Monday, June 14, 2010
Crosby Estate Loses Bid to Toss Claim by First Wife’s Heirs
By a MetNews Staff Writer
The estate of Bing Crosby’s first wife may have a community property interest in Crosby’s right of publicity under a 2008 law retroactively making such interests transferable, Los Angeles Superior Court Judge Michael I. Levanas ruled Friday.
Levanas, who issued a tentative ruling in favor of Dixie Lee Crosby’s estate last month, denied a motion for judgment on the pleadings brought by the Bing Crosby estate.
The judge agreed with the Dixie Lee Crosby estate that the interest should be considered newly-discovered property for probate purposes. But he also ruled that Crosby’s second wife, Kathryn Grant Crosby, may have am interest in the property and gave the first wife’s estate 20 days to name her in an amended petition.
Born Wilma Wyatt, actress and singer Dixie Crosby married Bing Crosby in 1930. She died of cancer in 1952 at age 40, predeceasing her husband, who died in 1977.
The pair had four sons: Gary, twins Dennis and Phillip, and Lindsay. Bing Crosby, who was born Harry Lillis Crosby, married his second wife in 1957; they had three children together.
In 1979, the California Supreme Court ruled in Lugosi v. Universal Pictures (1979) 25 Cal.3d 813 that an individual’s right of publicity “protects against the unauthorized use of one’s name, likeness, or personality.”
In 1984, the Legislature created a post-mortem right of publicity for deceased personalities, which could be willed or transferred. In 2007, however, federal judges in New York and California ruled that Marilyn Monroe could not have passed post-mortem rights of publicity through the residuary clause in her will because those rights did not exist when she died.
Later that year, however, Gov. Arnold Schwarzenegger signed a law expanding Civil Code Sec. 3344.1’s statutory right of publicity to be retroactive and transferable, even if the celebrity died before the 1984 law was enacted.
The law provided that where a deceased celebrity’s statutory heirs did not assert those rights on or before May 1, 2007, and there was no specific disposition of them in the testamentary instrument, the rights would pass under the instrument’s residuary clause.
Probate proceedings in Dixie Crosby’s estate were revived shortly thereafter, and her grandson, Philip Crosby’s son Bing, in May 2009 petitioned for ownership. He argued that Dixie Crosby’s community property interest in her husband’s publicity rights was now the property of her trust, pursuant to her will.
Opposing her petition, HLC Properties, Ltd., which was established to manage Bing Crosby’s assets after his death, argued that the petition was untimely.
HLC also contended that the claims were foreclosed by a detailed agreement between Bing and Dixie Crosby’s estates whereby Dixie Crosby’s estate received $1.5 million in exchange for warranting that all community property rights had been transferred and waiving any other obligations pre-dating the agreement or that the estate “might have.”
The petitioner, however, argued that the 1999 settlement merely resolved issues of money owed, and did not contemplate any question of ownership of publicity rights.
Levanas explained Friday that the legislation enacted in 2007 “rendered the decisions of the courts in [the Marilyn Monroe litigation] invalid and cut-off the rights of statutory heirs where there is a testamentary instrument with a residual clause.”
The new law “in effect caused a ‘reboot’ of” Sec. 3344.1 “with a January 1, 2008 effective date for a new statute of limitations period for testamentary heirs,” the judge said in a footnote.
The judge went on to say that because the 1999 agreement was confidential and not made a part of the record in the prior litigation, he could not consider it as part of the motion for judgment on the pleadings.
Susan Cooley of Oldman Cooley Leighton Sallus in Encino represented HLC Properties, Ltd., while Henry K. Workman of Sullivan, Workman and Dee represented the Dixie Lee Crosby interests.
The case is In re Crosby, P334700.
Copyright 2010, Metropolitan News Company
Text of Levanas's Order
The above-entitled action came on regularly for hearing on April 29, 2010, in Department 11 of the Superior Court, the Honorable Michael I. Levanas, Judge presiding. Petitioner and Special Administrator of the Estate of Wilma Wyatt Crosby (“Dixie Lee”) appeared through attorneys, Henry K. Workman of Sullivan, Workman, and Dee, LLP and Respondent HLC, Properties, Ltd. (“HCL”) appeared through attorneys, Susan J. Cooley of Oldman, Cooley, Sallus, Gold, Birnberg & Coleman, LLP.
