Penthouse Intern., Ltd. v. Barnes
| Decision Date | 30 July 1986 |
| Docket Number | No. 85-6023,85-6023 |
| Parties | PENTHOUSE INTERNATIONAL, LTD., a New York Corporation, Plaintiff/Appellant, v. Priscilla BARNES, Defendant/Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Norman Roy Grutman, Grutman, Miller, Greenspoon, Hendler & Levin, New York City, for plaintiff/appellant.
David Elson, Manatt, Phelps, Rothenberg & Tunney, Los Angeles, Cal., for defendant/appellee.
On appeal from the United States District Court for the Central District of California.
Before SCHROEDER, BOOCHEVER and HALL, Circuit Judges.
Penthouse International, Ltd. (Penthouse) filed for a declaratory judgment of the terms of a 1975 model release with Priscilla Barnes (Barnes). Barnes counterclaimed for damages and injunctive relief, alleging breach of confidentiality. The district court bifurcated the trial, and this appeal is from the declaratory judgment only.
Pursuant to the contract Penthouse published nude photographs of Barnes under a fictitious name in its March 1976 issue. Penthouse now proposes pursuant to the same contract to republish the photographs using her true identity. The district court, however, found that the contract did not convey to Penthouse the right to identify Barnes with the photographs, declared the contract terminated, and ordered Penthouse to return the transparencies to Barnes and to refrain from publishing the photographs entirely. Penthouse appeals.
At issue are (1) whether photographer Jeff Dunas (Dunas) acted within his actual authority in modifying Penthouse's printed form contract by adding the term AKA, (2) whether the district court erred in interpreting the AKA term to mean that Penthouse could not publish the photographs under Barnes' name, and (3) whether the district court abused its discretion by fashioning a remedy that ordered Penthouse to refrain from publishing entirely and to return the transparencies to Barnes. Although the district court made findings on ostensible authority, ratification, adhesion, breach of contract, and fraud, we find it unnecessary to review those issues because of our disposition based on actual agency and implied actual authority. We affirm the declaratory judgment interpreting the contract and finding actual agency, but reverse, in part, the grant of relief.
While acting as a hostess at a Hollywood club, Barnes was approached by Dunas, who identified himself as a freelance photographer who sold photographs to Penthouse. Dunas asked Barnes to pose nude, having in mind "the possibility of selling" photographs of her to Penthouse. Dunas suggested that Barnes examine the current issue of Penthouse to review the quality of his work. Although Dunas was paid as an independent contractor and did not have an office at Penthouse, Penthouse provided Dunas with the title of "Penthouse Staff Photographer" and included his name on its masthead. Dunas explained that if Barnes desired, her photographs would be accompanied by a pseudonym.
Before the photo session began Dunas presented Penthouse's standard model "Release, Authorization and Agreement" (the contract), filled in the blanks with the appropriate names and compensation figures, and asked Barnes to read and sign it. The release states in part:
I, Priscilla Barnes, hereby give Penthouse, its legal representatives and assigns, and those acting with its permission, or its employees, the consent, right and permission to buy, and/or purchase, and/or own, and/or assign, and/or transfer, and/or sell, and/or copyright and/or license to use, reuse and/or publish, and republish photographic pictures or portraits of me, or in which I may be distorted in character, or form, in conjunction with my own or a fictitious name....
Barnes read and signed the contract. Sometime immediately before or after her signing Dunas added the handwritten term "AKA" below the date. Barnes testified that Dunas told her that this notation meant that Penthouse would not publish her name, but would instead use a pseudonym.
According to Barnes, anonymity was an important consideration because of the nature of the photographs. Barnes, however, did not cross out in the provision for publication "in connection with my own ... name" nor did she add that only a fictitious name could be used. She testified that she read and understood the contract but did not know that she could alter the contract.
Robert C. Guccione (Guccione), Penthouse editor and publisher, testified, as did Barnes, that "AKA" meant "also known as." Guccione explained that such a notation was sometimes used to communicate a model's preference that her real name not be used. Unless a model crossed out the words "my own or" from the contract's provision allowing use of "my own or a fictitious name," or otherwise clearly indicated that the nonuse of her name was a condition of her agreement, he did not treat the mere notation "AKA" as affecting Penthouse's option under the contract to use either the model's real or a fictitious name. The district court found, however, that the photographers and other staff members customarily did not publish or republish photographs under a model's real name if AKA was added to the contract, regardless of whether the term "in my own name" was not stricken. The record supports that finding.
After a rumor was published in the National Enquirer and People Magazine that Barnes was Penthouse's 1976 centerfold, Guccione decided in the fall of 1983 to republish Barnes' photographs using her name. Before doing so Penthouse submitted the contract to the district court for a declaratory judgment that, pursuant to the contract, it had the right to republish the photographs with Barnes' name. In her answer and counterclaims, Barnes alleged that the contract not only prohibited Penthouse from publishing her name but also imposed upon Penthouse an affirmative duty never to associate her name with the photographs published in 1976. Barnes sought compensatory and punitive damages as well as injunctive relief premised on the allegation that Penthouse had breached its duty of confidentiality by its actions in 1983 and 1984, including failing to file suit under seal. In response to Barnes' request for a temporary restraining order, Penthouse agreed during the pendency of the suit not to publish the "photographs until a judicial determination that we have a right to do so has been obtained."
I. ANALYSIS
Under California law, questions regarding the existence of agency are questions of fact that we review for clear error. In re Nelson, 761 F.2d 1320, 1322 (9th Cir.1985).
The California Civil Code defines actual authority as "such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess." Cal.Civ.Code Sec. 2316 (West 1985).
The parties dispute whether Dunas was solely an independent contractor or whether his acts could be construed as the acts of an agent. The Restatement (Second) of Agency Sec. 14N (1958), provides that "[o]ne who contracts to act on behalf of another and subject to the others' control except with respect to his physical conduct is an agent and also an independent contractor." See City of Los Angeles v. Meyers Brothers Parking System, Inc., 54 Cal.App.3d 135, 138, 126 Cal.Rptr. 545, 546 (1975). At issue is whether Dunas contracted to act on behalf of Penthouse.
The district court explained that
[t]he acts performed by Dunas may be distinguished by the separate roles that he performed as a free-lance photographer and as an authorized Penthouse agent. The latter role is similar to activities performed by a salesman, i.e., soliciting young women to pose for Penthouse and convincing them to sign a Penthouse release form.... Dunas was an agent for Penthouse for the purpose of securing model releases. He was also an independent contractor as a Penthouse photographer.
Guccione explained that Dunas If Penthouse liked the test photographs, it would commission Dunas to do a full portfolio. With respect to the final portfolio Penthouse instructed photographers "to get a signed model release and not to alter the release in any way, without our permission."
In Barnes' case, however, it appears Dunas may not have used the normal procedure; instead of submitting test shots prior to a full portfolio, he photographed an entire portfolio for sale to Penthouse. Guccione explained that If so, under this arrangement Dunas conceivably might not be a Penthouse agent.
Guccione, however, also testified that Further, Penthouse carried Dunas' name on its masthead, gave him blank Penthouse contracts, may have given him business cards, and had him present contracts to models. Thus, although the record conflicts as to whether Dunas was an actual agent of Penthouse, on review, we cannot find that the district court clearly erred in finding Dunas to be a Penthouse agent.
Having found that the district court did not err in characterizing Dunas as an agent, we next turn to whether Dunas was acting within the scope of his authority by modifying the contract. Barnes does not contend nor is there evidence that Dunas possessed express actual authority to modify the contract....
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