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United States District Court, Southern District of New York

November 8, 1990


The opinion of the court was delivered by: Kram, District Judge.


Plaintiff brought this copyright infringement action to recover monetary damages arising from defendant's alleged wrongful use of the song "A Girl Named Kim" on a recent album produced by defendant Cold Chillin' Records ("Cold Chillin'"). Defendants failed timely to interpose an answer and plaintiff moved for entry of a default judgment, which judgment was filed on February 8, 1990. Cold Chillin' now moves, pursuant to Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure, for an order setting aside the default judgment.


On March 15, 1983, plaintiff Frost Belt International Recording Enterprises, Inc. d/b/a Tuff City Records ("Tuff City") entered into a written contract with Curtis Fisher ("Fisher"), a "rap" musician, which provides generally for Fisher to render his services as a recording artist exclusively to Tuff City (the "Contract").*fn1 Pursuant to the Contract, Fisher recorded a number of rap compositions, including the one that is the subject of this litigation, "A Girl Named Kim."*fn2 On March 23, 1985, Street Tuff Tunes and Curtis Fisher, as Publisher, entered into a separate agreement with Curtis Fisher, which expressly conveys to Street Tuff Tunes the "title, words and music, and all copyrights thereof" to all compositions written by Fisher and recorded pursuant to the Contract (the "Standard Songwriters Contract").*fn3

On September 7, 1989, Aaron Fuchs ("Fuchs"), Tuff City's president, "heard Marcel Hall, a rap artist professionally known as `Biz Markie,' perform Mr. Fisher's musical composition live on the radio station WBLS." Fuchs Aff. at ¶ 17. Knowing that Biz Markie was signed to Cold Chillin', Fuchs immediately telephoned Leonard Fitchelberg ("Fitchelberg"), Cold Chillin's president, and informed him of Tuff City's rights in "A Thing Named Kim," the name attributed to Fisher's composition "A Girl Named Kim" as performed by Biz Markie. Fuchs Aff. at ¶ 18. Fitchelberg stated that Biz Markie had already recorded the song, under the title "A Thing Named Kim," for a soon to be released album, and that it was too late to pull the song from the album. Fuchs Aff. at ¶ 19. "At the same time, Mr. Fitchelberg did not dispute that the composition was written by Mr. Fisher, who was under exclusive contract with Tuff City. He said from the outset that he just wanted to work out a monetary settlement." Id.

On September 11, 1989, Tuff City filed a certificate of copyright registration for "A Girl Named Kim" with the United States Copyright Office (the "Registration Certificate"). Tuff City's response to Registration Certificate question 2(a) indicates the work is not one "made for hire," and Tuff City's response to Certificate question 4 indicates that Tuff City obtained ownership of the copyright to "A Girl Named Kim" "by written agreement." Fuchs Aff. Exhibit "B".

On October 18, 1989, at a meeting at which Tuff City General Counsel, Daniel Nooger ("Nooger"), and Fuchs had with Fitchelberg at Cold Chillin's office, Fitchelberg stated that Cold Chillin's attorney was Alan Skiena, Esq. ("Skiena"), who would draw up a written settlement agreement for their review. Fuchs Aff. at ¶ 22. Based on Fitchelberg's representation that Skiena was Cold Chillin's attorney, plaintiff sent by facsimile transmission two letters, dated October 27 and November 2, 1989, respectively, concerning plaintiff's failure to receive a draft settlement agreement. Fuchs Aff. at ¶ 23, Exhibit "G". On November 14, 1989, Skiena contacted Nooger and advised that he was not Cold Chillin's attorney but had been Biz Markie's attorney, and was now being replaced by Roderick Plummer, Esq. ("Plummer"). Fuchs Aff. at ¶ 24.

