SUPREME
COURT
OF THE
STATE
OF
NEW
YORK
COUNTY
OF
NEW
YORK
x IAN PAI, : : Plaintiff, : : : -against- : :
BLUE
MAN
GROUP
PUBLISHING, LLC; : Index. No. 650427/2016BLUE
MAN
GROUP
PRODUCTIONS,
LLC; :BLUE
MAN
GROUP
HOLDINGS, LLC; : Motion Sequence No. 005BLUE
MAN
PRODUCTIONS,
LLC; :BLUE
MAN
VEGAS
LLC; : I.A.S. Part 61BLUE
MAN
BOSTON
LIMITED PARTNERSHIP; : Hon. Barry R. OstragerBLUE
MAN
CHICAGO
LIMITED PARTNERSHIP; :BLUE
MAN
INTERNATIONAL,
LLC; :BLUE
MAN
TORONTO,
LLC; :BLUE
MAN
TOURING, LLC; :ASTOR
SHOW
PRODUCTIONS,
LLC; :ZEBRA
HORSE, LLC; :CHRIS WINK; PHILLIP
STANTON;
AND
:MATT
GOLDMAN,
:: Defendants. : x
PLAINTIFF'S
PRETRIAL
MEMORANDUM
OF
LAW
PILIERO
&
ASSOCIATES,PLLC
Robert D. Piliero, Esq.Lisa A. Frey, Esq.
444 Madison Avenue, 4th Floor
New
York,NY
10016646. 854. 1275 piliero@pilierolaw.com frey@pilierolaw.com
URntUm
D
TABLE
OF
CONTENTS
PageTABLE
OF
AUTHORITIES...~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 11 ~~ Back round ... 1Q
M
.t ... 7U
JUn e • Ennchment... 8 If of Ta On aCO ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••treaC 9 fDeenSCS •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 10ueeVV~ ~ ~ ~Wt~V WV~P» r ~ ~
W
~ ~~sue ~VeTABLE
OF
AUTHORITIES
Page(s)
Cases:
Am. Trucking Ass'ns, Inc. v
NY
State Thruway Auth.,238 F. Supp. 3d 527, 540-541 (S.D.N.Y. 2017)... 11
Edenwald Contracting Co. v. City.City of
New
York,60 N.Y.2d 957, 959, 471 N.Y.S.2d 55 (1983)... 12
Fundamental Portfolio Advisors, Inc. v. Toqueville Asset Management, L.P.,
7 N.Y.3d 96, 817 N.Y.S.2d 606 (2006)... 12
Georgia Malone die Co., Inc. v. Rieder,
19 N.Y.3d 511, 950 N.Y.S.2d 333 (2012)... 8-9
Gilbert Frank Corp. v. Fed. Ins. Co., y
70 N.Y.2d 966, 525 N.Y.S.2d 793 (1988)... 10
Kramer v. Greene,
142 A.D.3d 438, 36 N.Y.S.3d 448 (1(1st Dept. 2016) ... 8
Melcher v. Apollo Med. Fund Mgt., L.L.C.,
25 A.D.3d 482, 808 N.Y.S.2d 207 (13 Dep't 2006)... 10-11
Orange Steel Erectors, Inc. v. Newburgh Steel Prods., Inc.,
225 A.D.2d 1010, 1012, 640 N.Y.S.2d 283 (3d Dep't 1996)... 10
Shapira v United Medical Service, Inc.,
SUPREME
COURT
OF THE
STATE
OF
NEW
YORK
COUNTY
OF
NEW
YORK
x IAN PAI, : : Plaintiff, : : : -against- : :
BLUE
MAN
GROUP
PUBLISHING, LLC; : Index. No. 650427/2016BLUE
MAN
GROUP
PRODUCTIONS,
LLC; :BLUE
MAN
GROUP
HOLDINGS, LLC; :BLUE
MAN
PRODUCTIONS,
LLC; :BLUE
MAN
VEGAS
LLC; : I.A.S. Part 61BLUE
MAN
BOSTON
LIMITED PARTNERSHIP; : Hon. Barry R. OstragerBLUE
MAN
CHICAGO
LIMITED PARTNERSHIP; :BLUE
MAN
INTERNATIONAL,
LLC; :BLUE
MAN
TORONTO,
LLC; :BLUE
MAN
TOURING, LLC; :ASTOR
SHOW
PRODUCTIONS,
LLC; :ZEBRA
HORSE, LLC; :CHRIS WINK; PHILLIP
STANTON;
AND
:MATT
GOLDMAN,
:: Defendants. : x
PLAINTIFF'S
PRETRIAL
MEMORANDUM
OF
LAW
Plaintiff Ian Pai respectfully submits this as and for his Pretrial Memorandum of Law.
