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LOUIS R. MILLER (State Bar No. 54141)


smiller@millerbarondess.com

DANIEL S. MILLER (State Bar No. 218214) . t^rtfP)


dmiller@millerbarondess.com
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JASON H. TOKORO (State Bar No. 252345) Q r-^J^
jtokoro@millerbarondess.com
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Los Angeles, California 90067


Telephone:

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Facsimiie:

(310)552-4400

(310)552-8400

DEC 09 20H
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MILLER BARONDESS, LLP

1999 Avenue of theStars. Suite 1000 A

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Attorneys for Plaintiff


TITA CAHN TRUST, d/b/a CAHN MUSIC

SUPERIOR COURT OF THE STATE OF CALIFORNIA


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COUNTY OF LOS ANGELES, CENTRAL DISTRICT


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BC 5661 04

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TITA CAHN TRUST, d/b/a CAHN MUSIC,,

CASE NO.

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Plaintiff,

COMPLAINT FOR:

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WB MUSIC CORP., a Californiacorporation;


WARNER/CHAPPELL MUSIC, INC., a

Delaware corporation; and DOES 1 through


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**

1. BREACH OF CONTRACT

2. BREACH OF THE IMPLIED


COVENANT OF GOOD FAITH AND
FAIR DEALING

10, inclusive,,
3. BREACH OF FIDUCIARY DUTY

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Defendants.

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CONVERSION

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ACCOUNTING

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DEMAND FOR JURY TRIAL


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200890.6

COMPLAINT

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Plaintiff Tita Cahn Trust, d/b/a Cahn Music ("Plaintiff'), alleges against Defendants WB

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Music Corp. ("WB Music"), Warner/Chappell Music, Inc. ("Wamer/ChappeH"), and DOES 1

through 10, inclusive, (collectively, "Defendants") as follows:

NATURE OF THE ACTION

1.

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including to all ofhis rights to hundreds oftimeless musical compositions written by Mr. Cahn

during his legendary career. Included among those compositions is the evergreen Christmas

classic "Let It Snow, Let It Snow, Let It Snow" (hereafter "Let It Snow"), written and composed

by Mr. Cahn with Jule Styne.

2.

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For decadesbeginning in the 1970's and continuing uninterrupted through

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December 31, 2011, with the sole exception being the period from January 1, 2002 to December

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31, 2004Defendants have acted as the administrator for the musical copyrights ofMr. Cahn. In

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that fiduciary capacity, Defendants have been entrusted to preserve, protect and exploit the Calm

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catalog in motion picture, television, phonograph recording and other media worldwide for the

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benefit ofPlaintiff and to account for such exploitation in a timely and accurate fashion.

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Plaintiff is the successor-in-interest to the iconic songwriter Sammy Cahn,

3.

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This action arises out ofDefendants' breach offiduciary duties owed to Plaintiff as

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administrator and trustee of the copyrights ofMr. Cahn and many breaches ofthe parties' January

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2005 agreement (the"Administration Agreement").

4.

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In August 2011, Defendants advised Plaintiff that the Estate ofJule Styne ("Styne"

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or the "Styne Estate") had conducted an audit ofDefendants and made a claim against the musical

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composition "Let It Snow."

5.

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Plaintiff promptly responded to the notice ofclaim and, among other things,

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requested necessary and appropriate information concerning the details ofthe Styne claim,

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including a copy ofthe Styne audit report, the date on which the audit report was first submitted to

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Defendants, and any demand or other correspondence from the Styne Estate relating to its claim.

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Plaintiff requited this information in order to evaluate and defend against the claim.
6.

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Despite numerous and persistent requests from Plaintiff, Defendants stonewalled

and refused to provide any details concerning the Styne claim. Instead, without any justification
200890.6

1
COMPLAINT

and in blatant disregard of the process outlined in the Administration Agreement, Defendants

wrongfully converted millions of dollars in monies owed to Plaintiff for royalties mainly on

compositions other than "Let It Snow."

7.

