Citation. 98 N.Y.2d 562, 780 N.E.2d 166, 750 N.Y.S.2d 565 (N.Y. 2002)
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A contract between a music producer and a group of singers was at issue. One of the singers was married to and subsequently divorced from the music producer. The singer and music producer entered into a divorce settlement, which included certain releases, the scope of which are at issue.
Synopsis of Rule of Law.
The mutual releases in this divorce agreement were not so broad to apply to the parties' recording contract.
Facts.
The Plaintiffs were the individuals making up the group of "The Ronettes" (the "Plaintiffs"). One of the Plaintiffs was Ronnie Greenfield ("Ms. Greenfield"). In 1963, the Plaintiffs entered into a five year "personal services" recording contract (the "Agreement") with the Defendants, Phil Spector ("Mr. Spector") and his production company, Philles Records (the "Defendants"). The Plaintiffs "agreed to perform exclusively for Philles Records and in exchange, Philles Records acquired an ownership right to the recordings of the Ronettes' musical performances." The Agreement provided for the Plaintiffs to receive royalties and also granted them a lump sum payment of about $15,000. The group disbanded in 1967 and Plaintiffs never received any royalty payments despite their popularity. The Plaintiffs most popular album was "Be My Baby". Ms. Greenfield and Mr. Spector were married in 1968 and separated a few years later. A divorce settlement was agreed to in 1974 and the settlement included "mutual general releases that purported to resolve all past and future claims and obligations that existed between them, as well as between Greenfield and Spector's companies." Music from the 1960's became popular again and the Defendants began to "mak[e] use of new recording technologies and licensing master recordings of the Ronettes' vocal performances for use in movie and television productions, a process known in entertainment industry parlance as 'synchronization.' " The Defendants also profited with the Plaintiffs' music in other ways by utilizing advances in technology. The Plaintiffs never received any royalties from these endeavors.
Issue.
"[W]hether the artists' transfer of full ownership rights to the master recordings of musical performances carried with it the unconditional right of the producer to redistribute those performances in any technological format?"
• Whether the mutual releases set forth in the parties' divorce agreement bars Ms. Greenfield from sharing in any of the royalties?
Held.
Yes. "In the absence of an explicit contractual reservation of rights by the artists there is a transfer of rights." The Court of Appeals held that "[u]nder the 'plain meaning rule' defendant's had the absolute right, without royalties, to reproduce the recordings in media that were not in existence at the time of the contract."
• The court first determined that California law applied when determining the scope of Ms. Greenfield's release. California courts consider "all credible evidence of the parties' intent in addition to the language of the contract." Further, "[t]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." The court followed the New York Supreme Courts determination that the extrinsic evidence demonstrated Ms Greenfield did not intend for the divorce settlement to apply to the 1963 recording contract and its granting of royalties.
Discussion.
This case offers a basic discussion of how to determine the scope of a release.
