SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

LESLIE BENZIES,Plaintiff,

v.

TAKE-TWO INTERACTIVE SOFTWARE, INC.,ROCKSTAR GAMES, INC., ROCKSTAR NORTHLTD., DAN HOUSER and SAM HOUSER,

Defendants.

Index No. 651920/2016

Justice Barry R. Ostrager

Motion Sequence No. 002

REPLY MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’CPLR 3211 MOTION TO DISMISS PLAINTIFF’S COMPLAINT

OR, IN THE ALTERNATIVE, STAY THIS ACTION

DECHERT LLP1095 Avenue of the AmericasNew York, NY 10036Attorneys for Rockstar Games, Inc.,Rockstar North Ltd., Dan Houser, andSam Houser

KELLEY DRYE & WARREN LLP101 Park AvenueNew York, NY 10178Attorneys for Take-Two InteractiveSoftware, Inc., Rockstar Games, Inc.,and Rockstar North Ltd.

FILED: NEW YORK COUNTY CLERK 11/22/2016 05:42 PM INDEX NO. 651920/2016

NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 11/22/2016

1 of 26

TABLE OF CONTENTS

Page

-i-

PRELIMINARY STATEMENT ................................................................................................... 1ARGUMENT................................................................................................................................. 2

I. THE COURT SHOULD DISMISS OR STAY THIS ACTION INFAVOR OF THE LITIGATION IN FEDERAL DISTRICT COURT ................. 2

II. BENZIES’ CONTRACT-BASED CLAIMS AND TORTIOUSINTERFERENCE WITH CONTRACT CLAIMS ALL FAIL TO STATEA CLAIM FOR RELIEF ....................................................................................... 4

A. Benzies Did Not Resign For Good Reason Because He Failed ToProvide The Contractually-Mandated Notice And Opportunity ToCure............................................................................................................ 4

B. Benzies Fails To Plead Constructive Discharge ........................................ 5

C. Benzies Cannot Overcome The Plain Language of the Agreements......... 6

D. Benzies’ Claims Related To The Sabbatical Agreement Fail.................. 10

III. BENZIES’ FRAUD-BASED, BREACH OF FIDUCIARY DUTY,AIDING AND ABETTING AND QUASI-CONTRACT CLAIMS FAIL......... 11

A. Benzies’ Fraud And Fiduciary Duty Claims Are Untimely..................... 11

B. Benzies’ Fraud, Breach Of Fiduciary Duty, Unjust Enrichment,And Constructive Trust Claims Are Duplicative Of His ContractClaim........................................................................................................ 12

C. Benzies’ Fraud Claims Fail To State A Claim......................................... 15

D. Benzies’ Fiduciary Duty Claims Fail To State A Claim.......................... 17

IV. BENZIES’ CLAIMS FOR DEFAMATION AND BREACH OF THEMEDIATION AGREEMENT FAIL AS A MATTER OF LAW........................ 19

CONCLUSION............................................................................................................................ 20

2 of 26

-ii-

TABLE OF AUTHORITIES

Page(s)

CASES

Akerson Advert. & Mktg., Inc. v. St. John & Partners Advert. and Pub. Relations,Inc.,89 F. Supp. 3d 341 (N.D.N.Y. 2015).......................................................................................15

Anderson ex rel. Anderson, Weinroth & Co., L.P. v. Weinroth,48 A.D.3d 121 (1st Dep’t 2007) ...............................................................................................4

Apple Records, Inc. v. Capitol Records,137 A.D.2d 50 (1st Dep’t 1988) ..............................................................................................18

Ashmore v. CGI Grp. Inc.,No. 11 CIV. 8611, 2012 WL 2148899 (S.D.N.Y. June 12, 2012).............................................9

Bettan v. Geico Gen. Ins. Co.,296 A.D.2d 469 (2d Dep’t 2002) .............................................................................................14

Bradbury v. Cope-Schwarz,20 A.D. 657 (3rd Dep’t 2005)....................................................................................................5

Buckler v. Marvel, Entm't Grp., Inc.,No. 91 Civ. 2167, 1992 WL 210101 (S.D.N.Y. Aug. 17, 1992) .......................................11, 12

CAMOFI Master LDC v. College Partnership,452 F. Supp. 2d 462 (S.D.N.Y. 2006)......................................................................................16

CIBC Bank & Trust Co. (Cayman) v. Credit Lyonnais,270 A.D.2d 138 (1st Dep’t 2000) ..............................................................................................2

Clark-Fitzpatrick, Inc. v. Long Island R. Co.,70 N.Y.2d 382 (N.Y. 1987) ...............................................................................................14, 15

Columbus Park Corp. v. Dep’t of Hous. Pres. & Dev. of City of N.Y.,80 N.Y.2d 19 (N.Y. 1992) .........................................................................................................9

Culver v. Merrill Lynch & Co.,No. 94 Civ. 8124, 1995 WL 422203 (S.D.N.Y. Jul. 17, 1995) .................................................9

Daikoff v. American Re-Insurance Co.,492 F. Supp. 1115 (S.D.N.Y. 1980)...........................................................................................8

Digizip.com, Inc. v. Verizon Servs. Corp.,139 F. Supp. 3d 670 (S.D.N.Y. 2015)......................................................................................14

3 of 26

-iii-

Dillon v. City of New York,261 A.D. 2d 34 (1st Dep’t 1999) .......................................................................................19, 20

Ely-Cruikshank Co. v. Bank of Montreal,81 N.Y.2d 399 (N.Y. 1993) .....................................................................................................12

Faulkner v. Arista Records LLC,602 F. Supp. 2d 470 (S.D.N.Y. 2009)......................................................................................18

Ferrari v. KeyBank Nat’l Ass’n,No. 06-cv-6525, 2009 WL 35330 (W.D.N.Y. Jan. 5, 2009)................................................9, 15

Financial Structures Ltd. v. UBS AG,77 A.D.3d 417 (1st Dep’t 2010) ..............................................................................................13

First Bank of Americas v. Motor Car Funding, Inc.,257 A.D.2d 287 (1st Dep’t 1999) ............................................................................................13

Foss v. Am. Tel. & Tel. Co.,199 A.D.2d 668 (3d Dep’t 1993) ...............................................................................................8

Gershunoff v. Panov,77 A.D.2d 511 (1st Dep’t 1980) ..............................................................................................18

Gibney v. Marchay,34 N.Y. 301 (N.Y. 1866) ...........................................................................................................5

Golub Assoc. v. Lincolnshire Mgmt.,1 A.D.3d 237 (1st Dep’t 2003) ................................................................................................13

GoSmile, Inc. v. Levine,81 A.D.3d 77 (1st Dep’t 2010) ................................................................................................13

Hickey v. Nat’l League of Professional Baseball Clubs,169 A.D.2d 685 (1st Dep’t 1991) ............................................................................................20

Holzer v. Mondadori,No. 151409/2012, 2013 WL 4523615 (Sup. Ct. N.Y. Cnty. 2013) .........................................18

