Songbyrd, Inc. v. Estate of Grossman

Brief Fact Summary.

Byrd, a musician, composed several recordings of his performances. Those records were transferred to Bearsville, a recording company. Bearsville licensed the recordings to Rounder, a recording corporation. Rounder released two albums with the recordings. Byrd’s representative demanded Rounder to return the recordings, but Rounder refused. Plaintiff, Songbyrd, Inc., brought suit against Bearsville.

Synopsis of Rule of Law.

Pursuant to New York law, the statute of limitations for conversion begins the moment the conversion takes place, not the moment the owner’s demands the property is declined.

Facts.

Around the 1970s, Henry Roeland Byrd, a musician,composed several master recordings of his performances. Byrd produced the recordings in a Louisiana studio. Later 1972, the recordings were transferred from a predecessor in interest to Bearsville Records, Inc. (“Bearsville”) in New York. In 1986, Bearsville licensed the recordings to Rounder Records Corporation (“Rounder”). Thereafter, in 1987, Rounderannounced an album. Additionally, in 1991, Rounder announced another album under a licensing agreement with Bearsville. At that time, Byrd’s representatives requested that Rounder return of the recordings several times. In 1995, Songbyrd, Inc. (“Plaintiff”) brought suit against Albert B. Grossman’s estate, doing business as Bearsville,in Louisiana state court, requesting damages and for the court to declare Plaintiff rights to the recordings. Bearsville removed the case to the United States District Court for the Eastern District of Louisiana, andmotioned to dismiss because the case was time barred and there was a lack of personal jurisdiction. Subsequently, Louisiana district court granted the motion to dismiss on the grounds that the case was time barred. Plaintiff appealed the district court’s decision to the United States Court of Appeals for the Fifth Circuit. The appellate court reversed the trial court’s order on the grounds that the claim was not time barred. On remand, the district court held that there was a lack of personal jurisdiction and transferred the case to the United States District Court for the Northern District of New York. Subsequently, the New York district court determined whether the statute of limitations for conversion ran at the time of conversion, as illustrated in Sporn v. MCA Records, Inc., 448 N.E.2d 1324 (N.Y. 1983). Plaintiff alleged that the statute of limitations was triggered when a plaintiff demands the defendant to return property and the defendant refuses to return the property, as described in Solomon R. Guggenheim Foundation v. Lubell, 569 N.E.2d 426 (N.Y. 1991). Bearsville motioned to dismiss the case.

Issue.

Whether, pursuant to New York law, the statute of limitations for conversion begins the moment the conversion takes place, not the moment the owner’s demands the property is declined.

Held.

Yes, pursuant to New York law, the statute of limitations for conversion begins the moment the conversion takes place, not the moment the owner’s demands the property is declined.

Discussion.

Pursuant to New York law, the statute of limitations for conversion begins the moment the conversion takes place, not the moment the owner’s demands the property is declined.

In this case, Plaintiff’s claim to recover chattel is governed by a three-year statute of limitations. Under Sporn, a conversion claim’s statute of limitations begins to run the moment the conversion takes place. Guggenheim is not applicable in this case because that principle is limited to cases that involve with a bona fide purchaser’s possession of chattel. The Guggenheim court held that when a bona fide purchaser for value has refused to return property to upon the true owner’s demand for the chattel’s return, the statute of limitations is triggered. Moreover, the Guggenheim court cited Sporn and stated that a thief, who is in possession of stolen chattel, triggers the statute of limitations the moment the theft takes place. In this case, there is an absence of any evidence that Bearsville constitutes a bona fide purchaser for value. Thus, the statute of limitations was triggered when Bearsville composed the recordings. Furthermore, the pivotal factor in determining when a conversion was started is the moment when there was an unauthorized possession. In 1972, Bearsville was in lawful possession of the recordings. Further, the 1986 licensing agreement between Bearsville and Rounder specifically illustrated that Bearsville’s intended to exercise control of the recordings to the exclusion of Plaintiff. Plaintiff’s lack of knowledge of the 1986 conversion is not dispositive because conversion is not a wrong that continues with continuing limitations period. Therefore, conversion claim was triggered no later than August 1986 and was time barred when the claim was filed in 1995. Therefore, Bearsville’s motion to dismiss is granted.