After hearing, the matter was taken under submission. HCL’s request for judicial notice of (1) the final order of distribution filed in the County of San Mateo in Case No. 61911 [Harry L. Crosby (“Bing”)’s will was probated in San Mateo County]; (2) the complaint filed in SC 044176, and (3) the dismissal with prejudice filed in SC 044176 is granted.
After further consideration of the arguments and the relevant case law and statutory authority, the Court makes the following finding:
HLC’s motion for judgment on the pleadings (Petition by the personal representative of the Dixie Lee Estate for Order Confirming Dixie Lee’s Community Property Interest in Bing’s Estate”) (PC 850) is denied. However upon the Court’s own motion pursuant to CCP § 436, the Court strikes the Petition and grants twenty (20) days leave to amend to name and serve Kathryn Grant Crosby (“Kathryn”) as a Respondent because Kathryn may be an interested party who is presently not named in the Petition.
The 850 petition herein was filed on May 14, 2009 and made a claim for Dixie Lee’s community property portion of her propriety interest in Bing’s freely descendible “right of publicity”. There is no dispute that both Dixie Lee’s interest and Bing’s interest passed by testamentary instruments prior to 1985. The Petition sets forth sufficient facts to make that determination as to whether Dixie Lee has a community property interest in Bing’s right of publicity and whether the claim to it was timely under the 2007 amendment to CC § 3344.1 (effective January 1, 2008).
CC § 3344.1’s freely descendible “right of publicity” is similar to newly discovered property after there was a final distribution and the matter should proceed as such. Accordingly, this action based upon the 2007 amendment to CC § 3344.1 is timely under CCP § 343 based upon the retroactive substantive changes to CC § 3344.1(effective January 1, 2008). However, if the Court were to rule on Dixie Lee’s community property interest, due process and notice mandates that Bing’s second wife, Kathryn be named and served as a Respondent. Therefore the Court strikes the Petition with leave to amend. (CCP § 436.)
A judgment on the pleadings acts like a demurrer. For purposes of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded (i.e., all ultimate facts alleged, but not contentions, deductions or conclusions of fact or law). (Weil and Brown, Cal. Practice Guide:Civil Procedure Before Trial, (The Rutter Group 1999.) 7:43, p. 7-20.)
The sole issue raised by a general demurrer is whether the facts pleaded state a valid cause of action-not whether they are true. Thus, no matter how unlikely or improbable, plaintiffs allegations must be accepted as true for purposes of ruling on the demurrer. (Weil and Brown, Cal. Practice Guide:Civil Procedure Before Trial, (The Rutter Group 1999.) 7:44, p. 7-20 - 7-21.)
The Court, as a matter of law cannot consider Exhibit 1 attached to HLC’s Reply filed on April 28, 2010 because it is extrinsic evidence of a confidential settlement. There was no judicial notice requested by HCL as to the settlement agreement which was made confidential. (See Reply, Ex 1, p, 14, paragraph 7 (f).) There is no dispute that evidentiary determinations of documents not judicially noticeable cannot be made on a motion for judgment on the pleadings.
It is sufficiently pled that Petitioner’s claim is not a collateral attack on the order for final distribution in the Bing ‘s Probate Estate but rather whether Dixie Lee had a retroactive freely transferrable community property interest in Bing’s “right of publicity” at the time of her death. Dixie Lee bequeathed her community property interest to her trust (Dixie Lee’s ultimate beneficiaries). (Dixie Lee Probate Case No. P 334700.) The Petition, filed May 14, 2009, seeks to have a determination that the Dixie Lee’s community property interest in the “right of publicity” was freely transferrable according to the terms of her will. Dixie Lee died in 1952 and Bing died in 1977. The Judgment on the Pleadings seeks to have the claim declared time barred.
At their deaths neither Dixie Lee nor Bing had a freely descendible “right of publicity”.
