Obtaining Royalty Settlement-Talk Documents In Litigation Over Loss of Legal Client

Turner's suit in Los Angeles Superior Court alleged, among other things, fraud, interference with contract, extortion, legal malpractice, slander and conversion. Turner also sought an accounting. She claimed that Harper refused to pay legal fees and had physically threatened her if she enforced her fee agreement. Meanwhile, Harper filed a cross-complaint against Turner alleging that Turner's attorney fee lien had interfered with Harper's ability to collect in the royalty dispute. Turner in turn filed an indemnity cross-complaint against Robinson regarding Harper's alleged damages.

In her request for production of documents, Turner sought from Robinson '[a]ll correspondence to and from you during July 1997 to the present concerning the negotiations for the payment of royalties due Marvin 'Darryl' Harper for any services he provided towards the creation of the [Shakur] Don Killuminati, Makaveli album.'

Robinson argued that the request was too broad, but Turner claimed that she needed the settlement-talk documents to defend the cross-claim against her and so that an expert could establish the value of the settlement legal work. Robinson responded that the settlement agreement was still being negotiated and that 'the court said that the settlement agreements would be produced at the time they were approved by the probate court,' which had not yet concluded its examination of Tupac Shakur's estate. But the superior court ordered Robinson to hand over the settlement negotiation documents, noting that Turner would agree to a protective order so that the settlement negotiations wouldn't be disrupted. When Robinson failed to produce the documents, Turner moved for sanctions, alleging 'a large pattern of discovery misuse.' The superior court granted Turner's motion by entering a default judgment against Robinson and Harper that included $700,000 in damages in favor of Turner.

Robinson and Harper appealed. They argued that the lower court's discovery order was vague because it didn't specifically require that settlement agreement drafts attached to correspondence be handed over to Turner. Affirming, however, the Court of Appeal of California, Second Appellate District, emphasized in an unpublished opinion that 'correspondence' reasonably included enclosures sent with letters. Turner v. Harper, B152729. 'This conclusion is particularly appropriate where, as here, the enclosed documents are referred to in the letters and noted as enclosed with them,' the court of appeal noted. 'The discovery order requiring Robinson and Harper to turn over 'correspondence' thus included discovery of any written material enclosed with the letters sent. ' The ineluctable conclusion is that Robinson willfully decided to ignore the plain import of the discovery order ' Robinson and Harper thus knew exactly what Turner was seeking and what discovery was ordered.' The court of appeal added, 'The [superior] court's imposition of terminating sanctions for the willful failure to comply, which at a minimum thwarted any meaningful defense of the cross-complaint alleging interference with settlement negotiations, was not an abuse of its broad discretion. ' Accordingly, although terminating sanctions are by definition extreme and severe, the sanctions imposed bore a reasonable relationship to the information withheld.'

Robinson and Harper challenged the $700,000 damages amount that had been included in the default judgment, but the court of appeal upheld the award considering that Turner had asked for an accounting and that withholding the discovery documents had made it difficult to readily ascertain Turner's true damages. According to the court, 'although the complaint itself did not state the amount of damages, Robinson and Harper had actual notice from Turner's statement of damages served, had awareness of the essential facts necessary to determine damages themselves, and had acknowledged exposure to a judgment of over $1 million in their opposition to the motion for terminating sanctions. Robinson and Harper thus had adequate notice and cannot complain about a judgment approximately $300,000 less than they anticipated and far less than claimed in Turner's statement of damages. This result is particularly appropriate since Robinson and Harper willfully obstructed discovery to prevent revealing the precise amount of Turner's damages by hiding the amount being negotiated on the royalty claims.'

For practical purposes, it's worth noting how the lower court arrived at the $700,000 figure. First, in California, damages can be estimated where a party makes it difficult to determine actual damages. Second, the evidence submitted to estimate damages need only be the best in light of the type of case involved. Turner had submitted declarations regarding the nature of her relationship with Robinson and Harper. In addition, Turner's expert witness from the music industry had declared that Turner's share of projected royalties for completing the settlement talks would have conservatively amounted to $700,000. This was sufficient, the court of appeal concluded because the 'evidence and reasonable inferences therefrom provide an adequate nexus between the elements of fraud and the damages awarded.'

What are the primary lessons to be learned here? That documents related to ongoing royalty settlement talks are not only discoverable, but that attorneys suing over loss of clients may receive a default judgment with estimated damages if recalcitrant defendants refuse to provide the settlement-talk documents that the court has ordered be disclosed.

Stan Soocher is Editor-in-Chief of Entertainment Law & Finance. He is also an entertainment attorney, chair of Music & Entertainment Industry Studies at the University of Colorado at Denver, and author of the book 'The Fought the Law: Rock Music Goes to Court.' Web site: http://www.theyfoughtthelaw.com/;

In an industry of ever-changing loyalties, it's not unusual for attorneys to be concerned about keeping their entertainment clients. In some instances, lawyers may lose clients to competitors. If one lawyer sues another lawyer over such a loss, a key issue will likely be what correspondence the original lawyer can obtain in the lawsuit against the new lawyer.

