group, · supreme court of the state of new york county of new york x aspire music group, llc,...

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK

x ASPIRE MUSIC GROUP, LLC,

Plaintiff,

v.

CASH MONEY RECORDS, INC., YOUNG MONEY ENTERTAINMENT, LLC, YOUNG MONEY ENTERTAINMENT, a joint venture, BRYAN "BABY" WILLIAMS, RONALD "SLIM" WILLIAMS and UMG RECORDINGS, INC.,

Defendants.

YOUNG MONEY ENTERTAINMENT LLC,

Counterclaimant,

v.

ASPIRE MUSIC GROUP,

Counterclaim Defendant. :

Index No. 652029/2017

Hon. Barry R. Ostrager

Motion Sequence No. 009

x

ASPIRE MUSIC GROUP, LLC'S REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF ITS MOTION TO DISMISS

YOUNG MONEY ENTERTAINMENT, LLC'S COUNTERCLAIMS

PROFETA & EISENSTEIN Jethro Eisenstein ([email protected]) 45 Broadway New York, NY 10006 Telephone: (212) 577-6500

KASOWITZ BENSON TORRES LLP Marc E. Kasowitz ([email protected]) 1633 Broadway New York, NY 10019 Telephone: (212) 506-1700

John V. Berlinski ([email protected]) Daniel A. Saunders ([email protected]) Alexandra E. Siegel ([email protected]) 2029 Century Park East, Suite 2000 Los Angeles, CA 90067 Telephone: (424) 288-7900 Admitted pro hac vice

Attorneys for Plaintiff and Counterclaim Defendant Aspire Music Group, LLC

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

XASPIRE MUSIC GROUP, LLC,

Plaintiff,

V

CASH MONEY RECORDS, INC., YOLINGMONEY ENTERTAINMENT, LLC, YOLTNGMONEY ENTERTAINMENT, a joint venture,BRYAN "BABY" WILIAMS, RONALD"SLIM" WILLIAMS and UMGRECORDINGS, INC.,

Defendants.

YOUNG MONEY ENTERTAINMENT LLC,

Counterclaimant,

ASPIRE MUSIC GROUP, :

Counterclaim Defendant. i

Index No. 65202912017

Hon. Barry R. Ostrager

Motion Sequence No. 009

v

X

LA SUPPO OF ITS MOTI

KASOV/ITZ BENSON TORRES LLPMarc E. Kasowitz ([email protected])1633 BroadwayNew York, NY 10019Telephone : (212) 506- I 700

John V. Berlinski ([email protected])Daniel A. Saunders ([email protected])Alexandra E. Siegel ([email protected])2029 Century Park East, Suite 2000Los Angeles, CA 90067Telephone : (424) 288 -7 9 00Admitted pro hac vice

PROFETA & EISENSTEINJethro Eisenstein (ethro 1 [email protected])45 BroadwayNew York, NY 10006Telephone: (212) 577 -6500

Attorneys for Pløintiff and Counterclaim DefendantAspire Music Group, LLC

FILED: NEW YORK COUNTY CLERK 12/06/2018 06:05 PM INDEX NO. 652029/2017

NYSCEF DOC. NO. 197 RECEIVED NYSCEF: 12/06/2018

1 of 14

TABLE OF CONTENTS

Page(s)

I. PRELIMINARY STATEMENT 1

II. ARGUMENT 2

A. Young Money's Attempts to Fabricate a Payment Term That Does Not Exist in Any of the Contracts It Is Suing Under Fail 2

B. Young Money's Extrinsic Evidence Should be Disregarded and Does Not Support the Counterclaims Regardless. 5

C. Young Money's Counterclaims are Also Partially Barred by the Statute of Limitations. 7

III. CONCLUSION 10

i

TABLE OF CONTENTS

Paqe(sl

I PRELIMINARY STATEMENT 1

il ARGUMENT 2

A. Young Money's Attempts to Fabricate a Payment Term That Ðoes NotExist in Any of the Contracts It Is Suing Under Fail.........., ,....,..,....,...2

B. Young Money's Extrinsic Evidonce Should be Disregardçd and Does NotSupport the Counterclaims Regardless

C Young Money's Counterclaims aÍe Also Partially Barred by the Statuteof Limitations. .,,........

III. CONCLUSION.... 10

5

,f



2 of 14

TABLE OF AUTHORITIES

Cases

2138747 Ontario, Inc. v. Samsung C & T Corp., 31 N.Y.3d 372 (2018)

Page(s)

6

Am. Stock Exch., LLC v. Mopex, Inc., 230 F. Supp. 2d 333 (S.D.N.Y. 2002) 8

Barrett v. Grenda, 154 A.D.3d 1275 (4th Dep't 2017) 3

Bellino v. Bellino Const. Co., 75 A.D.2d 630 (2nd Dep't 1980) 6

Chun Hye Kang-Kim v. Feldman, 121 A.D.2d 590 (2nd Dep't 1986) 6

Coleman, Grasso & Zasada Appraisals Inc. v. Coleman, 246 A.D.2d 893, 894 (1998) 8

In re Gulf Oil/Cities Serv. Tender Offer Litig., 725 F. Supp. 712 (S.D.N.Y. 1989) 5

Modern Art Servs., LLC v. Fin. Guar. Ins. Co., 161 A.D.3d 618 (1st Dep't 2018) 2

N.Y. C. Health & Hosps. Corp. v. St. Barnabas Hosp., 10 A.D.3d 489 (1st Dep't 2004) 5

Quintas v. Pace Univ., 23 A.D.3d 246 (1st Dep't 2005) 3

Rosenfeld v. City of New York, No. 06CV1979ERKVVP, 2009 WL 10701874 (E.D.N.Y. Jan. 11, 2009) 8

SCM Corp. v. Fisher Park Lane Co., 40 N.Y.2d 788 (1976) 8, 9

Other Authorities

CPLR 203(d) 2, 7, 8, 9

1 Nimmer on Copyright § 6.12 (2018) 5

ii

TABLE OF AUTHORITIES

Cases

2138747 Ontørio, Inc. v. Sømsung C & T Corp.,3 1 N.y.3d 372 (201,8) ..............

Am. Stock Exch., LLC v. Mopex, Inc.,230 F . Supp. 2d 333 (S.D.N.Y. 2002)...

