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Kenneth D. Freundlich (SBN: 119806)
Michael J. Kaiser (SBN: 258717)
FREUNDLICH LAW
16133 Ventura Blvd. Suite 1270
Encino.CA 91436
P: (310)275-5350
P: (818)377-3790
F: (310)275-5351
E-Mail: ken@freundlichlaw.com
MaxJ.Sprecher(SBN: 169285)
LAW OFFICES OF MAX J. SPRECHER
5850 Canoga Avenue, 4th Floor
Woodland Hills, CA 91367
P: 818.996.2255
F: 818.996.4204
E-Mail: max@sprecherlaw.com
Attorneys for Plaintiffs
Harold Brown, Lee Oskar Levitin, Howard Scott, Morris Dickerson, Jr.
as Conservator of the Estate of Morris Dewayne ("BB") Dickerson,
Laurian Miller on her own behalf and as assignee
of the Heirs of Charles Miller
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES, CENTRAL DISTRICT
FILED
>r Court of G
bounty of Los Angeles
OCT 0 3 2014
Superior Court of Californfe
Co
Sherri fl. Caj
By.
Offiar/Clerk
Dijxity
m
HAROLD BROWN, an individual; LEE OSKAR
LEVITIN, an individual; HOWARD SCOTT, an
individual; MORRIS DICKERSON, JR. as
Conservator of the Estate of MORRIS DEWAYNE
("BB") DICKERSON, an individual; and
LAURIAN MILLER, on behalf of herself and as
assignee of the claims of the Heirs of Charles
Miller,
Plaintiffs,
Case No.
BC559691
Related cases assigned to
the Hon. William F. Fahey,
Dept. 69: BC371227 (Lead),
BC423291, and BC457391
COMPLAINT FOR:
vs.
GERALD GOLDSTEIN, an individual: FAR OUT
MUSIC, INC., a California corporation; FAR OUT
PRODUCTIONS, INC., a California corporation;
FAR OUT MANAGEMENT, LTD., a California
corporation; JERRY GOLDSTEIN MUSIC, INC., a
California corporation; TMC MUSIC, INC., a
California corporation; AUDIO VISUAL
ENTERTAINMENT, INC., a California
corporation dba AVENUE RECORDS; FAR OUT
HOLDING CORP., a Delaware corporation; and
DOES 1 through 20,
Defendants.
I
COMPLAINT
DECLARATORY RELIEF;
BREACH OF CONTRACT
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Plaintiffs Harold Brown ("Brown"), Lee Oskar Levitin ("Levitin"), Howard Scott ("Scott"),
Morris Dickerson, Jr. as Conservator of the Estateof Morris ("BB") Dickerson ("Dickerson"),
and Laurian Miller ("L. Miller") on her own behalf and as assignee of the Heirs of Charles Miller
(collectively, "Plaintiffs") hereby complain and allege as follows.
I. INTRODUCTION
1. Plaintiffs Brown, Levitin, Scott, and Dickerson, in one settlement agreement, and
PlaintiffMiller in a second settlement agreement, resolvedprotracted litigationagainst the
Defendants by two written settlement agreements, bothof which, inter alia, required Defendant
TMC Music, Inc., with respect to Plaintiffs' musical compositions, and Defendant Far Out
Productions, Inc. with respect to Plaintiffs' sound recordings, to account to Plaintiffs semi-annually
for royalties earned from the exploitation of Plaintiffs' musical compositions and recordings under
agreed formulae, and to provide Plaintiffs with audit rights to test the validityof these accountings
and payments.
2. The settlement agreementseach provided for accounting with respect to the Musical
Compositions "in accordance withthe terms of the 1972 Songwriters' Agreement as modified by
the 1975 Memorandum (the "1975Amendment"). The parties agreed that "[A]nydisputes and
disagreements concerning the interpretation of the 1975 Amendment, and the application of the
1975 Amendment in this Agreementshall be resolved by litigation before a Judge of the Los
Angeles Superior Court."
