Aaron Sperske v. Ariel Rosenberg et al

Filing 78

ORDER by Judge Otis D. Wright, II: that Sperskes Motion for Summary Judgment is DENIED 62 . The Court also VACATES the default judgment previously entered against Ariel Pinks Haunted Graffiti on October 23, 2012 34 . (lc). Modified on 7/23/2013. (lc).

O

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
11

AARON SPERSKE,

12
13
14
15
16

v.

Plaintiff,

ARIEL ROSENBERG a/k/a ARIEL
PINK; KWANG NAM KOH p/k/a TIM
KOH; KENNETH JOHN GILMORE; and
ARIEL PINK’S HAUNTED GRAFFITI,

Case No. 2:12-cv-07034-ODW(JCx)
ORDER DENYING MOTION FOR
SUMMARY JUDGMENT [62];
ORDER VACATING DEFAULT
JUDGMENT AGAINST ARIEL
PINK’S HAUNTED GRAFFITI [34]

Defendants.

17
18

In May 2012, band members Ariel Rosenberg, Kwang Nam Koh, and Kenneth

19

John Gilmore ousted drummer Aaron Sperske from the band Ariel Pink’s Haunted

20

Graffiti. Shortly thereafter, the band released the album Mature Themes and had

21

moderate business success. Having been slighted, Sperske brought this action against

22

the band and the individual band members. Sperske’s Complaint alleges four claims

23

for relief: (1) declaratory relief and an accounting under the Copyright Act for 25%

24

ownership of the copyrights to the compositions on the album Mature Themes;

25

(2) declaratory relief under the California Uniform Partnership Act; (3) an accounting

26

of partnership assets and proceeds; and (4) breach of fiduciary duty.

27

The Court entered default judgment against Ariel Pink’s Haunted Graffiti on

28

October 23, 2012. (ECF No. 34.) Sperske now moves the Court for summary

1

judgment against the individual Defendants. (ECF No. 62.) After considering the

2

papers filed by Sperske and the oral arguments presented at the hearing, the Court

3

DENIES Sperske’s Motion for Summary Judgment. The Court also VACATES the

4

earlier-issued default judgment against Ariel Pink’s Haunted Graffiti.
II.

5

BACKGROUND

6

Ariel Rosenberg started the band Ariel Pink’s Haunted Grafitti in 1996.

7

(Rosenberg Decl. ¶ 2 (ECF No. 36-1).) In about 2008, the members of the band

8

consisted of Ariel Rosenberg, Kwang Nam Koh, Kenneth John Gilmore, Aaron

9

Sperske, and a fifth individual. (SUF ¶ 1.) In late 2009, the band entered into a

10

recording contract with 4AD Records. (SUF ¶ 5.) Each band member signed the

11

4AD contract.

12

contract: Before Today in 2010 and Mature Themes in 2012. (SUF ¶ 7.)

(SUF ¶ 6.)

The band released two albums under the recording

13

On May 15, 2012, Rosenberg, Koh, and Gilmore ousted Sperske from the band.

14

(Compl. ¶ 13.) After Sperske’s departure, the band continued its business, earning a

15

total of $219,498, from touring revenue and merchandise sales. (SUF ¶ 23.)

16

Earlier in this case, the Court granted Sperske’s Motion for Default Judgment

17

against Ariel Pink’s Haunted Graffiti. (ECF No. 34.) After conducting discovery,

18

Sperske filed this Motion for Summary Judgment against Rosenberg, Koh, and

19

Gilmore in their individual capacities.

20

III.

LEGAL STANDARD

21

Summary judgment should be granted if there are no genuine issues of material

22

fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.

23

P. 56(c). The moving party bears the initial burden of establishing the absence of a

24

genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).

25

Once the moving party has met its burden, the nonmoving party must go beyond the

26

pleadings and identify specific facts through admissible evidence that show a genuine

27

issue for trial. Id.; Fed. R. Civ. P. 56(c). Conclusory or speculative testimony in

28

affidavits and moving papers is insufficient to raise genuine issues of fact and defeat

2

1

summary judgment. Thornhill’s Publ’g Co. v. GTE Corp., 594 F.2d 730, 738 (9th

2

Cir. 1979).

3

A genuine issue of material fact must be more than a scintilla of evidence, or

4

evidence that is merely colorable or not significantly probative. Addisu v. Fred

5

Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). A disputed fact is “material” where the

6

resolution of that fact might affect the outcome of the suit under the governing law.

7

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1968). An issue is “genuine” if

8

the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving

9

party. Id. Where the moving and nonmoving parties’ versions of events differ, courts

10

are required to view the facts and draw reasonable inferences in the light most

11

favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).
IV.

12

DISCUSSION

13

This case is complicated by Defendants’ halfhearted defense. First, the Court

14

entered default judgment against the band because the band, as a partnership, never

15

responded to the allegations in the Complaint. (ECF No. 34.) Next, the individual

16

Defendants hired lawyers to file their Answers to the Complaint, but soon thereafter,

17

the lawyers withdrew citing irreconcilable differences and failure to pay.

