Rapper’s Delight: Insurer on the Hook for Hip Hop Artist Fat Joe’s Defense
Rapper Fly Havana was working on a song called “All the Way Up.” He decided to “shop” the unfinished song to his colleague Fat Joe, a hip-hop artist, so that Fat Joe could continue to develop and release it.
Over the next few months, Fat Joe worked on the song and an album with the same name. After release, the album became a double platinum recording, which in the world of music means it sold more than 2 million copies.
Fly Havana was not compensated for his role in the song. So, Fly Havana sued Fat Joe. He brought forth claims of “constructive trust, unjust enrichment, quantum meruit, conversion, moneys had and received, breach of fiduciary duties, and negligence/gross negligence.”
Fat Joe held a $1 million claims-made music professional liability insurance policy with Homeland Insurance Company of New York. The policy named both Fat Joe and his record label, Sneaker Addict, as insureds under the policy.
It was set up to specifically cover claims arising out of “infringement of copyright, plagiarism, Piracy, and misappropriation of ideas under implied contract or other misappropriation or ideas or information.”
When Fat Joe contacted Homeland regarding the underlying Fly Havana case, however, Homeland denied coverage. The policy excluded claims brought by independent contractors (Fly Havana). Homeland also said that the allegations from the underlying suit were not perils covered under the policy.
Fat Joe and Sneaker Addict took Homeland to court.
The court looked at each piece of Homeland’s dismissal, starting with Fly Havana’s status as an independent contractor.
According to Homeland, “Exclusion B of the Policy excludes coverage for claims ‘against the Insured by any past, present or future Insured, joint venturer or Independent Contractor seeking compensation.”
However, argued Fat Joe, Fly Havana wasn’t contracted by Sneaker Addict. Instead, the underlying suit was claiming ownership.
The court also said that the policy did, in fact, have named perils covered under the policy, including piracy and plagiarism. Homeland alleged breach of contract and breach of the implied covenant of good faith and fair dealing and sought declaratory relief. But the court said no dice.
Scorecard: Homeland Insurance Company of New York must cover the underlying suit between Fat Joe and Fly Havana.
Takeaway: If a company is working with outside partners for any project, it is best practice to review where those partners stand under current coverages to avoid potential disputes. &