The Administration Agreement between Plaintiff and Defendants is explicit in

outlining the procedure to be followed in the event there are third partyclaims made relating to the

musical compositions of Mr. Cahn:

8.1.4. If a claim is made against us and/or with respect to

any [Subject Composition], you have the right to elect to defend


such claim against us at your cost with counsel of your choice. In
addition, if any claim is made againstus with respect to any [Subject
Composition], we may withhold a reasonable amount (i.e., an
amountreasonably related to the scope of the claim and potential

liability including anticipated attorney's fees and litigation costs)


from monies due or to become due to you, but if requested to do so

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by notice in the manner prescribed in f 9, below, we will notify you

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of the amount on legal hold and we will refund it (together with


interest on the amount released at the regular savings and loan
passbook interest rate prevailing in Los Angeles from time to time
during the period of withholding) if (and to the extent that) suit is
not brought with respect to that sum within 1 year thereafter, and
provided that you have fully responded in writing to any written

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inquiry we have made in respect of such claim, and we won't


withhold if you provide us with a satisfactory commercial surety

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8.

Defendants willfully breached the Administration Agreement and disregarded their

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fiduciary duties owed to Plaintiffby favoring the interests of the Styne Estate (whose copyrights
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continue to be administered by Defendants) to the detriment of Plaintiff(whose administration


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agreement with Defendants expired in December 2011, subject to post-term obligations from
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Defendants to Plaintiff).
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9.

Defendants prevented Plaintiff from having theopportunity to defend against the

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Styne claim by acting as "judge and jury" and unilaterally deciding the validity and amountof the
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Styne claim, without any input by or disclosure of the details of the claim to Plaintiff. Even with
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themeager information that Plaintiff has been provided, it is indisputable that a substantial portion
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of theStyne claim is barred bycontractual and statutory limitations periods and subject to other
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offsets, including for the Styne Estate's failure to account to Plaintiff onother Cahn-Styne joint
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works.
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200890.6

COMPLAINT

10.

Defendants wrongfully withheld from Plaintiff$2,381,365.27 in monies admittedly

due to Plaintiff for periods beginning in 2011 and continuing through 2012. Defendants

subsequently credited Plaintiff the sum of $325,501.36 on December 3, 2012, leaving the sum of
$2,055,863.91 wrongfully withheld and not refunded, together with interest, as required since no
suit was brought by the Styne Estate and no settlement entered into with Plaintiffs consent.

11.

Plaintiffhas been significantly damaged by Defendants' contractual and fiduciary

breaches and brings this lawsuit to recover the monies it is rightfully owed as successor-in-interest
to Mr. Cahn and his valuable catalog ofmusical compositions.
PARTIES

12.

PlaintiffTita Cahn Trust, d/b/a Cahn Music, is aCalifornia trust and the successor-

in-interest to Mr. Cahn.

13.
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business at 10585 Santa Monica Boulevard, Los Angeles, California 90025.

14.

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Defendant Wamer/Chappell Music, Inc. is aDelaware corporation with its

principal place ofbusiness at 10585 Santa Monica Boulevard, Los Angeles, California 90025.

15.

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Defendant WB Music Corp. is aCalifornia corporation with its principal place of

The true names and capacities, whether individual, corporate, or otherwise, of the

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defendants named herein as DOES 1through 10, inclusive, are presently unknown to Plaintiff,

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who therefore sues these defendants by such fictitious names. Plaintiff will seek leave to amend

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this complaint to allege the true names and capacities of DOES 1through 10, inclusive, when it
has ascertained such information. Plaintiffis informed and believes and on that basis alleges that
each defendant named herein as DOES 1through 10, inclusive, has participated in some or all of

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the acts or conduct alleged in this complaint and is liable to Plaintiff by reason thereof.

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JURISDICTION AND VENUE

16.

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This Court has jurisdiction over the claims alleged herein because Plaintiffseeks

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relief pursuant to the laws of the state ofCalifornia and the amount in controversy exceeds

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$25,000, and all defendants are subject to the personal jurisdiction ofthis Court.

17.

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Venue is proper pursuant to California Code ofCivil Procedure section 395, as

Defendants WB Music and Warner/Chappell have their principal places of business in this judicial
200890.6

COMPLAINT"

district, the contract was made in this judicial district, and Defendants' many breaches and

misconduct occurred in this judicial district.

18.

Furthermore, the parties agreed in the Administration Agreement that "[a]ll actions

orproceedings seeking interpretation and/or enforcement of this agreement shall be brought only

in the State or Federal Courts in Los Angeles County, all parties hereby submit themselves to the

jurisdiction ofsuch courts for such purpose." See Administration Agreement at%10.1.

FACTUAL ALLEGATIONS

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musician. During his career, Mr. Cahn was involved in creating hundreds of musical

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compositions, including hit recordings with Frank Sinatra, Dean Martin, Doris Day, and many

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others. Among his most enduring songs is "Let It Snow," co-written with Jule Styne in 1945.
20.