IKB Int’l S.A. v. Morgan Stanley,142 A.D.3d 447 (1st Dep’t 2016) ............................................................................................16

Kaminsky v. FSP Inc.,5 A.D.3d 251 (1st Dep’t 2004) ................................................................................................13

Kramer v. Greene,142 A.D.3d 438 (1st Dep’t 2016) ............................................................................................15

4 of 26

-iv-

Levion v. Societe Generale,822 F. Supp. 2d 390 (S.D.N.Y. 2011)..................................................................................7, 10

MacDiarmid v. ING Bank N.V.,No. 02 Civ. 3077, 2003 WL 41995 (S.D.N.Y. Jan. 6, 2003).............................................11, 12

Madison Equities, LLC v. Serbian Orthodox Cathedral of St. Sava,--- N.Y.S. 3d ---, No. 162041/14, 2016 WL 6432664 (1st Dep’t Nov. 1, 2016) .......................2

Malone v. Bayerische Hypo-Und Vereins Bank,No. 08 Civ 7277, 2010 WL 391826 (S.D.N.Y. Feb. 4, 2010) ...........................................11, 12

Mañas v. VMS Assocs., LLC,53 A.D.3d 451 (1st Dep’t 2008) ..............................................................................................13

Mandelblatt v. Devon Stores, Inc.,132 A.D.2d 162 (1st Dep’t 1987) ............................................................................................18

Merrill Lynch Capital Mkts Ag. v. Controladora Comercial Mexicana SAB DEC.V.,No. 603214/08, 2010 WL 5827550 (Sup. Ct. N.Y. Cnty. Mar. 16, 2010) ..............................18

Mosaic Caribe, Ltd. v. All Settled Grp., Inc.,117 A.D.3d 421 (1st Dep’t 2014) ......................................................................................13, 14

MP Cool Invs. Ltd. v. Forkosh,142 A.D.3d 286 (1st Dep’t 2016) ...........................................................................................16

Namad v. Salomon Inc.,74 N.Y.2d 751 (N.Y. 1989) .....................................................................................................10

O’Shea v. Bidcom, Inc.,No. 01 Civ. 3855-WHP, 2002 WL 1610942 (S.D.N.Y. July 22, 2002) ..................................15

Polidori v. Societe Generale Groupe,39 A.D.3d 404 (1st Dep’t 2007) ................................................................................................5

Rather v. CBS Corp.,68 A.D.3d 49 (1st Dep’t 2009) ................................................................................................18

Robinson v. Day,103 A.D.3d 584 (1st Dep’t 2013) ............................................................................................15

Sathe v. Bank of New York,No. 89 CIV. 6810, 1990 WL 58862 (S.D.N.Y. May 2, 1990)...................................................8

Schindler Elevator Corp. v. Tully Const. Co.,139 A.D.3d 930 (2d Dep’t 2016) ...............................................................................................5

5 of 26

-v-

Schneider v. Jarmain,2010 NY Slip Op 30801(U), (Sup. Ct. N.Y. Cnty. 2010)........................................................20

Scottsdale Ins. Co. v. Indem. Ins. Corp. RRG,110 A.D.3d 783 (2d Dep’t 2013) ...............................................................................................3

Sergeants Benevolent Ass’n Annuity Fund v. Renck,19 A.D.3d 107 (1st Dep’t 2005) ..............................................................................................18

Stepanov v. Dow Jones & Co., Inc.,120 A.D.3d 28 (1st Dep’t 2014) ..............................................................................................19

Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs.,63 N.Y.2d 396 (N.Y. 1984) .......................................................................................................9

U.S. Bank Nat. Ass’n v. DLJ Mortg. Capital, Inc.,121 A.D.3d 535 (1st Dept 2014)..............................................................................................12

UST Private Equity Invs. Fund, Inc. v. Salomon Smith Barney,288 A.D.2d 87 (1st Dep’t 2001) ..............................................................................................17

Valassis Comms., Inc. v. Weimer,304 A.D.2d 448 (1st Dep’t 2003) ............................................................................................17

Valentine v. Carlisle Leasing Int’l Co.,97-CV-1406, 1998 U.S. Dist. LEXIS 15581 (N.D.N.Y. Sept. 30, 1998)..................................8

Wachtell, Lipton, Rosen & Katz v. CVR Energy, Inc.,--- N.Y.S. 3d ---, No. 654343/13, 2016 WL 6271085 (1st Dep’t Oct. 27, 2016) ......................2

Wyle Inc. v. ITT Corp.,130 A.D.3d 438 (1st Dep’t 2015) ............................................................................................13

STATUTES

CPLR 3211(a)(1) .............................................................................................................................1

CPLR 3211(a)(4) .........................................................................................................................2, 3

6 of 26

PRELIMINARY STATEMENT

Defendants’ opening brief demonstrated that (i) this dispute should be litigated in federal

court, where the first-filed action is pending, and (ii) on the merits all of Plaintiff’s claims fail as

a matter of law and are barred by the plain terms of the relevant contracts. Implicitly recognizing

the deficiencies in his Complaint and in a blatantly improper effort to circumvent the 35-page

limit on his brief, Benzies also submitted a 19-page affidavit making a host of new factual

allegations. Even if the Court were to consider Benzies’ affidavit and deem his new assertions to

be an amendment of the Complaint, Benzies still has not produced a single document or even

identified any alleged promise using the words “equal” or “parity.”

Rather, Benzies contends that emails from Sam Houser referring to him as a partner

entitle him to equal compensation as Sam Houser and Dan Houser even though neither his

Employment Agreement nor the Royalty Plan contain any such guarantee. To the contrary, the

Royalty Plan, which is incorporated with the Employment Agreement, explicitly provides for the

possibility of different royalty payments to different Rockstar Principals. Def. Mem. at 20.

Benzies’ entire case is an attempt to sidestep those express provisions. But neither his untimely

accusations nor a handful of friendly emails can rewrite the plain language of the contracts.

Indeed, even “partners” are simply not guaranteed equal compensation or bonuses.

Nor is there merit to Benzies’ assertion that Defendants’ motion is a premature motion

for “accelerated summary judgment” that requires further factual development before it should

be considered. CPLR 3211(a)(1) expressly permits the Court to consider documentary evidence

on a motion to dismiss without converting the motion to one for summary judgment where the

documentary evidence contradicts the plaintiff’s allegations and shows that he has no viable

claim. Indeed, as recently as November 1, 2016, the First Department again confirmed that trial

7 of 26

2

courts appropriately dismiss claims on motions to dismiss on the basis of documentary evidence

where, as here, the contract “simply does not say what plaintiff claims it says.” Madison

Equities, LLC v. Serbian Orthodox Cathedral of St. Sava, --- N.Y.S. 3d ---, No. 162041/14, 2016

WL 6432664, at *1 (1st Dep’t Nov. 1, 2016); see also CIBC Bank & Trust Co. (Cayman) v.

