Annye C. Anderson v. Stephen C. LaVere ( 2012 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2012-CA-00601-SCT
ANNYE C. ANDERSON, AS PERSONAL
REPRESENTATIVE AND LEGATEE OF THE
ESTATE OF CARRIE H. THOMPSON,
DECEASED; AND ROBERT M. HARRIS,
LEGATEE OF THE ESTATE OF CARRIE H.
THOMPSON, DECEASED
v.
STEPHEN C. LAVERE, DELTA HAZE
CORPORATION, A NEVADA CORPORATION;
SONY MUSIC ENTERTAINMENT, INC., A
DELAWARE CORPORATION, AND CLAUD L.
JOHNSON
DATE OF JUDGMENT: 02/23/2012
TRIAL JUDGE: HON. W. ASHLEY HINES
COURT FROM WHICH APPEALED: LEFLORE COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: JAMES W. SHELSON
REUBEN V. ANDERSON
ROBERT GREGG MAYER
STEPHEN E. NEVAS
ATTORNEYS FOR APPELLEE: RICHARD A. OAKES
ANTHONY KORNARENS
ANITA K. MODAK-TRURAN
JOHN W. KITCHENS
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: AFFIRMED - 02/20/2014
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE DICKINSON, P.J., CHANDLER AND PIERCE, JJ.
DICKINSON, PRESIDING JUSTICE, FOR THE COURT:
STATEMENT OF THE CASE
¶1. Legendary blues musician Robert Johnson died in 1938 without a will. The legatees
of Johnson’s deceased half-sister sought to recover royalties and fees from the use of two
photographs of Johnson. Among the several reasons the trial court denied their claim was
that the statute of limitations had expired. We affirm.
FACTS
¶2. When Johnson died intestate on August 16, 1938, he had no money and appeared to
have left no assets to distribute to his heirs, so no estate was opened at that time. But the
increasing popularity of Johnson’s music over the years following his death led Steven
LaVere, a music producer from Tennessee who owns Delta Haze Corporation, to contact
Johnson’s half-sister, Carrie Thompson, about previously unpublished photographs of
Johnson. Believing Thompson to be Johnson’s only heir, LaVere requested a meeting with
Thompson to discuss possibly using the photographs to launch a new release of Johnson’s
music.
¶3. On June 12, 1973, Thompson met with LaVere and showed him a photo taken by
Hooks Brothers Photography in Memphis, Tennessee, which depicted Johnson wearing a pin-
striped suit, fedora hat, and polished dress shoes, while holding his Gibson guitar. Thompson
allowed LaVere to take this photo – later to become known as the “Hooks Brothers”
photograph – to have negatives made.
¶4. On LaVere’s second visit, Thompson showed him a different photograph that depicted
Johnson in front of a curtain with a cigarette in his mouth, holding a Gibson guitar. This
2
photograph – which appears to be a self-portrait taken at a photo booth in the 1930s – later
became known as the “dime store photo.”
¶5. Sony Music Entertainment, Inc. (“Sony”) – owner of the master of Johnson’s
recordings 1 – already had published albums of Johnson’s music. Based on the discovery of
the photographs and biographical information of Johnson’s life, LaVere pitched the idea of
rereleasing Johnson’s music to John Hammond, then vice-president of Sony.2 LaVere
initiated these discussions with Sony in the summer of 1973.
¶6. LaVere’s negotiations with Sony prompted negotiations between LaVere and
Thompson, through counsel. On June 25, 1974, Thompson appointed LaVere as her agent,
granting him the right
to do any and all things necessary, and to execute any and all documents,
contracts, file copyrights, and institute litigation and any and all other things
necessary or proper to protect my rights or the rights of my deceased brother.
¶7. Thompson’s attorney drafted this agreement to allow LaVere to continue negotiations
with Sony pertaining to the rerelease of Johnson’s recordings. Then, on November 20, 1974,
LaVere and Thompson entered into a comprehensive agreement (“the 1974 Agreement”),
which included a royalties and fees provision.
1
Johnson originally recorded his masters with American Record Company in 1936 and 1937.
