Killette v. Pittman ( 1997 )

Filed: December 11, 1997
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-1827
(CA-91-8-3)
Dorothy Killette, etc., et al,
Plaintiffs - Appellees,
versus
E. Wayne Pittman,
Defendant - Appellant.
O R D E R
The Court amends its opinion filed October 22, 1997, as
follows:
On page 10, first full paragraph, line 17 -- a new foot-
note 7 is added at the end of the final sentence of the paragraph,
which reads:
We note that Killette and Pittman also agreed to amend
the copyrights to the three songs to reflect joint
authorship. Because the district court concluded that the
agreement between Killette and Pittman did not provide
for a present transfer of the copyrights, the issue of
authorship was erroneously presented to the jury.
Similarly, the district court erred in deciding whether
Pittman was still entitled to writer's royalties.
- 2 -
The previous footnotes 7 and 8 are renumbered 8 and 9,
respectively.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
DOROTHY KILLETTE, personal
representative of the estate of
Ronald B. Killette; NORTH STATE
MUSIC; RONALD B. KILLETTE, III;
SUN COAST MUSIC; KAREN FAITH
KILLETTE; DRIVE-IN MUSIC COMPANY,
No. 96-1827
INCORPORATED,
Plaintiffs-Appellees,
v.
E. WAYNE PITTMAN,
Defendant-Appellant.
Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Matthew J. Perry, Jr., Senior District Judge.
(CA-91-8-3)
Argued: May 5, 1997
Decided: October 22, 1997
Before WILKINSON, Chief Judge, and RUSSELL and
WILLIAMS, Circuit Judges.
_________________________________________________________________
Reversed and remanded by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Ira George Greenberg, EDWARDS & ANGELL, New
York, New York, for Appellant. Allen Hyman, LAW OFFICE OF
ALLEN HYMAN, Studio City, California; Daryl G. Hawkins,
LEWIS, BABCOCK & HAWKINS, Columbia, South Carolina, for
Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
In 1992, members of the Ronald Killette family, North State
Music, and Sun Coast Music (collectively "Killette"), settled a
twenty-five year old dispute with Wayne Pittman over who authored
and owned the songs "Girl Watcher," "Boy Watcher," and "Girl
Watcher/Boy Watcher." Before the ink had dried on the settlement
agreement, Killette sought to have it vacated. The district court, how-
ever, granted Pittman's motion for an order enforcing the settlement.
While Killette's appeal of the district court's order was pending
before this Court, Drive-In Music Company (Drive-In) moved for
leave to intervene. We remanded the case to the district court to deter-
mine the rights, if any, of Drive-In under the terms of the Killette/
Pittman settlement agreement. On remand from this Court, the district
court granted Drive-In's motion to intervene, held that the settlement
agreement did not provide for a present transfer of the copyright to
the three songs, and vacated its previous order enforcing the settle-
ment. The district court also denied Pittman's motion for judgment as
a matter of law on Drive-In's successful slander-of-title claim. Pitt-
man now appeals. For the reasons that follow, we reverse and once
again remand.
I.
In the spring of 1968, the band "The O'Kaysions" recorded the hit
song "Girl Watcher."1 Killette, the song's publisher, and Pittman, the
_________________________________________________________________
1 The song "Girl Watcher," which eventually climbed to number five
on the national pop charts, was considered "Beach Music." Beach music
2
band's lead guitar player, each claim to be the sole author of "Girl
Watcher" and several similar compositions, including "Boy Watcher"
and "Girl Watcher/Boy Watcher." Killette contends that in January of
1968, he provided the band with a recording of the song "Boy
Watcher," and that the popular version of "Girl Watcher" arose from
that recording.2 Pittman argues, however, that he wrote "Girl
Watcher" before he met Killette.
