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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

HARRY BALK, an individual,

v.

Plaintiff,

CLARENCE AVANT and INTERIOR MUSIC, CORP., A California Corporation;

Defendants.

INTERIOR MUSIC CORP.,

Third-Party Plaintiff,

v.

SIXTO RODRIGUEZ,

Third-Party Defendant.

Case No. 14-cv-11767 Hon. Laurie J. Michelson Magistrate Judge R. Steven Whalen

THIRD-PARTY DEFENDANT SIXTO RODRIGUEZ’S MOTION FOR SUMMARY JUDGMENT PURSUANT TO FED. R. CIV. P. 56

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THIRD-PARTY DEFENDANT SIXTO RODRIGUEZ’S MOTION FOR SUMMARY JUDGMENT PURSUANT TO FED. R. CIV. P. 56

Third-Party Defendant, Sixto Rodriguez, by his undersigned counsel,

brings this Motion for Summary Judgment against Third-Party Plaintiff Interior

Music Corp. (“Interior”) pursuant to Fed. R. Civ. P. 56. Rodriguez requests that

this Court dismiss Interior’s “Failure to Cooperate” claim for lack of material

factual support for the claim.

When the facts are viewed in a light most

favorable to Interior, no reasonable juror can conclude that Rodriguez has failed

to cooperate during the pendency of this litigation.

Rodriguez also requests that this Court dismiss Interior’s “Breach of

Warranty” claim, contingent on Plaintiff Balk establishing that Interior knew

that Rodriguez was not free to assign the rights to his music free and clear of his

agreement with Balk. The 6-year breach of contract statute of limitations on a

breach of warranty claim accrues at the time that the breach of warranty was or

reasonably should have been discovered. Mich. Comp. Laws § 600.5833.

If

Interior knew all along that Rodriguez had made a faulty warranty, then the

cause of action accrued in 1970, and the statute of limitations has long run.

Last, Rodriguez requests that this Honorable Court enter an order

limiting Interior to damages against Rodriguez to those specified in the

Exclusive Songwriters and Composer’s Agreement (ESCA).

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There was a conference between attorneys regarding the nature of the

motion and legal basis for the requested relief, and concurrence was not

obtained.

WHEREFORE,

Third-Party

Defendant

Sixto

Rodriguez

respectfully

requests that this Honorable Court GRANT Rodriguez’s Motion for Summary

Judgment and enter an order: 1) Dismissing Defendant’s “Failure to Cooperate”

claim; 2) Dismissing Defendant’s “Breach of Warranty” claim contingent on

Plaintiff Balk establishing that Interior knew about the alleged breach from the

inception

of

the

ESCA,

and

3)

Limiting

any

damages

assessed

against

Rodriguez to those specified in the ESCA.

Dated: July 20, 2016

Respectfully submitted,

/s/ Sima G. Patel

GEOFFREY N. FIEGER (P-30441) SIMA G. PATEL (P-69541) Attorneys for Plaintiff 19390 W. 10 Mile Road Southfield, MI 48075 (248) 355-5555 s.patel@fiegerlaw.com

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

HARRY BALK, an individual,

v.

Plaintiff,

CLARENCE AVANT and INTERIOR MUSIC, CORP., A California Corporation;

Defendants.

INTERIOR MUSIC CORP.,

Third-Party Plaintiff,

v.

SIXTO RODRIGUEZ,

Third-Party Defendant.

Case No. 14-cv-11767 Hon. Laurie J. Michelson Magistrate Judge R. Steven Whalen

BRIEF IN SUPPORT THIRD-PARTY DEFENDANT SIXTO RODRIGUEZ’S MOTION FOR SUMMARY JUDGMENT PURSUANT TO FED. R. CIV. P. 56

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CONCISE STATEMENT OF THE ISSUES PRESENTED

I. Viewing the record in a light most favorable to Interior, has Interior failed to establish a genuine issue of material fact as to whether Rodriguez cooperated in the defense of Interior’s case or that he colluded with Plaintiff Harry Balk?

Third-Party Defendant Rodriguez answers: “Yes.”

