FILED: NEW YORK COUNTY CLERK 05/15/ :53 AM INDEX NO /2016 NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 05/15/2017

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK FRANK FIDILIO, - against- Plaintiff, Index No.: /2016 Commercial Division Part 3 Hon. Eileen Bransten HOOSICK FALLS PRODUCTIONS INC., NEW 38TH FLOOR PRODUCTIONS INC. and VIACOM INTERNATIONAL INC., Motion Seq. No. 3 Defendants. PLAINTIFF FRANK FIDILIO S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF HIS MOTION FOR LEAVE TO REARGUE OR ALTERNATIVELY, TO VACATE IN PART AND/OR MODIFY IN PART, THE ORDERS DISMISSING THE ACTION WITH PREJUDICE OR ALTERNATIVELY, FOR LEAVE TO AMEND THE COMPLAINT KERR, LLP 44 Wall Street, 12 th Floor New York, New York Attorneys for Plaintiff Frank Fidilio 1 of 18

2 TABLE OF CONTENTS PRELIMINARY STATEMENT...1 ARGUMENT... I. PLAINTIFF S MOTION FOR LEAVE TO REARGUE SHOULD BE GRANTED...2 A. The Court Respectfully Did Not Liberally Construe Plaintiff s Allegations...3 B. The Court Respectfully Misapprehended Pertinent Provisions of the PSA and Producer Agreement...3 C. Notwithstanding, Any Such Dismissal Should Have Been Without Prejudice...7 II. PLAINTIFF SHOULD BE GRANTED LEAVE TO AMEND THE COMPLAINT...8 A. Leave to Amend is Not Barred by the Prior Ruling...9 B. Plaintiff s Proposed Amended Complaint is Meritorious...9 III. PLAINTIFF S MOTION IS NOT FRIVOLOUS...11 IV. THE ACTION AGAINST HOOSICK FALLS SHOULD NOT BE DISMISSED, BUT INSTEAD STAYED DURING MEDIATION AND ARBITRATION...12 CONCLUSION of 18

3 TABLE OF AUTHORITIES CASES Am. Audio Service Bureau Inc. v. AT & T Corp., 823 N.Y.S.2d 25 (1st Dep t 2006)...8 Blonder & Co., Inc. v. Citibank, N.A., 28 A.D.3d 180 (1st Dep t 2006)...3 Bryant v. City of N.Y., 188 A.D.2d 446 (2d Dep t 1992)...9 Cadet-Duval v. Gursim Holding, Inc., 45 N.Y.S.3d 585 (2d Dep t 2017)...7 Clark v. N.Y. State Office of Parks, Rec. & Hist. Pres., 288 A.D.2d 934 (4th Dep t 2001) Foley v. Roche, 418 N.Y.S.2d 588 (1st Dep t 1979)...2 Gassman v. Rothlein, 275 A.D.2d 731 (2d Dep t 2000)...4 Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314 (2002)...3 MBIA Ins. Corp. v. Greystone & Co., Inc., 74 A.D.3d 499, 901 N.Y.S.2d 522 (1 st Dep t 2010)...9 McCaskey, Davies and Assoc., Inc. v. N.Y. City Health & Hosp. Corp., 463 N.Y.S.2d 434 (1983)...8 McGhee v. Odell, 946 N.Y.S.2d 134 (1st Dep t 2012)... 8, 9-10 Patsis v. Nicolia, 120 A.D.3d 1326 (2d Dep t 2014)...4 Postiglione v. Castro, 990 N.Y.S.2d 257 (2d Dep t 2014)...8, 10 Republic Mortgage Insurance Company v. Countrywide Financial Corporation, 28 Misc.3d 1214(A) (N.Y. County 2010) of 18

