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Filed 5/29/08 Densmore v. Manzarek CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
JOHN DENSMORE, Plaintiff and Respondent, v.RAYMOND MANZAREK et al., Defendants and Appellants. B186036 (Los Angeles County Super. Ct. No. BC 289730)
COLUMBUS COURSON et al., Plaintiffs and Respondents, v.RAYMOND MANZAREK et al., Defendants and Appellants. B186037 (Los Angeles County Super. Ct. No. BC 294495)
JOHN DENSMORE et al., Plaintiffs and Respondents, v.RAYMOND MANZAREK et al., Defendants and Appellants. B188708 (Los Angeles County Super. Ct. No. BC 294495)
APPEAL from the judgments of the Superior Court of Los Angeles County, Gregory W. Alarcon, Judge. Affirmed.
Greines, Martin, Stein & Richland, Irving H. Greines, Marc J. Poster, Jens B. Koepke; Lavely & Singer, Martin D. Singer, William J. Briggs II, and Henry L. Self III for Defendants and Appellants.
Mandel, Norwood & Grant, S. Jerome Mandel and Lilly Lewis for Plaintiffs and Respondents John Densmore, Pearl M. Courson and Columbus Courson.
Hinojosa & Wallet and Jeffrey Forer for Plaintiffs and Respondents George Morrison and Clara Morrison.
* * * * * *
The trial court issued a permanent injunction enjoining appellants Raymond Manzarek and Robert Krieger from holding themselves out as the musical band The Doors. The trial court also ordered appellants to pay respondent John Densmore $82,274 and to pay the sum of $3.2 million to a partnership consisting of Densmore, respondents Columbus and Pearl M. Courson and George and Clara Morrison, and appellants. We affirm.
FACTS
1. The Doors, 1965-1971
Three young men met in a meditation class in Los Angeles in 1965. They were Densmore, Krieger and Manzarek; Manzarek knew a young man named Jim Morrison. Manzarek suggested that the four of them should form a band, which they all agreed to do. They began playing in the garage of Manzarek’s parents’ home in Manhattan Beach. Densmore played the drums, Manzarek the keyboard, Krieger the guitar and Morrison was the vocalist.
According to Densmore, The Doors, as the band became known, was rooted in the protest movements of the 1960’s. When asked at trial if the band had a “social philosophy,” Densmore put it this way: “Just that we were all together. A band of four brothers completely equal. And we hoped we could sort of level the playing field for everyone else out there. It was a pipe dream. But we were trying to be socially conscious.” In four years, the principle of unanimity would be written into the first partnership agreement.
The Doors, as a rock-and-roll band, rose rapidly to great heights of success. In 1966, The Doors signed a six-album deal with Elektra records that would include such hits as “Light My Fire,” “L.A. Woman” and “Riders on the Storm.” Morrison played a pivotal role in the growing fame of The Doors. According to Nigel Williamson, a British critic and writer, “. . . the musical vision and the power of ‘The Doors’ came specifically from Jim Morrison. I’m not denying the contribution that the other three musicians in the group made. But I think without Jim Morrison there would not have been a group as we know ‘The Doors’ to have been. The music would not have existed in that shape or form.”
In 1969, the four men executed what the parties refer to as the “DMC Agreement,” standing for the “Doors Music Company” agreement, which provided among other things that the “management and control of the partnership business shall be determined by unanimous agreement of all partners.”
In November 1970, the DMC Agreement was amended to provide that no agreement, license or other document “respecting the partnership shall be binding upon the partnership unless signed by each and every member of the partnership.” This amendment was spawned by a violent disagreement between Morrison, on the one hand, and the other three partners, on the other, over doing a Buick commercial using The Doors’ piece “Light My Fire.” While the three partners had agreed to the commercial, Morrison vehemently disagreed and the commercial was not done.
A second agreement, executed in 1971 prior to Morrison’s departure in March 1971 to Paris, but effective as of January 1, 1966, entitled “GENERAL PARTNERSHIP AGREEMENT,” which the parties refer to as the “Old Doors Agreement,” prohibited the partners from entering into agreements without prior written consent of all of the partners. Both the DMC Agreement and Old Doors Agreement provided for the dissolution of the partnership upon the death of any partner. On March 11, 1971, prior to Morrison’s departure, the Old Doors Agreement was amended to provide that upon the termination or dissolution of the partnership other than by the death of any partner, none of the partners “shall have the right to use the name ‘The Doors’ for phonograph record purposes or in connection with personal appearances.”
Morrison died in Paris in July 1971. He left his property to his wife, Pamela Courson.
2. The New Doors Partnership, 1971-2003
In October 1971, Densmore, Manzarek and Krieger entered into a new partnership agreement that the parties refer to as the “New Doors Agreement.” (Pamela Courson was not a party to the New Doors Agreement.) This agreement duplicated the provisions of the DMC and Old Doors Agreements and it also contained the following, which duplicated the March 11, 1971 amendment to the Old Doors Agreement: “Notwithstanding anything to the contrary contained herein, upon the dissolution and/or termination of the Partnership, other than by reason of the death of any of the Partners, none of the Partners shall have the right to use the name ‘THE DOORS’ for phonograph record purposes or in connection with personal appearances.” The New Doors Agreement could be terminated by 30 days’ written notice.
Pamela Courson died in 1974. Her parents, Pearl and Columbus Courson, and Morrison’s parents, Clara and George Morrison, resolved their differences and agreed to share equally in Morrison’s interest in The Doors. The parties refer to the parents collectively as the “Estates” and we follow that usage.
The fortunes of The Doors after Morrison’s death were mixed. On the one hand, the remaining three were not able to generate new successes without Morrison; two albums produced after Morrison’s death did only moderately well, according to Densmore, “[n]othing like the original ‘Doors.’ ” No more albums were produced because, in Densmore’s words, “. . . we realized without Jim, what were we doing? He was the soul of the band.” The partnership cancelled the recording deal it had with Elektra. With three exceptions, the trio never performed again together as The Doors. These occasions came in 1978 when they created an album performed to poetry Morrison had recorded; in 1992 when The Doors was inducted into the Rock and Roll Hall of Fame; and in 2000 when the trio performed as The Doors for a VH1 cable channel production.
As respondents put it, The Doors endured “not as a performing band, but as a musical legacy.” Merchandising and album sales of The Doors with Morrison flourished. Densmore, Manzarek, Krieger and the Estates shared in these profits and filed partnership tax returns. The Doors, as it existed prior to Morrison’s death, continued in the public eye when Apocalypse Now (Zoetrope Studios) was released in 1979, which opened with the song “The End,” and with the release of Oliver Stone’s film The Doors (Tri-Star Pictures) in the early 1990’s, with Val Kilmer playing Morrison. Forrest Gump (Paramount Pictures 1994) played three or four Doors songs, which were sold to the movie production by the partnership for several million dollars. Merchandising deals involving The Doors also generated fees in the millions.
Because of these very handsome returns, requests for permission to use The Doors in advertising proved to be tempting, at least as far as Manzarek was concerned. In 2001 or 2002, The Doors received a $15 million offer from Cadillac to use a Doors hit in a sales campaign. Manzarek and the Estates were in favor of accepting it, Krieger was on the fence and Densmore was opposed because it was a Doors tradition not to do commercials. (Between 1965 and 2002, The Doors participated in only one commercial; it was for a tire company in Britain.) Morrison had been adamant against doing commercials and Densmore wanted to honor Morrison’s memory. The offer was not accepted. The same fate befell a multimillion-dollar offer made by Apple Computer, and for the same reason, at least as far as Densmore was concerned. In July 2002, an article appeared in the magazine The Nation in which Densmore was quoted as expressing philosophical objections to the use of rock music in commercials. The failed Cadillac and Apple commercials, and The Nation article, formed the basis of Manzarek’s and Krieger’s eventual cross-complaint against Densmore in which they alleged that Densmore’s conduct was unreasonable and capricious and a breach of his fiduciary obligations toward his two partners.
3. The Breakup, 2002-2003
About a year after the Cadillac offer, Harley-Davidson invited The Doors to give a rock concert in Fontana, California, on Labor Day 2002. The occasion was a celebration of the manufacturer’s 100th anniversary; Harley-Davidson offered the group $150,000 for a two-hour concert. The trio, including Densmore, were interested in doing this concert and plans went ahead with Ian Astbury, the singer from The Cult, as the vocalist. Eventually, however, Densmore decided that his health was not up to it and he opted not to participate; Stewart Copeland from The Police appeared in his place. The concert took place without Densmore but with his consent.