A few years later, Columbia Broad Casting Systems (“CBS”) purchased American Record
Company. Thereafter, Sony Music purchased CBS. Throughout these acquisitions, Johnson’s
masters changed ownership to each acquiring company, leaving Sony the current owner.
2
Though at this point in time Sony was known as CBS, Sony later purchased CBS. For
purposes of clarity, CBS will be referred to as Sony, since Sony now stands in the place of CBS and
is party to this lawsuit.
3
¶8. The 1974 Agreement stated that Thompson, as Johnson’s known living heir, agreed
to transfer to LaVere “all of her right, title and interest, including all common law and
statutory copyrights, in and to the musical works and recordings of Robert L. Johnson, a
photograph of Robert L. Johnson taken by Hooks Brothers Photography in Memphis,
Tennessee . . . [and] a small photograph of Johnson with a guitar . . . .” But Thompson, her
heirs and assigns, would retain ownership and possession of all original photographs.
¶9. In return, LaVere agreed to “use his best efforts to obtain commercial utilization of
such photograph or photographs and memorandum in conjunction with the recordings of and
or by Robert L. Johnson as well as in books, magazines or other media, and to take all steps
necessary to register or protect the statutory copyright,” and he would pay Thompson fifty
percent of all royalties collected by him.
¶10. This 1974 Agreement also stated that Thompson was “acting upon the representations
to the effect that she is the nearest next of kin of Robert L. Johnson . . . . She understands and
agrees that in the event that there are other heirs of Robert L. Johnson who would have a
right to the payment of such sums, she shall be responsible for the payment . . . .”
¶11. After Thompson and LaVere finalized the 1974 Agreement, Sony entered into a
separate and independent contract with LaVere and Thompson dated November 21, 1974
(“the CBS agreement”). In this agreement, Thompson and LaVere agreed to assign their
rights in Johnson’s music, as well as their rights in two photographs, services, artwork, and
biographical information to be used in conjunction with the release of the album Robert
Johnson: The Complete Recordings (“The Complete Recordings”). Sony agreed to pay all
royalties and fees to LaVere, but it never agreed to pay Thompson any royalties or fees
4
directly. Instead, LaVere was responsible for paying to Thompson any money generated
from the CBS agreement, in accordance with the terms of the 1974 agreement.
¶12. After that, the project stalled,3 but LaVere continued to push Sony to release The
Complete Recordings, and the album finally debuted on August 28, 1990. The album sold
more than one million copies and, as of 2009, Thompson’s royalty agreement with LaVere
had generated more than one and half million dollars. Sony paid all money due and owing
under the CBS agreement to LaVere.
¶13. Thompson passed away in February 20, 1983, leaving her estate to her half-sister,
Annye Anderson, and her grandson, Robert Harris. Then in 1989, her legatees – Anderson
and Harris – opened Johnson’s estate in Leflore County. When the estate was opened,
Anderson and Harris believed they were the sole heirs to the Johnson estate. But in the years
to follow, litigation ensued to determine the legal heirs of Johnson’s estate and, in 1998, the
chancery court entered a final judgment proclaiming Claud Johnson, Johnson’s biological
son, as the sole heir of the estate.
¶14. Prior to the chancery court naming Claud Johnson as Johnson’s sole heir, Anderson,
as the adminstratrix of Johnson’s estate, swore under oath that the photographs and
copyrights of the photographs belonged to the Johnson estate. Anderson also submitted
accountings listing the photographs as assets of Johnson’s estate, and she requested payment
3
Issues included a Robert Johnson impersonator claiming royalties from the music; a rumor
that Johnson had a wife and child, bringing into question whether Thompson was Johnson’s lawful
heir; and a threatened lawsuit from Mack McCormick, who claimed a contractual right to the
photographs.
5
for her duties as adminstratrix based on a percentage of the estate’s total assets, which
included the photographs.
