Howard v. Sony Music BMG , 354 F. App'x 75 ( 2009 )


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  •            IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    November 13, 2009
    No. 08-20345
    Charles R. Fulbruge III
    Clerk
    JOSEPH HOWARD, JR., p/k/a Joe Traxx
    Plaintiff - Appellant
    v.
    WESLEY ERIC WESTON
    Defendant - Appellee
    Appeal from the United States District Court for the
    Southern District of Texas, Houston Division
    USDC No. 4:06-CV-3133
    Before GARWOOD, OWEN, and SOUTHWICK, Circuit Judges.
    PER CURIAM:*
    Joseph Howard, Jr. filed this breach of contract and copyright action
    against a number of defendants seeking money allegedly owed for a musical
    composition Howard produced. The district court entered a default judgment
    against Defendant Wesley E. Weston, but Howard was granted no relief. The
    district court also denied Howard attorney’s fees and costs. We AFFIRM.
    FACTS AND PROCEDURAL HISTORY
    Howard, a self-described solo musician and producer, alleges that the
    defendants failed to compensate him for the incorporation of one of his musical
    *
    Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
    R. 47.5.4.
    No. 08-20345
    compositions into a song recorded by Defendants Suckafree Records, Inc. and
    Wesley E. Weston and released and distributed by Defendant Sony BMG Music
    Entertainment, Inc.
    In October 2006, Howard filed suit against Weston, Sony, Suckafree,
    Estelle D. Hobbs who is the CEO of Suckafree, and two other parties involved
    in the album’s production - Hobbs Publishing Company and Lucky Publishing
    Company. The theories included breach of contract, copyright infringement, a
    declaration of joint ownership, an accounting, negligent misrepresentation,
    fraud, and theft under the Texas Theft Liability Act.
    Not all of the original claims are in the present appeal. For example,
    claims were dismissed against Sony, and we affirmed. See Howard v. Sony, No.
    07-20722, 
    2008 WL 4302220
    (5th Cir. Sept. 22, 2008). Because Weston failed to
    plead, the district court clerk entered a default against him in February 2007.
    In November 2007, the district court declined to set aside the default because it
    found that Weston willfully failed to respond to Howard’s complaint.
    Despite the default, Howard was awarded no damages on his breach of
    contract and copyright ownership claims against Weston. Further, Howard had
    abandoned any claim       for relief against Weston for fraud, negligent
    misrepresentation, and under the Texas Theft Liability Act. The district court
    entered a final judgment in favor of Howard with an award of zero damages for
    all of Howard’s claims against Weston. Howard was also denied all attorney’s
    fees and costs because he was not a prevailing party.
    DISCUSSION
    A. Entry of Default
    We review a district court’s decision to enter default judgment for abuse
    of discretion. Smith v. Smith, 
    145 F.3d 335
    , 344 (5th Cir. 1998). An entry of
    default “does not establish the amount of damages. After a default judgment,
    the plaintiff’s well-pleaded factual allegations are taken as true, except
    2
    No. 08-20345
    regarding damages.” U.S. of Am. for Use of M-Co Constr., Inc. v. Shipco Gen.,
    Inc., 
    814 F.2d 1011
    , 1014 (5th Cir. 1987) (internal citations omitted).
    Accordingly, we determine whether the well-pleaded allegations in Howard’s
    amended complaint constitute a breach of contract or copyright claim against
    Weston that would warrant damages.
    1. Breach of Contract Claims
    There are two contracts under which Howard might have a claim for relief:
    the Producer Agreement and the Mechanical License Agreement.                These
    agreements were attached to the amended complaint and are “part of the
    pleadings for all purposes.” Nishimatsu Constr. Co. v. Houston Nat’l Bank, 
    515 F.2d 1200
    , 1206 (5th Cir. 1975). Howard argues that Weston is personally liable
    for the royalties due under both contracts. However, a contract “generally binds
    no one except the parties to it. And courts generally cannot bind a nonparty to
    a contract because the nonparty never agreed to the contract’s terms.” BML
    Stage Lighting, Inc. v. Mayflower Transit, Inc., 
    14 S.W.3d 395
    , 400 (Tex. App. -
    Houston [14th Dist.] 2000) (citations omitted). The Producer Agreement is
    between Howard and Suckafree, and the Mechanical License Agreement is
    between Suckafree and Malaco, Inc. on behalf of Howard; Weston did not sign
    either agreement.