Within days after the Fontana concert, Densmore read in Billboard magazine, a music industry publication, that Manzarek, Krieger, Copeland and Astbury had appeared, after the Fontana concert, at another Harley-Davidson concert in Canada. The first paragraph of the article stated: “Police drummer Stewart Copeland and Cult vocalist Ian Astbury (singing the late Jim Morrison’s parts) weren’t just temporary additions to the Doors’ lineup for last weekend’s show in Fontana, Calif. As Doors keyboardist Ray Manzarek tells Billboard.com, ‘Stewart is drumming from here on out. Ian is singing from here on out. We’re not doing a TV show. We’re playing live music. This is the new Doors lineup for the 21st century.”
Densmore was surprised, hurt and angry after he read this. Neither Manzarek nor Krieger had ever told him that there would be “a new lineup” for the 21st century or another concert in Canada.
Within a month or so after this, Krieger called Densmore and said that they wanted to go on a tour, and he invited Densmore to go with them. Densmore declined the invitation, but said that they should do a tour, as long as they made it clear that “there is a big difference between your new band and our classic ‘Doors’ band.” Densmore definitely did not think that the band composed of Manzarek, Krieger, Stewart and Astbury were The Doors. Densmore told Krieger that they should modify The Doors by calling it “The New Doors,” as an example, and that use of The Doors logo, which they had guarded jealously over the years, was strictly out.
Densmore had several telephone conversations with Krieger along the foregoing lines. At some point during these conversations, the two men discussed using the titles “The 21st Century Doors” or “The Doors of the 21st Century.” Densmore thought the title to be a mouthful and questionable since they were all getting on in years and might not see much of the 21st century, but he voiced no objection to these titles.
Ultimately, Krieger professed to agree to Densmore’s demands. Densmore had no reason to doubt Krieger’s sincerity; they had been friends for many years.
In January 2003, Densmore began getting calls from friends congratulating him on The Doors getting back together; the impetus for this appears to have been a billboard at the Palm Hotel announcing a performance by The Doors on January 19, 2003. Densmore also began to see advertisements. One in the Los Angeles Times caught his eye; it was an ad for a concert at the Universal Amphitheatre in Los Angeles scheduled for February 7, 2003. The first line of the ad states, “Witness Rock & Roll History”; this line is followed by “The Doors” and The Doors logo; in small print under the logo is “21st Century” and “Live”; and Manzarek, Astbury, Krieger and Copeland are shown as a group. Changes to The Doors website, which referred to the 21st century band, and advertisements along the lines of the Los Angeles Times ad continued, much to Densmore’s concern and dissatisfaction.
When asked at trial whether the Los Angeles Times ad represented what Densmore had had in mind when he discussed “21st Century Doors” with Krieger, Densmore testified: “Absolutely not. This infuriated me. I couldn’t believe that the modifier ‘21st Century’ is about a tenth the size of the word ‘Doors.’ And the word ‘Live’ under it implies 21st century live tour starring this band, ‘The Doors.’ ”
Densmore had three telephone conversations with Krieger after he saw the Los Angeles Times ad. Densmore was angry; he told Krieger they were using The Doors logo, the modifier “21st Century” was too small, and it was not clear that this was a new band. Krieger’s response was that that’s the way they had to do it “if we want to play big concerts.” Krieger suggested minor changes that did not satisfy Densmore.
On March 19, 2003, Densmore wrote Manzarek and Krieger, stating that he was terminating the New Doors Agreement of 1971. Under the terms of that agreement, this precluded use of The Doors name; nevertheless the band composed of Manzarek, Krieger and Astbury continued to appear as The Doors or as The Doors of the 21st Century and display The Doors logo.
4. Appellants’ Band, 2003-2004
Manzarek, Krieger and Astbury appeared and performed on three nationally televised shows in January and February 2003.
After the February 7, 2003 concert in Los Angeles, the band composed of Manzarek, Krieger, and Astbury performed more than 65 concerts in approximately two years. The advertisements for these concerts used the word “Doors” in various permutations, and took differing approaches to the modifier “of the 21st Century.” The trial court found that in approximately 30 concerts performed during this period, the image of Jim Morrison was displayed to the audience from 30 to 90 seconds at the inception of the concert. Morrison’s voice singing Doors songs was used in advertising for the band in several cities on the tour. Merchandising used the word “Doors” and words and phrases associated with Morrison.
The trial court found in its statement of decision that these concerts grossed more than $8 million and generated more than $2.7 million in profits; these findings were supplanted by a stipulation, entered into after the trial, that the net profits were $3.2 million. No part of these earnings was ever transmitted to Densmore or the Estates. The proceeds all went to Doors Touring, Inc., the band’s “loan-out” corporation.
PROCEDURAL HISTORY
1. The Complaints and the Cross-complaint
Densmore filed his action on February 4, 2003, three days before the band’s first major concert in Los Angeles. The complaint alleged six causes of action. The first cause of action set forth alleged violations of the Lanham Act (15 U.S.C. § 1125(c)(1)) in that the defendants (Manzarek, Krieger, Astbury and Copeland) threatened to perform as The Doors and advertised their performances using The Doors name and The Doors’ distinctive logo. The second cause of action was for unfair competition. The third cause of action alleged violations of Business and Professions Code section 17200. The fourth cause of action was for breach of two oral partnership agreements that were allegedly formed after Morrison’s death; these were the DMC and Old Doors Agreements. The fourth cause of action alleged that Manzarek and Krieger had violated the principle of unanimity contained in these agreements. The fifth cause of action set forth an alleged breach of the New Doors Agreement. The sixth cause of action alleged that Manzarek and Krieger had breached their fiduciary duty toward Densmore by diverting to themselves the renown of The Doors and reaping the benefits of this misconduct; this cause of action alleged violations of the DMC and Old Doors Agreements.
The jury eventually returned verdicts for Densmore on the fifth and sixth causes of action, and found for appellants on the remaining claims.
The complaint sought the following relief: First, an injunction enjoining the defendants (a) from using the name and logo of The Doors; (b) from selling or marketing themselves in such a way as to suggest that they were, or were affiliated with, The Doors; and (c) to deliver up all products confusingly similar to The Doors’ distinctive trademark and logo. Second, the complaint sought an order that the defendants be required to account for all profits arising from the unlawful use of The Doors distinctive trademark and logo. Third, the complaint demanded that Manzarek and Krieger respond in damages for their breaches of the oral partnership agreement and the New Doors Agreement.
The Estates filed their action on April 23, 2003. The plaintiffs were Columbus and Pearl Courson and Clara and George Morrison, who, it was alleged, held between them James Morrison’s 25 percent partnership interest in The Doors. The Estates’ action largely tracked the lawsuit filed by Densmore, with the exception that it included a cause of action for the misappropriation of Morrison’s name and likeness, in violation of Civil Code section 3344.1. As in Densmore’s action, the Estates’ complaint included a cause of action for breach of fiduciary duties based on The Doors partnerships, i.e., the Old Doors and DMC Agreements. The Estates’ action also included a cause of action that sought to impose a constructive trust and that sought an accounting. The relief demanded by the Estates’ action was largely the same as in Densmore’s lawsuit, with additional injunctive relief predicated on the misuse of Morrison’s name and likeness.
Manzarek and Krieger cross-complained.
The cross-complaint alleged that during Morrison’s lifetime decisions were made by majority vote, and did not require unanimity; that the New Doors Agreement did not actually reflect the true intent of the signatories thereto since “the partners would sign contracts and legal documents without reading them,” and the true intent behind the purported unanimity rule was to prevent individual partners from unilaterally conducting business; that Manzarek dissolved the partnership in 1973; that in 1978 Densmore participated in producing an album of music with poetry recorded by Morrison and that this was a waiver, by Densmore, of the New Doors Agreement’s provision that no member can use The Doors name after termination of the partnership; that Densmore’s conduct was arbitrary and reflected bad faith when he vetoed the $15 million Cadillac offer; that the cross-complainants repeatedly asked Densmore to tour with them but that he unreasonably refused to do so; and that the cross-complainants continued to extend an invitation to Densmore to join the band.
The cross-complaint alleged seven causes of action. The first cause of action for breach of fiduciary duty alleged that Densmore acted capriciously in refusing to consent to various ventures and in insisting that he had the right to veto decisions made by the majority. The second cause of action was for the breach of the covenant of good faith and fair dealing and relied largely on the same facts as the first cause. The third cause of action for promissory estoppel alleged that Densmore led the cross-complainants to believe in 2002 that he would tour with them, a promise on which they relied. The remainder of the cross-complaint was for intentional interference with economic advantage; violations of Business and Professions Code section 17200; declaratory relief, notably a declaration that “21st Century Doors” and “The Doors of the 21st Century” are not likely to cause confusion; and reformation. The cross-complaint demanded a trial by jury.
