JOHNSON, Acting P. J., Dissenting. I respectfully dissent, in order to explain why I differ from the conclusion reached in the majority opinion and also to clarify how this case appears fundamentally distinguishable from Yoo v. Robi,1 a case I authored in 2005, with Justices Woods and Zelon concurring in that decision.
Respondent and the majority emphasize what the majority characterizes as “inconsistencies in the pleadings, specifically with respect to the issues relating to severability.” This evidently refers to the three complaints appellant filed—the original complaint, the first amended complaint, and the second amended complaint. As the majority itself points out, the original complaint alleged the two contracts (or clauses of a single contract)—the lawful and unlawful—in separate paragraphs. The first amended complaint dropped the paragraph reciting the unlawful contract but added the “manager and agent” services to the list of duties she performed as part of the Marvin contract. Finally, in the second amended complaint she alleged two separate contracts—the cohabitation agreement and the management contract. But in this complaint appellant candidly conceded the second contract was unlawful and she was not entitled to recover any compensation based on that contract. Thus, it was as if the second amended complaint only alleged a single contract—the Marvin agreement.
In my view, the purported “inconsistencies” among these three pleadings are little more than a tempest in a teapot. This is unlike cases where [83]appellants plead facts in an amended complaint which are the opposite of facts pleaded in the original complaint or omit facts from the second complaint which the trial court found had defeated their cause of action when included in the original version. Here the original and second amended complaints were essentially the same. On the issue of severability, it makes no difference whether these were two contracts or two clauses of a single contract. In none of the complaints did appellant conceal or withdraw the true nature of the arrangement she was alleging. Yes, she was in a Marvin relationship with the deceased artist and there was an agreement she was to be compensated for her services in that relationship, and yes, she also was performing some management and agent services for him and she was to get a percentage of his revenues for those services.
Perhaps most significantly, however, it is my view the trial court erred in sustaining the demurrer to the original complaint—even though it did so “with leave to amend”—and consequently, any “inconsistencies” introduced in the later amended pleadings are irrelevant. Merely because plaintiffs accept a trial court’s offer to amend their pleadings does not mean they concede the validity of the court’s ruling the original complaint was defective. As to allegations regarding the two contracts or clauses in the original complaint— the Marvin arrangement and the “artist manager” deal—in my view there is no problem warranting the trial court’s order sustaining a demurrer with or without leave to amend those allegations. Those allegations appear in paragraphs 8 and 9 of the original complaint and read as follows:
“8. In or about August, 2002, [appellant] and ELLIOT SMITH, aka STEVEN PAUL SMITH (hereinafter ‘decedent’) entered into an oral covenant and agreement (hereinafter ‘Subject Agreement’) by and through which the parties agreed that they would live together, cohabitate and combine their efforts and earnings and would share equally any and all property accumulated as a result of their efforts whether individual or combined. [Appellant] and decedent further covenanted and agreed with each other that they would hold themselves out to the public as husband and wife and that [appellant] would render her services as a homemaker, housekeeper, and cook to the decedent, and that [appellant] further would forego any independent career opportunities to devote her full time to decedent as a homemaker, housekeeper, cook, secretary, bookkeeper, and financial counselor to the decedent, in consideration for which decedent agreed to provide for all of the [appellant’s] financial needs and support for the rest of her life.
“9. [Appellant] and decedent further covenanted and agreed as part of the foregoing Subject Agreement, that [appellant] would also act as decedent’s manager and agent for the purposes of arranging the booking and scheduling appearances for musical performances by decedent as well as the preparation [84]and production of an album of decedent’s performances, in consideration for which [appellant] would be specifically entitled to 15% of the proceeds earned and received on all such performances and album sales.”
At a minimum, these two paragraphs allege two independent clauses of a single contract, each with a different promised performance by appellant in return for a different form and measure of consideration. Alternatively, they may be characterized as two separate contracts executed at the same time. But, for reasons explained below, whether considered separate clauses or different contracts, they are severable and the Marvin arrangement is enforceable.
One of the alleged contracts or clauses qualifies as a quasi-marital partnership where appellant is to perform a variety of domestic and secretarial duties while the two hold themselves out as husband and wife. As consideration for appellant’s performance of these promised duties she is to “share equally any and all property accumulated as a result of their efforts whether individual or combined” and to be provided by the deceased her “financial needs and support for the rest of her life.” That contract or clause, if proven, is lawful and valid under Marvin v. Marvin.2
The other contract or clause calls for appellant to serve as the deceased’s “manager and agent” and in that capacity to perform distinctly different functions and for a different measure of consideration. She is to arrange and schedule the deceased’s musical performances and prepare and produce his albums and as consideration for those activities is to receive 15 percent of the proceeds earned and received from those appearances and albums.