Assume that the client's original lawyer procured a promise from an entertainment company to settle a royalty dispute. But the original lawyer has sued the client's new lawyer alleging a conspiracy to replace the original lawyer and to split the original lawyer's contingency fee between client and new lawyer. As part of discovery, can the original lawyer obtain documents handled by the new lawyer in negotiating the royalty settlement on behalf of the client?

Attorney Cheryl Turner represented producer/songwriter Marvin Harper in a royalty dispute with Death Row Records and other entities over Harper's work on a Tupac Shakur album. Turner received advice from entertainment attorney Angela Robinson but later sued Robinson and Harper claiming that Harper improperly replaced Turner with Robinson in the settlement negotiations.

Turner's suit in Los Angeles Superior Court alleged, among other things, fraud, interference with contract, extortion, legal malpractice, slander and conversion. Turner also sought an accounting. She claimed that Harper refused to pay legal fees and had physically threatened her if she enforced her fee agreement. Meanwhile, Harper filed a cross-complaint against Turner alleging that Turner's attorney fee lien had interfered with Harper's ability to collect in the royalty dispute. Turner in turn filed an indemnity cross-complaint against Robinson regarding Harper's alleged damages.

In her request for production of documents, Turner sought from Robinson '[a]ll correspondence to and from you during July 1997 to the present concerning the negotiations for the payment of royalties due Marvin 'Darryl' Harper for any services he provided towards the creation of the [Shakur] Don Killuminati, Makaveli album.'

Robinson argued that the request was too broad, but Turner claimed that she needed the settlement-talk documents to defend the cross-claim against her and so that an expert could establish the value of the settlement legal work. Robinson responded that the settlement agreement was still being negotiated and that 'the court said that the settlement agreements would be produced at the time they were approved by the probate court,' which had not yet concluded its examination of Tupac Shakur's estate. But the superior court ordered Robinson to hand over the settlement negotiation documents, noting that Turner would agree to a protective order so that the settlement negotiations wouldn't be disrupted. When Robinson failed to produce the documents, Turner moved for sanctions, alleging 'a large pattern of discovery misuse.' The superior court granted Turner's motion by entering a default judgment against Robinson and Harper that included $700,000 in damages in favor of Turner.

Robinson and Harper appealed. They argued that the lower court's discovery order was vague because it didn't specifically require that settlement agreement drafts attached to correspondence be handed over to Turner. Affirming, however, the Court of Appeal of California, Second Appellate District, emphasized in an unpublished opinion that 'correspondence' reasonably included enclosures sent with letters. Turner v. Harper, B152729. 'This conclusion is particularly appropriate where, as here, the enclosed documents are referred to in the letters and noted as enclosed with them,' the court of appeal noted. 'The discovery order requiring Robinson and Harper to turn over 'correspondence' thus included discovery of any written material enclosed with the letters sent. ' The ineluctable conclusion is that Robinson willfully decided to ignore the plain import of the discovery order ' Robinson and Harper thus knew exactly what Turner was seeking and what discovery was ordered.' The court of appeal added, 'The [superior] court's imposition of terminating sanctions for the willful failure to comply, which at a minimum thwarted any meaningful defense of the cross-complaint alleging interference with settlement negotiations, was not an abuse of its broad discretion. ' Accordingly, although terminating sanctions are by definition extreme and severe, the sanctions imposed bore a reasonable relationship to the information withheld.'

Robinson and Harper challenged the $700,000 damages amount that had been included in the default judgment, but the court of appeal upheld the award considering that Turner had asked for an accounting and that withholding the discovery documents had made it difficult to readily ascertain Turner's true damages. According to the court, 'although the complaint itself did not state the amount of damages, Robinson and Harper had actual notice from Turner's statement of damages served, had awareness of the essential facts necessary to determine damages themselves, and had acknowledged exposure to a judgment of over $1 million in their opposition to the motion for terminating sanctions. Robinson and Harper thus had adequate notice and cannot complain about a judgment approximately $300,000 less than they anticipated and far less than claimed in Turner's statement of damages. This result is particularly appropriate since Robinson and Harper willfully obstructed discovery to prevent revealing the precise amount of Turner's damages by hiding the amount being negotiated on the royalty claims.'

For practical purposes, it's worth noting how the lower court arrived at the $700,000 figure. First, in California, damages can be estimated where a party makes it difficult to determine actual damages. Second, the evidence submitted to estimate damages need only be the best in light of the type of case involved. Turner had submitted declarations regarding the nature of her relationship with Robinson and Harper. In addition, Turner's expert witness from the music industry had declared that Turner's share of projected royalties for completing the settlement talks would have conservatively amounted to $700,000. This was sufficient, the court of appeal concluded because the 'evidence and reasonable inferences therefrom provide an adequate nexus between the elements of fraud and the damages awarded.'

What are the primary lessons to be learned here? That documents related to ongoing royalty settlement talks are not only discoverable, but that attorneys suing over loss of clients may receive a default judgment with estimated damages if recalcitrant defendants refuse to provide the settlement-talk documents that the court has ordered be disclosed.

Stan Soocher is Editor-in-Chief of Entertainment Law & Finance. He is also an entertainment attorney, chair of Music & Entertainment Industry Studies at the University of Colorado at Denver, and author of the book 'The Fought the Law: Rock Music Goes to Court.' Web site: http://www.theyfoughtthelaw.com/;