HLC Properties v. MCA Records

Filed 5/16/08 HLC Properties v. MCA Records CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

APPEAL from a judgment of the Superior Court of Los Angeles County, Terry Friedman, Judge. Affirmed in part; reversed in part.

Law Offices of Mark A. Brodka, Mark A. Brodka; Greines, Martin, Stein, & Richland, Kent L. Richland and Cynthia E. Tobisman for Plaintiffs and Appellants.

Irell & Manella, Steven A. Marenberg, Philip M. Kelly and Kara D. McDonald for Defendants and Respondents.

I. INTRODUCTION

Plaintiffs, HLC Properties, Ltd. (HLC Properties) and Thomas E. OSullivan, as trustee for the Wilma Wyatt Crosby Trust (the trust), appeal from a judgment in their favor against defendants: MCA Records, Inc. (MCA); GRP Records, Inc.; UMG Recordings, Inc.; MCA, Inc.; and Universal Studios, Inc. Plaintiffs contend: they were denied their right to a jury trial; the summary adjudication motions were improperly granted; and they were the prevailing parties and, as such, were entitled to their costs. We conclude: the judgment must be set aside because plaintiffs were denied their right to a jury trial; the orders granting the summary adjudication motions may not be set aside; and the cost issue is now moot.

II. JURY TRIAL ISSUE

A. Overview

Plaintiffs contend they were denied their jury trial right. We will discuss the relevant facts and procedural aspects of their jury trial contention in chronological order. We will discuss the procedural and relevant factual matters as follows: the allegations in the pleadings; the procedural history of plaintiffs jury trial request; an analysis of the jury trial issue based on the pleadings as they existed after the strictly equitable claims were removed from the litigation by defendants two summary adjudication motions and plaintiffs dismissal of the constructive trust and accounting causes of action; and an analysis of the jury trial issue as it relates to the evidence presented during the court trial.

B. First Amended Complaint And Answer

1. Preliminary allegations

The complaint was filed on July 31, 2000. The first amended complaint was filed on October 10, 2002. Plaintiff, HLC Properties, was formed in 1980 and was the successor to all of the property rights of Harry L. Crosby that existed after his death on October 14, 1977. Mr. OSullivan was the trustee of the trust, which was named and formed after Mr. Crosbys first wife died on November 1, 1952. The trust held a one-half community property interest in all of the property accumulated during the marriage of Mr. Crosby and his late wife. Plaintiffs property rights included Mr. Crosbys royalties or income derived from recording contracts with Decca Records Inc. (Decca) and Decros Corporation (Decros).

2. Contract breach (first cause of action)

Mr. Crosby had a contractual relationship with Decca beginning on February 11, 1937. On March 29, 1943, Mr. Crosby entered into a written contract, which superseded all of their prior agreements, with Decca which granted it his exclusive services for the purpose of recording records. Decca was obligated to pay Mr. Crosby 15 percent of the established wholesale price of records retailing for $1 or more. If the wholesale price increased, Mr. Crosbys royalty was to increase by 10 percent on each record sold. Decca was also obligated to pay Mr. Crosby 50 percent of the proceeds of all public performances. Beginning January 1, 1972, defendants breached the 1943 contract by: failing to pay royalties at an agreed upon rate; releasing Mr. Crosbys recordings in media other than records and failing to pay appropriate royalties even if the recording could be released in cassette and compact disc format; reducing the royalty base by 10 and 20 percent on compact discs and tape cassettes respectively; computing royalties without regard to the obligation to pay greater sums when the wholesale price increased; failing to remit royalties on all sales; taking unauthorized deductions; recouping unauthorized sessions costs; and failing to account and pay for the public performance or broadcasting of Mr. Crosbys records.

On January 3, 1949, Mr. Crosby and Decros entered into a contract. Decros agreed to pay plaintiff 7.5 percent of the suggested retail price less taxes on shellac records with a price of $1 dollar or more. Further, on vinylite records pressed from specified master recordings, where the suggested retail price was $1 or more, the royalty rate under the 1949 contract was 5.25 percent. If an entity other than Decros outside the United States or Canada pressed a double disc record, there was a 7.5 percent royalty rate payable under enumerated circumstances. Moreover, as to other specified master records, Decros agreed to pay 2.5 cents on each double disc shellac record and 2.5 percent of the suggested retail price where the price was $1 or more on double disc vinylite records. The immediately foregoing royalties would be increased by 10 percent in the event of any increase in the wholesale price of records containing selections recorded by Mr. Crosby. Mr. Crosby was the majority shareholder in Decros. The intention of the 1949 contract was that Mr. Crosby, who was at the apex of his career, would share on a pro rata basis in future Decros profits. Finally, Decros was obligated to pay Mr. Crosby 25 percent of the net proceeds it received from the public performance and broadcasting of his recordings. Royalties were payable 45 days after the expiration of each calendar half year. Except as modified by an exhibit attached to the 1949 contract, there was no change in the obligation to pay royalties on recordings subject to the 1943 contract.

Beginning January 1, 1972, defendants breached the 1949 contract by: failing to pay royalties at an agreed upon rate; reducing the royalty base by 10 and 20 percent on compact discs and tape cassettes respectively; computing royalties without regard to the obligation to pay greater sums when the wholesale price increased; failing to remit royalties on all sales; taking unauthorized deductions; recouping unauthorized sessions costs; and failing to account and pay for the public performance or broadcasting of Mr. Crosbys records.

On May 10, 1956, Decros entered into another contract with Mr. Crosby. Decros agreed to pay Mr. Crosby royalties of: 7.5 percent of the suggested retail price less taxes for records retailing at $1 or more; 7 percent of the suggested retail price on double disc 45 and 33 1/3 revolutions per minute records where the price was $1 or more on records manufactured in Canada or the United States; and 7.5 percent of the established retail price less taxes for records manufactured outside Canada and the United States. These royalties would be increased by 10 percent of any increase in the wholesale price of records containing Mr. Crosbys recordings. Royalties were payable to Mr. Crosby 45 days after each calendar half year. The 1956 contract did not modify the royalty obligations owed under the 1943 and 1949 contracts with Decca and Decros respectively. Beginning January 1, 1972, defendants breached the 1956 contract by: failing to pay royalties at an agreed upon rate; reducing the royalty base by 10 and 20 percent on compact discs and tape cassettes respectively; computing royalties without regard to the obligation to pay greater sums when the wholesale price increased; failing to remit royalties on all sales; taking unauthorized deductions; recouping unauthorized sessions costs; and failing to account and pay for the public performance or broadcasting of Mr. Crosbys records.

