Maya Angelou’s Multi-Million Dollar Bout with Butch Lewis

Maya cardThe number one best-selling book on in this week’s New York Times best seller list is one first published in 1969: “I Know Why the Caged Bird Sings,” by Maya Angelou, the renowned poet and professor at Wake Forest University who passed away three weeks ago. Since she published that autobiography, Angelou’s acclaimed poetry has been published widely by Random House and initially reached a distinguished, though small, audience.

How that audience grew to a multi-million dollar phenomenon, and how her book is again number one, includes a fascinating story of entrepreneurship and law of general interest and especially for those interested in contract law. As a tribute to the distinguished author for literary, commercial and spiritual success, herewith an account of that saga, from my book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter.

In 1994, Butch Lewis, the former prize fighter and promoter of famous boxers such as Muhammad Ali and Joe Frazier, conceived the idea of popularizing Angelou’s poetry by including it in Hallmark greeting cards and similar media. Lewis first met Angelou in early 1994 when the scrappy fighter asked the elegant poet to take a trip to Indiana with him to visit his boxing client, Mike Tyson, in prison. During the trip, Angelou and Lewis discussed how she might expand her readership by publishing her works in greeting cards. After negotiations, the two signed an informal letter agreement on November 22, 1994.

Angelou promised to contribute poetry exclusively to Lewis and he promised to promote its publication in greeting cards. The exclusivity feature was important, since it meant Angelou could not market her poetry without Lewis and Lewis need not fear that his efforts would be undercut by a last-minute switch to a competing promoter.  Aside from exclusivity, the letter recited only basic terms, such as how they would later agree on what poetry to include, that Lewis would fund promotion, and how revenues would be shared—first to reimburse Lewis’ investment and expenses, then to split the rest equally. The letter said it would be binding until the two drew up a formal contract. Though Lewis prepared one in March 1997, it was never signed.

Lewis began marketing efforts immediately, though it took until March 1997 for Lewis and Hallmark to finalize terms—a three-year deal, covering any new poem Angelou produced during that time. In exchange, Hallmark would pay Angelou and Lewis a $50,000 advance against royalties, which would be paid at a flat 9% rate of total sales, with a guaranteed minimum of $100,000. Angelou’s greeting cards would be administered through Hallmark’s Ethnic Business Center, targeted to an African-American audience.

Lewis sent Angelou the proposed Hallmark agreement. By then, however, Angelou’s views of Lewis had curdled. For the Hallmark pitch, Lewis prepared sample cards and brought these for Angelou’s approval. Angelou found the display of caricatures of African-Americans distasteful and unreflective of her poetry’s meaning. Her impression of Lewis worsened when the two crossed paths in Las Vegas in 1997, where Angelou was appalled by Lewis’s behavior, which included punctuating his conversations by “grabbing his crotch.”

After deciding she no longer wanted to be in business with Lewis, Angelou instructed her long-time literary agent, Helen Brann, to “start putting a little cold water on the prospect of this deal with Hallmark.” Brann did so by writing to Lewis in May 1997 that Angelou could not accept the proposed Hallmark deal, citing her long relationship with her publisher, Random House. Lewis persisted, urging Angelou to sign the Hallmark deal, but her procrastination finally led him to give up his pleas in February 1998.

But Hallmark’s interest survived and the saga took a dramatic turn in June 1999. Angelou was to be in Kansas City, Missouri, location of Hallmark’s world headquarters, for a speaking engagement. At the suggestion of a close friend, Amelia Parker, Angelou had lunch with a Hallmark executive with whom Parker was acquainted. Angelou left with the impression that she could make her own deal directly with Hallmark. As a result, Angelou’s lawyer promptly wrote Lewis, notifying him that any business relationship created by the November 22, 1994, letter was over.

With Lewis out of the picture, Angelou and Hallmark negotiated directly. Within one year, Angelou and Hallmark signed a contract. It differed greatly from the deal Lewis negotiated: it would cover Angelou’s future as well as existing work and include rights to her name and likeness; Hallmark would pay an advance of $1 million against royalties paid at rates up to 9% of sales; Hallmark provided a guaranteed minimum payment of $2 million; and product marketing would target a broad general audience.

Lewis learned of this new contract by reading a Hallmark press release. He considered this a breach of contract by Angelou, violating his exclusive marketing rights, and triggered the eight-year litigation battle over whether the informal letter of November 22, 1994 created a binding contract.

