The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge
Clerk, U.S. District Court, ILCD
This case is before the court for ruling on the Motion for Summary Judgment (#35) filed by Plaintiffs and the Motion for Summary Judgment (#38) filed by Defendant, J.W. Pirtle. This court has carefully and thoroughly reviewed the arguments of the parties and the documents provided to this court. Following this review, Defendant Pirtle's Motion for Summary Judgment (#38) is DENIED and Plaintiffs' Motion for Summary Judgment on Causes of Action 1 - 5 and 7 - 17 (#35) is GRANTED as to Defendants Pirtle and P & C Enterprises, Inc. This court also accepts the Report and Recommendation (#46) filed by Magistrate Judge David G. Bernthal in this case. Accordingly, the Motion to Dismiss (#36) filed on behalf of Defendant Lonnie E. Clark is DENIED.
Plaintiffs are the owners of valid copyrights in the 16 songs at issue in this case. Each Plaintiff is a member of the American Society of Composers, Authors and Publishers (ASCAP) and has granted ASCAP a nonexclusive right to license the nondramatic performances of their copyrighted musical compositions.*fn2
Defendants Lonnie E. Clark and J.W. Pirtle formed a corporation, Defendant P & C Enterprises, Inc. (P & C). P & C owns and operates a radio station named WBCP. WBCP has been broadcasting since 1989 and currently broadcasts over the airwaves and via the internet. WBCP broadcasts music on a daily basis. P & C is a for profit corporation whose only business is the operation of the radio station. Pirtle testified at his deposition that he and Clark are the two stockholders in P & C. Clark was the president of P & C and Pirtle was, and still is, Secretary, Treasurer and Vice President of P & C. Pirtle and Clark each have 50% of the voting rights in P & C and agreed to take equal parts of the profits generated by P & C. Pirtle testified that P & C's only source of revenue is advertising on WBCP from local businesses and local churches. Pirtle testified that he writes up the advertisements and Sam Britten, who Pirtle supervises, produces some of the advertisements. P & C generated revenues in excess of $100,000 per year during the years 1995 through 2002, but that has fallen off recently due to the economy.
Pirtle testified that his children own title to the real property and building where P & C's offices are located and where WBCP broadcasts. P & C pays rent to Pirtle for occupying the property. Pirtle testified that he used the payments to pay down a mortgage on the property held by "the bank." Pirtle reported these rent payments as income on his personal tax return. Pirtle also testified that he has loaned money to P & C and P & C owes him "probably 25,000" dollars.
Pirtle testified that Clark "pretty well managed everything at the radio station because he was there almost every day." This included supervising, hiring and firing employees. Pirtle testified that he occasionally "runs" radio shows broadcast by WBCP and sometimes sits in on the show Straight Talk Live. Pirtle is involved in the management of WBCP. He testified that employees at WBCP would stop playing any music he told them to stop playing and that he could unplug music being played at WBCP "at any time." Pirtle testified that both he and Clark had the ability to supervise and control the activities of P & C's employees and "control everything that gets broadcast out of that station." Pirtle testified that both he and Clark paid bills for P & C and both of them signed checks for P & C.
Sam Britten testified that he is the station coordinator for WBCP and "is the coordinator of practically all of it" when determining what WBCP airs on a day-to-day basis. Britten confirmed that both Clark and Pirtle have been "in a position to monitor what broadcasts are aired if [they] so chose." All of the employees in charge of pressing buttons to control what airs on WBCP report to Clark and Pirtle. Britten testified that Clark and Pirtle controlled and supervised all of the employees of WBCP on a day-to-day basis and "[p]retty much" controlled "all aspects of [WBCP]."
Pirtle testified that he, Clark and Britten determined the programming format of radio station WBCP, which has remained generally the same for "[a]t least the last ten years." Defendants have no record or log, or any other document, detailing the programming on WBCP.
The evidence shows that WBCP entered into a local radio station license agreement with ASCAP in May 1990. This agreement authorized Defendants to perform lawfully any and all copyrighted musical compositions in the ASCAP repertory. On November 10, 1993, as a result of Defendants' failure to pay ASCAP the license fees provided for in the agreement, ASCAP sent a notice to WBCP and terminated the license. The Notice stated that "any performances of copyrighted musical compositions in [ASCAP's] repertory without advance permission from the respective members concerned will constitute infringements of the respective copyrights."
