Post by darkstar on Aug 7, 2005 18:54:21 GMT
LOS ANGELES SUPERIOR COURT JUL 21 2005
JOHN A CLARKE, CLERK
BY B. GREGG, DEPUTY
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES
STATEMENT OF DECISION
Judge: Gregory W. Alarcon
Case No. BC 289730
JOHN DENSMORE, individually and on behalf of California general partnership comprised of John Densmore, the Estate of Jam es Morrison, and the Estate of Pamela Courson, Raymond Manzarek and Robert Krieger,
RAYMOND MANZAREK, an individual; ROBERT KRIEGER, an individual; IAN ASTBURY, an individual; DOORS TOURING, INC., a California corporation; and Does 1 through 20 inclusive,
AND RELATED CROSS ACTION
PEARL COURSON, individually and as guardian ad litem for COLUMBUS COURSON, each on behalf of the DOORS MUSIC CO., a California general partnership and on behalf of THE DOORS, a California general partnership, and GEORGE MORRISON and CLARA MORRISON, each on behalf of the DOORS MUSIC CO., a California general partnership and on behalf of the DOORS, a California general partnership, and PEARL COURSON, individually and as guardian ad litem for COLUMBUS COURSON, and GEORGE MORRISON and CLARA MORRISON, individually with respect to the seventh cause of action,
Post by darkstar on Aug 7, 2005 18:54:58 GMT
STATEMENT OF DECISION
The above two cases were consolidated for trial which commenced on June 28, 2004. This Statement Of Decision is intended to address the issues in both cases.
In Densmore, et al v. Manzarek, et al, Case No. BC289730 (“Densmore Action”), plaintiff John Densmore (hereinafter “Densmore”), individually and in some instances on behalf of various partnerships, seeks injunctive relief, damages, and disgorgement of profits against defendants Raymond (hereinafter “Manzarek”), Robby Krieger (hereinafter “Krieger”), Ian Astbury (hereinafter “Astbury”) and Doors Touring, Inc., a California corporation. In the cross-complaint filed in the Densmore Action, Manzarek and Krieger seek damages and equitable relief against Densmore.
In Pearl Courson, et al. vs. Manzarek, et al., Case No. BC294495 (the “Estates Action”) the plaintiffs are Pearl Courson, individually and as guardian ad litem for her husband Columbus Courson (hereinafter the “Coursons”), and George and Clara Morrison (hereinafter the “Morrisons”), all individually and on behalf of certain partnerships (collectively “the Estates”). In the Estates Action, plaintiffs seek to recover damages and equitable relief against defendents Manzarek, Krieger and Astbury.
This litigation involves the determination of the relationships and agreements among the various parties and entities that have an interest in the assets and business of the American rock band The Doors. Among the issues to be decided are (1) whether the defendants are entitled to perform and record publicly as The Doors or The Doors of the 21st Century, (2) whether by doing so they have breached various alleged agreements among the parties, and (3) whether they have violated laws pertaining to the right to use the name and likeness of the late Jim Morrison. In their cross-complaint, Manzarek and Krieger allege, inter alia, that Densmore has breached certain duties by his refusal to agree to allow certain music of The Doors to be licensed for television commercials. Manzarek and Krieger also seek declaratory relief and reformation of a 1971 written agreement entered into by Densmore, Manzarek and Krieger.
II. Statement Of The Case
The Densmore Action was commenced on February 4, 2003. Densmore’s operative pleading is the Second Amendment Complaint. He seeks an injunction against the defendants, and an accounting, damages, and disgorgement of profits earned by them from what he contends to be the wrongful use of the name The Doors for touring, performing, and recording activities. In their cross-complaint, Manzarek and Krieger seek damages, injunctive relief, declaratory relief, and reformation of a 1971 written agreement entered into by Densmore, Manzarek and Krieger. The Fourth Cause Of Action (for intentional interference with economic advantage) was previously dismissed as a result of Densmore’s anti-SLAPP motion, which was granted by the court.
The Estates Action was commenced on April 23, 2003. The Estates seek injunctive relief. Damages, disgorgement of profits, accounting, and imposition of a constructive trust.
The plaintiffs in the Densmore action previously sought a preliminary injunction to enjoin the defendants from calling themselves The Doors or any name that included the name The Doors, and further sought to prevent the defendants from using the traditional logo of The Doors. Densmore’s application for preliminary injunction was denied on May 10, 2003, on the condition that the band call itself The Doors of the 21st Century.
Although Plaintiffs initially requested a trial by jury, during the jury trial, plaintiffs urged that the gravamen of their claims is equitable in nature as (1) the remedies sought sound in equity, and (2) certain alleged statutory violations also provide for equitable relief such as injunctions and disgorgement. The court agreed that there appears to be a confluence of legal and equitable issues, such that the jury should decide legal issues while reserving equitable issues for the court.
At the conclusion of trial, the parties attempted to agree on special jury instructions which would assist the court in subsequently determining the equitable issues. After considering counsel’s arguments and the extended duration of the trial, the court decided a general verdict was appropriate.
The Jury’s Verdict
One September 2, 2004, the jury began deliberations. On September 27, 2004, the jury reached the following verdicts:
Violation of Lanham Act No Liability
Common Law Unfair Competion No Liability
Bus. & Prof, Code Section 17200 No Liability
Breach of Oral Partnership No Liability
Breach Of Written 1971 Agreement Manzarek & Krieger liable
No Damages Awarded
Breach Of Fiduciary Duty Manzarek & Krieger liable
No Damages Awarded
The Morrison’s and The Courson’s Claims
Violation of Lanham Act No Liability
Common Law Trade Mark Infringement No Liability
Common Law Unfair Competion No Liability
Bus. & Prof, Code Section 17200 No Liability
State Trademark Dilution No Liability
Violation of Post-Mortem Right of Publicity Manzarek & Krieger liable
No Damages awarded. Astbury
Breach of Contract No Liability
Breach Of Implied Covenant No Liability
Breach Of Fiduciary Duty Manzarek & Krieger liable
No Damages Awarded.
Manzarek’s & Krieger’s Cross-Claim
Breach Of Fiduciary Duty Densmore liable
No Damages Awarded
Breach Of Implied Cov. Of Good Faith &
Fair Dealing Densmore liable
No Damages Awarded.
Promissory Estoppel Densmore liable
No Damages Awarded
Bus. & Prof. Code Section 17200 No Liability
Post by darkstar on Aug 7, 2005 18:55:42 GMT
On October 27 2004, counsel were permitted to state their interpretation of the jury’s general verdict and its effect on and its effect on the equitable issues and any causes of action to be decided by the court.
The court has considered the evidence presented by the parties and the jury’s verdicts on Densmore’s and the Estate’s claims. For each set of claims, the jury verdict found in favor of the complainants(s) on some causes of action (but awarded no damages) and against the complainants(s) on others. Defendents maintain that the jurys verdict is a complete vindication of their theory of defense and therefore this court should find for defendants on each cause of action, including the equitable claims that were never presented to the jury. Plaintiffs take the view that the verdicts were only advisory. They request that this court should rule in their favor on all causes of action, including the equitable ones.
STATEMENT OF FACTS
From 1966 to 1971 The Doors were a legendary rock band in America. The members were Jim Morrison (the vocalist), Densmore (the drummer), Manzarek (the keyboard player), and Krieger (the guitarist). Morrison died in 1971. He was survived by Pamela Courson who, while not legally married to Morrison, was found to be his surviving widow by the probate court of the Los Angeles Superior Court. She inherited his estate as the beneficiary of his will. Courson died in 1974 without a will. Through a settlement agreement, Courson’s estate was divided evenly between her parents and Morrison’s parents.
During Jim Morrison’s life, there were partnerships involved with the business activities of The Doors. After the death of Morrison, the three surviving band members entered into a written partnership agreement. Thereafter, they performed as the Doors for about two years. Except for a performance at their induction into the Rock and Roll Hall Of Fame in December 1992, and a subsequent performance in August 2000 with six different vocalists on the cable television station VH1, Densmore, Manzarek and Krieger never again performed together publicly as the Doors. Since September 2002, however, Manzarek, Krieger and Astbury have performed publicly as The Doors or The Doors of The 21st Century (hereinafter “D21C’). The actions brought by Densmore and the Estates seek to enjoin defendants from performing and recording as D21C or The Doors, claiming the defendants do not have permission from Densmore, the Morrisons, and the Coursons to use these names. Densmore maintains that the use of these names requires unanimous consent by the partnership and, in the absence of unanimity, defendants are in breach of the partnership agreements. Densmore’s claims raise issues as to the ownership of the name The Doors, the nature of the relationship between the parties, the rule of governance in decision making among the parties, if any, and trademark and unfair competition claims. In addition, the Estates raise further issues about the defendants’ use of the name and likeness of Morrison in their activities of performance and promotional activities.
Defendant’s cross-complaint raises separate issues that generally relate to the governance issues inherent in the underlying two actions. In 2001, two licensing opportunities to use their music for television commercials were offered. In the past, The Doors’ music had been licensed for dramatic films and television, but rarely for commercials. Densmore purported to veto the proposals, and Robby Krieger refused to support the proposals. Manzarek and Krieger seek to recover from Densmore the alleged lost profits resulting in Densmore’s veto. The effect of Densmore’s veto on the music license raises issues pertaining to the parties rule of governance as to who are the decision makers.
2. The Creation Of The Doors
In 1965, Morrison, Densmore, Manzarek and Krieger formed a band called The Doors. Manzarek and Morrison met in film school at UCLA. Densmore and Krieger had been friends in high school. Manzarek met Densmore and Krieger while attending meditation classes in Southern California and introduced Morrison to Krieger and Densmore. At the time, Morrison had received his bachelor’s degree from UCLA, Manzarek had a bachelor’s degree in economics from DePaul University in Chicago, Illinois and had also received a master’s degree from UCLA in film school. Densmore and Krieger had attended some college, but did not qualify for an undergraduate degree.
