The Estate of Joe Brown v. ARC Music Group, et al.

Filing 98

MEMORANDUM Opinion and Order Signed by the Honorable Harry D. Leinenweber on 11/22/2011:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ESTATE OF JOE BROWN,
Plaintiff,

Case No. 10 C 7141

v.
Hon. Harry D. Leinenweber
ARC MUSIC GROUP, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
The late Joe Brown was a musician and founder of three Chicago
record labels, the first in 1949.

Brown died in 1976.

In 2008,

his son, Michael Brown, began looking into his father’s various
recordings and became convinced that his father’s Estate was due
fees

and

royalties

for

songs

his

father

produced.

Brown

subsequently was appointed the independent administrator of his
father’s estate, (hereinafter, “the Estate,” or “Plaintiff.”)
The Estate brought the instant Complaint alleging, inter alia,
breach of fiduciary duty, fraud, copyright infringement, and civil
conspiracy against various defendants.
After two sets of Defendants brought Motions to Dismiss,
Plaintiff sought and was granted leave to file a Second Amended
Complaint.

Unfortunately, that Complaint did little to clarify

matters and is now the subject of Motions to Dismiss by Defendants

Music Sales Corp. (“Music Sales”), Frederick Music Co. and Vincent
Brandom (collectively, the “Frederick Defendants”), Katrina Music
Co. and Willie C. Cobbs (collectively, the “Katrina Defendants”)
and Arc Music Group and Opus 19 Music, LLC (collectively, the “Arc
Defendants”).

For the reasons stated herein, all claims are

dismissed with prejudice, except that the Estate may replead its
claims for an accounting and unjust enrichment against the Arc
Defendants within 30 days of the date of this Order.
I.

BACKGROUND

The Plaintiff’s Second Amended Complaint alleges that this
Court has jurisdiction on the basis of the Copyright Act under 28
U.S.C. § 1338(a) and on the basis of diversity jurisdiction under
28 U.S.C. § 1332(a).
The following facts are taken from the Plaintiff’s Second
Amended Complaint, and will be presumed to be true for the purposes
of Defendants’ Motions to Dismiss.

Joe Brown owned and operated

Lawn Music Co. (“Lawn”), the JOB Record Label (“JOB”), and Ruler
Record Label (“Ruler”) in Chicago beginning in approximately 1949.
His Estate is the successor in interest to Lawn, JOB, and Ruler,
which

were

engaged

in

the

business

producing and publishing music.

of

creating,

recording,

During the 1940’s and 1950’s,

these companies copyrighted hundreds of musical compositions.

In

particular, the Estate, according to its Second Amended Complaint,

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is the owner of all or a portion of certain compositions, including
“This New Generation,” “Dark Road Blues,” and “Please Don’t Leave.”
Unfortunately, after laying out these basic facts, the Second
Amended Complaint becomes vague and difficult to follow, providing
sketchy details of alleged machinations in regard to Brown’s
musical compositions.
Defendant

will

be

For clarity, the allegations as to each

summarized

within

the

discussion

of

that

Defendant’s Motion to Dismiss.
II.

ANALYSIS

Although each Defendant makes somewhat different arguments in
support of its Motion to Dismiss, each argues that the Second
Amended Complaint should be dismissed pursuant to FED . R. 12(b)(6)
because it fails to state claims upon which relief can be granted.
A motion to dismiss for failure to state a claim should be
granted if the complaint fails to satisfy FED . R. CIV . P. 8’s
pleading requirement of “a short and plain statement of the claim
showing that the pleader is entitled to relief.”

“To survive a

motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)).

The Court must construe the complaint in the light most

favorable to the plaintiff and draw all inferences in its favor.
Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009).
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However, “it is by now well established that a plaintiff must
do better than putting a few words on paper that, in the hands of
an imaginative reader, might suggest that something has happened to
[it] that might be redressed by the law.”
F.3d 400, 403 (7th Cir. 2010).

Swanson v. Citibank, 614

Rather, the plaintiff must provide

enough factual detail to “present a story that holds together.”
Id. at 404.
Because each 12(b)(6) Motion to Dismiss presents somewhat
different issues, the Court will address each individually.
A.

Music Sales’ Motion

Music Sales argues that dismissal is required because, at
best,

the

Estate

has

alleged

that

Music

Sales

breached

a

contractual obligation to pay certain royalties, but it has not
brought a breach of contract claim.

Plaintiff seeks to recover

from Music Sales for Breach of Fiduciary Duty (Count V), Fraud
(Count VI), Unjust Enrichment (Count VIII), and Civil Conspiracy.
(Count XI).

It also seeks an accounting (Count IX) and the

imposition of a constructive trust (Count X).
As it does in response to all of the Motions to Dismiss,
Plaintiff points out in its response to Music Sales’ Motion that
the events at issue here occurred between 30 and 50 years ago.
Plaintiff contends that it possesses evidence “not included in the
Complaint so as not to confuse the trier of fact and to create a
clear,

‘short

and

plain

statement
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of

the

claim,’

as

per

Rule 8(a)(2).”

This is all well and good, provided that Plaintiff

alleges sufficient facts to provide fair notice of its claims.
However, its Second Amended Complaint is deficient in various
respects. The gist of the Estate’s claim against Music Sales stems
from a

March

6,

Frederick Music.