4 Siegmund Strauss, Inc. v. E. 149th Realty Corp., 104 A.D.3d 401 (1st Dep t 2013)...3 Strujan v. Glencord Bldg. Corp., 137 A.D.3d 1252 (2d Dep t 2016)...9 Wen Zong Yu v. Charles Schwab & Co., 34 Misc. 3d 32 (App. Term 2d 2011)...13 RULES CPLR 2221(a)... passim CPLR 2221(d)... passim CPLR 3025(b)...8, 10 CPLR 3211(a)(1)... passim CPLR 3211(a)(7)... passim CPLR 7503(a)...12, 13 CPLR 2214(b)...11 N.Y.C.R.R (c) of 18

5 Plaintiff Frank Fidilio ( Plaintiff ) submits this Reply Memorandum of Law in Further Support of his motion (1) pursuant to CPLR 2221(d) for leave to reargue Defendant New 38th Floor Productions Inc. s ( New 38th Floor ) 1 motion to dismiss and/or stay (Mot. Seq. No. 2) and upon reargument, deny New 38th Floor s motion to dismiss and stay Plaintiff s cause of action for breach of implied contract and/or third party beneficiary to contract (Count II); and (2) pursuant to CPLR 2221(a) to modify the Order dismissing the action against Defendant Hoosick Falls Productions Inc. ( Hoosick Falls ) (Mot. Seq. No. 1) to instead stay the action pending arbitration in accordance with CPLR 7503(a); or alternatively, (3) pursuant to CPLR 3025 for leave to amend the Complaint to cure any defects in pleading Count II; or alternatively, to modify the Orders so as to dismiss the Complaint against New 38th Floor without prejudice with leave to replead if the arbitration against Hoosick Falls reveals evidence in discovery supporting Plaintiffs allegations that New 38th Floor failed to pay all Contingent Compensation. 2 PRELIMINARY STATEMENT Plaintiff s Complaint alleges not just that he did not receive all Contingent Compensation from Defendant Hoosick Falls, but that Defendant New 38 th Floor did not pay out all Contingent Compensation (i.e., to Hoosick Falls). Specifically, Plaintiff alleges that by failing to disclose all revenues and by charging expenses of affiliates against revenue earned from Scappers, Defendant New 38 th Floor did not pay and/or underpaid Contingent Compensation. Defendant New 39 th Floor argued that the Production Services Agreement entered into between New 38 th Floor and Hoosick shifts liability for non-payment of Contingent Compensation to Hoosick Falls, but Hoosick Falls cannot pay out shares of Contingent Compensation it never received. 1 Again, Plaintiff is not seeking to reargue the portion of the Court s Decision and Order (NYCEF Doc. Nos. 39 & 40, annexed as Exs. 1 & 2 to the Kerr Affirm.) dismissing of each cause of action in the Complaint as against Defendant Viacom International, Inc. 2 All capitalized terms, unless otherwise stated, shall have the same meaning as those set forth in the Complaint (NYSCEF Doc. No. 2). 1 5 of 18

6 As such, Plaintiff seeks leave to reargue the narrow portion of Defendant New 38 th Floor s motion to dismiss and/or stay (Mot. Seq. No. 2) which resulted in dismissal of Plaintiff s claim against New 38 th Floor for breach of implied contract/third party beneficiary to contract (Count II). Should the Court reverse its decision as to that count, Plaintiff requests modification of the Order dismissing the action against Hoosick Falls in favor of a stay pending mediation and arbitration. Alternatively, Plaintiff seeks leave to amend the Complaint to cure any defects in Count II and/or modification of the order such that the dismissal is without prejudice, providing leave to amend Plaintiff s pleading should evidence of New 38th Floor s misconduct be revealed in its mediation and arbitration with Hoosick Falls. ARGUMENT I. PLAINTIFF S MOTION FOR LEAVE TO REARGUE SHOULD BE GRANTED As set forth in Plaintiff s initial moving papers on this motion ( Moving Brief ) [NYCEF Doc. No. 53 at 5], CPLR 2221(d) provides that a motion for leave to reargue shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion. Foley v. Roche, 418 N.Y.S.2d 588, 593 (1st Dep t 1979) (CPLR 2221(d) is designed to afford a party an opportunity to establish that the court overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law ). In opposition to this motion, Defendant New 38th Floor argues that Plaintiff is engaging in a rehashing exercise that he has failed to allege any issue of fact or law overlooked or misapprehended by the Court, and is instead merely attempting to reassert arguments made in opposition to its motion to dismiss. This is not true. As stated in its moving papers on this motion, Plaintiff argues that the Court respectfully misapprehended pertinent facts allegations pled by Plaintiff and language contained in the PSA and the Producer Agreement. And, the Court 2 6 of 18

