Guardian Music v. James W. Guercio Enterprises
| Decision Date | 06 July 2006 |
| Docket Number | No. 03 Civ. 9687(SAS).,03 Civ. 9687(SAS). |
| Citation | 459 F.Supp.2d 216 |
| Parties | GUARDIAN MUSIC CORPORATION, Plaintiff, v. JAMES W. GUERCIO ENTERPRISES, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
James Cinque, Cinque & Cinque, P.C., New York, NY, Steven Ames Brown, Steven Ames Brown Entertainment Law, San Francisco, CA, for Plaintiff.
Helene M. Freeman, Dorsey & Whitney LLP, New York, NY, for Defendant.
Guardian Music Corporation ("Guardian"), a music publishing company, asserts a breach of contract claim1 against James W. Guercio Enterprises, Inc. ("Guercio"), another music publishing company, and requests two forms of relief. First, Guardian demands an accounting of all revenue derived from Guercio's exploitation of Louis "Moon Dog" Hardin's compositions.2 Second, Guardian seeks to impose a constructive trust on Guercio's interest in the Hardin compositions and on monies Guercio received from their commercial exploitation.3
Guardian moves for summary judgment with respect to liability on both of its claims.4 Guardian argues that summary judgment is appropriate because Guardian and Guercio are co-owners of the original and renewal terms of certain Hardin copyrights,5 and regardless of copyright ownership, a 1969 agreement contractually obligates Guercio to share revenue derived from the exploitation of the Hardin copyrights with Guardian.6
Guercio cross-moves for summary judgment on both claims on four separate grounds. First, Hardin never conveyed renewal term rights to Guardian.7 Second, Guardian cannot enforce an agreement (which, Guardian alleges, grants renewal term rights) because Guardian has breached a material term of that agreement.8 Third, Guardian's claims are barred by laches.9 Fourth, Guardian cannot maintain this action without joining Hardin's heirs as parties.10
The following facts are undisputed. Hardin, "a mysterious and extravagantly garbed street performer,11 released two recordings of original music compositions in 1969 and 1971. Guercio produced both of these recordings, the first of which included the song "Lament."12 On February 26, 1969, Hardin conveyed his original term musical copyrights to Skiff Music Corporation ("Skiff') in a written agreement (the "Songwriter's Agreement") that obligated Skiff to publish the assigned musical works and to pay Hardin royalties during the initial term of copyright.13 Guardian is Skiff's successor in interest.14 On March 6, 1969, Hardin entered into an agreement (the "Recording Agreement") with Poseidon Productions ("Poseidon"), a division of Guercio, pursuant to which Poseidon would produce recordings of Hardin's work.15
During 1969, Skiff and Archimedes, another division of Guercio, entered into an agreement (the "Co-Publishing Agreement") to which Hardin assented.16 Under the terms of the Co-Publishing Agreement, Skiff conveyed to Archimedes a one-half interest in four Hardin compositions (the "Split Compositions"), including "Lament," and a full interest in the remaining thirty Hardin compositions (the "Participating Compositions").17 Skiff agreed to administer the Split Compositions, and Archimedes agreed to administer the Participating Compositions.18 Each party agreed to pay the other one-half of all profits derived from exploitation of the compositions.19
For the 1969 compositions, the renewal term vested on January 1, 1998.20 For the 1971 compositions, the renewal term vested on January 1, 2000.21 Hardin died on September 9, 1999.22 Pursuant to his will, Hardin left all of his copyrights to Illona Goebel Sommer, his German patroness.23 In the spring of 1999, Andy Carthy, an English disc jockey known professionally as "Mr. Scruff," composed a hip-hop song titled "Get a Move On," in which he sampled Hardin's recording of "Lament" without authorization.24 Through his English subpublisher, Guercio negotiated to obtain a half interest in the "Get a Move On" copyright.25 "Get a Move On" became a hit in Europe and was subsequently licensed in several lucrative television commercial deals.26
Summary judgment is appropriate if the record "show[s] 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."27 An issue of fact is genuine "if the evidence is such that a jury could return a verdict for the nonmoving party."28 A fact is material when it would "`affect the outcome of the suit under the governing law.'"29 The moving party has the burden of demonstrating that no genuine issue of material fact exists.30
To defeat a motion for summary judgment, a party must raise a genuine issue of material fact that "does not rely on conclusory allegations or unsubstantiated speculation"31 and raises more than a "`metaphysical doubt as to the material facts.'"32 In determining whether a genuine issue of material fact exists, the court must construe the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in that party's favor.33