Depending primarily on the meaning of the term “arrange,” this latter contract or clause is arguably unlawful. That is because appellant never registered as a talent agent, yet the procurement of new concert dates is a function expected of an agent rather than a personal manager.3 The remainder of the activities appellant promised to perform in this contract, on the other hand, do not require registration as a talent agent. Merely “scheduling” musical performances someone else has solicited and obtained does not appear something only registered agents are licensed to do. Moreover, the [85]procurement of recording contracts is expressly exempted from the talent agent registration requirement4
Nonetheless, the term “arranging” is susceptible to the interpretation it was contemplated appellant would solicit and obtain new concert dates. This is a function it would be illegal for her to perform without registering as a talent agent, something she admittedly had not bothered to do. Furthermore, in her briefing and in her deposition as well, appellant has conceded the portion of the agreement in which she agreed to “arrange” performances violated the Talent Agencies Act. The question of severability remains, however. That is, whether the contract or clause which promised appellant 15 percent of the proceeds from the deceased’s concerts and record albums in return for work she did related to those concerts and albums infects the contract or clause which promised her a share in his income, however it was earned, along with lifetime support in return for her personal services in connection with their personal relationship.
The common law has long recognized contracts containing lawful clauses frequently can be severed from unlawful clauses contained in the same contract and those lawful clauses then enforced. As Williston’s treatise emphasizes, “[w]here [as here] not only is the consideration separable into legal and illegal portions, but the promises are also correspondingly apportioned, that is, where the agreement may properly be called divisible, recovery may be had upon the promises which are supported by the legal portions of the consideration.”5 Furthermore, “If the legal portion of a bilateral contract is severable, legal promises on one side being wholly supported by legal promises on the other, and the illegal portion of the contract does not go to its essence, the legal part may be enforced.”6
The Restatement likewise recognizes a contract unlawful in part is not necessarily unenforceable in its entirety, although it does not use the language of “severability” in doing so. “If the parties’ performances can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents and one pair is not offensive to public policy, that portion of the agreement is enforceable by a party who did not engage in serious misconduct.”7
The common law principles sanctioning the severability of contracts and thus the enforcement of lawful clauses in contracts containing unlawful [86]provisions have been codified in California. “Where a contract has several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole or in part, the contract is void as to the latter and valid as to the rest.”8
The cases which have denied personal managers or other persons who failed to obtain a “talent agent” license any recovery under their contract with the artist, unlike the case before this court, failed to involve situations where “the consideration [was] separable into legal and illegal portions, [and] the promises [were] also correspondingly apportioned . . . ,”9 Instead they all involved attempts to recover as consideration a percentage of what the artist earned for the performance, album, or other artistic product the representative or other appellant claimed their contract entitled them to receive in return for promises to perform services related to that artistic endeavor. Thus, the consideration and the promised unlawful performance were closely interrelated.
In some of those cases, the personal representatives have claimed they were owed a percentage of the artist’s earnings from the artist’s artistic product in return for professional services they rendered related to the artist’s artistic “product” other than (or in addition to) any services they may have rendered which only a registered talent agent is permitted to perform. In other words, even conceding they had procured the entertainment deal that made it possible for the artist to produce the income-generating “product,” they also did other things called for in their contracts that were not unlawful and thus they deserved a percentage of the earnings for those services. These attempts to gain partial recoveries under contracts as “personal representatives” have failed, however, in several cases—among them, Park v. Deftones,10 Waisbren v. Peppercorn Productions Inc.,11 and Yoo v. Robi12 the latter which I authored for this court.
These opinions would apply and, if followed, deny appellant any recovery if she were still seeking to recover the 15 percent—or at least some percentage—of the deceased’s album sales and proceeds from past performances under the second contract or clause. Such a claim would be based on the theory some part of the work appellant did under that contract or clause did not constitute unlawful services performed as an unlicensed talent agent, but rather lawful services which personal representatives are allowed to [87]undertake. In that instance, she would be contending she should get a percent of the deceased’s earnings derived from her lawful services under that second contract or clause.
This is the sort of “severance” issue the Supreme Court is considering in the Marathon case.13 It also is the sort of severance this court refused to allow in Yoo v. Robi.14 In the latter case, a personal manager who had knowingly failed to register as a talent agent procured concert dates for the band he was representing, a prohibited activity, but also negotiated recording contracts for that same artist. He only sought to enforce the contract as to the recording contracts and only sought his percentage fee for the revenues from the sales of those records. We rejected the manager’s argument the permissible activities and the revenues generated from those activities should be severed from the impermissible activities he performed under the contract with these artists.15 I would agree we should do the same in this case, had appellant sought to sever the portion of this contract related to albums from the portion dealing with concerts.
