Jacksons vs AEG - Day 31 – June 17 2013 – Summary
Jackson family was not in court
David Berman Testimony
David Berman lasted all day in the stand. William Bloss, attorney for the Jacksons, did the questioning. Sabrina Strong for AEG crossed. (ABC7)
Jackson direct
Berman has been an executive in the music industry for 45 years. He has BA in Business Admin from University of Michigan and JD from Harvard. Berman represented artists, negotiated management agreements, worked with Beach Boys Temptations, A&M records, 20th Century Fox, the Doors. Some of Berman's work included contracts. He went to Warner Brothers, worked with Madonna, Fleetwood Mac, Prince. Berman said he did acquisitions with other record companies. He explained the function of music lawyer is the "deal." Berman explained 60 to 70% of his practice involved contracts. He became president of Capitol Records, supervised running the record company. Berman worked with Bonnie Raittt, Beastie Boys, Queen, Paul McCartney; left Capitol Records in Sept 89; returned to law firm for the year. Berman then went to Geffen Records as senior executive in charge of business affairs. Became general counsel and supervised business affairs. Berman worked with Guns and Roses, Eagles,Peter Gabriel. In Feb 1998 went to Walt Disney to be in charge of Buena Vista Music group. (ABC7)
Berman is an attorney and longtime recording executive. He’s been in the business since 1969. He started out as an attorney. In 1976, he left his law firm and went to work as a vice president for Warner Bros. Records. Eventually promoted to Senior Vice President. In 1987, he left Warner Bros. and eventually went to work as the president for Capitol Records. He left Capitol Records in 1990, and went back to his old firm, Mitchell Silberberg & Knupp, for about a year. After that, Berman went to Geffen Records, where he was general counsel and head of business affairs. In the late 1990s, Berman left Geffen for Buena Vista Music Group, which is basically the music division for Disney, he told jury.(AP)
Berman retired in 2001 and became an expert witness. He said he’s testified in about 38 cases, 60% of times for plaintiffs. (AP) Berman has been engaged 38 times to testify in court as an expert witness, 60% of times for plaintiffs, 40% defendants. Berman said he was contacted by plaintiffs attorneys in December of last year and a meeting was set up. (ABC7)
Bloss: What were you provided by attorneys?
Berman: An enormous amount of written material (ABC7)
Berman said he reviewed 26 depositions, declarations, extraordinary amount of email, pleadings, all that. Bloss asked if getting paid $500/hr is standard amount. Berman said he knows some experts who charge more, others less. (ABC7) Berman said he’s reviewed an “enormous amount of written materials.” They included 26 depositions. He’s being paid $500/hour for his work. (AP)
AEG was major promoter, Berman said, explaining concert promoter promotes or markets the concert, secure the venue, ticket sales, tour merchandise. The tour producer, Berman said, is in charge of physical production of the show, the staging, the lighting, the dancing, the choreography. (ABC7)
Bloss: Have you been a concert promoter or producer?
Bernam: No (ABC7)
Berman: The essential deal involves the relationship with the artist, what does a concert entity do for, to and with the artist. "The customer for concert promoter is not the ticket buyer, it is the artist," Berman explained. (ABC7)
Berman said he believed that music companies owe a higher obligation to artists than to music buyers or concert goers and, in this instance, AEG failed Jackson.(AP)
Berman testified he believes AEG Live bringing Conrad Murray into “This Is It” tour was a conflict of interest. He said he believes the issues in this case relate to artist relations, not the intricacies of promoting a tour. Berman said he believes music industry companies should treat artists like their customers, placing their importance higher than customers. Berman: “Without the artist, you don’t have a record to sell.” (AP)
Asked whether it was appropriate for AEG Live to attempt to hire a doctor on Jackson's behalf, Berman responded, "I believe that it's highly inappropriate. It is highly unusual."(AP)
Bloss: Do you have opinion if tour producer should hire physician for the artist?