II. If Balk prevails and establishes that Interior and Avant knew that Rodriguez’s warranty that he was free to sell the rights his music was untrue from the inception of the Exclusive Songwriter and Composer’s Agreement (ESCA) in 1970, has the statute of limitations for Interior’s breach of warranty claim against Rodriguez long expired?

Third-Party Defendant Rodriguez answers: “Yes.”

III. Based on the plain and unambiguous language of the ESCA, is Interior contractually limited to only withholding royalties to reimburse itself for any damages putatively owed by Rodriguez as a result of the underlying litigation?

Third-Party Defendant Rodriguez answers: “Yes.”

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INDEX OF AUTHORITY

Cases

Adickes v. S. H. Kress & Co.,

Pg ID 1126

398

U.S. 144, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970)

4

Am. Fed'n of State, Cty. & Mun. Employees, AFL-CIO, Michigan Council 25

& Local 1416 Highland Park Sch. Dist. Bd. of Educ.,

 

457

Mich. 74, 577 N.W.2d 79 (1998)

7

Anderson v. Liberty Lobby, Inc.,

477

U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)

4, 5, 6

Celotex Corp. v. Catrett,

477

U.S. 317 (1986)

4

Darrah v. City of Oak Park,

255

F.3d 301 (6th Cir. 2001)

5

Quality Products & Concepts Co. v. Nagel Precision, Inc.,

469

Mich. 362, 666 N.W.2d 251 (2003)

9

Wilkie v. Auto-Owners Ins. Co.,

469

Mich. 41, 664 N.W.2d 776 (2003)

9

Statutes

Mich. Comp. Laws § 600.5807(8)

7

Mich. Comp. Laws § 600.5827

7

Mich. Comp. Laws § 600.5833

1, 7, 10

Rules

Fed. R. Civ. P. 56

1, i, 1, 4

Fed. R. Civ. P. 56(c)

4

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I. INTRODUCTION AND SUMMARY OF ARGUMENT

Third-Party Defendant Sixto Rodriguez moves this Court for summary

judgment pursuant to Fed. R. Civ. P. 56.

Plaintiff requests that this Court

dismiss Interior’s “Failure to Cooperate” claim for lack of material factual

support for the claim.

There are no facts to support Interior’s claim that

Rodriguez has failed to cooperate. Rodriguez has participated in all discovery,

including a lengthy deposition.

There is no factual support for this claim and

summary judgment is appropriate.

Plaintiff also requests that this Court dismiss Interior’s “Breach of

Warranty” claim, contingent on Plaintiff Balk establishing that Interior knew

that Rodriguez was not free to assign the rights to his music free and clear of his

agreement with Balk from the inception of the Exclusive Songwriter and

Composer’s Agreement (ESCA).

The 6-year breach of contract statute of

limitations on a breach of warranty claim accrues at the time that the breach of

warranty was or reasonably should have been discovered. Mich. Comp. Laws

§ 600.5833.

If Interior knew from the inception of the ESCA that Rodriguez

had made a faulty warranty, then the cause of action accrued in 1970, and the

statute of limitations has long since expired.

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Last, plaintiff requests that this Honorable Court enter an order limiting

Interior to damages against Rodriguez to those specified in the Exclusive

Songwriters and Composer’s Agreement (ESCA).

II. FACTS AND PROCEEDINGS

This case arises out of a dispute regarding who owns the music rights to

songs authored by Sixto Rodriguez, referred to in the pleadings as the “Cold

Fact Compositions.”

These songs were featured in the 2012 Oscar-winning

documentary Searching for Sugarman. Rodriguez allegedly authored the songs

over 40 years ago, and they were credited to his brother on a record label owned

by Clarence Avant’s company, Interior Music. Until recently, Rodriguez did not

realize that while the songs never took off in the United States, they were a

commercial success in South Africa and became anthemic for the anti-apartheid

movement.

Plaintiff Harry Balk also did not know that the songs were a commercial

success, and he now claims that Rodriguez composed the songs while under an

exclusive

songwriter

agreement

with

his

company,

Gomba

Music.

