United States District Court, S.D. New York
JOSEPH A. CARTAGENA AND SNEAKER ADDICT TOURING, LLC, Plaintiffs,
HOMELAND INSURANCE COMPANY OF NEW YORK, Defendant.
DECISION AND ORDER DENYING DEFENDANT'S MOTION TO
DISMISS AND GRANTING SUMMARY JUDGMENT IN FAVOR OF PLAINTIFFS
ON THE ISSUES RAISED BY DEFENDANT
Joseph A. Cartagena (p/k/a “Fat Joe”)
(“Cartagena”) and Sneaker Addict Touring, LLC
(“Sneaker Addict”) bring this insurance coverage
action against Defendant Homeland Insurance Company of New
York (“Homeland”) arising from the policy
Homeland issued Plaintiffs (the “Policy”).
Homeland has refused to provide Plaintiffs with a defense in
an underlying action entitled Elliott v. Cartagena et al.,
No. 19-cv-1998 (NRB) (the “Elliott Lawsuit”),
presently pending before another judge of this Court.
Plaintiffs assert claims for (i) breach of contract; (ii)
breach of the implied covenant of good faith and fair
dealing; and (iii) a declaration that they are entitled to
coverage in the Elliott Lawsuit.
originally moved to dismiss the complaint for failure to
state a claim on two grounds: (i) the Policy excludes the
claim asserted in the Elliott Lawsuit because Elliott was an
independent contractor or joint venturer, and (ii) the
various causes of action asserted by Elliott are not
“perils” covered by the Policy. Plaintiffs
opposed the motion but did not cross-move for summary
judgment. It quickly became clear to the Court that these
issues, which involve nothing more than construction of an
unambiguous contract, could be disposed of on summary
judgment. Accordingly, on November 25, 2019, I issued an
order converting the motion to dismiss to a motion for
summary judgment (Fed. R. Civ. P. 12(d)), and invited the
Parties to deal with the motion on that basis. (Dkt. No. 20).
Plaintiffs and Homeland filed additional papers on December
6, 2019 (Dkt. Nos. 21, 22).
the motion as a motion for summary judgment, Homeland's
original motion is granted only as to Count II. The remainder
of its motion is denied, and summary judgment is awarded to
Plaintiffs on the remaining issues raised by the motion -
namely, whether the Elliott Lawsuit alleges “covered
perils” and whether Exclusion B applies. Plaintiffs are
entitled to judgment as a matter of law on the undisputed
facts. The fact that Plaintiffs made no motion is of no
moment, since on a motion for summary judgment the Court may
enter judgment in favor of any party, including a non-moving
party, who is entitled thereto, after giving reasonable
notice. Fed.R.Civ.P. 56(f)(1). The Court's notice that
the motion was being converted and request for further
submissions satisfies the requirements of Rule 56(f).
remain in the case several other bases for Homeland's
denial of coverage. The Parties were ordered to complete
discovery on those issues within 90 days.
is a renowned hip-hop artist professionally known as
“Fat Joe, ” and the sole member of his company,
Sneaker Addict. (Compl. ¶ 12, Dkt. No. 1; Dkt. No. 7).
Both plaintiffs are citizens of Florida. (Compl. ¶¶
3-4; Dkt. No. 7).
is an insurance company with its principal place of business
in New York. (Compl. ¶¶ 10-11). On January 18,
2019, Homeland issued Plaintiffs a $1, 000, 000 claims-made
Music Professional Liability Insurance Policy (the
“Policy”). Cartagena and Sneaker Addict are both
Named Insureds under the Policy. (“Policy” at 4,
17, Dkt. No. 14).
Policy provides coverage for certain claims brought against
the Insureds that arise from their music publishing,
producing, recording, songwriting, distributing, licensing,
and performing, including specifically: “infringement
of copyright, plagiarism, Piracy, and misappropriation of
ideas under implied contract or other misappropriation or
ideas or information.” (Id. at 11, 18).
Exclusion B, the Policy excludes coverage for claims brought
“against the Insureds by any past, present or future
Insured, joint venturer or Independent Contractor” who
is either (1) seeking compensation, an accounting or recovery
of profits or royalties, or (2) claiming an ownership
interest in the Insured's music or lyrics. (See
Id. at 20, 21).
claim is covered by the Policy, Homeland must defend the
underlying lawsuit on behalf of the Insureds and indemnify
the Insureds for any judgment or settlement, subject to the
limits of liability and retention. (Id. at 18-20).