Berman: I believe it's entire inappropriate highly unusual (ABc7)
"I've never done it, I've never heard it being done" Berman said about hiring doctor "It's my understanding until this time AEG hadn't done". "It creats an inherent conflict of interest," Berman opined. "The physician has obligation to the person treating and the entity paying him". "It is a more egregioius conflict given the factors in this case," Berman expressed. (ABC7)
Berman said he had never heard of a music company hiring a doctor on behalf of an artist. He called it “highly unusual.” He said that the company paying the doctor “creates an inherent conflict of interest on the part of the physician.” Berman: “The physician has dual obligations to the patient of course and to the entity that his engaging” him or her. (AP)
Bloss showed Berman the 'Trouble at the Front' email Ortega sent to Phillips saying he didn't think MJ was ready, his physical weakening. "The response to me is very telling" Berman explained, saying Phillips was dismissive when he responded lets not become amateur psychiatrist. Phillips recognized the potential of the doctor not being ethical or unbiased, Berman highlighted. "It is my understanding AEG never did anything to check out Dr. Murray," Berman testified, "It shows they were aware of potential conflict (ABC7)
Plantiff’s attorney Bill Bloss showed Berman several emails the jury has seen, including messages traded by Randy Phillips and Kenny Ortega. He said one of the emails Phillips sent to Ortega seemed dismissive of the tour director’s concerns about Jackson’s health. (AP)
Bloss: Did you become involved in retaining a physician for any entity?
Berman: No
Bloss: Did you ever hear of a music company retaining a physician for an artist whether it was at artist's request or not?
Berman: No
Bloss: Would it be a reasonable practice?
Berman: No
WB: How could conflict be avoided?
DB: By hiring a doctor with no relationship to AEG (ABC7)
Defendants objected saying Berman has never been a producer, a tour manager or worked for a producer or manager. (ABC7)
Bloss: What is personal manager?
Berman: A personal manager is involved in every aspect of the artist's career and the artist's life (ABC7)
Berman said the fact Dr. Murray wanted $5 million to be engaged as MJ's physician is some kind of red flag, even though it was turned down. Berman: Even amount of $150k/month, as agreed, is an exorbitant amount. It's more money than any individual in the tour was getting. The expert said AEG was aware of another physician, Dr. Finkelstein, had been willing to take the position as MJ's doctor for $40k a month. Berman: If there was an alternative to Dr. Murray at a fraction of the price, it seems to me that information should've been passed on to MJ (ABC7)
He said he was troubled by the fact that another doctor had quoted a $10k per week price to care for Jackson on the tour. Berman said information about the other doctor should have been turned over to Jackson, but it wasn’t. (AP)
There were a lot of objections by AEG Live attorneys to Berman’s testimony and expertise. This prompted a lengthy sidebar in the morning. Ultimately, Berman was able to testify that he thought AEG Live’s involvement in negotiating Murray’s contract was an ethical conflict (AP).
Berman said he understands that Mr. Gongaware was the one dealing with Dr. Murray's hiring on behalf of AEG Live. Berman expressed AEG was in the process of negotiating and securing an agreement between themselves and Dr. Murray to be MJ's physician. Bloss showed the email where Paul Gongaware wrote "Done at $150k a month, per MJ." "It's indicative of fact that agreement had been reached on behalf of AEG Live that Dr. Murray," Berman explained. Berman said he didn't think this email alone proves AEG hired Dr. Murray. (ABC7)
Judge: to the jury, YOU will decide whether Dr. Murray was hired. All the testimony by hiring is made on assumption he was hired (or not) (ABC7)
Berman opined that emails between AEG and Dr. Murray offered more details of the terms of the engagement between AEG Live and Dr. Murray. Berman said it was a three party agreement between AEG Live, Dr. Murray and MJ. Berman said emails about the agreement were never sent to MJ. Berman explained it is as if one party was being denied participation in the bind in the terms of the agreement. (ABC7)
Bloss showed Berman a tour budget dated May 16, 2009. Berman explained it included $300k for medical management. Berman said the amount on budget is consistent with $150k for Dr. Murray for the months of May and June, 2009. (ABC7)
Dr. Murray acknowledged he's in agreement with terms of May 8th email, Berman explained, saying he was performing services that day already. Berman noted Dr. Murray wrote "I have performed and continue to fulfill my services to the client in good faith" and "as per our agreement" (ABC7)
"I've never heard of it and, to my knowledge, AEG had not done it before," Berman said about retaining a doctor. "I think an artist is perfectly entitled to engage any physician he chooses," Berman said. (ABC7)
Berman testified it is not unusual for an artist to hire and bring his own doctor on tour. However, Berman opined that AEG inserted themselves in the middle of the deal as an attempt to be in position to control MJ's doctor. (ABC7)
Bloss: May agreements be oral in your industry?