In 1995, some of ASCAP's members filed suit against Clark and P & C for willful copyright infringement. See Flyte Time Tunes, et al. v. P & C Enterprises, Inc. et al., Case No. 95-CV-2208. Pirtle was later added as a defendant. The case concluded with P & C, Clark and Pirtle entering into a consent judgment providing that P & C would pay the judgment amount of $15,800. Clark and Pirtle executed agreements to toll the statute of limitations as to all claims that could be asserted against them subject to P & C's payment of the full judgment amount of $15,800.
Subsequently, P & C was having difficulty meeting its responsibilities to pay ASCAP. On May 22, 1997, Pirtle wrote a letter to ASCAP regarding P & C's financial problems. Between February 27, 1996, and December 1, 1999, Defendants, through WBCP, again broadcast performances of works in the ASCAP repertory without a license. Consequently, on December 1, 1999, members of ASCAP sued Pirtle, Clark and P & C for copyright infringement. See Nick-OVal Music et al. v. Lonnie E. Clark, et al., Case No. 99-CV-2309. This case concluded with Pirtle, Clark and P & C entering into a consent judgment for $10,000 on February 14, 2000. In February 2000, Defendants entered into a license agreement with ASCAP.
At some point prior to February 8, 2007, Defendants stopped paying license fees to ASCAP. ASCAP notified Defendants, by regular mail and certified mail, return receipt requested, that P & C's failure to pay license fees was a substantial default of its license agreement and the license would be terminated unless all payments were made. On March 4, 2008, ASCAP sent notice to Defendants, both by regular mail and certified mail, return receipt requested, that their license was terminated for their failure to pay the required fees. The letter stated that the balance due was $5,180.50. ASCAP also warned Defendants that they no longer had permission to broadcast performances of ASCAP's members' copyrighted musical compositions over WBCP and that any subsequent performances of copyrighted musical compositions in the ASCAP repertory without advance permission from copyright owners would constitute infringements of copyright. ASCAP provided Defendants with a CD-ROM that contained an extensive, searchable database of works in the ASCAP repertory.
On May 7 and May 8, 2008, Dan Hughes, a National Aircheck Field Recorder, recorded broadcasts of WBCP. On January 26 and 27, 2009, Anna Flood, who is also a National Aircheck Field Recorder, recorded broadcasts of WBCP. These recordings were transmitted electronically to Robert A. Wexler, president of National Aircheck. Wexler converted these recordings of WBCP's over-the-air broadcasts to two compact discs. Wexler sent the two compact discs to ASCAP's offices in New York. Oleksander Kuzyszyn is an employee of ASCAP and analyzed the recordings. Kuzyszyn is a professional musician, whose training enables him to read and write musical notation and readily identify works he hears performed. Kuzyszyn listened to the recordings of broadcasts made on May 8 and 9, 2008, and January 26 and 27, 2009. Kuzyszyn determined that the following songs were on the compact disc of the broadcasts from May 8 and 9, 2008: "BEING WITH YOU," "YOU'RE NOT MY KIND OF GIRL," "THERE'S HOPE," "NO ONE," and "LIKE YOU'LL NEVER SEE ME AGAIN." Kuzyszyn also determined that the following songs were on the compact disc of the broadcasts from January 26 and 27, 2009: "THE LADY IN MY LIFE," "OVERJOYED," "ALL THIS LOVE," "LOVE OF MY LIFE," "FOREVER MY LADY," "SAY AMEN," "JESUS IS LOVE," "DON'T YOU KNOW THAT" and "BREAK-IN' MY HEART (PRETTY BROWN EYES)." Kuzyszyn also determined that the songs "I CARE 4 U" and "MY BODY" were on the compact disc of the broadcasts from January 26 and 27, 2009. As noted previously, the evidence shows that Plaintiffs own valid copyrights in these 16 songs and that they have granted ASCAP the nonexclusive right to license the nondramatic public performance of these songs.
