Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 1 of 33
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`Civil Action No. 13-12193-LTS
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
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`ANDREW CONWAY, et al.,
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`Plaintiffs,
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`SAM LICATA, et al.,
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`Defendants.
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`ORDER ON PENDING MOTIONS
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`May 8, 2015
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`SOROKIN, J.
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`This case arises from a soured business relationship between an aspiring recording artist
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`and her father who was investing in her music career on one side, and a husband-wife team
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`acting as the artist’s producer and marketing agents on the other. Before the Court is
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`Defendants’ Motion for Summary Judgment and Plaintiff’s Cross-Motion for Summary
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`Judgment. Defendants have moved for summary judgment on all the counts remaining in
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`Plaintiffs’ Complaint, while Plaintiffs have moved for summary judgment on Plaintiffs’ claim of
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`copyright infringement. As described below, both Motions are ALLOWED IN PART and
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`DENIED IN PART. Separately, Defendants have moved to compel production of certain
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`documents and exclude evidence, Doc. No. 189, and to stay a related action filed in California
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`state court and enjoin the filing of further actions by Plaintiffs, Doc. No. 220. The Motion to
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`Compel and Exclude is ALLOWED IN PART and DENIED IN PART, and the Motion to Stay
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`and Enjoin is DENIED.
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 2 of 33
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`I.
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`STATEMENT OF FACTS1
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`Plaintiff Andrew Conway (“Mr. Conway”) is a businessman who resides in
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`Massachusetts. SOMF ¶¶ 8, 188.2 Mr. Conway’s daughter, Plaintiff Liana Conway (“Ms.
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`Conway”) was a college student, amateur songwriter, and aspiring recording artist in 2010, when
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`the interactions between the parties first occurred. Id. ¶ 11, 13. Defendant Sam Licata, who
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`performs under the name Phoenix Stone (“Stone”), is a recording artist, actor, and music
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`producer. Id. ¶ 19. Stone’s wife, Defendant Sybil Hall (“Hall”) has worked in the entertainment
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`and music industries for a number of years. Id. ¶ 18. Together, Stone and Hall own or operate
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`the remaining business entity defendants, all entities containing “Stonehall” in the title, which
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`they use to facilitate their music and entertainment business. Id. ¶¶ 23, 185-87.
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`Plaintiffs and Defendants first came into contact in 2010 through a mutual friend. Id. ¶¶
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`28-29. Plaintiffs knew Defendants were in the music industry and were interested in establishing
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`a connection with them because of Ms. Conway’s interest in a music career. Ex. 1 at 16:5-16.3
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`After some initial conversations, Plaintiffs eventually sent Hall an amateur recording of Ms.
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`Conway singing. Ex. 1 at 17:2-22. Defendants, impressed by the recording, suggested that Ms.
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`Conway record some songs with them in California. Ex. 2 at 13:14-20. In June of 2010, Ms.
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`Conway went to California to record four songs with Stone. Id. at 13:23-14:22. Defendants
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`1 The facts which follow are not disputed by the parties unless explicitly noted otherwise. The Court
`reserves discussion of certain undisputed facts and factual allegations for the analysis of the specific legal
`issue to which they are relevant.
`2 Citations in this form refer to the parties’ combined statement of material facts, found on the docket in
`this action at number 216. The Court notes that both parties seemingly misunderstand the requirement of
`filing a “concise statement of material facts” as called for by Local Rule 56.1. The parties’ combined
`statement stretches more than 600 numbered paragraphs across more than 180 pages. Plaintiffs, in
`particular, include numerous paragraphs in the statement similar to paragraph 233, which reads, in its
`entirety, “On January 7, 2011, Andrew received a call from Hall.” These sorts of facts, if indeed material
`to the present motions (which the Court doubts) are best presented in summary form, if at all. The parties
`should note that such voluminous filings hinder, rather than assist, the Court’s resolution of their dispute.
`3 Citations in this form refer to the parties’ combined sequentially numbered exhibits to their motions for
`summary judgment, appearing on the docket in this action at numbers 186, 196, 217, and 234.
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`2
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 3 of 33
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`arranged for musicians to prerecord the music and Ms. Conway provided vocals over the music.
