                    NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                               File Name: 05a0593n.06
                                 Filed: July 13, 2005

                                           No. 04-1489

                            UNITED STATES COURT OF APPEALS
                                 FOR THE SIXTH CIRCUIT

ROSALIND ASHFORD HOLMES and
ANNETTE BEARD STERLING,

          Plaintiffs-Appellants,
                                                           ON APPEAL FROM THE
v.                                                         UNITED STATES DISTRICT
                                                           COURT FOR THE EASTERN
ARTISTS RIGHTS ENFORCEMENT CORP.                           DISTRICT OF MICHIGAN
(AREC), CHARLES RUBIN, SUMMIT,
ROVINS & FELDESMAN and IRA
GREENBERG

          Defendants-Appellees,

v.

UMG RECORDINGS, INC.

          Defendant/Third Party-Plaintiff-Appellee




Before:          MARTIN and ROGERS, Circuit Judges; McKINLEY, District Judge.*

          JOSEPH H. McKINLEY, JR., District Judge. Rosalind Ashford Holmes and Annette Beard

Sterling appeal the district court’s grant of summary judgment in favor of Defendants, Artists Rights

Enforcement Corporation; its President, Charles Rubin; the law firm of Summit, Rovins &

Feldesman; and one of its attorneys, Ira Greenberg. Holmes and Sterling claim that the district court



          *
         The Honorable Joseph H. McKinley, Jr., United States District Judge for the Western
District of Kentucky, sitting by designation.
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 2

erred in its interpretation of the contracts between them and Artists Rights Enforcement Corporation.

Holmes and Sterling also claim that the district court abused its discretion in denying their Motion

to Reconsider both the grant of summary judgment as to Artists Rights Enforcement Corporation

as well as the Court’s award of attorneys’ fees to UMG Recordings, Inc. For the following reasons,

we AFFIRM the judgment of the district court.

                                                 I.

       The Appellants, Rosalind Holmes and Annette Beard Sterling, are original members of the

Motown Records group Martha and the Vandellas. Martha and the Vandellas, inductees into the

Rock and Roll Hall of Fame, recorded a number of hits in the 1960s, such as “Heat Wave” and

“Dancing in the Street.” Despite their success, the two members of the Vandellas who bring this

action had difficulty obtaining royalty payments allegedly owed to them by Motown Records. In

1984, Holmes and Sterling (collectively the “Vandellas”) entered into two separate contracts with

Artists Rights Enforcement Corporation (“AREC”) under which AREC and its president, Defendant

Charles Rubin, agreed to collect the Vandellas’ royalties. The contracts, which were identical,

provided in pertinent part:

       I hereby retain you and your firm to act on my behalf in connection with
       investigation and collection of any and all royalties which are, or may be due and
       owing to MARTHA AND THE VANDELLAS...

       It is my further understanding that in the event it is desirable or necessary to engage
       counsel to act on my behalf, that you shall recommend counsel who is satisfactory
       to me that I shall retain upon such terms as may be agreeable between us and such
       counsel shall be paid out of your share of the proceeds realized, and in accord with
       my separate agreement with such counsel.

       In return for your services set forth hereinabove, I shall pay you fifty (50%) percent
       of all sums which may come into your hands or which may be realized as a
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 3

        proximate result of your activities on my behalf...

        Further, I hereby authorize you to receive all funds collected by you hereunder and
        appoint you my attorney in fact but only for the purpose of depositing them into your
        special account. Upon the clearing of such funds, you shall then make payment to
        me, yourself and any third parties including attorneys under the terms of this
        agreement.

        Several years later, Rubin suggested and the Vandellas agreed to hire the law firm of

Summit, Rovins & Feldesman (“Summit Rovins”) to pursue a case against Motown. Ms. Sterling’s

retainer agreement1 provided as follows:

        For our services, we shall be entitled to receive 33-1/3% of all monies payable to or
        received by Ms. Sterling on account of sums found due to the date of judgment and,
        in addition, 25% of all monies due to or received by Ms. Sterling from Motown
        thereafter....You [AREC] understand that Ms. Sterling and her co-plaintiffs are the
        clients and that, in case of conflicting advice, we are obliged to follow that received
        from Ms. Sterling and her co-plaintiffs.