Barrett v, Grenda,154 A.D.3d 1275 ( thDop't 2017).

Bellino v. Bellino Const. Co,,75 A.D.zd630 (2ndDep't 1980)

Chun Hye Kang-Kimv. Feldman,I2I A.D2d 590 (2nd Dep't 1986)

Coleman, Grasso & Zasøda Appraisals Inc. v. Coleman,246 A.D.2d 893, 894 (1998)

In re Gulf Oil/Cities Serv. Tender Offer Litig.,72sF. Supp.712 (S.D.N.Y. 1989)

Modern Art Servs., LLC v. Fin. Guar. Ins. Co.,161 A.D.3d 618 (1st Dep't 2018)

N.Y.C, Health & Hosps. Corp. v. St. Barnabas Hosp.,10 A.D.3d 489 (1st Dep't 2004)

Quintas v. Pqce Univ.,23 A.D.3d 246 (IstDep't 2005)

Rosenfeldv. City of New York,No. 06CV1979ERKVVP, 2009 WL 10701874 (E.D.N.Y. Jan. 1 1,2009)

SCM Corp. v. Fisher Park Lane Co.,40 N.Y.2d 788 (r976)

Other Authorities

CPLR 203(d)

1 Nimmer on Copyright $ 6.12 (2018)

Page(s)

8

6

J

2

8

5

I

aJ

8,9

11

.,...,,2,7,8,9



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Plaintiff and Counterclaim Defendant Aspire Music Group, LLC ("Aspire") respectfully

submits this reply in support of its Motion to Dismiss (the "Motion") the counterclaims asserted

against it (the "Counterclaims") by Defendant and Counterclaimant Young Money

Entertainment, LLC ("Young Money").

I. PRELIMINARY STATEMENT

In an action alleging breach of a written contract, there is no evidence more critical than

the language of the contract itself. But here, Young Money's Opposition (the "Opposition" or

"Opp.") to Aspire's Motion would have the Court look everywhere except the contract at issue.

That is because the underlying premise of Young Money's Counterclaims—that Aspire breached

a contractual obligation to pay Young Money one-third of the profits from exploitation of

Aubrey "Drake" Graham's music in Canada—is not supported by the contract Young Money

alleges Aspire has breached (the "Aspire/YME Agreement"), or, for that matter, any of the other

agreements referenced in Young Money's Counterclaims. This absence of any contract

provision granting Young Money the right to receive revenues from the Canadian distribution of

Drake's music is fatal to all of Young Money's Counterclaims.

As a "hail Mary" play at saving its Counterclaims, Young Money nevertheless cobbles

together several pieces of extrinsic evidence in an attempt to conjure such a contractual provision

out of thin air. But the purported evidence cited in Young Money's Opposition is precluded by

the merger clause in the Aspire/YME Agreement, and in any event it is utterly unpersuasive on

its face. Young Money's focus on certain legal opinions contained in an affidavit submitted in a

separate action by non-lawyer and non-party Jas Prince is particularly desperate; as set forth

below, Prince's statements in an action in which he was adverse to Aspire about a contract to

which he was not a party cannot amount to party admissions and have no probative value as a

1

Plaintiff and Counterclaim Defendant Aspire Music Group, LLC ("Aspire") respectfully

submits this reply in support of its Motion to Dismiss (the'oMotion") the counterclaims asserted

against it (the'oCounterclaims") by Defendant and Counterclaimant Young Money

Entertainment, LLC ("Young Money").

L PRELIMINARY STATEMENT

In an action alleging breach of a written contract, there is no evidence more critical than

the language of the contract itself. But here, Young Money's Opposition (the "Opposition" or

"Opp.") to Aspire's Motion would have the Court look everywhere except the contract at issue.

That is because the underlying premise of Young Money's Counterclaims-that Aspire breached

a contractual obligation to pay Young Money one-third of the profits from exploitation of

AubreyooDrake" Graham's music in Canada-is not supported by the contract Young Money

alleges Aspire has breached (the "AspireiYME Agreement"), or, for that matter, any of the other

agreements referenced in Young Money's Counterclaims. This absence of any contract

provision granting Young Money the right to receive revenues from the Canadian distribution of

Drake's music is fatal to all of Young Money's Counterclaims.

As a "hail Mary" play at saving its Counterclaims, Young Money nevertheless cobbles

together several pieces of extrinsic evidence in an attempt to conjure such a contractual provision

out of thin air. But the purported evidence cited in Young Money's Opposition is precluded by

the merger clause in the Aspire/YME Agreement, and in any event it is utterly unpersuasive on

its face. Young Money's focus on certain legal opinions contained in an affidavit submitted in a

separate action by non-lawyer and non-party Jas Prince is particularly desperate; as set forth

below, Prince's statements in an action in which he was ødverse to Aspire about a contract to

which he was nof ø purty cannot amount to party admissions and have no probative value as a

i



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matter of law. Nor does any of the other purported evidence cited by Young Money make up for

the absence of any actual contractual duty.

Finally, even if Young Money had evidence to sustain the Counterclaims, they would be

partially time-barred, and Young Money could not avail itself of the benefits of CPLR 203(d) to

toll the statute of limitations on these Counterclaims because it failed—without any

justification—to bring the Counterclaims in response to Aspire's initial complaint. Moreover,

Young Money's Counterclaims do not arise from the same transactions or occurrences as

Aspire's claims. For all of these reasons, as set forth in more detail below, Aspire respectfully

requests that the Court grant its motion to dismiss Young Money's Counterclaims.