(NOTE: The term “governance” has been used through the papers and in the trial and refers generally to whether decisions are made by a majority versus unanimous vote and whether the Estates are included as decision making partners.)
3. The Doors Decide To Share Royalties Equally
In 1966, Morrison, Densmore, Manzarek and Krieger began performing publicity as The Doors. They filed a fictitious business statement. The Doors was a unique band in rock and roll history, not only for its memorable music, or the iconic superstar status and image of Morrison memorialized on T-Shirts and posters, but also for the band members’ egalitarian treatment of each other. For example, while Morrison was generally know as the poet/songwriter who wrote haunting lyrics, the band’s most famous song, “Light My Fire,” was actually written by Robby Krieger. Jim Morrison had a unique baritone voice and a gift for creating poetic lyrics, but each member of the group possessed a special talent that made the group unique. Manzarek had a vision fro the direction of the group, given his eclectic musical background in classical, jazz, and rock music and his gift of musical arrangement. His impressive educational background, including a bachelors degree in economics from DePaul, as well as a master’s degree in film studies from UCLA, coupled with the fact that he was older than the other members and a talented public speaker, made him the perfect spokesperson for the group. Krieger wrote many of the Doors songs and his mastery of the guitar reflected the influence of jazz, blues, rock and flamenco.
Densmore, the drummer and youngest member of the band, had a broad knowledge of jazz and rock styles. He also had a gift for arrangement, which he shared with Manzarek and Krieger. The Doors first single record, “Break On Through,” the subject of various causes of action in these consolidated actions relating to its possible licensing for a Cadillac commercial, is instantly recognizable by Densmore’s unique bossa nova drumming introducing the song.
Unlike other musical groups, wherein the songwriters carefully protect and insist on their music royalties based on their individual song writing and never share those royalties with the other band members who did not write the songs. The Doors were unique. Given the special talents of all of the members, in the spirit of unity, or as canny tactic to maintain harmony among the group, The Doors’ policy was to share equally all song writing credits, regardless of who wrote the music or the lyrics. Throughout the trial, Densmore poetically described each individual band member as a “facet of a diamond.”
Ray Manzarek described the unique relationship of the group as follows,
“See, here is the way it worked with The Doors. There are four guys in the band; each person is as essential as anybody else in the band. The drums are as important as the words. The words are as important as the guitar. The guitar is as important as the keyboard bass guy.
Each thing contributed its 25 percent……We each had our area of expertise. That was one quarter of the pie. You remove any one of those quarters and you don’t have anything.”
Ray Manzarek, The Doors Myth and Reality, The Spoken Word History, Audio CD (Monstersounds, 1996) (Side Two, “Making The Magic Circle”) (Emphasis added.)
In 1966, Max Fink served as legal counsel to the band when it entered into a recording contract with Elektra Records. The Elektra Records agreement was for six albums. The band was an immediate success. It was ultimately one of the most successful bands of all time.
The band’s first business manager and accountant was Robert Greene. He continued in that capacity until 1984. Since that time Jerry Swartz has been the business manager and accountant for The Doors. Not long after the Elektra contract was executed, Abraham Somer served as the band’s counsel. Somer continued until approximately 1984, when Gary Stiffleman and John Branca replaced him. Stiffleman continues to be the primary legal counsel for The Doors.
(NOTE: An example of Manzarek’s talent, sophistication, and extensive background in music is demonstrated by his recording of an electronic version of Carl Orff’s Carmina Burana (1935) produced by the esteemed Philip Glass in 1980.)
4. Abraham Somer Secures Publishing Rights From Elektra, and the Creation Of The Doors Music Publishing
In 1969, Somer secured from Elektra, all of the publishing rights to The Doors’ music. That same year, Somer created a partnership for Morrison, Densmore, Manzarek, and Krieger called Doors Music Company. The terms of the partnership were reflected in a written agreement signed by the four band members (hereinafter “DMC” or the “DMC Partnership”) The DMC Partnership was executed on February 8, 1969. Paragraph 6 of the DMC Partnership provided that management of the partnership would be decided by unanimous agreement of the parties.
At trial, Densmore, Somer, and Green testified that governance by unanimous agreement was consistent with the manner in which the band had conducted itself since its inception. Stiffleman and Swartz testified that unanimity was the rule of governance among The Doors’ members and that with respect to any significant opportunity to license music by the Doors, any member of The Doors had a right to veto any such proposal.
5. The Buick Car Commerical
In 1969, The Doors experienced perhaps their most significant internal rift involving the question of whether the group should sell its music for use in a car commercial. Manzarek, Krieger, and Densmore agreed that Buick should be allowed to use the hit song, “Light My Fire” in a television commercial for a the new Buick Opel automobile. Because Morrison was unavailable for reasons never clarified during the trial, the other band members gave consent. Several days later, Morrison learned of the decision and was furious. He believed that his partners had reneged on the rule of unanimity of failing to abide by ‘one for all, all for one,’ and had “sold out” to corporate America, “the Devil.” Light My Fire at 305-307. Morrison was so angry that he threatened to destroy an Opel on stage during the group’s future performances, and insisted that Somer rescind the agreement with Buick. The commercial was never aired, and apparently the band members never received any compensation.
Morrison sought the names of other lawyers from Somer to consult about possible legal action against his partners, but never initiated any legal action. On November 11, 1970, the DMC Partnership Agreement was amended to require that any decisions about licensing music require a unanimous vote signed by all of the partners.
From 1966 to the date of Morrison’s death, the Doors were a huge success, performing throughout the United States as well as abroad, selling millions of dollars worth of albums and merchandise. An no time prior to Morrison’s death did the band formally register the name The Doors with any state or federal agency.
(NOTE: Ray Manzarek characterized this incident in his autobiography as a “fiasco.” Manzarek, Light My Fire, My Life With The Doors (Putnam’s Son, 1998 at 305)
(NOTE: At trial, Manzarek said Morrison also objected to the commercial because his father drove a Buick.)
(NOTE: The testimony of various witnesses during the trial was not consistent as to whether a commercial ever aired, whether all the money was returned, whether money was paid to halt the agreement and other details as to how this commercial was stopped.)
6. New Orleans: The Doors Final Public Appearance (1970)
1970 was a difficult year for The Doors as a result of the arrest of Morrison for obscenity during a performance of the band in Miami. The arrest and subsequent trial, coupled with Morrison’s erratic behavior at concerts, made it difficult to get the type of bookings that The Doors had enjoyed prior to the Miami incident. In December 1970 The Doors performed in New Orleans. It was their last public performance due to Jim Morrison’s poor performance on stage, apparently the result of his severe alcohol addiction.
7. Morrison’s Poetry Album (1970)
At trial, Ray Manzarek testified about the formation of the Doors. He described Morrison’s poetry, which was later integrated in the Doors music. Morrison continued throughout his musical career to work on his craft as a poet in addition to his work as a musician. He published the poetry in limited printings and gave these publications to his friends. Morrison wanted to record his poetry without the group and agreed to a drastic cut in his customary salary to do it. On his birthday, December 8 1970, he recorded his poetry with the intent to include the material in an album.
8. Morrison Decides To Leave For France
In early 1971, Morrison announced to his fellow band members that he was going to move for a short time to Paris, France with Pamela Courson. He intended to leave for Paris shortly after the band finished recording their sixth album for Elektra, L.A. Woman.
9. The DMC Partnership Agreement Entered Into In March 1971, Effective As Of January 1, 1966.
At about the time, Somer prepared a partnership agreement for the Doors, for all purposes except music publishing. In March 1971, the four members of The Doors executed their written partnership agreement, effective January 1, 1966 (hereinafter the “Old Doors Agreement”). Somer testified that he explained the “Old Doors Agreement” to the four members of The Doors, and that it reflected the way the partnership had operated by oral agreement up until the time of its execution. It provided for unanimous agreement in the management of the business of the Doors.
10. The Administration Agreement Entered Into On March 8, 1971
On March 8, 1971, in anticipation of Morrison leaving the United States, The Doors entered into an Administration Agreement with Greene, their business manager, granting him exclusive authority to enter into licensing agreements for music of The Doors. However, to avoid what had happened in 1969 with regard to the Buick Commerical incident Greene was empowered to sign agreements for television and radio commercials only after receiving the written approval of all four partners. As of the date for the execution of the Administration Agreement, no Doors music was authorized to used for radio or television commercials. Densmore, Manzarek and Krieger all testified that while Morrison was alive, The Doors did not intend to authorize use of its music in radio or television commercials.
11. Amendment To The Old Doors Partnership Agreement (March 11, 1971)
On March 11, 1971, the parties executed a one-page amendment to the Old Doors Partnership Agreement. It sets forth a specific provision prohibiting the use of the name, The Doors, by any partner upon termination of the partnership for any reason other than the death of a partner. The amendment was prompted by a concern that after L.A. Woman was delivered to Elektra, Morrison might leave the band and form another band in Europe using the name “The Doors.” Manzarek testified that he signed the one-page amendment when it was prepared but did not read it and did not understand its purpose. Somer testified that he recalled some concern about the band splintering, and that the amendment, as well as all of the band’s agreements, were explained to the band members before they signed. The court finds Somer’s testimony credible and accepts it as true.
(NOTEL Paragraph 8 of Original Old Doors Agreement. Paragraph 2 of the Administration Agreement.)
