Download as pdf or txt
Download as pdf or txt
You are on page 1of 51

Filing # 135887341 E-Filed 10/04/2021 09:30:00 PM

IN THE THIRD DISTRICT COURT OF APPEAL


STATE OF FLORIDA

CASE NO. 3D21-1776

BIG LIGAS, LLC,


CRISTIAN ANDRES SALAZAR, and DANIEL ECHAVARRIA OVIEDO,

Appellants,

v.

PAULO EZEQUIEL LONDRA,

Appellee.

INITIAL BRIEF OF APPELLANTS

ON APPEAL FROM A NON-FINAL ORDER ENTERED IN THE


ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA

Elliot B. Kula Jesus E. Cuza


W. Aaron Daniel Monica V. Castro
KULA & ASSOCIATES, P.A. Annelise Del Rivero
11900 Biscayne Blvd., Suite 310 HOLLAND & KNIGHT LLP
Miami, Florida 33181 701 Brickell Avenue, Suite 3300
Telephone: (305) 354-3858 Miami, Florida 33131
eservice@kulalegal.com Telephone: (305) 374-8500
elliot@kulalegal.com jesus.cuza@hklaw.com
aaron@kulalegal.com monica.castro@hklaw.com
Counsel for Big Ligas, LLC annelise.delrivero@hklaw.com
Counsel for Big Ligas, LLC, Cristian
Salazar, and Daniel Oviedo
TABLE OF CONTENTS
Page
TABLE OF CONTENTS .............................................................................. 2
TABLE OF CITATIONS .............................................................................. 4

INTRODUCTION ........................................................................................ 8

STATEMENT OF THE CASE AND FACTS ................................................ 9

I. THE GOVERNING CONTRACTS............................................. 9


A. The Deal Memo. .............................................................. 9
B. The Exclusive Recording Agreement. ............................ 10

C. Amendment To The Warner Agreement. ....................... 12


II. THE HEART OF THE DISPUTE. ............................................ 12

III. LITIGATION ENSUED. ........................................................... 13

A. Big Ligas Sued Londra For Breach Of


Contract. ........................................................................ 13
B. Londra Sought a Declaratory Judgment. ....................... 13

C. Londra Moved For Partial Summary Judgment


On His Declaratory Judgment Claim. ............................. 14

IV. The Partial Summary Judgment. ............................................ 16

SUMMARY OF ARGUMENT .................................................................... 20

ARGUMENT ............................................................................................. 22

I. STANDARD OF REVIEW. ...................................................... 22

II. THE DEAL MEMO DOES NOT EXPIRE UNTIL


2024. ...................................................................................... 22

2
TABLE OF CONTENTS
(Continued)

Page

A. The Plain Language of the Deal Memo and


Warner Agreement Provide that the “Term” of
the “Exclusive Recording Agreement” Includes
Both the “Recording Period” and “Licensing
Period.” .......................................................................... 23

B. The Trial Court Examined Extrinsic Evidence


and Improperly Resolved Genuine Issues of
Fact Regarding the Deal Memo and Warner
Agreement. .................................................................... 31
III. THE WARNER AMENDMENT IS VALID AND
ENFORCEABLE. .................................................................... 38

A. Londra Failed to Join Warner, an


Indispensable Party. ...................................................... 40

B. The Deal Memo’s Plain Language Grants Big


Ligas Exclusive Authority to Enter Recording
Agreements Without Londra’s Assent. ........................... 41
CONCLUSION .......................................................................................... 49
CERTIFICATE OF SERVICE .................................................................... 51

CERTIFICATE OF COMPLIANCE ............................................................ 51

3
TABLE OF CITATIONS

Page
Cases

Allett v. Hill,
422 So. 2d 1047 (Fla. 4th DCA 1982) ................................................... 33

Allman v. Wolfe,
592 So. 2d 1261 (Fla. 2d DCA 1992) .................................................... 41
Andersen Windows, Inc. v. Hochberg,
997 So. 2d 1212 (Fla. 3d DCA 2008) .................................................... 28
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) .............................................................................. 34

Antoniazzi v. Wardak,
259 So. 3d 206 (Fla. 3d DCA 2018) ...................................................... 29

Celotex Corp. v. Catrett,


477 U.S. 317 (1986) .............................................................................. 34
Clark v. Coats & Clark, Inc.,
929 F.2d 604 (11th Cir. 1991) ............................................................... 34
Diaz v. Kosch,
250 So. 3d 156 (Fla. 3d DCA 2018) ...................................................... 22
Dirico v. Redland Estates, Inc.,
154 So. 3d 355 (Fla. 3d DCA 2014) ................................................ 23, 28

Duval Motors Co. v. Rogers,


73 So. 3d 261 (Fla. 1st DCA 2011)........................................................ 33
Fla. Bd. of Regents v. Mycon Corp.,
651 So. 2d 149 (Fla. 1st DCA 1995)...................................................... 22
Fla. Dept. of Revenue v. Cummings,
930 So. 2d 604 (Fla. 2006) .................................................................... 40

4
TABLE OF CITATIONS
(Continued)

Page

Fla. Inv. Group 100, LLC v. Lafont,


271 So. 3d 1 (Fla. 4th DCA 2019) ............................................. 26, 28, 30
Gold Crown Resort Mktg. Inc. v. Phillpotts,
272 So. 3d 789 (Fla. 5th DCA 2019) ............................................... 29, 47
Hahamovitch v. Hahamovitch,
174 So. 3d 983 (Fla. 2015) .................................................................... 23

Home Dev. Co. of St. Petersburg v. Bursani,


178 So. 2d 113 (Fla. 1965) .................................................................... 28
In re Amend. To Fla. R. Civ. P. 1.510, 317 So. 3d 72, 81 (Fla. 2021) ....... 34

Int'l Expositions, Inc. v. City of Miami Beach,


274 So. 2d 29 (Fla. 3d DCA 1973) ........................................................ 28

J. C. Penney Co., Inc. v. Koff,


345 So. 2d 732 (Fla. 4th DCA 1977) ............................................... 32, 33

Land O'Sun Realty Ltd. v. REWJB Gas Invs.,


685 So. 2d 870 (Fla. 3d DCA 1996) ...................................................... 45

Lee v. Cole,
46 So. 3d 612 (Fla. 2d DCA 2010) ........................................................ 41

Lipsig v. Ramlawi,
760 So. 2d 170 (Fla. 3d DCA 2000) ...................................................... 38
Loxahatchee River Envtl. Control Dist. v. Martin County Little Club, Inc.,
409 So. 2d 135 (Fla. 4th DCA 1982) ..................................................... 41

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,


475 U.S. 574 (1986) .............................................................................. 34

Miren Intern. Lodging Corp. v. Manley,


982 So. 2d 1203 (Fla. 5th DCA 2008) ................................................... 48

5
TABLE OF CITATIONS
(Continued)

Page

Ohio v. Am. Express Co.,


138 S. Ct. 2274 (2018) .......................................................................... 46
Old Port Cove Holdings, Inc. v. Old Port Cove Condo. Ass'n One, Inc.,
986 So. 2d 1279 (Fla. 2008) .................................................................. 48
Palazzolo v. Fessler,
680 So. 2d 607 (Fla. 2d DCA 1996) ...................................................... 45

Penley v. Eslinger,
605 F.3d 843 (11th Cir. 2010) ............................................................... 35
Real Estate Value Co., Inc. v. Carnival Corp.,
92 So. 3d 255 (Fla. 3d DCA 2012) ........................................................ 23
Ruotal Corp., N. W., Inc. v. Ottati,
391 So. 2d 308 (Fla. 4th DCA 1980) ..................................................... 38
Sch. Bd. of Broward Cty. v. The Great Am. Ins. Co.,
807 So. 2d 750 (Fla. 4th DCA 2002) ..................................................... 17
St. Petersburg Yacht Charters, Inc. v. Morgan Yacht, Inc.,
457 So. 2d 1028 (Fla. 2d DCA 1984) .................................................... 47

Teague v. Teague,
122 So. 3d 938 (Fla. 4th DCA 2013) ..................................................... 32

Walgreen Co. v. Habitat Dev. Corp.,


655 So. 2d 164 (Fla. 3d DCA 1995) ...................................................... 28

White v. White,
141 So. 3d 645 (Fla. 4th DCA 2014) ..................................................... 32

Statutes

§ 542.15, Fla. Stat. (2020) ........................................................................ 46


§ 542.16, Fla. Stat. (2020) ........................................................................ 46

6
TABLE OF CITATIONS
(Continued)

Page

§ 542.18, Fla. Stat. (2020) ........................................................................ 46

§ 605.04091, Fla. Stat. (2020) .................................................................. 13


Rules

Fed. R. Civ. P. 56 ..................................................................................... 34

Fla. R. Civ. P. 1.510 .................................................................................. 34


Fla. R. Civ. P. 1.510(f) (2021) ................................................................... 31

7
INTRODUCTION

On appeal is a partial summary judgment adjudicating the “Term,” or


duration, of an (undisputedly) clear and unambiguous contract. The

contract, a “Deal Memorandum” between a recording artist and music


producers/marketers, provides that its “Term” will be extended by the “Term”
of any “exclusive recording agreement” with a third-party major record label.