II. ARGUMENT

A. Young Money's Attempts to Fabricate a Payment Term That Does Not Exist in Any of the Contracts It Is Suing Under Fail.

"[T]he best evidence of the parties' intent is what they say in their writing." Modern Art

Servs., LLC v. Fin. Guar. Ins. Co., 161 A.D.3d 618, 618 (1st Dep't 2018) (quotation omitted)

(affirming dismissal of breach of contract claim). Here, the written agreements at issue

conclusively bar Young Money's Counterclaims. Not one of the agreements referenced in the

Counterclaims—the Memorandum of Agreement ("MOA"), the Aspire/YME Agreement, or the

Universal Canada Agreement—contains any provision entitling Young Money to any amount of

the profits from the exploitation of Drake's music in Canada, much less one-third of the profits,

as alleged. Young Money does not point to any contract provision in its Opposition. Instead,

Young Money argues that none of these agreements "preclude the Counterclaims." Opp. at 10

(emphasis added). This position is, of course, absurd. The issue is not whether the parties

reached an agreement precluding the Counterclaims, but rather, whether the fully integrated

agreements at issue provide any support for Young Money's Counterclaims. They do not and

2

matter of law. Nor does any of the other purported evidence cited by Young Money make up for

the absence ofany actual contractual duty.

Finally, even if Young Money had evidence to sustain the Counterclaims, they would be

partially time-barred, and Young Money could not avail itself of the benefits of CPLR 203 (d) to

toll the statute of limitations on these Counterclaims because it failed-without any

justification-to bring the Counterclaims in response to Aspire's initial complaint. Moreover,

Young Money's Counterclaims do not arise from the same transactions or occuffences as

Aspire's claims. For all of these reasons, as set forth in more detail below, Aspire respectfully

requests that the Court grant its motion to dismiss Young Money's Counterclaims,

il. ARGUMENT

A. Youns Monev's Attemnts to Fabricate a Payment Term That Does Not Existin Any of the Contracts It Is Suins Under Fail.

"[T]he best evidence of the parties' intent is what they say in their writing." Modern Art

Servs., LLC v. Fin. Guar. Ins. Co.,161 A.D.3d 618, 618 (1st Dep't 2018) (quotation omitted)

(affirming dismissal of breach of contract claim). Here, the written agreements at issue

conclusively bar Young Money's Counterclaims. Not one of the agreements referenced in the

Counterclaims-the Memorandum of Agreement ("MOA"), the Aspire/YME Agreement, or the

Universal CanadaAgreement-contains any provision entitling Young Money to any amount of

the profits from the exploitation of Drake's music in Canada, much less one-third of the profits,

as alleged. Young Money does not point to any contract provision in its Opposition. Instead,

Young Money argues that none of these agreements "preclude the Counterclaims." Opp. at 10

(emphasis added). This position is, of course, absurd. The issue is not whether the parties

reached an agreement precluding the Counterclaims, but rather, whether thefully integrøted

øgreements at issue provide any support for Young Money's Counterclaims. They do not and

2



5 of 14

therefore Young Money cannot state a claim.' See, e.g., Quintas v. Pace Univ., 23 A.D.3d 246,

247 (1st Dep't 2005) (affirming dismissal of breach of contract claim where "[p]laintiff did not

identify any contractual provision" obligating defendant to perform obligation alleged in

complaint); Barrett v. Grenda, 154 A.D.3d 1275, 1277-78 (4th Dep't 2017) (dismissing breach

of contract claims because "Plaintiff was required to set forth in that cause of action . . . the

provisions of the contract upon which the claim was based," but "failed to identify the particular

contractual provision that was breached.")

Young Money and Aspire agreed in the MOA "that they shall enter into a distribution

agreement with Universal Canada for the distribution of Artist's recordings in Canada."

Affirmation of Alexandra E. Siegel in Support of Motion ("Siegel Aff."), Ex. A at ¶ 15. This is

precisely what these parties did by entering into the Universal Canada Agreement, which Young

Money specifically approved, fully aware that that agreement only provides for payments to

Aspire, subject only to Aspire's promise to direct one-third of the proceeds payable to it under

the Universal Canada Agreement to Universal Motown Republic Group on Cash Money's

behalf. See Siegel Aff., Ex. C at Schedule "B" (inducement letter in which Young Money

"confirm[ed] that it has received and read the Agreement and approve[d] of the terms of the

Agreement and voluntarily consent[ed] to its execution and delivery by [Aspire] to Universal.").

As established on the face of the parties' agreements, therefore, the only payment obligation

Aspire had in connection with Canadian distribution of Drake's recordings was to "Universal

Motown Republic Group on Cash Money's behalf."

These flaws are equally fatal to Young Money's causes of action for declaratory relief and an accounting, which are grounded entirely in the allegations underlying Young Money's breach of contract claim, and thus rise and fall with that claim.

3

therefore Young Money cannot state a claim.l See, e.g., Quintas v. Pace Univ.,23 A.D.3d246,

247 (lst Dep't 2005) (affirming dismissal of breach of contract claim where "[p]laintiff did not

identify any contractual provision" obligating defendant to perform obligation alieged in

complaint); Baruett v. Grenda,154 A.D.3d 1275, 1277-78 (4th Dep't 2017) (dismissing breach

of contract claims because "Plaintiff was required to set forth in that cause of action . . . the

provisions of the contract upon which the claim was based," but "failed to identiff the particular

contractual provision that was breached.")

Young Money and Aspire agreed in the MOA "that they shall enter into a distribution

agreement with Universal Canada for the distribution of Artist's recordings in Canada."

Affirmation of Alexandra E. Siegel in Support of Motion ("Siegel Aff."), Ex. A at tf 15. This is

precisely what these parties did by entering into the Universal Canada Agreement, which Young

Money specifically approved, fiilly aware that that agreement only provides for payments to

Aspire, subject only to Aspire's promise to direct one-third of the proceeds payable to it under

the Universal Canada Agreement to Universøl Motown Republíc Group on Cøslt Money's

beltølf. See Siegel Aff., Ex. C at Schedule "B" (inducement letter in which Young Money

"confirm[ed] that it has received and read the Agreement and approve[d] of the terms of the

Agreement and voluntarily consentfed] to its execution and delivery by fAspire] to Universai.").