12. Jim Morrison’s Death In Paris, France (July 3, 1971)
Morrison left for Paris in mid-march 1971. L. A. Woman was delivered to Elektra shortly thereafter. On July 3, 1971, Morrison died in Paris; the cause of death was listed as a heart attack. He was buried at Pere-Lachaise Cemetary. The grave site is a major attraction in Paris, even though other luminaries also buried in this Parisian landmark include Sarah Berhardt, Edith Piaf, Marcel Proust, Frederic Chopin, Henri Balzac and Oscar Wilde.
Music experts Nigel Williamson from England and Anthony DeCurtis of the United States testified regarding the iconic status of Jim Morrison, both during his life and for the thirty-three years since his death. Each expressed the opinion that Morrison and The Doors are likely more important and popular today than when Morrison was alive.
Jim Morrison left all of his property to Pamela Courson in his will. The DMC and the “Original Old Doors” partnership agreements provided for termination upon the death of a partner. Neither partnership had been wound up and dissolved. Partnership tax returns for the “Old Doors” have been filed since 1966, and partnership tax returns for DMC have been filed since its formation in 1969. After the death of Jim Morrison, Pamela Courson received K-1 tax schedules from the two partnerships. Following her death, the Morrison’s and the Courson’s received the K-1 schedules from the two partnerships
Post by darkstar on Aug 7, 2005 18:56:46 GMT
13. The New Partnership Agreement For The Surviving Members Of The Doors October 1, 1971
On October 1, 1971, Somer registered a new recording contract between Elektra and the three surviving members of the Doors for five albums, at a minimum guaranty of $250,000 per album. The three surviving band members continued performing without replacing Jim Morrison with another vocalist, choosing to sing vocals themselves. On October 1, 1971, a new written partnership agreement was entered into between among Densmore, Manzarek and Krieger for purposes of performing and recording as The Doors (hereinafter the “New Doors” partnership agreement.) The New Doors partnership agreement continued the unanimous agreement provision. In addition, the New Doors partnership agreement continued the same provision set forth in the earlier and recently signed one-page amendment to the Original Old Doors partnership agreement, namely that in the event of a termination of the partnership for any reason other than the death of a partner, none of the partners could use the name The Doors. It also provided that in the event of the termination of the partnership because of the death of a partner, the remaining partners might perform together but not separately using the name The Doors. Like the prior two written partnership agreements, the New Doors partnership was terminable at will by any partner.
While no written license permitting the three surviving members to use the name The Doors for recording and performing purposes was produced at trial, Manzarek, Kreiger and Densmore used the name without objection from Pamela Courson. She did not object to their activities although she was aware of the performances and recordings by the new band and saw them in Sausalito, California. No evidence was produced at the trial that there was any objection by anyone to the three surviving band members using the name The Doors for recording and performing purposes.
14. The Three Surviving Members of The Doors Release Two Albums as The Doors (1971-1972)
The three band members recorded two albums as The Doors: Other Voices (1971) and Full Circle (1972), and toured in connection therewith. They did not hire a new singer, sharing vocal duties between Ray Manzarek and Robby Krieger. The three surviving members of the Doors created yet another partnership, Alchemical, for purposes of owning the publishing rights to the music recorded on their two albums (similar to the situation with DMC and the music of the Old Doors.) Alchemical continues to exist today, and files tax returns with state and federal agencies. The New Doors albums were not a success, and the band members were not enthusiastic about proceeding further without a lead vocalist.
All of the original recordings of The Doors with Jim Morrison have been reissued and continue to be available for new audiences. The previously mentioned two albums without Jim Morrison have not be repackaged and reissued in the popular CD form as of the time of the trial.
(NOTE: Paragraph 6 of the New Doors partnership agreement. Paragraph 9 of the New Doors partnership agreement.)
15. The Surviving Members of The Doors Search For A New Vocalist In England (1973)
In 1973, the three surviving members of The Doors, along with Manzarek’s wife Dorothy went to England in search of a new lead vocalist. They failed to persuade Paul McCartney or Joe Cocker to join them and they were unable to agree on an unknown singer. At some point shortly after he arrived, Manzarek characterized this departure as “quitting the band.” Manzarek, Krieger and Densmore concluded that without Jim Morrison or a suitable replacement lead vocalist, they could not perform in the musical style that had made them so successful. The three surviving members of The Doors ceased performing and touring together at that time. Somer advised Elektra that Manzarek would not be recording with his band mates, “and that at the current time there in no plan for any of the aforesaid individuals to use the name ‘The Doors’”. The agreement with Elektra was terminated and the band forfeited its $750,000 guaranty for the three remaining albums.
At the time Manzarek left England with his wife Dorothy, the New Doors partnership agreement and the Alchemical partnership were not terminated. Manzarek did not consider terminating or dissolving the New Doors partnership. None of the professional advisors of The Doors were informed that Manzarek terminated the New Doors partnership. Through 2003 tax returns for the New Doors and Alchemical, the two partnerships owned solely by the three surviving band members, continued to be filed with state and federal authorities.
After Manzarek left England, Densmore and Krieger formed a new band named The Butts Band. It performed for a few years, released two albums and thereafter ceased to exist.
16. The Three Surviving Doors Reunite For American Prayer (1978)
In approximately 1978, Manzarek, Krieger and Densmore created and released a new album called American Prayer. It was intended to be the poetry album that Jim Morrison always wanted to produce. The basis of the album was the poems recorded by Jim Morrison on December 8, 1970, set to music performed by the three surviving band members. The Estate of Jim Morrison owned the poems, and Columbus Courson, as representative of the Estate, on behalf of the Morrisons and Coursons, contributed the poetry and participated in the production of American Prayer. The album enjoyed success.
17. The Surviving Members of The Doors Separate Projects
From approximately 1975 through 1990, the three surviving band members did not perform together in public. Each continued with his own endeavors, writing books, producing albums, performing music, and performing on stage. Manzarek occasionally performed with others including poet Michael McClure. Krieger performed with his own band, called either The Robby Krieger band or The Robby Krieger Organization. Densmore performed as a musician as well as an actor.
18. Apocalypse Now (1978) and The Doors movie (1991) The Doors Reintroduction to A New Generation
Two things occurred that caused The Doors to become even more popular than it had been when the original four members performed together. In approximately 1979, Francis Ford Coppola, directed the film Apocalypse Now, a modernized version of Joseph Conrad’s Heart of Darkness. The Doors’ song ‘The End’ became an integral part of the film. The movie and its soundtrack resulted in a great boost in the sales of The Doors music catalog. In approximately 1991, Oliver Stone directed the successful movie ‘The Doors’ which presents a dramatized account of The Doors from the beginnings of the band up to the death of Jim Morrison. While all of The Doors’ music was licensed for the film, Manzarek, Krieger and Densmore insisted that the classic Doors logo could not be used in any advertising for the film. This motion picture resulted in a huge boost in the sales of The Doors’ music catalog, and brought the popularity of the band again to the forefront with a soundtrack album containing original Doors compositions.
19. Previous Objections To Being Identified As The Doors With Less Than The Three Surviving Members Of The Original Band
In December 1992, The Doors were inducted into the Rock and Roll Hall of Fame. The ceremony was attended by the three surviving band members and Morrison’s sister Anne. The three surviving band members performed during the ceremony.
In 1997, the Robby Krieger Band scheduled a short tour in Denmark. Ray Manzarek was scheduled to be a guest musician. Manzarek became ill, however, and Densmore substituted for him. The show was billed as “Robby Krieger Band with special appearance by John Densmore of The Doors.” The following year, Robby Krieger and Densmore undertook another short music tour of Europe, and the show was billed as “Robby Krieger with John Densmore of The Doors.” At least one promoter identified the performers as The Doors. Densmore strongly objected and tore up some posters that contained the erroneous description. Later, Krieger and Manzarek performed in Mexico, and again the performance was occasionally promoted erroneously as The Doors. Posters depicting the performers as The Doors were destroyed at Densmore’s request.
20. The VH-1 Storytellers Performance of “The Doors” 2000
In August 2000, cable television station VH-1 produced for its series Storytellers, a one-time studio concert of The Doors billed as a “celebration.” Manzarek, Krieger and Densmore performed together along with six lead vocalists, each of whom alternated playing lead vocalist on selected hits of The Doors. One of the vocalists was Ian Astbury, then the lead vocalist of a rock band called The Cult. The performance was recorded and later released on DVD, VHS and compact disc. The opportunity to participate in this venture was the result of the efforts of Tom Vitorino, an assistant to Krieger.
Prior to the time of the VH-1 Storytellers performance, Densmore and Manzarek had each written autobiographies detailing their experiences with The Doors. Both books featured a cover photograph of the author taken with Jim Morrison and both books took their titles from hit songs of The Doors: Riders On The Storm (Densmore , 1990) and Light My Fire (Manzarek, 1998). Testimony by Densmore and Manzarek at trial revealed that the two autobiographies were the source of friction between the two and their subsequent estrangement.
As of the beginning of 2001, The Doors’ music by the original four band members had sold more than 50 million albums. Millions of dollars worth of merchandise was sold depicting the band name and images of Jim Morrison, and millions of dollars in royalties were paid to The Doors, (including $3 million that had been advanced by Signatures Network on December 31, 1998.) Except for the VH-1 Storytellers performance and The Rock and Roll Hall of Fame performance, Densmore, Manzarek and Krieger did not perform together. They pursued their own careers.
Neither the Old Doors partnership agreement nor the DMC partnership agreement, as entered into by the original four band members, had ever been terminated, dissolved, or wound up. The “New Doors” partnership agreement and the Alchemical partnership also have not been formally terminated, dissolved or wound up. From the inception of each of the partnerships until after 2000, federal and state tax returns were filed annually by each of the four partnerships, and K-1 schedules were delivered yearly to each of the participants. Each partnership has always been represented by the same legal counsel, the same accountants, and the same business managers. In addition, Manzarek, Krieger and Densmore also had consistently been represented by professional managers, principally Danny Sugerman from the early 1980s.