Credit Lyonnais, 270 A.D.2d 138, 138 (1st Dep’t 2000) (“Although on a motion to dismiss for

failure to state a cause of action the facts pleaded are presumed to be true and accorded every

favorable inference, allegations consisting of bare legal conclusions, as well as factual claims

that are contradicted by documentary evidence, are not entitled to such consideration.”

(emphasis added)).

In addition to these fatal defects in Plaintiff’s contract claims, his non-contractual claims

for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraudulent inducement

and concealment, fraud, reformation of contract, unjust enrichment, and constructive trust are

barred by the statute of limitations, and are duplicative of the defective contract claims. The

fraud claims also fail to allege fraud with specificity and fail to allege reasonable reliance. And

Benzies still does not, because he cannot, explain how he plausibly was defamed, much less

damaged, by Rockstar’s complimentary statement about his departure from the company.

ARGUMENT

I. THE COURT SHOULD DISMISS OR STAY THIS ACTION INFAVOR OF THE LITIGATION IN FEDERAL DISTRICT COURT

Benzies acknowledges that litigation between the parties should proceed in only one

court, and does not seriously dispute any of the factors relevant to this Court’s analysis of a

CPLR 3211(a)(4) motion to dismiss or stay.1 He nevertheless argues that this Court should not

1 Benzies argues that the first-filed rule should not apply to the circumstances of this case, but the rule was recentlyaffirmed in Wachtell, Lipton, Rosen & Katz v. CVR Energy, Inc., --- N.Y.S. 3d ---, No. 654343/13, 2016 WL6271085 (1st Dep’t Oct. 27, 2016).

8 of 26

3

dismiss or stay this action in favor of the federal court action because this Court has jurisdiction

over all the parties while the federal court may not be able to adjudicate Benzies’ claims against

Rockstar North. Pl. Opp. at 31-34.

Only three of Benzies’ claims in this action are pled against Rockstar North: Count 10

(breach of sabbatical agreement), Count 11 (constructive discharge), and Count 12 (declaration

of rights). All of those claims will necessarily be resolved by the resolution of the federal

declaratory judgment action and any counterclaims Benzies brings against Rockstar North’s

corporate parent in that action, regardless of whether Rockstar North is added as a separate

party.2 See Scottsdale Ins. Co. v. Indem. Ins. Corp. RRG, 110 A.D.3d 783, 784 (2d Dep’t 2013)

(noting that CPLR 3211(a)(4) dismissal or stay is appropriate “where there is a substantial

identity of the parties, the two actions are sufficiently similar, and the relief sought is

substantially the same”). To the extent this Court is concerned that the federal action will not

fully resolve Benzies’ claims against Rockstar North, this action can be stayed until the federal

court resolves the Take-Two case, at which time any remaining claims can be adjudicated.

While Benzies raises the specter of both cases being stayed at the same time, in reality

there is no such danger. With the filing of this reply memorandum, Defendants’ motion to

dismiss is fully briefed. Plaintiff has not even moved to stay the Take-Two action – Judge

Broderick granted his request to have until November 23 (a total of 10 weeks after the remand

decision) to make that motion, and briefing will not be complete until December 21, 2016.

Moreover, Benzies’ claims for breach of the sabbatical agreement and constructive

2 The Take-Two Complaint requests a declaration that “Benzies did not have Good Reason to terminate hisemployment,” “the Royalty Plan does not establish any minimum allocations to Benzies . . . and instead provides theCommittee complete discretion over what pre-termination bonuses, if any, to pay to Benzies,” and that “even if[Benzies] did have Good Reason . . . Sam Houser would have the sole authority to determine any royalty percentagepaid to Benzies.” See Levander Aff., Ex. B at 9-10.

9 of 26

4

discharge both fail to state a claim and must be dismissed. Def. Mem. at 16, 23. And Benzies’

claim for a determination as to whether Sam Houser has the right to deny an individual Rockstar

Principal post-termination distributions under the Royalty Plan is conclusively resolved against

Benzies by the plain language of the Royalty Plan. Def. Mem. at 18-19.

II. BENZIES’ CONTRACT-BASED CLAIMS AND TORTIOUS INTERFERENCEWITH CONTRACT CLAIMS ALL FAIL TO STATE A CLAIM FOR RELIEF

A. Benzies Did Not Resign For Good Reason Because He Failed To Provide TheContractually-Mandated Notice And Opportunity To Cure

Benzies’ claims for post-termination benefits are barred because he failed to comply with

the notice and cure provisions of his Employment Agreement. In an effort to avoid the

consequences of this fatal defect, Benzies falsely claims that Defendants “misrepresent” and

“suspiciously do not quote” Section 6(d) of the Employment Agreement. Pl. Opp. at 12-13. In

fact, Defendants accurately quoted Section 6(d). Def. Mem. at 8 (quoting Levander Aff., Ex. I §

6(d)). That Section provides that Good Reason does not exist “unless such events, if curable, are

cured by the Employer or the Company within 30 days following written notification by the

Employee to the Company that he intends to terminate his employment” on the basis of such

reason. Thus, when Benzies announced that he “hereby terminates his employment” on April 1,

2015, he did not have Good Reason to do so because the 30-day cure period had not expired.

Benzies also ignores the notice requirement of Section 6(e) of the Employment

Agreement. Pl. Opp. at 12-14. In addition to the 30-day cure period contained in Section 6(d),

Section 6(e) provides that “[a]ny termination of the Employee’s employment by the . . .

Employee (other than termination . . . by the Employer for cause) shall (i) be communicated by

written notice of termination to the other party at least 30 days prior to the Date of

Termination[.]” Levander Aff. Ex. I, § 6(e) (emphasis added).

10 of 26

5

Benzies attempts to avoid the implications of his failure to provide the necessary written

notice and 30-day opportunity to cure by arguing that he “did not state in his resignation letter

that his resignation was effective immediately.” Pl. Opp. at 13. Benzies’ desperate argument is

defeated by the actual words used by his sophisticated counsel in his termination letter: “Mr.

Benzies hereby terminates his employment.” Levander Aff., Ex. K, at 3 (emphasis added). This

is an unambiguous, immediate termination of his employment, not an intention to terminate at an

unspecified future time unless his claimed breaches were cured. See Bradbury v. Cope-Schwarz,

20 A.D. 657, 658-59 (3rd Dep’t 2005) (letter stating “seller hereby terminates the contract”

meant that the “contract was considered canceled” by the seller on that date).3 Finally, Benzies’

assertion that the Court cannot determine on a motion to dismiss whether his purported grounds

for termination were curable is defeated by his admission in the very same paragraph that cure

was possible by restoring his duties, title and payments. Pl. Opp. at 14. Because Benzies did not

comply with the notice and cure provisions, he is not entitled to any post-termination royalties.

