August 24, 2012 4:42am PT by Matthew Belloni
Lisa Kudrow Suffers Appeals Court Setback in 'Friends' Manager Commission Case
A California appeals court has dealt Friends actress Lisa Kudrow a setback in her years-long legal battle with her former manager, ruling that a lower court should have allowed an expert witness to testify that Hollywood managers typically continue to receive commissions from jobs their clients book, even after they are fired.
In a decision issued Wednesday, the state Court of Appeal sided with Scott Howard, who first signed Kudrow to an oral agreement in 1991 and claims he is owed 5 percent of her earnings (decreased in 2004 from its original 10 percent) she still generates from the 1994-2004 NBC megahit Friends, even though he parted ways with the actress in 2007.
During Howard's litigation with Kurdrow, he presented as an expert witness Martin Bauer, a longtime Hollywood agent, manager and executive who testified that the custom and practice in the entertainment industry — even back in the early 1990s as the talent management profession was developing — was that managers get paid in perpetuity on all gigs their clients score while represented by the manager.
Superior Court judge Cesar Sarmiento refused to allow the testimony, finding that it lacked foundation because, among other things, Bauer "has only been involved in talent management since 1998, which is after Kudrow and Howard formed the agreement in 1991." The judge had granted Kudrow's motion for summary judgment.
But the appeals court disagreed, finding that Bauer, as a Hollywood insider and former president of UTA and vp at William Morris, had represented actors like Mike Myers who paid commissions to their personal managers after terminating them. Bauer's testimony was credible and relevant, according to the three-judge appeals court panel, and the trial court should not have dismissed the case without allowing it to be considered.
The decision is a win for Hollywood talent managers because in allowing Bauer's testimony, the court has paved the way for a ruling that custom and practice in the entertainment industry is for managers to receive compensation based on oral agreements even years after they are fired. Most talent agents, who perform similar jobs to managers but are licensed by the state to procure employment for clients, have long enjoyed this custom and practice.
Still, the case isn't over, and Bauer's expert testimony could be countered at trial by other witnesses, though he claims he came to his opinion after consulting with many industry veterans and lawyers at the Ziffren Brittenham law firm. The case will now proceed.
This is actually the second time the appeals court has intervened in the Kudrow matter. As we reported in 2010, the appellate justices overturned the trial court and ordered that Bauer be allowed to submit testimony in the case. But when that testimony was submitted, the judge refused to consider it. Now he must.
Howard is repped by LA's Horvitz & Levy firm. Kudrow is repped by Sauer & Wagner.