In 1988, Killette sued Pittman in the United States District Court
for the District of South Carolina.3 Killette sought a declaration that
Pittman had not written "Girl Watcher/Boy Watcher." Pittman
answered (and counterclaimed seeking a declaration) that he was the
sole author of the original song "Girl Watcher." During this same time
period, Killette approached Drive-In, a music publisher located in Los
Angeles, regarding a plan to market "Girl Watcher." Despite the law-
suit pending in South Carolina, Killette informed Drive-In that all of
Pittman's claims to "Girl Watcher" had been resolved.
On June 26, 1990, Killette assigned to Drive-In a 50% interest in
"Girl Watcher" and a 50% interest in the derivative compositions
"Boy Watcher" and "Girl Watcher/Boy Watcher." The following
month, Drive-In recorded with the Copyright Office its 50% interest
in the three songs. In 1992, as a part of its ongoing efforts to market
the three songs, Drive-In decided to release a gay version of "Boy
Watcher." After Killette objected, Drive-In sued Killette in the United
States District Court for the Central District of California for (1)
fraud; (2) negligent misrepresentation; (3) breach of contract; (4)
copyright infringement; and (5) slander of title.
Meanwhile, on August 25, 1992, Killette and Pittman, through
their respective attorneys of record, entered an agreement to settle the
_________________________________________________________________
originated in the beach communities of the Carolinas during the 1950s
and 1960s and was popular, in part, because its tempo was ideal for
Shagging, the official dance of the State of South Carolina. See South
Carolina Legislative Manual A-20 (1996).
2 No recording of the pre-January 1968 version of "Boy Watcher" was
ever located or introduced at trial.
3 This suit was dismissed without prejudice and then refiled in 1991.
3
litigation in South Carolina. The settlement agreement provided,
among other things, that Pittman would pay Killette $12,000 within
sixty days and that the copyright to the three songs would be amended
and reissued to reflect joint ownership and authorship by Killette and
Pittman.
On September 11, 1992, Killette and Drive-In entered an agree-
ment to settle the litigation in California. The settlement agreement
provided, among other things, that Killette would assign to Drive-In
what he purported was his remaining 50% interest in "Girl Watcher."
In addition, Drive-In was given the right to reinstate the California
action "in the event it is determined that Pittman has any ownership
interest in the Girl Watcher Musical Compositions." (J.A. at 1742.)
On September 21, 1992, Killette moved to vacate the settlement
agreement with Pittman. Rather than challenging the validity of the
settlement, Killette simply argued, without elaboration, that it was
"impossible for [him] to accept the Agreement." (J.A. at 42, 46-47.)
After a hearing on the matter, the district court rejected Killette's
motion to vacate the agreement and granted Pittman's motion for an
order enforcing the settlement. In July of 1993, Killette filed a timely
notice of appeal.
While that appeal was pending before this Court, Drive-In moved
for leave to intervene or, in the alternative, for remand to the district
court for consideration of its motion to intervene.4 Drive-In alleged
that it had an interest in the "Girl Watcher" compositions and that the
disposition of the current appeal would impair its ability to protect
that interest. We remanded "the case to the district court for consider-
ation of Drive-In Music Co.'s motion to intervene and for restructur-
ing of the court's enforcement order to determine the rights, if any,
of Drive-In Music Co. under the terms of the [Killette/Pittman] settle-
ment." (J.A. at 49-50.)
On remand, the district court granted Drive-In's motion to inter-
vene. In its complaint-in-intervention, Drive-In asserted that it -- as
the assignee under the June 26, 1990, and the September 11, 1992,
_________________________________________________________________
4 Drive-In's motion was uncontested by Killette and contested by Pitt-
man.
4
agreements -- was the 100% owner of the copyright to "Girl
Watcher," and the 50% owner of the copyrights to "Boy Watcher" and
"Girl Watcher/Boy Watcher." Drive-In also sought a declaration that
the Killette/Pittman settlement agreement was subject to the two
Drive-In/Killette agreements and that Killette was the sole author of
the three songs. In addition, Drive-In sought damages and attorneys'
fees against Pittman for slander of title.
