brown et al v. goldstein - war complaint.pdf

8/11/2019 Brown et al v. Goldstein - WAR complaint.pdf

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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: [email protected]

MaxJ.Sprecher(SBN:

169285)

LAW OFFICES

OF MAX J. SPRECHER

5850Canoga Avenue, 4th Floor

Woodland Hills , CA 91367

P: 818.996.2255

F:

818.996.4204

E-Mail: [email protected]

Attorneys for Plaintiffs

Harold Brown, Lee

Oskar

Levitin,

Howard

Scott, Morris Dickerson, Jr.

as Conservatorof the Estate

of

Morris Dewayne ( BB ) Dickerson,

LaurianMiller on her own behalf and as assignee

o f th e Heirs

o f

Char les

Miller

SUPERIOR COURT OF

THE STATE

OF

CALIFORNIA

COUNTY OF LOS ANGELES, CENTRAL DISTRICT

FILED

>rCourt of G

bounty of Los Angeles

OCT

0 3

2014

Superior Court of Californfe

o

Sherri fl. Caj

By.

Offiar/Cler

Dijxity

m

HAROLD BROWN, an individual;

LEE OSKAR

LEVITIN, an individual; HOWARD

SCOTT,

an

individual; MORRIS

DICKERSON,

JR. as

Conservator o f 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:

v s

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,

Defendan ts .

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. asConservator of theEstateof Morris( BB )Dickerson ( Dickerson ),

and Laurian Miller ( L. Miller ) on her own behalfand as assignee

of

the Heirs

of

Charles Miller

(collectively, Plaintiffs ) hereby complain and allege as follows.

I.

INTRODUCT ION

1. Plaintiffs Brown, Levitin, Scott, and Dickerson, in one settlement agreement, and

PlaintiffMiller in a second settlementagreement, resolvedprotracted litigationagainst the

Defendants by twowritten settlementagreements, bothof which,

inter alia,

requiredDefendant

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 royaltiesearned from the exploitation of Plaintiffs' musical compositions and recordings under

agreed formulae, and to providePlaintiffswith audit rights to test the validityof these accountings

and payments.

2. The settlementagreementseach providedforaccounting withrespect to the Musical

Compositions in accordancewith the termsof the 1972 Songwriters' Agreementas modified by

the 1975 Memorandum (the 1975Amendment ). Theparties agreedthat [A]nydisputesand

disagreements concerning the interpretation

of

the 1975Amendment, and the application

of

the

1975 Amendment in this Agreementshall be resolved by litigation beforea Judge of the Los

Angeles Superior Court.

3. Plaintiffs allege that Defendants have applied an incorrect formula to the calculation

of royalties arising fromtheexploitation of musicalcompositions under thesettlementagreements

in misconstruing the 1975Amendment throughout the entire post-settlement period, as well as

abruptly changingthe revenuebase on which Defendants computed the paymentsdue to Plaintiffs

incontravention of thesettlementagreements, the underlying agreements setting forth the

formulae, andDefendantsown40 year course

of

dealing.

II THE PART IES

4. PlaintiffBrown isan individual, currently residing in Los AngelesCounty,

California.

COMPLAINT


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5.

Plaintiff Dickerson is an individual

and

a resident ofLos

Angeles

County,

California. Morris Dickerson, Jr. was appointed

Conservator

in the Los Angeles Superior Court on

or about September 19, 2014, inCase No. BPI53826.

6. Plaintiff

Levitin

is

an

individual

and

a

resident

of

Redmond, Washington.

7. PlaintiffScott is

an

individual and a

resident

ofArlington, Texas.

8.

Plaintiff

L.

Miller

is

an

individual and

a resident of

Los

Angeles

County,

California.

Miller

is a surviving

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 in

June

1980,

intestate,

and

his

interests

in

the

subject matter

of

this

lawsuit

where

collectively inherited

by

E.

Miller,

D.

Miller,

M.

Miller, L. Miller and

A.

Miller

(collectively,

the

MillerHeirs ).

