Opinion
Index No.: 653118/2014
02-06-2020
LUKASZ GOTTWALD p/k/a DR. LUKE, KASZ MONEY, INC., and PRESCRIPTION SONGS, LLC, Plaintiffs, v. KESHA ROSE SEBERT p/k/a KESHA, Defendant.
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PART IAS MOTION 54EFM
PRESENT: HON. JENNIFER G. SCHECTER Justice LUKASZ GOTTWALD, KASZ MONEY, INC., PRESCRIPTION SONGS, LLC, Plaintiffs, - v - KESHA SEBERT, Defendant. INDEX NO. 653118/2014MOTION DATE __________ MOTION SEQ. NO. 045
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 045) 1693, 1694, 1695, 1696, 1697, 1698, 1699, 1700, 1701, 1702, 1703, 1704, 1705, 1706, 1707, 1708, 1709, 1710, 1711, 1712, 1713, 1714, 1715, 1716, 1717, 1718, 1719, 1720, 1721, 1722, 1723, 1724, 1725, 1726, 1727, 1728, 1729, 1730, 1731, 1732, 1733, 1734, 1735, 1736, 1737, 1738, 1739, 1740, 1741, 1742, 1743, 1744, 1745, 1746, 1747, 1748, 1749, 1750, 1751, 1752, 1753, 1754, 1755, 1756, 1757, 1758, 1759, 1760, 1761, 1762, 1763, 1764, 1765, 1766, 1767, 1768, 1769, 1770, 1771, 1772, 1773, 1774, 1775, 1776, 1777, 1778, 1779, 1780, 1781, 1782, 1783, 1784, 1785, 1786, 1787, 1788, 1789, 1790, 1791, 1792, 1793, 1794, 1795, 1796, 1797, 1798, 1799, 1800, 1801, 1802, 1803, 1804, 1805, 1806, 1807, 1808, 1809, 1810, 1811, 1812, 1813, 1814, 1815, 1816, 1817, 1818, 1819, 1820, 1821, 1822, 2090, 2091, 2092, 2093, 2094, 2095, 2096, 2097, 2098, 2099, 2100, 2101, 2102, 2103, 2104, 2105, 2106, 2107, 2108, 2109, 2110, 2111, 2112, 2113, 2114, 2115, 2116, 2117, 2118, 2119, 2120, 2121, 2122, 2123, 2124, 2125, 2126, 2127, 2128, 2129, 2130, 2131, 2132, 2133, 2134, 2135, 2136, 2137, 2138, 2139, 2140, 2141, 2142, 2143, 2144, 2145, 2146, 2147, 2148, 2149, 2150, 2151, 2152, 2153, 2154, 2155, 2156, 2157, 2158, 2159, 2160, 2161, 2162, 2163, 2164, 2165, 2166, 2167, 2168, 2169, 2170, 2171, 2172, 2173, 2174, 2175, 2176, 2177, 2178, 2179, 2180, 2181, 2182, 2183, 2184, 2185, 2186, 2187, 2188, 2189, 2190, 2191, 2192, 2193, 2194, 2195, 2196, 2197, 2198, 2199 were read on this motion to/for SUMMARY JUDGMENT (AFTER JOINDER . The following e-filed documents, listed by NYSCEF document number (Motion 046) 1823, 1824, 1825, 1826, 1827, 1828, 1829, 1830, 1831, 1832, 1833, 1834, 1835, 1836, 1837, 1838, 1839, 1840, 1841, 1842, 1843, 1844, 1845, 1846, 1847, 1848, 1849, 1850, 1851, 1852, 1853, 1854, 1855, 1856, 1857, 1858, 1859, 1860, 1861, 1862, 1863, 1864, 1865, 1866, 1867, 1868, 1869, 1870, 1871, 1872, 1873, 1874, 1875, 1876, 1877, 1878, 1879, 1880, 1881, 1882, 1883, 1884, 1885, 1886, 1887, 1888, 1889, 1890, 1891, 1892, 1893, 1894, 1895, 1896, 1897, 1898, 1899, 1900, 1901, 1902, 1903, 1904, 1905, 1906, 1907, 1908, 1909, 1910, 1911, 1912, 1913, 1914, 1915, 1916, 1917, 1918, 1919, 1920, 1921, 1922, 1923, 1924, 1925, 1926, 1927, 1928, 1929, 1930, 1931, 1932, 1933, 1934, 1935, 1936, 1937, 1938, 1939, 1940, 1941, 1942, 1943, 1944, 1945, 1946, 1947, 1948, 1949, 1950, 1951, 1952, 1953, 1954, 1955, 1956, 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965, 1966, 1967, 1968, 1969, 1970, 1971, 1972, 1973, 1974, 1975, 1976, 1977, 1978, 1979, 1980, 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030, 2031, 2032, 2033, 2034, 2035, 2036, 2037, 2040, 2041, 2050, 2051, 2052, 2053, 2054, 2055, 2056, 2057, 2058, 2059, 2060, 2061, 2062, 2063, 2064, 2065, 2066, 2067, 2068, 2069, 2070, 2071, 2072, 2073, 2074, 2075, 2076, 2077, 2078, 2079, 2080, 2081, 2082, 2083, 2084, 2085, 2086, 2087, 2088, 2089, 2200, 2201, 2202, 2203, 2204, 2205, 2206, 2207, 2208, 2209, 2210, 2211, 2212, 2213, 2214, 2215 were read on this motion to/for PARTIAL SUMMARY JUDGMENT . Upon the foregoing papers it is ordered that motion sequence numbers 045 and 046 are consolidated for disposition and are decided in accordance with the accompanying decision and order. It is further ordered that plaintiffs file a proposed judgment to the clerk as to the monetary relief awarded. 2/6/2020
DATE
/s/ _________
JENNIFER G. SCHECTER, J.S.C. NYSCEF DOC. NO. 2278
DECISION & ORDER
JENNIFER G. SCHECTER, J.:
In this defamation and breach-of-contract action, plaintiffs Lukasz Gottwald (Gottwald), Kasz Money, Inc. (KMI) and Prescription Songs, LLC (Prescription) move for partial summary judgment against defendant Kesha Rose Sebert (Kesha) (seq. 045). Kesha opposes and moves for partial summary judgment against plaintiffs, which they oppose (seq. 046). Plaintiffs' motion is granted in part and defendant's motion is denied.
BACKGROUND
Gottwald, known professionally as "Dr. Luke," is a songwriter and music producer. In 2005, he heard Kesha's demo tape and decided that he wanted to work with her. After meeting, Gottwald and Kesha each retained independent entertainment counsel to negotiate an agreement for KMI, a corporation controlled by Gottwald, to record and produce Kesha's music. Kesha and KMI executed a written agreement dated September 26, 2005 (Dkt. 1742 [the KMI Agreement]). The KMI Agreement obligates Kesha to provide exclusive recording services to KMI for a specified term, which at KMI's election could be extended through the release of her sixth album, and to engage Gottwald as producer for at least six recordings on each album for which he would receive royalties (Dkt. 1694 at 10; see Dkt. 1742 at 3-6).
