Catala v. Joombas Co LTD

Background

Juan Catala, doing business as Majic Entertainment LLC and Adrawn Music Publishing, brought claims against songwriter Hyuk Shin; Joombas Co. Ltd., Joombas Music International, Joombas LLC, and Joombas Music Group; and the LA Reid Music Publishing Company LLC, EMI April Music Inc., and Sony/ATV Songs LLC. The claims included breach of contract, fraud, tortious interference with contract, Copyright Act violations, breach of fiduciary duty, and an accounting claim. They arose from agreements concerning rights to musical compositions authored by Shin.

In a September 23, 2019 order, the court dismissed the Joombas Entities’ and Reid Defendants’ motions in their entirety and granted Shin’s motion in part. The court dismissed Catala’s claims concerning Contracts 2 and 3, dismissed his claims against the Reid Defendants, dismissed his tortious-interference and fraud claims against the Joombas Defendants, and dismissed his Copyright Act and accounting claims against Shin. The court allowed only a breach-of-Contract-1 claim against Shin to proceed, and only for conduct occurring before Contract 3 was executed in January 2014.

Catala then moved for reconsideration, which asks a court to revisit an earlier ruling under limited circumstances, and moved to amend the complaint. He argued that the court had misinterpreted Contracts 1, 2, and 3, that the Reid Defendants had breached their obligations, and that he should be allowed to add a fraud-in-the-inducement claim and refile his tortious-interference claim.

Reconsideration

The court denied reconsideration. It found that Catala identified neither an intervening change in controlling law nor new evidence. Instead, he repeated arguments that the court had already considered and rejected. Under the court’s stated standard, reconsideration is an extraordinary remedy and is not a vehicle for relitigating decided issues or presenting new arguments.

Regarding Contract 1, the court reaffirmed that Contract 3 modified the delivery obligations in Contracts 1 and 2. Before Contract 3, Shin was required to deliver compositions to Majic, and Majic was required to deliver them to Reid. After Contract 3 was executed in January 2014, Shin was required to perform composition-delivery obligations for Reid rather than deliver compositions to Majic. The court therefore denied reconsideration of the Contract-1 claims against Shin and the Joombas Entities.

The court also denied reconsideration of the Contract-2 and Contract-3 claims against Shin and the Joombas Entities. It explained that Contract 2 did not require Shin to deliver compositions to Majic, and Contract 3 likewise did not impose that obligation. The court found no contradiction between Majic’s obligation to ensure delivery to Reid and Shin’s lack of an obligation to deliver compositions to Majic.

As to the Reid Defendants, Catala argued that their settlement with Shin breached Contracts 2 and 3 and that they had failed to administer compositions, collect funds, and address copyright registrations. The court denied reconsideration because Catala repeated earlier arguments, did not identify specific compositions or funds involved, and raised the copyright-reregistration theory for the first time in the reconsideration motion.

Motion to Amend

The court denied Catala’s motion to amend. He sought to add a fraud-in-the-inducement claim against the Joombas Defendants based on alleged concealment or misrepresentations during the negotiations leading to Contract 3. He also sought to refile the tortious-interference claim.

The court found the proposed fraud claim futile, meaning legally insufficient even if added to the complaint. Under New York law, fraud in the inducement requires a material false representation, an intent to defraud, reasonable reliance, and resulting damage. The alleged misrepresentation must also be collateral to the contract. The court concluded that Catala had not identified any specific misrepresentation by Shin during the Contract-3 negotiations and was alleging only that Shin breached his contractual obligations and failed to disclose that breach. The court held that this theory was not collateral to the contract and duplicated the breach-of-contract claims.

The court also denied the request to refile the tortious-interference claim. It found that Catala’s additional allegations—that the Joombas Entities intended to cause a breach and obtain royalties—still did not adequately allege that the Joombas Entities procured Shin’s breach.

Disposition

The March 31, 2021 order denied Catala’s motion for reconsideration and motion for leave to amend. The May 20, 2021 memorandum opinion explained the reasons for those rulings. The court also reaffirmed that Catala’s remaining breach-of-contract claim against Shin was limited to Contract 1 and conduct occurring before Contract 3 was executed in January 2014.