¶15. Then, in 1991 the chancellor appointed Willis B. Brumsfield administrator of
Johnson’s estate. Brumsfield entered into an agreement with LaVere, on behalf of the estate,
ratifying both the 1974 agreement and the CBS agreement. LaVere then paid all royalties
and fees due and owing under the agreements to the Johnson estate. As of March 22, 1999,
the property of the Johnson estate was transferred to Claud Johnson.
¶16. Anderson and Harris now assert that the photographs belonged to Thompson,
personally, and not to Johnson’s estate. While Anderson and Harris do not dispute that the
copyrights in Johnson’s musical compositions belong to Claud Johnson, they argue that, as
the heirs of Thompson, they are entitled to the fees generated from the Johnson photographs,
as those were Thompson’s personal property.
PROCEDURAL HISTORY
¶17. Anderson and Harris filed a complaint against Claud Johnson, Stephen LaVere, Delta
Haze,4 and Sony, asserting claims of fraud, misrepresentation, concealment, conversion,
unjust enrichment, unfair competition and business practice, and breach of fiduciary duty.
They also asserted a breach-of-contract claim against LaVere.
¶18. The complaint was filed in Hinds County, but Claud Johnson moved the court for a
change of venue, which it granted. The trial court allowed Anderson and Harris to continue
the action in either Copiah County, where Claud Johnson lived, or Leflore County, where
4
Stephen LaVere owns Delta Haze. Further, Delta Haze and LaVere have jointly submitted
briefs and arguments throughout all of this litigation. Thus, “the LaVere defendants” will be used
to refer to Delta Haze and LaVere collectively.
6
Johnson’s estate was administered. Anderson and Harris filed an interlocutory appeal of the
transfer order, which this Court denied on November 29, 2000. Anderson and Harris then
chose to transfer to Leflore County.
¶19. On January 31, 2001, the LaVere defendants moved for a dismissal of the claims, or,
in the alternative, for summary judgement. On August 8, 2001, Sony joined that motion.
Without addressing three alternative arguments, the trial court granted the motion for
summary judgment on the basis of res judicata. We reversed and remanded the case to the
Leflore County Circuit Court.
¶20. On January 4, 2005, the LaVere defendants moved to dismiss or, in the alternative,
for summary judgment on the defenses not originally adjudicated, and Sony joined this
motion. This circuit court took no action on this motion for six years.
¶21. Then, on January 21, 2011, Sony awoke the lawsuit by moving for approval of a
license to use the photographs of Johnson for a new compilation of Johnson’s music called
The Centennial Collection, which was to be a tribute to Johnson’s 100th birthday. Sony
sought permission among all parties to use the photographs in the packaging of this album,
subject to a licensing fee which would be held by Sony until resolution of this dispute.
LaVere and Claud Johnson agreed, but Anderson and Harris did not, so Sony filed an
Emergency Motion for a License, which the trial court granted.
¶22. In April 2011, both Sony and the LaVere defendants filed separate supplemental
motions for summary judgment. Claud Johnson joined Sony’s motion. Anderson and Harris
then filed a motion for partial summary judgment against the LaVere defendants. The trial
court granted the LaVere defendants’ motion to renew defenses not adjudicated in their
7
motion for summary judgment, eventually holding that the doctrines of laches, judicial
estoppel, and collateral estoppel precluded all of the plaintiffs’ claims.
¶23. The trial court also granted Sony’s supplemental motion for summary judgment –
which was joined by Claud Johnson, and the LaVere defendants’ supplemental motion for
summary judgment, finding that the claims also were time-barred. The trial court entered
judgment orders against Anderson and Harris and denied any remaining motions. Anderson
and Harris now appeal, arguing that the trial court improperly granted all of the defendants’
motions for summary judgment.
DISCUSSION
¶24. We apply a de novo standard of review to the trial court’s ruling on summary
judgment.5 Summary judgment is appropriate only when there is no genuine issue of
material fact.6 If there is no genuine issue of material fact, and the moving party is entitled
to judgment as a matter of law, summary judgment should be entered in that movant’s favor.7
In considering a motion for summary judgment, courts view the evidence in the light most
favorable to the nonmoving party. Although appellants raise several issues, we shall address
only the statute of limitations, which we find to be dispositive.