Shortly after entering into the KMI Agreement, on October 5, 2005, Gottwald and Kesha attended Nicky Hilton's birthday party at a Los Angeles nightclub. They both drank at the party. On the way out of the club, Kesha alleges that Gottwald gave her a "sober pill," which was really a roofie (Dkt. 252 at 22; Dkt. 1703 at 12). They proceeded to an afterparty at Paris Hilton's house where Kesha had more to drink. Kesha became very ill possibly because of food poisoning, alcohol or a roofie. After vomiting in a closet, Kesha was kicked out of the party. Kesha only has a vague recollection of what happened next. It is undisputed that Gottwald took Kesha to his hotel--he says they walked; she thinks they took a car--and that she slept in the bed. Gottwald insists that he slept, fully clothed, on the couch and that there was no sexual contact whatsoever between them.
The next morning, Gottwald got up before Kesha because he had to go to the recoding studio. Before leaving, Gottwald told Kesha, who was feeling very sick, that she could stay at the hotel for the rest of the day. Though she has no memory of Gottwald assaulting her, Kesha maintains that he raped her during the night because she felt ripped and sore and experienced the after effects of a roofie (see Dkt. 1839 at 61, 75).
Many facts related to the events of October 5 and 6, 2005 are disputed. The court does not know what transpired between the parties and is not tasked with fact finding. That is solely the job of the jury.
On Gottwald's recommendation, Kesha subsequently hired David Sonenberg of DAS Communications Ltd. as her manager. Sonenberg immediately tried to renegotiate the KMI Agreement because he secured a deal for Kesha with Warner Brothers. Gottwald objected to the Warner Brothers arrangement, asserting that it contravened the terms of the KMI contract. Kesha hired lawyers who challenged the validity of the KMI Agreement and threatened Gottwald with bad publicity if he refused to give in to Kesha's demands (see Dkt. 1764 at 3 ["Kesha has advised us that she has every intention of bringing all of your client's prior behavior to light in the event he continues to try and enforce what he believes, incorrectly, are his contractual rights"]). The KMI Agreement, however, was not renegotiated.
In 2008, Kesha changed representation and began working with Gottwald. She hired a new lawyer, who helped her negotiate and execute amendments to the KMI Agreement, including a letter agreement that capped KMI's ability to extend its exclusive arrangement with Kesha to the release of her fifth album instead of her sixth (Dkt. 1743 [2008 amendment]; Dkt. 1744 [2009 amendment]). Kesha also later agreed to two additional contracts with plaintiffs: a Co-Publishing and Exclusive Administration Agreement, dated November 26, 2008 (Dkt. 1496 [the Prescription Agreement]), governing the rights of Prescription, an LLC controlled by Gottwald, to publish her music and an agreement dated January 27, 2009 (the RCA Agreement), between KMI and RCA, a Sony Music label (Dkt. 1733 at 64 [the Assent]).
In 2010, after releasing her fist album, Animal, which included hit songs such as "Tik Tok," Kesha achieved tremendous success. It is undisputed that Gottwald and Kesha worked together closely on the album. They were still, however, dealing with the fallout from disputes involving Sonenberg, who had sued Gottwald (see DAS Communications, Ltd. v Sebert, Index No. 650457/2010 [Sup Ct, NY County]). It was alleged that Kesha, through her mother Pebe, told Sonenberg that, on the night of October 5, 2005, Gottwald drugged and raped her. On June 16, 2011, at her deposition in that action, Kesha testified under oath that (1) Gottwald never gave her a roofie, (2) she did not remember telling Pebe that she woke up in Gottwald's bed without memory of what had occurred the night before and (3) she never had "an intimate relationship with Gottwald" (Dkt. 1539 at 57-58, 61). She further testified that Gottwald "never made sexual advances" at her (id. at 62). Pebe testified at her deposition, on October 18, 2011, that before meeting Sonenberg she was unaware of Kesha having had "any kind of sexual relationship" with Gottwald or that Gottwald had given Kesha drugs of any kind, including a date-rape drug (see id. at 67-68).
At their depositions in this action, Kesha and Pebe explained their prior testimony. It is up to the jury to decide what testimony is true.
In late 2011 and early 2012, Kesha again sought to renegotiate her contracts with Gottwald. She hired counsel and did not show up for her recording sessions. Kesha's management team described their efforts as a "jihad" against Gottwald who was "no friend of an artist" (see Dkt. 1781). In an April 2, 2012 email, they wrote that they should "battle [Gottwald] in the press" and take "down his business" (Dkt. 1783). In a May 25, 2012 email, her management wrote that Kesha despised Gottwald and that, after completion of the album that was underway, they wanted to "ruin" him (see Dkt. 1782).
In 2013, after Gottwald did not accede to Kesha's demands, she stopped working with him. She refused to deliver new compositions pursuant to the Prescription Agreement and stopped paying royalties owed under the KMI Agreement. Kesha hired two new lawyers, Mark Geragos and Kenneth Meiselas.
On October 30, 2013, Pebe indicated that, unless Gottwald released Kesha from all legal contracts and returned all of Pebe's publishing, she was going to "tell the truth" and make "really public" that Gottwald drugged and date raped Kesha (see Dkt. 1784). On December 30, 2013, Pebe emailed Gottwald's business partners that "Dr. Luke abused Kesha both physically and mentally" (see Dkt. 1725 [the December 2013 Email]). She then sent the email to Michael Eisele "the blogger who . . . started the whole 'Free Kesha' thing" (see Dkt. 1786; Dkt. 1798). Thereafter, Pebe and Eisele discussed edits to a message that he planned to send Gottwald, RCA and Sony on behalf of the Free Kesha movement, urging them to "take the necessary action" to end Kesha's "horrendous contract" that was "signed by an 18 year old girl, who . . . already suffered . . . for her mistake" (Dkt. 1799).
During the summer of 2014, Meiselas met with Sony's general counsel and provided her with a draft complaint alleging that Gottwald had drugged and raped Kesha in 2005. Meiselas informed Sony that the complaint would be filed if Sony did not let Kesha out of her contract. Kesha's team, including her lawyers and the public relations firm SS KS LLC (Sunshine Sachs), prepared a press plan related to their impending litigation with Gottwald (see Dkt. 1712 [Press Plan]). The Press Plan stated: "Our goal is to help extricate CLIENT K from her current professional relationship with PERSON L by inciting a deluge of negative media attention and public pressure on the basis of the horrific personal abuses presented in the lawsuit" (id. at 2). The press announcements were timed "to achieve the maximum level of negative publicity" (id.).