As established on the face of the parties' agreements, therefore, the only payment obiigation

Aspire had in connection with Canadian distribution of Drake's recordings was to "Universal

Motown Republic Group on Cash Money's behalf."

I These flaws are equally fatal to Young Money's causes of action for declaratory relief and an accounting, whichare grounded entirely in the allegations underlying Young Money's breach of contract claim, and thus rise and fallwith that claim.

aJ



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Young Money also reaffirmed its consent to the terms of the Universal Canada

Agreement by executing the Aspire/YME Agreement, which explicitly referenced the Universal

Canada Agreement and contained no terms reflecting Young Money's purported right to a share

of the profits therefrom, let alone the one-third interest that Young Money has pled in the

Counterclaims.2 See Siegel Aff., Ex. B at ¶ 8.07(a). The only reference to any payments that

might hypothetically be directed to Young Money is a passing reference to "monies otherwise

payable to Young Money and [Aspire]." But that passing reference simply covers a potential

future scenario where Young Money might receive payments3—it clearly does not create an

obligation on the part of Aspire to pay Young Money, as it contends, a one-third interest in the

proceeds from the Universal Canada Agreement. Nor can such an interpretation be squared with

the Aspire/YME Agreement's explicit reference to the then-existing Universal Canada

Agreement, which does not provide that any monies are payable to Young Money.

With no language in the contract supporting its claim, Young Money resorts to arguing

that Drake's recordings are "works for hire" for the benefit of the joint venture between Young

Money and Cash Money, and that because Aspire retained only a one-third interest in the

copyright to Drake's music, "the allocation of ownership to Aspire in the Drake recordings

carries with it the right to only one-third of the profits received from the exploitation of those

recordings, including in Canada." Opp. at 3. But notwithstanding the default rules set forth

under copyright law—which is not the law governing this pure breach of contract action—the

2 Thus, Young Money's contention that "Aspire is barred from exploiting those works independently without express written approval" (Opp. at 7) is irrelevant. There can be no debate that both Cash Money and Young Money expressly approved Aspire's exploitation of Drake's music in Canada in the MOA, the Aspire/YME Agreement, and, in Young Money's case, the inducement letter to the Universal Canada Agreement.

In the inducement letter Young Money signed with regard to the Universal Canada Agreement, Young Money agreed "to be added as a direct party to the Agreement as if Young Money had been an original signatory thereto jointly and severally with [Aspire]" if Aspire is dissolved or in default. Siegel Aff., Ex. A at Schedule "B."

4

Young Money also reaffirmed its consent to the terms of the Universal Canada

Agreement by executing the Aspire/YME Agreement, which explicitly referenced the Universal

Canada Agreement and contained no terms reflecting Young Money's purported right to a share

of the profits therefrom, let alone the one-third interest that Young Money has pled in the

Counterclaims.2 ,See Siegel Aff., Ex. B at !f 8.07(a). The only reference to any payments that

might hypothetically be directed to Young Money is a passing reference to "monies otherwise

payable to Young Money and fAspire]." But that passing reference simply covers a potential

future scenario where Young Money might receive payments3-it clearly does not create an

obligation on the part of Aspire to pay Young Money, as it contends, a one-third interest in the

proceeds from the Universal CanadaAgreement. Nor can such an interpretation be squared with

the Aspire/YME Agreement's explicit reference to the then-existing Universal Canada

Agreement, which does not provide that øny monies are payable to Young Money.

V/ith no language in the contract supporting its claim, Young Money resorts to arguing

that Drake's recordings are "works for hire" for the benefit of the joint venture between Young

Money and Cash Money, and that because Aspire retained only a one-third interest in the

copyright to Drake's music, "the allocation of ownership to Aspire in the Drake recordings

caruies with it the right to only one-third of the profits received from the exploitation of those

recordings, including in Canada." Opp. at 3. But notwithstanding the default rules set forth

under copyright law-which is not the law governing this pure breach of contract action-the

2 Thus, Young Money's contention that "Aspire is baned from exploiting those works independently withoutexpress written approval" (Opp. at 7) is inelevant. There can be no debate that both Cash Money and Young Moneyexpressly approved Aspire's exploitation of Drake's music in Canada in the MOA, the AspireAlME Agreement,and, in Young Money's case, the inducement letter to the Universal Canada Agreement.

3 In the inducement letter Young Money signed with regard to the Universal Canada Agreement, Young Moneyagreed "to be added as a direct party to the Agreement as if Young Money had been an original signatory theretojointly and severally with [Aspire]" if Aspire is dissolved or in default. Siegel Aff., Ex. A at Schedule "8."

4



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agreements at issue unambiguously establish that Young Money agreed to a payment structure

under which Aspire received two-thirds of the profits from Canadian distribution.4

The unambiguous language of the contracts at issue establishes that Young Money

expressly agreed to permit Aspire to unilaterally license the Canadian distribution rights to

Universal Canada, and that Aspire's only payment obligation relating to that distribution was to

pay "Universal Motown Republic Group on Cash Money's behalf." Aspire therefore requests

that the Court grant its motion to dismiss Young Money's claims in their entirety.

B. Young Money's Extrinsic Evidence Should be Disregarded and Does Not Support the Counterclaims Regardless.

"[W]here an agreement contains . . . a merger clause, extrinsic evidence that adds to or

varies its terms should [be] precluded[.]" NYC. Health & Hasps. Corp. v. St. Barnabas Hosp.,

10 A.D.3d 489, 490-91 (1st Dep't 2004); see also In re Gulf Oil/Cities Serv. Tender Offer Litig.,

725 F. Supp. 712, 728 (S.D.N.Y. 1989) ("When contracts contain integration clauses as they do

here, extrinsic evidence may not be admitted to prove different or additional terms in the

contract, although it may be admitted to interpret ambiguous terms of an integrated contract.").