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Sammy Cahn was an enormously successful American lyricist, songwriter and

Beginning in the 1970's, Mr. Cahn engaged Defendants to act on his behalfas his

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agent and fiduciaryin the worldwide administration and exploitation in all media ofhis catalog

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ofmusical compositions, and to account to him for receipts from such exploitation in atimely and

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accurate fashion.

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This contractual and fiduciary relationship between Mr. Cahn (and Plaintiff ashis

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successor-in-interest) and Defendants continued uninterrupted through the end of 2011, with the

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sole exception being the period from 2002 through 2004.

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2005 Administration Agreement With Defendants

22.

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Plaintiff and Defendants entered into the Administration Agreement "[a]s of

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January 1, 2005." Consistent with their longstanding relationship, the Administration Agreement

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provided that Defendants would act as the administrator for the musical copyrights ofMr. Cahn

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and in that fiduciary capacity was entrusted with preserving, protecting and exploiting the Cahn

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catalog in all media worldwide for the benefit ofPlaintiff. Atrue and correct copy ofthe

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Administration Agreement is attached hereto as Exhibit 1and is incorporated herein by this

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reference.

23.

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The Administration Agreement required Defendants to employ "best efforts" to

collect income from the worldwide exploitation of the Cahn catalog:


200890 6

COMPLAINT

4.1. Subject to post Term collection rights of DreamWorks Music


Publishingand Cherry Lane Music PublishingCompanypursuant to the
annexed provisions of the prior agreement on Schedule "A", [Defendants] will
be entitled to collect (and shall employ best efforts consistent with our
reasonable business judgment to collect) pre-Term earnings in respect of
Existing [Subject Compositions], as well as all writer/publisher income
(except water's share of public performances collected by societies) generated
by each [Subject Composition] within the Territoryduring the Term and
collected by us or by our sublicensees during the Term or during the PostExpiration Collection and Sell-OffPeriods, as defined in paragraph 1.3.

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above.

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and net income to Plaintiff. See Administration Agreement at ^[ 4-6.

25.

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Defendants were obligated to then calculate, divide, account and pay gross receipts

To ensure compliance, the Administration Agreement provided Plaintiffwith audit

rights relating to Defendants' accountings:

5.3.1. You (or a certified public accountant on your behalf) shall have
the right to audit our books and records as to each statement for a period of 3
years aftersuch statement is received (or deemed received as provided below).
Legal action with respect to a specific accounting statement or the accounting
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period to which such statement relates shall be barred if not commenced in a


court of competentjurisdiction within 3 years after such statement is received
(or deemed received as provided below).

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The Administration Agreement sets forth an explicit procedure for handling third

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party claims:

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8.1.1. Each party will indemnify theother against any loss or damage

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(including court costs and reasonable attorney's fees) due to a breachof this
agreement by that party which results in a judgment against the other party or
which is settled with the other party's prior written consent (not to be
unreasonably withheld). In addition, your indemnity shall extend to the
"deductible" under our errors-and-omissions policy without regard to

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judgment or settlement.

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8.1.2. Weshall each give theother prompt notice of any third party
claim which you or we receive in respect of any [Subject Composition] and
we shall make a good faith effort to consult with you prior to responding to

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such claim. We will not incur and charge against your account more than
$3,000 in costs or fees in respect of a claim for which a complaint has not

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been filed and served on us.


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8.1.3. Eachparty is entitledto be notified of any action against the


other brought with respect to any [Subject Composition], and to participate in
the defense thereto, with each party having their own counsel. However, if

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you wish to participate in the defense by counsel other than our errors and

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omissions counsel, such participation shall be at your sole cost and expense.
Furthermore, in respect of any action alleging that any [Subject Composition]
infringes a third party's rights or violates any applicable criminal statute

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including but not limited to such third party's copyright, trademark,

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200890.6

COMPLAINT

servicemark, or right of privacy or publicity, weshall at all times have the

right to tender the defense thereof to you (i.e., require you to assume the
obligation of defense).

8.1.4. Ifaclaim is made against us and/or with respect to any

[Subject Composition], you have theright to elect to defend such claim

against us at your cost with counsel ofyour choice. In addition, ifany claim
is made against us with respect to any [Subject Composition], we may

withhold areasonable amount (i.e., an amount reasonably related to the scope

ofthe claim and potential liability including anticipated attorney's fees and
litigation costs) from monies due or to become due to you, but ifrequested to
do so by notice in the manner prescribed in %9, below, we will notify' you of

the amount on legal hold and we will refund it(together with interest on the
amount released atthe regular savings and loan passbook interest rate

prevailing in Los Angeles from time to time during the period ofwithholding)

year thereafter, and provided that you have fully responded in writing to any

if(and to the extent that) suit is not brought with respect to that sum within 1

written inquiry wehave made in respect of such claim, and we won't withhold

if you provide us with a satisfactory commercial surety bond.

