Court Opinion

ID: 4301526
Source: CourtListenerOpinion
Date Created: 2018-08-07 15:00:27.491891+00
Date Added: 2024-06-11T14:03:13.723032
License: Public Domain

Case: 17-15353   Date Filed: 08/07/2018   Page: 1 of 27

                                                         [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                             No. 17-15353
                         Non-Argument Calendar
                       ________________________

                   D.C. Docket No. 8:17-cv-00328-CEH,
                     Bkcy No. 8:12-bkc-15725-KRM

In Re:

         BAMBI ALICIA HERRERA-EDWARDS,

                                                                        Debtor.
________________________________________________________
BAMBI ALICIA HERRERA-EDWARDS
670 76th Avenue
St. Pete Beach, FL 33706-1808,

                                                                      Plaintiff,

DARRYL E. ROUSON,
AS CURATOR OF THE ESTATE OF BAMBI ALICIA
HERRERA-EDWARDS,

                                                     Interested Party-Appellant,

                                  versus

BERNARD EDWARDS COMPANY, LLC,
5750 Wilshire Blvd., Suite 590
Los Angeles, CA 90036-3697,
JESS S. MORGAN & CO., INC.,
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5900 Wilshire Blvd., Suite 2300
Los Angeles, CA 90036 323-634-2400,

                                                               Defendants-Appellees.

                           ________________________

                   Appeal from the United States District Court
                       for the Middle District of Florida
                         ________________________

                                 (August 7, 2018)

Before MARCUS, ROSENBAUM and HULL, Circuit Judges.

PER CURIAM:

      This bankruptcy case involves Bambi Alicia Herrera-Edwards

(“Herrera-Edwards”), who filed voluntary bankruptcy proceedings in 2012.

Herrera-Edwards was married to Bernard Edwards, a well-known singer,

songwriter, and producer who died in 1996. After Mr. Edwards’s death, litigation

over his estate ensued between (1) his widow, Herrera-Edwards, (2) his former

wife, Alexis Edwards, and (3) his six children.

      Ultimately, the parties entered into a Settlement Agreement, and a

corresponding Co-Publishing Agreement, that divided royalties and compensation

from Mr. Edwards’s copyrights and other assets. For years, Herrera-Edwards

received a stream of income as a result of these agreements.

      But in 2012, Herrera-Edwards filed for bankruptcy. In her bankruptcy

petition, Herrera-Edwards asked the bankruptcy court to reject portions of the

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Co-Publishing Agreement regarding the administration rights to Mr. Edwards’s

composition copyrights. Also in the bankruptcy court, Herrera-Edwards filed an

adversary proceeding against two defendants: (1) a company owned by

Mr. Edwards’s children that managed their inherited interests—defendant-appellee

Bernard Edwards Company, LLC (the “Edwards Company”)—and

(2) Mr. Edwards’s business manager—defendant-appellee Jess S. Morgan & Co.,

Inc. (the “Morgan Company”). In that separate adversary proceeding,

Herrera-Edwards sought artist and producer royalties from Mr. Edwards’s

copyrights and challenged a perpetual fee paid to the Morgan Company.

      After a bench trial, the bankruptcy court issued its findings of fact and

conclusions of law, which granted the defendants’ motion for judgment on partial

findings and denied Herrera-Edwards’s motion to reject portions of the

Co-Publishing Agreement. Herrera-Edwards then moved the bankruptcy court to

amend its findings of fact or, alternatively, to grant a new trial, but the bankruptcy

court denied her motion.

      Herrera-Edwards appealed the bankruptcy court’s rulings. Between oral

argument in the district court and the entry of the district court’s order (now on

appeal), Herrera-Edwards died, and Darryl E. Rouson was appointed as curator of

her estate. For the sake of simplicity, however, we address the appellant as

Herrera-Edwards throughout this opinion.

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      On appeal, the district court affirmed the bankruptcy court’s rulings. After

careful review, we affirm the district court’s rulings.

                                I.     BACKGROUND

      These disputes center on what interests Herrera-Edwards, and now her

estate, obtained from the probate of her late husband Bernard Edwards’s estate.

Herrera-Edwards was represented by counsel at all times relevant to this action.

A.    Bernard Edwards and his Music Career

      Bernard Edwards co-founded the disco and funk band Chic. Mr. Edwards

coauthored, performed, and produced many popular songs, including “Dance,

Dance, Dance,” “Everybody Dance,” “Le Freak,” and “We Are Family.”

