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Insurance Policy Doesn't Cover Artists Suit Against Record Company

The California Court of Appeal, Second Appellate District, found that an insurance company wasn't obligated to defend an insured record company in a lawsuit filed against the label by one of its recording artists. The Oglio Entertainment Group Inc. v. The Hartford Casualty Insurance Co., B224156. Comic lounge singer Richard Cheese (a.k.a., Richard Davis) had sued Oglio over an offer of a low advance on a second album and for then hiring other artists to record in his style. Hartford refused to defend Oglio under an insurance policy the record company had with Hartford. Oglio and Cheese later settled their case, and Oglio sued Hartford. The insurance policy covers certain types of advertising injury claims. The court of appeal noted: “The policy language defines advertising injury as an injury arising out of '[c]opying, in your 'advertisement,' a person's or organizations 'advertising idea' or style of 'advertisement.' Davis's complaint alleged that Oglio sought out other recording artists to record lounge-style versions of popular songs, and released the Competing Albums by Bud E. Luv and Jaymz Bee & The Deep Lounge Coalition while the recording agreement was in effect ' diverting sales away from Davis's album and reducing the value of Davis's professional name, Richard Cheese. This does not allege that Oglio copied, in an advertisement, Davis's advertising idea or style of advertisement ' [T]he policy defines advertisement as the widespread dissemination of information or images with the purpose of selling a product, and the complaint alleged that Oglio copied Davis's product.”

No Oral Agreement for TV Producer and Distributor to Share Revenue

The U.S. District Court for the District of New Jersey decided there was no oral agreement for revenue sharing between a TV producer/broadcaster of Arab-oriented content and a distributor that secured a deal for the producer on the DISH network. Dandana LLC v. MBC FZ-LLC, 08-5592. Senior District Judge Dickinson R. Debevoise noted in an unpublished opinion: “[T]he wealth of documentary evidence produced by the Plaintiff [distributor] makes clear that even as late as January 2008, MBC was still soliciting formal offers from Dandana and was unwilling to provide an agency letter. In the face of this unchallenged evidence, the Court cannot credit Dandana's incredible assertion that the parties had already come to agreement.” Then referring to a written 2008 agreement between the parties, Judge Debevoise observed that the “subsequent, unambiguous fully-integrated written contract between the parties concerning the same subject matter prohibits recourse to prior oral representations. ' In the days that followed, Dandana submitted an invoice that requested payment on the contract. Payment was made by MBC and accepted by Dandana on or about June 26, 2008. While Plaintiff tries to claim that this payment was made pursuant to the July 27, 2007 [proported oral] Agreement, this is belied by its own invoice, which requested the $250,000 'Per MBC/Dandana LLC executed agreement dated May 27, 2008.'” The district judge continued: “Moreover, counsel for Dandana acknowledged in his letter dated June 23, 2008 that the parties had come to a 'subsequent agreement' concerning work done in connection with the DISH deal that was 'accepted by my client. '” 

Non-Payment of Foreign Record Royalties Not Enough for Rescission of Entire Contract

The U.S. District Court for the Southern District of New York refused to find that foreign rights in recording agreements were divisible such that the alleged non-payment of foreign royalties would allow for rescission of the contracts. Robinson v. Sanctuary Record Groups Ltd., 03 Civ. 10235. In New York, there must be a total failure to pay royalties in order for a party to be able to rescind its contractual grant of rights to the non-payor. The Robinson case involved the recordings of artists like Grand Master Flash, The Furious Five and The Sugar Hill Gang. The Sanctuary defendants had obtained the foreign rights from Rhino Records in 1995. District Judge Victor Marrero noted: “Regardless of whether the law allows rescission of divisible contracts, Plaintiffs have offered no facts indicating that the parties intended the Recording Agreements to be divisible. ' Plaintiffs argue that paragraphs 27, 28, and 29 of the Complaint demonstrate the divisibility of the 'Foreign Rights' provision, but those paragraphs contain only conclusory allegations that 'Foreign Rights' are 'independent,' 'divisible assets,' and that 'all the parties have intended to treat, and have in fact treated the exploitation of the Foreign Rights as separate and distinct.'” Judge Marrero added: “[T]he alleged partial non-payment of royalties would be more appropriately remedied by a legal, rather than equitable remedy. Plaintiffs do not argue, and indicate no facts suggesting, that monetary damages would be impossible or inadequate. To the contrary, Plaintiffs insist that it would be possible to 'identify and calculate' the royalties owed to them, and Plaintiffs' attorney has submitted a declaration to that effect.”