Background
This case arises out of the decades-long relationship between the Plaintiff, Ian Pai, and
the Individual Defendants, Chris Wink, Phillip Stanton, and Matt Goldman. Pai, a young artist at
the time he met the Individual Defendants, had grown up in an artistic household: in his
formative years he studied classical piano, taught himself to play the drums, studied ballet with
the American Ballet Theatre, and took a special interest in painting, following in the footsteps of
a painter sculptor a professor at Pratt for
By nine years old, Pai was dancing ballet at the Metropolitan Opera House; throughout
high school he played music in bands, and upon reaching college age Pai enrolled at the
Macalaster College in Minnesota to study fine art. After two years of study, he returned to his
native
New
York as a transfer student at Pratt Institute. It was in these years - around late1989/early 1990 that Pai met the Individual Defendants.
The meeting with the Individual Defendants came about through non-party Larry
Heinemann. Heinemann and Pai were working at the same restaurant in
New
York (Pai had metHeinemann working there while Pai was still in high school). One night in 1989, Heinemann
invited Pai to see a performance downtown at P.S. 122. Pai went and saw a short production of
skits put on by the Individual Defendants, dressed in black with blue head masks. At that
performance, the only music consisted of Heinemann playing
"soundscapey"
music on the
Chapman stick (a stringed instrument usually with 10 or 12 individually tuned strings).
About a month later, Heinemann asked Pai if he had any interest helping out with this
little performance. Heinemann states that he thought Pai would be a "good fit" because he not
only played music, but he was also artistic and "handy" - that is, able to build things well. Pai
agreed to try it out. Soon thereafter, Wink drove to Pai's house, Pai loaded Wink's truck with
his drums, tools and other miscellaneous instruments, and the pair drove to a rehearsal space they
were using. By the end of that day, the creative chemistry among them was clear.
From that day forward, these five people - Defendants Wink, Goldman, Stanton, together
with Plaintiff Pai and non-party Heinemann - all worked tirelessly to create the production (the
"Production") "Production"
that has been continuously performed, with relatively minor changes, for more
than a quarter-century to the delight of more than 35 million people who have spent well more
next two years developing the Production. By early 1991, the five had collaborated enough
-integrating the music and the skits - to perform the Production with live music at a small venue,
Gusto House.
A
few random performances followed, some on the road, and then the five got abreak by booking La
Mama
- known for showcasing new, innovative acts. The LaMama
runwas well-received, running initially for four weeks and extending to six. The La
Mama
runattracted producers, who were signed on to move the Production to the Astor Place Theater, also
in Manhattan.
The producers asked the five to quit their jobs to work on the Production in the summer
of 1991. The Production was scheduled to open in November at the Astor Place Theater. All
quit their jobs except Goldman, who continued working. Along the way the five picked up a
zither player, Brian Dewan.
These co-creators of the Production worked at putting together the Production now
known as the Blue
Man
Group Show - which - to this day -- plays nightly in six permanentvenues throughout the world. Heinemann and Pai wrote most of the music for the Production
(with the assistance of Dewan); Wink composed some music on the
PVC
pipes, and the threeIndividual Defendants developed the skits. It was an artistic and musical collaboration, using
everyone's talents. In addition to composing music, Pai painted paintings for the lobby,
designed the costumes and makeup for the band members, and choreographed dances for the
band to perform in the Production finale. As with all collaborative efforts, especially those that
achieve phenomenal success, everyone worked together in a spirit of friendship and harmony
with an "all-for-one, one-for-all" mentality. Individual Defendant Goldman in particular, but also
Stanton and Wink, continually proselytized that they were all part of a "community," and Ian Pai
The Production at Astor Place was a huge success, and Heinemann and Pai were given
their proper billing in the Playbill directly below the Individual Defendants, with the Individual
Defendants listed as the "Blue Men" and Heinemann and Pai listed as "Artistic and Musical
Collaborators."
During this early period - 1991 to 1995 -- Pai formed a very tight bond with the
Individual Defendants - performing in the Production eight times a week with them - there were
no substitutes in the early years - and spending virtually all their free time together as well.
By 1995 there were plans to open the Production at another venue in Boston. In order to
be able to do that, each of the five co-creators (all of
whom
were performers as well) needed totrain substitutes for their performance roles.