Thereafter all of the 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

behalf and

as

assignee

and

representative

of

Millers

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,

andtwoothermembers 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

a

resident

of

Los

Angeles

County, and/or the relevant

contracts

were entered into

in

Los

Angeles County orwith

other residents of

Los

Angeles

County,

and/or

operative

events

occurred in

Los Angeles County.

11. Defendant Gerald ( Jerry ) Goldstein ( Goldstein )

isan

individual. Plaintiffs

are

informed and believe and

based thereon

allege

that

Goldstein

is a

resident

ofLos

Angeles County.

COMPLAINT


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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 a

California

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

FarOut

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 of

music

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 a

record label

and

music publisher.

COMPLAINT


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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 or

all

of

Far Out

Productions'

(or

Jerry

Goldstein

Music's) rights

and interests as theypertain to Plaintiffs.

18.

Plaintiffs are

informed and believe and

based

thereon allege that

Defendant

Far

Out

Holding Corporation ( Far Out Holdings ) is aDelaware

corporation

with its principal offices

located

inLos

Angeles County.

Plaintiffs are further informed andbelieve 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, andFarOutHoldings are hereinafter referred to as to theGoldstein

Defendants.

20. Plaintiffs are informed and believe and based

thereon allege that

there

isa

substantial unity of interest between and among Goldstein Defendants in that, among other reasons,

Goldstein is a substantial shareholder of eachof dieentitiesand/orGoldstein is a substantial

shareholder in an entitywhich, in turn, ownsone of theother GoldsteinDefendants. Plaintiffs are

further informed and believe

and

based

thereon

allege

that Goldstein

exercises

complete control

over and

dominates

each of

the

Goldstein Defendants

in

all substantive

matters,

including, but not

limited to, the hiring of

its 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

thatGoldstein holdshimselfout as theequivalent of eachof theGoldsteinDefendants.

21 Plaintiffs

are

informed and believes and based

thereon

allege that Goldstein exerts,

andat all times relevant heretohas exerted, such dominion andcontrol over theGoldstein

Defendants,

and

so combined the business and operations

of

the Goldstein Defendants, individually

COMPLAINT


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and collectively, that the Goldstein Defendants are alter

egos of

each 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

of

judgment.

24. The

true

names and capacities, whether individual, corporate,

associate,

or

otherwise, ofDefendants 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.

Plaintiffwill

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

of

the

Defendants named in this Complaint as aDoe is

responsible

in some

manner

for the

events,

happenings, acts, and omissions alleged

in

this Complaint,

has

damaged

Plaintiff,

and, therefore,

is

responsible or

liable

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 W R (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 RollHallof Fame.

27. During

the 1970s, Brown,

Dickerson, Levitin, Scott,

and Miller

entered into

a

series

of written 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

1

and incorporated herein by this

reference

is

a

true 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, Plaintiff L. 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

a

settlement 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

Plaintiffwould start one

period

behind the accountings to the Plaintiffs

in

the

Brown

Action).1

Attached hereto as Exhibit2and

incorporated

herein

by

this reference is a

true

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

COMPLAINT


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30. The Settlement

Agreements

provided, inter

alia,

that with respect to the Musical

Compositions (as

defined

therein), royalties

shall

be accounted

forand

paid

by

TMC

to

Plaintiffs

in

accordance

with the terms of

the

1972

Songwriters' Agreement

asmodified by the 1975 .

Memorandum

(the

'1975 Agreement') . Exhibit

I,

ft5A.(i).

The Songwriters'

Agreement

and the

1975

Memorandum

are

attached

tothe

settlement

agreements and incorporated by reference

therein, and trueand correct

copies thereof,

arealsoattached to this

Complaint

as Exhibits 3and4,

and incorporated herein by this 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 theattachedcopiesare trueand accurate copiesof thedocuments each of the

original artists executed.)

31. The

Settlement 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 of the Settlement

Agreement

and the underlying

pre-existing

songwriter/music publishing agreements

(as

to the exploitation

of the

musical compositions)

and

master

recording agreements (as

to

the

exploitation

of the

sound recordings) (the Ongoing

Accounting Obligations ) [e.g.,Exhibit 1,ffl5-6].