7 respectfully misapplied pertinent law liberal deference to notice pleading was not provided under CPLR 3211(a)(7) and 3211(a)(1), and controlling principals of contract interpretation were overlooked, all of which affected the outcome of the motions. Neither of these points is a rehashing of the underlying motion. A. The Court Respectfully Did Not Liberally Construe the Allegations In deciding a motion under CPLR 3211(a)(7), [t]he court must accept the facts alleged in the pleading as true and accord the opponent of the motion... the benefit of every possible favorable inference [to] determine only whether the facts as alleged fit within any cognizable legal theory. Siegmund Strauss, Inc. v. E. 149th Realty Corp., 104 A.D.3d 401, 403 (1st Dep t 2013). Where the motion is made on the basis of documentary evidence under CPLR 3211(a)(1), dismissal is warranted only if the documentary evidence submitted in opposition utterly refutes plaintiff s factual allegations, Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002) and definitively dispose of plaintiff s claim. Blonder & Co., Inc. v. Citibank, N.A., 28 A.D.3d 180, 182 (1st Dep t 2006) (emphasis added). Respectfully, the Court did not weigh all facts as pled in favor of Plaintiff. At this preliminary stage of the litigation, Plaintiff should not be outright barred from pursuing a nonpayment claim against the party that controlled the funds absent definite documentary evidence that such a claim could never be cognizable. Plaintiff proffers that the Court, respectfully, ignored the full scope of the facts as pled and instead weighed those facts in favor of New 38 th Floor deciding that the PSA and Producer Agreement s definitively dispose[d] of any cognizable legal theory alleged in the Complaint. Construing those in the light most favorable to Defendants, the Court denied Plaintiff s ability to pursue any claim against New 38 th Floor. B. The Court Respectfully Misapprehended Pertinent Provisions of the PSA and Producer Agreement It is well-settled that interpretation of an unambiguous contract is a function for the 3 7 of 18

8 court. Patsis v. Nicolia, 120 A.D.3d 1326, 1327 (2d Dep t 2014); Gassman v. Rothlein, 275 A.D.2d 731, 732 (2d Dep t 2000)( It is well established that the interpretation of a contract is a matter of law for the court. ). When interpreting a contract, the court should arrive at a construction which will give fair meaning to all of the language employed by the parties to reach a practical interpretation of the expressions of the parties so that their reasonable expectations will be realized. Id. Paragraph 5 of the Producer Agreement provides as follows: [Hoosick Falls] has entered into Production Services Agreement with New 38 th Floor Productions Inc. dated April 1, 2009 for the production and distribution of the Series ( Production Services Agreement ). [Hoosick Falls] shall pay to Artists % of each amount that [Hoosick Falls] receives as contingent compensation under the Producer Services Agreement, and any amendments or modifications thereto, whether pursuant to Section 7 (Contingent Compensation) or otherwise. See Exhibit B to the Affirmation of Jeffrey Wang in support of dismissal (annexed to the Kerr Affirmation dated April 28, 2017, within Plaintiff s initial moving papers on this motion. 3 ) Further, Plaintiff s initial opposition papers highlighted the provisions of the parties agreements that impacted his contract claim. In particular, Paragraph 5(b) of the PSA, titled Service of Executive Producer/Key Talent, contains a carve-out through which liability can be imposed upon New 38th Floor, as follows: [Hoosick Falls] acknowledges that the delivery to [New 38th Floor] of the talent agreements with each of the Key Talent is a condition precedent and of the essence of the Agreement ( Key Talen Agreements ). [Hoosick Falls] therefore agrees that [Hoosick] will enter into Key Talent Agreements, the form an substance reasonably satisfactory to [New 38th Floor].... Provided that [New 38th Floor] makes all such payments to [Hoosick Falls] pursuant to the applicable cash flow schedule, under no circumstance shall Key Talent have any claim or recourse against [New 38th Floor] for payment of any such monies due to them in connection with the Pilot and/or Series, and [Hoosick 3 All exhibits cited herein were set forth within the underlying motion, but for ease of reference are referred to first by exhibit number provided within Plaintiff s initial motion papers and then by exhibit number or letter contained within each all of which are annexed to the Affirmation of William Kerr dated April 28, 2017 ( Moving Affirm ). 4 8 of 18