Elliott (p/k/a Fly Havana) (“Elliott”) filed a
lawsuit (the “Elliott Lawsuit”) against
Plaintiffs, among others, in the Southern District of New
York in March of 2019 (“Elliott Compl., ” Ex. 2
to Def.'s Mot. to Dismiss, Dkt. No. 9-2).
Cartagena's hit recordings is “All the Way
Up.” (Compl. ¶ 13). According to the complaint in
the Elliott Lawsuit (the “Elliott Complaint”),
Elliott and Shandel Green (p/k/a Infared)
(“Green”) created an unfinished version of the
song “All the Way Up.” (Elliott Compl. ¶ 8).
At the time, Elliott “supported the song being shopped
to Fat Joe [Cartagena] so it could be further developed and
released.” (Id. ¶ 13). In the following
months, Cartagena and other artists added to the unfinished
version to create the final version of the song, which went
on to become a double platinum recording. Elliott allegedly
knew none of this. (Id. ¶¶ 9, 34-38).
claims that he is a joint author and joint owner of the final
version. However, Cartagena, Green, other contributing
artists, and various entities are listed as authors on the
copyright registrations for the final released versions of
“All the Way Up.” (Id. ¶¶
108-09). The same authors are listed on the song's
registrations with BMI and ASCAP, two performing rights
organizations. (Id. ¶ 110). Elliott is not
listed as an author on any registration.
Elliott heard the final version of “All the Way
Up” on the radio, he confronted Cartagena and asked why
he had not received any credit or compensation for his work.
(Id. ¶¶ 38-42). The two spoke by
telephone. While Cartagena said he “initially thought
Elliott had nothing to do with the song, ” he
eventually concluded that Elliott had written and performed
on the unfinished version. (Id. ¶¶ 40).
Cartagena allegedly offered to give Elliott
“‘some bread' up front, ” more money
later, and to work with Elliott in the future. (Id.
or so later, Cartagena met with Elliott, gave him a check for
$5, 000, and made him sign a contract. (Id.
¶¶ 48-56). According to Elliott, Cartagena
represented that the contract memorialized his offer that
Elliott would get some money up front, more money later, and
would have an opportunity to work with Cartagena in the
future. (Id. ¶ 54). Elliott now alleges that
Cartagena's statements were knowingly false
representations. (Id. ¶ 55).
alleges that he has not received any credit or compensation
for his contribution to the song beyond the single $5, 000
check. (Id. ¶ 104).
lawsuit, Elliott seeks a declaration that he is either the
sole author and owner of the composition and sound recording
of “All the Way Up, ” or a joint author and owner
with Plaintiffs. (Id. ¶¶ 222-86, Counts
I-IV). Elliott also brings several state law claims against
the defendants, including claims for an accounting,
constructive trust, unjust enrichment, quantum meruit,
conversion, moneys had and received, breach of fiduciary
duties, and negligence/gross negligence. (Id.
¶¶ 287-331, Counts V-XII). Finally, Elliott brings
several claims for fraud/negligent misrepresentation and
civil conspiracy against Cartagena and Green and their
related entities (including Sneaker Addict) arising out of
their alleged effort to cut Elliott out of his fair share.
(Id. ¶¶ 332-55, Counts XIII-XIV).
specifically says that his lawsuit “is not an
infringement action, ” and he does not bring a
copyright infringement claim. (Id. ¶¶ 3,
222-355). And indeed, his claim of joint authorship would be
inconsistent with a copyright infringement claim, since joint
authors may not sue one another for infringement.
Weissmann v. Freeman, 868 F.2d 1313, 1318 (2d Cir.
1989); Korman v. Iglesias, 736 F.Supp. 261, 264
(S.D. Fla. 1990).
Seek Defense from Homeland Under the Policy
submitted a claim to Homeland under the Policy for coverage
for the Elliott Lawsuit. (Compl. ¶¶ 15-17).
denied Cartagena's claim because (i) the Policy excludes
claims brought by an Independent Contractor (Elliott); (ii)
the causes of action alleged in the Elliott Lawsuit are not
perils covered by the Policy; and (iii) Cartagena allegedly
knew before Homeland issued the Policy that Elliott was
likely to make a claim, but falsely represented that he was
unaware of any situation that could give rise to a claim.
(Id. ¶¶ 18-19).
present, Plaintiffs are defending against the Elliott Lawsuit
on their own. They filed the instant lawsuit in order to
survive a motion to dismiss, “a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556).
Court may grant summary judgment, even for a non-movant,
where a party is entitled to judgment as a matter of law on
undisputed facts. Fed.R.Civ.P. 56(f)(1).