Stewart v. First Cal. Bank
Filed 5/30/13 Stewart v. First Cal. Bank CA2/5
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
SYLVESTER STEWART et al.,
Plaintiffs and Appellants,
v.
FIRST CALIFORNIA BANK et al.,
Defendants and Respondents.
B236286
(Los Angeles County
Super. Ct. No. BC430809)
APPEAL from
a judgment of the Superior Court of
County, Mark V. Mooney, Judge.
Affirmed in part, reversed in part with directions.
Allan Law
Group, Robert J. Allan, Edythe E. Huang; Scheper Kim & Harris, David C.
Scheper, William H. Forman and Julio V. Vergara for Plaintiffs and Appellants.
Davis
Wright Tremaine, Mary H. Haas, Carla A. Veltman and Law Offices of Richard A.
Shaffer and Richard A. Shaffer for Defendant and Respondent First California Bank.
Mitchell
Silberberg & Knupp, Marc E. Mayer, Andrew C. Spitser for Defendants and
Respondents Warner/Chappell Music, Inc. and Warner-Tamerlane Publishing Corp.
Law Offices
of Peter J. Anderson, Peter J. Anderson for Defendant and Respondent Sony Music
Entertainment.
Ballard
Spahr Andrews & Ingersoll, Penny Marie Costa, Corey Field and Rosina Maria
Hernandez for Defendant and Respondent Broadcast Music, Inc.
I. INTRODUCTION
Plaintiffs/appellants Sylvester
Stewart (“Stewartâ€) and Ken Roberts (“Robertsâ€) brought suit against a large
number of individuals and entities, including those involved in this appeal,
defendants/respondents Sony Music Entertainment (“Sonyâ€), Warner/Chappell
Music, Inc. and Warner-Tamerlane Publishing Corp. (“Warnerâ€), Broadcast Music,
Inc. (“BMIâ€), and First California Bank (“Bankâ€). Through multiple causes of action, plaintiffs
seek recovery of past and future royalty payments for musical works authored
and produced by plaintiff Stewart, who rose to prominence in popular music as
“Sly Stone†in the late 1960’s and early
1970’s. Stewart was also the lead
performer of the works, as “front man†for the band known as “Sly and the
Family Stone.†Roberts was Stewart’s
friend and one-time manager, and an assignee of some of Stewart’s royalty
rights.
The court below sustained these
defendants’ demurrers without leave to amend. We will affirm, except as to
plaintiff Roberts’ breach of contract and declaratory relief causes of action
against defendant BMI. Roberts’ conversion claim against BMI was properly
dismissed. Plaintiff Stewart’s several
causes of action against Sony, Warner, and BMI were also properly dismissed by
the trial court.
Following oral argument before this
Court, both plaintiffs dismissed their appeals as to defendant Bank.
II. PROCEDURAL HISTORY
In a series of complaints filed
between January 28, 2009 and May 10, 2011, plaintiffs Stewart and Roberts made
claims against nearly three dozen individuals and entities. The Fourth Amended Complaint (4AC) consists of
88 pages, supplemented by 142 pages of attachments. It includes
35 causes of action, 13 of which name one of the three defendants involved in
this appeal. They are as follows:
Stewart v. Sony (23d for Breach of contract, 24th
for Conversion, 25th for Negligence, 26th for Accounting,
27th for Declaratory relief);
Stewart v. Warner (28th for Conversion, 29th
for Accounting, 30th for Declaratory relief);
Stewart v. BMI (31st for Breach of
contract, 32nd for Accounting); and
Roberts v. BMI (33d for Conversion, 34th
for Breach of “written agreement,†35th
for Declaratory relief).
In June of 2011, these defendants’
demurrers to all of the above-listed causes of action were sustained without
leave to amend. Plaintiffs filed these
timely appeals.
III. FACTUAL SUMMARY
We
summarize the pertinent facts alleged in the Fourth Amended Complaint and
exhibits thereto, with occasional references to earlier versions of the
complaint. (Berg & Berg
LLC v. Boyle (2010) 178 Cal.App.4th 1020,
1034 [the court “may consider the factual allegations of prior complaints,
which a plaintiff may not [contradict]. . .†in an amended pleading]; Performance
Plastering v. Richmond American Homes of
Inc. (2007) 153 Cal.App.4th 659, 665
[“We also consider matters shown in exhibits attached to the complaint and
incorporated by reference.â€] [Citation.])
A. Overview Of The Complaint
the action arises from the misappropriation of “tens of millions†of dollars by
defendant Gerald “Jerry†Goldstein (“Goldsteinâ€) and his business partners
(collectively, the “Goldstein Groupâ€) in concert with, among others, defendants
Sony, Warner and BMI, who are referred to collectively as the “royalty
distribution companies.â€
name="_ftnref1" title="">[1]
In the 1960’s, Stewart signed recording contracts with
Sony, and agreements with Warner and BMI to exploit the compositions and
recordings. Roberts became Stewart’s
manager in the early 1970’s. In 1975,
Stewart assigned his BMI royalty rights to Roberts. In 1989, defendants
Goldstein, Glenn Stone (“attorney Stoneâ€) and Stephen Topley (“Topleyâ€)
“induced†Stewart to sign an “Employment Agreement†and a “Shareholders
Agreement.†The latter created an entity
called Stone Fire Productions, later known as Even St. Productions Ltd. (Even
Street). Based on what he was told,
Stewart thought he was simply agreeing to hire Goldstein, attorney Stone and
Topley, working through Even Street and an entity called TAG Management, Inc.
(“TAGâ€), as his personal and business managers.
The written agreements, however, “did not comport with the terms
discussed between the parties.†For over
two decades thereafter, the Goldstein Group used the fraudulently obtained
Employment Agreement to “divert, convert and misappropriate†Stewart’s
royalties. Goldstein convinced Stewart that his royalties were minimal due to
tax liens and levies, and that, in light of his tax problems, Stewart could not
have assets in his name or receive royalties directly. Several entities (“Goldstein Music
Companiesâ€) were empowered to collect Stewart’s royalties.
Beginning
in 1997 the Goldstein Group and the entities they controlled borrowed millions
of dollars from former defendant Bank, secured by Stewart’s future
royalties. Under the Employment
Agreement, the loan proceeds did not belong to Stewart. In 2008 Goldstein told Stewart he would
receive no further advances of funds from the Goldstein Music Companies,
leaving Stewart virtually destitute and dependent on friends for housing and
support.