Mr. Edwards had an ownership interest in the copyrights for the compositions he

coauthored and received songwriter royalties for their use (“composition

copyrights”). Mr. Edwards also received artist and producer royalties for

performing and producing copyrighted sound recordings of these compositions

(“recording copyrights”). Although Mr. Edwards received royalties for his role in

making these sound recordings, he did not own their recording copyrights. Rather,

a recording company—in this case, Atlantic Records—owned the recording

copyrights related to Mr. Edwards’s compositions.

      Based on trial testimony in the bankruptcy court, songwriter royalties are

paid whenever the words of a song are used, whether by performance or some

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other medium. Separately, artist and producer royalties are paid largely based on

the number of record sales for a particular recording. Consequently, when a

publishing company wants to use a recorded song, it has to buy two licenses—one

for the composition itself and one for the audio recording. The respective parties

are paid accordingly.

      At some point during his career, Mr. Edwards hired Wallace Franson and

Franson’s firm, the Morgan Company, to manage his business affairs.

Mr. Edwards and Franson orally agreed that, while Mr. Edwards was a client, the

Morgan Company would be compensated at 5% of Edwards’s gross income.

B.    Bernard Edwards’s Death and Probate

      On April 18, 1996, Mr. Edwards died. Mr. Edwards was survived by his six

children from a former marriage, his ex-wife Alexis Edwards, and his then-wife,

appellant Herrera-Edwards. Mr. Edwards’s last will and testament named his six

children as beneficiaries, established trusts in their names, appointed Franson as

executor and trustee, and authorized Franson to substitute the Morgan Company as

executor or trustee at his discretion.

      Mr. Edwards’s last will also disinherited appellant Herrera-Edwards, stating:

“I [Bernard Edwards] have intentionally and with full knowledge omitted to

provide herein for my wife [Herrera-Edwards].” But, under Connecticut law, a

surviving spouse, like Herrera-Edwards, has a statutory right to “a life estate of

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one-third in value of all the property passing under the will, . . . after the payment

of all debts and charges against the estate.” Conn. Gen. Stat. § 45a-436(a); see

Dinan v. Patten, 116 A.3d 275, 288–96 (Conn. 2015) (explaining that the value of

the statutory share should be calculated based on the value of the estate as of the

date of distribution). This right cannot be defeated by “any disposition of the

property by will to other parties.” Conn. Gen. Stat. § 45a-436(a).

      Mr. Edwards’s estate was probated in Westport, Connecticut. During that

proceeding, appellant Herrera-Edwards filed a notice of election to take a statutory

spousal share and asserted complete ownership of the Edwards home in Westport,

Connecticut. She also filed a $10 million tort claim against Mr. Edwards’s estate

in federal court.

      The probate court rejected Herrera-Edwards’s claim to the home, but granted

her election for a statutory spousal share. Both Herrera-Edwards and Mr.

Edwards’s estate appealed the probate court’s decision.

C.    Mediation

      While the probate court’s decision was on appeal, and the separate federal

tort action was still pending, the parties attended mediation on July 9, 1997.

Present at the mediation were Franson, Herrera-Edwards and her attorney, two of

Mr. Edwards’s adult children, a representative for one of Mr. Edwards’s minor

children, the attorney for Alexis Edwards (the ex-wife), and the attorney for Mr.

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Edwards’s estate. Ultimately, the parties signed and dated a handwritten

stipulation outlining the terms of a proposed settlement (“July 9th Stipulation”).

D.    July 9th Stipulation and Applications for Settlement Approval

      The July 9th Stipulation stated that Herrera-Edwards: (1) would release “any

claims” she had against Mr. Edwards’s estate up to the date of the stipulation; and

(2) would withdraw her federal tort action against Mr. Edwards’s estate.

In exchange, Herrera-Edwards would be assigned “full and complete ownership

and interest in 37½% of all royalties and other payments received from the

copyrights and other such interests owned by Bernard Edwards at the time of his

death.” (emphasis added). For a similar release of claims, Alexis Edwards also

would receive “a percentage of the royalties to be agreed upon” by Franson at a

later date. Those in attendance at the mediation agreed to subsequently “execute

such documents, contracts and agreements as are necessary to effectuate the terms

and conditions of this stipulation.”

      On July 16, 1997, a draft settlement agreement was circulated and

Mr. Edwards’s estate filed with the probate court two applications for approval of a

settlement. One of these applications stated that “[t]he estate agrees that

[Herrera-Edwards] shall receive a participation in the income stream of the

copyrights to be received by the estate in the percentage of 37 ½ percent, net after

all expenses.” (emphasis added). The other application stated that Alexis Edwards

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would receive “12 ½ percent” of a similar interest. Both applications provided that

the parties planned to enter into a standard co-publishing agreement, wherein

Franson, as executor of Mr. Edwards’s estate, would act as the publisher of Mr.

