BEFORE THE LABOR COMMISSIONER STATE OF CALIFORNIA

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TAC-52727 Determination of Controversy

STATE OF CALIFORNIA

DEPARTMENT OF INDUSTRIAL RELATIONS

DIVISION OF LABOR STANDARDS ENFORCEMENT

David L. Gurley, Esq. (194298)

1500 Hughes Ste. C-202

Long Beach, CA 90810

Telephone No. (424) 450-2585

Fax No. (562) 546-1359

Attorney for the Labor Commissioner

BEFORE THE LABOR COMMISSIONER

STATE OF CALIFORNIA

THE GERSH AGENCY, INC., a California

corporation,

Petitioner,

vs.

LANGSTON FAIZON SANTISIMA p/k/a

“FAIZON LOVE”, an individual;

ASSEMBLY ROBOT, INC. a California

Corporation,

Respondents.

CASE NO.: TAC-52727

DETERMINATION OF CONTROVERSY

I. INTRODUCTION

The above-captioned matter, a Petition to Determine Controversy under Labor Code

section 1700.44, was heard remotely over Zoom on March 4, 2021 before the undersigned attorney

for the Labor Commissioner assigned to hear this case. THE GERSH AGENCY, INC., a

California corporation (hereinafter, referred to as “TGA”) was represented by Joseph P. Costa,

Esq. of COSTALAW. Respondents, LANSTON FAIZON SANTISIMA p/k/a “FAIZON LOVE”,

an individual; and ASSEMBLY ROBOT INC., a California Corporation (hereinafter, collectively

referred to as “LOVE”) was represented by Sergio Bent, Esq. of BENT CARYL & KROLL, LLP

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TAC-52727 Determination of Controversy

The matter was taken under submission and post-trial briefs submitted. Based on the

evidence presented at this hearing and on the other papers on file in this matter, the Labor

Commissioner hereby adopts the following decision.

II. FINDINGS OF FACT

Petitioner TGA is a talent and literary agency which includes a television, movie and

comedy department.

Respondent LOVE is a comedian and an actor appearing in movies and currently appearing

in the television series Step-Up: High Water (“Step-Up”).

In or around May 2017, LOVE and TGA entered into an oral agreement whereby TGA

would serve as LOVE’s talent agency in exchange for ten percent (10%) of all compensation

earned by LOVE for his services as an entertainer (“Oral Agreement”).

In 2017, the parties performed under the Oral Agreement. According to TGA talent agent,

Kent Ochse (“Ochse”), TGA received an offer for the television show Step-Up on May 22, 2017.

Soon thereafter, an agreement was signed between LOVE and the Step-Up producer, Step-Up

Productions, Inc. (“Series Agreement”).

On or around May 23, 2017, the Series Agreement was sent to TGA providing that LOVE

would play the role of “Uncle Al” in Step-Up for the episodic contract rate of $30,000. The Series

Agreement included a one-year term with six (6) successive year options. According to the Series

Agreement, the episodic rate would increase by five percent (5%) each year. LOVE was

guaranteed payment for seven episodes for Season 1; eight episodes for Season 2; and ten episodes

for every season thereafter.

LOVE performed as the character “Uncle Al” and received his guaranteed salary of

$30,000 per episode for seven episodes in Season 1. Pursuant to the Oral Agreement, LOVE paid

TGA a 10% commission rate on LOVE’s gross earnings of $210,000 for Season 1 in the amount

of $21,000 ($3,000 x 7 episodes).

On or around September 17, 2017, after completing Season 1 and before filming Season 2,

LOVE terminated the relationship with TGA and sent an email stating the following:

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TAC-52727 Determination of Controversy

“At this time Due [sic] to current events, I think it’s better we cut all ties and go our

separate ways no need to rehash the obvious. Since there is no paperwork between

myself and Gersh I think this email shall act as a final letter of business. If Step Up

is renewed for a second season my attorney will advocate and distribute

commissions due.” [Emphasis added]

On or around April 30, 2018, Step-Up was renewed for a second season. Filming began on

May 30, 2018, and Season 2 was completed some time in 2018. In accordance with the Series

Agreement, LOVE performed in 8 of 13 episodes and was paid according to the terms of the Series

Agreement for Season 2. Specifically, LOVE received a 5% increase in his episodic rate from

Season 1 and received $31,500

per episode for his participation in Season 2.