Berman: Of course, it's a common occurrence (ABC7)
Berman: agreements are commenced and performed by both parties by oral agreement and subsequently put in writing. It's not uncommon at all. (ABC7)
Bloss: When does the agreement start?
Berman: Generally speaking, when one party has commenced performing under the oral agreement (ABC7)
Berman said it is not unusual in the entertainment business at all to amend contracts without putting the changes in writing. For instance, Berman said MJ's agreement called for 31 shows, it was amended to 50; tour budget was $7.5 million, increased to $30 million. (ABC7) It is common that parties in the music industry reach oral agreements, then put the terms into writing, Berman told jurors. (AP)
David Berman told jurors hearing a negligent hiring lawsuit against concert promoter AEG Live LLC that the company should not have negotiated with Jackson's physician without notifying the singer's representatives of the discussion. Berman said there were no indications that Murray’s draft contract was sent to Michael Jackson’s representatives, which should have happened . (AP)
Berman said it's common practice for outside counsel, Kathy Jorrie in this case, to send agreement they're drafting to in house counsel. Berman: The email shows that nobody from MJ's camp received copy of the draft agreement AEG Live was putting together for Dr. Murray. Berman thinks it's unreasonable and inappropriate not to include one of the three parties of the agreement in the discussions of the deal. Berman said he understands Dennis Hawk, Mr. Branca and Mr. Katz were MJ's attorneys at this point in time. (ABC7)
Bloss showed email where Ms. Jorrie referred to as final contract between AEG and Dr. Murray. "As far as AEG is concerned, the contract is concluded and ready for execution," Berman explained the email meant in his opinion. (ABC7)
Berman said his understanding is that AEG Live had already secured housing in London for Dr. Murray and was included in the UK party tour, Berman said that in addition to insurance, AEG requested that Dr. Murray be in control of MJ's rehearsal schedule. Berman: If contract terminated then agreement terminated with Conrad Murray, giving Dr. Murray even greater conflict. "He was in dire straits, he did need this gig. He ran the risk of losing further compensation," Berman opined. Gongaware said "We want to remind Dr Murray that it's AEG, not MJ, who is paying his salary. We want him 2 understand what's expected of him"."It is indicatative of the fact that they want to control the services of Dr. Murray," Berman opined. (ABC7)
AEG Live’s ability to end Murray’s contract if the tour was canceled increased the conflict of interest, Berman said. “He was in financial dire straits,” Berman said. “He did need this gig.” (This refers to Randy Phillips email calling Murray successful.) (AP)
Berman said there would have been nothing inappropriate if Michael Jackson hired his own doctor, but AEG’s involvement made it inappropriate (AP).
Bloss: If Dr. Murray had been hired by MJ would this be necessary?
Berman: It would not have been factually accurate (ABC7)
After the lunch break, plaintiff’s attorney Bill Bloss asked Berman a few questions before wrapping up his examination. He started off by showing a copy of Conrad Murray’s “Independent Contractor Agreement.” Berman keyed in on a couple areas. Berman was asked about a section where Murray was required to ensure that his services would be “administered professionally”. “Well, it’s a pretty glaring example of why AEG inappropriateness,” Berman said. He said they had no experience supervising doctors. Berman’s point was that AEG wasn’t qualified to evaluate Dr. Murray’s care of Jackson. They could assess lighting, sound crew, but not a doctor (AP).
