Hastad v. Hippos in Tanks, LLC
| Decision Date | 15 March 2019 |
| Docket Number | 17-CV-2518 (VEC) |
| Parties | JONATAN LEANDOER HASTAD, personally known as YUNG LEAN, Plaintiff, v. HIPPOS IN TANKS, LLC, and STEVEN MACHAT, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Jonatan Leandoer Hastad has sued Hippos In Tanks, LLC and Steven Machat for copyright infringement, breach of contract, a declaratory judgment, and an accounting. See Compl., Dkt. 1. Defendants have counterclaimed for breach of contract and an accounting. See Defs.' Ans., Dkt. 23, ¶¶ 157-168. Plaintiff has moved for partial summary judgment, pursuant to Federal Rule of Civil Procedure 56. See Pl.'s Notice of Mot., Dkt. 35. For the following reasons, Plaintiff's motion is GRANTED IN PART AND DENIED IN PART.
Plaintiff is a Swedish hip-hop artist. See Pl.'s 56.1 Stmt. ¶ 2; Defs.' 56.1 Stmt. ¶ 2. Hippos In Tanks, LLC ("HIT") is a record label owned by Machat. See Pl.'s 56.1 Stmt. ¶ 5;Defs.' 56.1 Stmt. ¶ 5; Machat Decl. ¶ 16. Between 2014 and 2015, the parties worked together to produce and publicize Plaintiff's music. See Pl.'s 56.1 Stmt. ¶¶ 6-9; Defs.' 56.1 Stmt. ¶¶ 6-9. In the fall of 2014, Plaintiff released an album, Unknown Memory, on Defendants' label; the album was distributed through a third party, Redeye Distribution ("Redeye"), pursuant to an agreement between Redeye and HIT (the "Redeye-HIT Agreement"). See Pl.'s 56.1 Stmt. ¶¶ 4, 7, 41; Defs.' 56.1 Stmt. ¶¶ 4, 7, 41. During this time, Redeye also distributed other records and works of Plaintiff (together with Unknown Memory, the "Existing Materials") pursuant to the Redeye-HIT Agreement. See Pl.'s 56.1 Stmt. ¶ 41; Defs.' 56.1 Stmt. ¶ 41. The royalties that Plaintiff earned from sales of the Existing Materials were collected by Redeye and paid to HIT. See Pl.'s 56.1 Stmt. ¶ 15; Defs.' 56.1 Stmt. ¶ 15; Freeman Decl. ¶ 8. Throughout 2014 and early 2015, Plaintiff also partnered with Defendants on an international tour and on producing other works of music. See Pl.'s 56.1 Stmt. ¶¶ 8-9; Defs.' 56.1 Stmt. ¶¶ 8-9.
In mid-2015, the parties' relationship broke down. See Pl.'s 56.1 Stmt. ¶¶ 15-20; Defs.' 56.1 Stmt. ¶¶ 15-20. Plaintiff alleges that Defendants failed to pay him his share of royalties for the Existing Materials during this time. See Pl.'s 56.1 Stmt. ¶ 15; Hastad Decl. ¶ 11. Defendants allege that Plaintiff failed to supply them with certain accounting materials that they needed in order to calculate Plaintiff's share of the royalties. See Machat Decl. ¶ 59. The parties' relationship further deteriorated in January 2016, when Plaintiff accused Defendants of releasing his recordings without authorization and of forging his signature on a distribution contract. See Pl.'s 56.1 Stmt. ¶¶ 21-33; Defs.' 56.1 Stmt. ¶¶ 21-33.
In February or March 2016, the parties executed a Settlement and Release Agreement in an attempt to resolve their disputes. See Hastad Decl. Ex. 1 (the "Settlement Agreement"); see also Pl.'s 56.1 Stmt. ¶¶ 35-36; Defs.' 56.1 Stmt. ¶¶ 35-36; Machat Decl. ¶¶ 21, 43. Although the Settlement Agreement is not a model of clarity, it appears to contemplate that Plaintiff and Defendants each expected to receive royalties from various record distributors in connection with the Existing Materials and another album, entitled Warlord. See Settlement Agreement § 2(b), 2(f). The Settlement Agreement requires the parties to share these royalties in agreed-upon proportions for a period of time. See id. The Settlement Agreement also requires the parties to take steps to ensure that each side receives various accountings and other documentation relating to Plaintiff's music. See id. §§ 2(d), 4(b).
The Settlement Agreement imposes two obligations on Defendants: they are required to pay Plaintiff a share of any royalties on the Existing Materials that they receive during the term of the Redeye-HIT Agreement, see Settlement Agreement § 2(f); and they are required to provide to Plaintiff all accounting statements, copies of recordings, and other materials relating to Plaintiff's music, see id. § 4(b). Plaintiff has three obligations under the Settlement Agreement: he was required to pay Defendants a flat fee of $15,000, see id. § 2(a); he is required to pay Defendants a share of any royalties on the Existing Materials and Warlord that he receives during the agreed-upon period, see id. § 2(b); and he is required to instruct his record distributors to remit to Defendants certain other payments and accountings owed to Defendants, see id. § 2(d).