When
Pai had selected and trained his replacementas the drummer in the band for the Astor Place Production, he went to Boston as one of the five
creative forces in developing this first offspring of the original Production. Again, Pai did far
more than compose music: he interviewed, hired and trained new band members; he painted
paintings in the lobby; he ran
PVC
pipes from the basement into the seating areas, helped buildthe sets, and did whatever else needed to be done. By this time, he was on salary, but it was a
living-wage type salary that Pai received while working to expand the business. The Production
at the Boston venue opened after months of work in getting it up and running.
With the opening of a second venue for the Production, to run concurrently with the first,
Pai realized that maintaining musical consistency across venues and with different performers
would require careful and continuing attention. With that in mind, Pai suggested to the Individual
Defendants that what had already become his de facto role of Music Supervisor be officially
confirmed. The Individual Defendants agreed to give him that responsibility and recognition.
would be ".4%" of the box office. Consistent with the nature of the relationship and the
"community,"
it did not even occur to Pai to negotiate compensation or even to discuss any
details. He just assumed that, as had always been the case, any misunderstandings that might
later arise would be sorted out as friends and co-creators.
Boston was a success, and so Chicago followed, and then Las Vegas, and Orlando. Over
the years, new venues opened for the Production all over the world, and the Productions at the
U.S. venues and in Berlin are still open today.
Throughout these years, the Individual Defendants never entered into any formal contract
with Pai covering his share of box office receipts. There were "composer split" documents that
were drafted by the Individual Defendants, and their lawyers. These composer split documents
started back in 1992, with the thought of producing a cast album based directly on the live
performance.1
A
schedule was drafted by Defendants' lawyers showing Dewan, Heinemann andPai as the only three composers of the music. Subsequently, another draft was created, again by
Defendants'
Defendants lawyers,this time adding the Individual Defendants as co-composers of songs that
were actually composed solely by Pai, Heinemann and Dewan. This new schedule also added
songs that the Individual Defendants claimed they alone wrote, but Pai, Heinemann and Dewan
were not "cut in" as co-composers of those songs.
After these early song split documents - dated back in 1992 - Pai was never given
anything in writing showing total composer song splits for the Production. In 2014, however, he
received correspondence that triggered this lawsuit: the revelation by then-Blue
Man
employee1
That cast album was never produced. In the 1999-2001 time frame, they did put out their first album, named "Audio," but it was not a studio album, which the press release accompanying its launch quoted Wink as saying was "distinct from the show's score."
Carl Flanigan that Pai's share of composer splits for the Production had been reduced to about
five percent of the total paid in composer credits.
Pai was never given the complete picture regarding the calculation of royalties. Before
the Flanigan email, at one point Pai was told that he was receiving
20%
of the composer share-and as large checks kept coming in he had every reason to believe that was true. This
representations, however, was only a part of the story. Most importantly, although Pai was
repeatedly told that the percentage of box office receipts allocated to composers was at least
industry standard, if not generous, Pai learned in discovery that the Individual Defendants had
actually done no investigation whatsoever on that issue. Recognizing that traditional musicals
allocate
6%
to authors before show costs are recouped (the figure is9%
- 10% after recoupment),with composers, lyricists and book-writers each receiving equal shares, Wink, Goldman and
Stanton nonetheless unilaterally decided that the Blue
Man
Production was not a traditionalmusical, and so the composers would receive only
1%
of the box office. That decision departssignificantly from industry standards for composers, especially since the absence of lyrics and a "book"
for the Production meant that the music was a key driver of the Production and,
accordingly, the share of the box office allocated to composers should have increased, not
decreased.
Another fact Defendants never shared with Pai relates to the Music Supervisor royalty.
When
Goldman told Pai the royalty would be .4% -- itself a relatively small number -- heconveniently neglected to tell Pai that that .4% covered composer royalties as well as Music
Supervisor royalties.
Pai complains that he is entitled to recover proper industry standard royalties for the
under theories of quantum meruit and unjust enrichment. He also seeks to be paid for the
Defendants'
breach of their oral agreement to pay him Music Supervisor royalties consistent
with industry standards. Defendants' position has consistently been that the passage of time
defeats Pai's claims because his acceptance of payments over the years constitutes, in effect, a
waiver of a right to complain, or a course of conduct that he should be estopped from challenging
after all these years.
We
respectfully submit that, as set forth more fully below, those defensetheories should be rejected by a properly charged jury for the simple reason that no legally
sufficient waiver or estoppel can arise without full knowledge of all the relevant the facts.
Merely because Pai received some amount of money in royalties does not mean that Defendants
could with impunity promise him "industry standard" royalties and then pay him a small fraction
of that amount.