The parties entered into such an “exclusive recording agreement” with a


record label, which itself contained an expressly defined “Term” of five years.
And the heart of the dispute is this: the music producers/marketers
interpret the “Term” of the “exclusive recording agreement” as extending the
“Deal Memorandum” for five years, or until November 23, 2024. The
recording artist, by contrast, contends the “exclusive recording agreement”

does not extend the “Deal Memorandum,” which he asserts ended on


February 21, 2021.
The trial court ruled in the recording artist’s favor. But in so doing, it
rewrote the plain and unambiguous terms of the “exclusive recording
agreement” and “Deal Memorandum.” Moreover, in support of that misread,
it reached outside the four-corners of the unambiguous agreements and

relied on parol evidence.


Reversal is warranted because the plain and unambiguous language
of the contracts establishes that the “Term” of the “Deal Memorandum”

expires no sooner than November 23, 2024.

8
STATEMENT OF THE CASE AND FACTS

I. THE GOVERNING CONTRACTS


A. The Deal Memo.

On February 21, 2018, Argentine singer and entertainer Paulo Londra


signed a contract, the “Deal Memorandum,” with Cristian Andres Salazar and
Daniel Echavarria Oviedo to create a business entity, Big Ligas, LLC, “in
order to foster and pursue the development and commercial exploitation of

[Londra’s] Services and Works, including, without limitation, negotiating and


entering into an exclusive recording agreement” (the “Deal Memo”).
Appendix to Initial Brief (“A:”) at 188 (emphasis added). See also A:297,
338. In furtherance of Big Ligas’s purpose, the Deal Memo granted to Big
Ligas ownership in “the Works and all copyrights … and intellectual property
rights therein,” and also the “right to exploit the Works.” A:188, 193. And

Salazar and Oviedo served as Managing Members. A:189.


The Deal Memo was very specific and clear in articulating its “Term,”
in section 4, as follows:

The “Term” of this Agreement shall initially extend for a period of


three (3) years from date of the full execution hereof. Thereafter, the
Term shall automatically renew for additional periods of one (1) year
each unless any Member shall notify the other two in writing of his
desire to end the Term at any time prior to the dated [sic] on which
the Term would otherwise expire, except as provided in the
remainder of this paragraph. If during the Term, [Big Ligas] shall
enter into an exclusive recording agreement with a Major Label
or other third party record label (a “Recording Agreement”), [Londra]
shall not have the right to terminate the Term as described in the
preceding sentence and the Term shall not expire until the date six
9
(6) moths [sic] following the expiration of the “Term” of the such
Recording Agreement.
A:189.

Breaking down the Deal Memo’s Term, for ease of reference as


pertinent in this appeal, it contained four components:
1) An initial 3-year period;

2) Automatic 1-year renewal periods;


3) The members’ right to terminate after the initial 3-year term,
unless

4) Big Ligas entered into “an exclusive recording agreement with


a Major Label,” which would extend the Deal Memo’s Term “until
six mo[n]ths following the expiration of the ‘Term’ of … such

Recording Agreement.”
Id. (Note: It is the 4th component of the Deal Memo’s Term that will be
important going forward on appeal.)

B. The Exclusive Recording Agreement.

During the Deal Memo’s initial three-year term, Big Ligas secured an
“exclusive recording agreement” — as contemplated by the Deal Memo’s
Term (its 4th component). On January 2, 2019, Big Ligas entered into the

“Recording License Agreement” (the “Warner Agreement”) with Warner


Music Latina, Inc. (“Warner”). A:196.

10
(Thus, the 4th component of the Deal Memo’s Term was triggered,
“extend[ing] the Deal Memo’s Term ‘until six mo[n]ths following the expiration

of the ‘Term,’” of the Warner Agreement. A:189.)


The Warner Agreement, of course, had its own “Term,” expressly
(clearly and unambiguously) defined as follows:

The term for Artist’s exclusive recording services shall


commence on the date hereof and shall continue for a period
ending on the last day of the sixth (6th) complete month following
the date of the initial United States commercial release of the
Album constituting the Recording Commitment. As used herein,
the term “Recording Period” or “Recording Services Term”
shall mean the time period described in the foregoing sentence,
as such may be suspended or extended as provided herein.
Notwithstanding the foregoing, Company shall have the
exclusive right to manufacture, distribute, sell and otherwise
exploit the Recordings (as defined below) licensed to Company
hereunder subject to the terms and conditions of this agreement
commencing upon the date hereof until a period ending on the
date which is five (5) years following the date of the initial United
States commercial release of the Album constituting the
Recording Commitment (the “License Period”). For the
avoidance of doubt, the License Period and any extension
thereof shall be subject to the Sell-Off Period (as defined in
paragraph 5(a)(ii) below). Unless the context otherwise requires,
the Recording Services Term and the License Period are
sometimes collectively referred to herein the “Term”.
A:196 (underline in original; italics added).
Breaking down the Warner Agreement’s “Term” for ease of reference

as pertinent in this appeal, it comprises two periods, as follows:


1) The “Recording Period,” or “Recording Services Term” (which
essentially is the production period), and

11
2) The “License Period,” (which essentially is the sales, or revenue
generating period).

Id.
Importantly, in the Artist Inducement Letter attached to the Warner
Agreement — signed by Londra — Londra expressly ratified the Warner

Agreement. A:235–43.

C. Amendment To The Warner Agreement.

On March 2, 2020, Big Ligas and Warner entered into a “Second Album
Amendment” (the “Warner Amendment”). A:247–48.
Big Ligas was obligated to deliver the Second Album by “no later than
July 2021.” A:247–48.

II. THE HEART OF THE DISPUTE.

On May 23, 2019, Londra released his first album under the Warner
Agreement. A:6–7, 260, 342–43. Thus, the “Term” of the Warner Agreement
— both the “Recording Period” and “License Period” — was to run until May
23, 2024. See A:196. And, accordingly, the Deal Memo’s “Term” was
extended until November 23, 2024, or “(6) moths [sic] following the expiration
of the ‘Term’ of the such Recording Agreement.” A:189.

But around the time of the album’s release, Londra broke off
communications with Oviedo and Salazar and refused to further honor his
obligations under the Deal Memo. A:260, 342–43. Litigation ensued.

12
III. LITIGATION ENSUED.

A. Big Ligas Sued Londra For Breach Of Contract.

Big Ligas filed a four-count complaint against Londra (“Big Ligas’s

Complaint”). A:249–67. Big Ligas’s Complaint asserted claims for:


• Count I: Anticipatory Breach of the Deal Memo;
• Count II: Breach of the Deal Memo;

• Count III: Breach of the Publishing Agreement; and


• Count IV: Breach of Fiduciary Duty and Violation of
§ 605.04091, Fla. Stat.

A:263–66.

B. Londra Sought a Declaratory Judgment.

Londra separately filed a complaint against Big Ligas, as well as


Salazar and Oviedo (the “Big Ligas Parties”) (A:268–91), which was twice

amended. A:294–335.1
Londra’s Second Amended Complaint, the operative complaint,
primarily sought declaratory relief. A:315–16. Londra sought a declaration

that, among other things:


• That Londra lawfully terminated the Deal Memo on February 14, 2020;
• That “the Deal Memo expire[d] six months following the term of Big

Ligas’[s] recording agreement with Warner Latina”; and

1
Londra’s subsequent action was consolidated into Big Ligas’s first-filed
action. A:292–93.
13
• “[W]hether or not Londra [was] bound by the terms of the purported
Warner Latina Amendment.”

