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Bit Parts

“Dead Man Statute” No Bar to Testimony About Alleged Oral Contract for Share of Royalties from Ben E. King Songs

The U.S. District Court for the Southern District of New York decided that New York's “dead man statute,” N.Y.C.P.L.R §4519, which bars an “interested” litigation party from testifying about communications with a deceased person, didn't bar Chuck Rubin, the founder of plaintiff Artists Rights Enforcement Corporation (AREC), from testifying about discussions he had with the late artist Ben E. King — in which Rubin claims King orally agreed that AREC had a right to share in the King's royalties. Artists Rights Enforcement Corp. v. Estate of King, 16-CV-1121. King died in April 2015. AREC sued King's estate in February 2016 for songwriting royalties from King's share in the hits “There Goes My Baby” and “Stand by Me.” Rubin, who continues as AREC's president, transferred his AREC stock to his wife in June 2017. District Judge J. Paul Oetken found: “Here, the 'direct legal operation' of any judgment would benefit only AREC and its sole shareholder, Marcia Rubin. While the factfinder at trial may certainly consider the Rubins' spousal connection when it comes to credibility determinations, Charles Rubin is not an 'interested' party solely by virtue of marriage.” The district judge added: “Second, the fact that Rubin transferred his shares on the eve of his deposition, presumably so he could testify, does not make him interested.”

Eleventh Circuit Sees No Personal Jurisdiction in Malpractice Lawsuit Against Law Firm that Handled Concert Industry Litigation

The U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal of a legal malpractice lawsuit brought in Georgia federal district court by Georgia plaintiffs who were unsuccessfully represented by a Florida law firm in a concerts-booking race discrimination case in New York federal court a decade before. Rowe v. Gary, Williams, Parteni, Watson & Gary, P.L.L.C., 16-17798. Determining the Georgia federal district court lacked personal jurisdiction over the law firm, the Eleventh Circuit explained: “Plaintiffs point to few actual contacts that occurred in Georgia — mainly to the one litigation preparation meeting in December 2002, the taking of one deposition for the New York action, and the initial contact between Plaintiffs and the Gary Firm. As to the initial meeting, we find that it was 'fortuitous' that Willie Gary happened to be in Atlanta working on an unrelated case at the time Rowe initiated contact with the Gary Firm.” The appeals court added: “Plaintiffs argue the Gary Defendants regularly communicated with them via phone, e-mail, and even fax about the New York action, including the contested discovery e-mails and the offer of settlement. While [Leonard] Rowe might have been in Georgia for some of the discussions about the ongoing litigation, he clearly admits that he also spoke to the Gary Defendants about his case from New York and in the Gary Firm office in Florida.”

Tax Court Finds No Profit Motive in Music Club Operation

The U.S. Tax Court ruled that the owner of the Bell Cove Club in Hendersonville, TN, near Nashville, wasn't operating the music venue for profit and thus couldn't deduct the club's financial losses. Ford v. Commissioner of Internal Revenue, Memo 2018-8. Petitioner Joy Ford and her husband, music producer Sherman Ford, had established Bell Cover as a songwriters' showcase. In the tax proceeding, Joy Ford challenged the federal government's denial of her bid to deduct the club's monetary losses from income she received from trusts set up by her late husband. Tax Court Judge Maurice B. Foley noted Ford “selected the performing artists, devoted most of her time to Bell Cove, and paid all of its expenses. [She] charged a $5 admission fee and a nominal amount for snacks and beverages and received annual gross receipts of $17,006, $14,156, and $13,581 relating to 2012, 2013, and 2014, respectively. Bell Cove's expenses, which [Ford] paid in cash or from her personal checking account, consistently exceeded its revenue.” Tax Judge Foley concluded: “[P]etitioner did not have the requisite intent to make a profit and thus may not deduct the losses in dispute. … [She] was primarily motivated by personal pleasure, not profit, and simply used the club's losses to offset her trust and capital gain income.”

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Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is author of the book Baby You're a Rich Man: Suing the Beatles for Fun & Profit (ForeEdge/University Press of New England). For more,
visit www.stansoocher.com.

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