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LaChapelle v. Torres

United States District Court, S.D. New York

August 7, 2014

DAVID LACHAPELLE, an individual, and DAVID LACHAPELLE STUDIOS, INC., a New York Corporation, Plaintiffs,
v.
FRED TORRES, an individual d/b/a FRED TORRES COLLABORATIONS and FINE ART ACCOUNT, INC., a corporation d/b/a FRED TORRES COLLABORATIONS, and JAMES PARMENTER, an individual, Defendant. FINE ART ACCOUNT, INC., a New York Corporation d/b/a FRED TORRES COLLABORATIONS and FRED TORRES, Counterclaimants and Third-Party Plaintiffs,
v.
DAVID LACHAPELLE and DAVID LACHAPELLE STUDIOS, INC., a New York Corporation, GHRETTA HYND, KUMI TANIMURA, MICHAEL MOCKLER, KENDRA DACEY, VICKIE ARNDT, MICHELLE LEEDY, SIMONE ZUCHARELLO, PAUL KASMIN GALLERY, INC., RACINE BERKOW ASSOCIATES, INC., a New York Corporation, and MICHAEL ANDERSON, Counterclaim and Third-Party Defendants

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[Copyrighted Material Omitted]

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For David LaChapelle, an individual, David LaChapelle Studios, Inc., a New York corporation, Plaintiffs, Counter Defendants: Lauren J. Wachtler, Paul D. Montclare, LEAD ATTORNEYS, Mitchell Silberberg & Knupp LLP (NY), New York, NY; Bruce Allen Schoenberg, Schrader & Schoenberg, LLP, New York, NY.

For Fred Torres, an individual doing business as Fred Torres Collaborations, Defendant: Benjamin Suess, Bruce Allen Schoenberg, Scuraoer & Schoenberg, LLP, New York, NY.

For Fine Art Account, Inc., doing business as Fred Torres Collaborations, Defendant: Bruce Allen Schoenberg, Scuraoer & Schoenberg, LLP, New York, NY.

For MR Ira Richard Abel, Interested Party: Ira Richard Abel, LEAD ATTORNEY, Law Office of Ira R. Abel, New York, NY.

For Fred Torres, an individual, Counter Claimant, ThirdParty Plaintiff: Benjamin Suess, Bruce Allen Schoenberg, Scuraoer & Schoenberg, LLP, New York, NY.

For Fine Art Account, Inc., Counter Claimant, ThirdParty Plaintiff: Bruce Allen Schoenberg, Scuraoer & Schoenberg, LLP, New York, NY.

For James Parmenter, an individual, ThirdParty Plaintiff: Bruce Allen Schoenberg, Scuraoer & Schoenberg, LLP, New York, NY.

For Kumi Tanimura, Simone Zucharello, Michael Mockler, Ghretta Hynd, Kendra Dacey, Michelle Leedy, Vickie Arndt, ThirdParty Defendants: Lauren J. Wachtler, Paul D. Montclare, LEAD ATTORNEYS, Mitchell Silberberg & Knupp LLP (NY), New York, NY.

For Racine Berkow Associates, Inc., ThirdParty Defendant: Joel Alan Siegel, LEAD ATTORNEY, PRO HAC VICE, Joel A. Siegel, Esq., New York, NY.

For Paul Kasmin Gallery, Inc., ThirdParty Defendant: John B. Koegel, LEAD ATTORNEY, The Koegel Group LLP, New York, NY.

For Michael Anderson, ThirdParty Defendant: Debra Anne Mayer, Shatzkin & Mayer, P.C., New York, NY.

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OPINION & ORDER

VALERIE CAPRONI, United States District Judge.

This lawsuit, arising from the acrimonious demise of the relationship between an artist, Plaintiff David LaChapelle, and his agent, Defendant Fred Torres, was commenced on December 21, 2012. As the case currently stands after three amended complaints, LaChapelle and David LaChapelle Studios, Inc. (" DLC Studios" ) have claims against Torres and Fine Art Account, Inc., doing business as Fred Torres Collaborations (" FTC" ), for violations of the Lanham Act, 15 U.S.C. § 1125(a), and the Copyright Act, 17 U.S.C. § 106.

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Plaintiffs also have alleged a multitude of state statutory and common law claims against Defendants. Defendants have responded in kind and have asserted similar state law counterclaims against Plaintiffs. Defendants have also brought third-party state law claims against an art gallery, an art transporter, and numerous individuals.[1] The gallery has counterclaimed with state law claims against Defendants, and the transporter has asserted an interpleader claim regarding LaChapelle artwork in its possession.[2]

To make the case seem even more like a civil procedure law school hypothetical, on May 8, 2013, Plaintiffs moved to attach the proceeds from Torres's sale of an apartment in Manhattan in an amount up to $493,422.00. LaChapelle v. Torres, No. 12-CV-9362, (S.D.N.Y. May 8, 2013) (ECF No. 58). Plaintiffs posted a bond and an order of attachment was entered. LaChapelle v. Torres, No. 12-CV-9362, (S.D.N.Y. July 18, 2013) (ECF No. 113). That order was premised upon Plaintiffs' breach of contract claim relating to a $550,000 promissory note between Torres and LaChapelle.