The
royalty distribution companies “disregarded signed contracts and assignmentsâ€
between Stewart and Roberts, allowing royalties to be diverted to “improper
entities.†The royalty companies acted
without “due diligence†and “in some instances . . . with knowledge that
[Stewart] was not aware of†agreements between Even Street and the royalty
companies.
The
introduction to the Fourth Amended
Complaint concludes by stating plaintiffs are seeking past and future
royalties and declaratory relief.
B. Detailed Summary of Plaintiffs’ Factual
Allegations
1. Stewart, aka Sly Stone
composer of over 300 registered songs.
He and his band, Sly and the Family Stone, developed an international
reputation based on several “top 40†hit songs written by Stewart, and
performances including an appearance at the Woodstock, New York concert in
1969. The band, a racially diverse group
of men and women, was considered socially progressive. Their performances of Stewart’s music were
influenced by multiple genres. The band
was inducted into the Rock and Roll Hall of Fame in 1993, and Stewart was
honored as an influential musician by Rolling
Stone magazine. Stewart’s songs continue to be played by other performers
and on the radio and elsewhere, and have been used in several movies in recent
years.
Stewart had no business or money management experience;
as a result, he has always been dependent on managers and other advisors for
handling of his personal and professional financial affairs. Stewart engaged in substance abuse during his
performing years, resulting in a lifelong addiction to cocaine and
sedatives. This allegedly made him
“particularly susceptible to the duress and undue influence of†Goldstein,
Topley and attorney Stone.
2. Roberts
manager†in the early 1970’s. Between
1975 and 1982, he advanced money to Stewart and paid some of Stewart’s debts to
third parties. To repay Roberts, in
January of 1976 Stewart executed an “irrevocable†assignment (“1976 Assignmentâ€) of his BMI royalties to
Roberts and/or Ken Roberts, Inc., an entity wholly owned and controlled by
Roberts.
3. Stewart, Roberts, BMI and the Internal
Revenue Service
Defendant
BMI is a not-for-profit performing rights organization. It distributes all of its income, after
deducting operating expenses and reasonable reserves, to its affiliated music
publishers and songwriters. Through
affiliation agreements with copyright owners, BMI acquires non-exclusive public
performance rights. BMI, in turn, enters into license agreements which grant to
music users, such as broadcasters and the operators of concert halls, the right
to publicly perform any of the works in BMI’s repertoire.
In
1964, plaintiff Stewart entered into an affiliation agreement with BMI that was
amended and extended numerous times until March of 1979, when Stewart entered
into a new agreement with BMI (the “1979 BMI Affiliation Agreementâ€), in which
Stewart granted BMI the right to collect royalties on his behalf in exchange
for BMI paying royalties and providing royalty statements to the party entitled
to receive them. Under the terms of the
1979 BMI Affiliation Agreement, Stewart was obligated to notify BMI promptly of
any change of his address.
Beginning
in 1976, BMI paid Stewart’s royalties to his then-manager, plaintiff Roberts,
pursuant to the aforementioned 1976 Assignment.
In April of 1979, Stewart, Roberts and BMI “modified†the 1976
Assignment of the BMI royalties in a writing signed by all three parties (the
“1979 BMI Modificationâ€). That document
identified “Majoken Inc.,†a corporation formed by Roberts in New York in 1975,
“as successor in interest to Ken Roberts Enterprises.†BMI was directed to begin paying Stewart’s
royalties, approximately $30,000 a year at that time, to “Majoken, Inc.†(“Roberts-Majokenâ€). BMI followed this directive (the “1979 BMI
Amendmentâ€) until the IRS levied a multi-million dollar tax lien upon Stewart’s
BMI royalties in 1980. Until the lien
was lifted in 1996, BMI paid the royalties directly to the IRS.
Stewart
and Roberts were unaware that negotiations between an attorney hired by the Goldstein
Group and the IRS resulted in the lifting of the lien in July of 1996. At about that time, a new entity called
“Majoken, Inc.†(“Goldstein-Majokenâ€), was formed by Goldstein, Topley and
attorney Stone without the knowledge or consent of Stewart or Roberts. In an August 1996 letter, attorney Stone
instructed BMI to begin sending the BMI royalty checks to “Majoken, Inc.†at
the Los Angeles address of Even Street. BMI began doing so shortly before the
letter was sent, and did so until 2009, when BMI was informed by Stewart’s
attorney about the existence of two companies named “Majoken, Inc.†Pursuant to attorney Stone’s instructions,
BMI had been sending royalty statements
to attorney Stone since 1989.
name="_ftnref2" title="">[2]
Between 1996 and 1999
name="_ftnref3" title="">[3]
BMI paid approximately $600,000 in royalties to Goldstein-Majoken.
Unbeknownst
to BMI, Roberts-Majoken was dissolved by the State of New York in 1991 and
remained defunct until its reinstatement in 2009, shortly before Stewart and
Roberts filed the instant lawsuit. For
more than 30 years, from 1979 through 2009, the BMI royalties were made payable
to either the IRS or “Majoken, Inc.â€
During this period neither
Stewart nor Roberts nor
anyone on their behalf ever
complained to BMI
that they were not receiving royalty payments or statements. No one ever advised BMI to cease sending
royalty payments and statements to Majoken, Inc. In 2009, BMI provided Stewart’s attorney with
copies of all of Stewart’s royalty statements, along with other documents
counsel had requested.
4. Stewart and Sony
Under
three 1967 and 1972 recording contracts, Stewart rendered services as a
recording artist to Epic Records, a division of CBS Records, Sony’s predecessor
(“CBS/Sonyâ€). The first contract, dated
June 6, 1967 when Stewart was 22 years old, assigned to CBS/Sony all rights in
eight Sly and The Family Stone master recordings made the previous month. The second contract, dated June 7, 1967,
provided that Stewart and Sly and the Family Stone would render recording
services to CBS/Sony for up to five years, or until 1972. The third contract, dated September 15, 1972,
extended those recording services for up to another four-and-a-half years or
until ten master recordings had been delivered.
Under the recording contracts, CBS/Sony received certain rights to the
master recordings and agreed to pay Stewart royalties. In 1977, Stewart and Sony released each other
from all obligations except Sony’s continuing obligation to pay royalties to
Stewart and Stewart’s right to audit Sony’s accountings.
