Is it Better to Settle? Sometimes!

Legal Corner

Volume CIX, No. 5May, 2009

Harvey Mars, Esq.

Sometimes it’s better to settle. Here’s a story of two cases, one where the parties settled and one where they didn’t.

Go back to my December 2008 and January 2009 columns. (You can read them on my Web site, at under “Articles & Publications.”) Those stories were about two interesting litigations I had commenced on behalf of two current Local 802 members.

In my December column, I described a suit whose allegations concerned a arranger/orchestra whose arrangements were being leased out by a small opera company without the arranger’s permission or payment of royalties to the arranger.

The suit, which was commenced in New York City Civil Court, has since been amicably settled after a meeting between the principals and their counsel.

A settlement agreement has been drafted by counsel that provides for compensation to the arranger for past rentals of his arrangements.

More importantly, the agreement now contains a limited licensing agreement that provides that the arranger will receive a percentage of the gross rental fees received by the opera company from rental of his arrangements.

This limited license will be for a two-year period of time with the possibility that it may be continued at the election of the parties.

Furthermore, it requires periodic accountings of the fees received and contains a dispute resolution mechanism in the event there are any conflicts between the parties regarding operation of the license agreement.

This agreement constitutes a practical solution to the suit and is a “win-win” result for both the plaintiff and the defendant.

The plaintiff gets additional rental income from his arrangements from a source that has a greater presence in the market than he has.

On the other hand, the defendant receives the ability to continue to rent the plaintiff’s scores, something he would have lost the right to do if he did not prevail in the suit.

On the other hand, in my January column, I described a suit that involved a record company’s alleged breach of a marketing and distribution agreement of a jazz recording entitled “Just For The Fun Of It.”

I conducted a bench trial of this matter in Supreme Court, Nassau County, over the course of four days.

On March 9, 2009, the trial judge rendered his verdict, finding Vibe Records, Inc., in breach of its distribution agreement.

The court held that Vibe undertook to distribute “Just For The Fun of It” and that when Vibe’s CEO, Timothy Olphie, admittedly lost interest in the project, Vibe failed to live up to its obligations.

The court also held that the suit was timely since it was initiated within six years of the date that the distributor Vibe had gone out of business.

The court awarded the plaintiffs the costs that they incurred after they had entered the distribution agreement, in reliance upon it.

While this is not by any means a huge amount of money, it does hold the record company accountable for failure of the project and I will now diligently initiate collection efforts.

While these two matters have now been concluded, it is interesting to contrast the ways in which they were resolved.

The first suit resulted in a licensing agreement that will benefit both parties.

The second suit was tried to verdict and the record company was found liable and now must reimburse for production costs.

(Vibe’s owner adamantly refused to discuss settlement).

The contrast between these two conclusions demonstrates how voluntarily resolving a litigated matter may result in an agreement that in the long run is more beneficial than a trial verdict.

Anyone involved in litigation should take note. Pushing a case to trial may not always be the most practical or beneficial way to resolve it.