B. Benzies Fails To Plead Constructive Discharge

Benzies has not asserted a viable claim of constructive discharge because he has failed to

plead facts alleging “conditions so intolerable, difficult, or unpleasant that a reasonable person

would have felt compelled to resign.” Polidori v. Societe Generale Groupe, 39 A.D.3d 404, 405

(1st Dep’t 2007) (internal quotations omitted). His main objection is that he was not “fully-paid”

while on sabbatical because he did not receive any royalties. Pl. Opp. 25. But he does not

dispute that he was paid his full salary while on sabbatical. Id. The case law is clear that paid

3 Nor are Benzies’ claims saved by the 150-year old decision in Gibney v. Marchay, 34 N.Y. 301 (N.Y. 1866).Relying on Gibney, Benzies makes a last-ditch argument that Defendants supposedly waived compliance with thenotice and cure requirements by not objecting sooner. But no modern authority supports his theory. Rather, thedefendant’s conduct “[does] not excuse the plaintiff from complying with the notice requirements” set forth in the2012 Employment Agreement. See Schindler Elevator Corp. v. Tully Const. Co., 139 A.D.3d 930, 932 (2d Dep’t2016).

11 of 26

6

leave is inconsistent with a claim for constructive discharge. See Def. Mem. at 17 (citing Unruh

v. State of Colorado Dep’t of Corrections, No. 08-CV-00077-C, 2009 WL 1796300, at *7 (D.

Colo. June 23, 2009), aff’d, 365 Fed. App’x 950 (10th Cir. 2010); Levenstein v. Salafsky, 414

F.3d 767, 775 (7th Cir. 2005); Harris v. Detroit Public Schools, 245 F. App’x 437, 444 (6th Cir.

2007)). The fact that he was not paid royalties – to which he was not entitled – does not alter the

fact that he received his salary and was thus not constructively discharged.

C. Benzies Cannot Overcome The Plain Language Of The Agreements

Defendants’ opening brief demonstrated that, far from guaranteeing Benzies “co-equal”

participation with Sam Houser and Dan Houser in the royalty pool, the Royalty Plan clearly and

unambiguously vests the Allocation Committee (as to pre-termination royalties) and Sam Houser

(as to post-termination royalties) with final and exclusive decision making authority as to the

amount of bonuses, if any. Contrary to Benzies’ conclusory allegations, nowhere does the

Royalty Plan – or any other document – use the terms “equal” or “parity” to describe the

relationship or compensation of Benzies and Sam Houser or Dan Houser. Benzies’ opposition

simply ignores that critical fact. Benzies similarly fails to respond to Defendants’ argument that

the deletion of a guaranteed minimum royalty allocation from his prior contract evidenced the

intent that there be no such contractual guarantee.4 He likewise ignores the numerous provisions

in the Royalty Plan that showed Benzies and Sam Houser were not equals.

Benzies concedes that an employer may reserve for itself absolute discretion with respect

to bonus payments through explicit and unambiguous language. Pl. Opp. at 5. It is telling that

4 Benzies argues that the inclusion of both the 25% individual and 60% aggregate cap on royalty allocations is notnecessarily superfluous under his desired reconstruction of the Royalty Plan because both terms could have meaningif there were only two Rockstar Principals. But this is clearly not the purpose of including such a provision inSection 2.1, which governs royalty allocations in general, as opposed to the later sections governing post-separationroyalty allocations.

12 of 26

7

Benzies fails to address the plain language of the Royalty Plan, which unambiguously confers

such discretion on the Allocation Committee (pre-termination) and Sam Houser (post-

termination). Sections 2.1 and 2.3.3 place no restrictions whatsoever on the Allocation

Committee’s and Sam Houser’s respective decision-making authority. Nor do those provisions

identify any formula or other objective criteria that the Allocation Committee and Sam Houser

must apply in exercising their respective authority. The unambiguous language of the Royalty

Plan makes clear that no Rockstar Principal or Eligible Employee is guaranteed any royalties

under the Plan. Benzies accordingly has no claim for royalty allocations. See Levion v. Societe

Generale, 822 F. Supp. 2d 390, 397 (S.D.N.Y. 2011) (explaining that “entitlement to a bonus

exists only where the terms of the relevant contract require it”).5

Plaintiff incorrectly argues that because a line of New York cases provides that certain

“magic words” in a bonus plan confers absolute discretion regarding bonus decisions on the

employer, the absence of such specific magic words automatically creates ambiguity. Pl. Opp.

at 5-9. Plaintiff also wrongly contends that the only so-called “magic words” that courts have

recognized as conferring such absolute discretion are the words “discretion” and “discretionary.”

Id. Neither of these arguments is supported by case law or logic.

First, contrary to Plaintiff’s suggestion, specific, so-called “magic words” are not

required to vest an employer with absolute discretion over bonus decisions, and the absence of

specific magic words does not obligate an employer to pay a bonus. Rather, as Plaintiff

concedes, the relevant inquiry is whether the plan unambiguously provides that bonuses are

5 Benzies’ claim for breach of the implied duty of good faith and fair dealing fails because the Royalty Plan isdiscretionary. Def. Mem. at 29. This is especially true here where the Royalty Plan expressly provides that Benzies“shall not have or make any claim against the Company or any other party on account of his or its eligibility orineligibility to receive royalties or his allocable share of any royalties, if any.” Levander Aff., Ex. E § 2.1 (emphasisadded). None of the cases cited in Plaintiff’s opposition involved a discretionary bonus plan. Pl. Opp. at 12 n.11.

13 of 26

8

discretionary. Pl. Opp. at 5. If it does, no cause of action exists to recover a bonus. Nor is there

any requirement that the words “discretion” or “discretionary” appear in a bonus plan to confer

absolute discretion. Any words will do, so long as they are clear and unambiguous.

Indeed, the case law is replete with decisions in which courts have found that bonus plans

were clearly and unambiguously discretionary despite the absence of the words “discretion” or

“discretionary.” In Sathe v. Bank of New York, No. 89 CIV. 6810, 1990 WL 58862, at *4

(S.D.N.Y. May 2, 1990), for example, the plan vested the employer’s Chairman with the power

to “revoke and nullify any and all steps previously taken towards making any award to any

person.” The court found that such language was clear “as to the discretionary nature of the

bonus award.” Similarly, in Daikoff v. American Re-Insurance Co., 492 F. Supp. 1115, 1120

(S.D.N.Y. 1980), the court found that a bonus plan, which provided that any profit “shall be

allotted among all or any of the participants and in such proportions as the Committee shall

determine,” gave the committee “full discretion to determine which participants shall receive an

allotment, and the amount of any such allotment.” See also Valentine v. Carlisle Leasing Int’l

Co., 97-CV-1406, 1998 U.S. Dist. LEXIS 15581, at *10-11 (N.D.N.Y. Sept. 30, 1998) (provision

providing that plaintiff was “eligible for an annual target bonus of 40% of [his] salary” subject to

satisfactory performance “clearly stated that [the employer] would retain absolute discretion to

determine both whether [plaintiff] would receive a bonus and, if so, how much he would

receive” even though his offer letter did not contain the word “discretion”); Foss v. Am. Tel. &

Tel. Co., 199 A.D.2d 668, 669 (3d Dep’t 1993) (plaintiff was not entitled to commissions where

the incentive compensation plan contained a “disclaimer [that] explicitly reserves to AT & T the

right to ‘reduce, modify, or withhold compensation or noncash awards based on management

determination of special circumstances at any time for any reason with or without prior notice’”).

