737 F.2d 229 (2nd Cir. 1984), 241, Croce v. Kurnit

Docket Nº:241, Docket 83-7402.
Citation:737 F.2d 229
Party Name:Ingrid CROCE, Individually, as heir of the Estate of James Joseph Croce, also known as Jim Croce, Plaintiff-Appellee, v. Philip S. KURNIT, Thomas R. Picardo, Jr., a/k/a Tommy West, Dennis Minogue, a/k/a Terry Cashman, Cashman, Pistilli & West, Blendingwell Music, Inc., Cashwest Productions, Inc., and Lifesong Records, Inc., Defendants, Blendingwell
Case Date:June 14, 1984
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 229

737 F.2d 229 (2nd Cir. 1984)

Ingrid CROCE, Individually, as heir of the Estate of James

Joseph Croce, also known as Jim Croce, Plaintiff-Appellee,

v.

Philip S. KURNIT, Thomas R. Picardo, Jr., a/k/a Tommy West,

Dennis Minogue, a/k/a Terry Cashman, Cashman, Pistilli &

West, Blendingwell Music, Inc., Cashwest Productions, Inc.,

and Lifesong Records, Inc., Defendants,

Blendingwell Music, Inc. and Cashwest Productions, Inc.,

Defendants-Appellants,

Time In A Bottle, Inc., Additional Defendant on Counterclaims.

No. 241, Docket 83-7402.

United States Court of Appeals, Second Circuit

June 14, 1984

Argued Nov. 21, 1983.

Page 230

Lawrence I. Kaplan, New York City, for plaintiff-appellee.

Leonard M. Marks, New York City (Terri E. Simon, Gold, Farrell & Marks, New York City, on the brief), for defendants-appellants.

Before LUMBARD, MANSFIELD and KEARSE, Circuit Judges.

KEARSE, Circuit Judge:

Defendants Blendingwell Music, Inc. ("Blendingwell"), and Cashwest Productions, Inc. ("Cashwest"), appeal from so much of a judgment of the United States District Court for the Southern District of

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New York, Robert W. Sweet,Judge, as granted certain claims asserted by plaintiff Ingrid Croce as the heir of the popular singer and songwriter Jim Croce who died in 1973 (collectively "Croce") for royalties due Croce, and dismissed a counterclaim asserted by Blendingwell to recover alleged overpayments of royalties to Croce. Following a jury trial as to certain issues and a bench trial as to others, the court entered judgment in favor of plaintiff in the total amounts of $348,359.93 against Blendingwell and $359,008.81 against Cashwest; the court dismissed Blendingwell's counterclaim for $334,024 in royalty overpayments to Croce. On appeal, Blendingwell and Cashwest attack so much of the judgment as awarded plaintiff a total of $102,543 against Blendingwell and $181,161 against Cashwest, on the grounds that the court erred in not submitting certain questions to the jury and in not upholding Blendingwell's counterclaim as a matter of law. Finding no merit in these contentions, we affirm the judgment. 565 F.Supp. 884.

I. BACKGROUND

Blendingwell is a corporation of which defendant Philip S. Kurnit was president and defendants Thomas R. Picardo, Jr., a/k/a Tommy West ("West"), and Dennis Minogue, a/k/a Terry Cashman ("Cashman"), were officers. Cashwest is a corporation of which Kurnit, Cashman, and West were also officers. The pertinent events and controversies are summarized below.

  1. The Agreements and the Events

    In 1968 Jim Croce entered into contracts with Blendingwell pursuant to which Blendingwell became the exclusive publisher of his compositions and his personal manager, and a contract with a corporate predecessor of Cashwest (hereinafter also "Cashwest") for the recording of his compositions. Jim Croce and Blendingwell executed a document entitled "Standard Songwriters Contract" (hereinafter "Songwriting Agreement"), paragraph 3 of which provided that Blendingwell would pay Croce royalties in the amount of, inter alia, three cents per copy of pianoforte copy (more commonly called "sheet music") sold by Blendingwell, "50% of the net sums actually received" by Blendingwell from mechanical licenses, and 50% of the net amounts received by Blendingwell from any sources or rights not specifically provided for:

    1. In consideration of this agreement, and conditioned upon the compliance by the WRITER with each and every of the terms, conditions and warranties of this agreement to be performed and observed, the COMPANY agrees to pay, during the term of the copyright owned by it, to the WRITER ..., and the WRITER will accept in full payment the following:

  2. 03cents per copy for each and every complete pianoforte copy of the composition sold by the COMPANY, and paid for in the United States of America and Canada.

