United States District Court, C.D. California
ORDER GRANTING THIRD-PARTY DEFENDANT VICTOR
SIASAT'S MOTION FOR SUMMARY JUDGMENT [DKT. 117]
D. PREGERSON, UNITED STATES DISTRICT JUDGE
before the court is Third-Party Defendant Victor Siasat's
Motion for Summary Judgment. After considering the
parties' submissions and hearing oral argument, the court
GRANTS the motion and adopts the following Order.
Plaintiff The Lambus Corporation (“TLC”) is an
entity partly-owned and operated by Harry Haralambus.
(Declaration of Harry Haralambus ¶ 4.) For approximately
the past two decades, TLC, along with several other corporate
entities that Haralambus operates, has had a business
relationship with an apparel company called Mossimo
concerning trademarks in the MOSSIMO brand. During a similar
period, Haralambus also had a business relationship with an
apparel manufacturing and distribution company called Promark
Industries, Inc. (“Promark”). (Declaration of
Victor Siasat ¶ 5.) Across numerous agreements, which
will be addressed in greater detail below, Promark acquired a
sublicense to the MOSSIMO mark from Haralambus for use in
connection with the manufacture and sale of branded apparel
in the Philippines.
point, relations between Haralambus and Mossimo broke down
and Mossimo sued Haralambus for breach of contract,
conversion, fraud, and other related claims in July 2014.
(See Dkt. 35.) The gravamen of Mossimo's suit
was that Haralambus assigned his companies' rights in the
MOSSIMO mark to various shell companies and then collected
royalties from sublicenses without Mossimo's knowledge or
consent and without making required royalty payments to
Mossimo. (Id. ¶¶ 4-8.) These unauthorized
sublicenses allegedly included the deal with Promark.
(Id. ¶ 32.) These allegations were never
adjudicated and, instead, the parties entered into a
settlement and Mossimo dismissed its suit. (See
Dkts. 92, 97.) Before the case settled, in September 2014,
Mossimo directly granted Promark a license to use the MOSSIMO
mark in the Philippines. (Declaration of Adamson Bactat, Ex.
5.) Also while the suit was pending, TLC filed a Third-Party
Complaint against Victor Siasat and Iconix Brand Group. (Dkt.
57.) According to TLC, when relations had begun to break down
between Haralambus and Mossimo, the parties discussed
granting TLC a new exclusive license in exchange for an
advance payment of $100, 000. (Id. ¶ 10.) Based
on those discussions, TLC made the payment but alleges that
the draft licensing agreement Iconix later provided to TLC
did not represent the parties' prior understanding.
(Id. ¶ 14.) According to TLC, this was because
Siasat had interceded with Iconix to interfere with TLC's
contractual relations and prospective economic advantage.
(Id. ¶¶ 40-49.)
Haralambus's Relationship with Siasat and Promark
1997, Victor Siasat first introduced Harry Haralambus to
Promark Industries. (Siasat Decl. ¶ 5; Haralambus Decl.
¶ 8.) Siasat made the introduction because, at the time,
Haralambus was looking for a firm to manufacture and
distribute apparel bearing the “MOSSIMO” brand
mark in the Philippines. (Id.) Although the parties
dispute the precise relationship between Siasat and Promark,
it is undisputed that the owner, or one of the owners, of
Promark was a relative of Siasat's and that Siasat had
facilitated business for Promark on various occasions.
(Declaration of Harry Haralambus ¶ 8; Siasat Decl.
¶ 14.) Haralambus also alleged that Siasat was a
co-owner of Promark. (Haralambus Decl. ¶ 8.)
January 1, 1998, Promark entered into a Master License
Agreement with Sole Supply, Inc. (“Sole
Supply”)-a company owned and operated by Haralambus.
