its creation and could transfer those rights to M & A.[1]
8. The next issue involves the determination of what law governs the non-copyright questions in this case. Federal courts in diversity of citizenship cases must apply the choice of law rules for the state in which they sit. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). In Michigan, the nature and effect of a contract it determined according to the law of the state where the contract was made. E.g., Rubin v. Gallagher, 294 Mich. 124, 128, 292 N.W. 584 (1940); see also Wells v. 10-X Mfg. Co., 609 F.2d 248, 253 (6th Cir.1979); Leff v. NAC Agency, Inc., 639 F.Supp. 1426, 1428 (E.D.Mich.1986).
9. The fact that the contract was made in Michigan, however, does not necessarily determine the choice of law. Michigan has adopted an additional rule that if the parties intended that a contract made in one state be performed in another state, then the law of the latter state governs performance. See George Realty Co. v. Gulf Refining Co., 275 Mich. 442, 266 N.W. 411 (1936). In general, the state of performance refers to the state in which the party who allegedly breached the contract was required to perform. Liberty Mutual Insurance Co. v. Vanderbush Sheet Metal Co., 512 F.Supp. 1159, 1167 (E.D.Mich.1981) (citing, e.g., George Realty Co., supra).
10. Its not clear how the performance rule should be applied to this case. Both parties allege a breach of the contract by the other party, which suggests that both Michigan and California could be the state of performance. California could also be considered the state of performance since each of the acts by VCX relating to the distribution, manufacture, duplication, or sale of video cassettes cold only have been intended, at the time the contract was formed, to take place in California. Indeed, each of these acts by VCX took place in California. On the other band, Weisberg claims that VCX breached its obligation to pay royalties. Under Michigan law, “[a] contractual obligation to pay money is generally to be performed in the state where the creditor resides.” Liberty Mutual Insurance Co., 512 F.Supp. at 1168 (citing Bastian Brothers Co. v. Brown, 293 Mich. 242, 291 N.W. 644 (1940); Douglass v. Paine, 141 Mich. 485, 104 N.W. 624 (1905)). This suggests that Michigan should be considered the state of performance. Additionally, VCX alleges that Weisberg breached his obligations under the contract. If Weisberg’s performance of the contract was contemplated to have occurred in any particular state, it certainly would have been in Michigan, the only state in which Weisberg conducted business under the assumed name M & A.
11. “Where the place of performance is not focused in any particular state, courts have held that in the absence of evidence to the contrary, the parties intended that the law of the place where the contract was made should govern questions of validity.” Structural Dynamics Research Corp. v. Engineering Mechanics Research Corp., 401 F.Supp. 1102, 1115 (E.D.Mich.1975). The Structural Dynamics court, noting the absence of Michigan authority on this point, relied on numerous decisions from other jurisdictions. Id. at 1115 & n. 9. This Court agrees that the performance rule does not determine choice of law when no state can be identified as the primary place of performance. Accordingly, the rights and obligations of the parties will be determined under Michigan law.
12. In this case the contract is silent as to copyright protection. The question is whether the contract can be interpreted as including the requirement that Weisberg obtain copyright protection for the film. When a contract is open to construction, a court must determine the true intent of parties by looking to the language of the contract, its subject matter, and the circumstances surrounding its making. E.g., Fischbach-Natkin Co. v. Power Process Piping, Inc., 157 Mich.App. 448, 452, 403 N.W.2d 569 (1987); Damerau v. Rieckhoff
- ↑ Because Buckley owned the copyright in the film, there is no need to consider under § 201(b) the validity of Schoolday’s purported transfer of the film to Buckley. See Finding of Fact ¶ 7.
