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1 DAVID L. GURLEY, State Bar No. 194298


STATE OF CALIFORNIA
2 DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
3 300 Oceangate, Suite 850
Long Beach, California 90802
4 Telephone: (562) 590-5461
Facsimile: (562) 499-6438
5
Attorney for the Labor Commissioner
6
7
8 BEFORE THE LABOR COMMISSIONER
9 OF THE STATE OF CALIFORNIA
10
11 RICKY BELL, an individual; MIKE CASE NO. TAC 37001
BIVENS, an individual; RON DEVOE, an
12 individual; JOHNNY GILL, an individual; DETERMINATION OF
RALPH TRESVANT, an individual; and CONTROVERSY
13 NEW EDITION ENTERPRISES, LLC a
Florida limited liability company,
14
15 Petitioners,
16 vs.
17
BENCHMARK ENTERTAINMENT,
18 LLC, a California limited liability
company,
19
Respondent.
20
21
22 I. INTRODUCTION
23
The above-captioned matter, a Petition to Determine Controversy under Labor
24
25 Code section 1700.44, came on regularly for hearing in Long Beach, California, before

26 the undersigned attorney for the Labor Commissioner assigned to hear this case.
27
Petitioner RICKY BELL, an individual; MIKE BIVENS, an individual; RON DEVOE, an
28
1
DETERMINATION OF CONTROVERSY -TAC 37001
1 MICHAEL N. JACKMAN, SBN 149138
State of California
2 Department of Industrial Relations
DIVISION OF LABOR STANDARDS ENFORCEMENT
3
7575 Metropolitan Drive, Suite 210
4 San Diego, CA 92108
Telephone No. (619) 767-2023
5 Facsimile No. (619) 767-2026

6 Attorney for the Labor Commissioner


7
8
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10

11 ANNA DOKOZA, Case No. TAC41756

12 Petitioner,

13 v.
DETERMINATION OF CONTROVERSY
14 LENHOFF ENTERPRISES, INC., a
California Corporation dba:
15 LENHOFF & LENHOFF,

16 Respondent.

17

18 The above-captioned matter, a Petition to Determine Controversy under Labor Code


19
1700.44, came on regularly for hearing in Los Angeles, California, before the undersigned attorney
20
for the Labor Commissioner assigned to hear this case. Petitioner ANNA DOKOZA appeared and
21
was represented by David Marmostein, Esq. Respondent LENHOFF ENTERPRISES, INC. was
22
represented by John M. Kalajian, Esq. At the conclusion of the hearing, the matter was taken under
23

24 submission.

25 Based upon the evidence presented at the hearing and on the other papers on file in this
26 matter, the Labor Commissioner adopts the following decision.
27
Ill
28
DEPAR1',\l~'N'f 01'
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L>O<W.UN<< DETERMINATION OF CONTROVERSY -TAC 41756
1 FINDINGS OF FACT

2 1. Petitioner Anna Dokoza (hereafter, "Ms. Dokoza" or "Petitioner"), is an Executive


3
Producer and was engaged by Louie Zach Productions, Inc. to perform services for two of the
4
company's television shows, "Brothers in Atlanta" and "Baskets."
5
2. Respondent Lenhoff Enterprises, Inc., (hereafter, "Lenhoff' or "Respondent") was,
6
during the time relevant to this action, a licensed talent agency in the state of California. Lenhoff
7

8 represented Ms. Dokoza as her talent agent between September 28, 2010 and November 4, 2010

9 under the terms of a verbal agreement. During the period of the representation, Lenhoff procured

10 employment for Ms. Dokoza with Louie Zach Productions, Inc. for work on the pilot episode of
11
"Baskets."
12
3. Following termination of the verbal agreement, Ms. Dokoza entered into a second
13
contract with Louie Zach Productions for work on a full season of "Baskets," as well as work on
14
15 another television series, "Brothers in Atlanta."

16 4. Lenhoff asserts Ms. Dokoza owes the agency commissions on her compensation for

17 the second employment agreement with Louie Zach, and assigned their claim for those commissions
18 to a third party, Arden Silverman dba Capital Asset Protection (hereafter "CAP"). Following that
19
assignment, CAP filed suit against Petitioner in Los Angeles Superior Court as assignee of the
20
commissions Lenhoff claims it is owed. Petitioner then filed a cross-complaint for declaratory relief
21
that no commissions were owed.
22
23 5. Ms. Dokoza brings this action before the Labor Commissioner, asserting Lenhoff

24 received a payment of $7,500.00 for her work on the "Baskets" series, and Lenhoff failed to tender

25 Ms. Dokoza her portion of that payment as required by Labor Code section 1700.25. In this action,
26
Ms. Dokoza seeks a determination she does not owe Lenhoff any commissions; that Lenhoff be
27
ordered to pay Petitioner her portion of the money it received for her work on "Baskets"; damages,
28
DEPA!l1'M~N'l'OF
INmrsTmAl, REl.A'J'lONS 2
lllVISIONOFLAllOR
S'fANIJ/\IUJSJmFORC!;Mr.N'f- -----------=-======-=-=-=-=====-=,----=-----C-:-:::-::-:-----------
L>'"""'" DETERMINATION OF CONTROVERSY -TAC 41756
1 interest and attorney fees for the withholding of that payment; a determination by the Labor

2 Commissioner the parties' suit and counter-suit in Superior Court are barred by the Labor
3
Commissioner's original jurisdiction over enforcement of the Talent Agencies Act; and for an order
4
suspending or revoking Respondent's talent agency license.
5
6. In response to Ms. Dokoza's petition, Lenhoff brought a Motion to Dismiss, arguing
6
that as a producer, Ms. Dokoza is not an "artist" as defined by the Talent Agency Act, and as a result
7

8 her petition is not subject to the original jurisdiction of the Labor Commissioner.

9 LEGAL CONCLUSIONS

10 The Petitioner is not an "artist" under the Talent Agencies Act.


11
The Talent Agencies Act provides the Labor Commissioner exercises original jurisdiction
12
over controversies between "artists" and "agents." Labor Code l 700.44(a). Labor Code section
13
1700.4(b) defines "artists" as "actors and actresses rendering services on the legitimate stage and in
14

15 the production of motion pictures, radio artists, musical artists, musical organizations, directors of

16 legitimate stage, motion picture and radio productions, musical directors, writers, cinematographers,

17 composers, lyricists, arrangers, models, and other artists and persons rendering professional services
18 in motion picture, theatrical, radio, television and other entertainment."
19
Prior decisions of the Labor Commissioner have addressed application of the term "artist" in
20
relation to controversies presented by producers or production companies. In examining that issue,
21
we have held:
22
23 Although Labor Code 1700.4(b) does not expressly list producers or production companies
as a category within the definition of 'artist,' the broadly worded definition includes 'other
24 artists and persons rendering professional services in...television and other entertainment
enterprises.' Despite this seemingly open-ended formulation, we believe the Legislature
25 intended to limit the term 'artists' to those individuals who perform creative services in
connection with an entertainment enterprise. Without such limitation, virtually every "person
26
rendering professional services" connected with an entertainment project -- including the
27 production company's accountants, lawyers and studio teachers .... would fall within the
definition of 'artists.' We do not believe that the Legislature intended such a radically far-
28 reaching result.
DF.PARTrn~N'l' OF
INDL'HTIUAI, J(l>!./\TlONH 3
DIVIHIUN Ul' T.AllUlt
H1'ANDA!lDS ENl'Ol!CEMENT
Lr;OAl, UNIT DETERMINATION OF CONTROVERSY -TAC 41756
1 American First Run dba American First Run Studios, Max Keller, Micheline Keller v. Omni

2 Entertainment Group, Sheryl Hardy, Steven Maier, TAC 1995-32-1. See also James Mark Burnett,
3
an Individual; Mark Burnett Productions, Inc.; JMBP, Inc., DJB Inc.; and Jump In, Inc. v. Conrad
4
Riggs; and CloudbreakEntertainment, Inc., TAC 10192.
5
The Labor Commissioner has held when the services provided were primarily of a
6
managerial or business nature, as opposed to creative, the party supplying the services does not meet
7

8 the statutory definition of "artist" under the Talent Agencies Act. In determining to what extent a

9 producer provided the requisite level of creative services, we have held:

10 Virtually all line producers or production managers engage in de minimis levels of creativity.
There must be more than incidental creative input. The individual must be primarily engaged
11
in or make a significant showing of a creative contribution to the production to be afforded
12 the protection of the Act.

13 Burt Bluestein, aka Burton Ira Bluestein v. Production Arts Management; Gary Marsh, Steven
14 Miley, Michael Wagner, TAC I998-2.
15
Clearly, the analysis set forth in Bluestein and American First Run requires application of the
16
facts specific to each case. While application of that test has led to findings that a given producer
17
was not an artist as that term is defined by the Talent Agency Act and our decisions interpreting the
18

19 act, the same analysis has produced determinations that a producer who makes a sufficient showing

20 of creative contribution to a production is properly classified as an artist. See e.g. William Morris

21 Agency, LLC v. Dan O'Shannon and Atomic Television TAC 2006-05.


22
Ms. Dokoza argues the services she provided in the production of "Baskets" and "Brothers in
23
Atlanta" involved significant creative contribution, and she defines herself as an "all-encompassing
24
producer" as opposed to a "line producer." Petitioner testified she does not take jobs which do not
25
provide her the opportunity to be involved in the creative aspects of the production, and without the
26

27 creative aspect of the work, a project would not present a sufficient challenge to her. On direct

28 examination, Ms. Dokoza listed instances in which she provided creative contributions to the
I Nm 'S'l'ltTAJ, rtr.1.i1r10Ns
DIVISION 01' l.Al!OJI
S1'ANDAl!llH J,;NFOllCE~IBNT
LlmAJ,UNJ1' DETERMINATION OF CONTROVERSY -TAC 41756
1 production, including suggesting specific actions for talent and background to perform, participating

2 in the decision of placement of a flag to be used in a rodeo scene, and expressing her opinion
3
regarding a storyline involving a character's pregnancy. She also testified she would be present in
4
the writers' room during discussions and had "script involvement," discussed casting decisions with
5
those responsible for that aspect of the production, and brought the attention of a make-up artist to
6
the look of an actor's make-up. Ms. Dokoza also stated during the editing process, she was in the
7

8 editing room and participated in "editing choices." Petitioner also stated she would participate in

9 "discussion and feedback" regarding design aspects of the production, that creative meetings would

10 not take place without her, and those meetings would have to be rescheduled if she could not attend.
11
Ms. Dokoza also testified for two days of the production, she worked as the "B-unit" filming
12
director, making decisions regarding the filming of establishing shots. Ms. Dokoza stated she was
13
paid extra for her work as B-unit director.
14

15 In cross-examination, Ms. Dokoza was asked to assign a percentage to the amount of her

16 work in a creative capacity in comparison to her work as a regular line producer. Ms. Dokoza's

17 response was she could not provide an estimate because she could not separate the two activities,
18 since they were "entwined together."
19
As we previously stated in Bluestein, in order to establish a producer is an "artist" under the
20
Talent Agencies Act, the petitioner must show more than incidental creative input as part of the
21
production. Rather, the test is whether the petitioner is "primarily engaged in" or whether the
22

23 petitioner can make "a significant showing of a creative contribution to the production to be afforded

24 the protection of the Act."

25 In this case, Ms. Dokoza provided testimony she was involved to some extent in several
26
creative aspects of the production. However, the evidence presented does not support a finding the
27
Petitioner was primarily engaged in a creative role, or that her account of her activities supports a
28
Di,:P~R't.f!.ll~N'fUf'
I NJ)("S'fRJ,\l. Rl:ldl'l'lONS 5
lllV!SlflN OF LAIJOR
S'!',\NIJAJ1JJH l!NJIO](C~;M1;N"1'
LEGAi. UN11'
DETERMINATION OF CONTROVERSY - TAC 41756
I significant showing of a creative cont:ri bution to the production. Consequently, we cannot find

2 Ms. Dokoza to be an "artist" as that term is defined in the Talent Agency Act and our previous
3
decisions interpreting the use of that term.
4
ORDER
5
For the reasons set forth above, Respondent's Motion to Dismiss is granted. The Petition is
6
dismissed.
7
8 Dated: December 2, 2016

10
By
11 MICHAEL N. JACK AN
Attorney for the Labor Commissioner
12

13
ADOPTED AS THE DETERMINATION OF THE LABOR COMMISSIONER.
.14

15
16 By:

17 California Labor Commissioner

18

19

20

21

22
23

24

25
26

27
28
1'11>P,1l!'rM~:xror
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H'f-l'1lMl~fl.9t:1'f<'~!'r.~f~;}rf- ---------------- ----,------------


U.U.lJW DETERMINATION OF CONTROVERSY - TAC 41756
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT

CERTIFICATION OF SERVICE BY MAIL


(C.C.P. 1013A) OR CERTIFIED MAIL

I, JUDITH A. ROJAS, do hereby certify that I am a resident of or employed in the


County of San Diego, over 18 years of age, not a party to the within action, and that I am
employed at and my business address is: 7575 Metropolitan Drive, Suite 210, San Diego, CA
92108-4424

On December 9 , 2016, I served the within DETERMINATION OF


CONTROVERSY by placing a true copy thereof in an envelope addressed as follows:

Bryan J. Freedman, Esq.


David Marmorstein, Esq.
Freedman+ Taitelman LLP
1901 Avenue of the Stars, Suite 500
Los Angeles, CA 90067

John M. Kalajian, Esq.


Law Offices of John M. Kalajian
PO Box 1690
Simi Valley, CA 93062

and then sealing the envelope and with postage and certified mail fees (if applicable) thereon
fully prepaid, depositing it for pickup in this city by:

Federal Express Overnight Mail

X Ordinary First Class Mail

I certify under penalty of perjury that the foregoing is true and correct.

Executed on December 9 , 2016, at San Diego, California.

q.~22. f!u~
JUDITH A. RO As

Case No. TAC-41756

PROOF OF SERVICE
!.
1 ,, EDNA GARCIA EARLEY, Bar No. 195661
STATE OF CALIFORNIA
2 . DEPARTMENT OF INDUSTRL.\L RELATIONS
Df1.VISIO.N OF LABO RS..TANDARDS ENFORCEMENT
3 320 W. 4th Street, Suite 430

1
. Los Angeles, California 9001} . ' . .
4 /I Teleplioiie: (2T3)"897I5IT ''.. ..
Facsnnile: (213) 897-2877
5
Attorney for the Labor Commissioner
6 !,
7
8 BEFORE THE LABOR COMMISSIONER
9 OF THE STATE OF CALIFORNIA
10
11 ROSA A. RIVERA FLORES, AS CASE NO. TAC 23007
TRUSTEE OF THE DOLORES J..
12 RIVERA LIVING TRUST, DETERMINATION OF
CONTROVERSY
13
Petitioner,
14
vs.
15
16
GABRIEL VAZQUEZ individually and
17 . dba TALENTO lJNIVERSAL;
l8 _1_6filii:&1ci.66itkMR:C
19 Respondents.
20
21. The above-captioned matter, a Petition to Determine C011troversy under Labor. ..
22
Code 1700.44, came on regularly for hearing in Los Angeles, California on June 12;
. I
I

23
2012 fu"ld concluded on July 3, 2012, before the undersigned attorney for the Labor
24
25 .commissioner assigned to hear this case. Petitioner at the time, JANN'EY Rlv'ERA,
2s
27
I PROFESSIONALLY KNOWN AS JENNI RlVERA, (hereinafter, refer::ed to as

j "RIVER.<\"), appeared represented by Anthony Lopez, Esq. of Law Offices Lopez and
.28
1
DETERMINATION OF CONTROVERSY TAC 23007
" ..

1 EDNA GARCIA EARLEY, Bar No. 195661


STATE OF CALIFORNIA
2 DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
3 320 W. 4th Street, Suite 430
Los Angeles, California 90013
4 Telephone: (213) 897-1511
Facsimile: (213) 897-2877
5
Attorney for the Labor Commissioner
6
7
8 BEFORE THE LABOR COMMISSIONER
9 OF THE STATE OF CALIFORNIA
10
11 MICHAEL GRECCO, an Individual; and CASE NO. TAC 23297
MICHAEL PHOTOGRAPHY, INC., a
12 California Corporation, DETERMINATION OF
CONTROVERSY
13
Petitioners,
14
vs.
15
16
BLUR PHOTO, LLC, a California
17 Limited Liability Company, CLIO
BITBOUL, an Individual; and MICHAEL
18 LOHR, an Individual,
19 Respondents.
20
21
The above-captioned matter, a Petition to Detennine Controversy under
22
Labor Code 1700.44, came on regularly for hearing before the undersigned attorney for
23
the Labor Commissioner assigned to hear this case. Petitioner MICHAEL GRECCO, an
24
Individual; and MICHAEL PHOTOGRAPHY, INC., a California Corporation,
25
(collectively, referred to as "Petitioner Grecco"), appeared represented by Michael D.
26
Kuznetsky, Esq. ofKuznetsky Law Group and Michael W. Fattorosi, Esq. ofFattorosi &
27
Associates. Respondents BLUR PHOTO, LLC, a California limited liability company;
28

1
DETERMINATION OF CONTROVERSY -TAC 23297
1 CLIO BITBOUL, an individual; and MICHAEL LOHR, an individual, (collectively
2 referred to as "Respondents"), appeared represented by Steven Sandler, Esq., of Law
3 Offices of Steven Sandler.
4 Based on the evidence presented at this hearing and on the other papers on
5 file in this matter, the Labor Commissioner hereby adopts the following decision:
6
FINDINGS OF FACT
7
8 1. At the c01mnencement of the hearing, the parties entered into the following
9 Stipulations:
10 a. Respondents are not licensed as talent agents by the State of California.
11 b. Respondents procured work for Petitioner Grecco.

12 c. Respondents received a commission of 25 % for all paid work that they

13 procured for Petitioner Grecco.


d. Exhibit llabeh~dArtist Agreement is the "Agreement" between the parties.
14
e. Per the Agreement, Respondents were obligated to solicit work for
15
Petitioner Grecco.
16
2. Petitioner Grecco has been a professional photographer for 34 years. He is the
17
author of two books on lighting in portrait photography called "The Art of Portrait
18
Photography," and "Lighting and the Dramatic Portrait" as well as author of a coffee-
19
table book called "Naked Ambition: An R Rated Look at an X Rated Industry." Petitioner
20 Grecco's works are part of a permanent collection at the San Diego Museum of
21 Photographic Arts and have been featured in exhibits and galleries around the world
22 including the Museur of Sex in New York, the Fahey/Klein Gallery, the Stephen Cohen
23 Gallery and the Jennifer Schwartz Gallery. Petitioner Grecco has won numerous awards
24 for his photography and has shot for and been on the cover of magazines such as "Time,"
25 "Newsweek," "People" magazine, "New York" magazine, and "Entertainment Weekly."

26 3. Respondent Blur Photo is a limited liability company that represents and

27 manages commercial still photographers. Respondents Michael Lohr and Clio Bitboul are
the principals of Blur.
28
2

DETERMINATION OF CONTROVERSY -TAC 23297


1 4. In March, 2005, the parties entered into the Agreement which provides
2 Respondent would serve as Petitioner Grecco's exclusive representative in exchange for
3 25% c01mnission for any work Respondents procured for Petitioner Grecco.

4 5. Respondents terminated their relationship with Petitioner Grecco on June 29,


5 2010.