From
1989 until 2009, Sony paid royalties under the 1967 and 1972 Sony recording
contracts to Even Street, pursuant to the 1989 Assignment by Stewart to Even
Street, which is discussed further below. Sony was not given notice of the 1989
Employment Agreement, also discussed further below. Stewart did not contact Sony directly before
2009, and Sony took no steps to determine the validity of the 1989 Assignment.
In
2002, Stewart’s managers, Goldstein, Topley and Stone, negotiated an agreement
between Sony and Even Street (the “2002 Sony Agreementâ€), which provided for new
advances and royalty rates for Sony’s exploitation of the master recordings
created under the 1967 and 1972 recording contracts. This agreement included the right to market
re-releases, re-mixes, a compact disc box set of Sly and The Family Stone
albums and to create a web-site. Even
Street retained certain veto powers as to the content of new products. The 2002 Agreement also settled an audit
claim. A draft of the 2002 Sony
Agreement included Stewart’s signature line, but in the final version the
signature line was replaced with Even Street’s warranty of both its authority
and Stewart’s knowledge of the 2002 Sony Agreement’s terms. Sony did not further investigate the issue of
Stewart’s awareness or consent to the new agreement. However, Sony asked for and received from the
Goldstein Group a draft press release for use in the event Stewart contested
the authority of the Goldstein Group enter into the 2002 Sony Agreement.
5. Stewart and
Warner
In 1985, Stewart sold his publishing interest
in most of his existing musical compositions (the “Stone compositionsâ€) to
Michael Jackson’s MiJac Music, retaining only the right to 100% of the
“songwriter’s share†of the royalties.
Thereafter, the Warner defendants, who are publishers specializing in
administration of the written words and notes of musical compositions,
administered and exploited the Stone compositions pursuant to its contract with
MiJac. Warner’s duties included
collecting and paying out the songwriter’s royalties.
Between
1985 and 1989, Warner paid Stewart’s royalties to the IRS pursuant to a tax
lien. After the lien was lifted in 1989
and Warner received notice of the 1989 Assignment, Warner distributed royalties to Stone
Fire Productions, Inc. and
its successors and assignees (including Even Street and former defendant Bank)
in reliance on the 1989 Assignment. For the following 20 years,
neither Stewart nor anyone else objected
to Warner’s actions regarding the royalties.
As
noted below, Bank made a series of loans to Even Street and its subsidiary,
Goldstein-Majoken, which were secured in part by the Warner royalties. From 1999 to 2008 the Warner royalties were
assigned to Bank by Goldstein and Even Street. Bank applied the Warner
royalties it collected to the loan balance and related fees.
6. Stewart and the Goldstein Group
Stewart first met Goldstein in the 1960s and by 1989 they
had known each other for over 20 years.
Goldstein had extensive experience as the producer of hit songs and in
financial management in the music business. Stewart first met Topley in the
late 1960’s when Topley worked for Epic Records and was assigned to promote
“Sly and the Family Stone.†Attorney Stone
was introduced to Stewart by Goldstein in late 1988 or early 1989; Goldstein
told Stewart attorney Stone was legal counsel for Goldstein’s music companies.
By
early 1989, Stewart’s addiction to cocaine and sedatives had resulted in legal
trouble, including the aforementioned tax liens and levies. He was a fugitive and he had no record deal or other substantial income. Between December of 1988 and February of 1989
Goldstein, through his company Goldstein Music, made approximately 30 loans to
Stewart in amounts ranging from one hundred to several hundred dollars. The money was used to pay Stewart’s living
expenses and to fuel his drug addictions.
Goldstein and attorney Stone gave cocaine to Stewart on several occasions. In late February of 1989, Goldstein, Topley
and attorney Stone told Stewart that Goldstein had obtained a new recording
contract for Stewart. They told Stewart
there would be no more loans or drugs, and no recording contract, unless
Stewart signed an agreement providing that their entity, Even Street, would
become manager of all of Stewart’s personal and professional financial
affairs. They promised to help Stewart
and advised that because of the tax problems, Stewart should not have any
assets in his name or receive royalties directly.
Trusting
Goldstein, Topley and attorney Stone, Stewart agreed. Three documents, which Stewart had no role in
preparing, were executed in February 1989 to confirm the arrangement. Stewart was told and believed the documents
established a standard professional and business management arrangement whereby
Goldstein, Topley and attorney Stone would provide services in return for
standard fees based on a percentage of the income earned. Instead, unbeknownst to Stewart, the
documents provided that Stewart would become the employee of Even Street.
The
first document was the “Shareholders Agreement,†which provided Even Street (then known as
“Stone Fire Productions Ltd.â€) would be owned equally by Stewart and defendant
TAG Management, Inc. (“TAGâ€), a Goldstein company. The Shareholders Agreement also states Even
Street would “employ†Stewart.
The
second February 1989 document was the “Employment Agreement,†whereby Even
Street obtained Stewart’s services in the music industry, agreed to use best
efforts to advance his career and agreed to pay him 50% of Even Street’s net
profits. The Employment Agreement
provided for a five-year term and allowed Stewart to terminate his employment
if he did not receive minimum payments ranging from $75,000 to $250,000 a year. The Employment Agreement included, unbeknownst
to Stewart, his express appointment of Even Street, and his managers, Topley
and Goldstein, as his attorneys-in-fact.
Their authority included signing music related contracts on Stewart’s
behalf. After the 1989 Employment Agreement’s stated five-year term expired,
Stewart continued to allow the Goldstein Group to manage his financial and
personal affairs through 2009. Stewart never received a copy of the Employment
Agreement before 2009.
The
third February 1989 document, which Stewart initialed and signed, is a
notarized assignment (“the 1989 Assignmentâ€) to Stone Fire Productions Ltd.,
later renamed Even Street, of all rights and benefits resulting from “the prior
exploitation†of Stewart’s “skills, talents and services in the entertainment
industry, including but not limited to, as a musician, composer, arranger,
publisher, recording artist, actor, writer and performing artist.†The 1989 Assignment expressly includes all
royalties due or to become due from CBS/Sony, BMI and Warner. The 1989 Assignment also includes,
“without limitation,
“ the full right
to settle or compromise claims on the assigned rights. The document makes no mention of Roberts, or
of the 1976 “irrevocable†Assignment to Roberts of Stewart’s BMI royalties.
Once
the Goldstein Group became his managers in 1989, Stewart relied on them to deal
with defendants Sony, BMI and Warner regarding royalty distribution. Stewart often asked Goldstein about
royalties. Goldstein told him the amounts received did not exceed those Even
Street had paid to Stewart or on his behalf.