The evidence shows that WBCP and its employees make no efforts to ensure that WBCP does not broadcast performances of songs that are in ASCAP's repertory. Britten testified that Clark and Pirtle never even talked to him about it. Pirtle testified that he does not check on the music being played on any regular basis. Britten testified that he has "no idea" whether the works WBCP continues to broadcast include works in ASCAP's repertory and admitted "it's possible they could be, yes."
On October 13, 2009, Plaintiffs filed a Complaint (#1) against Defendants. Plaintiffs alleged 17 causes of action for copyright infringement based on Defendants' public performances of copyrighted musical compositions. All three Defendants, represented by the same attorney, filed an Answer (#14, #15, #16) to the Complaint. There were numerous problems and delays in conducting discovery in this case which caused Plaintiffs to file motions to compel.
On December 16, 2010, Defendants Pirtle and P & C filed a Statement Noting a Party's Death (#30) and stated that Defendant Clark died on December 10, 2010. This Statement was served only upon counsel for Plaintiffs. On March 15, 2011, Plaintiffs filed a Motion to Extend the Rule 25(a)(1) Deadline for Filing a Motion to Substitute Party (#34). Plaintiffs stated that they have not been notified, and their own investigation has not shown, that a petition for letters of office for Clark or his estate has been filed. Plaintiffs asked for an order extending the time for the substitution of parties until 56 days following the date that Defendants' counsel identified the proper party to be substituted. On April 8, 2011, United States Magistrate Judge David G. Bernthal entered a text order and granted Plaintiffs' Motion (#34). Judge Bernthal stated that Plaintiffs' deadline to file a substitution of party was extended to 56 days after Defendants' counsel notifies Plaintiffs' counsel of the proper successor, representative or other special administrator substitute.
On March 22, 2011, Plaintiffs filed their Motion for Summary Judgment on Causes of Action 1 - 5 and 7 - 17 (#35). Plaintiffs stated that they were not seeking summary judgment of infringement as to their sixth cause of action regarding the song, "HEAVEN KNOWS." Plaintiffs attached voluminous documentation in support of their claims regarding the 16 songs at issue. The documentation included true and correct copies of the copyright certificates, assignments, notices of termination, merger certificates and related documents for each of the 16 songs. Plaintiffs also provided the sheet music for 14 of the songs (there is no sheet music for two of the songs) and copies of each Plaintiff-copyright owner's ASCAP membership agreement. In addition, Plaintiff provided the two compact discs containing the recordings of WBCP's broadcasts. Plaintiffs also submitted the affidavit of Hugo Del Bove, Radio Accounts Manager for ASCAP. Del Bove stated that, on the basis of financial information provided by Defendants, he estimated that if WBCP had been properly licensed by ASCAP to date, license fees owed would total approximately $15,000, including late payment charges of approximately $3,100.
On April 11, 2011, Defendants' counsel filed a Motion to Dismiss (#36) asking that Clark be dismissed as a Defendant due to his death. Defendants' counsel attached a copy of Clark's death certificate. Also on April 11, 2011, Pirtle filed a Motion for Summary Judgment (#38). Pirtle argued that he was entitled to summary judgment as to Plaintiffs' infringement claims because there was no basis for piercing P & C's corporate veil and subjecting him to personal liability. Pirtle attached his own affidavit as the only documentation in support of his motion. However, the affidavit is not signed, dated or notarized. The motion to dismiss and motions for summary judgment are fully briefed and ready for ruling.
This court will first consider the Motion to Dismiss (#36) seeking the dismissal of Defendant Clark from this action based upon his death. The Motion to Dismiss stated that more than 90 days had elapsed since service on Plaintiffs of the notice of Clark's death and no motion for substitution had been made by any party. Rule 25(a)(1) of the Federal Rules of Civil Procedure provides:
If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent's successor or representative. If the motion is not made within 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.
Fed. R. Civ. P. 25(a)(1).
Plaintiffs filed a Response to the Motion to Dismiss (#43) on April 28, 2011. Plaintiffs noted that the deadline for substituting a party for Defendant Clark was extended by Judge Bernthal to 56 days after Defendants' counsel notified Plaintiffs' counsel of the proper successor, representative or other special administrator ...