On April 2, 1986, HLC Properties entered into a contract with MCA. Under the terms of the 1986 agreement, the 1943, 1949, and 1956 contracts were amended to cover compact discs. The first amended complaint alleges that Mr. Crosby was to receive the same royalty rate as if the recording was produced on a black vinyl disc. Further, in light of Mr. Crosbys stature, MCA agreed to pay him a royalty rate equal to that of other artists under specified circumstances. The exact allegation is: [I]n light of [Mr. Crosbys] stature as one of the most successful recording artists in history, [MCA] agreed to a most favored nations . . . clause which provided that should [MCA] agree to pay any of its artists a royalty which exceeds that artists rate for top-line single disc LPs sold through normal retail channels, then it would immediately apply that royalty basis to [Mr. Crosby]. Not later than January 26, 1988, defendants breached their obligations by offering more favorable terms to other artists when calculating compact disc royalties than to plaintiffs. Defendants began paying other artists royalties based on the suggested retail price of the compact discs rather than the rate payable for black vinyl records. The breach of the duty to pay plaintiffs the same favorable terms offered to other artists was not discoverable until September 2001 after documents were produced during the early stages of this litigation.

According to the first amended complaint, plaintiffs and their predecessors had performed all of their obligations under the 1943, 1949, 1956, and 1986 contracts. As a direct result of defendants breaching the 1943, 1949, 1956, and 1986 contracts, plaintiffs suffered damages in excess of $16 million. Between January 1, 1994, and December 31, 1998, defendants understated the royalties due to plaintiffs by 221 percent.

3. Fraud (second cause of action)

In 1972, defendants devised a fraudulent scheme to reduce the amount of royalties payable to Mr. Crosby and plaintiffs. In 1985, representatives of HLC Properties inquired as to how defendants calculated Mr. Crosbys royalties. Defendants provided copies of several contracts but deliberately refused to reveal the existence of the 1943 contract. In 1998, HLC Properties decided to conduct a formal audit. This time, defendants provided the 1943 contract. Defendants asserted that royalties were not to be paid under the 1943 contract but pursuant to a 1948 agreement as modified by letter between the parties exchanged in June 1960. In a July 28, 1999 letter, Raymond J. Valentin, a royalty auditor for Universal Music Group, stated that the January 2, 1948 agreement superseded prior contracts and there had been a subsequent modification in June 1960 of the parties understandings. In fact, there was no January 2, 1948 contract between Mr. Crosby and Decca. Further, nothing in the June 1960 correspondence modified any of Mr. Crosbys contracts. Plaintiffs alleged defendants knew the true factsthere was no January 2, 1948 contract and the 1960s correspondence did not modify the 1943, 1949, and 1956 contracts. Plaintiffs alleged defendants were obligated to disclose that the 1943 contract was the operative agreement. Plaintiffs relied on defendants representations that royalties were being paid in conformity with the operative contractual terms. On or about October 5, 1999, plaintiffs received an audit report and discovered defendants ignored provisions of the 1943 contract. As a result, plaintiffs had been damaged in excess of $16 million. The second cause of action contained a punitive damage allegation.

4. Fraud (third cause of action)

The third cause of action realleged all of the allegations in the first amended complaint except for the punitive damage claim in the second cause of action. Plaintiffs alleged that since 1972, defendants sent biannual written royalty statements to Mr. Crosby and his estate. Around 1999, defendant sent the royalty statements to plaintiffs. The royalty statements grossly understated the royalties due to plaintiffs. Defendants had no reasonable grounds for believing they were paying the correct amount of royalties and concealed the amounts due. The deceptive reporting and payments were made with the intent that plaintiffs would rely on them. On October 5, 1999, plaintiffs received an audit report and only then discovered defendants deceit. Plaintiffs have been damaged in excess of $16 million. The third cause of action also contained a punitive damage allegation.

5. Fiduciary duty breach (fourth cause of action)

Plaintiffs realleged all of the allegations except the punitive damage allegation in the third cause of action. Defendants acted as Mr. Crosbys exclusive agent for: recording his records; marketing the records using his name and likeness; keeping accurate accounts regarding the sales; and remitting the percentage of sales due under the 1943, 1949, and 1956 contracts. Under the 1949 and 1956 contracts, Mr. Crosby had the right to cancel them if they were breached by Decros and to prevent their assignment or transfer. Because Mr. Crosby was inexperienced in the marketing of records, he relied on Decca and Decros to act as his exclusive agents in these matters. Decca, Decros, and defendants held themselves out as experts in these matters. As a result, Mr. Crosby and his successors relied on Decca, Decros, and defendants to act with integrity and fidelity. Defendants breached their fiduciary obligations to plaintiffs causing damages in excess of $16 million. Finally, the fourth cause of action also contained a punitive damage allegation.

6. Implied covenant breach (fifth cause of action)

The fifth cause of action realleged all of the matters in the first four causes of action except the punitive damage allegation at the conclusion of the fourth cause of action. Based upon the previously stated facts, plaintiffs alleged defendants violated the fair dealing and implied good faith covenant. Finally, plaintiffs alleged they were damaged in excess of $16 million.

7. Rescission of contracts (sixth cause of action)

Plaintiffs realleged all of the prior allegations at the commencement of the sixth cause of action. All of defendants conduct constituted a material breach of the 1943, 1949, 1956, and 1986 contracts. The sixth cause of action alleged, Plaintiffs hereby elect to rescind the [1943, 1949, 1956, and 1986 contracts] based on material breach of contracts, fraud and breach of fiduciary or confidential relationship.

8. Cancellation of contracts (seventh cause of action)

At the commencement of the seventh cause of action, plaintiffs realleged all of the prior allegations in the first amended complaint. Under the terms of the 1949 and 1956 contracts, in the event of a breach, 30 days after providing notice of the violation of a contractual obligation, the defaulting party was entitled to terminate the agreement by written notice. In that case, all rights and obligations were to cease and terminate. On November 30, 1999, in a letter sent by certified mail, HLC Properties notified defendants they were in material breach of the 1943, 1949, 1956, and 1986 contracts. Plaintiffs sought a declaration that the 1949 and 1956 contracts were cancelled.