Notwithstanding LOVE’s promise to pay TGA commissions for Season 2 in his September

17, 2017 termination email, in which LOVE stated, “[i]f Step Up is renewed for a second season

my attorney will advocate and distribute commissions due”, LOVE ceased paying any

commissions after September 17, 2017; and, to date, TGA has not been paid any commissions for

Season 2.

On or around July 31, 2018, TGA sent LOVE a protection letter advising LOVE that TGA

was ready, willing and able to render talent agency services for LOVE, and moreover, TGA

expected to be paid commissions according to the parties’ Oral Agreement and consistent with the

financial terms contained in the Series Agreement for Season 2.

Sometime in 2019, Step Up was cancelled, although in 2020, a reboot of Step-Up was

initiated. On or around April 15, 2020, a new contract for the reboot of Step-Up Season 3 was

executed by LOVE and Step-Up Productions Inc. The contract was titled STEP UP / FAIZON

LOVE FIRST AMENDMENT (“Amended Series Agreement”).

The Amended Series Agreement reestablished payments received by LOVE for Seasons 1

($30,000 per episode) and 2 ($31,500 per episode) and included an increase to $40,000 for his

episodic rate for Season 3, with an increase of 5% per year for any subsequent years. According

TGA claims LOVE was paid $31,000 per episode during Season 2 and appears to inadvertently claim

unpaid commissions in the amount $24,800 ($3,100 x 8 episodes). The evidence established LOVE earned

5% more in Season 2 and was therefore paid a $31,500 episodic rate. TGA’s claim for unpaid commissions

should be $25,200 ($3,150 x 8 episodes) and not $24,800 as alleged and seemingly miscalculated in TGA’s

post-trial brief.

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TAC-52727 Determination of Controversy

to the original Series Agreement, LOVE would have been paid 5% more per episode in Season 3

than he was paid for in Season 2 ($31,500). So, according to the Series Agreement, LOVE would

have been paid $33,075 ($31,500 x .05 = $1,575 + $31,500 = $33,075) per episode for Season 3.

The amended Season 3 rate of $40,000 per episode represented an increase of $6,925 per episode,

which is more than TGA negotiated for LOVE in the original Series Agreement for Season 3.

LOVE argues his termination of TGA on September 17, 2017, forever releases LOVE from

any obligation to pay TGA post-termination commissions, including commissions for Season 2,

Season 3 or any seasons subsequently renewed and produced after termination. In support of this

argument, LOVE states he retained the services of an attorney who drafted and negotiated different

contractual terms, including the $6,925 per episode increase for Season 3. LOVE also argues the

reboot of Step-Up Season 3 includes a new distributor

, incorporates new cast members and a new

storyline, all of which support his position that Season 3 is not a reboot but rather an entirely new

show thereby relieving LOVE of any obligation to pay TGA commissions after September 2017.

We disagree with LOVE’s arguments.

III. LEGAL ARGUMENT

Labor Code section 1700.4(b) defines “artist” and states, “‘artists’ means actors and

actresses rendering professional services on the legitimate stage … and other artists rendering

professional services in … other entertainment enterprises.” It is undisputed that LOVE is an

“artist" within the meaning of Labor Code section 1700.4(b). It was stipulated that TGA is a

California licensed talent agency.

Labor Code section 1700.23 provides that the Labor Commissioner is vested with

jurisdiction over “any controversy between the artist and the talent agency relating to the terms of

the contract,” and the Labor Commissioner’s jurisdiction has been held to include the resolution

of contract claims brought by artists or agents seeking damages for breach of a talent agency

contract. (Robinson v. Superior Court (1950) 35 Cal.2d 379; Garson v. Div. Of Labor Law

Seasons 1 and 2 of Step-Up was distributed and broadcast on the YouTube Red platform while Season 3

will be distributed and broadcast on the Starz Network.