Lucy, Lady Duff-Gordon

For support in the battle, Angelou and Lewis both cited a landmark opinion written by Judge Benjamin Cardozo in 1917.  That revered case involved Lucy, Lady Duff-Gordon, a fashion plate of the era, who signed an agreement with Otis Wood as a distributor. The detailed writing gave Wood exclusive rights to use and market Duff-Gordon designs. Gains would be shared equally.   However, when Duff-Gordon endorsed competing products, Wood argued that she had violated their pact. Duff-Gordon claimed the agreement was not binding because it did not spell out what duties Wood undertook and therefore lacked consideration. She also said it was too indefinite to enforce. Judge Cardozo, however, disagreed on both points.

Though the contract did not explicitly state Wood’s duties, Cardozo saw it as “instinct with an obligation” for Wood to market the brand using reasonable efforts. That implied duty, Cardozo said, provided consideration, and enabled giving meaning to otherwise indefinite terms.    Vital to this reasoning was the exclusivity feature: if Wood did not market the goods, they would not be marketed at all. In the ensuing century, Cardozo’s insight about “instinct obligations” grew into a general implied duty of good faith courts use to fill gaps in a wide range of incomplete contracts, though it is most often seen in exclusive dealing contracts.

Angelou used the Duff-Gordon case as a contrast. It featured an elaborate document suggesting it was intended to be final, warranting a modest judicial move to fill the small gaps with such notions of reasonable efforts or good faith. In contrast, she stressed, her letter agreement with Lewis was missing many essential, such as exactly which of her works would be included or when or how many she would produce. These were vital Angelou said, given that her existing contract with Random House covered much of her work.   In addition, their letter expressly contemplated a further formal document the two never signed. These terms and that statement could not be turned into a binding contract merely by importing vague gap-fillers such as reasonable efforts or good faith, Angelou said.

Lewis countered that none of the missing terms was so essential to prevent a reasonable person from seeing that the two intended a bargain, and how both parties made commitments that provided consideration. It was a small step to recognize an implied duty to market in good faith or using reasonable efforts—and Lewis clearly had done all that such concepts require.    Lewis acknowledged that the letter did not delineate what works of Angelou’s were within its scope and instead referred only vaguely to “original literary works” for promotion in greeting cards. But, Lewis argued, the letter recited that the works to be included would be mutually agreed upon. And that made the deal definite enough in scope.

Though Angelou thought that concession proved her point—that the letter only expressed an agreement to agree, not a commitment to deal—the exclusivity provision indicated an intent to form a bargain. Lewis argued that exclusive marketing contracts like these need not precisely delineate the marketer’s duties—any more than it was necessary in the Duff-Gordon case for the contract to spell out Wood’s duties.  The court in the dispute between Lewis and Angelou treated the case as a modern replay of that between Otis Wood and Lucy, Lady Duff-Gordon. Both involve an exclusive deal with one party creating brands and the other marketing them, a 50-50 financial split, and a claim that the creator went behind the marketer’s back to do a deal on her own.

The features Cardozo identified that justified implying a promise of reasonable efforts also appeared: an exclusive marketing arrangement with the creator’s payout strictly a function of the marketer’s effort. Unless the marketer exerted effort, the creator would not profit; that implies the creator wanted the marketer to exert effort. That supports an implied bargain, supplying consideration.   Any alleged gaps, then, concerning literary works or other matters, could also be resolved by implication from what the two clearly had agreed about. Lewis could not insist that Angelou write songs instead of poetry and Angelou could not insist Lewis market gibberish not verse; neither could claim more than 50% of the net proceeds.

Angelou may have honestly objected to Lewis’s mock-ups for greeting cards and behavior in Las Vegas and repented jilting her business associates at Random House. But none of that is relevant to whether she and Lewis formed a contract. Instead, these factors indicate that she came to regret the deal, which often occurs after making contracts. One purpose of contracts is to secure arrangements known to be gambles. Some work out favorably, and some do not.

In the end, the court thus indicated that Lewis and Angelou formed a binding contract, the two settled their dispute. In January 2006, Angelou agreed to pay Lewis $1 million plus 30.5% of royalties under the Hallmark deal from then onward. The Hallmark deal was remarkably lucrative. In its first five years, Hallmark generated $45 million in sales from Maya Angelou greeting cards, paying the poet more than $4 million. Lewis was entitled to share that fortune. But Angelou became rich too, earning substantial economic gain along with her well-deserved literary, artistic, and inspirational acclaim.  Win, win.

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