Stewart’s repeated requests that his managers show him reports or
documents concerning royalties, as well as the books and records of Even
Street, were ignored.
7. The Goldstein Group, First California Bank
and the royalty rights
Between 1997 and 2009, former defendant Bank made approximately 24 loans to Even Street,
Goldstein-Majoken and other Goldstein entities, totaling at least $5 million. The loans were secured in part by Stewart’s music
royalties.
Eventually,
Goldstein executed assignments of Goldstein-Majoken’s “right†to receive the BMI and Warner
royalties, allowing Bank to collect the royalties directly. From 1999 to 2008, Bank received BMI
royalties by direct assignment from Goldstein and Goldstein-Majoken. Bank applied these monies to the balance owed
and fees due for the Goldstein and Goldstein-Majoken loans. From 1996 through 2009, BMI paid to
Goldstein-Majoken and Bank a total of $3,292,675.82).
8. Events shortly before the filing of this action
In 2008 Goldstein had stopped
giving Stewart advances, leaving him destitute. With the help of friends, in
2009 Stewart obtained a copy of his 1989 Employment Agreement with Even Street,
allegedly realizing for the first time that it provided he was a mere employee.
In
2009, after Stewart provided his Employment Agreement to Sony, BMI and Warner,
royalty distributions were suspended.
Eventually, the accruing royalty funds were interpleaded in this
lawsuit.
On
January 7, 2010, days before plaintiffs filed their initial complaint in this
action, Roberts provided BMI with a declaration in which he stated that he and
Majoken, Inc. are owed nothing under the assignments from Stewart. After first noting that the 1976 Assignment
had been given to him and Ken Roberts Enterprises, Inc. as security for loans
they had made to Stewart, Roberts declared under penalty of perjury, “At this
time, no monies are due and payable by Sly Stone to me or Majoken, Inc.â€
On
January 28, 2010, plaintiffs filed their initial complaint against 23
individuals and entities.
name="_ftnref5" title="">[5]
IV. STANDARD OF REVIEW
We independently review the record to determine if the
trial court erred in sustaining a demurrer.
(Desai v. Farmers Ins. Exchange
(1996) 47 Cal.App.4th 1110, 1115.) In conducting a de novo review,
“we independently review the pleading to determine whether the facts alleged
state a cause of action under any possible legal theory. (Citations.)†(
Indemnity Co. (2008) 163 Cal.App.4th 1460, 1467.) The appealing “[p]laintiff bears the burden
of proving the trial court erred in sustaining the demurrer or abused its
discretion in denying leave to amend.†(
Mutual, Inc. (2006) 142 Cal.App.4th 1457,
1469 (McKell).)
“‘Our only task . . . is to determine whether the
complaint states a cause of action. Accordingly we assume that the complaint’s
properly pleaded material allegations are true and give the complaint a
reasonable interpretation by reading it as a whole and all its parts in their
context. [Citations.] We do not, however, assume the truth of
contentions, deductions, or conclusions of fact or law.’ [Citation.]â€
(People ex rel. Lungren v.
Superior Court (1996)14 Cal.4th 294, 300-301.) Nor
do we accept as true allegations that are contradicted by exhibits to the
complaint. In that circumstance, we
accept as true the contents of the exhibits unless they are ambiguous. (SC Manufactured
Homes, Inc. v.
Design,
v. Serrano (2005) 134 Cal.App.4th 1035,
1044-45.) We may not assume “the [plaintiff] can prove facts that [he
or she] has not alleged.†(Associated General Contractors of California,
Inc.
v.
California State Council of Carpenters (1983) 459 U.S. 519, 526, [103 S. Ct. 897, 74 L. Ed. 2d
723.])
Like
the court below, we may take judicial notice of certain facts, including “. . .
a party’s earlier pleadings and positions as well as established facts from
both the same case and other cases.
[Citations.] The complaint should
be read as containing the judicially noticeable facts, ‘“even when the pleading
contains an express allegation to the contrary.â€â€™ [Citation.]
A plaintiff may not avoid a demurrer by pleading facts or positions in
an amended complaint that contradict the facts pleaded in the original
complaint or by suppressing facts which prove the pleaded facts false.†(McKell, supra, 142 Cal.App.4th at p. 1491.)
When a pleading “reveals that [plaintiff] lacks either the
right or standing to sue, it is vulnerable to a general demurrer on the ground
that it fails to state a cause of action.â€
(
796.) Similarly, a demurrer must be
sustained where the face of the complaint demonstrates clearly and
affirmatively that the right of action is barred by the statute of limitations. (Lockley
v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91
Cal.App.4th 875, 881.)
Applying
these standards, we “liberally construe [the pleading] with a view to
substantial justice between the parties.â€
(Code Civ. Proc., § 452; Kotlar
Hartford Fire Insurance Co. (2000) 83 Cal.App.4th 1116,
1120.) We will “affirm the judgment if
it is correct on any ground stated in the demurrer, regardless of the trial
court’s stated reasons.†(Fremont Indemnity
v. Fremont General Corp. (2007)
148 Cal.App.4th 97, 111.)
While
leave to amend is liberally granted, “. . . [i]t should not be granted where .
. . amendment would be futile.†(Vaillette v.
Fund Insurance Co.
(1993) 18 Cal.App.4th
680, 685; Long v.
p.1467.) “[W]e decide whether
there is a reasonable possibility that the defect can be cured by amendment: if
it can be, the trial court has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. [Citations.]
The burden of proving such reasonable possibility is squarely on the
plaintiff. [Citation.]†(Blank
v. Kirwan (1985) 39 Cal.3d 311, 318.)
V. DISCUSSION
A. Stewart’s Separate Claims
1. Stewart concedes he lacks standing to sue BMI
Stewart sued BMI for
that BMI wrongfully failed to furnish Stewart with royalty statements at least twice a year, beginning in 1989.
There
is no dispute that Stewart assigned his BMI royalty payments to plaintiff
Roberts and/or his designee in 1976.
Stewart assigned them to Even Street in 1989. These assignments included the right to
receive “[a]ll monies payable pursuant to [Stewart’s Affiliation Agreement with
BMI] and any extensions or modifications thereof.†Presumably, the right to receive statements
was assigned along with the right to royalty payments.
By
assigning his BMI royalty rights, Stewart relinquished his standing to bring
suit. Once rights are assigned, the
assignee “stands in the shoes of the assignor,â€
and “the assignor lacks standing to sue on the claim.†(See Civ. Code § 1458; Johnson
County of Fresno (2003)
111 Cal.App.4th 1087, 1096 (Johnson).)
Apparently
conceding this issue, Stewart does not challenge the trial court’s ruling as to
his causes of action against BMI.
