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noting that a court may consider matters of which judicial notice may be taken, "even if the corresponding documents are not attached to or incorporated by reference in the complaint," and this includes "'admissions in pleadings and other documents in the public record filed by a party in other judicial proceedings that contradict the party's factual assertions in a subsequent action'" (quoting Harris v. N.Y. State Dep't ofHealth, 202 F. Supp. 2d 143, 173 (S.D.N.Y. 2002))
Summary of this case from Muhammad v. Cnty. of SuffolkOpinion
04 CV 5948 (TPG).
January 31, 2006
OPINION
In this action, plaintiff Clarence Jackson claims that defendants wrongfully deprived him of his ownership rights in the song "It's a Man's Man's Man's World" (the "Song").
Defendants Broadcast Music, Inc., Warner/Chappell Music, Inc., and William Krasilovsky move to dismiss the complaint pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. The motions are granted. Michael Jackson, who is named as a defendant, has not been served and is therefore not a party to this action.
PLAINTIFF'S ALLEGATIONS
Plaintiff was the sole owner and stockholder in Clamike Music, Inc., a corporation formed by plaintiff to engage in the publishing of musical works. This opinion will make reference to a number of Clamike entities, including Clamike Music, Inc., Clamike Records, Inc., as well as a New York corporation named Clamike Music Publishing Co., and a New Jersey corporation of the same name. It is not clear from the record whether these entities had a precise corporate relationship, or indeed whether these entities were ever formally incorporated under applicable law. For the purposes of this case, it can be assumed that these names refer to one company unless otherwise noted.Sometime prior to October 22, 1964, plaintiff collaborated with Betty Newsome to create the song "It's a Man's World." On or about October 23, 1964, Clamike Music Publishing Co., the purported New York corporation, registered its claim to copyright for "It's a Man's World." At the same time, plaintiff and Clamike Music Publishing Co. entered into a songwriter's agreement with Newsome, under which royalties from "It's a Man's World" would be shared equally between Clamike and Newsome.
At some point, Newsome hummed the melody of "It's a Man's World" to world-renowned singer James Brown while in a limousine leaving New York City. At that time, Newsome and Brown made some efforts to come up with a new song, and ultimately Brown developed "It's a Man's Man's Man's World," the Song which is the subject of the present action. Brown performed and recorded the Song in 1966, and it became an international hit. Brown assigned his rights in the Song to Dynatone Publishing Co. on April 14, 1966. Dynatone registered the Song for copyright on the same day, crediting Brown as the sole author.
In 1966 Clamike Records, Inc. and Newsome sued Brown and Dynatone, claiming that the Song infringed Clamike Music Publishing Company's copyright in "It's a Man's World." That action was settled in 1967 with an agreement that (i) Dynatone would receive a 2/3 interest in the Song and Clamike Records, Inc., would receive a 1/3 interest in the Song, and (ii) royalties from the Song would be shared between Dynatone and Clamike Records, Inc. in percentages which did not correspond to the above ownership interests, according to complicated formulas, the description of which is not necessary for the purposes of this opinion.
The settlement agreement also contained provisions relating to the mechanics of the collection and distribution of royalties from both the mechanical and performing rights in the Song. The mechanical right in a composition is the right to reproduce a piece of music onto records or tapes and other digital media. The performing right entitles the copyright owner to receive royalties when his or her composition is sung or played, recorded or live, on radio and television. Defendant Broadcast Music, Inc. is in the business of licensing these performing rights of copyrighted musical compositions on behalf of songwriters, composers, and music publishers, and performed this function as to the Song following the settlement agreement.
The settlement agreement provided that Dynatone would manage mechanical licensing of the copyright in the Song for a ten percent fee, and that Dynatone would instruct payment from certain "record licensees" to be delivered to Leonard Mietus Copyright Management ("Mietus"), a copyright administration company, which would receive such payments for Clamike. As to performing rights income from Broadcast Music, the settlement agreement provided that "all such income shall be collected by Dynatone on behalf of Dynatone and Clamike until such time that Clamike advises Dynatone that it chooses to be paid directly by BMI." Initially, Dynatone did collect all performing rights income from Broadcast Music and forwarded Clamike's portion to it by way of Mietus. It appears from the complaint, however, that at some later point Broadcast Music began to send Clamike's performing rights royalties directly to Clamike via Clamike's administrator, Mietus.
