IP Law Daily, TOP STORY—Cal. App.: Settlement agreement barred estate of Bing Crosby’s first wife from asserting community property interest in late singer’s publicity rights, (Feb 4, 2014)

By Thomas Long, J.D.

The estate of late entertainer Bing Crosby’s first wife, Wilma Wyatt Crosby (the “Wilma Estate”) could not pursue a claim that the Wilma Estate possessed community property interest in Bing Crosby’s right of publicity, a California state appellate court has held (Crosby v. HLC Properties, Ltd., January 29, 2014, Croskey, H.). A prior settlement of Wilma Wyatt Crosby’s community property claims barred the Estate’s petition filed under California Probate Code Sec. 850.

Bing Crosby married Wilma on September 29, 1930, and they had four sons together. Wilma died on November 1, 1952. Her will provided that her community property be distributed in trust to her sons (“Wilma’s Trust”).

Bing Crosby remarried and remained married to his second wife, Kathryn, until his death on October 14, 1977. His will left the residue of his estate to a marital trust for the benefit of Kathryn; the will did not provide for Wilma.

After Bing’s death, defendant-appellant HLC Properties, Ltd. was formed for the purpose of managing Bing’s interests, including his right of publicity.

On September 18, 1996, Wilma’s Trust sued HLC and Kathryn for declaratory relief as to the trust’s entitlement to income derived from the community property of Bing and Wilma. In 1999, the parties settled for approximately $1.5 million. The settlement agreement provided, in part, that it was “in complete and final settlement of all claims from any source whatsoever of royalties, income or monies due [Wilma’s Trust] and all beneficiaries of the Trust, arising from property interests acquired by [Wilma], as a result of her marriage to Bing Crosby, through the date of this Agreement.” The settlement agreement specified each source of income due Wilma’s Trust and stated that, if income from Bing’s works or performances during the marriage with Wilma were discovered in the future, the trust would be entitled to a share. The agreement did not address Bing’s right of publicity.

In 2008, the California legislature amended the state’s statutory provision on publicity rights, Civil Code Sec. 3344.1, to provide that a deceased celebrity’s right of publicity was descendible. The rights recognized by amended Sec. 3344.1 were expressly made retroactive.

On June 23, 2010, Wilma’s Estate filed the present petition for an order stating that Wilma possessed a community property interest in Bing’s right to publicity, and that Wilma’s share of this interest passed to her heirs pursuant to the terms of her will. HLC and Kathryn opposed the petition on the grounds that (1) the 1999 settlement agreement barred it and (2) the right of publicity is not community property.

The trial court granted the petition and entered an order stating that Wilma’s Estate had a community property interest in Bing’s right of publicity that Wilma acquired during their marriage and that this interest passed to her heirs. The trial court found that the 1999 settlement agreement did not bar the petition because the 2008 amendment to Sec. 3344.1 created a right that did not exist before. In addition, the trial court determined that res judicata did not apply because the petition presented different issues from those raised in the 1996 complaint, which had sought damages for monies wrongfully withheld by HLC.

HLC and Kathryn appealed.

Release of claims. HLC and Kathryn contended that Wilma’s Estate’s petition was barred by res judicata because the 1996 lawsuit determined what forms of community property to which Wilma was entitled. In the appellate court’s view, the primary right involved in both the 1996 proceeding and the current proceeding was the same: the asserted right to Wilma’s share of the community property owned by her and Bing. Therefore, the court stated, res judicata principles precluded Wilma’s Estate from re-litigating its claims to Wilma’s share of community property.

Furthermore, in the 1999 agreement, Wilma’s Estate had expressly released its claims to additional sources of community property, known or unknown, at the time of Wilma’s Trust’s settlement. Wilma’s Estate argued that the agreement created an exception to the general release “should other income derived from works or performances of Bing Crosby during [the marriage with Wilma] be discovered in the future.” The estate contended that income from Bing’s right of publicity was only discovered after the settlement.

However, the court noted, the right of publicity involved the right of a person to profit derived from the use of the person’s “name, voice, signature, photograph, or likeness,” rather than income derived from a “work or performance.” In addition, Bing’s right of publicity was not an undiscovered asset generating income unknown to the parties. Nor did it constitute undiscovered income that existed at the time of the 1999 settlement agreement, the court held.

Statutory right of publicity. HLC and Kathryn contended that, because Sec. 3344.1 was originally enacted in 1985, the statute applied to Bing’s estate, and, therefore, Wilma’s Estate released its claim to this right by failing to assert it in the 1996 lawsuit and by not excepting it from the 1999 settlement of that action. Wilma’s Estate argued that the statute did not apply retroactively to Bing’s estate until the 2008 amendment was passed, and the estate could not have released its claim to Bing’s right of publicity in the 1999 agreement because that right did not exist at that time.

Prior to 2008, Sec. 3344.1 protected the right of a “deceased personality” to control the commercial usage of such person’s “name, voice, signature, photograph, or likeness.” The statute defined a “deceased personality” as “any such natural person who has died within 70 years prior to January 1, 1985.” The statute further provided that the right of publicity was freely transferable “by means of trust or testamentary documents,” and could also pass by intestacy.

In May 2007, courts in California and New York, both addressing the commercial usage of the image of Marilyn Monroe, held that Sec. 3344.1 did not authorize celebrities who died before the statute’s enactment to transfer their right of publicity by will. Shortly thereafter, a bill (S.B. 771) was introduced in the California legislature to abrogate these court decisions and to clarify the meaning of Sec. 3344.1. As signed by Governor Schwarzenegger, S.B. 771 revised the statute’s provision regarding the transfer of the right of publicity by contract or testamentary instrument, explicitly providing that this provision applied to instruments “executed before or after January 1, 1985” and that such rights shall be deemed to have existed at the time of death of any deceased personality who died prior to January 1, 1985.

In the court’s view, the 2008 amendment to Sec. 3344.1 only clarified existing law and did not create any new rights that fell outside of the 1999 settlement’s release of all claims to community property. Therefore, the petition of Wilma’s Estate was barred by res judicata.

The case is No. B242089.

Attorneys: Henry K. Workman (Sullivan, Workman & Dee) for Bing Crosby. Susan J. Cooley (Oldman, Cooley & Leighton LLP) for Kathryn G. Crosby. Kent L. Richland and Cynthia E. Tobisman (Greines, Martin, Stein & Richland) and George Knopfler (Hamirck & Evans) for HLC Properties, Ltd.

Companies: HLC Properties, Ltd.

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