By certified letter dated November 14, 1989, Fuchs wrote, at Fitchelberg's request, to Bert Padell of the accounting firm of Padell, Nadell, Fine, Weinberger & Co., concerning resolution of the dispute and advised that "[i]f this matter is not resolved by September 21 [sic], we will take legal action to have a restraining order issued to stop the manufacture, distribution and sale of the infringing recording." Fuchs Aff. Exhibit "H". Mr. Padell responded by indicating, in a telephone conversation with Nooger, that "he was Biz's accountant only, and not Cold Chillin's." Fuchs Aff. at ¶ 26.

By certified letter dated November 17, 1989, Fuchs wrote directly to Fitchelberg. Fuchs Aff. Exhibit "H". The closing paragraph of this letter reiterates the possibility of imminent litigation and provides: "[i]f we do not receive a written ratification of our [settlement] agreement by November 21, we will take legal action to have a restraining order issued to stop the manufacture, distribution and sale of the infringing recording." Fuchs Aff. Exhibit "H".

On November 20, 1989, Nooger spoke with Plummer, who advised that as of November 17, 1989, he was Biz Markie's attorney. Affidavit of Daniel Nooger, sworn to on June 6, 1989, at ¶ 7 ("Nooger Aff."). On November 29, 1989, Nooger again spoke with Plummer and advised Plummer that Tuff City would commence suit against Cold Chillin' if the dispute was not promptly resolved.

Having failed to resolve the dispute, Tuff City commenced this action on December 15, 1989, and on that date caused a copy of the summons and complaint to be personally served upon Cold Chillin'. On January 4, 1990, Cold Chillin's time to answer or move with respect to the complaint expired and no request to extend such time had been directed to plaintiff or its attorneys.

On January 26, 1990, Plummer's secretary phoned Nooger to request an "extension" though she did not state on whose behalf the extension was sought; Nooger advised Plummer's secretary that he would "get back to her" but did not. Nooger Aff. at ¶ 13. Thereafter, Plummer made no further attempt to contact Nooger. Also on January 26th, Tuff City filed for entry of a default judgment,*fn4 which judgment subsequently was filed with the Clerk on February 8, 1990.*fn5

On February 9, 1990, Nooger received a telephone call from Robert Cinque, Esq. ("Cinque") of the firm of Cinque & Cinque, who stated that he was Cold Chillin's attorney. Cinque requested that plaintiff stipulate to vacate the default judgment. Plaintiff refused to do so. By letter dated February 15, 1990, Cold Chillin', by its attorneys, Vladeck, Waldman, Elias & Engelhard, P.C., wrote to the Court requesting permission to make the instant motion, which permission was granted.

Defendant Cold Chillin' contends that the default judgment against it should be vacated and argues that (a) Cold Chillin' has meritorious defenses to plaintiff's claim, (b) plaintiff will not suffer "substantial prejudice" if the default judgment is vacated and (c) Cold Chillin' is entitled to have the default judgment vacated regardless of a finding of willful failure to timely respond to the complaint. Plaintiff strenuously opposes the motion and contends that Cold Chillin's default was willful and part of an overall dilatory strategy, and that Cold Chillin's defenses are frivolous and barred by the express terms of the Contract. For the reasons set forth below, the Court finds that Cold Chillin' has failed to establish good cause for setting aside the default judgment, and its motion should be denied.


In accordance with Rule 55 of the Federal Rules of Civil Procedure, the court "[f]or good cause shown . . . may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)." Fed.R.Civ.P. 55(c). Rule 60(b) provides, in relevant part:

  the court may relieve a party or a party's legal
  representative from a final judgment, order, or
  proceeding for the following reasons: (1) mistake,
  inadvertence, surprise or excusable neglect; (3)
  fraud . . . misrepresentation, or other misconduct
  of an adverse party; (4) the judgment is void; . .
  . or (6) any other reason justifying relief from
  the operation of the judgment. . . .