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27.

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1, 2005 to and including December 31, 2006, and was extended thereafter to December 31,2011.

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Defendants Informally Advise Plaintiff Of The Styne Claim Against "Let It Snow"

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The initial term of the Administration Agreement was for two years from January

On August 23, 2011, an in-house attorney of Defendants sent an email to

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representatives of Plaintiff advising that the Styne Estate had conducted an audit of Defendants

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and made a claim against the musical composition "Let It Snow." Defendants further advised that

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they had "not finalized our analysis of the claim."

29.

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The email from Defendants informally and indirectly advising Plaintiff ofa

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possible claim by the Styne Estate did not comply with the notice requirements ofthe

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Administration Agreement. See Administration Agreement at f 9.1. In addition, Defendants did

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not provide Plaintiffs representatives with a copy ofthe Styne audit report orthe demand orother

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correspondence Defendants had received from the Styne Estate in this regard.

30.

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Plaintiffs representatives promptly responded to Defendants and requested

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information essential to evaluating and defending the Styne claim, including the Styne audit

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report, the actual amount in question, the accounting periods involved, and when and by whom the

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claim was first made by the Styne Estate to Defendants. Plaintiffs representatives also inquired

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ofDefendants how itwas that the Styne Estate was provided access to accounting records of

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Plaintiffto quantify its claim against "Let It Snow."

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200890.6

COMPLAINT

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the unsupportable position that the information was confidential and could not be disclosed

without consent from the Styne Estate. Defendants even refused to provide anyinformation

concerning whythe Styne Estate was given access to Defendants' accounting records, despite such

information clearly not being confidential to the Styne Estate.

32.

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Defendants did not advise Plaintiff that they intended to withhold royalty payments

dueor to become due to Plaintiff in connection with the Styne claim.

33.

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Defendants refused to provide any of the requested information to Plaintiff, taking

The Administration Agreement ended by its terms on December 31,2011, subject

to an 18-month post-term collection period. Defendants continued, however, to administer the

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Styne Estate's claimed interest in"Let It Snow" after December 31, 2011 and to this day maintain

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an administration relationship with the estate.

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Defendants Engage In "Self-Help" By Withholding Millions Of Dollars In Royalties Owed

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To Plaintiff Unrelated To Styne Claim

34.

In September 2012, after nearly a year of not hearing anything further from

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Defendants concerning the Styne claim, Plaintiffs representatives were informed by Defendants

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that without any notice whatsoever Defendants had withheld all royalty payments on all musical

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compositions in which Plaintiff held an interestnot just "Let It Snow"-starting with the quarter
ending June 30, 2011nearly a year earlier. Defendants advised Plaintiffs that they would

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continue to withhold all monies until the Styne claim was resolved.

35.

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Plaintiff was shocked by Defendants' position and promptly demanded that the

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royalties be immediately released by Defendants to Plaintiff. In addition, Plaintiffs

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representatives again requested that Defendants provide information essential to evaluating and

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defending against the Styne claim, including the Styne audit report, the actual amount in question,

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the accounting periods involved, and when and by whom the claim was first made by the Styne

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Estate to Defendants.

36.

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Defendants again failed to observe their contractual and fiduciary obligations to

Plaintiff, refusing to release the withheld royalty payments to Plaintiff or to provide the

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200890.6

COMPLAINT

information requested by Plaintiff so that it could evaluate the Styne claim. Instead, by November

2012, Defendants had withheld from Plaintiff royalty payments totaling$2,381,365.27.


37.

Not satisfiedwith simply withholding the monies owed to Plaintiffand letting a

court decide the amount in controversy, Defendants advised Plaintiffs representatives that it had

done its own calculation of the Styne claim against "Let It Snow" and valued the claim to be

$2,055,863.91. Defendants stated that theywould return the excess amount withheld

$325,501.36but refused to release the morethan $2 million withheld from Plaintiff.


38.

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Defendants refused to tell Plaintiff whether they would be paying those monies to

theStyne Estate to resolve the claim against "Let It Snow." To date, Plaintiff is notaware of
whether Defendants paid the withheld amount to the Styne Estate.
39.