6 6. In December, 2010, Petitioner Grecco filed a complaint in the Los Angeles


Superior Court against Respondents alleging Breach of Contract and Breach of Fiduciary
7
Duty. The superior court action is currently stayed pending resolution of this petition
8
which was filed by Petitioner Grecco on June 24, 2011.
9
7. With this filing, Petitioner Grecco seeks a determination from the Labor
10
Commissioner holding that Respondents acted as unlicensed talent agents under the
11
Talent Agencies Act ("Act") by procuring entertainment related engagements for
12
Petitioner Grecco in violation of the Act. Accordingly, Petitioner Grecco requests the
13 Artist Agreement between the parties be declared illegal and void. Petitioner Grecco
14 argues Respondents procured the following engagements for him in violation of the Act:
15 Campbell's Chunky Soup
16 a. Campbell's Chunky Soup's ad agency, Young & Rubicam, hired Petitioner
17 Grecco to photograph NFL football star LaDainian Tomlinson for a Campbell's Chunky

18 Soup commercial. Petitioner Grecco testified Respondent Lohr made the initial contact
1
19 with Young & Rubicam and prepared the estimate. Invoices and emails produced for this

20 project show Respondent Lohr was instrumental in negotiating the fees related to this
commercial shoot. In one email to Young & Rubi cam, Inc., Respondent Lohr emails, "It
21
is straight fees as discussed. However, there will be a $300.00 web gallery charge."
22
Similarly, in another email to Young & Rubicam, Respondent Lohr writes, "Grecco will
23
shoot (with the blessing of broadcast) their shots during our scheduling ofMay 5, 6, 7,
24
25 'The "estimate" included Petitioner Grecco's "creative services" fee which encompassed the
photography, prep, tech scout, pre lite, preproduction, travel and usage fees. It also included
26 "production expenses" which covered digital package rental (hard drive, monitor, tech), assistants
needed, coordinator, producer's expenses, stylist expenses, wardrobe stylist, groomer, studio
27 rental, location scouts, permits, equipment rental, truck rental for the equipment, prop rentals, set
materials, catering, messengers, insurance and travel expenses for the photo shoot. Any variations
28 to the estimate had to be negotiated with Petitioner Grecco, usually through Respondents.
3

DETERMINATION OF CONTROVERSY-TAC 23297


1 2008. We would like a $16, 000. 00 guarantee to provide 15-20 shots for the locker room
2 and the same amount for the tunnel (total 30-40)."
3 Leonard Maltin for DirecTV

4 b. In February 2006, Petitioner Grecco was hired by DirecTV to photograph

5 well-known television and film critic and author, Leonard Maltin. Petitioner Grecco
testified that while this engagement was initially obtained through one of his contacts,
6
Respondent Lohr prepared the estimate and paperwork, negotiated the fees and closed the
7
deal. The paperwork for this shoot demonstrates Respondent Lohr forwarded pertinent
8
documents to DirecTV in order for Petitioner Grecco to receive payment. Petitioner
9
Grecco's bank information was faxed and his estimate was emailed to DirecTV personnel.
10
Martin Scorsese for DirecTV
11
c. In April, 2006, Petitioner Grecco photographed Martin Scorsese for
12
promotional purposes for DirecTV. Specifically, the photos were used for a television
13 commercial, magazine ad and other advertising. Petitioner Grecco .testified he. obtained
14 the job through a contact he had in New York but Respondent Blur helped him produce
15 the job. The exhibits demonstrate Respondent Lohr sl\bmitted an initial estimate to
16 DirecTV, a revised estimate to the Picture Editor for DirecTV, Tyler Pappas of JTP
17 Creative/Byzantium Inc., and tried to ascertain the. photo shoot date.

18 Bruce Jenner

19 d. Petitioner Grecco testified Respondent Lohr obtained and negotiated

20 the fee for a photo shoot Petitioner Grecco shot of Bruce Jenner, an Olympic winning
decathlete and actor on the Keeping Up with the Kardashians reality show. The photos
21
were shot to accompany a WebMD webcast that featured Bruce Jenner promoting an
22
injectable product for osteoarthritis. Additionally, they were used for a magazine cover
23
wrap, article and for potential patient brochures. The agency directly contacted
24
Respondent Lohr asking for Petitioner Grecco's availability. Once it was determined
25
Petitioner Grecco was available, the exhibits show Respondent Lohr submitted original
26
and revised estimates on Petitioner Grecco's behalf.
27 Ill
28
4

DETERMINATION OF CONTROVERSY -TAC 23297


1 Howie Mandel
2 e. On July 21, 2008, Respondent Lohr was contacted by Vicki Stoiber, Head
3 of Production for M Street Creative seeking Petitioner Grecco's photography services on a

4 Public Service Announcement for ADHD, starring Howie Mandel. As with the previous

5 engagements, Respondent Lohr submitted Petitioner Grecco's estimate.

6 Shear Genius - NBC Bravo


f. In April, 2008, Petitioner Grecco appeared as on-air talent playing a judge
7
on the NBC Bravo show Shear Genius. Petitioner Grecco also helped create a photo shoot
8
that was part of the contest for the show which involved conceptualizing the contest and
9
helping put together all of the sets and create the contestant situation for the television
10
show. While Respondent Bitboul testified that her involvement was limited to negotiating
11
the photo shoot and that she was not involved in negotiating anything more, induding
12
Petitioner Grecco's involvement as on-air talent on the show, the evidence revealed
13 Respondents submitted expenses, estimates, and the final bill to NBC Bravo on behalf of
14 Petitioner Grecco.
15 Game Lounge - DirecTV
16 g. In 2006, Petitioner Grecco shot the cast of the DirecTV show Game Lounge
17 during the filming of a commercial. Petitioner Grecco testified this job was procured
18 through contacts he had with people at DirecTV from whom Respondent Lohr solicited

19 work. As with the other jobs, Respondent Lohr created the estimates and negotiated

20 Petitioner Grecco's fees.


"The Biggest Loser" - Season 6
21
h. In January, 2009, Petitioner Grecco shot the 4 remaining cast members of
22
The Biggest Loser Season 6 for a Got Milk? photo shoot at the Sundance Film Festival.
23
Respondent Lohr negotiated the fee, created the estimate and sent it to the client.
24
"The Biggest Loser" - Season 5
25
r. Petitioner Grecco shot The Biggest Loser 4 Finalist/Winner on Friday,
26
March 21, 2008 for a Got Milk? photo shoot. The fee was negotiated by Respondent Lohr.
27 Ill
28
5
DETERMINATION OF CONTROVERSY-TAC 23297
1 Additionally, estimates for this job were created by and sent to the client by Respondent
2 Lohr.
3 Terri Nunn - Lead Singer of Berlin

4 J. In May, 2008, Petitioner Grecco shot Terri Nunn and the rest of the band

5 members of the musical band, Berlin, for the cover of their CD. This job was initially
obtained through a friend of Respondent Bitboul. Respondent Bitboul then created the
6
estimate, sent it to the client and negotiated Petitioner Grecco's fee.
7
Blue Cross Blue Shield of Florida Commercial Starring Andy Cobb
8
k. In Aprii, 2006, Petitioner Grecco directed a commercial for Blue Cross Blue
9
Shield of Florida starring comedian, Andy Cobb. While the contact was initiated by
10
Petitioner Grecco, Respondent Lohr created the estimate, sent it to the client, negotiated
11
the fee structure and closed the deal. Respondent Bitboul explained that her agency
12
procures work for photographers in a directorial capacity in the sense that "if there's
13 motion attached to the print project, they can't get the print project without also doing the
14 video portion." She also explained "that a lot of the photographers are now being asked to
15 direct motion commercials or motion spots in association -Yvith the photography that
16 they're also shooting for the same project. However, these motion projects are typically
17 used for nothing more than as commercials for marketing and promotional pieces."

18 Style Her Famous - ABC Family

19 1. Petitioner Grecco was asked to bid on a photo shoot job for Style Her

20 Famous, an E Entertainment/Style Network show starring Jay Manual. Respondent Lohr


put the estimate together and submitted it; but ultimately, the job went to another
21
photographer.
22
Photo Shoot with Matthew Leinart and Summer Altice
23
m. In 2006, Petitioner Grecco photographed Reisman Trophy winning
24
football player, Matthew Leinart and Actress-Model Summer Altice for lcelink photo
25
shoots at the Viceroy hotel in Santa Monica, California. Respondent Lohr prepared the
26
estimate, provided it to the client and negotiated Petitioner Grecco's fee for both shoots.
27 Petitioner Grecco also directed some behind the scenes motion on this job but admitted
28

6
DETERMINATION OF CONTROVERSY -TAC 23297
1 Respondents initially got him the job as a still photographer. While at the job, however,
2 Icelink asked him to shoot motion on set. Respondents did not procure or negotiate this
3 motion work for Respondent.

4 Kathy Griffin for NBC Universal

5 n. In June, 2005, Petitioner photographed Actress and Comedian Kathy Griffin

6 for Bravo TV. Respondent Bitboul negotiated a $12,500 fee for this photo shoot.
Respondent Bitboul argue.cl that neither the procurement nor negotiation of this photo
7
shoot fall within the Act because the work was used for promotional purposes only.
8
According to Respondent Bitboul, Petitioner Grecco was approached by NBC to
9
photograph Ms. Griffin for a promotional poster NBC would use to promote her show.
10
Petitioner Grecco was being asked to create photographic content that Respondents would
11
then license to NBC, and NBC would have the right to take Petitioner Grecco's picture
12
and use it for promotional and marketing purposes.
13 Dane Reynolds for Surfer Magazine
14 o. On November 9, 2007Petitionerphotographe-dsurfer DaneReynolds on the
15 Beach in Ventura, California for Swfer Magazine. This job was procured and negotiated
16 by Respondent Bitboul. The exhibits show Respondent Lohr had to obtain approval by
17 Petitioner Grecco first before sending the estimate to Surfer Magazine.
18 Randy.Jackson.for Penguin Books

19 p. In 2008, Petitioner Grecco photographed Randy Jackson, who has appeared

20 as a judge on American Idol, for the cover of his new book published by Penguin Books.
Respondent Bitboul prepared the estimate, sent it to the client and negotiated the fee on
21
behalf of Petitioner Grecco.
22
The Pappas - ABC Family
23
q. In 2007, Respondents submitted estimates to ABC Family for Petitioner
24
Grecco to perform video and photography services for the show The Pappas. Ultimately,
25
Petitioner Grecco did not perform either service.
26
Cirque du So!eil
27 r. In 2007, Respondents handled negotiations for Petitioner Grecco to
28

DETERMINATION OF CONTROVERSY -TAC 23297


1 photograph the performers of Cirque du Soleil through an ad agency in San Francisco.
2 However, Petitioner Grecco did not perform the services for Cirque du Soleil.
3 Iman for Project Runway Canada

4 s. Petitioner Grecco testified Respondent Bitboul negotiated the fees for

5 him to photograph Superri:lodel Iman for her hosting job on Project Runway Canada in
2009. The photo shoot was ultimately canceled but Petitioner Grecco was still paid a fee
6
for the cancellation.
7
Play it 4-Ward Internet TV Show
8
t. Play it 4-Ward is a digital web series sponsored by Ford and Microsoft
9
which includes known intellectuals in the media world commenting about the future of
10
media and technology. In October, 2009, Petitioner Grecco was cast as a guest on the
11
show representing the film genre on a panel debating a wide range of subjects including
12
the future of film. Petitioner Grecco was allowed to promote his own material. Petitioner
13 Grecco testified Respondents negotiated his fee but the documents show he received a
14 $500.00 flat honorarium plus paid expenses. Respondents argued Play it 4-Ward only
15 approached them about retaining Petitioner Grecco as a guest panelist in regards to "still"
16 photography and that this engagement was only for promotional purposes to help
17 Petitioner Grecco obtain more "still" photography assignments.

18
19 LEGAL ANALYSIS

20 I. STATUTE OF LIMITATIONS

21
Respondents argue the petition is time barred under Labor Code 1700.44(b)
22 because the last payment Petitioner Grecco made to Respondents was in March, 2010 and
23 the petition was not filed until June 24, 2011. Labor Code l 700.44(b) provides:
24
No action or proceeding shall be brought pursuant to this
25
chapter with respect to any violation which is alleged to have
26
occurred more than one year prior to commencement of the
27
action or proceeding.
28

8
DETERMINATION OF CONTROVERSY-TAC 23297
1 Here, as Respondents point out, the petition was filed on June 24, 2011 but Respondents
2 terminated the relationship with Petitioner Grecco on June 29, 2010 when they sent him a
3 Termination Letter and Letter or Financial Obligation ("termination letter"). This
4 termination letter expressly states the following:
5 Pursuant to Clause 40 of BLUR Artist agreement, if Artist
6 fails to pay "commissions due Representative in conformity
7 with the terms of the Agreement: Representative has the right
8 to cure any such default. Artist has been aware of the
9 delinquency of $2523 .23 owed to 'Representative. This letter

10 will serve as notice of failure to pay. If payment is not

11 received in 30 days from the date of this agreement,


Representative will exercise its contractual right.
12
13 If Petitioner Grecco was seeking disgorgement in this petition, the action for
14 . disgorgemcnfwouid be time barred sirice the fast payment made to Respotidetits was
15 made in ]'.![arch, 2010, more than 1 year prior to the filing of the petition. Petitioner
16 Grecco, however, is not seeking disgorgement in this administrative action. Nor is he
17 raising the Act as a defense to any current action filed by Respondents. Rather, Petitioner
18 Grecco is only seeking a declaration that the Agreement is unlawful and void under the
19 Talent Agencies Act. To the extent the declaration serves as an "anticipatory" defense to a
20 potential claim, (e.g. an action by Respondents seeking to collect the unpaid commissions
21 referred to in the termination letter or otherwise enforce the Agreement against Petitioner
22 Grecco), there is no statute of limitations issue and we proceed to issue this determination
23 on the merits. Styne v. Stevens (2001) 26 Cal.4'11 42; Church v. Brown (TAC 52-92),
24 pp.5-7.
25 Ill
26 Ill
27 Ill
28
9
DETERMINATIO~ OF CONTROVERSY -TAC 23297
1 II. VIOLATION OF THE TALENT AGENCIES ACT
2
A. "Artist" Within the Meaning of the Act
3
4
Labor Code l 700.4(b) defines "artists" as:
5
Actors and actresses rendering services on the legitimate stage
6
and in the production of motion pictures, radio artists, musical
7
artists, musical organizations, directors of legitimate stage,
8
motion picture and radio productions, musical directors,
9
writers, cinematographers, composers, lyricists, arrangers,
10
models, and other artists and persons rendering professional
11
services in motion picture, theatrical, radio, television and
12
other entertainment enterprises.
13
14 Respondents argue Petitioner Grecco, while being a creative professionai, is not an
15 "artist" as defined under the Act when he is shooting "still" photography. Historically, we
16 have held that a person is an "artist" as defined in Labor Code 1700 .4(b) if he or she
17 renders professional services in motion picture, theatrical, radio, television and other
18 entertainment enterprises that are "creative" in nature. For example, in American First

19 Run dba American First Run Studios, Max Keller, Micheline Keller v. OMNI

20 Entertainment Group, A Corporation; Sheryl Hardy, Steven Maier (TAC 32-95),


(hereinafter, referred to as "American Run"), we discussed the meaning of the term
21
"artists" under the Act. In deciding whether a "producer" came under this definition we
22
explained that:
23
24 [a]lthough Labor Code l 700.4(b) does not expressly list
25 producers or production companies as a category within the

26 definition of 'artists,' the broadly worded definition includes

27 'other artists and persons rendering professional services

28 in ... television and other entertainment enterprises.' Despite

10
DETERMINATION OF CONTROVERSY -TAC 23297
1 this seemingly open ended fonnulation, we believe the
2 Legislature intended to limit the term 'artists' to those
3 individuals who perform creative services in connection with
4 an entertainment enterprise. Without such a limitation,

5 virtually every "person rendering professional services"

6 connected with an entertainment project---includirig the


production company's accountant's lawyers or studio
7
teachers-would fall within the definition of 'artists.' We do
8
not believe the Legislature intended such a radically far
9
reaching result. .. [I]n order to qualify as an 'artist' there must
10
be some showing that the producer's services are artistic or
11
creative in nature as opposed to services of an exclusively
12
business or managerial nature.
13
14 Americmi Ruh at pp. 4~5.

15
Applying this test in Burt Bluestein, aka Burton Ira Bluestein v. Production Arts
16
Management; Gary Marsh; Steven Miley; Michael Wagner, (TAC 14-98), (hereinafter,
17
referred to as "Bluestein"), we dismissed the petition because there was not a significant
18
showing that the producer's services were creative in nature as opposed to services of an
19
exclusively managerial or business nature. In reaching this conclusion, we explained that,
20
[o]ccasionally assisting in shot location or stepping in as a
21
second director as described by petitioner, does not rise to the
22
creative level required of an 'aiiist' as intended by the drafters.
23
Vitiually all line producers or production managers engage in
24
de minimus levels of creativity. There must be more than
25 incidental creative input. The individual must be primarily
26 engaged in or make a significant showing of a creative
27 contribution to the production to be afforded the protection of
28
11
DETERMINATION OF CONTROVERSY -TAC 23297
1 the Act. We do not feel budget management falls within these
2 parameters.
3 Bluestein at p. 6. See also, Hyperion Animation Co., Inc. v. Toltec Artists, Inc., (TAC 07-
4 99).
5 Likewise, in Angela Wells v. Barmas, Inc. dba Fred Segal Agency (17-00), we did
6 not find that the make-up artist was considered an "artist" under the Act because her skills
7 did not rise to the level of special effects wizardry which might be afforded protection
8 under the Act. We noted that "throughout the history of the Act, the definition of' artist'
9 only included above-the-line creative performers or the creative forces behind 'the
10 production whose contributions were an essential and integral element of the productions,
11 (i.e., directors, writers and composers)." Id. at pp 4-5.
12 Similarly, in applying this test to this case, for the reasons explained below, we do
13
not find that Petitioner Grecco is an "artist" under the Talent Agencies Act on
14 engagements where he perfonned "still" photography only. We, do, however find that he
15 is an ''artist" under the Act on those engagements where he provided directorial services
16 or was engaged as on-air talent.
17

18 1. "Still" commercial photography engagements.


19 Respondents stipulated that the Agreement provided they were required to solicit

20 work for Petitioner Grecco. Respondents also stipulated they did in fact procure work for

21 him. It is also evident from the testimony and exhibits Respondents actively negotiated
most of the "still" commercial photography engagements for Petitioner Grecco at issue in
22
this petition. Respondent Bitboul described her company's functions as:
23

24 What we attempt to do is secure assignments on behalf of the


25 photographer, and then we also manage the photographer's
26 career in that we oversee the promotion and marketing of that

27 photographer's career. We advise that photographer as to how

28 to promote themselves.

12
DETERMINATION OF CONTROVERSY -TAC 23297
1 In certain cases, we will aid the photographer in estimating,
2 collecting funds, and managing budgets. But ultimately, it is
3 our job to secure assignments and oversee the negotiations of
4 creative fees and licensing of those images.