On October 14, 2014, the parties sued each other in separate actions in separate states (see Dkt. 1). Kesha sued Gottwald in California (the California Action), alleging, among other things, sexual assault, sexual harassment, gender violence and unfair competition in violation of California law (Dkt. 1978). Gottwald commenced this case. After the California judge determined that the governing contracts' forum-selection clauses mandated proceeding in New York, Kesha withdrew the California Action. Plaintiffs filed their first amended complaint in December 2014 (Dkt. 39) and in July 2015, Kesha filed counterclaims against plaintiffs and Sony (Dkt. 252), which plaintiffs and Sony moved to dismiss.
In September 2015, Kesha moved for a preliminary injunction, seeking an order permitting her to make music without plaintiffs and releasing her from her agreements with them. About a month later, Kesha amended her counterclaims to include, among other causes of actions, claims that she had previously brought in the California Action (Dkt. 336), which plaintiffs and Sony then moved to dismiss. In February 2016, after oral argument, the court denied Kesha's preliminary-injunction motion and reserved on the dismissal motions (see Dkt. 496 [2/19/16 Tr.]).
By order dated April 6, 2016, the court dismissed all but one of Kesha's counterclaims and denied leave to amend because even if the sexual assault occurred, the counterclaims could not be maintained. Some claims were time barred and there was no subject matter jurisdiction over others (Dkt. 504 [the April 2016 Decision] at 16-23). Kesha appealed denial of the injunction and dismissal of her counterclaims but later withdrew both appeals (see Dkt. 1154; Dkt. 1155).
Abandonment of her appeals is a fact that a jury could reasonably consider in assessing whether the California complaint was a sham or whether its contents are privileged.
In January 2017, plaintiffs moved for leave to file a second amended complaint and Kesha moved for leave to file amended counterclaims. The court granted plaintiffs' motion without opposition (Dkt. 794). By order dated March 20, 2017, the court denied Kesha's motion, holding that her proposed amended counterclaims lacked merit (Dkt. 809 [the March 2017 Decision]). The court held that Kesha had failed to perform under the KMI Agreement (id. at 5-7) and that it was not legally impossible for her to perform under the KMI and Prescription Agreements (id. at 8). The Appellate Division affirmed (161 AD3d 679 [1st Dept 2018]).
By order dated August 31, 2018, the court granted plaintiffs' motion to file a third amended complaint (TAC), holding that a reasonable finder of fact could conclude that "the California complaint was a sham maliciously filed solely to defame plaintiffs" (Dkt. 1537 [the August 2018 Decision] at 9, affd 172 AD3d 445 [1st Dept 2019]). The TAC contains four causes of action: (1) defamation related to Kesha's assertions that Gottwald sexually assaulted her, (2) defamation related to a statement that Kesha made to Lady Gaga that Gottwald raped Katy Perry, (3) breach of the KMI Agreement and (4) breach of the Prescription Agreement (Dkt. 1539). Kesha answered the TAC and asserted 39 affirmative defenses in addition to her remaining counterclaim (Dkt. 1540). Plaintiffs filed a note of issue in September 2018, requesting a jury trial (Dkt. 1541).
The parties now move for partial summary judgment.
DISCUSSION
Summary judgment may only be granted if there are no material disputed facts (Alvarez v Prospect Hosp., 68 NY2d 320, 325 [1986]). The moving party bears the burden of making a prima-facie showing of entitlement to summary judgment as a matter of law (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Failure to make such a showing requires denial of the motion regardless of the sufficiency of the opposing papers (Ayotte v Gervasio, 81 NY2d 1062, 1063 [1993]). If a prima-facie showing has been made, then the burden shifts to the opposing party to produce evidence sufficient to establish the existence of a material question of fact (Alvarez, 68 NY2d at 324; Zuckerman, 49 NY2d at 562). The evidence must be construed in the light most favorable to the opposing party and the motion must be denied if there is any doubt as to the existence of a triable issue (Rotuba Extruders, Inc. v Ceppos, 46 NY2d 223, 231 [1978]; Martin v Briggs, 235 AD2d 192, 196 [1st Dept 1997]). Mere conclusions, unsubstantiated allegations or expressions of hope, however, are insufficient to defeat summary judgment (Zuckerman, 49 NY2d at 562). DEFAMATION
Defamation is publication of a false statement about a person tending "to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion" of the plaintiff "in the minds of right-thinking persons" and deprive that individual of "friendly intercourse in society" (Frechtman v Gutterman, 115 AD3d 102, 104 [1st Dept 2014]). A defamation plaintiff must establish that a false statement was published to a third party without privilege or authorization and that it caused harm, unless the statement is defamatory per se in which case it is actionable regardless of harm (Stepanov v Dow Jones & Co., 120 AD3d 28, 34 [1st Dept 2014])
A false accusation of rape, a serious crime, is defamation per se (see Thomas H. v Paul B., 18 NY3d 580, 584 [2012]; Liberman v Gelstein, 80 NY2d 429, 435 [1992]; see also Sprewell v NYP Holdings, Inc., 1 Misc 3d 847, 852 [Sup Ct, NY County 2003]; Goldman v Reddington, 2019 WL 4736803 [EDNY Sep. 27, 2019]; Franco v Diaz, 51 F Supp 3d 235, 244 [EDNY 2014]; Restatement (Second) of Torts § 571 cmt g [1977]). Statements that Gottwald Drugged , Raped and Sexually Assaulted Kesha
Both parties move for partial summary judgment on legal issues that will narrow the scope of the trial. In seeking only partial summary judgment, they acknowledge the obvious: that this case cannot be finally resolved without an assessment of credibility. It will be incumbent on a jury to decide what has been sufficiently proven. If the jury ultimately finds that statements Kesha and her agents made are not false, she cannot be liable for defamation under any circumstances and the defamation-related issues that follow would be academic.
Proof of Fault: Actual Malice and Gross Irresponsibility
Defamation jurisprudence has evolved from the tension between balancing the First Amendment's right of freedom of speech with protecting an individual from harm caused by dissemination of damaging, false information (Gertz v Robert Welch, Inc., 418 US 323, 325 [1974]). To ensure robust discourse about certain matters without fear and prior restraint, courts have adopted certain safeguards applicable under certain circumstances. Not all false statements are actionable (id. at 341).
Though some proof of fault is required, states are generally free to define the appropriate standard of liability for defamatory falsehoods related to private individuals even if the statements relate to a matter of public interest (Gertz, 418 US at 347). The United States Constitution, however, mandates more latitude for false statements related to public figures who are less vulnerable because they "usually enjoy significantly greater access to the channels of communication" and "have a more realistic opportunity to counteract false statements than private individuals normally enjoy" (id. at 344; see Kipper v NYP Holdings Co., Inc., 12 NY3d 348, 355 [2009] [falsehoods related to public figures are "inevitable in free debate" so publishers must have "breathing space"]). To recover for defamation, a public figure must not only establish that false statements were made, but must also prove, by clear and convincing evidence, that they were communicated with "actual malice"--that is knowledge or reckless disregard of their falsity (Kipper, 12 NY3d at 353, citing New York Times Co. v Sullivan, 376 US 254, 279-80 [1964]).
