Court Opinion

ID: 3151217
Source: CourtListenerOpinion
Date Created: 2015-11-02 08:07:11.07066+00
Date Added: 2024-06-11T11:55:33.993538
License: Public Domain

STATE OF MICHIGAN

                          COURT OF APPEALS

JOEL BACOW, a/k/a JOEL MARTIN,                                    UNPUBLISHED
                                                                  October 29, 2015
              Plaintiff-Appellant,

v                                                                 No. 320323
                                                                  Oakland Circuit Court
MASTER BEAT, INC., WALTER                                         LC No. 2013-131636-CZ
PALAMARCHUK, and MICHAEL SKILL,

              Defendants/Third-Party Plaintiffs-
              Appellees,

and

GEORGE CANLER,

              Third-Party Defendant.

Before: RONAYNE KRAUSE, P.J., and GLEICHER and STEPHENS, JJ.

PER CURIAM.

        Plaintiff appeals by right the trial court’s grant of summary disposition in favor of
defendants pursuant to MCR 2.116(C)(8). Plaintiff is a music producer, manager, and “music
industry professional” with extensive experience in the music industry. Defendants Walter
Palamarchuk and Michael Skill are two members of a band called “The Romantics,” along with
other band members not parties to this matter. The band formed defendant Master Beat to
handle the band’s business affairs. In 1994, defendants entered into an agreement with plaintiff
under which plaintiff assisted the band and acted as a consultant regarding a lawsuit defendants
pursued against a former manager. In relevant part, the agreement entitled plaintiff to a
percentage of defendants’ recovery from the lawsuit and from royalties defendants would receive
in the future. Plaintiff commenced the instant suit, alleging that he was not receiving the
percentages of royalties to which he was due. Defendants moved for summary disposition on the
argument that the consulting agreement violated public policy and was therefore unenforceable.
The trial court agreed. We disagree, so we reverse and remand.

       We review a trial court’s decision on summary disposition de novo. Spiek v Dep’t of
Transp, 456 Mich. 331, 337; 572 NW2d 201 (1998). The trial court reviewed and granted
defendants’ motion under MCR 2.116(C)(8). A motion under MCR 2.116(C)(8) tests the legal

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sufficiency of the plaintiff’s complaint by the pleadings alone.1 Patterson v Kleiman, 447 Mich.
429, 432; 526 NW2d 879 (1994). All well-pleaded factual allegations are accepted as true, “as
well as any reasonable inferences or conclusions that can be drawn from the allegations.” Peters
v Dep’t of Corrections, 215 Mich. App. 485, 486; 546 NW2d 668 (1996). Summary disposition
may be granted only if “the claims are so clearly unenforceable as a matter of law that no factual
development could possibly justify recovery.” Wade v. Dep’t of Corr., 439 Mich. 158, 163, 483
N.W.2d 26, 28 (1992) holding modified by Kleiman, 447 Mich. 429.

       The parties’ consulting agreement provides, in relevant part:

               In consideration of the mutual covenants and conditions herein contained,
       the parties agree as follows:

              The Group and/or Master Beat, Inc. hereby retains and employs Joel
       Martin to act as Consultant regarding the following:

               Civil lawsuit against Arnold Tencer, Joel Zuckerman, Peter
               Shukat, Forever Endeavor Inc., Spider Management Inc., and
               Spider Records Inc., et al, Oakland County Circuit Court case
               number 89-865792 CK (the “lawsuit”).

               As and when requested by The Group and/or Master Beat, Inc., Consultant
       will advise and counsel The Group and/or Master Beat, Inc. with the selection of
       attorneys, accountants, experts and other persons with respect to the lawsuit, and
       when requested will act as liason [sic] between The Group and/or Master Beat,
       Inc. and such individuals.