5 Reporter's Transcript 139:20-140:6.


6 Respondents argue that despite procuring and negotiating engagements for
7 Petitioner Grecco as a "still" photographer, they are not in violation of the Act because
8 "still" photographers are not considered "artists" under the Act. We agree and find
9 Respondents' procurement, including negotiation of "still" photography engagements for
10 Petitioner Grecco, do not violate the Act because a "still" photographer is not considered
11 an "artist" within the meaning of the Act. While Petitioner Grecco's artistic experience,
12 talent, and creativity inevitably play a role in how he photographs a subject, even a
13 celebrity subject, arguably many of the jobs performed "behind the scenes" require some
14 . degree ofa1iistic experie!lcc or creativity. Buf, this does not rnean any professional who is
15 creative and artistic in performing their job is a covered "artist" under the Act. For
16 example, the wardrobe stylist who works on Petitioner Grecco's photo shoots is a creative
17 professional. The wardrobe stylist is responsible for selecting clothing and accessories for
18 the artist (celebrity or model) based on the direction or look that the director or
19 photographer wants for the photo shoot. In selecting the right outfit and look for the shoot,
20 the wardrobe stylist is relying on his or her creativity and artistic sense. Is that stylist then
21 considered an "artist" under the Act? We do not find the legislative intent behind the Act
22 would support a finding that the wardrobe stylist is an "artist."
23 Likewise, the set builders, prop stylists, and make-up artists who are also working
24 on the photo shoot, all use their creativity and talent to perform their various roles. While
25 all of them are artistic and creative in performing their roles, in most cases, they are not
26 considered "artists" within the meaning of the Act. As we explained in American First
27 Run dba American First Run Studios, Max Keller, Micheline Keller v. OMNI
28
13
DETERMINATION OF CONTROVERSY -TAC 23297
1 Entertainment Group, A C01poration; Sheryl Hardy, Steven Maier (TAC 32-95), supra,
2 "without any kind of limitation as to who is considered an 'artist' under the Act, virtually
3 every 'person rendering professional services' connected with an entertainment project
4 would fall within the definition of 'artists.' As a result, the scope of the Act would be
5 broadened far beyond its legislative intent." The Act "must be given a reasonable and
6 common sense construction in accordance with the apparent purpose and intention of the
7 lawmakers-one that is practical rather than technical and that will lead to wise policy
8 rather than to mischief or absurdity." Buchwald v. Superior Court (1967) 254 Cal.App.2d
9 347, 354-355 citing 45 Cal.Jur.2d, Statutes, 116, pp. 625-626.
10 The cases relied on by Petitioner Grecco to argue that an ente1iainment
11 photographer is an "artist" under the Act, are distinguishable. In both the Billy Blanks, Jr.,
12 et al v. Anthony P. Riccio, (TAC 7163) decision and the Daniel Browning Smith v. Chuck
13 Harris aka Oaky Miller, et al., (TAC 53-05) decision, we held the petitioners were
14 "artists'' under the Act hecause they were the actual performers on an entertainment
15 enterprise (i.e., the infomercial and the sports event). In the Blanks v. Riccio case, we
16 noted that not any person performing on a Cardioke video would be considered an "artist"
17 under the Act and explained that Mr. Blanks was considered an "artist" when performing
18 on his infomercial only because his celebrity coupled with his musical and exercise
19 experience were being used to market his product. Likewise, in the Smith v. Harris case,
20 we held that Daniel Browning Smith, a contortionist, was an "artist" under the Act when
21 he was performing at a spo1iing event (an entertainment enterprise) for the purpose of
22 entertaining the audience.
23 In Leslie Redden v. Candy Ford Group, (TAC 13-06) and Nancy Sweeney v.
24 Penelope Lippincott dba Finesse Model Management, (TAC 40-05), also relied upon by
25 Petitioner Grecco, we found the models, even the promotional model, "artists" under the
26 Act because "models" are expressly listed as part of the definition of"artist" under Labor
27 Code 1700.4(b).
28 In William Morris Agency, LLC v. Dan O'Shannon, et al, (TAC 06-05), we held
14
DETERMINATION OF CONTROVERSY -TAC 23297
1 Respondent Dan O'Shannon, a producer on the long running television series Frasier was
2 an "artist" under the Act because he was the creative force behind the television show.
3 While Petitioner Grecco may be the creative force behind his photography, the "still"
4 photos he took, which are at issue, were used for promotional and marketing purposes
5 only. Unlike Mr. O'Shannon who was creating, by writing and editing, each television
6 episode of Frasier, Petitioner Grecco had no direct role in the television shows being
7 promoted through his "still" photography.
8 Petitioner Grecco also argues he is an "artist" under the Act because he is a
9 celebrity photographer. The fact Petitioner Grecco was photographing celebrities does not
10 change our analysis. Petitioner Grecco's photography of a "still" photo to be used for
11 promotion of a product is no different than shooting a photo that is used for promotion of
12 a television show. A photo is a photo and just because a celebrity is being used to
13 promote the product or the product is the television show, does not make the person taking
14 the photo art "artist" withJn the 1weani11g oftlre Act.
15 Consequently, we do not find that procurement, including negotiation, of the
16 following "still" photography engagements to be in violation of the Act: Campbell's
17 Chunky Soup, Leonard Maltin for DirecTV, Martin Scorsese for DirecTV, Bruce Jenner,
18 Howie Mandel, Game Lounge for DirecTV, The Biggest Loser - Seasons 5 and 6, Terri
19 Nunn-CD Cover, Style Her Famous for ABC Family, Matthew Leinart and Summer
20 Altice for Icelink, Kathy Griffin for NBC Universal, Dane Reynolds for Surfer Magazine,
21 Randy Jackson for Penguin Books, Cirque du Soleil and Iman for Project Runway
22 Canada.
23 2. Director Services
24 Petitioner Grecco also performed director services on a commercial for Blue Cross
25 Blue Shield of Florida featuring comedian Andy Cobb in April, 2006. Unlike "still"
26 photographers, directors of motion including, commercials, are considered "artists" within .
27 the meaning of the Act. See Howard Rose v. William Reilly, (TAC 43-97) where we held
28 that a director of a television commercial is an "artist" under the Act. Consequently,

15
DETERMINA TJON OF CONTROVERSY -TAC 23297
1 Respondent Lohr's act of creating the estimate, sending it to the client, negotiating the fee
2 structure, and closing the deal, were all done without a talent agency license, in violation
3 of the Act.
4 With regard to the photo shoot with Matthew Leinart and Smmner Altice for
5 Icelink, there was testimony that Petitioner Grecco also directed behind the scenes motion
6 for this ad campaign. However, Petitioner Grecco admitted Respondents secured the
7 photo shoot for him as a still photographer but were not involved in procurement of the
8 directorial work which was later requested by the client and performed by Petitioner
9 Grecco. As such, we do not find Respondents in violation of the Act on this directorial
10 engagement.
11 In 2007, Respondents submitted estimates to ABC Family for Petitioner Grecco to
12 perform video services for the show referred to as The Pappas. While Petitioner Grecco
13 did not end up performing this engagement, there is still a violation of the Act by
14 Respondents since they submitted estimates for Petitioner Grecco to perfonn-directing
15 services without a talent agency license. This constitutes an "attempt to procure"
16 employment under the Act.
17 Finally, in regard to Petitioner Grecco's argument Respondents were trying to
18 obtain employment for him as a film director by listing him on their film roster, we rule
19 there was insufficient evidence presented to establish a violation of the Act.
20 3. On-Air Talent
21 On April, 2008, Petitioner Grecco appeared as on-air talent on Shear Genius for
22 NBC Bravo. Petitioner Grecco submitted a copy of the script he was provided for this
23 show. The evidence established Respondents submitted expenses, estimates, and the final
24 bill to NBC Bravo on behalf of Petitioner Grecco. Consequently, Respondents violated the
25 Act by negotiating Petitioner Grecco's fee in connection with this on-air appearance as an
26 actor (which is covered by the Act).
27 We do not find any violation of the Act with respect to Petitioner Grecco's role as a
28 guest panelist on the Internet TV Show Play it 4-Ward because we do not find Petitioner
16
DETERMINATION OF CONTROVERSY -TAC 23297
1 Grecco was perfonning as an "artist" in connection with this show. Instead, Petitioner
2 Grecco was serving as a panelist debating a wide range of subjects including the future of
3 film. We also do not find this engagement constitutes an "entertaimnent related
4 engagement" within the meaning of the Act.
5
6 III. APPROPRIATE REMEDY FOR VIOLATIONS OF THE ACT
7 Petitioner Grecco seeks a determination from us that the contract is void and illegal
8 because Respondents procured engagements for Petitioner Grecco in violation of the Act.
9 As noted above, we only find Respondents violated the Act on the following
10 engagements: directing services on the Blue Cross Blue Shield of Florida internet
11 commercial featuring comedian, Andy Cobb, attempted procurement of video services for
12 the ABC Family show The Pappas, and Petitioner Grecco 's appearance as on-air talent on
13 Shear Genius for NBC Bravo. The remainder of the engagements were procured lawfully
14 as they donot faHunder the Aetforthe reasonsexplainedin this-determination,
15 We now address the appropriate remedy for the aforementioned violations of the
16 Act: In Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 991, the court
17 recognized the Labor Commissioner may invalidate an entire contract when the Act is
18 violated. The court left it to the discretion of the Labor Commissioner to apply the
19 doctrine of severability to preserve and enforce the lawful portions of the parties' contract
20 where the facts so warrant. As the Supreme Court explained in Marathon:
21 Courts are to look to the various purposes of the contract. If
22 the central purpose of the contract is tainted with illegality,
23 then the contract as a whole cannot be enforced. If the
24 illegality is collateral to the main purpose of the contract, and
25 the illegal provision can be extirpated from the contract by

26 means of severance or restriction, then such severance and

27 restriction are appropriate. [Citations omitted].

28
-~

17
DETERMINA T!ON OF CONTROVERSY -TAC 23297
1 Marathon, supra at p.996.
2 In this case, we find that "'the interests of justice ... would be furthered' by
3 severance." Id. Accordingly, we sever the following engagements which were procured
4 in violation of the Act: Directing services on the Blue Cross Blue Shield of Florida
5 internet commercial featuring comedian, Andy Cobb; Attempted procurement of video
6 services for the ABC Family show, The Pappas; and Petitioner Grecco's appearance as
7 on-air talent on Shear Genius for NBC Bravo. All other engagements that are the subject
8 of this petition, were lawfully obtained by Respondents.
9
10 IV. ORDER
For the reasons set forth above, IT IS HEREBY ORDERED the Artist
11
Agreement between Petitioner MICHAEL GRECCO and Respondents BLUR PHOTO,
12
LLC, a California limited liability company; CLIO BITBOUL, an individual; and
13
MICHAEL LOHR, an individual, is valid and enforceable under the Talent Agencies Act
14
except as to the following engagements which were procured in violation of the Act and
15
which we hereby sever from the Artist Agreement:
16
1 - Directing services on the Blue Cross Blue Shield of Florida internet
17 commercial featuring Comedian Andy Cobb;

. 18 2-Attempted procurement of video services for the ABC Family show - The
19 Pappas; and

20 3 - Petitioner Grecco's appearance as on-air talent on Shear Genius for NBC


Bravo.
21
22 Respondents BLUR PHOTO, LLC, a California limited liability company; CLIO

23 BITBOUL, an individual; and MICHAEL LOHR, an individual have no rights or

24 entitlements to any monies arising from these three engagements.


Ill
25
Ill
26
Ill
27
Ill
28
18
DETERMINATION OF CONTROVERSY -TAC 23297
1 Respectfully sLibm itted,
2
3
4
By~~C{~~
Attorney for the Labor Commissioner
5
6
7
ADOPTED AS THE DETERMINATION OF THE LABOR COMMISSION.ER

8
9
. Dated: J//fltj
I
.:zd .:V0/3 By:_~;z,::,~~~~==----

10
11

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
19
I
DRTERMINA TION OF CO:-ITROVERSY -TAC 23297

I
1 PROOF OF SERVICE

2 STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS.
3
I am employed in the County of Los Angeles, State of California. I am over the ag,
4 not a party to the within action. My business address is DIVISION OF LABOR STA1
ENFORCEMENT, Department ofindustrial Relations, 320 W. 4'h Street, Suite 430, Los AngL
5 90013.
On July 24. 2013, I served the following document described as:.
6

7 DETERMINATION OF CONTROVERSY
8 on the interested parties in this action [TAC 23297 ] by placing

9 [l the originals

10 [x] a true copy thereof enclosed in a sealed envelope addressed as follows:

11
Steven Sandler, Esq.
12 LAW OFFICES OF STEVEN SANDLER
20335 Ventura Boulevard, Suite 200
13 Woodland Hills, CA 91364

l!L .MichaelD ....Kuznetsky, Esq.


KUZNETSKY LAW GROUP, P.C.
15 6565 Sunset Boulevard, Suite 311
Hollywood, CA 90028
16
Michael W. Fattorosi, Esq.
17 FATTOROSI & ASSOCIATES, P.C.
5850 Canoga Avenue, Suite 400
18 Woodland Hills, CA 91367

19
[l BY MAIL I ~eposited such envelope in the United States Mail at Los Angeles, California,
20 postage prepaid.

21 [x] BY MAIL I am readily fainiliar 'Yith the firm's business practice of collection and processing
of correspondence for mailing with the Umted States Postal Service ai1d said correspondence
22 is deposited with the United States Postal Service the same day.

23

24 Executed on July 24, 2013 at Los Angeles, California. I d/Jare under penalty of perjury the
foregoing is. true and correct. ( \ /;/' ~;
25 \ ' , ___.----
. \ .I ..,.,,.-

26 LiCi Morales

27

28 Proof of Service
1 STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
2 DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
3 1901N. Rice Ave., Smte 200
Ventura, California 93030
4 Telerhone No. (805) 973-1244
Facsimile No. (805) 973-1251
5
Special Hearing Officer for the Labor Commissioner
6
7
8
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10
11 / JOHN BRANCA and JOHN McCLAIN, CASE NO.: TAC-26372
I as Executors of the Estate of Michael J.
12 Jackson, DETERMINATION ON PETITION
OF JOHN BRANCA AND JOHN
13 Petitioner, MCCLAIN, AS EXECUTORS OF
THE ESTATE OF MICHAEL J.
14 vs. JACKSON

15
TOHME R. TOHME,
16
1
/ Respondent.
17
18
19 / This proceeding arose under the provisions of the Talent Agencies Act ("TAA" or
20 "Act"), Labor Code 1700 - 1700.47'. On March 1, 2013, petitioners JOHN BRANCA
21 and JOHN McCLAIN, as Executors of the Estate of Michael J. Jackson ("petitioners"),
22 filed a petition with the Labor Commissioner pursuant to 1700.44 seeking determination
23 of an alleged controversy with respondent TOHME R. TOHME ("respondent" or
24 "Tohme"). On April 10, 2012 respondent filed an answer to the petition. Thereafter, on
25 November 13, 2012, February 13, 2013, and October 9, 2013, a full evidentiary hearing
26 spanning three days was held before William A. Reich, attorney for the Labor

27 Unless otherwise specified, all subsequent statutory references are to the Labor
Code.
28

DETERMJNA TION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN


Commissioner assigned as a hearing officer. Due consideration having been given to the

2 testimony, documentary evidence, briefs, and arguments submitted by the parties, the

3 Labor Commissioner now renders the following decision.

5 FACTUAL AND PROCEDURAL BACKGROUND

6
7 The multi-talented and internationally. renowned artist Michael Jackson

8 ("Jackson") died on June 25, 2009. Jackson was an extraordinarily gifted singer,

9 songwriter, composer, dancer, and actor.

IO
11 Subsequent to Jackson's death, a proceeding to probate Jackson's estate was
12 initiated in the Los Angeles County Superior Court. Pursuant to that proceeding,

13 / petitioners were appointed as the executors and personal representatives of the estate of
14 . / Michael Jackson.
I
15
16 On June 6, 2012, respondent Tohme filed a civil action in the Los Angeles County

17 Superior Court against petitioners in their capacity as the executors and personal

18 representatives of the Jackson estate. The complaint alleged that Jackson and his estate

19 had breached three written contracts that had been entered into by and between Tohme

20 and Jackson in 2008, and sought declaratory relief, damages for the contract breaches,

21 1 i and an accounting for certain revenues received by Jackson and the Jackson estate since

22 July 2, 2008.

23
24 One of the contracts sued upon was a management Services Agreement

25 ("management agreement") entered into on July 2, 2008, pursuant to which Tohme agreed

26 to provide services relating to the management and coordination of the various facets of

27

28
2
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
I Jackson's artistic career. In exchange for these services, Jackson agreed to pay Tohme
2 the sum of $35,000.00 per month plus 15% of "all gross compensation received by
3 [Jackson] for his services within the entertainment industry, including live performances,
4 merchandising, electronic arts, recorded and live telecasts, motion pictures, and animation
5 projects." It was with respect to this contract that the complaint sought an accounting of
6 the "gross compensation" received by Jackson and the Jackson estate.

7
8 Another contract sued upon in the civil action was a letter agreement dated May 2,
9 2008, pursuant to which Tohme was promised three separate finder's fees for bringing
IO Jackson into contact with the investment entity Colony Capital,. LLC ("Colony") and
11 facilitating Colony's purchase of the promissory note secured by a deed of trust on the
12 real property owned by Jackson in California known as the Neverland Ranch. This
13 purchase prevented the holder of the note from foreclosing on the Neverland Ranch
14 property, and also served to secure a release of the Hens that the note holder had against
15 Jackson's personal property and memorabilia. The fees payable to Tohme were 10% of
16 the amount of the loan purchased by Colony, l 0% of the proceeds realized upon the
17 subsequent sale of the Neverland Ranch property, and 10% of the proceeds of any
18 subsequent transactions brought to Jackson by Colony. The complaint alleged the fees
19 due under this contract had not been paid.

20
21 A third contract sued upon in the complaint was an Indemnity Agreement entered
22 into on August 6, 2008. The complaint alleged that under this agreement Tohme was
23 entitled to reimbursement for the expenses incurred, including legal fees, in rendering his
24 services to Jackson pursuant to the agreements between Tohme and Jackson. More
25 particularly, the complaint alleged that under the agreement Tohme was entitled to be
26 indemnified for the costs, expenses, and attorney's fees incurred in seeking to enforce the

28
3
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
2
1 three sued-upon contracts in the pending civil action.

2
3 Petitioners responded to the civil action by requesting a stay of the action so that
4 they could pursue appropriate proceedings before the Labor Commissioner under the
5 provisions of the TAA. Specifically, it was petitioners' position that the TAA furnished a
6 defense of illegality to the contract causes of action asserted in the complaint-namely,
7 that in rendering services under the management agreement Tohme had engaged in the
8 activities of a talent agency without having a license to do so, and that consequently the
9 management agreement and the other related agreements were illegal, void, and
10 unenforceable. Given the Labor Commissioner's exclusive original jurisdiction over
11 defenses of illegality predicated on the provisions of the TAA, a stay was necessary to
12 allow the Commissioner to address this issue first. Accordingly, the court granted a stay
13 of the civil action pending a determination by the Labor Commissioner.

14
15 The petition in this case alleges that Tohme violated the TAA, and in particular
16 section 1700.5, which provides that no person shall engage in the occupation of a talent
17 agency without first obtaining a license to do so. More particularly, the petition alleges
18 that, without being licensed as a talent agent, Tohme engaged in the occupation of a talent
19 agency by procuring and attempting to procure engagements for Jackson to perform as an
20 artist. The petition seeks a determination from the Labor Commissioner that, because of
21 I the violations of the TAA, the management agreement and the other agreements related

22
23 It should be noted that on February 17, 2012, petitioners initiated a proceeding
against Tohme in the probate court in which they set forth eight causes of action seeking
24 relief based on various acts of alleged misconduct on the part of Tohme in his dealings
with Jackson. The relief sought in that proceeding is based on rights and protections
25 conferred by laws other than the TAA. The present proceedin~ is concerned only with the
rights and protections that artists have under the TAA with respect to conduct that
26 violates the TAA's provisions. Therefore, the determination rendered in this proceeding
is not intended to affect, and should not be construed as affecting, any rights or duties that
27 the parties may have with respect to conduct that is outside the scope of the TAA and that
is therefore governed by laws other than the TAA.
28
4
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 thereto are void ab inctio and unenforceable and that consequently Jackson and his estate
2 have no liability under such contracts and no rights can be asserted against either Jackson
3 or his estate under the contracts' provisions.

4
5 In his answer to the petition, and in various other papers filed in this proceeding,
6 Tohme denies the factual allegations of the petition and disputes the legal contentions
7 advanced therein. Although Tohme's answer is packed with boilerplate affirmative
g defenses that have no application to this case, the answer essentially joins issue on the
9 petitioners' allegations by directly contradicting and challenging the core contention set
1o forth in the petition-that is to say, Tohme unequivocally asserts that during the course of
11 his management-artist relationship with Jackson he did not procure or attempt to procure
12 engagements for Jackson to perform as an artist.

13
14 Tohme first became involved in Jackson's business affairs sometime in the spring
15 of 2008. At the time, Jackson was in default on the promissory note that was secured by a
16 deed of trust on the Neverland Ranch property and by a lien on Jackson's personal
17 property, memorabilia, and ownership interest in his music catalogs. By virtue of
18 forthcoming foreclosure proceedings, Jackson was in serious danger of losing all of these
19 very valuable real property and personal property interests. It was at the request of
20 Jackson's brother, Jermain Jackson, that Tohme agreed to meet with Jackson regarding
21 this matter. As a resuit of the meeting, Tohme decided he would assist Jackson in seeking
22 to avoid the threatened foreclosure on the Neverland Ranch property and on the personal
23 property interests that were subject to a lien. After extensive efforts, involving reaching
24 out to various contacts in the investment world, Tohme finally succeeded in arranging for
25 the investment firm Colony to purchase the promissory note from the then holder of the
26 note, the Fortress Investment Group. Through Tohme's efforts, the purchase of the note
27 was implemented pursuant to a transaction that effected a cancellation of the foreclosure

28
5
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 on the Neverland Ranch property, secured a release of the lien on Jackson's personal

2 property, memorabilia, and ownership interest in his music catalog, and created a joint
3 venture structure for eventually selling the Neverland Ranch property and realizing a

4 proper return on its value. Tohme was to be compensated for these activities pursuant to

5 the previously mentioned finder's fee agreement dated May 2, 2008.

6
7 After Tohme had rescued Jackson from the dire consequences of the impending

8 foreclosure, Jackson asked Tohme to become his manager and provide guidance, advice,

9 and assistance with respect to his business affairs and his professional career as an artist.

