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Legendary Art, LLC v. Michael Godard

August 17, 2012

LEGENDARY ART, LLC
v.
MICHAEL GODARD, ET AL.



MEMORANDUM AND ORDER

Plaintiff in this case, Legendary Art, LLC ("Legendary Art"), brings claims of breach of contract and unjust enrichment against Defendants Michael Godard ("Godard"), Michael Godard Fine Art Enterprises, Inc. ("MGFA Enterprises"), Michael Godard Fine Art Associates ("MGFA Associates"), and Michael Godard LLC ("MG LLC"). Presently before the Court are Defendants' Motion for Summary Judgment (Doc. 36), Plaintiff's Response in Opposition to Defendants' Motion for Summary Judgment (Doc. 39), Defendants' Reply Brief in Support of its Motion for Summary Judgment (Doc. 42), and Plaintiff's Sur-reply (Doc. 45). After considering the briefing, along with the arguments presented at the hearing on July 27, 2012, for the reasons stated herein, Defendants' motion will be granted in part and denied in part.

I. FACTUAL BACKGROUND

Legendary Art was in the business of creating and marketing framed wall decor for commercial and residential purposes in both the retail and wholesale markets. (Sec. Am. Compl. ¶ 12.) Its focus was on sports, entertainment, and recreation themed artwork and novelty products. (Defs.' Facts ¶ 10; Pl.'s Resp. to Defs.' Facts ¶ 10.) During the events in question, Joel Fink ("Fink"), Neil Caplen, both "members" of the Legendary Art, and Larry Caplen, who was employed with the company, communicated with the Defendants on behalf of Legendary Art. (Defs.' Facts ¶¶ 2-3, 5; Pl.'s Resp. to Defs.' Facts ¶¶ 2-3, 5.)

Michael Godard is an artist whose works include alcohol and party themed paintings. (Defs.' Facts ¶ 12; Pl.'s Resp. to Defs.' Facts ¶ 12.) MGFA Enterprises and MGFA Associates are Nevada corporations formed in January 2007.*fn1 (Defs.' Facts ¶¶ 14, 15; Pl.'s Resp. to Defs.' Facts ¶¶ 14, 15.) MG LLC is a Nevada limited liability company formed in 2007. (Defs.' Facts ¶ 16; Pl.'s Resp. to Defs.' Facts ¶ 16.) At all times relevant to this dispute, Michael Godard was an officer/member of MGFA Enterprises, MGFA Associates, and MG LLC in varying capacities and held varying ownership interests in each entity. (Defs.' Facts ¶ 17; Pl.'s Resp. to Defs.' Facts ¶ 17.) During the relevant time period, Brandon Donofrio ("Donofrio") was employed to license and sell Godard artwork. (Defs.' Facts ¶ 20; Pl.'s Resp. to Defs.' Facts ¶ 20; Donofrio Dep. 59:6-61:25, Oct. 12, 2011.)

In late 2006, Legendary Art created the concept of incorporating posters of Godard artwork into "shadow boxes" that would surround the image with three dimensional objects. (Defs.' Facts ¶ 21; Pl.'s Resp. to Defs.' Facts ¶ 21.) Sometime in late 2006 or early 2007, Fink spoke via telephone to Godard regarding the shadow box idea, and Godard introduced Fink to Donofrio. (Defs.' Facts ¶¶ 22-23; Pl.'s Resp. to Defs.' Facts ¶¶ 22-23; Sec. Am. Compl. ¶¶ 19-20.) In late January 2007, Fink, Larry Caplen and Neil Caplen traveled to Las Vegas. (Defs.' Facts ¶ 24; Pl.'s Resp. to Defs.' Facts ¶ 24.) They met with Godard and Donofrio and presented prototypes of the shadow boxes. (Id.)

Shortly after returning to Philadelphia from Las Vegas, Fink, with Larry Caplen present, called Godard. (Fink Dep. 83:19-23; 87:12-88:2, Sept. 12, 2011.) The content of this conversation is in dispute: Legendary Art alleges that an oral contract was formed in which Godard agreed to personally perform certain marketing and promotional activities (the "Personal Performance Obligations"); Godard does not recall the specific content of the call and contends that the conversation was merely a part of the ongoing negotiations between the parties.

