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Color Events v. Multi Talent Agency and Dwayne Carter

Color Events B.V. v. Multi Talent Agency, Inc. and Dwayne Carter p/k/a "Lil Wayne", ICDR Case No. 01-17-0002-4822
Nature of the proceedings:
International
Type of case:
Commercial Arbitration
Economic sector:
Arts, entertainment and recreation
Creative, arts and entertainment activities
Date of introduction:
27 Apr 2017
Status of the case:
Concluded
Claimant’s country of origin:
Curaçao
Respondent's country of origin:
United States
Institution:
AAA-ICDR (International Centre for Dispute Resolution)
Rules of arbitration:
Seat of arbitration:
Los Angeles
Applicable law:
California (United States)

Documents of the case

profile picture Eric van Ginkel Sole arbitrator
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This document was contributed under the IBA x Jus Mundi Exclusive Partnership for Commercial Arbitration.

Contributor(s):

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    Jus Mundi

AAA-ICDR has not contributed to this publication.

Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award

I, THE UNDERSIGNED ARBITRATOR, having been duly appointed and designated in accordance with the arbitration agreement entered into between the above-named parties and dated July 20, 2016, and having been duly sworn, and having duly heard the proofs and allegations of Claimant, which has settled its claim against Respondent Dwayne Carter (herein "Respondent Carter"), but not as to Respondent Multi Talent Agency, Inc. (herein "Respondent MTA"), the latter not having appeared in this arbitration, do hereby issue this Final Award, as follows:

I. Introduction, the Parties and their Legal Representation

1.
This matter was initiated by the filing of a Demand for Arbitration by Claimant Color Events B.V. (herein "Claimant") on April 27, 2017 with the American Arbitration Association.
2.
Claimant is a company that organizes an annual concert on the island of Curaçao. It is represented herein by Michael C. Marsh, Ryan Roman and Donnie M. King, Esquires, of Akerman LLP in Miami, Florida.
3.
Dwayne Michael Carter Jr., known professionally as Lil Wayne, is an American rapper. He is represented herein by Ronald E. Sweeney, Esq. of Sweeney, Johnson & Sweeney, in New York, New York.
4.
Claimant reached a settlement with Respondent Carter on or about January 15, 2018.
5.
Respondent Multi Talent Agency, Inc. (herein "Respondent MTA") is a talent agency that specializes in representing hip-hop, rap, r&b, reggae, gospel and classic soul musicians. It failed to appear in this arbitration.
6.
Claimant submitted a Pre-Hearing Brief on October 13, 2017, and at the Arbitrator’s request, a Supplemental Brief on December 15, 2017 as well as a Supplemental Statement Regarding Damages on January 23, 2018, together with documents in support of its arguments.

II. Jurisdiction and Venue

7.
This arbitration is based on an arbitration clause contained in Section 15 (entitled "Miscellaneous") in the Performance Agreement (herein the "Agreement") dated as of July 20, 2016 by and between Claimant as "Purchaser" and Respondent MTA as "Lender" for Respondent Carter as "Artist". The arbitration clause reads as follows:

"All disputes hereunder shall be submitted to binding arbitration in Los Angeles, California or New York City, New York that is conducted under the commercial rules of the American Arbitration Association."

8.
Based on the foregoing, and his jurisdiction not having been challenged, the Arbitrator finds that he has jurisdiction over this matter. Venue properly lies in Los Angeles, California, as the arbitration clause provides that arbitration is to occur either in Los Angeles, California or New York, New York, and Claimant elected Los Angeles as the seat of arbitration.
9.
As to the substantive law governing the Agreement, Section 15 of the Agreement provides that "[t]he laws of the State of California shall govern this Agreement."