Public figures are those who have "assumed roles of especial prominence in the affairs of society" (Gertz, 418 US at 345). Few people attain "positions of such pervasive power and influence that they are deemed public figures for all purposes" (id.; see Waldbaum v Fairchild Publications, Inc., 627 F2d 1287, 1292 [DC Cir 1980], cert. denied 449 US 898 [1980]). More commonly "those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved" (Gertz, 418 US at 345).
Kesha urges that Gottwald is a public figure and can only recover for defamation if statements asserting that he drugged, raped and sexually assaulted her were made with actual malice. Gottwald certainly is not a "general public figure." Although he may be well known in music-industry circles, he has never been a household name or achieved general pervasive fame and notoriety in the community (Gertz, 418 US at 351-52; Waldbaum, 627 F2d at 306).
Nor is he a limited-purpose public figure. A person is a limited-purpose public figure "regarding a particular issue or subject when he or she voluntarily injects him or herself into a public controversy with a view toward influencing it" (Krauss v Globe Intl., Inc., 251 AD2d 191, 192 [1st Dept 1998]). Gottwald did not thrust himself into the vortex of the public issues or engage the public's attention on the important public matters implicated by the defamatory statements (see Time, Inc. v Firestone, 424 US 448, 454-55 [1976] [public controversy alone insufficient; plaintiff must assume "special prominence" in resolution of "public questions"]; see also Gubarev v Buzzfeed, Inc., 354 F Supp 3d 1317, 1328 [SD Fla 2018] ["Plaintiffs must be more than 'tangential participants' in the controversy; they must have achieved 'special prominence' in it" and "either '(1) must purposely try to influence the outcome of the public controversy, or (2) could realistically have been expected, because of (their) position in the controversy, to have an impact on its resolution'"], citing Waldbaum, 627 F2d 1297; contrast Kipper, 12 NY3d at 353 n 3 [in action related to statements about his medical license, plaintiff was a public figure due to, among other things, "his more than 100 television appearances as a medical expert"]; Maule v NYM Corp., 54 NY2d 880, 882-83 [1981] [plaintiff, who projected his name and personality before millions of readers and viewers "to establish his reputation as a leading authority on professional football," was a public-figure defamation plaintiff as to statements denigrating his professional abilities]; James v Gannett Co., 40 NY2d 415, 423 [1976] ["plaintiff welcomed publicity regarding her performances, and therefore, must be held to be a public figure with respect to newspaper accounts of those performances"]; Farber v Jefferys, 103 AD3d 514, 515 [1st Dept 2013] [plaintiff, through publication of "countless articles" on whether HIV causes AIDS, projected her name and personality to establish herself as a "leading authority" and was a limited public figure with respect to statements discrediting her research]; Park v Capital Cities Communications, 181 AD2d 192 [4th Dept 1992] [physician who invited favorable publicity for practice by appearing on television to discuss medical procedures was a public-figure plaintiff in defamation action related to broadcast about whether he performed unnecessary surgery]; Waldbaum, 627 F2d at 313-14 [status as "an executive within a prominent and influential company does not by itself make one a public figure;" plaintiff's role as an activist in public controversy "concerning unit pricing, open dating, the cooperative form of business and other issues" rendered him a limited public figure in action related to statement about whether his business lost money and was retrenching]).
Though Gottwald has sought publicity for his label, his music and his artists--none of which are the subject of the defamation here--he never injected himself into the public debate about sexual assault or abuse of artists in the entertainment industry. The only reason Gottwald has any public connection to the issues raised in this lawsuit is because they were raised in this lawsuit. That cannot convert him into a limited public figure (see Krauss, 251 AD2d at 192-193; Waldbaum, 627 F2d at 1295 n 19 [public figure inquiry focuses on plaintiff before defamation was published otherwise "press could convert a private individual into a general public figure simply by publicizing the defamation itself and creating a controversy surrounding it"]; Hutchinson v Proxmire, 443 US 111, 135 [1979] [defamation defendants "cannot, by their own conduct, create their own defense by making the claimant a public figure"]). Because Gottwald is not a public figure for purposes of determining the constitutional protection afforded to statements by Kesha that he drugged, raped and sexually assaulted her (Time, Inc., 424 US at 455), the actual-malice standard is inapplicable.
Defendant's reliance on Maule, for example, is misplaced because, in that case, there was a close nexus between the defamatory statements and the purposeful activity undertaken by the plaintiff to "thrust himself into the public eye" (Maule, 54 NY2d at 883). The alleged defamation in Maule denigrated the plaintiff's writing abilities and the product of his craft--"his books, articles and personal appearances--were obviously designed to project his name and personality before millions of readers" and television viewers "and to establish his reputation as a leading authority on professional football;" he not only "welcomed but actively sought publicity for his views and professional writing" (id. at 882-83). The same is true of the other cases defendant cites (see Dkt. 2200 at 10-11, citing Kipper, 12 NY3d at 351 [actual-malice standard applied for physician who sought fame in profession where defamation related to medical license]; Roche v Mulvihill, 214 AD2d 376 [1st Dept 1995] [actual-malice standard applied as defamatory statements related to Roche's comedic ability]). The defamatory statements at issue here, by contrast, are wholly unrelated to any purposeful activity undertaken by plaintiffs.
Plaintiffs need not prove gross irresponsibility under these circumstances either. The grossly-irresponsible standard, by its terms, does not apply to a first-hand account of events not involving any media publication, investigation or newsgathering (see Chapadeau v Utica Observer-Dispatch, Inc., 38 NY2d 196, 199 [1975] [where the content of an article is a matter of public concern a party may only recover after establishing "by a preponderance of the evidence, that the publisher acted in a grossly irresponsible manner without due consideration for the standards of information gathering and dissemination ordinarily followed by responsible parties"]).
Cases applying gross irresponsibility focus on information gathering and procedure or media publication (see e.g. Huggins v Moore, 94 NY2d 296, 303 [1999] ["Chapadeau standard is deferential to professional journalistic judgments"]; Rainbow v WPIX, Inc., 2020 WL 369548, at *1 [1st Dept Jan. 23, 2020] [analyzing responsibility in relying on sources of information]; see also Konikoff v Prudential Ins. Co. of Am., 234 F3d 92, 101 [2d Cir 2000] [Chapadeau applies "where the communication at issue admits of measurement by the Chapadeau standard"]; McGill v Parker, 179 AD2d 98, 108 [1st Dept 1992] ["gross irresponsibility standard may not always be apt in the case of a non-media defendant" reporting observations]).