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On many occasions Plaintiff reiterated its demand for information relating to the

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Styne claim and for the release of the royalty payments wrongfully withheld by Defendants.

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Defendants refused all such requests, despite acknowledging that the royalty payments withheld

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were appropriately owed to Plaintifffor the exploitation of the Calm catalog.

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Plaintiff Initiates Audit Of Defendants Pursuant To Administration Agreement

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40.

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In an effort to obtain information concerning the Styne claim, which Defendants

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had refused to provide, and to ascertain the accuracy of the accountings from Defendants to

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Plaintiffgenerally, Plaintiffin March 2013 notified Defendants of the intention of Plaintiffto

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exercise its right under the Administration Agreement to audit the books and records of

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Defendants. See Administration Agreement at *| 5.3.1,

41.

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As a part of the audit, Plaintiffand Defendants agreed to toll any otherwise

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applicable statute of limitations or contractual time periods for any and all statements rendered

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after March 25, 2010three years prior to the notice of auditrelating to the Cahn catalog. The

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tolling extended until commencement of the audit work, which began in September2014.
42.

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To obtain information and documentation essential to their audit, Plaintiffs

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auditors requested that Defendants provide them with information relating to when the Styne

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claim was first submitted, what form the claim was made in, any calculation provided by the Styne

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200890.6

COMPLAINT

Estate, and any other documentation supporting Defendants withholding payment of Cahn catalog

royalties.

43.

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Despite its obligations under the Administration Agreement to permitPlaintiffto

fully audit its books and records, Defendants refused to disclose to the auditors the necessary and

appropriate information concerning the details of the Styne claim.

Defendants Have Disregarded Their Contractual And Fiduciary Duties Owed To Plaintiff

44.

To this day, nota shred of documentation of the Styne claim has been provided to

Plaintiff, despite numerous requests. Plaintiff has no idea of the details of the Styne claim,

including, for example, the dateon which it was first asserted, calculation of the amount claimed,

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accounting periods, and territories of exploitation covered. As a result, Plaintiff has been

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prevented from responding to and defending against the Styne claim as it deems appropriate, as is

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its contractual right, and approving in writing anyproposed settlement of the Styne claim.

45.

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Instead of providing this basic information, and in blatant disregard of theprocess

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outlined in the Administration Agreement, Defendants recklessly exercised a crude form of "self-

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help" and converted more than $2,000,000 in monies owed to Plaintiff, most of which relates to

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compositions other than "Let It Snow."

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Defendants were required under the Administration Agreement promptly to return

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with interest the monies withlield from Plaintiff since the Styne claim did not proceed to litigation

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within one year. See Administration Agreement at f 8.1.4. Despite repeated demands by Plaintiff

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for return of the withheld amount, Defendants have refused to adhere to their clear and explicit

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obligations under the Administration Agreement.

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FIRST CAUSE OF ACTION

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(Breach of Contract - Against AH Defendants)

47.

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as if fully set forth herein, and further alleges as follows.

48.

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Plaintiff hereby repeats, realleges and incorporates each and every allegation above

The Administration Agreement is a binding contract between Plaintiff and

Defendants. See Exhibit 1.

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200890.6

COMPLAINT

49.

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Administration Agreement, or was excused by Defendants' many breaches.


50.

Defendants materially breached the Administration Agreement in the following

several ways:

Plaintiff Was Not Provided Proper Notice Of The Styne Claim

51.

Under the Administration Agreement. Defendants agreed to provide "prompt notice

of any third party claim" to "Let It Snow," and to "make a good faith effort to consult with

[Plaintiff] prior to respondingto such claim." See Administration Agreement at f 8.1.2; see also

id. at %8.1.3. ("Each party is entitled to be notified of any action against the other brought with

10

respect to any [Subject Composition]...."). Notice was required to be sent "by certified mail

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(return receipt requested), registered mail, Federal Express or Airborne Express." Id. at ^ 9.1.

52.

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Plaintiff performed all conditions, covenants, and promises required of it under the

Defendants materially breached the Administration Agreement by failing to

provide proper notice to Plaintiff of the Styne claim against "Let It Snow."

53.

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In addition. Defendants materially breached the Administration Agreement by

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failing to consult with Plaintiffin good faith prior to responding to the Styne claim against"Let It

16

Snow." Instead, Defendants unilaterally withheld millions of dollars in royalties owed to Plaintiff

17

for musical compositions in the Cahn catalogother than "Let It Snow" without notifyingor

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consulting with Plaintiff first.