    Despite Weston being a party to neither contract, Howard argues Weston
    is a co-CEO of Suckafree, is required to indemnify Suckafree for the amounts
    owed to Howard, and is equitably responsible under quantum meruit. Because
    of the default, Weston cannot challenge the sufficiency of the evidence, but he “is
    entitled to contest the sufficiency of the complaint and its allegations to support
    the judgment.” 
    Nishimatsu, 515 F.2d at 1206
    . In the amended complaint,
    Howard sued Weston in his individual capacity. Howard did not plead that
    Weston was a co-CEO of Suckafree, that Weston was personally liable, or that
    Weston was liable under a theory of quantum meruit or as an indemnitor.
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    No. 08-20345
    There was neither pleading nor evidence to support these theories.
    Howard is not entitled to damages based on breach of contract.
    2. Copyright Claims
    Howard’s amended complaint alleges he and Weston are joint owners of
    the master recording for R.I.P. Screw. Howard requests an accounting from
    Weston to determine the amount he is owed as a co-owner. A duty to account to
    other co-owners arises from “general principles of law governing the rights of co-
    owners.” Quintanilla v. Tex. Television Inc., 
    139 F.3d 494
    , 498 (5th Cir. 1998)
    (quoting Goodman v. Lee, 
    78 F.3d 1007
    , 1012 (5th Cir. 1996)). This right of
    accounting may only be enforced against a joint owner. 1 M ELVILLE B. N IMMER
    & D AVID N IMMER, N IMMER ON C OPYRIGHT § 6.12[B].
    A joint owner may transfer his interest without the other co-owner’s
    consent. “In such circumstances the transferor ceases to be a joint owner, and
    the transferee. . . becomes a joint owner. It follows, then, that the obligation of
    a joint owner to account for profits from use and from licensing obtains as to a[]
    transferee.” N IMMER ON C OPYRIGHT § 6.12[C][1].
    Under Section 204(a) of the Copyright Act, a transfer of copyright
    ownership is not valid unless the conveying instrument “is in writing and signed
    by the owner of the rights conveyed or such owner’s duly authorized agent.” 17
    U.S.C. § 204(a). These requirements were met. In the Producer Agreement,
    Howard transferred his copyright ownership rights to Suckafree.          Further,
    Weston transferred his ownership rights to Sony. Howard cannot bring an
    action to enforce the copyright rights he no longer owns, and he may not seek an
    accounting and damages from someone with no ownership interest in the
    copyrighted work. The district court did not abuse its discretion.
    B. Award of Attorney’s Fees
    The district court found that Howard was not a prevailing party because
    he was awarded no damages or other relief as a result of Weston’s default. We
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    No. 08-20345
    review a denial of attorney’s fees for abuse of discretion. Camacho v. Tex.
    Workforce Comm’n, 
    445 F.3d 407
    , 409 (5th Cir. 2006).
    To be awarded attorney’s fees and costs under Section 505 of the Copyright
    Act and Federal Rule of Civil Procedure 54, Howard must be a prevailing party.
    17 U.S.C. § 505; Fed. R. Civ. Proc. 54(d). A prevailing party must: (1) obtain
    actual relief that (2) materially alters the legal relationship between the parties
    and (3) modifies the defendant’s behavior in such a way that benefits the
    plaintiff at the time of the judgment. Dearmore v. City of Garland, 
    519 F.3d 517
    ,
    521 (5th Cir. 2008). “To become a prevailing party, a plaintiff must obtain, at an
    absolute minimum, actual relief on the merits of [the] claim.” Farrar v. Hobby,
    
    506 U.S. 103
    , 116 (1992) (O’Connor, J., concurring) (internal citations and
    quotation marks omitted). Howard obtained no damages or other relief despite
    the entry of default against Weston.
    The district court did not err in finding that Howard does not qualify as
    a prevailing party and should not be awarded attorney’s fees and costs. Cf.
    
    Farrar, 506 U.S. at 112
    (“To be sure, a judicial pronouncement that the
    defendant has violated the Constitution, unaccompanied by an enforceable
    judgment on the merits, does not render the plaintiff a prevailing party. Of
    itself, the moral satisfaction [that] results from any favorable statement of law
    cannot bestow prevailing party status.” (internal quotation marks and citation
    omitted) (alteration in original)).
    We AFFIRM the district court.
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