Howard Entm't, Inc. v. Kudrow

• Decision Date: 22 August 2012
• Docket Number: No. B234962.,B234962.
• Citation: 2012 Daily Journal D.A.R. 11728,146 Cal.Rptr.3d 154,208 Cal.App.4th 1102
• Parties: HOWARD ENTERTAINMENT, INC. et al., Plaintiffs and Appellants, v. Lisa KUDROW et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

208 Cal.App.4th 1102

146 Cal.Rptr.3d 154

2012 Daily Journal D.A.R. 11,728

HOWARD ENTERTAINMENT, INC. et al., Plaintiffs and Appellants,

v.Lisa KUDROW et al., Defendants and Respondents.

No. B234962.

Court of Appeal, Second District, Division 5, California.

Aug. 22, 2012.

See 1 Witkin, Cal. Evidence (5th ed. 2012) Opinion Evidence, § 75.

Horvitz & Levy, Encino, Frederic D. Cohen, Lisa Perrochet; Richard L. Hasen, Encino; Berman, Berman & Berman, Stephanie Berman Schneider, for Plaintiffs and Appellants.

Sauer & Wagner, Los Angeles, Gerald L. Sauer, Eve H. Wagner and Christopher V. Bulone for Defendants and Respondents.

MOSK, J.

INTRODUCTION

Plaintiff and appellant Scott Howard (Howard), a personal manager, entered into an oral agreement with the defendant and respondent Lisa Kudrow (Kudrow), an entertainer, by which agreement he would receive for personal management services a percentage of Kudrow's income.¹ After Kudrow terminated Howard'sservices, he claimed that he should continue to receive a percentage of Kudrow's income from Kudrow's engagements entered into, and services rendered, during the period of his retention. Howard relied upon custom and usage in the industry to support his claim. In granting a summary judgment in favor of Kudrow, the trial court excluded from evidence the declaration of Howard's expert on the ground of lack of foundation. We reverse the summary judgment, holding that the expert's declaration should have been admitted in evidence.

BACKGROUND

A. The Previous Appeal²

Kudrow began working in the entertainment industry in 1986. By 1991, she had performed in a play and an NBC pilot, had made several television appearances, had minor roles in several motion pictures, and had been a featured comedy theater performer. She had a personal manager for approximately one year and also had a talent agent, and knew their different roles. She knew that agents were entitled to commissions on the income generated on contracts they negotiated for their clients and engagements their clients performed during their relationship, even if that income was received or earned after the termination of the relationship. Kudrow sought career advice from fellow actors and had consulted with an entertainment attorney on issues relating to her entertainment career.

From 1984 through 1989, Howard worked in the entertainment industry, including positions at Capitol Records, MGM, and The William Morris Agency (William Morris). During that time he became a talent agent. In 1989, Howard left William Morris.

In 1991, Howard partnered with Debbie Miller, his former supervisor at William Morris, and became a personal manager,³ an occupation that purportedly was then developing in the entertainment industry.⁴ At that time, Howard did not have any experience as a personal manager and did not have any clients.

In 1991, Howard approached Kudrow about becoming her personal manager. Howard and Kudrow orally agreed that Howard would provide personal management services for Kudrow and in return receive a 10 percent commission on her income. There were no other specific discussions about compensation. Kudrow was one of the first clients Howard obtained after he became a personal manager.

In 1992, Kudrow landed a guest-starring part on the popular television show “Mad About You.” In 1993, she was cast in the recurring role of Ursula Buffay on Mad About You, and in 1994, she was cast in her “career-making” or “break-out” role as Phoebe on the hit television series, “Friends.” From 1994 through 2004, new episodes of Friends were broadcast on prime-time national television. Kudrow became contractually entitled to not only an amount of up to $1 million dollars per episode of Friends but also 1 1/4 percent of the “backend” earnings—i.e. profits from the show—and she was entitled to certain other residual payments. In 2000, the parties modified their oral agreement to provide that Howard's entitlement to commissions on certain earnings from Friends would be reduced. In 2004, the tenth and last year of Friends, Kudrow and Howard modified their oral agreement for the second and last time, decreasing Howard's commission from 10 percent to 5 percent on Kudrow's earnings for the final season of Friends.⁵ She was earning $1 million per episode for the final 18 episodes of Friends.