10 Tohme accepted, and the parties entered into the previously described July 2, 2008

11 management agreement. The agreement delineates certain of the services to be performed

12 by Tohme as follows:

13 I
(I) coordinate and authorize Warner/Chappell releases; (2) assist in
14 event management; (3) assist in maintaining license agreements and
relationships with licensors; ( 4) assist in coordinating payments to
15 those providing services to Mr. Jackson, including, without limitation,
16 accountants, advisors, attorneys, and assistants; ( 5) negotiate and
manage housing and personal business matters; (6) coordinate with
17 Sony Music regarding licensing, acquisitions, and distributions; (7)
negotiate product placements, memorialize licensing arrangements
18
and animation projects; and (8) assist in live and taped performance,
19 motion picture, and music career issues.
20
2i As previously noted, in exchange for the services, Jackson agreed to pay Tohme
22 $35,000.00 per month plus a 15% commission on all of the "gross compensation received

23 by [Jackson] for his services within the entertainment industry."

24
25 The evidence in this case conclusively establishes that Tohme provided Jackson
26 with a broad range of exclusively managerial services that were extremely beneficial to

27
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6
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 Jackson. From the outset of Tohme's involvement, it was evident that, due to a variety of

2 pre-existing personal problems, Jackson's professional career was in the throes of a

3 potentially destructive downward spiral. Tohme immediately set out to reverse that spiral
4 and rebuild Jackson's career. Tohme convinced Jackson that he should leave the negative
5. environment of Las Vegas, where he and his family were living, and move to the healthier

6 and more hospitable environment of Los Angeles. Through focused efforts and

7 discussions, he persuaded Jackson that he needed to return to work in order to earn the
8 money required to clear away the cobwebs of the financial bind he was in. Despite some
9 initial resistance, Jackson accepted the advice and committed to returning to work.
10 Tohme coordinated Jackson's housing and living arrangements in Los Angeles.

11
12 Tohme was in charge of handling Jackson's financial affairs. He handled the
13 payment of bills, expenses, outstanding loans, and other debt obligations, including tax
14 obligations. Tohme was also responsible for overseeing the status of Jackson's business
15 ventures with Sony Music. These duties included making sure that Sony Music was
16 paying Jackson all of the money that was due to him. At one point, Tohme discovered

17 that Sony Music was withholding money due and payable to Jackson as a result of the re-
18 release of the album "Thriller". Tohme contacted Sony Music, overcame its
19 recalcitrance, and eventually succeeded in inducing Sony Music to pay Jackson what was
20 owed to him, which turned out to be over $10,000,000.00.

21
22 Tohme was also in charge of hiring, firing, and overseemg the business
23 representatives and personal staff that provided needed services to Jackson, inclusive of
24 attorneys, accountants, and security personnel. During his tenure as manager, Tohme
25 hired various attorneys to handle a number of litigation and transactional matters affecting
26 Jackson and his interests. During this period, Tohme also discharged the pre-existing

27
28
7
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 // security team and brought in an entirely new staff to handle the security for Jackson.

2
3 Tohme was Jackson's official spokesperson in dealings with the media. He
4 handled the issuance of press releases and the communication of statements to the press,
5 which included responding to false or malicious news reports that might have a negative
6 impact on Jackson's reputation. Tohme's duties also included regularly taking care of the
7 needs of Jackson and his family with respect to a wide variety of personal matters.

8
9 In addition to providing the above-described managerial activities, Tohme played a
Io crucial role in finessing the resolution of a legal matter that stood as a seemingly
11 insurmountable obstacle to the revival of Jackson's career. During the time that Jackson
12 had been forced to defend himself against charges of child molestation, Sheikh Abdullah
13 of Bahrain had covered a substantial portion of the fees incurred by Jackson in mounting
14 his defense. Following his acquittal, Jackson and his family moved to Bahrain, where
15 they lived as guests of Sheikh Abdullah at the Sheikh's expense. While residing in
16 Bahrain, Jackson entered into a contract with a company controlled by the Sheikh, 2 Seas
17 Records LLC (the "2 Seas Contract"). Under this 2 Seas Contract, Sheikh Abdullah was
18 given the exclusive right throughout the world to any and all of Jackson's new creative
19 undertakings; this contract operated to preclude Jackson from recording, performing, or
20 otherwise pursuing any sort of artistic activity without first obtaining the consent of the
I
21 Ii Sheikh.
I
22
23 After Jackson left Bahrain in 2006, Sheikh Abdullah brought suit in London,
24 England to enforce the rights conferred by the 2 Seas Contract. The suit sought $7
25 million in damages, and injunctive relief either compelling performance or enjoining
26 Jackson from engaging in artistic activities not authorized under the contract. The

27
28
8
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 London lawsuit and the relief that might be awarded in effect prevented Jackson from
2 obtaining or accepting any engagements to perform as an artist.

3
4 Subsequent to becoming Jackson's manager, Tohme initiated a sustained and
5 intense effort to get Jackson out of the constraints of the 2 Seas Contract. Through his
6 / own extensive negotiations and exchanges with Sheikh Abdullah and those representing
7 him, and utilizing the services of attorneys he decided to hire, Tohme succeeded in
8 orchestrating a settlement agreement that resolved the London lawsuit and that, upon
9 payment of the agreed upon settlement amount, relieved Jackson of the strictures of the 2
1o Seas contract, enabling him to embark upon and accept new engagements to perform.

11
12 During the period from the date Tohme became Jackson's manager in July, 2008
13 and until the date -of Jackson's death on June 25, 2009, Jackson entered into only one
14 contractual engagement pursuant to which he agreed to render services as a performing
15 artist-that was the January, 2009 contract that Jackson entered into with AEG Live, LLC
16 dba Concerts West ("AEG") to deliver live performances at a series of 31 or more
17 concerts to be held in 2009 at AEG's 02 Arena in London, England (the "02 Concert Tour
18 agreement").

19
20 A proposal for Jackson to engage in a concert tour at the 02 Arena in London had
21 been the subject of negotiations between AEG's representatives and Jackson's
22 representatives at an earlier time in 2007. Those negotiations, however, did not culminate
23 in a contract because at a certain point in February, 2008 Jackson decided that he did not
24 want to do a concert tour.

25
26 The idea of a Jackson concert tour at the 02 Arena was revived around the

27

28/
9
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
beginning of September, 2008. At that time, a representative or representatives of
2 Colony, the company that had acquired the promissory note secured by the Neverland
3 Ranch property, contacted Phil Anschutz, the head of the Anschutz Entertainment Group,
4 of which AEG is a division. The contact involved the suggestion of Jackson performing
5 concerts at the 02 Arena. As a result of this contact, Phil Anschutz called Brandon
6 Phillips ("Phillips"), the president and CEO of AEG, and directed him to meet with
7 Colony's representatives Tom Barrack and Richard Nanule.

8
9 The meeting with Colony's representatives took place around the middle of
Io September. At that meeting Tom Barrack and Richard Nanula asked Phillips to set up a
II meeting with Tohme, who was managing Jackson. They brought up the potential for a
12 Jackson tour, and wanted Phillips to begin discussions with Tohme about putting together
13 such a tour. Thereafter, Richard Nanula arranged for Philips to meet with Tohme at the
14 old bar at the Bel Air Hotel; the meeting took place that same night or the next day.

15
16 The one-on-one meeting between Phillips and Tohme lasted approximately an
17 hour-and-a-half. There was a discussion of the prior proposal for a concert tour that had
18 not come to fruition. There was also a discussion of the desirability of a residency at one
19 of AEG's arenas, particularly the London one, which was an ideal market for Jackson to
20 begin the rebirth of his live career. This initial meeting was followed in succession by
21 two additional meetings, one of which was again just between Phillips and Tohme and
22 another one which included a third individual, Paul Gongaware, the co-CEO for AEG' s
23 touring division. There was also a subsequent meeting at which Jackson was present
24 along with Phillips and Tohme. There was also an additional meeting at which Phil
25 Anschutz was present, along with Phillips, Tohme, Jackson, and several other individuals.

26
27
281! I
IO
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 Early on in these preliminary meetings Tohme determined that he liked what he
2 was hearing from AEG. At a certain point, it became evident to Tohme that Phillips had
3 been green lighted to negotiate a Jackson tour at the 02 Arena with Tohme. For his part,
4 Tohme was also ready: he started working with Phillips, met with him, and told him what
5 was needed from AEG in order for the deal to happen. Eventually the parties reached an
6 agreement, and a deal was signed.

7
8 During the course of the meetings between Tohme and Phillips, Tohme identified
9 certain items that had to be included in the contract for an agreement to be concluded;
1oj these consisted of: ( 1) an advance of $5 million, $3 million of which would go to Sheikh
11 Abdullah's company to give effect to the settlement of the London lawsuit, a precondition
12 to Jackson being able to perform the concert tour; (2) an advance of $100,00.00 per
13 month to cover the rental of a house in Bel Air, California; and (3) an optional advance of
14 $15 million to be used for the purchase of a specifically identified house located in Las
15 Vegas, Nevada. Contractual provisions providing for each of these specific items were
16 included in the final 02 Concert Tour agreement signed by the parties.

17
18 The documentation and negotiation of the details of the specific terms to be
19 incorporated into the final contract for the concert tour was carried out by AEG's
20 attorneys and by the attorneys-Dennis Hawk and Peter Lopez-that were hired by
21 Tohme to represent Jackson's interests. Neither Dennis Hawk nor Peter Lopez was
22 licensed as a talent agent pursuant to the TAA.

23
24 I Following the execution of the 02 Concert Tour agreement, Jackson began
25 rehearsing for the concert performances that he would give at the 02 Arena beginning in
26 July, 2009. Sadly, and unexpectedly, Jackson passed away before the date of the first

27
28
11
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
I scheduled concert. As a result, Jackson never earned and never became entitled to the
2 I contingent percentage compensation provided for under the agreement, namely 90% of
3 the Net Pool Revenue from the concerts.

4
5 The rehearsals that Jackson was engaged in as he prepared for the concerts,
6 however, were recorded as they took place. The material contained in these recordings
7 was later put together to create a film about Jackson entitled "This Is It." The film was
8 released commercially and generated substantial revenues for Jackson's estate. Tohme's
9 civil action against petitioners evidently includes a claim to 15% of those revenues
Io pursuant to the management agreement.

11
12 Petitioners' position in this case is that AEG's engagement of Jackson for the 02
13 Arena concert tour was procured by Tohme, that such procurement was illegal because
I
14 I Tohme was not licensed as a talent agency pursuant to the TAA, and that consequently
15 the management agreement is void ab initio in its entirety, precluding Tohme from
16 recovering any commissions or other compensation under its provisions. Tohme counters
17 that he did not procure the engagement for the 2009 London tour, that Tohme has thus not
18 violated the TAA, and that consequently the right of Tohme to commissions and other
19 compensation under the management agreement is fully enforceable. Alternatively,
20 Tohme contends that, if there was illegal procurement, the proper remedy is to sever the
21 illegal portion of the agreement and enforce his compensation rights under the part of the
22 agreement that is legal. Although petitioners categorically oppose severance, they argue
23 that if severance is indeed appropriate, their approach to severance should be followed,
24 rather than the markedly different approach advanced by Tohme. Another question
25 presented concerns the impact, if any, that a finding of illegal procurement on the part of
26 Tohme would have on the enforcement of either the finder's fee contract or the Indemnity

27
28
12
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 Agreement. We now tum to consideration of these issues.

2
3 DETERMINATION ON ISSUE OF VIOLATION
4 OF LICENSING REQUIREMENTS OF TAA

5
6 As a threshold matter, the evidence in this case establishes that Jackson was an

7 artist within the meaning of section 1700.4, subdivision (b) and that during the period

8 July 2, 2008 to June 25, 2009 Tohme was not licensed as a talent agency under the

9 provisions of the TAA.

10
Section 1700.4 provides in relevant part as follows:
11 /
"Talent agency" means a person or corporation who engages in the
12 occupation of procuring, offering, promising, or attempting to procure
13 employment or engagements for an artist or artists.

14
Section 1700.5 provides in pertinent part:
15
No person shall engage in or carry on the occupation of a talent
16 agency without first procuring a license therefor from the Labor
Commissioner.
17
18
As the Supreme Court has explained:
19
The Act establishes its scope through a functional, not a titular,
20 definition. It regulates conduct, not labels; it is the act of procuring
(or soliciting), not the title of one's business, that qualifies one as a
21
talent agency and subjects one to the Act's licensure and related
22 requirements. ( 1700.4, subd. (a).) Any person who procures
employment-any individual, any corporation, any manager-is a
23 talent agency subject to regulation. ( 1700.4, subd. (a).)
24
25 (Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 986.) As the foregoing

26 makes perfectly clear, anyone who procures engagements for an artist is carrying on the

27
28
13
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 / occupation of a talent agency and must be licensed.

2
3 The Labor Commissioner has long recognized that the acts undertaken in the
4 course of negotiating an agreement for the employment of an artist constitute "procuring .
5 . . or attempting to procure employment" within the meaning of section 1700.4,
6 subdivision (a).

7
The term "procure," as used in Labor Code 1700.4(a), means "to
8 get possession of: obtain, acquire, to cause to happen or be done:
9 bring about." Wachs v. Curry (1993) 13 Cal.App.4th 616, 628. Thus,
"procuring employment" under the Talent Agencies Act is not limited
10 to initiating discussions with potential purchasers of the artist's
11 professional services or otherwise soliciting employment; rather,
"procurement" includes any active participation in a communication
12 with a potential purchaser of the artist's services aimed at obtaining
employment for the artist, regardless of who initiated the
13
communication. Hall v. X Management (TAC No. 19-90, pp. 29-31.)
14 The Labor Commissioner has long held that "procurement" includes
the process of negotiating an agreement for an artist's services. Pryor
151
v. Franklin (TAC 17 MP 114).
16
17 (Danielewski v. Agon Investment Company (Cal.Lab.Com., October 28, 2005) TAC No.
18 41-03, pages 15-16.)
19
20 The evidence in this case clearly establishes that Tohme was directly involved in
I
21 11
negotiating the engagement of Jackson for the 02 Arena Concert Tour and that
22 consequently the actions of Tohme constituted procurement and attempted procurement
23 of an engagement of an artist in violation of the TAA.
241
25 The evidence demonstrates that at the inception of their contacts with one another
26 AEG through its representatives and Tohme on behalf of Jackson were engaged in a
27
28
14
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 process of sizing each other up to determine whether there was trust, compatibility, and a
2 sufficient and reliable basis for committing to a major project. This process was a
3 threshold negotiation to determine whether the parties were willing to enter into a binding
4 contract with one another. The three most prominent principals of AEG-Phil Anschutz,
5 Brandon Philips, and Paul Gorgaware-met with and talked to Tohme regarding the
6 concert tour, and Tohme met and talked to them. In addition, there were recurring
7 meetings between Tohme and Phillips, and one or more of the other principals, which
8 spanned a period of at least six to eight weeks. At a certain point, this process culminated
9 in both parties recognizing that they' were satisfied with one another and ready to
Io negotiate the detailed provisions of a Jackson concert tour at AEG' s 02 Arena in London,
11 England.

12
13 i The culmination of that initial negotiation is aptly summed up in Tohme's own
14 words as spoken in a deposition taken in the action entitled Allgood Entertainment, Inc. v.
15 Estate of Michael Jackson, U.S. Dist. Ct. S.O.N.Y., Case No. 09CV5377(HB) ("Allgood
16 deposition").

17
So Michael at that time was living in Las Vegas. So I flew to Las
18 Vegas, and I told Michael. So I took Michael. We went - me and him
191 and his son Blanket, we went to the MGM hotel with Mr. Phil
Anschutz. And Paul Gongaware, Randy Phillips, and Tim Leiweke
20 were there and Mr. Anschutz's wife.
21 I So l'v1ichael came in. I was there with i'v1ichael, and we spent like
an hour. Then Michael left, and I told him I'll follow him home.
22 And I stayed and I spoke with the people at AEG that were
present at the meeting, and we decided to move forward. And I think
23
his superior gave Randy the green light to continue negotiation with
24 me. And we started working on it, and we met. And I told him what I
need from them, and we came to an agreement, and we signed the
25
deal.
26

27

2s II 15
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 The initial negotiations were followed by specific negotiations between Tohme

2 and Phillips, where Tohme identified certain basic terms that had to be made part of the

3 contract for the agreement to be consummated. These terms included: (1) an advance of

4 $5 million, with $3 million being disbursed to implement the Sheikh Abdullah settlement,

5 (2) a monthly advance of $100,000.00 to be used for payment of the rent on a house in

6 Bel Air, and (3) an available advance of $15 million that could be accessed for the

7 purpose of purchasing a certain house located in Las Vegas, Nevada. After discussing

8 each of these items and acknowledging that they were included as provisions in the final

9 02 Arena Concert Tour agreement, Phillips testified at the hearing as follows:

IO
Q. And would it be fair to say that these were all provisions, the ones
11 we've talked about, that were provisions that Mr. Tohme indicated
Mr. Jackson needed to have in the agreement in order to conclude the
12 agreement?
13 A. That is correct.

14
15 Phillips further testified that in their discussions Tohme was a "hard negotiator," and that
16 he believed Tohme had done "a good job representing [] Jackson" in connection with the
17 efforts undertaken to help put together the 02 Arena tour. This characterization coincides
18 with Tohme's own description of his central role in bringing about the concert tour
19 agreement.
20
. i
21 i II
Tohme has failed to provide a meaningful response to this compelling evidence.
22 In an effort to explain away his testimony in the Allgood deposition, Tohme focuses on
231
I the word "negotiation" and refers to the testimony he gave at the hearing to the effect that
24 by "negotiation" he merely meant that he was acting as a messenger between AEG and
25 Jackson. This explanation, however, is completely refuted by the rest of what was said at
26 the Allgood deposition-namely that Phillips and T ohme started to work on the
27
28
16
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
I negotiation, that they met, and that Tohme then told Phillips what he needed from AEG in
2 order to come to an agreement. Apart from its evident incredulity, the explanation rings
3 hollow for another reason. As evidenced by the many transactions he negotiated on
4 behalf of Jackson, Tohme was a very effective and persuasive negotiator; the notion that
5 j I he would use "negotiation" to mean he acted as a passive messenger is untenable.
6
7 Referring to his deposition testimony in another action entitled Livitsky
8 Productions, Inc. v. Optimum Productions, Los Angeles Superior Court - West District,
9 Case No. SC 101420 ("Livitsky deposition"), Tohme points to generalized statements he
Io made denying that he ever negotiated artistic employment for Jackson. However, these
11 generalized denials must yield to the very specific, clear, and forthright statements Tohme
12 made at the Allgood deposition in regard to his dealings with AEG. Moreover, Tohme
13 directly contradicts himself in the Levitsky deposition, admitting that he met with
14 representatives of AEG and that he was involved in negotiating the AEG - Jackson
15 agreement. This testimony is on all fours with the testimony in the Allgood deposition.
16 Therefore, Tohme's generalized denials of negotiating on behalf of Jackson cannot be
17 accorded any weight.

18
19 Tohme contends that he did not negotiate the AEG agreement because he did not
20 participate in the attorney meetings where the details of the final contract language were
21 hammered out. But, as has been made clear, the attorney meetings were not the only
22 meetings at which the concert tour agreement was discussed and negotiated. Whether an
23 agreement would or would not be entered into and the inclusion of certain basic
24 indispensable terms were negotiated at separate meetings without the involvement of the
25 attorneys. Plainly these meetings were as critical as the attorney meetings-if not more
26 critical-to reaching a final satisfactory agreement. It is evident that Tohme was directly

27
28
17
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 involved in negotiating the 02 Arena Concert Tour agreement even though he did not
2 attend the meetings at which the attorneys were engaged in negotiating the details of the
3 / language for the final contract.

4
5 Tohme also fails to provide a meaningful response to Phillips' testimony
6 acknowledging the negotiation of contract terms with Tohme. Although Tome advances
7 the conclusory assertion that the meetings between Phillips and Tohme did not involve
8 negotiation of the AEG contract, he never presents any evidence that dispels or negates
9 Phillips' unequivocal statement that the meetings did involve such negotiation with
10 respect to specific terms. While Tohme points extensively to various statements made by
11 Phillips, suggesting that these statements are indicative of a lack of negotiation, in fact
12 none of the statements in any way contradicts Phillips' firm, forthright assertion, that
13 negotiations regarding the AEG contract did indeed take place. Tohme points to
14 testimony by Philips regarding meetings with Tohme where there was definitely no
15 discussion of the 02 Arena Concert Tour. Obviously, however, the fact that the
16 agreement for the concert tour was not discussed at some meetings does not mean that it
17 was not discussed at other meetings. Phillips' testimony makes clear that the agreement
18 was discussed and negotiated at some of the meetings he had with Tohme. With regard to
19 Phillips, Tohme once again makes the argument that there was no negotiation between
20 Phillips and Tohme because neither attended the meetings at which the attorneys
21 ' negotiated the language and terms of the contract. But as has already been discussed, this
22 argument is without force-Phillips and Tohme engaged in essential contractual
23 negotiations at meeting that were entirely separate and apart from the meetings conducted
24 by the attorneys. In sum, nothing has been presented that would refute Phillips' testimony
25 regarding his contract negotiations with Tohme.

