Curb Records, Inc. v. McGraw
| Decision Date | 25 September 2012 |
| Docket Number | No. M2011-02762-COA-R3-CV,M2011-02762-COA-R3-CV |
| Parties | CURB RECORDS, INC. v. SAMUEL T. MCGRAW |
| Court | Tennessee Court of Appeals |
CURB RECORDS, INC.
v.
SAMUEL T. MCGRAW
No. M2011-02762-COA-R3-CV
COURT OF APPEALS OF TENNESSEE AT NASHVILLE
July 27, 2012 Session
Filed September 25, 2012
A recording company brought this breach of contract action against a recording artist. This appeal involves only the trial court's decision to deny the recording company temporary and permanent injunctive relief. We find no error in the decision of the trial court.
ANDY D. BENNETT, J., delivered the opinion of the Court, in which PATRICIA J. COTTRELL, P. J., M.S., and FRANK G. CLEMENT, JR., J., joined.
Jay S. Bowen, John L. Unger, Will Parsons and Amy J. Everhart, Nashville, Tennessee, for the appellant, Curb Records, Inc.
William T. Ramsey, Robert A. Peal and Russell A. Jones, Jr., Nashville, Tennessee, for the appellee, Samuel T. McGraw.
We begin this opinion by addressing the posture of the case in this appeal. This is a contractual dispute between Curb Records, Inc. ("Curb") and Tim McGraw. As will be discussed more fully below, the parties agreed to a bifurcated proceeding in which the trial court would first make a "final determination whether or not Curb is entitled to prevent Mr. McGraw, by injunction or otherwise, from recording for entities other than Curb" and then later have a trial on the merits. The first phase of the proceedings consisted of a hearing at which the attorneys made arguments to the court and submitted depositions, affidavits, and other documents. By agreement of the parties, no testimony was taken. In this appeal, we are asked to review the chancellor's decision on this initial phase of the proceedings. It is
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important to note that, since we are considering the propriety of the trial court's determination regarding injunctive relief, nothing in this opinion should be construed as making factual findings binding upon the court at the second phase of the proceedings.
In March 1997, Tim McGraw and Curb entered into a recording agreement under which McGraw would render his services as a recording artist exclusively for Curb during the term of the agreement. The agreement provides for an initial period during which McGraw was required to deliver three albums. After the initial period, McGraw granted Curb six options, "each to extend the term of this agreement for one option period commencing immediately upon the expiration of the then current period . . . and continuing until nine (9) months after your Delivery to Curb of all Masters required during such option period." During each option period, McGraw was required to record and deliver to Curb "a number of Masters sufficient for one (1) album of then customary playing time." The agreement contains the following key provisions concerning the duration of each option period:
The individual producer of the Masters, and the selections to be recorded, are subject to the mutual approval of you and Curb. . . . [Y]ou hereby agree to record and Deliver (and Curb hereby acknowledges that you shall be permitted to Deliver) to Curb all Masters in fulfillment of each album of your recording commitment hereunder (excluding Greatest Hits, Live albums etc.) subsequent to the "First LP" (as defined below) no earlier than twelve (12) months nor later than eighteen (18) months following Delivery to Curb of the immediately preceding album in fulfillment of your recording commitment hereunder (excluding Greatest Hits, Live albums, etc.). At such time, if any, that Curb elects to release any Greatest Hits album embodying Masters under this agreement and/or the Prior McGraw Agreement, Curb may in Curb's sole discretion, further extend the time frame for Delivery set forth in the previous sentences of the next such album of your recording commitment by up to a maximum of six (6) additional months in any single instance.
The agreement further provides that Curb is the "perpetual owner of all Masters (and all other recordings . . . embodying your performances made during the term hereof)."
McGraw recorded and delivered three albums during the initial period and one album during each of the first four option periods. On October 22, 2010, McGraw gave1 to Curb a group of masters for an album entitled Emotional Traffic. The current dispute arose when Curb refused to accept these masters in satisfaction of McGraw's contractual obligations for
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the fifth option period.
On May 13, 2011, Curb filed a complaint for a declaratory judgment against McGraw in which Curb alleged that McGraw was in breach of the agreement because he refused to record and deliver the fifth option period album in accordance with the terms of the agreement. Among Curb's assertions is that McGraw recorded the masters for Emotional Traffic prior to the fifth option period. The complaint includes a prayer for the following relief:
1. That the Court declare that Tim McGraw is in breach of the Recording Agreement because, among other things, he has failed and refused to record and Deliver the fifth Option Period Album during the six (6) month period ending April 20, 2011 pursuant to the terms of the Recording Agreement; and
2. That the Court declare that the Emotional Traffic Masters do not and cannot constitute the fifth Option Period Album; and
3. That Curb Records may exercise all of the rights provided to it in the Recording Agreement upon Tim McGraw's failure or refusal to Deliver Masters; and
4. That the Court declare that as he has repudiated the June 21, 2001 Settlement,2 Tim McGraw is obligated to record and Deliver a sixth Option Period Album to Curb Records under the Recording Agreement; and
5. For compensatory damages to Curb Records; and
6. For consequential damages to Curb Records; and
7. That the Court enjoin Tim McGraw from providing personal services as a recording artist, or agreeing to do so, other than to Curb Records for so long as he, among other things, fails and refuses to record and Deliver to Curb Records the fifth Option Period Album and the sixth Option Period Album under the Recording Agreement; . . . .
McGraw counterclaimed for breach of contract, breach of implied covenant of good faith and fair dealing, and intentional interference with business relationships.
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On September 29, 2011, the trial court entered an agreed scheduling order providing for "bifurcated proceeding that will first make a final determination whether or not Curb is entitled to prevent Mr. McGraw, by injunction or otherwise, from recording for entities other than Curb, followed by the progression of a trial on the merits." A "Rule 65.01 hearing" was scheduled for November 29 and 30, 2011. The trial on the merits was set for July 2012. By agreement of the parties, the Rule 65.01 phase of the proceedings would be based solely on documents submitted to the court and the arguments of counsel. In November 2011, Curb filed a motion for a preliminary injunction to prevent McGraw from working as a recording artist for any other person or entity during the pendency of the case.
After the 65.01 hearing in November 2011, the court denied Curb's request for injunctive relief and, on December 8, 2011, entered a memorandum and order. In denying Curb's request for injunctive relief, the trial court expressly reserved for adjudication at trial "the question of whether Emotional Traffic constitutes the Fifth Option Album and whether Mr. McGraw deprived Curb Records of its pre-approval rights, in breach of the parties' contract." The Court also ruled that, except for Emotional Traffic recordings, recordings made by McGraw as of November 30, 2011 belonged to McGraw "at least to the extent that he may control the release and distribution of those records." Only recordings by McGraw made on or after December 1, 2011 belonged wholly to McGraw or any company with which he might choose to contract. The court directed that the memorandum and order be entered as a final judgment under Tenn. R. Civ. P. 54.02, and Curb appealed.
On appeal, Curb argues that the trial court erred in concluding that Curb failed to demonstrate irreparable harm from McGraw's breach; and that the trial court erred in adjudicating the ownership of the...
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