At some point after the 1966 settlement agreement, defendant Warner/Chappell succeeded to the interest of Dynatone in the Song and the settlement agreement.
The complaint alleges that Warner/Chappell underreported and underpaid royalties due to Clamike Records under the terms of the 1967 settlement. Plaintiff therefore enlisted the help of his son, Michael, to assist him in his dealings with Warner/Chappell. Michael then hired attorney William Krasilovsky.
The complaint alleges that Michael and Krasilovky then "entered into a conspiracy to defraud plaintiff and to accomplish the conversion of his rights to the subject copyright [in the Song]." The complaint alleges that on July 7, 1997, upon the advice and counsel of Krasilovsky, Michael fraudulently induced plaintiff to sign two documents transferring Clamike Music Publishing Co. to Michael (the "1997 Agreement"). Plaintiff asserts that these two documents were prepared by Krasilovsky.
It appears from a later document, shortly to be quoted, that Clamike Music Publishing Co. was somehow regarded as the successor-in-interest to Clamike Records, Inc., the entity that had received a one third interest in the Song under the 1966 settlement agreement.
Plaintiff has appended the documents comprising the 1997 Agreement to his first amended complaint.
The first document, entitled "Purchase Agreement" in large font, is a contract of sale. The document denotes "Clarence Jackson DBA CLAMIKE MUSIC PUBLISHING CO. as Seller, and MICHAEL WYNN JACKSON as Purchaser," and provides that:
Subject to the terms and conditions set forth in this Agreement, Seller will sell to Purchaser and Purchaser will Purchase at the Closing, all of the business, assets, goodwill, and rights of Seller ("Seller's assets") including all assets named hereto:
a. All copyrights registered under Seller and all name and likenesses of the Seller
b. The name CLAMIKE
c. Contracts between music writers and Seller
d. Agreements and/or contracts with music publishers, distributors and music houses. Seller's Assets shall be conveyed free and clear of all liens and liabilities and encumbrances.
This Purchase Agreement is signed by both plaintiff and Michael, and recites consideration of $1.00.
The second document, also dated July 7, 1997, is a letter signed by plaintiff, addressed "To whom it may concern," which states, in pertinent part:
By this letter, I confirm my intent to sell my assets of said company. These assets are:
1. Copyright of "it's a man's man's man's world" and all name similarities of this title, and all other copyrights.
2. Use of the name CLAMIKE
3. Contracts between Betty Newsome and Clamike Music Publishing Co. and all other writers.
4. Agreements and/or contracts with any other music publisher or distributor.
Plaintiff concedes that his signature on each of these documents is authentic. Plaintiff alleges, however, that Michael misrepresented the purpose and effect of the two documents, leading plaintiff to believe that they merely transferred "copyright administration" between management firms and did not effect any sale.
As indicated earlier in this opinion, there is some doubt as to whether Clamike Music Publishing Co. was ever incorporated. If there was such a corporation at the time of the 1997 Agreement, it would apparently have been the New York corporation, which was owned by plaintiff. However, even if the company had not been incorporated, it was, in the view of the parties to these transactions, a company doing business, and would have been a sole proprietorship owned by plaintiff. In either case, Clamike Music Publishing Co. owned the rights to the Song, and had the capacity to sell those rights to Michael.
The complaint alleges that, after defrauding him out of his ownership of Clamike Music Publishing Co., Michael, with the advice and help of Krasilovsky, conspired to transfer the rights in the Song from Clamike to Warner/Chappell. As a first step, the complaint alleges that, upon the advice of Krasilovsky, and using the documents plaintiff had signed in the 1997 Agreement, Michael established a New Jersey based corporation named Clamike Music Publishing Co. On April 13, 1998, Krasilovsky wrote to Leonard Mietus, and terminated Mietus' long standing administration of Clamike's copyright interest in the Song.