But this is not the specie of severance appellant is seeking in this case. Instead it represents a very different situation, a case of first impression, and quite distinguishable not only from Yoo but from the Marathon case still pending before the California Supreme Court. Unlike these other cases based on professional services (some lawful and some unlawful) directly related to the artist’s “products” and to be compensated as a percentage of the earnings from those products, the Marvin contract or clause in this case is based on the rendering of personal services—homemaking, housekeeping, cooking, bookkeeping, and the like—while appellant and deceased were holding themselves out as husband and wife. It is compensated not as a percentage of revenues from concerts or albums on which appellant supplied services. Instead compensation is to be based on a pooling of the parties’ accumulated property—whether derived from the deceased’s artistic “products” or from either party’s earnings as business executives or waitpersons at a restaurant, or any other source—along with the provision of lifetime support to appellant.16
[88]Thus, this case presents a paradigm example of a contract which in the words of Civil Code section 1599 has two “distinct objects, of which one . . . is lawful, and one ... is unlawful, in whole or in part . . . .”17 Here the Marvin clause has a distinct object—indeed a completely distinct promised performance and promised consideration—from that in the “manager and agent” clause. Moreover, that clause and its distinct object is lawful, while only the “manager and agent” clause is unlawful—not in whole, but in part.
In the language of Williston’s treatise, both the consideration and the promises in the two clauses of this contract are “separable into legal and illegal portions.”18 Consequently, “recovery may be had upon the promises which are supported by the legal portions of the consideration.”19 Likewise, applying the Restatement’s test, the Marvin agreement and the manager and agent clause clearly “can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents and one pair [the Marvin pair of performances] is not offensive to public policy . . . ,”20 So once again, “that portion of the agreement is enforceable by a party who did not engage in serious misconduct.”21 Whatever might be said about appellant’s failure to register as a talent agent, it could not be characterized as “serious misconduct,” even had it been intentional rather than the result of her ignorance of these licensing requirements. Consequently, the pair of performances embodied in the Marvin agreement remains enforceable despite the illegality of a part of the performance appellant promised in the manager and agent clause of the contract.
To illustrate the point, imagine the first contract or clause was not a Marvin contract but a straight home remodeling contract. The artist promises to pay the appellant $100,000 to remodel his house. The artist dies after the house is remodeled but before he has paid the $100,000. Then assume there also is another contract or clause in the arrangements between the appellant and artist providing the appellant is to act as an agent and representative for specified types of the artist’s artistic endeavors and the appellant is to receive 15 percent of the artist’s earnings from those endeavors. Would we really deny the appellant the $100,000 owed for remodeling the artist’s home just because he or she failed to get licensed as a talent agent?22 I sincerely doubt this or any court would adopt such a draconian approach.
[89]Or what if the appellant was not in a Marvin relationship but had a regular job as a housekeeper or as a secretary with the artist? But, because she was trying to work her way into the business end of the entertainment world, the housekeeper or secretary also had a contract to represent the artist in lining up “gigs” at local bars for a percentage of what he earned on these jobs. If the artist refused to pay this housekeeper or secretary the wages she had earned for her housekeeping or secretarial services, would we refuse to enforce that employment contract just because she also was arranging concerts for him at the local pub without having registered as a talent agent? Once again, I doubt we would.
In both these hypothetical situations, the two contracts or the two clauses of a single contract are severable. Perhaps the main reason is that the promise and the consideration for fulfilling that promise in each contract or clause is distinct from the promise and consideration in the other contract or clause. In the first hypothetical, the promise to remodel the artist’s home and the $100,000 payment for completing that remodeling job are completely separate and distinct from the promise to procure artistic engagements for the artist and the 15 percent commission to be paid when those engagements bear fruit. Similarly, the promise to keep house or to perform secretarial work for the artist in return for a salary is separate and distinct from the promise to line up “gigs” at local bars in return for a percentage of the artist’s earnings at those bars.
For the same reason, the Marvin contract or clause is severable from the manager and agent contract in the present case. Both the two promises and the consideration for fulfilling those promises are separate and distinct from one clause to the other. In the words of Civil Code section 1599, the two contracts or clauses have different “objects.” The promise to hold themselves out as husband and wife and for appellant to forego her own career and perform the domestic duties for both of them in return for sharing in the partnership’s earnings and receiving lifetime support is completely separate and distinct from the illegal promise to “arrange” concerts in return for a percentage of the earnings from those concerts.
