Court Opinion

ID: 9481849
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:33:38.872233+00
Date Added: 2024-06-11T17:48:37.079178
License: Public Domain

KENNEDY, Circuit Judge,
concurring in part and dissenting in part.
I concur in all of the Court’s opinion except the holding that appellants are liable for royalties earned prior to the sale to Gusto Records, Inc. and G.M.L. Inc. and which were paid to Koala for the Thomas and Pitney masters. With respect to the Shirelles, I would affirm in full since it appears that Gusto had licensed them to third parties years before its purchases from Koala.
I agree that there can be an express assumption of this liability. I also agree that if, as here, the contract is silent and there is no integration clause, then such assumption can be found to be an implied term of the sale by resorting to extrinsic evidence. The majority points to two pieces of such extrinsic evidence: defendants’ claim of entitlement to royalties earned prior to the date of the purchase of the masters from Koala and their right to charge expenses of prior owners, as well as advances to the plaintiffs, against the plaintiffs’ royalties. However the District Court made no factual finding that there was such an implied term. Although the District Court accepted the testimony of the expert witness, I do not believe that testimony was sufficient to support a finding that there is such a custom in the industry.
Accordingly, I would remand the case to the District Court for a finding on that issue.