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CARTER v. GOODMAN GROUP MUSIC PUBLRS.

March 15, 1994

TOLLIE CARTER, individually and as administrator of the Estate of CALVIN CARTER, the Estate of JAMES BRACKEN and the Estate of VIVIAN BRACKEN, CALVIN CARTER, JR., CONRAD PUBLISHING CO., INC., TOLLIE MUSIC INC., GLADSTONE PUBLISHING CORP., and COSTOMA MUSIC PUBLISHING, Plaintiffs,
v.
THE GOODMAN GROUP MUSIC PUBLISHERS, ARC MUSIC CORP., GENE GOODMAN, PHILIP CHESS and SUNFLOWER MUSIC, INC., Defendants.



The opinion of the court was delivered by: JOHN S. MARTIN, JR.

 JOHN S. MARTIN, Jr., District Judge:

 Tollie Carter and Calvin Carter, Jr., the individual plaintiffs in this action, are the sons of Calvin Carter, Sr. ("Carter Sr.") and the nephews of James Bracken ("Bracken"). Carter Sr. and Bracken were composers who died in 1986 and 1972, respectively. The other plaintiffs are music publishing companies previously owned by either Carter Sr. or Bracken. Defendants Sunflower Music, Inc. ("Sunflower") and Arc Music Corp. ("Arc") are music publishing companies owned by the individual defendants Gene Goodman and Phillip Chess. The two defendants' companies are known together as the Goodman Group Music Publishers.

 FACTS

 This case arises out of certain music publishing, purchase and loan agreements between Carter Sr., Bracken and defendants made during the late 1960's and 1970's. In 1965, defendants purchased the publishing catalogues of Tollie Music, Inc. ("Tollie Music"), Conrad Publishing Co., Inc. ("Conrad"), and Gladstone Music, Inc. ("Gladstone") for $ 200,000. *fn1" See Defendants' Exhibits L and M. Upon purchasing these catalogues, defendants assumed the songwriter agreements which Tollie Music and Conrad had made with Carter Sr in the late 1950's. Under the songwriter agreements, Carter Sr. had relinquished his rights in many of his compositions, including renewal rights, in exchange for royalty payments. See Defendants' Exhibits GG, HH, and II.

 Bracken, his wife Vivian, and Carter Sr. were officers and directors of Tollie Music, Conrad and Gladstone. In conjunction with the purchase agreement, the Brackens and Carter Sr. personally guaranteed and warranted that their companies were the sole and exclusive owners of the compositions in the catalogues they were selling. See Defendants' Exhibits O, P and Q. Upon determining after the sale that many of the works so warranted were in fact not owned by Tollie Music, Conrad or Gladstone, and that several other music publishers claimed rights to many of the other compositions in the catalogues defendants had purchased, defendants stopped paying royalties to Bracken.

 In 1968, Carter Sr. borrowed $ 5,000 from defendants and pledged his rights in certain compositions as collateral. See Defendants' Exhibit X. When the loan was not repaid, defendants ceased paying royalties to Carter Sr. In 1979, Carter Sr. sought additional money from defendants, claiming for the first time that he had co-authored the composition "Goodnight, Sweetheart, Goodnight," which was generating a significant amount of income, and that Conrad had no right to sell his interest in the song to defendants. In an attempt to settle Carter Sr.'s claim, Arc agreed to pay him $ 4,000 in exchange for Carter Sr.'s relinquishment of all rights to receive royalties from the exploitation of his compositions. See Defendants' Exhibit EE ("the 1979 Agreement").

 Plaintiffs filed this action in April, 1992, alleging copyright infringement, breach of contract, breach of fiduciary duty, fraud and seeking equitable relief. All of plaintiffs' claims, despite their varied labels, essentially seek to recover for defendants' failure to pay royalties to Carter Sr. and Bracken. Defendants have moved this Court for summary judgment on all claims pursuant to Fed. R. Civ. P. 56.

 Summary judgment is proper when there is no genuine issue of material fact and, based upon facts not in dispute, the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). Summary judgment may be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case." Celotex, 477 U.S. at 322, 106 S. Ct. at 2552.

 The Copyright Claims

 Plaintiffs' first claim for copyright infringement alleges that defendants have illegally exploited the renewal copyrights in nine compositions authored by Carter Sr. Plaintiffs argue that they -- not defendants -- own the renewal copyrights in these songs and therefore seek compensation for defendants' exploitation of the compositions after the beginning of the renewal term. *fn2"

 It is undisputed that seven of the compositions were originally copyrighted in 1958 and were renewed by defendant Arc on behalf of Carter Sr. on Jan. 27, 1986 for a renewal term commencing on January 1, 1987. It is further undisputed that by virtue of defendants' purchase of the Conrad, Tollie Music and Gladstone publishing catalogues in 1965, defendants became assignees of the renewal rights in Carter Sr.'s compositions.

 Despite these facts, plaintiffs Tollie Carter and Calvin Carter, Jr. contend that they are entitled to the renewal copyrights because Carter Sr. died in July 1986, before the first day of the renewal term, and therefore defendants' renewal copyrights did not vest.

┬áSection 304 (a) of the Copyright Act of 1976, which governs plaintiffs' claims, provides that an author, if still living, may renew his copyright by application to the Copyright Office at any time during the last year of the original copyright term. 17 U.S.C. ┬ž 304(a)(1977). However, in the event that an author is no longer living, Section 304(a) provides that his widow, children, or next of kin have the right to apply for a renewal term. Id. The Supreme Court has interpreted this provision to mean that "when an author dies before the renewal period arrives, his executor is entitled to the renewal rights, even though the author previously assigned his renewal rights to another party." Stewart v. ...


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