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affirming the district court's determination that a plaintiff "could not reasonably have relied on [an] alleged ... misrepresentation" where it contradicted "the clear language of the agreement at issue"
Summary of this case from Min Lee v. New Kang Suh Inc.Opinion
No. 06-2283-cv.
October 5, 2007.
Appeal from the United States District Court for the Southern District of New York (Griesa, J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREEDthat the judgment of said District Court be and it hereby is AFFIRMED.
Appearing for Appellant: Clarence Jackson, pro se, New York, NY.
Appearing for Appellees: Cynthia S. Arato, Gibson, Dunn Crutcher LLP, New York, NY (for Warner/Chappell Music, Inc.); Judith M. Saffer, New York, NY (for Broadcast Music, Inc.); Robert S. Meloni, Meloni McCaffrey, P.C. New York, NY (for William Krasilovsky).
Present: JOSEPH M. McLAUGHLIN, ROSEMARY S. POOLER, REENA RAGGI, Circuit Judges.
Clarence Jackson appeals a judgment dismissing his complaint against Broadcast Music, Inc. ("BMI"), Warner/Chappell Music, Inc. ("Warner/Chappell"), and William Krasilovsky pursuant to Federal Rule of Civil Procedure 12(b). We assume the parties' familiarity with the facts, proceedings below, and specification of appellate issues.
New York law, which applies to Jackson's state-law claims, provides that an action based on fraud must be brought within the greater of six years from the time the fraud was committed or two years from the date on which it was or should have been discovered. See N.Y. C.P.L.R. 213(8). Jackson alleges that he was defrauded on July 7, 1997, and June 11, 1998, more than six years before Jackson filed his complaint on June 16, 2004. For the reasons stated in the District Court's opinion, we agree that Jackson should have been aware of the purportedly fraudulent acts by December 2001 at the latest. See Armstrong v. McAlpin, 699 F.2d 79, 88 (2d Cir. 1983) (holding that "where 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 him"(quoting Higgins v. Crouse, 147 N.Y. 411, 416 (1895))).
In addition, as the District Court found, Jackson could not reasonably have relied on the alleged July 7, 1997, misrepresentation because the clear language of the agreement at issue indicates that Jackson was transferring his entire interest in his copyright and the associated business to his son. See May Dep't Stores Co. v. Int'l Leasing Corp., 1 F.3d 138, 141 (2d Cir. 1993) (indicating that reasonable reliance is an element of a fraud claim); see also Dunkin' Donuts of Am., Inc. v. Liberatore, 526 N.Y.S.2d 141, 142 (2d Dep't 1988) ("It has been uniformly held that if the facts represented are not matters peculiarly within the representor's knowledge, and the other party has the means available to him of knowing by the exercise of ordinary intelligence the truth or real quality of the subject of the representation, he must make use of those means or he will not be heard to complain that he was induced to enter into the transaction by misrepresentations. Under the circumstances, the appellant's failure to read the clear language of the guarantee precludes a defense of fraudulent inducement." (internal citations omitted)).
The District Court also correctly determined that Jackson's conversion claim is time barred. See N.Y. C.P.L.R. 214(3) (providing a three-year statute of limitations for conversion).
Because Jackson is unable to show reasonable reliance on any asserted misstatement in connection with the July 1997 agreement, fraud did not vitiate his sale of the copyright to his son, Michael. Therefore, Jackson had no cognizable interest in the copyright in question on this appeal. As a non-owner, Jackson had no standing to contest the sale of the copyright to Warner/Chappell and the District Court correctly dismissed this claim. See Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 31 (2d Cir. 1982).
Finally, the District Court correctly dismissed Jackson's breach-of-fiduciary duty claim against BMI. Jackson's established lack of an ownership interest in the copyright also defeats this claim because he had no right to the royalties that were allegedly improperly transferred to Warner/Chappell.
We therefore affirm the District Court's judgment.