This case was reassigned to this Court on March 10, 2014. On April 3, 2014, the Court sua sponte directed the proponents of any state law claim to describe by letter the basis for supplemental jurisdiction over that claim. After hearing from the parties, the Court issued an order to show cause directing the parties to address the existence of supplemental jurisdiction over certain of the state law claims. A show cause hearing was held on June 6, 2014, after which Plaintiffs submitted supplemental briefing.

The following claims are DISMISSED for lack of subject-matter jurisdiction: (1) Plaintiffs' Eleventh, Twelfth, Fourteenth, Fifteenth, and Nineteenth Causes of Action for breach of contract related to two promissory notes and numerous other torts; (2) Defendants' claims against Plaintiffs for repayment of personal expenses (Counterclaim ¶ 86); (3) Defendants' Eleventh, Fourteenth, and Sixteenth Causes of Action for money had and received, tortious interference, and unfair competition; (4) Defendants' Ninth, Tenth, Twelfth, and Fifteenth Causes of Action for conversion, replevin, trespass to chattels, and prima facie tort, except to the extent that any of these claims involve the theft or possession of LaChapelle artwork; (5) Defendants' Fifth, Sixth, Seventh, Eighth, and Eighteenth Causes of Action (Cause of Action 18 as against Kasmin Gallery only) for breach of contract, promissory estoppel, quantum meruit, unjust enrichment, and account stated; and (6) Kasmin Gallery's third-party counterclaims against Defendants in their entirety. Plaintiffs' application for a stay of dismissal of these claims is DENIED. Further, the order of attachment entered on July 18, 2013 (ECF No. 113) is VACATED.

FACTUAL BACKGROUND

As noted above, multiple parties bring a plethora of state law claims against numerous defendants. The Court will focus on only those facts relevant to Plaintiffs' federal

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claims and to the claims subject to dismissal for lack of subject-matter jurisdiction. With that limitation in mind, the relevant facts begin in late 2005 when LaChapelle retained Torres as his agent and manager. As LaChapelle's manager, Torres's duties included " contracting with third party artisans (including printers and framers) for the fabrication of LaChapelle's artwork." (Third Am Compl. ¶ 15.) Through the fabrication process, physical prints of LaChapelle's photographs were generated for sale, consignment, or exhibition. The parties' agreement provided that Torres was responsible for fabrication costs and that a certain percentage of the " retail sales price" was to be remitted to LaChapelle following each sale. ( Id. ¶ 18.) Torres was entitled to retain the balance of the purchase price that he negotiated with buyers. During the course of their relationship, Torres arranged a number of exhibitions of LaChapelle work, including at least one exhibition at Kasmin Gallery.

On November 15, 2012, LaChapelle terminated his business relationship with Torres for " material breach of the parties' agreement." ( Id. ¶ 33.)

A. Plaintiffs' Claims[3]

1. Federal Claims

Defendants' alleged violation of the parties' agreement forms the basis for Plaintiffs' federal copyright claim. Under their agreement, Defendants had " limited authority to reproduce artwork to fill sales orders, create exhibition prints and provide prints to consignees" for Plaintiffs' benefit. ( Id. ¶ 146.) But Defendants " were not authorized to reproduce or distribute LaChapelle's images for their own benefit or for purposes outside the scope of the artist/agent relationship." ( Id.) Plaintiffs cite specific instances of copies made " [i]n or about 2011 . . . without LaChapelle's consent or ratification . . . [and] for [Defendants'] own use." ( Id. ¶ 147.) These unauthorized fabrications included copies of ten specific works in which Plaintiffs claim an exclusive copyright. ( Id. ¶ ¶ 145, 147.) Defendants provided " some, perhaps all, of [those] copies to third parties, including but not limited to" a gallery in Montana for an exhibition. ( Id. ¶ ¶ 60, 147.)

Plaintiffs also contend that after the relationship was terminated, Defendants continued to hold themselves out as Plaintiffs' representatives in violation of federal trademark law. Plaintiffs have " sold and exhibited artwork under the LaChapelle name all over the world since 1995." ( Id. ¶ 45.) The name is thus " associated with a body of commercially valuable and aesthetically desirable artwork." ( Id.) Upon Defendants' termination, Plaintiffs " demanded that [Defendants] cease and desist in exploiting LaChapelle's work and holding themselves out to the public as Plaintiffs' representatives." ( Id. ¶ ¶ 42, 52.) Despite that demand, Defendants continued to list LaChapelle as a " Collaborations Artist" and to display LaChapelle exhibition catalogs for sale on the FTC website. Moreover, Defendants also offered LaChapelle works for sale and otherwise continued to claim on third-party websites that Torres represented LaChapelle. ( Id. ¶ 51.) Defendants also falsely held themselves out as LaChapelle's representatives to promote an exhibit of LaChapelle's work that Defendants had arranged in Montana. ( Id. ¶ 61.) These false representations allegedly " enhanced [Defendants'] status in the art world" because LaChapelle had been the most " renowned and respected" of Defendants' clients. ( Id. ¶ 55.) According

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to Plaintiffs, Defendants' misrepresentations " divert[ed] business" from LaChapelle to Torres and tarnished LaChapelle's reputation among consumers. ( Id. ¶ ¶ 56-59.) Defendants thus " wrongfully benefited [from] confusion in the marketplace as to [Defendants'] ...


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