2. Stewart lacks standing to sue Sony
Stewart sued Sony for breach of
contract, conversion, negligence, accounting and declaratory relief. The claims are grounded on the allegations
that Stewart still owns
royalty or other rights in the master recordings under the 1967 and 1972
recording contracts, that Sony wrongfully paid Stewart’s royalties to
Even Street and Goldstein-Majoken, and that the 2002 Sony Agreement was
invalid.
The trial court, while questioning
whether royalty payments can be the subject of a conversion, ruled that the
facially valid 1989 Assignment was properly relied on by Sony, which, for over
two decades, had no notice of any contention the Assignment was invalid, or
that Stewart objected to the way the royalties were being paid. We agree with the trial court’s conclusion.
The 1989 Assignment included the
Sony royalties, and the fourth amended complaint specifically alleges that Sony
received the1989 Assignment and complied with it in distributing the royalties
to Even Street and Goldstein-Majoken. The 1989 Assignment reads:
“ASSIGNMENT [¶]
For One ($1.00) Dollar, and other good and valuable consideration,
receipt of which is hereby acknowledged SYLVESTER STEWART p/k/a Sly Stone
(“Assignorâ€) hereby assigns, transfers, sets over and conveys to STONE FIRE
PRODUCTIONS LTD. (“Assigneeâ€), all rights, title and interest in and to any and
all claims, rights, causes of action and benefits now known or unknown
resulting from the prior exploitation of the Assignor’ s skills talents and
services, in the entertainment industry including but not limited to, as a
musician, composer, arranger, publisher, recording artist, actor, writer and
performing artist. Said assignment shall include but not be limited to the
following: [¶] 1. Any royalty or other income now due past due or to become due from CBS RECORDS. [¶] 2. Any royalty
or other income now due, past due, or to become due from WARNER/CHAPPELL MUSIC, INC. including but
not limited to publishing royalties and income, and writer’s royalties and income. [¶] 3. Any royalty
or other income now due, past due, or to become due from BMI, INC. including but not limited to publisher’s peformance [sic] royalties or income, and writer’s performance royalties and income. [¶] The within named assignment, transfer and conveyance includes without limitation any and all rights that Assignor now has or to which Assignor may become entitled under existing or subsequently enacted federal, state or foreign laws. The within grant further includes all proceeds from the foregoing
accrued and unpaid and hereafter accruing and all such claims, rights, causes of action benefits arising therefrom without
limitation with
full right to maintain any actions thereon, and to
settle, compromise, or reassign
such claims, and to get a release in Assignor’s name in full discharge of the liability thereunder.â€
Stewart
would have us reject the plain meaning of the 1989 Assignment based on bare
allegations of ambiguity. We decline to
do so here, as did Division Eight of our court in George
Automobile Club of Southern California (2011) 201 Cal.App.4th 1112 (George). In
contract interpretation
in the context of a demurrer involving an insurance policy. (Id. at p. 1120.) The court rejected
the argument that a mere allegation of ambiguity, even if supported by
allegations of “unidentified extrinsic evidence, requires a demurrer to be
overruled.†(Id. at
pp. 1127-28.) Instead, in ruling on a
demurrer the plain meaning of an attached contract controls unless (1) the
plaintiff alleges the existence of “specified parol evidence†contrary to that
meaning and (2) the contract is reasonably susceptible of the plaintiff’s
claimed interpretation. (
In the present case, the trial court was entitled to credit the plain
meaning of the recording contracts and the 1989 Assignment because Stewart
failed to allege any “specified parol evidence†giving the documents a
reasonable alternative meaning.
Stewart
contends that “reissued, remastered, remixed or sampled recordings†are not
“prior recordings†within the meaning of the 1989 Assignment. This argument fails because it
mischaracterizes the phrase “prior recordings†as used in the 1989
Assignment. The document assigns all
rights resulting from the prior
exploitation of his
services as a
recording artist, which includes all
his rights under the 1967 and 1972 recording contracts. Stewart’s argument that he assigned only his
rights with respect to pre-1989 uses of the master recordings and not his
rights with respect to future uses, relies on a faulty premise. Master recordings are not sold to the
public. In the words of the 1967
Stewart-Sony contract, their value derives from the right to use them to
“manufacture by any method now or hereafter known phonograph records and other
reproductions†that are sold to the public.â€
Reissued, remastered, remixed and sampled recordings are such
reproductions that Sony has the right, as owner of the master recordings, to
create from time to time.
name="_ftnref6" title="">[6]
Stewart’s royalty rights in such newly created products are rights “resulting
from the prior exploitation of his skills talents and services . . . as a . . .
recording artistâ€
within the plain
meaning of the 1989 Assignment.
Stewart
also alleges that because the 1989 Assignment does not include the word
“irrevocable†he retained the right to revoke it. We disagree, since an unlimited assignment
normally transfers title. In any event,
the issue is moot because his pleadings established he did not purport to
revoke the 1989 Assignment until filing his January 2010 complaint, by which
time Sony had stopped paying Even Street.
Finally,
we note that Stewart’s conclusory allegations that his managers and Even Street
lacked his authority and he was unaware of their actions are trumped by his
pleadings’ factual allegations (
Berwald
(1999) 76
Cal.App.4th 990, 995.) and exhibits (Banis
managers and advisers to handle his personal and financial affairs.†In 1989, he retained Goldstein, Topley and
attorney Stone, through Even Street, “to provide financial advice . . . and to
act on [his] behalf . . . ; [and to] manage and take care of all his personal
and professional financial affairs . . . .â€
Once they became his managers, he relied on them to “deal with†the
royalty distribution companies. He also
gave Even Street and his managers his “all-encompassing, irrevocable and
virtually unlimited power of attorney . . .†to act on his behalf. He confirmed that power by attaching the 1989
Employment Agreement to his pleadings.
And, despite the Employment Agreement’s stated five year term, Stewart
and the Goldstein Group continued to operate under it for 20 years until
Stewart terminated it in 2009. Thus,
Even Street and the Goldstein Group had authority to deal with the royalty
companies as Stewart’s agents. Further, Stewart “is deemed to have knowledge
of†the conduct of his managers when they act on his behalf, notwithstanding
allegations they withheld information from him.
(Civ. Code § 2332; O
v.