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TAC-52727 Determination of Controversy

Enforcement (1949) 33 Cal.2d 861). Therefore, the Labor Commissioner has jurisdiction to

determine this matter.

The issues in this case are as follows:

A. Are Post-Termination Commissions Owed for Season Two and any Subsequent

Seasons Filmed after LOVE Terminated the Parties’ Oral Agreement?

B. Does the Statute of Frauds Excuse LOVE’s Performance?

A. Are Post-Termination Commissions Owed by LOVE?

The primary issue is whether TGA is entitled to commissions for Season 2 and any

subsequent seasons negotiated in the Series Agreement during the parties’ relationship but

performed after termination of the relationship.

In similar fact patterns, we have consistently applied the rule stating, “[a] talent agency is

generally entitled to receive post termination commissions for all employment secured by the

agency prior to its termination.” (ICM Partners v. James Bates, Case No. TAC-24469, p. 6 (2017)

(“Bates”) (citing Paradigm Talent Agency v. Charles Carroll, Case No. TAC 12728 (2011)

(“Paradigm”)). Further, “[c]ommissions are owed post termination for monies negotiated by the

agent during the term of the agreement and the artist cannot unilaterally determine there is no

further obligation to pay for work already performed.” (The Endeavor Agency, LLC v. Alyssa

Milano, Case No. TAC 10-05 (2007) (“Milano”)). In such matters, the Labor Commissioner

considers: (1) whether a valid agency contract was formed, (2) whether the agent procured the

artist’s income-generating engagement at issue prior to termination, and (3) whether pervasive

industry custom and practice concerning the continued payments of post termination commissions

applies. (See, e.g., Milano, at p. 4-8; Bates, supra, Case No. TAC-24469 at p. 4-6; International

Creative Management Partners LLC v. Celine Dion TAC 52673 p. 15-16 (“Dion”)). The evidence

presented to the Labor Commissioner in this matter demonstrates that the answer to all three

questions is in the affirmative.

1. A Contract was Formed between the Parties

LOVE argues no contract was formed between the parties because specified terms of the

contract were not certain and absent certainty, no contract exists. Specifically, LOVE argues there

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TAC-52727 Determination of Controversy

was no understanding between the parties or meeting of the minds as to whether LOVE was

required to pay TGA commissions post termination. We disagree with LOVE’s argument and

conclude there was an agreement to pay post termination commissions.

In order for acceptance of a proposal to result in the formation of a contract, the proposal

“must be sufficiently definite, or must call for such definite terms in the acceptance, that the

performance promised is reasonably certain.” (Weddington Productions, Inc. v. Flick (1998) 60

Cal.App.4th 793, 811). A proposal “cannot be accepted so as to form a contract unless the terms

of the contract are reasonably certain. [¶] The terms of a contract are reasonably certain if they

provide a basis for determining...the existence of a breach and for giving an appropriate remedy.”

(Id.) “If, by contrast, a supposed ‘contract’ does not provide a basis for determining what

obligations the parties have agreed to, and hence does not make possible a determination of

whether those agreed obligations have been breached, there is no contract.” (Id.)

The evidence and testimony presented at the hearing demonstrates that TGA and LOVE

negotiated an oral contract for a 10% commission payment on all of LOVE’s earnings in the

entertainment industry that was later manifested by the parties’ conduct. The essential elements

of a contract are that “[p]arties capable of contracting consented with a lawful object and sufficient

consideration.” (Civ. C. § 1550; Dion at 15, Case No. TAC 52673 (citing Milano, Case No. TAC

10-05 at 6). The existence and terms of an implied contract are manifested by conduct, and such

implied contract is formed, in the absence of a written agreement, where the parties’ conduct

demonstrates a meeting of the minds. (See Civ. C. § 1621; Dion at 15, Case No. TAC 52673

(citing Milano, Case No. TAC 10-05 at 6).