Id.2

C. Londra Moved For Partial Summary Judgment On His


Declaratory Judgment Claim.
(1) Londra’s Motion for Partial Summary Judgment.

Londra moved for partial summary judgment on Count I of his Second

Amended Complaint, for declaratory judgment. Londra sought a declaration


(i) that the Deal Memo’s “Term” expired on February 21, 2021, and (ii) that
the Warner Amendment was unenforceable. A:12.
Londra based his argument on section 4 of the Deal Memo, which
defined its “Term” as extending six months beyond “the expiration of the
‘Term’ of” a “recording agreement with a Major Label … (a ‘Recording

Agreement’).” A:6, 10. Londra agreed that the Warner Agreement was such
a Recording Agreement that could extend the Deal Memo’s Term. But he
interpreted the Warner Agreement’s definition of “Term” as comprising only

the “Recording Period,” but not the five-year “License Period.” Id.
Londra concluded, therefore, that the Deal Memo ended in February
2021, (wholly ignoring the Warner Agreement’s five-year “Licensing Period”

and its expressly defined “Term”). A:21.

2
Londra also asserted other claims, (A:317–34), which remain pending.
14
(2) Big Ligas Parties’ Response in Opposition.

The Big Ligas Parties opposed Londra’s motion for partial summary
judgment, arguing the Deal Memo did not expire until, at least, November

23, 2024. A:52–68. That is, Deal Memo’s Term — by its plain, clear and
unambiguous language, had not expired; indeed, Londra’s argument, the Big
Ligas Parties pointed out in opposition, failed to credit the Warner

Agreements full “Term” and presumed facts (improperly on summary


judgment) with respect to the Warner Amendment. A:52–68.
That is, they disagreed with Londra’s interpretation of the Warner
Agreement’s “Term” under section 2, pointing out that the Warner
Agreement’s “Term” did not expire until the end of both the “Recording
Period,” and the five-year “License Period.” A:55. Which is to say, Londra’s
interpretation, the Big Ligas Parties argued, impermissibly rewrote the
Warner Agreement, and thereby the Deal Memo, by eliminating the five-year
License Period altogether as a component of the “Term.” A:55–56.
The Big Ligas Parties thereon concluded that, because the “exclusive
recording agreement” (i.e., the Warner Agreement) spanned both periods
in its express definition of “Term,” the Deal Memo ended six months after

both periods ran. Id. The Deal Memo was thus extended beyond the initial

15
Deal Memo period to November 23, 2024 — six months after expiration of
the Warner Agreement’s “Term.”3

IV. THE PARTIAL SUMMARY JUDGMENT.


(1) Overview of the Ruling.

The trial court entered its Order [on] Paulo Londra’s Motion for Partial
Summary Judgment (the “Partial Summary Judgment”), granting Londra’s

motion and declaring that (i) the Deal Memo expired on February 20, 2021,
and, (ii) that the Warner Amendment was unenforceable. A:153.
The trial court ruled “that the Deal Memo is clear and unambiguous.”

A:149.
But the trial court nonetheless discussed and relied upon extrinsic facts
and circumstances surrounding the Deal Memo’s execution, as well as the

negotiation and execution of the Warner Agreement and Warner


Amendment. A:144, 146, 151–52 & n.1.

3
The Big Ligas Parties also moved for summary judgment separately from
their response in opposition to Londra’s motion for summary judgment.
A:69–85. The Big Ligas Parties’ motion was based on their interpretation of
the Deal Memo and Warner Agreement set forth in their response to Londra’s
motion, and sought a ruling that the Deal Memo expired no earlier than
November 23, 2024. Compare id., with 52–68. The Big Ligas Parties’
motion for summary judgment was fully briefed. A:86–132 (Londra’s
response).
16
And, after declaring the Deal Memo to be clear and unambiguous, the
trial court nonetheless applied four separate canons of construction to

construe the Deal Memo against the Big Ligas Parties.4 A:149–50.

(2) The Trial Court Ruled the Deal Memo Expired on


February 20, 2021 (Rejecting the Big Ligas Parties’
Position that it Extended Until at Least November 23,
2024).

On the question of whether the Deal Memo had expired on


February 20, 2021, the Partial Summary Judgment interpreted the Deal
Memo’s “Term” as being extended six months beyond “the expiration of the

‘Term’ of such Recording Agreement,” i.e., the Warner Agreement. A:144–


45.
But the trial court ruled that only a portion of the Warner

Agreement — not the entire contract — constituted the “exclusive recording


agreement” that extended the Deal Memo. A:150. That is, although the
Warner Agreement contained a clearly defined “Term” that was composed

of both a “Recording Period” or “Recording Services Term,” and a “License


Period,” the trial court ruled that only the “Recording Services Term” was the
“exclusive recording agreement.” A:150. According to the trial court, the

4
Sch. Bd. of Broward Cty. v. The Great Am. Ins. Co., 807 So. 2d 750, 752
(Fla. 4th DCA 2002) (explaining that the rule of construction that the contract
should be interpreted against the drafter is “at best ... a secondary rule of
interpretation, a ‘last resort’ which may be invoked after all of the ordinary
interpretative guides have been exhausted and there remain two or more
reasonable interpretations of the language in question”).
17
“License Period” was not part of the “exclusive recording agreement”
contemplated by Deal Memo. Thus, concluded the trial court, “[a]ny potential

extension of the Deal Memo’s [T]erm would end six months after the Warner
Agreement’s Recording Services Term on May 30, 2020.” A:151.
The trial court rejected the Big Ligas Parties’ interpretation that the

“exclusive recording agreement” meant the Warner Agreement’s full Term,


as defined in section 2 of the Warner Agreement. That is, the trial court ruled
that this interpretation “erroneously conflates the Warner Agreement’s six-

month exclusive Recording Services Term with the five-year License


Period.” A:151. According to the trial court’s findings of fact:

The Warner Agreement’s License Period is not an “exclusive


recording agreement.” The only exclusive recording agreement
term to which Londra has consented is the Warner Agreement’s
six-month Recording Services Term for the Album.
A:151–52.
The trial court thus ruled “that pursuant to the unambiguous contract,
the Deal Memo’s term expired on February 20, 2021.” A:153.

(3) The Trial Court Ruled the Separate Warner Amendment


Was Unenforceable.

In addition, the trial court interpreted the Deal Memo’s provisions

granting Salazar and Oviedo (as managing members of Big Ligas) the power
to enter into recording agreements as requiring “Londra’s approval before
entering into any deal, such as the Warner Amendment.” A:152–53. If
Londra’s consent to enter recording agreements was not required, reasoned

18
the trial court, the Big Ligas Parties could “unilaterally enter into recording
agreements for Londra’s services,” and “extend the Deal Memo’s term in

perpetuity to force Londra’s personal services to write songs and record


music for the Big Ligas [Parties] against his will forever.” A:153 n.2.
For that reason, the trial court ruled that “the Deal Memo could not be

enforced [as to the Warner Amendment] because it would constitute an


illegal restraint of trade and lead to absurd results.” A:153. The Order
provided no authority to support this alternative ruling, which concerned only

the Warner Amendment, and did not concern enforceability of the original
Warner Agreement (to which Londra assented).

19
SUMMARY OF ARGUMENT

The trial court entered judgment in Londra’s favor on his two requested
declarations, ruling that: (i) the Deal Memo expired on February 20, 2021

(not November 23, 2024), its duration determined solely by the original
Warner Agreement’s “Recording Services Term,” and not the full “Term”;
and (ii) the Warner Amendment was unenforceable.

THE DEAL MEMO EXTENDS INTO 2024


The trial court’s first declaration wrote out an entire component of the
Warner Agreement’s “Term” — the Licensing Period. Quite simply, the Deal

Memo was extended by the “Term” of any “recording services agreement.”


The Warner Agreement was just such an agreement, and its expressly
defined “Term” includes both an initial “Recording Services Term,” and a

five-year License Period. By the plain language of the Deal Memo and
Warner Agreement, therefore, the Deal Memo did not end until six months
after the License Period ended — on May 23, 2024. Which is to say, the
Deal Memo did not end until November 23, 2024.
Moreover, the trial court’s analysis improperly considered evidence
extrinsic to the Deal Memo and Warner Agreement, and further resolved

genuine issues of material fact.


For these reasons, the Partial Summary Judgment should be reversed
and remanded for a judgment in favor of the Big Ligas Parties, declaring that
the Deal Memo extended until 2024.