3. Plaintiffs allege that Defendants have applied an incorrect formula to the calculation
of royalties arisingfromtheexploitation of musicalcompositions under the settlementagreements
in misconstruing the 1975 Amendment throughout the entire post-settlement period, as well as
abruptly changingthe revenuebase on which Defendants computed the paymentsdue to Plaintiffs
in contravention of the settlement agreements, the underlying agreements setting forth the
formulae, and Defendantsown 40 year course of dealing.
II. THE PARTIES
4. Plaintiff Brown is an individual, currently residing in Los AngelesCounty,
California.
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5. Plaintiff Dickerson is an individual and a resident of Los Angeles County,
California. Morris Dickerson, Jr. was appointed Conservator in the Los Angeles Superior Court on
or about September 19, 2014, in Case No. BPI53826.
6. Plaintiff Levitin is an individual and a resident of Redmond, Washington.
7. Plaintiff Scott isan individual and a resident of Arlington, Texas.
8. Plaintiff L. Miller is an individual and a resident ofLos Angeles County, California.
Miller is asurviving daughter ofCharles Miller ("Miller") whose other survivors include his wife,
Eddy Miller ("E. Miler"), two sons, Donald Miller ("D. Miller') and Mark Miller ("M. Miller"),
and a second daughter Annette Miller ("A. Miller"). Miller died inJune 1980, intestate, and his
interests in the subject matter ofthis lawsuit where collectively inherited by E. Miller, D. Miller,
M. Miller, L. Miller and A. Miller (collectively, the "Miller Heirs"). Thereafter all ofthe surviving
Millers assigned all of their inherited rights in, inter alia, the subject matter of BC457391 and this
lawsuit, to L. Miller and appointed L. Miller to represent their interests in the subject matter of this
lawsuit. It is on her own behalfand as assignee and representative ofMillers surviving family,
that L. Miller is the Plaintiff.
9. Plaintiffs Brown, Dickerson, Levitin, Scott, along with Miller and LeRoy Lonnie
Jordan and Papa Dee Allen (deceased) are the founding, original members of the 1970s musical
performing and recording group WAR (the "Original War"J and the songwriters, recording artists,
and original perfonners of legendary musical hits, including Why Can't We Be Friends?, The World
Is a Ghetto, Cisco Kid. and Low Rider. The Original War, which included Plaintiffs, LeRoy
Lonnie Jordan, and twoother members whoare deceased, wroteand recordedmusical
compositions that have sold tens of millions of records worldwide, was nominated for several
23 IGrammy awards, and, in2009, was nominated for entrance into the Rock and Roll Hall of Fame.
24 I l- At various times relevant to this action, each of Plaintiffs was aresident ofLos
Angeles County, and/or the relevant contracts were entered into in Los Angeles County orwith
other residents ofLos Angeles County, and/or operative events occurred in Los Angeles County.
11. Defendant Gerald ("Jerry") Goldstein ("Goldstein") is an individual. Plaintiffs are
informed and believe and based thereon allege that Goldstein is aresident ofLos Angeles County.
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12. Plaintiffs are informed and believe and based thereon allege that Defendant Far Out
Productions, Inc. ("Far Out Productions" or "FOP") is aCalifornia corporation with its principal
offices located in Los Angeles County. Plaintiffs are further informed and believe and based
thereon allege that Far Out Productions is arecord label, i.e., in the business ofowning and
exploitingmusical recordings.
13. Plaintiffs are informed and believe and based thereon allege that Defendant Far Out
Music, Inc. ("Far Out Music") is aCalifornia corporation with its principal offices located in Los
Angeles County. Plaintiffs are further informed and believe and based thereon allege that Far Out
Music is in the business ofmusic publishing, i.e., exploiting musical compositions. Plaintiffs are
informed and believe that Far Out Music's corporate status has been suspended by the California
Secretary of State and Franchise Tax Board.
14. Plaintiffs are informed and believe and based thereon allege that Defendant TMC
Music, Inc. ("TMC") is aCalifornia corporation widi its principal offices located in Los Angeles
County. Plaintiffs are further informed and believe and based thereon allege that TMC is in the
business ofmusic publishing and is (or claims to be) asuccessor-in-interest to some or all ofFar
Out Music's rights and interests as they pertain to Plaintiffs. Plaintiffs are informed and believe
that TMC's corporate status has been suspended by the California Franchise Tax Board.