Edwards’s copyrights and would exercise complete administration rights.

Herrera-Edwards and Alexis Edwards would act as co-publishers but retain no

administration rights.

       In the music industry, “administrative” or “administration” rights involve

managing how a copyright is used in the marketplace. The duties of a copyright

administrator include registering the copyright, negotiating licensing agreements

with publishing companies, and collecting and disbursing income from use of the

copyrighted material. Essentially, administration rights mean commercial control

of the copyright. 1

E.     Settlement Agreement

       On July 30, 1997, Franson, appellant Herrera-Edwards, and the other

interested parties executed a settlement agreement (“Settlement Agreement”),

which gave Herrera-Edwards a “37 ½ percent” interest in the “income stream from

the copyrights owned by Bernard Edwards[’s] Estate,” as follows:

       1
         Appellant Herrera-Edwards seeks administration rights to secure “an advance” from a
publishing company and then pay off her creditors in the bankruptcy court. An advance serves
as a signing bonus paid against future royalties. Under these agreements, the publishing
company does not pay additional royalties until it recoups the amount of the advance.
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      [Herrera-Edwards] agrees to accept and the estate agrees to take any
      and all steps necessary to assign a 37 ½ percent participation in the
      income stream from the copyrights owned by Bernard Edwards[’s]
      Estate on the date of Bernard Edward[s]’s death after payment of all
      costs, expenses and debt related to the copyrights. The participation
      share of the income stream would be on a net basis after all estate,
      income and other taxes and administrative expenses of the estate have
      been paid.

(emphasis added). The Settlement Agreement gave Alexis Edwards a

corresponding “12 ½ percent” interest in the “income stream from the copyrights

owned by [the] Bernard Edwards Estate.” Herrera-Edwards and Alexis Edwards

were to receive “monthly statements while the estate . . . [was] open and quarterly

statements thereafter. . . . when all estate debts and expenses have been paid.”

      The Settlement Agreement reiterated the parties’ intent to enter into a

standard co-publishing agreement and provided that “[Herrera-Edwards] and

Alexis Edwards . . . will have no administrative rights whatsoever regarding the

copyrights” of Mr. Edwards’s estate. (emphasis added). Further elaborating on the

interest transferred, a separate paragraph in the Settlement Agreement stated that

Herrera-Edwards had no administration rights in the composition copyrights,

stating:

      [Herrera-Edwards] shall have the right to assign or sell her income
      stream only to any third party. [Herrera-Edwards] acknowledges that
      she has no administration rights in the copyrights and that any third
      party would be subject to all terms and conditions as set forth in this
      agreement.

(emphasis added).
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         The Settlement Agreement also provided that the Morgan Company would

receive “a 5% fee on all deferred income and other income received by the estate

of Bernard Edwards from copyrights as a debt of the decedent.” The Settlement

Agreement was signed by all parties, including Franson, Herrera-Edwards, Alexis

Edwards, each of Mr. Edwards’s adult children, and the guardian for the one minor

child.

         Also on July 30, 1997, subject to the terms of the Settlement Agreement,

Herrera-Edwards executed a general release of claims against Mr. Edwards’s

estate, the Morgan Company, and Mr. Edwards’s six children. Herrera-Edwards

also released these other parties from all contractual obligations, excepting those

contained in the Settlement Agreement.

F.       Co-Publishing Agreement

         On August 21, 1997, Mr. Edwards’s estate, appellant Herrera-Edwards, and

Alexis Edwards entered into a co-publishing agreement (“Co-Publishing

Agreement”), which assigned Herrera-Edwards a percentage of the “right, title and

interest” in Mr. Edwards’s composition copyrights, but expressly provided that

Herrera-Edwards had no administration rights and that Mr. Edwards’s estate had

the “sole and exclusive right to administer, control, use, exploit, and receive

income from” Mr. Edwards’s composition copyrights in perpetuity:

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       2. Grant of Rights

       (a) In consideration of all of the terms and conditions set forth herein
       and in the Settlement Agreement, [Edwards’s estate] hereby sells,
       assigns and transfers to [Herrera-Edwards] thirty-seven and one-half
       percent (37.5%), and to Alexis Edwards twelve and one-half percent
       (12.5%) in and to all the [Edwards’s estate]’s right, title and interest in
       the Compositions including, without limitation, all copyrights in the
       Compositions. To such effect, [Edwards’s estate] shall execute and
       deliver assignments of copyright and other documentation which may
       be reasonably requested to establish and record such ownership rights.