Pittman denied Drive-In's allegations and filed a counterclaim
seeking a declaration that he authored "Girl Watcher." After discov-
ery, Pittman moved for summary judgment as to the issues raised in
Drive-In's complaint. Pittman did not dispute that on June 26, 1990,
Killette assigned Drive-In a 50% interest in the three songs. Instead,
Pittman argued that he received the remaining 50% interest in the
three songs prior to the second Killette assignment to Drive-In. In its
own motion for summary judgment, Drive-In contended that the set-
tlement between Killette and Pittman did not provide for a present
transfer of the copyrights and, therefore, it was the sole owner of the
copyright to "Girl Watcher." After a hearing on the cross-motions for
summary judgment, the district court granted Drive-In's motion on
the grounds that the Killette/Pittman settlement agreement did not
provide for a present transfer of the copyright because the payment
of $12,000 was a condition precedent to Killette's performance.
Shortly thereafter, Drive-In's claims against both Killette and Pitt-
man were presented to a jury, which returned a verdict against Pitt-
man on Drive-In's slander-of-title claim and awarded Drive-In
damages of $85,000.5 In addition to its verdict, the jury answered spe-
cial interrogatories submitted to it with the consent of the parties. The
jury found, among other things, that "the ``author' of ``Girl Watcher'
as recorded by the O'Kaysions was Ronald B. Killette." (J.A. at 336.)
After the jury returned its verdict, Killette moved to vacate the dis-
trict court's previous order enforcing the Killette/Pittman settlement,
and Pittman moved for judgment as a matter of law on the slander-of-
title claim and for a new trial on the issue of authorship. Finding that
it was no longer equitable that its prior order be enforced, the district
_________________________________________________________________
5 In each of Drive-In's claims against Killette, the jury returned verdicts
in Killette's favor.
5
court granted Killette's motion to vacate pursuant to Rule 60(b)(5) of
the Federal Rules of Civil Procedure. The district court also denied
Pittman's motion for judgment as a matter of law on the slander-of-
title claim and for a new trial on the issue of authorship. Finally, the
district court awarded Drive-In its attorneys' fees and expenses under
the Copyright Act. This appeal by Pittman followed.
II.
Pittman contends that the district court erred in granting Killette's
post-trial motion to vacate the order enforcing the Killette/Pittman
settlement agreement. We review a district court's decision to grant
relief from a final order under Rule 60(b)(5) for abuse of discretion.
See National Credit Union Admin. Bd. v. Gray, 1 F.3d 262, 265 (4th
Cir. 1993). A district court abuses its discretion by applying an incor-
rect legal standard or by resting its decision on a clearly erroneous
finding of material fact. On appeal, Pittman argues that the district
court did both.
We turn first to the applicable legal standard. In order to seek relief
under Rule 60(b), "a party must first show ``timeliness, a meritorious
defense, a lack of unfair prejudice to the opposing party, and excep-
tional circumstances.'" Dowell v. State Farm Fire & Cas. Ins. Co.,
993 F.2d 46, 48 (4th Cir. 1993) (quoting Werner v. Carbo, 731 F.2d
204, 207 (4th Cir. 1984)). After a party "has crossed this initial
threshold, he then must satisfy one of the six specific sections of Rule
60(b)." Id.Pittman contends that Killette failed to show the required excep-
tional circumstances. The district court, however, found that Killette's
attorney settled the Pittman litigation without Killette's authorization
or knowledge. If true, Killette has adequately demonstrated the exis-
tence of exceptional circumstances. See Gray, 1 F.3d at 266 (noting
that evidence that attorney signed a party's name to court documents
without authority constitutes an exceptional circumstance); see also
Petty v. Timken Corp., 849 F.2d 130, 132 (4th Cir. 1988) (noting that
"summary enforcement is inappropriate when there is a material dis-
pute about the . . . authority of an attorney to enter a settlement agree-
ment on behalf of his client").
6
Pittman argues that the district court was clearly erroneous in find-
ing that Killette's attorney settled the case without Killette's authori-
zation or knowledge. (Appellant's Br. at 20 (contending that Killette's
argument strains credulity).) As support, Pittman notes that Killette
was present (and even testified) at the hearing where the district court
entered the order enforcing the Killette/Pittman settlement agreement.
