United States District Court, S.D. Florida
Incarcerated Entertainment, LLC, and Efraim Diveroli, Plaintiff,
Matthew Bevan Cox, Defendant/Counter-Plaintiff
ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY
N. Scola, Jr. United States District Judge
matter comes before the Court upon Plaintiffs Incarcerated
Entertainment, LLC and Efraim Diveroli’s motion for
summary judgment. (ECF No. 77.) The Defendant filed a
response (ECF No. 87) and the Plaintiffs timely replied. (ECF
No. 95.) Upon review of the record, the parties’
briefs, and the relevant legal authorities, the Court
grants the Plaintiffs’ motion.
(ECF No. 77.)
Efraim Diveroli was awarded several hundred million dollars
in arms and ammunition contracts by the United States
government during the war on terror. He was later convicted
of fraud and served time in prison. During his time in
prison, he met Defendant Cox and executed a work-for-hire
co-author agreement (the “Agreement”). (Compl. at
2, ECF No. 1.) According to the Agreement, Cox would assist
Diveroli in writing a memoir of Diveroli’s life.
(Id. at ¶ 13.) Diveroli agreed to pay Cox 10%
of royalties received by Cox for the book or any disposition
of the work and 5% of royalties received by Cox from the sale
of any derivatives of the work. (Id. at ¶ 15;
ECF No. 1-3 at ¶ 11.) Under the terms of the Agreement,
“[a]ll copyrights, renewals, and extensions thereof, in
and to the material contained in the Work, shall be secured
by [Diveroli] and held in his name, as the sole and exclusive
author and proprietor thereof, together with all literary
property and any other rights in the Work[.]” (ECF No.
1-3 at ¶ 2(a).)
February 20, 2014, Diveroli registered his book, Once a
Gun Runner, with the United States Copyright Office. He
then assigned his rights in the book to Plaintiff
Incarcerated Entertainment (“IE”). (ECF No. 1 at
¶ 19.) According to the complaint, IE has attemped to
pay Cox his percentage of the gross proceeds for the sale of
the book, but he has declined to provide payment instructions
because he owes over $5 million in restitution to the
government. (Id. at ¶ 22.) In 2016, Warner
Bros. released the motion picture War Dogs, loosely based on
the story of Diveroli and his associates. (Id. at
the release of the movie, IE sued Warner Bros. alleging
copyright violations, conspiracy, and unfair competition.
See Incarcerated Entm’t, LLC v. Warner Bros.
Pictures, No. 16-cv-1302-MSS-AAS (M.D. Fla. April 28,
2016). After the lawsuit had been pending for almost a year,
Defendant Cox sought to intervene, claiming that he was the
rightful owner of the book and copyright. (Id. at
ECF No. 106.) Before the district court could rule on the
motion to intervene, IE and Warner Bros. settled the dispute
and filed a joint stipulation of dismissal with prejudice.
(Id. at ECF No. 143.) Cox filed two separate appeals
related to that case. The first was dismissed as moot by the
Eleventh Circuit and the second was voluntarily dismissed by
November 14, 2017, IE and Diveroli filed a state court
complaint against Cox for declaratory judgment regarding the
parties’ rights under the work-for-hire agreement.
See Incarcerated Entm’t, et al. v. Cox, No.
2017-026376-CA-01 (11th Jud. Cir. Miami-Dade County). The
state court complaint was removed to the Southern District of
Florida on January 1, 2018. See Incarcerated
Entm’t, et al. v. Cox, No. 18-20023 (S.D. Fla.
Jan. 1, 2018) (Moreno, J.). Judge Moreno dismissed the
complaint without prejudice as duplicative of two cases
pending in the Middle District of Florida. (Id. at
ECF No. 8.)
December 27, 2017, Cox filed a lawsuit in the Middle District
of Florida against IE, Diveroli, and Warner Bros. claiming
ownership of IE’s copyright. See Cox v.
Incarcerated Entm’t, LLC, et al., No.
17-cv-3108-T-35JSS (M.D. Fla. Dec. 27, 2017). On May 16,
2018, the district court dismissed the lawsuit after Cox
failed to timely serve the parties. (Id. at ECF No.
14.) Two days later, IE and Diveroli filed the instant
lawsuit against Cox seeking declaratory judgment regarding
the Plaintiffs’ rights under the Agreement and their
exclusive copyright to the book. (ECF No. 1.) The Plaintiffs
now move for summary judgment on their claim for declaratory
relief. (ECF No. 77.)
judgment is proper if following discovery, the pleadings,
depositions, answers to interrogatories, affidavits and
admissions on file show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56. In
reviewing a motion for summary judgment, the Court must
“view the evidence and all factual inferences therefrom
in the light most favorable to the non-moving party, and
resolve all reasonable doubts about the facts in favor of the
non-movant.” Feliciano v. City of Miami Beach,
707 F.3d 1244, 1247 (11th Cir. 2013) (quoting Skop v.
City of Atlanta, Ga., 485 F.3d 1130, 1143 (11th Cir.
2007)). So, when a conflict arises between the facts
presented by the parties, the Court must credit the nonmoving
party’s version. Id. The moving party bears
the burden of proof to demonstrate the absence of a genuine
issue of material fact. Celotex, 477 U.S. at 323.
“In a case involving contract interpretation, summary
judgment is appropriate when the agreement is totally
unambiguous[.]” Dew Seven, L.L.C. v. Big Lots
Stores, Inc., 354 F. App’x 415, 416 (11th Cir.
Subject Matter Jurisdiction
initial matter, the Court will address subject matter
jurisdiction in this case. The Court raised this issue
sua sponte earlier in the case (ECF No. 68) and the
Defendant raises it again in his response to the
Plaintiffs’ motion for summary judgment. (ECF No. 85 at
4-5.) The Defendant argues that this case involves the
interpretation of a contract under Florida law, and therefore
does not raise a federal question. (Id.) Upon
careful review, the Court disagrees with the
an action for declaratory judgment. “[T]he Declaratory
Judgment Act, does not, of itself, confer jurisdiction upon
the federal courts; a suit brought under the Act must state
some independent source of jurisdiction, such as the
existence of diversity or the presentation of a federal
question.” Borden v. Katzman, 881 F.2d 1035,
1037 (11th Cir. 1989). There is no question that the parties
are not diverse. Therefore, the question is “whether,
absent the availability of declaratory relief, the instant
case could nonetheless be brought in federal court.”
Anand Vihar LLC v. Evans Group Inc., No. 16-cv-841,
2016 WL 9526560, at *1 (M.D. Fla. July 6, 2016). To help
answer this question, the Eleventh Circuit has held that
“a federal district court has subject-matter
jurisdiction over a declaratory judgment action if . . .
plaintiff’s well-pleaded complaint alleges facts
demonstrating that defendant could file a coercive action
arising under federal law.” Household Bank v. JFS
Group, 320 F.3d 1249, 1259 (11th Cir. 2003). “It
follows then that district courts have subject matter
jurisdiction over a declaratory judgment action that
anticipates a copyright counterclaim.” Anand,
2016 WL 9526560 at *2.
the Defendant claims that he is entitled to the copyright at
issue and filed a counterclaim for copyright infringement.
(ECF No. 27.) Although the Defendant voluntarily dismissed
his counterclaim (ECF No. 72), he recently filed another
action in the Southern District of Florida against the
Plaintiffs for copyright infringement, among other causes of
action. See Matthew Bevan Cox v. Efraim Diveroli, et
al., No. 19-cv-23483-BB (S.D. Fla. Aug. 20, 2019).
Because the Defendant could file, and has filed, a coercive