9. Constructive trust (eighth cause of action)

At the commencement of the eighth cause of action, plaintiffs realleged all of the prior allegations in the first amended complaint. Plaintiffs sought the imposition of a constructive trust on all of the masters recorded and royalties due under the 1943, 1949, 1956, and 1986 contracts. Finally, plaintiffs sought an injunction against defendants from engaging in any transfer or encumbrance of the master recordings or royalties.

10. Negligence (ninth cause of action)

The ninth cause of action realleged all of the prior allegations in the first amended complaint. According to the ninth cause of action, defendants owed a duty to exercise ordinary care with Mr. Crosby and his successors in interest. Defendants breached that duty of care and plaintiffs were damaged in an amount in excess of $16 million.

11. Accounting (tenth cause of action)

At the commencement of the tenth cause of action, plaintiffs realleged all of the prior allegations in the first amended complaint. Since defendants began collecting money generated by Mr. Crosbys recordings, they failed to remit the proper sums due. Since delivering the aforementioned 1999 audit report, defendants continued to fail to remit the full amount legally due. The accounting cause of action alleged: Plaintiffs do not know and cannot determine by calculation the exact amount of money owed to them by [d]efendants. Since [d]efendants have exclusive control of all documents and information necessary to ascertain the exact amount owed to [p]laintiffs, they should be required to render a full and complete accounting.

12. Open book account (eleventh cause of action)

All of the prior allegations of the first amended complaint were realleged at the commencement of the eleventh cause of action. The 1943, 1949, and 1956 contracts required defendants to maintain accurate books of account and render periodic accountings of moneys due on Mr. Crosbys recordings. An open book account exists between defendants and plaintiffs. Defendants were indebted to plaintiffs in the approximate sum of $16,336,931 plus interest.

13. Prayer for relief

The first amended complaints prayer for relief sought the following. The first paragraph of the prayer for relief sought: compensatory damages on all of the causes of action for moneys due under the 1943, 1949, 1956, and 1986 contracts; additional general, consequential, incidental, or special damages according to proof; and interest. The second paragraph sought punitive damages on the second, third, fourth, and eighth causes of action. The third paragraph sought as to the sixth cause of action for rescission of contracts a declaration: the 1943, 1949, 1956, and 1986 contracts were rescinded; the masters were held in trust as of the rescission date; defendants be required to deliver the masters recorded under the 1943, 1949, 1956, and 1986 contracts to plaintiffs; and all royalties generated after the rescission date be paid to plaintiffs. The fourth paragraph sought a declaration under the seventh cause of action that the 1949 and 1956 contracts were cancelled and all royalties collected and masters were to be held in trust. Also, plaintiffs sought an order that all royalties payable after the termination of the contracts and masters be delivered to plaintiffs. The fifth paragraph in the prayer for relief sought, as to the eighth cause of action, a declaration that defendants held the masters recorded under the 1943, 1949, and 1956 contracts and all royalties due thereunder in trust for plaintiffs. Additionally, the eighth cause of action sought an order that the masters be delivered along with all royalties to plaintiffs. Moreover, the eighth cause of action sought an order that defendants be enjoined from the transfer or creation of encumbrances upon the masters. The sixth paragraph of the prayer for relief sought as to the tenth cause of action an accounting of all moneys due to plaintiffs pursuant to the 1943, 1949, 1956, and 1986 contracts. Finally, plaintiffs sought interest and costs of suit including attorney fees.

14. Answer

Defendants filed a general denial. Defendants asserted as defenses: the statute of limitations; laches; federal copyright preemption; the right to a set-off; plaintiffs had ratified the royalty payments; waiver; estoppel; failure to mitigate damages; and the punitive damage claims were barred or limited by the Fifth and Fourteenth Amendment due process clauses.

B. Jury Trial

1. Procedural history of plaintiffs jury trial demand

By the time of trial, the issues raised by the first amended complaint had materially changed. Suit was filed on July 31, 2000. On August 1, 2002, defendants summary adjudication motion was granted to the extent that the statute of limitations limited plaintiffs claims. The trial court ruled the following claims arising prior to July 31, 1996, were barred: contract breach (first cause of action); fiduciary duty breach (fourth cause of action); implied covenant breach (fifth cause of action); rescission of contract (sixth cause of action); cancellation of contracts (seventh cause of action); constructive trust (eighth cause of action); and accounting (tenth cause of action). Further, the trial court ruled that all claims for fraud in the third cause of action arising prior to July 31, 1997 were time barred by the statute of limitations. Finally, the trial court ruled that the statute of limitations barred all of plaintiffs negligence claims arising prior to July 31, 1999.

After the first summary adjudication motion was granted, plaintiffs were permitted to file the first amended complaint, which primarily added allegations concerning the 1986 compact disc agreement. On May 9, 2003, the trial court granted defendants second summary adjudication motion as to the second (fraud), third (fraud), and fourth (breach of fiduciary duty) causes of action, and in part as to the eleventh cause of action (open book account). The trial court also granted summary adjudication as to plaintiffs punitive damage claims. The trial court concluded with respect to the second cause of actionalleging defendants fraudulently concealed the existence of the 1943 contract and then intentionally misrepresented the 1943 contract was superseded by a 1948 agreementthat: the cause of action was barred by the statute of limitations as to any acts prior to July 31, 1997; there was no evidence defendants justifiably relied on the representation as to the 1948 agreement; nor could there be any resulting damages from any such reliance; and failure to disclose a material termthe existence of the 1943 agreementwas not actionable absent a fiduciary relationship, which did not exist. The trial court found the third cause of actionalleging defendants knowingly sent plaintiffs false biannual royalty statementswas barred by the statute of limitations as to royalty payments made prior to July 31, 1997; further, given that the claim was dependent on the second cause of action, and given the ruling on the second cause of action, this third cause of action was really one for breach of contract. As to the fourth cause of action, for fiduciary duty breach, there were no new allegations that overcame the trial courts prior ruling of no triable issue that defendants owed a fiduciary duty to plaintiffs. Additionally, the trial court ruled the relationship between the parties was not a joint venture. Finally, the trial court held plaintiffs open book claims (eleventh cause of action) arising prior to July 31, 1997 were barred; and the motion was granted as to plaintiffs punitive damage claims.

