Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

INVENTIVE MUSIC, LTD. v. COHEN

June 9, 1982

INVENTIVE MUSIC, LTD., a New York corporation d/b/a MEADOW MUSIC GROUP, Plaintiff,
v.
JACK L. COHEN and FIRST NATIONAL STATE BANK OF N.J., co-executors of the Estate of Herman Lubinsky, Sr., dec'd, JACK L. COHEN, and COLUMBIA PICTURES INDUSTRIES, INC., a Delaware corporation, Defendants



The opinion of the court was delivered by: BIUNNO

 BIUNNO, Senior District Judge.

 This case was called for trial on June 1, 1982, and before having the panel brought to the courtroom to select a jury, the court questioned the lawyers for information to be on hand if needed for the voir dire of the jurors. In the course of that colloquy, it came to light that there was no diversity between the plaintiff, a New York corporation with its principal place of business there, and the defendant Columbia Pictures Industries, Inc., a Delaware corporation with its principal place of business in New York.

 The only basis for subject-matter jurisdiction is diversity of citizenship, and 28 USC § 1332 (c) makes it explicit that for diversity purposes, a corporation is taken as having multiple citizenship (1) of any State by which it was incorporated and (2) of the State where it has its principal place of business.

 The case has been tried twice before. The first trial ended in a mistrial. The second ended in a judgment for defendants at the end of plaintiff's case, a result that was reversed with directions for a new trial, 617 F.2d 29 (1980). To avoid a third fruitless trial, the court decided that the jury should not be then selected and directed the submission of briefs a few days later. Briefs have been submitted and argument heard. The court concludes that the action should be dismissed, leaving the matter to be resolved by the Superior Court of New Jersey. The background and rationale follow.

 Framework

 The time period involved runs from late 1973 to the summer of 1975. At the start of that period, the late Herman Lubinsky was the owner of a music business carried on by a number of New Jersey corporations. The major one evidently was Savoy Records. The others were Worldwide, Medallion and National Music. Mr. Lubinsky was evidently giving thought to the sale of Savoy, at least, and perhaps the others, and some word of this evidently got around.

 Jon Meadow, who was active in some branch of the music business evidently heard of this and called Savoy. He was told to talk to Jack L. Cohen, who was Mr. Lubinsky's personal attorney and business advisor, which he did. After a number of conversations, and several letters in late February from Meadow to Cohen, Cohen replied that in no circumstances was Savoy to be offered for sale; however, he said that if an interested buyer communicated with Cohen through Meadow, Meadow would be recognized as the finder. There was also a conversation, which Meadow does not deny, that he was not to disclose Savoy's name.

 There were negotiations with at least one prospect with whom Meadow had no connection, which went nowhere because the prospect lacked a satisfactory down payment. There were several other prospects brought in by Meadow, but these did not culminate in a sale. Rather, the litigation involves negotiations with Columbia and an eventual sale to Arista Records, a subsidiary of Columbia. Meadow was not recognized as the finder on that sale, and makes two claims (1) that he was contractually entitled to be recognized as the finder and seeks judgment for a finder's fee against Mr. Lubinsky's estate, and (2) that Columbia tortiously interfered with his relationship with Mr. Lubinsky, and later his estate and seeks damages equivalent to a finder's fee plus punitive damages, from Columbia. Also in the case are cross-claims for indemnity, both by the estate against Columbia and by Columbia against the estate.

 At one time, plaintiff's contract claim was asserted not only against the estate but also against Savoy, Worldwide, Medallion and National (the Lubinsky companies involved in the sale) but these parties were eliminated by stipulation on the record of April 11, 1979, in which the estate agreed that since it had been the seller and had received the net proceeds of sale, there was no need to leave the companies in the case since the estate would pay any judgment.

 This point was explored again on June 1, 1982 and it appeared that since Mr. Lubinsky, and later his estate, owned all or substantially all of the stock of his companies, there could be no sale of either stock or assets without his (or his estate's) control. Sales of wholly owned corporate businesses can be made by a sale of the stock or of their assets, and which is chosen is usually part of the negotiations, and an interested prospect may not know, just as the seller will not know, at the start which choice will be made. The stipulation eliminates a number of parties and some potentially complex issues.

 There was also a time when the Columbia subsidiary, Arista Records, was a party on a claim by the estate for contractual indemnity based on a provision in the sale contract. This claim was disposed of by summary judgment in favor of Arista before trial. There is no transcript of the hearing, but the court is told the reason was that the form of indemnity provision ran against Arista only if a fee was recovered by someone claiming to have been engaged by it. Since the claim here was grounded on an alleged engagement by the seller, and since the provision was not drawn to cover a claim of tortious interference, the summary judgment was entered.

 In any event, after the exchange of letters with Mr. Cohen in late February, 1974, Meadow attempted to talk to someone at Columbia but without success. He wrote a letter to Columbia March 7, 1974 to the effect that he knew of a record company that might be purchased, but did not mention Savoy. A Columbia employee, Adler, phoned Meadow on March 18, 1974 but Meadow was not in.

 Mr. Lubinsky died March 24, 1974. This terminated Cohen's agency and any alleged sub-agency of Meadow, under the usual rule, see Young v. Potter Title & Trust Co., 114 N.J.L. 561, 178 A. 177 (Sup. 1935), aff'd. 115 N.J.L. 518, 181 A. 44 (E & A 1936). Mr. Lubinsky's will was probated April 3, 1974 and his executors qualified. The court is told that there will be evidence that the co-executors revived or ratified or reauthorized the arrangement with Meadow, whatever it was.

 Whether there were further efforts by Meadow or Adler to reach each other does not now appear but there is evidence that on June 28, 1974 they did talk and Adler asked for the name of the company for sale, and Meadow disclosed it was Savoy. Adler said he would get back to Meadow by July 12, 1974.

 On July 9, 1974 Adler spoke to Cohen about Savoy and was asked whether the inquiry was through a finder and he said it was not. On July 12, 1974 Adler and Meadow spoke, and Adler told Meadow that Columbia had already been looking into a purchase of Savoy, that it was considered an in-house deal, and that Meadow's services would not be needed. On July 15, 1974 (a Monday), Meadow wrote Cohen to claim he was responsible for Columbia's interest. Sometime during the same week, on receiving the letter, Cohen spoke to Meadow and then called Adler to report Meadow's claim and to say that if what Meadow said was true, Adler had been far from candid with him. Adler insisted that Columbia had already been working on the matter before Meadow's call of June 28th. There is said to be a later letter from Meadow to Cohen whose meaning is in dispute, but which may be claimed to evidence a disclaimer or abandonment by Meadow of any further interest in the Columbia matter. In any event, Meadow took no part in negotiations, which led to a first draft agreement in late summer or so of 1974 and a final contract and closing in about mid-1975.

 The claims involved.

 With the elimination of Arista and the Lubinsky music companies, the remaining parties are Inventive Music Ltd. as plaintiff, the Lubinsky estate and Columbia as defendants, plus the cross claims ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.