1964,

Publishing

Agreement

between

Lawn and

In the agreement, Lawn granted Frederick an

exclusive license to use the musical compositions in its catalogue
in exchange for royalties and other payments.
Second Am. Compl.

See Ex. H. to Pl.’s

In 1996, Frederick Music assigned its rights

under that agreement to Music Sales, which gave Music Sales the
right to publish these compositions in exchange for the payment of
certain royalties to Lawn.

The Second Amended Complaint alleges

that Music Sales has received royalties for Lawn works including
“On the Road Again,” “Five Long Years,” and “You Don’t Love Me,”
but has failed to pay the Estate its share.

No allegation is made

as to how much is allegedly owed to the Estate.

Music Sales

contends that it repeatedly has offered the Estate the opportunity
to conduct an independent audit of Music Sales’ records to verify
whether any royalties are due, but Plaintiff has rejected these
overtures.
1.

Breach of Fiduciary Duties (Count V)

Music Sales argues that Count V must be dismissed because
Plaintiff has not adequately pleaded the existence of a fiduciary
duty on its part.

Under Illinois law, to state a claim for breach

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of fiduciary duty, a plaintiff must allege:

(1) the existence of

a fiduciary duty; (2) breach of that duty; and (3) resulting
damages.

See LaSalle Bank Lake View v. Seguban, 937 F.Supp. 1309,

1324 (N.D. Ill. 1996).
Here, the Second Amended Complaint alleges merely that “after
the execution of the Catalog Purchase on July 1, 1996, there
existed a fiduciary relationship of trust and confidence between
the Defendants and the [sic] Joe Brown and Lawn.”

Pl.’s Second Am.

Compl. ¶ 142. This conclusory allegation is insufficient to allege
a fiduciary relationship.
As a matter of law, the mere fact that Music Sales assumed
Frederick’s obligations under the Publishing Agreement does not
mean that a fiduciary relationship was created between Music Sales
and Lawn.

See, e.g., Estate of Stepney v. UMG Recordings, Inc.,

No. 10 C 8266, 2011 WL 2119130, at *3 (N.D. Ill. May 26, 2011)
(holding

that

contractual

relationship

between

musician

and

recording company did not give rise to fiduciary duty); Mellencamp
v. Riva Music Ltd.,

698 F.Supp. 1154, 1159–60 (S.D.N.Y. 1988)

(holding that obligations assumed by a publisher in an exclusive
licensing contract were not, as a matter of law, fiduciary duties).
Plaintiff cites CBS, Inc. v. Ahern, 108 F.R.D. 14, 24–26 (S.D.N.Y.
1985), for the proposition that a fiduciary duty can exist where a
recording company has a contractual duty to pay royalties to an
artist.

However, in that case, the music group alleged that the
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agreement at issue expressly provided that the recording company
was to hold previously earned royalties in a special account for
the group’s benefit.

Id. at 25.

The court found this allegation

was sufficient to state a claim for breach of fiduciary duty, but
specifically noted that a “simple contract” does not create a
fiduciary relationship.

Id.

Plaintiff additionally cites Apple Records, Inc. v. Capitol
Records, Inc., 529 N.Y.S.2d 279, 283 (N.Y. App. Div. 1988). There,
the court held that a “long-enduring” relationship of more than 25
years between the Beatles and the group’s record company was
indicative of a “special relationship of trust and confidence, one
which existed independent of the contractual duties” and which was
sufficient to state a claim for breach of fiduciary duties distinct
from the alleged breach of contract.

Id.

Neither case provides much support for Plaintiff’s position.
Plaintiff acknowledges that a fiduciary relationship arises when a
relationship of trust or confidence exists between the parties, but
does nothing to explain how such a relationship existed in this
case or why the Publishing Agreement (or Music Sales’ assumption of
Frederick Music’s duties under it) was anything more than an arm’s
length commercial transaction.

See Sony Music Entm’t, Inc. v.

Robison, No. 01 CIV 6415, 2002 WL 272406, at *3 (S.D.N.Y. 2002)
(noting that while the line between a contractual and fiduciary
relationship may be blurry, “additional factors are necessary to
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convert a conventional business relationship into a fiduciary
relationship.”).

As such, Count V of the Second Amended Complaint

is dismissed for failure to state a claim upon which relief can be
granted.
2.

Fraud (Count VI)

Music Sales argues that Count VI, alleging fraud based on
Music Sales’ failure to pay monies for works sold as part of the
Frederick Catalogue, is inadequately pleaded.

Under FED . R. CIV .

P. 9(b), a party must state with particularity the circumstances
surrounding an alleged fraud.

This means that a complaint should

explain the “who, what, when, where and how” of a fraudulent
scheme. DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990).
Here, the Estate contends that it has done so because it has
alleged that Music Sales engaged in “concealment, deception, and
failure to notify and pay the Plaintiff monies for works sold as
part of the Frederick Catalogue,” that this fraud has been ongoing
since 1996, and that it occurred in New York and Chicago.

However,

although Plaintiff couches its claim in the lexicon of fraud, it
boils down only to an allegation that Music Sales failed to pay
royalties due under the Publishing Agreement.

This may amount to

a breach of contract, but is insufficient to state a claim for
fraud.

See Bucciarelli-Tieger v. Victory Records, Inc., 488

F.Supp.2d 702, 711 (N.D. Ill. 2007).