18

No. 51.) Now, in the face of Sperske’s summary-judgment Motion, the individual

19

Defendants failed to file an opposition.

(ECF

20

Sperske’s Motion for Summary Judgment essentially seeks resolution of two

21

issues: (1) whether Sperske and the Individual Defendants formed a partnership; and

22

(2) whether Sperske is a co-author and co-owner of the 12 compositions on the album

23

Mature Themes. The direction of the remaining causes of action—how the band’s

24

profits should be distributed—necessarily flow from the determination of these two

25

issues. The Court first turns to the partnership issue.

26

A.

Partnership

27

Under California Law, “the association of two or more persons to carry on as

28

co-owners a business for profit forms a partnership, whether or not the persons intend

3

1

to form a partnership.” Cal. Corp. Code § 16202(a). If not in writing, a partnership

2

can be inferred if parties participate in (1) profits and losses, (2) contributing money,

3

property, or services, and (3) management of the business. In re Lona, 393 B.R. 1, 14

4

(Bankr. N.D. Cal. 2008); Dickenson v. Samples, 104 Cal. App. 2d 311, 315 (1951)

5

(“To participate to some extent in the management of a business is a primary element

6

in partnership organization, and it is virtually essential to a determination that such a

7

relationship existed.”).

8

Sperske alleges that he and the individual Defendants entered into an oral

9

partnership agreement, and also asserts that his status as a partner is evidenced by his

10

contribution of services and receipt of profits while touring with the band. (SUF

11

¶ 13.) Though the individual Defendants failed to file an opposition, it is obvious that

12

they oppose Sperske’s assertions based upon their earlier-filed motions for

13

reconsideration. (ECF Nos. 36, 47.)

14

First, profit sharing is not sufficient to demonstrate partnership if such sharing

15

could just as easily constitute wages for employment with the band. Cal. Corp. Code

16

§ 16202(c)(3)(B). Sperske has not shown that his profit sharing was anything more

17

than wages; for example, he has not shown that he “filed partnership tax returns or

18

made partner draw payments.” Fredianelli v. Jenkins, No. C-11-3232 EMC, 2013

19

WL 1087653, at *15 (N.D. Cal. Mar. 14, 2013). This suggests that Sperske is trying

20

to retroactively claim the benefits of partnership without paying for the privilege up

21

front.

22

Second, even if some of the hallmarks of a partnership are present (e.g., sharing

23

of profits and contribution of services), Sperske has not proven the primary element of

24

a partnership: participation in the band’s management. Rather, evidence suggests that

25

Rosenberg was the main force behind the band and controlled the band’s creative and

26

business decisions, including personnel decisions. (Rosenberg Decl. ¶¶ 2–7 (ECF

27

No. 36-1).) Simply put, the fact Sperske was “a band ‘member’ does not necessarily

28

denote ownership.”

Fredianelli, 2013 WL 1087653 at *16 (citing Bartels v.

4

1

Birmingham, 332 U.S. 126, 127–28 (1947) (members of “name bands” are employees

2

and the leader is the employer)).

3

Third, Sperske’s failure to name other ex-band members as partners is telling.

4

Under Sperske’s logic, there should be other partners of the band in addition to

5

Sperske and the three individual Defendants: Cole M. Grief-Neill, Jimmy Hey, Joe

6

Kennedy, and Ryeland Allison. (Rosenberg Decl. ¶¶ 4–8 (ECF No. 36-1).) For

7

instance, Kennedy and Sperske have a similar history and relationship with the band:

8

they each replaced former band members and performed similar services.

9

Sperske does not explain how it is that he became a partner upon replacing Hey (the

10

previous drummer), while Kennedy’s replacing of Greif-Neill (the previous lead

11

guitar) imputed to him no such partnership benefit. (Id.) Sperske is also silent on the

12

partnership status of other past and present band members.

Yet

13

Thus, because there are genuine issues of material fact concerning the existence

14

of a partnership, the Court must DENY summary judgment on Sperske’s partnership

15

claims, including the second claim for declaratory relief under the California Uniform

16

Partnership Act, the third claim for an accounting of partnership assets and proceeds,

17

and the fourth claim for breach of fiduciary duty.

18

B.

Copyright ownership and accounting

19

Sperske’s claim under the Copyright Act has two subparts: whether Sperske is a

20

co-author and co-owner of the copyright to the compositions on Mature Themes; and

21

if that is so, what Defendants owe him.

22

i.

Copyright ownership

23

Authors of a joint work are co-owners of copyright in the work. 17 U.S.C.

24

§ 201(a). But if the work was prepared for another, it may be considered a work for

25

hire and the person for whom the work was prepared is considered the sole author and

26

owner of the work. 17 U.S.C. § 201(b). A certificate of registration is prima facia

27

evidence of a copyright’s validity if it is registered before or within five years after

28

first publication of the work. 17 U.S.C. § 410(c). However, the presumptive validity

5

1

a certificate may be rebutted and defeated on summary judgment. S.O.S., Inc. v.

