Court Opinion

ID: 146693
Source: CourtListenerOpinion
Date Created: 2010-05-19 00:03:52+00
Date Added: 2024-06-11T17:24:02.393648
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              MAY 18 2010

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

PATRICK MIELE,                                   No. 09-55525

             Plaintiff - Appellant,              D.C. No. 2:05-cv-00196-R-RZ

  v.
                                                 MEMORANDUM *
RON PERLSTEIN; et al.,

             Defendants - Appellees,

  and

PETER DAVY; et al.,

             Defendants.

                    Appeal from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                        Argued and Submitted May 5, 2010
                              Pasadena, California

Before: B. FLETCHER and PAEZ, Circuit Judges, and EZRA, District Judge.**

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The Honorable David A. Ezra, United States District Judge for the
District of Hawaii, sitting by designation.
      Patrick Miele appeals an award of summary judgment to Ron and Judith

Perlstein and Danco, Inc. (Defendants). We exercise our discretion to assume

jurisdiction over the appeal, see Wahkiakum Band of Chinook Indians v. Bateman,

655 F.2d 176, 177 n.1 (9th Cir. 1981); Riggle v. California, 577 F.2d 579, 581 n.A

(9th Cir. 1978), and we affirm.

      No California state court has squarely decided whether the principles of

derivative lawsuits applicable to corporations also apply to a limited liability

company such as Rhapsody LLC. Cf. Paclink Commc’ns Int’l, Inc. v. Superior

Court, 109 Cal. Rptr. 2d 436, 439 (Ct. App. 2001) (noting that the plaintiffs had

conceded that such principles applied in the LLC context). We will assume for the

sake of argument that Miele has standing to assert his claims against Defendants.

See Franchise Tax Bd. of Cal. v. Alcan Aluminium Ltd., 493 U.S. 331, 338 (1990)

(assuming arguendo that a party met the prudential requirements of the standing

doctrine).

      Even under that assumption, Miele’s claims for breach of fiduciary duty and

intentional interference with prospective economic advantage are meritless as a

matter of law. Miele must show that he has suffered damages to establish either a

breach of fiduciary duty, see Alexander v. Robertson, 882 F.2d 421, 423 (9th Cir.

1989); Am. Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton, 117 Cal. Rptr.
2
2d 685, 705-06 (Ct. App. 2002), or intentional interference with prospective

economic advantage, see Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d
937, 950 (Cal. 2003); Salma v. Capon, 74 Cal. Rptr. 3d 873, 888 (Ct. App. 2008).

There is no evidence that the sale of the film Rhapsody to Blockbuster without

Miele’s consent,1 Danco’s separate contract with Bruder Releasing, or Perlstein’s

deposit of funds from the Blockbuster deal into Danco’s account deprived Miele of

any money that he would otherwise have received. There is no evidence that the

film’s fair market value exceeded the amount Blockbuster paid for it, or that other,

better offers were available.

      Furthermore, there is no evidence that Perlstein himself negotiated or

executed the deal with Blockbuster. It was Bruder Releasing that signed the

agreement with Blockbuster and had exclusive authority to enter into it. Bruder

Releasing was dismissed earlier in this case, but apparently Miele has not appealed

that dismissal. Insofar as Miele’s claims relate to the Blockbuster agreement, the

Perlsteins and Danco are not proper defendants.

      1
         The record is not entirely clear on the question of consent. Miele changed
his mind about the Blockbuster deal at least twice. The record does not explain
Miele’s change of mind, and counsel’s attempted explanation at oral argument
clarified nothing.

                                          3
        Miele also asserts a frivolous claim of usury. Perlstein’s investment in

Rhapsody was not a loan, see Ghirardo v. Antonioli, 883 P.2d 960, 965 (Cal. 1994)

(noting that in determining whether a transaction was a loan, and therefore subject

to usury law, the substance and not the form of the transaction controls), and even

if it were, Perlstein enjoyed a negative rate of “interest” by receiving less than

$200,000 from the Blockbuster deal since he had contributed $300,000 to

Rhapsody LLC. Miele has adduced no evidence of any other return that Perlstein

received on his investment.

        Because the district court’s summary judgment must be affirmed, Miele’s

contention that this case should be remanded to a different district court judge is

moot.

        AFFIRMED.

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