26

27
28
18
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 The evidence that Tohme engaged in contract negotiations with AEG is found in
2 The admissions of Tohme and in the testimony of Phillips, who is essentially a
3 disinterested witness. That unrefuted evidence is compelling and establishes that Tohme
4 was directly involved in the negotiation of the 02 Arena Concert Tour agreement with
5. / AEG. The negotiated agreement constituted procurement of an engagement for an artist
,,
6 I within the meaning of section 1700.4 of the TAA. Since Tohme was not licensed as a
7 talent agency, his procurement of the AEG engagement for Jackson constituted illegal
g procurement of an engagement in violation of the TAA.

9
1O DETERMINATION OF APPROPRIATE REMEDY FOR THE VIOLATION OF
SECTION 1700.5
11
12

14
invalidation of the entire contract. More particularly, the court explained that the TAA
15
does not prohibit application of the equitable doctrine of severability and that therefore, in
16
appropriate cases, a court is authorized to sever. the illegal parts of a contract from the
17
legal ones and enforce the parts of the contract that are legal. (Id. At pp. 990-996.)
18
19
In discussing how severability should be applied in TAA cases involving disputes
20
between managers and artists as to the legality of a contract, the court in Marathon made
. 21
the following observations.
22
23 No verbal formulation can precisely capture the full contours of the
24 range of cases in which severability properly should be applied, or
rejected. The doctrine is equitable and fact specific and its application
25 is appropriately directed to the sound discretion of the Labor
Commissioner and trial court in the first instance.
26
27
2s l1 19
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 (Marathon, supra, 42 Cal. 4th at p. 998.)

2
3j In assessing the appropriateness of severance, two important considerations are ( 1)
4 whether the central purpose of the contract was pervaded by illegality and (2) if not,
5 whether the illegal portions of the contract are such that they can be readily separated
6 from those portions that are legal.

7
8 In this case, we tum initially to a consideration of the management agreement
9 pursuant to which Tohme illegally procured and sought to procure an engagement for
1O Jackson as a performing artist.

11
12 . As a threshold matter, it is abundantly clear that the management agreement
1311 between Tohme and Jackson was not pervaded by illegality. In the present case, as is
14 evident from the discussions earlier in this determination, there was overwhelming
15 evidence that the primary purpose of the management agreement was not the illegal
16 procurement of engagements. Rather, the manifest primary purpose was to provide
17 managerial guidance, advice, direction, and assistance to the end of reviving Jackson's
18 artistic career and at the same time revitalizing and restructuring Jackson's badly
19 damaged personal and business affairs. Tohme' s accomplishments, as manager, in this
20 connection were very substantial and highly beneficial to Jackson. Building on his pre-
21 ' management rescue of Jackson from the impending foreclosure on Jackson's Neverland
22 I Ranch property and on various significant items of personal property, Tohme undertook a
23 wide range of restorative activities that served to lift Jackson's personal, professional, and
24 artistic life to a new plateau, where he now had the confidence to reignite his career as an
25 entertainer and performing artist. Two of Tohme's major achievements in this regard
26 were inducing Sony Music to cough up $10 million that had been improperly withheld
27 from Jackson and finessing a settlement of the Sheikh Abdullah London lawsuit that

28
20
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
essentially constrained Jackson from entering into any new contracts to render services as
2 an artist. Thus, as a preliminary matter, it is clear that the "primary purpose" standard

3 does not require invalidation of the entire management agreement.

4
5 The second line of inquiry, for assessing severability, entails determining whether
1

6 I the illegal portions of the contract can be readily separated from the legal portions. In
7 many instances, this line of inquiry will require consideration of two subsidiary questions.
8 The first is whether, on the one hand, the illegal activities are separable and distinct from

9 the legal activities, or whether, on the other hand, the illegal and legal activities are
IO inextricably intertwined. Here, it is readily apparent that Tohme's illegal activities-
11 namely the procurement and attempted procurement of the AEG concert tour-are
12 entirely separate and distinct from his legal activities, which involved intense focused
13 efforts aimed at reviving Jackson's artistic career and reshaping and strengthening his
''
14 personal, business, and professional affairs.

15
16 The second subsidiary question is whether the revenues from the illegal activities
17 can be reasonably separated from the revenues derived from the legal activities. In
18 , general, income that is generated under the provisions of an illegally procured
19 engagement contract cannot be the source for payment of an earned commission to the

20 manager that procured the engagement. In other words, income payable to an artist under
21 the provisions of an illegally procured engagement contract must be completely excluded
22 from the payment of any commissions under the management agreement, even if as to
23 that agreement the manager retains the right to receive some commissions or revenues
24 that are not derived from illegal procurements.

25
26 In this case, the revenues from Tohme's illegal procurement activities are

27
28
21
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 completely separable from any other revenues that may be commissionable under the

2 management agreement. Indeed, in this case there are no revenues from Tohme's illegal
3 procurement activities. More particularly, here the only engagement contract illegally
4 procured was the 02 Arena agreement, which called upon Jackson to perform 31 or more

5 concerts in London. However, the compensation that would have been payable to

6 Jackson under that contract-and that therefore would have been potentially subject to a
7 commission under the management agreement-never materialized. Jackson died before
8 the first concert, and therefore none of the compensation based on concert earnings ever
9 became payable to Jackson pursuant to the engagement contract's provisions. Since
IO Tohme never became entitled to illegal commission revenues from compensation paid
11 pursuant to the engagement contract, there are no such revenues that need to be severed
12 from the legal revenues for purposes of applying the severability doctrine.

13
14 Petitioners contend that the income from the film "This Is It" that was made from

15 the preserved recordings of Jackson's rehearsals for the 02 Arena concerts should be

161 treated as illegally procured and therefore excluded from any commissions that Tohme
3
17 might still be entitled to receive under the management agreement. This contention lacks

18 merit.

19
20 In this case there was no evidence presented that Tohme was involved in procuring

21 I any sort of engagement for Jackson to undertake rehearsals in preparation for the

22 concerts, or for Jackson's rehearsals to be visually recorded, or for those recordings to be

23 compiled into a film of the rehearsals, or for such a film to be released commercially and

24 marketed to the public. In other words, for all that appears in the present case there was

25 no engagement contract of any kind with respect to the rehearsals and the recording of

26
For purposes of this discussion, it is assumed that the income from the film,
271 I
''This Is It" would be subject to the provision in the management agreement requiring
payment of a 15% commission.
22
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 those rehearsals. Why these recordings were made and who decided to make them are
2 matters which are not before this tribunal. Through a sad and unexpected tum of events,
3 these preserved recordings suddenly acquired significant artistic and commercial value.
4 Since these unexpectedly valuable recordings and the film derived therefrom were not
5 produced pursuant to an illegally procured contract requiring the payment of
6 compensation to Jackson that was commissionable to Tohme, there is no basis under the
7 TAA for excluding the film's revenues from being subject to commissions in favor of
8 Tohme based on his legal activities as a manager. Enforcement of the policies underlying
9 the T AA do not require the exclusion of commissionable revenues that do not have their
1o source in payments due .under an illegally procured contract. Nor does the equitable
11 doctrine of severability require such a result in the circumstances of this case. Finally, the
12 metaphysical argument that these valuable recordings might never have come into being
13 but for the illegal procurement of the concert tour is entirely too speculative-in any
14 event, for the reasons stated, that possibility does not implicate any policies that would
15 require outright exclusion of the film's revenues from commissions properly attributable
16 solely to legal management activities.

17
18 The question now becomes what is the appropriate method of implementing
19 severance in the circumstances of this case. In its current lawsuit against petitioners,
20 Tohme is seeking to recover 15% of the gross compensation received by Jackson or his
21 estate for the services rendered by Jackson within the entertainment industry. This 15%
22 in commissions claimed by Tohme is not based on any specific service rendered by
23 Tohme, but rather constitutes undifferentiated compensation payable to Tohme as
24 consideration for the undifferentiated services Tohme has provided to Jackson under the
25 contract. The undifferentiated services provided by Tohme to Jackson include both legal
26 managerial services and illegal talent agency services. However, Tohme is not entitled to

27
28
23
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 receive compensation for his iHegal services. In such circumstances, the proper approach
2 is to deduct the value of the illegal services and permit recovery only for the value of the
3 legal services. (Marathon, supra, 42 Cal. 4th at p. 997; Birbrower, Montalbano, Condon
4 & Frank v. Superior Court (1998) 17 Cal. 4thl19, 139-140; Whorton v. Dillingham
5 (1988) 202 Cal. Ap.3d 447.452-454.)

6
7 In the present case, it is determined that the illegal activities engaged in by Tohme
8 were substantial and significant. Securing and finalizing the 02 Arena agreement with
9 AEG required a very significant and dedicated expenditure of time, effort and resources
1o on the part of Tohme. The magnitude of that effort is self-evident, and is reflected in the
11 importance of the concert tour to Jackson's career and in the fact that the income to
12 Jackson from the concerts would be enormous and constitute the only income Jackson
13 was then earning from live performances. When the illegal activities are measured
14 against the totality of Tohme's activities, and compared with the activities that were legal,
15 one is led to the conclusion that the illegal services provided by Tohme to Jackson
16 amounted to roughly 50% of the total services provided under the contract. It follows that
17 the value of the legal services provided by Tohme were equal to only 50% of the value of
18 the total services provided pursuant to the contract, and that accordingly Tohme should
19 receive and be paid only 50% of the amount that would have been due for the full value
20 of all the services. Put another way, the value of the services that were legal represents
21 only 50% of the 15% in commissions that was to be paid for the full value of ail the
22 services, and therefore the commissions payable to Tohme for the compensable legal
23 services must be reduced.to 7.5%.

24
25 I In sum, based on the application of the doctrine of severability, it is concluded that
26 Tohme can recover for the services that he provided legally under the management

27
28
24
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
I agreement. However, since these services represent only 50% of the value of all the
2 services furnished under the agreement, the compensation due pursuant to the terms of the
3 agreement must be reduced by 50%, such that the commissions payable to Tohme shall be
4 limited to 7 .5% of those amounts payable to Jackson or his estate that constitute "gross
5 compensation" under the terms of the agreement.

6
7 In this petition, the petitioners also sought invalidation of other agreements
8 between Tohme and Jackson that were related to the management agreement. This
9 request appears to be a reference to (1) the finder's fee agreement arising out of the
Io purchase of the promissory note secured by the Neverland Ranch property and (2) the
11 indemnity agreement of August 6, 2008. The issues raised by the request were not
12 discussed by the parties at the hearing or in their papers, and therefore will not be
13 addressed in this determination. However, a few observations are in order. The finder's
14 fee agreement does not implicate Tohme's illegal talent agency activities on behalf of
15 Jackson, and therefore the agreement does not appear to run afoul of the TAA. On the
16 other hand, the indemnity agreement appears to be an appendage and supplement to the
17 management agreement. Evidently, under its provisions, a manager that brings suit to
18 enforce the management agreement can recover attorneys fees and other forms of
19 indemnification from the artist, even though the artist has asserted a plausible defense that
20 the management agreement is illegal under the TAA. To the extent that the indemnity
21
I agreement would authorize that type of recovery in those circumstances, it would appear
1

22 that the indemnity agreement is incompatible with the policies underlying the TAA and
23 therefore illegal and unenforceable under the TAA's provisions.

24
25
26

271
28/
25
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
DISPOSITION

Accordingly, it is hereby ordered as follows:

1. The management agreement that Jackson entered into with Tohme is

determined to be partially illegal, and it is further determined that the illegal parts of the

agreement are severable from the remainder of the agreement.

2. Severance of the illegal portions of the agreement requires a 50% reduction


in the commissions due to Tohme under the agreement, and by virtue of such reduction

the commissions to which Tohme is entitled under the agreement shall be limited to 7.5%

of the earnings generated by Jackson that constitute "gross compensation" under the

terms of the agreement.

Dated: ,Tl(L. Y f 1 ;Ml 5


16
17 ~~
Attorney and Special Hearing Officer
18 for the Labor Commissioner

19
20
Adopted:
21

22

23
24
Dated: -, / 1 / JO IS-
Ji'~P0-:
u1e~ -
State Labor Commissioner

25
26
27

26
DETERMINATION ON PETITION OF JOHN BRANCA AND JOHN MCCLAIN
1 STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
2 DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
3 190 I N. Rice A venue, Suite 200
Oxnard, California 93030
4 Telephone No. (805) 973-1244
Facsimile No. (805) 973-1251
5
Special Hearing Officer for the Labor Commissioner
6
7
8
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10
11 MARIO SOLIS, an individual, CASE NO.: TAC-27089

12 Petitioner, DETERMINATION OF
CONTROVERSY
13 vs.

14 JAMES E. BLANCARTE, a
Professional Corporation,
15
Respondent.
16

The above-captioned matter, a petition to determine controversy under Labor Code


18
1700.44, came on regularly for hearing on January 10, 2013 in Los Angeles, California,
19
before the undersigned attorney for the Labor Commissioner assigned to hear this case.
20
Petitioner MARIO SOLIS (hereinafter "Petitioner") appeared personally and was
21
represented by attorney Miles J. Feldman. Respondent JAMES E. BLANCARTE
22
(hereinafter "Respondent") appeared personally and was represented by attorney Robert
23
D. Lipscomb.

This proceeding arises out of the Petition to Detennine Controversy filed by

petitioner with the Labor Commissioner on April 30, 2012. The petition alleges that
respondent entered into a representation agreement with petitioner, pursuant to which
28
1
DETERMINATION OF CONTROVERSY
I respondent agreed to act and acted as an unlicensed talent agent in violation of Labor
2 Code section 1700.5, a provision of the Talent Agencies Act (TAA), Labor Code section
3 1700 et seq. The petition seeks a declaration that the contract is void and unenforceable,
4 and that respondent is therefore barred from seeking any recovery under the terms of the
5 contract. Due consideration having been given to the evidence presented at the hearing
6 and to the documents and other papers on file in this proceeding, the Labor C01mnissioner
7 now renders the following decision.

8
9 FINDINGS OF FACT

10
11 1. Petitioner is a sports reporter and news anchor for a Los Angeles
12 television station, KNBC Channel 4. Apart from his talents and activities as a broadcast
13 journalist, petitione{ s artistic pursuits include acting, script writing, voice overs, and

14 perfonning as an entertainer.

15
16 2. Respondent is a duly licensed attorney who is admitted by the state
17 bar to practice law in the State of California.

18
19 3. Prior to July, 2002, when the parties entered into the engagement
20 contract described below, respondent had on certain occasions provided legal services to
21 the petitioner. In addition, according to petitioner, respondent had provided management
22 type services to petitioner in connection with petitioner's interest in breaking into network
23 television; specifically, respondent advised petitioner that he would keep his eye open for
24 opportunities for petitioner to work in television.

25
26 4. Sometime prior to July 8, 2002, KNBC approached petitioner and

27 expressed an interest in hiring petitioner to work for the station as a sports reporter, news
I
?8!I
...
2
DETERMINATION OF CONTROVERSY
1 anchor, commentator, and analyst, as well as in other roles related to the entertainment
2 programming offered by the station.

3
4 5. Following this expression of interest by KNBC, petitioner contacted
5 respondent and asked him to represent petitioner in handling the negotiation of the terms
6 of his employment with the station. Respondent was receptive to the proposal, and on
7 July 8, 2002 the parties entered into a written engagement contract set out in the form of
8 an engagement letter from respondent to petitioner. At the outset the letter states: "We
9 appreciate your asking us to represent you in connection with your broadcasting and
Io entertainment career, including without limitation, contract negotiations with KNBC
11 Channel 4."

12
13 6. The engagement contract provided that respondent would be paid a
14 five percent (5%) commission on all net monies paid to petitioner under the contract to be
15 negotiated by respondent with KNBC. According to petitioner, respondent wanted to be
16 paid a commission instead of a one-time fee because of the follow-up work he would do
I7 on the contract and because he would be acting as petitioner's representative and agent.

18
19 7. At the time that respondent was brought in, there was no deal in
20 place with KNBC: neither the compensation arrangements, nor the length of the contract,
21 nor of the other terms and conditions under which petitioner would be employed by
22 KNBC had been addressed or worked out. These were all matters that respondent had
23 been engaged to negotiate.

8. Thereafter, respondent proceeded to negotiate an employment


agreement for petitioner with KNBC, which was signed by both parties and became 1

effective August 5, 2002.

3
DETERMINATION OF CONTROVERSY
1 9. During the four-year period covered by petitioner's employment
2 agreement, August 5, 2002 through August 6, 2006, respondent was paid the
3 commissions due to him under the engagement contract.

5 10. Prior to August 7, 2006, respondent negotiated a three year renewal


6 of petitioner's employment agreement, which included an increase in annual
7 compensation for each of the three years. The agreement was signed and became
8 effective August 7, 2006.

10 11. During the period August 7, 2006 through the end of 2007,
11 respondent received his 5% share of petitioner's net monthly income under the
12 employment agreement, representing the commissions due pursuant to the engagement
13 contract. Thereafter, petitioner made no further commission payments to respondent.

14
15 12. Prior to June 2, 2009, respondent negotiated a two-year further
16 renewal of the employment agreement set to expire in August, 2009. Because prevailing
17 economic conditions resulted in a decrease in the compensation offered to and ultimately
18 accepted by petitioner, respondent is making no claim for commissions due under this
19 second renewal of the employment agreement.

20
13. At one point, apparently during the time that respondent was still
22 being paid his commissions, an opportunity arose for petitioner to go to work for ESPN.
23 Petitioner asserts that this opportunity was arranged by and presented to petitioner by
24 respondent. Respondent, on the other hand, asserts that the ESPN opportunity was
25 brought to his attention by petitioner, and that it was petitioner himself who was contacted 1

26 directly by ESPN.

i
I
28
4
DETERMINATION OF CONTROVERSY
1 14. Throughout the period encompassmg respondent's asserted

2 entitlement to commissions under the engagement contract, July 8, 2002 to August 31,

3 2009. respondent was not licensed as a "talent agency" under the provisions of the TAA.

4
5 15. On December 30, 2011, respondent filed a civil action against

6 petitioner in the Los Angeles County Superior Court, Central District-Blancarte v. Solis,

7 Case No. BC476169. The complaint sought to recover the commissions due under the

8 engagement contract based on the net monies paid to petitioner between January 1, 2008

9 and August 31, 2009 pursuant to the employment agreement with KNBC.

10

11 16. After filing an answer to the complaint, which included an

12 affirmative defense based on the TAA, petitioner filed the instant petition with the Labor

13 Commissioner seeking a determination that the engagement contract was entered into is

14 violation of the TAA and was therefore void and unenforceable.