On March 25, 2003, defendants filed a bifurcation motion to try the sixth, seventh, eighth, and tenth causes of action without a jury before trying any remaining legal issues. On April 15, 2003, defendants bifurcation motion was granted. On June 13, 2003, plaintiffs dismissed without prejudice their eighth and tenth causes of action in the first amended complaint for constructive trust and accounting. On August 13, 2003, plaintiffs filed a motion to empanel a jury to try their legal claims. Plaintiffs argued: as a result of the dismissal of the constructive trust and accounting causes of action, the gist of the remaining claims for contract and implied covenant breach, rescission, cancellation of contracts, negligence, and money due under an open book account was legal rather than equitable in nature; there is a jury trial right when the gist of a claim is legal; the gist of the rescission claim, which was based on contract breach and fraud, was legal rather than equitable; the key issues in the case involved questions of contract interpretation; and the witnesses will present conflicting testimony on the contract breaches at issue. On August 28, 2003, defendants filed their opposition to plaintiffs motion to empanel a jury and argued: when legal and equitable issues were present, the trial court could try the equity based questions first without a jury; the gist of plaintiffs rescission claim was equitable; the gist of plaintiffs contract breach claim was equitable because an accounting was required; and there was no absolute right to a jury trial. On September 4, 2003, the trial court denied plaintiffs motion to empanel a jury and ruled: the case turned on a determination as to the amount of the royalties due to plaintiffs; there can be no breach of contract or fraud if the [c]ourt determines that the amount of royalties paid has been proper; any determination of the amount of royalties required an accounting; and plaintiffs cited cases were inapposite. We summarily denied a writ petition challenging the trial courts order refusing to empanel a jury. (HLC Properties, Ltd. v. Superior Court (Nov. 6, 2003, B170493) [nonpub. order].)

2. Right to a jury trial

Article I, section 16 of the California Constitution guarantees a civil litigant the right to a jury trial on legal claims. (Grafton Partners v. Superior Court (2005) 36 Cal.4th 944, 951; Code Civ. Proc., 631, subd. (a) [The right to a trial by jury as declared by Section 16 of Article I of the California Constitution shall be preserved to the parties inviolate].) But the civil jury trial guaranteed is that as it existed at common law when the California Constitution was first adopted. (Corder v. Corder (2007) 41 Cal.4th 644, 655, fn. 7; Cornette v. Department of Transportation (2001) 26 Cal.4th 63, 75-76.) Hence, the constitutional civil jury trial right does not apply to equitable actions. (Corder v. Corder, supra, 41 Cal.4th at p. 655, fn. 7; Matter of Coburn (1913) 165 Cal. 202, 219.)  In resolving whether the causes of action in this case are legal or equitable in nature, we must determine the gist of plaintiffs claims: As we stated in People v. One 1941 Chevrolet Coupe [(1951)] 37 Cal.2d 283, If the action has to deal with ordinary common-law rights cognizable in courts of law, it is to that extent an action at law. In determining whether the action was one triable by a jury at common law, the court is not bound by the form of the action but rather by the nature of the rights involved and the facts of the particular case - - the gist of the action. A jury trial must be granted where the gist of the action is legal, where the action is in reality cognizable at law. (P. 299, fn. omitted, italics added.) (C & K Engineering Contractors v. Amber Steel Co. (1978) 23 Cal.3d 1, 9.) Normally, whether a claim is equitable or legal depends on the mode of relief the plaintiff seeks. (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 9; Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665, 672.) The operative complaints prayer for relief or the fact damages are sought may not be dispositive of whether the claim is equitable or legal. (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 9; Southern Pac. Transportation Co. v. Superior Court (1976) 58 Cal.App.3d 433, 436.) The fact that equitable principles may come into play during a trial does not abrogate the constitutional jury trial right. (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 10; McCall v. Superior Court (1934) 1 Cal.2d 527, 537.)

The extent of the constitutional civil jury trial right is set forth in Code of Civil Procedure, section 592, which provides in pertinent part, In actions for the recovery of specific, real, or personal property, with or without damages, or for money claimed as due upon contract, or as damages for breach of contract, or for injuries, an issue of fact must be tried by a jury, unless a jury trial is waived . . . . The scope of Code of Civil Procedure section 592 does not exceed the constitutional jury trial right. (Corder v. Corder, supra, 41 Cal.4th at p. 656; Crouchman v. Superior Court (1988) 45 Cal.3d 1167, 1174; see 7 Witkin, Cal. Procedure (4th ed. 1997) 90, pp. 110-111.) The jury trial right extends to claims for: contract breach and implied covenant damage claims as alleged in the first and fifth causes of action (Raedeke v. Gibraltar Sav. & Loan Assn., supra, 10 Cal.3d at p. 671; Davis v. Security-First Nat. Bank (1934) 1 Cal.2d 541, 542); negligence as alleged in the ninth cause of action (Ceriale v. Superior Court (1996) 48 Cal.App.4th 1629, 1634-1635; Morris v. Oney (1963) 217 Cal.App.2d 864, 873-874); and an open book account based upon a contract as alleged in the eleventh cause of action. (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1241; Grossblatt v. Wright (1951) 108 Cal.App.2d 475, 484-485.) There is no jury trial right on a contract cancellation cause of action when there is no claim for damages or restitution. (Proctor v. Arakelian (1929) 208 Cal.82, 99; Porter v. Superior Court (1977) 73 Cal.App.3d 793, 801.) As noted, in this case, the contract cancellation claim sought an award of damages.