After

learning of the songs’ success, Balk sued Interior and Avant in a multi-count

complaint,

essentially

claiming

that

Avant

and

Interior

conspired

with

Rodriguez to defraud him. In the now operative second amended complaint,

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Balk alleges that, to avoid Rodriguez’s obligation to write songs exclusively for

Gomba Music, Interior and Avant perpetrated a scheme in which Rodriguez

would write songs for them but falsely attribute them to others. (Doc # 39,

Second Am. Compl.)

The

second

amended

complaint

includes

claims

for

copyright

infringement, fraudulent misrepresentation, tortious interference with copyright

and

fraud

against

Defendants

Clarence

Avant

and

Interior

Music

Corp.

(“Interior”). Defendant Interior, in turn under Rule 14, filed a third-party

complaint against Sixto Rodriguez on May 28, 2014, asserting that Rodriguez is

liable to Interior for any damages incurred as a result of Balk’s lawsuit against

Interior. (See Doc # 11).

Defendant Interior alleged two counts in the third-party complaint. In

Count I, Breach of Contract – Warranties and Representations, Interior alleged

that Rodriguez was in breach by warranting under the Exclusive Songwriter and

Composer’s

Agreement

(ESCA)

with

Interior

that

all

the

rights

to

the

compositions were delivered “free and clear of any and all claims, rights and

obligations

whatsoever.”

In

Count

II,

Breach

of

Contract

Failure

to

Cooperate, Interior alleged that Rodriguez failed to cooperate in the defense of

the underlying litigation and that Rodriguez colluded with plaintiff against

Interior.

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On July 24, 2016, Interior executed service of its Third-Party Complaint

through alternate means (Doc # 20) after the Court granted its request to do so

(Doc # 19). When Rodriguez did not answer the third-party complaint, Interior

requested the clerk to enter default on August 15, 2014 (Doc # 22), which the

clerk did that same day (Doc # 23). Interior moved for a default judgment soon

afterward. (Doc # 25). This Court granted the motion for default judgment on

January 5, 2015. Subsequently, on October 29, 2015, Rodriguez filed a motion

to set aside the default judgment (Doc # 60), which the Court granted on April

15, 2016. (Doc # 68).

Rodriguez now moves this Court for summary judgment of the “Failure

to Cooperate” and “Breach of Warranty” claims against him.

III. STANDARD OF REVIEW

Third-Party

Defendant

Rodriguez

judgment pursuant to Fed. R. Civ. P. 56.

brings

his

motion

for

summary

Summary judgment is appropriate

only where the pleadings, affidavits, and responses to discovery “show that

there is no genuine issue as to any material fact and that the moving party is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986).

In determining whether there is a genuine

issue of material fact, the record is viewed in the light most favorable to the

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nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.

Ct. 2505, 91 L. Ed. 2d 202 (1986). Under Rule 56(c), the moving party has the

burden of establishing that there are no genuine issues of material fact and that

he is entitled to a judgment as a matter of law.

Adickes v. S. H. Kress & Co.,

398 U.S. 144, 159-160, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970); Darrah v. City

of Oak Park, 255 F.3d 301 (6th Cir. 2001).

A material fact is “one that might affect the outcome of the suit under the

governing law.” Anderson, 477 U.S. at 248. A disputed fact presents a genuine

issue “if the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.” Id. “The evidence of the nonmovant is to be believed, and

all justifiable inferences are to be drawn” in the nonmovant’s favor. Id.

IV.

ARGUMENT

1. When the facts are viewed in a light most favorable to Interior, there

material

Rodriguez’s

is

no

genuine

issue

of

fact

regarding

cooperation during this litigation.

In Count II of the TPC, Breach of Contract – Failure to Cooperate,

Interior alleged that Rodriguez failed to cooperate in the defense of the

underlying litigation and that Rodriguez colluded with plaintiff against Interior.

There are no facts to support this allegation. The record shows that Rodriguez

has cooperated with Interior during the course of this litigation. Rodriguez has

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timely answered all discovery requests, has shown up for deposition and has

participated fully in his lengthy deposition. See Exhibit 1, Deposition of Sixto

Rodriguez.