III. Procedural-Background

10.
This matter was initiated by the filing of a Demand for Arbitration by Claimant on April 27, 2017 with the American Arbitration Association. As Claimant is a foreign corporate entity and Respondents are a United States corporation and US citizen respectively, the matter was transferred to the International Centre for Dispute Resolution ("ICDR") to administer.
11.
The Notice of Appointment of the Arbitrator is dated June 20, 2017. The Arbitrator signed the Acceptance of his appointment as well as the disclosure statement on June 21, 2017.
12.
The Preliminary Hearing Conference was held via telephone conference call on August 21, 2017, and the Arbitrator issued Procedural/Scheduling Order No. 1 on August 23, 2017.
13.
No one appeared on behalf of Respondents. In view of this, upon the Arbitrator’s request, Counsel for Claimant stated its Demand with more specificity on September 8, 2017 and succeeded in contacting Mr. Ron Sweeney, who appeared on behalf of, and acted as counsel for Respondent Carter.
14.
A settlement agreement was agreed upon in principle between Claimant and Respondent Carter during the month of December 2017. As at no point an appearance was made on behalf of Respondent MTA, the Arbitrator and Claimant agreed during the Status Conference call on December 5, 2017, that no Evidentiary Hearing was necessary and that the Arbitrator could decide the matter on documents only in the event a settlement agreement between Claimant and Respondent Carter could be finalized.
15.
As Respondent MTA had sent an email dated September 18, 2017, which contained allusions to certain defenses, the Arbitrator requested additional briefing by Claimant’s counsel to address those issues, which resulted in Claimant’s Supplemental Brief dated December 15, 2017.
16.
A further Status Conference was held on January 16, 2018 regarding the settlement agreement between Claimant and Respondent Carter, which had now been signed. Counsel for these parties agreed to a due date for the first of two payments on January 31, 2018.
17.
At the request of the Arbitrator, Claimant submitted a Supplemental Brief on the question of damages as it relates to Claimant’s claim against Respondent MTA on January 23, 2018.
18.
A final Status Conference call was held on February 13, 2017, at which counsel for Claimant and Respondent Carter agreed on an extension of time relating to the two payments due under the settlement agreement.
19.
The Arbitrator declared the hearing closed on February 13, 2018.

IV. Findings of Fact

20.
Claimant and Respondent MTA entered into the Performance Agreement on or about July 20, 2016, pursuant to which Respondent Carter agreed to give a concert with a full band in "Sentro Deportivo Korsuo" on the island of Curaçao, on November 26, 2016 (the "Performance").
21.
The Agreement provided that Respondent MTA had the authority as Agent to bind Respondent Carter (Paragraph C of the Agreement), and that Respondent Carter (identified as "Artist" in the Agreement) agreed to provide the Performance in accordance with the terms of the Agreement.
22.
In consideration of the agreed-upon Performance, on July 21, 2016, Claimant wired an initial deposit of $235,000, which included the $200,000 initial deposit for the artist fee and $35,000 for a finder’s fee to one Terrence Williams, who acted on behalf of Respondent Carter. Subsequently, on November 15, 2016, Claimant wired the remainder of the artist fee, in the amount of $150,000, to Respondent MTA. In total, Claimant wired the artist fee in the entire amount of $350,000 and a finder’s fee of $35,000.
23.
Pursuant to Section 3 of the Agreement and in consideration of the Performance, Claimant also provided Respondents with: (a) a Private Charter for eight (8) passengers to Curaçao; (b) ten (10) round trip economy airline tickets to and from Curaçao; (c) hotel accommodations for eighteen (18) rooms for a two (2) night stay in Curaçao on November 25 and 26, 2016; and (d) ground transportation to the airport and concert venue (the "Travel Accommodations").
24.
On November 25, 2016 and November 26, 2016, Respondents and/or their agents and/or representatives made use of the Travel Accommodations and other consideration provided by Claimant
25.
On November 26, 2016, Respondent Carter failed to provide the Performance despite the terms of the Agreement and despite the receipt of the Performance Fee and Travel Accommodations.
26.
No reason was provided to Claimant for Respondent Carter’s failure to appear at the concert organized by Claimant. Claimant’s Statement of Relevant Facts at 16-17. More than nine months after the date of the Performance, Mr. Stephen (Steve) Ferguson, an authorized representative, and believed to be the COO, of Respondent MTA, claimed in an email dated September 18, 2017 to Ryan Roman, Esq., one of the attorneys representing Claimant, that a medical issue caused Respondent Carter’s absence. The Arbitrator notes that, even if a medical issue were covered by the force majeure provision in the Agreement (quod nori), notice thereof was not within the six months of the original date of November 26, 2016, as provided for in the Agreement.
27.
Leading up to the date of the concert, Claimant became aware that Respondent Carter intended to perform with only a DJ set rather than a full band, even though the Agreement provided that he perform with a full band. Claimant’s Statement of Relevant Facts at ¶11. Claimant, through its counsel, reached out to Respondents and its representatives, seeking confirmation that Respondents would abide by the terms of the Agreement and provide a full band show. Id. at ¶¶ 11-13. On or about November 14, 2016, Respondent Carter’s tour manager unequivocally stated, however, that Respondent Carter would not appear with a full band. Id. at ¶ 14.
28.
Despite repeated demands on behalf of Claimant, neither Respondent Carter nor Respondent MTA has returned any moneys paid by Claimant, nor has either Respondent reimbursed Claimant for any expenditures incurred in connection with the Agreement.
29.
In the above referenced email dated September 18, 2017 from Mr. Steve Ferguson to Ryan Roman, Esq., it is also contended that "there was a bogus contract provided as documentation," implying that the Agreement is a forgery and was never signed on behalf of Respondent MTA. The copy of the Agreement submitted by Claimant in evidence is signed by Steve Ferguson, as authorized representative of Respondent MTA. See Page 6 of the Agreement. The signed Agreement was transmitted to Claimant by Byron Trice, on behalf of Respondent MTA. The evidence also shows that Mr. Ferguson was copied on e-mails following the execution of the Agreement on July 21, 2016. See Exhs. 6 and 7 to Claimant’s Pre-Hearing Brief. On November 5, 2016, Claimant made a wire transfer in the amount of $150,000 to a bank account belonging to Respondent MTA. Exh. 4 to Claimant’s Pre-Hearing Brief. Until Mr. Ferguson sent the September 18, 2017 email, Respondent MTA had never claimed that there was no Agreement or that the Agreement was "bogus". The Arbitrator concludes that there is no evidence supporting this assertion and, while Respondent MTA made no appearance in this arbitration, the Arbitrator hereby denies such a claim even if it had been validly asserted.