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As such, Count VI of

Plaintiff’s Complaint is dismissed for failure to state a claim
upon which relief can be granted.
3.

Unjust Enrichment (Count VIII)

Music Sales contends that the Estate’s unjust enrichment claim
against it fails because a contract governs the relationship
between the parties.

Plaintiff points out that it is not bringing

a claim for breach of contract (although it does not explain why
not), but is instead alleging that Music Sales received a benefit
from Joe Brown’s work and that equity requires that Music Sales pay
for the benefit conferred.
breach

of

contract,

alternative.

it

It is true that where a party pleads
may

plead

unjust

enrichment

in

the

See Stepney, 2011 WL 2119130, at *3 (citing Horwitz

v. Sonnenschein Nath and Rosenthal LLP, 926 N.E.2d 934, 947 (Ill.
App. Ct. 2010)).

But a plaintiff cannot do what the Estate

attempts here — allege that there was a contract that it covers the
claims at issue here, and that Music Sales was unjustly enriched by
its breach.

See Allied Vision Grp., Inc. v. RLI Prof. Techs.,

Inc., 916 F.Supp. 778, 781–82 (N.D. Ill. 1996) (holding that FED .
R. CIV. P. 8(e)(2) does not allow a plaintiff to plead within a
single count that there was an agreement and that the defendant was
justly enriched).

As such, Count VIII is dismissed as to Music

Sales for failure to state a claim.

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4.

Accounting (Count IX)

Plaintiff’s claim for an accounting against Music Sales also
must be dismissed.

Typically, to state a claim for an accounting

under Illinois law, a

plaintiff must show “the absence of an

adequate remedy at law and one of the following:
fiduciary

relationship

between

the

parties;

(1) a breach of
(2)

a

need

for

discovery; (3) fraud; or (4) the existence of mutual accounts which
are of a complex nature.”

Cole-Haddon, Ltd. v. The Drew Philips

Corp., 454 F.Supp.2d 772, 778 (N.D. Ill. 2006).

The Estate has

failed to plead adequately any of these elements.

In fact, Music

Sales has repeatedly offered the Estate the chance to conduct an
independent audit of its records, and it has refused.

Further, it

is clear that a breach of contract claim would provide an adequate
legal remedy for any unpaid royalties.

Nor has the Estate shown

the existence of a fiduciary relationship or fraud.

Under these

circumstances, there is no need for an accounting.
For example, in Drake Enters., Inc. v. Colloid Envtl. Techs.
Co., 08 C 6753, 2009

WL 1789355, at *2-3

(N.D. Ill. June 24,

2009), the Court found that no accounting was required for claim
for failure to pay patent royalties because the claim amounted to
“a

run-of-the-mill

breach

of

contract

claim

with

complicated

damages calculations.” See also Glovaroma, Inc. v. Maljack Prods.,
Inc., 71 F.Supp.2d 846, 857 (N.D. Ill. 1999) (“An accounting claim
is improper without a specific, recognized factual predicate.”).
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Although the Estate has gone out of its way to call its claim
against Music Sales everything but a breach of contract, these
principles apply here.

The Court notes that Music Sales filed a

motion to dismiss the Estate’s original complaint, in which it also
pointed out that any cause of action would arise under breach of
contract. The Estate has disavowed this theory, and the Court will
not force the estate to pursue it.

See Walker v. Gibson, 633

F.Supp. 88, 91 (N.D. Ill. 1985).

However, no claim for an

accounting lies against Music Sales, and Count IX is dismissed as
to it.
5.

Constructive Trust (Count X)

The Estate’s claim for a constructive trust fails for much the
same reasons as its accounting claim — it has not adequately
pleaded either fraud or the existence of a fiduciary relationship.
Schultz v. Schultz, 696 N.E.2d 1169, 1173 (Ill. App. Ct. 1998)
(noting that a constructive trust arises under circumstances of
fraud, breach of fiduciary duty, duress, mistake, or coercion).
Indeed, the Seventh Circuit has noted that a breach of contract “is
not analogous to the wrongful activity that has been found to
warrant the imposition of a constructive trust.”
Bayer, 907 F.2d 760, 763 (7th Cir. 1990).

Amendola v.

Where the Estate has

made no specific allegations of wrongdoing against Music Sales
other than a failure to pay royalties due under a contract, this
claim must be dismissed.
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6.

Civil Conspiracy (Count XI)

In order to state a claim for civil conspiracy under Illinois
law, a plaintiff must show:

(1) a combination of two or more

people; (2) for the purpose of accomplishing by some concerted
action either an unlawful purpose or a lawful purpose by unlawful
means; (3) in the furtherance of which one of the conspirators
committed an overt tortious or unlawful act.

Fritz v. Johnston,

807 N.E.2d 461, 470 (Ill. 2004).
The Estate’s claim for civil conspiracy is vague in the
extreme.
breach

of

It alleges that Defendants conspired to commit fraud,
fiduciary

duty,

copyright

infringement,

or

unjust

enrichment, but provides no details as to the nature of the alleged
agreement between the defendants or what role each defendant took
in the alleged scheme.

General allegations such as “Defendants

conferred to formulate information and ideas in furtherance of a
common scheme,” Second Am. Compl. ¶ 181, and “Defendants had an
agreement to engage in a conspiratorial act to harm, harass,
exploit, and/or defraud the Plaintiff,” Id. at ¶ 180, are simply
insufficient to state a claim for civil conspiracy.