Anderson and Harris failed to argue waiver of the state statute-of-limitations
defenses in the trial court.
5
Indem. Ins. Co. of N. Am. v. Guidant Mut. Ins. Co., 99 So. 3d 142, 149 (Miss. 2012).
6
Miss. R. Civ. P. 56(c).
7
Chisolm v. Miss. Dep’t of Transp., 942 So. 2d 136 (Miss. 2006).
8
¶25. In granting the motions for summary judgment, the trial court ruled that Anderson’s
and Harris’s claims were time-barred by the Federal Copyright Act’s statute of limitations 8
and Mississippi’s general, three-year statute of limitations.9 In their brief, Anderson and
Harris argued that the LaVere defendants had waived both their preemption and their Federal
Copyright Act affirmative defenses by failing to timely raise and pursue them, as required
under this Court’s caselaw.10
¶26. At oral argument, Anderson and Harris expanded their position, asserting that the
LaVere defendants, Sony, and Claud Johnson had waived the right to argue any statute of
limitations as an affirmative defense. After requesting supplemental briefing on this issue,
we find that the Anderson and Harris are procedurally barred from making this broader
argument on appeal.
¶27. This Court has held that “absent extreme and unusual circumstances – an eight-month
unjustified delay in the asserting and pursuing a dispositive affirmative defense, coupled with
active participation in the litigation process, constitutes waiver as a matter of law.” 11 In order
to raise such an argument before this Court, however, Anderson and Harris must have first
8
17 U.S.C. § 507 (West, Westlaw through P.L. 113-74 (excluding P.L. 113-66 and 113-73)
approved 1-16-14.).
9
Miss. Code Ann. § 15-1-49 (Rev. 2012).
10
See Meadows v. Blake, 36 So. 3d 1225 (Miss. 2010).
11
MS Credit Ctr., Inc. v. Horton, 926 So. 2d 167, 180 (Miss. 2006).
9
raised this argument in the trial court – which they did not. We will not consider issues
raised for the first time on appeal.12
¶28. At the inception of this litigation in 2000, Claud Johnson and Sony asserted all
applicable statutes of limitations as affirmative defenses. Similarly, in their answer, the
LaVere defendants averred that the statute of limitations in Section 15-1-1, et seq., of the
Mississippi Code barred Anderson’s and Harris’s claims. While the LaVere defendants,
Sony, and Claud Johnson did not pursue the statute of limitations as a defense for some time,
Anderson and Harris did not argue wavier.
¶29. Then, in April 2011, the LaVere defendants filed a supplemental motion for summary
judgment, adding both federal preemption and the Federal Copyright Act statute of
limitations as affirmative defenses. In response to this motion, Anderson and Harris – for the
first time – argue waiver. Anderson and Harris, however, argue that waiver applied only to
the LaVere defendants, and only to the federal preemption and the copyright statute of
limitations defenses. But, in their response to the LaVere defendants’ supplemental motion,
Anderson and Harris concede that the LaVere defendants properly pleaded and did not waive
their right to assert the state statute of limitations under Section 15-1-49.
¶30. Anderson and Harris, however, argue that the trial court already found that they did
not waive their right to object to the LaVere defendants’ untimely assertion of affirmative
defenses. After filing their supplemental motion for summary judgment, the LaVere
defendants filed a “motion seeking determination that plaintiffs have waived the right to
12
Flagstar Bank, FSB v. Danos, 46 So. 3d 298, 311 (Miss. 2010) ( stating “we need not
consider this issue, which has been raised for the first time on appeal”) (citing Alexander v. Daniel,
904 So. 2d 172, 183 (Miss. 2005)).
10
object to the assertion of additional defenses by defendants LaVere and Delta Haze, or in the
alternative, for leave to amend answer to assert additional defenses.” In response, the trial
court issued an order ruling that Anderson and Harris did not waive their right to object to
the LaVere defendants’ addition of two new affirmative defenses – federal preemption and
the copyright act statute of limitations. The trial court then granted the LaVere defendants
leave to amend their original answers to include these defenses. This ruling clearly applied
only to the addition of any affirmative defenses not originally pleaded in the LaVere
defendants’ answers, and therefore does not include the three-year state statute of limitations,
which all defendants pleaded in their original answers.
