Wednesday, November 2, 2011
C.A. Says Insurer Had No Duty to Defend Record Label From Suit by Lounge Singer ‘Richard Cheese’
By a MetNews Staff Writer
A Torrance-based recording label which had signed an artist to sing lounge-style covers of popular songs was not entitled to a defense by its insurer to a lawsuit alleging it wrongfully had sought out other singers to produce similar albums which diluted the artist’s fan base and earning potential, the Court of Appeal for this district has ruled
Div. One said yesterday that not potential for coverage existed under Oglio Entertainment Group’s policy from the Hartford Casualty Insurance Company for the lawsuit filed by Mark Davis in 2006.
Davis, who performs as “Richard Cheese,” has released 12 albums over the last 11 years, and has two more—“Back in Black Tie” and “Let it Brie: A Tribute to The Beatles”—slated to come out in 2012 and 2013, according to his website.
He claims to have sold more than 175,000 CDs and to have had his songs featured in the 2004 horror-flick “Dawn of the Dead,” on NBC’s “Las Vegas” and “Passions,” as well as “Last Call with Carson Daly.”
His first album, Lounge Against the Machine, came out in 2000, after he had entered into a three-year recording contract with Oglio.
The contract provided that Oglio would own the copyrights to the recordings, and have the rights to use Cheese’s name to advertise, market, and promote the album, which included use of “www.richardcheese.com” as Oglio’s internet domain name to promote the album.
Oglio also received the option for two years after the execution of the recording agreement and upon payment of a minimum advance of $15,000, to require Cheese to record a second album.
In 2001, Oglio attempted to exercise its option to have Cheese record a second album containing lounge-style versions of songs originally performed by Ozzy Osbourne, but for a reduced advance payment of $7,000. Oglio also sought to modify the agreement to give it the right to a third album.
After Cheese declined to accept these changes to the contract, Oglio allegedly threatened to hire a different artist to record similar music, and in 2002, Oglio released two albums—“Diary Of A Loungeman” by “‘Bud E. Luv,’” consisting of lounge versions of Ozzy Osbourne songs, and “Sub-Urban” by “Jaymz Bee & The Deep Lounge Coalition,” another lounge-style artist.
Oglio allegedly marketed these albums, and Cheese’s first album, on the richardcheese.com website, even after the expiration of Cheese’s recording contract.
Cheese subsequently sued Oglio for breach of contract, violation of his right of publicity, and intentional interference with prospective economic advantage. He contended Oglio had recorded and released the competing albums with the intent to injure his professional reputation and goodwill and to divert sales from his future albums.
Oglio tendered defense to Hartford, and Hartford disclaimed coverage. Oglio settled with Cheese for $80,000 in Sept. 2006 and then sued Hartford, alleging breach of contract and breach of the implied covenant of good faith and fair dealing.
Hartford filed a demurrer to the first amended complaint, arguing that Cheese’s complaint did not assert a covered “advertising injury,” defined by the policy as an injury arising out of “[c]opying, in your ‘advertisement,’ a person’s or organizations ‘advertising idea’ or style of ‘advertisement.’ ”
Los Angeles Superior Court Judge Ernest M. Hiroshige agreed with Hartford and sustained the demurrer.
Writing for the appellate court, Justice Jeffrey W. Johnson said Hiroshige’s reasoning was sound.
Johnson noted the complaint “does not allege that Oglio copied, in an advertisement, Davis’s advertising idea or style of advertisement, but that Oglio sought out artists to copy Davis’s product and later sold a competing product, injuring Davis’s sales and the value of his professional name.”
As pleaded, Jonson concluded, the underlying complaint was “that Oglio copied Davis’s product,” not that “Oglio used an advertisement that copied an advertisement or advertising idea of [Cheese’s],” and thus did not allege facts constituting an “advertising injury” which would generate a duty to defend under the Hartford policy.
Presiding Justice Robert M. Mallano and Justice Victoria Gerrard Chaney joined Johnson’s opinion.
William H. Ford III and Claudia J. Serviss of Ford & Serviss served as counsel for Oglio. Hartford was represented by Dean B. Herman and Catherine L. Rivard of Mendes & Mount.
The case is The Oglio Entertainment Group, Inc. v. Hartford Casualty Insurance Company, 11 S.O.S. 5926.
Copyright 2011, Metropolitan News Company