Furthermore,

the Estate has failed to allege adequately any of the tort claims
underlying the alleged civil conspiracy, so it cannot stand. Nat’l
Council on Comp. Ins., Inc. v. Am. Int’l. Grp., Inc., No. 07 C
2898, 2009 WL 466802, at *16 (N.D. Ill. Feb. 23, 2009).

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7.

Leave To Amend

The Estate requests leave to file another amended complaint
against Music Sales, while Music Sales contends that the Estate’s
repeated failure to fix the problems in its Complaint justifies
dismissal with prejudice.

The Court agrees with Music Sales.

Leave to amend is discretionary in this circumstance, and the
denial is appropriate in cases of undue delay, bad faith, dilatory
motive, repeated failure to cure deficiencies in the complaint,
undue prejudice to the defendant, or where amendment would be
futile.

Stanard v. Nygren, 658 F.3d 792, 797 (7th Cir. 2011).

The Estate points out that its First Amended Complaint served
only to change the name of a former defendant, so this is its first
substantive re-pleading of its claims.

But the Court notes that

the Estate has not proffered a third amended complaint for the
Court’s review.

Additionally, the Estate has repeatedly resisted

offers from Music Sales to audits its records, even though the crux
of the Estate’s claim against Music Sales is that the company owes
it royalties.

This case was filed in November 2010, and Music

Sales first filed a Motion to Dismiss on March 9, 2011.

This Court

granted the Estate leave to amend, but the Estate clearly did not
take the time to properly investigate this case and formulate its
claims.

Rather, the Estate has taken the “kitchen–sink” approach

of bringing a number of poorly formulated claims against Music
Sales.

Plaintiff has unduly delayed the resolution of its claims

- 13 -

against Music Sales, and its request for leave to amend its claims
against Music Sales is denied.
B.

The Frederick Defendants’ Motion to Dismiss

The Estate also has sued Frederick Music and Vincent Brandom,
its owner, (collectively, the “Frederick Defendants”) in connection
with the 1964 Publishing Agreement.

Under that agreement, as

explained above, Lawn gave Frederick an exclusive license to all of
Lawn’s musical compositions and copyrights in exchange for the
payment of certain fees and royalties. The Estate alleges that the
Frederick Defendants have failed to pay Lawn any fees or royalties
for these

works

since

1976.

The Frederick

Music

catalogue,

including all rights under this agreement, then was sold to Music
Sales in 1996.

The Estate further alleges that it did not receive

any fees or royalties from that sale.

As such, it seeks to recover

from Frederick Defendants for breach of fiduciary duty (Count III),
unjust enrichment (Count VIII), and civil conspiracy (Count XI).
The

Estate

also

requests

an

accounting

(Count

IX)

and

the

imposition of a constructive trust (Count X).
1.

Statute of Limitations

The Frederick Defendants move to dismiss these claims on
various grounds, but the primary problem with the Estate’s claims
against the Frederick Defendants is that they are barred by the
statute of limitations. Frederick Music assigned its rights to the

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compositions at issue to Music Sales in 1996, more than fourteen
years before this lawsuit was filed.
The Estate, in its response, focuses on when Michael Brown
learned of the Frederick Defendants’ alleged failure to pay fees
owed to Lawn.

It argues that it was not until Brown heard one of

his father’s songs playing in a movie that he began to wonder why
the family had not received payment for that song and began
investigating, in about November of 2008.

The Estate argues that

Brown’s family knew nothing about any alleged wrongdoing before
that time.
This does not address the key issue, however.

Regardless of

when Michael Brown learned of the alleged failure to pay royalties,
Lawn (or someone associated with Lawn) should have known it had a
cause of action against Lawn when the royalty payments stopped in
1976.
The statutes of limitations for contract actions and torts
arising from contractual relationships ordinarily accrue at the
time of the breach, not when the party sustains damages.

Del

Bianco v. Am. Motorists Ins. Co., 392 N.E.2d 120, 124-25 (Ill. App.
Ct. 1979). Claims for breach of fiduciary duty, unjust enrichment,
fraud, and a request for an accounting all are subject to a fiveyear statute of limitation.

735 Ill. Comp. St. 5/13-205.

To the extent the Estate acknowledges this problem, it alleges
that the doctrine of fraudulent concealment tolls the statute of

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limitations.

See 735 Ill. Comp. St. 5/13-215 (providing that if

liable party fraudulently conceals the cause of action from the
plaintiff, an action may be brought within five years after the
plaintiff discovers that it has a cause of action).

However,

Plaintiff alleges no facts showing that the Frederick Defendants
acted affirmatively to keep the Estate (or Lawn before it) from
discovering the existence of a cause of action.
625 N.E.2d 198, 203 (Ill. App. Ct. 1993).

Foster v. Plaut,

Mere silence on the part

of the Frederick Defendants is not enough.

Id.

Rather, the

Plaintiff must allege that the Frederick Defendants lulled the
Estate into delaying the filing of this action.

Id.

Moreover,

even if the Estate could show that the Frederick Defendants made
fraudulent misrepresentations, this tolling provision does not
apply if the Plaintiff (or its predecessors-in-interest) could have
discovered the cause of action with reasonable diligence.

Id.

