Trusts & Estates & Bad Faith Claims

Here is a synopsis from the State Bar Trusts & Estates Section of an interesting case dealing with Trusts and Estates and the Court’s equitable power to charge the costs of attorneys fees incurred in defending a claim that is unfounded and brought in bad faith:

Pizarro v. Reynoso

Filed January 18, 2017, Third District
Cite as C077594

Melissa Reynoso served as trustee of her grandfather’s trust. The trust authorized Reynoso to sell real property to her mother, Karen Bartholomew, for $100,000 below the property’s appraised value. Reynoso agreed to help Bartholomew purchase the property. Reynoso obtained a personal loan, conveyed the property to Bartholomew, and the trust received the loan proceeds. Bartholomew’s son, Anthony Pizarro, and brother, Keith Jensen, filed petitions alleging that Reynoso breached her fiduciary duties, and that the sale must be set aside as a sham. During the litigation, Bartholomew turned against Reynoso and knowingly testified falsely. The trial court denied the petitions, finding the sale was valid and Reynoso did not breach her fiduciary duties. Additionally, exercising its equitable power over trusts, the trial court charged Bartholomew’s and Jensen’s shares of the trust with Reynoso’s attorney fees and costs. To the extent their trust shares were insufficient, the trial court held Bartholomew, Jenson, and Pizarro personally liable for the fees and costs.

The appellate court affirmed in part and reversed in part. Pizarro forfeited any arguments on appeal concerning the sale because his brief lacked clarity and failed to follow appellate procedure. The court properly exercised its equitable power to charge Reynoso’s attorney fees and costs against Bartholomew’s and Jensen’s trust shares. The court has the equitable power to charge a beneficiary’s share with the trustee’s attorney fees and costs if the beneficiary, in bad faith, brings an unfounded proceeding. While Bartholomew did not bring the petition, the court had the equitable power to charge her trust share because she took an unfounded position and acted in bad faith. However, the court could not order the litigants to personally pay the attorney fees and costs because such an order is beyond the court’s equitable power over trusts.

http://www.courts.ca.gov/opinions/documents/C077594.PDF

HIRING: IP & ENTERTAINMENT ATTORNEY

Our Santa Barbara firm is growing, and we are looking to immediately hire a full-time, career oriented attorney with 3 – 14 years’ experience to join the team. We have an eclectic practice, the foci of which are entertainment (filmed entertainment, music, publishing, and licensing), non-patent intellectual property (trademarks, copyrights, and trade secrets), Internet, business, and litigation in state and federal courts. We work with entrepreneurs, start-ups, and maturing companies, serving as outside general counsel, and represent a wide variety of businesses, including multi-media companies, music publishing companies, film and music producers, artists, photographers, songwriters, and others. We are looking for someone wanting a high quality, high energy, low key environment, who values relationships, innovation, and technology; is resourceful; and operates (or is willing to operate) on the principle that “THERE IS NO BOX.” Law review, great writing skills, and/or equivalent problem-solving and collaboration skills are highly valued here. We are willing and able to mentor the right person in any areas that may be needed. A book of business (small, medium, or large) is welcomed, although not necessary. This position is open now. Please let us know if you are the right person or know someone who is.  You may send resumes and writing samples to miblawgrp@gmail.com.  Please view our website at mbergerlaw.com and our LinkedIn profile at https://www.linkedin.com/in/matthewberger/ for more information about who we are and what we do.

Salons & Barber Shops Serving Beer & Wine in California (2017)

As of January 1, 2017, California beauty salons and barber shops in good standing with the State Board of Barbering and Cosmetology are permitted to serve their customers no more than 12 ounces of beer or 6 ounces of wine by the glass for no charge, providing that it is consistent with local zoning.  Of course, that permission does not extend to selling wine or beer, unless the salon or barber shop holds an appropriate beer or wine license issued by the Department of Alcohol Beverage Control (ABC).

As you might have guessed, barber shops and salons are treated as consumers, and can only purchase beer and wine from persons or companies that are legally licensed to sell to consumers, like licensed retailers and other licensees with retail privileges, such as licensed wineries and breweries.

The licensing process in California is challenging, especially to even understand what type of license or licenses are required.  Please make certain the you obtain qualified and knowledgeable assistance to ensure compliance with applicable rules and law.  One thing is likely: people probably won’t seem to mind the wait next time they visit their salon or barber shop.