(Bacatat Decl. ¶ 3, Ex. 1 [Promark Master License
Agreement.) Sole Supply represented in this agreement that it
held “all licensing right, title and interest” to
the relevant trademarks in the Philippines pursuant to a
separate licensing agreement with Mosssimo Inc. (Id.
at 1; id. § 4.1.) Under the terms of the
Promark Master License Agreement, Promark was granted a
non-exclusive right to use the MOSSIMO mark in connection
with manufacturing “anywhere in the world” and an
exclusive right to use the mark in connection with sale and
distribution of branded products in the Philippines for a
period of five years and four months (expiring on April 30,
2003). (Id. §§ 2.1, 15.1.) The agreement
also included a one-time renewal option for five years, which
Promark exercised. (Id. § 15.2; Bactat Decl.
¶ 5.) From January 1, 1998 until April 30, 2008, Promark
made royalty payments to Sole Supply and TLC-as noted above,
another entity owned and operated by Haralambus-totaling
$1.08 million for the use of the MOSSIMO marks in the
Philippines. (Bactat Decl. ¶ 6; Haralambus Decl. ¶
2008, immediately after the agreement between Promark and
Sole Supply expired, Promark entered into a new licensing
agreement with Onward Pacific (the “Second Promark
License Agreement.”) (Bactat Decl. ¶ 7, Ex. 2.)
Onward Pacific was another entity that Haralambus directed
and partially-owned. Under this agreement, Promark was again
granted the right to manufacture apparel with the MOSSIMO
mark anywhere in the world and sell licensed products in the
Philippines. (Id. § 2.1). The term of the
agreement was five years, expiring on April 30, 2013.
(Id. §§ 3.1, 3.2, 3.3.) Although the
Second Promark License Agreement was made with Onward Pacific
at least some of the royalty payments under the agreement
were sent to TLC. (See Declaration of Susan Baker,
Ex. 2 (Haralambus Depo. 186:18-187:3.) Between 2010 and 2013,
Promark asserts that it transferred at least $926, 187 to
TLC. (Bactat Decl. ¶ 11.) Immediately after the Second
Promark License Agreement expired, Promark entered into a
third license agreement for the MOSSIMO marks with Onward
Pacific on May 1, 2013. (Bactat Decl. ¶ 10, Ex. 3 [Third
Promark License Agreement].)
Haralambus's Relationship with Mossimo
parties dispute the precise status of the Mossimo marks in
the Philippines when Sole Supply and Promark entered into the
Promark Master License Agreement in 1998. Haralambus contends
that prior undisclosed agreements between Mossimo and Sole
Supply dating back to 1996 gave Sole Supply an exclusive
right to license the marks in the Phillipines, while Promark
questions whether Sole Supply or any other entity owned by
Haralambus had any such right at that time. (Compare
Haralambus Decl. ¶ 4 with Siasat Mot. Summ. J
(“Mot.”) 4-5.) What the undisputed evidence does
show is that Mossimo, Inc. licensed the MOSSIMO mark to
Beyond Blue, Inc. (“Beyond Blue”)- another
Haralambus owned entity-on April 1, 2001. (Dkt. 35, Ex. 1.)
According to that agreement, Mossimo granted Beyond Blue an
exclusive license to use the MOSSIMO trademark in Hong Kong,
Japan, Korea, Singapore, and the Philippines. (Id.
at 1) The initial term of the agreement was five years and
Beyond Blue was given an option to renew for another five
years. (Id. §§ 2.1, 2.2.) Under the terms
of the agreement, Beyond Blue had the right to sublicense the
mark but was required to secure Mossimo's prior written
consent and pay Mossimo seventy percent of all royalties from
any sublicense agreements. (Id. §§ 1.2,
5.1.) On July 6, 2007, Mossimo and Beyond Blue executed and
Amendment to the License Agreement, which terminated Beyond
Blue's license to use the MOSSIMO trademark everywhere
but the Philippines where Beyond Blue retained an exclusive
license to the marks until December 31, 2012. (Dkt. 35, Ex.