Fed.R.Civ.P. 60(b). In determining whether to set aside a default judgment*fn6 a court must consider (1) whether the default was willful, (2) whether the moving party has presented a meritorious defense, and (3) whether the party who secured the default would be prejudiced by setting it aside. See Brock v. Unique Racquetball and Health Clubs, Inc., 786 F.2d 61 (2d Cir. 1986); Marziliano v. Heckler, 728 F.2d 151, 156 (2d Cir. 1984); Traguth v. Zuck, 710 F.2d 90, 94 (2d Cir. 1983). Notwithstanding the general rule in this Circuit that "defaults are not favored," Meehan v. Snow, 652 F.2d 274, 277 (2d Cir. 1981), and "the strong policies favoring the resolution of genuine disputes on their merits," see Traguth, supra, 710 F.2d at 94, the Court declines to set aside the default judgment on the clear and convincing evidence of Cold Chillin's willful default and the absence of a meritorious defense to plaintiff's action.

I. Cold Chillin's Default

The Court draws the inescapable conclusion that Cold Chillin's default in responding to the complaint was willful rather than the result of any neglect, excusable or otherwise. As a result of the numerous communications between the parties (and Cold Chillin's designees on certain occasions) Cold Chillin' was fully apprised of the imminent litigation against it. Plaintiff's in-hand delivery of a copy of the summons and complaint to Cold Chillin's managing agent at Cold Chillin's 1966 Broadway offices establishes not only proper service but that the service effected insured immediate delivery of the process to a Cold Chillin' management-level employee rather than a mere agent designated to accept process. Indeed, Cold Chillin' neither contests the manner of service nor argues that the process never reached a management-level official.

In fact, there is every indication that Cold Chillin' deliberately ignored the summons and complaint. Despite the parties' extensive submissions,*fn7 Cold Chillin' fails to submit an affidavit from a single person with personal knowledge of the circumstances of its default in responding to the complaint, and advances absolutely no explanation for its default.*fn8 Such utter failure to explain the default effectively precludes a finding of excusable neglect. Standard Newspapers, Inc. v. King, 375 F.2d 115 (2d Cir. 1967); Original Appalachian Artworks v. Yuil Int'l Trading Corp., 105 F.R.D. 113 (S.D.N.Y. 1985); Robinson v. Bantam Books, Inc., 49 F.R.D. 139 (S.D.N.Y. 1970). Moreover, Cold Chillin's having instructed plaintiff to contact Biz Markie's attorneys (Mr. Plummer) and accountants (the Padell firm) also indicates that Cold Chillin' was attempting to shift responsibility for resolving the matter to Biz Markie both prior and subsequent to service of process. Cold Chillin's apparent stonewalling in this fashion, after admitting that "A Thing Named Kim" was written by Mr. Fisher and indicating that Cold Chillin' wanted to work out a monetary settlement, tends to confirm its dilatory strategy and the wilfulness of its default.

In reaching the conclusion that Cold Chillin's default was wilful, the Court need not speculate as to whether any animus toward this Court or perceived strategic advantage motivated Cold Chillin's default. In either case, Cold Chillin', having made its decision to ignore this action, will be bound to it. Cf. Brand v. NCC Corp., 540 F. Supp. 562 (E.D.Pa. 1982). However, in light of established precedent in this Circuit, see Marziliano v. Heckler, supra, the Court declines to follow the approach of the district court in Brand, in which the court indicated that where a party intentionally chooses to ignore a action, a default judgment should not be set aside regardless of meritorious defenses. 540 F. Supp. at 564.*fn9 In accordance with Marziliano, therefore, the Court shall consider the merit of Cold Chillin's defenses to plaintiff's claim.

II. Proffered Defenses

Cold Chillin' proffers various defenses to plaintiff's copyright claim, including the following: (1) plaintiff is not the owner of the copyright to the composition in question; (2) there has been no infringement with respect to the "music" (as opposed to the lyrics, which Cold Chillin' does not dispute are identical to those of the Fisher composition, "A Girl Named Kim"); and (3) plaintiff's claims for conversion and malicious interference with business opportunities are preempted by the Copyright Act, warranting dismissal of the complaint.

