On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Atlantic County, C-40-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges S.L. Reisner, Gilroy and Baxter.
This appeal arises from a dispute over the provision of artist management services for Tiffany Evans, a young singer (Tiffany or the minor). Tiffany's former manager, an entity known as Your Casting Connections, L.L.C., and also known as The Source Entertainment Group (Source), appeals from paragraphs 3vi, 5, and 6 of a trial court order dated May 12, 2006.*fn1
Source had been Tiffany's artist manager since the beginning of her career, when she was nine years old. According to Source, its principals Diane Kirman and Sal Dupree were the child's mentors, without whose professional help she would have not have had a singing career in the first place. She relied on them and in turn they developed her talent and helped her obtain a recording contract and other significant financial benefits. In particular, Sal Dupree was her voice coach.
On March 28, 2003, when the minor was ten years old, Source and her parents applied to the Atlantic County General Equity judge, pursuant to N.J.S.A. 3B:12-1, for approval of a management agreement dated October 2, 2002, allowing Source to manage the minor's career, and a supplemental agreement dated March 11, 2003. These agreements, which lasted for a term of three years, were notably one-sided in that paragraph 19 of the October 2002 contract (incorporated by reference in the March 2003 contract) gave Source an absolute right to extend and renew the agreements for an additional three years, but did not give any similar right to the minor to terminate or non-renew the contracts after three years. Thus, at the age of ten, the minor was committed by these agreements to retaining her artist manager for six years with no termination option.
After appointing John Ridgeway as the minor's guardian ad litem, the judge required that certain changes be made to the Source contract; these changes were reflected in a new contract signed on June 11, 2003. Significantly, paragraph 19 of the new contract included Source's option to renew the contract, but also gave the minor a guarantee that her mentors at Source would continue their involvement with her, and gave her an income guarantee, failing either of which condition she could cancel:
[T]his Agreement may be terminated at the end of the initial three year term if the Artist has not, during that term, had gross receipts of not less than $300,000 and in addition may terminate this Agreement at any time if Diane Kirman and Sal Dupree cease their involvement with the Artist or extinguish their interest in [Source].
The court also approved the creation of Tiffany Evans, L.L.C., an entity authorized to contract with recording companies and others on the minor's behalf, and permitted Kirman to serve as manager of that L.L.C.*fn2 The court permitted 20% of Tiffany's revenues to be paid to Source as management commissions. In an order dated December 10, 2003, the court also retained "jurisdiction over the minor's professional business affairs."
In March 2006, the minor's guardian ad litem filed a motion to compel accountings by the Tiffany Evans L.L.C. and by a trust set up to receive the minor's income. He also sought the court's guidance regarding the minor's desire to terminate her management agreement with Source.*fn3 He recited that he had spoken to the minor, who was "upset but very capable of expressing her dissatisfaction with her current management arrangement" and suggested that she was intelligent and articulate enough to express her views directly to the court. However, "in light of [the minor's] age and the personal nature of her disappointment," the guardian ad litem requested that the court establish "a protective arrangement to maintain the confidentiality of this situation." In response, the attorney for the Tiffany Evans, L.L.C. submitted a letter together with an array of financial information. The letter recited, among other things, that for the past two and half years, the minor had not earned the amount of money initially expected, allegedly due to delays engendered by her recording company.
Hector Baldonado's law firm*fn4 submitted a letter on the minor's behalf, urging that the court expeditiously decide the matter due to the upcoming release of her album, and difficulties engendered by the alleged conflict of interest between Kirman in her roles as principal of Source and as principal of Tiffany Evans, L.L.C. In reply, Source submitted a letter and a certification from Kirman. Among other things, Kirman certified that her "co-manager is Sal Dupree who was the original person who discovered Tiffany Evans." She also certified to continuing conflicts between Source and the minor's father over control of her career, and contended that the application reflected the father's wishes and not those of the minor. She attached a number of emails and other communications purporting to document that the father had interfered with the minor's career.
The application was scheduled to be heard before a second judge. That judge conducted a hearing on April 7, 2006, during which, with the agreement of all parties, he conducted an onthe-record in-chambers interview with the minor. At oral argument before us, Source conceded that this was proper in order to address the issue of whether the efforts to terminate the Source contract truly reflected the minor's wishes.
At that April 7 hearing, the judge also heard from the L.L.C's attorney Mr. Westmoreland and Ridgeway, who were both present during the 2003 court proceedings and were familiar with the formation of the June 2003 contract. Westmoreland explained that the first judge's primary concern in the 2003 proceedings was to protect the child's income for the future, since the money she had earned prior to the 2003 proceedings had "apparently been spent."*fn5 Westmoreland and Ridgeway agreed that the first judge had insisted on adding the $300,000 "revenue benchmark" to paragraph 19 of the June 2003 contract. Westmoreland and Ridgeway also agreed that the initial three years ran from the June 2003 date of the contract approved by the court, and that the clause concerning Kirman's and Dupree's continued participation was added at the request of Tiffany's parents. The attorneys disagreed on whether the $300,000 benchmark had been reached; that was one reason why Ridgeway wanted an accounting. On this issue, the court noted that it appeared that without a $200,000 payment from a talent contest, the benchmark had not been reached. The attorneys also acknowledged an issue as to whether certain advances paid by the recording company for the child's living expenses counted toward the benchmark.
The judge also closely questioned Baldonado's associate under oath, concerning the propriety of his attempt to terminate the minor's contract with Source without prior court approval and without the consent of the guardian ad litem. During that colloquy, the judge indicated that while he believed he could decide to authorize Tiffany to terminate the management arrangement, he did not think he could also resolve the underlying dispute between the minor and the management company. In other words, he believed that his only option was to authorize her to terminate Source and let her take the risk that in some other proceeding, Source might sue her for doing so.
At this hearing, the guardian ad litem also urged the court to protect the confidentiality of the proceedings because they involved a minor and her personal relationships as well as confidential financial information. Source's attorney joined in that request and also suggested that the minor and/or her family be evaluated by a mental health professional to be sure that her parents were not exercising undue influence over her. The judge also heard from an attorney for the ...