FILED: NEW YORK COUNTY CLERK 07/11/ :19 PM INDEX NO /2016 NYSCEF DOC. NO. 140 RECEIVED NYSCEF: 07/11/2017

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1 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION: FIRST DEPARTMENT X LESLIE BENZIES, Plaintiff-Respondent-Cross-Appellant, -against- TAKE-TWO INTERACTIVE SOFTWARE, INC., ROCKSTAR GAMES, INC., ROCKSTAR NORTH LTD., DAN HOUSER and SAM HOUSER, New York County Clerk s Index No /2016 CIVIL PRE-ARGUMENT STATEMENT Defendants-Appellants-Cross-Respondents X Plaintiff-Respondent-Cross-Appellant Leslie Benzies, by his attorneys Lewis Brisbois Bisgaard & Smith LLP, as and for his Civil Pre-Argument Statement, states as follows: 1. FULL NAMES OF ORIGINAL PARTIES AND ANY CHANGE IN THE PARTIES: As set forth in caption. 2. NAME, ADDRESS AND TELEPHONE NUMBER OF COUNSEL FOR CROSS-APPELLANT : Peter T. Shapiro Christopher J. Bakes LEWIS BRISBOIS BISGAARD & SMITH LLP 77 Water Street, Suite 2100 New York, NY Matthew Hooper (admitted pro hac vice) IME Law PC th Avenue Seattle, WA Attorneys for Plaintiff-Respondent-Cross-Appellant Leslie Benzies 3. NAME, ADDRESS AND TELEPHONE NUMBER OF COUNSEL FOR APPELLANTS-CROSS-RESPONDENTS: Andrew J. Levander DECHERT LLP 1 of 5

2 Attorneys for Defendants-Respondents Rockstar Games, Inc., Rockstar North Ltd., Dan Houser and Sam Houser 1095 Avenue of the Americas New York, New York (212) Michael C. Lynch KELLEY DRYE & WARREN LLP Attorneys for Defendants-Respondents Take-Two Interactive Software, Inc. Rockstar Games, Inc. and Rockstar North Ltd. 101 Park Avenue New York, New York (212) COURT AND COUNTY OR ADMINISTRATIVE BODY, FROM WHICH APPEAL IS TAKEN: Supreme Court, New York County. 5. BRIEF DESCRIPTION OF THE NATURE OF THE CASE: Plaintiff Leslie Benzies is the former President of Defendant Rockstar North Ltd. ( Rockstar North ) and was designated by contract as one of only three Rockstar Principals, along with Defendants Sam and Dan Houser. Rockstar North is a division of Defendant Rockstar Games, Inc. ( Rockstar ), a wholly-owned operating subsidiary of Defendant Take-Two Interactive Software, Inc. ( Take- Two ), a publicly-traded company. Under his Employment Agreements with Rockstar North, Plaintiff as its President was entitled to compensation in the form of salary, royalties, and stock, as well as other benefits under certain agreements at issue in this case. Under these agreements, Take-Two paid Plaintiff s royalty and stock compensation. As President of Rockstar North, Plaintiff directed and oversaw full production and release of several enormously successful videogames at Rockstar North, Ltd., the Scotland-based studio that produced the entire GTA series, including games that to date remain the most successful videogames ever released: Grand Theft Auto V and GTA Online. On its release, GTA V almost immediately sold over 11 million copies, eventually selling 80 million copies ( units ) sold and sales totaling well over $3 billion, and approaching $4 billion. GTA Online has had sales exceeding $2 billion. Pursuant to a Sabbatical Agreement following the release of Grand Theft Auto V, explicitly to reward Plaintiff for his exemplary, record-setting work, Plaintiff went on the sabbatical as agreed, for the set period of September 1, 2014, to March 31, However, when Plaintiff attempted to return from his sabbatical on the agreed date, Defendants physically barred his return and effectively terminated his employment. Though the Sabbatical Agreement specifically stated all Plaintiff s 2 of 5