V. Conclusions of Law

30.
As Respondent Carter never questioned the authority of Respondent MTA to enter into the Agreement on his behalf, and also in view of the acts of Respondents, including the acceptance of the Performance Fee and Travel Accommodations, the Arbitrator finds that Respondent MTA had actual and apparent authority to enter into the Agreement on behalf of Respondent Carter.
31.
Pursuant to Section 6 of the Agreement, Respondent Carter "shall not cancel the Performance for any reason other than a ‘force majeure event....’" Id. at § 6. "In the event Artist’s [sic] cancels the Performance, Artist shall return the Performance Fee paid to Artist, and Artist shall be liable for all costs associated with travel and lodging in addition to any and all rights and remedies available to Purchaser [Claimant] at law or in equity." Id.
32.
In the event of a "force majeure event," which is defined in the Agreement as "any act or regulation of any public authority or bureau, civil tumult, strike, epidemic, interruption in or delay of transportation services, war conditions or emergencies or any other similar or dissimilar cause beyond the control of Purchaser and Artist," the Agreement states that the Artist shall "re-schedule the Performance at Purchaser’s sole discretion... within six (6) months of the date first written above [November 26, 2016]. In the event Artist does not perform or fails to make up the Performance within six (6) months, the Performance Fee paid to Artist hereunder shall be returned to Purchaser within thirty (30) days, in full." Id. at § 7. Respondents did not claim any force majeure event, and did not convey to Claimant any reason for Respondent Carter not to have appeared within the stipulated six-month period. Therefore, the Arbitrator finds that no force majeure event as defined in the Agreement took place, and that there was no excuse for the non-performance.
33.
In addition, the statement by Respondent Carter’s tour manager made on or about November 14, 2016, that Respondent Carter would not appear with a full band constituted a repudiation of the Agreement, and therefore an anticipatory breach pursuant to California law. "As a matter of definition, an anticipatory breach of contract occurs when the contract is repudiated by the promisor before the promisor's performance under the contract is due." Central Valley General Hosp. v. Smith, 75 Cal. Rptr. 3d 771, 781 (Cal. Ct App. 2008). Claimant did not lose the right to declare an anticipatory breach and recover its damages by waiting to seek damages until after performance was supposed to occur. Id. at 783 ("A party to a contract does not lose the right to treat an implied repudiation of the contract as an anticipatory breach by failing to seek damages.")
34.
Respondent MTA agreed to "indemnify, defend and hold harmless [Claimant] and its officers, directors, employees, agents, successors and assigns (collectively, ‘Purchaser’s Indemnitees’) from and against any and all losses, costs (including without limitation, litigation, costs and attorneys’ fees), damages, liabilities, expenses, claims, suits and actions... [arising out of] any breach of this Agreement...Section 12(a) of the Agreement.
35.
The Arbitrator finds that Claimant has complied with its obligations under the Agreement.
36.
The Arbitrator concludes that Respondents breached the Agreement both by anticipatorily conveying that Respondent Carter would not appear with a full band as stipulated in the Agreement, and by Respondent Carter’s failure to appear for the Performance without any warning, and that as a result of such breach Claimant suffered damages. See Careau & Co. v. Security Pacific Business Credit, Inc., 272 Cal. Rptr. 387, 395 (Cal. Ct. App. 1990).