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`Id. at 18:3-16. Stone acted as producer and worked with an engineer to produce the master
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`recordings of the songs. Id. at 19:3-9. Some of the compositions sung by Ms. Conway were
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`songs she composed herself, others were songs composed by Stone. Id. at 14:20-15:2. Ms.
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`Conway returned to California in September of that year for a photo shoot organized by
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`Defendants intended to support the songs she recorded. SOMF ¶ 34(a).
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`The parties remained in contact after that initial recording session and photo shoot. Over
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`the fall of 2010, the parties discussed recording more songs to complete an album and engaging
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`in a marketing campaign with the object of transforming Ms. Conway into a successful
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`commercial recording artist. Ex. 1 at 26:5-28:19. Thereafter, in February 2011, Ms. Conway
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`recorded an additional six songs with Stone and Hall. Ex. 2 at 27:1-28:21. These songs were
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`recorded in the same manner as the previous four, with Ms. Conway providing vocals over
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`prerecorded music and Stone producing. Id. at 29:2-6. The songs recorded in this session
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`included compositions written by Ms. Conway, compositions written by Stone, and joint works
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`where both Stone and Ms. Conway contributed to the music and lyrics. Id. at 28:9-21.
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`Up to this point, Mr. Conway had been discussing individual projects to promote Ms.
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`Conway’s career with Stone and Hall as they arose and agreeing to pay for them on a project-by-
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`project basis. See, e.g., ex. 1 at 24:24-25:10, 37:13-38:10. In June 2011, however, the parties
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`discussed Mr. Conway paying $25,000 monthly for marketing to promote Ms. Conway’s career,
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`an arrangement to which Mr. Conway eventually agreed. SOMF ¶ 259. The purposes for which
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`that money was intended and the limitations on its use are the key disputes of this case.
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`Plaintiffs argue that the amounts transferred monthly were to be applied solely to pass-through
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`expenses from third parties and that Defendants were permitted to pay themselves from those
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`3
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 4 of 33
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`amounts only when specifically authorized by Mr. Conway. Defendants contend that the parties’
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`agreement was the $25,000 payments was intended to pay for their services at a discounted rate
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`in addition to paying for the services of third parties. It is undisputed, however, that Defendants
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`invoiced Mr. Conway $25,000 every month beginning in July 2011 and continuing through
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`August 20124 and that Mr. Conway paid those invoices. SOMF ¶ 85. In addition to the monthly
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`payments, Mr. Conway would pay separately for certain other expenses; for example, Mr.
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`Conway made separate transfers of funds earmarked for radio promotion of two of Ms.
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`Conway’s songs. Id. ¶¶ 580, 583.
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`In 2011, around the same time the parties began discussing the $25,000 monthly
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`payments, Mr. Conway broached the idea of drafting a written agreement with Hall and Stone
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`that would govern the parties’ business relationship. Id. ¶¶ 43-44. In June 2011, Defendants
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`contacted an attorney in Nashville to draft the agreement that the parties had contemplated,
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`which the parties refer to as the Great Lines Agreement. Id. ¶ 195. Mr. Conway’s notes
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`regarding the project reveal that he reviewed drafts of the agreement and communicated with
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`Defendants and the lawyer drafting the agreement about its content. Id. ¶ 50; Ex. 19 at
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`CON0440-52. In January 2012, the lawyer drafting the agreement emailed a copy of the
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`agreement for the parties to execute. Ex. 27. The draft of the agreement contemplated the
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`formation of a limited liability company to promote Ms. Conway’s career. Id. It also regulated
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`the ownership of intellectual property born of the relationship, Mr. Conway’s capital
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`contributions, and the distribution of profits from Ms. Conway’s career. Id. On February 4,
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`2012, Hall signed the agreement on behalf of Defendants and forwarded the signed copies to Mr.
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`Conway. SOMF ¶ 55. It is undisputed that neither Mr. Conway nor Ms. Conway ever signed
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`4 The parties note that Defendants did not bill for February 2012. SOMF ¶ 85.