3 rights under his Employment Agreement would continue, Defendants ceased paying him royalties during the sabbatical period. This was pursuant to Defendants undisclosed plan to oust Plaintiff using the sabbatical as a ruse. Applicable agreements governing Plaintiff s employment and compensation rights contain no provision for unilateral terminations of this kind. Defendants instead redirected Plaintiff s hundreds of millions of dollars in royalties to themselves. Defendants contend that Plaintiff resigned without good reason, their characterization of Plaintiff s reaction when they barred his return. Defendants also contend that Plaintiff has no right to the royalties and other compensation they by contract agreed to pay him. Under the agreements, Plaintiff, co-defendant Sam Houser and co-defendant Dan Houser were the highly compensated Rockstar Principals, jointly represented by the same law firm, Paul, Weiss, Rifkind, Wharton & Garrison LLP, without a conflict being disclosed either by the firm, any other Rockstar Principal, or any Defendant. All term sheets declared equality of authority and compensation between the Rockstar Principals, including explicitly representing Sam Houser s Employment Agreement as the template for each Rockstar Principal s Employment Agreement. This was consistent with Sam Houser s own explicit promises to Plaintiff over many years that he would strive to ensure that he and Plaintiff were (in the words of one ) partners forever. By these and many other intensely affectionate and familial assurances, Sam Houser became and intended to become Plaintiff s trusted fiduciary, Sam Houser s equal in authority and compensation. For five years, through successive agreement amendments, the Rockstar Principals compensation and authority were indeed exactly equal. At some point, Defendants realized it was to their advantage to oust Plaintiff so that they could keep his money for themselves, but having no grounds to do so for cause under his Employment Agreement, they instead implemented the sabbatical arrangement, from which sabbatical Plaintiff was never allowed to return. Defendant Sam Houser s conduct including his prior representations about Plaintiff s equal compensation under the agreements and his intent to protect Plaintiff contractually at least as well as Sam Houser himself was protected, and to act on Plaintiff s behalf in all contractual dealings with the corporate Defendants breached both his fiduciary duty and the joint venture that existed between the Rockstar Principals under which such equality was promised and therefore mandated. The Amended Complaint asserts causes of action for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of joint venture agreement, breaches of contracts, constructive discharge, breach of the implied duty of good faith and fair dealing, violation of New York Labor Law Art. 6, tortious interference with contract, fraudulent inducement, constructive fraud, negligent misrepresentation, unjust enrichment, and reformation. 3 of 5

4 6. RESULT REACHED IN THE COURT OR ADMINISTRATIVE BODY BELOW: The Court granted in part and denied in part Defendants motion to dismiss the Amended Complaint. The Court dismissed Plaintiff s fiduciary duty, fraud and quasi-contract causes of action without prejudice and dismissed Plaintiff s New York Labor Law claim with prejudice. The Court denied Defendants motion to dismiss Plaintiff s breach of contract, tortious interference with contract, reformation, and constructive discharge causes of action. 7. GROUND FOR SEEKING REVERSAL, ANNULMENT OR MODIFICATION: Plaintiff seeks reversal of the order on the grounds that the Court s ruling was erroneous in the following respects: (i) (ii) The Court erred by holding that Plaintiff s fiduciary duty, fraud, quasi-contract, negligent misrepresentation, and unjust enrichment claims were duplicative of Plaintiff s breach of contract claims. The Court erred by not recognizing that these claims are wellpleaded, based on extra-contractual duties independent of the contract and which seek relief against individual defendants who are not parties to the contracts at issue and they seek different damages recoverable on the different claims such that the claims cannot be deemed duplicative. Further, the Court erred by precluding Plaintiff from pleading in the alternative as contemplated by the CPLR. The Court erred by dismissing Plaintiff s New York Labor Law claim because Plaintiff s employment agreement mandated that New York law govern the terms and conditions of his employment by a New York-based entity and because the compensation sought by Plaintiff constitutes wages under the statute. Dated: New York, New York July 11, 2017 By: LEWIS BRISBOIS BISGAARD & SMITH LLP s/peter T. Shapiro Peter T. Shapiro, Esq. Attorneys for Plaintiff-Respondent-Cross-Appellant 77 Water Street, Suite 2100 New York, New York (212) Peter.Shapiro@lewisbrisbois.com 4 of 5

5 TO: Andrew J. Levander, Esq. DECHERT LLP Attorneys for Defendants-Appellants-Cross-Respondents Rockstar Games, Inc., Rockstar North Ltd. Dan Houser and Sam Houser 1095 Avenue of the Americas New York, New York (212) Michael C. Lynch, Esq. KELLEY DRYE & WARREN LLP Attorneys for Defendants-Appellants-Cross-Respondents Take-Two Interactive Software, Inc. Rockstar Games, Inc. and Rockstar North Ltd. 101 Park Avenue New York, New York (212) of 5