20
THE WARNER AMENDMENT IS ENFORCEABLE
The trial court’s second declaration, that the Warner Amendment is
unenforceable, is separate from the analysis of whether the Deal Memo’s

“Term” ends in 2021 or 2024. But it too is erroneous and presents as a


second, independent basis for reversal.
First, the trial court could not declare the Warner Amendment

unenforceable without first joining Warner — Big Ligas’s counterparty and


an indispensable party to the litigation.
Second, the trial court incorrectly interpreted the Deal Memo as
conditioning the right and power of Oviedo and Salazar as Managing
Members to enter into third-party recording agreements on Londra’s express
assent. That ruling impermissibly rewrote the Deal Memo’s plain language
that granted Oviedo and Salazar “without limitation … the power to …
enter into recording agreements with third party record labels.” A:188–89
(emphasis added).
Third, the trial court’s alternative ruling that the Deal Memo would be
against public policy if it did not permit Londra’s assent to third-party
recording agreements (such as the Warner Amendment) was without

authority.
Fourth, and finally, to the extent that the Deal Memo’s provisions are
internally inconsistent on Big Ligas ’s exclusive right to enter into recording

agreements, such an ambiguity would present issues of fact to be resolved


at trial.
21
ARGUMENT

I. STANDARD OF REVIEW.

Review of both the Partial Summary Judgment and its embedded

(mistaken) interpretation of the Deal Memo and Warner Agreement present


questions of law that are reviewed de novo. See Diaz v. Kosch, 250 So. 3d
156, 163 (Fla. 3d DCA 2018) (contracts are interpreted “according to their

plain language”). Indeed, because contract interpretation is a matter of law,


“an appellate court is not restricted in its review powers from reassessing the
meaning and effect of the document and, if appropriate, from reaching a

construction contrary to that of the trial court.” Fla. Bd. of Regents v. Mycon
Corp., 651 So. 2d 149, 153 (Fla. 1st DCA 1995).

II. THE DEAL MEMO DOES NOT EXPIRE UNTIL 2024.

There is no dispute that Londra entered into the Deal Memo on

February 21, 2018, and that he signed an inducement letter ratifying the
Warner Agreement entered into on January 2, 2019. See A:194–95, 243.
Setting aside the Warner Amendment for address in Section III, infra, these

are the first two agreements the trial court needed to examine to determine
when the Deal Memo expires. And, everyone agreed, and the trial court
ruled, that the Deal Memo was clear and unambiguous. See A:149, 153.

Determining the “Term” (duration) of the Deal Memo requires a two-


step analysis. First, the Court must look at Section 4 of the Deal Memo
defining “Term” and apply its plain language. Second, since the Deal

22
Memo’s Term is extended by the “Term” of a “exclusive recording
agreement” (plus six months), the Court must look at the definition of “Term”

in the “exclusive recording agreement,” i.e., the Warner Agreement, and


apply its plain language — stated in section 2 of the Warner Agreement.
The trial court’s ruling that the Deal Memo expired on February 20,

2021 was the product of error at each step of the analysis. The trial court,
first of all, overwrote the plain language of both the Deal Memo and the
Warner Agreement. And then compounding its error, the trial court made

factual findings about the Warner Agreement by considering parol


evidence — wholly inappropriate on summary judgment.

A. The Plain Language of the Deal Memo and Warner


Agreement Provide that the “Term” of the “Exclusive
Recording Agreement” Includes Both the “Recording
Period” and “Licensing Period.”

Again, the parties agreed, and the trial court ruled, that the Deal Memo
was clear and unambiguous. A:149, 153. And “[w]here a contract is clear

and unambiguous, it must be enforced pursuant to its plain language,”


because “the language itself is the best evidence of the parties’ intent, and
its plain meaning controls.’” Hahamovitch v. Hahamovitch, 174 So. 3d 983,

986 (Fla. 2015). Accord Dirico v. Redland Estates, Inc., 154 So. 3d 355, 357
(Fla. 3d DCA 2014) (quoting Real Estate Value Co., Inc. v. Carnival Corp.,
92 So. 3d 255, 260 (Fla. 3d DCA 2012) (“In the absence of some ambiguity,

23
the intent of the parties to a written contract must be ascertained from the
words used in the contract, without resort to extrinsic evidence.”).

Recall, section 4 of the Deal Memo expressly (clearly and


unambiguously) defined its “Term” as follows:

The “Term” of this Agreement shall initially extend for a period of


three (3) years from date of the full execution hereof. Thereafter,
the Term shall automatically renew for additional periods of one
(1) year each unless any Member shall notify the other two in
writing of his desire to end the Term at any time prior to the dated
[sic] on which the Term would otherwise expire, except as
provided in the remainder of this paragraph. If during the Term,
[Big Ligas] shall enter into an exclusive recording agreement
with a Major Label or other third party record label (a “Recording
Agreement”), [Londra] shall not have the right to terminate the
Term as described in the preceding sentence and the Term shall
not expire until the date six (6) moths [sic] following the expiration
of the “Term” of the such Recording Agreement.
A:189 (emphasis added). Thus, establishing four components to the Deal

Memo’s “Term”:
1) The initial 3-year period;
2) Automatic 1-year renewal periods;

3) The members’ right to terminate after the initial 3-year term, unless
4) Big Ligas enters into “an exclusive recording agreement with a Major
Label,” which extends the Deal Memo’s Term “until six mo[n]ths

following the expiration of the ‘Term’ of … such Recording Agreement.”


Id.

24
And it is the fourth component that is at issue here. Under section 4,
once Big Ligas entered into “an exclusive recording agreement,” i.e., the

Warner Agreement, the Deal Memo was extended for a period equal to the
“Term” of the “exclusive recording agreement,” plus six months.
The analysis starts with the fact beyond dispute that the “exclusive

recording agreement” contemplated by the Deal Memo is indeed the Warner


Agreement. A:6, 9–10, 145. The Deal Memo was thus extended by the
length of the Warner Agreement’s “Term,” plus six months. But the trial court

erroneously interpreted the Warner Agreement’s “Term,” ruling it was shorter


than its plain language provided.
That is, section 2 of the Warner Agreement defines its “Term” as

follows:

The term for Artist’s exclusive recording services shall


commence on the date hereof and shall continue for a period
ending on the last day of the sixth (6th) complete month following
the date of the initial United States commercial release of the
Album constituting the Recording Commitment. As used herein,
the term “Recording Period” or “Recording Services Term”
shall mean the time period described in the foregoing sentence,
as such may be suspended or extended as provided herein.
Notwithstanding the foregoing, Company shall have the
exclusive right to manufacture, distribute, sell and otherwise
exploit the Recordings (as defined below) licensed to Company
hereunder subject to the terms and conditions of this agreement
commencing upon the date hereof until a period ending on the
date which is five (5) years following the date of the initial United
States commercial release of the Album constituting the
Recording Commitment (the “License Period”). For the
avoidance of doubt, the License Period and any extension
thereof shall be subject to the Sell-Off Period (as defined in
25
paragraph 5(a)(ii) below). Unless the context otherwise requires,
the Recording Services Term and the License Period are
sometimes collectively referred to herein the “Term”.
A:196 (emphasis in original). Thus, the “Term” of the Warner Agreement is
composed of two periods:
1. The “Recording Period,” or “Recording Services Term,” and
2. The “License Period.”
Id.
The “Term” expressly defined in the Warner Agreement and
specifically referenced in the Deal Memo must be credited fully as written.
“Where the parties to a contract take pains to define a key term specially,
their dealings under the contract are governed by that definition.” Fla. Inv.
Group 100, LLC v. Lafont, 271 So. 3d 1, 5 (Fla. 4th DCA 2019).
The trial court, however, rejected the Warner Agreement’s specific and
express definition by giving voice only to the first period (the Recording
Period) when it interpreted the Warner Agreement’s “Term,” ruling that “[a]ny
potential extension of the Deal Memo’s term would end six months after the
Warner Agreement’s Recording Services Term.” A:151 (emphasis added).
As for the Licensing Period, the trial court reasoned that it was “not an

exclusive recording agreement,” and “[t]he only exclusive recording


agreement term to which Londra has consented is the Warner Agreement’s
six-month Recording Services Term for the Album.” A:151–52.

