SBK Catalogue Partnership v. Orion Pictures

• Decision Date: 13 September 1989
• Docket Number: Civ. No. 85-4983 (CSF).
• Citation: 723 F. Supp. 1053
• Parties: SBK CATALOGUE PARTNERSHIP, Plaintiff, v. ORION PICTURES CORPORATION, et al., Defendants. SBK CATALOGUE PARTNERSHIP, Plaintiff-Crossclaimant, v. Wandra MERRELL, Ray Allen, George Brown and Wandra Merrell d/b/a Music Productions Co., Plaintiffs-Cross-claimants.
• Court: U.S. District Court — District of New Jersey

723 F. Supp. 1053

SBK CATALOGUE PARTNERSHIP, Plaintiff, v. ORION PICTURES CORPORATION, et al., Defendants.

SBK CATALOGUE PARTNERSHIP, Plaintiff-Crossclaimant, v. Wandra MERRELL, Ray Allen, George Brown and Wandra Merrell d/b/a Music Productions Co., Plaintiffs-Cross-claimants.

Civ. No. 85-4983 (CSF).

United States District Court, D. New Jersey.

September 13, 1989.

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Sills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A. by Jeffrey Barton Cahn, Newark, N.J., for plaintiff-crossclaimant SBK Catalogue Partnership.

David Hoffman, Creskill, N.J., for plaintiffs-crossclaimants Merrell, Allen, Brown and Wanessa Music Productions Co.

CLARKSON S. FISHER, District Judge.

This action stems from an alleged copyright infringement of the composition "Pepino, The Italian Mouse" ("Pepino") and the corollary dispute over ownership rights to the musical piece which ensued. The litigation, long marked by bitterness and acrimony among the parties, is once again before the court. Presently, plaintiff-crossclaimant SBK Catalogue Partnership (the "Partnership") moves the court for an order granting it summary judgment on each of the following crossclaims against plaintiffs-crossclaimants Wandra Merrell ("Merrell"), Ray Allen ("Allen"), George Brown ("Brown") and Wanessa Music Production Co. ("Wanessa"): (1) copyright infringement; (2) tortious interference with statutory exclusive copyright and publishing rights and with prospective economic advantage of a copyright proprietor; (3) slander of copyright title; (4) abuse of process; (5) tortious interference with contract rights and, against Merrell and Allen only, (6) breach of contract.

In addition, the Partnership seeks enhanced statutory damages on its copyright infringement claim, pursuant to 17 U.S.C. § 504(c)(2), and an award of costs, including attorney's fees pursuant to 17 U.S.C. § 505. Alternatively, the Partnership seeks an award of attorney's fees, under either Fed.R.Civ.P. 11 or 28 U.S.C. § 1927, for the alleged bad-faith litigation of Merrell, Allen, Brown and Wanessa. With regard to the remaining claims, the Partnership requests that the issue of damages be submitted to the jury.¹ Merrell, Allen, Brown and Wanessa (for purposes of brevity, these parties shall hereinafter be referred to as the "composers") oppose the Partnership's motion for summary judgment and cross-move for summary judgment on their breach of fiduciary duty crossclaim against the Partnership. In addition, the composers seek an order striking the pleadings of the Partnership, as well as attorney's fees and costs, pursuant to Fed.R.Civ.P. 37, for the Partnership's alleged failure to comply with a discovery order issued by the Honorable Freda L. Wolfson, United States Magistrate, on May 1, 1989, regarding the date on which the deposition of James F. Lightstone would be taken. Finally, the Partnership has cross-moved for an order dismissing the composers' breach of fiduciary duty claim pursuant to Fed.R.Civ.P. 12(b)(6)² or, in the alternative, granting it summary judgment pursuant to Fed.R.Civ.P. 56.

Procedural History

For purposes of clarity, it is necessary to recount some of the tortured history of this litigation. I shall attempt to be brief. In 1962, Merrell and Allen composed the original melody and lyrics to "Pepino." That same year, they assigned all rights to Romance Music, Inc. ("Romance").³ The agreement between Merrell and Allen and Romance was a complete assignment of all present and future rights of the composers in exchange for royalties and was made assignable without restriction. Romance immediately assigned fifty percent (50%) of its copyright interest to Ding Dong Music Corporation ("Ding Dong").⁴ Romance and Ding Dong then applied for joint registration of the "Pepino" copyright.

In 1967, Romance assigned all of its rights in "Pepino" to Unart Music Corporation ("Unart") and recorded the assignment with the Copyright Office. Unart retained its rights pursuant to the agreement until 1983, when it assigned its 50% ownership rights to CBS, Inc. Again, this assignment was publicly recorded with the Copyright Office. Later that year, CBS, Inc. transferred all of its rights to "Pepino," by a publicly-recorded assignment, to the Partnership (then CBS Catalogue Partnership). Thus, in 1983, the Partnership acquired a 50% ownership interest in the copyright to "Pepino," which it retains to date.