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`4
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 5 of 33
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`the agreement, id. ¶¶ 199, 202, and that the paperwork was never filed to bring the business
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`entity into existence. Id. ¶ 211. Stone and Hall stated they did not know that the agreement was
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`unsigned until after the parties’ relationship dissolved in 2013. Id. ¶ 50. Conway did not
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`specifically advise them he had not signed it. Id. ¶ 61.
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`Defendants argue that the Great Lines Agreement, as manifested in the January draft,
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`governs even though it is unsigned because the written agreement simply memorialized the
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`parties’ agreement as to their relationship. Plaintiffs argue that they never intended that
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`agreement to govern the parties’ relationship. Plaintiffs contend that the parties had a separate
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`oral agreement under which Mr. Conway would provide funding and Defendants would provide
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`marketing and production services and would pay third-party vendors from the money Mr.
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`Conway advanced. Id. ¶ 65. Under the purported oral contract, Defendants would only pay
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`themselves from those funds for certain specified services that were “exceptions” to the general
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`rule and would receive a percentage or commission on the revenues Ms. Conway generated once
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`she became a successful recording artist. Id. ¶ 65.
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`Although the scope, propriety, and necessity of Defendants’ services is in dispute, it is
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`undisputed that throughout 2011 and much of 2012, the parties worked together to promote Ms.
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`Conway’s career. The record shows Mr. Conway and Defendants to have been in near weekly
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`contact over this period. The parties recorded additional songs, id. ¶ 37, completed photo shoots,
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`id. ¶ 34, and produced videos for at least six of the songs that had been recorded, id. ¶ 35. The
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`parties also worked together to expand Ms. Conway’s visibility by arranging performances at a
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`conference of music executives, id. ¶ 102, on a summer camp tour during the summer of 2012,
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`id. ¶ 100, and on various live shows, interviews, and other promotional events. Id. ¶¶ 94, 95,
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`103-05. To facilitate these events and to promote Ms. Conway generally, Defendants worked
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 6 of 33
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`with numerous third parties, including promoters, publicists, and marketing firms. Id. ¶¶ 100,
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`588, 604. One of the services Defendants procured was purchasing “likes” for Ms. Conway’s
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`Facebook account. Id. ¶ 422. The parties’ activities culminated in an album release party, held
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`in August 2012 for Ms. Conway’s album, which all of the parties attended and were involved in
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`bringing to fruition. Id. ¶¶ 106-107.
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`The parties’ relationship was, however, marked at times by conflict in the business and
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`creative aspects of their endeavor. In November 2011, Mr. Conway “[e]xpressed dissatisfaction
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`with diverging efforts and lack of cohesiveness to define Liana’s brand and accelerate its
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`appeal.” Id. ¶ 298. Around this time, Mr. Conway requested a breakdown of marketing
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`expenditures and Hall obliged with a document that purported to explain how marketing monies
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`were being spent. Ex. 134. Later, in February 2012, Mr. Conway “shut[] down” the project,
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`telling Defendants he would not be making future payments, apparently due to conflict between
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`Ms. Conway and Stone and concerns about financial transparency. SOMF ¶¶ 311, 312. In
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`response, Hall sent an email to Mr. Conway providing “a breakdown of where the marketing
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`budget went in January” and stating that “we are continuing to see increases on Twitter,
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`Facebook, You Tube [sic] and sales . . . indicating that the project is moving in a positive
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`direction.” Ex. 130. In late February, Mr. Conway restarted the project. SOMF ¶ 346.
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`Concerns persisted, however, regarding “maintaining transparency, providing financial
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`documentation & allowing [Ms. Conway]’s input on aspect[s] of the project.” Id. ¶ 347. Issues
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`were coming to a head through the summer of 2012, with Mr. Conway eventually speaking to
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`other individuals in the entertainment industry about the propriety and effectiveness of
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`Defendants’ services. Id. ¶ 172. On September 11, 2012, after the album release party, Mr.
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`Conway sent a text message to Hall requesting documentation related to all of the invoices paid
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 7 of 33
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`as of that date and informing her that no additional funding would be forthcoming except for live
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`performances. Ex. 101. Plaintiffs contend that they never received the documentation requested.
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`The parties did not work together again after that point.
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`After the parties’ active relationship ended, both parties sought to secure the intellectual
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`property that resulted from the relationship. On June 6, 2013, Ms. Conway, through her
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`attorney, registered copyrights to the compositions of the songs she contends that she wrote. Ex.
