INDEX NO. 654420/2013
FILED: NEW YORK COUNTY CLERK 11/06/2014 11:54 PM
NYSCEF DOC. NO. 121
RECEIVED NYSCEF: 11/06/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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INDEX NO. 654420/2013
OKSANA BAIUL and OKSANA, LTD
Justice Charles E. Ramos
Part 53
Plaintiffs,
-againstNBCUNIVERSAL MEDIA, LLC and
SONAR ENTERTAINMENT, INC.
Defendants.
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I.
MEMORANDUM OF LAW IN SUPPORT
OF PLAINTIFFS' MOTION FOR LEAVE
TO REARGUE DEFENDANT SONAR
ENTERTAINMENT, INC.'s
MOTION TO DISMISS PLAINTIFF'S
FIRST AMENDED COMPLAINT
(Motion Sequence # 003)
PRELIMINARY STATEMENT
Plaintiffs, by their attorney Raymond J. Markovich, Esq. hereby submit this
Memorandum of Law in Support of Plaintiffs' Motion for Leave to Reargue Defendant Sonar
Entertainment, Inc.'s ("Sonar") Motion to Dismiss Plaintiffs' First Amended Complaint ("FAC")
pursuant to CPLR §2221(d). Plaintiffs shall also be shortly filing a motion pursuant to CPLR
§2221(e) for leave to renew and a motion pursuant to CPLR §3025(b) for leave to amend their
FAC.
II.
PROCEDURAL HISTORY
Plaintiffs filed their Summons and Complaint on December 23, 2014 and FAC on
December 24, 2013. (Ex. 13). Sonar filed its Notice of Motion of Defendant Sonar
Entertainment, Inc. to Dismiss the FAC, Sonar's Memorandum of Law, Affirmation, Exhibits,
Request for Judicial Intervention and Addendum on February 14, 2014 ("Sonar's Motion"). (Ex.
1-5). The parties stipulated to adjourn the return date for Sonar's Motion to March 24, 2014. (Ex.
6-7). Plaintiffs timely filed their opposition to Sonar's Motion on March 17, 2014. (Ex. 8-14).
Sonar timely filed its reply on March 21, 2014. (Ex. 15). Sonar's Motion was fully briefed on
March 21, 2014 and oral argument was held before the Honorable Charles E. Ramos on April 16,
2014. (Ex. 1-17).
On or about September 17, 2014, Sonar served a letter upon this Court and annexed a
May 6, 2014 decision in Baiul v. William Morris Agency, LLC, et al., No. 13 Civ. 8683 (KBF),
2014 WL 1804526, at *6 (S.D.N.Y. May 6, 2014) ("WME") asserting that WME has "the same
facts" as the action before this Court. (Ex. 18). On September 22, 2014, Plaintiffs replied to the
Sonar letter and informed this Court that WME is currently on appeal to the United States Court
of Appeals for the Second Circuit in Baiul v. William Morris Agency, LLC, et al., Case: 14-1837.
(Ex. 19). Plaintiffs annexed to the letter a copy of Plaintiff Oksana Baiul's ("Plaintiff") timely
filed appellate brief. (Ex. 20).
On October 3, 2014, this Court issued a Memorandum Decision and Order ("Order")
finding that Plaintiffs have standing to bring this action but dismissing Plaintiffs' FAC for being
time-barred. (Ex. 21, p. 4-5, 7-9). This Court ruled that this action for breach of contract and/or
fraud should have been commenced by October 2013. (Ex. 21, p. 7-8; Ex. 18). Sonar filed a
Notice of Entry on October 8, 2014. (Ex. 24). On October 31, 2014, Plaintiffs timely filed their
Notice of Appeal, Pre-Argument Statement and copies of the Notice of Entry and Memorandum
Decision and Order. (Ex. 22-24). Plaintiffs filed their Affidavit of Service on November 1, 2014.
(Ex. 25).
III.
