\\Dc3\Vol1\WISEMAN\Memos and Orders\King Records Memop Msjs Ctt.Wpd

$\\Dc3\Vol1\WISEMAN\Memos and Orders\King Records Memop Msjs Ctt.Wpd$ IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION KING RECORDS, INC., et al., ) ) Plaintiffs, ) ) v. ) Case No. 3:03cv1130 ) DONALD M. DAILY, et al., ) Judge Thomas A. Wiseman, Jr. ) Defendants. ) MEMORANDUM OPINION Before the Court is Plaintiffs’ motion for summary judgment (Doc. No. 304). Specifically, Plaintiffs seek summary judgment on the following grounds: (1) That Defendants have received “all associated rights and obligations” to which they are entitled in the George Jones Musicor master recordings that were to be transferred to Defendants pursuant to the August 30, 2003 letter agreement (“Settlement Agreement”); (2) That Defendants have received all the George Jones Musicor master recordings as well as all “DATs, multitrack and mixed-down tapes” that they are entitled to receive pursuant to the Settlement Agreement; and (3) That the only sales by Plaintiffs of product manufactured from the George Jones Musicor master recordings after the expiration of the time period provided in the Settlement Agreement for Plaintiffs to sell off existing inventory were sales by Plaintiff International Marketing Group (“IMG”) of 1,359 units to Music net, Inc. (See Doc. No. 304, at 1–2.) Defendants oppose Plaintiffs’ motion on the basis that material issues of disputed fact render summary judgment inappropriate. For the reasons and on the grounds discussed in greater detail below, the Court finds that material issues of disputed fact preclude summary judgment on the issues of (1) whether Plaintiffs conveyed all the multitrack Musicor recordings in their possession that they were required to convey and (2) whether the recordings to which the parties refer as the “Mike Stone Tapes” are “mixed-down tapes” that Plaintiffs were required to convey to Defendants in accordance with the Settlement Agreement. Plaintiffs, however, are entitled to summary judgment in their favor on the remaining issues raised in their motion, including whether they breached the Settlement Agreement by failing to convey DATs; whether they breached the Settlement Agreement by failing to convey any recordings at all of twenty-eight songs that Defendants insist are George Case 3:03-cv-01130 Document 368 Filed 01/31/07 Page 1 of 18 PageID #: <pageID> Page 2 of 18 Jones songs recorded for Musicor to which they are entitled; and whether Plaintiffs breached the Settlement Agreement by selling product manufactured from the George Jones Musicor recordings after the expiration of the sell-off period other than the 1,359 items Plaintiffs acknowledge were accidentally sold in violation of the Settlement Agreement. I. STANDARD OF REVIEW Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In considering such a motion, the court must view the evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central issue is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52 (1986). “Where an issue as to a material fact cannot be resolved without observation of the demeanor of witnesses in order to evaluate their credibility, summary judgment is not appropriate.” Willetts v. Ford Motor Co., 583 F.2d 852, 855 (6th Cir. 1978) (quoting Notes of Advisory Committee on 1963 Amendment to Rule 56, Fed. R. Civ. P.). However, the party opposing summary judgment must “set forth specific facts” demonstrating a genuine issue for trial—not mere beliefs. Thus, unsupported allegations that credibility is in issue will not suffice. See, e.g., City of Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 586 (6th Cir. 2001) (noting that one party’s unsupported assertions were not sufficient to undercut the credibility of uncontroverted affidavits); In re Glazer, 239 B.R. 352, 356 (N.D. Ohio 1999) (“[T]he non-movant may not simply attack the credibility of the movant's affiants without a supporting factual showing.”). On the other hand, ”if the credibility of the movant’s witnesses is challenged by the opposing party and specific bases for possible impeachment are shown, summary judgment should be denied and the case allowed to proceed to trial, inasmuch as this situation presents the type of dispute over a genuine issue of material fact that should be left to the trier of fact.” Notes of Advisory Committee on 1963 Amendment to Rule 56, Fed. R. Civ. P. Case 3:03-cv-01130 Document 368 Filed 01/31/07 Page 2 of 18 PageID #: <pageID> Page 3 of 18 II. DISCUSSION A. The Conveyance of All Intangible Rights and Obligations At the time of the Settlement Agreement, Plaintiff King Records, now called Gusto (hereafter “King/Gusto”) was the only plaintiff that owned intangible rights to the George Jones Musicor master recordings (hereafter, the “Musicor Masters”) that were to be transferred pursuant to the Settlement Agreement. Defendants attempt to dispute this fact with a reference to a statement in David Showalter’s declaration in which he states: At the time of the August 30, 2003 Settlement Agreement, the Daily parties owned a right to a producer’s royalty. Due to the past conduct of surreptitiously transferring rights among related parties, the title of ownership may have been held by another entity which the King parties controlled, but it is believed that Moe Lytle and companies and persons he controlled and [sic] owned all other rights in and to the masters and indicia thereof, tangible and intangible. Further, Lytle had issued license to third parties who claimed a right to exploit the masters under limited conditions and terms. Lytle, his counsel and companies refused to transfer all license rights and income, claiming they were not included in the rights to be transferred. This was contrary to the terms and intent of the agreement. The Daily parties expended more than $20,000 in fees and costs and lost revenue forcing the Lytle parties to honor the agreement in this regard. (Doc. No. 317, at ¶ 6 (emphasis added).) The Court finds that Mr. Showalter’s statement does not create a genuine issue of disputed fact. Mr. Showalter speculates that title “may have been held” by some other entity but “it is believed” (Mr. Showalter does not indicate by whom) that Moe Lytle and other entities controlled by him owned all the rights to the Musicor Masters. This type of speculation is not sufficient to create a genuine dispute of fact. Moreover, the remainder of the paragraph has no relevance whatsoever to the matter before this Court, which is enforcement of the Settlement Agreement that was supposed to terminate this and all other litigation between and among the parties. On the effective date of the Settlement Agreement, all intangible rights in the Musicor Masters that were required to be transferred pursuant to the Settlement Agreement were transferred to the Defendants. Defendants attempt to dispute this fact by referring to ancient history. Regardless of whether any of the Plaintiffs initially sought to dispute the fact that all intangible rights were transferred or whether the parties previously engaged in litigation to settle that issue, the Plaintiffs no longer dispute the fact so it is no longer Case 3:03-cv-01130 Document 368 Filed 01/31/07 Page 3 of 18 PageID #: <pageID> Page 4 of 18 an issue, much to the Defendants’ advantage.1 The Court finds that Plaintiffs are entitled to summary judgment on the issue of whether they have complied with the Settlement Agreement by conveying all intangible rights and obligations associated with the Musicor Masters. B. The Conveyance of all DATs, Multitracks, “Mixed-Down Tapes” and Masters The Settlement Agreement required King/Gusto to convey to Defendants all George Jones Musicor Masters, as well as all digital audio tapes (“DATs”), multitrack and “mixed-down” versions thereof that were owned by King/Gusto at the time of the Settlement Agreement. Specifically in that regard, the Settlement Agreement provides: “All George Jones Musicor master recordings and all associated rights and obligations, DATs, multitrack and mixed-down tapes which King owns . .will be conveyed to [Defendants].” (Doc. No. 202, Ex. 1 (emphasis added).) One legal dispute and four potential factual disputes arise in connection with this single provision of the Settlement Agreement. The legal dispute concerns the proper interpretation of the phrase “which King owns.” (1) The Legal Issue: Interpretation of the Settlement Agreement A contract is to be interpreted according to its plain terms as written. Warren v. Metro. Gov’t of Nashville & Davidson County, 955 S.W.2d 618, 622–23 (Tenn. Ct. App. 1997). The interpretation should be one that gives reasonable meaning to all of the provisions of the agreement, without rendering portions of it neutralized or without effect. Davidson v. Davidson, 916 S.W.2d 918, 922–23 (Tenn. Ct. App. 1995). The entire written agreement must be considered to ascertain the parties' intent. D & E Constr. Co. v. Robert J. Denley Co., 38 S.W.3d 513, 518–19 (Tenn. 2001). The intent of the parties is derived from the four corners of the agreement, giving effect to all parts of the agreement. Gale Smith & Co. v. Governor's Club, LLC, No. M2001-01616-COA-R3-CV, 2002 WL 31094849, at *4 (Tenn. Ct . App. Sept. 20, 2002) (quoting Blue Diamond Coal v. Holland-Am. Ins. Co., 671 S.W.2d 829, 833 (Tenn. 1984)). If the agreement is ambiguous, however, “ ‘the intent of the parties may be derived from extrinsic evidence.’ ” Id.

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