This analysis entirely disregards the plain language of the Warner


Agreement’s definition of “Term” and the Deal Memo’s specific reference
26
thereto. The Warner Agreement expressly defined its full “Term” to include
the “License Period.” A:196. And section 4 of the Deal Memo specifies that

the Deal Memo does not expire “until six mo[n]ths following the expiration of
the ‘Term’ of … such Recording Agreement.” A:189 (emphasis added).
Thus, under the plain terms of both contracts, the Deal Memo does not expire

“until six mo[n]ths following the expiration of the ‘Term’ [i.e., both “Recording
Services Term” and “License Period”] of … such Recording Agreement.”
A:189, 196.

The trial court, however, rejected that specific and express definition of
“Term,” instead finding that “[a]ny potential extension of the Deal Memo’s
term would end six months after the Warner Agreement’s Recording

Services Term.” A:151 (emphasis added). That is, the trial court struck
“Term” from the Deal Memo and inserted in its place “Recording Services
Term,” illustrated as follows:
Deal Memo Plain Language Trial Court’s Interpretation
“If … [Big Ligas] shall enter into an “If … [Big Ligas] shall enter into an
exclusive recording agreement with a exclusive recording agreement with a
Major Label or other third party record Major Label or other third party record
label (a “Recording Agreement”), label (a “Recording Agreement”),
[Londra] shall not have the right to [Londra] shall not have the right to
terminate the Term as described in terminate the Term as described in
the preceding sentence and the Term the preceding sentence and the Term
shall not expire until the date six (6) shall not expire until the date six (6)
moths [sic] following the expiration of moths [sic] following the expiration of
the ‘Term’ of the such Recording the ‘Term’ Recording Services Term
Agreement.” of the such Recording Agreement.”

27
In other words, the trial court rewrote the Deal Memo’s express
definition by replacing

“‘Term’ of … such Recording Agreement”


with
“Recording Services Term of … such Recording Agreement.”

A:189. The trial court thus reduced the full “Term” to a partial “Term.”
Such re-write of this expressly defined term was error. Lafont, 271 So.
3d at 5.

“The law is quite clear that courts may not rewrite, alter, or add to the
terms of a written agreement between the parties and may not substitute
their judgment for that of the parties in order to relieve one from an alleged

hardship of an improvident bargain.” Int'l Expositions, Inc. v. City of Miami


Beach, 274 So. 2d 29, 30–31 (Fla. 3d DCA 1973) (citing Home Dev. Co. of
St. Petersburg v. Bursani, 178 So. 2d 113, 117 (Fla. 1965)). Accord Dirico,
154 So. 3d at 357 (“[w]hen a contract is clear and unambiguous, the court is
not at liberty to give the contract any meaning beyond that expressed.”
quoting Walgreen Co. v. Habitat Dev. Corp., 655 So. 2d 164, 165 (Fla. 3d
DCA 1995)); Andersen Windows, Inc. v. Hochberg, 997 So. 2d 1212, 1214
(Fla. 3d DCA 2008) (“Courts, without dispute, are not authorized to rewrite
clear and unambiguous contracts.”).
Beyond its re-write of the Deal Memo’s Term, the trial court
compounded its error by resorting to canons of construction to skew its

28
interpretation in Londra’s favor. A:149–50. But it is well-established that
“[t]he canons of construction cannot be used when the contract is

unambiguous as there is no need for judicial construction.” Gold Crown


Resort Mktg. Inc. v. Phillpotts, 272 So. 3d 789, 792 (Fla. 5th DCA 2019)
(citing with approval Antoniazzi v. Wardak, 259 So. 3d 206, 211 (Fla. 3d DCA

2018)). The parties agreed, and the trial court ruled, that the Deal Memo
was unambiguous. Application of the canons of construction to support the
tortured interpretation Londra advanced was reversible error.

The trial court’s failure to apply — and indeed, its complete alteration
of — the plain language of the unambiguous Deal Memo warrants reversal.
Section 4 of the Deal Memo and section 2 of the Warner Agreement make

clear that the Deal Memo did not expire on February 21, 2021, but rather
extended until six months after the full “Term” of the Warner Agreement. And
the full “Term” of the Warner Agreement extended until — at least — 2024.5
A:189, 196.
At bottom, the trial court’s ruling that the Deal Memo expired on
February 21, 2021 because the “exclusive recording agreement” spanned
only the length of the “Recording Services Term” was contrary to the plain
language of both the Deal Memo and Warner Agreement. That language

5
The Big Ligas Parties also maintain, and argue as a separate point of
reversal below, that its Amendment to the Warner Agreement was valid, and
thus the Warner Agreement’s “Term” was extended, thereby further
extending the Deal Memo. See Point III, infra.
29
was unambiguous: the Deal Memo was extended by the “Term” of any
“recording services agreement” (A:189), and the expressly defined “Term”

of the Warner Agreement included the five-year License Period. A:196. The
trial court’s ruling that the Deal Memo was only extended by the “Recording
Services Term” improperly rewrote this unambiguous language.6

With the five-year License Period properly included, the Deal Memo
currently still has full force and effect. The License Period, and thus the
Warner Agreement’s full “Term”, expires on May 23, 2024 (five years from

release of the first album). See A:342 (admitting album released on May 23,
2019). The Deal Memo, in turn, expires 6 months thereafter, on November
23, 2024. A:189. Because the Deal Memo has not yet expired, the Partial

6
More to the point, the trial court failed to give voice to, and harmonize, all
provisions of the contracts as a whole. Lafont, 271 So. 3d at 5 (“An
interpretation of a contract which gives a reasonable, lawful and effective
meaning to all of the terms is preferred to an interpretation which leaves a
part unreasonable, unlawful or of no effect.”) That is, by narrowly interpreting
the Warner Agreement’s “Term” as the “Recording Services Term” only, and
not the “Licensing Period,” the trial court rendered useless the Deal Memo’s
express grant to Big Ligas of the right to exploit any records, which
necessarily occurs after the record is made. A:188, 193. And to exploit
the works, the Deal Memo obligated Londra to actively promote and perform
any such recordings. A:190–91, 193. Once again, obligations arising after
the record is made. Those rights and obligations are superfluous if the Deal
Memo ends once the record is complete. The trial court’s interpretation,
therefore, is simply incongruous with the Deal Memo’s plain language.
30
Summary Judgment should be reversed and judgment entered in Big Ligas’s
favor.7

B. The Trial Court Examined Extrinsic Evidence and


Improperly Resolved Genuine Issues of Fact Regarding the
Deal Memo and Warner Agreement.

To reach its finding that the “Term” of the Warner Agreement was only

the Recording Services Term, the trial court also made an improper factual

determination that the License Period was not part of the Warner Recording

Agreement. Specifically, the trial court found (based on a misread of the

plain language and resort to extrinsic evidence, in violation of the summary

judgment standard), that “[t]he Warner Agreement’s License Period is not an

‘exclusive recording agreement.’” A:151.

The trial court considered pre-suit emails from the Big Ligas Parties’

attorney purportedly espousing Big Ligas’s understanding of the Warner

Agreement and the Deal Memo’s Term. See A:150, 151–52 n.1. Making

matters worse, the trial court also drew improper inferences from those

7
Big Ligas filed a cross-motion for summary judgment on Londra’s
declaratory judgment action, based on its interpretation that the Deal Memo
was still in effect. A:69–85. And, under the recently amended summary
judgment rule, the Court can grant judgment on this matter of law, sua
sponte. Fla. R. Civ. P. 1.510(f).
31
documents and failed to consider conflicting evidence in the record. All of

this was improper on summary judgment and warrants reversal.

(1) The Parol Evidence Rule Barred the Trial Court’s


Consideration of Extrinsic Facts.

Leaving aside for the moment that the trial court was precluded from
resolving material issues of fact on summary judgment, the parties certainly
agreed, and the trial court so ruled, that the Deal Memo’s plain language was
clear and unambiguous. A:149, 153. And because the Deal Memo is “clear
and unambiguous,” the parol evidence rule confined the trial court’s gaze to
“the four corners of the document[s].” Teague v. Teague, 122 So. 3d 938,

942 (Fla. 4th DCA 2013). Accordingly, the trial court was precluded from
considering extrinsic, parol evidence to rewrite the Deal Memo and Warner
Agreement’s plain terms.
“It is only when a term in a [contract] is ambiguous or unclear that the
trial court may consider extrinsic evidence as well as the parties’
interpretation of the contract to explain or clarify the language.” White v.
White, 141 So. 3d 645, 646 (Fla. 4th DCA 2014). (emphasis added). In other
words, the parol evidence rule “bar[s] the consideration of any extensive [sic]
evidence to explain or vary the express terms of a contract unless an

ambiguity of a contract is first found to fairly appear.” J. C. Penney Co., Inc.


v. Koff, 345 So. 2d 732, 735 (Fla. 4th DCA 1977). Before extrinsic evidence

32
may be introduced, therefore, there must be a threshold showing of
ambiguity. Id.

