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The Hollywood Reporter Covers Johnson & Johnson's Appellate Victory in Business Manager Royalty Row (May 7, 2015)

Posted by Johnson & Johnson, LLP | May 07, 2015 | 0 Comments

‘Cosby Show’ Creator Revives Fight With Business Managers

The Hollywood Reporter

May 7, 2015

By Austin Siegemund-Broka

Ed Weinberger claims his former accountants led him to lose years of revenue.

The co-creator of The Cosby Show, Taxi and other sitcoms will get to pursue his claims that his former business managers failed to monitor years of revenue he should have received for one of his creations.

Ed Weinberger‘s case concerns revenue he says he never received from 1999 to 2012 for one of his lesser-known series, the NBC sitcom Amen. In a ruling Wednesday, a California appeals court reversed the 2013 dismissals of his claims against the firms of Freedman Broder & Company and Myers and Associates on the grounds he filed too late.

Weinberger sued in 2012, claiming his payment structure for Amen comprised $8 million upfront and other compensation contingent on the production company Carson Productions recouping the full $8 million investment.

He says he tasked William Broder of Freedman Broder, his business manager in 1991, with monitoring the 1989 deal with Carson. “In 1995, both Carson and Broder told Weinberger that he should not expect to receive contingent compensation from Amen because his advance payment had been so large, the show's production costs had been high, and the show enjoyed only mediocre success,” reads the appellate ruling.

But by 1998 Carson was $1.45 million from recouping Weinberger's $8 million payment. The following year Broder stopped requesting accounting statements from the company without telling Weinberger.

In 2004 Broder stopped representing Weinberger, who then hired Ronald Myers of Myers & Associates, who received information on the contingent compensation agreement for Amen. “However, Weinberger also allege[s] that Broder intentionally failed to advise Myers that Broder had not checked on the status of Weinberger's contingent compensation rights for the past five years. Myers never monitored Weinberger's rights,” reads the ruling.

Myers quit representing him in 2008. In 2011 Weinberger finally requested an Amen accounting from Carson. He learned his $8 million was recouped in 1999 and the company owed him significant contingent compensation. Because the statute of limitations for breaches of contract is four years, the company paid him what it owed since 2007, but he couldn't recover the contingent compensation he was owed before then. He sued Broder and Myers and their companies for malpractice, fraud and breach of fiduciary duty.

In separate motions, the business firms held Weinberger should have requested an accounting of Amen from Carson when Broder stopped receiving statements in 1999, or when Myers concluded its work with him in 2008. Therefore, his lawsuit would be outside the two-year statute of limitations to bring accounting malpractice claims. The Los Angeles Superior Court held he didn't qualify for the delayed discovery rule, which extends the time for plaintiffs to file if they had reason not to know of the wrongdoing.

The appellate court decided his delay was reasonable.

Citing case law that gives plaintiffs time in filing complaints of professional malpractice “on the basis that the expertise expected of professionals is beyond the ability of laypersons to evaluate,” the court found Weinberger arguably was entitled to expect his business managers not to conceal earnings from him, especially after Broder told him of the unlikelihood of Amen earning more money. “We therefore view this as a case where the fact of injury was hidden due to the alleged failings of Weinberger's accountants during the consecutive periods during which they represented him.”

“We also acknowledge the logic of respondents' contention that once Weinberger began handling his own affairs in 2008 he was in a position to determine the facts at that time simply by asking Carson for an accounting statement,” continues the ruling. But the court then presents an unusual conclusion: “What triggered Weinberger's decision to ask Carson for an accounting statement in 2011…go[es] to Weinberger's state of mind at that time. This ambiguity in the pleadings does not clearly and affirmatively show that the discovery rule does not apply here,” presenting a factual question for the litigation process.

Read the full ruling.

Weinberger is represented by James Ryan of Johnson & Johnson. Freedman Broder is represented by Randall Dean of Chapman, Glucksman, Dean, Roeb & Barger, and Myers is represented by Stephen Tully of Garrett & Tully.

The Hollywood Reporter has reached out to the business managers for comment.

May 11, 5:36 p.m. A previous version of this story incorrectly named one defendant “Robert Myers,” not “Ronald Myers.” THR regrets the error.

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