In 1984, Orion Pictures released a Woody Allen film entitled "Broadway Danny Rose." Believing that part of the soundtrack (i.e., the song Agita) to "Broadway Danny Rose" infringed on the copyright to "Pepino," the original composers, Merrell and Allen, and their manager, George Brown, immediately began writing to CBS, Inc. to notify it of the alleged infringement, demanding that it initiate a lawsuit.⁵ When CBS, Inc. failed to take any action, the composers sent correspondence dated January 3, 1985, stating that they were cancelling the conveyance of ownership rights to "Pepino" which had been assigned to CBS, Inc. by Unart in 1967. On January 24, 1985, the composers entered into a new publishing agreement with Wanessa⁶ entitled "Songwriters Contract" which warranted that "Pepino" was an original work of Merrell and Allen and that the composers had complete power to enter into the agreement. The agreement also warranted that no adverse claims existed with regard to the musical composition.

In October 1985, Merrell, Allen and Brown instituted a lawsuit, based on copyright infringement, against Orion Pictures Corporation, Woody Allen, Jack Rollins, Charles H. Joffe, Jack Rollins & Charles H. Joffe Productions, Inc., Nick Apollo Forte, Vestron, Inc., Eric Pleskow, Versatility Music and Fan Records (the "Orion Defendants"). At the same time, the composers commenced a separate action in this court against CBS Songs, a division of CBS, Inc., alleging that they were damaged by the publisher/copyright owner's delay in commencing copyright infringement proceedings against the Orion defendants. Jurisdiction over this suit was based on 28 U.S.C. § 1332, diversity jurisdiction; however, because diversity was not complete as between all plaintiffs and all defendants, the action was dismissed by consent order on February 6, 1986.

In anticipation of the dismissal of the second federal action, the composers filed an identical suit in the Superior Court of New Jersey, Law Division, Bergen County, on January 21, 1986. The state action was dismissed on motion by defendant CBS Songs, a division of CBS, Inc., on June 25, 1986. As noted earlier, the state court found that CBS Songs was not a legal or beneficial owner of the "Pepino" copyright at the time of the alleged infringement. Since it lacked standing to sue, in the first instance, it could not be held liable to the composers for any damages which resulted from the alleged "delay."

On March 12, 1986, Brown, purporting to be President of Wanessa, sent a letter to Broadcast Music, Inc. ("BMI"), a major United States performing rights society, demanding that BMI amend its records to reflect that Wanessa is to receive whatever royalties BMI would have sent to the current record publisher for use of "Pepino." BMI complied. On March 25, 1986, Brown sent a letter to "All Sub-Publishers World-Wide," informing them that Wanessa had acquired the 50% interest in "Pepino" held by the Partnership and was currently the administrator of the copyright. Also, in March 1986, a second copyright infringement suit was instituted in this court against the Orion defendants, this time by Wanessa. On April 8, 1986, Allen, Merrell and Brown filed for copyright registration, claiming a copyright in the words and music (originally copyrighted) and new additional words to a work entitled "Pepino, The Italian Mouse." Finally, on May 27, 1986, Brown sent correspondence to the Canadian Music Reproduction Rights Agency, Ltd., a Canadian performing rights society, asserting the identical claim to royalties which had been made to BMI.

In May 1986, the Partnership, as a 50% copyright owner and the exclusive publisher of "Pepino," filed a motion to intervene in the first federal copyright infringement action instituted by the composers in this court against the Orion defendants (the October 1985 action). The composers opposed the motion to intervene. On July 3, 1986, before the motion was resolved, the Partnership commenced its own infringement action against the Orion defendants, and in the same suit asserted several pendent state law claims against the composers based on their attempt to cancel the copyright-publishing rights owned by the Partnership through the letters sent to CBS, Inc. Upon learning of the Wanessa action, the Partnership filed a motion to consolidate its July 1986 infringement suit, the March 1986 infringement suit and the October 1985 infringement suit commenced by the composers. Again, the composers opposed the motion.

In August 1986, the composers filed an answer, counterclaim and third-party complaint against CBS Songs, a division of CBS, Inc. in the July 1986 infringement action brought by the Partnership (notwithstanding the dismissal of its claim against this entity in the earlier state court action). Shortly after the composers filed these federal pleadings, they filed a second state court action alleging the identical "delay" claim and naming CBS, Inc. and CBS Catalogue Partnership as defendants. Both defendants moved for dismissal based on the existence of a pending federal action in which this claim had been asserted. Although the motion was denied, the case was placed on "inactive status."

In September 1986, this court granted the Partnership's motion to consolidate, thus rendering moot the Partnership's earlier motion to intervene in the composers' October 1985 infringement action. CBS Songs, a division of CBS, Inc. moved for dismissal of the third-party complaint, asserting the res judicata...