15. Plaintiffs are informed and believe and based thereon allege that Defendant Far Out
Management, Ltd. ("Far Out Management") is aCalifornia corporation with its principal offices
located in Los Angeles County. Plaintiffs are further informed and believe and based thereon
allege that Far Out Management is an artist management company. Plaintiffs are informed and
believe that Far Out Management's corporate status has been suspended by die California Franchise
Tax Board.
16. Plaintiffs are informed and believe and based thereon allege that Defendant Jerry
Goldstein Music, Inc. ("Jerry Goldstein Music") is aCalifornia corporation with its principal
offices located in Los Angeles County. Plaintiffs are further informed and believe and based
thereon allege that Jerry Goldstein Music purports to be arecord label and music publisher.
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17. Plaintiffs are informed andbelieve andbased thereon allegethat Defendant Audio
Visual Entertainment, Inc. (dba Avenue Records) ("Avenue") is a California corporation with its
principal offices located in Los Angeles County. Plaintiffs are further informed andbelieve and
based thereon allege that Avenue purports to be a record label and is (or claims to be orpreviously
claimed to be) a successor-in-interest to some orall ofFar Out Productions' (or Jerry Goldstein
Music's) rights andinterests as theypertain to Plaintiffs.
18. Plaintiffs are informed and believe and based thereon allege that Defendant Far Out
Holding Corporation ("Far Out Holdings") is a Delaware corporation with its principal offices
located in Los Angeles County. Plaintiffs are further informed and believe and based thereon
allege that Far Out Holdings is a shell through which Goldstein owns, manages, and/or controls the
other corporate Defendants.
19. Goldstein, Far Out Productions, TMC, Far Out Music, Far Out Management, Jerry
Goldstein Music, Avenue, and FarOut Holdings are hereinafter referred toas tothe"Goldstein
Defendants."
20. Plaintiffs are informed and believe and based thereon allege that there isa
substantial unity ofinterest between and among Goldstein Defendants inthat, among other reasons,
Goldstein is a substantial shareholder of eachof die entitiesand/orGoldstein is a substantial
shareholder in an entitywhich, in turn, owns one of the other Goldstein Defendants. Plaintiffs are
further informed and believe and based thereon allege that Goldstein exercises complete control
over and dominates each ofthe Goldstein Defendants in all substantive matters, including, but not
limited to, the hiring ofits officers, the ultimate authority to enter into contracts, the ultimate
authority concerning the direction and strategy of litigation, and the control over thedistribution
and disbursement ofassets. Plaintiffs are further informed and believe and based thereon allege
that Goldstein holdshimselfout as theequivalent of each of theGoldsteinDefendants.
21 Plaintiffs are informed and believes and based thereon allege that Goldstein exerts,
and at all times relevant hereto has exerted, such dominion and control over the Goldstein
Defendants, and so combined the business and operations ofthe Goldstein Defendants, individually
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and collectively, that the Goldstein Defendants are alter egos ofeach other in relation to the matters
alleged herein and in all matters of business.
22. Plaintiffs are further infonned and believe and based thereon allege that there exists,
and at all times herein mentioned there existed, aunity of interest and ownership between the
Goldstein Defendants, such that any individuality or separateness between the Goldstein
Defendants, ceased and that they should all be considered the alter egos ofeach other.
23. Plaintiffs are informed and believe and thereon allege that adherence to the fiction of
the separate existence of the Goldstein Defendants would sanction fraud, permit an abuse of the
corporate privilege, and would promote injustice, and unless judgment in this action includes all of
the Goldstein Defendants named herein, Plaintiffs may not be able to enforce the claims and rights
referred to herein and obtain satisfaction ofjudgment.
24. The true names and capacities, whether individual, corporate, associate, or
otherwise, of Defendants named in this Complaint as Does I through 20, inclusive, are unknown to
Plaintiffs. As aresult, Plaintiff has sued these Defendants by using fictitious names. Plaintiff will
amend this Complaint to allege these Defendants' true names and capacities once they have been
ascertained.