A. Copyright Ownership

Cold Chillin's first claimed defense is that plaintiff did not obtain a valid copyright to "A Girl Named Kim" because the Contract does not apply to that song. Cold Chillin' reasons as follows:

  The recording contract provides that plaintiff
  acquires ownership rights in Master Recordings and
  that all Master Recordings are works made for
  hire. In its application to the Copyright office,
  however, plaintiff stated that "A Girl Named Kim"
  was not a work made for hire. Because the recording
  "A Girl Named Kim" was not a work made for hire, it
  was not a Master Recording under the recording
  contract, and Tuff City Records did not acquire
  ownership rights in the song.

Defendant's Memorandum at 3 ("Def. Mem."). In light of the operative language of the Contract, Cold Chillin's argument is utterly implausible.

The Contract indeed provides that all Master Recordings are works made for hire and shall be the sole property of Tuff City. Cold Chillin's counsel, however, deliberately excises from its Memorandum and replaces with an ellipsis, Def. Mem. at 10, the Contract's operative language, apparently hoping that the Court and plaintiff's counsel would somehow gloss over the conspicuously absent text. Contract paragraph 7.01 provides, in its entirety:

    Each Master Recording made under this agreement
  or during its term, from the Inception of
  Recording, will be considered a "work made for
  hire" for Tuff City, if any such Master Recording
  is determined not to be a "work made for hire" it
  will be transferred to Tuff City by this agreement,
  together with all rights in it. All Master
  Recordings made under this agreement or during its
  term, from the Inception of Recording, and all
  Matrices and Phonograph Records manufactured from
  them, together with all performances embodied on
  them, shall be the sole property of Tuff City, free
  from any claims by you or any other Person; and
  Tuff City shall have the exclusive right to
  copyright those Master Recordings in its name as
  the author and owner of them and to secure any and
  all renewals and extensions of such copyright
  throughout the world. . . .*fn10

Contract paragraph 12.01 goes on to provide:

    You grant to Tuff City an irrevocable license,
  under copyright, to reproduce each Controlled
  Composition on Phonograph Records and distribute
  them in the United States and Canada.

Contract ¶ 12.03 makes clear that plaintiff's license to reproduce each Controlled Composition is essentially exclusive. It provides, in relevant part:

    If the copyright in any controlled composition
  is owned or controlled by anyone else, you will
  cause that Person to grant Tuff City the same
  rights described in paragraphs 12.01 and 12.02, on
  the same terms. If the copyright in any controlled
  composition is transferred, the transfer will be
  made subject to this agreement.

Contract at ¶ 12.03.

The Contract could be no clearer in defining Tuff City's ownership of the copyright to recordings made by Fisher as well as its exclusive license, under copyright, to reproduce Controlled Compositions.*fn11 The language of paragraph 7.01 expressly grants Tuff City exclusive copyright ownership of each Master Recording whether or not such recording is deemed a work made for hire.*fn12 Thus, as long as "A Girl Named Kim" is a Master Recording*fn13 and Controlled Composition under the Contract, and the facts indicate that "A Girl Named Kim" is both, Tuff City has the exclusive right to distribute on phonorecords "A Girl Called Kim."

Cold Chillin's argument that Fisher's belief that "A Girl Named Kim" is not a Master Recording "because it was never pressed," as expressed in a letter to Cold Chillin' counsel (Garcia Aff. Exhibit "E"), is equally unavailing. The Contract makes plain that it was unnecessary for Tuff City to actually press phonograph records of "A Girl Named Kim" in order to retain all copyrights granted to it under the Contract. Contract at ¶ 14.01.

The Court also flatly rejects the contention that Aaron Fuchs, president of Tuff City, orally "agreed" that Fisher could sell the song to Biz Markie. Garcia Aff. Exhibit "E". There is no admissible evidence supporting this allegation*fn14 which, in any event, is precluded by paragraph 18.02(a) of the Contract (a no oral modification/merger clause)*fn15 as well as the Copyright Act itself which provides, in relevant part:

  A transfer of Copyright ownership, other than by
  operation of law, is not valid unless an
  instrument of conveyance, or a note or memorandum
  of the transfer, is in writing or signed by the
  owner of the rights conveyed or such owner's duly
  authorized agent.