The parties do not dispute that an agreement for TGA to procure employment in the

entertainment industry is for a lawful purpose. Nor do the parties dispute that LOVE’s payment

of commissions under any such contract is sufficient consideration. The 10% commission rate

paid by LOVE for Season 1 conclusively demonstrates that, similar to the oral contracts in Dion

and Milano, the 2017 Oral Agreement between TGA and LOVE is an implied contract formed

between the parties, the existence and terms of which were manifested by the parties’ subsequent

conduct.

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TAC-52727 Determination of Controversy

The only remaining issue is whether there was an agreement by LOVE to pay TGA

commissions post termination. The September 17, 2017 termination email is instructive. LOVE

writes directly to TGA and states:

“… If Step Up is renewed for a second season my attorney will advocate and

distribute commissions due.” [Emphasis added]

This email does not suggest or imply LOVE believed or understood he was not

required to pay post termination commissions. The email states exactly the opposite of what

LOVE now argues. This is an express promise to pay post termination commissions and the

email demonstrates that LOVE knew of his obligation to pay commissions to TGA for

TGA’s work performed during the relationship. The fact that LOVE performed his work

after termination is irrelevant, so long as the employment was secured during the relationship

and prior to termination.

2. TGA Procured Step-Up and Negotiated the Series Agreement

The Talent Agencies Act (“TAA”) provides that a “talent agency” is “a person or

corporation who engages in the occupation of procuring, offering, promising, or attempting to

procure employment or engagements for an artist or artists,” and further states that “[n]o person

shall engage in or carry on the occupation of a talent agency without first procuring a license . . .

from the Labor Commissioner.” (Labor Code §§ 1700.4(a), 1700.5). The Labor Commissioner

has explained that, “[u]nder the Talent Agencies Act, ‘procuring employment’ is not limited to

soliciting employment or the initiating of contacts with employers. ‘Procurement’ within the

meaning of Labor Code section 1700.4(a) includes active participation in a communication with a

potential purchaser of the artists services aimed at obtaining employment for the artist, regardless

of who initiated the communication.” (ICM v. James Bates, Case No. TAC-24469, p. 5 (2017)

(citing Hall v. X Management, Case No. TAC 19-90, pp. 29-31 (1992)).

Procurement also includes the process of negotiating an agreement for an artist’s services.

(Id.) (citing Pryor v. Franklin, Case No. TAC 17 MP 114 (1982)). There is no dispute that Ochse,

on behalf of TGA, procured the Series Agreement for LOVE which lead to the Step-Up

engagement.

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TAC-52727 Determination of Controversy

3. Application of Industry Custom and Practice Confirms Post-Termination

Commissions are Owed

TGA argues that industry custom and practice supports TGA’s contention that TGA is

entitled to commission of future seasons of Step-Up after termination. We agree. During the

hearing, LOVE testified that his understanding of the agreement with TGA for Step-Up is that

TGA’s payment of commission would be based upon industry custom and practice. Similarly,

Ochse from TGA testified that his understanding of the TGA/Love Oral Agreement was based

upon industry custom and practice.

Like any tool of contract interpretation, industry custom and practice is useful only to the

extent it illuminates the parties’ intent. (See Paez v. Mut. Indem. Acc., Health & Life Ins. Co. of

Cal. (1931) 116 Cal.App. 654, 660 (“The primary purpose in the admission of ‘evidence of

industry custom and practice’ is to ascertain the intention of the parties to the contract . . . .”).

Additionally, it is a pervasive custom and practice in the entertainment industry that “[a]

talent agency is entitled to receive post termination commissions for all employment secured by

the agency prior to its termination.” (Bates, Case No. TAC-24469 at 6 (citing Paradigm, Case No.

TAC 12728, pp. 13, 16 (2011)). Moreover, “[c]ommissions are owed post termination for monies

negotiated by the agent during the term of the agreement and the artist cannot unilaterally

determine there is no further obligation to pay for work already performed.” (Id.) (citing Milano,

Case No. TAC 10-05).