The Estates were also recipients of K-1 partnership schedules each year. Legal counsel principally Mark Hurwitz in the later years, continuously represented the Coursons. The Morrisons have been represented by the same law firm, Weinstock, Manion, Reisman, Shore & Neumann, from the time of Pamela Courson’s death in 1974. From 1984, Gary Stiffleman and his law firm represented the various Doors entities and some of the members personally. There is extensive correspondence from Stiffleman over the years referred to the Estates as partners. Greene and Swartz, the accountants and business managers over the years, and Somer, the attorney for many years, all testified that the Estates were partners of the Old Doors and DMC.
Post by darkstar on Aug 7, 2005 18:57:22 GMT
21. Attempt To Register The Name The Doors (1998)
In 1998, efforts finally were undertaken to register the name The Doors with the United States Patent and Trademark Office. Michael Grace, a trademark specialist, prepared the application for registration. The owner of the name The Doors is listed in the application as a California general partnership composed of the three surviving members and the two Estates. Grace testified that the information on the application was listed correctly, as the application was to be signed under penalty of perjury. Grace testified that he did not apply for registration of The Doors as a performing band because the band was not then performing. With the exception of a single Pirelli tire commercial using the song “Riders On The Storm” in England after the death of Jim Morrison, The Doors never permitted their music to be licensed for use in a television commercial or radio commercial.
Nothwithstanding the refusal to license music for commercials, The Doors continued to be extremely profitable. Income was derived from the sale of albums, compact discs, videotapes of concerts, DVD’s, merchandise, and the licensing of music for movies and television. Up to the time of the trial, The Doors, through the partnerships, continue to earn several million dollars per year.
22. Cadillac Offers 15 Million Dollars Fro Use of the song “Break On Through”
In 2001, The Doors received a significant offer from the Cadillac motor division of General Motors. Cadillac sought to use one of The Doors’ most successful songs “Break On Through” for a worldwide campaign to sell cars. The amount offered for the exclusive right to use the song was $15 million dollars. Neither Densmore nor Krieger was in favor of granting the license. Krieger was “on the fence” about the offer, but tending to “side” with Densmore. Densmore voted against the opportunity, exercising his right to veto. The basis for his veto was: (1) the band members had never allowed their music to be used in commercials except the Pirelli tire commercial abroad, (2) a car commercial caused the internal dissension in 1969 when Jim Morrison was adamantly against a proposed Buick commercial for similar reasons, (3) The Doors were making plenty of money without “selling out” to corporate America, and (4) permitting the use of the song in a commercial was antithetical to the legacy of the band and the memory of Jim Morrison.
Manzarek was enthusiastic about excepting the offer. Stiffleman solicitied the Morrisons and Coursons who were also in favor or accepting the offer. Manzarek further attempted to have the Coursons and Morrisons influence Densmore and Krieger to change their minds. However, they were not successful and the Cadillac offer was not accepted.
Manzarek testified that not long afterward there was an offer from Apple for the use of a Doors song in exchange for the payment of 4 million dollars. That offer was rejected because there was no unanimous vote in favor of accepting it.
23. The Nation Article
On July 8, 2002, Densmore authored an article that appeared in The Nation magazine, entitled, “Riders On The Storm.” The article was later reprinted in Rolling Stone magazine. In the article, Densmore expressed his views concerning his opposition to the use of music in commercials by noted musicians and bands. He expressed his pride in the fact that he and Krieger refused to approve of the commercial opportunities described above.
The failure to accept these two offers was not then the subject of litigation. The decision of Krieger and Densmore to vote against accepting them was accepted by the Coursons and Morrisons and at least initially by Manzarek. Admiral Morrison and the legal representatives of the Morrisons and Coursons testified that they respected the right of any partner to veto such a proposal.
24. Harley Davidson Concerts (September 2002)
In early 2002, Tom Vitorino, Krieger’s manager, received a request for The Doors to perform in September 2002 as headliners at the 100th Anniversary celebration for Harley-Davidson in Fontana, California. The band was offered $150,000 for the performance, and later added an additional performance in Ontario, Canada, for which the band was offered $200,000.
The band’s usual guaranty ranges from $2,000 to $10,000.
Other than the Storytellers performance with a handful of lead vocalists and their brief performance at the Hall of Fame induction ceremony, The Doors had not performed publicly since the 1970s.
At the time of the Harley Davidson proposal, Densmore testified that he was suffering from the ear condition, tinnitus, the onset of which occurred during the Storytellers performance. He was unsure of his ability to play, or if he even wanted to play as The Doors, inasmuch as without Jim Morrison as the vocalist the group would not be The Doors, He also remembered the lack of success in 1971-1973 when the three surviving members performed. With some reluctance, Densmore agreed that the band would accept the Harley-Davidson performance offer, but insisted on a provision that all advertisements contain the conspicuous statement: “due to health conditions” Densmore might not appear for the performance. Harley-Davidson agreed to the added inclusion that in such an event a “world-class” drummer would replace Densmore. In addition, the agreement with Harley-Davidson specifically provided that the traditional Doors logo, which appeared on the first (The Doors), second (Strange Days), third (Waiting For The Sun”), fourth (Soft Parade)) Door’s albums, could not be used for advertising purposes. The Estates were never consulted about this proposed agreement.
As the concert dates approached, Densmore testified that his ear condition prevented him from performing. He rejected the suggestion of various enclosures to insulate him from the loud music if he chose to perform.
Stewart Copeland, a successful music composer and “world-class drummer” who had been the drummer for the rock band The Police, was hired as the replacement drummer fro the Fontana concert. Ian Astbury, who had performed with the band at the Storytellers celebration, was hired as lead vocalist for the performance. Both were paid fixed salaries for their performances. Astbury and Copeland testified that at the time they were hired, neother knew of any other Doors concerts being planned, and did not learn of the Canada concert for Harley-Davidson until after the concert in Fontana. The Fontana concert for Harley-Davidson took place on September 6, 2002. The Ontario, Canada concert took place on September 28, 2002.
Densmore testified that at the time he consented to The Doors performing for the Harley-Davidson concerts, he was unaware of any other contemplated performances by The Doors. Manzarek had no communications with Densmore. Krieger assumed Densmore knew of their plans to tour. Astbury and Copeland were unaware of the plans to tour.
(Note: At trial it was revealed through music experts Nigel Williams and Anthony DeCurtis that the position not to approve use of a performer’s music in commercials was a view shared by other notable performers such as The Beatles (before their publishing rights were sold to Michael Jackson), Neil Young, Bruce Springsteen, John Mellencamp, Bonnie Raitt, Jackson Brown, and Tom Waits.)
25. Changes In Management For Krieger and Manzarek (July 2002)
Jerry Swartz, the business manager and accountant for The Doors, caused defendant Doors Touring, Inc., to be formed by Stiffleman’s law firm at the end of July 2002. Manzarek and Krieger were the owners of Doors Touring, Inc. At the time Doors Touring, Inc. was created, Swartz had no idea that performances were contemplating anywhere except the two Harley-Davidson concerts in September 2002. Swartz continued as accountant and business manager for The Doors’ partnerships. In addition, shortly after the Fontana performance, and before the Canada performance, Danny Sugerman’s services in connection with Harley-Davidson and Doors Touring, Inc. were terminated by Manzarek and Krieger. Robby Krieger’s band manager, Tom Vitorino was hired to be the band manager for the new group.
Ian Astbury testified that even after the concert in Canada, he did not understand that a decision had been made for the band to become a touring band. Copeland sent a memorandum to Manzarek, Krieger and Vitorino that raised questions about what the band’s name would be if they began touring. And whether there a trademark question would arise if they called themselves The Doors or the “something Doors,” He was concerned whether they would have to compensate the “Old Doors” if they did so. He also raised the question of whether they would be required to secure the consent of the Estates and whether unanimous agreement was necessary. He also testified about a meeting at his home when he and the other band members worked on his computer, experimenting with possible new band names. Copeland also testified that after the Canadian performance for Harley Davidson, he understood that he was a member of the band, not a hired musician.
At this time, an interview of Manzarek appeared in Billboard magazine, in which he said that Stewart Copeland was The Doors drummer from now on, which Densmore believed meant that he was essentially “fired” as the drummer of The Doors.
(Note: The Soft Parade album has The Doors logo on the back of the record (or inside of the CD) but the word “the” is missing. The traditional Doors logo is on the label affixed to the compact disc of all of The Doors CDs.)
26. Krieger Informs Densmore of Tour, Accord Reached
After one or both of the Harley Davidson concerts, Krieger approached Densmore and told him that Manzarek and Krieger intended to go on tour. No further details were given.
Densmore told Krieger that he had no objection to Manzarek and Krieger performing as The Doors provided (1) that a modifier be inserted in the name to indicate that this new band was distinguished from the original Doors, and (2) that the band not use the traditional Doors logo, which had earlier been prohibited for use in the movie The Doors, as well in the contract for the Harley Davidson concerts. Densmore testified that he believed that Krieger had agreed to these conditions. According to Krieger’s testimony, he understood that words were to be included in the name to distinguish the band from the original Doors.
27. Alternate Logos Explored October 2002
In October 2002, Manzarek hired Tommy Gear, a graphic designer, to prepare logos and insignias for a band called “The 21st Century Doors.” Gear met twice with Manzarek, who rejected the designs. Kirby began to book performances for the new band. Until May 10, 2003 Kirby and his firm always referred to the band as The Doors, and never were told to call them anything else. In addition, Bill Young Productions was engaged to prepare print advertising materials (hereinafter “admats”) for newspaper ads, a form audio spot for radio commercials, and a form television spot for television commercials. In December 2002, the services of Tommy Gear were terminated. All of this activity occurred without the knowledge of Densmore or the Estates.
