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August 19, 1999


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


I. Introduction

Plaintiffs Music Sales Corporation ("Music Sales") and Tempo Music Corporation ("Tempo") seek a declaratory judgment that they are the rightful owners of the copyrights to certain musical compositions.*fn1 Defendants Gregory Morris and the Estate of Billy Strayhorn, et al.,*fn2 similarly seek a judgment that they are the rightful owners of the same copyrights. Defendants move, and Plaintiffs crossmove, for summary judgment pursuant to Fed.R.Civ.P. 56.

For purposes of summary judgment, Plaintiffs and Defendants stipulate to all material issues of fact.*fn3 See Plaintiffs' Statement Pursuant to Local Rule 56.1(a) ("Pl.56.1"); Defendants' Statement Pursuant to Local Rule 56.1(a) ("Def.56.1"). For the reasons that follow, the parties' opposing motions for summary judgment are granted in part and denied in part.

II. Jurisdiction

This Court has federal question jurisdiction over this dispute because the issues presented arise under the Federal Copyright Act, 17 U.S.C. § 304.

III. Background

A. The 1962 Agreement and Amendment

In 1962, Strayhorn executed an agreement ("1962 Agreement") with Tempo, a music publisher, assigning to Tempo whatever interests he held in the renewal rights of certain of the Strayhorn Compositions. See 1962 Agreement, Exh. A to 3/18/99 Affidavit of Gregory Morris, Executor of Strayhorn Estate ("Morris Aff."). All of Strayhorn's potential heirs, including his parents ("Parents") and siblings ("Siblings"), also signed the 1962 Agreement, assigning to Tempo whatever interest they might have had in the renewal rights of the Compositions.*fn4 See id. Gregory Morris ("Morris"), Strayhorn's nephew, did not sign the 1962 Agreement. See Morris Aff. ¶ 6. In consideration for assigning these rights, Strayhorn, his Parents, and the Siblings received ten shares of stock in Tempo and future royalties. See 1962 Agreement; Plaintiffs' Memorandum in Opposition to Defendants' Motion for Partial Summary Judgment and in Support of Cross-Motion for Summary Judgment and to Strike ("Pls.Mem.") at 2.

Three years later, on August 12, 1965, Strayhorn, his mother, and the Siblings, in return for additional consideration from Tempo, agreed to an amendment of the 1962 Agreement expanding the list of Compositions that the Agreement covered.*fn5 See Amended complaint ¶ 32 & Exh. C; Answer ¶ 32. As there are no separate issues of law governing the questions that pertain to the 1962 Agreement and its 1965 Amendment, they will be referred to collectively as "the Amended 1962 Agreement". Morris did not sign the Amended 1962 Agreement. See Morris Aff. ¶ 11.

B. Strayhorn's Will and Estate

Also in 1965, Strayhorn executed a last will and testament. In his will, he bequeathed his entire estate, but for a ring and a painting, to his mother, and appointed his nephew, Morris, as Executor. See Strayhorn Will, Exh. B to Morris Aff. In May of 1967, Strayhorn died, leaving behind neither a widow nor children. See Amended complaint ¶ 9. His mother, Lillian Strayhorn, predeceased him.

At the time of Strayhorn's death, the Compositions were in their initial copyright term. See Amended Compl ¶ 9; Morris Aff. ¶¶ 5, 10. Beginning in 1969, Morris, in his capacity as Executor, filed copyright renewal applications for each of the Compositions as they became eligible for renewal. These renewals included copyrights for Compositions covered by the Amended 1962 Agreement. See Morris Aff. ¶ 17. The parties do not dispute that copyrights in the Compositions have been renewed and are valid. See Amended complaint ¶ 25; Answer ¶ 25.

C. The Ellington Agreement

In 1969, Morris, as Executor, and the Siblings, entered into an agreement with Duke Ellington, Inc. ("Ellington"), pursuant to which Ellington purchased the Siblings' Tempo stock for $100,000.*fn6 As Tempo's rights in the Compositions constituted an asset contributing to the value of Tempo's stock, the Ellington Agreement explicitly addressed those rights. Morris, as Executor, agreed to renew the copyrights of the Compositions and to assign them to Tempo as they entered the renewal term. The Ellington Agreement also specified that these assignments were pursuant to, and as agreed in, the Amended 1962 Agreement. See Stock Purchase Agreement ("Ellington Agreement"), Exh. D to Morris Aff. Finally, Morris agreed to assign previously-renewed copyrights in the Compositions to Tempo. See id.; see also Morris Aff. ¶ 20.

D. Morris' Actions as Executor

In accordance with the Amended 1962 Agreement, the Ellington Agreement, and the will, Morris, as Executor, filed certificates for renewal of the Compositions. He, and in some instances the Siblings, assigned them all to Tempo (the "Short Form Assignments"). See Morris Aff. ¶ 15; Documents entitled Assignment of Renewal Copyrights ("Renewal Assignments"), Exhs. A & B to 4/9/99 Affidavit of William H. Crosby, Jr., Counsel for the Plaintiffs ("Crosby Aff."). These Renewal Assignments stated that Morris and the Siblings executed them pursuant to the 1962 Amended Agreement. See id.

In November 1976, Morris was discharged of any further liabilities relating to the Estate. See 11/12/76 Document of Surrogate's Court Releasing and Discharging Gregory A. Morris, Exh. H to Morris Aff. He retains to the present day the letters testamentary establishing him as Executor. There remains a question, however, as to whether Morris' discharge wholly terminated his responsibilities to the Estate or if he retained responsibility for the Estate, including the Compositions. This issue is discussed below.