9 Falls] hereby agrees to defend, indemnify and hold [New 38th Floor] harmless in connection with any such claim. (emphasis added.) Lastly, 7 of the PSA provides: Without limiting the generality of [Hoosick Falls s] indemnification obligations set forth in the Standard Terms, [Hoosick Falls] hereby agrees to indemnify and hold harmless [New 38th Floor], [New 38th Floor s] related and affiliated companies and entities, and the officers, directors, agents and employees of each, from and against any and all damages, costs, expenses, claims and causes of action (including, but not limited to, reasonable outside attorneys fees and costs in the defense and disposition of such matters), in any way arising by reason of any claim for payment of any respective shares of the foregoing aggregate contingent compensation by Executive Producer, MW, AW and/or any or all Key Talent (as applicable). (emphasis added.) By interpreting each of these provisions in favor of New 38 th Floor, the Court determined that Plaintiff s claim against New 38th Floor was barred because only Hoosick Falls owed any obligation to Plaintiff. However, Paragraph 5(b) s language is certainly qualified only in the instance where New 38 th Floor pays out all Contingent Compensation is sole liability shifted to Hoosick Falls. Simply put, the principle of expressio unius exclusion alterius, or, the qualification of one thing is the exclusion of the other, requires the reading that New 38 th Floor can in fact be liable to Plaintiff if it does not pay out all Contingent Compensation. While Hoosick Falls is obligated to pay out all shares and the sole party liable for not doing so, nowhere is New 38 th Floor absolved from its obligation to pay out at the top of the waterfall. New 38 th Floor must pay out all Contingent Compensation or the protections of its limitation of liability do not follow. Paragraph 5(b) of the PSA carves out the instance where New 38 th Floor can be liable to Plaintiff if it does not make all payments to Hoosick Falls. The Court next reviewed Plaintiff s pleading. Plaintiff alleged that (i) New 38th Floor made payments to Hoosick Falls outside of Contingent Compensation in order to deny Plaintiff his share of the Contingent Compensation and (ii) New 38th Floor intentionally concealed 5 9 of 18