The district court, however, specifically found that Killette's poor
hearing and the courtroom's poor acoustics prevented him from
understanding what happened during the hearing.
Even if Killette could not hear what was being said during the hear-
ing, however, it does not follow that his attorney settled the case with-
out his authorization or knowledge. In fact, that conclusion is flatly
contradicted by the evidence in the record. First, Killette testified that
he was aware that his attorney was attempting to negotiate a settle-
ment with Pittman. Second, during Killette's first (and unsuccessful)
attempt to vacate the settlement agreement, he signed a document
stating that the "settlement was entered into in good faith." (J.A. at
42.) Even if we accept that Killette's hearing was poor, there is no
evidence suggesting that his vision (or his ability to read) was simi-
larly impaired. Finally, in the very order from which Killette seeks
relief, the district court specifically found that "Killette admitted
accepting the terms of the agreement." (J.A. at 45 n.1.)
Based on the aforementioned evidence, it is clear that Killette
authorized his attorney to settle the case, was aware that his attorney
had done so, and, despite his poor hearing, understood that the hear-
ing was in response to his motion to vacate the settlement. Killette,
it appears, was simply dissatisfied with the terms that his attorney
negotiated. It is well established, however, that "the integrity of [a]
settlement cannot be attacked on the basis of inadequate representa-
tion by the litigant's attorney. In such cases, any remaining dispute is
purely between the party and his attorney. Unless the resulting settle-
ment is substantially unfair, judicial economy commands that a party
be held to the terms of a voluntary agreement." Petty, 849 F.2d at 133(citation omitted).
We can see no basis for finding Killette's settlement with Pittman
unfair. Killette contends that it is unfair because the jury found that
Killette was the sole author of "Girl Watcher" and that Pittman slan-
7
dered the title to "Girl Watcher/Boy Watcher." We find this argument
to be without merit. Cases are settled because of the risk that the other
side might prevail. Although a favorable jury verdict may demon-
strate that a party's decision to settle was ill-advised, it does not "es-
tablish unfairness or justify setting aside an otherwise valid
agreement." Id.; see also Schwartz v. United States, 976 F.2d 213, 218
(4th Cir. 1992) (noting "that strategic decisions made during the
course of litigation," including the decision to settle, "provide no basis
for relief under [Rule 60(b)], even though with hindsight they appear
wrong").
In sum, Killette has not demonstrated that exceptional circum-
stances exist and, therefore, does not qualify for relief under Rule
60(b) of the Federal Rules of Civil Procedure. As a result, we con-
clude that the district court abused its discretion in granting Killette's
post-trial motion to vacate the order enforcing the Killette/Pittman
settlement.
III.
Having determined that Killette and Pittman are bound by the
terms of their settlement agreement, we turn next to the district
court's interpretation of those terms. In so doing, we note that settle-
ment agreements are considered contracts and, therefore, must be
interpreted as such. See United States v. ITT Continental Baking Co.,
420 U.S. 223, 238 (1975). Since contract construction is a question
of law, we review the district court's interpretation of the Killette/
Pittman settlement agreement de novo. See Nehi Bottling Co. v. All-
American Bottling Corp., 8 F.3d 157, 162 (4th Cir. 1993).
Drive-In and Pittman disagree as to whether the settlement agree-
ment between Pittman and Killette operated as a transfer of rights in
the copyrights or was merely a promise to transfer those rights in the
future. If the former, Pittman's claim to the remaining 50% interest
in "Girl Watcher" has priority over Drive-In's competing claim.6 See
17 U.S.C.A. § 205(d) (West 1996) ("As between two conflicting
_________________________________________________________________
6 Pittman recorded the order enforcing its settlement agreement with
the Copyright Office on October 13, 1993. Drive-In recorded its settle-
ment agreement with the Copyright Office on November 5, 1993.