The termination email is clear and compelling. LOVE promised to pay TGA’s

commissions after termination if Season 2 was renewed. This uncontroverted email clarifies that

LOVE was aware of the industry custom and practice and intended to apply it to the Oral

Agreement. The rule has long been held to extend to work performed without a written contract

under the principles of contractual construction:

California Civil Code § 1656 states, “all things that in . . . usage are considered as

incidental to a contract, or as necessary to carry it into effect, are implied therefrom,

unless some of them are expressly mentioned therein . . .”) [sic]; Rest. Contracts

§221 (“An agreement is supplemented . . . by a reasonable usage with respect

to agreements of the same type if each party knows or has reason to know of the

usage and neither party knows or has reason to know that the other party has an

intention inconsistent with the usage.”) “ . . . if there is a reasonable usage which

supplies an omitted term and the parties know or have reason to know of the usage,

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TAC-52727 Determination of Controversy

it is a surer guide than the court’s own judgment of what is reasonable.” (Rest.,

supra, § 221, com. a, p. 151.) “The more general and well-established a usage is,

the stronger is the inference that a party knew of or had reason to know of it.

(Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 853;)

In short, LOVE promised to pay TGA for Season 2 and that promise is consistent with

well-known industry standard and custom. TGA procured and negotiated the Series Agreement

and TGA should be compensated for those efforts.

Further, California Code of Regulations, Title 8, section 12001(b) states, “[t]o be entitled

to the payment of compensation after termination of the contract between the artist and the talent

agency, the talent agency shall be obligated to serve the artist and perform obligations with respect

to any employment contract or to extensions or renewals of said employment contract or to any

employment requiring the services of the artist on which such compensation is based.” It was clear

through testimony and documentary evidence, TGA was willing and able to conduct services on

behalf of LOVE post termination.

B. Statute of Frauds

Respondent argues the Oral Agreement is invalid as a matter of law pursuant to the

Statute of Frauds. The common law doctrine embodied by the statute of frauds is codified at Civil

Code section 1624, subdivision (a). That subdivision provides, in relevant part: “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 courts have routinely held

that a contract is invalid under statute of frauds when it is evident from subject matter that the

parties contemplated a longer period than one year as time for performance. (Tostevin v. Douglas

(1958) 160 Cal.App.2d 321, 327.)

LOVE argues the contemplated Series Agreement was a period of time up to seven years.

LOVE argues because the commission payments would exceed a one-year period of time, the

alleged oral contract between Petitioner and Respondents for commissions is invalid as a matter

of law.

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TAC-52727 Determination of Controversy

We briefly respond to LOVE’s statute of frauds argument. The doctrine of estoppel to plead

the statute of frauds may be applied where necessary to prevent either unconscionable injury or

unjust enrichment. (Monarco v. Lo Greco (1950) 35 Cal.2d 621, 623–624). Also, in such cases,

the doctrine of estoppel to assert the statute of frauds may be applied in the interests of fairness.

(Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 27). Here, TGA performed the work and we find

in the interest of fairness that LOVE should pay commissions to TGA for the work. We, therefore,

are not persuaded by LOVE’s statute of frauds argument.

IV. CONCLUSION

TGA is entitled to a 10% commission rate for Seasons 2 and 3 and any future amounts

received by Respondents for Seasons 4-7 under the May 23, 2017 Series Agreement between

LOVE and Step-Up Productions, Inc. when such sums become payable to LOVE. TGA is not

entitled to commission any amounts in excess of the amounts negotiated for in the original Series

Agreement with Step-Up Productions for Season 1-7.

V. ORDER

For the above-stated reasons, IT IS HEREBY ORDERED Petitioner, THE GERSH

AGENCY INC., a California Corporation is awarded the following:

(1) Awarded commissions in favor of TGA and against Respondents, LANSTON FAIZON

SANTISIMA p/k/a “FAIZON LOVE”, and ASSEMBLY ROBOT INC., a California Corporation

in an amount equal to ten percent (10%) of the gross compensation earned or received by

Respondents from Season 2 of Step-Up: High Water for 8 episodes in the amount of $25,200

($3,150 x 8 episodes);

LOVE’s Post-Trial Brief references several facts in support of the position the Amended Series

Agreement was a new agreement thereby precluding TGA’s right to commission in accordance with that

agreement. Namely, LOVE argues that an increase in LOVE’s episodic rate and the presence of a new

distributor for Step-Up season 3, constitutes an entirely new agreement, thereby extinguishing LOVE’s

requirement to pay TGA commissions for terms previously negotiated in the Series Agreement.