VI. Damages

37.
The Arbitrator holds that each of the Respondents is jointly and severally liable on the Agreement and thus each of the Respondents is liable towards Claimant for the entire sum of damages suffered by Claimant. Brooke v. Glide, 179 P. 546, 547 (Cal. Ct. App. 1919) (""[w]here all the parties who unite in a promise receive some benefit from the consideration, whether past or present, their promise is presumed to be joint and several.") See also 7 Witkin Cal. Procedure (5th), Defendants: Contract Actions, § 39.
38.
Where now the Claimant has entered into a settlement agreement with one of the Respondents (Carter), Claimant can request an award for damages against the other Respondent (MTA) for the full amount, as if the other Respondent is the only respondent, provided that any amounts received from Respondent Carter pursuant to the settlement agreement are deducted from the actual amount for which Respondent MTA is ultimately liable. Cf. California Code of Civil Procedure §410.70, §§579-580.
39.
Based on the foregoing, the Arbitrator hereby awards damages to Claimant in the following amounts:

1. the artist fee in the amount of $350,000;

2. the finder’s fee in the amount of $35,000; and

3. travel and hotel expenses in the amount of $74,912.96.

40.
Claimant further requests that it be awarded its attorneys’ fees and costs in an amount to be established at or after the final hearing in this proceeding. It relies on Section 12(a) of the Agreement which states in relevant part that Respondent MTA agrees to indemnify and hold harmless Claimant from and against any and all "losses, costs (including without limitation, litigation costs and attorneys’ fees)... [arising out of] any breach of this Agreement..."
41.
Based on Section 12(a) of the Agreement, the Arbitrator holds that Respondent MTA is liable to Claimant for all attorneys’ fees incurred by it with respect to Claimant’s case against Respondent MTA, as well as the costs of this arbitration paid out to the ICDR. According to the evidence presented by Claimant’s counsel, the attorneys’ fees amount to $58,146.30, and the costs of the arbitration are outlined below.
42.
Finally, Claimant requests that it be paid both pre- and post-award interest. The Arbitrator finds that such interest is to be established pursuant to the applicable law of California. Section 3289(b) of the California Civil Code provides: "(b) If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach."
43.
As the date of the breach is November 26, 2016, Claimant is entitled to receive interest on $459,912.96 at the rate of 10% per annum from that date until paid. In addition, Claimant is entitled to interest at the rate of 10% per annum on the amount of fees and costs from the date of this award until paid.

VII. Summary and Final Award

For the reasons stated above, I AWARD as follows:
44.
Claimant’s claim of breach of contract succeeds in the following amounts:

1. the artist fee in the amount of $350,000;

2. the finder’s fee in the amount of $35,000; and

3. travel and hotel expenses in the amount of $74,912.96,

totaling $459,912.96, payable by Respondent MTA, provided that any amounts received by Claimant from Respondent Carter pursuant to the settlement agreement are deducted from the actual amount for which Respondent MTA is ultimately liable.

45.
Claimant’s claim for interest on the damages in the amount of $459,912.96 resulting from the breach of contract on November 26, 2016 succeeds at the rate of 10% per annum from November 26, 2016 until paid, provided that, as any principal amount(s) received by Claimant from Respondent Carter pursuant to the settlement agreement are deducted from the actual principal amount for which Respondent MTA is ultimately liable, the interest payable by Respondent MTA to Claimant is reduced accordingly as of the dates Claimant shall have, or has already, received such principal amount(s).
46.
Claimant’s claim for reimbursement of its attorneys’ fees and costs incurred in this arbitration against Respondent MTA succeeds in the amount of $58,146.30, payable by Respondent MTA only, together with interest at the rate of 10% per annum from the date of this Award until paid.
47.
The Administrative fees and expenses of the ICDR totaling $4,600.00 and the Compensation and expenses of the Arbitrator totaling $11,780.00 are to be borne by Respondent MTA. Therefore, Respondent MTA shall be liable to Claimant in an amount of $16,380.00, together with interest at the rate of 10% per annum from the date of this Award until paid.
48.
As Claimant’s breach of contract claim succeeds, the Arbitrator does not need to consider Claimant’s allegation of unjust enrichment, which is hereby dismissed.
This Final Award is in full settlement of all claims submitted to this Arbitration. All other claims and arguments are rejected and hereby dismissed.
I hereby certify that, for the purposes of Article I of the New York Convention of 1958, on the Recognition and Enforcement of Foreign Arbitral Awards, this Final Award was made in Los Angeles, California, United States of America.
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