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`119. Plaintiffs’ counsel also sent letters to Defendants, demanding the return of master
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`recordings and audiovisual works embodying Ms. Conway’s performances. Exs. 109, 110. A
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`later letter, dated August 9, 2013, informed Defendants that “any license which may have
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`existed” between Plaintiffs and Defendants regarding musical compositions or recordings was
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`“rescinded, revoked[,] and terminated.” Ex. 111. On September 17, 2013, Defendants registered
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`copyrights, in the name of Stonehall Records, in the sound recordings and compositions of nine
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`of the songs recorded by Ms. Conway, including compositions Ms. Conway had registered
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`months earlier. Ex. 98. Around the same time, on September 4, 2013, Plaintiffs filed this action,
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`making numerous allegations of malfeasance against Defendants. Defendants, for their part,
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`have counterclaimed alleging similar wrongdoing by Plaintiffs.
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`II.
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`LEGAL STANDARD
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`Summary judgment is appropriate when “the movant shows that there is no genuine
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`dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
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`R. Civ. P. 56(a). Once a party “has properly supported its motion for summary judgment, the
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`burden shifts to the non-moving party, who ‘may not rest on mere allegations or denials of his
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`pleading, but must set forth specific facts showing there is a genuine issue for trial.’” Barbour v.
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`Dynamics Research Corp., 63 F.3d 32, 37 (1st Cir. 1995) (quoting Anderson v. Liberty Lobby,
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 8 of 33
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`Inc., 477 U.S. 242, 256 (1986)). The Court is “obliged to []view the record in the light most
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`favorable to the nonmoving party, and to draw all reasonable inferences in the nonmoving
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`party’s favor.” LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). Even so, the
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`Court is to ignore “conclusory allegations, improbable inferences, and unsupported speculation.”
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`Prescott v. Higgins, 538 F.3d 32, 39 (1st Cir. 2008) (quoting Medina–Muñoz v. R.J. Reynolds
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`Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). A court may enter summary judgment “against a
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`party who fails to make a showing sufficient to establish the existence of an element essential to
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`that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v.
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`Catrett, 477 U.S. 317, 322 (1986). When cross-motions for summary judgment are presented,
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`the Court “must consider each motion separately” and draw all inferences against each moving
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`party in turn. Reich v. John Alden Life Ins. Co., 126 F.3d 1, 6 (1st Cir. 1997).
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`III.
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`DISCUSSION
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`Defendants have moved for summary judgment on all counts of Plaintiffs’ Complaint.5
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`In resolving this motion, all reasonable inferences are drawn in Plaintiffs’ favor. Plaintiffs, in
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`turn, have moved for summary judgment on their copyright infringement count.6 The Court will
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`address this claim separately and draw all reasonable interferences in Defendants’ favor when
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`resolving that motion. After resolving the parties’ motions for summary judgment, the Court
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`will address Defendants’ other motions.
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`5 Plaintiffs’ Complaint, as supplemented, originally brought twenty counts. Doc. Nos. 1, 37. The Court
`dismissed Count XIX of the Complaint, alleging violation of the Racketeer Influenced and Corrupt
`Organizations Act, on an earlier summary judgment motion. Doc. No. 144. Plaintiffs voluntarily
`dismissed Count VIII, alleging defamation, and Count XIV, alleging violation of Mass. Gen. Laws ch.
`214, § 3A. Doc. Nos. 172, 182. Accordingly, Defendants are moving for summary judgment on the
`remaining seventeen claims.
`6 Neither party has moved for summary judgment on Defendants’ counterclaims and thus those claims
`will proceed to trial along with the claims which survive the instant motions.
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 9 of 33
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`A.
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`Choice of Law
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`Defendants argue that Tennessee law applies to all of Plaintiffs’ claims because the
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`unexecuted Great Lines Agreement contained a choice of law provision in favor of Tennessee
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`and that, even though unsigned, the agreement represented a memorialization of an enforceable
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`agreement. Alternatively, Defendants argue, Tennessee law should apply as the jurisdiction with
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`the most significant relationship to the parties and the transaction. Plaintiffs counter, correctly,
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`that the Court need not decide the choice of law issue unless a conflict arises between the laws of
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`the applicable jurisdictions. At the hearing on these motions, Defendants conceded that there are
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`no material differences between Massachusetts and Tennessee law for the purposes of resolving
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`the claims at issue here.7 Given this concession and because the Court discerns no conflict
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`between Massachusetts and Tennessee law on the determinative issues, the Court does not decide
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`the choice of law question.