The jury found for the cross-complainants on the first three causes of action.
2. The Trial Court Denies Respondents’ Motions for a Preliminary Injunction on the Condition That Appellants Add to “The Doors” the Qualifier “of the 21st Century”
In April and May 2003, the trial court denied respondents’ applications for a temporary restraining order and preliminary injunction enjoining use of The Doors on the condition that the defendants use the qualifier “of the 21st Century” after The Doors name. Appellants seek to exploit this preliminary ruling in this appeal, contending that they did nothing more or less than what the trial court’s rulings on these provisional remedies allowed them to do.
We address this contention in part 9 of the Discussion. Here we note that, particularly during April 2003, the trial court was presented with advertising using The Doors name and logo, much of which had already been displayed, for performances to which appellants were contractually committed. The trial court had to deal pragmatically with these circumstances. Nor was the denial of provisional relief an indication that the court saw no merit in respondents’ side of the case. In ruling on the application for a temporary restraining order, the court found that Densmore “has raised a colorable argument regarding a threat of serious harm,” but the court found that Densmore’s notice of termination of the New Doors Agreement detracted from the claim that he was facing irreparable injury.
It is evident that in April and May 2003, when considering the applications for preliminary injunctive relief, the court was required to consider facts and circumstances that played no role in the ultimate resolution of the controversy between the parties.
3. Respondents Declare That They Do Not Seek Damages
Densmore’s and the Estates’ actions were consolidated for trial.
Densmore’s and the Estates’ complaints both sought damages for breach of contract. Apparently the first indication that respondents were not going to seek damages came during a hearing on discovery disputes held on April 22, 2004. During the course of argument, counsel for Densmore stated that “Mr. Densmore is not seeking to recover damages in the classic sense but disgorgement” and “We do attribute other damages to the conduct of the defendants. [] Do we seek to recover them? [] No. [] I made it very clear we are not intending to try to recover damages to the catalogue or reputation of The Doors. We think it has been damaged. But we are seeking to recover only in the form of disgorgement those profits earned by the defendants from their performing, recording, and videotaping activities.”
During his opening statement, counsel for Densmore and the Courson estate stated that while The Doors name and legacy had been harmed, “[w]e don’t want damage [sic] for the harm. . . . [] [W]e do want them to give to the partnership of four the revenues that they’ve made by using this name because it’s not right for them to keep it. They didn’t have a right to use it. That’s what we want, ladies and gentlemen. . . .” Counsel for the Morrison estate stated that “we want them to turn over their ill-gotten gain.”
As we discuss post, respondents never deviated after these opening remarks from their argument that they were seeking profits that belonged to The Doors’ partnerships. This is significant in that the calculation of partnership profits is usually a matter addressed in accounting proceedings on the equity side of the court.
4. Respondents Request During Trial That the Court Decide the Equitable Issues First; the Request Is Denied
Respondents state in their principal brief that they advised the trial court in late June 2004 “that they were waiving a jury trial given the predominant equitable issues” but that the “[appellants] demanded a jury trial.” The record is not as clear and streamlined as this, at least as far as the jury waiver is concerned. On June 25, 2004, in a pretrial conference, counsel for Densmore and the Courson estate stated: “We’ve given this a lot of thought, [respondents] and their counsel. And we know that the court is in a position to deal with the equitable and legal issues both. We’re inclined to waive the jury in favor of you trying this case. We think it’s faster, easier, just better for everybody for this to be a court trial if you were the judge.” While the reasons for the jury waiver appear to be mixed, there was no ambiguity about appellants’ demand for a jury trial, which they repeated after the quoted statement. Thus, a jury was impaneled on July 6, 2004.
Opening statements were made on July 6, 2004, and the first witness began his testimony that day. On July 27, 2004, respondents served on appellants a motion to have the equitable issues determined first by the court. Respondents’ motion took the position that their action was for injunctive relief, an accounting, restitution and imposition of a constructive trust, i.e., it was solely an equitable action. Respondents also contended that the cross-complaint was also solely equitable in nature. Appellants opposed the motion, contending that whether there was a partnership agreement, what its terms were, and whether that agreement was breached were all questions of law on which they were entitled to a jury.
On August 27, 2004, the trial court entered a minute order in which it noted that it had reviewed the jury instructions proposed by both sides, that it had rejected certain proposed instructions and approved others and that the court now required joint jury instructions. The minute order concluded by stating: “The Court will have the jury decide the legal issues first along with advisory findings regarding equitable issues.”
In principle, this minute order operated as a denial of respondents’ motion to have the court decide the equitable issues first. Unfortunately, this order did not address which claims were legal and which were equitable. In fact, the trial court left this question open until it filed its statement of decision in July 2005; as we relate below, the trial court expressly declined to make such a ruling while the jury was deliberating during September 2004.
The situation was complicated by the circumstance that there were some claims or causes of action that were not submitted to the jury for decision. These were the Estates’ fifth cause of action for a violation of Business and Professions Code section 17500 (false advertising), the Estates’ causes of action for the imposition of a constructive trust and for an accounting and the causes of action in the cross-complaint for declaratory relief and a reformation of the New Doors Agreement. Thus, when the case went to the jury, some claims had been withheld because they were equitable but some equitable claims did go to the jury.
It would have made for greater clarity if in the minute order of August 27, 2004, or in any event before the case went to the jury, the court had ruled which of the causes of action submitted to the jury were legal and which were equitable. This decision had to be made at some point. It is most useful to make this decision before the case goes to the jury. It is at that point, and not a year after jury deliberations, that the parties and the jury should know what questions are for the jury and what questions are reserved for the court.
As it was, the question of which claims were legal and which were equitable first surfaced on July 27, 2004, during the trial, and was not resolved until July 2005, long after the verdicts had been returned. Such a delay could only have a negative impact, as in fact turned out to be the case.
5. Arguments on the Evidence of Gross Earnings and Profits
The question whether respondents were harmed by appellants’ breaches of the partnerships agreements, assuming there were any breaches, was to surface during jury deliberations, as we discuss in part 7, post, of the Procedural History. The closing arguments of counsel clearly delineated the parties’ conflicting positions on this issue.
Mr. Mandel, counsel for Densmore and the Courson estate, stated that the money that was (hopefully) to be awarded would not go “to John Densmore’s pocket. It’s going to go to the partnership that owns the name. It’s going to go to the partnership whose property has been stolen. And if Manzarek and Krieger own half that partnership, so be it. We understand that.” Later, referring to Manzarek and Krieger, Mr. Mandel stated that each of them had earned $2.5 million, that Astbury had been paid $1 million, and that the concerts had grossed $8.5 million.
Attorney Jeffrey Forer, counsel for the Morrison estate, devoted considerable time to the issue of profits and gross revenues. He began by stating that the band had grossed $9 million. After pointing out that Manzarek, Krieger and Astbury had used Morrison’s name and likeness for their own benefit, Mr. Forer reviewed the exhibits that reflected income and expenses of Doors Touring, Inc., between August 2002 and July 2004. He then turned to checking account activity of another company used by appellants, Diamond Night Productions in 2003 and 2004. A summary of all of these documents showed earnings of $7,767,000, but this, according to Mr. Forer, was an incomplete figure. When merchandising and royalties were added, the gross earnings came “close to $9 million total.” Mr. Forer then examined in detail expenses claimed and argued that they were excessive since these operating expenses included salary paid Manzarek and Krieger, which, according to Forer, were not legitimate expenses. Forer challenged yet another tabulation of expenses that showed a loss of $1.6 million because these expenses included legal fees. Forer thought the legitimate expenses were between $4 and $5 million.
Attorney William Briggs, appellants’ counsel, countered these arguments by first pointing out that Densmore was invited to join the band but refused to do so. “He [Densmore] knows the basic principles of someone being in a band. If you don’t play, you don’t get paid.” Mr. Briggs then stated that after considering the expenses, the band operated at a loss, that all that Manzarek and Krieger took home with them was $439,000. In substance, the arguments were that Densmore was entitled to earnings only if he performed with the band and that, in any event, there were no profits or that, at best, the profits were minimal.