14 of 26

9

Second, the Royalty Plan does contain some of the “magic words” courts have held are

dispositive of royalty claims. For example, courts have found – including in some of the cases

relied on by Plaintiff – that the phrase “if any” in a royalty plan constitutes “magic words” that

confer discretion without further inquiry. See, e.g., Ferrari v. KeyBank Nat’l Ass’n, No. 06-cv-

6525, 2009 WL 35330 (W.D.N.Y. Jan. 5, 2009).6 In Ferrari, a case cited by Plaintiff, the court

found so-called “magic words” in a bonus plan that did not contain the words “discretion” or

“discretionary.” In particular, the court found that the following phrase conferred discretion

without further inquiry: “the Plan Administrator shall verify the amount of incentive awards, if

any, to be paid to the participant . . . .” Id. at *8 (emphasis added).

Similarly, here, Section 2.1 of the Royalty Plan vests the Allocation Committee with

“final and binding authority” to allocate royalties among the Rockstar Principals and Eligible

Employees and Section 2.3.3 provides that, as long as Sam Houser remains employed, he has the

sole authority to limit royalty allocations to a departed Rockstar Principal during the period such

Principal remains eligible for allocations. Though the word “discretion” is not used, the plain

text of the agreement clearly reserves discretion over royalty allocations to the Allocation

Committee and Sam Houser.7 Section 2.1 of the Plan further provides that the Rockstar

6 Plaintiff’s reliance on Culver v. Merrill Lynch & Co., No. 94 Civ. 8124, 1995 WL 422203 (S.D.N.Y. July 17,1995) is misplaced. There, the court noted the absence of the words “if any” from the allocation provision in findingthe plan did not clearly grant “complete discretion in determining whether to award any compensation.” Id. at *3.And in Ashmore v. CGI Grp. Inc., No. 11 CIV. 8611, 2012 WL 2148899, at *8-9 (S.D.N.Y. June 12, 2012), thebonus plan provided that employees “can earn an annual bonus based on” certain financial results and performance.By contrast, here the Royalty Plan expressly states that the Rockstar Principals “shall not have or make any claimagainst the Company or any other party on account of his or its eligibility or ineligibility to receive royalties or hisallocable share of any royalties, if any.” Levander Aff., Ex. E § 2.1 (emphasis added).

7 Plaintiff argues in a footnote that the absence of the word “discretion” in the 2009 Royalty Plan, when it was usedin the 2002 Royalty Plan, shows an intent to remove discretion over royalty allocations. But such an interpretationwould render meaningless the “final and binding authority” of the Allocation Committee to determine royalties. SeeLevander Aff., Ex. E § 2.1; Columbus Park Corp. v. Dep’t of Hous. Pres. & Dev. of City of N.Y., 80 N.Y.2d 19, 31(N.Y. 1992) (“Such a construction which makes a contract provision meaningless is contrary to basic principles ofcontract interpretation.”); Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs., 63 N.Y.2d 396, 403 (N.Y.1984).

15 of 26

10

Principals “shall not have or make a claim against the Company or any other party on account of

his or its eligibility or ineligibility to receive royalties or his allocable share of any royalties, if

any[.]” (emphasis added). In short, the plain language of the Royalty Plan is dispositive of

Benzies’ bonus claims.

Finally, Benzies argues that his 2008 and 2012 Employment Agreements entitled him to

royalties. Pl. Opp. at 10-11. Benzies has always been aware, however, that any royalty

payments he received were governed by the Royalty Plan, which he concedes was incorporated

into both Employment Agreements. Id. at 10. Where a “bonus clause unambiguously vests

discretion regarding the amount of bonus compensation to be awarded in defendants’

management,” the “customary policy” of paying a bonus in the past does not change the fact the

management retains discretion not to do so in the future. Namad v. Salomon Inc., 74 N.Y.2d

751, 753 (N.Y. 1989). Moreover, because the Royalty Plan clearly and unambiguously confers

absolute discretion to the employer in determining the amount, “if any,” of royalty payments, no

cause of action for royalties exists. An employee’s alleged “expectation” of a bonus does not

create a binding obligation on the employer. Levion, 822 F. Supp. 2d at 400.

D. Benzies’ Claims Related To The Sabbatical Agreement Fail

Benzies’ Opposition does not respond to Defendants’ argument that the Sabbatical

Agreement did not entitle Benzies to any new and independent rights, and that Benzies failed to

plead damages. Def. Mem. at 23-24. Indeed, his claim for breach of the Sabbatical Agreement

seeks the exact same damages as his breach of contract claim, and therefore duplicates his breach

of contract claim. Accordingly, Benzies’ claims for breach of the Sabbatical Agreement and

tortious interference with the Sabbatical Agreement should be dismissed.

16 of 26

11

III. BENZIES’ FRAUD-BASED, BREACH OF FIDUCIARY DUTY, AIDING ANDABETTING AND QUASI-CONTRACT CLAIMS FAIL

A. Benzies’ Fraud And Fiduciary Duty Claims Are Untimely

Benzies’ breach of fiduciary duty claim alleges that Sam Houser owed him a fiduciary

duty and breached it in connection with the 2009 Royalty Plan. Compl. ¶ 116. His related

aiding and abetting breach of fiduciary duty and fraud claims allege that Take-Two and Rockstar

were somehow complicit with Sam Houser in denying Benzies his rights under the 2009 Royalty

Plan. Compl. ¶¶ 137-47, 252-67. Both claims specifically refer to, and arise from, the signing of

the 2009 Royalty Plan. Hence, the statute of limitations on those claims began to run when that

agreement was signed in December 2008.

A claim for breach of fiduciary duty seeking money damages is subject to a three-year

statute of limitations, while a claim premised on fraud carries a six-year limitations period. See

Malone v. Bayerische Hypo-Und Vereins Bank, No. 08 Civ 7277, 2010 WL 391826, at *4-5

(S.D.N.Y. Feb. 4, 2010). Accordingly, the breach of fiduciary duty and aiding and abetting

claims were all time-barred in December 2011 or at the latest December 2014, well before this

action was commenced in April 2015. See, e.g., Buckler v. Marvel, Entm’t Grp., Inc., No. 91

Civ. 2167, 1992 WL 210101, at *3 (S.D.N.Y. Aug. 17, 1992); MacDiarmid v. ING Bank N.V.,

No. 02 Civ. 3077, 2003 WL 41995, at *4 (S.D.N.Y. Jan. 6, 2003).