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`B.
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`Breach of Contract
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`Defendants move for summary judgment on Plaintiffs’ breach of contract claim.
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`Plaintiffs’ contract claim arises not from the Great Lines Agreement but from an oral contract or,
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`alternatively, contracts arising from invoices sent by Defendants to Plaintiffs. Plaintiffs identify
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`no other contract nor advance any other contract theory in opposition to Defendants’ Motion for
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`Summary Judgment on this claim. Thus, to resolve summary judgment on this claim, the Court
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`need only address the contracts Plaintiffs seek to enforce.
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`First, the oral contract. The substance of the oral contract is set forth in Mr. Conway’s
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`response to an interrogatory, in which he states:
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`Stone and Hall proposed I pay them lump sums in response to line item invoices for such
`lump sum payments that they would hold and use to pay the vendors and service
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`7 At the hearing, Defendants did argue that there were subtle differences in the laws of the jurisdictions,
`but specifically identified no such differences at the hearing or in their motion papers.
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 10 of 33
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`providers working on Liana’s career. They agreed that they would come up with ideas
`for promoting Liana and her music and managing and developing her career, use the
`funds that I sent them to pay the expenses directly, and provide detailed, itemized
`invoices of the expenses that they incurred explaining their spending in detail. Every
`dollar that I advanced was to be spent on Liana’s career. In exchange for the opportunity
`to be involved, they also agreed that they would not take or retain any income (with some
`exceptions) until Liana’s career became profitable and she was a recognized commercial
`artist. After Liana became profitable and the funds that I had advanced were repaid,
`Stone and Hall would be paid a percentage of or a commission on the revenues that Liana
`generated. Based on my discussions with the Defendants, the commission was to be fair
`and reasonable based on music industry standards.
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`Ex. 33 at 7.
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`In order to succeed on their breach of contract claim under either Massachusetts or
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`Tennessee law, Plaintiffs “must prove that a valid, binding contract existed, the defendant
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`breached the terms of the contract, and the plaintiffs sustained damages as a result of the breach.”
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`Brooks v. AIG SunAmerica Life Assur. Co., 480 F.3d 579, 586 (1st Cir. 2007); accord Nw.
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`Tenn. Motorsports Park, LLC v. Tenn. Asphalt Co., 410 S.W.3d 810, 816-17 (Tenn. Ct. App.
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`2011). Defendants argue that the text of the alleged contract demonstrates that Plaintiffs cannot
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`prove the first element of their claim, the existence of an enforceable contract, because the
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`purported oral contract is indefinite as to essential terms of the contract and violates the statute of
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`frauds.
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`Defendants’ primary contention is that the contract is unenforceable as indefinite because
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`Defendants’ compensation was neither set forth in the agreement nor ascertainable from the
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`terms of the agreement. “It is axiomatic that to create an enforceable contract, there must be
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`agreement between the parties on the material terms of that contract, and the parties must have a
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`present intention to be bound by that agreement.” Situation Mgmt. Sys., Inc. v. Malouf, Inc.,
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`724 N.E.2d 699, 703 (Mass. 2000). “[W]hile ‘[i]t is not required that all terms of the agreement
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`be precisely specified, and the presence of undefined or unspecified terms will not necessarily
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 11 of 33
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`preclude the formation of a binding contract[,]’ in order for an enforceable contract to exist, the
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`parties must have reached an agreement on all of the essential terms.” D’Agostino v. Fed. Ins.
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`Co., 969 F. Supp. 2d 116, 127 (D. Mass. 2013) (quoting Situation Mgmt. Sys., 724 N.E.2d at
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`703); see Higgins v. Oil, Chem. & Atomic Workers Int’l Union, Local No. 3-677, 811 S.W.2d
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`875, 880 (Tenn. 1991) (“for a contract to be enforceable, it must be of sufficient explicitness so
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`that a court can perceive what are the respective obligations of the parties”) (quoting Soar v.