6. Jury Instructions
Respondents state in their principal brief that after the trial court’s minute order of August 27, 2004 (see part 4, ante, of the Procedural History), they prepared with appellants jury instructions “under protest.” There is no transcript reference to tell us what this protest was and when it was made. In any event, if the respondents were protesting that the jury was also receiving instructions on equitable claims, the protest was fruitless in that the instructions covered claims that were unquestionably equitable in nature. Remarks by the trial court, which we set forth in part 7, post, of the Procedural History, suggest that, on the equitable claims, the trial court considered the jury’s role to be advisory, a matter confirmed in the statement of decision.
We summarize the salient aspects of the instructions that pertain to the causes of action on which Densmore and the Estates recovered favorable verdicts. In light of appellants’ principal contention that the jury’s verdicts exonerated appellants, particularly noteworthy in the instructions is that the jury was instructed that, in order to recover, respondents had to show that they had been harmed.
On the breach of the New Doors Agreement, the jury was instructed that they had to find that Manzarek, Krieger and Densmore entered into this agreement, that Manzarek and Krieger “failed to do something that the contract required him or them to do or did something that the contract precluded them from doing,” and that Densmore “[was] harmed by that failure.”
Respecting the breach of the Old Doors and DMC Agreements, the jury was instructed that they had to find that Densmore, the Estates, Manzarek and Krieger formed such partnerships, that Manzarek and Krieger “failed to do something that the contract required him or them to do or did something that the contract precluded him or them from doing,” and that Densmore and the Estates “were harmed by that failure.”
On the claim brought under Civil Code section 3344.1, the jury was instructed that they had to find that appellants used Morrison’s name or likeness and that the Estates were harmed by this use.
No instructions on money damages were given.
In the instructions covering the Lanham Act, the jury was instructed that respondents had “elected not to seek such damages” and that they were seeking instead “injunctive relief and [appellants’] profits.” The jury was instructed how to calculate profits; these instructions were associated with the instructions on the Lanham Act.
7. The Question of “Harm” Arises During Jury Deliberations; Counsels’ Responses to the Jury’s Questions
The case went to the jury on September 2, 2004. The jury deliberated on September 7, 8, 9, and 10. On September 13, 2004, the jury returned with some questions. In addition to requesting read-back of testimony, the jury apparently had questions on the topics of what constitutes a breach of contract and what was meant by “harm” in the instructions on breach of contract. Unfortunately, the record does not appear to contain the actual questions asked by the jury but the comments of court and counsel make it acceptably clear what those questions were.
After the questions were presented to the court, the jury retired to resume deliberations and court and counsel discussed the questions propounded by the jury. Attorney Mandel, counsel for Densmore and the Courson estate, noted that the jury was “wrestling with [the] concept[] of harm” and that “[w]hile the disgorgement and the unjust enrichment are equitable remedies that the court will deal with, I think they need to understand for purposes of this that [sic] includes that.” Attorney Briggs, appellants’ counsel, disagreed, stating that this was a breach of contract claim, which was a matter for the jury. The court stated: “This is my suggestion: There’s so much that they’ve asked for. Why don’t we slowly look at this because I’d like to look at your original briefs when [sic] this whole issue of contract versus equitable. I think we can work this out. And interesting [sic] to see what they come up with. [] Their clarification may save a lot of time for us. Why don’t we pass it for a moment.”
After some discussion, the court decided to allow counsel to present argument on the questions the jury had asked.
Mr. Mandel went first. He stated that there had been two breaches of the partnership agreement. They were that Manzarek and Krieger had decided to tour as The Doors in 2002 when there was no unanimous agreement that they could do so. The second breach was that, after the termination of the New Doors partnership, Manzarek and Krieger used the name The Doors. Mr. Mandel then turned to the question of harm:
ExpandCharacters Remaining:Bookmark: Check this box if you wish to bookmark this thread.Disable Smilies: If this box is checked, smiley emoticons will be disabled in your message.Lock Thread: If checked, this thread will be locked once you post.Sticky Thread: To sticky this thread, check this box.Announcement: To make this announcement on all boards, check this box.shortcuts: hit alt+s to send, alt+p to preview, alt+c to spell check, or alt+r to reset F “Question No. 5 is a significant issue, and that is that [respondents] were harmed by the failure.[ ] In evaluating whether [respondents] were harmed by the failure, you have to keep in mind who [respondents] are and secondly what does it mean to be harmed which is the question that has been asked. [] With respect to who are [respondents], keep in mind that with respect to some of the causes of action, John [Densmore] has sued individually and on behalf of partnerships. Harm in the context of this lawsuit does not necessarily mean economically damaged. It doesn’t mean that we have to show that John lost money as a result of the breach of either of??as a result of either of the breaches that we’ve described. [] We have to show that John or the partnerships were harmed. We think that they were harmed because what’s happened is one form of harm is that the alleged wrongdoer has done something wrong and has benefited at the expense of the person who is complaining or the partnership who is complaining. [] . . . . [] So we believe in this case that there are two separate breaches both of which result in the same harm, that is, [appellants] have profited to the tune of roughly $3 million. They ought not to keep that in light of their own failure to adhere to the contract. And that’s the amount that should be awarded either in favor of John or in favor of the partnership as the court will determine at such time as the court considers everything that is going on and we deal with the other issues that are in this case.” (Italics added)
The response to this argument came from Attorney Briggs, appellants’ counsel. Mr. Briggs began with the point that Densmore, as a professional musician, knew that if you don’t play, you don’t get paid??and that Densmore admitted that he didn’t play at the Harley-Davidson concert or thereafter. Mr. Briggs disagreed with the claim that this was a case of unjust enrichment. Giving the example of a person using a car belonging to someone else, and stating that under such circumstances the owner of the car should be compensated, Mr. Briggs stated “[t]hat’s not what happened here. [] . . . [] [T]here was no harm. There is no harm. If you’re looking for the type of harm that that jury instruction is requesting of you, it’s how much is he out-of-pocket? Absolutely nothing.” When Mr. Mandel gave his reply argument, he closed by stating: “Harm is as we’ve discussed, the disgorgement, economic benefit.” Thus, as both counsel framed the issue for the jury, the question was whether the harm was the profits the appellants made on tour or whether the harm was Densmore’s out-of-pocket loss. If it was out-of-pocket loss, there was no harm since there was no evidence of out-of-pocket loss.
The proceedings of September 13, 2004, were very significant. As counsels’ arguments framed the issue for the jury, the question was whether respondents had been harmed to the extent they did not share in the profits generated by appellants’ concerts or whether, as appellants contended, respondents had not been harmed because they had not sustained any out-of-pocket loss. Thus, the jury had a real decision to make: Was the harm the loss of profits or was it an out-of-pocket loss? Significantly, if it was the former, Mr. Mandel had argued without drawing an objection that the court would determine the amount that would be awarded to the partnership. Neither the court nor opposing counsel corrected Mr. Mandel’s statement. The jury was left with one impression and one impression only: they were not to determine the amount of lost profits.
8. The Special Verdicts
The case went to the jury on September 2, 2004; the jury returned its verdicts on September 27, 2004, having deliberated during most of September.
The jury rejected the following of respondents’ claims: (1) Lanham Act (Densmore and Estates); (2) common law unfair competition (Densmore and Estates); (3) Business and Professions Code section 17200 (Densmore and Estates); (4) breach of oral partnership agreements (the DMC and Old Doors Agreements) (Densmore); (5) common law trademark infringement (Estates); (6) state trademark dilution (Estates); (7) breach of contract (Estates); and (8) breach of implied contract (Estates).
Respecting Densmore’s action, the jury found that Manzarek and Krieger had breached the New Doors Agreement and also had breached their fiduciary duties under The Doors partnerships. These claims were set forth respectively in the fifth and sixth causes of action. The jury found that Manzarek and Krieger were liable to Densmore for these breaches but entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches.
On the Estates’ action, the jury found that Manzarek and Krieger had violated Morrison’s postmortem right of publicity and that they had breached their fiduciary duties under the Old Doors and DMC Agreements. These were the seventh and 10th causes of action. As with Densmore, the jury found Manzarek and Krieger liable to the Estates for these breaches and entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches.
On the cross-complaint, the jury found that Densmore had breached his fiduciary duties that he owed Manzarek and Krieger, that he also breached the covenant of good faith and fair dealing incorporated in the New Doors Agreement, and that Densmore was also liable on the promissory estoppel claim. These were the first, second and third causes of action of the cross-complaint. As with Densmore and the Estates, the jury entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches. The jury found for Densmore on the cause of action for a violation of Business and Profession Code section 17200. The sixth and seventh causes of action of the cross-complaint, for declaratory relief and a reformation of the New Doors Agreement respectively, were not submitted to the jury for decision.