Then, in an agreement dated June 11, 1998, Clamike Music Publishing Co. sold to Warner-Tamerlane Publishing Corp. ("Warner-Tamerlane"), a subsidiary of Warner/Chappell, Clamike Music Publishing's one-third interest in the copyright in the Song, and all subsequent income deriving from the Song, for $950,000 (the "1998 Agreement"). The agreement bears the signature of Michael Jackson, both on behalf of Clamike Music Publishing Inc., and as "the sole shareholder of Clamike Music Publishing, Inc.," and the signature of plaintiff as "the former sole owner and shareholder of Clamike Records, Inc. and Clamike Music Publishing, Inc." Directly above plaintiff's signature the document states:
The undersigned is the former sole owner and shareholder of Clamike Records, Inc. and Clamike Music Publishing Co., Inc. ("CMPI"), which is successor in interest to Clamike Records, Inc. In order to induce Warner-Tamerlane Publishing Corp. ("W-T") to enter into and to perform the foregoing agreement, it being to my benefit that W-T do so, the undersigned hereby warrants and represents that CMPI is the successor in interest to Clamike Records, Inc. and joins in the warranties, representations and indemnities made and given by CMPI pursuant to said agreement.
The complaint alleges that Michael, with the knowledge and consent of Warner/Chappell and Krasilovsky, forged plaintiff's name on the June 11, 1998 agreement. The complaint also asserts that Warner/Chappell and Krasilovsky knew or should have known that Michael, having acquired the Song fraudulently, was not its true owner. In his Memorandum of Law plaintiff states that he was entirely unaware of the 1998 Agreement or that Clamike Music Publishing's rights in the Song had been sold "until after receipt of documents and information from plaintiff's counsel in August and September of 2003" in connection with a related action filed in this court.
Although the purchaser of Clamike's one-third interest in the song in the 1998 Agreement was Warner-Tamerlane, the royalties deriving from this interest were treated as belonging to Warner/Chappell.
Plaintiff's final allegations concern Broadcast Music's actions in complying with the 1998 Agreement and paying to Warner/Chappell the royalties that had been due to Clamike under the settlement agreement. Plaintiff alleges that Clamike and Broadcast Music had a contractual relationship beginning in 1963, and that any modification to that contract required his authenticated signature. Plaintiff claims that Broadcast Music acted wrongfully and breached a fiduciary duty it owed to him by transferring plaintiff's royalty income to Warner/Chappell without properly verifying the authenticity of his signature on the 1998 Agreement and on other internal Broadcast Music documents. Plaintiff asserts that his verified signatures on these documents were "a legal and procedural prerequisite" without which Broadcast Music could not properly transfer royalty payments deriving from the Song to Warner/Chappell. Plaintiff has submitted various documents and alleges the following facts to support this claim.
Subsequent to and consistent with the 1998 Agreement, Warner/Chappell took steps to have transferred to itself the royalty payments from Broadcast Music corresponding to the one-third interest in the Song it had acquired from Clamike as a result of the 1998 Agreement. To this end, on June 15, 1998, in conjunction with the 1998 Agreement, Michael signed a letter on behalf of Clamike Music Publishing Co., in which he authorized and directed that all such royalty payments be sent to Warner/Chappell.
Apparently, this letter, signed by Michael alone, was insufficient authorization for Broadcast Music to effect the transfer of royalty payments from Clamike to Warner/Chappell, because on October 21, 1998, Janet Raines of Warner/Chappell wrote to Krasilovsky:
It has recently come to my attention that Michael Jackson is not listed as an authorized signer for Clamike Music Publishing Co. at BMI. I have enclosed a copy of the letter I received from BMI for your review. My contract notification of our purchase agreement to BMI has been put on hold until this matter is resolved.
Therefore, if you would be so kind as to complete the enclosed form 101 document and return the completed form to my attention, I will be happy to submit it to BMI for processing.
On February 12, 1999, Christopher Galotta of Broadcast Music wrote to Michael, again requesting that he complete "a form 101 and W-9 form" to allow Broadcast Music to update its records to reflect the change of ownership for Clamike Music. The letter concluded: "In addition, we have received an assignment, signed by you for the [Song] from Clamike Music to Warner-Tamerlane Publishing Corp. Please note that we cannot process this assignment until the ownership for Clamike Music is properly updated."
A completed Form 101, dated February 20, 1999, was received by Broadcast Music. That form indicates that Clamike Music, the name under which plaintiff's company had originally contracted with Broadcast Music in 1963, had changed its name to "Clamike Music Publishing Co., a division of Clamike Music Publishing, Inc., a New Jersey corporation." The Form 101 was signed by Michael.