No such showing was made, of course. Thus, it was error for the trial
court to consider the events surrounding the contracts’ negotiation and
execution, as well as post-execution, out-of-court statements by the Big

Ligas Parties’ attorney. See A:144, 146, 150–52.8


This error alone mandates reversal.

(2) The Trial Court Improperly Resolved Factual Disputes


on Summary Judgment.

The Big Ligas Parties maintain that nothing other than the Deal
Memo’s clear and unambiguous language can be consulted to interpret its
“Term.” And the Deal Memo’s language is clear that its “Term” extends six

months beyond the full “Term” of the Warner Agreement, which expressly
includes both “Recording Services Term” and “Licensing Period.” Reversal
is warranted based on this unambiguous language alone. That much is clear
so far.
But should there be any doubt that the Deal Memo is clear and
unambiguous (contrary to the trial court’s ruling and the position of all

8
“[A]dmission of parol evidence to add a term to [the] written lease which,
whether part of the preliminary negotiations or a separate subsequent
condition, plainly violates … the doctrines of merger and the parol evidence
rule.” Duval Motors Co. v. Rogers, 73 So. 3d 261, 265 (Fla. 1st DCA 2011)
(internal quotation marks omitted) (ellipsis in original) (emphasis added)
(quoting Allett v. Hill, 422 So. 2d 1047, 1050 (Fla. 4th DCA 1982)).
33
parties), factual issues would preclude summary judgment. And to that point,
the trial court not only erred in resolving factual issues based on extrinsic

evidence, but drew improper inferences from the extrinsic evidence even so
far as to disregard evidence that favored the Big Ligas Parties.
In other words, assuming an ambiguity (there was none), the exercise

of resolving the ambiguity, based on parol evidence, should have been left
for a trier of fact and was improper on summary judgment.
THE SUMMARY JUDGMENT BURDEN

Londra, as the moving party, bore the initial burden of showing the
court that there were no genuine issues of material fact that should be
decided at trial. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 607 (11th

Cir. 1991).9 Londra could only carry that burden by “showing” or “pointing
out” to the court that there was an absence of evidence to support the Big
Ligas Parties, the non-moving parties’ case. See Celotex Corp. v. Catrett,
477 U.S. 317, 325 (1986). Londra did not, and cannot, meet that burden.

9
Effective May 1, 2021, the Florida Supreme Court amended Florida Rule of
Civil Procedure 1.510 to “adopt almost all the text of Federal Rule of Civil
Procedure 56,” and expressly incorporate the “federal summary judgment
standard” as “announced in Celotex Corp. v. Catrett, 477 U.S. 317 (1986),
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), and Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986), and more
generally to case law interpreting Federal Rule of Civil Procedure 56.” In re
Amend. To Fla. R. Civ. P. 1.510, 317 So. 3d 72, 81 (Fla. 2021). See also
Fla. R. Civ. P. 1.510 (May 1, 2021), Court Notes to 2021 Amend.
34
And, “[i]n determining the relevant set of facts at the summary
judgment stage, [the court] must view all evidence and make any reasonable

inferences that might be drawn therefrom in the light most favorable to the
non-moving party,” here, the Big Ligas Parties. Penley v. Eslinger, 605
F.3d 843, 848 (11th Cir. 2010) (emphasis added; citation and quotation

omitted).
THE FACTUAL ISSUES PRECLUDING SUMMARY JUDGMENT
In interpreting the Deal Memo’s “Term,” and concluding that the Deal

Memo terminated on February 20, 2021, the trial court relied on pre-suit
emails from the Big Ligas Parties’ attorney purportedly espousing Big Ligas’s
understanding of the Warner Agreement’s Term. See A:150–52. These

emails did not demonstrate the absence of evidence to support Big Ligas’
interpretation of the Deal Memo, however.
The trial court’s interpretations of the emails do not convey their actual
language, and are a result of improper inference drawing. In fact, the
language quoted by the trial court in no way contradicts Big Ligas’s position.
Contrary to the trial court’s inference, for example, Big Ligas’s attorney’s
statement that “the Warner Agreement’s Recording Services Term expires
‘on or about today’ [Nov. 22, 2019]” does not mean that Big Ligas believed
the Warner Agreement’s full “Term” ended that day, only the “Term’s” first
period. A:150–52 (emphasis added). That position is, of course, entirely
consistent with the text of the Warner Agreement’s definition of “Term.”

35
And Big Ligas’s attorney’s statement that the Deal Memo “endures for
a minimum o[f] three years from execution, i.e., until February 20, 2021”

(A:151), is again a correct articulation of the first component of the Deal


Memo’s “Term.” Recall, there are four components to the Deal Memo’s
“Term”:

1) The initial 3-year period;


2) Automatic 1-year renewal periods;
3) The members’ right to terminate after the initial 3-year term, unless

4) Big Ligas enters into “an exclusive recording agreement with a Major
Label,” which extends the Deal Memo’s Term “until six mo[n]ths
following the expiration of the ‘Term’ of … such Recording Agreement.”

A:189.
The email’s statement that the initial period under the Deal Memo’s
“Term” was three years in duration is accurate, and in no way undermines
Big Ligas’s interpretation of the fourth and final component of the Deal
Memo’s “Term,” whether “an exclusive recording agreement” was executed.
The trial court drew improper inferences from the emails that, at
most, should have been left for a trier of fact.
Furthermore, even assuming a proper inference could be drawn from
the emails that the Big Ligas Parties intended the Warner Agreement’s
“Term” to be limited to the “Recording Services Term,” additional evidence

36
in the summary judgment record conflicted with such an inference and thus
required resolution by the trier of fact.

Specifically, counsel for Warner, Giselle de Armendi, Esq., submitted


a declaration confirming that Warner (like Big Ligas) intended for the Warner
Agreement’s “Term” to be precisely what is stated by the plain language of

section 2: the Term is both the “Recording Services Term” and the “License
Period.” A:516–18, 527..
And, as argued during the trial court’s hearing on summary judgment

(see A:410), Londra’s own attorney, Helen Yu, sent a proposal to Warner
for a “recording agreement,” which contained the License Period as a
material term. A:83, 363. That is, in March 2020, in the midst of the parties’

dispute, Londra’s entertainment counsel, Helen Yu, sent a proposal to


Warner for a direct album deal (without the Big Ligas Parties). The proposal
stated that one of the material terms for the proposed “recording agreement”
between Londra and Warner was the “License Period.” A:83. That is a
significant admission by Londra’s own counsel that a “recording agreement”
includes a License Period, and that it is a material term of that agreement.
This is plainly at odds with any other record evidence purporting to suggest

37
that the License Period should not be included in the Warner Agreement and
considered part of its “Term.”10

To be sure, the Big Ligas Parties maintain that the Warner Agreement
is clear and unambiguous that its “Term” includes both “Recording Services
Term” and “Licensing Period.” But, to the extent the trial court found the

Warner Agreement ambiguous and had any doubt about whether the
License Period was part of the Warner Agreement (and thus part of its
“Term”), the trial court should have denied summary judgment because this

was a question of fact. Simply put, once the trial court determined it needed
to look outside of the agreement (i.e, at the emails), the issue should have
been sent to the jury — especially because of the conflicting evidence in the

record (i.e., Yu’s Proposal and Warner’s Declaration).


Reversal is warranted on this basis, as well.

III. THE WARNER AMENDMENT IS VALID AND ENFORCEABLE.

As argued above, the Partial Summary Judgment’s ruling that the Deal
Memo had expired should be reversed based on the trial court’s failure to

10
Yu’s statements and understandings are imputed to Londra as a matter of
law because she was his agent. See, e.g., Lipsig v. Ramlawi, 760 So. 2d
170, 186 (Fla. 3d DCA 2000) (“Professionals, such as lawyers and
accountants are always agents of their clients”); Ruotal Corp., N. W., Inc. v.
Ottati, 391 So. 2d 308, 309 (Fla. 4th DCA 1980) (“It is axiomatic that
knowledge of the agent constitutes knowledge of the principal as long as the
agent received such knowledge while acting within the scope of [her]
authority.”).
38
apply the plain language of the Deal Memo and original Warner Agreement,
which together provide that the Deal Memo extends until 2024. See Point

II.A., supra. And to the extent the Deal Memo and Warner Agreement’s
language was ambiguous (it was not) issues of fact precluded summary
judgment. See Point II.B., supra.