E. The Instant Dispute

In 1989, Morris, Dicks (the sole surviving Strayhorn Sibling), and the heirs of the deceased Siblings ("Heirs") sued Tempo in New York State court ("1989 Litigation") to obtain, inter alia, rescission of both the Amended 1962 Agreement and the 1969 Ellington Agreement because of their dissatisfaction with Tempo's performance in publishing and promoting the Strayhorn Compositions.*fn7 See Summons and Complaint in the Action of Susan Strayhorn, et al. v. Tempo Music Inc. and Ruth Boatwright, Exh. D to Crosby Aff. That Litigation proceeded through October 1993, when the parties agreed to a settlement.

The settlement agreement ("1993 Settlement Agreement"), executed between Tempo and Music Sales,*fn8 contained four major provisions relevant to this dispute*fn9: (1) that Music Sales would receive a fifty percent interest in Tempo's rights in the Compositions and would assume sole rights to, inter alia, publish, promote, and distribute the Compositions; (2) that Music Sales pay Morris and the Strayhorn Estate $350,000 in satisfaction of their claims against Tempo; (3) that Music Sales pay the Strayhorn Estate and Morris continuing royalties and account to them annually; and (4) that Morris and the Heirs agree to the dismissal, with prejudice, of all their claims. See 11/9/93 Stipulation of Discontinuance and 10/18/93 Settlement Agreement between the Strayhorn Estate, Tempo, and Music Sales ("1993 Settlement Agreement"), Exhs. E & F to Crosby Aff.

Music Sales assumed responsibility for promoting the Compositions, accounted to Morris and the Siblings' estates, and paid Morris and the Heirs royalties as per the Amended 1962 Agreement. See 1993 Settlement Agreement. In contrast with Tempo's neglect of the Compositions, Music Sales has generated upwards of $250,000 in revenues annually from its promotion of the Compositions. See Letter of Barrie Edwards, President of Music Sales, to Herb Jordan, General Manager of Strayhorn Songs, Exh. A to Herb Jordan Declaration.

1. The 1993, 1998, and 1999 Termination Notices

In January 1993, Morris filed a notice of termination with the U.S. Copyright Office purporting to terminate Tempo's rights to the second .39-year renewal term in certain of the Compositions included in the Amended 1962 Agreement.*fn10 See 1/25/93 U.S. Copyright Office Certificate of Recordation ("1993 Termination Notice"), Exh. E to Morris Aff. Morris filed the 1993 Termination Notice several months prior to his consent to the 1993 Settlement Agreement with Music Sales in which he and the Heirs agreed to Tempo's transfer of fifty percent of its interest in the Compositions to Music Sales in exchange for initial and on-going compensation. Although there is no dispute that Tempo received notification of Morris' 1993 Termination Notice, it is unclear at what point Music Sales became aware of this Termination Notice. See 4/9/99 Affidavit of Barrie Edwards, President of Music Sales ("Edwards Aff.") ¶ 7; but see 1993 Letter from Counsel for Defendant to President and Counsel of Music Sales re: Strayhorn Extended Term Rights ("August 1993 Letter"), Exh. A to Declaration of Gregory Morris ("Morris Decl.").

In 1996, Music Sales filed an objection to the sufficiency of the Notice with Defendants' counsel. See id. The validity of the 1993 Termination Notice is one of the issues raised in this dispute. See Amended complaint ¶¶ 63-74.

In 1998, Morris filed with the Copyright Office and served Music Sales and Tempo with a new termination notice, notifying them of the termination of their rights in all of the Compositions not included, and in some of the Compositions included, in the 1993 Termination Notice. See 1998 Termination Notice ("1998 Termination Notice"), Exh. F to Morris Aff.

2. Music Sales and Tempo Protest Termination Notices

Upon their receipt of the 1998 Notice, Music Sales and Tempo commenced the instant action against Morris and the Estate contesting the Termination Notices and seeking a declaratory judgment that the Defendants have no ability to terminate Plaintiffs' rights in the Compositions. Subsequent to their receipt of the Complaint, Music Sales and Tempo received ten additional termination notices, some executed by Dicks and some executed jointly by Dicks and Morris. See 1999 Termination Notices ("1999 Termination Notices"), Exh. G to Morris Aff. Music Sales and Tempo then served an Amended Complaint including challenges to the 1999 Notices. See Affidavit of Dorothy Weber, Counsel for the Defendants, of March 19, 1999, ("Weber Aff."), Exh. C to Amended Complaint.

IV. Summary Judgment

A motion for summary judgment may be granted only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual issue is material if its resolution could affect the outcome of the dispute. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Converse v. General Motors Corp., 893 F.2d 513, 514 (2d Cir. 1990). The moving party has the burden of identifying evidence that demonstrates the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Schwapp v. Town of Avon, 118 F.3d 106, 110 (2d Cir. 1997).

In determining whether summary judgment should be granted, the court resolves all ambiguities and draws all reasonable inferences against the moving party. See D'Amico v. City of New York, 132 F.3d 145, 148 (2d Cir. 1998). If there is any evidence in the record from which a reasonable inference could be drawn in favor of the nonmoving party on a material issue of fact, summary judgment is improper. See Hetchkop v. Woodlawn at Grassmere, Inc., 116 F.3d 28, 33 (2d Cir. 1997); see also Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir. 1994). The court must also examine "the substantive law applicable to the underlying litigation since that law ...

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