8
transfers, the one executed first prevails if it is recorded . . . at any
time before recordation . . . of the later transfer. Otherwise the later
transfer prevails if recorded first . . . , and if taken in good faith, for
valuable consideration . . . , and without notice of the earlier trans-
fer."). The district court, however, concluded that Pittman's payment
of $12,000 was a condition precedent to Killette's performance and,
therefore, that the settlement agreement did not provide for a present
transfer of the copyrights. For the reasons that follow, we disagree.
Conditions precedent are disfavored in South Carolina, and "may
not be implied when [they] might have been provided for by the
express agreement." Worley v. Yarborough Ford, Inc., 452 S.E.2d
622, 625 (S.C. Ct. App. 1994). "[W]hether a provision ``in a contract
constitutes a condition precedent is . . . to be gathered from the lan-
guage the[ parties] employ.'" Id. at 624 (quoting Ballenger Corp. v.
City of Columbia, 331 S.E.2d 365, 368 (S.C. Ct. App. 1985)); see also
Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 559 n.7 (9th Cir. 1990)
("Conditions precedent are disfavored and will not be read into a con-
tract unless required by plain, unambiguous language."). "``Words and
phrases such as "if," "provided that,"when," "after," "as soon as,"
and "subject to" frequently are used to indicate that performance . . .
has been made conditional.'" See Cobb v. Gross, 354 S.E.2d 573, 574
(S.C. Ct. App. 1987) (quoting Ballenger Corp. , 331 S.E.2d at 368).
The settlement agreement provided, in pertinent part:
1. Mr. Pittman shall pay Mr. Killette the sum of
$12,000 within sixty (60) days.
2. The copyrights to each of the following songs will be
amended or reissued to reflect ownership and authorship by
Messrs. Killette and Pittman jointly:
a. "Girl Watcher"
b. "Boy Watcher"
c. "Girl Watcher/Boy Watcher"
9
(J.A. at 45.) The language used by the parties in the settlement agree-
ment does not expressly condition the transfer of the copyright upon
Pittman's payment of $12,000. Nor does it employ any of the phrases
frequently used to indicate that performance has been made condi-
tional. We conclude, therefore, that a condition precedent may not be
implied in this case and that the district court erred in so holding.
Whether the Killette/Pittman settlement agreement provided for a
present transfer of the copyrights is governed by § 204 of the Copy-
right Act. See 17 U.S.C.A. § 204(a) (West 1996) (Execution of trans-
fers of copyright ownership). Section 204 provides that "a note or
memorandum" is sufficient to transfer the ownership of a copyright.
Id. Moreover, a note transferring ownership of a copyright "doesn't
have to be the Magna Charta; a one-line pro forma statement will do."
Cohen, 908 F.2d at 557. Here, the language employed in the Killet-
te/Pittman settlement agreement is more than sufficient to satisfy the
minimum requirements of the Copyright Act. Accordingly, we con-
clude that the district court erred in holding that the Killette/Pittman
settlement agreement did not provide for a present transfer of the
copyrights. Because that agreement -- wherein Killette and Pittman
agreed to amend the copyrights to the three songs to reflect joint own-
ership -- was executed and recorded before the second transfer from
Killette to Drive-In, Pittman's claim to the remaining 50% interest in
"Girl Watcher" has priority over Drive-In's competing claim.7 See 17
U.S.C.A. § 205(d) (West 1996).
IV.
Finally, Pittman argues that the district court erred in denying his
motion for judgment as a matter of law on Drive-In's slander-of-title
claim. In actions tried by a jury, the district court may grant a motion
for judgment as a matter of law if "a party has been fully heard . . .
and there is no legally sufficient evidentiary basis for a reasonable
jury to find for that party." Fed. R. Civ. P. 50(a)(1). As a result, judg-
ment as a matter of law is appropriate when a contrary verdict would
necessarily be based on speculation or conjecture. See Gairola v. Vir-
ginia Dep't of Gen. Servs., 753 F.2d 1281, 1285 (4th Cir. 1985). We
review de novo the grant or denial of a motion for judgment as a mat-
ter of law. See id. In considering such a motion, we must construe the
evidence in the light most favorable to the party against whom the
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7 We note that Killette and Pittman also agreed to amend the copyrights
to the three songs to reflect joint authorship. Because the district
court concluded that the agreement between Killette and Pittman did not
provide for a present transfer of the copyrights, the issue of authorship
was erroneously presented to the jury. Similarly, the district court erred
in deciding whether Pittman was still entitled to writer's royalties.
