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California's statute provides that the following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: (1) An agreement that by its terms is not to be performed within a year from the making thereof. California's statute has been interpreted literally and narrowly.
Plaintiff David Ehrlich was a manager of musical groups and an attorney. Plaintiff was a resident of California and was admitted to practice law in New York. Defendant Robert Diggs, resident of New York, was a popular rap artist, professionally known as RZA and Prince Rakim. Although defendant maintained an affiliation with his original musical group, the Gravediggaz, he has gone on to an extremely successful career as a solo recording artist, producer and member of another rap group, the Wu Tang Clan. Plaintiff and the Gravediggaz entered into a written contract under which the latter retained plaintiff as their exclusive representative in negotiating a record contract with a major record label. Allegedly, as a result of plaintiff's efforts, the Gravediggaz entered into a written contract with Gee Street Records. In August 1993, plaintiff was hired as the manager of the Gravediggaz pursuant to an oral agreement. It was never reduced to writing. Plaintiff claimed that he was to receive fifteen percent of the gross earnings of the Gravediggaz and each of its members for "all entertainment-related employment, engagements or agreements commenced or entered into" while he served as manager of the group. Defendant entered into a written contract with Gee Street as a solo recording artist. He argued that this contract was independent of the earlier relationship between plaintiff and defendant. Plaintiff then sought a portion of defendant artist's earnings. The artist moved to dismiss and, in the alternative, for summary judgment. The defendant contended that New York law applied and that New York's statute of frauds barred enforcement of the oral management agreement. Plaintiff countered that California law applied and that under the California statute of frauds, the management agreement was enforceable.
Was the California law applicable in this case?
The court found that California law was applicable. The court held that plaintiff resided in California and negotiated and entered the terms of the oral management agreement in California. Thus, any actions taken by plaintiff in performing the agreement were in California. Therefore, the contract was not barred by the statute of frauds. The court further found that the oral contract as alleged was sufficiently definite to be enforced because the terms personal representative and manager, standing alone, created enforceable rights and duties. Accordingly, defendant's motion is denied.