28. Advertising On The Offical Doors Website
The first concert booked by Kirby was at the Palms Hotel in Las Vegas, on December 8, 2002. At about the same time, Manzarek and Vitorino, acting for Manzarek and Krieger, began to instruct Todd Gray, the webmaster of The Official Doors website, to announce upcoming performances by the 21st Century Doors. Densmore expressed concerns about the use of the official website for an unofficial band. In addition, Vitorino instructed the Webmaster to send e-blast messages to The Doors e-mail list of registered fans. The matter was resolved by Todd Gray limiting references to the new band’s name to the “personal pages” of Manzarek and Krieger.
(Note: The Doors maintain a presence on the World Wide Web, at www.thedoors.com
. Official Doors Archivist Todd Gray is the webmaster. In addition o an extensive website, with personal pages for each of the three surviving members, one can purchase music, merchandise, and obtain current news. The website also has a message board system that allows fans to interact with one another. The server for the official website of The Doors received approximately 400,000 visitors a month.)
Post by darkstar on Aug 7, 2005 18:57:57 GMT
29. Performance of “The Doors” at the Palms Hotel (January 19, 2003)
Densmore began to receive calls about The Palms Hotel billboard announcing a performance by The Doors. Resiman learned from someone of the same billboard. A series of discussions then began between Densmore and Krieger and Vitorino, about the use of the name The Doors by Manzarek and Krieger. Densmore did not know that other performances were contemplated.
30. “The Doors” Strange Days Advertisement
On January 19, 2003, an advertisement appeared in the Los Angeles, announcing a concert performance by The Doors at the Universal amphitheater in Los Angeles, California on February 7, 2003. The advertisement identified the band solely as The Doors, used the traditional Doors logo and backdrop of an outtake photograph of the session of the original group’s second album (Strange Days), and depicted a picture of Manzarek, Krieger, Astbury and Copeland, with their names printed thereon. Densmore testified that he felt betrayed by Krieger, because he had not abided by the agreement to use a modifier in the name and not to use The Doors logo.
Densmore threatened to get “heavy-handed” if the situation was not “fixed.” Vitorino testified that he tried to appease Densmore. Krieger testified that he many have “forgotten” to make changes to the name of the band. Densmore testified that he received calls and letters reflecting the belief of others than The Doors were performing, or that Densmore was performing with The Doors as well.
The advertisement that appeared in the Los Angeles Times was prepared by Bill Young Productions, with the approval of Manzarek and Krieger. The advertisement used the traditional Doors logo, and underneath the logo, in much smaller print, the words “21st Century” and “Live.” The Bill Young Productions records reflect that this admat was prepared and completed by November 13, 2002. The difference between the January 19, 2003 advertisement and the November 2002 admat was the use of the phrase at the top “Witness Rock & Roll History,” instead of the phrase “The Ceremony Is About To Begin…..Again,” which appeared on advertisements for subsequent performances.
(NOTE: Stewart Copeland was terminated soon after this ad. Ty Dennis, a drummer from Robby Krieger’s band, replaced him.)
31, “The Doors” Perform On Television
At about the same time, Manzarek, Krieger and Astbury appeared and performed on three national late-night television shows, including “The Tonight Show with Jay Leno” (January 16, 2003), and The Late Late Show with Craig Kilborn” (January 31, 2002), and “Last Call with Carson Daly” (February 21, 2003). In all of these performances, the defendants were identified and announced as The Doors.
31. Litigation Initiated By Densmore February 4, 2003
Densmore commenced this litigation on February 4, 2003, just before the Los Angeles concert. Since the February 7, 2003 concert in Los Angeles, Manzaek and Krieger, and Astbury had continued to perform throughout the world. The group has performed in more than 65 concerts in approximately 2 years. It has grossed more than $8 million and the performances have generated more than $2.7 million in profits, net of normal expenses, legal fees for this litigation, and salaries paid to Manzarek and Krieger. In addition, Manzarek and Krieger have received $260,000 in tax credits from taxes paid in foreign countries, and have earned an additional $275,000 from Diamond Night, LLC, and LLC owned by them that provides services abroad for their concerts. These figures do not include an additional $1.5 million or so that was generated from the concerts Manzarek and Krieger participated in during the trial and thereafter. During this period of time, Astbury received a salary that totaled in excess of $1.1 million.
(NOTE: Jay Leno described the band as having been: (1) “reunited after 30 years,” (2) “one of the greatest rock and roll bands ever,” and (3) reminisced that he had seen the band in his senior year in high school. The original Doors logo is visible on the bass drum. Minus the “wavy gravy” word “the.”
Craig Kilborn described the group as a “brand new version of the one of the greatest rock and roll bands of all time.” The original Doors logo appears to be visible on the bass drum, but it is unclear what font the word “the” is.
Carson Daly described the group as “a bit of an updated version, same great sound, ‘The Doors’ and he later announced them as “one of the biggest names in rock history.” Again, the original Doors logo is visible, minus the wavy gravy word “the.”
32. The admats and radio spots prepared by Bill Young Productions have been altered a few times prior to this litigation. The original television and radio spots prepared by Bill Young Productions and sold to concert promoters, identified the defendants’ band as The Doors, and identified the concert as the 21st Century Live Tour. At least by June 9, 2003, after this court’s earlier order, a revised spot was created identifying the band as The Doors of the 21st Century (as evidenced by the Clear Channel promotional ad).
On February 20, 2003, after Densmore initiated this action at the direction of defendants Manzarek, Krieger and The Doors Touring, Inc., Bill Young Productions changed the admat to (1) eliminate the photo of the band members, (2) make clearer the out-take photo from the Strange Days album cover, (3) identify at the bottom the names Manzarek, Astbury and Krieger, (4) rotate the line through the two letters “o” in the word Doors, from the diagonal line that appeared in the traditional logo to one that was vertical only, (5) relocate the words “21st Century Live,” but continue to have them in a different font than the logo, and in much smaller font size, (6) change the font style of the word “the” in the logo, and (7) use the phrase “the ceremony is about to begin….again” in lieu of “witness rock & roll history.” This was the only approved admat for defendants’ concerts, until May 15, 2003. At that time, a change was made to the existing admat by adding in small type the words “of the” before 21st Century and deleting the word “live.” However, this was done only for admats to used in “all markets EXCEPT California.” Another admat, the “California version only,” was created at the same time and changed the font style completely (to the one from The Doors’ L.A. Woman album) and relocated the words “of the.” Those admats continued to be used up to the time of trial.
The defendants’ band has released compact discs and “downloading” opportunities for many of their concerts since December 31, 2003 as well as a DVD of one of their concert performances titled L.A. Woman LIVE. A video of their concert in Japan has been aired on MTV in Japan, with the rights soon to revert to the defendants.
(NOTE: Jim Morrison wrote a poem entitled “The Celebration of the Lizard” in which there is a phrase “Is Everybody In? The Ceremony Is About To Begin.” Jim Morrison used this phrase in The Doors concerts. The poem is printed on the inner sleeve of the third Doors album Waiting For The Sun, released July 1968, it was used in the record Absolutely Live, released in July 1970. It also begins the American Prayer, released November 1978. Jim Morrison repeated “Is Everybody In?” three times before starting “the ceremony is about to begin.” It also begins The Doors Collection in the first song of the video collection titled Dance On Fire.)
33. Jim Morrison Image Displayed At The Concerts
In approximately 30 concerts by this group, the image of Jim Morrison was displayed to the audience from 30 to 90 seconds at the inception of the concert. Posters of the admats are prominently displayed at some concerts (on which there is depicted the out take of the Strange Days album cover, which in turn depicts the image of the original band members.) An ad for the Universal Amphitheater concert used Jim Morrison’s picture. Jim Morrison’s voice singing Doors’ songs was used in the advertising for the band in several cities on the tour. Further, with respect to the new vocalist, Ian Astbury, Ray Manzerek was quoted stating that Astbury was the “reincarnation of Jim Morrison” and noting his “transformation” from lead singer of The Cult to an “uncanny resemblance of Jim Morrison.”
The merchandise sold at these shows included T-Shirts. Two of the shirts displayed on the front of the shirt in large red lettering, Doors with a small white letter “the” above and an equally small “21st Century” below the red lettering. Perched on the red large “D” in Doors is an iguana. Jim Morrison’s alter ego was the Lizard King. This characterization originated from a line from his poem “Celebration Of The Lizard” which states “I am the Lizard King. I can do anything.” The next T-shirt has the original Doors logo with the exception that the “the” is in traditional font rather than the original ‘wavy gravy’ font and the “D” is lowered. Underneath the word “Doors “ is “21st Century” written in a different and small type font from that the word “Doors.” On the back of the T-shirt is the phrase, also in red letters, is “No One Here Gets Out Alive.” This is the title of the most popular biography written about Jim Morrison by Jerry Hopkins and Danny Sugarman (Warner Books, Inc. 1980)
(NOTE: In the DVD L.A. Woman Live, in the final song “Soul Kitchen” there appears to be a staged rush of the audience by fans, many of whom are wearing the merchandise shirts presumably sold at the show. Close to the end of the song, a person on stage waves a flag that has an image of Jim Morrison. In the audience, a large flag is draped displaying the most famous “young lion” photograph of Jim Morrison stating “American Poet” and “1943 to 1971”. The camera holds on both of these images more than once.
