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REV. 4/2014
CIVIL COVER SI
The JS-44 civil cover sheet and the information contained herein aAprTgfce nor^pjalelfent the filing am
pleadings or other papers asrequired by law, except asprovided by local rule's of courfr lhH form, approvedi
Judicial Conference ofthe United States inSeptember 1974, is required foruse ofthe Clerk of Court forthe pilose
initiating the civil docket sheet
PLAINTIFFS
Andrea Magder
- :r f\
U V
fflffl
DEFENDANTS .OV/l 2 w2014
Belton Lee; Madhattan FilmCompany Global, LLC; Christopher Bongime;
Marc Jacobson, P.C.; Marc Jacobson; Dining With Alex, LLC
ATTORNEYS (FIRM NAME, ADDRESS, ANDTELEPHONE NUMBER
ATTORNEYS (IF KNOWN)
Sam P. Israel,
1 Liberty Plaza, 35th Floor
New York, NY 10006
646-787-9880 H
CAUSE OFACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE ABRIEF STATEMENT OF CAUSE)
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)
Copyright Infringement of screenplay 17 U.S.C. Section 101 et. seq.
Has this action, case, or proceeding, or one essentially the same been previously filed in SDNY at any time? Nc&esQjudge Previously Assigned
Ifyes, was this case Vol. fj Invol. Dismissed. No fj Yes fj If yes, give date.
No 0 Yes
NATURE OF SUIT
& Case No.
IS THIS AN INTERNATIONAL ARBITRATION CASE?
(PLACEAN[x] INONEBOXONLY)
TORTS
ACTIONS UNDER STATUTES
CONTRACT PERSONAL INJURY
[ ] 310 AIRPLANE
[ ]315 AIRPLANE PRODUCT
LIABILITY
[ ] 320 ASSAULT, LIBEL &
SLANDER
[ ] 330 FEDERAL
EMPLOYERS'
LIABILITY
[ ] 340 MARINE
[ ] 345 MARINE PRODUCT
LIABILITY
[ l 350 MOTOR VEHICLE
[ J355 MOTOR VEHICLE
PRODUCT LIABILITY
( ]360 OTHER PERSONAL
INJURY
[ ] 362 PERSONAL INJURY -
MED MALPRACTICE
PERSONAL INJURY
[ ] 367 HEALTHCARE/
PHARMACEUTICAL PERSONAL , j 625 DRUG RELATED
INJURY/PRODUCT LIABILITY
[ ] 365 PERSONAL INJURY
PRODUCT LIABILITY . , KQnOTNCB
[ ]368 ASBESTOS PERSONAL 1!"OI HbK
INJURY PRODUCT
LIABILITY
PERSONAL PROPERTY
[ ] 370 OTHER FRAUD
[ ]371 TRUTH INLENDING
FORFEITURE/PENALTY
[]110
[]120
[]130
[]140
[]150
[]151
[]152
[1153
[]160
[J 190
[]195
[]196
INSURANCE
MARINE
MILLER ACT
NEGOTIABLE
INSTRUMENT
RECOVERY OF
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT
RECOVERY OF
DEFAULTED
STUDENT LOANS
(EXCL VETERANS)
RECOVERY OF
OVERPAYMENT
OF VETERAN'S
BENEFITS
STOCKHOLDERS
SUITS
OTHER
CONTRACT
CONTRACT
PRODUCT
LIABILITY
FRANCHISE
REAL PROPERTY
[ ] 380 OTHER PERSONAL
PROPERTY DAMAGE
[ ]385 PROPERTY DAMAGE
PRODUCT LIABILITY
PRISONER PETITIONS
[ ] 463 ALIEN DETAINEE
[ ] 510 MOTIONS TO
VACATE SENTENCE
28 USC 2255
[ ] 530 HABEAS CORPUS