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Filed 5/29/08 Densmore v. Manzarek CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
JOHN DENSMORE, Plaintiff and Respondent, v.RAYMOND MANZAREK et al., Defendants and Appellants. B186036 (Los Angeles County Super. Ct. No. BC 289730)
COLUMBUS COURSON et al., Plaintiffs and Respondents, v.RAYMOND MANZAREK et al., Defendants and Appellants. B186037 (Los Angeles County Super. Ct. No. BC 294495)
JOHN DENSMORE et al., Plaintiffs and Respondents, v.RAYMOND MANZAREK et al., Defendants and Appellants. B188708 (Los Angeles County Super. Ct. No. BC 294495)
APPEAL from the judgments of the Superior Court of Los Angeles County, Gregory W. Alarcon, Judge. Affirmed.
Greines, Martin, Stein & Richland, Irving H. Greines, Marc J. Poster, Jens B. Koepke; Lavely & Singer, Martin D. Singer, William J. Briggs II, and Henry L. Self III for Defendants and Appellants.
Mandel, Norwood & Grant, S. Jerome Mandel and Lilly Lewis for Plaintiffs and Respondents John Densmore, Pearl M. Courson and Columbus Courson.
Hinojosa & Wallet and Jeffrey Forer for Plaintiffs and Respondents George Morrison and Clara Morrison.
* * * * * *
The trial court issued a permanent injunction enjoining appellants Raymond Manzarek and Robert Krieger from holding themselves out as the musical band The Doors. The trial court also ordered appellants to pay respondent John Densmore $82,274 and to pay the sum of $3.2 million to a partnership consisting of Densmore, respondents Columbus and Pearl M. Courson and George and Clara Morrison, and appellants. We affirm.
FACTS
1. The Doors, 1965-1971
Three young men met in a meditation class in Los Angeles in 1965. They were Densmore, Krieger and Manzarek; Manzarek knew a young man named Jim Morrison. Manzarek suggested that the four of them should form a band, which they all agreed to do. They began playing in the garage of Manzarek’s parents’ home in Manhattan Beach. Densmore played the drums, Manzarek the keyboard, Krieger the guitar and Morrison was the vocalist.
According to Densmore, The Doors, as the band became known, was rooted in the protest movements of the 1960’s. When asked at trial if the band had a “social philosophy,” Densmore put it this way: “Just that we were all together. A band of four brothers completely equal. And we hoped we could sort of level the playing field for everyone else out there. It was a pipe dream. But we were trying to be socially conscious.” In four years, the principle of unanimity would be written into the first partnership agreement.
The Doors, as a rock-and-roll band, rose rapidly to great heights of success. In 1966, The Doors signed a six-album deal with Elektra records that would include such hits as “Light My Fire,” “L.A. Woman” and “Riders on the Storm.” Morrison played a pivotal role in the growing fame of The Doors. According to Nigel Williamson, a British critic and writer, “. . . the musical vision and the power of ‘The Doors’ came specifically from Jim Morrison. I’m not denying the contribution that the other three musicians in the group made. But I think without Jim Morrison there would not have been a group as we know ‘The Doors’ to have been. The music would not have existed in that shape or form.”
In 1969, the four men executed what the parties refer to as the “DMC Agreement,” standing for the “Doors Music Company” agreement, which provided among other things that the “management and control of the partnership business shall be determined by unanimous agreement of all partners.”
In November 1970, the DMC Agreement was amended to provide that no agreement, license or other document “respecting the partnership shall be binding upon the partnership unless signed by each and every member of the partnership.” This amendment was spawned by a violent disagreement between Morrison, on the one hand, and the other three partners, on the other, over doing a Buick commercial using The Doors’ piece “Light My Fire.” While the three partners had agreed to the commercial, Morrison vehemently disagreed and the commercial was not done.
A second agreement, executed in 1971 prior to Morrison’s departure in March 1971 to Paris, but effective as of January 1, 1966, entitled “GENERAL PARTNERSHIP AGREEMENT,” which the parties refer to as the “Old Doors Agreement,” prohibited the partners from entering into agreements without prior written consent of all of the partners. Both the DMC Agreement and Old Doors Agreement provided for the dissolution of the partnership upon the death of any partner. On March 11, 1971, prior to Morrison’s departure, the Old Doors Agreement was amended to provide that upon the termination or dissolution of the partnership other than by the death of any partner, none of the partners “shall have the right to use the name ‘The Doors’ for phonograph record purposes or in connection with personal appearances.”
Morrison died in Paris in July 1971. He left his property to his wife, Pamela Courson.
2. The New Doors Partnership, 1971-2003
In October 1971, Densmore, Manzarek and Krieger entered into a new partnership agreement that the parties refer to as the “New Doors Agreement.” (Pamela Courson was not a party to the New Doors Agreement.) This agreement duplicated the provisions of the DMC and Old Doors Agreements and it also contained the following, which duplicated the March 11, 1971 amendment to the Old Doors Agreement: “Notwithstanding anything to the contrary contained herein, upon the dissolution and/or termination of the Partnership, other than by reason of the death of any of the Partners, none of the Partners shall have the right to use the name ‘THE DOORS’ for phonograph record purposes or in connection with personal appearances.” The New Doors Agreement could be terminated by 30 days’ written notice.
Pamela Courson died in 1974. Her parents, Pearl and Columbus Courson, and Morrison’s parents, Clara and George Morrison, resolved their differences and agreed to share equally in Morrison’s interest in The Doors. The parties refer to the parents collectively as the “Estates” and we follow that usage.
The fortunes of The Doors after Morrison’s death were mixed. On the one hand, the remaining three were not able to generate new successes without Morrison; two albums produced after Morrison’s death did only moderately well, according to Densmore, “[n]othing like the original ‘Doors.’ ” No more albums were produced because, in Densmore’s words, “. . . we realized without Jim, what were we doing? He was the soul of the band.” The partnership cancelled the recording deal it had with Elektra. With three exceptions, the trio never performed again together as The Doors. These occasions came in 1978 when they created an album performed to poetry Morrison had recorded; in 1992 when The Doors was inducted into the Rock and Roll Hall of Fame; and in 2000 when the trio performed as The Doors for a VH1 cable channel production.
As respondents put it, The Doors endured “not as a performing band, but as a musical legacy.” Merchandising and album sales of The Doors with Morrison flourished. Densmore, Manzarek, Krieger and the Estates shared in these profits and filed partnership tax returns. The Doors, as it existed prior to Morrison’s death, continued in the public eye when Apocalypse Now (Zoetrope Studios) was released in 1979, which opened with the song “The End,” and with the release of Oliver Stone’s film The Doors (Tri-Star Pictures) in the early 1990’s, with Val Kilmer playing Morrison. Forrest Gump (Paramount Pictures 1994) played three or four Doors songs, which were sold to the movie production by the partnership for several million dollars. Merchandising deals involving The Doors also generated fees in the millions.
Because of these very handsome returns, requests for permission to use The Doors in advertising proved to be tempting, at least as far as Manzarek was concerned. In 2001 or 2002, The Doors received a $15 million offer from Cadillac to use a Doors hit in a sales campaign. Manzarek and the Estates were in favor of accepting it, Krieger was on the fence and Densmore was opposed because it was a Doors tradition not to do commercials. (Between 1965 and 2002, The Doors participated in only one commercial; it was for a tire company in Britain.) Morrison had been adamant against doing commercials and Densmore wanted to honor Morrison’s memory. The offer was not accepted. The same fate befell a multimillion-dollar offer made by Apple Computer, and for the same reason, at least as far as Densmore was concerned. In July 2002, an article appeared in the magazine The Nation in which Densmore was quoted as expressing philosophical objections to the use of rock music in commercials. The failed Cadillac and Apple commercials, and The Nation article, formed the basis of Manzarek’s and Krieger’s eventual cross-complaint against Densmore in which they alleged that Densmore’s conduct was unreasonable and capricious and a breach of his fiduciary obligations toward his two partners.
3. The Breakup, 2002-2003
About a year after the Cadillac offer, Harley-Davidson invited The Doors to give a rock concert in Fontana, California, on Labor Day 2002. The occasion was a celebration of the manufacturer’s 100th anniversary; Harley-Davidson offered the group $150,000 for a two-hour concert. The trio, including Densmore, were interested in doing this concert and plans went ahead with Ian Astbury, the singer from The Cult, as the vocalist. Eventually, however, Densmore decided that his health was not up to it and he opted not to participate; Stewart Copeland from The Police appeared in his place. The concert took place without Densmore but with his consent.
