A reminder to practitioners: when a contract is unambiguous, the submission of a hurricane of extrinsic evidence to “interpret” it on a pre-answer motion to dismiss won’t fly.

A breach of contract action brought against Robert Zimmerman a/k/a Bob Dylan and Universal Music seeking to capitalize on the widely-reported blockbuster sale of Dylan’s 600-song catalog to Universal for more than $300 million dollars in late 2020 (the “Catalog Sale”), was recently tossed out by Manhattan Commercial Division Justice Barry Ostrager.

In Levy v Zimmerman, the widow of Jacques Levy — Dylan’s co-writer of 10 tracks, including the famous song “Hurricane” (“the Compositions”) — claimed that Dylan failed to pay Levy’s estate its portion of the proceeds from the Catalog Sale in breach of a 1975 agreement between them (the “1975 Agreement”).  Although Levy and/or his estate had received almost a million dollars of royalty revenue from Dylan to date based on the 1975 Agreement, they now claimed that the Agreement also entitled Levy to 35% of the revenue received by Dylan in connection with the sale of the Compositions.

Emphasizing that the lawsuit was an “opportunistic attempt to rewrite a 45-year-old contract to obtain a windfall payment that the [1975 Agreement] does not allow,” and that the Plaintiffs “saw an opportunity to extract money from Dylan” after learning of the Catalog Sale,  the Defendants jointly filed a pre-answer motion to dismiss the Complaint under CPLR 3211 (a) (1) and (7) based on documentary evidence (i.e., the 1975 Agreement) and for failure to state a cause of action.

In their motion, the Defendants argued that the “plain language” of the 1975 Agreement, together with basic principles of contract interpretation, foreclosed the Plaintiffs’ claims in their entirety.  Citing to key provisions, the Defendants stated that the 1975 Agreement was a standard work-for-hire agreement between Dylan and Levy that granted Dylan full ownership of the copyrights in the Compositions, making them Dylan’s “sole property,” and giving him the exclusive right to sell them.  The Defendants noted that the 1975 Agreement repeatedly identified Levy as an “Employee” and specified his compensation as 35% of the royalty payments from licensing rights granted to third-parties for the performance and use of the Compositions, but said nothing about giving Levy a cut of the proceeds from the sale of Dylan’s copyrights in the songs.

In response, the Plaintiffs filed “voluminous opposition papers,” including a 35-page affidavit of a self-described music copyright expert, who, based on his analysis of copyright law, opined that the Compositions were “joint works” of Dylan and Levy entitling Levy to a percentage of the proceeds of the Catalog Sale, rejecting the “employee-for-hire” relationship designated in the 1975 Agreement.

Agreeing with the Defendants, the Court ultimately found that the 1975 Agreement unambiguously precluded the Plaintiffs’ claim to any portion of the proceeds of the Catalog Sale.  The Court noted that, consistent with the standards of review on a motion to dismiss under CPLR 3211 (a) (1) and (7), the Court could not consider extrinsic evidence — including the “expert” affidavit — to interpret or alter the meaning of the terms of an otherwise unambiguous agreement.  Justice Ostrager also rejected the expert’s analysis of the 1975 Agreement, as “improperly usurp[ing] the Court’s function to interpret the Agreement by cherry-picking words and phrases and assigning them meanings” and, in doing so, violating basic principles of contract interpretation:

“Particular words should be considered not as if isolated from the context but in the light of the obligation as a whole and the intention of the parties as manifested thereby”; and

“[W]hen a general phrase [such as “any and all”] follows a list of specific terms, the general phrase must be interpreted to refer to items of the same ilk as those specifically listed.”

In the end, the Court dismissed the Complaint in its entirety based on the express terms of the 1975 Agreement, which it stated provided a complete defense as a matter of law that demonstrated the Plaintiffs had not stated a viable cause of action.  The Court also denied the Plaintiffs the ability to replead their causes of action as “futile” given that the Complaint cited to key provisions of the 1975 Agreement that were briefed at length in the Plaintiffs’ opposition papers and presented at oral argument and which conclusively undermined the Plaintiffs’ claim to any of the proceeds from the Catalog Sale.