In his Opposition, Benzies attempts to push forward the time of accrual of his claims

until, at the earliest, September 12, 2012, when he signed his Amended and Restated

Employment Agreement, or alternatively, March 2015, when he supposedly “first learned” of the

2014 royalty allocations. See Pl. Opp. at 28-29. However, even a cursory review of the

Complaint reveals that his claims for breach of fiduciary duty and fraud only focus on facts from

when the Royalty Plan was negotiated and signed, in 2008. Compl. ¶¶ 108-47, 252-67. Benzies

17 of 26

12

cannot ignore the plain allegations of his Complaint by attempting to re-date the accrual of the

relevant statute of limitations to the irrelevant signing of the 2012 Employment Agreement or his

alleged discovery of his claims. See Pl. Opp. at 29-30.

Benzies argues that his claims “could not have been discovered until he suffered some

form of damages arising from the breaches he alleges in his Complaint.” Id. at 28. But it is

settled law that the limitations “[s]tatute runs from the time of the breach though no damage

occurs until later.” Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 (N.Y. 1993)

(citing 6 Williston, Contracts § 2004, at 5641 (rev. ed. 1938)). The “breach” in an action for

fraud in connection with the execution of a contract occurs, and the claim accrues, at the time the

contract is signed. Buckler, 1992 WL 210101, at *3; MacDiarmid, 2003 WL 41995, at *4; see

also U.S. Bank Nat. Ass’n v. DLJ Mortg. Capital, Inc., 121 A.D.3d 535, 536 (1st Dep’t 2014).

Because Benzies’ breach of fiduciary duty and fraud claims are based on the terms of the 2009

Royalty Plan, his claim accrued at the time of the contract’s execution in December 2008 and are

therefore time-barred. See Malone, 2010 WL 391826, at *4-5.

B. Benzies’ Fraud, Breach Of Fiduciary Duty, Unjust Enrichment, AndConstructive Trust Claims Are Duplicative Of His Contract Claim

Benzies’ fiduciary duty, fraud, and quasi-contract claims must all be dismissed as

duplicative of his breach of contract claim because the plain terms of the Royalty Plan govern the

exact same subject matter. See Def. Mem. at 26-29. And Benzies concedes that his “fraud

claims allege that he was induced to enter into the 2009 Royalty Plan based on Defendants’

misrepresentations that [he] was an equal Rockstar Principal,” Pl. Opp. at 23, and that all of his

claims rely on the same theory of harm and seek the exact same damages as the contract claim.8

8 Benzies alleges that “[a]t the heart of” the purported fraud “was the wording and structure of the 2009 RoyaltyPlan.” Compl. ¶ 121; see also id. ¶ 253 (alleging that “[i]f indeed Sam Houser . . . harbored the undisclosed plan toeventually deny Mr. Benzies profit shares, or if he . . . harbored the plan to retain the power to do so, then not

18 of 26

13

Undeterred, Plaintiff argues that his fraud and breach of fiduciary claims “are unrelated

to, and independent from, his breach of contract claim.” Id. at 22. But his factual allegations

show the contrary. Benzies’ entire theory is that he was promised parity in royalty distributions;

his fraud and breach of fiduciary duty claims are premised on the conclusory assertion that

Defendants did not intend to perform their alleged contractual obligations (as Benzies construes

them) when they were made. Thus, Benzies “allege[s] a misrepresentation of future intent rather

than a misrepresentation of present fact, which is not sustainable as a cause of action separate

from breach of contract.” See Financial Structures Ltd. v. UBS AG, 77 A.D.3d 417, 419 (1st

Dep’t 2010); Golub Assoc. v. Lincolnshire Mgmt., 1 A.D.3d 237, 239 (1st Dep’t 2003) (“[A]

contract action may not be converted into one for fraud by the mere additional allegation that the

contracting party did not intend to meet its contractual obligation.”); Mañas v. VMS Assocs.,

LLC, 53 A.D.3d 451, 454 (1st Dep’t 2008) (same).9

Benzies’ “claim for breach of fiduciary duty fail[s] to allege conduct by defendants in

breach of a duty other than, and independent of, that contractually established between the

parties and [is] thus duplicative.” See Kaminsky v. FSP Inc., 5 A.D.3d 251, 251 (1st Dep’t

2004); Mosaic Caribe, Ltd. v. All Settled Grp., Inc., 117 A.D.3d 421, 423 (1st Dep’t 2014)

(affirming dismissal of breach of fiduciary duty claim where the claim “was properly deemed

disclosing this to Mr. Benzies and instead inducing him to sign agreements wherein he believed he was an equalRockstar Principal with full and equal rights of profit distribution, then Mr. Houser, on his and Defendants’ behalf,committed fraud”); id. ¶ 265.

9 By contrast, the cases on which Benzies relies all involve misrepresentations collateral to the contract. See, e.g.,First Bank of Americas v. Motor Car Funding, Inc., 257 A.D.2d 287, 289 (1st Dep’t 1999) (fraud claim notduplicative where plaintiff alleged that defendant made false “representations about the quality of the collateral, theindividual borrower’s credit history and the amount of the borrower’s down payment”); GoSmile, Inc. v. Levine, 81A.D.3d 77, 81-82 (1st Dep’t 2010) (sustaining claim for fraudulent inducement based “on a misrepresentation ofpresent fact, namely that at the time he entered into the contract, plaintiff had not breached [a separate] 2003noncompete agreement.”); Wyle Inc. v. ITT Corp., 130 A.D.3d 438, 439 (1st Dep’t 2015) (sustaining fraud claimwhere defendants “concede[d] that the[ir] intentional failure to disclose an ongoing audit [wa]s a misrepresentationas to present fact”).

19 of 26

14

duplicative of the breach of contract claim as it allege[d] the very same facts as the breach of

contract claim”). Plaintiff cites only one factually distinguishable case in support of his

argument that his breach of fiduciary duty claims are not duplicative. In Anderson ex rel.

