Chaquico v. Jefferson Starship, Inc.

Background

Craig Chaquico, a guitarist and songwriter, was a member of Jefferson Starship and Starship from 1976 to 1991. When he left the band, he entered into a written 1991 Termination Agreement signed by Bill Thompson individually and on behalf of Shiprats, Inc. and Starship, Inc., which the opinion identifies as Jefferson Starship, Inc. Chaquico later sued Jefferson Starship, Inc. and Shiprats, Inc.; he voluntarily dismissed the other originally named defendants.

Chaquico received publishing royalties for musical compositions he wrote and artist royalties for recordings on which he performed. The opinion states that his publishing royalties were not at issue in this action. His right to artist royalties arose from contracts rather than copyright ownership.

After the recording copyrights reverted to the defendants, they negotiated a distribution agreement with Rhino Records. The defendants deducted costs and expenses connected with obtaining and administering that agreement, including an 18 percent management-company commission and legal and accounting fees, before distributing the remaining artist royalties. Chaquico challenged those deductions.

The Counterclaim

The defendants sought a declaration that the 1991 Termination Agreement allowed them to deduct costs and expenses when calculating Chaquico’s share of artist royalties. Chaquico argued that paragraph 4 of the agreement prevented deductions from any royalties.

Paragraph 4 stated that Chaquico would receive direct payment of his continuing share of artist royalties and publishing royalties, and that he would no longer be charged a 10 percent administration fee or have royalties, advances, or other earnings subjected to fees, commissions, or other charges “by me.”

The court interpreted the paragraph as a whole. It concluded that the restriction on fees, commissions, and other charges related to the publishing-royalty provisions, particularly because the paragraph specifically referred to the 10 percent administration fee previously charged on publishing royalties. The court also ruled that, even if the language could apply to artist royalties, it prohibited charges by Thompson, not deductions made by Jefferson Starship, Inc. or Shiprats, Inc.

The court therefore granted summary judgment to the defendants on their counterclaim. It ruled that the 1991 Termination Agreement did not prevent them from allocating expenses associated with generating artist royalties among the people who benefited from that income.

The Complaint

Chaquico’s complaint was labeled as seeking an “accounting,” but an earlier order had allowed it to proceed as a possible breach-of-contract claim. The court explained that an accounting is generally a remedy or a procedure connected to another valid claim, not an independent claim merely because financial records are complicated.

At summary judgment, Chaquico identified only one alleged breach: the defendants’ deduction of expenses from artist royalties received through the Rhino advance before calculating his share. Because the court found those deductions permissible under the 1991 Termination Agreement, and because Chaquico identified no other contractual breach, it granted summary judgment to the defendants on his contract claim.

To the extent the complaint asserted an independent request for an accounting, the court ruled that Chaquico had not shown he was entitled to more information than he had received. The court stated that any objection to the completeness of the documents should have been raised through a motion to compel discovery, rather than through a request for the court to conduct an accounting.

Disposition

The court granted defendants’ motion for summary judgment on both the complaint and the counterclaim. A separate judgment was to issue.

Chaquico also moved to seal certain exhibits and redact limited portions of his brief. The court stated that the sealing motion would be deemed denied five days after the order unless defendants submitted a response adequately showing that at least part of the material warranted sealing.