[ ] 535 DEATH PENALTY
] 540 MANDAMUS &OTHER
PRISONER CIVIL RIGHTS
[ ] 550 CIVIL RIGHTS
[ ] 555 PRISON CONDITION
[ ] 560 CIVIL DETAINEE
SEIZURE OF PROPERTY
21 USC 881
LABOR
[ ] 710 FAIR LABOR
STANDARDS ACT
[ ]720 LABOR/MGMT
RELATIONS
[ ]740 RAILWAY LABOR ACT
[ l 751 FAMILY MEDICAL
LEAVE ACT (FMLA)
[ ]790 OTHER LABOR
LITIGATION
[ ]791 EMPL RET INC
SECURITY ACT
IMMIGRATION
[ ]462 NATURALIZATION
APPLICATION
( ] 465 OTHER IMMIGRATION
ACTIONS
[]210
[ ]220
[ ]230
[] 240
[]245
[ ]290
LAND
CONDEMNATION
FORECLOSURE
RENT LEASE &
EJECTMENT
TORTS TO LAND
TORT PRODUCT
LIABILITY
ALL OTHER
REAL PROPERTY
ACTIONS UNDER STATUTES
CIVIL RIGHTS
[ ]440 OTHER CIVILRIGHTS
(Non-Prisoner)
[ ] 441 VOTING
[ ]442 EMPLOYMENT
[ ]443 HOUSING/
ACCOMMODATIONS
[ ] 445 AMERICANS WITH
DISABILITIES -
EMPLOYMENT
[ ]446 AMERICANS WITH
DISABILITIES -OTHER
( ] 448 EDUCATION
CONDITIONS OF CONFINEMENT
Checkif demanded incomplaint:
CHECK IF THIS IS ACLASS ACTION
UNDER F.R.C.P. 23
BANKRUPTCY
[ ) 422 APPEAL
28 USC 158
[ ] 423 WITHDRAWAL
28 USC 157
PROPERTY RIGHTS
(XI820 COPYRIGHTS
[ ] 830 PATENT
[ ] 840 TRADEMARK
SOCIAL SECURITY
[ ]861 HIA(1395ff)
[ ] 862 BLACK LUNG (923)
[ ] 863 DIWC/DIWW (405(g))
[ ] 864 SSID TITLE XVI
[ ] 865 RSI (405(g))
FEDERAL TAX SUITS
[ ] 870 TAXES (U.S. Plaintiff or
Defendant)
[ ] 871 IRS-THIRD PARTY
26 USC 7609
OTHER STATUTES
375 FALSE CLAIMS
400 STATE
REAPPORTIONMENT
[ ] 410 ANTITRUST
[ ]430 BANKS &BANKING
[ ]450 COMMERCE
[ ]460 DEPORTATION
[ ]470 RACKETEER INFLU
ENCED & CORRUPT
ORGANIZATION ACT
(RICO)
[ ) 480 CONSUMER CREDIT
[ ] 490 CABLE/SATELLITE TV
[ ) 850 SECURITIES/
COMMODITIES/
EXCHANGE
u
( ] 890 OTHER STATUTORY
ACTIONS
[ ] 891 AGRICULTURAL ACTS
[ ] 893 ENVIRONMENTAL
MATTERS
[ ] 895 FREEDOM OF
INFORMATION ACT
[ ] 896 ARBITRATION
[ ] 899 ADMINISTRATIVE
PROCEDURE ACT/REVIEWOR
APPEAL OF AGENCY DECISION
I ]950 CONSTITUTIONALITY OF
STATE STATUTES
DEMAND $_ OTHER
QOYOUCLAJM THIS CASE IS RELATED TO A CIVILCASE NOW PENDING INS.D.N.Y.?
JUDGE DOCKET NUMBER
Check YES onlyifdemandedincomplaint
JURY DEMAND: YES UMO
NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).
[PLACEAN x INONEBOXONLY) ORIGIN
[xl 1 n~,ini no .,._ Dt d^=^=h fl 4 Reinstated or 5 Transferred from 6 Multidistrict 7 Appeal to District
SL 2 Removedfram L-1 3 Remanded L_l L_l n Judge from
Proceeding State Court from 5Ut*:"~ ^ Magistrate Judge
a. .iip.rtirePr.ii Appellate Judgment
| | b. Atleastone
party is prose.
(PLACEAN xINONEBOXONLY) BASIS OF JURISDICTION IFDIVERSITY, INDICATE
1USPLAINTIFF 2 U.S. DEFENDANT S 3FEDERAL QUESTION D4DIVERSITY CITIZENSHIPBELOW.