15

16 LEGAL ANALYSIS

17

18 1. Labor Code section 1700.5 provides in relevant part as follows:

19 No person shall engage in or carry on the occupation of a talent


20 agency without first procuring a license therefor from the Labor
Commissioner.
21

22
2. Under Labor Code section 1700.4, subdivision (a), "[t]alent agency"
23
is defined in relevant part as follows:
24
25 "Talent agency" means a person or corporation who engages in the
1
!i occupation of procuring, offering, promising, or attempting to procure
employment or engagements for an artist or artists, except that the activities
of procuring, offering, or promising to procure recording contracts for an
artist or artists shall not of itself subject a person or corporation to

5
DETERMINATION OF CONTROVERSY
l regulation and licensing under this chapter.
2

3 3. Labor Code section 1700.4, subdivision (b) defines "[a]rtists" in part

4 as follows:

5
"Artists" means actors and actresses ... , radio artists, ... writers, ... and
6 other artists and persons rendering professional services in motion picture,
theatrical, radio, television and other entertainment enterprises.
7
8
4. In the present case, the evidence establishes that petitioner was a
9
person rendering artistic and professional services in the medium of television for
10
purposes of entertaining the public. Thus, it is clear petitioner was an artist within the
11
meaning of section 1700.4, subdivision (b).
12
13
and crucial question, whether respondent was engaged in
14
the occupation of a talent agency, that is to say, whether he was engaged in procuring or
15
in offering, promising, or attempting to procure employment or engagements for
16
petitioner.
17
18
6. The principal and dominant activities that respondent perfonned on
19
behalf of petitioner pursuant to the engagement contract involved the negotiation of the
20
compensation and other terms of the agreements for the employment of petitioner by
21
KNBC. The Labor Commissioner has long recognized that the acts undertaken in the
course of u"''"'v"i""'"'u"" an agreement for the employment of an artist constitute "procuring .
. . or to procure employment" within the meaning of section 1700.4,

means

6
DETERMINATION OF CONTROVERSY
1 Cal.App.4th 616, 628. Thus, "procuring employment" under
the Talent Agencies Act is not limited to initiating discussions
2
with potential purchasers of the artist's professional services
or otherwise soliciting employment; rather, "procurement"
includes any active participation in a communication with a
potential purchaser of the artist's services aimed at obtaining
employment for the artist, regardless of who initiated the
communication. Hall v. X Management (TAC No. 19-90, pp.
29-31.) The Labor Commissioner has long held that
"procurement" includes the process of negotiating an
agreement for an artist's services. Pryor v. Franklin (TAC 17
MP 114). Significantly, the Talent Agencies Act specifically
provides that an unlicensed person may nevertheless
participate in negotiating an employment contract for an artist,
provided he or she does so "in conjunction with, and at the
request of a licensed talent agent." Labor Code 1700.44(d).
11 This limited exception to the licensing requirement would be
unnecessary if negotiating an employment contract for an
artist did not require a license in the first place.

(Danielewski v. Agan Investment Company (Cal.Lab.Com., October 28, 2005) TAC No.
15
41-03, pages 15-16.)
16
17
7. The negotiation of petitioner's employment agreements with KNBC
18
represented the bulk of the activities that respondent engaged in on behalf of petitioner
19
under the engagement contract. Indeed, the contract was entered into for the purpose of
20
i having respondent conduct such negotiations, and respondent carried out the contract by
, effectuating and accomplishing that purpose. By negotiating the KNBC agreements on
22
petitioner's behalf, respondent attempted to procure and procured employment for
23
petitioner. As a consequence, respondent engaged in and carried out the occupation of a
24
talent agency; because he did so without having first obtained a talent agency license
25
1 from the Labor Commissioner, respondent violated the provision of Labor Code section
26
1700.5.
,,
I

'18'
.:-
7
DETERMJNA TION OF CONTROVERSY
8. Respondent contends that because he is a duly licensed attorney, his
2 activities in negotiating the KNBC agreements on behalf of petitioner should be treated as
3 exempt from the licensing requirements of section 1700.5. The provisions of the TAA do
4 not contain or recognize any such exemption. Moreover, respondent has provided no
5 authority that would support the propriety of applying or creating such an exemption.

7 9. The applicable scope of the TAA has been delineated by the


8 Supreme Court:

9
The Act establishes its scope through a functional, not a
10 titular, definition. It regulates conduct, not labels; it is the act
11 of procuring (or soliciting), not the title of one's business, that
qualifies one as a talent agency and subjects one to the Act's
12 licensure and related requirements. ( 1700.4, subd. (a).) Any
13 person who procures employment-any individual, any
corporation, any manager-is a talent agency subject to
14 regulation. (1700.4, subd. (a).)
15
16 (Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 986.) As the foregoing
17 makes perfectly clear, anyone who procures or solicits engagements for an artist is
18 carrying on the occupation of a talent agency and must be licensed.
19
20 10. It is evident that the functional scope of the TAA admits of no
21 exceptions and encompasses the procurement activities of respondent, even though he is
an attorney. In this regard, it is of no moment that some of the skills respondent may have
brought to the negotiations on behalf of petitioner are the result of skills for which he has
been licensed as an attorney. As Labor Code section 1700.44 makes unequivocally clear,
when someone who is not licensed under the TAA wishes to bring such ski1ls to bear on
the negotiation of an artist's contract, he must do so "in conjunction with, and at the
request of, a licensed talent '' Here, respondent acted entirely on his own and

8
DETERMINATION OF CONTROVERSY
I without a talent agency license; consequently, his conduct constituted a clear violation of
2 the licensure requirements of section 1700.5.
3 11. The consequences that flow from a violation of the TAA are well
4 settled. When a person contracts to act as a talent agent without first having obtained a
5 talent agency license as required by the TAA, the contract that has been entered into is
6 illegal, void, and unenforceable. "Since the clear object of the Act is to prevent improper
7 persons from becoming [talent agents] and to regulate such activity for the protection of
8 the public, a contract between an unlicensed [talent agent] and an artist is void."
9 (Buchwald v. Superior Court (1967) 254 Cal.App. 2d 34 7, 351. ).

10
11 12. As recognized in Marathon Entertainment, Inc. v. Blasi, supra, in
12 some cases there may be a basis for severing the illegal portions of a contract violative of
13 the TAA's licensure requirements from the other parts of the contract. However, this will
14 be permissible only where there are both illegal and legal aspects to the contract and
15 where the two aspects can be properly severed in accordance with the legal standards
16 governing application of the severance doctrine.

17
18 13. There is no basis for applying the doctrine of severability in the
19 circumstances of this case. It is established law that if the central purpose of a contract is I
20 illegal, the entire contract is void and will not be enforced. In the present case, the central
21 purpose of the engagement contract was to enable respondent to act as petitioners'
22 unlicensed talent agent. This illegal purpose contaminated the entire contract, and
23 rendered it void and unenforceable. (See Marathon Entertainment, Inc. v. Blasi, supra,
24 1 42 Cal.4th at pp. 997-998.) In addition, in this case respondent is seeking to preserve his 1

25 1! right to recover certain commissions under the engagement contract the commissions that
26 he seeks to protect are based on the income that respondent generated for petitioner
through his illegal procurement activities. Plainly, respondent cannot capitalize on and

9
DETERMINATION OF CONTROVERSY
1 gain a benefit from illegal conduct under a contract; in these circumstances, the illegality
2 penneates the entire engagement contract and renders it void and unenforceable. In light
3 of these conclusions, it is unnecessary to consider whether, in rendering services under
4 the engagement contract, respondent engaged in other conduct violative of the TAA.

5
6 14. In sum, for the reasons stated above, it is determined that in entering
7 into the engagement contract with petitioner, and in performing under that contract,
8. respondent engaged in the occupation of a talent agency without having obtained a
9 license from the Labor Commissioner. Because it was pervaded by illegality, the entire
1o contract is found to be void and unenforceable.

11

12 ORDER

13
14 For the reasons set forth above, IT IS HEREBY ORDERED as follows:

15
16 The contract between petitioner and respondent is declared to be illegal,
17 void and unenforceable, and respondent is barred from enforcing or seeking to enforce
18 the contract against petitioner in any manner.

19
20 Dated: I
21
22
23 Adopted:
24
25 Dated:
. u
26 State Labor Commissioner
27

28
10
DETERMINATION OF CONTROVERSY
1 EDNA GARCIA EARLEY, Bar No. 195661
STATE OF CALIFORNIA
2 DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
3 320 W. 4th Street, Suite 430
Los Angeles, California 90013
4 Telephone: (213) 897-1511
Facsimile: (213) 897-2877
5
Attorney for the Labor Commissioner
6
7
8 BEFORE THE LABOR COMMISSIONER
9 OF THE STATE OF CALIFORNIA
10
11 SUMMER ORTIZ for EBIN PEDERSEN, CASE NO. TAC 28574
A Minor,
12 DETERMINATION OF
CONTROVERSY
13
Petitioner,
14
vs.
15
16
JET SET WORLD, LLC and JET SET
17 ENTERPRISES, LLC,
18 Respondents.
19
20
The above-captioned matter, a Petition to Determine Controversy under
21
Labor Code 1700.44, came on regularly for hearing on April 22, 2013 in Los Angeles,
22
California, before the undersigned attorney for the Labor Commissioner assigned to hear
23
this case. Petitioner SUMMER ORTIZ for EBIN PEDERSEN, A Minor, appeared in pro
24
per. Respondents JET SET WORLD, LLC and JET SET ENTERPRISES, LLC were
25
properly served with the Petition but failed to appear.
26
Based on the evidence presented at this hearing and on the other papers on
27
file in this matter, the Labor Commissioner hereby adopts the following decision:
28
1
DETERMINATION OF CONTROVERSY TAC 28574
1 FINDINGS OF FACT
2 1. Petitioner SUMMER ORTIZ, (hereinafter, Petitioner), is the
3 mother of minor, EBIN PEDERSEN and files this petition on his behalf.
4 2. Respondents JET SET ENTERPRISES, LLC and JET SET WORLD,
5 LLC, (hereinafter, referred to as Respondents), were licensed talent agencies during the
6 relevant claim period and were operating under Talent Agency license number 105270. 1
7 3. In March, 2011, Petitioner agreed to have Respondents act as a talent
8 agent for her minor son EBIN PEDERSEN in exchange for a 20% commission.
9 4. On August 1-3, 2011, minor EBIN PEDERSEN worked as a model
10 on a print job for Nuvaring , which was booked by Respondents. Petitioner provided a
11 casting sheet for this job showing $900.00 ($300 per day) earned and owed to minor
12 EBIN PEDERSEN.
13 5. Petitioner testified she contacted Respondent for payment, to no
14 avail. On August 27, 2012, Petitioner filed the instant petition seeking $900.00 in unpaid
15 earnings for her minor son, EBIN PEDERSEN.
16 6. Subsequent to filing this petition, Petitioner contacted Vegar
17 Abelsnes Photography, LLC, who was involved in the photo shoot. Petitioner was
18 informed by this company they had paid Respondent on or about September 24, 2011 for
19 Petitioners minor sons work. Upon being informed that Petitioner had not received this
20 payment from Respondents, in order to avoid any type of liability, on March 20, 2013,
21 Vegar Abelsnes Photography, LLC issued check number 2047, payable to EBIN
22 PEDERSEN for $900.00. Accordingly, Petitioner seeks only the interest due from
23 Respondents from the date payment should have been made to her by Respondents to the
24 date it was made by third party, Vegar Abelsnes Photography, LLC.
25 ///
26 ///
27 1
The evidence established that licensed talent agency JET SET ENTERPRISES, LLC also
operates as JET SET WORLD, LLC. Absent any evidence to the contrary, for purposes of
28 this petition, they will be treated as the same entity.
2
DETERMINATION OF CONTROVERSY TAC 28574
1 LEGAL ANALYSIS
2 1. Minor, EBIN PEDERSEN is a model and therefore, is an artist
3 within the meaning of Labor Code 1700.4(b).
4 2. Respondents were licensed talent agencies during the claim period.
5 3. Labor Code 1700.25(a) provides:
6
(a) A licensee who receives any payment of funds on
7 behalf of an artist shall immediately deposit that
amount in a trust fund account maintained by him or
8
her in a bank or other recognized depository. The
9 funds, less the licensees commission, shall be
disbursed to the artist within 30 days after receipt.
10 However, notwithstanding the preceding sentence, the
11 licensee may retain the funds beyond 30 days of receipt
in either the following circumstances:
12
(1) To the extent necessary to offset an
13 obligation of the artist to the talent agency that is
14 then due and owing.

15 (2) When the funds are the subject of a


controversy pending before the Labor
16 Commissioner under Section 1700.44
17 concerning a fee alleged to be owed by the artist
to the licensee.
18
The evidence presented establishes that Respondents received payment for the print
19
job at Nuvaring on behalf of minor EBIN PEDERSEN on approximately September 24,
20
2011 and failed to turn over the monies to Petitioner EBIN PEDERSEN.
21
3. Labor Code 1700.25(e) provides:
22
If the Labor Commissioner finds, in proceedings under
23 Section 1700.44, that the licensees failure to disburse
24 funds to an artist within the time required by
subdivision (a) was a willful violation, the Labor
25 Commissioner may, in addition to other relief under
Section 1700.44, order the following:
26
27 (1) Award reasonable attorneys fees to the
prevailing artist.
28
3
DETERMINATION OF CONTROVERSY TAC 28574
1 (2) Award interest to the prevailing artist on the
funds wrongfully withheld at the rate of 10
2
percent per annum during the period of the
3 violation.
4 Respondents failure to pay Petitioner the outstanding monies owed constitutes a

5 willful violation under Labor Code 1700.25(e). Respondents have failed to pay the

6 amount owed to date. However, the evidence establishes that after filing the instant

7 petition, Petitioner received $900.00 from the photographer on the job for the work

8 performed by her minor son, EBIN PEDERSEN. Accordingly, we only award Petitioner

9 interest from October 24, 2011 (30 days after Respondents received payment on behalf of

10 Petitioner, per Labor Code 1700.25(a)) to the date Petitioner received payment from the

11 third party photographer on March 20, 2013, calculated at 10 percent per annum for a total

12 of $126.49.

13
ORDER
14
For the foregoing reasons, Petitioner SUMMER ORTIZ for EBIN
15
PEDERSEN, A Minor, is entitled to collect $126.49 in interest under Labor Code
16
1700.25(2) from Respondents JET SET WORLD, LLC and JET SET ENTERPRISES,
17
LLC.
18
DATED: Respectfully submitted,
19
20
By:
21 EDNA GARCIA EARLEY
22 Attorney for the Labor Commissioner

23 ADOPTED AS THE DETERMINATION OF THE LABOR COMMISSIONER

24 Dated:

25
26 By:_______________________________
JULIE A. SU
27 State Labor Commissioner

28
4
DETERMINATION OF CONTROVERSY TAC 28574
I STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
2 DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
3 1901 N. Rice Avenue, Suite 200
Oxnard, California 93030
4 TeleJ?hone No. (805) 973-1244
Facsimile No. (805) 973-1251
5
Special Hearing Officer for the Labor Commissioner
6
7
gl
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10
11 JAMES ANDERSON, CASE NO.: TAC-29080
12 Petitioner, DETERMINATION OF
CONTROVERSY
13 vs.
14 NETWORK INTERNATIONAL MODEL &
TALENT,
15 Respondent.

16

17
l8 The above-captioned matter, a petition to determine controversy under Labor Code
l9 1700 .44, came on regularly for hearing on September 2 7, 2013 in Los Angeles,

2o California, before the undersigned attorney for the Labor Commissioner assigned to hear
21 this case. Petitioner JAMES ANDERSON (hereinafter "Petitioner") appeared personally
22 and represented himself. Respondent NETWORK INTERNATIONAL MODEL &
23 TALENT (hereinafter "Respondent") appeared by and through its authorized agents

24 Patrick Simpson and Paul Utteu, who also represented the Respondent at the hearing.

25
26 Based on the evidence presented at the hearing and on the other papers on file in
this matter, the Labor Commissioner hereby adopts the following decision.

281i
1
DETERMINATION OF CONTROVERSY
1 FINDINGS OF FACT

2
3 1. Respondent operated a licensed talent agency under its own name.

5 2. Petitioner is a model and actor. On January 23, 2012, Petitioner engaged

6 Respondent to act as his agent and represent him in obtaining work in the field of

7 modeling and also in films, television, radio, the theater, and other fields of entertainment.

8
9 3. The parties cemented their relationship by entering into a written
Io representation agreement. The agreement provided that Respondent would be
11 Petitioner's exclusive representative for a period of two years. Under the tenns of the

12 agreement, Petitioner agreed to pay Respondent a 20% commission or fee for all
13 engagements entered into to secure Petitioner's services as an artist during the two-year

14 period of representation.

15

16 4. At the time the representation agreement was entered into, Respondent


17 arranged for Petitioner to enter into an agreement with a photographer, Beverly Hills

18 Photo Studio, whereby a photo session was set up to generate a portfolio of photographs,
19 including headshots and full body images, to be used in marketing Petitioner's services as

20 a model and actor. The original cost for this portfolio of photos was $560.00, although
21 the cost later increased to $660.00 because Petitioner rescheduled the date of the photo

22 session.

23
24 5. At the hearing, Petitioner testified that when he received the photos he was
25 very dissatisfied with the quality of the product, considering the photos unsuitable for
26 their intended purpose of securing him engagements as a model or actor. Nevertheless,
Petitioner selected I 0 photos to be used in promoting him as a model and actor; there is,

2
DETERMINATION OF CONTROVERSY
however, a dispute as to whether he received only 7 photos or all 10.

3 6. After becoming Petitioner's agent, Respondent submitted Petitioner for a

4 project involving Transamerica Insurance. The submission-which utilized one of the

5 photos selected by Petitioner from those provided by Beverly Hills Photo Studio---

6 resulted in an audition, and then in Petitioner being hired to perform in a Transamerica

7 commercial. The pay for the project was $500.00, with Petitioner entitled to $400.00

8 after deduction of the 20% representation fee payable to Respondent. Although Petitioner

9 experienced some minor delays and difficulties in getting his money from Respondent, he

Io did receive the $400.00 that was due him.

11

12 7. Respondent proceeded to submit Petitioner for a number of other projects,

13 in each instance utilizing one of the photographs selected by Petitioner from the group of

14 photographs that had been provided to him. Many of these submissions resulted in

15 Petitioner being called in for an audition, although ultimately he was not hired for any of

16 these projects.

17

18 8. In May, 2012, while conducting his own independent online search for

19 engagements, Petitioner learned of a project being undertaken by USAA. The project


20 provided that the artist would be paid $1,000.00, plus an additional 20% if the artist had

21 been submitted by an agent Petitioner submitted himself to the project, acting on his own

22 without involving Respondent. The submission resulted in Petitioner being auditioned


23 and then hired for the project. However, because the agency contract required that a

24 representation fee be paid to Respondent even though it had not contributed to securing
25 the engagement, Petitioner advised the operator of the project to send his pay to the

26 Respondent

27
28
3
DETERMINATION OF CONTROVERSY
1 9. The payment for Petitioner's work on the USAA project was made around

2 June 26, 2012 by a company known as Team Services, which acted on behalf of its client

3 3 Star Productions. A check made payable to Petitioner for his services, was sent by

4 Team Services to Respondent. Treating Petitioner as an employee, Team Services

5 calculated the amount due as gross pay of $1,000.00 less withholding of $274.95 for

6 Federal Income Tax, Social Security, Medicare, State Income Tax, and State Disability.

7 The net check to plaintiff was for $725.05.

8
9 10. After receiving the $725.05 check, Respondent deducted $200.00 for its
10 20% agent's fee, and then on July 18, 2012 remitted its own check to Petitioner in the

11 amount of $525.05. When Petitioner attempted to negotiate the check, it was rejected and

12 then dishonored by the bank on which it was drawn. Respondent was notified of the

13 dishonor, but did not generate a replacement check until January 15, 2013. That

14 replacement was a cashier check for $525.05, which contained the following statement:

15 "PAID IN FULL USAA HEAD PRINT." After receiving the cashier's check, Petitioner

16 declined to negotiate it-being unwilling to submit to the condition that negotiation of the

17 check would constitute a waiver of any right Petitioner might have to pursue a claim

18 based on the USAA engagement.

19
20 11. Respondent's explanation for the bounced check was provided by its

21 representative Patrick Simpson. According to Mr. Simpson, Respondent's bank,


22 Washington Mutual, had been taken over and absorbed by CHASE bank, and Respondent

23 had inadvertently paid Petitioner with a check from the old Washington Mutual account,

24 which was no longer good. Mr. Simpson also provided Respondent's explanation for

25 why the replacement cashier's check was not issued until January 15, 2013. Mr. Simpson

26 stated that during the subject period Petitioner was constantly traveling, that Respondent

27 had no contact information for Petitioner, and that consequently Respondent was unable

28
4
DETERMINATION OF CONTROVERSY
1 to get a hold of Petitioner. Petitioner vigorously disputed these assertions. No

2 explanation was provided for why the condition of acknowledging payment in full was

3 added to the cashier's check.

4
5 12. As of the date of the hearing, the cashier's check had still not been

6 negotiated or cashed.

7
8 LEGAL ANALYSIS

10 1. Respondent operated as a licensed talent agency.

11

12 2. Petitioner was an artist who was represented by Respondent.

13
14 3. This case is within the jurisdiction of the Labor Commissioner under Labor

15 Code section 1700.44, subdivision (a).

16
17 4. Petitioner's claims against Respondent can be grouped into three areas of

18 dispute: (a) whether Petitioner is entitled to recoup the costs he incurred for the

19 photographs, (b) whether Petitioner was properly paid for the USAA project and, if not,

20 whether he is entitled to any monetary relief, and (c) whether Respondent's performance

21 under the representation agreement was deficient, thereby excusing further performance

22 on the part of Petitioner. Each of these areas will be addressed in turn.