A letter from Clamike Music dated March 9, 1999 containing the signatures of plaintiff, Michael, and a Broadcast Music representative, states:
This will confirm our understanding with respect to the modification of the agreement dated July 1, 1963 between Clamike Music, a division of Clamike Records, Inc., a New York Corporation (herein called the 'former owner') and Broadcast Music Inc., as modified (herein called the "basic agreement"):
All right, title, and interest of the former owner in and to the basic agreement and in and to the works embraced thereby has been sold, assigned and transferred to Clamike Music Publishing Co., a division of Clamike Music Publishing, Inc., a New Jersey corporation (herein called the new owner).
The complaint alleges that plaintiff's signature on the March 9, 1999 letter was forged by Michael.
PROCEDURAL HISTORY
Plaintiff filed his complaint on June 16, 2004 in New York State Supreme Court. This complaint (the "first complaint") asserted causes of action for fraud and for conversion of plaintiff's copyright rights. On July 30, 2004, defendant Warner/Chappell removed the action to this court, pursuant to 28 U.S.C. §§ 1331 and 1441 (a) on the basis that the complaint asserted claims under the United States Copyright Act, 17 U.S.C. §§ 101 et seq.On September 29, 2004, defendant Warner/Chappell moved to dismiss the first complaint. On October 22, 2004, plaintiff cross-moved to amend his complaint. The proposed amended complaint (the "second complaint") included new factual allegations, omitted the cause of action for conversion, reiterated his claim of fraud, and asserted a new claim for infringement of plaintiff's copyright. The court allowed the filing of the second complaint.
At a January 21, 2005 conference, the court stated that it would dismiss the fraud cause of action against Warner/Chappell "on the ground of statute of limitations and for failure to state a claim." The court did not include in this dismissal Broadcast Music or Krasilovsky. At the conference, the court also granted plaintiff leave to re-assert a claim for conversion.
On July 25, 2005, plaintiff, now acting pro se, submitted a second amended complaint (the "third complaint") asserting the claim for conversion and a new claim for breach of fiduciary duty. It also repeated the copyright infringement claim from the second complaint. At a conference on August 26, 2005, the court allowed this third complaint.
Usually, an amended pleading will entirely supersede the previous pleading. However, the court is treating this case differently. At the time of the filing of the second complaint, plaintiff was represented by an attorney who drafted that pleading. The second complaint contains a complete and detailed description of plaintiff's factual and legal claims. Attached to the second complaint are certain documents, including two of the agreements that are critical to plaintiff's claims. The third complaint, while it adds causes of action for conversion and breach of fiduciary duty, contains a far less complete recital of plaintiff's overall contentions, something which is understandable since by this time plaintiff was acting pro se. Consequently, in fairness to plaintiff, the court will deal with both the second and third complaints and will treat them, together, as his operative pleadings. In addition, because the fraud claim was previously dismissed only as to defendant Warner/Chappell, and no opinion has yet been issued on that decision, this opinion will address plaintiff's fraud claim against all defendants.
DISCUSSION
In considering a motion to dismiss, factual allegations in the complaint must be taken as true, Leatherman v. Tarrant County Narcotics Intelligence Coordination Unit, 507 U.S. 163, 164 (1993), and all reasonable inferences must be drawn in plaintiff's favor. Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir. 1994). A complaint should not be dismissed for failure to state a claim unless it appears "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
Moreover, where the case involves a pro se litigant, "the court must construe the allegations in the complaint liberally and dismiss the complaint only where the litigant could prove no set of facts entitling him to relief." Powell v. Am. Gen. Fin., Inc., 310 F. Supp. 2d 481, 483-484 (N.D.N.Y. 2004).
Plaintiff has appended to his first amended complaint copies of the 1997 and 1998 Agreements, and Janet Raines' October 21, 1998 letter to Krasilovsky. In addition, the complaint explicitly references several other documents. In connection with their motions to dismiss, defendants, too, have submitted various documents. These include a number of letters and forms submitted by Michael Jackson and Clamike Music Publishing Co. to Broadcast Music. Defendants also ask the court to take judicial notice of various court filings submitted by Clamike in a prior related action before this court.
In Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42 (2d Cir. 1991), the Second Circuit held that "the complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference."Id. at 47. The court may also consider matters of which judicial notice may be taken, even if the corresponding documents are not attached to or incorporated by reference in the complaint. Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999). In particular, the court may take judicial notice of public records and of "admissions in pleadings and other documents in the public record filed by a party in other judicial proceedings that contradict the party's factual assertions in a subsequent action" without converting the motion into one for summary judgment. Harris v. New York State Dep't of Health, 202 F.Supp.2d 143, 173 (S.D.N.Y. 2002). See also Munno v. Town of Orangetown, 03-CV-8650, 2005 U.S. Dist. LEXIS 24232 at *7-8 (S.D.N.Y. 2005). The court finds that the documents submitted by plaintiff together with his complaint, and by defendants in connection with their motions to dismiss, may properly be considered in evaluating the present motions.
Fraud
Plaintiff claims that Michael misrepresented the nature of the 1997 Agreement as pertaining solely to administration of the copyright, rather than transferring ownership in the Song from plaintiff to Michael as the documents stated. Plaintiff asserts that he relied on Michael's misrepresentation in signing the 1997 Agreement. Plaintiff further alleges that Krasilovsky assisted Michael in planning and perpetrating this fraud, and that, in fact, Krasilovsky himself prepared the documents comprising the 1997 Agreement. Plaintiff does not claim that Broadcast Music or Warner/Chappell had any involvement in the 1997 Agreement.
With respect to the 1998 Agreement, plaintiff claims that Michael forged plaintiff's name on that purchase agreement and that Krasilovsky and Warner/Chappell knew or should have known of this forgery. Plaintiff further alleges that Krasilovsky and Warner/Chappell knew or should have known that, because the 1997 Agreement was obtained fraudulently, Michael did not own any rights to the Song. The complaint asserts that Warner/Chappell's "failure to exercise due diligence . . . constituted an omission which contributed to the defrauding of plaintiff." Plaintiff asserts an unspecified claim of fraud against Broadcast Music but does not allege that Broadcast Music had any involvement in the 1998 Agreement.
As described earlier, Michael Jackson has not been served and is not a party to the action. Therefore the court has no occasion to discuss the fraud claims against him.
This leaves the fraud claims against Krasilovsky, Warner/Chappell and Broadcast Music. The only fraud cause of action pertaining to the 1997 Agreement is against Krasilovsky. Plaintiff's other fraud claims relate to the 1998 Agreement and are asserted against all defendants.
Plaintiff's claim against Krasilovsky for fraud in connection with the 1997 Agreement must be dismissed because it is barred by the statute of limitations and because plaintiff has failed to plead reasonable reliance, an essential element of a cause of action for fraud.
The New York statute of limitations for fraud is six years from the date of the commission of the fraud, or two years from the date plaintiff discovered, or should have discovered, the fraud, whichever is longer. N.Y C.P.L.R. §§ 203(f), 213(8);131 Main St. Assocs. v. Manko, 897 F. Supp. 1507, 1522 (S.D.N.Y. 1995). "The . . . six-year period begins to run . . . when a plaintiff suffers a loss as a result of the defendant's fraudulent act." Cruden v. Bank of New York, 957 F.2d 961, 974 (2d Cir. 1992). As to the "discovery" rule, whether and when a plaintiff should have discovered a fraud is to be measured by objective standards. Armstrong v. McAlpin, 699 F.2d 79, 88 (2d Cir. 1983); Higgins v. Crouse, 147 N.Y. 411, 416 (1895). A plaintiff may be found to have constructive notice of fraud when he should reasonably have been aware of it:
[W]here the circumstances are such as to suggest to a person of ordinary intelligence the probability that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth, and shuts his eyes to the facts which call for investigation, knowledge of the fraud will be imputed to himId.
Plaintiff's fraud claim fails under both the six-year "injury" or two-year "discovery" rules. With regard to the former, the loss resulting from the transfer of Clamike Publishing to Michael occurred on July 7, 1997, more than six years prior to the filing of this action on June 16, 2004.
Furthermore, with respect to the two-year "discovery rule," plaintiff's own filings in an earlier action before this court show that he was or should have known of any fraud relating to the 1997 Agreement more than two years prior to the filing of this action.