FACTS
On May 11, 1994, Olympic Champions Limited, a British Virgin Islands company
("OCL") entered into a contract ("PK Contract") with RHI Entertainment, Inc., the predecessor
to Sonar for the production and distribution of a motion picture entitled "A Promise Kept: The
Oksana Baiul Story" ("The Oksana Baiul Story") based upon the life story of Plaintiff. (Ex. 9, ¶5;
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Ex. 14). Oksana, LTD is Plaintiff's current loan-out company ("OLTD"). (Ex. 13, ¶2). When
Sonar executed the agreement with OCL, it caused Plaintiff to also concurrently execute a Life
Story Release ("Life Story Release"). (Ex. 11; Ex. 9, ¶8).
At the time of filing the complaint in this action, Plaintiffs reasonably believed that
Plaintiff was primarily a victim of fraudulent concealment by William Morris Endeavor
Entertainment, LLC, successor in interest to one or more William Morris entities, Plaintiff's
fiduciaries and talent agents from May 9, 1994 - 2000 ("WME"), Wallin, Simon & Black,
Plaintiff's fiduciaries, business managers, financial advisors and accountants from March 1997 to
January 2012 ("WSB"), OCL, Galina Zmievskaya, Victor Petrenko, Nina Petrenko and Joseph
Lemire as concerns discovery of everything relevant to the PK Contract including accounting for
royalties and residuals ("Fraudulent Concealment"). (Ex. 13, ¶¶37, 87; Ex. 9, ¶¶1-4, 6-7, 19-23).
As a result of such Fraudulent Concealment, Plaintiff only reasonably discovered that the Picture
was in a position to be paying residuals (and that she was owed monies by Sonar) on June 28,
2013, promptly filed a claim with the Screen Actor's Guild ("SAG") for SAG residuals and filed
this action against Sonar within six months of discovery. (Ex. 9, ¶23; Ex. 13).
At the time that Sonar's Motion was fully briefed on March 21, 2014 and at the time of
oral argument before the Honorable Charles E. Ramos on Sonar's Motion on April 16, 2014,
Plaintiffs did not reasonably believe that Sonar had committed fraud against Plaintiff(s),
Plaintiffs did not have knowledge of facts sufficient to support a fraud claim against Sonar and
Plaintiffs had not asserted a claim for fraud against Sonar. (Ex. 1-17).
IV.
STANDARD OF REVIEW FOR MOTION TO DISMISS UNDER CPLR § 3211
The Court of Appeals stated the following in Leon v. Martinez:
"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a
liberal construction (see, CPLR 3026). We accept the facts as alleged in the
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complaint as true, accord plaintiffs the benefit of every possible favorable
inference, and determine only whether the facts as alleged fit within any
cognizable legal theory (Morone v. Morone, 50 N.Y.2d 481, 484, 429 N.Y.S.2d
592, 413 N.E.2d 1154; Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 634, 389
N.Y.S.2d 314, 357 N.E.2d 970). Under CPLR 3211(a)(1), a dismissal is
warranted only if the documentary evidence submitted conclusively establishes a
defense to the asserted claims as a matter of law (see, e.g., Heaney v. Purdy, 29
N.Y.2d 157, 324 N.Y.S.2d 47, 272 N.E.2d 550). In assessing a motion under
CPLR 3211(a)(7), however, a court may freely consider affidavits submitted by
the plaintiff to remedy any defects in the complaint (Rovello v. Orofino Realty
Co., supra, 40 N.Y.2d at 635, 389 N.Y.S.2d 314, 357 N.E.2d 970) and “the
criterion is whether the proponent of the pleading has a cause of action, not
whether he has stated one” (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401
N.Y.S.2d 182, 372 N.E.2d 17; Rovello v. Orofino Realty Co., supra, 40 N.Y.2d at
636, 389 N.Y.S.2d 314, 357 N.E.2d 970)." Leon v. Martinez, 84 N.Y.2d 83, 8788, 638 N.E.2d 511, 614 N.Y.S.2d 972 (1994).
V.