(U.S. NOTAPARTY)
CITIZENSHIP OF PRINCIPAL PARTIES (FORDIVERSITY CASESONLY)
(Place an[X] in onebox for Plaintiff andonebox for Defendant)
PTF DEF PTFDEF PTF DEF
CITIZEN OF THIS STATE []1 []1 CITIZEN OR SUBJECT OF A t]3[]3 INCORPORATED and PRINC'PAL PLACE []5 []S
FOREIGN COUNTRY OF BUSINESS IN ANOTHER STATE
CITIZEN OF ANOTHER STATE [12 []2 INCORPORATED or PRINCIPAL PLACE []4[J4 FOREIGN NATION []6 []6
OF BUSINESS IN THIS STATE
PLAINTIFF(S) ADDRESS(ES) AND COUNTY(IES)
Andrea Magder, 445 East 80th Street, Apt 5J, New York, NY 10075
DEFENDANT(S) ADDRESS(ES) AND COUNTY(IES)
Belton Lee, 75-26 196th Street, Flushing NY 11366
Madhattan Film Company Global, LLC, 75-26 196th Street, Flushing, NY 11366
Christopher Bongirne, 513 East 11th Street, Apt B1, New York, NY 10009
Marc Jacobson &Marc Jacobson, P.C, 244 West 54thStreet, 9th Fl, New York, NY 10019
Dining With Alex, LLC, 75-26 196th Street, Flushing, NY 11366
DErIpReStATON ISEHE^EbTmADETHAT, AT THIS TIME, IHAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN
RESILIENCE ADDRESSES OF THE FOLLOWING DEFENDANTS:
Check one THIS ACTION SHOULD BE ASSIGNED TO: WHITE PLAINS [x] MANHATTAN
(DO NOT check either box ifthis a PRISONER PETITION/PRISONER CIVIL RIGHTS
COMPLAINT.) / / /7/1
DATE SIGNATURE OF ATTORNEY OF RECORD //^V ADMITTED TO PRACTICE IN THIS DISTRICT
YL/'* fl? MYES (DATE ADMITTED Mo 05 Yr. 1990 )
RECEIPT # / Attorney Bar Code #SPI0270
Magistrate Judge is to be designated bythe Cler^Ltae-Cqwfc
Magistrate Judge MP*> is so Designated.
Ruby J. Krajick, Clerk ofCourt by Deputy Clerk, DATED .
UNITED STATES DISTRICT COURT (NEWYORKSOUTHERN)
Sam P. Israel, P.C.
Sam P. Israel (SPI0270)
Eleonora Zlotnikova (EZ8814)
1 Liberty Plaza, 35th Floor
NewYork, New York 10006
T: (646) 787-9880 | F: (646) 787-9886
samisrael@spi-pc.com
AttorneysforAndrea Magder
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
14 CV
Q^
ANDREA MAGDER
Plaintiff,
-against-
BELTON LEE, MADHATTAN FILM COMPANY
GLOBAL, LLC, CHRISTOPHER BONGIRNE,
MARC JACOBSON, P.C, MARC JACOBSON,
AND DINING WITH ALEX, LLC,
Defendants.
COMPLAINT
Civ.
CO
_( :) *
JURY TRIAL DEMANDED
CT5
* r'-ri
C J ' '
-:0
o
Plaintiff Andrea Magder ("Magder" or the "Plaintiff"), as for her Complaint, by
and through her counsel, Sam P. Israel, P.C, against Belton Lee, Madhattan Film
CompanyGlobal, LLC ("MFCG"), Christopher Bongirne, MarcJacobson, MarcJacobson,
P.C. ("MJP") (collectively, the "Defendants"), and Dining With Alex, LLC ("DWA" or
the "Company") allege upon the Plaintiff's personal knowledge and otherwise upon
information and belief, as follows:
I. NATURE OF THE ACTION
1. This action is brought by an author and owner of valid copyright in a script
(Reg. No. Pau3-679-582) (the"Work") that was supposed to serveas the basisfor afeature
film Magder intended to produce. As alleged indetail below, the Plaintiff set out to make
appropriate business arrangements for the film, such as hiring actors, directors, co-
producers, as well as raising the capital necessary for its production. To this end, Magder
collaborated with defendants Belton Lee ("Lee") and Christopher Bongirne
("Bongirne"), individuals purporting to have skills and connections necessary for the
financing, productionand distribution of the film.