As discussed earlier, on a motion to dismiss under Rule 12(b)(6), the court may consider a pleading which plaintiff had signed and submitted in another judicial proceeding before this court. Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991); 5-Star Mgmt. v. Rogers, 940 F. Supp. 512, 518 (E.D.N.Y. 1996) ("When presented with a motion to dismiss, this Court is permitted to take judicial notice of matters of public record, including the fact of litigation and related filings.'").
In Newsome v. Brown, 01-CV-2807 (the "Newsome Action"), plaintiff Betty Newsome filed suit in the Southern District of New York in 2001 against Clamike and Warner/Chappell, claiminginter alia that these defendants had improperly registered the Song for copyright without crediting Newsome's contribution.
In December 2001, Clamike filed a pleading in that action acknowledging the existence of the 1998 Agreement. The pleading sought rescission of that agreement not on the grounds now asserted, i.e., that Michael did not have authority to enter into the purchase agreement or that plaintiff's signature on the 1998 Agreement was forged. Rather, the pleading sought recission of the 1998 Agreement on the grounds that Warner/Chappell's alleged failure to accurately report and pay royalty income from the Song to Clamike under the terms of the settlement agreement had induced Clamike to sell its interest in the Song to Warner/Chappell at a lower price than it would have, had Clamike known the true value of the Song's royalty revenues.
An affidavit accompanying Clamike's pleading, signed by plaintiff, states that plaintiff's "interests and the interests of Clamike are expressed in the answer submitted herewith." A December 2001 letter to the court from Clamike's attorney in the Newsome Action made the same assertions as Clamike's pleading.
The explicit references to the 1998 Agreement contained in plaintiff's December 2001 filings in the Newsome Action show beyond doubt that plaintiff knew or reasonably should have known that his interests in Clamike Music Publishing Co. had been transferred to Michael at that time, more than two years prior to the filing of the complaint in this action. Plaintiff's fraud claims with respect to the 1997 Agreement are therefore barred by the statute of limitations.
There is a second reason that plaintiff's fraud claim against Krasilovsky with respect to the 1997 Agreement must be dismissed. Plaintiff has failed to plead reasonable reliance, an essential element of a cause action for fraud. The elements of a fraud claim under New York law are "a material, false representation, an intent to defraud thereby, and reasonable reliance on the representation, causing damage to the plaintiff." May Dep't Stores Co. v. International Leasing Corp., 1 F.3d 138, 141 (2d Cir. 1993). Reasonable reliance is an essential element of a claim of fraud. Village on Canon v. Bankers Trust Co., 920 F. Supp. 520, 530 (S.D.N.Y. 1996).
Reasonable reliance cannot be adequately pleaded where a party has the means to discover the true nature of the transaction by the exercise of ordinary intelligence, and fails to make use of those means. Stuart Silver Assocs. v. Baco Dev. Corp., 245 A.D.2d 96, 98 (N.Y.App.Div. 1st Dep't, 1997). In Wash. Capital Ventures, L.L.C. v. Dynamicsoft, Inc., 373 F. Supp. 2d 360 (S.D.N.Y. 2005) the court held that, under New York law, "a plaintiff's ability to establish reasonable reliance is irreparably impaired when it simply fails to read a binding document prior to executing the document." Id. at 366. See also Dunkin' Donuts v. Liberatore, 138 A.D.2d 559, 560 (N.Y.App.Div. 2d Dep't, 1988); Morby v. Di Siena Assocs. LPA, 291 A.D.2d 604, 605 (N.Y.App.Div. 3d Dep't, 2002).
Plaintiff states that Michael misrepresented the content of the 1997 documents as relating solely to copyright administration in order to procure plaintiff's signature. However, both of the one-page documents comprising the 1997 Agreement, which were admittedly signed by plaintiff, clearly and explicitly state that plaintiff was thereby conveying to Michael his rights in Clamike Music Publishing Co. and the Song. Plaintiff could not reasonably have relied on any alleged misrepresentations to the contrary.
Since there is no valid claim that Michael committed fraud in connection with the 1997 Agreement, Krasilovsky cannot be liable for assisting Michael in the commission of fraud. Plaintiff's fraud claim against Krasilovsky in connection with the 1997 Agreement is therefore dismissed.
It is now necessary to deal with the fraud claims against all defendants with respect to the 1998 Agreement.
The situation with respect to Broadcast Music is simple. There is nothing in the way of a specific allegation of wrongdoing by Broadcast Music. Thus, the cause of action for fraud against this defendant is dismissed.
