Sporn v. MCA Records, Inc.

• Decision Date: 31 March 1983
• Citation: 448 N.E.2d 1324,58 N.Y.2d 482,462 N.Y.S.2d 413
• Parties: , 448 N.E.2d 1324 Murray SPORN, Appellant, v. MCA RECORDS, INC., et al., Respondents. (And a Third-Party Action.)
• Court: New York Court of Appeals Court of Appeals

Page 413

462 N.Y.S.2d 413

58 N.Y.2d 482, 448 N.E.2d 1324

Murray SPORN, Appellant, v. MCA RECORDS, INC., et al., Respondents (And a Third-Party Action.)

Court of Appeals of New York.

March 31, 1983.

Peter S. Kaufman, New York City, for appellant.

Douglas C. Fairhurst, New York City, for respondents.

OPINION OF THE COURT

JASEN, Judge.

The issue raised on this appeal is whether plaintiff's cause of action for unauthorized commercial exploitation of a master phonograph record accrued for the purpose of computing the Statute of Limitations when defendant first began using plaintiff's property as its own or whether a new cause of action arose each time the defendant used what plaintiff claims to be his property.

Plaintiff commenced this action in June of 1976. The complaint alleges that defendant MCA Records, Inc (MCA), commercially exploited master recordings which belong to the plaintiff. Defendants moved to dismiss the complaint on the grounds that the action raised a claim for injury to property and was barred by the three-year Statute of Limitations because the injury occurred in 1965 when MCA began using what plaintiff claimed to be his property as its own. (CPLR 214.) Plaintiff argued that although the statute would bar recovery for use by the defendant more than three years before the commencement of the action, this claim should be considered in the nature of a continuing trespass on the plaintiff's property rights in that master recording so that each unauthorized use by the defendant of plaintiff's property would give rise to a new cause of action. According to this argument, plaintiff would be entitled to recover for each unauthorized use by the defendant of plaintiff's property in the three years prior to the commencement of the action. Plaintiff also sought injunctive relief to bar the defendant from manufacturing or exploiting phonograph records from the master recording which the plaintiff claimed was his property.

Taking the facts as alleged by the plaintiff in the complaint and explained in supporting affidavits, the following occurred. In 1957, a Philadelphia disc jockey, Kae Williams, heard a rock and roll singing group, the Silhouettes, and arranged for them to record through his record company. In late 1957, that company, Junior Records, released the Silhouettes' recording of "Get a Job". According to Williams' affidavit, he had produced a master phonograph recording of "Get a Job" (the Master) in late 1957 and on December 12, 1957 he leased, pursuant to a written agreement, "exclusively and in perpetuity, all rights in the Master to Ember Records." He also alleges that he entered into an oral agreement with the president of Ember Records that if Ember at anytime "liquidat[ed] its business or with[drew] from the record business, the 'Get a Job' master tape * * * would be returned" to Williams.

It is not disputed that Ember did in fact liquidate its assets and terminate its recording business. Under a written agreement, dated February 5, 1965, Ember sold its master recording catalogue to Bell Records (Bell) and t master recordings were turned over to Bell Records pursuant to this agreement. Included was the master recording to "Get a Job". Bell Records, predecessor to defendant Arista Records, Inc. (Arista), released a recording of "Get a Job" in an album in 1965. Since then, it has continued to republish the song.

Defendant MCA has manufactured and sold recordings of the sound track from the motion picture "American Graffiti" since August, 1973. That recording includes copies of the song "Get a Job", pursuant to an agreement between MCA and Arista.

In his affidavit, Williams asserts that by virtue of his oral agreement with Ember's president, he reacquired all rights to the master recording of "Get a Job" when in 1965 Ember discontinued its business operations. There is no assertion that the master recording was ever returned to him. He claims to have objected to Bell's use of the master recording in a telephone call he made to Bell's president, Lawrence Uttal. Mr. Uttal, in his affidavit, states that no such claim was ever made and that Bell was never advised by Ember's president that anyone but Ember had any property rights in any of the master recordings purchased by Bell. Mr. Williams indicates that he did not take any action against Bell because he could not afford the cost of any litigation to resolve his rights. In June, 1976, he assigned his rights to plaintiff Murray Sporn, who commenced this action.

Supreme Court granted defendants' motion for partial summary judgment on the ground that the Statute of Limitations barred the action. The Appellate Division modified only to the extent of adding the additional declaration, pursuant to defendants' motion for a declaratory judgment, that plaintiff had no enforceable rights against the defendants to the recording of "Get a Job" by virtue of the expiration of the Statute of Limitations (88 A.D.2d 857, 451 N.Y.S.2d 750). Two Justices dissented on the ground that plaintiff had a continuing right to the property and each interference with that right constituted a new injury to plaintiff's property so that those claims arising within three years of the commencement of the action should not be considered time barred. The dissent also urged consideration of defendant claim that the concept of adverse possession should be applied to intangible personal property.

For the purposes of determining whether the Statute of Limitations will bar an action, the general rule is that the statutory period is computed from the time the cause of action accrued. (CPLR 203, subd [a].) The cause of action asserted here is wrongful use or misappropriation of the plaintiff's property--that is, the master recording. In order to determine whether that cause of action accrued when the defendant first allegedly used the property without authority or whether it accrued with each subsequent unauthorized use of the property, it is necessary to characterize the nature of that use.

Interference with a person's property constitutes a trespass (61 N.Y.Jur., Trespass, § 8, p. 12), while a "denial or violation of the plaintiff's dominion, rights, or possession, is the basis of an action for conversion" (23 N.Y.Jur.2d, Conversion, and Action for Recovery of Chattel, § 3, p. 210). The question then becomes whether the defendant's alleged conduct constituted an interference with plaintiff's property or was a denial of plaintiff's rights to the property or possession of that property. "A continuing right may exist where there is an interference with but no destruction or...