¶31. The record indicates that, prior to oral argument before this Court, Anderson and
Harris never asserted that the LaVere defendants, Sony, and Claud Johnson had waived the
state statute of limitations as an affirmative defense. We therefore must find, consistent with
our longstanding caselaw, that Anderson and Harris are barred from raising this argument
for the first time on appeal.13 Further, because we find the state statute of limitations controls
this case, it is unnecessary to address whether the trial court properly allowed the LaVere
defendants to raise federal preemption and the Federal Copyright Act statute of limitations
eleven years into the litigation.
13
Boyles v. Miss. State Oil & Gas Bd., 794 So. 2d 149, 153 (Miss. 2001) ( “It is a well-
settled proposition that this Court will not review matters on appeal that were not considered by the
lower court.”).
11
Anderson and Harris failed to file suit within the statute of limitations.
¶32. Section 15-1-49 states that “[a]ll actions for which no other period of limitation is
prescribed shall be commenced within three (3) years next after the cause of such action
accrued, and not after.” Anderson and Harris do not dispute that Section 15-1-49 is the
controlling statute of limitations 14 which applies to claims of fraud,15 misrepresentation,16
concealment,17 breach of fiduciary duty,18 conversion,19 unjust enrichment,20 unfair
14
It should be noted that, in their brief, Anderson and Harris argued that the constructive-
trust statute of limitations under Mississippi Code Section 15-1-39 controlled their claim for unjust
enrichment. At oral argument, however, Anderson and Harris informed the Court that they were
abandoning their constructive-trust argument. Thus, we will not consider the ten-year, constructive-
trust statute of limitations.
15
Fletcher v. Lyles, 999 So. 2d 1271, 1276 (Miss. 2009) (This Court applied the three-year
statute of limitations to fraud, negligence, and breach-of-contract claims.).
16
CitiFinancial Mortgage Co. v. Washington, 967 So. 2d 16, 17 (Miss. 2007) (This Court
applied the three-year limitations period to breach of fiduciary duty, breach of implied covenant of
good faith and fair dealing, fraudulent misrepresentation, and breach of contract.).
17
Carter v. Citigroup, 938 So. 2d 809, 817 (Miss. 2006) (citing Stephens v. Equitable Life
Assurance Soc.’y of U.S., 850 So. 2d 78, 82 (Miss. 2003) (holding that “this Court has also applied
the three-year statute of limitations [in Mississippi Code Section 15-1-49] for fraudulent
concealment, negligent hiring, and concealment).
18
Carter, 938 So. 2d at 817 (citing Am. Bankers’ Ins. Co v. Wells, 819 So. 2d 1196, 1200
(Miss. 2001) (holding that “there is a three year statute of limitations [in Mississippi Code Section
15-1-49] for claims of breach of a fiduciary duty, misrepresentation, and conspiracy)).
19
Estate of Martin Luther King Jr., Inc. v. Ballou, 856 F. Supp. 2d 860, 863 (S.D. Miss.
2012) (holding that “claims for conversion and replevin are governed by Mississippi’s residual
statute of limitations [Mississippi Code Section 15-1-49]. . .).
20
Miss. Code Ann. § 15-1-49(1) (Rev. 2012) (“All actions for which no other period of
limitation is prescribed shall be commenced within three (3) years next after the cause of such action
accrued, and not after.”).
12
competition and business practice,21 and breach of contract.22 Thus, Section 15-1-49 clearly
governs all of Anderson’s and Harris’s claims.
¶33. Under Section 15-1-49, the three-year statute of limitations begins to run when the
cause of action accrues,23 and we have held that the “cause of action accrues when it comes
into existence as an enforceable claim, that is, when the right to sue becomes vested.” 24 The
trial court found that Anderson’s and Harris’s claims accrued no later than August 29, 1990,
when they learned that Sony intended to release The Complete Recordings using the
photographs. And Anderson and Harris filed their complaint in 2000 – long after the three-
year statute of limitations expired. Anderson and Harris assert, however, that the statute of
limitations was tolled by this Court’s holding in LaVere I,25 and that their claims did not
accrue until October 15, 1998, when the chancery court adjudicated Claud Johnson sole heir
of the Johnson estate.