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54.

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As a direct and proximate result of Defendants' breaches of rite Administration

20

Agreement, Plaintiff has suffered damages in an amount to be proven at trial.

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Plaintiff Was Not Afforded Opportunity To Defend Against The Styne Claim

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55.

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Under the Administration Agreement, if any claim is made against any subject

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composition, each party is entitled to participate in the defense of the third party claim and has the

24

right to elect to defend such claim at their own cost with counsel of their choosing. See

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Administration Agreement at ff 8.1.3., 8.1.4.

56.

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Defendants materially breached the Administration Agreement by failing to permit

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Plaintiffto defend the Styne claim against "Let It Snow." Instead, Defendants appointed

28

themselves "judgeandjury" on all aspects of the Styne claim, including the purported legal basis;
200890.6

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the calculation of the amounts claimed to bedue; and the applicable contractual and statutory

limitations periods on any claims and potential offsets, including for the Stynes' failure to account

on eight other Cahn-Styne joint works which were part of the"Let It Snow" arrangements.

Defendants elected to exerciseunlawful "self-help" by converting millionsof dollars of income

generated by musical compositions in the Cahncatalog other than "Let It Snow,"all without

Plaintiffever being afforded its right to defend the Styne claim.


57.

As a direct and proximate result of Defendants' breaches of the Administration

Agreement, Plaintiffhas suffered damages in an amount to be proven at trial.

Defendants Did Not Return Withheld Monies When Suit Was Not Filed By The Styne Estate

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Within One Year

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58.

Under the Administration Agreement, where a third partyclaim is made to a

12

subject composition, Defendants are permitted to withhold a "reasonable amount" from monies

13

dueor to become due to Plaintiff. Defendants must return the withheld sum to Plaintiff together

14

with interest, "if (and to the extent that) suit is not brought [by the third party] with respect to that

15

sum within 1 year thereafter." See Administration Agreement at Tf 8.1.4.

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59.

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Defendants materially breached the Administration Agreement by failing to return

with interest the royalty payments withlield from Plaintiff since the Styne claim against "Let It

Snow" did not proceed to litigation within one year. In fact, Plaintiff is not aware of any lawsuit
19

filed by the Styne heirs against Defendants in connection with "Let It Snow."
60.

20

As a direct and proximate result of Defendants' breaches of the Administration

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Agreement, Plaintiffhas suffered damages in an amount to be proven at trial.

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Plaintiff Did Not Consent To Defendants' Settlement With The Styne Estate

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61.

Under the Administration Agreement, Plaintiffis obligated to indemnify

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Defendants against third party claims if and only if the third partyclaim is "settled with

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26 Agreement at f 8.1.1.
62.

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If and to theextent Defendants settled the Styne claim against "Let It Snow,"

Defendants materially breached the Administration Agreement by failing to request orobtain


200890.6

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COMPLAINT

Plaintiffs prior written consent to settle the Styne claim. As a result, Defendants had no right to
2

apply any monies withheld from Plaintiff towards any settlement with the Styne Estate. Plaintiff

is not obligated to indemnify Defendants for the Styne claim.


63.

Agreement, Plaintiff has suffered damages in an amount to be proven at trial.

Defendants Have Failed To Account To Plaintiff For Exploitation Of The Cahn Catalog

64.

J S

Under the Administration Agreement, Plaintiff is obligated to collect and to

account to Plaintiff for all income derived from the worldwide exploitation of the Cahn catalog.

See Administration Agreement atffl[4-6. Plaintiff agreed to "account to [Plaintiff] (and make

10

payment where appropriate) within 60 days following the end of each quarter calendar period."

11

See id. at f 6.1

65.

12

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As a direct and proximate result of Defendants' breaches of the Administration

Defendants materially breached the Administration Agreement by failing to collect

13

and account to Plaintifffor all income derived from the worldwide exploitation of the Cahn

14

catalog. Instead, Defendants converted millions of dollars of income generated by musical

15

compositions in the Cahn catalogmonies that Defendants admit are owed to Plaintiff.

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66.

16

17

As a direct and proximate result of Defendants' breaches of the Administration

Agreement, Plaintiffhas suffered damages in an amount to be proven at trial.

SECOND CAUSE OF ACTION

19

(Breach of the Implied Covenant of Good Faith and Fair Dealing - Against AH Defendants)
67.

20
21

Plaintiff hereby repeats, realleges and incorporates each and every allegation above

as if fully set forth herein, and further alleges as follows.