California first enacted a right of publicity statute in 1984, after the California Supreme Court in Lugosi v. Universal Pictures (1979) 25 Cal.3d 813, held that the right of publicity “protects against the unauthorized use of one’s name, likeness, or personality.” In 1984, the legislature created a post-mortem “right of publicity” for deceased personalities. Prior to 1985, a “right of publicity” was recognized for living celebrities. (California Civil Code Section 3344.) In 1985, CC § 3344.1 was added to permit the rights to be applicable to deceased personalities and those rights were transferable or descendible, either if they were deceased prior to or after January 1, 1985. CC § 3344.1 (b) recognized that the property rights under this section are “freely transferable or descendible in whole or part by contract or by means of a trust or any other testamentary instrument executed before or after January 1, 1985.
The judicial nomenclature for that bundles of rights described in CC § 3344.1 is collectively referred to as “the right of publicity”. (See Comedy III Productions, Inc. v. Gary Saderup, Inc. (2001) 25 Cal.4th 387, 391 [C.J. Mosk, writing for the unanimous Court referring to the CC § 3344.1 bundle of rights as the “right of publicity”.) Under CC § 3344.1, “the right of publicity” was defined as a property right that may be transferred by contract, trust, or other testamentary document. In the absence of such a transfer, the right is descendible to certain statutory heirs and their successors after the personality’s death.
HLC registered Crosby’s “right of publicity” on March 15, 1985. (See Court’s Judicial Notice below.) On this issue, the Court, on its own motion for Judicial Notice, takes judicial notice of the Official Records of Secretary of State’s office indicating HLC registered that bundle of rights on March 15, 1985. The official record from the Secretary of State’s office was received by the Court with a date stamp bearing the date of mailing as May 4, 2010 and received by the Court on May 7, 2010. It is incorporated into the Court’s ruling and entered into the file and records of the Court in this proceeding as a part of this ruling.
As to the Legislative intent of S.B 771, the “LEGISLATIVE COUNSEL'S DIGEST” for CC § 3344.1sets forth the following: “SB 771, Kuehl. Deceased personalities: testamentary instruments. Existing law establishes a cause of action for damages on behalf of specified injured parties for the unauthorized use of a deceased personality's name, voice, signature, photograph, or likeness for commercial purposes within 70 years of the personality's death, except as specified. Existing law provides that the rights recognized under these provisions are property rights, freely transferable, in whole or in part, by contract or by means of trust or testamentary documents, whether the transfer occurs before the death of the deceased personality, by the deceased personality or his or her transferees, or, after the death of the deceased personality, by the person in whom the rights vest under these provisions or the transferees of that person. This bill would provide, instead, [emphasis added] that the above property rights are freely transferable or descendible by contract or by means of any trust or any other testamentary instrument executed before or after January 1, 1985. It would provide that those rights shall be deemed to have existed at the time of death of any person who died prior to January 1, 1985, and shall vest in the persons entitled to these property rights under the testamentary instrument of the deceased personality effective as of the date of his or her death, except as specified. The bill would provide that, in the absence of an express provision in a testamentary instrument to transfer these rights, a provision in the instrument that provides for the disposition of the residue of the deceased personality's assets shall be effective to transfer the rights.” This indicates that there is a substantive change in law or otherwise “new law.”
The California Legislature passed Senate Bill 771 on September 7, 2007 and signed into law by Governor Schwarzenegger on October 10, 2007. This bill amended CC § 3344.1 to protect retroactively the publicity rights of celebrities who died before 1985. In addition, the bill rendered the decisions of the courts in Shaw Family Archives, Ltd. v. CMG Worldwide, Inc., No. 05 Civ. 3939 CM, 2007 WL 1413381 (D.N.Y. May 7, 2007) and Milton H. Greene Archives, Inc. v. CMG Worldwide, Inc., No. CV 05-2200 MMM (MCx) (D. Cal. Filed May 14, 2007) invalid, both of which dealt with the rights to market photographs of Marilyn Monroe.
These two federal courts revisited the issue of the scope of California’s right of publicity statute. Both the New York and California courts held that the California statute did not apply to Marilyn Monroe, because she died before 1985, the year when the statute had originally been passed. The courts relied on generally accepted probate laws, which assert that testators can only transfer property actually held at the time of their death. Because at the time of Monroe’s death, California had not yet recognized a right of publicity, she could not have passed a right she did not own through a residuary clause in her will. Only heirs specified in the statute could exercise such rights.