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`Nat’l Football League Players’ Ass’n, 550 F.2d 1287, 1290 (1st Cir. 1977)). Whether the terms
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`of a purported contract are sufficiently definite to be enforceable is a question of law for the
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`Court. Armstrong v. Rohm & Haas Co., 349 F. Supp. 2d 71, 78 (D. Mass. 2004); Doe v. HCA
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`Health Servs. of Tenn., Inc., 46 S.W.3d 191, 196 (Tenn. 2001).
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`Here, the purported contract did not include a specific rate or procedure for determining
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`the compensation for Defendants’ services other than providing that Defendants would be paid a
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`“percentage of or a commission on the revenues that Liana generated” that would “be fair and
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`reasonable based on music industry standards.” The contract does not specify the revenues that
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`would be considered in calculating compensation or any amounts that might be excluded from
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`the calculation. The contract does not specify the degree of effort Defendants must invest during
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`the life of the contract, for example, full-time effort, part-time effort, or some different measure.
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`Similarly, the contract does not specify whether Ms. Conway must work exclusively pursuant to
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`the contract. The contract, as recited, also is silent as to the duration of the agreement, the
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`duration of any period for which Defendants would be entitled to a commission, the ability of the
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`parties to terminate the agreement, and the terms, if any, that would regulate any such
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`termination. While the absence of any one of these terms may not have rendered the contract
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`unenforceable, in aggregate these omissions render the purported contract too indefinite to be
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 12 of 33
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`enforced by this Court. See Cooper v. Kenexa Tech., Inc., Civ. A. No. 10-12189-DJC, 2012 WL
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`2946012, at *6 (D. Mass. July 19, 2012) (finding contract unenforceable for indefiniteness “in
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`the absence of agreement on material terms including but not limited to how the bonus would be
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`determined and the duration of the alleged agreement”); Held v. Zamparelli, 431 N.E.2d 961,
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`962 (Mass. App. Ct. 1982) (declining to enforce contract where “described agreement is silent on
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`essential terms of the contract, such as, but scarcely limited to: when the plaintiff’s share of the
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`profits was to be computed and to be paid to her; the duration of the agreement under which she
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`claims the right to a share of the profits; what was to occur if the property were sold; or what
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`would be the plaintiff’s responsibility should there be a claim against the owners of the
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`property”); HCA Health Servs. of Tenn., 46 S.W.3d at 197 (holding contract to be unenforceable
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`because an essential term—the price—was indefinite).
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`The limited guidance that the alleged contract provides—that Defendants would be paid
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`“a percentage . . . or a commission” that would be “fair and reasonable based on music industry
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`standards”—leaves more questions than it answers. What revenues would be considered for
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`determining the compensation, over what period, and what rights, if any, would Defendants have
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`to compensation if the agreement was terminated? The contract also provides no measure for the
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`degree of effort either Defendants or Ms. Conway were required to devote to the project. These
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`questions highlight the inability of the Court to determine the rights and obligations of the parties
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`supposedly bound by the alleged contract.
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`What Plaintiffs present in the purported oral contract, rather, is an agreement to agree in
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`the future to the essential terms of a contract, including, but not limited to, terms sufficiently
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`detailing how Defendants would be compensated. This conclusion is aptly illustrated by Mr.
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`Conway who, in regard to the future division of profits, stated during his deposition that “[w]ith
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 13 of 33
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`the euphoria of [Ms. Conway] popping and becoming somebody, I’m sure we would have had a
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`collective well spring of good vibes and common interests and something would have been
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`worked out.” Ex. 1 at 70:17-21. This statement shows that the parties had not “progressed
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`beyond the stage of ‘imperfect negotiation,’” Situation Mgmt. Sys, 724 N.E.2d at 703 (quoting
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`Lafayette Place Assocs. v. Bos. Redevelopment Auth., 694 N.E.2d 820, 826 (Mass. 1998)),
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`leaving no contract for the Court to enforce.8 See Conner v. Hardee’s Food Sys., Inc., 65 F.
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`App’x 19, 23 (6th Cir. 2003).