2. In furtherance of the Plaintiff's plans, she and Lee (along with MFCG, a
non-managing investor) formed Dining With Alex, LLCa member-managed limited
liability company that was to serveas the vehicle to procurefinancing, as well as make
other arrangements for the production of Magder's film and achieve its ultimate
distribution (the "Project"). The Company's operating agreement secured Magder's
creative control over the Project as well as her managerial authority in all of the
Company's material decision-making. Magder's creative control over the Project was
further memorialized in a written producer agreement which delineated her
responsibilities, assured her receipt of expected profits and other entitlements and set
forth her overall stewardship of the Project as a producer (the "Producer Agreement").
To be sure, it was the parties' stated intention that, to the extent it would become
necessary to assign or transfer Magder'scopyrights in the Work in order to develop the
film, any such transfer would be conditioned upon her receipt of this aggregate
consideration, including participation in the sharing of expected profits as well as her
continued control of the Project.
3. Yet, in the first of a series of maneuvers designed to wrest control of the
Project from Magder, Lee came to insist that Magder first transfer her copyrights in the
Work to a shell company operated by Lee, namely, MFCG. Thus, Magder entered into a
further written agreement with MFCGa limited liability company formed by Lee,
pursuant to which she would transfer her rights and copyrights in the Work to MFCG
(the"Purchase Agreement"). Ultimately, the copyrightsin the Workwere to be reposed
with DWAas effectuated by way of a concurrent written assignment from MFCG to
DWA. But even with these interstitial steps, Magder could rely upon the assurances of
2
creative control set forth in the DWAoperating agreement and the appurtenant Producer
Agreement. This was the essential part of consideration for Magder's agreement to
transfer certain rights in the Work to DWA. While ensuing events revealed the Plaintiff's
reliance upon these instruments to be misplaced, the ostensible transfer of her copyrights
inthe Work to MFCG has been rendered equally illusory.
4. As soon as the parties' agreements were fully executed, Lee and Bongirne
advanced apre-conceived plan to take over the Project (and appropriate the Plaintiff's
copyrights), deny Magder of her contractual entitlements and eliminate her control of its
development. With the substantial assistance of defendant Marc Jacobson ("Jacobson")
and his law firm (MJP)-ostensibly disinterested counsel recruited by Lee and Bongirne
to represent the Company-the individual defendants ousted Magder fromall of DWA's
affairs, and allegedly removed as amanaging member of DWA.
5. The Plaintiff informed Lee and MFCG that, unless their contractual
breaches were cured and she was assured performance by astated date, the transfer of
any rights in and to the Work were nullified. No cure was forthcoming, however, and
Magder demanded through independent counsel that Lee and MFCG immediately cease
and desist from any further exploitation of her copyrights in the Work. But they not only
ignored the Plaintiff's admonition and continued in their misconduct, but Jacobson
threatened Magder with retaliation should she take measures to enforce her intellectual
property rights. Indeed, DWA's presumptively "disinterested" legal counsel went so far
as to commence apreemptive action in aNew York State Court, demanding attorneys'
fees and a"declaration" that Magder's contractual rights had been forfeited (and with
them, by extension, those rights afforded her under the U.S. Copyright Act).*
6. Meanwhile under cover of this bogus one-page lawsuit, together with the
transfer of atrivial sum offered to Magder in the wake of the Plaintiff's demands (in the
apparent belief that this token sumwould withstand judicial scrutiny and be recognized
i Dining With Alex, LLC v. Magder, No. 652915/2014 (N.Y. Sup. Ct. N.Y. Cnty, Sept. 23,
2014), Summons with Notice.
3
a
as legally adequate payment in full for her copyrights), the Defendants are utilizing,
exploiting and creating unauthorized derivative material from the Work in willful
infringement of the Plaintiff's copyrights and in derogation of the protections afforded
her under the 17 U.S.C. 101, et seq. as amended (the "Copyright Act").
7. Now, facing irreparable injury and already having sustained monetary
losses, the Plaintiff states claims for direct and contributory copyright infringement;
breaches of the three governing written agreements; breaches of fiduciary duties (against
Lee, Jacobson and MJP); seeks preliminary and permanent injunctive relief (or, as an
alternative remedy, a constructive trust over the Work); as well as other equitable
remedies, together with an award of the damages occasioned by the Defendants-
misconduct.