25. Plaintiff is infonned and believes and on that basis alleges that each ofthe
Defendants named in this Complaint as a"Doe" is responsible in some manner for the events,
happenings, acts, and omissions alleged in this Complaint, has damaged Plaintiff, and, therefore, is
responsible orliable to Plaintiff for the damages that each has caused.
IIL General Background Facts - The Settlement*
26. Brown, Dickerson, Levitin, Scott, and Miller (Plaintiff L. Miller's father) are five of
the founding, original members of the 1970s musical performing and recording group WAR (the
"Original War"; and the songwriters, recording artists, and original performers of legendary
musical hits, including Why Can't We Be Friends?, The. World Is aGhetto, Cisco Kid, and Low
Rider. The Original War, which also LeRoy Lonnie Jordan ("Jordan"), and two other members
who are deceased, wrote and recorded musical compositions that have sold tens of millions of
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records worldwide, was nominated for several Grammy awards, and, in 2009, was nominated for
entrance into the Rock and Roll Hall of Fame.
27. During the 1970s, Brown, Dickerson, Levitin, Scott, and Miller entered into aseries
ofwritten agreements with the Goldstein Defendants concerning Plaintiffs' composing and
recording services as members ofthe Original War.
28. In 2009, Brown, Levitin, Dickerson and Scott filed an action in the Los Angeles
Superior Court (BC423291 - the "Brown Action") seeking redress for decades of malfeasance by
the Goldstein Defendants in reporting and paying Plaintiffs in connection with the various
agreements that existed prior to that date. On October 13, 2010, each of the Defendants in the
above-captioned action executed the written settlement agreement resolving the Brown Action on
the terms and conditions set forth therein (the "Brown Settlement Agreement"). Attached hereto as
Exhibit 1and incorporated herein by this reference is atrue and correct copy of the Brown
Settlement Agreement (without the stipulated judgment exhibit).
29. On March 15, 20II, approximately 5months after the Brown Settlement Agreement
was concluded in the above-captioned action, PlaintiffL. Miller filed acompanion action in the
Los Angeles Superior Court (BC457391 - the "Miller Action") as the designated representative of
the heirs of Miller. On December 1, 2011, the parties in the Miller Action reached asettlement on
the identical overall terms and conditions set forth in the Brown Settlement Agreement (the only
real difference being the total Settlement Amount and that the initial accounting to the Miller
Plaintiff would start one period behind the accountings to the Plaintiffs in the Brown Action).1
Attached hereto as Exhibit 2and incorporated herein by this reference is atrue and correct copy of
the Miller Settlement Agreement from the Miller action (without the stipulated judgment exhibit).
The Brown Settlement Agreement and the Miller Settlement Agreement are individually and
collectively, the Settlement Agreements.
paragraphs in the Miller Settlement Agreement (Exhibit 2). corresponding
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30. The Settlement Agreements provided, inter alia, that withrespect to the Musical
Compositions (as defined therein), royalties "shall be accounted forand paid byTMC toPlaintiffs
inaccordance with the terms of the 1972 Songwriters' Agreement as modified by the 1975 .
Memorandum (the '1975 Agreement')". Exhibit I, ft5A.(i). The Songwriters' Agreement and the
1975 Memorandum areattached tothesettlement agreements andincorporated byreference
therein, and trueandcorrect copies thereof, arealsoattached to this Complaint as Exhibits 3 and4,
and incorporated herein bythis reference. (To the extent separate agreements were executed by the
individual artists, Plaintiffs are informed and believe that all of the artists executed identical
agreements and the attachedcopiesare trueand accurate copiesof thedocuments eachof the
original artists executed.)
31. TheSettlement Agreements set forth various obligations, including (a) certain
periodic (semi-annual) fixed payments (the "Settlement Payments") which are not presently at
issue in this action [e.g., Exhibit 1, f 1], and (b) ongoing accounting and payment obligations
pursuant to detailed provisions ofthe Settlement Agreement and the underlying pre-existing
songwriter/music publishing agreements (as to the exploitation of the musical compositions) and
master recording agreements (as tothe exploitation of the sound recordings) (the "Ongoing
Accounting Obligations") [e.g., Exhibit 1, ffl5-6].