The Aspire/YME Agreement includes such a merger clause. See Siegel Aff., Ex. B at ¶ 16.03

("This agreement contains the entire understanding of the parties relating to its subject matter

and supersedes all prior or contemporaneous written or oral agreements, representations,

understandings and/or discussions between the parties relating thereto. No change of this

agreement will be binding unless signed by the party to be charged."). Nevertheless, Young

4 Even if copyright law applied to the breach of contract claims brought by Young Money—which it does not—a copyright owner may by contract waive its rights. See 1 Nimmer on Copyright § 6.12 (2018) ("[N]o accounting is available between joint authors who have explicitly waived that remedy."). Notwithstanding such right as Young Money may have otherwise had as copyright owner, the agreements at issue conclusively show that Young Money agreed to Aspire's receiving two-thirds of the profits from Canadian distribution.

5

agreements at issue unambiguously establish that Young Money agreed to a payment structure

under which Aspire received two-thirds of the profits from Canadian distribution.a

The unambiguous language of the contracts at issue establishes that Young Money

expressly agreed to permit Aspire to unilaterally license the Canadian distribution rights to

Universal Canada, and that Aspire's only payment obligation relating to that distribution was to

pay "Universal Motown Republic Group on Cash Money's behalf." Aspire therefore requests

that the Court grant its motion to dismiss Young Money's claims in their entirety.

B. Young Monev's Extrinsic Evidence Should be Disregarded and Does NotSuppqrt tlre Counter,claims Re,ga4dless.

"[W]here an agreement contains . . . a merger clause, extrinsic evidence that adds to or

varies its terms should [be] precluded[.]" N.Y.C. Health & Hosps. Corp. v. St. Bqrnabas Hosp.,

10 A.D.3d 489,490-91 (lst Dep't 2004); see also In re Gulf Oil/Cities Serv. Tender Offer Litig.,

725 F. Supp. 712,728 (S.D.N.Y. 1989) ("When contracts contain integration clauses as they do

here, extrinsic evidence may not be admitted to prove different or additional terms in the

contract, although it may be aclmitted to interpret ambiguous terms of an integrated contract.").

The Aspire/YME Agreement includes such a merger clause. See Siegel Aff., Ex. B at fl 16.03

("This agreement contains the entire understanding of the parties relating to its subject matter

and supersedes all prior or contemporaneous written or oral agreements, representations,

understandings and/or discussions between the parties relating thereto. No change of this

agreement will be binding unless signed by the party to be charged."). Nevertheless, Young

a Even if copyright law applied to the breach of contract claims brought by Young Money-which it does not-acopyright owner may by contract waive its rights. ,See 1 Nimmer on Copyright $ 6.12 (2018) ("[N]o accounting is

available between joint authors who have explicitly waived that remedy."). Notwithstanding such right as YoungMoney may have otherwise had as copyright owner, the agreements at issue conclusively show that Young Moneyagreed to Aspire's receiving two-thirds of the profrts from Canadian distribution.

5



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Money submits various pieces of extrinsic evidence in an attempt to invent a nonexistent

payment term entitling Young Money to one-third of the Canada profits.

For example, Young Money contends that certain legal opinions in an affidavit submitted

in another action by Jas Prince—a layperson and nonparty to the Aspire/YME Agreement—

"alone warrants denial of [Aspire's] Motion." Opp, at 1. This evidence, however, should clearly

be disregarded in light of the Aspire/YME Agreement's integration clause. Moreover, even if

extrinsic evidence were proper or necessary (which it is not), a person who is not a party to a

clear, unambiguous, and integrated contract cannot speak to the parties' intent and his statement

is therefore completely irrelevant to interpreting the contract's terms. See Chun Hye Kang-Kim

v. Feldman, 121 A.D.2d 590, 591 (2nd Dep't 1986) ("[A]n alleged subsequent oral statement by

. . . a nonparty to the contract . . is irrelevant in view of the contract's integration clause and its

clear and unambiguous language."); 2138747 Ontario, Inc. v. Samsung C & T Corp., 31 N.Y.3d

372, 377 (2018) (stating that it is a "fundamental, neutral precept of contract interpretation ... that

agreements are construed in accord with the parties' intent," the best evidence of which is "what

[the parties] say in their writing") (emphasis added). Further, the Prince affidavit was filed in

connection with an action in which he was adverse to Aspire. See Affirmation of Howard E.

King in Opposition to Motion ("King Aff.'), Ex. 1 at ¶ 1. The notion that anything in the Prince

affidavit could be deemed an admission of Aspire is therefore utterly absurd. 5

5 Nor does Jas Prince's father James Prince's agreement to fund this lawsuit for Aspire magically transform the Prince affidavit into an Aspire admission, despite Young Money's best attempts to waive its hands and make it so. Moreover, that the Prince affidavit was proffered by one of the law firms representing Aspire in this litigation is doubly irrelevant, as Profeta & Eisenstein was also not a party to the underlying agreements and did not negotiate the underlying agreements on behalf of Aspire. Even if the Prince affidavit could be considered a statement by Profeta & Eisenstein—which it cannot—a statement by an attorney who was not representing Aspire in another case cannot be deemed an admission by Aspire. See, e.g., Bellino v. Bellino Const. Co., 75 A.D.2d 630, 630 (2nd Dep't 1980) ("Admissions by counsel . . are admissible against a party provided that the statements had been made by the attorney while acting in his authorized capacity.") (emphasis added).

6

Money submits various pieces of extrinsic evidence in an attempt to invent a nonexistent

payment term entitling Young Money to one-third of the Canada profits.

