leslie's videos and other activities together are best characterized as an offer for a reward. Leslie "sought to induce performance, unlike an invitation to negotiate [often an advertisement], which seeks a reciprocal promise." Leonard, 88 F. Supp. 2d at 125 (discussing Carlill v. Carbolic Smoke Ball Co., [1892] 1 Q.B. 256 (Eng.). Offers of reward are "intended to induce a potential offeree to perform a specific action." Id. at 126. A reasonable person viewing the video would understand that Leslie was seeking the return of his property and that by returning it, the bargain would be concluded. The increase of the reward from $20,000 to $1,000,000, the value of the property lost (in particular the unreleased album) and the news reports regarding the reward offer would lead a reasonable person to believe that Leslie was making an offer. As such, the video constitutes a valid offer and summary judgment is granted as to that issue. "[I]f a person chooses to make extravagant promises . . . he probably does so because it pays him to make them, and, if he has made them, the extravagance of the promises is no reason in law why he should not be bound by them." Id. at 125 (quoting Carbolic Smoke Ball, 1 Q.B. at 268 (Bowen, L.J.)).

Leslie attempt to persuade the court that the video is not an offer but an advertisement. Because advertisements, Leslie argues, are not generally considered offers, there is no contract. Def's Opp'n 13--14. He cites Leonard v. Pepsico, where the court did find an advertisement rather than an offer, to support that argument. However, unlike the television commercial in Leonard, Leslie's conduct in this case was meant to induce performance. Leslie was not seeking a promise from an individual who would return his belongings, rather he was seeking performance-the actual return of his property. In addition, his videos and other commentary cannot be reasonably understood as an invitation to negotiate because, similarly, Leslie was not soliciting help in finding his property, but the actual return itself. Leslie also relies on the fact that the offer was conveyed over YouTube (a website where many advertisements and promotional videos are shared, along with any number of other types of video) to undermine the legitimacy of the offer. Def's Opp'n 14--15. I do not find this reasoning persuasive. The forum for conveying the offer is not determinative,*fn2 but rather, the question is whether a reasonable person would have understood that Leslie made an offer of a reward. I conclude that they would.

II.Sanctions

Sanctions may be imposed for violating a court order, or if no court order is in place, sanctions may be imposed pursuant to the inherent power of the Court. See West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (citations omitted)). A party seeking sanctions based on spoliation of evidence must prove the following:

(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to the party's claim or defense such that a ...


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