32. AstheSettlement Agreements specifically recognized [Exhibit 1,1[5A(i)], at the
time the Settlement Agreements were executed, the parties could notagree what formula resulted
20 Jfrom the application of the "1972 Songwriters' Agreement as modified by the 1975 Memorandum
21 i(the '1975 Amendment')," (i.e., the "meaning of the 1975 Amendment"). The Parties further
agreed dial "[a]ny disputes and disagreements concerning the interpretation of the 1975
Amendment, and the application ofthe 1975 Amendment in this Agreement, shall be resolved, by
litigation before a Judge of the Los Angeles SuperiorCourt."
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IV- Defendants Required Accountings and Payments To Plaintiffs Relating to the
"Writer's" and the "Partiripants/Co-PublisherV" Share of Musical Composition
Revenues
A. Music Publishing Revenues and Royalties
33. Music publishing/songwriters' revenues consist mainly offour categories ofroyalty
income: (1) mechanical royalties which generally are based on record sales; (2) licenses for
synchronization royalties (or fees) which are based on music synchronized with visual images
such as amotion picture, television program or commercial; (3) song book and folio royalties
which are derived from the sale ofsheet music folios and other printed editions; and (4) "public
performance" royalties which are derived from, the broadcasting ofthe songs over public
airwaves (such as radio, television and cable), streaming over the Internet, live orrecorded uses
nightclubs, restaurants, concerts halls and other similar venues, and other public performances.
Collectively, the "Music Composition Royalty Categories".
34. It is longstanding industry custom and practice (including without limitation the
performance societies agreements between writer members and publisher members), in which
Defendants have engaged in for the life oftheir relationship with the Plaintiffs, that music
publishing revenue is divided into two equal parts: the "writer's share" and the "publisher's share".
35. Consistent with the foregoing practice, with the exception ofthe public performance
royalties, publishers, including, on information and belief, Defendant TMC, collect one hundred
percent (100%) ofroyalties earned for the Music Composition Royalty Categories which include
both the writers' share and the publishers' shareof suchincome.
36. Also consistent with the foregoing historical practice, publishers, including, on
information and belief, Defendant TMC, received (and continues to receive) directly from its
performing rights society (which Plaintiffs understand is ASCAP) fifty percent (50%) ofthe public
performance royalties which represents solely the "publisher's share" of such royalties is paid
directly to the publishers.
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B. The Writers'Share-1972
37. The 1972Songwriters' Agreement (with or without the modifications provided by
the 1975 Amendment), providedthe formula for Defendants toaccountand pay Plaintiffs' royalties
for their writers shares (1J7 of the 1972 Agreement), and, in addition, a separateformula for
Defendants to alsopayto Plaintiffs a share of the"publishers share" of the music publishing
revenue which represented Plaintiffs' so-called "participant's" or "co-publisher's" shares (f22 of
the 1972 Agreement).
38. As to the "Writer'sShare." pursuant to paragraphs 7(c) and 7(e) Defendants agreed
to pay to Plaintiffs, prorata, - as "writers" - their proportional interest in "fifty percent(50%) of
the "net sums" actually received by the[Defendant] Publisher" forall rights. These obligations
simplymaintained and continued the Defendants earlierobligations arisingundertheoriginal 1970
songwriting agreements that were replaced by the 1972 Songwriters' Agreement.
39. Because, as set forthabove, Plaintiffs received their writers' share of public
performance income directlyfrom ASCAP, bothparagraphs 7(c) and 7(e) make it clear that "net
sums" payable to Plaintiffs for their writers' share wouldexclude Defendants shareof the public
performance income it received fromASCAP. Paragraph 7(f) made that writers' share exclusion
clear that withrespect to writers' shares: "Thepublisher shall not be required to pay royalties
earner by reason of thepublicperfonnance of thecompositions; saidroyalties being payable only
by the performance rights society with whichWriter is or may in the future become affiliated."
40. Subject toaudit, there is no present dispute as to Defendants' handling of the
payment of the writers' share of royalties to Plaintiffs.