Thus, the courts in these cases acknowledged that the California laws confer rights of publicity specifically to the surviving spouses and children of celebrities who died before CC § 3344.1 was enacted. These rights could not, however, be transferred by stipulation of the celebrity’s will to other beneficiaries. Specifically, the District Court in Milton Greene Archives explained that the defendants had “no standing to assert the publicity rights they seek to enforce in this action.” Milton H. Greene Archives, Inc. at 36. The court left open the possibility for legislation. Specifically, the District Court explained, “Nothing in this order prevents legislatures from enacting right of publicity statutes so as to vest the right of publicity directly in the residuary beneficiaries of deceased personalities’ estates or their successors.” Id.
These decisions led to S.B. 771. The bill changes the scope of the earlier California statute, asserting that Section 3344.1 shall retroactively include deceased personalities who died before January 1, 1985 and that publicity rights are freely descendible by any testamentary instrument, even if executed before January 1, 1985. It further addresses the probate principles which were at issue in Shaw and Milton Greene Archives, and establishes that the right of publicity existed at the time of a personality’s death occurring before January 1, 1985 and those rights vest in heirs specified by the testamentary instrument. If there is no express transfer of these rights in the testamentary instrument, then any provision disposing of the balance of the personality’s assets is an effective transfer of such rights. In order for the statutory heirs to retain their publicity rights of personalities who died before 1985, they must have exercised such rights before May 1, 2007; otherwise, according to the bill, the rights will vest in heirs specified by testamentary instrument. Id.
This is new law because statutory heirs were able to claim a right of publicity until May 1, 2007 even if there was a will. The current law prevents this. (CC § 3344.1 (o).) The fact that Milton H. Green was subsequently reconsidered and thereafter reflected the changes in CC § 3344.1 in 2008 is of no consequence because it merely reflected the changes in state law. HLC’s argument that S.B. 771 merely clarified the law is without merit. “The law neither does nor require idle acts.” (CC § 3532.) S.B. 771 was originally a stem cell research bill but was gutted and changed to its current form so that S.B. 771 rendered the decisions of the courts in Milton Greene Archives and Shaw invalid and cut-off the rights of statutory heirs where there is a testamentary instrument with a residual clause.
As amended, the statutory “right of publicity” presently states it is retroactive and freely transferable or descendible even if the personality died before the 1985 enactment of CC § 3344.1. The amendment allows the disposition of the “right of publicity” with the residue of a deceased personality’s estate in the absence of an express provision in a testamentary instrument. Therefore, as new law, it started a new statute of limitations period which began running from January 1, 2008 for the “right of publicity” that passed with the residue of a deceased personality’s estate in a testamentary instrument for deceased personalities who died prior to January 1, 1985 and limited the rights of statutory heirs effective May 1, 2007.
The effect of the settlement agreement in SC 044176 was argued at the oral argument in this matter and attached to the Reply. However, while the Court granted judicial notice of the dismissal with prejudice in SC 044176, the settlement agreement was confidential and not made a part of the record in that matter. Therefore, the Court can not take judicial notice of the settlement agreement and it is not properly before the Court on a judgment on the pleadings.
NOW THEREFORE THE COURT ORDERS, ADJUDGES AND DECREES:
HLC’s motion for judgment on the pleadings is denied. However upon the Court’s own motion pursuant to CCP § 436, the Court strikes the Petition and grants twenty (20) days leave to amend to name and serve Kathryn Grant Crosby (“Kathryn”) as a Respondent because Kathryn may be an interested party who is presently not named in the Petition.
2. The Legislature could have prevented lawsuits like the one here be extending the May, 1, 2007 “cut-off” date to “all heirs” where “the right of publicity” was registered prior to May 1, 2007 where not challenged. The Legislature chose not to limit such actions and in effect caused a “reboot’ of CC § 3344.1 with a January 1, 2008 effective date for a new statute of limitations periods for testamentary heirs.