Within days after the Fontana concert, Densmore read in Billboard magazine, a music industry publication, that Manzarek, Krieger, Copeland and Astbury had appeared, after the Fontana concert, at another Harley-Davidson concert in Canada. The first paragraph of the article stated: “Police drummer Stewart Copeland and Cult vocalist Ian Astbury (singing the late Jim Morrison’s parts) weren’t just temporary additions to the Doors’ lineup for last weekend’s show in Fontana, Calif. As Doors keyboardist Ray Manzarek tells Billboard.com, ‘Stewart is drumming from here on out. Ian is singing from here on out. We’re not doing a TV show. We’re playing live music. This is the new Doors lineup for the 21st century.”
Densmore was surprised, hurt and angry after he read this. Neither Manzarek nor Krieger had ever told him that there would be “a new lineup” for the 21st century or another concert in Canada.
Within a month or so after this, Krieger called Densmore and said that they wanted to go on a tour, and he invited Densmore to go with them. Densmore declined the invitation, but said that they should do a tour, as long as they made it clear that “there is a big difference between your new band and our classic ‘Doors’ band.” Densmore definitely did not think that the band composed of Manzarek, Krieger, Stewart and Astbury were The Doors. Densmore told Krieger that they should modify The Doors by calling it “The New Doors,” as an example, and that use of The Doors logo, which they had guarded jealously over the years, was strictly out.
Densmore had several telephone conversations with Krieger along the foregoing lines. At some point during these conversations, the two men discussed using the titles “The 21st Century Doors” or “The Doors of the 21st Century.” Densmore thought the title to be a mouthful and questionable since they were all getting on in years and might not see much of the 21st century, but he voiced no objection to these titles.
Ultimately, Krieger professed to agree to Densmore’s demands. Densmore had no reason to doubt Krieger’s sincerity; they had been friends for many years.
In January 2003, Densmore began getting calls from friends congratulating him on The Doors getting back together; the impetus for this appears to have been a billboard at the Palm Hotel announcing a performance by The Doors on January 19, 2003. Densmore also began to see advertisements. One in the Los Angeles Times caught his eye; it was an ad for a concert at the Universal Amphitheatre in Los Angeles scheduled for February 7, 2003. The first line of the ad states, “Witness Rock & Roll History”; this line is followed by “The Doors” and The Doors logo; in small print under the logo is “21st Century” and “Live”; and Manzarek, Astbury, Krieger and Copeland are shown as a group. Changes to The Doors website, which referred to the 21st century band, and advertisements along the lines of the Los Angeles Times ad continued, much to Densmore’s concern and dissatisfaction.
When asked at trial whether the Los Angeles Times ad represented what Densmore had had in mind when he discussed “21st Century Doors” with Krieger, Densmore testified: “Absolutely not. This infuriated me. I couldn’t believe that the modifier ‘21st Century’ is about a tenth the size of the word ‘Doors.’ And the word ‘Live’ under it implies 21st century live tour starring this band, ‘The Doors.’ ”
Densmore had three telephone conversations with Krieger after he saw the Los Angeles Times ad. Densmore was angry; he told Krieger they were using The Doors logo, the modifier “21st Century” was too small, and it was not clear that this was a new band. Krieger’s response was that that’s the way they had to do it “if we want to play big concerts.” Krieger suggested minor changes that did not satisfy Densmore.
On March 19, 2003, Densmore wrote Manzarek and Krieger, stating that he was terminating the New Doors Agreement of 1971. Under the terms of that agreement, this precluded use of The Doors name; nevertheless the band composed of Manzarek, Krieger and Astbury continued to appear as The Doors or as The Doors of the 21st Century and display The Doors logo.
4. Appellants’ Band, 2003-2004
Manzarek, Krieger and Astbury appeared and performed on three nationally televised shows in January and February 2003.
After the February 7, 2003 concert in Los Angeles, the band composed of Manzarek, Krieger, and Astbury performed more than 65 concerts in approximately two years. The advertisements for these concerts used the word “Doors” in various permutations, and took differing approaches to the modifier “of the 21st Century.” The trial court found that in approximately 30 concerts performed during this period, the image of Jim Morrison was displayed to the audience from 30 to 90 seconds at the inception of the concert. Morrison’s voice singing Doors songs was used in advertising for the band in several cities on the tour. Merchandising used the word “Doors” and words and phrases associated with Morrison.
The trial court found in its statement of decision that these concerts grossed more than $8 million and generated more than $2.7 million in profits; these findings were supplanted by a stipulation, entered into after the trial, that the net profits were $3.2 million. No part of these earnings was ever transmitted to Densmore or the Estates. The proceeds all went to Doors Touring, Inc., the band’s “loan-out” corporation.
PROCEDURAL HISTORY
1. The Complaints and the Cross-complaint
Densmore filed his action on February 4, 2003, three days before the band’s first major concert in Los Angeles. The complaint alleged six causes of action. The first cause of action set forth alleged violations of the Lanham Act (15 U.S.C. § 1125(c)(1)) in that the defendants (Manzarek, Krieger, Astbury and Copeland) threatened to perform as The Doors and advertised their performances using The Doors name and The Doors’ distinctive logo. The second cause of action was for unfair competition. The third cause of action alleged violations of Business and Professions Code section 17200. The fourth cause of action was for breach of two oral partnership agreements that were allegedly formed after Morrison’s death; these were the DMC and Old Doors Agreements. The fourth cause of action alleged that Manzarek and Krieger had violated the principle of unanimity contained in these agreements. The fifth cause of action set forth an alleged breach of the New Doors Agreement. The sixth cause of action alleged that Manzarek and Krieger had breached their fiduciary duty toward Densmore by diverting to themselves the renown of The Doors and reaping the benefits of this misconduct; this cause of action alleged violations of the DMC and Old Doors Agreements.
The jury eventually returned verdicts for Densmore on the fifth and sixth causes of action, and found for appellants on the remaining claims.
The complaint sought the following relief: First, an injunction enjoining the defendants (a) from using the name and logo of The Doors; (b) from selling or marketing themselves in such a way as to suggest that they were, or were affiliated with, The Doors; and (c) to deliver up all products confusingly similar to The Doors’ distinctive trademark and logo. Second, the complaint sought an order that the defendants be required to account for all profits arising from the unlawful use of The Doors distinctive trademark and logo. Third, the complaint demanded that Manzarek and Krieger respond in damages for their breaches of the oral partnership agreement and the New Doors Agreement.
The Estates filed their action on April 23, 2003. The plaintiffs were Columbus and Pearl Courson and Clara and George Morrison, who, it was alleged, held between them James Morrison’s 25 percent partnership interest in The Doors. The Estates’ action largely tracked the lawsuit filed by Densmore, with the exception that it included a cause of action for the misappropriation of Morrison’s name and likeness, in violation of Civil Code section 3344.1. As in Densmore’s action, the Estates’ complaint included a cause of action for breach of fiduciary duties based on The Doors partnerships, i.e., the Old Doors and DMC Agreements. The Estates’ action also included a cause of action that sought to impose a constructive trust and that sought an accounting. The relief demanded by the Estates’ action was largely the same as in Densmore’s lawsuit, with additional injunctive relief predicated on the misuse of Morrison’s name and likeness.
Manzarek and Krieger cross-complained.
The cross-complaint alleged that during Morrison’s lifetime decisions were made by majority vote, and did not require unanimity; that the New Doors Agreement did not actually reflect the true intent of the signatories thereto since “the partners would sign contracts and legal documents without reading them,” and the true intent behind the purported unanimity rule was to prevent individual partners from unilaterally conducting business; that Manzarek dissolved the partnership in 1973; that in 1978 Densmore participated in producing an album of music with poetry recorded by Morrison and that this was a waiver, by Densmore, of the New Doors Agreement’s provision that no member can use The Doors name after termination of the partnership; that Densmore’s conduct was arbitrary and reflected bad faith when he vetoed the $15 million Cadillac offer; that the cross-complainants repeatedly asked Densmore to tour with them but that he unreasonably refused to do so; and that the cross-complainants continued to extend an invitation to Densmore to join the band.
The cross-complaint alleged seven causes of action. The first cause of action for breach of fiduciary duty alleged that Densmore acted capriciously in refusing to consent to various ventures and in insisting that he had the right to veto decisions made by the majority. The second cause of action was for the breach of the covenant of good faith and fair dealing and relied largely on the same facts as the first cause. The third cause of action for promissory estoppel alleged that Densmore led the cross-complainants to believe in 2002 that he would tour with them, a promise on which they relied. The remainder of the cross-complaint was for intentional interference with economic advantage; violations of Business and Professions Code section 17200; declaratory relief, notably a declaration that “21st Century Doors” and “The Doors of the 21st Century” are not likely to cause confusion; and reformation. The cross-complaint demanded a trial by jury.