There was no legal authority provided in the record to support the argument that the Amended

Series Agreement was a new agreement nor authority provided to support LOVE’s contention that the

renegotiated Amended Series Agreement somehow extinguishes an existing obligation to pay commissions

for services previously rendered during the relationship. Consequently, we decline to conclude in this

instance what is a renegotiation and what facts may or may not extinguish TGA’s contractual right to

commission terms originally negotiated for in the Series Agreement. We, therefore, expressly render no

opinion on this issue.

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TAC-52727 Determination of Controversy

(2) Awarded commissions in favor of TGA and against Respondents, LANSTON FAIZON

SANTISIMA p/k/a “FAIZON LOVE”, and ASSEMBLY ROBOT INC., a California Corporation

in an amount equal to ten percent (10%) of the gross compensation earned or received by

Respondents from Season 3 of Step-Up for 10 episodes in the amount of $33,075 ($3,307.50 x 10);

(3) Awarded commissions in favor of TGA and against Respondents, LANSTON FAIZON

SANTISIMA p/k/a “FAIZON LOVE”, and ASSEMBLY ROBOT INC., a California Corporation

in an amount equal to ten percent (10%) of the gross compensation earned or received by

Respondents from Seasons 4-7 of Step-Up in an amount not to exceed the financial terms

negotiated for in the May 23, 2017 Series Agreement;

(4) Shall be provided with a written accounting with respect to all monies or other

consideration received by or on behalf of LOVE in connection with the May 23, 2017 Series

Agreement;

(5) Shall be provided a quarterly accounting thereafter; and

(6) Awarded interest calculated at ten percent (10%) per annum.

Dated: July 27, 2021

Respectfully submitted,

By:

DAVID L. GURLEY

Attorney for the California State

Labor Commissioner

ADOPTED AS THE DETERMINATION OF THE LABOR COMMISSIONER

Dated: July 26, 2021 By: _________________________________

LILIA GARCIA-BROWER

California State Labor Commissioner

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TAC-52727 Determination of Controversy

PROOF OF SERVICE

(Code of Civil Procedure § 1013A(3))

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

)

) S.S.

)

I, Lindsey Lara, declare and state as follows:

I am employed in the State of California, County of Los Angeles. I am over the age of

eighteen years old and not a party to the within action; my business address is: 300 Oceangate,

Suite 850, Long Beach, CA 90802.

On July 27, 2021, I served the foregoing document described as: DETERMINATION OF

CONTROVERSY, on all interested parties in this action by placing a true copy thereof enclosed

in a sealed envelope addressed as follows:

Joseph P. Costa, Esq.;

[email protected]

COSTALAW

17383 Sunset Blvd., Ste. A350

Pacific Palisades, CA 90272

Attorney for Petitioner

Sergio Bent, Esq.;

[email protected]

Bent Caryl & Kroll, LLP

6300 Wilshire Blvd., Ste. 1415

Los Angeles, CA 90048

Attorney for Respondent

□ (BY E-MAIL SERVICE) I caused such document(s) to be delivered electronically via

e-mail to the e-mail address of the addressee(s) set forth above.

□ (BY CERTIFIED MAIL) I am readily familiar with the business practice for collection

and processing of correspondence for mailing with the United States Postal Service. This

correspondence shall be deposited with fully prepaid postage thereon for certified mail with

the United States Postal Service this same day in the ordinary course of business at our

office address in Long Beach, California. Service made pursuant to this paragraph, upon

motion of a party served, shall be presumed invalid if the postal cancellation date of postage

meter date on the envelope is more than one day after the date of deposit for mailing

contained in this affidavit.

□ (STATE) I declare under penalty of perjury, under the laws of the State of

California that the above is true and correct.

Executed this 27th day of July 2021, at Long Beach, California.

________________________________

Lindsey Lara

Declarant