        Summit Rovins pursued a case against Motown in Michigan which eventually settled in

1989.    In 1992, the lead attorney in that case, Ira Greenberg, left Summit Rovins, which

subsequently dissolved, to join the law firm of Edwards & Angell. Summit Rovins assigned the

benefit of the retainer agreement with the Vandellas to Edwards & Angell. In 1994, apparently

because Motown was again not paying sufficient royalties, Edwards & Angell commenced a new

action against Motown in California. That lawsuit also settled.

        As a result of the lawsuits, the Vandellas received royalties from Motown and still receive

royalties from Motown’s successor in interest, UMG Recordings, Inc. (“UMG”). As recently as

2003, UMG made payments to AREC, which, in turn, was retaining its share and paying the


        1
        While only Sterling’s retainer agreement appears in the Joint Appendix, no party suggests that Holmes’
agreement was any different.
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 4

remainder to Edwards & Angell. In 2003, the Vandellas attempted to terminate their contracts with

AREC on the theory that AREC had not done any new work and should not be entitled to continuing

payments. To that effect, the Vandellas corresponded with UMG, asking them to make royalty

payments to them only. Upon learning of this, Greenberg sent a letter to UMG on behalf of AREC

asking UMG to either continue paying AREC or place the funds in escrow pending judicial

resolution.

       On March 31, 2003, the Vandellas brought suit against AREC, Rubin, Summit Rovins, and

Greenberg in Michigan state court. The case was removed to federal court on April 23, 2003, on

the basis of diversity jurisdiction. The Vandellas alleged that the contracts with AREC, as “forever

contracts,” were terminable at will, that the Defendants had been overpaid, that the contracts were

unconscionable, and that the Defendants breached their fiduciary duties. The Vandellas also charged

unjust enrichment and constructive trust. The parties filed cross-motions for summary judgment,

and on March 3, 2004, the district court granted the Defendants’ motions for summary judgment.

       The district court held that the provision of contract with AREC providing that AREC would

receive “fifty (50%) percent of all sums which may come into [AREC’s] hands or which may be

realized as a proximate result of [AREC’s] activities on [the Vandellas’] behalf” was not ambiguous.

The court held that the provision entitled AREC to 50% of

       “all sums” realized by Plaintiffs, with only one limitation—the sums must be
       realized as a “proximate result” of Defendants efforts. Under this term, the 50%
       royalty fees could continue even after Plaintiffs terminate the contract, so long as the
       payment of the royalties is proximately caused by Defendants efforts.

Because the Vandellas offered no evidence of any other intervening cause that brought about the

royalty payments, the district court concluded that the royalty payments were proximately caused
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 5

by AREC. The Vandellas appeal the district court’s grant of summary judgment.2

        The Vandellas also appeal the district court’s decision in a consolidated interpleader matter.

As discussed above, after the Vandellas had directed UMG to make royalty payments to them only,

AREC wrote to UMG and attempted to force UMG to continue making royalty payments to AREC.

On March 26, 2003, UMG told AREC that it would account to the Vandellas directly. UMG,

however, did not in fact forward the payments to the Vandellas. On March 28, 2003, AREC filed

suit against UMG and the Vandellas in New York Supreme Court seeking to force UMG to pay

AREC the Vandellas’ royalties. On April 24, 2003, AREC voluntarily dismissed the action.