Liability for Statements by Alleged Agents
Kesha pleads that she did not "authorize, direct, or have knowledge" of statements made by others and therefore cannot be liable for them (Dkt. 1540, 34th affirmative defense). A party authorizing others to speak on its behalf can be held vicariously liable for defamatory statements made by its agents (National Puerto Rican Day Parade, Inc. v Casa Publs. Inc., 79 AD3d 592, 594-95 [1st Dept 2010]; see also Geraci v Probst, 15 NY3d 336, 342 [2010]; Levy v Smith, 132 AD3d 961, 962-63 [2d Dept 2015] [facts permitted reasonable inference that "appellant intended and authorized the republication"]; Hoffman v Landers, 146 AD2d 744, 747 [2d Dept 1989] [maker of defamatory statement "is not responsible for its recommunication without . . . authority or request by another over whom he has no control"]). At issue is whether, as a matter of law, Kesha should be held liable for statements that her press agent, lawyer, mother and Michael Eisele--organizer of the Free Kesha campaign--made.
Press Agent
A week before the California Action was commenced, Mark Geragos retained Sunshine Sachs to provide public-relations services "for the exclusive benefit" of Kesha (Dkt. 1705). Sunshine Sachs' very job was to speak on Kesha's behalf. Indeed, the only reason Sunshine Sachs made any of the statements or formulated the Press Plan was because Kesha paid it to do so. As a matter of law, if plaintiffs prove that Sunshine Sachs' statements were defamatory and a privilege does not apply, then Kesha will be held vicariously liable.
Kesha's Lawyer
The same is true for Geragos' statements. As Kesha's lawyer, Geragos was her agent with speaking authority. He filed the California complaint that is alleged to be a sham and the catalyst for Kesha's publicity campaign on Kesha's behalf. He spoke to the media on Kesha's behalf.
To avoid liability based on Geragos' statements, Kesha invokes her retainer agreement, which sets forth that "Attorney will not engage in any publicity . . . (including, without limitation, making any public statements, issuing any press releases or engaging in any interviews with members of the press) without [her] prior approval" (Dkt. 1702 ¶ 9). She swears that she did not "review or receive" the Press Plan itself or know that "the strategy memorandum was prepared" and that she "did not authorize, direct, approve of, or have advance knowledge of" Geragos' particular public statements that are the subject of this suit (Dkt. 2177 ¶¶ 7-8).
Kesha does not, however, deny that Geragos was authorized to hire Sunshine Sachs as a press agent on her behalf or that she gave him approval generally to handle publicity, make public statements, issue press releases and conduct interviews with members of the press, all of which he did regularly and starting from very early on. Lack of prior knowledge and individualized approval of the particular details or specific contents of the statements does not make them unauthorized. Significantly, there is no evidence that Kesha ever stopped Geragos from engaging in these usual activities to further her cause. There can be no doubt that Geragos' media communications were "generally foreseeable" and undertaken for her benefit, not for "personal motives unrelated to the furtherance" of her interests (Murray, 130 AD2d at 831; see Gorman v Sachem Cent. Sch. Dist., 262 AD2d 355 [2d Dept 1999] [defamation defendants failed to demonstrate that they did not know about, acquiesce in, or ratify the complained-of acts . . . (and that the) conduct was wholly personal in nature and outside the scope" of the employment]).
Even if Geragos breached the retainer agreement, and there is no evidence that he did, it would not alter the analysis because a principal is liable for its agent's acts when the conduct is generally within the scope of the agent's authority (see Murray v Watervliet City Sch. Dist., 130 AD2d 830, 831 [3d Dept 1987] ["An act falls within the scope of an (agent's) duties when the (agent) is doing his master's work, no matter how irregularly, or with what disregard of instructions"]; see Maurillo v Park Slope U-Haul, 194 AD2d 142, 147 [2d Dept 1993] ["Agency liability exists even though the principal does not specifically ratify, participate in, or know of such 'misconduct'" or even if act was forbidden; mere "deviation from the ordinary route or from that selected by the master, even for a purpose conceived by the servant, does not relieve the master from liability if his business, generally speaking, is still being carried on"]).
Pebe Sebert and Michael Eisele
In contrast, there can be no matter of law determination that either Pebe Sebert or Michael Eisele were Kesha's agents when they made statements about Gottwald.
It is unclear whether Kesha's mother Pebe was acting as her daughter's agent when she sent the December 2013 Email (Dkt. 1725). Although Kesha's attorney asserted that Pebe sent the email as Kesha's agent (see Dkt. 1724 at 22), that informal judicial admission is not dispositive (MPEG LA, LLC v Samsung Elecs. Co., 166 AD3d 13, 21 [1st Dept 2018]). Indeed, Kesha adduces evidence that her manager asked her mother to "stop" and that Pebe may have had her own independent motives for her statements (Dkt. 2208). She sufficiently raises issues of fact as to whether her mother was acting on her behalf and whether she was authorized to speak for her.
The admission was made during Meiselas' deposition for the express purpose of invoking the attorney-client privilege so that plaintiffs' counsel could not ask Meiselas about his communications with Pebe-who was not his client (see Dkt. 1724 at 22). Kesha is now walking back that admission; thus, her privilege objection is no longer viable.
Similarly, there are questions of fact about whether Eisele was Kesha's authorized agent. Kesha and Eisele were in direct communication concerning Kesha's claims about Gottwald. Eisele disseminated these allegations in public and online as part of the Free Kesha movement, often using Kesha's own words. Kesha--who gave Eisele gifts and paid for his hotel rooms so that he could protest her treatment--requested that Eisele post information (the exact contours of which are unclear) online and Eisele eagerly complied (see Dkt. 2050 at 46-48; Dkts. 1805-1806). Kesha even told Eisele to delete their text messages because "it just can't seem we are as close as we are" (see Dkt. 1804). This evidence could support a reasonable conclusion that Eisele was part of Kesha's public-relations strategy and served as her agent. Whether Eisele took direction from Kesha when he communicated the allegedly defamatory statements or whether he was independently inspired by her is a question for the jury.
Affirmative Defenses to Defamation
The parties move for summary judgment on several of Kesha's defamation-related affirmative defenses.
Only contested affirmative defenses that have not already been addressed are analyzed in this decision. Kesha's affirmative defenses that the claims are barred by the statute of limitations and have been pled insufficiently are rejected for the reasons set forth in the August 2018 Decision (see August 2018 Decision at 3-6, 9). Amendment would not have been allowed had the claims been beyond the statute of limitations or inadequately pleaded. Kesha does not oppose dismissal of her libel-proof-plaintiff affirmative defense.
Protected Opinion & Rhetorical Hyperbole
Both parties move for judgment on whether, as a matter of law, 18 statements constitute protected opinion or hyperbole that cannot be actionable (Dkt. 1540, 21st and 36th affirmative defenses); Kesha contends they are and plaintiffs maintain they are not (see Dkt. 1832).
Defamation claims may only be predicated on false factual statements. Because opinions cannot be proven false, they do not give rise to liability (Thomas H., 18 NY3d at 584; see Martin v Daily News L.P., 121 AD3d 90, 100 [1st Dept 2014]; Sandals Resorts Intl. Ltd. v Google, Inc., 86 AD3d 32, 38 [1st Dept 2011]). Whether a statement is one of opinion or objective fact is a question of law (Mann v Abel, 10 NY3d 271, 276 [2008]).
