Sony Music Entertainment, Inc. v. Clark Entertainment Group, Inc. (In Re Clark Entertainment Group, Inc.)

183 B.R. 73, 1995 Bankr. LEXIS 792, 27 Bankr. Ct. Dec. (CRR) 420, 1995 WL 349117
CourtUnited States Bankruptcy Court, D. New Jersey
DecidedJune 8, 1995
Docket19-12005
StatusPublished
Cited by2 cases

This text of 183 B.R. 73 (Sony Music Entertainment, Inc. v. Clark Entertainment Group, Inc. (In Re Clark Entertainment Group, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sony Music Entertainment, Inc. v. Clark Entertainment Group, Inc. (In Re Clark Entertainment Group, Inc.), 183 B.R. 73, 1995 Bankr. LEXIS 792, 27 Bankr. Ct. Dec. (CRR) 420, 1995 WL 349117 (N.J. 1995).

Opinion

OPINION

WILLIAM H. GINDIN, Chief Judge.

INTRODUCTION

This adversary proceeding involves the possession by debtor/defendant, the Clark Entertainment Group, Inc. (“Clark”), of certain audio tapes which were created by Columbia Records (“Columbia”), predecessor to Sony Music Entertainment Inc., plaintiff herein (“Sony”), and embody performances of Sony contracted artists. Plaintiff asserts common law causes of action against defendant, including conversion, unfair competition and copyright. Further, plaintiff seeks immediate possession of the tapes, or in the alternative, a permanent injunction barring debtor from copying and distributing the tapes.

This court has jurisdiction over the matter pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157. This is a core matter pursuant to 28 U.S.C. § 157(b)(2)(A), (B), (E), (M) and (0).

FACTS

The tapes in question were recorded at Columbia Studios in Nashville, Tennessee some time prior to 1972; they contain rehearsal performances of recognized recording artists, including The Byrds, Johnny Cash, David Houston, Jim & Jessie, Bob Luman, Marty Robbins, The Statler Brothers, Bobby Vinton, and Charlie Walker among others. Some of the performances are of songs contained in previously released albums while the remainder are performances of songs that were never publicly released. The chronicle of the chain of possession of these tapes is as follows:

Michael Figlio, an employee of Columbia, was the first to acquire the tapes. According to the testimony at trial, Figlio was granted permission to retain these tapes by Columbia through two different company policies. Initially, Figlio was permitted to take used tapes which otherwise would have been discarded. Later, when Columbia changed this policy and began to sell used tapes to employees and the public, Figlio purchased additional tapes. Without listening to them, *76 Figlio placed all of the tapes he had procured in a Nashville warehouse storage facility.

Columbia Records was purchased by Sony in 1988. Sony thereby succeeded to all of the rights of Columbia. Sometime in the late 1980’s, Figlio became delinquent in making his storage rental payments and the storage facility auctioned the contents of his locker on June 27, 1990. Doug and Brenda Cole were the successful bidders at the public auction with a fifty dollar ($50.00) bid. The aforementioned tapes were discovered among other items located in the locker. The Coles subsequently sold the tapes to debtor.

After acquiring possession of the tapes, the debtor, through its principal, Clark Enslin, contacted the plaintiff in order to determine if Sony had any interest in purchasing the tapes. Enslin contacted Sony a number of times. Sony did not agree to purchase the tapes and in fact filed lawsuits seeking possession of the tapes, based upon a claim of conversion, and seeking a restraining order prohibiting Enslin and/or debtor from selling, transferring or duplicating the tapes. Not knowing in which jurisdiction the tapes were located, Sony initiated parallel proceedings in both Tennessee and New Jersey state courts. On July 29, 1992, the Tennessee court entered an order granting a temporary injunction and on November 6, 1992, the same court orally issued an enforcement order against Enslin and debtor and sanctioned both for violating the injunction. On November 12, prior to the entry of a written order embodying the oral order of November 6, the debtor filed its petition under Chapter 11 of the Bankruptcy Code. The state court actions, consequently, were and remain stayed.

On January 27, 1993, Sony instituted the within adversary proceeding. An initial trial of this matter was held on April 13,1993. At the conclusion of plaintiffs case, this court found that Sony had failed to meet its burden of proof with respect to conversion. Specifically, the court held that Sony had not demonstrated that the tapes were improperly taken by Figlio from Columbia. That ruling was appealed to the district court. On July 28,1993, the District Court entered a Memorandum Opinion and Order (“Thompson Opinion”) granting Sony’s appeal and vacating the order of dismissal. The case was then remanded to the bankruptcy court for further proceedings consistent with the opinion. A second trial was held by the bankruptcy court on September 29, 1994 at which the parties agreed to stipulate that the record from the first trial would be incorporated as part of the record for the second trial. In addition, the bankruptcy court allowed the parties to supplement the trial testimony with depositions of certain parties. The present opinion constitutes the court’s ruling after the second trial.

DISCUSSION

Conversion

As this case has been remanded by the district court, this court is bound by the district court’s findings in its appellate capacity. In re Huderson, 96 B.R. 541, 548 (Bankr.E.D.Pa.1989); see also Moore v. Jas. H. Matthews & Co., 682 F.2d 830, 833-34 (9th Cir.1982) and Cherokee Nation v. Oklahoma, 461 F.2d 674, 677-78 (10th Cir.1972), cert. denied, 409 U.S. 1039, 93 S.Ct. 521, 34 L.Ed.2d 489 (1972) (decision and contents of the Order and the Opinion of an appellate court are the “law of the case” upon remand to the lower court).

The district court instructed that in order to prevail on a claim for conversion, two elements must be proved: (1) that the plaintiff owned, or had a right to use, the property in question at the time of the conversion; and (2) the defendant’s actions constituted an exercise of unlawful dominion over the plaintiffs property by the defendant in a manner that is inconsistent with the plaintiffs title or rights. Royal Store Fixture Co. v. N.J. Butter Co., 114 N.J.Super. 263, 268-69, 276 A.2d 153 (N.J.Super.Ct.App.Div.1971); Thompson Opinion at 5. Judge Thompson held that the burden of proof is on the plaintiff to show that he has title or ownership of the property and that once plaintiff meets this burden, the burden shifts to the defendant to show that he came into possession of the property under such circumstances as to relieve him from liability for conversion. Thompson Opinion at 5 (citing First Nat’l Bank of Blairstown v. *77 Goldberg, 340 Pa. 337, 338, 17 A.2d 377 (Pa.1941)).

The district court found that Sony’s burden had been met. Judge Thompson held that Figlio’s uncontroverted testimony at the first trial, i.e., that he obtained the tapes from Columbia and that Columbia was Sony’s predecessor, established that Sony (as Columbia’s successor) was the owner of the tapes prior to Figlio’s possession. The district court then remanded the case for the bankruptcy court to determine whether defendant (as successor to Figlio) had rightfully come into possession of the tapes so as to relieve him from liability for conversion.

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Bluebook (online)
183 B.R. 73, 1995 Bankr. LEXIS 792, 27 Bankr. Ct. Dec. (CRR) 420, 1995 WL 349117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sony-music-entertainment-inc-v-clark-entertainment-group-inc-in-re-njb-1995.