Hammond-Williams v. Aaron Fuchs d/b/a Tuff City Records

Background

The Estate of Roy C. Hammond brought a breach-of-contract action against Aaron Fuchs, TufAmerica Inc., and Funky Delicacies Records. The Estate alleged that the defendants breached a 2001 settlement agreement by failing to pay Hammond, and later his Estate, the required share of licensing income from “Impeach the President” and “Roy C.’s Theme.” The agreement gave TufAmerica a 50% interest in the copyrights and sound recordings and made TufAmerica the exclusive administrator of the songs. It required TufAmerica to pay Hammond 50% of net licensing income each quarter.

The defendants stopped making royalty payments and stopped providing quarterly reports in 2019. They said Hammond had previously breached the agreement through releases of the songs, a 2014 license, and statements about Fuchs, and that those breaches excused further payment. The defendants acknowledged that they continued licensing “Impeach the President” and collecting licensing income after stopping payments. Their records showed $346,030.32 in licensing income accrued between 2019 and 2022 and identified a $132,095.16 payee balance, although the parties disputed the amount owed.

The defendants also asserted counterclaims and third-party claims against the Estate and related parties for breach of the duty of good faith and fair dealing, unfair competition, tortious interference with prospective economic advantage, and injunctive relief. The Estate moved for partial summary judgment on the post-2019 royalty claim. The defendants moved for summary judgment against the Estate’s contract claim, on their counterclaims and third-party claims, and for a preliminary injunction. The Estate separately sought attorney’s fees.

Rulings on the Contract Claim

The court held that Fuchs could be personally liable because he signed the 2001 settlement agreement “in his individual capacity and on behalf of TufAmerica.” It therefore denied the defendants’ motion for summary judgment on the contract claims against Fuchs.

The court granted the defendants’ motion for summary judgment on the claims against Funky Delicacies Records. The court held that Funky Delicacies Records was a fictitious trade name rather than a legal entity that could be sued separately. The Estate had already sued TufAmerica, the legal entity doing business under that name. The court stated that the Estate could move to amend the caption to identify TufAmerica as doing business as Funky Delicacies Records.

The defendants argued that Hammond’s acceptance and cashing of an $18,790.51 check marked “All monies due through Dec. 2018” resolved all royalty disputes through 2018. The court denied summary judgment on that issue because the record did not conclusively establish either a genuine dispute over the amount due or Hammond’s knowing acceptance of a lesser amount as full payment. The court therefore left the pre-2019 royalty issue unresolved.

As to payments beginning in 2019, the court granted the Estate’s motion for partial summary judgment and denied the defendants’ motion. Under the contract rule applied by the court, a party that treats a contract as continuing by accepting its benefits cannot simultaneously stop performing its own payment obligations. Because the defendants continued licensing the songs and collecting fees while withholding royalties and reports, the court held that they breached the 2001 settlement agreement by suspending payments in 2019. The court reserved damages and the question of whether royalties were owed for periods before 2019 for trial or later proceedings.

Counterclaims and Third-Party Claims

The court denied the defendants’ motion for summary judgment on their claim that the Hammond Parties breached the implied duty of good faith and fair dealing. The alleged conduct included song releases, the 2014 license, public statements, a website posting, a video, and emails to Warner Music Group. The court held that some older allegations—the 1993 and 1994 releases and the 2014 license—fell outside New York’s six-year limitations period. It also found factual disputes about the later conduct, including whether statements were false, whether they were made by or on behalf of the Estate, and whether the conduct breached the agreement.

The court denied summary judgment on the unfair-competition claims. It treated the defendants’ theory as potentially involving unfair competition by disparagement, which requires proof of an untrue statement about a business or property and malice. The court found factual disputes about whether the Estate authorized or was responsible for the 2021 Warner Music Group emails, whether the individual third-party defendants acted together with Cisco, and whether the required malice existed.

The court also denied summary judgment on the tortious-interference claims. Those claims depended on proving wrongful conduct, and the same unresolved factual disputes concerning the alleged breaches, disparagement, and other torts prevented judgment as a matter of law.

Preliminary Injunction

The court denied the defendants’ application for a preliminary injunction. It held that the defendants had not shown that they were likely to succeed on their claims or that they faced irreparable harm. The court also noted that monetary compensation appeared adequate and that the defendants waited until years after the 2021 emails to seek this relief.

Attorney’s Fees and Disposition

The court denied the Estate’s motion for attorney’s fees without prejudice. Although the Estate obtained partial summary judgment on the post-2019 royalty claim, the pre-2019 royalty issues and the defendants’ counterclaims remained unresolved. The court therefore could not yet determine which side would ultimately be the prevailing party under the fee provision in the settlement agreement.

The order granted the Estate’s motion for partial summary judgment on the 2019-to-present royalty claim; granted in part the defendants’ defensive motion for summary judgment as to Funky Delicacies Records but denied it as to the remainder; denied the defendants’ affirmative motion for summary judgment on their counterclaims and third-party claims; denied the defendants’ application for a preliminary injunction; and denied the Estate’s attorney-fee motion without prejudice.