17 U.S.C. § 204(a) (1988).

B. Copyright Infringement

Cold Chillin's next proffered defense is that despite an identity of lyrics between "A Girl Named Kim" and Biz Markie's "A Thing Named Kim," plaintiff is unable to establish infringement with respect to the "music" because Biz Markie is prepared to testify that the music of "A Thing Named Kim" differs from that of "A Girl Named Kim." Compounding Cold Chillin's failure to provide any evidentiary support for this claim (or explain why Biz Markie's testimony is not now before the Court in proper evidentiary form) is Fuchs' uncontradicted testimony that:

  rap music consists of a highly rhythmic monologue,
  which is spoken by the recording artist over a
  drum beat that underscores the rhythm. The heart
  of any rap recording is the verbal message over a
  drum beat . . . I have listened to the Biz Markie
  recording. Like our recording it uses a
  machine-created drum track. All that it adds is a
  three-note bass line from time to time . . .

Fuchs Aff. at ¶¶ 32-34. In addition, Cold Chillin' fails to
explain why, if the "music" to "A Thing Named Kim" was
copyrightable material discrete from the lyrics, the cassette
package for "The Biz Never Sleeps," the album containing the
song "A Thing Named Kim," credits the lyrics to Biz Markie but
attributes to no one authorship of the "music." Fuchs Aff.
Exhibit "J". The record thus fails to support Cold Chillin's
claim that the "music" of "A Thing Named Kim" is sufficiently
different from that of "A Girl Named Kim" to defeat plaintiff's
claim of infringement with respect to the work as a whole. See
Shapiro, Bernstein & Co. v. Jerry Vogel Music Co., 73 F. Supp. 165
 (S.D.N.Y. 1947); Norden v. Oliver Ditson Co., 13 F. Supp. 415
 (D.Mass. 1936).

Cold Chillin's corollary to this argument is that plaintiff owns the copyright only to the sound recording of "A Girl Named Kim" but not to the lyrics themselves. In support of this argument, Cold Chillin' relies on the doctrine, correct in itself, that the copyright to a sound recording does not necessarily extend to the "copyrighted literary, musical or dramatic work embodied in the sound recording and fixed on a phonorecord. . . ." Def. Reply Mem. at 3 (quoting T.B. Harms Co. v. JEM Records, 655 F. Supp. 1575 n. 1 (D.N.J. 1987)). Here, however, the Standard Songwriters Contract between Street Tuff Tunes and Fisher, dated March 23, 1985, expressly conveys to Street Tuff Tunes, plaintiff's affiliate (Fuchs Reply Aff. Exhibit "K"), the "title, words and music, and all copyrights" to all compositions written and recorded by Fisher pursuant to the Contract. The Court therefore rejects Cold Chillin's argument that plaintiff has no copyright interest in the music and lyrics to "A Thing Called Kim".*fn16

C. Preemption Under the Copyright Act

Cold Chillin's next proffered defense is that the default judgment must be set aside because plaintiff's causes of action are preempted by the Copyright Act, 17 U.S.C. § 301.*fn17 This defense also fails. Review of the complaint establishes that although plaintiff employs the word "converted" in each of the first four claims, and the words "deliberately and maliciously interfered with plaintiff's business opportunities" in the fifth claim, Complaint at ¶¶ 18, 22, 26, 31 and 34, plaintiff nevertheless states a claim sounding in copyright. Plaintiff incorporates by reference the following allegations into each of the complaint's claims: (a) plaintiff's action is one brought pursuant to "28 U.S.C. § 1338, in that it arises under an Act of Congress relating to copyright"; (b) "Tuff City is the sole proprietor of the United States copyright in a recording entitled `A Girl Named Kim'; and (c) Tuff City has filed with the United States Copyright Office a request for a Certificate of Registration for `A Girl Named Kim' . . . and may commence a copyright infringement action even though a formal Certificate of Registration has not yet been issued." Complaint ¶¶ 6-8. On the basis of these (and other copyright-related allegations) of the complaint, the Court doubts neither that the gravamen of Plaintiff's claim is copyright infringement nor that plaintiff has satisfactorily pleaded an infringement claim under the Copyright Act. Whatever else the complaint may allege, it provides fair and adequate notice of plaintiff's copyright claim. See Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Conan Properties, Inc. v. Mattel, Inc., 601 F. Supp. 1179 (S.D.N Y 1984).