       (b) [Herrera-Edwards] and Alexis [Edwards] acknowledge that they
       shall have no administration rights in and to the Compositions, and
       that they each grant to [Edwards’s estate] the sole and exclusive right
       to administer, control, use, exploit, receive income from, and
       otherwise deal in and for the Compositions, throughout the Territory,
       and in perpetuity.

(emphasis added).

G.     Settlement Approval by the Probate Court

       On September 4, 1997, the probate court handling Mr. Edwards’s estate

entered an order approving the Settlement Agreement, 2 which declared that it

resolved all claims that can be made by Herrera-Edwards against the estate:

       The Court has reviewed and approved the Settlement Agreement
       entered into by the Estate, [Herrera-Edwards] as surviving spouse and
       Alexis Edwards as former spouse of the decedent. Disputed claims
       have been made against the estate by [Herrera-Edwards] and Alexis
       Edwards and the Settlement Agreement resolves all claims that can be

       2
        Under Connecticut law, a probate court must approve estate settlements exceeding
$10,000 in value and involving a minor. See Conn. Gen. Stat. §§ 45a-151, 45a-631. With the
probate court’s approval of the Settlement Agreement, Herrera-Edwards forfeited her right to a
spousal share. See Sacksell v. Barrett, 43 A.2d 79, 81–82 (Conn. 1945) (acknowledging that the
spousal share can be waived by agreement).
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      made by [Herrera-Edwards] and Alexis Edwards against the estate.
      The children of Bernard Edwards are the sole beneficiaries under his
      will. The children of Bernard Edwards have agreed to all terms of the
      Settlement Agreement and the Court believes the Agreement is fair
      and equitable for the children.

(emphasis added).

H.    Copyright Assignments

      Nearly three years after the probate of Mr. Edwards’s estate, on January 1,

2000, Mr. Edwards’s estate (through Franson as executor) and Herrera-Edwards

executed and filed a copyright assignment in the United States Copyright Office.

The copyright assignment granted Herrera-Edwards a 37.5% interest in the

“compositions” owned by Mr. Edwards’s estate, but reserved the administration

rights to those compositions and imposed a perpetual lien to secure the 5% fee on

gross income from their use, as follows:

      [Mr. Edwards’s estate] hereby sells, assigns, transfers and sets over
      unto [Herrera-Edwards a 37.5% undivided] portion of [the estate’s]
      right, title, and interest in and to the musical compositions . . . (the
      “Compositions”) [owned by Mr. Edwards’s estate], including . . . their
      titles, and lyrics . . . , reserving, however, the exclusive right to
      administer, control, use, exploit[,] receive income from, and otherwise
      deal in and for said Compositions . . . throughout the world
      in perpetuity . . . and subject to a lien to secure the payment to
      [the Morgan Company] of 5% of the gross receipts from exploitation
      of such assigned rights in perpetuity.

(emphasis added). Thus, although Herrera-Edwards received an ownership interest

in the composition copyrights, Mr. Edwards’s estate reserved all administration

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rights, and Herrera-Edwards agreed that the Morgan Company had a perpetual lien

on 5% of the gross receipts from administering the composition copyrights.

      That same day, Mr. Edwards’s estate (through Franson as executor) filed a

separate assignment conveying an 8.333% ownership interest in the composition

copyrights and 16.667% of the administration rights to each of the six trusts

established for Mr. Edwards’s children. Thus, in the aggregate, the six trusts for

the children received from the estate 50% ownership of the composition copyrights

and 100% of the administration rights. Mr. Edwards’s six children then formed the

Edwards Company to manage these interests. On January 2, 2000, the children’s

six trusts (through Franson as trustee) assigned their 50% copyright interests and

their 100% administration rights to the Edwards Company.

      After that time, the Edwards Company—through the Morgan Company as

its manager—remitted quarterly payments to appellant Herrera-Edwards pursuant

to the Settlement Agreement. These payments amounted to anywhere from

$700,000 to $900,000 per year and continue to this day.

      The Morgan Company received a 5% fee on these payments. In 2005,

Herrera-Edwards protested the Morgan Company’s fee with a letter from her

counsel but did not pursue any legal claims against the Morgan Company at that

time. As noted, the defendants-appellees in this case are the Edwards Company

and the Morgan Company.

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I.    Bankruptcy and Adversary Proceedings

      On October 17, 2012, appellant Herrera-Edwards filed a voluntary petition

under Chapter 11 of the Bankruptcy Code (No. 8:12-bk-15725-KRM, Bankr. M.D.