Federal Kemper Life Assurance Co. (2005) 36 Cal.4th 281, 288 (O’Riordan);
Columbia Pictures Corporation
630.) Accordingly, we properly disregard
Stewart’s conclusory allegations that Even Street and his managers lacked
authority to act on his behalf and that he was unaware of their actions.
We
conclude the trial court properly rejected Stewart’s standing arguments based
on the plain meaning of the 1989
Assignment and Stewart’s own allegations.
Because Stewart assigned to Even Street any and all royalty and other
rights derived from Sony’s master recordings, Stewart lacks standing to sue
Sony over those rights. Once rights are assigned, the
assignee “stands in the shoes of the assignor,â€
and “the assignor lacks standing to sue on the claim.†(See
Civ. Code § 1458; Johnson, supra, 111 Cal.App.4th at p. 1096.)
3. Stewart lacks standing to sue Warner
Stewart sued Warner for conversion,
accounting and declaratory relief. The
claims are grounded on the allegation that Warner wrongfully paid Stewart’s
royalties to Even Street. As noted
above, the 1989 Assignment included the Warner royalties. The fourth amended complaint specifically
alleges that Warner received the 1989 Assignment and complied with it in
distributing the royalties to Even Street.
The trial court ruled on the Warner
demurrer in the same breath as its Sony ruling, concluding that the facially
valid 1989 Assignment was properly relied on by Warner, which had no notice of
any contention it was invalid, or that Stewart objected to the way the
royalties were being paid. Again, we
agree with the trial court’s conclusion.
For the reasons discussed above as to defendant Sony, we
conclude Stewart has no standing to bring suit against Warner. The 1989 Assignment divested Stewart of his
individual right to the Warner royalties, and of any right to sue for them. (
4. Assuming standing, Stewart’s claims against
Warner were properly dismissed
Warner contends the 1989 Assignment
negates the “wrongful act†element of the tort of conversion. We agree.
The elements of conversion are: (1) plaintiff’s ownership or right to possession of the property;
(2) defendant’s conversion by a
wrongful act or disposition of property
rights; and (3) damages. (
Cal.App.4th 1062,
1066 (Burlesci); see
at p. 1491 [conversion requires “defendant’s wrongful act toward or disposition
of the property, interfering with plaintiff’s possession . . .â€]
230 Cal.App.2d 478, 481-482 [affirming dismissal of conversion claim where
there was no “wrongful conversion†of the subject property].) Moreover, “[t]he law is well settled that
there can be no conversion where an owner either expressly or impliedly assents
to or ratifies the taking,
use or disposition of his property.†(
(1943) 59 Cal.App.2d 468, 474; see also Reno
v. A.L. Boyden Co. (1931) 115 Cal.App. 697, 701 [“[Defendant] Fassel having
sold with plaintiff’s consent, there could be no conversion. . . .â€].)
As the trial court correctly pointed out, “the royalty
companies were simply doing what they were instructed to do for years upon
years.†Warner did not act wrongfully in
this matter. It paid and accounted for
royalties exactly as instructed by Stewart in a signed, notarized writing. As noted above, the complaint acknowledges
Warner received and relied on the 1989 Assignment. The document, which we quoted in full above,
clearly and unambiguously transfers the Warner royalty rights to Even Street,
and Warner was never given notice of any dispute as to its validity. Indeed, as noted above, Stewart’s own
pleadings establish that the Goldstein Group acted as his agents in dealing
with the royalty companies. Thus, even
assuming Stewart has standing to sue Warner, the trial court correctly sustained
the demurrer as to the conversion cause of action, as well as the derivative
actions seeking accounting and declaratory relief.
B. Roberts’
Separate Claims
Plaintiff Roberts sued BMI for
conversion, breach of written agreement and declaratory relief, Roberts alleges he was entitled to over
$3,000,000 of BMI royalties which were paid to Goldstein-Majoken and former
defendant Bank from 1996 to 2009.
The trial
court, immediately after finding Stewart had no standing to sue the royalty
companies, stated: “As to Mr. Roberts,
he is in a slightly different situation, but I also think the whole argument,
really, rises and falls on this [sic] sending royalties to Majoken. Inc.†The court then noted BMI was in literal
compliance with its obligation to pay Majoken, Inc., although unaware that a
second Majoken entity existed at the address to which the royalties were being
mailed. The court noted Roberts never
contacted BMI with any concerns before 2010.
The court stated, “It seems to the court that there is just not a breach
of contract claim there as to Mr. Roberts versus BMI.†The court also questioned whether, under New
York law, Roberts had succeeded to the assets of Roberts-Majoken when it
dissolved. The court added, “So I think
Mr. Roberts also has a standing problem up until the time he sends out the
notice to change where these things are directed to. I think the royalty companies . . . shouldn’t
be here. They were doing what they were
told to do either by Sylvester Stewart or Mr. Roberts or their agents.â€
1. Roberts has standing to sue BMI
We disagree with the trial court’s
conclusion that Roberts lacks standing to sue BMI.
There is no dispute that, in 1976,
Stewart “unconditionally, irrevocably and absolutely†assigned all his BMI royalty
rights to “Roberts and/or Ken Roberts Enterprises . . . and/or his . . .
designee, as you may hereafter be directed in writing by Ken Roberts.†BMI contends that Roberts lost those rights
in the 1979 Modification. The latter
document substituted Roberts-Majoken for Ken Roberts Enterprises as Roberts’
designated recipient of the royalty payments.
We disagree with BMI’s argument that the 1979 Modification was an
assignment to Roberts-Majoken. The 1979
Modification on its face is not an assignment and does not transfer Roberts’
individual rights in the BMI royalties.
Rather, under the 1979 Modification, Roberts merely exercised his right
to direct payment of the BMI royalties to Roberts-Majoken, “as successor in
interest to Ken Roberts Enterprises.â€
BMI cites to New York Business
Corporations Code sections 1006 and 1111 in support of its contention that
Roberts does not have standing to bring an action against BMI. Those sections state that the assets do not automatically
transfer to the directors
of a defunct corporation.
