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Ellington v. EMI Music, Inc.

21 N.E.3d 1000 (2014)

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Ellington v. EMI Music, Inc.

New York Court of Appeals

21 N.E.3d 1000 (2014)

Facts

Paul Ellington (plaintiff) was the legal heir and grandson of musical singer and composer Duke Ellington. In 1961, Paul entered into a copyright-renewal agreement with a group of music publishers. The agreement identified Paul and named members of his family as “First Parties.” Mills Music, Inc., the predecessor company of EMI Music, Inc. (EMI) (defendant), and its affiliates were named as “Second Party.” The agreement stated that the Second Party would renew the copyrights to certain musical compositions written by Duke in exchange for the First Parties being collectively entitled to 50 percent of the net revenues actually received by the Second Party. Years after entering the agreement, EMI became the successor-in-interest and began contracting with affiliated foreign subpublishers for foreign sales of the compositions. Consequently, the subpublishers were entitled to 50 percent of the royalties on foreign sales, and the remaining 50 percent was further split by EMI and the First Parties. Paul brought suit for breach of contract and fraudulent concealment, arguing that the amount retained by the affiliate subpublishers should be included in the amount actually received. EMI moved to dismiss the claim, arguing that its method of payments was consistent with the terms of the agreement. In turn, Paul argued that the terms of the agreement were ambiguous and thus required discovery. The trial court granted EMI’s motion to dismiss. On appeal, the lower appellate court affirmed, finding that the foreign subpublishers were not affiliates and therefore not considered a Second Party subject to the royalty-provision split. The lower appellate court reasoned that the term could not apply to an entity not in existence at the time the agreement was entered. Paul appealed.

Rule of Law

Issue

Holding and Reasoning (Abdus-Salaam, J.)

Dissent (Rivera, J.)

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