Fla.). Within that bankruptcy proceeding, Herrera-Edwards filed a motion to reject

executory portions of the Co-Publishing Agreement. Had she not entered this

agreement, Herrera-Edwards argued, she would have received a spousal share of

the administration rights to Mr. Edwards’s composition copyrights. In response to

Herrera-Edwards’s motion to reject, the Edwards Company filed a motion for

summary judgment. The bankruptcy court heard oral argument on the motion to

reject and then took it under advisement pending trial.

      Also in bankruptcy court, Herrera-Edwards initiated an adversary

proceeding against the Edwards Company and the Morgan Company as defendants

(No. 8:13-ap-641-KRM, Bankr. M.D. Fla.). This separate adversary proceeding

sought to establish that Herrera-Edwards had also received a 37.5% interest in

Mr. Edwards’s artist and producer royalties and that the Morgan Company was no

longer entitled to collect a 5% fee or assert a lien against her.

      Thus, between her motion to reject and the adversary proceeding, appellant

Herrera-Edwards asserted three claims in the bankruptcy court: (1) that she was

entitled to 37.5% in administration rights in the composition copyrights; (2) that

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she was entitled to artist and producer royalties; and (3) that the Morgan Company

was not entitled to collect a 5% fee or assert a lien against her.

      The bankruptcy court held a six-day joint trial on these issues. At the

conclusion, defendants the Edwards Company and the Morgan Company moved

for judgment on partial findings. See Fed. R. Civ. P. 52(c). The bankruptcy court

deferred ruling on the defendants’ motion in order to permit additional briefing.

J.    Bankruptcy Court’s Post-Trial Orders

      On November 2, 2016, after briefing was complete, the bankruptcy court

issued its written findings of fact and conclusions of law, ruling in favor of the

Edwards Company and the Morgan Company in the adversary proceeding and

denying Herrera-Edwards’s motion to reject in the bankruptcy proceeding.

      Based on the evidence submitted at trial, the bankruptcy court found that the

probate court that handled Mr. Edwards’s estate had reviewed and approved the

Settlement Agreement as the document governing the relationship of the parties.

The Settlement Agreement, unlike the July 9th Stipulation, was signed by all

relevant parties and provided for the interests of all those affected by the resolution

of claims against Mr. Edwards’s estate. 3

      As to the administration rights, the bankruptcy court determined that neither

the Settlement Agreement nor the Co-Publishing Agreement gave such rights to

      3
          Three of Mr. Edwards’s children were not signatories to the July 9th Stipulation.
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Herrera-Edwards. The bankruptcy court noted that, even if it were to reject the

executory portions of the Co-Publishing Agreement, it would not be able to rewrite

the terms of the “related and otherwise binding” Settlement Agreement. To that

end, the bankruptcy court reiterated that, in the Settlement Agreement, Herrera-

Edwards also acknowledged that she would receive no administration rights.

      Likewise, the bankruptcy court noted that rejection does not allow the

bankruptcy court to divest a right that has already vested in another party to the

agreement or to undo performance that has already occurred. See Thompkins v.

Lil’ Joe Records, Inc., 476 F.3d 1294, 1306, 1308 (11th Cir. 2007) (citing cases for

the proposition that rejection does not affect the continued existence of a contract

or function to reverse transferred interests, but rather signals that a breach has

occurred). The bankruptcy court found that the administration rights to

Mr. Edwards’s composition copyrights vested in the six trusts of Mr. Edwards’s

children, when Mr. Edwards’s estate executed the copyright assignments. In turn,

the six trusts validly assigned the administration rights to the Edwards Company.

      As to artist and producer royalties, the bankruptcy court concluded similarly

that the Settlement Agreement did not grant these recording royalties to

Herrera-Edwards. Rather, she received only the stated percentage of the “income

stream” from the composition copyrights, after the payment of all costs, expenses

and related debt. During trial, Herrera-Edwards pointed to payments and tax

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returns from Mr. Edwards’s estate during probate, which demonstrated that

Herrera-Edwards received a percentage of the “net estate” and that the estate

claimed a larger marital deduction.

      Based on the trial evidence, however, the bankruptcy court found that the

Edwards Company and the Morgan Company’s witnesses offered a “plausible and

credible” explanation for the differing payments while the debts of Mr. Edwards’s

estate were still being resolved. The bankruptcy court found that, in the face of

filing deadlines and without “final documentation” available, executor Franson’s

representation to the Internal Revenue Service was merely his best effort at

explaining the expected marital deduction of Mr. Edwards’s estate, which the

bankruptcy court found to be “entirely credible.” The bankruptcy court also noted

that the quarterly payments to Herrera-Edwards reflected only income from the

composition copyrights and that, from 2000 to 2012, Herrera-Edwards never

objected to these payments until filing the adversary proceeding in the bankruptcy

court in 2013.

