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Dachev v. Rich America, Inc.

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

December 30, 2019

KRASIMIR DACHEV, et al., Plaintiffs,
RICH AMERICA, INC., et al., Defendants.


          Robert M. Dow, Jr. United States District Judge

         For the reasons set forth below, the motion to dismiss [65] filed by Defendants Rich America, Inc. and Leonard Goodrum (collectively, “Defendants”) is denied.[1] This case is set for further status hearing on January 16, 2020, at 9:00 a.m.

         I. Background [2]

         Peace for You Peace for Me (the “Foundation”) is a private non-profit foundation registered under Bulgarian law, with its principal place of business is Sofia, Bulgaria. [62 at ¶ 2.] The Foundation was formed to organize and hold a charity concert to help homeless and displaced children in world conflict zones. [Id.] Plaintiff Krasimir Dachev is a resident of Sofia, Bulgaria and was a sponsor of the Foundation. [Id. at ¶ 3.] Plaintiff Svilosa is a publicly-traded company organized under the laws of Bulgaria and listed on the Bulgarian Stock Exchange. [Id. at ¶ 4.] Svilosa was the primary investor in the Foundation and the planned charity concert. [Id.]

         In early 2016, Dachev and Svilosa decided to help organize an all-day charity concert, patterned after the 1985 Live Aid concert and the 2010 Hope for Haiti Now concert, that would be internationally televised on October 1, 2016 (the “Charity Event”). [Id. at ¶ 12.] Plaintiffs allege that Defendants-in discussions with Krassimire Kourtev, an agent and representative of the Foundation-agreed to secure the performances “of various preferred artists” for the concert. [Id. at ¶ 14.] Dachev and Svilosa agreed to loan the Foundation most, if not all, of the money necessary to secure artists. [Id. at 15.] Plaintiffs allege that “their loans would be paid back with the proceeds generated by the ticket sales for admission to the charity concert” and that “any money sent to Defendants to secure an artist who declined the offer, or who otherwise could not be secured to perform, would be returned to Plaintiffs.” [Id. at 16.] Plaintiffs also allege that “Defendants agreed to act as Plaintiffs' agent and use the money provided by Plaintiffs to secure Plaintiffs' preferred artists.” [Id.]

         Around August 2016, Defendant Brandon Allen-an officer and/or representative of Defendant Rich America, Inc. (“RA”)-wrote to Kourtev representing that RA, “in coordination with RCA Records (“RCA”) & Sony Music Group (“Sony”), ” would contact various celebrities to “secure performance contracts” for the charity concert, then less than two months away. [Id. at ¶ 22.] Plaintiffs allege that in reliance on that representation, “the Foundation, Dachev and Svilosa entered into a loan agreement, whereby Dachev and Svilosa agreed to loan the Foundation monies to be provided to RA for the purpose of securing artists to perform at the charity event.” [Id. at ¶ 24.] The loan funds, which the Foundation agreed to repay, were provided directly to RA. [Id. at 25.]

         Defendants sent various written agreements to Plaintiffs purporting to book various celebrities, including Britney Spears, Snoop Dogg, Attika 7, Georgios Tsalikis, and DJ Markus Schultz. [Id. at ¶26.] In these written agreements, Allen represented that he was the “agent” of the artist subject to the agreement. [Id. at 41.] The agreements required that deposits (e.g., $142, 800 for Britney Spears and $150, 000 for Snoop Dogg) immediately be transferred to Defendants to “secure the date.” [Id. at 44.] Defendants transmitted to Plaintiffs video recordings of celebrities purporting to commit to the 2016 concert. [Id. at ¶ 55.] In one such video, an individual purporting to be Snoop Dogg says to “get ready” for the October 1, 2016 concert. [Id.] In August and September 2016, the Foundation, Dachev, and Svilosa collectively sent Defendants a total of $367, 800 to “secure” these celebrities for the event. [Id. at ¶¶ 45-46.]

         After receiving Plaintiffs' money, Defendants failed to secure any major celebrity for the 2016 concert, claiming, among other things, that Snoop Dogg “backed out” of the event and that the deposit money Plaintiffs paid to “secure” Britney Spears had instead been paid to “Natalie LaRose, ” an artist Plaintiffs did not authorize or want. [Id. at ¶ 58.] Plaintiffs were forced to cancel the 2016 concert because Defendants had not secured the promised celebrities. [Id. at 62.] Still, Plaintiffs asked that Defendants apply the money they already had transferred to RA to secure artists for another concert to be held in June 2017 (the “2017 Concert”). From September 2016 through April 2017, Defendants represented that they were negotiating with celebrities for the 2017 concert. During that time, Defendants sent Plaintiffs emails with the following statements:

• “We are happy to announce verbal confirmations from JLo, Jessica Simpson, Rihanna, Beyoncé, Diana Ross, Ludacris, Smiley, Mohombi, Iggy Azalea and David Guetta.”
• “The contract [with Natalie LaRose] is signed and cannot be canceled[.]”
• “We are still in the process of retrieving the Snoop Dogg deposit which will take some time but we are still debating keeping him for the show.”

[Id. at ¶ 69.] From at least December 2016, Plaintiffs repeatedly asked Defendants for an accounting of the money they had received for the purpose of booking celebrities. [Id. at ¶ 70.] Defendants ignored these requests. [Id. at 71.]

         By February 2017, after six additional months of alleged booking efforts, Defendants failed to secure any major celebrity for the 2017 concert. [Id. at 72.] Plaintiffs subsequently discovered that (1) Defendants were not authorized to represent or act on behalf of Sony or RCA in this matter; (2) Defendants were not authorized to represent or act on behalf of any of the major celebrities promised by Defendants; (3) the major celebrities promised by Defendants had never received any deposit from Defendants, had never entered into any agreement with Defendants, and had never heard of Defendants; and (4) the video recording sent to Plaintiffs of Snoop Dogg supposedly announcing his performance at the 2016 concert was a fraudulent production featuring a celebrity look-alike claiming to be Snoop Dogg. [Id. at ¶ 74.]

         Plaintiffs bring this lawsuit against Defendants to recover more than $3, 800, 000 in damages allegedly incurred as a result of Defendants' misconduct. Specifically, Plaintiffs seek to recover (a) approximately $350, 000 tendered to Defendants; (b) deposits and/or payments for artists, hosts, hotels, airfare, stage and lighting vendors, and other service provider contracts for the planned 2016 concert totaling another $2, 500, 000; and (c) another $1, 000, 000 of payment obligations under various contracts.

         On February 5, 2018, Defendants filed a motion to dismiss [30], which they later withdrew. See [34]. Plaintiffs filed an amended complaint [35], and Defendants filed a second motion to dismiss [38]. The Court granted the motion in part, dismissing certain contract claims, and denied it in part, declining to dismiss claims for fraud, conversion, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/2. See [57] Subsequently, Plaintiffs filed a second amended complaint (“SAC”) [62], and Defendants filed their third motion to dismiss [65], which is now before the Court.

         II. Legal Standard

         To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “fair notice of what the * * * claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to ...

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