The jury trial question is slightly more complex in terms of plaintiffs rescission claim. Prior to 1961, there were two forms of rescission. First, there was an action to enforce a rescission which was a legal claim. Second, there was an action to obtain a judicial rescission which was an equitable claim. (Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304, 311-312; Paularena v. Superior Court (1965) 231 Cal.App.2d 906, 912-913.) In 1961, Civil Code section 1691 was adopted which creates an action for relief from a party against whom a rescission has been accomplished. (Runyan v. Pacific Air Industries, Inc., supra, 2 Cal.3d at p. 313; Paularena v. Superior Court, supra, 231 Cal.App.2d at p. 913.) Whether a rescission claim is equitable or legal depends on the nature of the substantive relief requested by the plaintiff. (Runyan v. Pacific Air Industries, Inc., supra, 2 Cal.3d at p. 313; Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 728.) When the gist of the claim is for damages attendant to a rescission, the cause of action is legal in nature. (Ibid.; Paularena v. Superior Court, supra, 231 Cal.App.2d at p. 913.) Claims for return of personal property are likewise legal rather than equitable. (Code Civ. Proc., 592; Maldonado v. Superior Court (1984) 162 Cal.App.3d 1259, 1268; 7 Witkin, supra, Cal. Procedure, op. cit., 94, p. 114.)

3. The gist of plaintiffs claims as pled when their jury trial motion was denied were legal

When plaintiffs jury empanelment motion was denied, the following were the operative claims: contract breach; implied covenant breach; contracts rescission; cancellation of contracts; negligence; and open book account. The gist of plaintiffs claims were for damages and return of personal property; the masters of Mr. Crosbys recordings. After the dismissal of the equitable causes of action for imposition of a constructive trust and an accounting on June 13, 2003, the amended complaint contained causes of action arising out of alleged violations of the 1943, 1949, 1956, and 1986 contracts, all of which sought monetary damagesthe classic scenario involving legal claims. (Code Civ. Proc., 592; see Wegner, et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2007) 2:78 et seq., p. 2-48.1 (rev. #1, 2007).) Moreover, as to the rescission cause of action, plaintiffs sought to rescind the contracts based upon theories of: contract breach; fraud; and breach of fiduciary or confidential relationships. As to the contract breach and fraud claims, those theories are legal. (Raedeke v. Gibraltar Sav. & Loan Assn., supra, 10 Cal.3d at p. 671; Firemans Fund Ins. Companies v. Younesi (1996) 48 Cal.App.4th 451, 458-459.) The issue is closer as to the fiduciary duty and confidential relationship theories. (Compare Interactive Multimedia Artists v. Superior Court (1998) 62 Cal.App.4th 1546, 1554-1555 with Mortimer v. Loynes (1946) 74 Cal.App.2d 160, 168.) However, by the time plaintiffs filed their jury empanelment motion, the issues of fraud, fiduciary duties, and confidential relationships were moot. These issues were moot because the trial court granted summary adjudication on plaintiffs deceit and fiduciary relationship claims. In other words, the sole available theory to support plaintiffs rescission cause of action was their contract breach claim. In any event, the gist of plaintiffs rescission claim was defendants breached the 1943, 1949, 1956, and 1986 contracts. Also, the gist of the cancellation claim was that defendants breached the 1943, 1949, 1956, and 1986 contracts and plaintiff sought damages in addition to setting aside those agreements. Thus, based on the relief soughtmoney damages and recovery of personal property all arising from the alleged breaches of the 1943, 1949, 1956, and 1986 contractsthe gist of plaintiffs claims was legal and they were entitled to a jury trial.

Finally, in terms of the substantive relief sought, the fact plaintiffs dismissed their constructive trust and accounting claims is irrelevant. In Raedeke v. Gibraltar Sav. & Loan Assn., supra, 10 Cal.3d at pages 668-672: the plaintiffs filed a complaint with both equitable and legal claims; the plaintiffs dismissed their equitable claims prior to trial; and proceeded to trial on two legal theoriesconversion and breach of an oral promise to postpone a trustees sale. Despite these procedural intrigues, which parallel those in our case, our Supreme Court held: [W]hen the smoke created by plaintiffs' various maneuvers had finally cleared, plaintiffs were left with (1) a cause of action for damages for conversion, and (2) a cause of action for damages for breach of the oral promise to postpone the sale. As the relief sought in both causes of action was damages, and as the legal or equitable nature of a cause of action ordinarily is determined by the mode of relief to be afforded (Philpott v. Superior Court [(1934)]1 Cal.2d 512, 516; Paularena v. Superior Court, [supra,] 231 Cal.App.2d [at pp.] 911-912), plaintiffs were entitled to a jury trial as a matter of right. In terms of the pleadings, the same is true in this case. (Raedeke v. Gibraltar Sav. & Loan Assn., supra, 10 Cal.3d at pp. 671-672; Wegner et al, Cal. Practice Guide: Civil Trials and Evidence, supra, 2:75, p. 2-13 (rev. #1, 2007).)

4. The gist of plaintiffs claims at trial were legal

a. overview

As previously noted, our Supreme Court has emphasized that the state of the pleadings, specifically the prayer for relief, may not, depending on the circumstances, be dispositive of whether the gist of a lawsuit is legal or equitable. (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 9; see DiPirro v. Bondo Corp. (2007) 153 Cal.App.4th 150, 179.) Hence, our Supreme Court has also examined what occurred at trial in order to determine whether the constitutional jury trial right has been violated. (C & K Engineering Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 9.) Courts of Appeal have done likewise. (Nwosu v. Uba, supra, 122 Cal.App.4th at pp. 1242-1244; Lectrodryer v. SeoulBank, supra, 77 Cal.App.4th at p. 728; Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 969-971; Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 622-623.) Consideration of the issues raised during the trial demonstrate the gist of plaintiffs claims were legal. We set forth the facts developed during the trial as they relate to whether the gist of plaintiffs first amended complaint was a legal claim for damages based on violations of the 1943, 1949, 1956, and 1986 contracts. As will be noted, the trial involved plaintiffs right to damages because of alleged breaches of the 1943, 1949, 1956, and 1986 contracts and the return of personal property.

b. the contracts

The March 29, 1943 contract provided: Decca would record for a seven year period Mr. Crosbys commercial sound records; Mr. Crosby was to be paid between 2.5 cents and 5.25 cents on double disc 10-inch records manufactured in the United States and Canada which sold for less that 75 cents and 15 percent of the established wholesale price where the price exceeded $1 less taxes; on double disc 12-inch records manufactured in the United States and Canada, Mr. Crosby was to receive 4.5 and 5.5 percent when the suggested retail price was 75 cents and $1 respectively and 15 percent of the wholesale price when the established wholesale price was more than $1 minus taxes; and on double disc records manufactured and sold outside the United States and Canada, Mr. Crosby was to receive 5.25 cents when the suggested retail price was less than $1 and, when the suggested retail was more than $1, he was to be paid 15 percent of the established wholesale price in the country of manufacture minus taxes. Mr. Crosby was to receive 50 percent of all money recovered from public performances or broadcasting. When the 1943 agreement was executed, all records sold to the public were made from shellac.