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`As a fallback position, Plaintiffs argue that, even if the oral agreement is unenforceable,
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`each of the individual monthly invoices issued by Defendants constitutes a separate, individually
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`enforceable contract breached by Defendants. Defendants respond that the evidence shows
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`Defendants to have provided the services described in the contract, implicitly arguing that, if the
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`invoices are contracts, Plaintiffs cannot show evidence of breach of those agreements. Assuming
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`that each invoice constitutes a separate contract, the terms are limited to the provision of the
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`described services for the stated fees; the invoices contain no other language.
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`In order to demonstrate a breach of those contracts on the part of Defendants, Plaintiffs
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`would need to point to services set out in an invoice that were not performed as described on the
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`face of the invoice. Plaintiffs, while citing record evidence that Defendants issued the invoices,
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`SOMF ¶ 605 (citing ex. 34), and that Mr. Conway paid the invoices, id. ¶ 224, do not point to
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`8 The Court notes that the described contract is problematic for other reasons. Insofar as the Court
`assumes that the contract, lacking any term regarding termination, could be terminated by either party
`with reasonable notice, Plaintiffs could have terminated Defendants at any time before Mr. Conway’s
`capital contributions were repaid and Defendants would be entitled to nothing for their efforts. This
`raises the issue of whether such a one-sided contract would be unenforceable on the basis of
`unconscionability or lacking consideration, doctrines that are recognized in both jurisdictions. See
`Drakopoulos v. U.S. Bank Nat. Ass’n, 991 N.E.2d 1086, 1095-96 (Mass. 2013) (unconscionability);
`Graphic Arts Finishers, Inc. v. Bos. Redevelopment Auth., 255 N.E.2d 793, 796 (Mass. 1970) (illusory
`promise); Taylor v. Butler, 142 S.W.3d 277, 284-85 (Tenn. 2004) (unconscionability); Stinger Indus.,
`LLC v. Hill-Rom Co., 23 F. App’x 472, 474 (6th Cir. 2001) (illusory promise).
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 14 of 33
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`any evidence that any of the services set out in the invoices were not performed. Plaintiffs also
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`fail to point to any evidence that the services were not performed as described.9 Plaintiffs argue
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`that Defendants inflated the price of the services described in the invoice, that is, they charged
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`Mr. Conway substantially more for a service than the cost of the service as billed by the third
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`party providing that service. Assuming, as the Court does, that whether the individual invoices
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`permitted Defendants to mark up the cost of third party services presents a jury question,
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`Plaintiffs have nonetheless failed to identify any invoice item for which the listed charge
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`exceeded the actual cost of the service or item. In short, Plaintiffs offer no evidence in support
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`of the breach of any individual invoice.
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`Plaintiffs advance one more argument in support of the invoices as contracts. At the
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`hearing, they suggested that the Court should fill in or supplement the individual invoices’ terms
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`with the parties’ course of dealing and industry custom with the understanding that each invoice
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`prohibited Defendants from using any portion of the $25,000 monthly marketing fee to pay
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`themselves, absent specific permission from Mr. Conway. Of course, no express language in the
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`invoice prohibited Defendants from paying themselves in this manner. This theory suffers from
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`a number of legal defects, not least of which is, if the Court so interpreted the invoices, the
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`invoices would no longer constitute a binding contract due to lack of consideration. Under this
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`version of the contract, Defendants would merely be acting as agents to procure and pay third
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`parties without any contractual right to any compensation for any services they provided.
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`Presumably, Plaintiffs answer this problem by pointing to the terms of their proposed oral
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`contract (providing for a royalty payment after Liana became profitable) and arguing for
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`9 The Court notes that, as part of their misrepresentation claims, Plaintiffs point to evidence that services
`described in third-party invoices issued to Defendants may not have been provided as described in the
`invoice. Plaintiffs, however, do not argue that invoices issued by third parties to Defendants constitute
`enforceable contracts between Plaintiffs and Defendants.
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`Case 1:13-cv-12193-LTS Document 238 Filed 05/08/15 Page 15 of 33
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`wholesale incorporation, but then the invoices (lacking any contractual language) fail as
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`enforceable contracts for all the reasons that the oral contract