United States District Court, M.D. Florida, Tampa Division
IN RE BAMBI ALICIA HERRERA-EDWARDS, Debtor.
BERNARD EDWARDS COMPANY, LLC and JESS S. MORGAN & CO., INC., Appellees. BAMBI ALICIA HERRERA-EDWARDS, Appellant,
OPINION AND ORDER
Charlene Edwards Honeywell United States District Judge
THE COURT are Bambi Herrera-Edwards'
consolidated bankruptcy appeals from a final judgment and
order denying her motion for a new trial.
the death of her husband, Edwards began receiving substantial
income from his music copyrights pursuant to the terms of a
1997 settlement agreement. By 2012, Edwards' financial
difficulties prompted her to file a Chapter 11 bankruptcy
petition. Apparently no longer satisfied with the terms of
her settlement, Edwards attempted to re-write its terms in
bankruptcy court by (1) acquiring administration rights to
the copyrights, (2) obtaining a share of her late
husband's royalty income, and (3) eliminating a perpetual
5% management fee.
six-day trial, the bankruptcy court held that the 1997
settlement agreement was controlling as written and denied
Edwards' claims. For the reasons that follow, the Court
will affirm the bankruptcy court's decision.
Herrera-Edwards (“Edwards”), was once married to
Bernard Edwards, a well-known guitarist, songwriter, and
producer, who co-founded the funk and disco band Chic with
Nile Rodgers. Mr. Edwards and Mr. Rodgers authored and
performed many popular songs, including “We Are
Family” and “Le Freak.” Mr. Edwards
employed Wallace Franson and Defendant-Appellee Jess S.
Morgan & Co., Inc. (“JSM”) to manage his
business and financial affairs. Mr. Edwards and Mr. Franson
orally agreed that JSM would take a perpetual 5% fee of Mr.
Edwards' gross income.
Edwards died on April 18, 1996. He was survived by Bambi
Edwards, his ex-wife Alexis Edwards, and his six children.
Mr. Edwards' estate was submitted for probate in
Westport, Connecticut. Franson was appointed as executor.
the probate proceedings, Edwards was represented by two
lawyers from the law firm Ryan, Ryan, Johnson, McCaghey &
Deluca, LLP. Edwards agreed to pay the firm a perpetual fee
of 10% on all amounts exceeding $1.2 million in the event of
asserted a $10 million tort claim against the estate in
federal court, as well as claims in the probate case for a
spousal share and for ownership of a home in Westport. Doc.
10-316. The probate court allowed Edwards' claim for a
spousal share, but denied Edwards' claim to ownership of
the home. Doc. 10-6 at 3-4.
those rulings were on appeal, and while the federal case was
still pending, Edwards attended a mediation with Franson and
some of Mr. Edwards' children. At the conclusion of the
mediation, the parties in attendance signed a handwritten
stipulation (“the July 9th Stipulation”).
relevant part, the July 9th Stipulation stated:
Bambi Edwards shall be assigned full and complete ownership
and interest in 37-1/2% of all royalties and other
payments received from the copyrights and other such
interests owned by Bernard Edwards at the time of his
death, and shall be paid such royalties within 30 days after
receipt by Jess S. Morgan & Company of such sums.
10-121 at 2 (emphasis added). Edwards relies on the reference
to “royalties” to support her claim for a portion
of Mr. Edwards' royalty income.
July 9th Stipulation, the parties agreed that they would
execute additional documents “as are necessary to
effectuate the terms and conditions of this
Stipulation.” Id. at 3. Accordingly, a draft
settlement agreement was circulated on July 16, 1997. That
same day, Franson's attorney, Richard Pober, submitted to
the probate court an Application for Approval of Compromise
Claim (“the Application”) which outlined the
terms of the settlement. However, the Application did not
mention royalties and instead provided:
The estate agrees that Bambi Edwards shall receive a
participation in the income stream of the copyrights
to be received by the estate in the percentage of 37 ½
percent, net after all expenses.
Doc. 10-324 at 2 (emphasis added). The Application also
stated that the parties would enter into a standard
co-publishing agreement, that Franson would act as publisher
of the copyrights, that Franson would have full and complete
administration rights, and that Edwards and Alexis Edwards
would have no administration rights whatsoever. Id.
settlement negotiations, Edwards was represented by Ronald
St. Onge, an intellectual property attorney, who billed time
on her case on July 29th and July 30th. On July 30, 1997,
Edwards, Franson, Alexis Edwards, and the six children
executed a settlement agreement (“the Settlement
Agreement”). Relevant here, the Settlement Agreement
Bambi Edwards agrees to accept and the estate agrees to take
any and all steps necessary to assign a 37½ percent
participation in the income stream from the
copyrights owned by Bernard Edwards Estate on the date
of Bernard Edward's [sic] death after payment of
all costs, expenses and debt related to the copyrights. The
participation share of the income stream would be on a net
basis after all estate, income and other taxes and the
administrative expenses of the estate have been paid.
10-342 at 3 (emphasis added). The Settlement Agreement
included a similar provision in favor of Alexis Edwards,
except her share in the income stream was 12½ percent.
Id. at 4. The Settlement Agreement did not reference
Settlement Agreement further provided that the parties would
enter into a standard co-publishing agreement. Consistent
with the terms proposed in the Application, the Settlement
Agreement specified that Edwards and Alexis Edwards would
have no administration rights to the copyrights:
The co-publishing agreement will provide that (a) the
executor of the estate will act as publisher of the
copyrights and will have full and complete administration
rights therein; (b) the executor will have the absolute right
and ability to assign such administration rights to any
person or entity, including but not limited to the trust for
the children of Bernard Edwards; (c) Bambi Edwards and Alexis
Edwards will be co-publishers, and will have no
administrative rights whatsoever regarding the
copyrights; and (d) all costs of administering the
copyrights will be deducted “off-the-top” in
determining revenue earned by the copyrights. The estate will
file with the U.S. Copyright Office and other necessary
entities such documents as are necessary to effectuate the
transfer of the ownership interest, and costs of same shall
be paid by the estate.
Doc. 10-342 at 4-5 (emphasis added). A separate paragraph
Bambi Edwards shall have the right to assign or sell her
income stream only to any third party. Bambi Edwards
acknowledges that she has no administration rights in the
copyrights and that any third party would be subject to
all terms and conditions as set forth in this agreement.
Id. (emphasis added). Finally, the Settlement
Agreement approved a 5% fee to JSM as follows:
All parties agree and approve the claim by Jess S. Morgan
& Co. for a 5% fee on all deferred income and other
income received by the estate of Bernard Edwards from
copyrights as a debt of the decedent.
Id. at 6.
Settlement Agreement was signed by all parties, including
Edwards, Franson, Alexis Edwards, each of Mr. Edwards'
adult children, and the guardian for Mr. Edwards'
youngest child, Leah Edwards, who was then a minor. The
parties simultaneously executed mutual general releases,
any, and all manner of . . . covenants, contracts,
controversies, agreements, promises . . . EXCEPT FOR THE
TERMS, CONDITIONS AND CONSIDERATION CONTAINED IN THE
STIPULATION OF SETTLEMENT DATED JULY 30, 1997, WHICH REMAINS
IN FULL FORCE AND EFFECT.
11-89 at 2.
August 21, 1997, Edwards, Alexis Edwards, and the estate
executed a Co-Publishing Agreement, as contemplated by the
Application and the Settlement Agreement. The Co-Publishing
Agreement provided that Edwards and Alexis ...