With regard to Warner/Chappell and Krasilovsky, the first point to be made is that the claim is barred by the statute of limitations. More than six years elapsed from June 11, 1998 until the present action was filed, on June 16, 2004. Furthermore, as stated above, the two-year discovery rule does not assist plaintiff because he knew of the 1998 Agreement no later than the date Clamike filed its pleading in the Newsome Action, in December 2001, more than two years before plaintiff filed the present action. Thus any fraud claim related to the 1998 Agreement is barred by the statute of limitations, as well.
Second, the court has already dismissed any fraud claim with respect to the 1997 Agreement. The 1997 sale to Michael was therefore valid, and plaintiff did not own the Song at the time of the 1998 Agreement. Therefore, no viable fraud claim exists as to that transaction either, as plaintiff may not be defrauded out of an asset that he does not own. Brandwynne v. Combe Int'l, Ltd., 74 F. Supp. 2d 364, 380 (S.D.N.Y. 1999). Plaintiff's fraud claims against Krasilovsky and Warner/Chappell as to the 1998 Agreement are therefore dismissed.
To summarize, all fraud claims against the defendants named in such claims are dismissed.
Conversion
The complaint asserts that after Michael fraudulently obtained rights to the Song, Krasilovsky and Warner/Chappell "entered into a conspiracy to . . . accomplish the conversion of the subject copyright" by wrongfully taking and exercising control over plaintiff's rights to the Song. The complaint also asserts that Broadcast Music's transfer of Clamike's royalty payments to Warner/Chappell, in reliance upon documents allegedly containing forgeries of plaintiff's signature, was "a conversion of plaintiff's interest in the . . . royalty income from the subject song and composition."
Defendants argue that plaintiff's claim for conversion should be dismissed, both because it is preempted by the Federal Copyright Act and because it is barred by the statute of limitations. No discussion of the preemption issue is necessary because, even if the conversion claims are not preempted, they are barred by the statute of limitations.
New York law places a three-year statute of limitations on claims for conversion, C.P.L.R. § 214(3). Furthermore, causes of action for conversion generally do not accrue upon discovery.State v. Seventh Regiment Fund, 98 N.Y.2d 249, 261 (2002). Rather, the statute of limitations on such claims begins to run on the date the alleged conversion occurred. Galet v. Carolace Embroidery Prods. Co., 91-CV-7991, 1994 U.S. Dist. LEXIS 14060 (S.D.N.Y. October 5, 1994). All the events upon which plaintiff bases his conversion claims, including the cessation of royalty payments from Broadcast Music, took place in 1998 or prior thereto. Plaintiff's conversion claims are therefore barred by the statute of limitations.
Copyright
As noted above, the court has already dismissed plaintiff's causes of action for fraud and conversion as to the 1997 transaction, by which plaintiff conveyed his interests in Clamike Music Publishing Co. and the Song to Michael. As a result, in 1998, when Clamike Music Publishing Co. sold its partial ownership interest in the Song to Warner/Chappell, plaintiff no longer had any interest in or rights to the Song and therefore no standing to challenge that sale under the Copyright Act. Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 31 (2d Cir. 1982).
Breach of Fiduciary Duty
Finally, in his most recent amended complaint, plaintiff alleges that defendant Broadcast Music owed him "fiduciary duties of care, candor and loyalty." Plaintiff alleges that Broadcast Music could not have transferred royalty payments to Warner/Chappell without his authentic signature evidencing his consent, and that Broadcast Music was "under an express duty to insure that whatever was . . . submitted was proper and legal." Plaintiff asserts that Broadcast Music breached its fiduciary duty to him by transferring royalty payments based upon documents that plaintiff alleges contained a forgery of his signature.
This claim must likewise be dismissed. The court has already held that there can be no valid fraud claim with respect to plaintiff's 1997 sale of Clamike Music Publishing Co. to Michael. As a result, by the time Broadcast Music transferred the royalty payments to Warner/Chappell, plaintiff no longer owned any rights in the Song and was not entitled to any such royalties. He therefore may not maintain any claim against Broadcast Music.
CONCLUSION
The complaint is dismissed as to defendants Broadcast Music, Krasilovsky, and Warner/Chappell.
SO ORDERED.