A New York Supreme Court judge has dismissed most of the claims in a lawsuit filed by The Peter Lampack Agency against his former client Martha Grimes and her publisher, Penguin Group. The ruling in the suit, Peter Lampack Agency., Inc. v. Martha Grimes, et al, could stand as a legal touchstone supporting authors' fiduciary rights when it comes to the author-agent relationship.
In the suit, which Lampack filed in November 2009, the agent claimed Grimes and Penguin were in breach of contract as well as breach of fiduciary duty. According to court documents, Grimes, who writes literary and commercial fiction, retained Lampack as her agent in 1996. Lampack remained her agent for 12 years, a period of time in which she made more than $12 million from the sale of her books (both locally, and through international rights deals). In 2007, Grimes left Lampack and hired a new agent.
The crux of the case revolves around the interpretation of the “option clause,” which is the de facto option agents often give to publishers who buy an author’s work—they grant the house the option to get first crack at the author’s next work. In this case, Penguin exercised its option from a 2005 contract in 2009. The house signed Grimes to a book deal in 2005 and, in the contract for that deal, the publisher was granted a 30-day exclusive on the author’s next work. That option was exercised in 2009, when Grimes’s next manuscript was ready—at that point Grimes had a new agent who sent the work, a novel called The Black Cat, to Penguin.
Lampack claimed that, since he was Grimes’s agent in 2005 when the option clause was initially issued on the work that was to become The Black Cat, he retained financial rights to proceeds from that book. As the court document notes: “PLA alleges the agreement for The Black Cat arose out of the Option on Next Work clause and that Grimes violated the terms of the 2005 Penguin/Viking-Penguin Agreement by refusing to account PLA and refusing to pay PLA the sums due for The Black Cat.” But the court found that under the "commission provision" Lampack was entitled only to proceeds from the sale of her literary works, and didn't have an interest in the literary works themsevles, making it possible for Grimes to revoke Lampack's "agency" which she did in May 2007, thereby removing any obligation for Grimes to pay Lampback for future works. In addition, the court agreed withh Grimes' argument that she does not owe Lampack a fiduciary duty, noting that claims made by Lampack that the contract placed a fiduciary duty on Grimes "{are} unsupported by case law and the general principles of agency law that the obligations that a principal owes and agent are not fiduciary."
Lampack has made a motion to reargue the case.