ARGUMENT
Plaintiffs respectfully believe that this Court overlooked certain matters of fact (already
in the record on April 16, 2014) and law in its Order and pursuant to CPLR §2221(d), Plaintiffs
request leave of this Court to reargue. (Ex. 1-17). Plaintiffs do not include any newly discovered
facts in this Argument for this Motion For Leave To Reargue.
In the Order, this Court held that whether under the discovery rule governing contract
claims or under the discovery rule concerning fraud claims, the two-year limitations period
began to run in October 2011 and expired two years later in October 2013 and thus Plaintiffs'
breach of contract claim is time-barred. (Ex. 21, p. 7-8).
A.
Continuing Performance
"It is well settled that, “where a contract provides for continuing performance over a
period of time, each breach may begin the running of the statute [of limitations] anew such that
accrual occurs continuously and plaintiffs may assert claims for damages occurring up to six
years prior to filing of the suit” (Airco Alloys Div. v. Niagara Mohawk Power Corp., 76 A.D.2d
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68, 80, 430 N.Y.S.2d 179; see Westchester County Correction Officers Benevolent Assn., Inc. v.
County of Westchester, 65 A.D.3d 1226, 1228, 885 N.Y.S.2d 728)." Inter-Community Memorial
Hosp. of Newfane, Inc. v. Hamilton Wharton Group, Inc., 93 A.D.3d 1176, 1178 (4th Dept.
2012). In the Plaintiff's FAC and in oral argument before this Court on April 16, 2014
(concerning royalties), Plaintiffs did not claim damages from Sonar for breach of contract as
concerns the $500,000 in fixed compensation that was paid to legal strangers but rather Plaintiffs
only claimed damages from Sonar for breach of contract as concerns residuals and royalties, both
of which are in perpetuity, requiring continuing performance by Sonar. (Ex. 13, ¶¶37, 83-94; Ex.
17, p. 24:12 - 25:9).
It appears that this Court acknowledged that Plaintiffs' claim for royalties would be
treated differently for statute of limitations purposes under the law when this Court stated during
oral argument that "[t]he claim for royalties is something else" in response to Plaintiffs' counsel's
assertion that "the royalties are in perpetuity". (Ex. 17, p. 24:12-15). However, the Order appears
to have overlooked the "continuing performance" required of Sonar in connection with Plaintiffs'
breach of contract claim for royalties and residuals which are in perpetuity. (Ex. 21, p. 7-8; Ex.
13, ¶¶37, 83-94; Ex. 17, p. 24:12 - 25:9).
Plaintiffs' claim for breach of contract concerning residuals and royalties cannot be
completely time-barred nor should it have been dismissed since the facts as alleged, accepted as
true, fit within a "cognizable legal theory" that accrual occurs continuously and Plaintiff has
sufficiently pled that the The Oksana Baiul Story still does generate gross revenue through the
date of the complaint in this action and that Sonar's non-payment to Plaintiff is a continuing
breach of the PK Contract since continuing performance by Sonar is required under the PK
Contract. Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994) quoting Morone v. Morone, 50 N.Y.2d
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481, 484 (1988); Inter-Community at 1178-1179; (Ex. 13, ¶¶37, 83-94; Ex. 17, p. 24:12 - 25:9;
Ex. 14, Sec. 2).1
While this Court held that whether under the discovery rule governing contract claims or
under the discovery rule concerning fraud claims, the two-year limitations period began to run in
October 2011 and expired two years later in October 2013 and thus Plaintiffs' breach of contract
claim is time-barred, as explained in Section V.B. infra, Plaintiffs' claim for breach of contract
accrued no earlier than June 28, 2013 when Plaintiff discovered that the The Oksana Baiul Story
was in a position to be paying residuals (most films don't pay residuals or make a profit) and she
could allege damages. (Ex. 21, p. 7-8; Ex. 9, ¶23; Section V.B. infra). This would mean that
Plaintiffs actually have six years from June 28, 2013 (or at least two years from June 28, 2013 if
we apply this Court's stated two year discovery rule) within which to bring their breach of
contract claims and the claim is timely for all amounts due in residuals and royalties from Sonar
since production of The Oksana Baiul Story in 1994 and not just amounts due in residuals and
royalties from Sonar for the period within six years of filing Plaintiffs' complaint.