      Lastly, as to the perpetual lien and the 5% fee for the Morgan Company’s

management services, the bankruptcy court found that the clear language of the

Settlement Agreement provided for “a 5% fee on all deferred income and other

income” and that the copyright assignment to Herrera-Edwards granted a lien on

5% of gross receipts from the composition copyrights. The bankruptcy court

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concluded that Herrera-Edwards had failed to present “any evidence or case law

establishing that the 5% lien is invalid or was not properly perfected.”

Alternatively, the bankruptcy court stated that any challenge to the fee was now

time-barred because, even when Herrera-Edwards protested the fee in 2005, she

failed to bring any claim against the Morgan Company until the adversary

proceeding in 2013. See Conn. Gen. Stat. §§ 52-576, 52-577 (establishing a

six-year statute of limitations for breach of contract and a three-year statute of

limitations for tort claims).

      The bankruptcy court granted the Edwards Company and the Morgan

Company’s motion for judgment on partial findings, denied Herrera-Edwards’s

motion to reject executory portions of the Co-Publishing Agreement, and entered

final judgment in favor of the defendants.

      Herrera-Edwards appealed the denial of her motion to reject in the

bankruptcy proceeding and the bankruptcy court’s final judgment in the adversary

proceeding. She also filed a motion for new trial, which the bankruptcy court

denied in both proceedings. Herrera-Edwards subsequently appealed those orders.

On March 8, 2017, the four appeals were consolidated in the district court, which

heard oral argument on August 17, 2017.

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K.    District Court’s Proceedings

      On November 1, 2017, the district court issued an order affirming the

bankruptcy court’s rulings on all grounds, including its final judgment in favor of

the Edwards Company and the Morgan Company; its denial of Herrera-Edwards’s

motion to reject; and its denial of Herrera-Edwards’s motion for new trial.

      First, the district court concluded that, in advancing her arguments as to

administration rights, Herrera-Edwards ignored the controlling language from the

Settlement Agreement, Co-Publishing Agreement, and copyright assignments.

In each of these documents, Herrera-Edwards acknowledged that the interest

transferred to her did not include administration rights. Rather, Mr. Edwards’s

estate retained those rights and subsequently transferred them to the six trusts for

Mr. Edwards’s children and then the trusts transferred them to the Edwards

Company. Therefore, Herrera-Edwards could not move to reject executory

portions of the Co-Publishing Agreement in order to reclaim rights that she had

never obtained. See Thompkins, 476 F.3d at 1306.

      Second, with regard to artist and producer royalties, the district court

determined that Herrera-Edwards had essentially conceded that the Settlement

Agreement governed and that, as established by expert testimony at trial, the

common meaning of the word “copyright” did not include income from sources

other than the written “compositions” themselves. Because Herrera-Edwards had

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failed to show any ambiguity in the Settlement Agreement, the district court

concluded that, under the parol evidence rule, the bankruptcy court had properly

declined to consider the July 9th Stipulation to interpret the Settlement Agreement.

The district court also concluded that the conduct of Mr. Edwards’s estate did not

establish that the parties agreed to give Herrera-Edwards an interest in

Mr. Edwards’s artist and producer royalties. The district court did not address the

statute-of-limitations issue posited by the bankruptcy court.

      Third, the district court also affirmed the bankruptcy court’s findings as to

the Morgan Company’s 5% fee or perpetual lien, determining that this claim

against the Morgan Company was time-barred.

      The district court entered final judgment in favor of the

defendants-appellees, the Edwards Company and the Morgan Company. This

second appeal followed.

                               II.    DISCUSSION

A.    Standard of Review

      This Court serves as a “second court of review” for the bankruptcy court’s

judgment. In re Int’l Admin. Servs., Inc., 408 F.3d 689, 698 (11th Cir. 2005)

(quotation marks omitted) (quoting In re Issac Leaseco, Inc., 389 F.3d 1205, 1209

(11th Cir. 2004)); see 28 U.S.C. § 158(d). Like the district court, we review the

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bankruptcy court’s fact findings for clear error. Id. We review legal

determinations by the bankruptcy court and district court de novo. Id.

B.    Administration Rights to the Composition Copyrights

      In this appeal, Herrera-Edwards argues the bankruptcy court erred by

concluding that she did not receive the administration rights to Mr. Edwards’s

composition copyrights. Herrera-Edwards contends that, because she had an

ownership interest in the composition copyrights, she necessarily had the

administration rights to them as well. She claims that, in the Co-Publishing

Agreement, she simply delegated her administration rights to Mr. Edwards’s estate,

and thus she is entitled to reject that delegation in the bankruptcy court and reclaim

her administration rights.