C. The Participant/Co-Publisher Share Formula - 1972
41. Paragraph 22 of the 1972 Songwriters' Agreement reflected a completely new
obligation thatdidnot previously exist between theparties, andprovides, inpertinent part, as
fotlows (emphasis added):
"In addition to the royalties provided in Paragraph 7 above, all
monies actually earned and received from the sale, lease, license,
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43. However, there were two keychanges to^22 of the 1972 Songwriters' Agreement,
the first of which changed AdministrationFee (J22(a)) as follows:
"2(d). Pursuant to Paragraph 22 ... Publisher shall be entitled first to
deduct thesumof twenty-five (25%) percent from theComposition
Gross Receipts in consideration of its services and also from the
direct feesof a trusteeor collecting agent for the licensingof
recordings of Compositions and legal and accounting fees relating to
the Compositions including thosearisingout of any claimof
copyright infringement brought by or against the Publisher. All other
direct costsrelating Co the Compositions such as copyright, printing,
engraving, advertising, promotion andexploiting the Compositions
shall be bornesolely by Publisher."
44. The secondchangemodified Plaintiffs' Net Participant's Payment as follows:
"2(e). Pursuant to Paragraph 22(d). .. one hundred (100%) percent
of the balance of Compositions Gross Receipts remaining after the
deductions set forth in subparagraph (2](d) [of the 1975
Amendment], shall belong to Writer..."
45. Nothing in die 1975 Memorandummodified the categories of revenue to which the
modified fomtula applied.
46. The net effect of the 1975 Amendment is that withrespect to Plaintiffs participation
in the publisher's share of revenues, the formula should be as follows:
Inaddition tothe songwriter royalties provided for in paragraph 7 of the
1972Songwriter's Agreement which remain unchanged, all moniesearned
and received from the sale, lease, license, disposition or other turning to
account of rights in the Compositions, includingall moniesreceived fromall
sources including in connection with the infringement by third parties of
rightsintheCompositions andthe publisher's shareof public performance
royalties ("Composition Gross Receipts"), shall be treated as follows:
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(a) Publisher shall be entitled first to deduct twenty-five percent
(25%) from the Composition Gross Receipts in consideration of its services
and also the direct fees of a trustee or collective for the licensing of
recordings (such fees not to exceed the standard Harry Fox fees) and actual
legal and accounting fees relating to the Compositions including those
arising out of any claimof copyright infringement brought by or against the
Publisher. All other direct costs relating to the Compositions such as
copyright, printing, engraving, advertising, promoting and exploiting the
Compositions shall be bome solely by Publisher;
(b) Publisher shall then deduct from Composition Gross Receipts
and pay therefrom the royalties due to the compositions of the Compositions
in accordance with any agreement Publisher may have with such composers
(including without limitation, paragraph 7 of the 1972 Songwriters'
Agreements);
(c) No further deductions.
(d) 100%of the balance of the Composition Gross Receipts
remaining after the deductions set forth in paragraphs 22(a) and (b), above,
shall belong to Plaintiffs on a pro rata basis.
47. Plaintiffs are informed and believe and thereon allege that for all post-settlement
accounting periods, Defendants have incorrectly accounted to Plaintiffs for Plaintiffs' share as a
"participant/co-publisher" in the "publisher's share" of income earned for the Musical
Compositions, by applying the formula contained in the 1972 Songwriters Agreement, not
modified by the 1975 Memorandum to various categories of income. Until the accounting for the
period ending December 31, 2013, such accountings included payment to Plaintiffs, a
participants/co-publishers share of all Music Composition Royalty Categories including, without
limitation, the publisher's share of public performance collected from ASCAP,
48. Suddenly, for the accounting period ending December 31, 2013, Defendants,
without any basis for doing so, eliminated "performance income" as a category of income for
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which they were paying royalties, even though they had paid royalties on such "performance
income" without fail for nearly four decades, including both after and before the Settlements. This
modification to the revenue base is wholly independent of the resulting formula to be applied under
either the 1972 Songwriters' Agreement or the 1975Memorandum, and constitutes a separate and
independent issue.