Meanwhile, the Vandellas continued to ask UMG to send any royalties only to them. Throughout

this period, UMG remained non-committal. On May 27, 2004, the Vandellas sued UMG in

Michigan state court, alleging breach of fiduciary duties and unjust enrichment. UMG removed the

case to federal court, and on June 10, 2003, sent a letter to the Vandellas informing them that if they

did not voluntarily dismiss the case against UMG with prejudice, UMG would be forced to file a

counterclaim for interpleader. In exchange for the Vandellas’ voluntary dismissal, UMG offered

to deposit the royalties in a court-maintained trust account. On June 12, 2003, UMG sent another

letter to the Vandellas indicating that UMG’s “policy is that it will not pay in these sorts of

situations, where two parties are claiming the right to the same funds.” After the Vandellas refused


        2
          The district court made a number of rulings with respect to whether AREC, Rubin, Greenberg, and Summit
Rovins were proper defendants. Because the Vandellas’ agreement with AREC also explicitly included Rubin as a
contracting party, the district court held that Rubin was a proper defendant. The district court held that Greenberg
and Summit Rovins, however, were not proper defendants as to the count of overpayment of royalties. Although the
Vandellas argue in their brief that the “AREC defendants” were overpaid—a group that includes Greenberg and
Summit Rovins—the Vandellas do not appear to argue that the holding that Greenberg and Summit Rovins were not
proper defendants was in error. Thus, the Court understands the appeal to argue only that AREC and Rubin were
overpaid.
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 6

to stipulate to a compromise, UMG filed a counterclaim/third party complaint for interpleader,

disowning an interest in the royalty payments, and seeking a declaration of the rights of the parties

claiming an interest in the royalty payments. On July 11, 2003, the Vandellas’ action against UMG

was consolidated with the Vandellas’ action against AREC and the other defendants.

       On August 8, 2003, the parties agreed that UMG should be dismissed from the action and

should make all royalty payments to AREC, who agreed to pay 50% of the royalties directly to the

Vandellas, while placing the remaining 50% into an escrow account. On August 6, 2003, UMG

filed a motion seeking attorneys’ fees and costs in the amount of $25,567.45. The district court, on

January 15, 2004, granted UMG’s motion, and concluded that the Vandellas alone were responsible

for UMG’s fees. The district court justified its decision on the theory that “even before litigation

commenced in this case, AREC agreed with and advocated that UMG place all disputed funds into

an escrow account.” The Vandellas filed motions for reconsideration as to both the grant of

summary judgment for AREC and as to the award of attorneys’ fees and costs to UMG. Both

motions were denied by the district court, and the Vandellas appeal those decisions. UMG filed with

this court a motion to dismiss the appeal against it for lack of appellate jurisdiction. On December

15, 2004, the motions panel denied the motion, holding that the notice of appeal was timely and

effectively appealed the order awarding fees and costs to UMG.

                                                II.

       This court reviews a grant of summary judgment de novo, viewing all evidence in the light

most favorable to the nonmoving party. Boone v. Spurgess, 385 F.3d 923, 927 (6th Cir. 2004).

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 7

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(c). The typical standard of review for the denial of a motion to reconsider is the "abuse of

discretion" standard, "but where reconsideration of summary judgment was sought, . . . a de novo

review" is appropriate. Sommer v. Davis, 317 F.3d 686, 691 (6th Cir. 2003). In interpleader actions,

the award of costs and attorneys fees is within the sound discretion of the court, and an award should

not be reversed unless the district court abused that discretion. 4 Moore's Federal Practice § 22.06.

       In this appeal, the Vandellas challenge the district court’s finding that their contracts with

AREC were not ambiguous with respect to the term providing that AREC would receive 50% of all

sums “which may be realized as a proximate result of [AREC’s] activities on [the Vandellas’]

behalf.” Relatedly, the Vandellas contend that the district court erred in its interpretation of the

phrase “proximate result.” The Vandellas also argue that the district court abused its discretion in

awarding UMG all of its attorneys’ fees and costs associated with the interpleader action.

       The interpretation of these contracts is governed by Michigan law. “The initial question

whether contract language is ambiguous is a question of law. If the contract language is clear and

unambiguous, its meaning is a question of law. Where the contract language is unclear or

susceptible to multiple meanings, interpretation becomes a question of fact.” Port Huron Educ.