However, Roberts was not only Roberts-Majoken’s sole director, he was
its only shareholder and officer. “When
a corporation dissolves, the rights of that corporation transfer to the
shareholders upon dissolution of that corporation.†(Gilbert
Indiana,
2011 U.S. Dist. LEXIS 16675 *8 (S.D.N.Y.
Feb. 16, 2011); see
also Wells
Ronning
(N.Y. App. Div. 2000) 269 A.D.2d 690, 692 [applying
New York Law to determine that “upon dissolution of the corporation, after
the payment of or provision for all liabilities, the remaining assets may
be distributed to the shareholders,†citing N.Y. Business Corporations Law, §
1005].) In Gilbert, the plaintiff had
assigned certain rights to his wholly owned corporation, which was later
dissolved. The court found the result of
the dissolution was reversion of the assigned rights to its sole shareholder,
the plaintiff.
(Gilbert v. Indiana, supra, at pp. *8-9.)
We also
disagree with BMI’s contention that,
because earlier versions of the complaint acknowledged a side agreement between
the plaintiffs that the assigned royalties would not exceed the amount of
Roberts’ loans to Stewart, and further acknowledged that the loans “have been
repaid,†Roberts has no basis for asserting damages. BMI correctly notes that a plaintiff may not
resurrect a cause of action by the unexplained omission of facts which made a
previous complaint defective. (
Development Co. v. Beck Development Co. (1994) 24
Cal.App.4th 929, 946.) Here, however,
mere allegations in all versions of the complaint are trumped by relevant
documents attached to it. As noted
above, the 1976 Assignment from Stewart to Roberts was unconditional,
irrevocable and absolute. If liability
is established, damages, if any, will flow to Roberts. The issue of whether Roberts
factual dispute best resolved at trial.
Because Roberts at all times
retained his individual rights to the BMI royalties, the trial court erred in
concluding Roberts has no standing to sue BMI.
We turn to the merits of Roberts’ causes of action, which the trial
court did not fully address after ruling that Roberts lacked standing to sue
BMI.
2. Roberts’ sufficiently pled breach of contract
and declaratory relief claims against BMI, as limited by the statute of
limitations
The
essential elements of a breach of contract claim are “(1) the contract, (2)
plaintiffs performance or excuse for nonperformance, (3) defendant’s breach and
(4) resulting damages to Plaintiff.†(
Petroleum Corp. v. Tri-Valley Oil &
Co. (2004) 116
Cal.App.4th 1375, 1391, fn 6 (Armstrong).) The trial court found Roberts’ complaint
against BMI lacked a sufficient claim of breach because it acknowledged BMI at
all times paid an entity called “Majoken Inc.†as it had been directed to do in
the 1979 Modification document signed by both Roberts and Stewart. However, that is neither the beginning nor
the end of the story. The 1976
Assignment notified BMI that Roberts, and only Roberts, had unconditional control
of the BMI royalties, including the right to designate a new recipient entity
by written notice. BMI received such
written notice from Roberts (and Stewart) when it received and signed off on
the 1979 Modification. However, when
Stewart’s manager, attorney Stone, notified BMI of a change of address for
“Majoken Inc.†in 1996, BMI had a contractual duty to insist on written
instructions from Roberts. Its alleged
failure to do so was properly pled as a breach of contract because the direct
consequence was payment of the royalties to Goldstein-Majoken rather than
Roberts-Majoken. The trial court erred
in concluding otherwise.
We
also reject BMI’s contention that no
contract existed between BMI and Roberts.
As the unconditional assignee of Stewart’s rights, Roberts was owed the
same contractual duty which BMI owed Stewart under their original
agreement. BMI had notice of the
assignment by virtue of its participation in the 1976 Assignment and the 1979
Modification. (Johnson, supra, 111
Cal.App.4th at p. 1096.)
BMI
contends that Roberts’
breach of contract cause of action is barred by the applicable four-year statute of limitations. (See Code Civ. Proc. § 337.) BMI asserts the alleged breach occurred nearly two decades ago, when BMI complied with the notice
of change of address that it received from attorney Stone, Stewart’s then-manager and attorney. BMI asserts that any claim accrued at that
time and is long since time-barred, relying primarily on
Cal.App.4th 1375, along with federal District Court authority. We disagree.
for periodic breach is to be distinguished from that of a single breach or
other wrong which has continuing impact.â€
(Armstrong, supra, at p. 1389;
see also Aryeh v. Canon Business
Solutions, Inc. (2013) 55 Cal.4th 1185, 1197-1198 (Aryeh).)
obligation to make monthly payments based on oil and gas production
revenue. The court found that each monthly
obligation was severable for statute of limitations purposes. (
each time BMI sent a royalty check to an address not authorized by
Roberts. We find BMI’s periodic payment
duties severable, as were the duties in Armstrong. (Aryeh,
supra, 55 Cal.4th at pp. 1198-1201 [monthly Unfair Competition Law
violations in context of copier rental contract]; Wells Fargo Bank v. Bank of America (1995) 32 Cal.App.4th 424,
439, fn. 7 [monthly rental agreement]; White
v. Moriarty (1993) 15 Cal.App.4th 1290, 1299 [promissory note];
Cal.App.3d 194, 200 [buy-sell agreement with monthly payments for life].)
We note that any other result would be impractical, since
no ascertainable damages would have existed based only on BMI’s acceptance of
the change of address notice. BMI’s
position would also be extremely unfair to Roberts, assuming he can make good
on his allegation that he was completely unaware of the change of address
notice and the payment of royalties to another entity until 2009. Accordingly, Roberts’ breach of contract
cause of action is not time-barred, but, as he concedes, he may only seek to
recover payments dating back four years from the filing of the action against
BMI. (Code Civ. Proc. § 337.)
As for declaratory relief, it derives its force from the affirmative claim for breach of
contract, and properly remains in the case.
Subject to the four-year statute of limitations, Roberts is entitled to
a determination of his rights under the BMI-Stewart Affiliation Agreement, the
1976 Assignment and the 1979 Modification.
3. The trial court properly sustained BMI’s
demurrer to Roberts’ conversion claim
As noted above, the elements of conversion are: (1) plaintiff’s ownership or right to
possession of the property; (2) defendant’s conversion by a wrongful act or
disposition of property rights; and (3) damages. (Burlesci,
supra, 68 Cal.App.4th at p. 1066; see McKell,
supra, 142 Cal.App.4th at p. 1491
[conversion requires “defendant’s wrongful act toward or disposition of the
property, interfering with plaintiff’s possession . . .â€].)
In the
present case, in addition to finding Roberts had no standing, the trial court
expressed doubt that royalty payments can be the subject of conversion. The trial court also impliedly found no
wrongful act, given BMI’s undisputed good faith reliance on the notice of
address change for Majoken, Inc. The
parties brief these and several other issues related to the conversion claim,
including the statute of limitations. We need not reach all of them, because
the following are each dispositive.