               The Group and/or Master Beat, Inc., agrees to pay the Consultant for the
       service to be performed by him, as compensation, the sum of an amount equal to
       20% (twenty percent) of the gross proceeds from said lawsuit (any legal and
       accounting fees relating to the lawsuit shall be deducted from gross proceeds
       before calculating the Consultants [sic] compensation) and 20% (twenty percent)
       of any recovery of property, whether or not in lieu of cash (including 20% of
       monies or property recovered or received from defendants (a) during the
       pendency of the lawsuit; (b) as a result of a settlement of the lawsuit; (c) or based
       on a judgement entered by the court) and 20% (twenty percent) of the future gross
       publishing and songwriting royalties received by The Group and/or Master Beat,
       Inc. (excluding the songwriters [sic] share from ASCAP royalties) relating to all
       compositions written and/or recorded by The Group (The Romantics) from 1977
       through 1987 inclusive. Within ten days of the receipt of any funds received as

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  Thus, like the trial court, we must confine our review to the pleadings and, therefore, we do not
consider the documentary evidence submitted on appeal. We note, however, that the consulting
agreement was attached as an exhibit to the complaint and, therefore, is part of the complaint for
all purposes. MCR 2.113(F)(2).

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       described in the preceeding [sic] sentence, the Group and/or Master Beat, Inc.
       shall pay consultant the agreed upon compensation along with copies of the
       checks and statements received relating to such gross income.

               In addition to such compensation, the Group and/or Master Beat, Inc. shall
       pay, from first funds received, any and all necessary fees and/or expenses which
       may be paid or incurred by the Consultant on behalf of the Group and/or Master
       Beat, Inc. in connection with his performance of the above-mentioned services.

The trial court found that this was a contingency fee agreement dependent upon the results of the
underlying litigation and that it compensated plaintiff for acting as a middleman or broker in that
litigation. Relying on Dupree v Malpractice Research, Inc, 179 Mich. App. 254; 445 NW2d 498
(1989), the trial court found that the agreement was therefore void as violative of public policy.
We disagree.

        “[T]he bedrock principle of American contract law [is] that parties are free to contract as
they see fit, and the courts are to enforce the agreement as written absent some highly unusual
circumstance, such as a contract in violation of law or public policy.” Wilkie v Auto-Owners Ins
Co, 469 Mich. 41, 51; 664 NW2d 776 (2003). What constitutes “public policy” must be more
than the mere opinions of judges or justices, but rather must be objectively ascertainable from the
law itself, including the common law, statutes, and constitutions. Rory v Continental Ins Co, 473
Mich. 457, 471; 703 NW2d 23 (2005). A violation of any such public policy will only be found
under narrow circumstances. DeFrain v State Farm Mut Auto Ins Co, 491 Mich. 359, 372; 817
NW2d 504 (2012). Any such public policy must be explicit, well-defined, and “adopted by the
public through our various legal processes”; it is not enough to find that disregarding a contract
would serve a social good. Terrien v Zwit, 467 Mich. 56, 66-70; 648 NW2d 602 (2002).

        We find Dupree critically distinguishable from this case because Dupree involved a
contingency fee for expert testimony in a medical malpractice and personal injury context. The
outcome of Dupree was based in large part on the fact that there were specific laws against
contingency fees for expert witnesses. Dupree, 179 Mich. App. at 260. In addition, the Dupree
Court observed that contingency fees for expert witnesses were intrinsically corrupting and likely
to induce such witnesses to take licenses with the truth in their testimonies, with the effect of
perverting the entire court system. Id. at 264-265. It is not possible to draw an analogy between
the situation in Dupree and the situation at bar without noting that we have been cited with no
statutory or constitutional or common law prohibiting consultants from receiving a percentage
share of whatever benefit they accrue to their clients, nor have we been cited any convincing
argument that such an arrangement will pervert our courts or jurisprudence. We agree with
defendants that plaintiff’s argument, at its core, is that Dupree should be limited to its facts and
we agree: Dupree should, be limited to its facts.

       Reversed and remanded. We do not retain jurisdiction.

                                                             /s/ Amy Ronayne Krause
                                                             /s/ Cynthia Diane Stephens

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