OUANTUM
MERUIT
Plaintiff will show at trial that, for the damages period of January 1, 2010 to the present,
he is entitled in quantum meruit for the reasonable value of his creative contributions to the
Production, less the amounts paid by Defendants during that period. Pai will show that
Defendants owe him the reasonable value of services as a co-creator of the Production that plays
nightly in venues worldwide. The parties agree that there is no contract between them
addressing the payment for his contributions. However, because Pai performed his services in
good faith with the expectation of compensation, and Defendants accepted those services,
Defendants owe Pai the reasonable value of those services in quantum meruit.
To establish a claim for quantum meruit, Plaintiff must demonstrate: 1) the performance
of services in good faith, 2) the acceptance of the services by the person to
whom
they areKramer v. Greene, 142 A.D.3d 438, 442, 36 N.Y.S.3d 448, 452 (1" Dept. 2016). Put another
way, a plaintiff may recover in quantum meruit, in the absence of a formal contract, where, as
here, the plaintiff provided services and materials under circumstances implying an
understanding by both parties that the plaintiff would be paid. Shapira v United Medical
Service, Inc., 15 N.Y.2d 200, 257 N.Y.S.2d 150 (1965). There is little doubt that Pai performed
his services in good faith, with the expectation of compensation, and that the Defendants
accepted his services. The parties disagree as to the reasonable value of Pai's services, which is
a question for the jury. Pai will present evidence that he co-created the Production, and that his
music has been used, adapted, imitated, studied, and performed regularly over the 27 years of the
Production. He will present evidence that the makeup and costumes that he designed back in
1991 are still used today, and that his artwork, or the templates for his artwork are still used
today. For these contributions to the original Production, the uniqueness of which was replicated
over and again and which fashioned a powerful brand among the theater-going population of all
ages, Pai seeks fair and reasonable compensation.
UNJUST
ENRICHMENT
Pai will also show at trial that, for the damages period of January 1, 2010 to
present, he is entitled to the unjust enrichment enjoyed by Defendants for their use of his creative
contributions as co-creator of the Production. At trial, Pai will show that 1) Defendants were
enriched, 2) at Plaintiff's expense, and 3) it is against equity and good conscience to permit such
Defendant(s) to retain what is sought to be recovered. Georgia Malone
&
Co., Inc. v. Rieder, 19N.Y.3d 511, 516, 950 N.Y.S.2d 333 (2012). To the extent the jury finds a number for the
"reasonable"
value of Pai's services that is in excess of what Defendants have paid to Pai during
"equitable principle that a person shall not be allowed to enrich himself unjustly at the expense
of another." Id. Pai will show at trial that it would be inequitable to allow Defendants to keep
money that constituted the reasonable value of the services they have used.
BREACH
OF
ORAL
CONTRACT
Pai will show at trial that he is entitled to recover on breach of contract for the oral
agreement with the Individual Defendants entrusting him to the role of Music Supervisor for all
Productions. Pai will show that, at the time the parties were opening the Production at the
Boston venue, he proposed that he take on the role of Music Supervisor, and the parties agreed to
that proposal. In fact, Defendants have admitted there was an oral agreement to pay Pai a Music
Supervisor royalty for Boston and Chicago. At trial, Pai will also show that the compensation he
was promised for this duty was 0.4% of net weekly box office receipts. The evidence will show
that this representation is set forth in internal documents drafted by Defendants, and, to the
extent that there are missing terms - for example, the extent to which his role applied to future
venues - Pai will show that the industry standard dictates that the original Music Supervisor of a
Production is paid a royalty out of all venues that showcase the Production and benefit from his
or her seminal contributions. As this Court has recognized, "to the extent that Plaintiff seeks to
fill missing provisions in the Agreement with terms supplied by industry standards, he will be
permitted to do so." Court Dec., Dkt. 156, March 15, 2018.
Pai will thus show at trial that a contract for Music Supervisor services was agreed to by
the parties, that he performed his services, that Defendants breached that contract and failed to
DEFENSES
Defendants submit that they have three defenses to Plaintiff's claims: estoppel, waiver,
and laches. None of these defenses has merit, and none of them is bolstered by proof that Pai
was sophisticated, or had sophisticated counsel to advise him. In
New
York, to establish thedefense of waiver, defendants must show that Pai had the intention to relinquish a known right.
Gilbert Frank Corp. v. Fed. Ins. .Co.,Co., 70 N.Y.2d 966, 968 (1988) (waiver is an intentional
relinquishment of a known right and should not be lightly presumed); Melcher v. Apollo Med.
Fund Mgt., L.L.C., 25 A.D.3d 482, 808 N.Y.S.2d 207 (1" Dep't 2006); Orange Steel Erectors,
Inv. V. Newburgh Steel Prods., Inc., 225 A.D.2d 1010, 1012, 640 N.Y.S.2d 283 (3d Dep't 1996).