Berman said AEG doesn't have experience supervising physicians. "That's not their area of expertise." The chain of email Trouble at the Front shows an attempt to exercise some degree of control, Berman said. "This is the first time I'm aware of them reaching out to various MJ advisors, filling them in with the problem they now see," Berman said. Mr. Branca immediately responds saying he has a person he thinks can help, Berman said. AEG rejects the proposition regarding the person Mr. Branca suggested and never answered the question of substance abuse, Berman opined. (ABC7)
Berman: It indicates that they were concerned and the email from Gongaware to Phillips appears to be attempt to exercise control. "Take the doctor with you" mention is yet another attempt to control Dr. Murray, Berman said. (ABC7)
Berman: They don't know what the problem is, they don't know Dr. Murray is the right doctor, they just don't know what the problem is (ABC7)
Bloss asked if AEG should've entered into agreement w/ physician. Berman said no, they have no expertise or experience supervising a doctor (ABC7)
AEG cross
Berman said he's inactive member of the CA Bar for 10 years, pay dues but can't practice law until taking continuing education. Strong asked if the reason he left Capitol Records was because he was fired. "I demanded to be fired, they accepted my request" Berman said. (ABC7) She quickly asked Berman about him being fired from Capitol Records. He said he demanded to be fired. (AP)
Strong: Your primary job is working as expert witness since 2001, right?
Berman: Primary job is essentially inaccurate (ABC7)
Berman has been working with disputes in the industry for about 11 years. As expert witness, he's paid by whomever hires him. Berman gets $500/hour as payment, received about $25,000 from plaintiffs, $5,000 from defendants from when they deposed him. That makes about 60 hours of work on this case, Berman said, recalling about six meeting with attorneys for the plaintiffs. (ABC7)
Strong then keyed in on Berman’s work as an expert witness. She broke down his payments for the case. Berman has received $25,000 from the plaintiffs, and $5,000 from the defense. Defense had to pay him for his deposition, he said. He estimated he spent about 60 hours preparing his opinion on the Jackson vs AEG Live case so far. (AP)
Strong asked if Berman has been disqualified previously from testifying. He said the judge disqualified the methodology he used. (ABC7)
Strong: Did you testify outside the area of your expertise?
Berman: No, it had to do with putting a value on starting record label (ABC7)
Berman explained he used real life experience, based value on quality, knowledge and expertise but judge wanted academic and economic method. (ABC7)
AEG Live is primarily concert promoter, Berman explained. (ABC7) Strong noted that Berman hadn’t worked as a concert promoter or producer, nor had he worked on a tour before. (AP)
Berman never worked with MJ in a tour. "I was at a party once that he attended, but I was not introduced to him," Berman said. (ABC7)
Strong: You agree here that MJ chose Dr. Murray?
Berman: That's my understanding (ABC7)
Strong asked if MJ was the one paying Dr. Murray. Berman said he disagrees with it. Strong asked if Berman thinks it matters who Dr. Murray believes hired him. Berman responded the critical factor with Dr. Murray regarding conflict is knowing in fact that he was to be compensated by AEG and not MJ. Berman: AEG Live had the ability to terminate the agreement with Dr. Murray should the concert be postponed. "I think Dr. Murray had the right to be concerned about the issue," Berman testified. "It was not his best interest to harm MJ, but his interest was also the tour didn't get canceled or postponed," Berman said about Dr. Murray (ABC7)
Strong: Dr. Murray was under pressure because he might lose his job?
Berman: I feel he would be concerned about that, yes (ABC7)
Strong asked Berman if artists have the ability to not perform. He replied they have physical ability, but legal would be breach of contract. (ABC7)
The lawyer asked Berman what would have happened to Murray if Michael Jackson canceled the tour. He said he didn’t know. (AP)
Strong: It wouldn't matter who canceled the tour, correct?
