Keep On Kicking Music, Ltd. v. Hibbert
| Decision Date | 17 August 2016 |
| Docket Number | 15cv7464 |
| Parties | KEEP ON KICKING MUSIC, LTD., Plaintiff, v. FREDERICK "TOOTS" HIBBERT, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Keep on Kicking Music, Limited ("KOK UK") brings this breach of contract and tortious interference action against Defendants Frederick "Toots" Hibbert; Toots Music, Inc.; and Alla Son Music Inc. (collectively, "Defendants"). KOK UK also seeks declaratory and injunctive relief regarding its rights to music composed by Hibbert. Defendants counterclaim for unjust enrichment, conversion, and breach of contract against KOK UK, and also assert third-party claims of unjust enrichment, conversion, and fraud against KOK UK's principal Marc Chetata.
KOK UK moves for judgment on the pleadings with respect to several of its claims against Defendants. KOK UK and Chetata also move to dismiss Defendants' counterclaims and third-party claims. KOK UK and Chetata's motions are granted in part and denied in part.
The following facts are derived from the Amended Complaint (ECF No. 27), and the Amended Answer and Third Party Complaint (ECF Nos. 28-29).
In June 1994, Hibbert, Toots Music, and Keep on Kicking Music, Inc. (a non-party New York corporation referred to herein as "KOK NY") entered into an Exclusive Administration Agreement (the "Administration Agreement"). (Am Compl. Ex. 2.) The Administration Agreement gave KOK NY exclusive administration rights to some of Hibbert's musical compositions, as well as an undivided 50% interest in them. (Am. Compl. ¶ 2.) The Administration Agreement also provided that it would "be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns." (Am Compl. Ex. 2 § 6.) Schedule B of the Administration Agreement acknowledged a $3,500 payment to Hibbert as "an advance recoupable against future publishing monies to be due by Keep on Kicking." ( In January 1995, Hibbert executed Schedules D and E, which acknowledged receipt of additional payments. (Am Compl. ¶¶ 35-36.)
In September 1997, KOK UK was formed in the United Kingdom. The following month, KOK NY assigned its interests under the Administration Agreement to KOK UK. (Am. Compl. ¶¶ 30-43.) In December 1997, Hibbert signed an addendum to the Administration Agreement, acknowledging that the Administration Agreement had been assigned to KOK UK (the "Administration Agreement Addendum"). (Am Compl. ¶ 47.) In a separate letter, Hibbert acknowledged that KOK UK and KOK NY "exclusively administrated" his copyrights and "represent[ed his] catalog." (Am Compl. ¶¶ 51-52; Ex. 5.) Hibbert also agreed to bring more compositions within the ambit of the Administration Agreement by executing a document titled "Additional Songs added to Schedule 'A' of Agreement Dated June 17, 1994 Between Frederick Hibbert - Toots Music And Keep On Kicking Music, Inc. now between Alla SonMusic Inc. & Keep On Kicking Ltd" (the "Additional Compositions"). (Am. Compl. ¶ 53, Ex. 2.)
In September 1998, KOK NY was dissolved. (Am Compl. ¶ 54; Ex. 1.) Six years later, a new Delaware corporation, Keep on Kicking Music, Inc. ("KOK Delaware"), acquired certain rights under the Administration Agreement from KOK UK. (Am Compl. ¶ 56.)
In 2007, KOK UK learned that Hibbert and Toots Music had attempted to assign some of the compositions governed by the Administration Agreement to Universal-Songs of Polygram International, Inc. ("Universal" and the "Universal Compositions"). (Am Compl ¶ 57.) In January 2008, KOK Delaware, Universal, Hibbert, and Toots Music entered into a Settlement Agreement that "fully and finally releas[ed] and forever discharge[ed KOK Delaware] and [] Chetata and [their] . . . affiliates . . . and assigns . . . from [all] claims . . . which Hibbert . . . has at any time heretofore had . . . or may at any time hereafter have" concerning the Universal Compositions. (Am Compl. ¶¶ 57, 64; Ex. 2.)
In 2013, Hibbert sued KOK NY and Chetata in this District. See Frederick "Toots" Hibbert, p/k/a Toots and the Maytals v. Keep on Kicking Music, Inc., 13-cv-3664 (PAC) (S.D.N.Y.) (the "2013 Lawsuit"). Among other things, the 2013 Lawsuit asserted claims concerning the Universal Compositions. While Hibbert's complaint acknowledged KOK NY's dissolution, he obtained a default judgment against KOK NY declaring that "all contractual agreements between Plaintiff Toots and Defendant [KOK NY] are null and void, and that all musical compositions transferred or otherwise encumbered by Defendant [KOK NY] under such agreements are returned to Plaintiff." (Am Compl. ¶ 79; Ex. 9.) The Default Judgment also awarded Hibbert $1,895,097.41 against KOK NY. (Am Compl. ¶ 79; Ex. 9.) Chetata, the other defendant, was never served with the complaint. (Am Compl. ¶ 73.)