Importantly, Plaintiff's obligation to pay Defendants their share of royalties, pursuant to § 2(b) of the Settlement Agreement, is subject to two conditions: first, that Defendants payPlaintiff his share of any Existing Materials royalties that Defendants receive pursuant to the Redeye-HIT Agreement and, second, that Defendants not otherwise be "in breach" of the Settlement Agreement. See id. § 2(b).2
Additionally, in the Settlement Agreement, the parties agreed that "all other agreements" that they had previously entered into with each other were "terminated ab initio." Id. § 1. The Settlement Agreement also contained a general release provision, whereby the parties agreed to release each other from "any and all claims" (except those arising out of the Settlement Agreement). Id. §§ 3, 5(b). Additionally, the Settlement Agreement contained a merger clause, id. § 5(f), a clause prohibiting oral modifications, id., and a representation that each party had signed the Settlement Agreement "freely," "voluntarily," and with the advice of counsel, id. § 5(a). The Settlement Agreement stated that the parties had not "been influenced to any extent whatsoever" in signing it "by any party . . . except for those representations, statements and promises expressly set forth herein." Id. § 5(a).
Following execution of the Settlement Agreement, Plaintiff paid $15,000 to Defendants as required by § 2(a) of the Settlement Agreement. See Pl.'s 56.1 Stmt. ¶¶ 54-55; Defs.' 56.1 ¶¶ 54-55; Machat Decl. ¶ 90. According to Plaintiff, Defendants breached the Settlement Agreement by failing to pay Plaintiff his share of the Existing Materials royalties that Defendants received from Redeye, as required by § 2(f) of the Settlement Agreement. See Pl.'s 56.1 Stmt.¶¶ 56-66. Plaintiff also alleges that Defendants failed to provide him with certain accountings and other materials, as required by § 4(b) of the Settlement Agreement. See id. Defendants, for their part, allege that Plaintiff breached the Settlement Agreement by failing to pay them their share of the royalties from the Existing Materials and Warlord, as required by § 2(b) of the Settlement Agreement, and by failing to instruct his record distributors to remit to Defendants certain accountings and other payments, as required by § 2(d) of the Settlement Agreement. See Machat Decl. ¶¶ 88, 90, 93, 95, 98-105.
In late 2016, the parties provided each other with notices of breach. See Pl.'s 56.1 Stmt. ¶ 72; Defs.' 56.1 Stmt. ¶ 72; Machat Decl. ¶ 88. In March 2017, as disputes between the parties escalated, Defendants threatened to release a number of Plaintiff's recordings without authorization. See Pl.'s 56.1 Stmt. ¶¶ 77-78; Defs.' 56.1 Stmt. ¶ 77. On April 7, 2017, Plaintiff filed the Complaint and moved for a temporary restraining order ("TRO") to enjoin Defendants from releasing Plaintiff's recordings. See Dkts. 1, 3. On April 10, 2017, the Court entered the TRO, see Dkt. 10, which the Court later converted into a permanent injunction on consent of the parties, see Dkt. 12.
Plaintiff brings claims for copyright infringement (Count I), breach of contract (Count II), a declaratory judgment (Count III), and an accounting (Count IV). See Compl. ¶¶ 63-116. Defendant brings counterclaims for breach of contract (Count I) and an accounting (Count II). See Defs.' Ans. ¶¶ 157-168. Plaintiff has moved for summary judgment only on his breach of contract claim and on Defendants' counterclaims. See Pl.'s Notice of Mot.
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)) (internal quotation marks omitted). Courts "construe the facts in the light most favorable to the non-moving party and resolve all ambiguities and draw all reasonable inferences against the movant." Delaney v. Bank of Am. Corp., 766 F.3d 163, 167 (2d Cir. 2014) (per curiam) (quoting Aulicino v. N.Y.C. Dep't of Homeless Servs., 580 F.3d 73, 79-80 (2d Cir. 2009)) (alteration omitted).
Affidavits submitted to support or oppose a motion for summary judgment "must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." Fed. R. Civ. P. 56(c)(4). "When an affidavit does not comply with these basic requirements, the offending portions should be disregarded by the court." Wahad v. F.B.I., 179 F.R.D. 429, 435 (S.D.N.Y. 1998) (citing United States v. Alessi, 599 F.2d 513, 514-15 (2d Cir. 1979)); see also Hicks v. Baines, 593 F.3d 159, 167 (2d Cir. 2010).
"[U]ltimate or conclusory facts and conclusions of law . . . cannot be utilized on a summary judgment motion." BellSouth Telecomms., Inc. v. W.R. Grace & Co.-Conn., 77 F.3d 603, 615 (2d Cir. 1996). Put differently, a party opposing summary judgment cannot demonstrate the existence of a genuine question...
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