Anderson, Weinroth & Co., L.P. v. Weinroth, the Court allowed fraudulent concealment and

breach of fiduciary duty claims where it held that there was no enforceable oral agreement

governing the partners’ respective capital accounts, and the partner in control of the partnership’s

books and records had made false entries in the records to conceal his misconduct. 48 A.D.3d

121, 130-31 (1st Dep’t 2007). Here, by contrast, the parties’ relationship is indisputably

governed by the Royalty Plan and Employment Agreements. Thus, Benzies’ breach of fiduciary

duty claim is duplicative of his contract claim and must be dismissed. See Mosaic Caribe, Ltd.,

117 A.D.3d at 423.

Benzies further acknowledges, as he must, that “quasi-contract claims are typically

unavailable if there is a valid and enforceable agreement.” Pl. Opp. at 30. The New York Court

of Appeals has instructed that “[t]he existence of a valid and enforceable written contract

governing a particular subject matter ordinarily precludes recovery in quasi contract for events

arising out of the same subject matter.” Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d

382, 388-89 (N.Y. 1987); Digizip.com, Inc. v. Verizon Servs. Corp., 139 F. Supp. 3d 670, 682-83

(S.D.N.Y. 2015) (“The quasi-contract theory of unjust enrichment is an obligation the law

creates in the absence of any agreement.”) (internal quotation marks omitted). Because Benzies’

quasi-contract claims “seek damages for events arising from the same subject matter that is

governed by an enforceable contract,” they should be dismissed as duplicative of the contract

claims. See Bettan v. Geico Gen. Ins. Co., 296 A.D.2d 469, 470 (2d Dep’t 2002). By contrast,

the cases on which Benzies relies involved disputes as to the existence of a contract, claims to

20 of 26

15

rescind the contract, or did not even address quasi-contract claims. See Kramer v. Greene, 142

A.D.3d 438, 441-42 (1st Dep’t 2016) (no meeting of the minds and therefore no binding

contract); Robinson v. Day, 103 A.D.3d 584 (1st Dep’t 2013) (claim for rescission of contract);

O’Shea v. Bidcom, Inc., No. 01 Civ. 3855-WHP, 2002 WL 1610942, at *3 (S.D.N.Y. July 22,

2002) (no quasi-contract claims addressed).

Benzies’ claim for constructive trust, another quasi-contract remedy, also fails because

there is an enforceable written agreement here. See Clark-Fitzpatrick, Inc., 70 N.Y.2d at 388;

see also Akerson Advert. & Mktg., Inc. v. St. John & Partners Advert. and Pub. Relations, Inc.,

89 F. Supp. 3d 341, 356 (N.D.N.Y. 2015) (a claim of a constructive trust fails where it is merely

duplicative of a breach of contract claim). And the constructive trust claim fails for the

independent reason that Benzies does not allege any transfer made in reliance on a promise. See

Akerson, 89 F. Supp. 3d at 355.

In an attempt to overcome the substantial authority that quasi-contract remedies are

barred where a written agreement governs, Plaintiff argues “that if the Court accepts Defendants’

interpretation of the 2009 Royalty Plan, there is effectively no binding and enforceable

agreement between the parties regarding profit sharing payment.” Pl. Opp. at 30. That argument

is nonsensical. The Royalty Plan is a binding, enforceable agreement with respect to the

allocation of royalties, even though the plain reading of that contract affords Benzies no

additional payments. See Ferrari, 2009 WL 35330, at *8-9, 12 (quasi-contract unjust

enrichment claim fails where “the language of the Incentive Plan is not ambiguous as claimed by

plaintiffs” and did not afford plaintiff contractual relief).

C. Benzies’ Fraud Claims Fail To State A Claim

Benzies’ fraud claims are fatally flawed because they fail to identify a single false

21 of 26

16

representation purportedly made by Defendants. See Def. Mem. at 29-31. In opposition,

Benzies argues that his fraud claims “are based on [Sam Houser’s] misrepresentations that: (1)

he would ensure Mr. Benzies was treated as his partner entitled to the same share of royalties;

and (2) the Royalty Plan . . . would maintain royalty equality.” Pl. Opp. at 18. But neither the

Complaint, Benzies’ opposition, nor his improper, self-serving affidavit identifies a single

promise by Defendants that Benzies would receive an equal share of royalties as Sam Houser or

Dan Houser. That failure is fatal given the particularity required for pleading fraud claims. Def.

Mem. at 30. Indeed, MP Cool Invs. Ltd. v. Forkosh – which Plaintiff cites – makes clear that his

allegations are insufficient. See 142 A.D.3d 286 (1st Dep’t 2016). There, the First Department

affirmed the dismissal of fraud claims where “[a]ctual specific false factual statements [we]re not

identified. Nor [wa]s specific false concealment identified.” Id. at 291. “Such bundled, bare-

boned and conclusory allegations do not establish the basic elements of fraud.” Id.10

Unable to identify a single false representation made by any of the Defendants, Benzies

desperately cites his supervisor Sam Houser’s various statements of encouragement and support.

See Pl. Opp. at 19 (citing Compl. ¶¶ 45, 50, 63). Yet Benzies does not cite a single case finding

fraud adequately pled on the basis of such vague, noncommittal statements. To the contrary, the

cases upon which Benzies relies involved specific allegations of fraud. See, e.g., IKB Int’l S.A. v.

Morgan Stanley, 142 A.D.3d 447, 449 (1st Dep’t 2016) (sustaining fraud claim where plaintiff

alleged defendants knowingly misrepresented “the credit quality and characteristics of the pool

of residential mortgage loans . . . . loan to value ratios, the appraised values of the underlying

10 Contrary to Benzies’ claim (Pl. Opp. at 19 n.15), Defendants demonstrated in their opening brief that Benzies’

claim for reformation—like his other fraud claims—fails because he does not plead with particularity any specificmisrepresentation made by Defendants. Def. Mem. at 30 (citing CAMOFI Master LDC v. College Partnership, 452F. Supp. 2d 462, 482 (S.D.N.Y. 2006)). CAMOFI also makes clear that reformation claims require a plaintiff to

demonstrate reasonable reliance. See id. at 481. Benzies fails to allege such reliance. Def. Mem. at 31.

22 of 26

17

loans, owner occupancy of the mortgaged properties, and credit ratings”).

Nor does Benzies surmount the significant case law holding that a sophisticated party

cannot establish that he entered into a contract “in justifiable reliance on alleged

misrepresentations if that plaintiff failed to make use of the means of verification that were

available to [him].” See UST Private Equity Invs. Fund, Inc. v. Salomon Smith Barney, 288

A.D.2d 87, 88 (1st Dep’t 2001); Valassis Comms., Inc. v. Weimer, 304 A.D.2d 448, 448-49 (1st

Dep’t 2003) (plaintiffs could not establish reasonable reliance where plaintiffs were

“sophisticated business entities” provided with information sufficient to verify the accuracy of

representations but failed to do so); see also Def. Mem. at 31. Thus, the Court should reject

Benzies’ strained argument that he could not be expected to protect his own interests by, at a

minimum, reading a 22-page contract governing the allocation of potentially millions of dollars

of royalties or even gaining an understanding of those key terms by having a conversation with

his sophisticated counsel.11

Finally, “[i]n light of . . . provisions of [Benzies’ Employment Agreement] specifically

prohibiting plaintiff[’s] reliance on extra-contractual representations such as those upon which

plaintiff[’s] fraud claim is premised, it is plain that plaintiff[] possess[es] no viable claim for

fraud.” See Valassis Comms., Inc., 304 A.D.2d at 448.