68.

22

As a matter of law, the Administration Agreement contains an implied covenant

23

that Defendants will acttoward Plaintiff in good faith and fair dealing. The implied covenant

24

imposes upon Defendants theduty not to take anyaction with the motive to, or that would,

25

intentionally frustrate Plaintiffs enjoyment of its rightsor benefits under the Administration

26

Agreement.

27

28

200890.6

12
COMPLAINT

69.

Defendants breached the covenant of good faith and fair dealing implied in the

Administration Agreement by acting in bad faith and with a motive to intentionally frustrate
Plaintiffs enjoyment of its right under the agreement.

70.

the Styneclaim against "Let It Snow." Instead, Defendants unilaterally withheldmillions of

dollars in royalties owed to Plaintifffor musical compositions in the Calm catalog other than"Let

It Snow" without notifying or first consulting with Plaintiff.

71.

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First, Defendants failed to consult with Plaintiff in good faith prior to responding to

Second, Defendants failed to permit Plaintiffto defend the Styneclaimagainst "Let

It Snow." Instead, Defendants appointed themselves "judge and jury" on all aspects of the Styne

10

claim, including the purported legal basis; the calculation of the amounts claimed to be due; and

11

the applicable contractual and statutory limitations periods on any claims and potential offsets,

12

including for the Stynes' failure to account on eiglit other Cahn-Styne joint works which were part

13

of the "Let It Snow" arrangements. Defendants elected to exercise unlawful "self-help" by

14

converting millions of dollars of income generated by musical compositions in the Cahncatalog

15

other than"Let It Snow," all without Plaintiffever being afforded its right to defend against the

16

Styne claim.

72.

17

Third, Defendants failed to return with interest the withheld royalty payments owed

18

to Plaintiffon musical compositions in the Cahn catalog since the Styneclaim against "Let It

19

Snow" did not proceed to litigation within one year. In fact, Plaintiff is not aware of anylawsuit

20

filed by the Styne heirs against Defendants in connection with "Let It Snow."

73.

21

Fourth, if and to the extent Defendants settled the Styne claim against "Let It

22

Snow," Defendants failed to request or obtain Plaintiffs priorwritten consent to settle the Styne

23

claim. Defendants breached the implied covenant of good faith and fair dealing by applying

24

monies withlield from Plaintiff towards any settlement with the Styne heirs. Plaintiff is not

25

obligated to indemnify Defendants for the Styne claim.

74.

26
27

As a direct and proximate result of Defendants' breaches of the implied covenant of

good faith and fair dealing, Plaintiffhas suffered damages in an amount to be proven at trial.

28

200890.6

i:
COMPLAINT

THIRD CAUSE OF ACTION

(Breach of Fiduciary Duty - Against AH Defendants)

75.

3
4

Plaintiff hereby repeats, realleges and incorporates each and every allegation above

as if fully set forth herein, and further alleges as follows.

76.

At all relevant times, Defendants were Plaintiffs fiduciary and trustee under the

Administration Agreement. Plaintiffentrusted Defendants to administer and exploit in all media

worldwide Mr. Calm's valuable catalog of musical compositions, and to account to Plaintiff for

receipts from such exploitation in a timely and accurate fashion.

77.

As a fiduciary and trustee, Defendants were at all times required to exercisean

10

undivided duty of loyalty to Plaintiff, including not taking any actions to benefit itself or others at

11

the expense of Plaintiff.

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78.

12

Defendants breached their longstanding and continuing fiduciary duties owed to

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of the Styne Estate to thedetriment of Plaintiff. Plaintiffs contractual relationship with

15

Defendants expired in December 2011, with the exception of specific post-term obligations from

16

Defendants to Plaintiff, whereas the Styne Estate continued with Defendants as the administrator

17

of its musical composition catalog. Thus, Defendants favored the interests of theStyne Estate to

18

the detriment of Plaintiffto maintain and ensure its ongoing relationship with the Styne Estate.

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14

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Plaintiffas the administrator of the extraordinarily valuable Cahn catalog by favoring the interests

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79.