An independent basis for reversal of the Partial Summary Judgment


presents in the trial court’s additional ruling that the Warner Amendment
was unauthorized and unenforceable.

That is, Londra sought summary judgment on two specific requests for
declaration: (i) that the Deal Memo expired in February, 2021, and (ii) that
the Warner Amendment was unenforceable. A:12, 21, 315.

In addition to ruling in Londra’s favor on the first request for declaration,


the trial court also ruled that the Warner Amendment was unauthorized and
thus unenforceable. A:153.
Specifically, the trial court found that the Deal Memo’s “provisions
plainly require Big Ligas to secure Londra’s approval before entering into any
deal, such as the Warner Amendment, relating to the recording, distribution
or sale of Londra’s musical Works.” A:153.
This additional, independent declaration is erroneous for two reasons.
First, the trial court could not declare the Warner Amendment unenforceable
because Big Ligas’s counterparty, Warner, was not a party to the action.

39
Without this indispensable party, the trial court could not rule on the Warner
Agreement’s enforceability.

Second, the plain language of the Deal Memo grants to Big Ligas the
discretion and power to enter into recording agreements without Londra’s
consent.

And, of course, to the extent any ambiguity appeared in the Deal Memo
relative to Big Ligas’s authority to enter into agreements, factual issues
precluded summary judgment on this issue.

A. Londra Failed to Join Warner, an Indispensable Party.

“An indispensable party is one whose interest in the controversy makes


it impossible to completely adjudicate the matter without affecting either that
party's interest or the interests of another party in the action.” Fla. Dept. of

Revenue v. Cummings, 930 So. 2d 604, 607 (Fla. 2006). “The general rule
in equity is that all persons materially interested, either legally or beneficially,
in the subject-matter of the suit, must be made parties either as complainants
or defendants, so that a complete decree may be binding upon all parties.”
Id.
It cannot be denied that Warner has a legal interest in the Warner

Agreement, as a party thereto. See A:248 (Warner Amendment, bearing


Warner Music Latina’s signature). The Partial Summary Judgment’s
declaration that Big Ligas was unauthorized to enter into the Warner

Agreement with Warner necessarily affects Warner’s rights and interests

40
as a party to the Warner Amendment. Warner is, therefore, an
indispensable party. See, e.g., Allman v. Wolfe, 592 So. 2d 1261, 1263 (Fla.

2d DCA 1992) (“In an action for rescission of a transaction, the parties to the
transaction are indispensable.”); Lee v. Cole, 46 So. 3d 612, 613 (Fla. 2d
DCA 2010) (grantee under deed was indispensable party to action that

declared deed void); Loxahatchee River Envtl. Control Dist. v. Martin County
Little Club, Inc., 409 So. 2d 135, 137 (Fla. 4th DCA 1982) (party to escrow
agreement and underlying property development agreement indispensable

party).
Because Warner was an indispensable party to Londra’s declaratory
action to void the Warner Amendment, the Partial Summary Judgment must

be reversed.

B. The Deal Memo’s Plain Language Grants Big Ligas


Exclusive Authority to Enter Recording Agreements Without
Londra’s Assent.
(1) The Deal Memo’s Plain Language.

Londra’s consent to third-party recording agreements is not required


by the Deal Memo. The applicable provisions of the Deal Memo concerning
Big Ligas Parties’ authority to enter into third-party recording agreements are

as follows.
Section 2 of the Deal Memo grants Big Ligas ownership of “the Works
and all copyrights and all other neighboring and intellectual property rights

41
therein,” and further provides that Big Ligas’s “exclusive right to exploit the
Works will be perpetual.” A:188.

And consistent therewith, section 3(a) of the Deal Memo grants


Salazar and Oviedo, the Managing Members of Big Ligas, “without
limitation … the power to … enter into recording agreements with third

party record labels.” A:188–89. (emphasis added). .


Section 8 of the Deal Memo obligates Londra to execute any document
the third party record label may require to facilitate the agreement with Big

Ligas. A:190–91. Section 8 further requires Londra to “comply with all


obligations under any third party agreement between [Big Ligas] and any
third party insofar as it concerns [Londra] so that [Big Ligas] may fulfill its

obligations to such third party.” Id.


The trial court did not apply the plain language of sections 3(a) and 8,
which unambiguously grant broad and unfettered authority (power) to the Big
Ligas Parties to enter into third-party recording agreements. Instead, it relied
on sections of the Deal Memo unrelated to third-party recording
agreements, which governed Londra’s creation of Works and exploitation of
Goods.
That is, the trial court relied on Section 3(b) of the Deal Memo, which
states Big Ligas may “distribute, license, sell or otherwise exploit Goods
subject to [Londra’s] and [Salazar and Oviedo’s] mutual approval.” A:189.
“Goods” is defined as “items and materials embodying Works” (A:192), but

42
they are not the “Works” themselves, i.e., the “musical compositions,
recordings, performances, endorsements,” etc. A:193. The Warner

Amendment concerns Londra’s “Works,” i.e., recordings, not “Goods.


A:247–48. Reliance on Section 3(b) was error.
More, and significantly so, “Works” and “Goods” are not “recording

agreements.” Indeed, Section 3(a) specifically sets them apart:

[Salazar and Oviedo] will be responsible for the administration of


the affairs of [Big Ligas] including without limitation the power
to, and to authorize others to, sell, license or otherwise exploit
Works and Goods, and to enter into recording agreements
with third party record labels respecting Artist’s exclusive
recording services.

A:188–89. Thus, under Section 3(a), Big Ligas has unlimited power to sell,
license, or exploit Works and Goods and separately also has unlimited power

to enter into recording agreements with third party record labels.


The trial court also erroneously relied on section 14(f) of the Deal
Memo, which defines a “Joint Venture Business Plan,” which was to contain
“a budget, timeline and other specifications for the creation of Works and the
marketing and exploitation of Goods, as may be revised from time to time
subject to our mutual approval.” A:192. The trial court also looked to the

language of section 3(a) stating the members would “develop together Joint
Venture Business Plans,” which would “be subject to [Londra’s] review and
approval.” A:188.

43
These sections on the Joint Venture Business Plan, by their plain
terms, do not mention or concern recording agreements with third-party

record labels. The Joint Venture Business Plan concerns creation of


“Works,” and marketing of the “Goods,” but it does not limit Big Ligas’s right
to enter into recording agreements for Londra’s Works.

Indeed, to interpret these unrelated sections of the Deal Memo as


conditioning the Big Ligas Parties’ power to enter into recording agreements
on Londra’s approval would be to rewrite section 3(a)’s express language

that such power was “without limitation” and “exclusive.” A:188–89.

Plain Language of Section 3(a). Trial Court’s Interpretation.

Salazar and Oviedo “will be Salazar and Oviedo “will be


responsible for the administration of responsible for the administration of
the affairs of the Joint Venture the affairs of the Joint Venture
including without limitation the including without limitation
power to … enter into recording subject to [Londra’s] review and
agreements with third party record approval the power to … enter into
labels respecting Artist’s exclusive recording agreements with third
recording services.” party record labels respecting
Artist’s exclusive recording
services.”

Once again, the trial court’s Partial Summary Judgment has rewritten
the Deal Memo’s plain terms. This error warrants reversal and remand. The
plain language of the Deal Memo authorized the Big Ligas Parties’ to “enter

44
into” the Warner Amendment — without Londra’s prior approval. Thus, the
Warner Amendment is valid and enforceable.

(2) Alternatively, any Ambiguity Should be Resolved by


the Trier of Fact.