Alternatively, it is revealing to view this Marvin contract or clause as more of a quasi-marital arrangement—or analogous enough that we confront the question whether a spouse of an artist would be entitled to community property or promised spousal support, if she also had a contract with her husband to act as his agent and representative in relation to his artistic business endeavors. As even respondent’s counsel conceded at oral argument, the spouse would be entitled to her community property rights, presumably because those rights are independent of the illegal agent contract. For analogous reasons, the Marvin appellant is entitled to her benefits under that [90]arrangement because it too is a personal not a professionally based relationship and is independent of the illegal contract as agent and representative of the artist.
The trial court somehow found these separate and distinct contracts or contract clauses to be so “intertwined” they could not be severed. In my view, the only way these clauses conceivably could be intertwined to that degree would be if appellant had told the deceased she would not agree to the Marvin arrangement unless he also agreed to give her a 15 percent commission on any concerts she procured for him. There is no evidence yet in the record to even suggest to say nothing of supporting such an inference. The fact these may have been clauses included in the same oral contract the parties agreed to during the same conversation and on the same day is irrelevant. Clauses are regularly severed in order to enforce one but not the other despite the fact they are part of a single contract negotiated at the same time and place—and even when one might not have been agreed to but for the other.
The remaining argument tendered for refusing to sever these two contract clauses is that denying enforcement of the Marvin agreement in this case is essential to enforcement of the public policy against procurement of entertainment deals by persons who are not registered as talent agents. In my view, the “overriding public policy of deterring unlicensed activities” would not require or justify the denial of recovery in the hypothetical situations discussed above—nor in the case before this court. Conversely, if that public policy is so overwhelming in its importance as to justify denying enforcement of this Marvin agreement it likewise would mean recovery must be denied in the analogous situations described above.
In my view, this “overriding public policy” can be served without the overkill inherent in effectively canceling independent contractual arrangements that happen to have been agreed to by the same parties. As in the other situations described above, appellant here would take nothing from the contract clause based on her unlicensed procurement of concerts. She would not even be allowed any recovery for her permissible procurement of and related activities on the deceased’s recording contracts. Instead she would only be allowed to enforce the separate and distinct, completely unrelated clause based on a personal relationship and for her personal services in connection with that relationship. No matter how the California Supreme Court resolves the Marathon case, in this case severance should be allowed and appellant given the opportunity to pursue enforcement of the Marvin agreement.
[91]For all these reasons, if in the majority I would reverse the judgment in this case.
A petition for a rehearing was denied November 7, 2007.
Yoo v. Robi (2005) 126 Cal.App.4th 1089 [24 Cal.Rptr.3d 740].
Marvin v. Marvin (1976) 18 Cal.3d 660 [134 Cal.Rptr. 815, 557 P.2d 106],
“[A talent agency is] a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist (Lab. Code, § 1700.4, subd. (a).)
“No person shall engage in or carry on the occupation of a talent agency without first procuring a license therefor from the Labor Commissioner. . . .” (Lab. Code, § 1700.5.)
Labor Code section 1700.4, subdivision (a) provides in part: “[T]he activities of procuring, offering, or promising to procure recording contracts for an artist or artists shall not of itself subject a person or corporation to regulation and licensing under [the Talent Agencies Act].”
8 Williston on Contracts (4th ed. 1998) section 19.70, page 548.
8 Williston on Contracts, supra, section 19.72, pages 553-554.
Restatement Second of Contracts, section 183, page 27.
Civil Code section 1599.
8 Williston on Contracts, supra, section 19.70, page 548.
Park v. Deftones (1999) 71 Cal.App.4th 1465 [84 Cal.Rptr.2d 616],
Waisbren v. Peppercorn Productions, Inc. (1995) 41 Cal.App.4th 246 [48 Cal.Rptr.2d 437],
Yoo v. Robi, supra, 126 Cal.App.4th 1089.
Marathon Entertainment, Inc. v. Blasi (June 23, 2006, B179819) review granted September 20, 2006, S145428.
Yoo v. Robi, supra, 126 Cal.App.4th 1089.
Yoo v. Robi, supra, 126 Cal.App.4th at pages 1104—1105.
I have no occasion to express an opinion whether, in the absence of a written contract, appellant would be able to enforce her claim to “lifetime support” from the estate of her now deceased Marvin partner. (In re Marriage of Thornton (2002) 95 Cal.App.4th 251, 254-255 [115 Cal.Rptr.2d 380].)
Civil Code section 1599.
8 Williston on Contracts, supra, section 19.70, page 548.
8 Williston on Contracts, supra, section 19.70, page 548.
Restatement Second of Contracts, section 183, page 27.
Restatement Second of Contracts, section 183, page 27.
This is not as absurd a combination of contracts as one might think in Southern California, where many aspiring actors, agents, screenwriters, and others in the entertainment business work in construction or other occupations to earn their living while attempting to gain a foothold in their chosen profession.