On January 3, 1949, Mr. Crosby formed Decros which was dedicated to producing and selling his records. The January 3, 1949 contract provided that Mr. Crosby granted Decros ownership rights to specified master records and the authority to record his commercial phonograph records for seven years. The term commercial phonograph records was defined thusly in the 1949 agreement: Commercial phonograph records as used in this Agreement shall mean phonograph records, whether made in the form of discs, wire, or tape, or any devices which are now or hereafter used as a substitution for or a replacement of phonograph records as now known, and shall not include records intended exclusively for motion pictures, radio or television broadcasts. Mr. Crosby was to be paid $295,750 which was to be applied against royalties when the specified records were manufactured in the United States or Canada or anywhere by Decros. On specified records, Mr. Crosby was to receive on double disc 10-inch shellac records the following royalties: when the suggested retail list price was 35 cents, 2.5 cents; 3.5 cents when the suggested retail list price was 50 cents; and 5.25 cents when the suggested retail price was 75 cents. When the suggested retail list price was $1 or more, Mr. Crosby was to receive 7.5 cents less taxes. On double disc 12-inch shellac records manufactured in the United States or Canada or anywhere by Decros, Mr. Crosby was to receive: 4.5 cents when the suggested retail price was 75 cents; 5.5 cents when the suggested retail price was $1; and 7.5 cents when the suggested retail price was more than $1. But when a record was manufactured on vinylite in the United States or Canada or anywhere by Decros, 5.25 cents was to be paid to Mr. Crosby when the suggested retail price was less than $1 dollar. When the suggested retail price was $1 or more, Mr. Crosby was to receive the established retail price in the country of manufacture minus any taxes. Specified records listed on an exhibit to the 1949 agreement were to be paid at a rate of 2.5 cents on double disc shellac records. If the suggested retail price of the same records manufactured on vinylite was $1 or more, Mr. Crosby was to receive a royalty of 2.5 percent. When the wholesale price increased, Mr. Crosbys royalties were to increase by 10 percent. Mr. Crosby was to receive 50 percent of all moneys received by Decca for public performances but had received no compensation. The obligation to make payments for public performances was transferred from Decca to Decros. For pubic performances in the United States, Decros was obligated to pay 25 percent of the net proceeds. All of the net proceeds for public performances outside the United States were payable to Mr. Crosby. There were other aspects of the 1949 contract which did not directly relate to the contractual duties owed by Decros to Mr. Crosby at issue in this lawsuit.

On May 10, 1956, Decros and Mr. Crosby entered into a second recording contract which had as its purpose, The parties wish to arrange for the services of [Mr. Crosby] in the making of commercial phonograph records for the future. On double disc 10-inch 78 or 7-inch 45 revolutions per minute records manufactured in Canada or the United States or by Decros anywhere, Mr. Crosby was to receive the following royalties: when the suggested retail list price was 35 cents, a royalty of 2.5 cents; when the suggested retail list price was 50 cents, a royalty of 3.25 cents; and when the suggested retail list price was 75 cents, a royalty of 5.34 cents. For those records, when the price was over 75 cents and under $1, Mr. Crosby was to receive a 5.75 cent royalty. If the price was over $1, Mr. Crosby was to receive 7.5 percent of the suggested retail price less taxes imposed.

In paragraph 10, the May 10, 1956 contract provided a separate royalty rate for 78 revolutions per minute double disc 12-inch records manufactured in Canada or the United States or by Decros anywhere: 4.5 cents on a record with a suggested retail list price of 75 cents; 5.5 cents on a record with a suggested retail list price of $1; and 7.5 percent on a record with a suggested retail list price of $1 or more less taxes. On double disc extended play 45 or 33 and one third revolutions per minute records manufactured in Canada or the United States or by Decros anywhere, the royalty rate would be 7 percent of the suggested retail price where the price was $1 or more. If double disc records were manufactured by someone other than Decros outside the United States and Canada, if the suggested retail price in the United States was less than $1, the royalty would be 5.75 cents. If the retail price in the United States was $1 or more, the royalty rate was 7.5 percent minus taxes. The royalty rates in paragraph 10 could be reduced in enumerated amounts if another artists work was on a record containing a recording by Mr. Crosby.

The 1986 compact disc contract modified all of Mr. Crosbys agreements. Dated April 2, 1986, the agreement provided: The royalty payable on recordings in the form of compact discs shall be the same cent rate (or other currency) otherwise payable on single-disc top-line LPs (which is currently $8.98) for sales through normal retail channels (with proportionate reductions for non-retail sales). Commencing with the first full accounting period two years from the release date of a compact disc embodying Artists performance, MCA and Artist, at Artists written request, shall negotiate in good faith a new compact disc royalty based on the then current industry standards for artists of similar stature . . . through normal retail channels. Also, the 1986 contract contained what the parties refer to as a most favored nations clause: If during said two (2) year period or any time thereafter, MCA uses a different basis for determining royalties on compact discs and, as a result thereof, MCA agrees to pay any artist a royalty which exceeds that artists cent rate for top-line single disc LPs sold through normal retail channels. . . . (Rather than use the metaphor most favored nations clause which finds its basis in diplomacy and international treaties, we will use the more accurate phrase equal preferential treatment clause.) The 1986 contract was signed by Roy Farrow, on behalf of Hillsborough Productions, the general partner of HLC Properties, and Susan Allen on behalf of defendants. The president and chief executive officer of Hillsborough Productions is Kathryn Crosby, Mr. Crosbys second wife.

c. the 1960s correspondence

The parties disagreed as to the impact of what they refer to as the 1960s correspondence. The 1960s correspondence, an exchange of letters, consisted of a: June 8, 1960 letter between Basil Grillo, who ran Mr. Crosbys Beverly Hills business office, and an accountant which indicated that understandings had been reached concerning royalty rates; a June 8, 1960 letter from Mr. Grillo to Mr. Crosby explaining that an effort would be made to settle a dispute with Decca; a June 22, 1960 letter from Mr. Grillo acknowledging that the 94 cent rate was acceptable; a June 28, 1960 letter from Mr. Cohen to Mr. Grillo explaining the calculation on the 94 cent rate; Mr. Grillos telegram agreeing with Mr. Cohensanalysis in the June 28, 1960 letter; and Mr. Grillos March 11, 1960 letter to Louis A. Buchner of Decca agreeing to a settlement of a dispute. According to defendants, the 1960 correspondence allowed them to pay a 7 percent royalty on Mr. Crosbys recordings.