10
motion is made. See Garraghty v. Jordan, 830 F.2d 1295, 1302 (4th
Cir. 1987).
To maintain a claim for slander of title, Drive-In "must establish
(1) the publication (2) with malice (3) of a false statement (4) that is
derogatory to plaintiff's title and (5) causes special damages (6) as a
result of diminished value of the property in the eyes of third parties."
Huff v. Jennings, 459 S.E.2d 886, 891 (S.C. Ct. App. 1995). Pittman
argues that Drive-In failed to prove damages. We agree.
Drive-In argues that evidence that Pittman recorded his claims in
the Copyright Office was sufficient to prove slander of title. Although
"the malice requirement may be satisfied by showing the [recorda-
tion] was made in reckless or wanton disregard to the rights of
another," id. at 891, proof that Pittman recorded his claims in the
Copyright Office is not sufficient to prove damages. After reviewing
the record in this case, we do not believe that there was any evidence
to show that Drive-In was damaged by Pittman's filing a claim to
"Girl Watcher/Boy Watcher" in the Copyright Office. Specifically, no
evidence was introduced that Drive-In suffered any monetary loss.8
Even if Drive-In did lose money, it failed to show that any dam-
ages were "as a result of [the] diminished value of the property in the
eyes of third parties." Id. at 891. There was absolutely no evidence
that any third-party, let alone a potential licensee, was aware that
Drive-In's title to "Girl Watcher" might be infirm. Because Drive-In
failed to introduce evidence concerning every element of the offense,
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8 Drive-In concedes that, to the extent that the damage award for its
successful slander-of-title claim is solely for attorneys' fees in bringing
the action, the granting of attorneys' fees under the Copyright Act for the
same fees would not be appropriate. Although we agree with Drive-In's
conclusion, i.e., the double recovery of fees is inappropriate, we disagree
with its premise. Damages in a slander-of-title claim must be separate
from and predate the incurrence of attorneys' fees. Thus, to the extent
that the damage award for Drive-In's successful slander-of-title claim is
solely for attorneys' fees, the district court erred in failing to grant Pitt-
man's motion for judgment as a matter of law. Moreover, because Drive-
In failed to establish damages, the district court erred in awarding Drive-
In its attorneys' fees and expenses under the Copyright Act.
11
there was no legally sufficient evidentiary basis for a reasonable jury
to find for it on the slander-of-title claim. As a result, the district court
erred in failing to grant Pittman's motion for judgment as a matter of
law.9
V.
For the foregoing reasons, the judgment of the district court is
reversed and the case is remanded to the district court to enter judg-
ment consistent with this opinion.
REVERSED AND REMANDED
_________________________________________________________________
9 We note that § 301(a) of the Copyright Act "preempts state-law
claims if the work is within the scope of the ``subject matter of copyright'
as specified in 17 U.S.C. §§ 102, 103 and the rights granted under state
law are equivalent to any exclusive rights within the scope of federal
copyright." Rosciszewski v. Arete Assocs. Inc., 1 F.3d 225, 229 (4th Cir.
1993) (internal quotation marks omitted). Given our disposition on this
claim, we need not sua sponte address the issue of whether Drive-In's
slander-of-title claim was preempted by § 301 of the Copyright Act.
Compare Cramer v. Crestar Fin. Corp., 67 F.3d 294 (4th Cir. 1995)
(unpublished) (finding that state-law slander-of-title claim was pre-
empted by § 301 of the Copyright Act); with Lomah Elec. Targetry, Inc.
v. ATA Training Aids, 828 F.2d 1021, 1023 (4th Cir. 1987) (noting in
dicta that, among other things, a copyright may be subject to the tort of
slander of title).
12