Assoc. v. Port Huron Area Sch. Dist., 550 N.W.2d 228, 237 (Mich. 1996) (internal citation omitted).

A contract is ambiguous “when its provisions are capable of conflicting interpretations.” Klapp v.

United Ins. Group Agency, Inc., 663 N.W.2d 447, 453 (Mich. 2003). Though a term may be

undefined, Michigan law does not consider such term ambiguous automatically. Terrien v. Zwit,
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
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648 N.W.2d 602, 613 (Mich. 2002). If a term is not defined in a contract, courts will interpret such

term in accordance with its commonly used meaning. Id. However, “where terms having a definite

legal meaning are used in a written contract, the parties to the contract are presumed to have

intended such terms to have their proper legal meaning, absent a contrary intention appearing in the

instrument.” Nationwide Insurance v. Detroit Edison, 289 N.W.2d 879, 881 (Mich. App. 1980).

       Since the term “proximate result” is not defined in the contracts, the Vandellas contend that

the plain meaning of the term must be used. They urge us to adopt the Random House Dictionary

definition of each word, which they argue supports the following conclusion:

       The word ‘proximate’ ordinarily means being ‘next, nearest, immediately before or
       after in order, place or occurrence, close or ver near.’ Result is defined as ‘to spring
       from, arise or proceeds as a consequence from the actions, circumstances or
       premises. The logical meaning of ‘proximate result’ when applied under these
       circumstances is that Defendants are entitled to 50% of the royalties collected close
       or very soon after their royalty collection based activities.

The Vandellas argue that a triable issue exists due to the mere passage of time since AREC’s last

“royalty collection based activity.” We disagree. We do not find the term “proximate result” to be

ambiguous when it is given its definite legal meaning.

       We find no error in the district court’s application of the “proximate cause” standard in tort

claims to this contact claim. The Michigan Supreme Court has defined the proximate cause of an

injury to be “ that which in a natural and continuous sequence, unbroken by any new, independent

cause, produces the injury, without which such injury would not have occurred.” Weissert v. City

of Escanaba, 299 N.W. 139, 143 (Mich. 1941) (internal quotation omitted); see also Gantt v. Mobil

Chem. Co., 463 F.2d 691, 700 (5th Cir. 1972) (noting that “proximate cause” has a well-settled and

long-established legal meaning). The definition of “proximate cause” is remarkably similar to the
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
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definition of “proximate result” as set forth by the Montana Supreme Court in Harri v. Isaac, 111

Mont. 107 P.2d 137, 141 (Mont. 1940), which found that term to mean “a result that would naturally

and ordinarily follow from the alleged act complained of, unbroken by any new and independent

cause.” In so finding, the court noted that the term "proximate" means the same in the term

"proximate result" as in the term "proximate cause." Id. Similarly, BLACK’S LAW DICTIONARY

1226 (6th ed. 1990) sets forth the following as one of its definitions for “proximate consequence or

result:” “One ordinarily following from the negligence complained of, unbroken by any independent

cause, which might have been reasonably foreseen.”

       There is no contrary intention to be found in these contracts; thus, it is presumed that the

parties intended the term “proximate result” to be given its proper legal meaning. In the context of

these contracts, the term “proximate result” means that there must be a causal link between the

efforts of AREC and the receipt of royalties by the Vandellas, unbroken by any other cause, in order

for AREC to be entitled to remuneration. The Vandellas are currently receiving payments from

UMG for only one reason–the efforts of AREC. AREC’s efforts are thus the “proximate result” of

the Vandellas current receipt of royalties. The evidence does not even remotely suggest another

cause. Because the causal chain remains unbroken, the passage of time is irrelevant.

