Fusari Inc. v. Mermaid LLC

Rob Fusari (Rob) owned Fusari Inc. (plaintiff), a music-production company. Rob signed Stephani Germanotta (Lady Gaga) to Fusari Inc., and Fusari Inc. signed an agreement with Lady Gaga’s company, Mermaid LLC (Mermaid) (defendant). The agreement created a third entity, TLC (defendant). The agreement provided that TLC was 80 percent owned by Mermaid and 20 percent owned by Fusari Inc. Pursuant to the agreement, Mermaid had the exclusive rights to Lady Gaga’s recording services, and it licensed those rights to TLC for purposes of securing distribution of the recordings. As Rob and Lady Gaga’s personal relationship deteriorated, their business relationship did as well. Rob claimed that he found himself shut out of any creative decisions regarding Lady Gaga’s music, including Lady Gaga’s signing of a new distribution deal with Interscope Records (Interscope). Pursuant to the contract between Fusari Inc. and Mermaid, Rob sought a 20 percent interest in Lady Gaga’s deal with Interscope. In response to this, TLC sent two checks to Fusari Inc. The second check states, under the endorser’s signature line, “Endorsed in Accord And Satisfaction Of All Sums Due To Undersigned.” Likely believing that signing and depositing the check would amount to acceptance of TLC’s offer of an accord and satisfaction, Rob did not sign or deposit the check, but rather returned it to TLC and brought this complaint against Mermaid and TLC.