Facts

Chris McAlister is a three-time Pro Bowl Defensive Back for the Baltimore Ravens, an All-American at the University of Arizona and Pasadena high school multi-sport standout. McAlister was approached by cross-defendants and Mr. McAlister's father James McAlister (ex-NFL player) to host a TV show concept called Tattoos and Sports and agreed to host the program.

According to plaintiff's counsel, the program involved a television show, direct market DVDs, documentaries and artwork. Also, according to plaintiff's counsel, McAlister was supposed to attend investor meetings to promote the project, secure A-List celebrities to appear on the program and have the celebrities sign their original paintings done by Antoinne Christopher, as well as prints. Plaintiffs alleged that McAlister failed to attend any investor meetings, failed to secure A-List celebrities and failed to get signatures on numerous original paintings which were painted because McAlister had promised to secure these celebrities. Plaintiffs also allege that because McAlister failed to promote the project, cross-defendants exhausted their personal savings by June 2003.

In late 2002, Weston, along with his partner, cross- defendant Ed Castro, had entered into an oral agreement on behalf of EFC with McAlister to create the program. In June 2003, McAlister loaned Weston and Castro $125,000 for the production of the program pursuant to a written promissory note. To date, the loan remains due and unpaid.

According to EFC's First Amended Complaint, all rights to an alleged written Joint Venture Agreement regarding the creation of the program were assigned to her in writing in June 2003. The alleged Joint Venture Agreement purports to be between One Way International Inc. and McAlister, and was executed by Weston on behalf of One Way International, Inc. The alleged written assignment was executed by Castro on behalf of One Way International, Inc. and Weston on behalf of EFC.

After over two years of litigation, EFC made a motion to amend its pleading from EFC as a sole proprietor to EFC as a general partnership to conform to the evidence that had been developed. However, the court denied the motion and bifurcated the trial to determine the issue of EFC's standing to sue McAlister first. The court granted McAlister's motion for non-suit at the close of EFC's case in chief in this first phase of the bifurcated trial.

In their motion for nonsuit, McAlister's attorneys argued that EFC's evidence did not establish its standing, but instead established that: (1) EFC did not have a valid fictitious business name statement on record as required to maintain a lawsuit under a fictitious name; (2) the alleged Joint Venture Agreement is unenforceable because Weston did not have authority to enter into the agreement on behalf of the corporation, One Way International, Inc.; (3) the alleged written assignment of rights is unenforceable because Castro did not have authority to make the assignment on behalf of the corporation, One Way International, Inc.; (4) McAlister's written consent to any such assignment of rights was required; (5) the alleged assignment was not signed by McAlister; (6) McAlister was never aware of, and never consented to any such assignment of rights; (7) the alleged assignment was not intended to assign any interest in the program to EFC; and (8) EFC, a sole proprietorship, is not the real party-in-interest.

The court granted nonsuit.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that McAlister waived any capacity argument with regard to any fictitious name filing by failing to include this defense in his answer. Also, EFC had a valid filing as a sole proprietorship at the time the lawsuit was initiated and made a subsequent filing to a general partnership that was valid at the time of trial.

With regard to corporate capacity, McAlister contracted with a corporation and could not subsequently deny its existence. Also, EFC argued that the corporate capacity of Weston and Castro to make an assignment from One Way International Inc. to EFC was controlled by Nevada law as One Way International Inc. was a Nevada corporation. Under Nevada law, One Way International Inc. was validly formed and operated, and all corporate acts by Weston and Castro were valid, legal and binding.

EFC also argued that it was always the real party in interest under the oral agreement, under the assigned written agreement, and based on its reliance damages.

DEFENDANT'S CONTENTIONS:
Chris McAlister contended that he agreed to host the show as a favor to Ed Castro, who was a long-time friend of his father, (former UCLA and NFL standout James McAlister). Defendant also contended that EFC did not have standing to purse its claim against him. Chris contended that after he requested repayment of his loan, One Way International, Inc. demanded $82 million in damages. Plaintiff's counsel disputed this.

Settlement Discussions

At mediation, the plaintiff EFC's final offer was that Chris McAlister pay $1 million so the program could be completed with a different celebrity or agree to continue to participate in the TV Program.

Result

At the close of plaintiff's case in chief on Phase 1 of a bifurcated trial, the court granted defendant Chris McAlister's motion for nonsuit. The court indicated at the outset of this bifurcated phase of trial that EFC and Chris McAlister were the only parties to phase I on standing.

Other Information

EFC intends to appeal. Jury trial on McAlister's cross-complaint is set for June 16, 2008.