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P.A. Properties, Inc. v. B.S. Moss’ Criterion Center Corp.

United States District Court for the Southern District of New York
2004 WL 2979984


Facts

In February 1988, Moss Venturers entered into a joint venture agreement with United Artists Theatre Circuit, Inc. (UA) to create Moss/United Artists Joint Venture (the Joint Venture). The purpose of the Joint Venture was to operate a number of movie theaters. Under the venture agreement, UA was the managing venturer and had “complete authority and responsibility” to operate the business and make day-to-day business decisions. The venture agreement, by its terms, was governed by New York partnership law. In September 1992, UA entered into a consulting agreement with P.A. Properties, Inc. (PAP) (plaintiff). In the consulting agreement, PAP agreed to analyze and investigate possible overcharges in the lease arrangement for Movieworld Douglaston, a theater operated by the Joint Venture. The consulting agreement did not mention the Joint Venture; UA entered into the agreement in its own name only. By entering the agreement, UA intended to benefit the Joint Venture by locating savings. UA filed for bankruptcy in 2000, having never paid PAP for its services. PAP filed a claim in bankruptcy against UA in the amount of $1,059,716, which was later negotiated down to $600,000. PAP ultimately received only $35,000 from UA. To recover the balance of its debt, PAP then sued B.S. Moss’ Criterion Center Corporation (defendant), the successor entity to Moss Venturers. Both parties moved for summary judgment.

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Holding and Reasoning (Swain, J.)

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