10 significant revenues and charged expenses of affiliates against the limited revenue it did disclose in order to reduce Contingent Compensation paid to Hoosick Falls, thus reducing Plaintiff s share. Discussing only the former, the Court ruled that Plaintiff did allege that Hoosick Falls was not paid in full. But, that is exactly what Plaintiff alleged. Respectfully, the Court looked only to the allegations that New 38 th Floor hid Contingent Compensation within other categories, with the effect that Hoosick Falls rightly could have been paid in full and thus still obligated to pay out Plaintiff s share, whether labeled Contingent Compensation or otherwise. However, Plaintiff also alleged that New 38 th Floor failed to disclose and underpaid Contingent Compensation altogether both by inflating expenses and not disclosing and therefore deflating total revenues. See Amended Compl. annexed to the Moving Affirm. as Ex. 11, at 23-25, 51. The gravamen of Plaintiff s claim is found within those allegations, read together that New 38 th Floor failed to pay out all Contingent Compensation and thus, is not protected by the PSA s limitations of liability. Plaintiff referred to those allegations in its initial opposition papers. See Ex. 6, Kerr Affirm., Memo. in Opp. at 4 & 20. Specifically, Plaintiff argued as follows: Ex, 6 at 4. New 38 th Floor and Viacom International have received significant revenues from Scrappers that have not been fully disclosed to Fidilio in order to deny him of his Contingent Compensation and other equitable compensation for the creation and production of Scrappers. Compl. at 26. These undisclosed booked revenues include revenue from advertising, distribution and licensing. Compl. at 27. Additionally, New 38th Floor and Viacom International charged expenses of their affiliates against the limited revenue that they have disclosed. Id. The Complaint alleges that that is exactly what transpired New 38th Floor and Viacom International did not pay all Contingent Compensation. See e.g., Compl. at 21 ( Scrappers has been more profitable to New 38th Floor and Viacom International than either has disclosed); ( [t]he Scrappers concept has been recycled in various forms, including Auction Hunters which began to run on Spike TV in late 2010, featuring competing bands of participants bidding on storage units, and shows such as Porter Ridge, Scrappers UK and Junkyard Empire ) of 18

11 Id. (Point II(B)(2) at 20). Respectfully, the Court overlooked these allegations in the shadow of a greater number of allegations that point liability at Hoosick Falls and its receipt of hidden payments passed down through categories not categorized as Contingent Compensation. Even the indemnification provision that follows soon thereafter is limited to instances where Hoosick Falls fails to pay out shares and not when New 38 th Floor fails to pay out all Contingent Compensation. See PSA 7. Hoosick Falls must indemnify New 38 th Floor only in the instance of any claim for payment of any respective shares of the foregoing aggregate contingent compensation by Executive Producer, MW, AW and/or any or all Key Talent (as applicable) and not for payment of overall Contingent Compensation itself. See id. On a CPLR 3211(a)(1) motion and in conformity with general tenets of contract interpretation, the Court, respectfully, should have construed the pleading and the above-quoted provisions with a more liberal view so as not to unnecessarily bar Plaintiff s claim out of the gate. To absolve New 38th Floor from liability when Plaintiff alleged both that it reduced overall Contingent Compensation and/or made payments to Hoosick Falls in other categories other than Contingent Compensation, is respectfully, is not a fair application of the PSA s limitation of liability. Again, [p]rovided that [New 38th Floor] makes all such payments to [Hoosick Falls].... under no circumstance shall Key Talent have any claim or recourse against [New 38th Floor] for payment of any such monies due to them in connection with the Pilot and/or Series... (emphasis added.) And, when it does not make all such payments, Plaintiff should have redress. C. Notwithstanding, Any Such Dismissal Should Have Been Without Prejudice Notwithstanding, Plaintiff alleged in its opening brief that the Court misapprehended the law when it dismissed of all plaintiff s claims with prejudice at this early stage of the litigation. See Cadet-Duval v. Gursim Holding, Inc., 45 N.Y.S.3d 585, 587 (2d Dep t 2017) ( Dismissals for pleading deficiencies... [is] not on the merits and [is] without prejudice. ); Clark v. N.Y of 18

