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Wall Street Entertainment, LLC v. Buvision, LLC

United States District Court, S.D. New York

October 31, 2014

WALL STREET ENTERTAINMENT, LLC, Plaintiff,
v.
BuVISION, LLC, Defendants.

REPORT AND RECOMMENDATION

JAMES C. FRANCIS, IV, Magistrate Judge.

This case concerns the breach of a Co-Publishing Agreement between the plaintiff, Wall Street Entertainment, LLC ("Wall Street"), a New York based music publisher and producer, and the defendant, BuVision, LLC ("BuVision"), a Georgia based limited liability company. (Complaint ("Compl."), ¶¶ 2-3). The Co-Publishing Agreement, which was entered into on June 11, 2009, required BuVision to render semi-annual statements and provide corresponding semi-annual royalty payments to Wall Street, an obligation that the defendant allegedly failed to meet. (Compl., ¶¶ 15-18).[1]

Wall Street filed the instant motion for summary judgment on July 15, 2014, seeking (1) a declaratory judgment that BuVision breached the Co-Publishing Agreement, (2) compensatory damages for the amount owed under the contract for the period between June 11, 2009 and December 31, 2012, (3) an ex parte hearing to determine damages for the period after December 31, 2012, (4) reasonable attorneys' fees and costs (Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment ("Pl. Memo.") at 5), and (5) sanctions stemming from the failure of BuVision's principal to attend a June 2014 settlement conference (Letter of Sandy A. Roberts dated June 23, 2014 ("Roberts Letter").

For the reasons set forth below, I recommend that partial summary judgment be granted on liability but denied with respect to damages. I further recommend that Wall Street's application for attorneys' fees and costs be denied and its application for sanctions be granted in part.

Background[2]

A. The Exclusive Producer Agreement

On July 25, 2007, Wall Street entered into an Exclusive Producer Agreement with songwriters Melvin Hough, II and Rivelino Wouter (the "Writers"). (Compl., ¶¶ 5, 8; TKT Entertainment, LLC -w- Wall Street Entertainment, LLC/Exclusive Producer Agreement dated July 25, 2007 ("Exclusive Producer Agreement"), attached as Exh. 1 to Pl. Memo., at 14). Under the terms of the this agreement, Wall Street was granted an undivided fifty percent interest in any and all copyright and musical compositions (the "Songs") created by the Writers during the term of the agreement and was appointed the sole and exclusive administrator of the copyrights. (Compl., ¶¶ 8-9). The Exclusive Producer Agreement obligated Wall Street to pay the Writers fifty percent of any negotiated sum from any third party co-publishing agreement entered into between Wall Street and a co-publisher with respect to the Songs. (Compl., ¶ 9).

B. The Co-Publishing Agreement

On June 11, 2009, Wall Street and BuVision entered into the Co-Publishing Agreement that is at issue. (Co-Publishing Agreement by and between BuVision, LLC and Wall Street Entertainment, LLC dated June 11, 2009 ("Co-Publishing Agreement"), attached as Exh. 2 to Pl. Memo., at 1). This contract made the parties joint owners in the Songs for a specified term, which continued until three full compositions, or the fractional equivalent thereof, were completed by the Writers and released on any album by any major record label or distributor. (Co-Publishing Agreement at 1-2). In consideration for receiving a fifty percent interest in the Songs, the Co-Publishing Agreement required BuVision to submit semi-annual royalty statements to Wall Street on or before September 30 and March 31 of each year, accompanied by payments of any royalties due in connection with the Songs for the preceding semi-annual period ending June 30 and December 31, respectively. (Pl. Memo. at 3; Co-Publishing Agreement at 4).

As of January, 2011, BuVision had not rendered any royalty statements or payments to Wall Street. (Reply Memorandum in Support of Plaintiff's Motion for Summary Judgment ("Pl. Reply Memo.") at 2). On January 14, 2011, the plaintiff sent a letter to the defendant, asserting that BuVision had failed to perform its accounting obligations under the Co-Publishing Agreement. (Letter of Louise C. West dated Jan. 14, 2011 ("West Letter"), attached as Exh. 4 to Pl. Reply Memo.). This letter notified the defendant that failing to remit a royalty statement within thirty days of the letter's receipt would result in "material breach" of the parties' agreement. (West Letter; Pl. Reply Memo. at 2). The defendant neither responded to the letter nor submitted any statements or payment to the plaintiff prior to the filing of the instant complaint. (Pl. Reply Memo. at 2).

C. Procedural History

On Feb. 25, 2013, Wall Street filed its complaint against BuVision for breach of contract, money damages, and attorneys' fees and costs. BuVision filed an answer on May 15, 2013, acknowledging its failure to submit any royalty statements to Wall Street. (Answer ("Ans."), ¶ 17). The defendant averred that the terms of the Co-Publishing Agreement were self-evident, but denied Wall Street's allegations "to the extent that they mischaracterize the terms of that agreement." (Ans., ¶¶ 12-18).

Following discovery, Wall Street filed the present motion seeking (1) a declaratory judgment that the Co-Publishing Agreement had been breached by BuVision, (2) an award in the amount of $133, 955.82, representing compensatory damages for the period between June 11, 2009 and December 31, 2012, (3) the scheduling of an ex parte hearing on damages to determine an additional amount owed for the period from January 1, 2013 to the present, and (4) reasonable attorneys' fees and costs. (Pl. Memo. at 5). As of the filing of the plaintiff's motion for summary judgment, BuVision had not rendered any royalty statements or payments to Wall Street. (Affidavit of Keith Betts dated July 14, 2014 ("Betts Aff."), attached to Pl. Memo., ¶¶ 11-12).

Although BuVision acknowledges that "there is no real dispute regarding the facts at issue" (Def. Memo. at 1), it points to two separate provisions in the Co-Publishing Agreement that allegedly bar Wall Street's claims: (1) a notice and cure provision in paragraph 18(b), and (2) a limitations provision in paragraph 8(b). (Def. Memo. at 1-3).

On June 16, 2014, following a representation by counsel that a settlement in principle had been reached but not yet executed, I ordered a settlement conference to be held on June 17, 2014. (Order dated June 16, 2014 ("June 17, 2014 Order")). The order provided that failure of BuVision's principal to attend in person would result in an assessment against BuVision of the costs incurred by plaintiff's counsel in appearing at the conference. (June 17, 2014 Order). Neither counsel for the defendant nor BuVision's principal appeared at the conference, and, as a result, Wall Street submitted a letter motion for ...


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