The Strange Days record cover depicts a Felliniesque scene of a small circus with all of the performers performing their various acts in a deserted street location. To the right of the photograph is a poster which is a black and white photograph of the group, which has the traditional font The Doors and a sticker stating Strange Days placed on the bottom of the poster diagonally.)
Finally the last T-Shirt introduced into evidence has the same traditional font with the same exceptions as noted regarding exhibit 304, a color drawing of a nymph-like figure below and below her as the words “Let The Ceremony Begin….Again.” On the back of the T-Shirt are the words “birth and death and enlightenment.”
The DVD L.A. Woman LIVE has the traditional Doors logo with the exceptions that the word “the” is not in the “wavy gravy” font and the “o” is not in Doors and been changed so that they are vertical rather than diagonal and below that, in much smaller lettering and in different font is “Of The 21st Century.” The original album L.A. Woman had as an insert a high contrast photograph of a woman who appears to be placed in a crucifixion pose on a telephone pole. On the DVD there is what appears to be an airbrushed and more abstract female figure with long flowing hair that has her arms stretched but not connected to any object. In the background are palm trees and bordering the cover is a frame of silver barbed wire. The original L.A. Woman album’s color scheme is a burnt sienna and yellow; the DVD is a dark metallic red and silver. On the back of the DVD, Ray Manzarek describes the contents of the DVD as “the tour that never was” explaining that Jim Morrison died before the songs could be performed live and “hope he will be pleased.”
The majority of the songs on the DVD are songs from L.A. Woman with the exception of songs from earlier Doors records that include “Roadhouse Blues,” “Break On Through,” “Love Me Two Times,” Light My Fire,” and “Soul Kitchen.” No songs are included from Other Voices or Full Circle.
(NOTE: Manzarek is quoted on the back of the DVD cover that it is “L.A. Woman in its entirety” but the DVD seems to omit “Crawling King Snake.”)
Post by darkstar on Aug 7, 2005 18:58:35 GMT
III. IDENTIFICATION OF ISSUES TO BE DECIDED BY THE COURT
This case was tried first to a jury. At trial, but during a proceeding outside the presence of the jury, plaintiff argued that this case involved principally equitable claims. Defendants objected and stated that it was a mix of legal and equitable causes of actions. The jury returned a general verdict. This court must now examine the claims and determine which ones are equitable. This is significant because, unlike federal law, a judge’s findings of fact on equitable matters are binding on the jury. Dills vs. Delira Corp. (1956) 145 Cal. App. 2d 124, 129, compare Beacon Theatres vs. Westover (1959) 359 U.S. 500, 510-511 (legal issues must generally be tried by the jury before the equitable issues are tried by the court.) See also Dairy Queen, Inc. vs. Wood (1962) 369 U.S. 469, 477. While generally equitable issues are tried first, this court has discretion as to the order of proof. Evidence Code Section 320 Heppler vs. J.M. Peters Co., Inc. (1999) 73 Cal. Appl. 4th 1265, 1285.
As to the question whether the plaintiff’s claims are equitable in nature was not raised until trial began, this court proceeded with the jury first. Because this court proceeded with the jury first, California law further instructs that the court cannot ignore the jury’s verdict and grant equable relief inconsistent with the jury’s verdict. Huges vs. Dunlap (1891) 91 Cal 385, 388. It is significant to note that the verdict reached by the jury was a general verdict. No special verdicts were submitted to the jury.
The next issue raised which has been the subject of lengthy oral argument and recent additional briefing was whether the causes of action addressed by the jury’s verdict were legal or equitable in nature. The plaintiff’s position is if they were equitable, then the verdicts are advisory, and this court is not bound by them. The defendants counter that the jury reached verdicts on legal issues, and their findings, in particular a finding of no damages, is binding on this court. The difficulty with adopting the plaintiff’s position is that the use of an advisory jury would be permissible if it were clearly stated and understood by all sides that such a procedure was being employed. In this case, there was never an understanding that counsel were presenting their case to an advisory jury. This court cannot treat the verdicts as to legal causes of action as advisory without violating the right to trial by jury. In the legal causes of actions, the court intends to enter a judgment consistent with the jury’s verdicts.
(NOTE: The comments in the California Practice Guide state “(Advisory juries are rarely used. When they are used, it is often where there is a doubt whether a particular cause of action (among many) is legal or equitable. Using an advisory jury, but not informing the jury that its verdict is only advisory, allows the judge to avoid the automatic reversal that would follow if the judge was wrong about the right to a jury trial. (This does not work, however, where the judge disagrees with the verdict…in which case, the court must ‘bite the bullet’ regarding jury entitlement.) (Civil Trials and Evidence, Section 2:171, pages 2-30-31.)
The Court’s conclusions and decisions are as follows:
A. Densmore’s Causes Of Action
1. First Cause Of Action For Violation Of Lanham Act
This action is brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. The jury found in favor of defendants. The court finds that the Lanham Act is a legal claim. Dairy Queen vs. Wood (1962) 369 U.S. 469. The court enters judgment in favor of defendants.
2. Second Cause Of Action For Common Law Unfair Competion
This action us brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. The jury found in favor of defendants. The court enters judgement in favor of defendants.
3. Third Cause Of Action For A Violation Of Business and Professions Code Section 17200
This action is brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. It is also the Fourth Cause Of Action of the Estates. The jury found in favor of defendants. The court enters judgement in favor of defendants.
4. Fourth Cause Of Action For Breach Of Oral Partnership
This action is brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. The jury found in favor defendants. The court enters judgment in favor of defendants.
5. Fifth Cause Of Action For Breach Of The 1971 New Doors Agreement
This action is brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. The jury found in favor of Densmore. No damages were awarded. The court finds this is a legal claim and the jury’s verdict that there was a breach is binding on this court. Ceriale vs. Superior Court (Taback) (1996) 48 Cal. App. 4th 1629. 1634. This cause of action is unique to Densmore, as only he, Manzarek and Krieger were partners of the 1971 New Doors. The court agrees with the jury and finds that defendants Manzarek and Krieger breached the 1971 Agreement in two repects: (1) the 1971 agreement was not terminated in 1973, but rather in April 2003, and (2) the rule of governance for the partnership was unanimity. While the 1971 partnership existed, i.e., prior to April 18, 2003, Manzarek and Krieger needed the permission of Densmore to tour using the name The Doors. They did not secure Densmore’s permission, other than for the two Harley-Davidson concerts. The failure of Manzarek and Krieger to do so breached the written New Doors agreement, constituting the first breach.
The second breach occurred as a result of the use of the name The Doors after the New Doors agreement was terminated effect April 18, 2003. This was a violation of the post-termination prohibition of the written agreement.
Judgment is entered in favor of Densmore. The equitable remedies of disgorgement of the profits and permanent injunction are ordered.
6. Breach Of Fiduciary Duty
This action is brought by Densmore individually and on behalf of the Old Doors and DMC partnerships. The jury found in favor of Densmore. No damages were awarded. To the extent that Plaintiff is seeking equitable damages, those damages would be duplicative of those awarded in the fifth cause of action and therefore no damages are awarded on this claim.
B. The Estate’s Causes Of Action
1. First Cause Of Action For Violation Of Lanham Act
The jury found in favor of defendants. Judgment is entered in favor of defendants.
2. Second Cause Of Action For Common Law Trademark Infringement
The jury found in favor of defendants. Judgment is entered in favor of defendants.
3. Third Cause Of Action For Common Law Unfair Competition
The jury found in favor of defendants. Judgment is entered in favor of defendants.
4. Fourth Cause Of Action For Violation Of B & P Section 17200
The jury found in favor of defendants. Judgment is entered in favor of defendants.
5. Fifth Cause Of Action For Violation Of B & P Section 17500 (False Advertising)
Counsel and the court agree that this is an equitable claim, removed from the jury’s consideration. The court finds that use of the name The Doors by defendants is a violation of B & P Section 17500. By engaging in advertising which prominently displayed the logo of The Doors, in The Doors’ well-known type font, and minimizing in a different font the words “21st Century” or “of the 21st Century,” coupled with the use of the out-take photograph from the Strange Days album cover, further permitting the dissemination of radio and television ads prepared by Bill Young Productions that identified the band as The Doors and the tour as the 21st Century Live tour, the defendants have engaged in false advertising.
The court finds Manzarek and Krieger liable for false advertising. The court finds in favor of Astbury and against the Estate.
A permanent injunction shall issue in favor of the Estates and against Manzarek and Krieger enjoining them from using the name The Doors or any name containing The Doors, or using the name, voice or likeness of Jim Morrison to promote their concerts.
6. Sixth Cause Of Action For State Law Trademark Dilution In Violation Of B & P Section 14330.
The jury found in favor of defendants. The court finds is a legal claim. Judgment is entered in favor of defendants.
7. Seventh Cause Of Action For Violation Of Right To Publicity
The jury determined that the defendants Manzarek and Krieger violated the Morrisons’ and Coursons’ interest in the right under the Astaire Celebrity Image Protection Act, as codified under California Civil Code Section 3344.1. The jury also determined no liability against defendant Astbury. The court finds this is a legal claim. Abdul-Jabbar vs. GMC (9th Cir. 1985) 85 F. 3d 407, 416. Judgment is entered in favor of the Estates against defendants Manzarek and Krieger. Judgment is entered in favor of Astbury and against the Estates. In order to find defendants Manzarek and Krieger liable under that Section, the Jury had to determine the following elements: (1) that Ray Manzarek and Robby Krieger knowingly used Jim Morrison’s name, voice, photograph, likeness on merchandise or to advertise or sell products or services; (2) that Ray Manzarek and Robert Krieger’s use of Jim Morrison’s name, voice, photograph, or likeness was directly connected to Ray Manzarek and Robby Krieger’s commercial purpose; (4) that the use did not occur in connection with a news broadcast or account, a public affairs broadcast or account, a sports broadcast or account, or a political campaign; (5) that the Morrisons and Coursons were harmed; and (6) that Ray Manzarek and Robby Krieger’s conduct was a substantial factor in causing the Morrisons’ and Coursons’ harm. Having necessarily found all this by their verdict, the jury did not award any monetary damages to the Morrisons and Coursons. Civil Code Section 3344.1 requires that the person who violates this Right To Publicity be liable for an amount equal to the greater of $750 or the actual damage suffered by Plaintiffs. The court requested briefing on this issue, examined the papers, and agrees with Plaintiff that under Civil Code Section 3344.1 Manzarek and Krieger must be held liable to the Estates for the statutory damages of $750. Defendants Manzarek and Krieger are enjoined from using the name, voice and likeness of Jim Morrison to promote their concerts.