There is also no record evidence to support that Rodriguez has colluded

with Balk against Interior. Rodriguez was questioned in detail in his deposition

about meeting with Balk at a concert at Wayne State University in 2008.

(Rodriguez Dep, pg 89). When asked whether he and Balk colluded, or talked

about Interior or Avant and the financial side of the music, Rodriguez answered

that he did not talk to Balk about these subjects. (Id. at pg. 89-92).

There is no factual support for Interior’s claim that Rodriguez has failed

to cooperate in this litigation or that he has colluded with Plaintiff Balk in any

way. Count II of the TPC should be dismissed with prejudice.

2. Third-Party

Plaintiff

Interior’s

Claim

for

Breach

of

Warranty

Should

be

dismissed

as

untimely,

contingent

on

Plaintiff

Balk

establishing that Interior and Avant knew about the alleged faulty warranty from the inception of the ESCA.

In

Count

I

of

the

TPC,

Breach

of

Contract

Warranties

and

Representations, Interior alleges that Rodriguez was in breach by warranting

under the Exclusive Songwriter and Composer’s Agreement (ESCA) with

Interior that all the rights to the compositions were delivered “free and clear of

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any and all claims, rights and obligations whatsoever.”

The alleged breach of

warranty occurred over 40 years ago, and taking the allegations in Balk’s

Second Amended Complaint as true, occurred with the full knowledge and

collusion of Interior.

The statute of limitations for breach of contract claims in Michigan is six

years. Mich. Comp. Laws § 600.5807(8). A breach of contract claim accrues “at

the time the wrong upon which the claim is based was done regardless of the

time when the damage results.” Mich. Comp. Laws § 600.5827.

Put another

way, the statute of limitations begins to run on the date the contract is breached.

Am. Fed'n of State, Cty. & Mun. Employees, AFL-CIO, Michigan Council 25 &

Local 1416 Highland Park Sch. Dist. Bd. of Educ., 457 Mich. 74, 90, 577

N.W.2d 79, 85 (1998). The 6-year breach of contract statute of limitations on a

breach of warranty claim accrues at the time that the breach of warranty was or

reasonably should have been discovered. Mich. Comp. Laws § 600.5833.

If Plaintiff Balk succeeds in establishing that Defendants Interior and

Avant knew, from the inception of the ESCA, that Rodriguez was making a

faulty warranty, then the breach of warranty claim accrued on the date that the

ESCA was allegedly entered into, March 2, 1970. (See TPC, Doc #11, pg 4 of

16, Page ID 37).

As such, the statute of limitations on the breach of warranty

claim would have expired 6 years later, on March 2, 1976.

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that, if Plaintiff Balk prevails and proves that Defendant Interior and Avant

were complicit and knew that Rodriguez provided an allegedly faulty warranty

in 1970, then the breach of warranty claim against Rodriguez must be dismissed

as untimely.

3. Plaintiff requests that this Court enter an order limiting

explicitly

damages

assessed

against

Rodriguez

to

those

spelled out in the ESCA.

Finally, Rodriguez asks that this Court enter an order limiting any

damages assessed against Rodriguez under the TPC to those specified in the

ESCA. Clause 13 of the ESCA provides in relevant part:

If a claim is presented against Publisher in respect of any musical composition hereunder, and because thereof Publisher is jeopardized, Publisher shall have the right thereafter, until said claim has been finally adjudicated or settled, to withhold any and all royalties that may be or become due with respect to such disputed compositions pending the final adjudication or settlement of such claim. Publisher, in addition, may withhold other royalties to be earned pursuant to this agreement or any other agreement between Writer and Publisher, and its affiliated or related companies, sufficient, in the opinion of Publisher, to reimburse Publisher for any contemplated damages, including court costs and attorneys’ fees and costs resulting therefrom. Publisher shall advance the costs of litigation, if any, including court costs and attorneys’ fees together with any damages which may be paid as a result of the settlement or adjudication of a claim in connection with a musical composition written or composed by Writer. All such costs and damages shall be deemed an advance against any royalties payable to Writer under this or any other agreement between Writer and Publisher. Upon

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the final adjudication or settlement of each and every claim hereunder, all moneys withheld shall then be disbursed in accordance with the rights of the parties as provided hereinabove.