There was conflicting testimony as to the effect of the 1960s correspondence. Plaintiffs called David Berman, an experienced recording industry lawyer, who testified that the 1960s correspondence did not modify the 1943, 1949, and 1956 contracts other than to provide for a new royalty rate on a 94 cent single. Gary Cohen, who prepared an audit report dated October 5, 1999, which asserted that plaintiffs were entitled to substantial damages, testified the 1960s correspondence did not affect the moneys due under the 1943, 1949, and 1956 contracts. According to Mr. Berman, the parties course of conduct over the years was such they only used specific documents executed by them including personally by Mr. Crosby when he was alive. There was no evidence Mr. Crosby ever personally approved any changes in the 1943, 1949, and 1956 contracts. Further, some of the language in the 1960s correspondence is cryptic compared to the express agreements reflected in the 1943, 1949, and 1956 contracts.

By contrast, defendants presented evidence the 1960s correspondence reflected a change in the royalty rate apart from the 94 cent single. Walter Dean, an experienced recording industry lawyer, testified that 1960s correspondence reflected the typical settlement of a royalty dispute. Moreover, a June 8, 1960 letter states, On EPs and LPs, the rate will be 7% of the retail price, less excise taxes and the prices heretofore established for packaging. There was testimony the 7 percent rate was consistent with what internal Decca rate cards show was being paid on albums. The same is true of Decros albums. In addition to Mr. Deans testimony, there was evidence that after the 1960s correspondence, Decca began paying a 7 percent retail royalty rate minus excise taxes and packaging costs on long playing vinyl records and later on cassettes and compact discs. Also, Roy Farrow, an officer of Hillsborough Productions and an attorney, conceded that he was aware in April 1986, that plaintiffs were being paid at a 7 percent royalty rate. Also, on June 23, 1987, Mr. Farrow was advised that a 7 percent of retail royalty was being paid. Mr. Berman believed that Mr. Farrows failure to object upon being notified of the 7 percent royalty rate in 1987 was deficient representation of plaintiffs interests. But Mr. Berman, testifying on behalf of plaintiffs, conceded Mr. Farrows failure to raise the issue might change the legal situation.

In reducing the contract rate of 15 percent to 7 percent, Mr. Dean testified Decca was struggling to decide what portion of the 1943 contract made the most sense in light of changing technologies: And the conclusion they came to . . . was looking at the fact that a single record was going to bear 5-1/4 cent royalty on a 75 cent double-sided record in shellac, and basically interpolated that into, well if you have the typical long playing record which basically has ten cuts on it instead of two, that the 5-1/4 cents on 75 cents really equated to a 7 percent of retail royalty. [] And they applied that 7 percent retail royalty to the new configuration, and each succeeding new configuration they did exactly the same thing. There were Decca internal documents that confirmed the efforts to calculate royalties as record technologies evolved. Marjorie Fieldman, the senior vice president for Universal Music Group, testified, based upon rate cards and other documents, that Decca paid at the 7 percent royalty rate except in the case of budget records.

d. less well selling recordings

The parties presented conflicting evidence as to the alleged existence of a reduced royalty rate on less well selling recordings referred to as midline or budget products. Ms. Fieldman described the purpose of such marketing: [T[he purpose of a midline record is to sell a higher volume at a lower margin. So the record companies were requesting that the artist take a lower royalty rate, which would then be compensated by the increased volume. [] . . . The purpose is to stimulate catalog activity because the people are no longer willing to buy the records at top price. So in order to continue to sell the product, you have to reduce the price to make it attractive to the customer. Plaintiffs acknowledge Mr. Crosbys estate agreed in January 1978 in writing to a reduced royalty rate as to two recordings, Shillelaghs & Shamrocks and When Irish Eyes Are Smiling. There was evidence that any other requests for reduced rates must be personally approved by Mr. Grillo. However, since the January 1978 agreement, the reduced royalty rate was paid on all of the so-called midline products. Mr. Cohen testified there was no contractual basis for paying a reduced royalty on the midline or budget recordings. Mr. Cohen testified that Mr. Crosby only agreed to the reduced royalty rate on only the aforementioned two recordings. And there was testimony until Mr. Cohens 1999 audit report, plaintiffs never raised the issue of reduced royalties on midline releases.

e. 1986 compact disc preferential treatment clause

The parties presented conflicting testimony as to when the equal preferential treatment clause in the 1986 compact disc agreement was triggered. When the 1986 compact disc amendment was executed, Mr. Farrow, on behalf of plaintiffs, was told that the royalty for Mr. Crosbys recordings would be the same as that payable on a vinyl record. Because of the uncertainty as to the production costs of compact discs and whether they would be profitable, it was an industry-wide practice for the artist to be paid at the same rate payable on vinyl records. There was testimony and documentary evidence plaintiffs were paid on what was characterized as black vinyl rate (that payable under the 1943, 1949, and 1956 contracts for a vinyl record) which was a lower rate than the constructed retail basis later paid to other artists in violation of the equal preferential treatment clause in the 1986 compact disc agreement. Ms. Fieldman described the concept of a constructed retail price as follows, Constructing a wholesale price from a retail price. Later, Ms. Fieldman described the concept, That would be applying an uplift to a wholesale price and varying with packaging and percentage of units paid or other results - - units that would in calculations that would be made other then black vinyl.