    * * *

  3. 50% of the net sums actually received by the COMPANY from mechanical, transcription and synchronization licenses.

    * * *

  4. 50% of the net sums actually received from any other sources or rights now known or which may hereafter come into existence not specifically provided for herein ....

    New York law was to govern matters of interpretation, performance, and breach.

    In 1969, Blendingwell entered into an agreement with Robbins Music Corp. ("Robbins") granting Robbins a license to sell Croce compositions in sheet music form. Until 1976 Blendingwell paid Croce 50% of the amounts it received from Robbins under this agreement. In 1976, Blendingwell commenced to pay Croce instead three cents per copy of sheet music sold by Robbins. In addition, Blendingwell claimed that prior amounts paid to Croce for sheet music sales by Robbins were overpayments to the extent that they exceeded three cents per copy, and it accordingly deducted

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    $70,992 from Croce's then-current royalties in order to recoup the alleged overpayments.

    Jim Croce's career had begun to flourish in 1972. In that year Cashwest and Blendingwell entered into agreements with ABC Records, Inc. ("ABC"), and ABC's affiliate, Wingate Music Corp. ("Wingate"), giving ABC a mechanical license, i.e., the right to manufacture, distribute, and sell Croce's recordings, and requiring ABC to pay royalties to Cashwest and Blendingwell. Under these agreements (collectively the "ABC Agreements"), Blendingwell "assigned to [Wingate] 50% of Blendingwell's share in publishing income generated by the Croce compositions under the Songwriting Agreement." (Appellants' brief on appeal at 7.) 1 Thus, if Blendingwell received royalties for Croce compositions from a record company other than ABC, it would pay 50% to Croce, keep 25%, and pay 25% to Wingate. As to the royalties payable to Blendingwell by ABC, Blendingwell agreed that ABC could pay 25% of the gross amount directly to Wingate and simply remit to Blendingwell the 75% remainder.

    Thereafter, until 1980, Blendingwell paid Croce as royalties under the Songwriting Agreement 50% of the gross amounts ABC was required to pay to Blendingwell. In 1980, however, Blendingwell decided to pay plaintiff instead only 50% of ABC's 75% cash payments made to Blendingwell and to exclude from consideration the amounts paid by ABC to Wingate for Blendingwell's account.

    In the meantime, in the mid 1970's a controversy had arisen between Cashwest and Blendingwell on the one hand and ABC on the other, and Cashwest engaged accountants to audit ABC's royalty payments through December 31, 1975. The auditors' reports stated that ABC owed Cashwest more than $4.5 million and owed Blendingwell some $223,000. The audits also revealed that Blendingwell owed Wingate's corporate successor (hereinafter also "Wingate") approximately $326,000 under the ABC Agreements. In 1979, Cashwest, Blendingwell, ABC, and Wingate entered into a settlement agreement pursuant to which, inter alia, ABC paid Cashwest some $1,920,000 for past royalties, and both ABC's debt of $223,000 to Blendingwell and Blendingwell's debt of $326,000 to Wingate were extinguished.

  5. The Present Lawsuit and the Decision Below

    Ingrid Croce commenced the present lawsuit in 1978 against, inter alia, Blendingwell, Cashwest, Kurnit, West, and Cashman, claiming principally that the defendants had acted unconscionably and had breached their fiduciary duties to Croce. Jurisdiction was based on diversity of citizenship.

    The second amended complaint, upon which the parties proceeded to trial, asserted three claims that are at issue on this appeal: (1) a claim against Blendingwell for 50% of the gross amounts payable to it by ABC under the ABC Agreements since...

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