Berg v. Traylor

56 Cal. Rptr. 3d 140, 148 Cal. App. 4th 809, 2007 Cal. Daily Op. Serv. 2863, 2007 Daily Journal DAR 3696, 2007 Cal. App. LEXIS 390
CourtCalifornia Court of Appeal
DecidedMarch 19, 2007
DocketB188554
StatusPublished
Cited by25 cases

This text of 56 Cal. Rptr. 3d 140 (Berg v. Traylor) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berg v. Traylor, 56 Cal. Rptr. 3d 140, 148 Cal. App. 4th 809, 2007 Cal. Daily Op. Serv. 2863, 2007 Daily Journal DAR 3696, 2007 Cal. App. LEXIS 390 (Cal. Ct. App. 2007).

Opinion

Opinion

DOI TODD, J.

Appellants Meshiel Cooper Traylor (Meshiel) and her minor son Craig Lamar Traylor (Craig) appeal the judgment confirming an arbitration award in favor of Craig’s former personal manager, respondent Sharyn Berg (Berg), for unpaid commissions under a contract between Berg, Meshiel and Craig and unrepaid loans from Berg. 1 Because we find that Craig had the statutory right as a minor to disaffirm both the original contract and the arbitration award, we reverse the judgment against Craig. We affirm the judgment against Meshiel:

FACTUAL AND PROCEDURAL BACKGROUND 2

The Agreement

On January 18, 1999, Berg entered into a two-page “Artist’s Manager’s Agreement” (agreement) with Meshiel and Craig, who was then 10 years old. Meshiel signed the agreement and wrote Craig’s name on the signature page where he was designated “Artist.” Craig did not sign the agreement. Pursuant *813 to the agreement, Berg was to act as Craig’s exclusive personal manager in exchange for a commission of 15 percent of all gross monies or other consideration paid to him as an artist during the three-year term of the agreement, as well as income from merchandising or promotional efforts or offers of employment made during the term of the agreement, regardless of when Craig received such monies. The agreement expressly provided that any action Craig “may take in the future pertaining to disaffirmance of this agreement, whether successful or not,” would not affect Meshiel’s liability for any commissions due Berg. The agreement also provided that any disputes concerning payment or interpretation of the agreement would be determined by arbitration in accordance with the rules of Judicial Arbitration and Mediation Services, Inc. (JAMS).

Termination of the Agreement

On or about June 13, 2001, Craig obtained á recurring acting role on the Fox Television Network show Malcolm in the Middle (show). On September 11, 2001, four months prior to the expiration of the agreement, Meshiel sent a certified letter to Berg stating that while she and Craig appreciated her advice and guidance, they no longer needed her management services and could no longer afford to pay Berg her 15 percent commission because they owed a “huge amount” of taxes. On September 28, 2001, Berg responded, informing appellants that they were in breach of the agreement.

The Lawsuit

In 2004, Berg filed suit against Meshiel and Craig for breach of the agreement, breach of the implied covenant of good faith and fair dealing, breach of an oral loan agreement, conversion and declaratory relief. In July 2004, the law firm of White O’Connor Curry & Avanzado represented Meshiel and Craig when the parties stipulated to submit the matter to binding arbitration before JAMS. But in November 2004, the trial court granted that firm’s motion to withdraw due to appellants’ refusal to pay legal fees or communicate with the firm.

The Arbitration

The arbitration hearing was originally scheduled for December 7, 2004. In order to accommodate Meshiel’s hospitalization for the premature delivery of her third child and to give appellants time to find new counsel, JAMS continued the hearing to February 7, 2005. In the meantime, appellants’ second counsel, the law firm of Cohen & Gardner, represented appellants in unsuccessful settlement negotiations.

*814 The arbitration hearing commenced on February 7, 2005. Because appellants had failed to pay their share of the arbitration fees, Berg did not anticipate their appearance and did not retain a court reporter. Though Meshiel and Craig’s counsel failed to appear at the hearing, Meshiel personally appeared with Craig’s talent agent, Steven Rice. Craig did not appear. According to Meshiel, the arbitrator denied her request for a two-week continuance. The arbitrator permitted Meshiel to use Rice’s assistance and advice in presenting her case: Rice asserted that the agreement was invalid because Craig was a minor at the time it was executed and there had been no court approval of the agreement.

The Arbitration Award

On February 11, 2005, the arbitrator issued his award, which was served on the parties on February 14, 2005. Noting that Craig had not appeared at the hearing “despite personal service of summons and notice from JAMS,” the arbitrator stated that the award was “issued against him through prove-up and default as provided for in the JAMS Rules” incorporated by reference. 3 After briefly summarizing the testimonial and documentary evidence presented, the arbitrator found that Berg had proven her case by a preponderance of the evidence and reiterated that “Craig did not appear at the arbitration and the award of the undersigned is made on the basis of the evidence produced during the prove-up and is deemed a default judgment.” The arbitrator awarded Berg commissions and interest of $154,714.15, repayment of personal loans and interest of $5,094, and attorney fees and costs of $13,762. He also awarded Berg $405,000 “for future earnings projected on a minimum of 6 years for national syndication earnings,” and stated that this part of the award would “vest and become final, as monies earned after February 7, 2005, become due and payable.” On February 20, 2005, the arbitrator served a clarification of the award, stating that “all monies earned by Craig Traylor, pursuant to the contract with Ms. Berg, are paid directly to Ms. Berg. . . . After, deduction of fees and commissions, etc., the balance of the funds shall be forwarded to the client.”

Stipulated Order

Following issuance of the arbitration award, appellants hired their third counsel, the law firm of White Bordy &. Levey. The parties then entered into *815 a stipulated order signed by the court in March 2005, which contained the following provisions: (1) Appellants would pay Berg $50,000 plus 50 percent of compensation earned by Craig on the show until the award was satisfied and thereafter 15 percent of all future compensation related to the show; (2) the award of unpaid commissions could not be reduced below $50,000 and the award of attorney fees and costs could not be modified; (3) appellants could only seek an adjustment of the amount of the award if they disclosed all of Craig’s earnings from the show with verified declarations; and (4) the arbitration award would be treated as final for all purposes until the parties agreed on any correction to the award or the arbitrator recalculated the commissions and interest due. Pursuant to the stipulated order, appellants’ counsel directed Fox Television Network to pay Berg $50,000, and Meshiel signed an “Authorization Re: One-Time Payment” to this effect on behalf of Craig as his “legal guardian.”

Petitions to Confirm and Vacate the Arbitration Award

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Bluebook (online)
56 Cal. Rptr. 3d 140, 148 Cal. App. 4th 809, 2007 Cal. Daily Op. Serv. 2863, 2007 Daily Journal DAR 3696, 2007 Cal. App. LEXIS 390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berg-v-traylor-calctapp-2007.