32. Asthe

Settlement Agreements

specifically

recognized [Exhibit 1,1[5A(i)],

at the

time the Settlement Agreements

were

executed,

the

parties could

not

agree what formula

resulted

20 J

from 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

of

the

1975

Amendment

in this Agreement, shall be

resolved, by

litigation before a Judgeof theLosAngeles SuperiorCourt.

8

COMPLAINT


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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. usicPublishing Revenues and Royalties

33. Music publishing/songwriters'

revenues consist

mainly offour

categories

of

royalty

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 a

motion 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

of

the

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 of

their

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 of

the publicperformance

royalties, publishers,

including,

on information and belief, Defendant TMC, collect one hundred

percent

(100%)

of

royalties earned

for the Music Composition Royalty Categories

which

include

both thewriters'

share

and thepublishers' shareof such

income.

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%)

of

the

public

performance royalties which represents solely the publisher's

share

of such royalties is paid

directly to the publishers.

COMPLAuNT


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B The

Wri t e r s Share -1972

37. The 1972Songwriters'Agreement (with or without themodifications providedby

the 1975 Amendment), providedthe

formula

forDefendants to accountand payPlaintiffs' royalties

for theirwriters shares

(1J7

of the 1972

Agreement),

and, inaddition, a separate

formula

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, pro rata,- 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 thatwere

replaced

by the

1972

Songwriters' Agreement.

39. Because, as set forth

above,

Plaintiffs received theirwriters' shareof public

performance

income

directly

from ASCAP,

bothparagraphs 7(c)and7(e)make it clear that net

sums payable to Plaintiffs for theirwriters' sharewouldexclude Defendants shareof thepublic

performance income it received fromASCAP.Paragraph 7(f) made that writers' share exclusion

clear that with respect towriters' shares: Thepublisher shallnotbe required topayroyalties

earnerby reason of thepublicperfonnance of thecompositions; saidroyalties being payable only

by the performancerightssocietywithwhichWriter is or may in the future becomeaffiliated.

40. Subject toaudit, there isno present dispute as toDefendants' 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 thatdid

not

previously

exist

between

the

parties,

and

provides,

inpertinent

part,

as

fotlows (emphasis added):

In

addition

to theroyalties 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 ofCompositions and legaland accounting fees relating to

theCompositions including thosearisingout of any claimof

copyright infringement brought by or against the Publisher. All other

directcosts

relating

Co theCompositions suchas copyright, printing,

engraving, advertising, promotion andexploiting theCompositions

shall be bornesolely by Publisher.

44. The secondchangemodifiedPlaintiffs' 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 indie 1975Memorandummodified the categories of revenue to which the

modified fomtula applied.

46. The net

effect

ofthe 1975

Amendment

is thatwithrespect to Plaintiffs participation

in the publisher's share of revenues, the formula shouldbe as follows:

In addition to the

songwriter royalties

provided forinparagraph 7 of the

1972Songwriter's Agreement which

remain

unchanged, all moniesearned

and received from thesale, lease, license, dispositionor other turning to

accountof rights in theCompositions, includingall moniesreceived from all

sources including in connectionwith the infringementby third parties of

rightsin theCompositions and thepublisher's shareof public performance

royalties ( Composition Gross Receipts ),shall be treatedas follows:

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(a) Publishershall be entitled first to deduct twenty-five percent

(25 ) from theComposition 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 ofany claim

of

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

theCompositions

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 informedand 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 1972Songwriters 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 categoryof income for

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which theywere paying royalties, even though theyhad paid royaltieson 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 1972Songwriters' 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 thatthe

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 reliefand 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. Plaintiffsare infonned and believeandbased 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 paragraph22 of the 1972Songwriters' Agreement before applying themodifications required by

th e

1975

Memorandum. Second,

the ef fect of

th e

modifications

se t

forth

i n t he 1 975 Memorandum

incalculating the amount to be paid to Plaintiffs.