8. Eight Cause Of Action For Breach Of Contract
The jury found in favor of defendants. Judgment is entered in favor of defendants.
9. Ninth Cause Of Action For Breach Of Implied In Fact Contract.
The jury found in favor of defendants. Judgment is entered in favor of defendants.
10. Tenth Cause Of Action For Breach Of Fiduciary Duty
The jury found that Manzarek and Krieger breached their fiduciary duty. They awarded no damages and made no special findings.
The court finds that Densmore, Manzarek and Krieger, the Coursons and the Morrisons have treated each other as partners. With respect to the commercial opportunities of the Cadillac and Apple, the Estates’ vote and approval was sought.
The court finds importance in the fact that Manzarek sought the Estates’ alliance when he proposed a change of governance to “majority rule.” Through the actions of their advisors, the Estates have participated directly in the business of The Doors. Both business managers of The Doors, each of whom concurrently represented partners on both sides of this case, testified to their belief that the Estates were partners in those partnerships. Abe Somer concurred. Gary Stiffleman sent numerous letters to everyone accusing them of not fulfilling their fiduciary duties to their partners. No evidence was presented at trial that anyone ever corrected Stiffleman for describing the Estates as partners.
The application for registration of the name The Doors, prepared by Michael Grace, Esq., and the subsequent registrations of the name with the United States Patent and Trademark Office, acknowledge the existence of a partnership in which the Estates are partners. Manzarek, Krieger and Densmore all signed the document under penalty of perjury that this was true. Manzarek and Krieger each acknowledged that the Estates were obligated to pay their share of expenses of The Doors and receive their share of the profits of The Doors, justifying the presumption that they are partners. California Corporations Code Section 16202 c (3).
The court concludes that the Morrisons and Coursons are partners of the oral partnerships known by the parties as “Old Doors” and DMC (sharing the remaining 25% of these partnerships equally between them), each of whom currently files tax returns and issues K-1 Schedules to the partners, including the Estates. Swartz is the current accountant and business manager of these two oral partnerships.
As partners, defendants Manzarek and Krieger owed the Estates a fiduciary duty. That duty was breached. Judgment is entered in favor of the Estates. The equitable remedies of a permanent injunction and disgorgement of profits earned by Manzarek and Krieger after April 18, 2003 is ordered.
11. Eleventh Cause Of Action For Imposition Of A Constructive Trust
This equitable cause of action was not presented to the jury. The Court finds that defendants Manzarek and Krieger are required to disgorge their profits. Those profits shall, and hereby are, deemed constructively held by Manzarek and Krieger until turned over to the Old Doors Partnership pursuant to this Statement Of Decision.
12. Twelfth Cause Of Action For An Accounting
The equitable cause of action was not presented to the jury. An accounting is required in order to determine the amount of profits earned by defendants before and after April 18, 2003, the effective date of the termination of the New Doors partnership. The accounting must also update the profit information for the period after July 29, 2004, the date through which Goldman’s testimony pertained. Defendants are ordered to supply that accounting to the Court with fifteen (15) days from the date of this Statement Of Decision, after which the court will modify this Statement Of Decision accordingly.
C. Cross-Complaint Of Manzarek and Krieger Against Densmore
1. First Cause Of Action For Breach Of Fiduciary Duty
The jury found Densmore liable but awarded no damages. The defendants do not seek equitable remedies and the court finds that none are appropriate for the reasons set forth below. As a result, and in the absence of any money damages, defendants have failed to demonstrate their entitlement to any relief based on this claim. Accordingly, judgment is entered in favor of Densmore.
Manzarek and Krieger urge that Densmore breached his fiduciary duty by refusing to accept the offers from Cadillac and Apple to use certain music of The Doors in television commercials. It also was asserted that such a duty was breached by Densmore’s authorship of his article in The Nation.
The music of The Doors is owned by Doors Music Co. Regardless of whether DMC has three partners (Manzarek, Krieger and Densmore) or five partners (the same three plus the two Estates), there is no circumstance in which there was sufficient votes to accept either offer for use of music in a commercial. As discussed above, Densmore and Krieger, who together own 50% of DMC, never voted to accept either offer. Densmore vetoed it. Krieger was “on the fence” leaning in support of Densmore, Whether the rule of governance was “majority rule” or unanimity, which this court finds, neither could be achieved as long as Densmore and Krieger refused to accept the offers. Whether the partners were the three of them or the three of them and the Estates, which the court finds, the result the same. Under no circumstance could the offers be accepted as long as Densmore and Krieger were not in favor, and they were not.
Assuming that only Densmore was opposed and the rule of governance of DMC was “majority rule”, the result would be the same. In those circumstances, according to Manzarek and Krieger, they would have had sufficient votes to accept the offers. But they did not accept them. The court finds that the failure to do so because of some belief that, if they did so, Densmore would sue, is not a legally sufficient basis of holding Densmore responsible for lost profits. There was no evidence that, had the offers ostensibly been “accepted” by Manzarek and Krieger, Densmore would have sued.
To the extent that this cause of action relates to Densmore’s publication if an article in The Nation, Manzarek and Krieger cannot recover equitable relief. While they proffer the argument that after reading Densmore’s article, corporate America would shun seeking the use of the music of The Doors for commercials, there is no evidence presented that such was or is the case or of any lost opportunity to license Doors music for a commercial based on The Nation article.
2. Second Cause Of Action For Breach Of The Covenant Of Good Faith and Fair Dealing
The jury found Densmore liable but awarded no damages. No equitable relief was sought by defendants and none appears appropriate. As a result, and in the absence of any money damages, defendants have failed to demonstrate their entitlement to any relief based on this claim. Accordingly, judgement is entered in favor of Densmore.
To the extent that this cause of action is intended to address the conduct of Densmore alleged to be “reneging” of his permission to allow Manzarek and Krieger to use the name The Doors after the two Harley Davidson concerts, the Court finds that Densmore never gave such unqualified consent. His consent was given conditionally, and Manzarek and Krieger failed and refused to abide by the conditions.
To the extent that this cause of action is intended to address the termination of the 1971 New Doors partnership, the Court finds no breach of duty. There is no evidence that Densmore exercised his right to terminate the at-will partnership for his personal economic gain, or that he, in fact, did personally gain from this termination.
3. Third Cause Of Action For Promissory Estoppel
The jury found against Densmore and awarded no damages. Promissory Estoppel is an equitable doctrine for which this jury’s verdict is advisory. C & K Engineering Contracts vs. Amber Steel Company, Inc. (1978) 23 Cal. 3d 1, 3. The Court finds that there was no justifiable reliance on the part of Manzarek and Krieger that Densmore “promised” Manzarek and Krieger that they could use the name The Doors for purposes of touring and performing after the two Harley Davidson concerts. Densmore actually consented to the use of the name The Doors by Manzarek and Krieger for the two Harley Davidson concerts. In fact, he considered performing until deciding that his health condition did not so permit.
The promise or consent given by Densmore was conditional. It was given on condition that (1) there be a modifier inserted in the band name to distinguish the new band from the old, and (2) that the new band not use the logo of the “Old Doors.” Manzarek did not discuss this at all with Densmore, the discussion being only with Krieger. Krieger admitted at trial that there was suppose to be a distinguishing modifier, but maybe he “didn’t get around to it.” The Court finds that there was no unconditional “promise” made by Densmore and that Manzarek and Krieger failed to satisfy the two conditions imposed by Densmore. Judgment is entered in favor of Densmore.
4. Fifth Cause Of Action For Violation Of B & P Section 17200
The jury found in favor of Densmore. Judgment is entered in favor of Densmore.
5. Sixth Cause Of Action For Declaratory Relief
This equitable cause of action was not presented to the jury. Manzarek and Krieger seek a declaration from the Court that (1) the rule of governance among them and Densmore is one of “majority rule” (although it is unclear as to what partnership this declaration is sought), (2) as between them and Densmore, Manzarek and Krieger may tour and promote themselves as The Doors or The Doors of the 21st Century, (3) said names are not likely to confuse consumers, (4) no partner of the partnership can use his vote arbitrarily to frustrate the purposes of a partnership. “and/or” (5) the partners never had a meeting of the minds as to the provisions of the Old Doors and New Doors partnership agreements.
Plaintiffs urge that the rule is one of unanimity. Manzarek and Krieger urge that it is “majority rule.” The conduct of the parties and the testimony of witnesses support the conclusion that unanimity is the rule of governance in these partnerships. The “Original Old Doors” 1966 written partnership agreement and the DMC 1969 written partnership agreement each provide that unanimity is the rule of governance in these partnership agreement each provide that unanimity was the rule while Jim Morrison was alive. This is reconfirmed by the Administration Agreement entered into the Greene. This rule was extended to the 1971 New Doors partnership after Morrison died. Evidence that the unanimity requirement was the actual practice is found by the Buick incident, and later during the Cadillac proposal through the conduct of Manzarek seeking to change the rule to a “majority rule” as reflected in his voice mail to Stiffleman.