12 State Office of Parks, Rec. & Hist. Pres., 288 A.D.2d 934, 935 (4th Dep t 2001) ( dismissal pursuant to CPLR 3211(a)(7)... results in a dismissal without prejudice ). Instead, a dismissal with prejudice is reserved only for a decision on the merits with resulting res judicata and collateral estoppel effect. As it stands, the Order granting Defendant New 38th Floor s motion would preclude Plaintiff from recovery even if mediation and arbitration against Hoosick Falls reveals evidence that New 38th Floor failed to pay all Contingent Compensation to Hoosick Falls and thus caused Plaintiff damages beyond Hoosick Falls s failure to pay over his portion of the Contingent Compensation it received from New 38 th Floor. Respectfully, if the Court is inclined to deny reargument, the Decision and Order should respectfully be modified pursuant to CPLR 2221(a) 4 so as to effect a dismissal without prejudice as to New 38th Floor in light of the strong public policy of this State to dispose of cases on their merits. Am. Audio Service Bureau Inc. v. AT & T Corp., 823 N.Y.S.2d 25, 28 (1st Dep t 2006). In that manner, Plaintiff s claim can be preserved for post-mediation and arbitration if necessary. II. PLAINTIFF SHOULD BE GRANTED LEAVE TO AMEND THE COMPLAINT CPLR 3025(b) provides that [a] party may amend his or her pleading... at any time by leave of court or by stipulation of all parties.... Such leave shall be freely given absent prejudice or surprise resulting directly from the delay. McCaskey, Davies and Assoc., Inc. v. New York City Health & Hosp. Corp., 463 N.Y.S.2d 434, 434 (1983) (citations omitted). Leave to amend is routinely given as a matter of course unless the party opposing the amendments overcomes the heavy presumption of validity McGhee v. Odell, 946 N.Y.S.2d 134, 135 (1st Dep t 2012) and shows that the proposed amended pleading is palpably insufficient or patently devoid of merit. Postiglione v. Castro, 990 N.Y.S.2d 257, 260 (2d Dep t 2014). 4 CPLR 2221(a) provides A motion for leave to renew or to reargue a prior motion, for leave to appeal from, or to stay, vacate or modify, an order shall be made, on notice, to the judge who signed the order of 18

13 A. Leave to Amend is Not Barred by the Prior Ruling Defendant New 38th Floor argues that leave to amend should not be granted because such leave is barred under the doctrine of the law of the case by the prior Decision and Order granting Defendant New 38th Floor s pre-answer motions and dismissing Plaintiff s causes of action with prejudice. However, as above and as the court explained in Strujan v. Glencord Buidling. Corp., the doctrine [f the law of the case] applies only to legal determinations that were necessarily resolved on the merits in [a] prior decision. 137 A.D.3d 1252 (2d Dep t 2016) (emphasis added). The doctrine does not apply to determinations made on pleading deficiencies under CPLR 3211(a)(1) or 3211 (a)(7). Notwithstanding, in addition to leave to replead, Plaintiff requests that the Court s prior Order be modified so as to be without prejudice, which if the Court were to agree with New 38 th s Floor s argument - would have no preclusive effect and thus would not be the law of the case as New 38 th Floor contends. Finally, the cases cited by New 38th Floor are procedurally distinguishable from the instant matter. In both Strujan, 137 A.D.3d 1252 (2d Dep t 2016) and Bryant v. City of N.Y., 188 A.D.2d 446 (2d Dep t 1992), leave was denied where the movant had previously moved for, and been denied, leave to amend. B. Plaintiff s Proposed Amended Complaint is Meritorious Contrary to New 38 th Floor s contention, [o]n a motion for leave to amend, plaintiff need not establish the merit of its proposed new allegations. See MBIA Ins. Corp. v. Greystone & Co., Inc., 74 A.D.3d 499, 901 N.Y.S.2d 522 (1st Dep't 2010). Notwithstanding, relying solely upon the Court s decision on dismissal, New 38 th Floor offered no showing in evidentiary form that Plaintiff s allegations were not meritorious. Defendant New 38th Floor has not overcome[ ] the heavy presumption of validity McGhee v. Odell, 946 N.Y.S.2d 134, 135 (1st Dep t 2012) to 9 13 of 18