2

Payday, Inc., 886 F.2d 1081, 1086 (9th Cir. 1989).

3

Sperske claims he helped compose and record 12 compositions on Mature

4

Themes, and therefore co-owns the copyrights to those compositions. (SUF ¶ 8.) He

5

also submits as evidence a certificate of registration issued by the Copyright Office.

6

(Sperske Decl., Ex. A.) The certificate lists Sperske, Rosenberg, Gilmore, and Koh as

7

co-authors and copyright claimants of all 12 compositions on Mature Themes. (Id.)

8

But the Court finds it suspicious that this certificate was issued several months

9

after Sperske initiated this suit. Logic dictates that this certificate was filed without

10

consent by Rosenberg, Gilmore, and Koh, because this certificate was filed by Evan S.

11

Cohen, Sperske’s attorney in this case. (Id.) Indeed, Rosenberg has asserted that

12

Sperske only helped compose three songs and record four songs on Mature Themes.

13

(Rosenberg Decl. ¶¶ 3–4 (ECF No. 36-1).) Rosenberg also explained that publishing

14

rights (i.e., copyright ownership rights) were not to be distributed equally: since

15

Rosenberg did the majority of the song writing, he received the lionshare of the

16

publishing rights over the other band members. (Id. ¶¶ 5, 7.)

17

Accordingly, because there are genuine issues of material fact concerning

18

authorship and ownership of the 12 songs on Mature Themes, the Court must DENY

19

summary judgment on Sperske’s copyright claim.

20

ii.

Copyright accounting

21

Even if Sperkse is assumed to own 25% of the copyright (and assuming there is

22

no partnership), the Court notes that there are genuine issues of material fact

23

concerning how the band proceeds are to be distributed to the copyright owners.

24

Specifically, Sperske fails to distinguish proceeds obtained by way of the copyright

25

and proceeds obtained otherwise.

26

$219,498 since May 15, 2012, this figure shows only the total proceeds earned from

27

touring and merchandise sales without discerning what amount was derived from the

28

copyright. (SUF ¶ 7.) It would be incorrect to assert that the entire $219,498 was

While he submits that the band has earned

6

1

derived from the copyright and therefore, should be split based on copyright

2

ownership percentages—25% to each of Sperske and the three individual Defendants.

3

Thus, this remains a factual issue for determination at trial.

4

C.

Effect on prior default judgment

5

Justice demands vacating the default judgment against the partnership. In the

6

Ninth Circuit, courts may act sua sponte to adjust default judgments. Kingvision Pay-

7

Per-View Ltd. v. Lake Alice Bar, 168 F.3d 347, 351 (9th Cir. 1999). Courts may set

8

aside a default judgment under Federal Rule of Civil Procedure 60(b). Fed. R. Civ.

9

P. 55(c). Relief under Rule 60(b) may be based upon mistake, inadvertence, surprise,

10

excusable neglect, newly discovered evidence, fraud, void judgment, satisfied

11

judgment, or for “any other reason justifying relief.” Fed. R. Civ. P. 60(b). Absent

12

highly unusual circumstances, the district court should decline to reconsider an order

13

unless it committed clear error, is presented with newly discovered evidence, or is

14

notified of an intervening change in the controlling law. Marlyn Nutraceuticals, Inc.

15

v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009).

16

Though the Court previously denied motions for reconsideration filed by the

17

individual Defendants, the Court now finds that the default judgment is inconsistent

18

with evidence submitted in this case and believes that it committed a clear error. This

19

inconsistency is compounded by the fact that Sperske deems the default judgment

20

against the partnership to be practically insufficient.

21

concerning whether Ariel Pink’s Haunted Grafitti was ever a partnership and who

22

those partners may have been.

There are real questions

23

The Court alerted Sperske to this issue at the hearing on June 24, 2013.

24

Sperske’s Response to the Court’s concerns itself raised questions whether Ariel

25

Pink’s Haunted Grafitti was ever a partnership. (ECF No. 76 (“For example, ASCAP,

26

the performing rights society which collects and distributes performance royalties to

27

songwriters and publishers, pays individual songwriters according to the percentages

28

submitted.”).) In light of that Response and the findings discussed here, the Court

7

1

hereby VACATES the default judgment entered against Ariel Pink’s Haunted

2

Graffiti. (ECF No. 34.)
V.

3
4

CONCLUSION

For the reasons discussed above, Sperske’s Motion for Summary Judgment is

5

DENIED.

(ECF No. 62.)

6

previously entered against Ariel Pink’s Haunted Graffiti on October 23, 2012. (ECF

7

No. 34.)

8

IT IS SO ORDERED.

9

The Court also VACATES the default judgment

July 23, 2013

10
11
12

____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

8