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Natara Multimedia Group Inc. v. Carranza

United States District Court, N.D. Illinois, Eastern Division

June 17, 2015

NATARA MULTIMEDIA GROUP INC., and EVENT LIFE LLC, Plaintiffs,
v.
ERINEO

OPINION AND ORDER

JOAN H. LEFKOW, District Judge.

Natara Multimedia Group Inc. ("Natara") and Event Life LLC ("Event Life") filed an amended complaint against Congress Theatre Inc. ("Congress Inc."), Congress Corporation, 2117-2139 N Milwaukee Property, LLC, Ticketfly Inc. ("Ticketfly"), and individuals associated with the Congress Theatre, a historic theatre in Chicago, Illinois ("the Theatre"). (Dkt. 29 ("Compl.").) Plaintiffs, concert producers in the Chicago area, allege that defendants engaged in a scheme to defraud plaintiffs of contractually guaranteed ticket- and liquor-sale revenue earned at three concerts held at the Theatre in 2012 and 2013. Plaintiffs bring claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq., as well as claims for breach of contract, intentional misrepresentation, conversion, and civil conspiracy. ( Id. ) Defendants have moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6).[1] (Dkt. 30.) For the reasons stated below, defendants' motion is granted.[2]

BACKGROUND[3]

I. The Parties

Natara and Event Life are closely held corporations that produce concerts in Chicago, Illinois. (Compl. ¶¶ 5-6.) Natara is owned and controlled by Nick Huminsky, and Event Life is owned and controlled by George Herrera. ( Id. )

Although not specified in the amended complaint, Congress Inc. and Congress Corporation are presumably the legal entities through which the Theatre conducts business. Similarly, the court presumes that 2117-2139 N Milwaukee Property, LLC is the owner of the property on which the Theatre is located.

Ticketfly[4] is a corporation that partners with concert promoters and venues to sell concert tickets around the country. ( Id. ¶ 12.) It maintains its principal place of business in San Francisco, California ( id. ) and claims to be the exclusive ticket service for the Theatre (dkt. 31 at 3).

The remaining defendants are individuals associated with or employed by the Theatre, Congress Inc., or Congress Corporation. Erineo "Eddie" Carranza owns and controls the Theatre. (Compl. ¶ 7.) Alberto Solorio is a relative of Carranza and serves as "a business accountant/controller." ( Id. ¶ 8.) Tyler Deroo is the Theatre's "other controller" and works as a "venue manager in charge of processing Carranza bank wires and finances." ( Id. ¶ 9.) Don Snow is a ticket scalper who works for Carranza. ( Id. ¶ 10.) May Day is a Chicago police officer who heads the Theatre's security and serves as Carranza's "street enforcer." ( Id. ¶ 11.) He is the brother of Athen (also known as Atieh) Irayyan and Ahmad Mahidi, who are managers at the Theatre. ( Id. )

II. The Natara Concerts

A. October 13, 2012

On August 7, 2012, Natara and Congress Inc. entered into a contract to present a concert at the Theatre on October 13, 2012. ( Id. ¶ 14; dkt. 29-2 Exh. B.) The agreement provided that Natara would "have full control of all ticket revenue" and would receive "100% [of] the balance of ticket sales." (Dkt. 29-2 Exh. B ¶ 2(a).) The parties agreed that Congress Inc. would receive 100% of gross liquor-sale proceeds. (Compl. ¶ 15.)

Despite the plain language of the contract, Natara was denied its right to ticket-sale revenue. Specifically, on the day of the concert, Huminsky observed individuals unaffiliated with Natara selling tickets on the streets outside the Theatre. ( Id. ) These sales were not reported to Natara and violated the terms of the contract between Natara and Congress Inc., which gave Natara complete control of ticket sales. ( Id. ) Later that night, the ticket scanners provided by the Theatre were not charged properly and did not work, forcing Natara's door staff to collect tickets by hand and place them in garbage bags. ( Id. ¶ 17-18.) Then, Carranza's staff, including May Day, Irayyan, and Mahidi, took the bags and resold the tickets outside the Theatre for a price lower than that offered at the door. ( Id. ¶¶ 18, 21.) As a result, defendants deprived Natara of "walk-up" ticket sales, and because defendants did not report to Natara the revenue earned from scalping the tickets, defendants denied Natara its right to receive ticket-sale revenue under the contract. ( Id. ¶ 22.) Indeed, although defendants reported that only 3, 300 tickets had been sold, plaintiffs claim that a 4, 700 capacity crowd attended the concert on October 13. ( Id. ¶ 23.) While not specified in the amended complaint, the original complaint indicates that Natara lost $42, 000 on the October 13 concert. (Dkt. 1 ¶ 27.)

B. April 13, 2013

In the weeks following October 13, 2012, Carranza met with Huminsky at a sports bar in Barrington, Illinois. (Compl. ¶ 26.) Huminsky demanded that Carranza pay him the ticket-sale revenue due under the contract, but Carranza responded that he did not have the money. ( Id. ) Nevertheless, Carranza persuaded Huminsky to produce another concert at the Theatre. ( Id. ¶¶ 26, 43.) Carranza assured Huminsky that he "would recoup the money he lost ...


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