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Magi XXI, Inc. v. Stato Della Cit Del Vaticano

United States District Court, E.D. New York

May 23, 2014

MAGI XXI, INC., Plaintiff,

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[Copyrighted Material Omitted]

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For Magi XXI, Inc., Plaintiff: Bernard Kobroff, LEAD ATTORNEY, Goetz Fitzpatrick LLP, New York, NY; Sheldon J. Fleishman, Sheldon J. Fleishman, New York, NY.

For Gerald P. Colapinto, Second Renaissance, LLC, Defendants: Sheldon J. Fleishman, Sheldon J. Fleishman, New York, NY.

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HON. WILLIAM F. KUNTZ, II, United States District Judge.

Magi XXI, Inc. (" Magi" or " Plaintiff" ) initiated this action by complaint filed July 17, 2007. Plaintiff filed a first amended complaint (" FAC" ) on October 29, 2007. Gerald P. Colapinto (" Colapinto" ) and Second Renaissance, LLC (" Second Renaissance" ) (collectively, " Defendants" )[1] now move this Court to dismiss the FAC in its entirety on the basis of claim preclusion ( res judicata ) and issue preclusion (collateral estoppel) in light of a prior litigation filed in the Southern District of New York (" Magi I " ).[2] Though the licensing programs and agreements at issue are purportedly different, the acts that induced Plaintiff to enter into both sets of sublicense agreements substantially overlap and involve the same claim or nucleus of operative fact. The allegations Plaintiff puts forward for its breach of contract action similarly overlap. Therefore, the fraud and breach of contract claims are barred by res judicata. Plaintiff's remaining claims for unjust enrichment, money had and received, and rescission are meritless and hereby dismissed.

I. Background

This case arises out of a long-standing dispute involving numerous parties and spanning multiple litigations, but the matter before the Court is now limited to Plaintiff and Defendants Colapinto and Second Renaissance. FAC at 1-2. On July 18, 2001, Plaintiff entered into seven sublicense agreements (" Library Sublicenses" ) with Defendants that gave Plaintiff the rights to sell certain categories of products that making use of Vatican State intellectual property rights. Id. ¶ 24-27. These sublicenses conferred the right to

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produce and market lines of merchandise inspired by items in the Vatican Library Collection, which included use of the name, logo, and seal of the Vatican Library Collection. Id. ¶ 24.

Prior to signing the July 18, 2001 agreement, Defendant Colapinto made numerous representations to Plaintiff that purportedly induced Plaintiff into entering into the sublicense agreements. Id. ¶ 27. These included representations that: " the Vatican Treasury licensing program was valid and in good standing; Colapinto and [Second Renaissance] had a strong working relationship with officials at the Holy See; each of the licensing programs was well managed and supported by the various agencies or instrumentalities of the Holy See; each sublicensee would have access to thousands of commercial quality images of the respective artwork which could be used for product development; and each sublicensee would have reasonable access to the respective artwork for research and product development purposes." Id. ¶ 27.

Plaintiff specifically alleges in its fraud claim (" Fraudulent Representations Made By All Defendants To Induce Magi To Enter Into Seven (7) Sublicense Agreements" ) that during negotiations for rights to the Library Sublicenses, Defendants " made numerous representations to [Claire] Mahr in order to induce Magi to enter into the Magi Sublicenses." Id. ¶ 37. One such instance was a May 1999 meeting where " Claire Mahr, the President of Magi, Neville Hockley and [Defendant] Colapinto met at the Grand Hyatt in New York City." Id. ¶ 37(a). At this meeting, Defendant Colapinto made numerous representations including that Colapinto " had a very close relationship with representatives and officials of the Holy See" and thus he " would be able to assist sublicensees in obtaining images from the Holy See of its artwork to be used for product development and would be able to arrange for sublicensees to access the Holy See's artwork to obtain their own images for product development." Id. ¶ 37(a)(i). Defendant Colapinto allegedly advised Plaintiff that he had been awarded the master license for the Vatican Library, which meant he would be in effect running all of the Holy See's licensing programs and therefore have substantial clout with the Holy See and be able to obtain reasonable access to the Holy See's artwork and representatives. Id. ¶ 36.

There were several other occasions where Defendants made representations that Plaintiff relied on in entering into the sublicense agreements, including a December 1999 meeting at the Convention Center in Anaheim, California, id. ¶ 37(b); a telephone conversation on August 2, 2000, id. ¶ 37(e); another telephone conversation on August 19, 2000, id.; a September 13, 2000 meeting at the Grand Hyatt Hotel in New York City, id. ¶ 37(f); a September 14, 2000 meeting with the Knights of Columbus in Connecticut, id. ¶ 37(h); a September 14, 2000 meeting at the offices of " KSH" in Great Neck, New York, id. ¶ 37(j); and two more meetings in New York City, on January 29 and 30, 2001, id. ¶ 37(m).

After these numerous meetings and telephone conversations, Plaintiff ultimately entered into agreements for the Library Sublicenses on July 18, 2001 for the following product categories: candles, chocolates, confections, flowers, stamps, wrapping paper/gift bags, and fundraising. Id. ¶ 26. The sublicense agreements bound Second Renaissance to assist Plaintiff in obtaining images of and access to the Vatican Library Collection artwork. Id. ¶ 70. In consideration for the sublicense rights, Magi paid a total sum of $425,000 in advance royalty payments to Second Renaissance.

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Id. ¶ 29. Additionally, in November 2001, Plaintiff obtained $500,000 and later another $700,000 in financing in reliance on Defendant Colapinto's numerous alleged misrepresentations. Id. ¶ 48-49.

However, soon after signing the agreement, Plaintiff encountered difficulty obtaining the images and Library access it was promised. On December 11 and 12, 2001, Plaintiff's representatives were supposed to meet with Defendant Colapinto at the Vatican Library to gain access to the artwork, but no commercially usable images were made available to Plaintiff and it was granted no access outside of the tour offered to the general public. Id. ¶ 73. After repeated attempts to obtain the commercially usable images of and access to the artwork it was promised, Plaintiff finally informed Defendants by way of a letter dated October 23, ...

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