      Under the Copyright Act, a copyright owner is defined as the owner of

“any one of the exclusive rights” listed in 17 U.S.C. § 106, which “refers to the

owner of that particular right.” See 17 U.S.C. § 101. Section 106 states that

copyright ownership can include the “exclusive rights to do and to authorize” any

one or multiple of the following:

      (1) to reproduce the copyrighted work in copies or phonorecords;

      (2) to prepare derivative works based upon the copyrighted work;
      (3) to distribute copies and phonorecords of the copyrighted work to
      the public by sale or other transfer of ownership, or by rental, lease, or
      lending;

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      (4) in the case of literary, musical, dramatic, and choreographic
      works, pantomimes, and motion pictures and other audiovisual works,
      to perform the copyrighted work publicly;

      (5) in the case of literary, musical, dramatic, and choreographic
      works, pantomimes, and pictorial, graphic, or sculptural works,
      including the individual images of a motion picture or other
      audiovisual work, to display the copyrighted work publicly; and

      (6) in the case of sound recordings, to perform the copyrighted work
      publicly by means of a digital audio transmission.

17 U.S.C. § 106 (emphasis added). At the same time, the Act provides that

ownership of a copyright “may be transferred in whole or in part by any means of

conveyance or by operation of law” and that the exclusive rights that make up

ownership “may be transferred [in whole or in part by any means of conveyance]”

and may be “owned separately.” 17 U.S.C. § 201(d) (emphasis added).

      In this case, Mr. Edwards’s estate transferred in part an ownership interest in

Mr. Edwards’s composition copyrights to Herrera-Edwards, which did not include

administration rights. Id. Instead, the administration rights were carved out and

retained by Mr. Edwards’s estate, transferred to the trusts of his six children, and

are thus “owned separately” for purposes of the Copyright Act. Id. In one way or

another, the Settlement Agreement, Co-Publishing Agreement, and copyright

assignment all explicitly state that Herrera-Edwards had no administration rights to

Mr. Edwards’s composition copyrights.

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       Under the Settlement Agreement, for example, the parties agreed that

Herrera-Edwards would have “no administrative rights whatsoever regarding the

copyrights.” (emphasis added). The Co-Publishing Agreement provided similarly

that Herrera-Edwards would have “no administration rights.”4 Even the copyright

assignment transferring the interest to Herrera-Edwards specified that Mr.

Edwards’s estate expressly “reserv[ed] . . . the exclusive right to administer,

control, use, exploit[,] receive income from, and otherwise deal in and for said

Compositions.” (emphasis added).

       In essence, Herrera-Edwards received a property interest in Mr. Edwards’s

composition copyrights, including an “income stream” from their use and

licensing, but she never received any right to control how these copyrights would

be used or licensed.

       Herrera-Edwards cannot demonstrate that she ever received administration

rights, and thus she has not shown that the bankruptcy court erred by denying her

motion to reject portions of the Co-Publishing Agreement. See Thompkins, 476

F.3d at 1306. After the Settlement Agreement, Mr. Edwards’s estate transferred

the copyright administration rights to the trusts of Mr. Edwards’s six children,

       4
        Herrera-Edwards focuses on the word “grant” in the Co-Publishing Agreement to
suggest that she somehow received administration rights. But, taken in context, that language
was just another way of saying that Herrera-Edwards “acknowledge[s] that [she] shall have no
administration rights in and to the Compositions.” Indeed, even assuming arguendo that
Herrera-Edwards did receive administration rights from the Co-Publishing Agreement, she
granted them in perpetuity back to Mr. Edwards’s estate in the same sentence. See Thompkins,
476 F.3d at 1306, 1308.
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which vested upon assignment. See 17 U.S.C. § 201(d). A motion to reject

cannot be used to strip another party of a vested interest. See Thompkins, 476 F.3d

at 1307 (explaining fully executed portions of an agreement cannot be rejected);

see also In re the Ground Round, Inc., 335 B.R. 253, 261 (B.A.P. 1st Cir. 2005)

(“[R]ejection does not change the substantive rights of the parties to the

contract . . . .” (citation omitted)). Accordingly, we affirm the district court’s

ruling on this issue.

C.    Artist and Producer Royalties

      Herrera-Edwards also argues that the bankruptcy court erred in concluding

that she was not entitled to a share of Mr. Edwards’s artist and producer royalties.