For example, Young Money contends that certain legal opinions in an affrdavit submitted

in another action by Jas Prince-a layperson and nonparty to the Aspire/YME Agreement-

o'alone warrants denial of fAspire's] Motion." Opp. at 1. This evidence, however, should clearly

be clisregarded in light of the Aspire/YME Agreement's integration clause. Moreover, even if

extrinsic evidence were proper or nesessary (which it is not), a person who is not a party to a

clear, unambiguous, and integrated contract cannot speak to the parties' intent and his statement

is therefore completely irrelevant to interpreting the contract's terms. See Chun Hye Kang-Kim

v. Feldman,l2I A.D.2d 590, 591 (2nd Dep't 1986) ("lAln alleged subsequent oral statement by

. . . a nonparty to the contract . . . is inelevant in view of the contract's integration clause and its

clear and unambiguous language.");2138747 Ontario, Inc. v. Samsung C & T Corp,,31 N.Y.3d

372,377 (2018) (stating that it is a "fundamental, neutral precept of contract interpretation ... that

agreements are construed in accord with the pørtíes' intent," the best evidence of which is'owhat

fthe parties] say in their writing") (emphasis added). Further, the Prince affidavit was filed in

connection with an action in which he was ødverse to Aspìre. ,9ee Affirmation of Howard E.

King in Opposition to Motion ("King Aff.'), Ex. 1 at fl 1. The notion that anything in the Prince

affidavit could be deemed an admission of Aspire is therefore utterly absurd. s

5 Nor does Jas Prince's father James Prince's agreement to fund this lawsuit for Aspire magically transform the

Prince affidavit into an Aspire admission, despite Young Money's best attempts to waive its hands and make it so.

Moreover, that the Prince affrdavit was proffered by one of the law firms representing Aspire in this litigation isdoubly irrelevant, as Profeta & Eisenstein was also not a party to the underlying agreements and did not negotiate

the underlying agreements on behalf of Aspire. Even if the Prince afhdavit could be considered a statement byProfeta & Eisenstein-which it cannot-a statement by an attorney who was not representing Aspire in another case

cannot be deemed an admission by Aspire. See, e.g., Bellinov. Bellino Const. Co.,75 A.D.2d 630, 630 (2nd Dep't1980) ("Admissions by counsel . . . are admissible against apar',y provided that the statements had been made by the

attorney while øcling ìn hÌs &uthorized capacity;') (emphasis added),

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Young Money's other evidence, even if it could properly be considered, is equally

unavailing. Indeed, Young Money's contention that a nonparty's discovery request in a different

litigation somehow bears upon the meaning of the contracts at issue here is ridiculous. See Opp.

at 13-14. Nor is the testimony of Ronald Sweeney—Young Money's own attorney, who has a

documented history of interfering in this litigation to benefit Young Money at Aspire's

detriment, and who potentially stands to gain if Young Money prevails in this litigation (see

King Aff., Ex. 4 at 10:18-11:21)—at all probative. See Opp. at 14. And finally, Young Money's

focus on the January 11, 2017 Complaint filed by Aspire against Cash Money is misplaced. See

id. That complaint alleged that Cash Money failed to pay Aspire the one-third share of profits

that was due to Aspire from exploitation of Drake's music in the territory of the Aspire/YME

Agreement, defined as "the Universe excluding Canada." See Siegel Aff., Ex. B at ¶ 14.44.

That Aspire did not make "any distinction regarding exploitation being a higher share [sic] to

Aspire for Drake recordings in Canada" (Opp. at 14) is beside the point, because Aspire's profit

share with regard to Canada was irrelevant to the claims in that proceeding.

C. Young Money's Counterclaims are Also Partially Barred by the Statute of Limitations.

Even if Young Money's Counterclaims had any merit—which they do not—Young

Money's attempt to evade the partial bar on its Counterclaims imposed by the statute of

limitations is fruitless, for several reasons. First, Young Money filed its initial answer to

Aspire's initial complaint on June 27, 2017, at which time it failed to assert the Counterclaims

and therefore failed to secure itself of the benefits of CPLR 203(d). "[A]lthough the tolling

provision of subsection 203(d) clearly applies to counterclaims asserted in a defendant's initial

answer to the original complaint, courts have typically not considered it to be applicable to

counterclaims asserted in subsequent pleadings filed by a defendant — i.e., either in an answer to

7

Young Money's other evidence, even if it could properly be considered, is equally

unavailing. Indeed, Young Money's contention that anonparty's discovery reqaest in a different

litigation somehow bears upon the meaning of the contracts at issue here is ridiculous. See Opp.

atI3-I4. Nor is the testimony of Ronald Sweeney-Young Money's own øttornøy, who has a

documented history of interfering in this litigation to benefit Young Money at Aspire's

detriment, and who potentially stands to gain if Young Money prevails in this litigation (see

King Aff., Ex.4 at 10:18-11:21)-at all probative. See Opp. at 14. And finally, Young Money's

focus on the January II,2017 Complaint filed by Aspire against Cash Money is misplaced. See

id. That complaint alleged that Cash Money failed to pay Aspire the one-third share of profits

that was due to Aspire from exploitation of Drake's music in the territory of the Aspire/YME

Agreement, defined as "the Universe excludíng Canøds." ,See Siegel Aff., Ex. B at fl 14.44.

That Aspire did not make "any distinction regarding exploitation being a higher share [sic] to

Aspire for Drake recordings in Canada" (Opp. at 14) is beside the point, because Aspire's profit

share with regard to Canada was irrelevant to the claims in that proceeding.