The statements at issue assert, as a matter of fact, that Gottwald drugged and raped Kesha (see Thomas H., 18 NY3d at 585-586; Mann, 10 NY3d at 276; Gross v New York Times Co., 82 NY2d 146, 152-53 [1993]). They are undoubtedly factual because their precise meaning is clear and unequivocal: Gottwald drugged and raped Kesha. The statements can be proven true or false because Gottwald either drugged and raped Kesha or he didn't. The overall context of the statements, moreover, is unmistakably indicative of factual assertions. After all, Kesha sued Gottwald for, in fact, drugging and raping her. She wanted to be released from her contracts with plaintiffs because she maintains that Gottwald did drug and rape her. She hired Geragos to pursue justice on her behalf because she asserts that Gottwald drugged and raped her not simply because those events may or may not have happened in her opinion.
Almost each and every statement that is the subject of Kesha's summary-judgment motion explicitly refers to Gottwald drugging, raping or sexually assaulting her (see Dkts. 1832-1833). To the extent that a few of these statements do not contain express references to rape or sexual assault, summary judgment still cannot be awarded on this record because the statements, which refer to or imply physical "abuse" (see e.g. Dkt. 1832 at 4 [#15]; Dkt. 1833 at 1 [#2-4], 4 [#14 & 17]) are still potentially susceptible to a defamatory meaning if a jury were to find that the speaker was referring to the alleged rape. It is questionable whether these particular statements matter to Gottwald considering that the explicit statements and allegations alone were likely enough to have caused all of the alleged damage to his reputation. On this record, the court cannot rule out liability as a matter of law.
Even equivocal accusations, unlike the ones here, can be deemed statements of facts (see Thomas H., 18 NY3d at 585 ["a reasonable listener would have understood that defendants intended to label plaintiff as a child rapist. Hence, the statements would be actionable even if they were couched in the form of an opinion ('I think plaintiff sexually assaulted my child'), rather than fact ('plaintiff sexually assaulted my child')"]).
For the same reasons, none of the statements qualify as rhetorical hyperbole. Each statement conveys exactly what its speaker intended to convey: that Gottwald drugged, raped and sexually assaulted Kesha and is a criminal for doing so like Bill Cosby. In the context of this litigation and of her very serious assertions, Kesha cannot be suggesting that the statements are not factual or are exaggerations. Kesha's belief that a litigation privilege applies to allegations in her California complaint and to statements related to litigation does not render the statements nonfactual opinions.
Litigation Privileges
Kesha moves for summary judgment dismissal of the defamation claim as to certain statements, arguing that there can be no liability because "it is undisputed that they were made (i) during settlement discussions as pertinent to good-faith anticipated litigation (2 statements); (ii) by Kesha in litigation filings (6 statements); or (iii) by Kesha or her attorneys to contextualize litigation developments (19 statements)" (Dkt. 1824 at 40).
Ordinarily, statements made during or in connection with good-faith anticipated litigation are privileged and cannot give rise to defamation liability. Here, however, there are sharply disputed questions of fact going to the heart of the case about whether Kesha's California complaint was brought in good faith, as Kesha asserts, or whether it was a "sham" intended to defame and pressure plaintiffs, as plaintiffs assert (see August 2018 Decision at 8-9 [collecting cases]; see also Williams v Williams, 23 NY2d 592, 599 [1969] ["it was never the intention of the Legislature in enacting section 74 to allow 'any person' to maliciously institute a judicial proceeding alleging false and defamatory charges, and to then circulate a press release or other communication based thereon and escape liability by invoking the statute"]).
As discussed in the August 2018 Decision, Kesha's attempts to distinguish Thomas v G2 FMV LLC (2016 WL 320622 [Sup Ct, NY County 2016], affd 147 AD3d 700 [1st Dept 2017]) are unavailing.
Kesha and Gottwald have very different accounts about what happened on the night at issue. This court cannot decide, as a matter of law on papers and without any assessment of credibility, who should be believed and whether Kesha commenced the California Action, which she would not have done if she had been released from her contracts, in good faith or as a sham to defame Gottwald and obtain business leverage. That decision is for the jury. Statement that Gottwald Raped Katy Perry
Plaintiffs' motion for partial summary judgment on elements of their defamation claim related to Kesha's statement to Lady Gaga that Gottwald raped Katy Perry is granted. Plaintiffs met their heavy burden of establishing entitlement to judgment that Kesha published a false statement about Gottwald to a third party that was defamatory per se. Kesha admits that, on February 26, 2016, she texted Lady Gaga that Katy Perry was raped by "the same man," referring to Gottwald (Dkt. 2090 at 24; Dkt. 1698 at 14-23). Plaintiffs submitted evidence that Gottwald did not rape Katy Perry. Perry unequivocally testified that Gottwald did not do so (see Dkt. 1701 at 3). In response, Kesha has not raised a triable issue. There is no evidence whatsoever that Gottwald raped Katy Perry or that Katy Perry, whose sworn testimony is unrefuted, must not be believed. Kesha cannot defeat summary judgment with mere speculation (Genger v Genger, 123 AD3d 445, 447 [1st Dept 2014] [once movant meets burden "it is insufficient to merely set forth averments of factual or legal conclusions" and evidence must be proffered in opposition]; see Red Zone LLC v Cadwalader, Wickersham & Taft LLP, 27 NY3d 1048, 1049 [2016]). Moreover, publication of a false statement to even one person, here Lady Gaga, is sufficient to impose liability (see Lentlie v Egan, 61 NY2d 874, 876 [1984] ["defamation requires but one communication to a single person"]; Torati v Hodak, 147 AD3d 502, 504 [1st Dept 2017] [that the defamatory statement was only shared with three people who were plaintiff's family members is not a basis for dismissal; communication "to even one person other than the defamed is sufficient"]). BREACH OF CONTRACT
Kesha's argument that plaintiffs cannot obtain partial summary judgment on certain elements of a claim is rejected. Kesha herself seeks partial summary judgment on certain elements of plaintiffs' claims. In any event, CPLR 3212(e) expressly permits summary judgment on a cause of action "or part thereof" (see e.g. Basis PAC-Rim Opportunity Fund [Master] v TCW Asset Mgt. Co., 149 AD3d 146, 151 [1st Dept 2017] [granting summary judgment to defendant on loss causation element of fraud claim]). Plaintiffs do not seek summary judgment on the "without privilege or authorization" element (see Dkt. 1694 at 23).
Courts are not free to after-the-fact alter agreements that the parties reach to reflect personal notions of fairness and equity (Greenfield v Philles Records, Inc., 98 NY2d 562, 570 [2002]). To "ensure stability in the law and provide guidance to parties weighing the risks and advantages of entering a binding agreement," settled rules must be neutrally applied (id. at 573). Absent extraordinary circumstances, parties are held to the agreements that they make. Plaintiffs move for summary judgment on Kesha's counterclaim, which seeks declaratory judgments that (1) the KMI Agreement has been terminated and (2) Kesha has replaced KMI as a party to the RCA Agreement. Their motion is granted.