2.) Under the terms of the Amended License Agreement, Beyond
Blue was permitted to assign its interests and rights to
Onward Pacific-as noted above, a company Haralambus
partly-owned and directed. (Id. § 7.) The
Amended License Agreement provided for certain guaranteed
minimum royalties and maintained the same rights and
responsibilities for sublicensing the mark. (Id.
§§ 4, 10.)
three assertions Siasat makes about this account are that
Haralambus never informed Mossimo of its sublicense agreement
with Promark, Haralambus never paid Mossimo the required
portion of sublicense royalties, and that Haralambus, and his
entities, had lost their rights to the MOSSIMO mark at least
five months prior to Promark's third license agreement
with Onward Pacific. Haralambus disputes each of these
claims. As to the first two, Haralambus asserts that Mossimo
was aware of the arrangement and was not owed any additional
royalty payments. As to the final point, Haralambus notes
that the rights to license the MOSSIMO mark in the
Philippines derived from the alleged 1996 agreement with Sole
Supply and not any subsequent agreement. (Haralambus Decl.
¶¶ 19, 27.) Thus, any claimed expiration of
licensing rights is irrelevant.
Parties' Accounts Intersect
entering into the Amended License Agreement with Haralambus,
Mossimo alleges that Onward Pacific failed to make the
guaranteed minimum royalty payments. (Dkt. 35 ¶ 44.)
Mossimo contacted Haralambus about the issue and, after some
discussion, Mossimo alleges that Haralambus had TLC transfer
$100, 000 to Mossimo to partially satisfy the owed royalty
payments. (Id. ¶ 45.) During this period,
Haralambus agrees that the parties were engaged in
discussions about the MOSSIMO marks. (Haralambus Decl. ¶
23.) In Haralambus's view, he did not owe any minimum
guaranteed royalty payments because of the alleged agreement
with Sole Supply that gave that company the rights to the
MOSSIMO mark in the Philippines. (Id.) Nonetheless,
Haralambus concedes making a $100, 000 payment to Mossimo.
(Id. ¶ 24.) Haralambus asserts that this
payment was made as “part of an overall far-reaching
settlement between the parties . . . which was to be
consummated in writing.” (Id.) Subsequent to
this payment, in September 2013, Haralambus received a draft
agreement between Onward Pacific and Iconix. (Id.
¶ 28, Ex. 7.) This draft agreement was never executed.
this time, two other relevant events transpired. First,
Mossimo entered into a new joint venture on September 30,
2013 with an affiliate of the Global Brands Group
(“Global Brands”)-an independent company that no
party or third-party claims an ownership or interest in-that
granted Global Brands the exclusive right to exploit and
sublicense the MOSSIMO brand trademarks in a number of
Southeast Asian Companies including the Philippines.
(Declaration of Jared Margolis ¶ 3.)
also in September 2013, Siasat met with representatives from
Mossimo. (Siasat Decl.¶ 6.) Siasat states that the
meeting was to discuss the possibility of acquiring the
licensing rights for certain other brands not at issue here.
(Id. ¶ 6.) As Mossimo was now operated by
Iconix, Siasat claims he did not even know that this meeting
was with a Mossimo representative and he claims that he never
discussed the Mossimo mark. (Id.) Haralambus
disputes this assertion and contends that Siasat spoke about
the MOSSIMO mark on this occasion. (Haralambus Decl. ¶
27.) Subsequently, in December 2013, Siasat met with an
individual named Jason Rabin who was a representative of the
Global Brands Group. (Id. ¶ 11.) Siasat claims
that this was the first of multiple interactions with Mossimo
representatives who told Siasat that Promark was using the
MOSSIMO mark without authorization in the Philippines.
(Id. ¶¶ 11, 12.) During these
interactions, Siasat claims he turned over Promark's
licensing agreements with the various entities Haralambus
operated, as well ...