II. PARTIES
1. Andrea Magder is an individual residing at 445 East 80th Street, Apt. 5J,
New York, N.Y. 10075.
2. Upon informationandbelief, defendant BeltonLee is an individual residing
at 75-26196th Street, Flushing, N.Y. 11366.
3. Upon information and belief, defendant Madhattan FilmCompany Global,
LLC (MFCG) is a limited liability company, maintaining offices and/or conducting
business at 75-26196th Street, Flushing, N.Y. 11366.
4. Upon information and belief, defendant Christopher Bongirne is an
individual residing at 513 East 11thStreet, Apt. Bl, NewYork, N.Y. 10009.
5. Upon information and belief, defendant Marc Jacobson, P.C. is a
professional corporation, maintaining offices and/or conducting business at 244 West
54th Street 9th floor, NewYork, N.Y. 10019.
6. Upon information and belief, defendant Marc Jacobson is an individual
attorney and principal of Marc Jacobson, P.C, maintaining offices and/or conducting
business at 244 West 54thStreet 9thfloor, NewYork, N.Y. 10019.
7. Dining With Alex, LLC is alimited liability company, maintaining offices
and/or conducting business at 75-26196th Street, Flushing, N.Y. 11366.
III. TURISDICTION ANDVENUE
8. The Court has subject matter jurisdiction over this action pursuant to 28
U.S.C. 1338(a), in that the Plaintiff's chief causes of action arise under the Copyright
Act. The Court also has subject matter jurisdictionunder 28 U.S.C 1331, and principles
of pendent jurisdiction. Supplemental jurisdiction over the common law and State law
claims alleged herein is available under 28 U.S.C. 1367(a) as they arise from the same
core of operative facts as those arising under 18 U.S.C. 1338, and are therefore properly
brought before the Court. Additionally, the Declaratory Judgment Act, 28 U.S.C. 2201
gives this Court jurisdiction over the declaratory relief requested in this action.
9. The Court has in personam jurisdiction over the Defendants and DWA
Defendant generally and/or specifically in that they reside in New York and/or
purposely avail themselves of the privileges of conducting business here under the laws
of New York State within the meaning of Section 301 of the New York Civ. Prac. L. &
Rules.
10. Venue is proper in this forum pursuant to 28 U.S.C 1391(a), (b) and (c)
and 1400(b) because the Defendants and DWADefendant conduct business within this
District, are amenable to process here, and/or have infringed Plaintiff's copyrights within
this District, as described herein.
IV. FACTS
The Plaintiff Authors the Work, Registers Copyrights in the Work, and Arranges
to Produce a Feature Film Based on the Work.
11. Plaintiff Andrea Magder is a New York City-based writer, producer, and
an active member of the film industry.
12. In or about 2012, Magder collaborated with Quentin Cine ("Cline")
("collectively, the "Co-authors") to write ascreenplay titled "DiningWith Alex" about an
Indianfamily's ruse to obtainatelevised reviewof their restaurant in the hope of infusing
this otherwise failingventure with customers.
13. On January 11, 2006, Magder registered the completed script with the
Writers Guild of America ("WGA") as afirst step toward producing afeature film based
on the screenplay.
14. Shortly thereafter, Magder launched the Project by soliciting the
involvement of potential investors and producers. At all times the Plaintiff intended and
expected to retain creative and managerial control over the Project from its inception to
the film's "final cut," which would require Magder's approval before being released to
the public. For over one year, the Plaintiff's efforts were dedicated to recruiting passive
investors and/or co-producers, who would share her vision while contributing to the
production of the filminreturn for expected profits or other financial compensation.
15. Her efforts led to defendant Belton Lee, an individual claiming to have
business relations with Chinese citizens of considerable means who were seeking
opportunities for investing in film production. Magder and Lee discussed the potential
for producing aforeign version of the film, and Magder decided to rewrite the script to
target the audience in China.
16. Uponcompletionof the screenplay, andwithCline's authorization, Magder
filed acopyright registrationstatement withthe U.S. Copyright Office designatingherself
as theclaimant and point ofcontact for inquiries or anypermission solicitations.