Berman: There were elements that Dr. Murray had no control whatsoever (ABC7)
Berman opined that if the tour was canceled, it's fair to say that AEG would not want to keep Dr. Murray under contract. "I don't know what'd have happened with Dr. Murray if the show were canceled, I don't have any way of knowing," Berman said. (ABC7).
Berman said he's aware Dr. Murray performed services for MJ, and maybe for his children, but doesn't know the extent of services. (ABC7)
"Personal manager in CA cannot perform the functions of a booking agent; personal manager cannot perform function of attorney," Berman said (ABC7)
Berman said he thinks he knows enough to say that it is not unusual for masseuses to be brought along in a tour. (ABC7)
Strong asked if Berman knows that AEG Live negotiated contract with Karen Faye, make up artist. He said yes, and he had no problem with it. Strong: Faye could've cause skin damage on MJ's face? ((One of the jurors looked at Strong very puzzled!)) Berman: Anyone could've hurt MJ (ABC7)
Berman said it's his understanding that Dr. Murray was MJ's choice. He said he firmly believes producer should never hire doctor for artist. "It is extremely unusual, it goes beyond unusual," Berman opined. Strong rebutted: But you never produced a tour?
Berman: No (ABC7)
Berman said tour doctors are different from artist doctors. (ABC7)
Strong: You know The Stones tour with a doctor?
Berman: I know that Mr. Trell indicated that (ABC7)
"I know that AEG never hired a doctor to go on tour with an artist," Berman testified. Berman said is an unusual event for concert promoter to be the producer. "Producer shouldn't be engaging the services of doctor," Berman opined, "even if doctor has been treating artist/children for long time." (ABC7)
"The contract is between AEG Live and Dr. Murray," Berman said, adding that MJ is a third party beneficiary. Strong showed Berman Dr. Murray's Contract Agreement, "Perform the services reasonably requested by Producer." Strong said it was a mistake. (ABC7)
"Producer did request Dr. Murray to perform services," Berman said. Shawn Trell, in the audience, shook his head no. (ABC7)
"MJ did not sign it," Berman said about Dr. Murray's contract. Neither AEG Live, Strong asked. That's correct, Berman answered. (ABC7)
Strong: How often do you pay $1.5 mil without a signed contract?
Berman: I have paid probably more than $1.5 mil without executed contract (ABC7)
Strong argued that Berman's contract must not have included provision saying it had to be fully executed prior to payment. (ABC7)
Berman testified increasing shows from 31 to 50 wasn't in writing, neither was production cost raised from $7.5 million to more than $30 million (ABC7).
Strong: This contract doesn't limit the spending to $7.5 million, correct?
Berman: Correct, I don't have a problem with oral agreements (ABC7)
"I know there are no written documents signed by MJ approving increase in production costs," Berman testified. "There's one document signed by quote representative that I doubt he was a representative," Berman expressed. (ABC7)
Strong asked if Berman were to work for plaintiffs for 80 hours at rate of $500/hour, he would make $40k/week. Berman responded: "With all due respect, I'm 69 years old, I'm not working 80 hours a week for anybody." Some jurors laughed. (ABC7)
Strong asked Berman if his testimony should not be believed because he's being paid by the plaintiffs. "My salary as an expert witness is well in line with other experts," Berman responded, adding he knows several experts who charge much more. (ABC7)
Strong inquired if Berman was expert in doctor's salaries. "I'm not an expert but I'm aware of another doctor willing to be paid $40k/month". Strong: Do you know doctors make millions a year? Berman: I know my does (ABC7)
Strong also challenged Berman on his contention that Murray would have been the highest-paid worker on the “This Is It” tour. She said Kenny Ortega would have been paid $1m for about five months of work on the tour. He said he didn’t recall details of Ortega’s deal (AP).
