I have had to take bed and sofa privileges away from Leo and Penny Lane since their tussle. It is widely regarded as an "alpha" position to be on the furniture. There are some great free articles by Suzanne Clothier on her website. http://www.flyingdogpress.com/articles.html

Unfortuately the one about the multi dog household in being edited and I couldn't access it yesterday.

Good Luck - I'm sure you will make it all work out. Bailey and James are both adorable.