Requirement for Designating Agent for Copyright Takedown Notices Under the DMCA

For those who allow users to generate content on your website, please note the following about the Copyright Office requirement for designating a person to receive take-down notices under the Digital Millennium Copyright Act:
Electronic System for Designating Agents under DMCA Launched December 1, 2016
The U.S. Copyright Office launched its new electronic system to designate and search for agents to receive notifications of claimed infringement under the Digital Millennium Copyright Act (DMCA). The final rule implementing the new system and governing what is required of service providers to designate an agent also comes into effect on December 1st.
As of December 1, all new designations must now be made through the online registration system. Additionally, any service provider that has previously designated an agent with the Office through the old paper-based system will have until December 31, 2017, to submit a new designation electronically through the new system. Until that time, an accurate designation in the old paper-generated directory will continue to satisfy the service provider’s obligations under section 512(c)(2), and the public will need to continue to search the paper-generated directory if the service provider is not yet listed in the new electronically generated directory.

Net Neutrality Rules Upheld

The Net Neutrality Rules have been upheld by the U.S. Court of Appeals: https://www.yahoo.com/news/u-appeals-court-rejects-challenge-obama-net-neutrality-142305055–finance.html?ref=gs.  It appears that everyone on the Internet is going to get to be treated the same.

Idea Submission and Avatar: James Cameron and Lightstorm Prevail

There are several lessons to be learned from this idea submission and breach of contract case, where the plaintiff contends that his idea was misappropriated by James Cameron for the film Avatar, among which are the proof that one must have demonstrated in order to claim a similarity between the alleged infringing work and one’s own idea, and the questions of timing. An interesting analysis can be found here: http://www.loeb.com/publications-ipentertainmentcaselawupdates-20160325-rydervlightstormentertainmentincetal.

The unpublished opinion of the court can be found here: https://scholar.google.com/scholar_case?case=15675251615603331785&hl=en&as_sdt=6&as_vis=1&oi=scholarr

Are the Turtles Certifiable? Music Industry To Litigate Pre-1972 Public Performance Right

There’s an interesting case percolating in the Court of Appeals dealing with the Turtles and Sirius XM radio. Here is an excerpt from “Copyright Litigation Blog” by Ray Dowd (the entire blog post can be found here: http://archive.feedblitz.com/445362/~5153291/25405111/1462521c88182b58dcf7fc1a6dd57035):
 
Are The Turtles Certifiable? Music Industry To Litigate Pre-1972 Public Performance Right @ New York Court of Appeals In Albany.
 
On April 13, 2016, the United States Court of Appeals for the Second Circuit “certified” the question of whether New York common law provides a right of public performance to owners of pre-1972 sound recordings to the New York Court of Appeals, which is New York State’s highest appellate court.
The “Second Circuit” is a federal court, just below the U.S. Supreme Court, that has appellate jurisdiction over all of the U.S. District Courts in Connecticut, New York and Vermont. The “certification” came about because the band the Turtles complained that Sirius FM radio was copying, caching, and broadcasting their pre-1972 sound recordings.
 
* * *
 
“Certification” means that the Second Circuit asks the New York Court of Appeals to decide an important question of New York law.
Here is what the Second Circuit considers in determining whether to “certify” the question to the New York Court of Appeals:
(1) whether the New York Court of Appeals has addressed the issue and, if not, whether the decisions of other New York courts permit us to predict how the Court of Appeals would resolve it;
(2) whether the question is of importance to the state and may require value judgments and public policy choices; and
(3) whether the certified question is determinative of a claim before us.
 
Here is Judge Guido Calabresi’s explanation of the issue certified:
In 1971, Congress amended the Copyright Act to grant limited copyright protection to sound recordings fixed on or after February 15, 1972, while expressly preserving state-law property rights in sound recordings fixed before that date. See 17 U.S.C. § 301(c). Later, Congress created an exclusive performance right in post-1972 sound recordings performed by digital audio transmission. See 17 U.S.C. § 106(6). Performances of post-1972 sound recordings transmitted by other means, such as AM/FM radio, still do not enjoy federal copyright protection. Because Appellee’s recordings were fixed before February 15, 1972, they are protected, if at all, by state copyright law. While New York provides no statutory protection to owners of pre-1972 sound recordings, New York common law does provide certain rights to copyright holders in these recordings. See Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 563 (2005) (Naxos II). As a result, the issue before us is whether New York common law affords copyright holders the right to control the performance of sound recordings as part of their copyright ownership.
 
Judge Calabresi has left the “policy choice” as to whether to recognize the right to the New York Court of Appeals. Many law professors and folks in the broadcasting industry have filed amicus briefs, guaranteeing that the Amtrak to Albany will be booked on argument day.