19

Defendants breached their fiduciary duties owed to Plaintiff by the following:

20

Without anyjustification, Defendants prevented Plaintiff from electing to defend the Styne claim

21

against "Let It Snow." Instead, Defendants appointed themselves "judge and jury"on all aspects

22

of the Styne claim, including the purported legal basis; the calculation of the amounts claimed to

23

be due; and the applicable contractual and statutory limitations periods on any claims andpotential

24

offsets, including for the Stynes' failure to accounton eight other Cahn-Stynejoint works which

25

were part of the "Let It Snow" arrangements. Defendants elected to exercise unlawful "self-help"

26

by convertingmillions of dollars of incomegenerated by musical compositions in the Cahn

27

catalog other than "Let It Snow," all without Plaintiffever being afforded its right to defend

28

against the Styne claim.

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200890,6

14
COMPLAINT

80.

As a direct and proximate result ofDefendants' breaches of its fiduciary duties

owed to Plaintiff, Plaintiff has suffered damages in an amount to be proven at trial.

81.

These acts by Defendants, and each ofthem, were done willfully, maliciously, and

with the intent to cause injury to Plaintiff. Plaintiff is therefore entitled to recover from

Defendants punitive and exemplary damages.


FOURTH CAUSE OF ACTION

(Conversion - Against All Defendants)

82.

Plaintiff hereby repeats, realleges and incorporates each and every allegation above

as if fully set forth herein, and further alleges as follows.

83.

10
11

Plaintiff, which Defendants admit is payable to Plaintiff on exploitation ofmusical compositions

12

in the Calm catalog.

84.

13

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Defendants wrongfully converted $2,055,863.91 in royalty payments owed to

As a direct and proximate results ofDefendants' conversion of royalties owed to

14

Plaintiff, Plaintiff has suffered damages inthe amount of$2,055,863.91, plus interest "atthe

15

regular savings and loan passbook interest rate prevailing in Los Angeles from time to time during

16

the period of withholding." See Administration Agreement at f 8.1.4.

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85.

17
<

These acts by Defendants, and each ofthem, were done willfully, maliciously, and

18

with the intent to cause injury to Plaintiff. Plaintiff is therefore entitled to recover from

19

Defendants punitive and exemplary damages.

20

FIFTH CAUSE OF ACTION

21

(Accounting - Against AH Defendants)

86.

22
23

Plaintiff hereby repeats, realleges and incorporates each and every allegation above

as if fully set forth herein, and further alleges as follows.


87.

24

Under the Administration Agreement, Plaintiff is entitled to audit Defendants'

25

"books and records as to each statement for a period of 3 years after such statement is received."

26

See Administration Agreement at f 6.3.1.

27

28

200890.6

15
COMPLAINT

88.
2

contractual right to audit Defendants' books and records under the Administration Agreement for

any and all statements rendered after March 25, 2013.

89.

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To date, Defendants have refused to provide Plaintiff with necessary and

appropriate information to complete its audit of the books and records of Defendants, including,

but not limited to, details regarding theStyne claim, the millions of dollars of monies withheld by

Defendants from monies due to Plaintiff, therelevant portions of the Styne audit report, the date

the audit report was submitted, and any settlement or other agreements related to the issue. Even

without the information and documentation which Defendants have refused to provide to Plaintiff,

10

the preliminary report of the auditors for Plaintiff discloses hundreds of thousands of dollars of

11

additional underpayments of royalties and interest due from Defendants to Plaintiff, over and

12

above the monies duewith respect to the wrongful withholding of royalties relating to the Styne

13

claim.

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Plaintiff has notified Defendants of the intention of Plaintiff to exercise its

90.

14
15

Plaintiff has been prevented from completing its audit of the books and records of

Defendants by their refusal to provide the requested essential and appropriate information

16

PRAYER FOR RELIEF

17

Plaintiff prays for judgment against Defendants as follows:

18

I.

An award of actual and compensatory damages in an amount to be determined at

20

2.

An award of exemplary and punitive damages;

21

3.

An award of pre- and post-judgment interest at the maximum rate permitted by law;

22

4.

An accounting for any and all royalties and other monies due for accounting

19

23

trial:

periods reflected on statements rendered after March 25, 2010;

5.

24
25

converted by Defendants;

6.

26
27

The imposition of a constructive trust on the $2,055,863.91 that was wrongfully

An award of attorneys' fees and costs herein incurred pursuant to the terms of the

Administration Agreement; and

7.

28
200890.6

For suchother and further reliefas the Court shall deem just andproper.
16
COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury.

2
3

DATED: December 8, 2014

MILLER BARONDESS, LLP

5
6

LOUIS R. MILLER

Attorneys for Plaintiff

TITA CAHN TRUST, d/b/a CAHN MUSIC

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10
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16
17
18

19
20
21

22
23
24

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26
27

28

200890.6

17
COMPLAINT