C. Youns Monevts Counterclaims are o Partiallv Barred bv the Statute ofLimitatigls.

Even if Young Money's Counterclaims had any merit-which they do not-Young

Money's attempt to evade the partial bar on its Counterclaims imposed by the statute of

limitations is fruitless, for several reasons. First, Young Money filed its initial answer to

Aspire's initial complaint on June 27,2011, at which time it failed to assert the Counterclaims

and therefore failed to secure itself of the benefits of CPLR 203(d). "fA]lthough the tolling

provision of subsection 203(d) clearly applies to counterclaims asserted in a defendant's initial

answer to the original complaint, courts have typically not considered it to be applicable to

counterclaims asserted in subsequent pleadings filed by a defendant - i.e., either in an ønswer to

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an amended complaint or in an amended answer to the original complaint." Rosenfeld v. City of

New York, No. 06CV1979ERKVVP, 2009 WL 10701874, at *3 (E.D.N.Y. Jan. 11, 2009)

(emphasis added); see also Am. Stock Exch., LLC v. Mopex, Inc., 230 F. Supp. 2d 333, 336

(S.D.N.Y. 2002) ("Mopex could have asserted its trade secret claims pursuant to Section 203(d)

on September 14, 2000, at the time of its original answer and counterclaim, even if those claims

were otherwise time-barred. . . . When it chose not to do so, it gave up the claim-saving benefits

of Section 203(d)."), citing Coleman, Grasso & Zasada Appraisals Inc. v. Coleman, 246 A.D.2d

893, 894 (1998) (counterclaim asserted in amended answer was not timely because CPLR 203(d)

"applies to counterclaims but does not mention amended pleadings"). Because Young Money

could have asserted the Counterclaims at the time it first answered Aspire's initial complaint, it

cannot belatedly invoke CPLR 203(d) now.

Even if CPLR 203(d) did apply, Young Money would still be unable to avail itself of the

offset provision of that statute because its Counterclaims do not arise from the same transactions

or occurrences as Aspire's claims. Young Money nevertheless attempts to support its invocation

of CPLR 203(d)'s offset provision with the wholly conclusory declaration that "[t]here can be no

honest argument that the claims regarding Canada profits did not . . . 'arise from the same

transactions, occurrences, or series of transactions or occurrences" as Aspire's claims. Opp. at

18, quoting CPLR 203(d). But a review of SCM Corp. v. Fisher Park Lane Co., 40 N.Y.2d 788

(1976) reveals this unsubstantiated statement to be false. There, a tenant brought claims seeking

a refund for overpayment of rent, "predicated on acts of the landlord related to, or by which it

computed and assessed, escalations of rent after the term of the lease[.]" Id. at 791. The

landlord brought a "defense" seeking reformation of the lease, "grounded on allegations as to the

intention of the contracting parties prior to and at the time the lease was executed with respect to

8

&n omended compløinl or in an amended answer to the original complaint." Rosenfeld v. City of

New York, No. 06CV1979ERKVVP,2009 WL 10701874, at *3 (E.D.N.Y. Jan. 11,2009)

(emphasis added); see also Am. Stock Exch., LLC v. Mopex, lnc.,230 F. Supp. 2d333,336

(S.D.N.Y. 2002) ("Mopex could have asserted its trade secret claims pursuant to Section 203(d)

on September 14,2000, at the time of its original answer and counterclaim, even if those claims

were otherwise time-bared. . . . V/hen it chose not to do so, it gave up the claim-saving benefits

of Section 203(d)."), citing Coleman, Grasso & Zasada Appraisals Inc. v. Coleman,246 A.D.2d

893, 894 (1998) (counterclaim asserted in amended answer was not timely because CPLR 203(d)

"applies to counterclaims but does not mention amended pleadings"). Because Young Money

could have asserted the Counterclaims at the time it first answered Aspire's initial complaint, it

cannot belatedly invoke CPLR 203(d) now.

Even if CPLR 203(d) did apply, Young Money would stillbe unable to avail itself of the

offset provision of that statute because its Counterclaims do not arise from the same transactions

or occurrences as Aspire's claims. Young Money nevertheless attempts to support its invocation

of CPLR 203(d)'s ofßet provision with the wholly conclusory declaration that "[t]here can be no

honest argument that the claims regarding Canadaprofits did not . . . 'arise from the same

transactions, occurrences, or series of transactions or occurrences"' as Aspire's claims. Opp. at

18, quoting CPLR 203(d). But a review of SCM Corp. v. Fisher Park Lane Co.,40 N.Y.2d 788

(I976) reveals this unsubstantiated statement to be false. There, a tenant brought claims seeking

a refund for overpayment of rent, o'predicated on acts of the landlord related to, or by which it

computed and assessed, escalations of rent after the term of the lease[.]" Id. at79l. The

landlord brought a "defense" seeking reformation of the lease, "grounded on allegations as to the

intention of the contracting parties prior to and atthe time the lease was executed with respect to

8



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the proportionate share of electrical expense to be borne by the tenant." Id. at 790, 791-92. The

Court of Appeals concluded that these actions did not arise from the same transactions or

occurrences as required under CPLR 203(d), because while "[t]he tenant's claim relates to

performance under the contract[,] the landlord's relates to the negotiation and articulation of the

agreement made between the parties prior to its execution." Id. at 792. "While in a most general

sense both might be said to be associated with the lease, in the language of [former] CPLR 203

(subd. (c)[61), the claims do not arise out of the same transactions or occurrences." Id.

Here, Young Money's position is rebutted by the language of the Aspire/YME

Agreement, which expressly excludes from its purview Canadian distribution and references the

Universal Canada Agreement without including any terms relating to Young Money's and

Aspire's purported division of profits from the Universal Canada Agreement. 7 See Siegel Aff.,

Ex. B at ¶ 1.01 (furnishing Drake's recording services to the YME Joint Venture "in the

Territory"), 1114.44 (defining "Territory" as "the Universe excluding Canada"). Furthermore, as

in the SCM Corp. case, while Aspire's claims arise out of Young Money's and Cash Money's

performance (or, more particularly, lack thereof) under the Aspire/YME Agreement, Young

Money's claims relate to the intention of the parties prior to the execution of the Aspire/YME

Agreement with respect to the sharing of profits for Canadian distribution.8 Under the precedent

6 At the time, subdivision (c) of CPLR 203, like present-day CPLR 203(d), "exclude[d] from the bar of limitations, but only to the extent of plaintiffs claim, counterclaims even if they would have been barred at the time of the commencement of the action, provided that the counterclaim be one that 'arose from the transactions, occurrences, or series of transactions or occurrences, upon which a claim asserted in the complaint depends.'" SCM Corp., 40 N.Y.2d at 791.

