## Facts

- Quincy Jones produced Michael Jackson albums under producer agreements executed in 1978 and 1985 with MJJ Productions, Inc. (MJJP).
- The producer agreements set a “basic royalty rate” of 10% for records, calculated in the same manner as Jackson’s recording-agreement royalties, and also granted Jones a right of first opportunity to remix master recordings.
- Michael Jackson’s recording arrangements included royalties on record sales and a share of net receipts from licensing the master recordings.
- In 1991, MJJP and Sony formed a joint venture to sell records and license masters, splitting net profits 50/50.
- In 2009, amendments increased MJJP’s share of joint-venture net profits to 66 2/3%.
- MJJP released multiple remixes by third parties between 1993 and 2008 without first offering the remix work to Jones.
- A 2009 concert documentary film used the master recordings extensively and generated substantial revenue; Jones claimed underpayment of amounts due for uses tied to this project and other licenses.
- Jones sued for breach of contract and related relief, seeking unpaid royalties, license-related payments, and damages for lost remix opportunities.
- A jury found multiple breaches and awarded Jones $9,423,695, including $5,315,787 tied to joint-venture profits and $1,574,128 for remix fees.
- MJJP appealed the joint-venture profits and remix-fee awards; Jones cross-appealed, including challenges involving financial elder abuse instructions and prejudgment interest.

## Issues

1. Whether the producer agreements’ royalty provision entitled Jones to share in MJJP’s increased joint-venture profit allocation and related licensing-derived profits.
2. Whether breach of a “right of first opportunity” to remix masters supported an award of hypothetical remix fees on remixes performed by others.
3. Whether the trial court improperly submitted contract interpretation to the jury without first deciding ambiguity and the existence of conflicts in admissible extrinsic evidence.
4. Whether Jones was entitled to financial elder abuse remedies and substantial prejudgment interest beyond a limited amount.

## Decision

- The court affirmed in part, reversed in part, and remanded with directions.
- The court reversed the $5,315,787 award tied to joint-venture profits, holding the agreements did not grant Jones that entitlement.
- The court reversed the $1,574,128 remix-fee award, concluding the claimed damages were not supported as awarded.
- The court otherwise affirmed aspects of the judgment not shown to be erroneous on appeal.
- The court rejected Jones’s financial elder abuse theory and left intact the denial of most requested prejudgment interest (beyond interest on an amount MJJP conceded it owed).

## Legal Principles

- Contract interpretation is generally a question of law for the court; a jury resolves interpretation only when credible extrinsic evidence presents a genuine factual conflict after the court’s threshold determinations.
- Extrinsic evidence may explain terms only if the contract language is reasonably susceptible to the proposed meaning; it cannot add to, detract from, or vary unambiguous written terms in an integrated agreement.
- A royalty clause pegged to a stated rate and calculation base does not expand to cover broader profit participation or later-negotiated profit reallocations absent contractual language providing that right.
- A contractual “right of first opportunity” can support damages only upon proof of breach and non-speculative loss; hypothetical fee awards require evidentiary support sufficient to avoid speculation.
- Prejudgment interest under California law generally requires damages to be certain or capable of being made certain by calculation; disputed, unliquidated contract damages typically do not qualify.

## Conclusion

The court limited Jones’s recovery to entitlements supported by the producer agreements’ terms and legally permissible contract-interpretation methods, reversing awards premised on participation in MJJP’s joint-venture profit increase and on speculative remix-fee damages, while otherwise upholding the judgment and rejecting enhanced statutory remedies and most prejudgment interest.


Jones v. MJJ Prods., Inc., 2020 WL 2140759 (Cal. Ct. App. May 5, 2020)