The only suggestion to the contrary about “majority rule: comes from the defendants’ post litigation statements, but their position is belied by their own words prior to litigation. On the commentary track to The Doors Collection DVD, Manzarek admits that any member of The Doors had a veto, a statement repeated in the liner notes of his own spoken word compact disc Myth & Reality:
“The Doors all had veto power. If one guy didn’t want to do something it wasn’t done. That’s the way it always worked out with The Doors. It was a four way split of all The Doors’ money, totally democratic with veto power.”
The Court rejects the assertion that this requirement was not known to Manzarek and Krieger or that the written agreements did not accurately reflect their understanding of governance. First, these were college-educated men represented by legal counsel when the written agreements were signed.
As discussed above, as for the written 1971 partnership agreement among Densmore, Manzarek and Krieger, the rule of unanimity was plainly set forth in paragraph 6 of the agreement. This court already has found that the use of the name The Doors of the 21st Century Doors is not a name used by Manzarek and Krieger, except as a name given to Tommy Gear to prepare the logos later rejected by Manzarek in late 2002. In any event, had Manzarek and Krieger used that name instead of The Doors of the 21st Century, the decision of the court would be the same.
As for the alleged “right to tour” as The Doors or The Doors of the 21st Century, the Court has ruled previously through the granting of an injunction that Manzarek and Krieger have no such right. As for the finding that the names are not likely to confuse, the court has already ruled on that issue in the false advertising claim and through the granting of the injunction.
The Court declines to set forth a declaration whether or not a partner can use his vote in bad faith, arbitrarily, without good cause, to frustrate the purposes of the partnership. While correct, this rule of law has no application in this dispute and this court finds no such evidence of the described conduct to merit such an advisory opinion regarding potential future conduct.
As for the final matter that the parties had no meeting of the minds when the Old Doors and new Doors written partnership agreements were entered into, the Court finds no competent evidence to support such a conclusion. Manzarek’s argument that neither he nor Krieger read the agreements is unavailing and belied by the testimony of Somer. Which the court accepts as true. The court rules in favor of Densmore.
Post by darkstar on Aug 7, 2005 19:00:02 GMT
6. Seventh Cause Of Action For Reformation
This equitable cause of action was never presented to the jury. Manzarek and Krieger seek to reform the New Doors written partnership agreement, notwithstanding their position that it was terminated in 1973. Based on all of the evidence presented, the Court finds that there was no legally recognizable basis for reformatting the agreement. The parties were mature, educated men, represented by competent legal counsel when the New Doors partnership agreement was executed. Somer, their legal counsel, testified that the agreement was explained to the three of them. The provisions were substantially similar to those agreements that preceded it, including a one-page amendment to the Old Doors agreement, which amendment was executed earlier that same year. Failure to read a document, assuming arguendo that was the case, is not a viable legal justification for the Court to reform an agreement that was extant for more than 30 years. The agreement was “at will” which nobody disputes, and has been terminated. Since this court is granting the permanent injunction as to the use of the name The Doors in the future, this issue has already been resolved.
Post by darkstar on Aug 7, 2005 19:00:43 GMT
VIII. CURRENT DISPOSITION AND ORDERS OF THE COURT
On the basis of the findings, conclusions, and analysis of the court set forth above, the court makes the following orders:
1. With respect to the two Complaints of Densmore and the Estates, respectively, the court orders as follows:
a. The defendants Manzarek and Krieger, and those acting in concert with them, including their agents, representatives and employees, be, and hereby are, permanently enjoined from performing, touring, promoting their band, recording, and otherwise holding themselves out as The Doors, The Doors of the 21st Century, or any other name that includes the words The Doors, without the written consent of all of the partners of the Old Doors, which partners today are Densmore, Manzarek, Krieger, and the Morrisons, and the Coursons. Defendants’ request for a stay of the injunction is DENIED.
b. That the profits (meaning all revenue less operating expenses other than legal fees for the defense of this litigation and salaries to any defendant herein) earned by Manzarek and Krieger from touring, performing, and recording as The Doors or The Doors of the 21st Century including merchandise, income from Diamond Night Productions, LLC.) be immediately divested of defendants and turned over to plaintiff Densmore and the Old Doors partnership, as described above. It is to be disbursed as follows:
1. One-third of all profits (as defined above) from January 1, 2003 through April 18, 2003, be delivered to Densmore.
2. All profits (as defined above) after April 18, 2003, be turned over to the Old Doors partnership.
c. That no later than August 15, 2005, defendants file and serve copies of a written accounting and supporting documentation, including a list identifying any individual or individuals who will testify at the hearing. Plaintiffs shall file and serve any objections to the written accounting and supporting documents by no later than August 22, 2005. Defendants are to file their response to plaintiffs’ objections by September 5, 2005. The hearing on accounting issues will be held on September 16, 2005. At the hearing, defendants are to appear before this court to present testimony and evidence supporting their written accounting and, in particular, demonstrating (1) all profits earned from and after June 30, 2003, (2) all profits earned by defendants prior to April 18 2003.
d. Following the hearing ordered above to determine the amount of profits earned before and after April 18, 2003, the court will issue an additional order reflecting the proper distribution of any additional money that remains to be turned over, if any. Manzarek and Krieger shall be, and hereby are, permanently enjoined from using the name, likeness, voice or image of Jim Morrison to promote their band or their concerts.
2. With respect to the Cross-Complaint of Manzarek and Krieger, the court orders that said Cross-Complaints take nothing as a result of their claims.
3. All causes of action brought by Densmore against Astbury have been decided either by the jury or the court in favor of Astbury. All causes of action brought by the Estates against Astbury have been decided either by the jury of the court in favor of Astbury.
4. All causes of action brought by Densmore against Doors Touring, Inc., have been decided in favor of Doors’ Touring, Inc.
5. This Statement Of Decision shall be placed and recorded in the court files of each of the two cases consolidated for trial.
6. Counsel for plaintiffs in each case shall prepare a proposed form of judgement and submit it to the Court within 10 days of the Statement Of Decision.
IT IS SO ORDERED.
DATED: July 21, 2005
Hon. Gregory W. Alarcon
Superior Court Judge
Foot Notes included in the Statement Of Decision
Paragraph 2 b after the words “The Doors or The Doors of the 21st Century…..” and c. after the words “September 16, 2005. At the hearing, defendants are to appear before this court…….”
The granting of this permanent injunction does not prevent Krieger and Manzarek from identifying themselves as the founding or original members of The Doors as long as: 1) the names Krieger and Manzarek be listed first either to the left or above the other wording; 2) the words “original” or “founding” and “members of The Doors” be in the same or smaller type font size than the names Krieger and Manzarek; and 3) that the name The Doors not be displayed in the classic Doors logo which is the round letters with the diagonal intersections and the ‘wavy gravy’ font for the word “the” found on The Doors debut record in 1967 or any font similar in style to the classic Doors logo. Kassbaum v. Steppenwolf Productions, Inc. (9th Cir. 2001) 236 F.3d 487, 492. (See also Plt. Exh. 77).
Plaintiffs have requested that Doors Touring, Inc. (“DTI”) be included in the disgorgement calculation under the alter ego doctrine. Generally, the alter ego doctrine is used to hold an individual liable for a corporation’s misconduct. Towe Antique Ford Found .v IRS (9th Cir. 1993) 999 F.2d 1387, 1390. However, some jurisdictions permit the alter ego doctrine to also be used to pierce the corporate veil in a “reverse” sense. Towers v. Titus (D.C. Cal. 1979) 5 B.R. 786, 796. The court will hold a corporation liable for an individual’s obligations when the entity is used to evade those obligations and when “it appears that it is being used merely as an instrumentality through which an individual….transacts his business.” Grotheer v. Meyer Rosenberg, Inc., (1936) 11 Cal. App. 2d 268, 271. In order to find that DTI is the alter ego of Manzarek and Krieger, the court must find that (1) such unity of interest and ownership exists that the personalities of the corporation and the individuals are no longer separate; and 2) an inequitable result will follow if the acts are treated as those of the corporation alone. Watson v. Commonwealth Insurance Co., (1936) 8 Cal. 2d 61, 68; Sonora Diamond Corp. v. Superior Court, (2000) 83 Cal. App. 4th 523, 538; Hennessey’s Tavern, Inc. v. American Air Filter Co., (1988) 204 Cal. App. 3d 1351, 1358. Two factor considered by courts in determining whether to pierce the corporate veil are (1) “the use of a corporation as a mere shell, instrumentality or conduit of a single venture or the business of an individual or another corporation,” and 2) “the use of the corporate entity to produce labor, services or merchandise for another person or entity.” Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal. App. 2d 825, 839-840.
Plaintiffs claim that DTI is a loan-out corporation created, dominated and owned by Manazarek and Krieger. Plaintiffs ask this court to find that DTI is a corporation used by the two defendants as a conduit through which The Doors of the 21st Century conducts its business; DTI manages the promotions, expenses, profits and performance rights of The Doors of the 21st Century. Further, plaintiffs maintain that recognition of the entity as distinct from Manzarek and Krieger would allow the defendants to keep and maintain improperly made profits by simply setting up an entity to “hold” and “manage” those profits. US v. Boyce (S.D. Cal 2001) 148 F. Supp. 2d 1069, 1093-94.
The court will entertain motions by plaintiffs to hold DTI liable on the judgment against the individual defendants under an alter ego theory, to be heard at the September 16, 2005 hearing on accounting issues. Plaintiffs and defendants are directed to timely file and serve moving, opposition and reply briefs addressing the procedural propriety and substantive merits of plaintiffs’ request to include DTI’s income in the accounting.