This provision of the ESCA controls Rodriguez’s putative liability to Interior in

the event of any litigation: Interior has the right to withhold royalties to

reimburse itself for the costs associated with the litigation, including for the cost

of any contemplated damages.

The agreement does not allow for a separate

money damages award to be assessed against Rodriguez.

The proper interpretation of a contract is a question of law. Wilkie v.

Auto-Owners

Ins.

Co.,

469

Mich.

41,

47,

664

N.W.2d

776

(2003).

In

interpreting a contract, this Court’s obligation is to determine the intent of the

parties. Quality Products & Concepts Co. v. Nagel Precision, Inc., 469 Mich.

362, 375, 666 N.W.2d 251 (2003). This Court must examine the language of the

contract and accord the words their ordinary and plain meanings, if such

meanings are apparent. Wilkie, supra at 47. If the contractual language is

unambiguous, courts must interpret and enforce the contract as written. Quality

Products, supra at 375. “Thus, an unambiguous contractual provision is

reflective of the parties’ intent as a matter of law.” Id.

Rodriguez submits that the plain and ordinary meaning of the ESCA

controls as to damages. The damages clause of the contract is detailed.

It sets

forth what type of damages Interior can claim as a result of litigation, and how

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and when the damages can be recovered. The contract specifically limits

Interior to damages of “withholding” royalties and reimbursing itself for any

damages, costs or fees. The contract goes so far as to state that “[a]ll such costs

and damages shall be deemed an advance against any royalties payable to

Writer under this or any other agreement.” The ESCA allows for royalties to be

withheld to reimburse Interior for any damages and costs of litigation. On the

other hand, the contract is silent regarding any separate money judgment

against Rodriguez. Given the details in the contract about how, when and how

much can be recovered/withheld, the silence is telling. The agreement does not

allow for a separate money judgment to be entered against Rodriguez.

V. CONCLUSION AND RELIEF REQUESTED

Third-Party Defendant, Sixto Rodriguez, by his undersigned counsel,

requests that this Court dismiss Interior’s “Failure to Cooperate” claim for lack

of material factual support for the claim.

When the facts are viewed in a light

most favorable to Interior, there is no record evidence to support the claim that

Rodriguez has failed to cooperate during the pendency of this litigation.

Rodriguez also requests that this Court dismiss Interior’s “Breach of

Warranty” claim, contingent on Plaintiff Balk establishing that Interior knew

that Rodriguez was not free to assign the rights to his music free and clear of his

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agreement with Balk.

If Interior knew all along that Rodriguez had made a

faulty warranty, then the cause of action accrued in 1970, and the statute of

limitations has long run. Mich. Comp. Laws § 600.5833.

Last, Rodriguez requests that this Honorable Court enter an order

limiting Interior to damages against Rodriguez to those specified in the

Exclusive Songwriters and Composer’s Agreement (ESCA).

WHEREFORE,

Third-Party

Defendant

Sixto

Rodriguez

respectfully

requests that this Honorable Court GRANT Rodriguez’s Motion for Summary

Judgment and enter an order: 1) Dismissing Defendant’s “Failure to Cooperate”

claim; 2) Dismissing Defendant’s “Breach of Warranty” claim contingent on

Plaintiff Balk establishing that Interior knew about the alleged breach from the

inception

of

the

ESCA,

and

3)

Limiting

any

damages

Rodriguez to those specified in the ESCA.

assessed

against

Dated: July 20, 2016

Respectfully submitted,

/s/ Sima G. Patel

GEOFFREY N. FIEGER (P-30441) SIMA G. PATEL (P-69541) Attorneys for Plaintiff 19390 W. 10 Mile Road Southfield, MI 48075 (248) 355-5555 s.patel@fiegerlaw.com

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PROOF OF SERVICE

On July 20, 2016, I served a copy of the foregoing upon all counsel of record, and declare under penalty of perjury that this statement is true to the best of my knowledge, information and belief.

/s/ Sima G. Patel

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