According to Ms. Fieldman, if the use of the constructed retail price resulted in higher royalties than those paid utilizing the black vinyl rate, the equal preferential treatment clause in the 1986 compact disc agreement would be triggered. Mr. Cohen testified the equal preferential treatment clause was triggered when other artists, the Ink Spots, Burl Ives, the Andrews Sisters and Fred Astaire, received a more generous constructed retail basis rate. As early as 1987, other artists were paid on the so-called constructed retail basis which yielded more lucrative royalties than those paid to plaintiffs. Mr. Valentin, a former MCA employee, testified that the Fontaine Sisters, Peggy Lee, Frances Craig, Dooley Wilson, Pearl Bailey, and Fred Waring were paid at a more favorable rate on compact discs than plaintiffs. In 2003, Ms. Fieldman testified MCA discontinued using the black vinyl rate and this triggered the equal preferential treatment clause in the 1986 compact disc agreement. Also, other artists were not charged for compact disc packaging. Thus, according to defendants, only commencing January 1, 2003, were plaintiffs entitled to more generous royalties. Ms. Fieldman only became aware the defendants were underpaying plaintiffs under the 1986 compact disc agreement two weeks before testifying. During his opening statement, defense counsel admitted that there had been errors in the computation of moneys due to plaintiffs for compact discs containing Mr. Crosbys recordings.

An MCA Records employee, Nancy Allen, admitted she could not recall if her employer had a method for keeping track of when an equal preferential treatment clause in an artists compact disc agreement would be triggered. Lawrence Kenswil, a lawyer with Universal Music Group and now the president of e-labs, a division developing and launching new businesses , when asked whether there was a method to detect when an equal preferential treatment clause was triggered in 1986 through 1990, testified: Generally, I dont remember precisely. And it could be that it changed from year to year. Mr. Kenswil indicated there were very few equal preferential treatment clauses and it would be the obligation of lawyers and paralegals using lists to notice that the artist were entitled to more lucrative royalty payments. Mr. Kenswil could not recall if there was a formal procedure for notifying artists that their equal preferential treatment clause had been triggered.

f. packaging costs

Plaintiffs asserted that defendants breached the 1943, 1949, 1956, and 1986 contracts by deducting packaging and container costs. Mr. Berman testified that under the 1943, 1949, and 1956 contracts, no packaging deduction could be taken form the royalties. As to the packaging costs deducted from plaintiffs royalties, Mr. Dean testified that record companies made a standard deduction of 10 percent from royalties for packaging. Mr. Dean testified, [E]verybody was subject to the same 10 percent packaging deduction except in very, very rare instances . . . . Ms. Fieldman testified as to internal Decca documents which implied a packaging deduction was being taken. Mr. Kenswil conceded that if an underlying contract did not provide for a packaging deduction, then none could be deducted from a compact disc royalty. By contrast, defendants presented evidence that during an audit of Decca and Decros in the later 1950s, Mr. Grillo, Mr. Crosbys business manger, stated that the royalties should not include packaging costs; i.e., the record companies were entitled to deduct for packaging. Moreover, in February 1962, Mr. Crosby personally approved a packaging deduction for sales occurring during the month of March 1962. On June 23, 1987, Mr. Kenswil notified Mr. Farrow that packaging deductions were being taken.

g. overseas public performances

It was undisputed that plaintiffs were never paid by defendants for overseas public performances prior to 2001. Ms. Fieldman, the senior vice president for Universal Music Group, admitted that prior to 2001, defendants did not pay any public performance royalties to plaintiffs. Mr. Cohen corroborated Ms. Fieldmans admission concerning the failure to pay for overseas public performances. But there was evidence Decca had paid foreign royalties to Mr. Crosby in the late 1950s.

h. 10 percent enhancement on increased wholesale prices

Plaintiffs and defendants disagreed as to whether there was an entitlement to a 10 percent enhancement on royalties because of increases in the wholesale prices of Mr. Crosbys recordings. Mr. Cohen originally estimated plaintiffs were contractually entitled to $883,154 in additional royalties based upon the increase in wholesale prices. Wayne Coleman, a certified public accountant employed by The Royalty Compliance Organization who testified for defendants, calculated that if plaintiffs were entitled to the 10 percent increase in royalties, the damage amount would be $736,587 for that item. After reviewing Mr. Colemans calculations for the time period of 1996 through 2002, Mr. Cohen agreed that the correct damage figure for the failure to pay plaintiffs the 10 percent figure for increases in the wholesale price was $736,587. Mr. Coleman assumed that plaintiffs had no right to payment for the increased wholesale price of recordings subject to the 1943 contract.

i. additional damage calculations

Plaintiffs presented a specific damage figure for losses sustained through 2002. Mr. Cohen reviewed the royalty statements and the underlying agreements. Mr. Cohen concluded the royalties paid to plaintiffs were not in accordance with the underlying agreements. In 1999, Mr. Cohen prepared a report setting forth plaintiffs theory that they were entitled to total contract breach damages in the sum of $16,336,931. Mr. Cohens damage analysis had to be modified in light of the trial courts summary adjudication rulings which found most of plaintiffs claims were untimely and thus barred by the applicable statute of limitations. For trial in late 2005, after the summary adjudication motions were granted in part, Mr. Cohen reviewed Mr. Colemans May 12, 2003 report. Mr. Cohen agreed with Mr. Colemans analysis which reduced the amount of royalties assuming a 15 percent royalty rate to $706,527. In fact, Mr. Cohen materially reduced his damage assessment based upon Mr. Colemans financial analysis. Mr. Cohen acknowledged that he had abandoned some of the opinions he held concerning plaintiffs damages earlier on in the litigation. Mr. Cohen disagreed with Mr. Colemans assessments as to pricing in several respects. Mr. Cohen testified plaintiffs were damaged in the sum of $3,918,000 assuming the 1960s correspondence did not modify the 1943, 1949, and 1956 contracts. Plaintiffs post-trial brief requested damages in the sum of $3.9 million plus interest and return of the masters. Plaintiffs did not ask for anything else.

Defendants agreed that they had breached their contractual obligations to a limited extent but presented evidence they were entitled to offsets totaling $3,480,000 which included interest which potentially may have been compounded. Without consideration of the offsets, Mr. Coleman testified defendants owed plaintiffs $76,284. Mr. Coleman utilized assumptions provided to him by defendants. Under those assumptions, defendants indicated they failed to pay the follow