The facts as alleged in the FAC, accepted as true, under both "cognizable legal" theories
of "continuing performance" and date of accrual based upon "Plaintiffs' ability to allege
damages",2 dictate that Sonar's Motion should not have been granted since Plaintiffs' breach of
1
While Plaintiffs do not agree with Sonar, for the reasons set forth below, concerning an action
for any payments owed prior to six years before the commencement of this action being timebarred, even Sonar concedes that "the instant action is unavoidably time barred with respect to
any payments purportedly owed prior to six years before commencement of this action." (Ex. 13,
¶37; Ex. 3, p. 7). Such concession by Sonar necessarily means that any payments purportedly
owed within six years before commencement of this action would not in any event be time
barred and this action should not have been dismissed. (Ex. 13, ¶37; Ex. 3, p. 7).
2
Both of which theories are consistent with the facts as alleged in the FAC, Plaintiffs'
Opposition to Sonar's Motion concerning the discovery of the fraud, Oral Argument on Sonar's
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contract claim is not time-barred and the Order concerning dismissal of Plaintiffs' breach of
contract claim should be reversed or vacated. Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994)
quoting Morone v. Morone, 50 N.Y.2d 481, 484 (1988); Inter-Community at 1178-1179; A & T
at 1437; Ely-Cruikshank Co., Inc. v. Bank of Montreal, 81 N.Y.2d 399, 407-408 (1993); (Ex. 13,
¶¶37, 83-94; Ex. 17, p. 24:12 - 25:9; Ex. 14, Sec. 2).
B.
Claims Accrue When Levied Or A Refusal To Pay
In Inter-Community, the Fourth Department held that as damages are an essential
component of a breach of contract claim, the plaintiffs could not allege damages for the pro rata
deficit assessments until those assessments were actually levied against them and plaintiffs had
six years from the date of the levy in which to commence suit. Inter-Community at 1179; State of
NY, Workers' Compensation Bd. v. A & T Healthcare, LLC 85 A.D.3d 1436, 1437 (3d Dept
2011). Similarly, the Third Department in A & T held that the defendant did not establish as a
matter of law that the statute of limitations bars plaintiff's claims and that no breach arose until
the defendant refused to pay the assessment levied in 2008. A & T at 1437-1438.
These recent Third (2011) and Fourth Department (2012) decisions, that have not been
overruled, largely follow the law and logic of the 1993 dissenting opinion of Judge Hancock of
the Court of Appeals in Ely-Cruikshank where he stated "The Appellate Division's analysis
follows the established proposition that in the absence of allegations of fact showing damage, a
complaint for breach of contract must be dismissed as insufficient (see, Reade v. Sullivan, 259
App.Div. 229, 18 N.Y.S.2d 841; Gordon v. De Laurentiis Corp., 141 A.D.2d 435, 529 N.Y.S.2d
777 [“the pleadings must set forth facts showing the damage upon which the action is based”
(id., at 436, 529 N.Y.S.2d 777) ]; Calabria v. Associated Hosp. Serv., 459 F.Supp. 946, 949
Motion and/or the PK Contract. (Ex. 13, ¶¶37, 83-94; Ex. 8, p. 9-11; Ex. 17, p. 24:12 - 25:9; Ex.
14, Sec. 2).