49. This Action seeks resolution of the meaning of the "1975 Amendment" as used in
the Settlement Agreement, including without limitation a determination that all Music Composition
Royalty Categories, including, without limitation, public perfonnance royalties, are subject to
Defendants' obligation to pay royalties.
50. Plaintiffs alsocontend that the 1975 Amendment unproved Plaintiffs' >
participant/co-publisher share by making certain improvements to the formula contained in 1|22of
the 1972Agreement and this is also part of Plaintiffs' claims for relief and damages herein.
FIRST CAUSE OF ACTION
(Declaratory Relief against the Goldstein Defendants and DOES 1 through 20)
51. Plaintiffs hereby incorporate paragraphs I through 50 as though set forth folly
herein.
52. Plaintiffs are infonned and believeand based thereon allege that there are existing
disputes as to the fonnula to be applied to the Goldstein Defendants' accountings and payments
pursuant to paragraph 5.A.i. of the Settlement Agreements.
53. Specifically, Plaintiffs believe that the present dispute involves at least two separate
and independent issues. First, whether the publisher's share of public performance revenues are to
be included in the revenue base for the calculationand payment of Plaintiffs' participation pursuant
to paragraph 22 of the 1972Songwriters' Agreement before applying the modifications required by
the 1975 Memorandum. Second, the effect of the modifications set forth in the 1975 Memorandum
in calculating the amount to be paid to Plaintiffs.
54. Plaintiffs contend that (a) die publisher's share of public performance revenues is
includedin the revenue base of the payments requiredby paragraph 22 of the 1972 Songwriters'
Agreement (irrespective of any modifications to amount paid on that revenue base by die 1975
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Memorandum), and (b) the effect of the modifications set forth in the 1975 Memorandum result in
a significant increase in die amount to be paid to Plaintiffs.
55. Plaintiffs are infonned and believe and based thereon allege that Defendants dispute
that the publisher's share of public performance monies are included in the revenue base and that
the modifications to paragraph22 of the 1972 Songwriters' Agreement set forth in the 1975
Memorandum have any effect on the amounts paid to Plaintiffs.
56. Accordingly, an actual controversy has arisen and presently exists as to the rights
and duties of die parties hereto, as alleged herein, as to which Plaintiffs request, and are entitled to,
a detennination in accordance with their contentions herein.
57. In addition, and based upon the resolution of the conect formulae, Plaintiffs are
informed andbelieveand based thereon allege that for the bi-annual periods commencing January
1, 2011 throughpresent, the Goldstein Defendants havesubstantially underreported and underpaid
Plaintiffs in an amount to establishedat trial, but believed to be in excess of $300,000, and which
underpayment should be ordered paidand accounted for as part of the declaratory relief.
SECOND CAUSE OF ACTION
(Breach of Contract against the Goldstein Defendants and DOES 1through 20)
58. Plaintiffs hereby incorporate paragraphs 1 through50 as though set forth fully
herein.
59. Plaintiffs are infonned and believe andbased thereon allegethat Plaintiffs have fully
sufficiently performed all covenants andconditions required to be performed on their part under the
Settlement Agreements, except to the extent excused, prevented, or waived. Plaintiffs are further
informed and believe andbased diereon allege that Plaintiffs have not been and are not presently in
material breach of the Settlement Agreements in any manner that excuses the Goldstein
Defendants' further and continuing obligations.
60. The Goldstein Defendants havematerially breached the Settlement Agreements by,
among other things: (a) failing to use the conect formulae in calculating Plaintiffs' paymentsin
connection with the musical compositions, (b) altering the revenue baseupon which the Goldstein
Defendants calculated Plaintiffs' payments under paragraph 22of the 1972 Songwriters' Agreement
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(inespective of andbefore applying the increases required bythe 1975 Memorandum which do not
relate to the underlyingrevenue base), and (c) failing to adequatelyand completelyaccount to
Plaintiffs for all accounting periodsafter execution of the Settlement Agreements.
