Catala v. Joombas Co LTD

Background

Juan Catala, doing business through Majic Entertainment LLC and Adrawn Music Publishing, sued Hyuk Shin, several Joombas entities, and the Reid Defendants. The complaint asserted claims involving breach of contract, breach of fiduciary duty, fraud, interference with contractual relations, copyright, and an accounting.

The case concerned three agreements. Under the 2009 agreement between Majic and Shin, referred to as Contract 1, Shin and his affiliates were required to deliver musical compositions and relevant ownership interests for exclusive administration. The agreement also gave Majic an undivided 50% copyright interest in compositions written entirely by Shin and required delivery of at least four new compositions, or the fractional equivalent, during each contract period. Contract 1 defined Shin’s “Affiliates” broadly and defined “Your Interest” to include ownership or authorship interests held by Shin or those affiliates.

A separate agreement between Majic, Reid, and EMI was later modified by Contract 3, effective January 1, 2014. In an earlier order, the court ruled that Contract 3 changed the delivery obligations and that Shin no longer had to deliver compositions to Majic after Contract 3 took effect. The earlier order dismissed the other claims and left only Catala’s breach-of-Contract-1 claim against Shin for conduct before January 1, 2014.

Motions and evidence

Catala moved for summary judgment, a procedure that permits judgment without a trial when there is no genuine dispute about an important fact and the moving party is entitled to judgment under the law. Shin cross-moved for summary judgment. Catala also moved to strike Shin’s affirmative defenses.

Catala argued that Shin had concealed or misreported his interests in compositions by placing music in other writers’ names or in the names of entities connected with Joombas. Catala also argued that this conduct prevented him from receiving royalties and from advancing through Contract 1’s minimum-delivery requirements.

Shin argued that the relevant compositions had been delivered and that Catala could not identify a composition in which Shin or an affiliate had an ownership or authorship interest subject to Contract 1 but failed to deliver it. The court also addressed Catala’s contention that Shin’s responses to requests for admission were late. Although Shin responded three days, or one business day, after the deadline, the court ruled that the responses would be treated as timely for purposes of avoiding automatic admissions because allowing that result promoted consideration of the merits and did not unfairly prejudice Catala.

Court’s reasoning

The court concluded that Catala had not presented evidence sufficient to show a breach of Contract 1 or to create a genuine factual dispute. Catala did not dispute that Shin delivered compositions resulting from Shin’s individual authorship or ownership. Instead, Catala alleged that Shin had understated his ownership interests or attributed compositions to other people or entities.

The court found those allegations speculative. Catala did not identify the compositions at issue, establish that Shin or an affiliate had an authorship or ownership interest in them, show what percentage interest was required to be delivered, or show that any required interest was not delivered to Majic or Sony. The exhibits cited by Catala likewise did not establish those points. They did not show that the interests listed were held by Shin or an affiliate, were subject to Contract 1, or had not been delivered as required.

The court separately rejected Catala’s argument concerning the minimum-delivery provision because Catala did not offer evidence that Shin failed to deliver four new compositions or the fractional equivalent. The court also noted that Contract 1 prohibited Shin from assigning his rights or interests in covered compositions without Majic’s prior written consent, but held that Catala still had not produced evidence showing a violation of that provision.

Disposition

The court held that failure to prove that Shin or a Shin affiliate did not deliver a required authorship or ownership interest was an essential part of Catala’s breach claim. Because Catala had not offered evidence creating a material factual dispute on that point, Judge Paul G. Gardephe denied Catala’s motion for summary judgment and granted Shin’s motion for summary judgment. The court denied Catala’s motion to strike Shin’s affirmative defenses as moot and directed the Clerk of Court to terminate the motions and close the case.