Herrera-Edwards once again points to the July 9th Stipulation, the payments she

received during the probate of Mr. Edwards’s estate, and the tax returns filed by

Edwards’s estate before the Settlement Agreement was executed. As to the

limitations period, Herrera-Edwards contends that each quarterly payment lacking

artist and producer royalties constituted a separate breach by the defendants and

thus resulted in a separate claim accruing at that time.

      As Herrera-Edwards points out, the July 9th Stipulation does refer to a

percent interest in “all royalties and other payments received from the copyrights

and other such interests owned by Bernard Edwards at the time of his death.”

(emphasis added). However, the subsequent Settlement Agreement ultimately

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signed by Herrera-Edwards, and later approved by the probate court, circumscribed

Herrera-Edwards’s interest to only “the income stream from the copyrights owned

by Bernard Edward[’s] Estate.” (emphasis added). By its terms, the Settlement

Agreement clearly limits Herrera-Edwards’s interest to only the copyrights owned

by Mr. Edwards’s estate—namely, the composition copyrights. As discussed

above, Mr. Edwards did not own the recording copyrights to his compositions, and

thus the Settlement Agreement did not grant Herrera-Edwards an interest in the

income related to those recording copyrights. Furthermore, the general release,

signed along with the Settlement Agreement, relieved the parties of all other

preceding contractual obligations.

      The Co-Publishing Agreement and copyright assignments provide additional

evidence of what Herrera-Edwards received under the Settlement Agreement.

These documents transferred a percentage of the “right, title and interest in”

Mr. Edwards’s written “compositions” to Herrera-Edwards. The interest

transferred, and thus the applicable “income stream,” related to the written

“compositions” owned by Mr. Edwards’s estate. Moreover, trial testimony in the

bankruptcy court established that a “copyright in a composition generally refers to

the words and music” rather than to artist and producer royalties.

      As to Herrera-Edwards’s other arguments, the payments made during

probate were consistent with the Settlement Agreement, as well as the necessity to

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settle “all estate debts and expenses” prior to issuing quarterly payments. The

bankruptcy court found that the Edwards Company and the Morgan Company’s

witnesses offered a “plausible and credible” explanation for these “net” payments

while settling the debts of Mr. Edwards’s estate. The bankruptcy court also found

that Franson’s explanation for claiming a larger marital deduction was “entirely

credible.” Herrera-Edwards has not demonstrated clear error in the bankruptcy

court’s credibility determinations on these issues.5 See In re Int’l Admin. Servs.,

Inc., 408 F.3d at 698. Thus, we affirm the district court’s ruling.

D.     The Morgan Company’s 5% Fee and Perpetual Lien

       Herrera-Edwards further argues that the bankruptcy court erred in finding

that the Morgan Company holds a valid perpetual lien on 5% of the gross income

due to her under the composition copyrights. She claims that the Settlement

Agreement permitted the 5% fee against only the income of Edwards’s estate,

which has been closed for over a decade, and that the Morgan Company no longer

provides a service significant enough to justify its lien or fee.

       The 1997 Settlement Agreement specified a 5% fee as to the “deferred

income and other income received by the estate of Bernard Edwards from

copyrights.” (emphasis added). Subsequently, however, the estate’s 2000

copyright assignment to Herrera-Edwards expressly provided that her income

       5
         In any event, Herrera-Edwards’s royalty claim is likely time-barred. See Conn. Gen.
Stat. §§ 52-576, 52-577.
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interest was “subject to a lien to secure the payment to [the Morgan Company] of

5% of the gross receipts from exploitation of such assigned rights in perpetuity.”

To the extent that there is arguably some conflict, Herrera-Edwards ignores that the

bankruptcy court conducted a six-day trial and found that Herrera-Edwards failed

to present “evidence or case law establishing that the 5% lien is invalid or was not

properly perfected.” 6 Given the documents and the trial record, we cannot say that

the bankruptcy court erred in its ultimate findings and conclusion in this case.

                                   III.    CONCLUSION

       For all of these reasons, we affirm the district court’s final judgment

upholding the bankruptcy court’s orders, which denied Herrera-Edwards’s motion

to reject in the bankruptcy proceeding, granted judgment in favor of the defendants

in the adversary proceeding, and denied Herrera-Edwards’s motion for new trial.

       AFFIRMED.

       6
         In any event, Herrera-Edwards’s claim against the perpetual lien and the 5% fee is likely
time-barred. See Conn. Gen. Stat. §§ 52-576, 52-577. As the bankruptcy court posited, in 2005,
Herrera-Edwards protested the perpetual lien and the 5% fee on her quarterly payments but yet
did not pursue a claim.
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