14 prove that Plaintiff s proposed Amended Complaint [see Ex. 11] is palpably insufficient or patently devoid of merit. Postiglione v. Castro, 990 N.Y.S.2d 257, 260 (2d Dep t 2014), as required for denial of a motion for leave to amend under CPLR 3025(b). Plaintiff does not seek to add new causes of action to the complaint but only to amplify and clarify the allegations regarding New 38th Floor s breach of the PSA. By hiding Contingent Compensation paid to Hoosick Falls and/or by reducing the payments due to Hoosick Falls and thus ultimately due Plaintiff New 38 th Floor denied Plaintiff his monies due. Specifically, by concealing revenue New 38 th Floor did receive and charging expenses of its affiliates against the limited revenue that it did disclose, Plaintiff averred that New 38 th Floor failed to pay all Contingent Compensation. However, those allegations can be amplified and clarified. Not all allegations in support of Count II are based upon information and belief as New 38 th Floor contends. See e.g., Amended Compl., Moving Affirm, Ex. 11 [NYSCEF Doc. No. 54] at 23 ( New 38th Floor has received significant revenues... yet [has] not provided full disclosure to Frankie in order to deny him his Contingent Compensation... ), 51 ( Defendant New 38th Floor materially breached the Production Services Agreement by paying reduced Contingent Compensation and Hidden Compensation.... ). Notwithstanding, to the extent that the allegations are on information and belief, they are rightly so. Plaintiff cannot possibly further amplify Plaintiff s claims against New 38th Floor with full details of New 38 th Floor s concealment. By definition, concealment-type claims cannot be fully fleshed-out at the pleading phase because the acts and omissions underlying those claims are hidden until revealed through discovery. Plaintiff avers that New 38 th Floor has hidden such revenues and obscured its expenses. See Amended Compl. annexed to the Moving Affirm. as Ex. 11, at 23-25, 51. Of course, each of his allegations cannot fully be substantiated at this time. It is expected of 18

15 that discovery during mediation and arbitration against Hoosick Falls will reveal evidence that New 38th Floor failed to pay all sums due to Hoosick Falls and thereby reduced Plaintiff s share that could be paid by Hoosick Falls. At that point, Plaintiff will be able to aver more. Notwithstanding, the information Plaintiff has and basis for his belief as to each of these allegations is set forth within paragraphs of the Amended Complaint. Plaintiff knows that New 38 th Floor received substantial revenue from the show and that other shows followed with the same format. See e.g., Amended Compl., Moving Affirm., Ex. 11, 19 ( The Scrappers concept has also been recycled in various forms, including Auction Hunters which began to run on Viacom Inc. s Spike TV in late 2010, featuring competing bands of participants bidding on storage units. ) Plaintiff knows he was never paid for any of the shows that followed and believes that some Contingent Compensation was withheld completely and at other times, Hoosick Falls was compensated in other ways. III. PLAINTIFF S MOTION IS NOT FRIVOLOUS Defendant New 38th Floor asks the Court without cross-moving for such relief to Order Plaintiff to pay its costs incurred in opposing the instant motion, claiming that the motion is merely an attempt to prolong this litigation. Not so. The Court has discretion to award sanctions for frivolous conduct that it is completely without merit in law and cannot be supported by a reasonable argument, is undertaken primarily to delay or prolong the resolution of the litigation or is made solely to harass or maliciously injure. N.Y.C.R.R (c). Here, Plaintiff has timely moved for reargument of the pre-answer dismissal of his Complaint, in its entirety, with prejudice. The relief granted was harsh denying all claims against the companies at the top of the waterfall. As addressed in detail above and in Plaintiff s opening brief, this motion is limited solely to reargument of one cause of action against only one of 18