23
24 Costs Of The Photographs

25
26 5. Petitioner contends that he is entitled to recover the $660.00 he expended

5
DETERMINATION OF CONTROVERSY
1 for the photographs he ordered at the direction of Respondent.

2
3 6. As a threshold matter, it should be noted Labor Code section 1700.40,

4 subdivision (b) precludes a talent agency from referring an artist to a photography

5 business in which the talent agency has a financial interest. Likewise, section 1700.40,

6 subdivision (c) prohibits a talent agency from accepting a referral fee or similar

7 compensation from a photography business to which a represented artist is referred. In

g the present case, however, there was no evidence that Respondent had a financial interest

9 in Beverly Hills Photo Studio, nor was there any evidence that Beverly Hills Photo Studio

Io paid Respondent a fee or other compensation for referring Petitioner. Consequently,

11 these statutory provisions cannot provide the basis for Petitioner recovering the costs of

12 the photos.

13
14 7. Petitioner's primary argument for recoupment is that the photos were of

15 such poor quality and so unsuitable for their intended purpose that he did not receive what

16 he bargained for and therefore should be reimbursed by Respondent for the costs he

17 expended. The evidence presented, however, fails to establish that the photos were of

18 poor quality and unsuitable for their intended purpose. Apart from Petitioner's subjective

19 opinion, which is found to be unpersuasive, there is no evidence that the photos were of

20 poor quality. Moreover, it is apparent that the photographs selected by Petitioner served

21 their intended purpose. In each instance that Respondent submitted Petitioner for a

22 project, it utilized a photo drawn from Petitioner's selection. These submissions resulted

23 in Petitioner being called in for a number of auditions, one of which culminated in

24 Petitioner being hired for the project. In other words, the photos fulfilled their function of

25 eliciting audition invitations for Petitioner from those with an interest in securing the

26 services of an artist. Accordingly, the photos cannot be considered deficient or unsuitable


for their intended purpose and Petitioner's contrary assertion cannot provide the basis for

28
6
DETERMINATION OF CONTROVERSY
recovering the costs of the photos from Respondent.

3 Proper Payment for USAA Project

4
5 8. It is undisputed, that a minimum-after deducting withholdings and

6 Respondent's agency fee-Petitioner was entitled to a net payment of $525.05 on the

7 USAA project. As of the date of the hearing, however, that amount still had not been

g paid. The original check had been dishonored because it had been written on a defunct

9 account, and the replacement check had justifiably not been cashed because it had

1o conditioned negotiability on a waiver of Petitioner's right to claim more money was due

11 to him on the USAA project. At the hearing, Respondent stipulated on the record that

12 Petitioner could proceed to cash the replacement cashier's check and that the condition of

13 waiver on the check was withdrawn, so that Petitioner's negotiation of the check would

14 not bar Petitioner from asserting any other claims he might have for money due on the

15 USAA project. Petitioner was directed to cash the check following the hearing and to

16 notify the Labor Commissioner after receiving payment. Petitioner has since notified the

17 1 Labor Commissioner that the check has been negotiated and that he has now been paid

18 the $525 .05.

19

20 9. Petitioner questions the $274.95 that was withheld from the $1,000.00

21 payable to Petitioner on the USAA project, an amount classified by Respondent as

22 "taxes." The evidence at the hearing established that this amount was withheld not by

Respondent but by those in charge of the USAA project. The producer on the project was

3 Star Productions, and the company handling the payroll was Team Services, 90 I W.

Alameda Avenue, Suite 100, Burbank, California 91506-2801 (Tel. No. 818-558-3261).

In paying Petitioner for the USAA project, Team Services, treated Petitioner as an
employee and withheld the following from his wages: $163.32 in federal income taxes,

7
DETERMINATION OF CONTROVERSY
$42.00 in social security taxes, $14.50 for Medicare, $45.13 in state income taxes, and
2 $10.00 in state disability insurance. Team Services should have issued a W-2 to
3 Petitioner, and the amounts withheld for federal and state income taxes would have been
4 a credit against Petitioner's income tax liability as reported on his federal and state
5 income tax returns. Petitioner would be entitled to a refund of any excess withholdings.
6 As the foregoing makes clear, however, the $274.95 in tax and related withholdings is not
7 attributable to any impropriety on the part of Respondent.

8
9 10. Petitioner also raises a question regarding the additional 20% that was
1o payable on the USAA project if the hired artist was submitted by an agent. Petitioner
11 suggests that, even though initially he submitted himself for the project, the additional
12 20% might have been paid because Respondent was identified as Petitioner's agent for
13 purposes of collecting the money due for Petitioner's services on the project. At the
14 hearing, the evidence showed that those in charge of the USAA project made a single
15 gross payment of $1,000.00 for the services rendered by Petitioner, issuing a net check of
16 $725.05 after deducting $274.95 in tax and related withholdings. There was no evidence
17 of an additional 20% being paid to Respondent. Absent such evidence, there is no basis
18 for inferring or concluding that Respondent withheld any additional monies due Petitioner
19 in connection with the USAA project.

20
21 11. Labor Code section 1700.25, subdivision (a) provides that funds collected
22 by a talent agent on behalf of an artist must be disbursed to the artist within 30 days of
23 receipt. Subdivision (e)(2) of that section provides that if the failure of a talent agent to
24 disburse funds to an artist within 30 days is "willful/' the Labor Commissioner can award
25 the artist interest on the money withheld a the rate of 10% per annum. In the present case,
the money collected on behalf of Petitioner around June 26, 2012 should have been
disbursed to Petitioner by July 26, 201 However, Petitioner did not receive free and

8
DETERMINATION OF CONTROVERSY
clear access to that money until September 27, 2013, the date of the hearing in this case.
2 This was a delay of almost 14 months.

3
4 It is well established that the word "willful" as used in this statutory context-and

5 in analogous statutory contexts-merely means an intentional and voluntary failure to


6 perform an act that the law requires. There is no need to show malice or an intent to
7 defraud. (David v. Morris (1940) 37 Cal.App.2d 269.)

8
9 In the present case, Respondent contends that its failure to timely disburse the
1o funds due Petitioner was excusable and not willful. This contention is rejected. Here, the
11 initial delay in payment was occasioned by Respondent issuing an invalid check on a
12 defunct account. Respondent argues that this was an error triggered by its old bank being
13 replaced by a new bank and by the check writer accidenta1ly picking up and using checks
14 from its old account. From a business that must regularly pay artists moneys that have
15 been collected on their behalf, this explanation of purported clumsiness is neither
16 plausible nor credible. Furthermore, and more significantly, this initial failure was
17 compounded by the issuance of a replacement cashier's check that could not be cashed by
18 Petitioner without waiving the right to claim that he was due more on the USAA project.
19 The $525.05 being remitted to Petitioner was indisputably owed. Imposing a waiver of
20 rights requirement as a condition to receiving these unconditionally owed funds was
21 absolutely improper and impermissible. Petitioner justifiably refrained from cashing the
22 check until the hearing in this case. Respondent did not provide Petitioner with a
23 replacement check until January 15, 2013. Its explanation that it was unable to locate
24 Petitioner earlier because Petitioner was always traveling is rejected as lacking in
25 credibility. Moreover, as has already been discussed, the replacement check that
26 Respondent provided contained an improper condition and therefore was not a valid
payment at that time. Accordingly, Respondent's prolonged failure to disburse the funds

9
DETERMINATION OF CONTROVERSY
owed to Petitioner is found to be willful within the meaning of Labor Code section
2 1700.25, subdivision ( e )(2).

3
4 Petitioner is therefore entitled to recover interest on the sum of $525 .05 at 10% per

5 annum from July 26, 2012 to September 17, 2013. The interest owed to Petitioner is
6 $60.13.

7
8 Deficient Perfonnance by Respondent

9
Io 12. Petitioner contends that, because of the cumulative deficiencies that he
11 ascribes to Respondent's performance as a talent agent, Petitioner should be excused from
12 further perfonnance under the representation agreement with respect to any engagements

13 obtained by or for Petitioner subsequent to the USAA project. At the hearing,


14 Respondent indicated it was agreeable to releasing Petitioner from the agreement with

15 respect to any post USAA project engagements obtained by or for Petitioner.


16 Accordingly, pursuant to stipulation of the parties, it was agreed that the hearing officer
17 would declare the representation agreement extinguished with respect to any engagements
18 obtained by or for Petitioner subsequent to June 26, 2012 and with respect to the further
19 representation of Petitioner by Respondent after that date.

20 Ill
21 Ill
22 Ill
23 Ill
24 Ill
25 Ill
26 Ill

10
DETERMINATION OF CONTROVERSY
ORDER

21'
31 For the reasons set forth above,

I:
5 : IT IS HEREBY ORDERED that Respondent NETWORK INTERNATIONAL
61 MODEL & TALENT shall pay to Petitioner JAMES ANDERSON the sum of$60.13.
ll
7 I;
r !
I'
8 IT IS HEREBY FURTHER ORDERED that the agreement between Petitioner
i:
9 1 1 and Respondent is declared to be extinguished and of no force or effect with respect to
1o 1
any engagements obtained by or for Petitioner subsequent to June 26, 2012 and with
11 respect to the representation of Petitioner by Respondent after that date.

12
13

15 Dated:
William A. eic1i
16 Special Hearing Officer
17
18 Ado12ted:
19 i

20
21 Dated:
Su
22 State Labor Commissioner
23
24
25
26
27

11
DETERMINATION OF CONTROVERSY
1 I
STA TE OF CALIFORNIA
1'

DEPARTMENT OF INDUSTRIAL RELATIONS


2 DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
3 1901 N. Rice Avenue, Suite 200
Oxnard, California 93030
4 I Telephone No. (805) 973-1244
I Facsimile No. (805) 973-1251
5
Special Hearing Officer for the Labor Commissioner
6

7
8
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10
11 EXPECTING MODELS, INC., CASE NO.: TAC-31147

12 Petitioner, DETERMINATION OF
CONTROVERSY
13 vs.
14 STACIE SCHIFINO, MIKE CAHOON,
15 Respondents.

16
17
18 The above-captioned matter, a petition to determine controversy under Labor Code
19 1700.44, came on regularly for hearing on January 7, 2015 in Los Angeles, California,
20 before the undersigned attorney for the Labor Commissioner assigned to hear this case.
21 Petitioner EXPECTING MODELS, INC. (hereinafter "Petitioner") appeared by and
22 through its President and CEO Liza Elliott-Ramirez and its Vice-President Eric Ramirez.
23 Respondents Stacie Schifino and Michael Cahoon appeared personally on their own

24 behalf.

25
26 Based on the evidence presented at the hearing and on the other papers on file in
this matter, the Labor Commissioner hereby adopts the following decision.

28

DETERMINATION OF CONTROVERSY
I
1 FINDINGS OF FACT

2
3 1 1. Petitioner is a talent agency licensed to operate as such under the provisions
4 of the Talent Agencies Act (the "Act" or "TAA"), Labor code sections 1700 - 1700.47.

5
6 2. Petitioner represents artists in obtaining work in the fields of modeling,
7 film, television, and commercials.

8
9 3. Maria Pallas and her husband, Jeff Dyll, are artists who were represented by

10 petitioner, as their agent, during the February through March, 2013 time period pertinent

11 to this claim.

12
13 4. In late February, 2013, a casting call was placed in connection with a
14 television (internet) commercial project being undertaken by Mass Mutual Financing
15 Group. The casting call sought pregnant couples and solo pregnant women, with a
16 preliminary preference for the former.

17
18 5. At that time, an employee of petitioner contacted the head of casting on the
19 project to pitch artists represented by petitioner for roles in the planned commercial.
20 These efforts succeeded in securing an audition for Maria Pallas and Jeff Dyll.

21

22 6. In the course of securing the audition for Maria Pallas and Jeff Dyll, the
23 employee of the petitioner was advised that the project was also interested in casting
24 actual friends of the pregnant couple that might ultimately be selected and wanted friends,
if available, to accompany the couple that was being sent to the audition by petitioner. As

26 a result, petitioner's employee asked Maria Pallas and Jeff Dyll to invite friends to come

27 with them and audition for roles as their friends in the commercial.

28
2
CONTROVERSY
1 11 7. Thereafter, Maria Pallas asked respondents Stacie Schifino ("Schifino") and

2 Michael Cahoon ("Cahoon") to accompany her and audition for a role in the commercial.

3 They agreed and went with her and Jeff Dyll to the audition. After being asked to return

4 for a call back, all four individuals eventually were booked by the project for roles in the

5 commercial.

6
7 8. At the time that Schifino and Cahoon attended the audition with Maria

8 Pallas and Jeff Dyll, they had never had any contact or dealings of any kind with

9 petitioner. They went to the audition only because Maria Pallas had asked them to come

1O and act as her friends.

11
12 9. At the time that the four individuals were asked to return for the call back,

13 petitioner-speaking through the employee that had arranged for the audition-had some

14 e-mail exchanges with Maria Pallas in which it expressed the view that it should be

15 considered the booking agent not only for Maria Pallas and her husband but also for

16 Schifino and Cahoon. All of these exchanges, and additional exchanges which occurred

17 prior to the time the four individuals were booked for the commercial, were between

18 petitioner and Maria Pallas; to that point, there has been no contact between petitioner

19 and Schifino or Cahoon.

20
21 l 0. The booking of the four individuals for the commercial was confirmed in
22 the afternoon of March 4, 2013. Early that evening, Schifino-who was represented by
23 another talent agency-sent an e-mail to the employee of petitioner who had secured the
24 audition for Maria Pallas and Jeff Dyll. The e-mail informed petitioner's employee that
25 Schifino had contacted her own agent and that Schifino's agent would be handling the
26 booking of the commercial and the paperwork for her and for Cahoon.

27

281
3
DETERMINATION OF CONTROVERSY
I 11. Late that evening, petitioner's CEO, Liza Elliott-Ramirez, sent Schifino an
2 e-mail stating that since Schifino and Cahoon had auditioned for the project through her
3 company it was improper for them to pull out and have the representation handled by a
4 different talent agency. Ms. Elliott-Ramirez threatened to take steps to effect a
5 cancellation of the booking of all four individuals, including those of petitioner's own
6 clients. The indication was that this is what would happen ifthe matter was not resolved.

7
8 12. In an e-mail sent to petitioner the next evening, Schifino stated that
9 regardless of who handled the booking and paperwork on the commercial she and Cahoon
Io both wanted petitioner to receive a commission.

11
12 13. In an April 5, 2013 e-mail sent to petitioner and directed to Ms. Elliott-
13 Alvarez, Schifino complained about being harassed by petitioner and stated that she had
14 determined that she was under no legal obligation to pay petitioner a commission fee on
15 her earnings from the completed commercial. On April 8, 2013, Schifino's agent sent
16 Ms. Elliott-Alvarez an e-mail to the same effect, indicating that neither S9hifino nor
17 Cahoon was obligated to pay any commission of any kind to petitioner.

18
19 14. Nevertheless, despite their legal position, both Schifino and Cahoon did
20 subsequently regularly pay a 10% commission fee to petitioner on all the earnings that
21 1/ they received as payment for their roles in the Mass Mutuai commercial.

22 I

23 LEGAL ANALYSIS

24
25 I. Petitioner operated as a duly licensed talent agency.

26
27 j 2. Respondents Schifino and Cahoon were artists for purposes of their
I
28
4
DETERMINATION OF CONTROVERSY
1 employment in connection with the Mass Mutual project.

2
3 3. This case is within the jurisdiction of the Labor Commissioner under Labor

4 Code section 1700.44, subdivision (a).

5
6 4. The petition filed in this case seeks two types of relief. First, the petition
7 seeks a determination that the talent agency that Schifino identified as her agent, namely
8 The House of Representatives, was not in fact contractually the agent of either Schifino or
9 Cahoon during the period that encompassed the auditioning and booking of Schifino and
1o Cahoon for the Mass Mutual project. This particular request for relief can be readily
11 disposed of since it does not set forth a cognizable claim for relief affecting the rights of

12 petitioner.

13
14 I 5. Insofar as petitioner is concerned, whether the House of Representatives
15 i was the agent of Schifino and Cahoon at the time the Mass Mutual engagement was
16 entered into is immaterial. If, on the one hand, we were to assume that an agency
17 relationship did exist, this would not operate to preclude petitioner from seeking to
18 establish that Schifino and Cahoon simultaneously engaged petitioner to be their agent in
19 connection with the Mass Mutual project. On the other hand, if we were to assume that
20 an agency relationship did not exist, this would not mean that petitioner would
21 ' automatically be constituted as the talent agent for Schifino and Cahoon in relation to the
22 Mass Mutual project. Put another way, the rights of petitioner viz a viz respondents
23 Schifino and Cahoon must be premised on the relationship that petitioner had with
24 respondents, and cannot be based on the entirely irrelevant relationship that respondents
25 I had with a distinct third party.

26
27!
28
5
DETERMINATION OF CONTROVERSY
6. It follows that petitioner is not legally entitled to seek a determination of

2 whether Schifino and Cahoon had a contractual talent agency relationship with The
3 House of Representatives at the time the Mass Mutual engagement was finalized.
4 Accordingly, that request for relief must be denied.

51
6 7. The second type of relief that the petition seeks is a determination that
7. petitioner is the talent agent for Schifino and Cahoon in connection with the Mass Mutual
8 project and that therefore it is legally entitled to a I 0% commission fee on all the amounts
9 paid to Schifino and Cahoon for their work on that project.

10
11 8. It is axiomatic that the sine qua non of any claim by a talent agency for fees

12 due from an artist is the existence of a contract that entitles the agency to receive such
13 fees for representing the artist. Absent the existence of such a contract, a talent agency
14 has no legal basis for asserting a right to receive a commission fee from the earnings
15 generated by an artist-or to receive any other compensation from an artist.

16
17 9. A contract is an agreement by the parties to do or not do something. (Civ.

is/ Code 1549; 1 Witkin, Cal. Procedure (10th ed. 2005) Contracts, I, pp. 58 - 59.) An
19 essential element of a contract is the parties' mutual consent. (Id, at 3, p. 61.)
20 Contractual consent is manifested through the mechanism of an offer and acceptance, i.e.,
21 one party offers to do something in exchange for something from the other party, and the
22 other party accepts the offer. (Id, at 117, pp. 155 - 157.) If, however, the parties have
23 I not consented to contract with one another, then their actions, or failures to act, are
'
24 I without contractual significance and do not give rise to any legal obligation.

25
26 10. In this case, at the time that petitioner's employee arranged for Maria Pallas

27 and Jeff Dyll to be auditioned for the Mass Mutual project, there was no agreement of any
I
281!
6
DETERMINATION OF CONTROVERSY
1 kind between petitioners, on the one hand, and Schifino and Cahoon, on the other.
2 Indeed, at that point in time the parties had not even communicated with one another, and
3 thus could not possibly have consented to contract with one another. In other words,
4 there had been no offer from petitioner to represent Schifino and Cahoon in seeking to
5 obtain a role for the two of them on the Mass Mutual commercial in exchange for the
6 payment of a commission, and there had been no acceptance by Schifino and Cahoon of

7 any such offer.

8
9 11. Thus, when petitioner's employee urged Maria Pallas to bring her friends
1o with her to the Mass Mutual audition, petitioner was not acting pursuant to any contract
11 which authorized it to attempt to obtain an audition for Schifino and Cahoon or which
12 obligated Schifino and Cahoon to pay petitioner a commission if the audition resulted in
13 the two of them being booked for the commercial. Petitioner in fact acted in furtherance
14 of its own interests and those of its clients Maria Pallas and Jeff Dyll, seeking to leverage
15 the producer's interest in casting friends of the pregnant couple to bolster the chances of
16 its clients being selected as the main pregnant couple for the commercial. While
17 petitioner's actions played an indirect role in Schifino and Cahoon ending up at the
18 audition with an opportunity to be cast in the commercial, that was a purely fortuitous
19 circumstance having absolutely nothing to do with any contract between petitioner and
20 Schifino and Cahoon-such a contract simply did not exist.