Strong asked if Berman knew how much Kenny Ortega was going to make in the tour to say Dr. Murray was getting more money. "The red flag is $150,000 a month compared with another doctor asking $40,000," Berman explained. "It was not a problem that the doctor was going to make more, it's an indicative something is out of whack," Berman testified. (ABC7)
Strong asked Berman about the request for MJ's medical records for insurance purposes. He said it would benefit both AEG and MJ. (ABC7)
Strong asked if Berman was concerned MJ's reps were kept out of the loop. "To the best of my understanding that's what happened" Berman said. "I'm aware that Mr. DiLeo was aware of Dr. Murray, but don't know whether he was involved in the negotiation of the contract," Berman opined (ABC7) Berman said he felt it was “extremely unusual” that Murray’s contracts would not have been sent to Jackson’s representatives. (AP)
Strong then displayed a statement signed by Frank Dileo in July 2009 that stated he was aware of negotiations with Murray. Dileo’s statement indicated that AEG Live CEO Randy Phillips objected to hiring Murray, but Jackson wanted him. Berman said the statement didn’t deal with the issue that Murray’s contract wasn’t sent to Jackson reps, according to emails shown in court. (AP)
Berman said Brigitte Seagal was an attorney in the UK working on housing arrangements. He doesn't know if she had any relation with MJ. (ABC7)
Berman said that as President at Capitol Records, he was involved in hiring heads of departments, senior executives. Strong: You never checked financial background of executives you hired in the music industry? Berman: To the extent it would've been done, it was at the human resources level. Berman said he personally never checked financial background of anyone because it would not have reach his level it would've been done at Human Resources. Strong played Berman's depo where he said he couldn't recall any credit check being done (ABC7) Strong asked Berman whether he’d ever looked into the finances of executives he hired. He said if it happened, HR did the checks. (AP)
Jackson redirect
Berman said MJ's contract required any modification to be done in writing. But addition of shows, budget increase was never written anywhere. (ABC7) Bloss asked Berman whether he was aware if there was a document authorizing 50 shows for “This Is It.” “Apparently not,” he said. (AP)
Bloss: Did anybody considered that to be a problem?
Berman: Apparently not (ABC7)
As to the firing of Berman from Capitol Records he explained he was hired by chief executive whom he had immense respect, but ended up fired. However, Berman did not have same level of respect for the new global Chief Executive, he said. "It was pretty arrogant and naive of me," Berman said. "The word began to go around that the president was going to get fire." Berman said the morale was pretty bad for the company, no one wanted to sign with the company if the president was about to be booted. Berman explained he went to his immediate boss and demanded full support of termination. "Then I'm fired," Berman said, he insisted in getting fired, it was the only way to get paid off. If he quit, he would've gotten nothing. (ABC7) Berman was then asked about his firing from Capitol Records. He explained he was hired by one executive, but another exec took over. Berman said he didn’t have respect for the new executive. Berman said he asked to have the company either publicly support him, or fire him. (AP)
Berman said he believes the DiLeo letter was an attempt to get some MJ representative of some form to retroactively approve the budget. (ABC7) The expert was also asked whether he knew how the Dileo statement came about. Berman said he believed it was entered after Jackson’s death and in an attempt to recoup some costs of the “This Is It” production. (AP)
The purpose of this letter is to confirm that I'm appointing Frank DiLeo one of my new representatives & tour manager. Mr. DiLeo has my authorization to conduct business matters on my behalf only when instructed. Signed by MJ (ABC7)
Berman said it was a weird letter and inconsistent with DiLeo's declaration, which said he was MJ's rep since March 2009. (ABC7)
"I believe this document to be a written document confirming binding oral agreement," Berman said about Dr. Murray's contract. (ABC7)
AEG recross
Strong asked in re-cross if Berman was aware that MJ directed Randy Phillips to deal with Frank DiLeo on his behalf. He said no. As to DiLeo's letter dated May 2, 2009, Strong asked if Berman knows when DiLeo was hired. He said no. (ABC7)