61. Plaintiffs are informed and believe, and based thereon allege, that die Settlement
Agreements contain an implied covenant that eachparty shall conduct himselfTherself/itself ingood
faithand will fairly deal withtheotherpartiesand that nopartywill interfere withor deprivethe
other of the benefits of the agreements. Pursuant to this implied covenant, Defendants owed
Plaintiffs to act in a reasonable manner in their accountings and payments under the Settlement
Agreements.
62. Plaintiffs are informedand believe and based thereon allege that by altering the
revenue base upon which Plaintiffs' payments under paragraph 22 of the 1972Songwriters'
Agreement as modified by the 1975 Memorandum were calculated in connection with the reports
for the periodending December 31, 2013, Defendants breachedthe impliedcovenant of good faith
and fair dealing.
63. Asa direct and proximate result of theaforesaid material breaches, Plaintiffsare
informed and believe, and based thereon allege, that Defendants have damaged Plaintiffs in an
amount of not less than $300,000.
WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
follows:
1. For a declaration that the publisher's share of public performance revenue is to be
included in the revenue base upon which Defendants account to and pay Plaintiffs pursuant to 1975
Amendment (i.e., pursuant to paragraph22 of the 1972 Songwriters' Agreement as modified by
paragraph 2(d)-2(f) of the 1975 Memorandum).
2. For a declaration that based upon the 1975Amendment, Defendants are obligated to
account to and pay Plaintiffs in connection with the Musical Compositions in two separate and
27 independent roles as follows:
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a. First, for Plaintiffs' royalties as songwriters (i.e., the songwriter's share)
pursuant to paragraph7 of the 1972Songwriters' Agreement which remains unmodifiedby
anything in the 1975 Memorandum.
b. Second, for Plaintiffs' participation as co-participants in the publisher's share
of revenue pursuant toparagraph 22 of the 1972 Songwriters' Agreement as specifically modified
by paragraphs 2(d)-2(f) of the 1975 Memorandum, which results in the following formula:
i. In additionto the songwriter royalties provided for in paragraph 7 of
the 1972 Songwriter's Agreement which remain unchanged, ail monies
earned and received fromthe sale, lease, license, disposition or other turning
to account of rights in the Compositions, includingalt monies received from
all sources including inconnection with the infringement by thirdparties of
rights in the Compositions and the publisher's share ofpublic performance
royalties ("Composition Gross Receipts"), shall be treated as follows:
(a) Publisher shall be entitled first to deduct twenty-five percent
(25%) from the Composition Gross Receipts in consideration of its services
and also the direct fees of a trustee or collective for the licensing of
recordings(such fees not to exceed the standard Harry Fox fees) and actual
legal and accounting fees relating to the Compositions including those
arising out of anyclaim of copyright infringement brought byor against the
Publisher. All other direct costs relating to theCompositions such as
copyright, printing, engraving, advertising, promoting and exploiting the
Compositions shall be borne solely by Publisher;
(b) Publishershall thendeduct from Composition Gross Receipts
and pay therefromthe royaltiesdue to the compositions of the Compositions
in accordance withanyagreement Publishermayhave with suchcomposers
(including without limitation, paragraph 7 of the 1972 Songwriters'
Agreements);
(c) No further deductions.
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3.
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(d) 100% ofthe balance ofthe Composition Gross Receipts
remaining after the deductions set forth inparagraphs 22(a) and (b), above,
shall belong to Plaintiffs on a prorata basis.
For an accounting;
Fordamages according toproofat trial inan amount tobe determined at trial but
believed to exceed $300,000;
5. For pre-judgment interest aspermitted by law;
For post-judgment interest as permitted bylaw;
For attorneys' fees as provided by the Settlement Agreements;
For costs of suit; and
For such other further relief at law or in equity which the court deems proper.
DATED: October 3,2014 FREUNDLICHLAW
&
LAW OFFICES OF MAX J. SPRECHER
*%**
Kenneth D." Freundlich
Attorneys for Plaintiffs
Harold Brown, Lee Oskar Levitin, Howard Scott,
Morris Dickerson, Jr. as Conservator of the Estate of
Morris Dewayne ("BB") Dickerson, and Laurian
Miller onherown behalf andas assignee of the Heirs
of Charles Miller
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