¶34. In LaVere I, we stated that Anderson and Harris had no obligation to litigate
ownership of the photographs in the Johnson estate heirship proceeding.26 Anderson and
Harris argue that this statement tolled the statute of limitations for all of their claims arising
21
Id.
22
CitiFinancial Mortgage, 976 So. 2d at 17 (This Court applied Section 15-1-49 to
plaintiff’s breach-of-contract claim.).
23
Miss. Code Ann. § 15-1-49(1) (Rev. 2012).
24
Bullard v. Guardian Life Ins. Co. of Am., 941 So. 2d 812, 815 (Miss. 2006) (quoting
Forman v. Miss. Publishers Corp., 195 Miss. 90, 14 So. 2d 344, 346 (1943)).
25
Anderson v. LaVere, 895 So. 2d 828 (Miss. 2004).
26
Id. at 837.
13
out of the ownership of the photographs until after the conclusion of the heirship proceeding
in 1998. We disagree.
¶35. In LaVere I, we merely held that Anderson and Harris were under no obligation to
litigate, nor could they litigate, ownership of the photographs in the heirship proceedings.27
Our holding in no way tolled the statute of limitations on any claims they may have had
against the LaVere defendants over ownership of the photographs. Anderson and Harris
could have brought a separate civil action asserting their claims.
¶36. Also, we note that during the heirship proceedings, Anderson and Harris did not claim
the photographs belonged to Thompson. Rather, they claimed the photographs were assets
of the Johnson estate. They assert that they did not bring a separate action because they
thought they were the only heirs to the Johnson estate, and thus they were entitled to the
photographs as Johnson’s heirs. So, only after losing the estate case did Anderson and Harris
bring a separate action claiming that Thompson – and not the estate – owned the
photographs. This strategy cannot serve to toll the statute of limitations.
¶37. Though it is likely, as the trial court ruled, that Anderson and Harris discovered their
cause of action in 1990 when they learned of Sony’s upcoming release of The Complete
Recordings, there is no question that they were aware of their injury – and their claims
against all appellees – at the latest in 1991, when LaVere began paying all royalties and fees
under the 1974 agreement to the Johnson estate, rather than to Thompson’s estate. Claiming
to be Johnson’s sole heirs, both Anderson and Harris were parties to all of the Johnson estate
proceedings. Indeed, Anderson and Harris opened Johnson’s estate, and Anderson acted as
27
Id. at 837.
14
the Aministratrix of that estate until 1991. Anderson obviously was aware that LaVere had
made royalty payments to the Johnson estate, rather than the Thompson estate, since it was
Anderson who listed the photographs as assets of the Johnson estate.
¶38. Additionally, Anderson and Harris – as Thompson’s legatees – knew in 1991 that
Thompson’s estate had not been paid any money earned from the use of the pictures. Neither
Anderson nor Harris disputes that he or she knew the funds were being paid to the Johnson
estate. Instead, they argue that, since they believed themselves to be Johnson’s heirs and
entitled to the profit from the pictures through Johnson’s estate, there was no need to make
the claim. We must reject this argument. We find that Anderson’s and Harris’s cause of
action accrued, at the latest, in 1991, when LaVere began paying royalties and fees to the
Johnson estate. Therefore, Anderson’s and Haris’s claims are time-barred under the three-
year statute of limitations in Mississippi Code Section 15-1-49.
CONCLUSION
¶39. We find that Anderson’s and Harris’s claims are barred by the three-year statute of
limitations in Section 15-1-49, so we affirm the trial court’s grant of summary judgment.
¶40. AFFIRMED.
WALLER, C.J., RANDOLPH, P.J., LAMAR, CHANDLER, PIERCE, KING
AND COLEMAN, JJ., CONCUR. KITCHENS, J., NOT PARTICIPATING.
15