At trial Pai will show that he was not informed of many material facts that were
exclusively within
Defendants'
Defendants knowledge and control. First, Pai was told that the composers
were getting paid "generously" and "more than industry standard." In accepting payment, Pai
took the Defendants at their word. In fact, the one percent Defendants allocated to composers as
a royalty pool is shamefully below industry standard. So, to the extent Pai acquiesced to Defendants'
allocation of "one percent" to the composer pool, Pai did so with the false
information - provided by Defendants - that this allocation was "way more generous" than
industry standard.
Also, although Defendants showed Pai early on a sheet that had them receiving a small
(15%) share of royalties for songs that they did not compose, over the years they upped their
share to 60% of those songs without seeking Pai's consent or even notifying him. In short, Pai
did not have the information needed to intentionally waive his right to his fair share of income
for his contributions to the Production. To the extent that Defendants seek to argue that he could
—
.F
consistent in stating they did not do so because they trusted their friends this argument does not
salvage Defendants' waiver defense. Unlike in the area of fraud, "should have known" does not
suffice for waiver. Melcher v. Apollo Med. Fund Mgt., L.L.C., 25 A.D.3d 482, 808 N.Y.S.2d
207 (13(1 Dep't 2006) (rejecting defendants' contention that they established their affirmative
defense of waiver by showing what plaintiff "should have known"); Am. Trucking Ass n, Inc. v
NY
State Thruway Auth., ,238238 F Supp. 3d 527, 540-541(SDNY
2017) ("waiver is the consciousand voluntary relinquishment of a known right . . . 'should have known does not suffice for
waiver, which requires conscious relinquishment of a right that is actually known. ") (emphasis in
original).
Here, there is no argument that Pai actually knew that he was receiving well below
industry standard when he accepted his royalty checks. What Defendants seek to prove at trial is
that Pai should have known or should have asked someone what the overall box-office receipts
were and whether the size of his royalty checks was consistent with industry standards. In
urging the defense of waiver, however,
Defendants'
proffer of proof that Pai should have known
he was not being paid industry standard fails. Melcher v. Apollo Med. Fund Mgt., L.L.C., 25
A.D.3d 482, 808 N.Y.S.2d 207 (13 Dep't 2006). In Melcher. plaintiff, a former member of
defendant limited liability company, sued the company for breach of contract, alleging that the
spreadsheets the defendants provided to him did not disclose the formula employed by
defendants to calculate the allocations for profit splits and contained no explanatory footnotes.
The court held that the spreadsheets could not establish plaintiff's waiver of his claim for higher
profits splits, because the documents provided to him did not conclusively establish plaintiff's
Plaintiff will full information as to how royalties paid to him were calculated, and therefore
Defendants cannot establish waiver of a known right.
Neither is the defense of estoppel available to Defendants. For estoppel to apply,
Defendants must show that they would suffer inequitable detriment based upon Pai's conduct.
Fundamental Portfolio Advisors, Inc. v. Toqueville Asset Management, L.P., 7 N.Y.3d 96, 817
N.Y.S.2d 606, 850 N.E.2d 653 (2006). Equitable estoppel is imposed by law in the interest of
fairness to prevent the enforcement of rights which would work a fraud of injustice upon the
person against
whom
enforcement is sought. Id. Since the entirety of Pai's claim is that he seeksfair compensation for the contributions he made as co-creator of the Production, Defendants have
no claim that fair compensation to him would be inequitable. And again, the fact that Pai may
have asked about royalties over the years, in a general sense, and consulted with a few lawyers
has no bearing on what the reasonable value of his contribution to the Production has been.
Lastly, Defendants cannot prevail by invoking the doctrine of laches. First, laches is an
equitable defense, and so is unavailable with respect to the quantum meruit and breach of oral
contract causes of action. Even if that were not the case, to establish laches, a defendant must
show it has been prejudiced by the alleged delay. Edenwald Contracting v.
New
York, 60 N..2d957, 959, 471 N.Y.S.2d 55, 459 N.E.2d 164 (1983). As stated above, because Plaintiff only
seeks what is reasonable compensation for his services, Defendants cannot show any prejudice
by asserting delay.
Dated:
New
YorkNew
YorkPILIERO
&
ASSOCIATES
PLLC
March 26, 2018/s/ Robert D. Piliero
Robert
D
Piliero (Piliero@pilierolaw.com) LisaA
Frey (Frey@Pilierolaw.com)444 Madison Avenue, Fourth floor
New
York,NY
10022