Plaintiff's allegation that its claim arises under the Copyright Act, together with its satisfactory allegations of copyright infringement, easily distinguishes this case from Mayer v. Josiah Wedgewood & Sons, Ltd., 601 F. Supp. 1523 (S.D.N.Y. 1985), in which the court found plaintiff's common law claims of conversion and unfair competition preempted under the Copyright Act, 17 U.S.C. § 301. In Mayer, unlike this case, plaintiff alleged no claim under the Copyright Act and relied exclusively on its common law tort claims. Plaintiff did so apparently because no copyright claim could be stated on account of plaintiff having permitted the material in which she asserted a proprietary interest to be published without first securing federal copyright protection. 601 F. Supp. at 1532, 1536 (citing Decorative Aides Corp. v. Staple Sewing Aides Corp., 497 F. Supp. 154, 161 (S.D.N.Y. 1980), aff'd, 657 F.2d 262 (2d Cir. 1981)).*fn18 The court went on to hold that plaintiff's common law claims were preempted by the copyright laws, 17 U.S.C. § 301. Mayer, 601 F. Supp. at 1534-37.

Mayer's preemption analysis is insufficient to warrant setting aside the default judgment because in Mayer, plaintiff's failure to allege a copyright claim together with its apparent inability to state a valid copyright claim had it pleaded one, appear to have been the deciding factors in the court's decision to grant defendant's motion for summary judgment on preemption grounds. 601 F. Supp. at 1352-56. Application of Mayer to bar plaintiff's copyright claim here would be tantamount to holding that plaintiff has failed to allege a valid claim under the Copyright Act. In light of the express copyright allegations of the complaint, the Court refuses to do so. Moreover, plaintiff's consent to withdrawal of all claims other than a claim under the Copyright Act, see Fuchs Aff. at ¶ 2, cures any technical pleading defect in the complaint. Thus, rather than set aside the default judgment as a result of common law claims that the complaint may contain, the Court will direct that an inquest be held with respect only to those damages or other relief obtainable under the Copyright Act, 17 U.S.C. § 501 et seq.

III. Attorneys' Fees

Under the Copyright Act, the Court may in its discretion "allow the recovery of full costs by or against any party other than the United States or an officer thereof . . . [and] may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505 (1988). Because the Copyright Act is intended to encourage suits to redress copyright infringement, fees are awarded to a prevailing plaintiff as a matter of course. Whimsicality, Inc. v. Rubie's Costume Co., Inc., 891 F.2d 452 (2d Cir. 1989); Roth v. Pritikin, 787 F.2d 54 (2d Cir. 1986); Diamond v. Am-Law Publishing Corp., 745 F.2d 142 (2d Cir. 1984). Accordingly, plaintiff is entitled to recover, upon proper proof, its attorneys' fees reasonably incurred opposing this motion.


For the reasons set forth above, the Court finds Cold Chillin's failure to respond to the complaint willful rather than the result of any excusable neglect, and Cold Chillin's purported defenses void of merit. Cold Chillin' has failed to establish good cause for vacating the default judgment and, accordingly, its motion to set aside the default judgment is denied. The matter shall be referred to a United States Magistrate who shall conduct an inquest to determine the damages sustained by plaintiff and recoverable under the Copyright Act, as well as plaintiff's costs and reasonable attorneys' fees incurred opposing this motion, pursuant to 17 U.S.C. § 505.


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