The Estate completely fails to address these requirements, and
its talismanic invocation of terms like fraud, misrepresentation,
and concealment is not enough to make its claims timely.
Whirlpool Fin. Corp. v. GN Holdings, Inc.,

See

67 F.3d 605, 608 (7th

Cir. 1995) (holding that if a plaintiff pleads facts that show its
claims are barred by the statute of limitations, it pleads itself
out of court).

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2.

Inadequate Pleading

Regardless, the Court notes that not only are the Estate’s
claims against the Frederick Defendants defeated by the statute of
limitations, but the Second Amended Complaint fails to allege facts
sufficient to state a claim for breach of fiduciary duty, common
law fraud, unjust enrichment, civil conspiracy, an accounting, or
a constructive trust for many of the same reasons discussed in
regard to the claims against Music Sales.

The claims against the

Frederick Defendants thus fail.
3.
Plaintiff

seeks

Leave to Amend

leave

to

amend

his

claims

against

the

Frederick Defendants, but again proffers no explanation as to how
such a Complaint would be viable.

Further, as with Music Sales,

the Frederick Defendants had filed a motion to dismiss Plaintiff’s
previous complaint

which

raised

the

issue

limitations as a bar to Plaintiff’s claims.

of

the

statute

of

The estate has failed

to in any way meaningfully respond to this issue, so the claims
against the Frederick Defendants are dismissed with prejudice.
C.

The Katrina Defendants’ Motion to Dismiss

The Estate’s claims against Willie Cobbs and Katrina Music are
related to the song “You Don’t Love Me.”

The Court will attempt to

recite the facts in the light most favorable to the Estate, as is
the standard for a motion to dismiss, but must point out again that

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the Estate’s pleading of the facts is at times so confusing as to
be incomprehensible.
At any rate, this song was published in 1958 on the Ruler
Records label, and performed by Cobbs.

Plaintiff has attached to

its Second Amended Complaint numerous copyright registrations made
by Frederick Music, acting as administrator for Lawn, which listed
Cobbs as the author of “You Don’t Love Me” and an alternative
version

of

the

song,

known

as

“Please

Don’t

Leave.”

These

registrations date back to May 4, 1962.
Additionally, as discussed above, Plaintiff acknowledges that
in 1964, Lawn Music Company entered into an exclusive license with
Frederick Music that covered the entire Lawn Catalogue and which
gave Frederick the exclusive right to license those compositions,
as well as all rights existing under Lawn’s copyrights.
Subsequently, in 1971, Katrina Music, as assignee of Cobbs’
copyright interest in “You Don’t Love Me,” brought suit against
Frederick

Music in

the

United

Southern District of New York.

States

District

Court

for

the

A stipulation of settlement was

filed on August 7, 1968, a copy of which the Katrina Defendants
attached to their memorandum in support of their motion to dismiss.
This settlement declared Cobbs the sole author of the song and
provided that Katrina Music and Frederick Music jointly owned the
copyright to the song.

See Ex. 1 to Memo. of Law in Support of

- 18 -

Defs. Katrina Music Company and Willie C. Cobbs’ Motion to Dismiss
the Second Am. Compl.
The core of Plaintiff’s claim is that the Katrina Defendants
have misrepresented the ownership of “You Don’t Love Me” and
related songs, and have failed to pay royalties due the Estate.
Plaintiff seeks to recover from the Katrina Defendants for fraud
(Count VII), unjust enrichment (Count VIII), and civil conspiracy
(Count XI), and seeks an accounting (Count IX) and the imposition
of a constructive trust (Count X).
The Katrina Defendants argue that the settlement agreement is
dispositive of the claims at issue here, and that all the claims
against it are time-barred and inadequately pleaded.

The Court

will address each claim in turn.
1.

Count VII (Fraud)

Plaintiff’s fraud claim against the Katrina Defendants, like
all of its other fraud claims, is too thinly pleaded to stand.
Essentially,

Plaintiff

contends

that

the

Katrina

Defendants

withheld royalties that were due and owning to the Estate, and made
representations that induced others to do likewise.
provided as to these representations.

No detail is

As noted above, allegations

of fraud are subject to the heightened pleading standards of FED .
R. CIV. P. 9(b), and the Estate falls well short of showing the
“who, what, when, where and how” of a fraudulent scheme.
901 F.2d at 627.

DiLeo,

In its response, the Estate claims that the fraud

- 19 -

was “for misrepresenting the ownership of ‘You Don’t Love Me,” and
for failure to pay Plaintiff monies they are owed.”
But the failure to pay royalties does not amount to fraud,
even

if

the

Defendants

Estate

were

alleged

obligated

a

to

basis
do

so

upon
–

which

which

the

it

has

Katrina
not.

Additionally, the Estate claims that the fraud took place at the
time

of

the

registrations.

1968

settlement

and

the

various

copyright

As noted above, Illinois law provides a five-year

statute of limitations for fraud.

735 Ill. Comp. Stat. 5/13–205.

The Court notes that the last registration of “You Don’t Love Me”
mentioned in the Complaint happened in 1994.

As with its claims

against the Frederick Defendants, the Estate contends that it knew
nothing of the claims until 2008, but that does not make them
timely.
Although the Estate denies it, its real complaint appears not
to be fraud, but rather an authorship dispute under the Copyright
Act in that it claims that Cobbs wrote “You Don’t Love Me” as a
work–for–hire for Joe Brown, who would then have been the sole
owner of the composition. See Martha Graham Sch. and Dance Found.,
Inc. v. Martha Graham Center of Contemporary Dance, Inc., 380 F.3d
624, 634 (2d Cir. 2004).