D. Benzies’ Fiduciary Duty Claims Fail To State A Claim

Defendants’ opening brief demonstrated that the fiduciary duty and aiding and abetting

fiduciary duty claims fail as a matter of law because Sam Houser did not owe Benzies a fiduciary

11 Whether Paul Weiss did or did not represent Benzies in connection with the negotiation of the Royalty Plan andEmployment Agreements is immaterial to the defects in his fraud claim. It is undisputed that Benzies retained UKcounsel to advise him in connection with those contracts. And if Benzies’ allegation that Paul Weiss alsorepresented him in connection with those contracts is to be credited for purposes of the motion to dismiss, he hadample opportunity to discuss the contract with those ultra-sophisticated advisors and should not be heard tocomplain that he only bothered to have a single 30-minute conversation with them.

23 of 26

18

duty. In opposition, Benzies argues that he sufficiently pleads those claims based on his

friendship with Sam Houser. Yet a close relationship does not “give rise to fiduciary

obligations” when there is a written agreement between the parties. Holzer v. Mondadori, No.

151409/2012, 2013 WL 4523615, at * 7 (Sup. Ct. N.Y. Cnty. 2013).12

Nor do the cases relied on by Plaintiff support the finding of a fiduciary relationship

based on a friendship or close relationship. Rather, Sergeants Benevolent Ass’n Annuity Fund v.

Renck, 19 A.D.3d 107 (1st Dep’t 2005), involved a claim by a client against its investment

advisor; Mandelblatt v. Devon Stores, Inc., 132 A.D.2d 162 (1st Dep’t 1987), held that a high-

level consultant owed a fiduciary duty to his employer; and Gershunoff v. Panov, 77 A.D.2d 511

(1st Dep’t 1980), found that a talent manager owed a fiduciary obligation to his clients. And

Apple Records, Inc. v. Capitol Records, 137 A.D.2d 50 (1st Dep’t 1988), has been deemed an

outlier and limited to its facts by more recent First Department authority. See Rather v. CBS

Corp., 68 A.D.3d 49, 56 (1st Dep’t 2009); see also Faulkner v. Arista Records LLC, 602 F.

Supp. 2d 470, 483 (S.D.N.Y. 2009).

Moreover, courts have been clear that no cause of action for breach of fiduciary duty may

proceed where a sophisticated party’s understanding of an agreement is contradicted by the

agreement’s plain terms. Merrill Lynch Capital Mkts Ag. v. Controladora Comercial Mexicana

SAB DE C.V., No. 603214/08, 2010 WL 5827550, at *12 (Sup. Ct. N.Y. Cnty. Mar. 16, 2010).

Though Benzies claims that he is not a sophisticated businessman, his own affidavit attests to his

understanding of what was at stake in the negotiation of the 2008 Employment Agreement and

2009 Royalty Plan. Benzies Aff. ¶ 19 (“I sought an increase in my base compensation as well as

12 Plaintiff disingenuously attempts to distinguish Holzer on the ground that that case did not involve parties with asubstantive relationship outside of the contract; in fact, the opinion recognized the plaintiffs’ allegations that theparties “were close friends and had prior business dealings” and rejected those allegations as insufficient to give riseto a fiduciary relationship. See 2013 WL 4523615, at *7.

24 of 26

19

in my participation in royalty distributions”); id. ¶ 20 (noting his position as President “gave me

a degree of authority and control that I felt was essential to the work we were doing, to what I

hoped to accomplish, and to the profitability of the company”). Thus, he cannot save his

fiduciary duty claim by selectively downplaying his credentials when it suits him.

IV. BENZIES’ CLAIMS FOR DEFAMATION AND BREACH OF THE MEDIATIONAGREEMENT FAIL AS A MATTER OF LAW

Plaintiff does not seriously dispute Defendants’ argument that Take-Two’s comment to a

reporter confirming that he went on a sabbatical starting September 1, 2014 and chose not to

return to the company is not “reasonably susceptible of a defamatory meaning.” Def. Mem. at

34 (citing Golub v. Enquirer/Star Group, 89 N.Y.2d 1074, 1076 (1997)). Take-Two’s comment

did not state how long Benzies was on sabbatical or identify when he chose not to return to the

company. Plaintiff nevertheless contends that he was defamed by Take-Two because the

reporter misreported that Benzies had been on sabbatical for eighteen months. Benzies’

contention that he was defamed, much less damaged, by that difference is absurd. The remainder

of Take-Two’s statement praises Benzies, expresses gratitude for his contributions, states that he

will be missed, and wishes him “the absolute best for the future,” and cannot plausibly be

susceptible of a defamatory meaning.

This Court must construe the allegedly defamatory statement “in the context of the entire

statement . . . as a whole, tested against the understanding of the average reader.” Dillon v. City

of New York, 261 A.D. 2d 34, 38 (1st Dep’t 1999) (dismissing claim for defamation brought by

employees who complained that defendants told third parties that they had been terminated); see

also Stepanov v. Dow Jones & Co., Inc., 120 A.D.3d 28, 34 (1st Dep’t 2014) (dismissing

plaintiffs’ claims for defamation because they were “substantially true statements that [were] not

reasonably susceptible of defamatory connotations”). This Court should not “strain to find

25 of 26

20

defamation where none exists,” and therefore should dismiss Benzies’ claim for defamation. See

Dillon, 261 A.D. 2d at 38 (internal quotation marks omitted).

Because the statement to Kotaku.com did not harm Benzies in any way, this Court should

also dismiss his claim for breach of the mediation agreement, due to his failure to allege damages

stemming from Take-Two’s statement.13

CONCLUSION

For the reasons set forth above and in Defendants’ opening motion, the Court should

dismiss or stay this action in favor of the earlier-filed federal action, or alternatively dismiss the

Complaint in its entirety with prejudice on the basis of documentary evidence and for failure to

state a claim.

Dated: November 22, 2016New York, NY

DECHERT LLP

By: /s/ Andrew J. LevanderAndrew J. LevanderNeil A. SteinerNicolle L. Jacoby

1095 Avenue of the AmericasNew York, NY 10036Tel: (212) 698-3500Fax: (212) 698-3599andrew.levander@dechert.com

Attorneys for Rockstar Games, Inc., RockstarNorth Ltd., Dan Houser, and Sam Houser

KELLEY DRYE & WARREN LLP

Michael C. LynchJeffrey JacobsonJoel Hankin101 Park AvenueNew York, New York 10178Tel: (212) 808-7800Fax: (212) 808-7987mlynch@kelleydrye.com

Attorneys for Take-Two Interactive Software,Inc., Rockstar Games, Inc., and RockstarNorth Ltd.

13 Plaintiff’s request in a footnote for leave to amend, which does not specify what additional allegations he wouldadd or how those unspecified allegations would save any of his claims, should be denied. Schneider v. Jarmain,2010 NY Slip Op 30801(U), at *44-46 (Sup. Ct. N.Y. Cnty. 2010) (denying leave to amend where plaintiff maderequest “in a sentence on the last page of their opposition”); see also Hickey v. Nat’l League of ProfessionalBaseball Clubs, 169 A.D.2d 685 (1st Dep’t 1991) (noting leave to amend was properly denied where it was“contained in a single sentence without even the most conclusory indication of what the new pleadings would be”).

26 of 26