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Ledecky v. Source Interlink Companies

February 1, 2007


The opinion of the court was delivered by: John Garrett Penn United States District Judge


Presently before the Court is Defendant Source Interlink Companies, Inc.'s Motion for Summary Judgment [#58] ("Def.'s Mot.")*fn1 , which moves for dismissal of plaintiff's Amended Complaint ("Amend. Compl.") on the ground that no genuine issue of material fact remains in dispute which merits this case proceeding to trial. Def.'s Mot. (citing Fed. R. Civ. P. 56). Plaintiff takes issue with defendant's Motion, arguing that there are material disputes worthy of review by a jury which find ample support within the record. Plaintiff's Memorandum in Opposition to Defendant's Motion for Summary Judgment [#61] ("Pl.'s Opp."), at 1 ("Source's assertions are belied by the record.").

As explained more fully below, the Court concludes that plaintiff has raised genuine issues of material fact and, as a consequence, defendant's Motion will be denied.


Plaintiff has brought this action against defendant alleging breach of a Referral Agreement ("Ref. Agr."), which became effective on April 26, 2004.*fn2 Ref. Agr., at 1; see Amend. Compl., at ¶ 1. Defendant is a large retail magazine distribution and fulfillment company. Amend. Compl. at ¶ 6. It was the function of plaintiff, a sole proprietorship, to introduce business entities to each other for "new growth opportunities[.]"*fn3 Amend. Compl. at ¶¶ 5, 15.

In terms of compensation for services, the Referral Agreement provides the following:

Source shall pay to Ironbound, and Ironbound shall accept, 5% of the net income recorded by Source as a result of its relationship with Client during the five-year period following the date . . . on which the business relationship is established between Source and Client.

Ref. Agr., at 1. Also effective as of April 26, 2004, defendant and Endeavor Agency, LLC ("Endeavor"), a talent agency based in California, entered into a Mutual Non-Disclosure Agreement.*fn4 The NDA states in pertinent part below:

Whereas, in connection with exploring and evaluating a possible business relationship . . . and for the purpose of the ongoing relationship, the Parties recognize the need to disclose to one another certain of their Confidential Information . . . .

NDA, at 1 (emphasis added).

Pursuant to the terms of the Referral Agreement, plaintiff's principal and sole representative, Jonathan Ledecky, introduced defendant's former Chairman and CEO, S. Leslie Flegel, to Ariel Emanuel, a representative for Endeavor. Pl.'s Opp., at 1 (citations omitted); Amend. Compl., at ¶¶ 9, 13; Def.'s Memo, at 5. The attendees at the meeting "discuss[ed] possible business opportunities involving the retail distribution of audio and video products." Amend. Compl. at ¶ 20; see also Pl.'s Opp., at 4 (citations omitted). The meeting occurred via telephone conference on April 28, 2004, and was followed by another meeting held in New York City on May 12, 2004. Def.'s Memo, at 5; Amend. Compl., at ¶ 20.

On June 22, 2004, after becoming an advisor to defendant, Emanuel arranged for defendant to meet with representatives of Alliance Entertainment Corp. ("Alliance"), a large distributor of home entertainment content products. Amend. Compl., at ¶¶ 25, 26; Def.'s Memo, at 5. Following a series of involved negotiations, defendant and Alliance merged on November 18, 2004. Def.'s Memo, at 5-6; Amend. Compl., at ¶ 29. Principally, plaintiff asserts that as a result of the introduction and subsequent merger of the two companies, Endeavor received $1.5 million and Emanuel, its representative, was appointed director of the newly merged entity. Amend. Compl., at ¶¶ 19, 31. After the merger, on this information and belief, plaintiff demanded that defendant remit payment pursuant to the terms of the Referral Agreement, which defendant refused. Id. at ¶¶ 33-35. Defendant stated as grounds for its refusal that the Referral Agreement, by its terms, does not cover the Alliance merger. See Def.'s Memo, at 6; Amend. Compl., at ¶ 35.

On February 22, 2006, plaintiff filed an Amended Complaint*fn5 seeking compensation from defendant under the Referral Agreement, moving that defendant be ordered to produce its books and records for an annual accounting to determine amounts owed to plaintiff, and seeking damages in an amount to be proven at trial. Amend. Compl., at ¶ 1. These issues are ripe for the Court's consideration.


A court should only grant a motion for summary judgment if it finds there to be no genuine issues of material fact in dispute between the parties after the close of the pleadings. Paquin v. Fannie Mae, 20 F. Supp. 2d 94, 95 (D.D.C. 1998) (citing Fed. R. Civ. P. 56(c)). All reasonable inferences should be drawn in the light most favorable to the nonmoving party because upon review of a motion for summary judgment, it is the moving party that bears the burden of demonstrating the absence of material issues in dispute. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986). If successful in establishing its case at the summary judgment stage, the moving party has the right to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512 (1986). Despite the favorable inferences drawn for the nonmoving party,however, "the mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient; there must be evidence on which the jury could reasonably find for the plaintiff to defeat a motion for summary judgment." Paquin, 20 F. Supp. 2d at 95 (citation and internal ...

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