First,
Roberts has no
ownership interest in Stewart’s BMI royalties which
could be converted, despite the 1976 Assignment. Under the terms of the BMI Affiliation
Agreement, neither Stewart nor his assignee owns the monies BMI collects from
the licensing of Stewart’s performance rights.
As expressly provided in the BMI Affiliation Agreement, “You [Stewart]
acknowledge that the rights obtained by you pursuant to this agreement
constitute rights to payment of money and that during the period we shall hold
absolute title to the performing rights granted to us hereunder.†As a BMI affiliate, Stewart retained, and
later assigned to Roberts, only a contractual right to such payments, the
breach of which does not support a conversion
claim. (See Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452 [“ .
. . a mere contractual right of payment, without more, will not suffice†to
plead conversion]; see also Cusano
Klein
(C.D. Cal. 2003)
280 F.Supp.2d 1035, 1043 [summary judgment upheld on conversion claim
predicated on breach of royalty agreement]; see also
v.
Roulette Records, Inc. (S.D.N.Y.
1988) 677 F.Supp. 731, 736-737 [“Defendants never held property belonging to
plaintiff since they only held the proceeds of sales of their own property, the
recordings, a part of which they were contractually obligated to pass onto
plaintiff in the form of royalties. [. .
. ] When royalties are due pursuant to a
contractual relationship, whether express or implied, a plaintiff cannot
recover on a theory of conversion without establishing more.†(Citations omitted)].)
Second,
“a breach of contract becomes tortious only when it also violates a duty
independent of the contract arising from the principles of tort law.†(Erlich
v. Menezes (1999) 21 Cal.4th 543, 551(Erlich);
see also Applied Equipment Corp. v.
Saudi Arabia Ltd.
(1994) 7 Cal.4th
503, 516.) Absent such an independent
violation, the “wrongful act†element of the tort of conversion is
missing. (Erlich, supra, at p. 551.) Despite Roberts’ claim that BMI was a
bailee and a fiduciary, we agree with BMI’s contention that no such independent
violation is adequately alleged in the present case.
Roberts’
attempt to characterize the agreement between BMI and Stewart as a bailment is
not persuasive. “A bailment (called
deposit of personal property with another, usually for a particular purpose,
under an express or implied contract.â€
(13 Witkin, Summary of California Law (10th ed. 2005) Personal Property,
§ 156, p. 168.) Bailments generally
involve the storage of personal property for hire, as with warehouses, parking
lots and banks. None of the cases cited
by Roberts stands for the proposition that a licensing agreement creates a
bailment, and most of the cases involve items of tangible rather than
intangible property. (See e.g. Byer v. Canadian Bank of Commerce (1937) 8 Cal.2d 297, 298 [bonds];
v. Yank (1985) 172 Cal.App.3d 544, 547
[two thoroughbred horses].)
The
cases cited by Roberts involving the alleged conversion of money are factually
inapposite. In
v.Washington Mutual, Inc.,
supra, 142 Cal.App.4th at p. 1490, plaintiff was held to have
failed to plead breach of a bailment
agreement and conversion where it alleged
that a bank had wrongfully overcharged and refused to refund fees paid for
transfer services. In explaining its
ruling, the McKell
court noted
that plaintiff had failed to cite any authority
to support the proposition that a cause of action for conversion can be based
v. Bank of America Nat’l Trust &
Asso. (1942) 53 Cal.App.2d
deposited them in a warehouse,
receiving receipts which he delivered to a bank with the instructions as to disbursement of the funds. In violation of those instructions, the bank
sold the property and used the proceeds to
satisfy its own judgment against the owner.
Notably, Powell involves facts that are not present here: a corpus of
property delivered and entrusted to a bank, the sale of that
self-dealing in using the sale proceeds to satisfy its own judgment against the owner in violation of the instructions of
the owner. In
addition, the
present case involves no allegation of money held in trust or reserve accounts as
occurred in McKell, supra, 142 Cal.App.4th at p. 1490 and
v. Concord Music
Group, Inc. (N.D. Cal. 2012, No. C-11-2519
EMC) 2012 U.S. Dist. LEXIS 14084.
Further,
in the Fourth Amended Complaint Roberts has not alleged a bailment and he may
not turn a licensing agreement into a bailment by saying so in a brief. A license is a “mere waiver of the right to
sue†the licensee for infringement. (DeForest Radio
Co. v. United States (1927) 273 U.S. 236, 242.)
Roberts has not shown authority that a licensing agreement can be the
subject of a bailment. Further, he has not and cannot allege a
anything improper with its contractual licensing authority, as opposed to the
royalties derived from that authority.
Roberts’ contends BMI breached a fiduciary relationship
which was established by the provision in the BMI Affiliation Agreement
granting BMI a power of attorney to enforce Stewart’s royalty rights. Again, we are not persuaded. The power of attorney provision was limited
in scope to enforcing and protecting the very rights granted to BMI in the
contract. It created no additional duty
on the part of BMI that can be characterized as fiduciary. (See Wolf v. Superior Court (2003)
107 Cal.App.4th 25, 27; Cusano v. Klein,
supra, 280 F.Supp.2d at pp. 1040-1041
[limited power of attorney in royalty contract does not establish fiduciary
relationship for all purposes]; compare Tran
v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202, 1206 [limited fiduciary
duty created by power of attorney in insurance context].)
Thus,
had the trial court reached the merits of Roberts’ conversion claim against
BMI, it would have been obligated to sustain the demurrer.
VI.
DISPOSITION
The trial
court shall vacate its order sustaining defendant Broadcast Music, Inc.’s
demurrer to plaintiff Ken Roberts’ causes of action for breach of contract and
declaratory relief. In all other
respects the rulings and orders of the trial court are affirmed. Defendants
Sony, BMI and Warner shall recover their costs on appeal from plaintiff
Sylvester Stewart. No costs are awarded
as between defendants and plaintiff Roberts, and as between former defendant
First California Bank and plaintiffs.
NOT TO BE PUBLISHED
IN THE OFFICIAL REPORTS
O’NEILL,
J.
We concur:
TURNER,
P.J.
ARMSTRONG, J.
introductory section of the Fourth Amended Complaint makes no mention of
defendant Bank. Nor does it mention a highly significant document, the “1989
Assignment.â€
In
the 1989 Assignment, discussed below, Stewart assigned his BMI royalty rights
to Even Street, without purporting to revoke the 1976 assignment to
Roberts.