54. Plaintiffs contend that (a) die publisher'sshare

of

public performance revenues is

includedin the revenue baseof the payments required by paragraph 22of the 1972Songwriters'

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 1975Memorandum 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

themodifications to paragraph22of the 1972 Songwriters' Agreementset 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 towhich 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 thatfor thebi-annual periods commencing January

1,

2011

throughpresent, theGoldstein Defendants havesubstantiallyunderreported and underpaid

Plaintiffs in an amount to establishedat trial, but believed to be in excess of 300,000, and which

underpayment should be ordered paidandaccounted foras part of thedeclaratory relief.

SECOND

CAUSE

OF ACT ION

(Breach ofContract against the Goldstein Defendants and DOES 1 through 20)

58. Plaintiffs

hereby

incorporate paragraphs 1 through50 as though set forth

fully

herein.

59. Plaintiffs are infonned and believe and

based

thereon allegethatPlaintiffs have fully

sufficiently performed all covenants and conditions required tobe performed on theirpartunder

the

Settlement Agreements,

except

to theextent excused, prevented, or

waived.

Plaintiffs are further

informed and believe

and

based diereon allege

that

Plaintiffs have

not

been and

arenot

presently

in

material breachof the SettlementAgreements in any manner that excuses the Goldstein

Defendants' further and continuing obligations.

60. TheGoldstein

Defendants

havematerially breached the Settlement Agreements by,

among other

things:

(a) failing touse the conect formulae in calculating Plaintiffs' paymentsin

connection with themusical compositions, (b) altering the revenue baseupon which theGoldstein

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 donot

relate to theunderlying revenue base),and (c) failing to adequatelyand completelyaccount to

Plaintiffs forall accounting periodsafter executionof the SettlementAgreements.

61. Plaintiffs are informed and believe, and based thereon allege, that die Settlement

Agreements

contain

an

implied covenant

thateach

party shall

conduct himselfTherself/itself in

good

faithandwill

fairly

deal with theotherpartiesand thatnopartywill interfere withor deprivethe

other of the benefitsof 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' paymentsunder paragraph 22 of the 1972Songwriters'

Agreement as modified by the 1975Memorandum were calculated in connection with the reports

for the periodending December31, 2013,Defendantsbreachedthe implied covenantof good faith

and fair dealing.

63. As a direct and proximate resultof theaforesaid materialbreaches, 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 paragraph 22 of the 1972Songwriters' 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'Agreementwhich remains unmodifiedby

anything in the 1975Memorandum.

b. Second, for Plaintiffs' participation as co-participants in the publisher's share

of revenue pursuant toparagraph 22of the

1972

Songwriters' Agreement as specifically modified

by paragraphs2(d)-2(f)of the 1975Memorandum, which results in the following formula:

i. Inadditionto the songwriter royalties provided for in paragraph 7 of

the 1972Songwriter's Agreement which remainunchanged, ail monies

earnedand received from thesale, lease, license,disposition or other turning

to account of rights in theCompositions,

including

alt 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 ent itled first to deduct twenty-five percent

(25 )

from the Composition Gross Receipts in consideration of its services

and also the direct feesof a trustee or collective for the licensing of

recordings(such fees not to exceed the standardHarry Fox fees)and actual

legaland accounting fees relating to theCompositions including those

arising

outof anyclaim of copyright

infringement brought

byor

against

the

Publisher. All other directcosts relating to theCompositionssuch as

copyright, printing, engraving, advertising,

promoting

and exploiting the

Compositions shall be borne solely by Publisher;

(b) Publishershall thendeduct

from

Composition GrossReceipts

and pay therefromthe royaltiesdue to the compositions

of

the Compositions

in accordance withanyagreement Publishermayhavewith suchcomposers

(including withoutlimitation, paragraph 7 of the 1972 Songwriters'

Agreements);

(c) No further deductions.

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(d) 100% ofthe balance of the 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;

For

damages according

toproofat

trial

inan amount tobe determined at

trial

but

believed to exceed

300,000;

5.

For pre-judgment interest

as

permitted

by law;

For post-judgment interest aspermitted by law;

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

onher

own behalf

andas

assignee

of

the Heirs

ofCharles Miller

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brown et al v. goldstein - war complaint.pdf

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