3. Plaintiff's Right to an Accounting
Scotti argues that breach of contract claims 7, 8, 9, 15, 18, 19, 28, 29, 39, 40, 42, 47, 48, 50, 52, and 53 should be dismissed because Cafferty is concededly unable to specify his damages on these claims without an audit or accounting. The Court has already dismissed claims 7, 8, 18, 19, 28, 39, 42, 48, and 52 on the grounds that defendants were not contractually obligated to account to plaintiff for goods given away free for promotional purposes. Therefore, this discussion relates only to claims 9, 15, 29, 40, 47, and 53.
Scotti argues that these claims must be dismissed because plaintiff cannot prove his damages at trial with the degree of certainty required by 12 Cal. Civ. Code § 3301 (Deering 1988), which states, inter alia, that "no damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin." As Judge Sweet explained with regard to the same California statute, also in the context of a dispute between a musical recording artist and a distribution company regarding the payment of royalties, only "the fact of damages . . . must be proved with reasonable certainty," and "the amount of damages need not be calculated with reasonable certainty." Gordy Co. v. Mary Jane Girls, Inc., 1989 U.S. Dist. LEXIS 14581 at *62, 1989 WL 149290 at *23 (S.D.N.Y. 1989). In Gordy, Judge Sweet dismissed certain claims for lost profits on unproduced albums, unwritten songs and hypothetical sales that plaintiff claimed he was denied as a result of the distribution company's breach of contract. Id. at *24. In this case, Cafferty's claims are not for hypothetical lost profits, but for actual lost profits. Whether Cafferty is entitled to damages for these claims is a fact that can be determined with reasonable certainty. It is only the amount of the damages that requires a further accounting. Accordingly, § 3301 of the California Civil Code provides no basis for dismissing the claims and Scotti's motion for summary judgment as to these claims is denied.
Scotti has offered no legal authority for the argument that Cafferty is not entitled to an accounting because he could have sought such information in discovery. Moreover, an accounting to determine the amount of royalties due is an appropriate and recognized remedy in a case such as this. See Nolan v. Sam Fox Publishing Co., 300 F. Supp. 1311, 1320 (S.D.N.Y. 1969), aff'd, 499 F.2d 1394 (2d Cir. 1974) (directing an accounting to determine amount of royalties due to musical composer in breach of contract action).
As to plaintiff's cross-motion for summary judgment in this respect, there is no dispute that royalties were not paid for a substantial period of time. On the present record, however, summary judgment in favor of Cafferty is not appropriate because I cannot determine what amounts are due and owing on the contract claims that survive defendants' motions. I will consider, and the parties should be prepared to discuss at the next pretrial conference, whether the contract claims for unpaid royalties should be severed from the rest of the case and addressed by way of an accounting.
4. Unreleased Tapes
Scotti seeks summary judgment dismissing the breach of contract claims based on the Unreleased Tapes Album on grounds of waiver and estoppel. To the extent the claim is based on Scotti's failure to obtain prior approval from Cafferty, the claim is dismissed, for Cafferty ratified Scotti's release of the album. Scotti's motion is denied, however, to the extent the claim seeks payments due and owing, for Cafferty certainly did not waive his right to be paid royalties.
Scotti moves to dismiss claims 13, 25, 38, and 45 insofar as they seek additional interest on royalties due Cafferty that accrued after December 31, 1992, the date of Scotti's first tender of partial payment of past royalties, which was rejected by Cafferty.
On October 22, 1993, after litigation had commenced, Scotti sent Cafferty checks totalling $ 141,096.92 as payment for outstanding royalties. (DX 22). On July 13, 1994, Scotti sent Cafferty a check for $ 12,967.63 representing interest owed on the past due royalties. (DX 23). Scotti deliberately excluded from the July 13 payment interest that accrued after December 31, 1992, the date on which Scotti first tendered partial payment of the outstanding royalties. (DX 18). As a result of the omission of interest for the period December 31, 1992 to October 23, 1993, Cafferty claims that he is still owed $ 4,778.02. Scotti argues that Cafferty's rejection of the December 31 tender relieves Scotti of its obligation to pay interest on outstanding royalties after the date of the attempted cure.
"It is well settled that the tender of payment of a debt . . . operates to terminate all incidents of the obligation, such as interest." Litwak v. Wolkenberg, 130 A.D.2d 630, 631, 515 N.Y.S.2d 559, 560 (2d Dep't 1987). To stop the accrual of interest, the amount of the tender must have been sufficient to satisfy the debt. 83 N.Y. Jur. 2d, Payment and Tender, § 166 at 55-56 (1990). See also Affiliated Credit Adjustors v. Carlucci & Legum, 139 A.D.2d 611, 613, 527 N.Y.S.2d 426, 428 (2d Dep't 1988) ("a lawful bona fide tender of the amount due prevents the accrual of further interest"). In this case, the tender was clearly not sufficient to satisfy the amount of the debt and therefore Scotti's motion to dismiss plaintiff's claims for additional interest is denied.
Cafferty contends that Scotti's failure to account to Cafferty and failure to pay royalties for a three year period are breaches that go "to the heart of its contractual relationship with Cafferty and are sufficient to justify rescission of the contracts and reversion to Cafferty of all rights in the recordings and compositions at issue." (Pl. Mem. at 29).