17. On May 28, 2013 the U.S. Copyright Office issued a Certificate of
Registration (Reg. No. PAu 3-679-582) for the Work. See Exhibit 1hereto.
18. Inensuing discussions, Lee suggested that his Chinese investors would be
prepared to contribute approximately 80% of the budget for the Project in exchange for
rights to the Chinese distribution of the film if assured of a release in China by no later
than February 14, 2015. Whereas Lee professed to be experienced in managing the
financial aspects of film production, he also sought a co-producer role in the Project in
exchange for facilitating the introduction between the Chinese investors and Magder.
19. Magder also recruited Bongirne as a producer/line producer.
20. Thus, both Bongirne and Lee would be engaged by DWA as co-producers
tasked with furthering Magder's creative vision for the Project. The three individuals
agreed to an equally shared producer salary, though Magder would receive further
compensation and benefits derived from the anticipated distribution of the film she
conceived with Cline. (For his part, Cline declined to have a role in the production of the
feature film. He sought only writing credits, a cash purchase price and a portion of certain
future proceeds in exchange for his rights to the Work.)
21. To effectuate their arrangement, Magder and Lee formed a limited liability
company (DWA), whichwould serve as the vehicle for developing, financing, producing,
distributing and otherwise engaging in transactions in connection with the Project. Lee
and Magder would be the only managing members of DWA, and MFCG would be the
sole non-managing member.
22. In accordance with their agreement and mutual understanding, Lee and
Magder filed DWA's Articles of Organization on May 23,2014.
23. Yet, before they entered into an operating agreement for DWA, Lee insisted
that any transfer of copyrights would take place through MFCG, which would purchase
the rights and copyrights in the Work from Cline and Magder, and simultaneously
transfer those rights to DWA.
TheRelevant Contractual Arrangements Governing the Parties' Relationship and
Use of the Work.
24. On or about June 12, 2014, Magder entered into three concurrent
agreementsthe Dining With Alex Operating Agreement ("DWAOA"), the Producer
Agreement, and the Purchase Agreementthat would encapsulate her discussions with
Lee with respect to her involvement with the Project and her entitlements. As
subsequently memorialized in the written agreements, the parties acknowledged that not
only would the Plaintiff and Cline receive financial compensation in exchange for their
rights in the Work, but that Magder and Lee would have equal control of the Project and
DWAas Managing Members, with Magder responsible for all creative processes and Lee
in charge of DWA's non-material, day-to-day business operations, subject to certain
important restrictions, including, in relevant part: that any disbursement of funds would
be in accordance with the agreed-upon budget; Lee would confer with Magder on all
material decisions before taking any actions in connection therewith; no distribution
agreements would be executed without the prior written consent of both managing
members, and; no attorneys or other professionals would be retained or terminated by
the Company without the prior written consent of both Lee and Magder.
25. Retention of creative control was essential to the Plaintiff. Whereas her
reputation and goodwill depended on the outcome of the Project, the right to control the
development of the filmwas specifically carved out and reserved for Magder in the three
concurrent governing agreements. Thus, Magder expressly reserved control over the
creation and development of all derivative material.
26. The Producer Agreement with DWA, states that Magder, Lee and Bongirne
would "work cooperatively to produce a world class motion picture." (Producer
Agreement at 1).
27. Under the Producer Agreement, Magder was to receive "fixed
compensation" in the amount of $125,000.00, although up to $60,000.00 of that amount
could be deferred and payable pro-rata, pari-passu with all other deferred compensation,
(in accordance with the terms of the operating agreement for DWA). Further, any
"deferred" amount would be the same as to Magder, Bongirne and Lee, and all payments
were required to be made at the same time and frequency as payments made to Lee and
Bongirne as producer. Id. ( 4.1-4.2).
28. Among Magder's other significant entitlements under the Producer
Agreement, the Plaintiff was assured aportion of the expected profits from the film (after
certainstated expenses) as follows:
Andrea Magder: 30%
Belton Lee: 55%
Chris Bongirne: 15%
8
29. The Producer Agreement states that no changes will be made to the
distribution of the net proceeds and adjusted gross receipts without prior written
consent from the employeethat is, Magder.
