Lisa Kudrow has been ordered to pay her former manager Scott Howard $1.6 million in residuals by a jury in Santa Monica, Calif., on Wednesday, Feb. 26.

Kudrow Sued For Residual Commission From 'Friends'

Howard acted as Kudrow’s manager for 16 years, starting in 1991, before Kudrow earned her star-making role as Phoebe in Friends. After Kudrow fired Howard in 2007, Howard sued Kudrow in 2008 for residual earnings, claiming that as her former manager, he is entitled to five percent of her earnings for any jobs she booked while they worked together. The lawsuit has been long and hard for both parties, after first being ruled in Kudrow’s favor and then overturned in appeals, and many industry insiders are paying close attention to the case, as it could set an industry precedent for dealings between manager and client, which are less regulated than the business relationship between agent and client. Clients are not required to pay their managers post-termination commissions as they are with agents, but it is still a widely accepted practice.

Howard maintains that he and Kudrow entered into a verbal agreement in 1991 that Kudrow would continue to pay him residual earnings even after they no longer worked together. Kurdrow, however, says they never had any such agreement and, in fact, had agreed that she would not have to pay him commission past the first round of residuals.

Scott Howard And Lisa Kudrow Testify

In court, Howard admitted in his testimony that he and Kudrow had never discussed the details of post-termination commission. Furthermore, Howard also admitted to being on the sidelines during Kudrow’s contract negotiations while on Friends and during her projects on the side and says he does not believe he was ever underpaid during his working relationship with Kudrow. In the 16 years that they worked together, Howard made over $11 million in commissions, despite his percentage being cut in 2004 from 10 to five percent.

“I felt like I didn’t really need Scott anymore. I didn’t want to fire him as I didn’t think it would be fair. A lot of people were firing their managers and told me I was being an idiot for not doing so. I think I wanted him to know that having a manager was unnecessary but I was going to keep him anyway – I just wanted a gesture,” Kudrow testified, explaining that she cut Howard’s commission because she felt it was unfair that he should get a higher percentage than her agents.

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Most likely it was testimony from expert witness and veteran Hollywood agent, Martin Bauer, that tipped the scales in Howard’s favor. Bauer, who had been barred from testifying in the initial court case in a decision that was then appealed, testified that it was unheard of for a client to terminate all commissions after ending the professional relationship, saying, “I would never make that deal. The only consequence of a termination is on future projects.”

Kudrow To Appeal Decision

In a 10-2 decision, the jury ruled that Howard should receive $1.6 million for “past and future economic losses." The verdict could have been much worse for Kudrow, as some outlets reported that Kudrow could have to pay Howard up to $8 million. As one of the stars of Friends, Kudrow made over $1 million an episode in the show’s tenth season. Gerald Sauer, Kudrow’s attorney, released a statement declaring Kudrow’s intention to appeal the decision.

“The jury’s verdict is merely one step in the legal process. This case ultimately will be resolved at the appellate level. Ms. Kudrow has faith in the judicial system, and she believes that the eventual outcome of this contractual dispute will be in her favor,” reads the statement.

Howard’s attorney, Mark Baute, also released a statement, calling Kudrow an “unsophisticated actress” and emphasizing his confidence that the verdict will remain the same after an appeal.

“What generally happens now with unsophisticated actress clients is they overpay for filing a frivolous appeal that has no chance for success. The verdict is rock solid, and we look forward to collecting 10 percent, $16,000 a month, in post-judgment interest while their frivolous appeal is pending. We will collect that interest for two years, which is how long it will take for the Court of Appeal to affirm this jury’s righteous verdict,” said Baute.

Howard told Inside Edition that he was more than satisfied by the jury’s verdict, saying, “I feel gratified. It was our agreement and I live up to my agreement, and I expect others to live up to theirs as well.”

– Olivia Truffaut-Wong

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