21

22 12. In sum, petitioner did not contractually represent Schifino and Cahoon in

23 connection with the audition that landed Schifino and Cahoon their
, roles in the Mass

24 Mutual commercial. Consequently, petitioner had and has no legal basis for claiming a

25 I 0% commission fee on the amounts due and payable to Schifino and Cahoon for their

26 work on the commercial. Since petitioner was not their agent in connection with the

27 procurement of the Mass Mutual engagement, Schifnio and Cahoon did not and do not

28
7
DETERMINATION OF CONTROVERSY
owe petitioner any commission fees.

3 13. Ultimately, Schifino and Cahoon elected to pay petitioner a 10%

4 commission fee on the amounts they received from the Mass Mutual commercial. This

5 decision, however, was not made based on any valid agreement that obligated Schifnio

6 and Cahoon to pay such a commission fee; rather, it was made in direct consequence of
7 the threats from petitioner's CEO that if they did not accede to her demands she would

8 completely extinguish the Mass Mutual commercial booking. These threats from

9 petitioner's CEO were a form of illegal economic compulsion that vitiated any promises

1o that might have been made in submission to the threats (see 1 Witkin, Cal. Procedure,

11 supra, 314, pp. 339 - 341 ); in addition, the threats constituted illegal consideration that
12 could not serve to support promises made in exchange for the CEO refraining from

13 carrying out her threats (see 1 Witkin, supra, 419, pp. 460 - 461). Thus, even if the
14 decision to pay the commissions-made in response to the CEO's threats-were to be

15 considered a contractual promise to pay, that illegally exacted contractual promise could

16 not be enforced under California law.

17
18 14. Accordingly, with respect to the second type of relief it seeks, petitioner is
19 not entitled to a determination that requires Schifino and Cahoon to pay petitioner a 10%

20 commission fee on any amounts they receive for their work on the Mass Mutual

21 commercial. It is determined that Schifino and Cahoon are not required or obligated to

22 pay petitioner any such fees.

23
24

26
27
28
8
DETERMINATION OF CONTROVERSY
DISPOSITION

2
3 Accordingly, for the reasons set forth above, IT IS HEREBY ORDERED as

4 follows:

5
6 1. Petitioner was not the talent agent for respondents Stacie Schifino and Mike

7 Cahoon in connection with the procurement of their roles in the Mass Mutual
8 commercial, and petitioner has never had and does not now have any contractual or other

9 right to claim a commission fee on the amounts due and payable to respondents for their

1o work on the Mass Mutual commercial. Respondents do not have, and have never had, an
11 obligation to pay petitioner any such fee.

12
13 2. Petitioner is not entitled to a determination that House of Representatives

14 was not respondents' talent agent in connection with the Mass Mutual project.

15

16 3. All of the relief requested by petitioner in this proceeding is denied.

17
18
19

20
Dated: TJ'"U l.. V 11 J. 0 f J'
~ Special Hearing Officer

21
22 Adopted:

23
24
25 i
I
Dated: r/1/
Julie
26 : State

27
23:
9
DETERMINATION OF CONTROVERSY
1 .. STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
2 DIVISION OF LABOR STANDARDS ENFORCEMENT
1

William A. Reich, Esq. (SBN 51397)


3:' 1901 N. Rice Avenue, Suite 200
Oxnard, California 93030
4 Telephone No. (805) 973-1244
Facsimile No. (805) 973-1251
5 .,
Special Hearing Officer for the Labor Commissioner

BEFORE THE LABOR COMMISSIONER


9 '~
OF THE STATE OF CALIFORNIA
10 1 '
11 Ii RUSSELL G. CLARK, CASE NO.: TAC-31732

12 Petitioner, DETERMINATION OF
CONTROVERSY
13 ;: vs.
14 THE PINKERTON MODEL AND TALENT
COMPANY, LLC aka PINKERTON MODEL
15 1 AND TALENT CO., LLC,
Respondent.

17'
I
18 i
I
19 . The above-captioned matter, a petition to determine controversy under Labor Code
20: 1700.44, came on regularly for hearing on January 7, 2015 in Los Angeles, California,
i
21 ! before the undersigned attorney for the Labor Commissioner assigned to hear this case.
I

22, 1
Petitioner RUSSELL G. CLARK (hereinafter "Petitioner") appeared personally. 1

!:

23 Respondent THE PINKERTON MODEL AND TALENT COMPANY, LLC aka


24 PINKERTON MODEL AND TALENT CO., LLC (hereinafter "Respondent") appeared
25 by and through its authorized agent and representative LYNN VENTURELLA.

26
27 Based on the facts stipulated to at the hearing and on the other papers on file in this
28 matter, the Labor Commissioner hereby adopts the following decision.
I
DETERMINATION OF CONTROVERSY
II

1 '! FINDINGS OF FACT

2
3 The Respondent acknowledged and stipulated to the following facts:

I. Petitioner is a model and actor, and an artist within the meaning of Labor
6! code section 1700.44.

2. Respondent is a limited liability company licensed as a talent agency under


the provisions of the Talent Agencies Act, Labor Code section 1700 et seq. (TAA).

11 3. In February, 2012, respondent became indebted to petitioner in the amount


of $5,400.00 as a result of fees and amounts it received on behalf of petitioner as his
13 agent, which fees and amounts had been remitted to respondent as a result of modeling
14 , and other engagements that respondent had procured and obtained for petitioner through
1

I
15 :: its procurement activities as petitioner's talent agent.
f 1

I
16
17 4. Although respondent received the above-described amounts on behalf of
18 I petitioner, it did not deposit these funds in a trust account, but instead diverted these
i
19 : funds to other purposes and failed to pay petitioner the money it owed him.

201
I
11
21: 5. Respondent is obligated to petitioner in the sum of $5,400.00 and that sum
I

22 i remains due, owing, and unpaid.


I

24. 6. Having inexcusably failed to pay petitioner the money it owed to him,
25 respondent owes petitioner interest on the money due at I 0% per annum from March 16,
26 2012; the total amount of interest due is $1,395.00.

27
28
2
DETERMINATION OF CONTROVERSY
1. The petitioner acknowledged and stipulated to these facts.

21

3 ;I
'
LEGAL ANALYSIS

4:

5 ': 1. Respondent operated as a licensed talent agency.

6
i
7 ''i 2. Petitioner was an artist who was represented by respondent.
I
gl I

9 3. This case is within the jurisdiction of the Labor Commissioner under Labor

1oi. Code section 1700.44, subdivision (a).


i

11:

12 4. Under the arrangement entered into at the time respondent became

13 1 petitioner's talent agent, respondent agreed to accept payments on behalf of petitioner for

14 1 1
the services he rendered and to promptly remit to petitioner his share of those payments,
I

15 i; after deducting respondent's commission. This was also respondent's statutory obligation
11
16; 1 under Labor Code section 1700.25, subdivision (a).
I

5. It is conceded and undisputed that in February, 2012, respondent became


19 ' indebted to petitioner in the amount of $5,400.00 for monies received by respondent in I

20 ! payment for petitioner's services. This amount of $5,400.00 representing petitioner's

21 ; share of the payments should have been remitted to petitioner forthwith.

22,

23 6. No part of the $5,400.00 was ever paid to petitioner, and the entire sum is

24 , due, owing, and unpaid.

25,

26 7. Labor Code section 1700 .25, subdivision (e) provides that where there is a

27 willful failure on the part of a talent agent to pay funds to an artist within 30 days of

28
3
DETERMINATION OF CONTROVERSY
I receipt, as mandated by subdivision (a) of section 1700.25, the Labor Commissioner may
2 award the artist interest on the wrongfully withheld funds. Here, there is no question that
3 respondent wrongfully withheld monies belonging to petitioner. This plainly constituted
4 a willful violation of section 1700.25, subdivision (a). Accordingly, petitioner is entitled
to interest on the withheld funds.

6
7 8. The total accumulated interest now due is $1,395.00

8
9 ORDER

10
I

11 I For the reasons set forth above, IT IS HEREBY ORDERED that:

12
13 I Respondents THE PINKERTON MODEL AND TALENT COMPANY, LLC aka
14 ! PINKERTON MODEL AND TALENT CO., LLC pay to petitioner RUSSELL G.
151 CLARK the sum of $5,400.00, plus interest in the amount of$1,395.00, for a total of
16 $6,795.00.

17
18
19
Dated: rj'l/ts ~~Special Hearing Officer
20 for the Labor Commissioner
21 !

' Adopted:
22 I
23
24 I -i1I
Dated: S-bj?OIS-
25
State Labor Commissioner
26
27'
28i
4
DETERMINATION OF CONTROVERSY
I

1I STA TE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
2 DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
3 , 1901 N. Rice Avenue, Suite 200
Oxnard, California 93030
4 Telephone No. (805) 973-1244
Facsimile No. (805) 973-1251
5
Special Hearing Officer for the Labor Commissioner
6
7

81
BEFORE THE LABOR COMMISSIONER
9
OF THE STATE OF CALIFORNIA
10
11 BJANKA MURGEL, CASE NO.: TAC-33185

12 Petitioner, DETERMINATION OF
CONTROVERSY
13 vs.

14 THE PINKERTON MODEL AND TALENT


COMPANY, LLC aka PINKERTON MODEL
15 AND TALENT CO., LLC,

16 Respondent.

17

18
19 The above-captioned matter, a petition to determine controversy under Labor Code

20 1700.44, came on regularly for hearing on June 2, 2015 in Los Angeles, California,

21 before the undersigned attorney for the Labor Commissioner assigned to hear this case.

22 Petitioner BJANKA MURGEL (hereinafter "Petitioner") appeared personally, along with

23 her representatitve, New York attorney Raymond J. Markovich, who stood in for

24 Petitioner's attorney of record, Peter M. Hoffman. Respondent THE PINKERTON


25 MODEL AND TALENT COMPANY, LLC aka PINKERTON MODEL AND TALENT

26 CO., LLC (hereinafter "Respondent"), having filed a response to the petition, failed to

27 appear for the hearing.

28
1
DETERMINATION OF CONTROVERSY
1 Based on the evidence presented at the hearing and on the other papers on file in

2 this matter, the Labor Commissioner hereby adopts the following decision.

4 FINDINGS OF FACT

5
6 1. Petitioner is a model and actress, and an artist within the meaning of Labor

7 code section 1700.44.

8
9 2. Respondent is a limited liability company licensed as a talent agency under

1o the provisions of the Talent Agencies Act, Labor Code section 1700 et seq. (TAA).

11

12 3. In January, 2013, Petitioner engaged Respondent to represent her in

13 securing work in modeling and in films, television, and commercials. Under the 3-year

14 written representation agreement, Respondent was to receive an agency fee of 20% of the

15 amounts paid to Petitioner as an artist during the period of Respondent's representation.

16

17 4. During the period from February 1, 2013 through April 11, 2013,

18 Respondent procured four engagements for Petitioner to render services as an artist.

19

20 a. The first was the GEICO Insurance project on February 1, 2013, for

21 which Petitioner was to be paid the net amount of $1,000.00, with the $200.00 agency fee

22 being paid by the production company. After Petitioner completed the work, a check for

23 $1,200.00 was sent to Respondent.

24
25 b. The second engagement was the Leinenkugel Beer project on

26 February 3, 9, and 11, 2013, for which Petitioner was to be paid the net amount of
27 $4,000.00 after deducting Respondent's 20% commission of $1,000.00 from the gross

28
2
DETERMINATION OF CONTROVERSY
1 payment of $5,000.00. Once Petitioner completed the work, a check for $5,000.00 was

2 I sent to Respondent.

3/
4 c. The third engagement was the Volvo Motors project on March 3,

5 2013, for which Petitioner was to be paid the net amount of $1,000.00 after deducting
6 Respondent's 20% commission of $250.00 from the gross payment of $1,250.00. After

7 the work was completed by Petitioner, a check for $1,250.00 was sent to Respondent.

d. The fourth engagement was the Jacob's Coffee project on April 3

Io and 4, 2013, for which Petitioner was to be paid the net amount of $5,952.00 after
11 deducting Respondent's 20% commission of $1,400.00 from the gross payment of
12 $7,440.00. Petitioner completed the work, after which a check for $7,440.00 was sent to

13 Respondent.

14
5. Although Respondent received the above-described net amounts totaling
16 $11,952.00 on behalf of Petitioner, it did not deposit these funds in a trust account, but
17 instead diverted these funds to other purposes and failed to promptly pay Petitioner the
18 money it owed to her. As a result of Petitioner's repeated demands for payment,
19 Respondent gradually and sporadically made various payments. The total amount of
20 these payments was $6,950.00, leaving an unpaid balance of $5,002.00 due and owing to
21 Petitioner.

22
23 LEGAL ANALYSIS

24
25 1. Respondent operated as a licensed talent agency.

26
27 2. Petitioner was an artist who was represented by Respondent.

28
3
DETERMINATION OF CONTROVERSY
1

2 3. This case is within the jurisdiction of the Labor Commissioner under Labor

3 Code section 1700.44, subdivision (a).

4
5 4. Under the arrangement entered into at the time Respondent became

6 Petitioner's talent agent, Respondent agreed to accept payments on behalf of Petitioner

7 for the services she rendered and to promptly remit to Petitioner her share of those

8 payments, after deducting Respondent's commission. This was also Respondent's

9 statutory obligation under Labor Code section 1700.25, subdivision (a).

10

11 5. The evidence unequivocally establishes that as of May 1, 2013, Respondent

12 had become indebted to Petitioner in the amount of $11,952.00 for monies received by

13 Respondent in payment for Petitioner's services. This amount of $11,952.00 representing

14 Petitioner's share of the payments made to the Respondent should have been remitted in
15 full to Petitioner forthwith. Instead, Respondent made intermittent payments which

16 totaled only $6,950.00, leaving an unpaid balance of $5,002.00.

17

18 6. No part of the $5,002.00 balance was ever paid to Petitioner, and that entire

19 sum is due, owing, and unpaid.

20
21 7. Labor Code section 1700.25, subdivision (e) provides that where there is a

22 willful failure on the part of a talent agent to pay funds to an artist within 30 days of

23 receipt, as mandated by subdivision (a) of section 1700.25, the Labor Commissioner may

24 award the artist interest on the wrongfully withheld funds. Here, there is no question that

25 respondent wrongfully withheld monies belonging to petitioner. This plainly constituted

26 a willful violation of section 1700.25, subdivision (a). Accordingly, petitioner is entitled

27 1
to interest at I 0% per annum on the withheld funds from May 31, 2013.
I
2811
4
DETERMINATION OF CONTROVERSY
1
8. The total accumulated interest now due is $1,104.55.

I
4i ORDER
I
5 !
I
6 I For the reasons set forth above, IT IS HEREBY ORDERED that:

7
8I Respondent THE PINKERTON MODEL AND TALENT COMPANY, LLC aka
9 . PINKERTON MODEL AND TALENT CO., LLC pay to Petitioner BJANKA MURGEL
I
10 the sum of$5,002.00, plus interest in the amount of$1,104.55, for a total of$6,106.55.

11

Special Hearing Officer


for the Labor Commissioner
15
Adopted:
16 I

17
18
19
Dated: t/31 1~15 JWit::~
State Labor Commissioner
20
21
22
!
I
23 :
.
24 :

25:
I

261

27.
28
5
DETERMINATION OF CONTROVERSY
1 STATE OF CALIFORNIA
' DEPARTMENT OF INDUSTRIAL RELATIONS
'I
2;; DIVISION OF LABOR STANDARDS ENFORCEMENT
William A. Reich, Esq. (SBN 51397)
1

3 Ii 1901 N. Rice Avenue, Suite 200


Oxnard, California 93030
4' Telephone No. (805) 973-1244
Facsimile No. (805) 973-1251
1

Special Hearing Officer for the Labor Commissioner

Si I
' BEFORE THE LABOR COMMISSIONER
9;
i OF THE STATE OF CALIFORNIA
10
11 I JA YDN MEIER, CASE NO.: TAC-33688

12 Petitioner, DETERMINATION OF
CONTROVERSY
13 vs.
14 THE PINKERTON MODEL AND TALENT
COMPANY, LLC aka PINKERTON MODEL
1

15 i AND TALENT CO., LLC,


I
16 !
I
Respondent.

18
19 !! The above-captioned matter, a petition to determine controversy under Labor Code
'I
/,
2011 1700.44, came on regularly for hearing on January 7, 2015 in Los Angeles, California,
'I
/!

21 !l before the undersigned attorney for the Labor Commissioner assigned to hear this case.
22 ! 1 Petitioner JA YDN MEIER (hereinafter "Petitioner") appeared personally. Respondent
23 THE PINKERTON MODEL AND TALENT COMPANY, LLC aka PINKERTON
24 MODEL AND TALENT CO., LLC (hereinafter "Respondent") appeared by and through ,
25 : its authorized agent and representative LYNN VENTURELLA.

26
27 Based on the facts stipulated to at the hearing and on the other papers on file in this
28 matter, the Labor Commissioner hereby adopts the following decision.
I
DETERMINATION OF CONTROVERSY
FINDINGS OF FACT

2
3 The Respondent acknowledged and stipulated to the following facts:

4
5 1. Petitioner is a model and actor, and an artist within the meaning of Labor
6 code section 1700.44.

7
8 2. Respondent is a limited liability company licensed as a talent agency under
9 the provisions of the Talent Agencies Act, Labor Code section 1700 et seq. (TAA).

10
11 3. In January, 2013, respondent became indebted to petitioner in the amount of

12 $4,760.00 as a result of fees and amounts it received on behalf of petitioner as her agent,

13 which fees and amounts had been remitted to respondent as a result of modeling and other

14 engagements that respondent had procured and obtained for petitioner through its

15 procurement activities as petitioner's talent agent.

16
17 4. Although respondent received the above-described amounts on behalf of
18 petitioner, it did not deposit these funds in a trust account, but instead diverted these
19 funds to other purposes and failed to pay petitioner the money it owed her.

20
21 5. Respondent is obligated to petitioner in the sum of $4,760.00 and that sum
22 i remains due, owing, and unpaid.

23
241 6. Having inexcusably failed to pay petitioner the money it owed to her,
25 respondent owes petitioner interest on the money due at I 0% per annum from March I,
26 2013; the total amount of interest due is $948.00.

27
28
2
DETERMINATION OF CONTROVERSY
1 The petitioner acknowledged and stipulated to these facts.

2
3 I LEGAL ANALYSIS

5 1. Respondent operated as a licensed talent agency.

6
7 2. Petitioner was an artist who was represented by Respondent.

8
9 3. This case is within the jurisdiction of the Labor Commissioner under Labor
1o 1
Code section 1700.44, subdivision (a).

11
12. 4. Under the arrangement entered into at the time respondent became
i
13 ! petitioner's talent agent, respondent agreed to accept payments on behalf of petitioner for
14 1 the services she rendered and to promptly remit to petitioner her share of those payments,
15 after deducting respondent's commission. This was also respondent's statutory obligation

16 under Labor Code section 1700.25, subdivision (a).

17
18 5. It is conceded and undisputed that in January, 2013, respondent became

19 indebted to petitioner in the amount of $4,760.00 for monies received by respondent in


20 payment for petitioner's services. This amount of $4,760.00 representing petitioner's
share of the payments should have been remitted to petitioner forthwith.
I
22!
i
231 6. No part of the $4,760.00 was ever paid to petitioner, and the entire sum is

24 due, owing, and unpaid.

25
26 7. Labor Code section 1700.25, subdivision ( e) provides that where there is a
27 willful failure on the part of a talent agent to pay funds to an artist within 30 days of

28
3
DETERMINATION OF CONTROVERSY
I ' reoeipt, as mandated by subdivision (a) of section 1700.25, the Labor Commissioner may
2 award the artist interest on the wrongfully withheld funds. Here, there is no question that
3 respondent wrongfully withheld monies belonging to petitioner. This plainly constituted
4 a willful violation of section 1700.25, subdivision (a). Accordingly, petitioner is entitled
5 to interest on the withheld funds.

6
7 8. The total accumulated interest now due is $948.00

8
9 ORDER
10
11 For the reasons set forth above, IT IS HEREBY ORDERED that:

12
13 1 Respondent THE PINKERTON MODEL AND TALENT COMPANY, LLC aka
14 PINKERTON MODEL AND TALENT CO., LLC pay to petitioner JADYN MEIER the
15 sum of$4,760.00, plus interest in the amount of$948.00, for a total of$5,708.00.

16

~
17
t8 I
I
Dated: /';/J.5
19 I Special Hearing Officer
for the Labor Commissioner
20
21 Adopted:
22
23
24 Dated:_f/~0
25 I
i
I
26 i
27 I

28
4
DETERMINATION OF CONTROVERSY