Weatherly

In this appeal, we reject the argument that an unexercised contractual right to conduct an audit necessarily demonstrates a lack of diligence for purposes of the delayed discovery doctrine. We reverse the award of summary judgment, which the trial court based on a contractual limitations period. We also reverse an order of the trial court sustaining, without leave to amend, a demurrer to Weatherly’s cause of action for breach of the implied covenant of good faith and fair dealing.

FACTUAL BACKGROUND

The Parties

Universal-PolyGram International Publishing, Inc. (UPIP) describes itself as a worldwide music publishing company. Universal Music Publishing Group (UMPG), the named defendant and respondent, describes itself as “a fictitious ‘umbrella’ name for a group of affiliated companies engaged in the business of music publishing, including Universal-PolyGram International Publishing, Inc.”

Plaintiff and appellant, James D. Weatherly is a songwriter, who continues to reap the financial benefits of his songs through royalties paid by either UPIP or UMPG. The royalty checks are sent to Gursey, Schneider & Co., where Weatherly’s accountant, Stanley Schneider, is employed…