Brief Fact Summary. 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.
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.
Extrinsic evidence of the parties intent may be considered only if the agreement is ambiguous, which is an issue of law for the courts to decide.View Full Point of Law