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CMG Worldwide, Inc. v. Glaser

United States District Court, Southern District of Indiana, Indianapolis Division

January 9, 2015

CMG WORLDWIDE, INC., Plaintiff,
v.
JAN GLASER an individual, TATYANA KHOMYAKOVA an individual, TATYANA DESIGNS, INC., and TATYANA, LLC, Defendants.

ENTRY ON DEFENDANTS’ MOTION TO DISMISS

RICHARD L. YOUNG, CHIEF JUDGE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA

Defendants, Jan Glaser, Tatyana Khomyakova, Tatyana Designs, Inc. (“TDI”), and Tatyana, LLC (“TL”), move to dismiss Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. Plaintiff, CMG Worldwide, Inc., opposes the motion. The court, having read and reviewed the Defendants’ motion, the supporting and opposing memorandums of law, and the applicable law, now GRANTS the motion.

I. Dismissal Standard

Federal Rule of Civil Procedure 12(b)(6) authorizes the dismissal of claims for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6). The purpose of a motion to dismiss is to test the legal sufficiency of the complaint, not the merits of the lawsuit. Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675 (7th Cir. 2001). A court may grant a Rule 12(b)(6) motion to dismiss only if a complaint lacks “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A complaint sufficient on its face need not give “detailed factual allegations, ” but it must provide more than “labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Id. at 555. The court accepts all well-pleaded factual allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. See Yeksigian v. Nappi, 900 F.2d 101, 102 (7th Cir. 1990).

In addition to the allegations of the complaint, the court may consider “documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice.” Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013) (citing cases). Here, CMG attached an email communication to its Complaint, designated as Exhibit 1. To CMG’s dismay, Defendants also request the court take judicial notice of four documents: (1) the Complaint in CMG Brands, LLC v. Stop!Staring Designs, Inc., Case No. BC 431713 (“Lawsuit”); (2) the Judgment in the Lawsuit; (3) a stock quote on TDI downloaded from the OTC Markets website at http://www.otcmarkets.com/stock/TATD/quote, and the company profile downloaded from OTC Markets at http://www.otcmarkets.com/stock/ TATD profile; and (4) a copy of the SEC Edgar Search Results on Tatyana Designs, Inc., downloaded from the Securities and Exchange Commission’s website at http://www.sec.gov/cgik-bin/browse-edgar?company=tatyana痫⊂&match =&filenum=&State=&SIC=&myowner=exclude&action=getcompany&Find=Search.

Pursuant to Rule 201(b) of the Federal Rules of Evidence, a court may take judicial notice of an adjudicative fact that is both “not subject to reasonable dispute” and either: (1) “generally known within the trial court’s territorial jurisdiction;” or (2) capable of accurate and ready determination “from sources whose accuracy cannot reasonably be questioned.” The documents at issue are public records and documents “whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). The court will therefore consider them for purposes of this motion to dismiss. General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1081 (7th Cir. 1997) (recognizing court may take judicial notice of the contents of court records); Opoka v. INS, 94 F.3d 392, 394 (7th Cir. 1996) (recognizing that proceedings in other courts, both inside and outside the federal system, may be judicially noticed); In re Guidant Corp. v. Sec. Litig., 536 F.Supp.2d 913, 921 (S.D. Ind. 2008), aff’d sub nom. Fannon v. Guidant Corp., 583 F.3d 995 (7th Cir. 2009) (recognizing court may take judicial notice of SEC filings at the 12(b)(6) stage); Grimes v. Navigant Consulting, Inc., 185 F.Supp.2d 906, 913 (N.D. Ill. 2002) (recognizing court may take judicial notice of published stock quotes).

II. Background

CMG, located in Indianapolis, Indiana, is a well-known celebrity and brand licensing agency that, for purposes of this case, serves as the agent of Bettie Page, LLC (or “BPL”) and the Estate of Bettie Davis. (Compl. ¶¶ 1, 10). TDI and TL, organized and existing under the laws of the State of Nevada, are in the business of designing, producing, promoting, and/or distributing, by retail and/or wholesale sales, retro women’s apparel and accessories. (Id. ¶¶ 4-5, 15-16). Glaser is CEO, Chief Financial Officer, Treasurer, and Director of TDI and TL; Khomyakova is the Co-CEO, President, and director of TDI and TL. (Id. ¶¶ 2-3).

CMG entered into licensing agreements with Defendants that granted Defendants the right to use the Page Intellectual Property on and/or in connection with a number of stores (i.e., the Bettie Page Stores), retro women’s apparel and accessories, and a line of women’s fragrance. (Id. ¶¶ 18-20). The first such agreement occurred on April 6, 2006. (Id. ¶ 19).

On March 24, 2009, Stop Staring! Designs, a California company in the same line of business as TDI, sued Glaser, Khomyakova, and TDI in the United States District Court for the Central District of California – Western Division, Case No. 2:09-cv-02014-DSF-AJW, for trademark and trade dress infringement, fraud, misappropriation of trade secrets, and unfair competition. (Id. ¶ 25). In November or December 2009, Defendants contacted CMG and, for “strategic reasons”, asked CMG to file a separate action against Stop Staring! Designs arising out of Stop Staring! Design’s alleged unauthorized use of the Davis Intellectual Property. (Id. ¶ 26). Defendants also offered the assistance of their counsel, One, LLP. (Id. ¶ 28).

On February 11, 2010, Defendants’ counsel, One, LLP, filed a Complaint for Infringement of Bette Davis Right of Publicity on behalf of CMG in an action entitled CMG Brands, LLC v. Stop! Staring Designs, Inc., BC 431713 (“Lawsuit”) in the Superior Court of Los Angeles County, California. (Id. ¶ 27; Declaration of Jan Glaser (“Glaser Dec.”), Ex. 1). Glaser subsequently reaffirmed multiple times that the Defendants would indemnify CMG for any costs associated with the Lawsuit if CMG would continue to proceed with the Lawsuit. (Id. ¶ 29). Attached to the Complaint is an email communication dated October 26, 2010 between Mark Roesler of CMG to Glaser, which reads:

Hi Jan . . . after a number of discussions with One LLP, we have the Bette Davis suit back on track. Because of “standing issues” and the risk of an adverse decision thereto which would expose us all to “prevailing party legal fees”, CMG is withdrawing from the suit and the two heirs of the Bette Davis estate (her son, Michael Merrill & her long time assistant Kathryn Sermack) will become the plaintiffs in the lawsuit. As you know, this is a contingency arrangement where One LLP will get 1/3 of the recovery, but we are obligated for any of the expenses such as filing fees or depositions, etc. Apparently there has been a few hundred dollars of such expenses incurred to date. Both Mr. Merrill & Ms. Sermack want us to confirm that they would not be responsible for any of these costs but would instead prefer that any recovery that [sic] you be allowed to recoup those costs from the 2/3 recovery prior to them receiving any of it. Is this acceptable?

(Id., Ex. 1). Glaser responds: “Absolutely. I will also indemnify for any costs absent recovery. Thank you very much for getting this done.” (Id.). Roesler replies: “Ok great . . . it is in the works. THx and talk soon.” (Id.).

CMG proceeded with the Lawsuit and, in turn, incurred substantial costs. (Compl. ¶ 30). On July 7, 2011, Judgment was entered against CMG in the amount of $120, 843.75 – $118, 518.75 in ...


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