However, the Estate’s purported support

for this contention, including an unrelated songwriter’s contract
from 1971 pertaining to different songs, provides no support at
all.

More importantly, Plaintiff disavows any reliance on the

- 20 -

Copyright Act, and such a claim likely would have expired long ago
anyway.

See Merchant v. Levy, 92 F.3d 51, 57 (2d Cir. 1996)

(providing that claims of authorship under the Copyright Act are
subject to

a

three–year

statute

of

limitations).

For

these

reasons, the Court dismisses Count VII.
2.
Plaintiff’s

Unjust Enrichment (Count VIII)
allegation

of

unjust

enrichment

against

the

Katrina Defendants alleges only that they have enjoyed the “fruits
of the Plaintiff’s work, labor, and services rendered without any
payment of any consideration since Jan. 18, 1971.”
Compl. ¶ 163.
is

it

clear

Second Am.

It is not clear why Plaintiff chose this date, nor
upon

what

basis

the

Estate

claims

the

Katrina

Defendants owed it royalties.
As it may do when ruling on a motion to dismiss, the Court
takes judicial notice of the 1968 settlement agreement between
Katrina Music Co. and Frederick Music Co., which had an exclusive
license to use the musical compositions in the Lawn catalogue. See
Langone v. Miller, 631 F.Supp.2d 1067, 1070 (N.D. Ill. 2009). That
agreement provided that Cobbs was the sole author of the song, but
that Katrina and Frederick were co-owners and that each could
license the song.

Plaintiff argues in its response that the

settlement was invalid because it excluded the copyright holder,
Joe Brown.

However, the Publishing Agreement between Lawn and

Frederick Music, as noted above, gave Frederick all rights under
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Brown’s copyrights.

As such, the Court agrees with the Katrina

Defendants that to the extent the Estate claims that it was owed
royalties, this obligation would have stemmed from the Publishing
Agreement between Lawn and Frederick Music. The Katrina Defendants
were not parties to that agreement, and regardless, this claim also
is time-barred.

See 735 Ill. Comp. St. 5/13-205.
3.

Accounting (Count IX)

For the reasons discussed above in relation to Defendant Music
Sales, and because the Estate has failed to allege a valid basis
upon which the Katrina Defendants owe it royalties, this count is
dismissed as to the Katrina Defendants.
4.

Constructive Trust (Count X)

Again, as discussed in relation to Music Sales, the Estate’s
claim for a constructive trust fails where it has adequately
pleaded

neither

relationship.

fraud

the

existence

of

a

fiduciary

Schultz, 696 N.E.2d at 1173.
5.

Plaintiff

nor

has

Civil Conspiracy (Count XI)
failed

to

allege

the

elements

of

civil

conspiracy under Illinois law, or its underlying tort claims, so
this count is dismissed as to the Katrina Defendants.
6.

Leave to Amend

Given that the Plaintiff has failed to proffer an amended
complaint that would cure the deficiencies in its claims against

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the Katrina Defendants and the Court cannot see how it could do so,
these claims are dismissed with prejudice.
D.

ARC Defendants’ Motion to Dismiss

The Estate seeks to recover from the Arc Defendants for
Copyright

Infringement

(Count

I),

Fraud

(Count

II),

Unjust

Enrichment (Count VIII), an Accounting (Count IX), a Constructive
Trust (Count X), and Civil Conspiracy (Count XI).
These claims are based in part on its allegation that the Arc
Defendants filed copyright registrations for works owned by Lawn,
Job, or Ruler without authorization in an effort to claim the right
to these compositions.

As with its other claims, the Estate’s

theory of the case is not entirely clear, and the contentions in
its response memorandum do little to clarify matters.
Regardless,

as

best

the

Court

can

discern,

Plaintiff’s

allegations as to the composition “This New Generation” are as
follows.

Joe Brown registered the copyright for this song on

August 9, 1968, and James Oden (“Oden”), a co-author of the song,
registered a copyright on April 11, 1970.

On January 6, 1998, Arc

Music filed a renewal registration on behalf of Doris Burton,
Oden’s next of kin.

The registration listed two claimaints:

Burton as next-of-kin for Oden, “c/o ARC Music, 254 W. 54th St.,
13th Floor, New York, NY 10019,” and Brown, also “c/o Arc Music.”
The Estate alleges that Arc Music was never authorized to collect
funds for Joe Brown.

On the same day, Arc filed an additional

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renewal of Oden’s registration, which listed only Oden as the
author of the work.
As to the composition “Dark Road Blues,” the Estate alleges
that it was created by Brown and another songwriter, Floyd Jones,
in 1951.

In 1952, Brown and Jones co-wrote “On the Road Again,”

which the Second Amended Complaint confusingly describes both as
“part two” to “Dark Road Blues,” and substantially the same as
“Dark Road Blues.”

Second Amended Compl., ¶¶ 38, 39.

In 1953,

according to the Complaint, Jones assigned his rights in “On the
Road Again” to Brown.
Then,

on

June

28,

1961,

Brown

filed

an

registration of copyright for “Dark Road Blues.”
were listed as co-authors.

application

for

Jones and Brown

On August 18, 1964, the Arc Defendants

filed an application for registration of copyright listing Jones as
the sole author of “Dark Road,” a composition that Plaintiff claims
is identical to “Dark Road Blues.”