30. Concurrently with the Producer Agreement, Magder, Lee and MFCG
executed an OperatingAgreementfor DWA, which provides that Magder and Leewould
be the managing members of DWA, with 70and 30membership units respectively; and
MFCGwould be its sole "Cass Amember" (with 80Class A membership units), meaning
any actions taken by the managing members would neither be subject to, nor require
MFCG's approval. Magder agreed to the 70/30 split (instead of a 50/50 partnership)
because Lee agreed to finance the Project (80% from investors in China and 20% from
himself or another investor).
31. Section 8.1of the DWAOAprovides that the "business, property and affairs
of the Company shall be managed and directed exclusively by the Managing Members
[and] no other member shall have the power to so act or bind the Company unless agreed
to in writing by the Managing Members."
32. Furthermore, the DWAOA states that Magder will control all creative
decisions and have the final say over script, talent, director and writer engagements, the
film'sfinal cut, as well as the negotiation and execution of any related agreements.
33. Thus, by its own terms, DWAOA preserves Magder's creative control over
the Work and the Project, as well as managerial authority with respect to the film's
production.
34. The DWAOA also references the concurrently-executed Purchase
Agreement, which would affect a limited transfer of the Co-authors' copyrights and
entitlements to the Workfirst, to MFCG and then to DWA by way of a simultaneously-
executed Assumption and Assignment Agreement (the latter purporting to assign the
Purchase Agreement, and "all rights and obligations granted to MFCG thereunder" to
DWA).
35. Yet, DWAcould only exploit Magder's (and Cline's) copyrights in the Work
if the authors received their bargained-for consideration.
9
36. Unlike the express recitals set forth in the Assumption and Assignment
Agreement, the Purchase Agreement does not acknowledge that Magder and Cline were
already in receipt of their due consideration.
37. Rather, the Purchase Agreement provides that MFCG shall, inter alia, pay
or cause to be paid to Cline and Magder $65,200.00 (the "Purchase Price") for the rights
in the Work but provides for Magder's future entitlements in the form of expected profits
and writer's credit, together with full and timely producer compensation (per the fully
incorporated Producer Agreement), and consideration under the DWAOA. Whereas it
was acknowledged that $7,000.00 of the Purchase Price had been paid to Magder, the
remaining $25,600.00 was to be paid to her concurrently with the transfer of any funds to
a newly recruited writer/director (who remained a third party to the agreement), and
even then the transfer assumedand could not be effectuated withoutMagder's receipt
of her producer compensation under the terms of the integrated contract providing for it.
(Purchase Agreement at 1).
38. In addition to all of these payments, Magder was entitled to "Contingent
Compensation" consisting of a percentage of the net proceeds on the film and passive
payments in connection with the enumerated adaptions of the film. Id. ( 2).
39. Yet another part of Magder's consideration for the Plaintiff's transfer of
rights was that she would retain control over the Project, such that no material decisions
could be made without her approval, and so long as she was solely in charge of the
creative aspects of the Project. To be sure, Lee and MFCG warranted that they would
perform all of their obligations under the full set of the parties' cross-referenced
agreements.
40. Indeed, Magder would not have given up her rights and copyrights in the
Work she authored unless she was assured of, and received the foregoing consideration.
41. In reliance upon the bona fides of her counterparties, Magder executed the
Purchase Agreement, intending to assign the copyright in the Work to MFCG in the
expectation of receipt of the aforementioned consideration and in accordance with the
Plaintiff's expectations.
10
56 Indeed, when Katz produced his re-written final draft of the script-and
Magder was finally aUowed toviewhis workproduct-shewas dumbstruckby its dearth
of professional craftsmanship and overall remarkably poor quality. She advised Lee and
everyone involved with the Project that the script was so subpar, that proceeding with
the production based on the rewrite would impair Magder's professional reputation and
goodwill. Although Magder had the final approval of all decisions regarding the scnpt,
Lee ignored the Plaintiff's entreaties and disseminated the script to third parties for the
purpose of moving forward with the production.
57 In another blatant disregard for the Plaintiff's rights, Lee opened abank
account for DWA in Chase Bank's location in Queens, New York without notifying
Magder or seeking her approval. The Plaintiff contacted the bank to determine how Lee
was able to open an account for DWA without her knowledge or authorization.
According to the bank's representatives, aU members of aUmited liabUity company must
be present in order to open acompany account. Apparently, Lee supplied false
information about DWA to the bank in order to unilaterally open abank account that
onlyhe could access.