Subsequently, Donofrio sent Legendary Art a document entitled "Michael Godard Fine Art Enterprises, Inc. Deal Memorandum Worksheet" (the "Deal Memorandum"). (Defs.' Ex. J.) The Deal Memorandum included the following material terms:

a. Legendary Art was identified as the "Licensee";

b. the property to be licensed was identified as "Only Godard Posters that are current";

c. the products to be manufactured were "Godard Component Shadow Box Framing for Godard Poster Art";

d. the consideration was "$10,000 Upon Signing this agreement" and "$8,000 Monthly payments of $800 starting March 15th";

e. the term of the agreement was three years "with two extensions";

f. the royalty rate was "10%"; and

g. the territory was identified as "USA." (Id.) Finally, the Deal Memorandum contained the following language: "This is a binding contract and will proceed to a formal contract after the above terms have been accepted." (Id.) The Deal Memorandum was signed on behalf of Legendary Art on February 8, 2007 (id.), and an advance royalty check of $10,000 was sent to MGFA Enterprises (Defs.' Facts ¶ 36; Pl.'s Resp. to Defs.' Facts ¶ 36). Thereafter, Legendary Art began the manufacture and sale of shadowboxes containing Godard artwork. (Defs.' Facts ¶ 37; Pl.'s Resp. to Defs.' Facts ¶ 37.)

In on March 14, 2007, Donofrio sent Fink a draft of a more comprehensive licensing agreement for Legendary Art's review, listing MGFA Enterprises as the licensor. (Defs.' Ex. L.) The agreement contained expanded terms about ownership of intellectual property, sales reporting requirements, provisions for termination and default, and other standard license agreement terms. (Id.) The draft also contained an integration clause, which stated that the agreement was to be the "completed understanding and agreement of the parties with respect to the subject matter." (Id.)

On April 27, 2007, Donofrio emailed Fink stating that the advance royalty check of $10,000 was being returned to Legendary Art and that a new check would need to be made out to MGFA Associates. (Sec. Am. Compl. Ex. 4.) The email identified MGFA Associates as "the company that you guys license the artwork from," and instructed that "[a]ll checks for licensing go to this company." (Id.) Donofrio further indicated that "[t]he contract once we receive it back, will be also in Michael Godard Fine Art Associates [sic]." (Id.)

On May 30, 2007, Legendary Art returned a markup of the draft agreement containing proposed revisions. (Defs.' Exs. M, N.) Legendary Art's markup did not include any of the Personal Performance Obligations allegedly promised by Godard during the phone call with Fink and Larry Caplen and did not alter the integration clause. (Defs.' Ex. N.) During these negotiations, Legendary Art continued manufacturing and selling Godard shadowboxes under the terms of the Deal Memorandum.

Sometime in the summer of 2007, the relationship between Legendary Art and the Defendants began to deteriorate. Donofrio, Legendary Art's primary contact with Godard and his associated entities, left Godard's employ. (Godard Dep. 321:23 - 322:2, Oct. 12, 2011.) The evidence is disputed as to what happened next. Beginning in late July 2007, Fink sent a series of increasingly desperate correspondences to Donofrio, and then to Godard himself, in an attempt to finalize the licensing agreement and address other issues. (Pl.'s Exs. 37-42.) Godard testified that he never received any of Fink's correspondence, and that the fax numbers, phone numbers, and addresses Fink used were incorrect. (Godard Dep. 215:5 - 222:21, Oct. 11, 2011.) Both sides agreed that there was no further communication between Godard or anyone from the Godard entities and Legendary Art.

In 2008, Fink, who had been financing Legendary Art's business, decided not to continue investing in the company due, he testified, to the failed relationship with Godard and the lack of return on his investment. (Fink Dep. 158:6-160:10.) The parties dispute whether Legendary Art ceased to operate shortly thereafter, or whether it continued to operate under a new name.

II. STANDARD OF REVIEW

Summary judgment is appropriate where the moving party establishes that "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Levy v. Sterling Holding Co. LLC, 544 F.3d 493, 501 (3d Cir. 2008). Only a factual dispute that is both genuine and material will defeat a motion for summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505 (1986). A factual dispute is "genuine" if the evidence is such that a reasonable jury could possibly return a verdict for the non-movant. Id. at 248. A dispute is "material" if it would affect the outcome of the case under governing substantive law. Id.

The moving party bears the initial burden to demonstrate that there are no facts on record that support the non-moving party's position. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). If the moving party carries this burden, the non-moving party must then present specific facts showing the existence of a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348 (1986). At the summary judgment stage, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the non-movant. See Matsushita, 475 U.S. at 587. However, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. at 586. The non-moving ...


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