The jury found for the cross-complainants on the first three causes of action.
2. The Trial Court Denies Respondents’ Motions for a Preliminary Injunction on the Condition That Appellants Add to “The Doors” the Qualifier “of the 21st Century”
In April and May 2003, the trial court denied respondents’ applications for a temporary restraining order and preliminary injunction enjoining use of The Doors on the condition that the defendants use the qualifier “of the 21st Century” after The Doors name. Appellants seek to exploit this preliminary ruling in this appeal, contending that they did nothing more or less than what the trial court’s rulings on these provisional remedies allowed them to do.
We address this contention in part 9 of the Discussion. Here we note that, particularly during April 2003, the trial court was presented with advertising using The Doors name and logo, much of which had already been displayed, for performances to which appellants were contractually committed. The trial court had to deal pragmatically with these circumstances. Nor was the denial of provisional relief an indication that the court saw no merit in respondents’ side of the case. In ruling on the application for a temporary restraining order, the court found that Densmore “has raised a colorable argument regarding a threat of serious harm,” but the court found that Densmore’s notice of termination of the New Doors Agreement detracted from the claim that he was facing irreparable injury.
It is evident that in April and May 2003, when considering the applications for preliminary injunctive relief, the court was required to consider facts and circumstances that played no role in the ultimate resolution of the controversy between the parties.
3. Respondents Declare That They Do Not Seek Damages
Densmore’s and the Estates’ actions were consolidated for trial.
Densmore’s and the Estates’ complaints both sought damages for breach of contract. Apparently the first indication that respondents were not going to seek damages came during a hearing on discovery disputes held on April 22, 2004. During the course of argument, counsel for Densmore stated that “Mr. Densmore is not seeking to recover damages in the classic sense but disgorgement” and “We do attribute other damages to the conduct of the defendants. [] Do we seek to recover them? [] No. [] I made it very clear we are not intending to try to recover damages to the catalogue or reputation of The Doors. We think it has been damaged. But we are seeking to recover only in the form of disgorgement those profits earned by the defendants from their performing, recording, and videotaping activities.”
During his opening statement, counsel for Densmore and the Courson estate stated that while The Doors name and legacy had been harmed, “[w]e don’t want damage [sic] for the harm. . . . [] [W]e do want them to give to the partnership of four the revenues that they’ve made by using this name because it’s not right for them to keep it. They didn’t have a right to use it. That’s what we want, ladies and gentlemen. . . .” Counsel for the Morrison estate stated that “we want them to turn over their ill-gotten gain.”
As we discuss post, respondents never deviated after these opening remarks from their argument that they were seeking profits that belonged to The Doors’ partnerships. This is significant in that the calculation of partnership profits is usually a matter addressed in accounting proceedings on the equity side of the court.
4. Respondents Request During Trial That the Court Decide the Equitable Issues First; the Request Is Denied
Respondents state in their principal brief that they advised the trial court in late June 2004 “that they were waiving a jury trial given the predominant equitable issues” but that the “[appellants] demanded a jury trial.” The record is not as clear and streamlined as this, at least as far as the jury waiver is concerned. On June 25, 2004, in a pretrial conference, counsel for Densmore and the Courson estate stated: “We’ve given this a lot of thought, [respondents] and their counsel. And we know that the court is in a position to deal with the equitable and legal issues both. We’re inclined to waive the jury in favor of you trying this case. We think it’s faster, easier, just better for everybody for this to be a court trial if you were the judge.” While the reasons for the jury waiver appear to be mixed, there was no ambiguity about appellants’ demand for a jury trial, which they repeated after the quoted statement. Thus, a jury was impaneled on July 6, 2004.
Opening statements were made on July 6, 2004, and the first witness began his testimony that day. On July 27, 2004, respondents served on appellants a motion to have the equitable issues determined first by the court. Respondents’ motion took the position that their action was for injunctive relief, an accounting, restitution and imposition of a constructive trust, i.e., it was solely an equitable action. Respondents also contended that the cross-complaint was also solely equitable in nature. Appellants opposed the motion, contending that whether there was a partnership agreement, what its terms were, and whether that agreement was breached were all questions of law on which they were entitled to a jury.
On August 27, 2004, the trial court entered a minute order in which it noted that it had reviewed the jury instructions proposed by both sides, that it had rejected certain proposed instructions and approved others and that the court now required joint jury instructions. The minute order concluded by stating: “The Court will have the jury decide the legal issues first along with advisory findings regarding equitable issues.”
In principle, this minute order operated as a denial of respondents’ motion to have the court decide the equitable issues first. Unfortunately, this order did not address which claims were legal and which were equitable. In fact, the trial court left this question open until it filed its statement of decision in July 2005; as we relate below, the trial court expressly declined to make such a ruling while the jury was deliberating during September 2004.
The situation was complicated by the circumstance that there were some claims or causes of action that were not submitted to the jury for decision. These were the Estates’ fifth cause of action for a violation of Business and Professions Code section 17500 (false advertising), the Estates’ causes of action for the imposition of a constructive trust and for an accounting and the causes of action in the cross-complaint for declaratory relief and a reformation of the New Doors Agreement. Thus, when the case went to the jury, some claims had been withheld because they were equitable but some equitable claims did go to the jury.
It would have made for greater clarity if in the minute order of August 27, 2004, or in any event before the case went to the jury, the court had ruled which of the causes of action submitted to the jury were legal and which were equitable. This decision had to be made at some point. It is most useful to make this decision before the case goes to the jury. It is at that point, and not a year after jury deliberations, that the parties and the jury should know what questions are for the jury and what questions are reserved for the court.
As it was, the question of which claims were legal and which were equitable first surfaced on July 27, 2004, during the trial, and was not resolved until July 2005, long after the verdicts had been returned. Such a delay could only have a negative impact, as in fact turned out to be the case.
5. Arguments on the Evidence of Gross Earnings and Profits
The question whether respondents were harmed by appellants’ breaches of the partnerships agreements, assuming there were any breaches, was to surface during jury deliberations, as we discuss in part 7, post, of the Procedural History. The closing arguments of counsel clearly delineated the parties’ conflicting positions on this issue.
Mr. Mandel, counsel for Densmore and the Courson estate, stated that the money that was (hopefully) to be awarded would not go “to John Densmore’s pocket. It’s going to go to the partnership that owns the name. It’s going to go to the partnership whose property has been stolen. And if Manzarek and Krieger own half that partnership, so be it. We understand that.” Later, referring to Manzarek and Krieger, Mr. Mandel stated that each of them had earned $2.5 million, that Astbury had been paid $1 million, and that the concerts had grossed $8.5 million.
Attorney Jeffrey Forer, counsel for the Morrison estate, devoted considerable time to the issue of profits and gross revenues. He began by stating that the band had grossed $9 million. After pointing out that Manzarek, Krieger and Astbury had used Morrison’s name and likeness for their own benefit, Mr. Forer reviewed the exhibits that reflected income and expenses of Doors Touring, Inc., between August 2002 and July 2004. He then turned to checking account activity of another company used by appellants, Diamond Night Productions in 2003 and 2004. A summary of all of these documents showed earnings of $7,767,000, but this, according to Mr. Forer, was an incomplete figure. When merchandising and royalties were added, the gross earnings came “close to $9 million total.” Mr. Forer then examined in detail expenses claimed and argued that they were excessive since these operating expenses included salary paid Manzarek and Krieger, which, according to Forer, were not legitimate expenses. Forer challenged yet another tabulation of expenses that showed a loss of $1.6 million because these expenses included legal fees. Forer thought the legitimate expenses were between $4 and $5 million.
Attorney William Briggs, appellants’ counsel, countered these arguments by first pointing out that Densmore was invited to join the band but refused to do so. “He [Densmore] knows the basic principles of someone being in a band. If you don’t play, you don’t get paid.” Mr. Briggs then stated that after considering the expenses, the band operated at a loss, that all that Manzarek and Krieger took home with them was $439,000. In substance, the arguments were that Densmore was entitled to earnings only if he performed with the band and that, in any event, there were no profits or that, at best, the profits were minimal.