58 Lee, through his shell company MFCG, also failed to transmit the stated
consideration to both Magder and Cline provided by the Purchase Agreement. In
selectively withholding Magder's entitlements, Lee unilaterally disbursed Company's
funds toRoss Katz andother individuals.
> 59. On or about July 25,2014 Magder and Cline transmitted awritten notice to
MFCG and Lee, stating that, among other things, their "failure to pay the balance of the
Purchase Price to the Writers [Magder and Cline] ... is abreach of the express terms of
the Purchase Agreement and as aresult, the transfer of the rights to the Screenplay as
provided therein is null and void and all right, title and interest in and to the Screenplay
remain [fjully vested with the Writers."
60. Lee and MFCG had ten (10) business days to cure the material breaches
under the Purchase Agreement and assure Magder that they would otherwise honor their
Lee that Magderwas terminatedas a producer, and "no payment is or will be due to Ms.
Magder at any time under the Producer Agreement."
112. To date, the amount of $125,000.00 has beenwrongfully withheldfrom the
Plaintiff, and she has been deprived of her other contractual entitlements, including
expected profits and commissions.
113. By reason of the foregoing, the Plaintiff is entitled to recovery
compensatory damages in an amount to be determined at trial, but which the Plaintiff
believes to exceed $1,000,000.00.
COUNT FIVE
BREACH OF DWAOA
(Against Lee and MFCG)
114. Plaintiff re-alleges andincorporates each andevery allegation contained in
each paragraph above as if fully set forth herein.
115. On or about June 12, 2014 Magder, Lee and MFCG entered into the
DWAOA (which operated concurrently with the Producer Agreement and Purchase
Agreement aspart ofthesame transaction), which provides that Magder andLee would
be the Managing Members of DWA. Under the DWA, Magder would have thirty (30)
units andLee would have seventy (70) units asManaging Members. MFCG would bethe
sole "Class Amember" (having 80 Class Amembership units).
116. Under the DWAOA, the "business, property and affairs of the Company
shall be managed and directed exclusively by the Managing Members [and] no other
member shall have the power to so act or bind the Company unless agreed to inwriting
by the Managing Members."
117. Furthermore, the DWAOA states that Magder will control all creative
decisions and have the final say over script, talent, director and writer engagements, the
film'sfinal cut, as well as the negotiation and execution of any related agreements.
118. Thus, byitsownterms, DWAOA preserves Magder's creative control over
the Work and the Project, as well as managerial authority with respect to the film's
production, inexchange for the transfer of her copyrights inthe Work (for which she was
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to receiveadditional consideration reflectedin the Producer Agreement and the Purchase
Agreement).
119. Fromthe time that Magder and Leeformed DWA, Magder had been acting
as theManaging Member for the benefit of theCompany, and fully performed her duties
and obligations under the DWAOA.
120. Lee and MFCGbreached the terms of the DWAOA by, among other things,
wresting managerial authority away from Magder, engaging professionals and making
material decisions for the Company without Magder's consent, purporting to terminate
her services as a producer, withholding material information, and otherwise failing to
confer with Magder regarding all other significant Company matters, including those
over which she had exclusive control.
121. On July 25, 2014 Magder transmitted a written notice to Lee an MFCG,
informing the defendants of their breaches. Rather than curing their breaches and
providing assurances, the defendants retaliated by purporting to remove Magder's
managerial authority and threatening the Plaintiff with legal prosecution.
122. Although Magder agreed to transfer her copyrights in the Work to DWAin
exchange for her bargained-for consideration, the Plaintiff has been ousted from the
Company and she has been deprived of her contractual entitlements under the DWAOA,
including expected profits and commissions.
123. By reason of the foregoing, the Plaintiff is entitled to recovery of
compensatory damages in an amount to be determined at trial, but which the Plaintiff
believes to exceed $1,000,000.00.
COUNT srx
BREACH OF THE PURCHASE AGREEMENT
(Against MFCG)
124. The Plaintiff executed the Purchase Agreement concurrently with the
DWAOA and the Producer Agreement. The Purchase Agreement is incorporated by
reference in the DWAOA, and provides that MFCG would purchase Magder's and
Cline's respective rights, copyrights and entitlements to the Work, while simultaneously
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