Chadly v. Music Together, LLC

Background

Music Together, LLC offered a music-school kit that included licensed children’s music and marketing materials. Justine Chadly operated a music school as a licensee and either created or co-created songs that Music Together distributed to other music schools. After the business relationship ended, Chadly sued Music Together. The dispute includes whether Music Together acquired rights to four songs, whether Chadly breached the franchise-type license agreement, and whether Music Together interfered with Chadly’s business relationships and prospective sale of her music school.

Both parties moved for partial summary judgment, which asks the court to decide particular claims or issues without a trial when the evidence shows no genuine dispute requiring a jury’s decision. The court reviewed extensive briefing and more than 3,000 pages of record materials, but found disputed facts on nearly every issue.

Copyright claims

For “Singing In Harmony,” both sides claimed full copyright ownership and accused the other of infringement. The court found that disputed facts concerned, among other things, whether Music Together hired musical consultant Thomas Foote to create works, whether Foote co-created the song with Chadly, whether a 2017 Song Purchase Agreement transferred rights, and what effect Music Together’s later payment to Chadly had. The court also found disputed facts concerning Music Together’s estoppel-type defenses. The cross-motions for summary judgment on “Singing In Harmony” were DENIED as to Claims I, VI, and VII in part, and Counterclaims I, V, and VI.

For “Hand in Hand,” “Let Me Hear You,” and “Singing My Song,” the court found that the record presented other disputed issues. The cross-motions for summary judgment on those songs were DENIED as to Claims I, VI, and VII in part.

Breach of the license agreement

Music Together claimed Chadly breached the license agreement by stopping payments while continuing to offer music classes. Regarding summer 2023 classes, the parties disputed what contract conditions triggered service fees, whether Chadly used Music Together’s materials, whether she placed an order, whether an in-term noncompete provision was enforceable, and whether Chadly signed the agreement under duress. The cross-motions for summary judgment on Counterclaim III were DENIED.

Regarding fall 2023 classes, Chadly moved for summary judgment. The parties disputed when and how the license ended, including the effect of Chadly’s communications, Music Together’s communications about possible termination or waiver, and the agreement’s termination provisions. Chadly’s motion for summary judgment on Counterclaim IV was DENIED.

Tort claims

Music Together moved for summary judgment on Chadly’s claim for tortious interference with contractual relations. The court rejected Music Together’s argument that recruiting at-will employees could not support that claim and found evidence from which a jury could find wrongful conduct, including alleged use of Chadly’s proprietary business information and statements to employees about whether they could continue teaching with Chadly. Music Together’s motion on Claim II was DENIED.

Music Together also moved for summary judgment on Chadly’s claim for tortious interference with prospective economic advantage involving the planned sale of her music school to Foote. The court found that Music Together’s arguments about the transaction’s details and price did not disprove a probability of future economic benefit. The motion on Claim III was DENIED.

California Business and Professions Code Section 17200 claim

Music Together moved for summary judgment on Chadly’s claim under Section 17200, which addresses certain unlawful, unfair, or fraudulent business practices. The court GRANTED the motion as to “unfair” acts under Claim IV, in part, because Chadly did not dispute Music Together’s argument that she could not show the required harm to competition. The court DENIED the motion as to “unlawful” acts under Claim IV, in part, because Chadly’s surviving claims could potentially provide a basis for that part of the claim.

Intentional infliction of emotional distress

Music Together moved for summary judgment on Chadly’s intentional-infliction-of-emotional-distress claim. The court held that the alleged commercial misconduct, even when viewed in Chadly’s favor, was not sufficiently extreme to meet the legal standard for outrageous conduct. The court also held that racial remarks allegedly made by Music Together’s president in May 2019 occurred outside the applicable statutory period and could not support the claim. Music Together’s motion on Claim V was GRANTED.

Other motions and conclusion

The court overruled Chadly’s objection to an agreement between Music Together and Foote because the agreement was relevant to copyright ownership. The court denied Chadly’s other evidentiary objections as moot, while allowing the objections to be renewed at trial. The court found Chadly’s requests for judicial notice premature and deferred them until trial.

The parties’ stipulated motion concerning docket entries was construed as a motion to seal and was GRANTED as to the addresses only. The court reserved the right to issue further orders concerning unexplained redactions.

The court’s conclusion states that every motion seeking partial summary judgment was DENIED except Music Together’s motion, which was GRANTED as to Chadly’s “unfair” acts claim under Section 17200, Claim IV in part, and her intentional-infliction-of-emotional-distress claim, Claim V. The court stated that all elements of the claims and defenses going to trial remained to be proven. Trial was set for November 10, 2025.