(For the purposes of this

motion, the Court will accept that they were the same song.)
Additionally, the Estate alleges that at various points, Joe
Brown and/or his companies owned certain works he lists in Ex. 2A
to the Second Amended Complaint.

(The Court notes that this list

is incomplete, although a complete version was supplied to the Arc
Defendants and submitted to the court by them.)

Regardless, the

Estate alleges that the Arc Defendants or their affiliates have

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collected royalties for some of these songs that were rightfully
due the Estate.
1.

Copyright Infringement (Count I)
a.

“This New Generation”

As to its claim regarding “This New Generation,” the Arc
Defendants contend that the Estate has essentially pleaded itself
out of court because it acknowledges that Oden was a co-author of
the song.

This makes Oden and Brown joint authors, and joint

authors (and their successors, like the Arc Defendants) cannot be
liable

to

one

another

for

copyright

infringement.

Warren

Freedenfeld Assocs., Inc. v. McTigue, 531 F.3d 38, 47 (1st Cir.
2008); Dead Kennedys v. Biafra, 37 F.Supp.2d 1151, 1153 (N.D. Cal.
1999).

Thus, the Arc Defendants argue, any exploitation of the

song on behalf of his next-of-kin, Burton, cannot give rise to an
infringement claim.
While the Estate alleges that Oden “was a work for hire under
Lawn,” Second Am. Compl. ¶ 25, it includes no facts supporting this
assertion. This is important because, as noted above, if “This New
Generation” was a work-for-hire, then Lawn would have been the sole
owner of the composition. Martha Graham Sch. and Dance Found., 380
F.3d at 634. However, Brown’s own copyright registration, in which
he listed Oden as a co-author of “This New Generation,” belies any
assertion that this was a work-for-hire.

As such, it is clear to

the Court that Oden and Brown were joint authors, and the Estate
- 25 -

cannot recover for copyright infringement based on a co-author’s
exploitation of the copyright.
Again, the Estate’s pleadings as to the alleged wrongdoing by
the Arc Defendants are difficult to follow and display a poor grasp
of the underlying principles of copyright law.
apparent

effort

to

show

that

the

Arc

For example, in an

Defendants’

renewal

registration on behalf of Oden’s next-of-kin was invalid, the
Estate argues that Oden’s original registration of the work was
invalid because Brown already had registered the work.

This is

incorrect because federal regulations provide that when someone
other than an author is identified as a claimant in registration,
another registration may be made by the author in his own name.
37 C.F.R. § 202.3(b)(11)(ii).
However, courts have held that although a joint owner may not
be liable for copyright infringement, the joint owner must account
to other joint owners for a share of the profits realized from his
or her sole use of the jointly owned work.

DeBitetto v. Alpha

Books, 7 F.Supp.2d 330, 335 n.6 (S.D.N.Y. 1998) (citing Melville B.
Nimmer & David Nimmer, Nimmer on Copyright, § 6.12[A](1997)).

It

is possible, as the Court will discuss subsequently, that the
Estate may have a claim for accounting against the Arc Defendants.
But

it

has

clearly

failed

to

plead

infringement in regard to this work.

- 26 -

a

claim

for

copyright

b.

Copyright Infringement as to “Dark Road Blues”

The Estate fares no better in relation to its copyright
infringement claim as to “Dark Road Blues.” Plaintiff argues that,
even though the composition was jointly created by Brown and Jones,
Brown became the sole owner when a company called Metric Music Co.
assigned one-half of its interest in “On the Road Again” to Lawn.
The Estate’s arguments on this point are unclear.

Plaintiff

simultaneously pleads that “On the Road Again” is both part two to
“Dark Road Blues,” and “substantially the same.”
Compl. ¶¶ 38, 39.

Pl.’s Second Am.

Plaintiff also pleads that Jones, in 1953,

assigned his interest in “On the Road Again,” to Brown.

The Court

notes that the assignment from Metric Music Co. is dated August 7,
1970, and it is unclear it is to this assignment that the Estate
refers when it claims that Jones assigned his rights in “On the
Road Again” to Brown.
Regardless, the Court cannot figure out how the assignment of
“On the Road Again,” a subsequent work to “Dark Road Blues,” would
have given Brown sole rights to “Dark Road Blues.” Plaintiff makes
no attempt to explain this.

Further, the fact that Brown, in 1961,

filed a copyright registration listing Jones as a claimant belies
the Estate’s contentions that Brown became the sole owner of the
rights to “Dark Road Blues” in 1953.
As with “This New Generation,” Plaintiff’s pleadings and
exhibits show that Brown and Jones were joint owners of “Dark Road

- 27 -

Blues,” and thus a copyright infringement claim does not lie
against the Arc Defendants, Jones’ successors-in-interest. (Whether
a claim for accounting may lie will be discussed below.)
c.

Copyright Infringement as to the listed works

Plaintiff

has

additional

problems

with

establishing

a

copyright violation in regard to the list of 80 songs that it
attempted to attach to its complaint.

Plaintiff has annexed

copyright registration certificates for only three of those songs
—

“Dark

Road

Blues,”

“On

the

Road

Again,”

and

“This

New

Generation.” Plaintiff fails to allege that the other compositions
have been registered and does not even allege that it currently
owns the copyrights to these works.
a claim.