Hibbert used the Default Judgment to cloud KOK UK's rights to the compositions. (Am. Compl. ¶ 80.) KOK UK alleges that it has incurred significant costs andexpenses as a result of those actions. (Am. Compl. ¶ 82.) In April 2016, this Court vacated the Default Judgment on consent. (ECF No. 38.)
The Amended Answer generally asserts that Defendants "are without the knowledge or information sufficient to form a belief as to the truth of the allegations." However, Hibbert: (1) admits to "entering into [the Administration Agreement] with KOK NY on June 17, 1994" (Am. Answer ¶ 22); (2) denies signing the Administration Agreement Addendum or December 1997 letter acknowledging the assignment from KOK NY to KOK UK (Am. Answer ¶¶ 46-53); (3) admits releasing claims related to the Universal Compositions (Am. Answer ¶ 59); (4) admits filing the 2013 Lawsuit (Am. Answer ¶ 67); (5) denies agreeing to add the Additional Compositions to the Administration Agreement (Compare Am. Compl. ¶ 53, Ex. 2 with Am. Compl. ¶¶ 53, 121.); and (6) does not recall signing Schedules B-E to the Administration Agreement. (Am. Answer ¶¶ 114-16.)
Additionally, Hibbert alleges that Chetata misrepresented the purpose of the Administration Agreement by asserting that it only gave Chetata the rights to collect "tour advances" from promoters. (Am Answer ¶¶ 107-10.) Hibbert also asserts that any documents he does not recognize but appear to bear his signature "had to have been created by someone under the direct supervision or control of Chetata." (Am. Answer ¶ 122.) Finally, Hibbert maintains that Chetata held KOK NY out to be a corporation in good standing after its dissolution, and that Chetata and the KOK entities generally failed to provide regular statements and pay royalties under the Administration Agreement. (Am. Answer ¶ 124-29.)
"A motion to dismiss counterclaims is governed by the familiar standards of Rule 12(b)(6)." IDI Design Inc. v. A.O.D. Jewelry Co., No. 13-cv-08266 (CM), 2014 WL 661355, at*2 (S.D.N.Y. Feb. 19, 2014). Thus, the factual allegations in a non-movant's pleadings are accepted as true and all reasonable inferences are drawn in the non-movant's favor. Rescuecom Corp. v. Google Inc., 562 F.3d 123, 127 (2d Cir. 2009). To survive a motion to dismiss, such pleadings "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 663, 678 (2009) (citation omitted); Ruston v. Town Bd. for Town of Skaneateles, 610 F.3d 55, 59 (2d Cir. 2010). "[L]abels and conclusions" or a "formulaic recitation of the elements of a cause of action" are insufficient. Iqbal, 556 U.S. at 678 (citation omitted).
Motions for judgment on the pleadings under Rule 12(c) are governed by the same standards applicable to motions to dismiss under Rule 12(b)(6). See Cleveland v. Caplaw Enter., 448 F.3d 518, 521 (2d Cir. 2006). A "plaintiff may not secure a judgment on the pleadings when the answer raises issues of fact that, if proved, would defeat recovery." Flextech Rights Ltd. v. RHI Entm't, LLC, No. 09-cv-3462 (DC), 2010 WL 245570, at *1 (S.D.N.Y. Jan. 22, 2010) (quotation marks omitted); see also Transamerica Fin. Life Ins. Co. v. Session, No. 10-cv-1328 (HB), 2010 WL 4273294, at *2 (S.D.N.Y. Oct. 28, 2010) ().
KOK UK seeks (1) a declaration of its rights in the compositions, (2) a finding that Defendants breached the Administration Agreement, and (3) a finding that Defendants breached the Settlement Agreement. KOK UK and Chetata also move to dismiss Defendants' counterclaims and third-party claims.
KOK UK seeks a judgment declaring that it is the exclusive and worldwide administrator of Hibbert's compositions, the owner of an undivided fifty percent interest in Hibbert's compositions, and co-publisher of Hibbert's compositions.
Hibbert's defense that he did not read the Administration Agreement is insufficient as a matter of law. "Under New York law, a person who signs an agreement is conclusively bound by it even if he did not read the agreement or understand its terms." Kearins v. Panalpina, Inc., 570 F. App'x 9, 10 (2d Cir. 2014) (citing Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 11-12 (1988)). Moreover, "there is no requirement in the law that consultation with a lawyer must occur in order to render a contractual obligation enforceable." Reach Music Pub., Inc. v. Warner/Chappell Music, Inc., No. 09-cv-5580 (KBF), 2014 WL 5861984, at *7 (S.D.N.Y. Nov. 10, 2014) (quotation marks omitted).1
Hibbert also asserts that he was unaware of the KOK UK assignment. But the Administration Agreement is binding upon any "assigns" and does not require a counterparty's consent to assignment. Because it is unclear how his lack of knowledge would...
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