Insurance Policy Doesn't Cover Artists Suit Against Record Company

The California Court of Appeal, Second Appellate District, found that an insurance company wasn't obligated to defend an insured record company in a lawsuit filed against the label by one of its recording artists. The Oglio Entertainment Group Inc. v. The Hartford Casualty Insurance Co., B224156. Comic lounge singer Richard Cheese (a.k.a., Richard Davis) had sued Oglio over an offer of a low advance on a second album and for then hiring other artists to record in his style. Hartford refused to defend Oglio under an insurance policy the record company had with Hartford. Oglio and Cheese later settled their case, and Oglio sued Hartford. The insurance policy covers certain types of advertising injury claims. The court of appeal noted: “The policy language defines advertising injury as an injury arising out of '[c]opying, in your 'advertisement,' a person's or organizations 'advertising idea' or style of 'advertisement.' Davis's complaint alleged that Oglio sought out other recording artists to record lounge-style versions of popular songs, and released the Competing Albums by Bud E. Luv and Jaymz Bee & The Deep Lounge Coalition while the recording agreement was in effect ' diverting sales away from Davis's album and reducing the value of Davis's professional name, Richard Cheese. This does not allege that Oglio copied, in an advertisement, Davis's advertising idea or style of advertisement ' [T]he policy defines advertisement as the widespread dissemination of information or images with the purpose of selling a product, and the complaint alleged that Oglio copied Davis's product.”

No Oral Agreement for TV Producer and Distributor to Share Revenue

The U.S. District Court for the District of New Jersey decided there was no oral agreement for revenue sharing between a TV producer/broadcaster of Arab-oriented content and a distributor that secured a deal for the producer on the DISH network. Dandana LLC v. MBC FZ-LLC, 08-5592. Senior District Judge Dickinson R. Debevoise noted in an unpublished opinion: “[T]he wealth of documentary evidence produced by the Plaintiff [distributor] makes clear that even as late as January 2008, MBC was still soliciting formal offers from Dandana and was unwilling to provide an agency letter. In the face of this unchallenged evidence, the Court cannot credit Dandana's incredible assertion that the parties had already come to agreement.” Then referring to a written 2008 agreement between the parties, Judge Debevoise observed that the “subsequent, unambiguous fully-integrated written contract between the parties concerning the same subject matter prohibits recourse to prior oral representations. ' In the days that followed, Dandana submitted an invoice that requested payment on the contract. Payment was made by MBC and accepted by Dandana on or about June 26, 2008. While Plaintiff tries to claim that this payment was made pursuant to the July 27, 2007 [proported oral] Agreement, this is belied by its own invoice, which requested the $250,000 'Per MBC/Dandana LLC executed agreement dated May 27, 2008.'” The district judge continued: “Moreover, counsel for Dandana acknowledged in his letter dated June 23, 2008 that the parties had come to a 'subsequent agreement' concerning work done in connection with the DISH deal that was 'accepted by my client. '” 

Non-Payment of Foreign Record Royalties Not Enough for Rescission of Entire Contract

The U.S. District Court for the Southern District of New York refused to find that foreign rights in recording agreements were divisible such that the alleged non-payment of foreign royalties would allow for rescission of the contracts. Robinson v. Sanctuary Record Groups Ltd., 03 Civ. 10235. In New York, there must be a total failure to pay royalties in order for a party to be able to rescind its contractual grant of rights to the non-payor. The Robinson case involved the recordings of artists like Grand Master Flash, The Furious Five and The Sugar Hill Gang. The Sanctuary defendants had obtained the foreign rights from Rhino Records in 1995. District Judge Victor Marrero noted: “Regardless of whether the law allows rescission of divisible contracts, Plaintiffs have offered no facts indicating that the parties intended the Recording Agreements to be divisible. ' Plaintiffs argue that paragraphs 27, 28, and 29 of the Complaint demonstrate the divisibility of the 'Foreign Rights' provision, but those paragraphs contain only conclusory allegations that 'Foreign Rights' are 'independent,' 'divisible assets,' and that 'all the parties have intended to treat, and have in fact treated the exploitation of the Foreign Rights as separate and distinct.'” Judge Marrero added: “[T]he alleged partial non-payment of royalties would be more appropriately remedied by a legal, rather than equitable remedy. Plaintiffs do not argue, and indicate no facts suggesting, that monetary damages would be impossible or inadequate. To the contrary, Plaintiffs insist that it would be possible to 'identify and calculate' the royalties owed to them, and Plaintiffs' attorney has submitted a declaration to that effect.”