Termination Based on Election of Remedies
Kesha seeks a declaration that the KMI Agreement has been terminated based on KMI's "election to sue . . . for damages rather than specific performance and its failure to perform" (Dkt. 2241 ¶ 72). She maintains that by suing her for breach and seeking damages, KMI elected its remedy and waived the right to further enforce the agreement. That argument was already rejected in the April 2016 Decision because nothing precludes a party from affirming the existence of an ongoing contract and suing for damages owed while the agreement remains in full force and effect (Dkt. 504 at 24-26). A breaching party, for example, cannot escape its future contractual obligations by deeming the contract terminated after it has violated provisions of the agreement and the nonbreaching party has sought redress through the courts.
Kesha also maintains that by refusing to renegotiate her contract and "verbally and emotionally abusing" her, Gottwald breached the KMI Agreement's implied covenant of good faith and fair dealing and terminated the contractual relationship. The court, however, has already rejected this argument (March 2017 Decision at 7-8; see Dkts. 570-571). Additionally, the implied covenant cannot be used as a vehicle to add terms to the parties' contract that they did not expressly adopt particularly where, as here, the parties agreed that no additional representations were made (Dkt. 1742 ¶ 10[c]; see LDIR, LLC v DB Structured Products, Inc., 172 AD3d 1, 6 [1st Dept 2019]; National Union Fire Ins. Co. of Pittsburgh, Pa v Xerox Corp., 25 AD3d 309, 310 [1st Dept 2006] [implied covenant of good faith and fair dealing cannot "create independent contractual rights"], lv dismissed 7 NY3d 886 [2006]). Nothing in the parties' agreement legally obligated renegotiation of the existing contract.
Replacement of KMI as a Party to the RCA Agreement
Paragraph 3 of the Assent provides:
If, during the term of the [RCA] Agreement, [KMI] for any reason ceases to be entitled to [Kesha's] services or the results of [Kesha's] services as the Artist in accordance with the terms of the [RCA] Agreement or [KMI] for any reason fails or refuses to furnish to RCA [Kesha's] services or the results of [Kesha's] services . . . in accordance with the terms of the [RCA] Agreement: (i) [Kesha] will be deemed substituted for [KMI] as party to the [RCA] Agreement, and (ii) she will render such services and perform such acts as will give RCA the same rights, privileges and benefits it would have received under the [RCA] Agreement had [KMI] continued to be entitled to [Kesha's] services and the results of [Kesha's] services as the Artist in accordance with the terms of the [RCA] Agreement. Such rights, privileges,
and benefits will be enforceable in RCA's behalf against [Kesha] (Dkt. 1733 at 65).
Kesha maintains that because there are triable issues of fact as to "whether KMI has 'cease[d] to be entitled to [her] services,' given [Gottwald's] implied-covenant breach" and as to whether KMI "for any reason failed to furnish . . . [Kesha's services . . . in accordance with the terms of the Agreement]" (Dkt. 2090 at 38), summary judgment must be denied. She maintains that KMI's failure to meet delivery requirements under the RCA Agreement was not because of her failure to perform but rather because of Gottwald's "unreasonable refusal to renegotiate and pattern of abuse" (id. at 39).
There are no questions of fact as to whether Kesha was actually "deemed substituted" for KMI or whether she is entitled to be "deemed substituted" for it under the Assent. KMI did not cease to be entitled to Kesha's services as a matter of law and, subsequent to interposition of her counterclaim, Kesha delivered two albums. RCA, moreover, has not complained of any breach of the agreement and has deemed the relationship a "success" (Dkt. 1739). There is no basis for Kesha to invoke a breach of the RCA Agreement that would allow her to be deemed KMI's replacement. Her counterclaim thus fails.
Pre-Judgment Interest on Late Royalty Payments
In their third claim (Dkt. 1539 ¶¶ 125-130), plaintiffs allege that the KMI Agreement entitles them to unpaid royalties due within 45 days of Kesha's receipt of certain ancillary income and unpaid tour receipts payable within 30 days of the end of the applicable tour cycle. They allege that Kesha must pay damages "plus interest" for her breach (id. ¶ 130; Prayer for Relief ¶ 3; see also Dkt. 1694 at 33, citing Dkt. 1744 at 2). Kesha does not dispute that she did not pay any royalties to KMI between January 1, 2012 and December 31, 2016. It is further undisputed that on August 7, 2017--well beyond the deadlines set forth in the parties' contract and after this action had been commenced--Kesha finally paid KMI $1,302,043.41 in royalties for this period. Plaintiffs accepted the payment but expressly reserved "the right to seek an award of prejudgment interest on the entire amount Kesha withheld for years" (Dkt. 1750).
Plaintiffs now seek summary judgment on the interest due for the belatedly paid $1,302,043.41. They propose an intermediate date for assessing the interest owed each year and, based on CPLR 5001, calculate the interest due as $373,671.88.
Kesha does not dispute the terms of the contract or calculation of the interest. She urges that because there has been no finding of breach, there is no predicate for an interest award (Dkt. 2090 at 40). She maintains that the payments of over $1.3 million with checks endorsed "DR LUKE COMMISSION PAYABLE as of 12.31.16" (see e.g. Dkt. 1749 at 1) were simply a "good-faith gesture to resolve a dispute without troubling the Court" (id. n 173). She also contends that there remain triable issues of fact for the jury to resolve that the parties altered or waived the timeframes for payment and that there should be an offset for monies owed to her. Those arguments are rejected.
Kesha again asserts that plaintiffs cannot maintain a breach of contract claim against her because Gottwald breached the parties' agreement. That argument, however, has been rejected (see supra n 13).
By making the August 2017 payments for commissions "as of 12.31.16," Kesha conceded that she owed those amounts. In fact, even now, she does not dispute that the KMI Agreement entitles plaintiffs to those sums and that she paid late. Nor does she show that plaintiffs' timeframes and interest calculations are incorrect or otherwise challenge them. Her arguments that the parties modified the time for payment despite the absence of any written agreement and that there was an ongoing waiver of timely payment by plaintiffs is not countenanced by the KMI Agreement, which contains no-oral-modification and no-waiver provisions (Dkt. 1742 ¶ 10[c]). Plaintiffs have proven that they were entitled to the over $1.3 million that Kesha paid belatedly after this lawsuit was commenced and there is no legal basis for absolving her of paying statutory prejudgment interest on that amount (cf. Kagan v HMC-New York, Inc., 100 AD3d 468, 469 [1st Dept 2012] [plaintiff "entitled to prejudgment interest on the withheld compensation (defendants) admittedly owed and in fact paid"]; Matter of Hoffman, 275 AD2d 372, 372-73 [1st Dept 2000] ["respondents' tender of payment after the commencement of litigation did not defeat the petitioner's statutory rights under CPLR 5001 because she accepted the tender without prejudice to her claim for interest"]).