Young Money's assertion that there is "no language in the [Aspire/YME] Agreement that grants to Aspire two-thirds of the net profits or proceeds from distribution of Drake albums in Canada" (Counterclaims at ¶ 13) is thus far beyond the point, as the Aspire/YME Agreement on its face does not and was not intended to apply to the split of revenues from such Canadian distribution.

8 As Young Money admits, the Universal Canada Agreement was executed before the Aspire/YME Agreement. See Opp. at 8, fn.7.

9

the proportionate share of electrical expense to be borne by the tenant." Id. at790,791-92. The

Court of Appeals concluded that these actions did not arise from the same transactions or

occurrences as required under CPLR 203(d), because while "[t]he tenant's claim relates to

performance under the contractf,] the landlord's relates to the negotiation and articulation of the

agreement made between the parties prior to its execution." Id. at792. "While in a most general

sense both might be said to be associated with the lease, in the language of [former] CPLR 203

(subd. (c)t0t;, the claims do not arise out of the same transactions or occurrences." Id.

Here, Young Money's position is rebutted by the language of the Aspire/YME

Agreement, which expressly excludes from its purview Canadian distribution and references the

Universal CanadaAgreement without including any terms relating to Young Money's and

Aspire's purported division of profits from the Universal Canada Agreement .7 See Siegel Aff.,

Ex. B at tf 1.01 (furnishing Drake's recording services to the YME Joint Venture 'oin the

Territory") ,\ 14.44 (defining "Teritory" as o'the Universe excluding Canada"), Furthermore, as

in the SCM Corp. case, while Aspire's claims arise out of Young Money's and Cash Money's

performance (or, more particularly, lack thereof) under the Aspire/YME Agreement, Young

Money's claims relate to the intention of the parties prior to the execution of the Aspire/YME

Agreement with respect to the sharing of profits for Canadian distribution.s Under the precedent

6 At the time, subdivision (c) of CPLR 203, like present-day CPLR 203(d), "exclude[d] from the bar of limitations,but only to the extent of plaintiffs claim, counterclaims even if they would have been barred at the time of thecommencement of the action, provided that the counterclaim be one that 'arose from the transactions, occurrences,or series of transactions or occuffences, upon which a claim assefied in the complaint depends."' SCM Corp., 40N.Y.2d at79l.7 Young Money's asseftion that there is "no language in the [Aspire/YME] Agreement that grants to Aspire two-thirds of the net profrts or proceeds from distribution of Drake albums in Canada" (Counterclaims at tf 13) is thus farbeyond the point, as the Aspire/YME Agreement on its face does not and was not intended to apply to the split ofrevenues from such Canadian distribution.

8 As Young Money admits, the Universal Canada Agreement was executed before the Aspire/YME Agreemen| See

Opp. at 8, fu.7.

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established by the Court of Appeals, Young Money's Counterclaims therefore plainly do not

arise out of the same transactions or occurrences as Aspire's claims.

Because Young Money failed to timely interpose its Counterclaims in response to

Aspire's initial complaint, and because the Counterclaims do not relate to the same transactions

or occurrences underlying Aspire's claims, Young Money's Counterclaims are at minimum time-

barred to the extent they accrued before August 17, 2012—six years before the filing of the

Counterclaims—regardless of whether they seek affirmative relief or set-off against Aspire's

recovery.

III. CONCLUSION

For the reasons set forth above, Aspire requests that Young Money's Counterclaims be

dismissed in their entirety and with prejudice.

Dated: December 6, 2018 Los Angeles, CA

KASOWITZ BENSON TORRES LLP

By.

Marc E. Kasowitz ([email protected]) 1633 Broadway New York, New York 10019 Telephone: (212) 506-1700

John V. Berlinski ([email protected]) Daniel A. Saunders ([email protected]) Alexandra E. Siegel ([email protected]) 2029 Century Park East, Suite 2000 Los Angeles, California 90067 Telephone: (424) 288-7900

Admitted pro hac vice

10

established by the Court of Appeals, Young Money's Counterclaims therefore plainly do not

arise out of the same transactions or occurrences as Aspire's claims.

Because Young Money failed to timely interpose its Counterclaims in response to

Aspire's initial complaint, and because the Counterclaims do not relate to the same transactions

or occurrences underlying Aspire's claims, Young Money's Counterclaims are at minimum time-

barred to the extent they accrued before August 17,2012-six years before the filing of the

Counterclaims-regardless of whether they seek affirmative relief or set-off against Aspire' s

recovery.

III. CONCLUSION

For the reasons set forth above, Aspire requests that Young Money's Counterclaims be

dismissed in their entirety and with prejudice.

Dated: December 6,2018Los Angeles, CA

KASOWITZ BENSON TORRES LLP

/, r/--By:

Marc E. Kasowitz (mkasowitz @kasowitz.com)1633 BroadwayNew York, New York 100i9Telephone: (212) 506-17 00

John V. Berlinski ([email protected])Daniel A. Saunders ([email protected])Alexandra E, Siegel ([email protected])2029 Century Park East, Suite 2000Los Angeles, California 90067Telephone: (424) 288 -7 900

10

Admitted pro hqc vice



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PROFETA & EISENSTEIN

Jethro Eisenstein ([email protected]) [email protected] 45 Broadway New York, NY 10006 Telephone: (212) 577-6500

Attorneys for Plaintiffs

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PROFETA & EISENSTEIN

Jeth¡o Eisenstein (¡etfu o 19 @gmail. com)[email protected] BroadwayNew York, NY 10006Telephone: (212) 577 -6500

Attorneys for Plaintffi

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