       The Vandellas point to a footnote in the district court’s opinion to support its argument that

the passage of time is sufficient to break the causal chain. In footnote 10, the district court stated,

       Plaintiffs may seek to argue again at some time in the future that the passage of time
       has finally been enough to permit a reasonable jury to find that AREC’s efforts
       should no longer be considered the proximate cause of all or part of Plaintiffs’
       royalty payments. Although unconvinced by such an argument at this time, the court
       expresses no view as to the propriety or persuasiveness of such an argument if made
       in the future.
No. 04-1489
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        Contrary to the Vandellas’ assertions, the district court did not conclude that the mere

passage of time would be sufficient to break the causal chain. Instead, the district court expressed

no view as to the propriety of such an argument. However, in the body of the opinion itself, the

district court stated, “[i]n the future, it is conceivable that Plaintiffs may be able to point to facts not

yet in existence that may show that some or all of the royalty payments resulted from circumstances

or actions outside of AREC’s efforts, and argue that such circumstances or actions constitute a

separate or intervening proximate cause of such royalties.” The district court’s opinion is thus

entirely consistent with our interpretation of the legal phrase “proximate result.” Since the

Vandellas failed to present any other cause for the receipt of the royalties, we find that the district

court properly resolved this issue as a matter of law.

        Lastly, the Vandellas object to the district court’s award of attorneys’ fees and costs to UMG.

The district court found an award of attorneys’ fees and costs for all of UMG’s expenses to be

appropriate because the Vandellas consistently rebuffed UMG’s attempts to place the disputed funds

in an escrow account. In so holding, the district court noted its discretion to award attorneys’ fees

and costs in both an interpleader action, as well as under 28 U.S.C. § 1927. The Vandellas argue

that the district court abused its discretion because the interpleader action did not promote

efficiency, UMG was not innocent of provoking the dispute, the fees were not minor in relation to

the fund nor were they reasonable, and AREC should be forced to bear some of the attorneys’ fees

and costs as well.

        “Neither Rule 22 nor the interpleader statute contains an express reference to costs or

attorney’s fees.” 7 Wright, Miller & Kane, Federal Practice and Procedure: Civil § 1719 (3d ed.
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 11

2001). Nevertheless, “[a] federal court has discretion to award costs and counsel fees to the

stakeholder in an interpleader action, whether brought under Rule 22 or the interpleader statute,

whenever it is fair and equitable to do so. Id. An interpleading party is entitled to recover costs and

attorney's fees when it is (1) a disinterested stakeholder, (2) who has conceded liability, (3) has

deposited the disputed funds into court, and (4) has sought a discharge from liability. Septembertide

Publishing v. Stein and Day, 884 F.2d 675 (2d Cir. 1989). The only limiting principle is

reasonableness, and it is at the discretion of the Court to determine what award is appropriate. 7

Wright, Miller & Kane, supra, § 1719.

       In this case, UMG was a disinterested stakeholder that conceded liability, offered to deposit

the funds into court, and sought discharge. UMG warned the Vandellas it would seek attorneys’

fees and costs if forced to file an interpleader action. In a letter from UMG counsel Daniel D. Quick

to Gregory Reed, counsel for the Vandellas, Quick wrote,

       Before Universal [UMG] is forced to incur additional attorney fees to address your
       lawsuit, I am asking you to voluntarily dismiss your litigation against Universal, with
       prejudice. In exchange, Universal (through the proper entity) will agree to pay the
       subject royalties into a court-maintained trust account, to be released only upon order
       of the Court or settlement between your clients and AREC. You have until noon,
       June 11, to accept this option. If you do not concur, please be advised that Universal
       will move to consolidate both lawsuits before Judge Cleland, and file a counter-claim
       and third-party complaint for interpleader, after which Universal shall be entitled to
       recover its actual attorney fees from your clients.

       Unfortunately, despite the warning, the Vandellas chose to proceed and now face the

consequences of that choice. UMG had no choice. It was forced to incur attorneys’ fees and costs

in order to extricate itself from the litigation. We find no abuse of discretion by the district court

in assessing all the attorneys’ fees and costs to the Vandellas under these circumstances.
No. 04-1489
Holmes v. Artists Rights Enforcement Corp.
Page 12
                                             III.

       For the foregoing reasons, we AFFIRM the decision of the district court.