The law is clear, however, that rescission is not an appropriate remedy in this case. Rescission of a contract is an "extraordinary remedy" that should be permitted only if the breach is "material and willful or, if not willful, so substantial and fundamental as to strongly tend to defeat the object of the parties in making the contract." Nolan v. Sam Fox Publishing Co., 499 F.2d 1394, 1397 (2d Cir. 1974). Applying these general principles, the Court of Appeals for the Second Circuit has held that, in the absence of fraud, a contract assigning rights in a musical composition cannot be rescinded for non-payment of royalties unless the failure to pay royalties is total. In Nolan, the assignee of a composer's copyright in a popular song failed to pay the composer 74% of the royalties due and, for a six year period, failed to pay any royalties on income from foreign sources, from licensing of the song for public performances, or from income from most printed materials. Id. at 1398. Nevertheless, the Court of Appeals held that because the defendant had made partial payment of the royalties due plaintiff, the contract could not be rescinded. Id. at 1399. See also Gordy Co. v. Mary Jane Girls, Inc., 1989 U.S. Dist. LEXIS 14581 at *124, 1989 WL 149290 at *41 (S.D.N.Y. Dec. 6, 1989) (denying claim for rescission in suit by recording artist for past royalties due to absence of an allegation of fraud or complete non-payment). In this case, there is no dispute that, on October 22, 1993, Scotti made at least partial payment of the royalties due Cafferty and there is no allegation of fraud on Scotti's part.
Accordingly, Scotti's motion for summary judgment dismissing Cafferty's claims for rescission as a matter of law is granted.
D. The Breach of Fiduciary Duty Claim
Claim XVIII asserts a breach of fiduciary duty claim. This claim is dismissed, for Cafferty simply has not presented sufficient facts from which a jury could find the special circumstances necessary for the creation of a fiduciary relationship. As Judge Martin has held,
In the absence of special circumstances, no fiduciary relationship exists between a music publisher and composers as a matter of law.
Carter v. Goodman Group Music Publishers, 848 F. Supp. 438, 445 (S.D.N.Y. 1994); accord Mellencamp v. Riva Music Ltd., 698 F. Supp. 1154, 1157 (S.D.N.Y. 1988) ("the greater weight of authority . . . teaches that the conventional publisher-author arrangement is not a per se fiduciary relationship"). The cases cited by Cafferty are not to the contrary.
Cafferty's relationship with Scotti was a conventional one. Represented by counsel, he entered into arms-length contracts with Scotti. Those contracts did not create a fiduciary relationship. Cafferty's remedy is to seek damages for breach of contract. Accordingly, Claim XVIII for breach of fiduciary duty is dismissed.
E. The Civil Rights Law Claims
Claim XIX alleges violations of sections 50 and 51 of the New York State Civil Rights Law. Section 50 prohibits the use, for purposes of advertising or trade, of a living person's "name, portrait or picture" without his prior written consent. N.Y. Civil Rights Law § 50 (McKinney 1992). Section 51 permits an individual aggrieved by a violation of section 50 to sue for injunctive relief and damages. Section 51 also provides, however, that:
nothing contained in this article shall be so construed as to prevent any person, firm or corporation . . . from using the name, portrait, picture or voice of any author, composer or artist in connection with his literary, musical or artistic productions which he has sold or disposed of with such name, portrait or picture used in connection therewith.
N.Y. Civil Rights Law § 51 (McKinney Supp. 1997). This exclusion applies to the sale or disposition of compositions, and contemplates that the sale or disposition of a composition carries with it the right to use -- accurately -- the composer's name or likeness in connection with the composition. Kamakazi Music Corp. v. Robbins Music Corp., 534 F. Supp. 69, 77 (S.D.N.Y. 1982).
Here, with one exception, genuine issues of fact exist with respect to the scope of Cafferty's consent, whether defendants' actions exceeded that consent, and whether defendants fairly and accurately used Cafferty's name in connection with compositions the rights to which were transferred to defendants. The one exception are the claims based on the Unreleased Tapes Album. For the reasons stated above, Cafferty ratified Scotti's release of the Unreleased Tapes Album and thus he has waived any claims under Sections 50 and 51 in that respect. Accordingly, the cross-motions for summary judgment as to the privacy claim are denied, except as to the Unreleased Tapes Album.
The cross-motions for partial summary judgment are granted in part and denied in part. The motions of defendants Famous and BMG are granted and denied to the same extent as the motion of defendant Scotti. To summarize:
a) Copyright Claims (Claims I through IV)
Claims I, II, and III, seeking damages for copyright infringement, are dismissed. Claim IV is dismissed to the extent that it is based on songs from the Cruisers I album or the Ritz concert. At trial, Scotti may not argue that it had or reasonably believed it had Cafferty's permission to use his copyrighted songs on the Cruisers Live album.
b) Unfair Competition (Claims V through X)
The unfair competition claims are dismissed insofar as they are based on the Unreleased Tapes album. To the extent they are based on the other "repackaged" Cruisers albums, however, the unfair competition claims raise triable issues of fact as to whether the public was or will be misled.
c) Breach of Contract Claims (Claims XI through XVII)
The breach of contract claims relating to free goods are dismissed, as are those claims alleging breaches that took place more than four years before the initiation of the lawsuit in August, 1993. Likewise, Cafferty's claims for rescission are dismissed. The rest of Cafferty's breach of contract claims raise triable issues of fact, at least as to the amounts due and owing.
d) Breach of Fiduciary Duty Claim (Claim XVIII)
The breach of fiduciary duty claim is dismissed.
e) Civil Rights Law Claim (Claim XIX)
Claim XIX raises triable issues of fact, except insofar as it is based on the Unreleased Tapes album. Claim XIX is dismissed only to the extent it is based on the Unreleased Tapes album.
A pretrial conference will be held in Courtroom 11A of the United States Courthouse at 500 Pearl Street on July 10, 1997, at 9:15 a.m.
Dated: New York, New York
June 27, 1997
United States District Judge