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[S.D.N.Y.] [applying New York law]).* The Appellate Division's reasoning and the result it
reaches are consistent with other decisions (see, Bauer v. Roman Catholic Diocese, 91 A.D.2d
730, 731, 457 N.Y.S.2d 1003 [action for breach of agreement to pay retirement benefits into
investment fund during plaintiff's employment did not accrue until plaintiff's termination or later
when benefits became due]; Brooklyn Union Gas Co. v. *408 Interboro Surface Co., 87 A.D.2d
833, 449 N.Y.S.2d 274 [breach of contract action against insurance agents for failure to obtain
insurance did not accrue until insurer refused to provide a defense to plaintiff])." Ely-Cruikshank
Co., Inc. v. Bank of Montreal, 81 N.Y.2d 399, 407-408 (1993).
Plaintiffs pled that they discovered only the PK Contract on or about October 2011. (Ex.
13, ¶¶37, 87). But the discovery of the mere existence of the PK Contract was not a fact
sufficient to satisfy actual or imputed discovery of facts sufficient when any payments
potentially due would be contingent upon certain measures of profitability or economic success
that may not have been achieved and thus no payments might have been due. (Ex. 14, Sec. 2-3).
This is quite similar to Inter-Community and A & T in that Plaintiffs did not discover that
Plaintiff was owed anything until June 28, 2013 and Sonar had not refused (to Plaintiffs) to pay
Plaintiffs anything in residuals or royalties prior to June 28, 2013. Inter-Community at 11781179; A & T at 1437. (Ex. 9, ¶23). Plaintiffs did not discover facts sufficient to sustain a claim
for damages from Sonar for breach of contract as concerns residuals and royalties until Plaintiffs'
claim for breach of contract accrued no earlier than June 28, 2013 when Plaintiff discovered that
the The Oksana Baiul Story was in a position to be paying residuals (most films don't pay
residuals or make a profit) and she could allege damages. (Ex. 21, p. 7-8; Ex. 9, ¶23). This would
mean that Plaintiffs actually have six years from June 28, 2013 (or at least two years from June
28, 2013 if we apply this Court's stated two year discovery rule) within which to bring their
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breach of contract claims and the claim is timely for all amounts due in residuals and royalties
from Sonar from the date of the production of The Oksana Baiul Story in 1994 and not just
amounts due in residuals and royalties from Sonar for the period within six years of filing
Plaintiffs' complaint. Inter-Community at 1178-1179; A & T at 1437.
The facts as alleged in the FAC, accepted as true, under the "cognizable legal" theory of
"Plaintiffs' ability to allege damages", dictate that Sonar's Motion should not have been granted
since Plaintiffs' breach of contract claim is not time-barred and the Order concerning dismissal of
Plaintiffs' breach of contract claim should be reversed or vacated. Leon v. Martinez, 84 N.Y.2d
83, 87-88 (1994) quoting Morone v. Morone, 50 N.Y.2d 481, 484 (1988); Inter-Community at
1178-1179; A & T at 1437; Ely-Cruikshank at 407-408; (Ex. 13, ¶¶37, 83-94; Ex. 17, p. 24:12 25:9; Ex. 14, Sec. 2).
VI.
CONCLUSION
For the foregoing reasons, Sonar's Motion should not have been granted since Plaintiffs'
breach of contract claim is not time-barred and the Order concerning dismissal of Plaintiffs'
breach of contract claim should be reversed or vacated.
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Dated: West Hollywood, California
November 6, 2014
/s/ Raymond J. Markovich
Raymond J. Markovich, Esq. (#2582419)
Attorney for Plaintiffs Oksana Baiul and Oksana, LTD
351 Westbourne Drive
West Hollywood, CA 90048
(323) 401-8032
rjmarkovich@me.com
To:
Dennis O. Cohen, Esq.
Francesca M. Harker, Esq.
Kaitlyn Ferguson, Esq.
Baker & Hostetler LLP
45 Rockefeller Plaza
14th Floor
New York, NY 10111
(212) 589-4288
Attorneys for Defendant
Sonar Entertainment, Inc.
(via NYSCEF)
Chelley E. Talbert, Esq.
(via NYSCEF)
30 Rockefeller Plaza, 1221-28A11
New York, NY 10112-0002
(212) 664-2527
Attorney for Defendant NBCUniversal
Media, LLC
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