Kudrow terminated Howard's management services as of early March 2007. During their meeting concerning this termination, neither Kudrow nor Howard addressed Howard's compensation or how the termination would affect his compensation following termination. Thereafter, Howard made a demand for commissions on income Kudrow earned following the termination of their relationship for work she performed during the relationship, such as, for example, in Friends. When Kudrow rejected that demand, Howard filed a complaint against her alleging breach of contract and seeking declaratory relief and an accounting. Howard alleged that in 1991, the parties entered into an oral agreement pursuant to which he would provide management services to Kudrow in exchange for a 10 percent commission on her earnings, and that they later modified the agreement. He further alleged that after Kudrow terminated Howard's services, she breached their oral contract by failing to make commission payments for income she received after the termination of his services for work she performed or contracted to perform when Howard was still her manager. Howard sought a declaration of his claimed rights and an accounting of the relevant income.

Kudrow filed a motion for summary judgment contending that although there was an oral agreement pursuant to which Howard would receive commissions on Kudrow's earnings, Howard could not establish that she breached the agreement because there was no evidence that the parties agreed to post-termination compensation. Kudrow further contended that the causes of action for declaratory relief and an accounting also failed because they could not survive dismissal of the breach of contract claim.

Howard opposed the motion and submitted a declaration from his expert, Martin Bauer, in which Bauer stated that from at least the early 1980's, 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. Bauer opined that Howard was entitled to receive his commissions on all of Kudrow's earnings derived from the services she rendered and engagements she entered into while Howard was her manager, even after Kudrow terminated Howard's services in 2007.

Six calendar days before the summary judgment hearing, Kudrow filed objections to statements set forth in the Bauer declaration on the grounds that such statements were mere conclusions and made without a reasoned explanation connecting them to the facts of the case. At the hearing, after the trial court indicated an intention to sustain the objections to the Bauer declaration and grant the summary judgment motion, the parties argued whether the Bauer declaration contained a sufficient foundation.

Before the trial court ruled on Kudrow's objections, Howard requested a continuance to submit a revised declaration to provide the information the trial court said was missing from the Bauer declaration. The trial court denied Howard's request for a continuance, stating that a continuance was not authorized under Code of Civil Procedure section 437(c) and that it could not “think of any reason why it would be in [its] discretion to do so.” The trial court further noted that Howard had not requested the continuance until after Kudrow objected in her reply papers on the ground that the Bauer declaration lacked foundation and Howard learned of the trial court's adverse tentative ruling. The trial court then sustained Kudrow's evidentiary objections and granted the summary judgment motion. In doing so, the trial court observed that had it “admitted the Bower [ sic ] declaration, there would have been a big fat material dispute at several different levels.” Thereafter, Howard moved for a new trial and filed a supplemental declaration from Bauer. Howard also moved for relief from default under Code of Civil Procedure section 473 and requested that the trial court reconsider the summary judgment. The trial court denied both motions.

Howard filed a notice of appeal from the summary judgment in favor of Kudrow and the order denying his motion for relief under Code of Civil Procedure section 473. We held that the trial court did not err by sustaining Kudrow's objections to Bauer's declaration, but did err in denying Howard's request for a continuance because the court either failed to exercise its discretion in making that ruling, or at a minimum, it was unclear that the trial court exercised its discretion, which in itself was a basis to remand the matter. Accordingly, we remanded the matter to the trial court with directions to exercise its discretion to determine if Howard was entitled to a continuance to file a supplemental expert declaration.

B. Proceedings Upon Remand

After the matter was remanded, the trial court exercised its discretion and granted Howard's request to file a supplemental expert witness declaration. Thereafter, Howard filed an additional Bauer declaration in which Bauer reiterated matters contained in his original declaration, including that from 1974 through 1998, Bauer had experience in the entertainment industry based on his employment by talent agencies as a business affairs executive, vice-president and president, and based on his ownership of various talent agencies. Bauer stated that during that period he had obtained employment for actors, directors, writers, and producers in the entertainment industry. He added that in 1998 he formed a company, which since that date, has been in the “talent...