Bit Parts

Film Rights/No Double Recovery Allowed

The U.S. Court of Appeals for the Fourth Circuit affirmed that a film investor who was awarded damages for breach of contract over the film director's activities in promoting the movie, wasn't also entitled to a declaration of ownership of the movie's distribution and promotion rights. Berman v. Flynn, 07-2154. Richard Berman had provided funding for the documentary film Your Mommy Kills Animals. Maura Flynn wrote the treatment. Berman and Flynn later sued director Curt Johnson for making significant changes to the treatment and over Johnson's “promot[ing] the film via the Internet, interviews, screenings, and by engaging a distribution consultant.” A jury awarded Berman $370,000 on the breach of contract claim. (Berman had invested $310,000 in the movie in return for a promised $60,000 in profit.) The district judge then ruled that Flynn was a co-author of the movie with Johnson but denied Berman's request for a declaration that Berman owned the distribution and promotion rights. The Fourth Circuit noted in its unpublished opinion: “We agree with the district court that the jury, in finding a breach of contract and awarding damages, compensated Berman for all losses flowing from the breach. A declaration granting Berman the promotion and distribution rights, which had already been taken into account in the jury's damages award to him, would therefore amount to a double recovery.”

Music Royalties/Statute of Limitations

The U.S. District Court for the Southern District of New York ruled that members of the once-successful Bay City Rollers may proceed with a claim alleging breach of an artist-royalty contract they signed with their label, Arista Records, when the band broke up in 1981. Faulkner v. Arista Records LLC, 07 Civ. 2318(DAB). Arista had promised to send future royalties directly to the artists but allegedly made only one payment, in 1997. The artists filed suit in 2007. Arista claimed it hadn't paid the royalties due to a dispute among the Rollers as to where royalty statements and payments should be sent. The label also moved to have the breach of contract claim dismissed under New York's six-year statute of limitations for such actions. The district court noted that under N.Y. General Obligations Law Sec. 17-101, “a written acknowledgement of a contractual obligation made subsequent to the execution of the contract may effectively toll the statute of limitations for a breach of contract claim. ' Plaintiffs claim that Defendant has on at least three occasions over the past six years rendered an express, written acknowledgment and intention to pay its debt to Plaintiffs.” The court refused, however, to find that a fiduciary relationship existed between the band and the record company. The court also denied a motion, by one-time members of the Rollers who hadn't been signatories to the 1981 agreement with Arista, to intervene in the royalty suit. Mitchell v. Faulkner, 07 Civ. 2318(DAB). “[D]isposition in the instant action without Movants' participation will not bar under the doctrines of res judicata or collateral estoppel any future attempt by Movants to pursue their share of the royalties against [the Arista-suit] Plaintiffs,” the district court held.

TV Affiliation Agreements/Promotional Payments

The U.S. Court of Appeals for the Fourth Circuit affirmed that a TV network-affiliation agreement obligation that required CBS to make $400,000 annually in promotional payments continued after the stations' parent company merged with another company. Lincoln Financial Media Co. v. CBS Broadcasting Inc., 08-1478. The affiliation letter agreement between CBS and Jefferson-Pilot Communications Co. involved stations in North Carolina and South Carolina. CBS stopped the promotional payments after the TV affiliates' parent, Jefferson-Pilot Corp., merged with Lincoln National Corp. The Fourth Circuit found in its unpublished opinion: “CBS is correct that the merger changed Jefferson-Pilot [Communications'] parent from Jefferson-Pilot Corporation to Lincoln National Corporation. But the plain language of the Letter Agreement provides that the promotional payments only terminate if Jefferson-Pilot itself (not its corporate parent) 'assigns or transfer any interest in either station.' CBS could have written the contract more broadly, but it did not. Because the contractual language is unambiguous, we cannot accept CBS's invitation to consider extrinsic evidence of the parties' intent.”

Film Rights/No Double Recovery Allowed

The U.S. Court of Appeals for the Fourth Circuit affirmed that a film investor who was awarded damages for breach of contract over the film director's activities in promoting the movie, wasn't also entitled to a declaration of ownership of the movie's distribution and promotion rights. Berman v. Flynn, 07-2154. Richard Berman had provided funding for the documentary film Your Mommy Kills Animals. Maura Flynn wrote the treatment. Berman and Flynn later sued director Curt Johnson for making significant changes to the treatment and over Johnson's “promot[ing] the film via the Internet, interviews, screenings, and by engaging a distribution consultant.” A jury awarded Berman $370,000 on the breach of contract claim. (Berman had invested $310,000 in the movie in return for a promised $60,000 in profit.) The district judge then ruled that Flynn was a co-author of the movie with Johnson but denied Berman's request for a declaration that Berman owned the distribution and promotion rights. The Fourth Circuit noted in its unpublished opinion: “We agree with the district court that the jury, in finding a breach of contract and awarding damages, compensated Berman for all losses flowing from the breach. A declaration granting Berman the promotion and distribution rights, which had already been taken into account in the jury's damages award to him, would therefore amount to a double recovery.”

Music Royalties/Statute of Limitations

The U.S. District Court for the Southern District of New York ruled that members of the once-successful Bay City Rollers may proceed with a claim alleging breach of an artist-royalty contract they signed with their label, Arista Records, when the band broke up in 1981. Faulkner v. Arista Records LLC, 07 Civ. 2318(DAB). Arista had promised to send future royalties directly to the artists but allegedly made only one payment, in 1997. The artists filed suit in 2007. Arista claimed it hadn't paid the royalties due to a dispute among the Rollers as to where royalty statements and payments should be sent. The label also moved to have the breach of contract claim dismissed under New York's six-year statute of limitations for such actions. The district court noted that under N.Y. General Obligations Law Sec. 17-101, “a written acknowledgement of a contractual obligation made subsequent to the execution of the contract may effectively toll the statute of limitations for a breach of contract claim. ' Plaintiffs claim that Defendant has on at least three occasions over the past six years rendered an express, written acknowledgment and intention to pay its debt to Plaintiffs.” The court refused, however, to find that a fiduciary relationship existed between the band and the record company. The court also denied a motion, by one-time members of the Rollers who hadn't been signatories to the 1981 agreement with Arista, to intervene in the royalty suit. Mitchell v. Faulkner, 07 Civ. 2318(DAB). “[D]isposition in the instant action without Movants' participation will not bar under the doctrines of res judicata or collateral estoppel any future attempt by Movants to pursue their share of the royalties against [the Arista-suit] Plaintiffs,” the district court held.

TV Affiliation Agreements/Promotional Payments

The U.S. Court of Appeals for the Fourth Circuit affirmed that a TV network-affiliation agreement obligation that required CBS to make $400,000 annually in promotional payments continued after the stations' parent company merged with another company. Lincoln Financial Media Co. v. CBS Broadcasting Inc., 08-1478. The affiliation letter agreement between CBS and Jefferson-Pilot Communications Co. involved stations in North Carolina and South Carolina. CBS stopped the promotional payments after the TV affiliates' parent, Jefferson-Pilot Corp., merged with Lincoln National Corp. The Fourth Circuit found in its unpublished opinion: “CBS is correct that the merger changed Jefferson-Pilot [Communications'] parent from Jefferson-Pilot Corporation to Lincoln National Corporation. But the plain language of the Letter Agreement provides that the promotional payments only terminate if Jefferson-Pilot itself (not its corporate parent) 'assigns or transfer any interest in either station.' CBS could have written the contract more broadly, but it did not. Because the contractual language is unambiguous, we cannot accept CBS's invitation to consider extrinsic evidence of the parties' intent.”