If the moving party will bear the burden of persuasion at trial, the burden at summary judgment is higher — the moving party must support its motion with credible evidence that would entitle it to a directed verdict if not controverted at trial.34 "Summary judgment in favor of the party with the burden of persuasion, however, is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier of fact."35
"[O]ne joint owner is accountable to the others for their rateable share of the profits that he has realized from licensing of the work."36 An accounting is an equitable remedy "designed to provide a means for compelling one, who because of a confidential or trust relationship has been entrusted with property of another, to render an account of his actions and for the recovery of any balance found to be due."37 A party seeking the imposition of a constructive trust ordinarily must show: "(1) a confidential or fiduciary relation[ship], (2) a promise, express or implied, (3) a transfer made in reliance on that promise, and (4) unjust enrichment."38 Because the imposition of a constructive trust is an equitable remedy, however, it is not necessary to prove all of these factors.39
Under New York law, this Court should interpret a written contract "so as to give effect to the intention of the parties as expressed in the unequivocal language they have employed."40
When the question is the contract's proper construction, summary judgment may be granted when [the contract's] words convey a definite and precise meaning absent any ambiguity.... Contract language is ambiguous if it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages, and terminology as generally understood in the particular trade or business.41
The language of a contract is not ambiguous, however, simply because the parties urge different interpretations,42 or if one party's view "strain[s] the contract language beyond its reasonable and ordinary meaning."43 "Ascertaining whether or not a writing is ambiguous is a question of law for the trial court."44 "If the court finds that the contract is not ambiguous it should assign the plain and ordinary meaning to each term and interpret the contract without the aid of extrinsic evidence and it may then award summary judgment."45 Ambiguous language, however, should be "construed against the interest of the drafting party."46
Section 304(a)(1)(C) of Title 17 of the United States Code governs the duration of copyright renewals:
(I) [T]he author of such work, if the author is still living, (ii) the widow, widower, or children of the author, if the author is not living, (iii) the author's executors, if such author, widow, widower, or children are not living, or (iv) the author's next of kin, in the absence of a will of the author, shall be entitled to a renewal and extension of the copyright in such work for a further term of 47 years.47
The renewal period is not merely an extension of the original copyright term — it is a "new estate ... clear of all rights, interests or licenses granted under the original copyright."48 Congress's purpose in creating this right of renewal was to "provide[] authors a second opportunity to obtain remuneration for their works."49
Under section 28 of the 1909 Copyright Act, which governs grants of copyrights executed before 1978, an assignment must be made by an "instrument in writing signed by the proprietor of the copyright."50 Despite Congress's intention to protect authors "originally in a poor bargaining position,"51 the Supreme Court and the Second Circuit have "consistently allowed authors to assign their rights in the renewal term before that term commences."52 Such an assignment, however, carries "a strong presumption against conveyance,"53 which may be rebutted "where the author includes language which expressly grants rights in renewals of copyright or extensions of copyright."54 If an author specifically intended to convey renewal rights, however, courts have accepted general words of assignment as including renewal rights.55 To ascertain an author's specific intention to convey renewal rights, courts may consider extrinsic evidence.56
If the author is alive at the time renewal vests and has not previously assigned the renewal term of copyright, then renewal rights vest in the author, and upon death the renewal copyright passes to the author's testamentary successors in the same manner as the rest of the author's property. If the author dies before renewal vests, then the author's statutory successors are not bound by any...
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...breaches the contract as well [since] a contracting party cannot benefit from its own breach." Guardian Music Corp. v. James W. Guercio Enters., Inc. , 459 F.Supp.2d 216, 223 (S.D.N.Y. 2006) (quoting 23 Williston on Contracts § 63.8). But the very same section of the treatise goes on to des......