You Be the Judge! Page 74

ASE: 8

You Be the Judge!

Sources

The case brie ng above contains

excerpts and direct extractions

from the sources noted below

that have been combined

with the author's own expert

legal input. The case has been

condensed and formatted from its

original content for purposes of

this workbook.
Holmes v. Lerner, 74 Cal. App. 4th

442, 88 Cal. Rptr.2d. 130 (1999).

California Court of Appeals, First

District, Division One

September 7, 1999. Opinion

written by the Honorable Justice

James J. Marchiano.

Urban Decays colors

were inspired by the

unique hues of Americas

modern edgy urban

scene.

ate the purple color Holmes had made in England. Lerner made a dif-
ferent shade of purple, and Holmes commented that it looked just like
a bruise and called it "Plague." Holmes had been reading about 16th
century England and how people with the plague developed purple
sores. She thought the color looked like the plague sores.

Lerner and Holmes decided to create names with an urban theme,

such as "bruise," "plague," "mildew," "smog," "uzi," and "oil slick." Len
Bosack heard the conversation about the urban theme and suggested
"decay." e two women liked the idea and decided that Urban Decay
was a good name for their concept. Lerner stated, " is seems like a
good thing; it's something that we both like and it isn't out there. Do
you think we should start a company?" Holmes responded, "Yes, I
think it's a great idea."

Lerner's housekeeper testi ed that she heard Lerner tell Holmes,

"It's going to be our baby, and we're going to work on it together. It
was all Pat's idea over in England, but I've got the money to make it
work." Lerner also told her housekeeper that she hoped to sell Urban
Decay to Estee Lauder for $50 million.

Neither woman had experience in cosmetics, but they began to

work on their idea immediately. Holmes and Lerner did market re-
search by going to stores, talking with people about nail polish, check-
ing what nail polishes were available, and buying samples to bring
back to discuss with each other. Using Lerner's home as a laboratory,
they experimented with nail colors, taking pictures of various color
mixing sessions. ey met with a graphic artist to create a logo, and
secured a trademark for Urban Decay. Lerner and Holmes discussed
visiting chemical companies and hiring people to handle the daily
operations of the company.

Eventually, Lerner stopped including Holmes in meetings and

business decisions of the company. Feeling edged out of the business,
Holmes confronted Lerner. Lerner claimed she was just being nice
to Holmes by including her in the Urban Decay business and denied
Holmes had any role in creating the colors, names, or concepts for
Urban Decay. Furious, Holmes sued for breach of a partnership contract.

At trial, Lerner maintained that because the two women did not

discuss sharing pro ts and losses of the business during their earliest
conversations about the business, there can be no partnership.

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