## Facts

- In 1997, Wayne Nugent, individually and on behalf of members of the band “Us,” entered into an exclusive recording artist and co‑publishing agreement with Jambetta Music, Inc.
- Nugent and Us agreed to compose, record, and deliver enough commercially viable songs for a full-length album.
- The agreement was subject to renewal at Jambetta’s discretion.
- Jambetta agreed to produce, publicize, and market the album and to advance up to $250,000 toward recording-related costs.
- The agreement granted Jambetta full rights to the recordings, the exclusive right to administer the copyrights, and an undivided 50% interest in “controlled compositions.”
- “Controlled compositions” were defined to include all compositions written, composed, owned, or controlled (in whole or in part) by Nugent or any Us member during the contract term.
- The agreement included an express restrictive covenant barring Us members from recording or composing for third parties during the contract term.
- Beginning around 1999, Nugent worked with other artists and companies to record, compose, and produce music outside Jambetta.
- In 2004, Nugent signed an exclusive publishing agreement with Sony/ATV and assigned rights in several compositions; Jambetta alleged those works fell within the agreement’s controlled-composition provisions.
- Jambetta sued for breach of contract. The court granted summary judgment to Jambetta on liability and then held proceedings to determine damages and to rule on Jambetta’s request for injunctive relief.
- For damages, Jambetta sought recovery based on lost profits and unpaid royalties tied to music Nugent created or exploited through third parties during the contract term, as well as recovery of amounts Jambetta had invested. Jambetta also sought an injunction barring Nugent from working for third parties until the agreement was satisfied.
- Nugent argued, among other things, that Jambetta’s recovery should be limited to advances or other narrow measures, and that Jambetta should not recover based on royalties Nugent earned after the breach.

## Issues

1. Whether Jambetta’s contract damages were limited to reimbursement of advances and expenditures, or whether the agreement allowed damages measured by lost royalties and profits tied to controlled compositions exploited in violation of exclusivity.
2. Whether Jambetta could recover royalty-based damages that continued after the breach when those royalties flowed from controlled compositions created during the contract term and improperly assigned or exploited through third-party deals.
3. Whether the court should issue an injunction barring Nugent from working for third parties until the agreement’s obligations were satisfied.

## Decision

- The court held that Jambetta was not limited to repayment of advances; the agreement’s structure (including Jambetta’s copyright administration rights and 50% interest in controlled compositions) supported an award of damages measured by lost royalties and related profits resulting from Nugent’s breach.
- The court allowed royalty-based damages only to the extent they were within the parties’ contemplation at contracting and could be shown with reasonable certainty, tied to specific controlled compositions and identifiable royalty streams.
- The court declined to impose damages theories that were not anchored to the contract’s defined rights or that were too speculative.
- The court denied Jambetta’s request for an injunction barring Nugent from working for third parties, concluding that monetary relief was the appropriate remedy and that the requested restraint was too broad and too close to compelling performance in a personal-services setting.

## Legal Principles

- Contract damages compensate the nonbreaching party for losses that arise naturally from the breach or that were within the parties’ contemplation as a probable result when the contract was made.
- Lost profits and royalty-based damages may be recovered when they are capable of proof with reasonable certainty and are not speculative.
- Where a contract grants a party an ownership interest and administration rights in compositions created during the term, damages may be measured by the royalty income the party would have received absent the breach, so long as the claim is tied to works covered by the contract.
- Courts generally disfavor injunctions that functionally enforce personal services or broadly restrain an artist’s ability to work; when money damages can address the harm, equitable relief is often denied or limited.

## Conclusion

After finding breach liability, the court treated the agreement’s co‑publishing and administration provisions as supporting expectancy damages based on lost royalties from controlled compositions wrongfully exploited through third parties, while limiting recovery to losses that were foreseeable and provable with reasonable certainty, and it refused to bar Nugent from future third‑party work by injunction.


Jambetta Music Inc. v. Nugent, 2008 NY Slip Op 30363U, 2008 WL 412618 (2008)