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Friends Actress Lisa Kudrow's Former Manager Seeks To Reap The Fruits of His Labor

By Aleeshea Sanders

Howard Entertainment, Inc. et al., v. Lisa Kudrow et al.

On August 22nd the California Court of Appeal opened the door for the former manager of the well-known sitcom "Friends" actress, Lisa Kudrow a/k/a "Phoebe", to finally reap the fruits of his labor. In this ongoing legal battle for breach of contract between Kudrow and Scott Howard, the Second District California Court of Appeal sided with Howard, reversing the trial court's summary judgment for Kudrow, and ruling admissible Howard's proffered expert testimony relating to the customary practice in the entertainment industry with regard to post-termination commissions. (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012); see also http://www.courts.ca.gov/opinions/documents/B234962A.PDF.).

The dispute arose when, after a 16-year management relationship, Kudrow terminated Howard in early March 2007. She then refused to pay him commissions for work that he handled during the term of their agreement. In 1991, Howard and Kudrow had orally agreed that Howard would provide management services for Kudrow in return for ten percent commission on her income. In 2000 and 2004 respectively, the parties again made modifications to their verbal agreement, which included a reduction in Howard's commissions on certain earnings for "Friends", and then a reduction in Howard's commissions to five percent.

In 2008, Howard brought suit against Kudrow for breach of contract alleging that she failed to make more than $50,000 in continuing post-termination commission payments. Howard sought declaratory relief that he was entitled to receive commissions on all of Kudrow's continuing earnings for work done between 1991 and 1997.

Howard attempted to offer the expert testimony and declaration of Martin Bauer that it was customary for a personal manager to be paid post-termination commissions on work handled during the management term. Bauer stated, "[F]rom at least the early 1980s, it had been the custom and practice in the entertainment industry for a personal manager to be paid post-termination commissions on the services that their clients rendered, and on engagements that their clients entered into, when the personal manager was representing them." (Howard Entertainment, Inc. v. Lisa Kudrow, 2010 WL 3758592, (Cal. Ct. App. Sept. 28, 2010)).

However, Kudrow objected to the inclusion of Bauer's testimony, and the court granted summary judgment on the grounds that Bauer's opinion lacked foundation as it did not adequately reflect specified knowledge of the customary entertainment industry practices with regard to a manager's post-termination commissions at the time the parties entered into their agreement. Howard requested a continuance to address the deficiencies in Bauer's declaration. The trial court concluded that it did not have the discretion to grant Howard a continuance, so it granted Kudrow's motion and dismissed the case.

In the Court of Appeal's unpublished decision, it ruled that the trial court erred in concluding that it had no discretion to allow an opportunity to supplement the declaration, and that it abused its discretion in failing to grant a continuance to allow Howard to file a supplemental expert declaration with sufficient foundation. (See http://scholar.google.com/scholar_case?case=4321723798193235120&hl=en&as_sdt=2&as_vis=1&oi=scholarr.). The court stated, "If Bauer supplied the necessary foundation, arguably there would be a triable issue of fact as to whether the custom and usage was of such 'general and universal application that [Kudrow] may be conclusively presumed to know of the custom.'" (Howard Entertainment, Inc. v. Lisa Kudrow, 2010 WL 3758592, (Cal. Ct. App. Sept. 28, 2010) [quoting Miller v. Germain Seed & Plant Co. (1924) 193 Cal. 62, 69 (Miller)]).

The court stated that "custom and usage" in the entertainment industry may become part of the oral agreement between the parties to explain whether Howard was entitled to receive post-termination earnings, and it relied on long-standing precedent which states:

"'[A] reasonable usage may supply an omitted term or otherwise supplement an agreement." (Varni Bros., Corp. v. Wine World, Inc. (1995) 35 Cal. App. 4th 880, 889 [quoting 1 Witkin, Summary of California Law (8th ed. 1987) Contracts, § 696, p. 630]; see also Civ. Code § 1655.); and

"Custom and usage is considered 'in determining the intent of the parties, and are in effect a part of the contract unless the contract manifests a contrary intention.'" (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 77; accord Civ. Code § 1655.).

The court continued, "Evidence of custom and usage in the entertainment industry, even if Kudrow was unaware of that custom and usage, may therefore be relevant to explain or disclose an ambiguity in the agreement or provide by implication a missing term." (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 69 italics added.) "[A] party to a contract may be bound by a custom not inconsistent with the terms of the contract, even though he is ignorant of the custom, if that custom is of such general and universal application that he may be conclusively presumed to know of the custom." (Miller v. Germain Seed & Plant Co., supra, 193 Cal. at p. 69, italics added.).

The Court of Appeal concluded that Howard should have been granted a continuance, and it reversed the summary judgment.

On remand, the trial court accepted Bauer's supplemental declaration that detailed the basis for the expert's understanding about the relevant custom and practice, but again, it granted summary judgment for Kudrow, explaining that Bauer's knowledge provided an insufficient basis to admit his declaration because he did not include details of his personal experience in handling the exact type of transactions involving the exact custom and practice that he described.

Now, on Howard's second appeal, the Second District Court of Appeal once more reversed the trial court in a published opinion holding that, again, it improperly granted summary judgment in favor of Kudrow. The court explained, "An expert may rely upon experiences and conversations he or she has had and information he or she has obtained without the necessity of providing the specifics of such experiences and conversation." The court concluded that "there is no requirement that an expert set forth specific persons, conversations, or dates of such conversation for the formation of the opinion, as apparently required by the trial court." (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012)).

Thus, the trial court erred in requiring Bauer to provide names and dates to back up his opinion based on his experience that it is custom and practice to continue paying commissions to talent managers after a contract is terminated. The Court of Appeal reversed the summary judgment for Kudrow and ruled as admissible Bauer's expert testimony that it is customary practice to pay managers post-termination commission. (Howard Entertainment, Inc. et al. v. Lisa Kudrow et al., No. B234962, (Cal. Ct. App. 2nd Dist. August 22, 2012)).

However, despite a 16-year entertainment-industry marriage, and the laborious four-year-old legal separation and divorce that have come along with it, Kudrow's attorney stated that she is considering taking the legal dispute to the California Supreme Court. "The bottom line at this point in time is we are taking a look at possibly petitioning the California Supreme Court to look at the matter and at the same Ms. Kudrow is looking forward to having the matter decided in front of a jury if the matter proceeds to a trial court for a determination." (See http://abcnewsradioonline.com/entertainment-news/lisa-kudrow-may-take-legal-dispute-with-ex-manager-to-state.html).

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This page contains a single entry from the blog posted on September 4, 2012 2:30 PM.

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