United States District Court, E.D. Virginia, Richmond Division
KYLIN NETWORK BEIJING MOVIE & CULTURE MEDIA CO. LTD, Plaintiff,
BENNETT J. FIDLOW et at., Defendants.
MEMORANDUM OPINION (GRANTING IN PART AND DENYING IN
PART DEFENDANTS' MOTION TO DISMISS)
E. Hudson United States District Judge.
MATTER is before the Court on Defendants Bennett J. Fidlow
and Schroder Fidlow, PLC's (collectively
"Defendants") Motion to Dismiss, filed on January
16, 2017. (ECF No. 4.) For the reasons that follow, the
Motion to Dismiss will be granted in part and denied in part.
required by Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the Court assumes Plaintiffs well-pleaded
allegations to be true and views all facts in the light most
favorable to it. T.G. Slater & Son v. Donald P. &
Patricia A. Brennan, LLC, 385 F.3d 836, 841 (4th Cir.
2004) (citing Mylan Labs, Inc. v. Matkari, 7 F.3d
1130, 1134 (4th Cir. 1993)). Viewed through this lens, the
facts are as follows.
relationship between Kylin, a Chinese company, and Defendants
began with Kylin's decision in 2014 to produce a movie
about the life of martial arts legend Bruce Lee, entitled
"Birth of the Dragon." (Compl. ¶ 4, ECF No.
Kylin partnered with another company, Bliss Media Limited
("Bliss"), to obtain the movie rights.
(Id.) Bliss's attorney, Fidlow, drafted the
partnership agreement. (Id. ¶ 7.) At the time,
Fidlow was a member of the defendant law firm, Schroder
Fidlow, PLC. (Id. ¶ 3.)
Kylin partnered with Bliss, Fidlow represented both entities
in their attempt to obtain the rights to "Birth of the
Dragon." (Id. ¶ 8.) Kylin entered into a
legal services agreement with Fidlow on June 25, 2014.
(Id; Compl. Ex. B, ECF No. 1-2.) Despite Kylin and
Bliss working together to obtain the movie rights, each had
its own individual and competing interests. (Compl. ¶
9.) However, Fidlow never disclosed to Kylin or Bliss that
his representation of them created a conflict of interest,
and neither Kylin nor Bliss signed a waiver consenting to
joint representation. (Id. ¶ 10.)
representation of Kylin and Bliss, Fidlow failed to conduct a
diligent and comprehensive review of the chain of title of
"Birth of the Dragon." (Id. ¶ 14.) He
negotiated on behalf of Kylin and Bliss to purchase the movie
rights from QED Pictures, LLC, ("QED Pictures").
(Id. ¶ 12.) But QED Pictures did not own those
rights. (Id. ¶ 13.) "Birth of the
Dragon" was actually owned by two other entities, QED
Holdings, LLC and QED Writing, LLC. (Id.) Despite
QED Pictures's lack of ownership in "Birth of the
Dragon, " Fidlow facilitated a financing agreement
whereby Kylin paid $ 1 million to QED Pictures for the
nonexistent movie rights. (Id. ¶¶ 17-18,
20.) Under the impression that it had acquired the rights to
"Birth of the Dragon, " Kylin paid an additional $1
million to Bliss pursuant to their partnership agreement.
(Id. ¶ 20.)
to Kylin, while Fidlow was negotiating with QED Pictures, he
"actually knew or, alternatively, had constructive
knowledge that QED Pictures did not hold the rights which his
clients ostensibly purchased." (Id. ¶ 15.)
In support of this assertion, Kylin alleges that Fidlow had
access to documents indicating that QED Pictures did not own
the movie rights. (Id. ¶¶ 15-16.) Those
documents were even referenced in the agreement that he
negotiated. (Id. ¶ 15.)
also failed to provide Kylin with a Chinese translation of
the agreement. (Id. ¶ 19.) Nor did he fully
explain the terms of the agreement to Kylin's principals.
February, 2015, Kylin discovered that it had not, in
actuality, acquired the rights to "Birth of the
Dragon." (Id. ¶ 23.) Without the
assistance of Fidlow or Bliss, Kylin then entered into an
agreement with QED Holdings, LLC to actually obtain the movie
rights. (Id. ¶24.)
April 2, 2015, without Kylin's knowledge or
authorization, Fidlow filed UCC-1 financing statements with
the California and Delaware Secretaries of State.
(Id. ¶ 26; Compl. Ex. D, ECF No. 1-4.) These
financing statements indicated that Kylin and Bliss each had
a security interest in the movie rights. (Compl. Ex. D.)
However, because Kylin and Bliss's original joint attempt
to purchase the rights from QED Pictures was ineffective,
Bliss never actually had any rights-including a security
interest-in "Birth of the Dragon." (Compl. ¶
alleges that Fidlow's filing of the financing statements
clouded the title of "Birth of the Dragon, " the
rights to which Kylin had independently acquired from QED
Holdings, LLC. (Id. ¶ 32.) Kylin further
asserts that in filing the financing statements, Fidlow
placed the interests of one client, Bliss, over those of
another, Kylin. (Id. ¶ 34.)
Kylin learned that the false financing statements had been
filed, it demanded that Fidlow withdraw them. (Id.
¶ 31.) Fidlow refused. (Id.) Kylin hired
separate counsel who continued to demand that Fidlow withdraw
the financing statements and accused him of fraud,
malpractice, breach of contract, and breach of fiduciary
duty. (Compl. Exs. E, F.) In response, Fidlow threatened to
file a bar complaint against Kylin's new attorney.
result of Fidlow's conduct, Kylin filed a three-count
Complaint alleging legal malpractice, ...