This is insufficient to state

See Reid v. ASCAP, No 92 Civ. 270, 1994 U.S. Dist. LEXIS

2151, at *6 (S.D.N.Y. Jan. 5, 1994).
The prerequisite of registration prior to filing a suit
predates the 1976 version of the Copyright Act and also was a
requirement under the 1909 version of the Act, which would cover
the works at issue here.

See G.R.I. Corp. v. Golden Fifty Pharm.

Co., No. 74 C 2830, 1975 U.S. Dist. LEXIS 12785, at *4 (N.D. Ill.
Apr. 18, 1975); see also Burns v. Rockwood Distrib. Co., 481
F.Supp.841, 845–46 (D.C. Ill. 1979) (describing it as “well-settled
that registration is a precondition to filing suit.”).

Plaintiff

fails to address meaningfully why this requirement was not met here
or whether it can be met at all in regard to the 77 listed works.
- 28 -

As such, Plaintiff’s infringement claims in regard to these works
must be dismissed.
Finally,

because

the

Estate

has

failed

to

offer

any

explanation as to how its copyright claims might be cured through
an amended complaint, the Court dismisses Count I with prejudice.
2.
Plaintiff’s

state

State Law Claims

law

claims

against

the

Arc

Defendants

present many of the same problems discussed above in relation to
the other defendants in that they are confusingly and inadequately
plead in many instances. The claims of fraud and civil conspiracy,
in particular, are conclusory and wholly inadequate.
Court cannot

see

how an

amended

complaint

might

Because the
solve

these

problems, and the Estate has not proffered any explanation as to
how it might do so, the Court dismisses these claims, as well as
Plaintiff’s claim for a constructive trust, with prejudice.
The Estate’s unjust enrichment and accounting claims, however,
are more problematic.

The attachments to the Second Amended

Complaint clearly show a joint ownership relationship between Brown
and the Arc Defendants’ predecessors-in-interest as to “Dark Road
Blues” and “This New Generation,” and the Arc Defendants admit that
there is a co-ownership relationship.
As noted above, co-owners must account to one another for the
profits generated by copyrighted works.

In Gaiman v. McFarlane,

360 F.3d 644, 652–53 (7th Cir. 2004), the Seventh Circuit held that

- 29 -

when co-ownership is contested, the alleged co-owner must seek a
declaration of ownership and an accounting under the federal
Copyright Act.

Id. at 652–53.

However, where co-ownership is

conceded and the only issue is the equitable division of profits,
the appropriate remedy is a state law suit for accounting of
profits.

Id. at 652.

Similarly, although state law unjust

enrichment claims are typically preempted by the Copyright Act, a
state law unjust enrichment claim between acknowledged co-owners
might not implicate the Copyright Act. Cf. Heriot v. Byrne, No. 08
C 2222, 2008 WL 5397496, at * 4 (N.D. Ill. Dec. 23, 2008).
This case presents an odd wrinkle because the Plaintiff pleads
that Brown was the sole owner of the “This New Generation” and
“Dark Road Blues,” even though the attachments to his Complaint
prove otherwise. Plaintiff’s pleading of its accounting and unjust
enrichment claims do not rest on a co-ownership theory, but rather
on fraud.

In fact, the Estate devotes just one line to a potential

co-ownership theory in its response brief, and even then, it
attempts to premise a right of recovery on fraud.

Specifically,

the Estate contends that even if its copyright infringement claims
fail because Oden and Jones assigned their copyrights to Arc,
“Plaintiff still has a claim for unjust enrichment and fraud since
Defendants fail to pay the Plaintiff their [sic] right share in the
works.”

- 30 -

The Estate’s Second Amended Complaint is so convoluted and
confusing

that

it

cannot

be

fairly

said

to

provide

the

Arc

Defendants with notice of state-law accounting claim based on coownership.
timely.

Nor is the Court certain that such claims would be

However, the Court notes that this is the first Motion to

Dismiss by the Arc Defendants.
Estate

may

have

a

valid

Where the facts indicate that the

claim

for

an

accounting

and

unjust

enrichment as to two of the compositions, the Court will allow the
Estate to replead those claims within thirty (30) days of the date
of this Order, provided that there is a jurisdictional basis for
this Court to preside over these claims.

(The Estate has alleged

in its Complaint that the parties are diverse.)
However, Plaintiff’s counsel is warned that a greater degree
of clarity and familiarity with the underlying principles of law
will be expected in all future pleadings.
III.

CONCLUSION

For the reasons stated herein, the Court rules as follows:
1.

Defendant Music Sales Motion to Dismiss [52] is granted,

and all claims against it are dismissed with prejudice.
2.

Defendants

Frederick

Music

Co.

and

Victor

Brandom’s

Motion to Dismiss [58] is granted, and all claims against them are
dismissed with prejudice.

- 31 -

3.

Defendants Katrina Music Co. and Willie Cobbs’ Motion to

Dismiss [64] is granted, and all claims against them are dismissed
with prejudice.
4. Defendants Arc Music Group and Opus 19 Music, LLC’s Motion
to Dismiss [80] is granted and all claims against it are dismissed
with prejudice, except that the Estate may replead its claims for
an accounting and unjust enrichment as to “This New Generation” and
“Dark Road Blues” within thirty (30) days of the date of this
Order.
IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
DATE: 11/22/2011

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