16 Defendant. 5 This is not a shot gun motion, but very limited. Plaintiff has not sought to keep Defendant Viacom International Inc. in the case the deepest pocket; nor has he attempted to extract a nuisance settlement from New 38 th Floor as New 38 th Floor implies. Plaintiff has done nothing of the sort and that implication is itself warrants sanctions. Rather than attempt to impermissibly prolong this litigation, this matter was, and if restored, would still be at its infancy. 6 Plaintiff sought the least time afforded under CPLR 2214 (b), serving the motion under the shortest timeline for which a reply right would still be available. And, Plaintiff seeks only the opportunity to litigate on the merits by reinstating Count II, or alternatively, to have that Count dismissed without prejudice. Such relief is imperative in order for Plaintiff to be able to pursue claims against New 38th Floor when evidence of its wrongdoing is revealed through mediation and arbitration with Hoosick Falls. IV. THE ACTION AGAINST HOOSICK FALLS SHOULD NOT BE DISMISSED, BUT INSTEAD STAYED DURING MEDIATION AND ARBITRATION Lastly, Defendant Hoosick Falls opposes that portion of Plaintiff s motion which seeks to reargue the dismissal of the Complaint against Hoosick Falls with prejudice, rather than to stay the action against Hoosick Falls pending arbitration and mediation. CPLR 7503(a) provides [i]f an issue claimed to be arbitrable is involved in an action pending in a court having jurisdiction to hear a motion to compel arbitration, the application shall be made by motion in that action. If the application is granted, the order shall operate to stay a pending or subsequent action, or so much of it as is referable to arbitration. (emphasis added). Here, the Court determined that all of the surviving causes of action were referable to mediation and/or arbitration, and thus the court cannot envision a scenario in which the parties would need to return back to court to mete out.... Moving Affirm, Ex. 1 (9:5-9:9). In granting 5 And, the effect of which would be to also modify the Order to invoke a stay, rather than dismissal, against another. 6 In contrast, upon first appearing, counsel for New 38 th Floor, now asserting sanctions for protracting litigation, initially requested some two months to respond to the Complaint of 18

17 dismissal, the Court relied on Republic Mortgage Insurance Company v. Countrywide Financial Corporation. 28 Misc.3d 1214(A), *3 (Sup. Ct. N.Y. County 2010). If the action against New 38 th Floor is restored, under a plain reading of CPLR 7503(a), the Court s determination that the parties were required to mediate and/or arbitrate each cause of action against Hoosick Falls necessarily requires a stay of the pending action albeit with only one cause of action in play. See Wen Zong Yu v. Charles Schwab & Co., 34 Misc. 3d 32, 35 (App. Term 2d 2011) ( A party may make a proper and timely motion to compel arbitration pursuant to CPLR 7503[a], and the remedy is to stay the action pending the arbitration. ). Hoosick Falls contends that Plaintiff has failed to connect the dots that irrespective, all claims against it are arbitrable and thus, relying upon Republic Mortgage Insurance Company, the Court s decision should stand. Yet, Republic Mortgage Insurance Company is limited to the circumstance where all causes of action are deemed arbitrable against all defendants. Rep. Mort. Ins. Co. v. Countrywide Fin. Corp., 28 Misc.3d 1214(A), *3 (Sup. Ct. N.Y. County 2010) ( when all of the issues raised in the Complaint must be submitted to arbitration, the Court may dismiss an action rather than stay proceedings, dismissal is appropriate ). It is not Plaintiff s failure to connect the dots but, if even one count remains that is not arbitrable a stay is the only relief available, even against parties whose claims are wholeheartedly arbitrable. Should the Court reinstate Count II, staying the action will favor judicial economy obviating any need to commence a new action to confirm, and subsequently enforce, any award issued in mediation or arbitration and obviating any need to enforce subpoenas against and compel discovery from third-parties, including New 38 th Floor. CONCLUSION For each of the foregoing reasons, Plaintiff should be granted leave to reargue that portion of New 38 th Floor s motion to dismiss and/or to stay Count II, and upon reargument, the of 18

18 Court should deny dismissal of Count II and stay the remaining counts against Hoosick Falls pending arbitration against it, or alternatively, Plaintiff should be permitted leave to replead, or alternatively, the Order dismissing the action against New 39 th Floor should be modified so that dismissal is without prejudice. Dated: New York, New York May 14, 2017 KERR, LLP By: William B. Kerr 44 Wall Street, 12 th Floor New York, New York Attorneys for Plaintiff Frank Fidilio of 18