Courthouse Steps

CAUSES OF ACTION: Breach of contract, and breach of implied covenant of good faith and fair dealing.

COMPLAINT ALLEGATIONS: This action arises out of a claim for copyright infringement brought by the Isley Brothers' publisher over the song 'Love Is a Wonderful Thing,' co-authored by Bolton and Andy Goldmark. TIG insured Time-Warner Inc. and its subsidiaries, which included Warner Chappell Music Ltd., also a defendant in the copyright action. Bolton and Bolton Music were additional insureds. TIG agreed to defend the action but failed to inform Bolton of the potential and actual conflicts of interests in having one attorney represent different parties whose positions were not necessarily aligned. In addition, TIG rejected opportunities for a reasonable settlement despite losing on summary judgment. TIG did not inform Bolton that during a settlement conference, the judge informed the defendants that the case could be settled that day for between $600,000 and $800,000. The trial ultimately resulted in a verdict that was affirmed on appeal. Bolton was held personally liable for about $900,000, Sony (Bolton's record label) for $4.2 million and Warner Chappell (which had the publishing contract) for about $76,000. TIG has now sought to collect the entire amount from Bolton by instituting litigation against him in England and Connecticut, seeking more than $12 million. This came after TIG controlled the initial litigation to protect its own interests and paid the amounts attributable to Sony, which was not even TIG's insured.