Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Counsel Concerns: Lawyer Ethics Rule In Play in Suit By Business Manager Against Rap Artist
The U.S. District Court for the Western District of North Carolina dismissed a conversion counterclaim by rapper Chingy against his former business manager Leslie King, who is a lawyer, on the ground that the artist hadn't established that a royalty purchase agreement he signed with the lawyer was void for allegedly violating the state's attorney ethics rule. Viper Publishing Inc. v. Bailey, 3:17-CV-00314. However, the district court allowed the artist to pursue the ethics rule as an affirmative defense in the underlying lawsuit the attorney's music company has filed against Chingy.
King's Viper Publishing sued Chingy for allegedly breaching a contract under which Viper claims it obtained the right to Chingy's digital performance royalties from his sound recordings. Chingy argues he thought the purchase agreement included only one of his tracks.
Under the conflict-of-interest provision of Rule 1.8 of the North Carolina's Rules of Professional Conduct, when an attorney acquires “an ownership, possessory, security, or other pecuniary interest directly adverse to a client,” the lawyer must in writing make full disclosure to the client and advise the client to seek independent counsel for the transaction, as well as obtain informed written consent from the client.
But District Judge Graham C. Mullen found: “The only allegation describing any type of current relationship between [Howard] Bailey [i.e., Chingy] and King consists of the statement that King provided 'advice' and 'assistance' from 'time to time' to Bailey. Bailey does not describe the type of advice or assistance provided by King, nor does he even allege that the advice and assistance was legal in nature. … At the time the [music royalty] Purchase Agreement was negotiated and signed, Bailey alleges only that he asked King to help him secure financing [to record a single track], and that when those efforts were unsuccessful, King offered to finance the project. Neither of these actions would lead a person in Bailey's position to reasonably believe that he and King shared an attorney-client relationship.”
On the other hand, District Judge Mullen noted: “Bailey does not need to plead an affirmative defense with the same level of specificity. Rather, in light of the allegations contained in the Complaint, it is clear that such a[n ethics] violation, if proven, would qualify as a valid defense to Viper's breach of contract claims.”
*****
Stan Soocher is Editor-in-Chief of Entertainment Law & Finance as well as an entertainment attorney and a book author. He is also a tenured Associate Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. For more information: www.stansoocher.com.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
'Huguenot LLC v. Megalith Capital Group Fund I, L.P.': A Tutorial On Contract Liability for Real Estate Purchasers
In June 2024, the First Department decided Huguenot LLC v. Megalith Capital Group Fund I, L.P., which resolved a question of liability for a group of condominium apartment buyers and in so doing, touched on a wide range of issues about how contracts can obligate purchasers of real property.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
CoStar Wins Injunction for Breach-of-Contract Damages In CRE Database Access Lawsuit
Latham & Watkins helped the largest U.S. commercial real estate research company prevail in a breach-of-contract dispute in District of Columbia federal court.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.