Because plaintiffs demonstrated that Kesha breached the KMI Agreement by not timely making payment, prejudgment interest on the delinquency is mandatory (CPLR 5001[a] [mandating that interest "shall" be recovered upon a sum awarded for breach of contract]; see also Eighteen Holding Corp. v Drizin, 268 AD2d 371, 372 [1st Dept 2000]). As Kesha has not raised any issue related to the reasonability of the proposed dates of accrual of prejudgment interest or its calculation, judgment is awarded to plaintiffs in the amount of $373,671.88 (see Dkt. 1694 at 35; Arany v Arany, 282 AD2d 389, 390 [1st Dept 2001] [reasonable intermediate date authorized]).
Affirmative Defenses to Breach of Contract
Plaintiffs move for summary judgment on several of Kesha's breach-of-contract related affirmative defenses. The only two that have not already been addressed that Kesha contests are unconscionability and fraudulent inducement. Those defenses fail as a matter of law.
Plaintiffs move for judgment on five affirmative defenses: (1) statute of limitations, (2) impossibility, (3) California's "seven-year rule," (4) unconscionability and (5) fraudulent inducement. Kesha concedes dismissal of the first and third of these defenses by failing to address them in opposition. To be sure, Kesha is alleged to have begun breaching the KMI and Prescription Agreements in 2013 and this action was commenced in 2014, well within the applicable six-year statute of limitations (CPLR 213[2]). The impossibility and "seven-year-rule" affirmative defenses were previously rejected (161 AD3d at 680).
Unconscionability
"A determination of unconscionability generally requires a showing that the contract was both procedurally and substantively unconscionable when made" (Gillman v Chase Manhattan Bank, N.A., 73 NY2d 1, 10 [1988]). There must be an "absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party" (id.). Neither factor is present here. At the time of contracting, Kesha was represented by counsel and nothing compelled her to enter into the agreements (Cash4Cases, Inc. v Brunetti, 167 AD3d 448, 449 [1st Dept 2018]). The contractual terms, moreover, as acknowledged by Kesha's expert (Dkt. 1737 at 5, 7) are typical in the music industry between producers and fledgling artists and nothing authorizes invalidating the bargain that the parties struck after weighing their options and making informed, counselled choices (see Gillman, 73 NY2d at 10 [contract's terms must be viewed "in the light of the mores and business practices of the time and place" of execution]; see also Reznor v J. Artist Mgmt., Inc., 365 F Supp 2d 565, 577 [SDNY 2005] ["there is no admissible evidence that the objected-to provisions in the management agreement were unusual for the industry"]).
California's seven-year rule, which does not apply because New York law governs (161 AD3d at 680), does not render the agreements unconscionable. Unconscionability, moreover, is analyzed as of the time the contract is made. There is no authority that an agreement can become unconscionable due to subsequent events.
Fraudulent Inducement
Kesha's claim that she was fraudulently induced to enter into the KMI Agreement based on Gottwald's promise to renegotiate the contract if her first album was successful is not viable because a fraud claim cannot be predicated on a promise of future performance (New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]; Wyle Inc. v ITT Corp., 130 AD3d 438, 439 [1st Dept 2015]). Kesha does not claim that Gottwald misrepresented any then-present facts (see TIAA Global Invs., LLC v One Astoria Sq. LLC, 127 AD3d 75, 87 [1st Dept 2015]). To the extent the fraud is based on Gottwald's future promise being insincere, the lack of proof of scienter is fatal (see Cronos Group Ltd. v XComIP, LLC, 156 AD3d 54, 72 [1st Dept 2017] ["where a fraud claim is based upon an alleged false promise, the plaintiff is required to plead specific facts from which it may be reasonably inferred that the defendant did not intend to keep the promise when it was made"]). In opposition to plaintiffs' motion, Kesha does not cite any evidence of Gottwald's insincerity in 2005 (see Tanzman v La Pietra, 8 AD3d 706, 708 [3d Dept 2004] ["mere fact that the expected performance was not realized is insufficient to demonstrate . . . defendant falsely stated its intentions"]).
Additionally, the KMI Agreement sets forth that no one "made any promise, representation or warranty whatsoever, express or implied, oral or written, not contained" in the contract itself and that "all understandings and agreements" between the parties were merged into the contract "which fully and completely expresses their agreement" (Dkt. 1742 ¶ 10[c]). Kesha therefore could not reasonably rely on any promise of future performance that was made before the agreement was signed but not included in the final contract (see Schron v Troutman Sanders LLP, 20 NY3d 430, 436 [2013]; see also Matter of Primex Intl. Corp. v Wal-Mart Stores, Inc., 89 NY2d 594, 599-600 [1997] [a "completely integrated contract precludes extrinsic proof to add to or vary its terms"]; see also Pate v BNY Mellon-Alcentra Mezzanine III, LP, 163 AD3d 429, 430 [1st Dept 2018] [general-merger and no-additional-representation clauses rendered fraud claim not viable]).
Accordingly, it is
ORDERED that plaintiffs' motion for partial summary judgment is granted to the following extent: (1) Geragos and Sunshine Sachs were Kesha's agents when they made the subject statements; (2) Kesha's sole remaining counterclaim for a declaratory judgment is denied; (3) KMI is entitled to pre-judgment interest of $373,671.88 from Kesha due to her breach of the KMI Agreement by making late royalty payments; (4) Kesha's affirmative defenses that: (a) the subject defamatory statements are not pleaded with sufficient specificity; (b) Gottwald is libel-proof; (c) the subject statements are opinions; or hyperbole; and (d) the defamation claims are time-barred - are dismissed; (5) Kesha made a false statement to Lady Gaga about Gottwald that was defamatory per se and (6) Kesha's breach of contract affirmative defenses based on (a) the statute of limitations; (b) impossibility; (c) California's "seven-year rule"; (d) unconscionability; and (e) fraudulent inducement are dismissed; plaintiffs' motion is otherwise denied; and it is further
ORDERED that the Clerk is directed to separately enter (1) judgment in favor of KMI, and against Kesha, in the amount of $373,671.88; and (2) judgment on Kesha's counterclaim; plaintiffs' remaining claims are hereby severed and shall continue; and it is further
ORDERED that Kesha's motion for summary judgment is denied; and it is further
ORDERED that, upon denial of Kesha's motion for summary judgment related to whether plaintiffs must establish actual malice and gross irresponsibility, pursuant to CPLR 3212(b), the court grants partial summary judgment to plaintiffs on this issue and plaintiffs need not prove actual malice or gross irresponsibility at trial; and it is further
ORDERED that because the viability of Kesha's affirmative defenses based on the implied covenant of good faith and fair dealing were raised by the parties and addressed, pursuant to CPLR 3212(b), summary judgment is granted to plaintiffs on those defenses, which are dismissed. Dated: February 6, 2020
ENTER:
/s/_________
Jennifer G. Schecter, J.S.C.