| Niche Music Group, LLC v Orchard Enters., Inc. |
| 2020 NY Slip Op 07139 [189 AD3d 412] |
| December 1, 2020 |
| Appellate Division, First Department |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| Niche Music Group, LLC, Appellant, v The Orchard Enterprises, Inc., et al., Respondents. |
Fairchild Law, LLC, Brooklyn (Steven R. Fairchild of counsel), for appellant.
Jonathan D. Davis, P.C., New York (Johnathan D. Davis of counsel), for respondents.
Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered June 20, 2019, which, to the extent appealed from as limited by the briefs, granted defendants' motion for summary judgment dismissing the complaint as against Orchard Enterprises Inc., unanimously affirmed, without costs, and the matter is remanded for a determination of defendants' reasonable attorneys' fees and costs.
The contractual claims are governed by California law. Contrary to plaintiff's contention, the 2004 contract in which defendant Orchard agreed to promote and distribute plaintiff's digital music catalogue does not bar Orchard from providing the same services to a former client of plaintiff. If the parties intended to include a non-compete provision, they should have said so plainly in the agreement (see Chisom v Board of Retirement of Fresno County Employees' Retirement Assn., 218 Cal App 4th 400, 415, 160 Cal Rptr 3d 131, 143 [2013]). "[A]n implied term may not be found where it would contradict the express terms of the contract" (281 Cal App 4th at 415, 160 Cal Rptr 3d at 143). A further reason not to imply such a term is California's strong public policy against non-compete covenants (see Cal Bus & Prof Code § 16600; Advanced Bionics Corp. v Medtronic, Inc., 29 Cal 4th 697, 706, 59 P3d 231, 236 [2002]). Plaintiff's reliance on Sonoma Tires, Inc. v Big O Tires, LLC (2013 WL 12173748, *8, 2013 US Dist LEXIS 204314, *27 [ND Cal, Jan. 22, 2013, No. C 11-0818 RS]), is misplaced, as in that case the agreement contained an "exclusive dealing clause" that was found valid and enforceable because it would not substantially foreclose competition in the industry.
The cause of action for breach of the implied covenant of good faith and fair dealing was correctly dismissed because plaintiff cannot identify a specific contractual provision from which the covenant arises (see Citizens of Humanity, LLC v LAB sarl, 2013 WL 12129393, *10, 2013 US Dist LEXIS 201413, * 25 [CD Cal, Apr. 22, 2013, Case No. CV 12-10627-MMM (JEMx)]).
The cause of action for tortious interference with contract, which is not governed by California law because it does not arise under the parties' contract, was correctly dismissed because there is no evidence that Orchard intentionally procured the breach of any contract between plaintiff and nonparty Barbershop Harmony Society (BHS) (see White Plains Coat & Apron Co., Inc. v Cintas Corp., 8 NY3d 422, 426 [2007]). The record shows that after terminating its contract with plaintiff, plaintiff's former client sought out Orchard and solicited its services. The claim is also barred by the applicable three-year statute of limitations (CPLR 214 [4]; American Fed. Group v Edelman, 282 AD2d 279 [1st Dept 2001]). The claim accrued no later (and probably earlier) than January 2, 2105, the date plaintiff notified defendant that BHS had terminated its contract with plaintiff. This action was commenced no earlier than January 8, 2018.
As the prevailing party, Orchard is entitled under the contract to an award of reasonable attorneys' fees and costs, which, under California law, includes those incurred on appeal (Villinger/Nicholls Dev. Co. v Meleyco, 31 Cal App 4th 321, 328, 37 Cal Rptr 2d 36, 39 [1995]).
We have considered plaintiff's remaining arguments and find them unavailing. Concur—Gische, J.P., Webber, Oing, Mendez, JJ. [Prior Case History: 2019 NY Slip Op 31760(U).]