To the extent that the Deal Memo’s sections granting the Big Ligas
Parties “exclusive” authority “without limitation” to enter into record

agreements conflict with its sections allowing Londra to approve creative


aspects of the Joint Venture Business Plan, then the Deal Memo would
present an “internal conflict, a paradigmatic ‘ambiguity,’” which would be

resolvable “only by evidence beyond the words themselves.” Land O'Sun


Realty Ltd. v. REWJB Gas Invs., 685 So. 2d 870, 872 (Fla. 3d DCA 1996).
In other words, if the trial court is correct that Londra’s right to approve

the business plan also concerns the Big Ligas’ Parties exclusive and
unlimited right to enter into recording agreements with third parties, then the
Partial Summary Judgment must be reversed for further proceedings to
resolve the ambiguity created by these conflicting provisions. Palazzolo v.
Fessler, 680 So. 2d 607, 608 (Fla. 2d DCA 1996) (“When the wording of an
agreement is ambiguous and parties suggest different interpretations, the

issue of proper interpretation becomes one of fact precluding grant of


summary judgment.”).

45
(3) The Deal Memo’s Grant of Exclusive Authority to Enter
into Third-Party Recording Agreements is Not Against
Public Policy.

The Partial Summary Judgment also ruled in the alternative that


“[e]ven if the language of the relevant contracts supported Big Ligas’
proffered interpretation of the Deal Memo’s term,” the Deal Memo’s grant to
the Big Ligas Parties of exclusive authority to enter into the Warner

Amendment without Londra’s consent, “could not be enforced because it


would constitute an illegal restraint of trade and lead to absurd results.”
A:153. The Partial Summary Judgment provides no rationale or authority for
this ruling.
Indeed, there is no such authority.
Londra relied on Section 542.18, Florida Statutes, to argue such
exclusive authority was an illegal restraint of trade (A:20), but that statute is
part of the Florida Antitrust Act of 1980 (§ 542.15, Fla. Stat.), and thus does
not apply to routine contract disputes between the parties thereto. See
§ 542.16, Fla. Stat. (“[T]he purpose of this act to complement the body of
federal law prohibiting restraints of trade or commerce in order to foster
effective competition.”). See also Ohio v. Am. Express Co., 138 S. Ct. 2274,

2283–84 (2018) (“Typically only … restraints imposed by agreement


between competitors,” or restraints that have “a substantial anticompetitive

46
effect that harms consumers in the relevant market” are unreasonable and
thus unlawful.).11

The Deal Memo, as it concerns the Warner Amendment, is not in


violation of antitrust laws for unreasonably restraining trade in any market or
for harming any customers.

And the trial court’s ruling that the Deal Memo’s plain terms granting
the Big Ligas Parties exclusive authority to enter third-party recording
agreements, like the Warner Amendment, create an “absurd result” is wrong

for two reasons.


First, the absurd result canon is inapplicable to this unambiguous Deal
Memo. Gold Crown Resort Mktg. Inc. v. Phillpotts, 272 So. 3d 789, 792 (Fla.

5th DCA 2019).


Second, there is no absurdity here. Londra agreed to let the Big Ligas
Parties focus on the “administration of the affairs of” Big Ligas (A:188),
including promoting and distributing Londra’s Works, while Londra would
focus on creating those Works. Anything falling in the creative sphere
required Londra’s assent. This was the division of labor and authority that
Londra and the Big Ligas Parties contracted for.

11
The Florida legislature has adopted as the law of Florida the body of
antitrust law developed by the federal courts under the Sherman Act. St.
Petersburg Yacht Charters, Inc. v. Morgan Yacht, Inc., 457 So. 2d 1028,
1032 (Fla. 2d DCA 1984).
47
And the trial court’s interpretation of the Deal Memo as giving the Big
Ligas Parties the “ability to extend the Deal Memo any number of times,

including in perpetuity,” is not based on the plain language of the contract.


A:149 (emphasis added).12 The “Term” of the Deal Memo is extended only
“If during the Term,” Big Ligas enters into a Recording Agreement with a third

party. A:189. Thus, any extension of the Term of the Deal Memo is subject
to a condition precedent over which Big Ligas does not have unilateral
control. Big Ligas alone cannot enter into a Recording Agreement, which is

a standalone, separate contract negotiated and entered into with a third


party, such as Warner.13

12
The concept that contracts “in perpetuity are not favored,” by the way,
applies only to real property interests, which are not at play here. See A:149
(Partial Summary Judgment citing Miren Intern. Lodging Corp. v. Manley,
982 So. 2d 1203 (Fla. 5th DCA 2008)). The Florida Supreme Court has
made clear that “[t]he rule against perpetuities ... is ‘a rule of property law,
not of contract law.’” Old Port Cove Holdings, Inc. v. Old Port Cove Condo.
Ass'n One, Inc., 986 So. 2d 1279, 1287–88 (Fla. 2008).
13
To be clear, the Partial Summary Judgment’s ruling on “restraint of trade”
and resort to public policy arguments concerned only the Warner
Amendment (i.e., Big Ligas’s authority to enter into the Amendment without
Londra’s assent). The trial court did not extend its ruling to any agreement
that required or had Londra’s consent — i.e., the Deal Memo and the original
Warner Agreement. In other words, the trial court’s (erroneous) finding that
the Warner Amendment was unenforceable on public policy grounds has
nothing to do with the enforceability of the Deal Memo and the Warner
Agreement, both of which Londra unquestionably consented to and which
run through November 23, 2024.
48
CONCLUSION

Both declarations of the Partial Summary Judgment should be


reversed. First, the Deal Memo’s plain language makes clear that it does

not expire until 2024 — six months after the Warner Agreement’s five-year
License Period. The trial court impermissibly wrote out the License Period,
and did so by relying on extrinsic evidence outside the four-corners of the

contracts and resolving material issues of fact.


Second, the Warner Amendment was not unenforceable. As a
threshold matter, the trial court failed to join Warner as an indispensable
party before voiding the Amendment to which it was a party. And, on the
merits, the plain language of the Deal Memo granted Oviedo and Salazar
the “power,” “without limitation,” to enter into recording agreements without
Londra’s express assent. And no authority supports the trial court’s ruling
that such a provision was against public policy. Finally, to the extent that
provisions of the Deal Memo were internally inconsistent, such ambiguity
presents genuine issues of fact appropriate for resolution only by the trier of
fact.
Reversal and remand is warranted for a declaration that the Deal

Memo still in force, and the Warner Amendment is valid.

49
Respectfully submitted,

Elliot B. Kula Jesus E. Cuza


Florida Bar No. 003794 Florida Bar No. 428991
W. Aaron Daniel Monica V. Castro
Florida Bar No. 99739 Florida Bar No. 22976
KULA & ASSOCIATES, P.A. Annelise Del Rivero
11900 Biscayne Blvd., Suite 310 Florida Bar No. 1003234
Miami, Florida 33181 HOLLAND & KNIGHT LLP
Telephone: (305) 354-3858 701 Brickell Avenue, Suite 3300
eservice@kulalegal.com Miami, Florida 3313
elliot@kulalegal.com Telephone: (305) 374-8500
aaron@kulalegal.com jesus.cuza@hklaw.com
Counsel for Big Ligas, LLC monica.castro@hklaw.com
annelise.delrivero@hklaw.com
Counsel for Big Ligas, LLC, Cristian
Salazar, and Daniel Oviedo

By: /s/ Elliot B. Kula By: /s/ Jesus E. Cuza


Elliot B. Kula Jesus E. Cuza

50
CERTIFICATE OF SERVICE

I certify that, on October 4, 2021, pursuant to Fla. R. Gen. Prac. & Jud.

Admin. 2.516, this Initial Brief was served via the Florida courts ePortal on:

James G. Sammataro, Esq. Richard C. Wolfe, Esq.


Brendan S. Everman, Esq. WOLFE LAW MIAMI, P.A.
PRYOR CASHMAN LLP 175 SW 7th Street, Suite 2410
201 South Biscayne Blvd., Ste. 2700 Miami, Florida 33130
Miami, FL 33131 rwolfe@wolfemiamilaw.com
jsammataro@pryorcashman.com Attorneys for Big Ligas, LLC,
beverman@pryorcashman.com Cristian Salazar, and Daniel Oviedo
ksuarez@pryorcashman.com
Attorneys for Paulo Londra

Henry L. Self III, Esq.


HARDER LLP
8383 Wilshire Blvd. Ste. 526
Beverly Hills, CA 90211
hself@harderllp.com

/s/ Elliot B. Kula


Elliot B. Kula

CERTIFICATE OF COMPLIANCE
I hereby certify that this brief was prepared in Arial, 14-point font, in

compliance with Rule 9.045(b) of the Florida Rules of Appellate Procedure,

and does not exceed 13,000 words, in compliance with Rule 9.210(a)(2)(B).

/s/ Elliot B. Kula


Elliot B. Kula

51

You might also like