6. Jury Instructions
Respondents state in their principal brief that after the trial court’s minute order of August 27, 2004 (see part 4, ante, of the Procedural History), they prepared with appellants jury instructions “under protest.” There is no transcript reference to tell us what this protest was and when it was made. In any event, if the respondents were protesting that the jury was also receiving instructions on equitable claims, the protest was fruitless in that the instructions covered claims that were unquestionably equitable in nature. Remarks by the trial court, which we set forth in part 7, post, of the Procedural History, suggest that, on the equitable claims, the trial court considered the jury’s role to be advisory, a matter confirmed in the statement of decision.
We summarize the salient aspects of the instructions that pertain to the causes of action on which Densmore and the Estates recovered favorable verdicts. In light of appellants’ principal contention that the jury’s verdicts exonerated appellants, particularly noteworthy in the instructions is that the jury was instructed that, in order to recover, respondents had to show that they had been harmed.
On the breach of the New Doors Agreement, the jury was instructed that they had to find that Manzarek, Krieger and Densmore entered into this agreement, that Manzarek and Krieger “failed to do something that the contract required him or them to do or did something that the contract precluded them from doing,” and that Densmore “[was] harmed by that failure.”
Respecting the breach of the Old Doors and DMC Agreements, the jury was instructed that they had to find that Densmore, the Estates, Manzarek and Krieger formed such partnerships, that Manzarek and Krieger “failed to do something that the contract required him or them to do or did something that the contract precluded him or them from doing,” and that Densmore and the Estates “were harmed by that failure.”
On the claim brought under Civil Code section 3344.1, the jury was instructed that they had to find that appellants used Morrison’s name or likeness and that the Estates were harmed by this use.
No instructions on money damages were given.
In the instructions covering the Lanham Act, the jury was instructed that respondents had “elected not to seek such damages” and that they were seeking instead “injunctive relief and [appellants’] profits.” The jury was instructed how to calculate profits; these instructions were associated with the instructions on the Lanham Act.
7. The Question of “Harm” Arises During Jury Deliberations; Counsels’ Responses to the Jury’s Questions
The case went to the jury on September 2, 2004. The jury deliberated on September 7, 8, 9, and 10. On September 13, 2004, the jury returned with some questions. In addition to requesting read-back of testimony, the jury apparently had questions on the topics of what constitutes a breach of contract and what was meant by “harm” in the instructions on breach of contract. Unfortunately, the record does not appear to contain the actual questions asked by the jury but the comments of court and counsel make it acceptably clear what those questions were.
After the questions were presented to the court, the jury retired to resume deliberations and court and counsel discussed the questions propounded by the jury. Attorney Mandel, counsel for Densmore and the Courson estate, noted that the jury was “wrestling with [the] concept[] of harm” and that “[w]hile the disgorgement and the unjust enrichment are equitable remedies that the court will deal with, I think they need to understand for purposes of this that [sic] includes that.” Attorney Briggs, appellants’ counsel, disagreed, stating that this was a breach of contract claim, which was a matter for the jury. The court stated: “This is my suggestion: There’s so much that they’ve asked for. Why don’t we slowly look at this because I’d like to look at your original briefs when [sic] this whole issue of contract versus equitable. I think we can work this out. And interesting [sic] to see what they come up with. [] Their clarification may save a lot of time for us. Why don’t we pass it for a moment.”
After some discussion, the court decided to allow counsel to present argument on the questions the jury had asked.
Mr. Mandel went first. He stated that there had been two breaches of the partnership agreement. They were that Manzarek and Krieger had decided to tour as The Doors in 2002 when there was no unanimous agreement that they could do so. The second breach was that, after the termination of the New Doors partnership, Manzarek and Krieger used the name The Doors. Mr. Mandel then turned to the question of harm:
ExpandCharacters Remaining:Bookmark: Check this box if you wish to bookmark this thread.Disable Smilies: If this box is checked, smiley emoticons will be disabled in your message.Lock Thread: If checked, this thread will be locked once you post.Sticky Thread: To sticky this thread, check this box.Announcement: To make this announcement on all boards, check this box.shortcuts: hit alt+s to send, alt+p to preview, alt+c to spell check, or alt+r to reset F “Question No. 5 is a significant issue, and that is that [respondents] were harmed by the failure.[ ] In evaluating whether [respondents] were harmed by the failure, you have to keep in mind who [respondents] are and secondly what does it mean to be harmed which is the question that has been asked. [] With respect to who are [respondents], keep in mind that with respect to some of the causes of action, John [Densmore] has sued individually and on behalf of partnerships. Harm in the context of this lawsuit does not necessarily mean economically damaged. It doesn’t mean that we have to show that John lost money as a result of the breach of either of??as a result of either of the breaches that we’ve described. [] We have to show that John or the partnerships were harmed. We think that they were harmed because what’s happened is one form of harm is that the alleged wrongdoer has done something wrong and has benefited at the expense of the person who is complaining or the partnership who is complaining. [] . . . . [] So we believe in this case that there are two separate breaches both of which result in the same harm, that is, [appellants] have profited to the tune of roughly $3 million. They ought not to keep that in light of their own failure to adhere to the contract. And that’s the amount that should be awarded either in favor of John or in favor of the partnership as the court will determine at such time as the court considers everything that is going on and we deal with the other issues that are in this case.” (Italics added)
The response to this argument came from Attorney Briggs, appellants’ counsel. Mr. Briggs began with the point that Densmore, as a professional musician, knew that if you don’t play, you don’t get paid??and that Densmore admitted that he didn’t play at the Harley-Davidson concert or thereafter. Mr. Briggs disagreed with the claim that this was a case of unjust enrichment. Giving the example of a person using a car belonging to someone else, and stating that under such circumstances the owner of the car should be compensated, Mr. Briggs stated “[t]hat’s not what happened here. [] . . . [] [T]here was no harm. There is no harm. If you’re looking for the type of harm that that jury instruction is requesting of you, it’s how much is he out-of-pocket? Absolutely nothing.” When Mr. Mandel gave his reply argument, he closed by stating: “Harm is as we’ve discussed, the disgorgement, economic benefit.” Thus, as both counsel framed the issue for the jury, the question was whether the harm was the profits the appellants made on tour or whether the harm was Densmore’s out-of-pocket loss. If it was out-of-pocket loss, there was no harm since there was no evidence of out-of-pocket loss.
The proceedings of September 13, 2004, were very significant. As counsels’ arguments framed the issue for the jury, the question was whether respondents had been harmed to the extent they did not share in the profits generated by appellants’ concerts or whether, as appellants contended, respondents had not been harmed because they had not sustained any out-of-pocket loss. Thus, the jury had a real decision to make: Was the harm the loss of profits or was it an out-of-pocket loss? Significantly, if it was the former, Mr. Mandel had argued without drawing an objection that the court would determine the amount that would be awarded to the partnership. Neither the court nor opposing counsel corrected Mr. Mandel’s statement. The jury was left with one impression and one impression only: they were not to determine the amount of lost profits.
8. The Special Verdicts
The case went to the jury on September 2, 2004; the jury returned its verdicts on September 27, 2004, having deliberated during most of September.
The jury rejected the following of respondents’ claims: (1) Lanham Act (Densmore and Estates); (2) common law unfair competition (Densmore and Estates); (3) Business and Professions Code section 17200 (Densmore and Estates); (4) breach of oral partnership agreements (the DMC and Old Doors Agreements) (Densmore); (5) common law trademark infringement (Estates); (6) state trademark dilution (Estates); (7) breach of contract (Estates); and (8) breach of implied contract (Estates).
Respecting Densmore’s action, the jury found that Manzarek and Krieger had breached the New Doors Agreement and also had breached their fiduciary duties under The Doors partnerships. These claims were set forth respectively in the fifth and sixth causes of action. The jury found that Manzarek and Krieger were liable to Densmore for these breaches but entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches.
On the Estates’ action, the jury found that Manzarek and Krieger had violated Morrison’s postmortem right of publicity and that they had breached their fiduciary duties under the Old Doors and DMC Agreements. These were the seventh and 10th causes of action. As with Densmore, the jury found Manzarek and Krieger liable to the Estates for these breaches and entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches.
On the cross-complaint, the jury found that Densmore had breached his fiduciary duties that he owed Manzarek and Krieger, that he also breached the covenant of good faith and fair dealing incorporated in the New Doors Agreement, and that Densmore was also liable on the promissory estoppel claim. These were the first, second and third causes of action of the cross-complaint. As with Densmore and the Estates, the jury entered a zero, in each instance, to the question “what amount, if any, do you award” for these breaches. The jury found for Densmore on the cause of action for a violation of Business and Profession Code section 17200. The sixth and seventh causes of action of the cross-complaint, for declaratory relief and a reformation of the New Doors Agreement respectively, were not submitted to the jury for decision.