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No Implied Covenant Breach in Cussler's Rejection of Screenplays

The California Court of Appeal, Second District, ruled that best-selling novelist Clive Cussler didn't breach an implied covenant of good faith and fair dealing when he rejected a series of screenplays developed for a movie based on his novel Sahara. Cussler v. Crusader Entertainment LLC, B208738. The litigation arose out of a $20 million option agreement that allowed Crusader Entertainment to produce films based on several Cussler novels. A Los Angeles Superior Court jury turned down claims that Cussler filed against the production company over his vehement dislike of the Sahara screenplays. The jury also declined Cussler's request to obtain payment from Crusader of remaining installments under the option deal. But the jury awarded Crusader $5 million on an implied covenant claim. California law inserts an implied covenant of good faith and fair dealing into contracts. Affirming all aspects of the case but this latter issue, the Court of Appeals noted in its unpublished opinion: “The implied covenant cannot be imposed on a subject that is completely covered by the contract's express terms.” The court continued: “The bargain struck by Crusader and Cussler did not require Cussler to act reasonably or in good faith in approving screenplays. Rather, the agreement expressly gave Cussler the right to approve screenplays 'in his sole and absolute discretion.' The parties were free to grant Cussler by express terms such discretion even if such discretion would otherwise be forbidden by the implied covenant. ' We cannot rewrite the contract simply because Crusader believes, with hindsight, that using the Approved Screenplay or giving Cussler unfettered discretion to reject other screenplays was not a commercially wise endeavor.”

No Copyright Infringement Found in God of War Video Game

The U.S. District Court for the Northern District of California ruled on summary judgment that there was no substantial similarity between the plaintiffs' works and the defendants' video game God of War. Bissoon-Dath v. Sony Computer Entertainment America Inc., C 08-1235 MHP. Plaintiffs Jonathan Bissoon-Dath and Jennifer Dath's copyrights consisted of two screenplay treatments, two screenplays and an illustrated map, all depicting similar tales. As District Judge Marilyn Hall Patel observed: “Plaintiffs' works and God of War both involve a mortal human questing at the behest of a Greek god.” Judge Patel first denied the plaintiffs' motion for further discovery by emphasizing: “Notably, the requested additional depositions each pertain to the question of access. Even if access could be proved, plaintiffs' copyright infringement claim can be readily adjudicated based on the lack of substantial similarity; accordingly, it would waste the litigants' resources to allow further discovery relating to the access prong.” The district judge then concluded: “An examination of articulable similarities between the plot, themes, dialogue, mood, settings, pace, characters and sequence of events of God of War and plaintiffs' works reveals far less similarity than would be required to overcome summary judgment ' [V]irtually all of the elements comprising plaintiffs' works are stock elements that have been used in literary and artistic works for years, if not millennia.”

Second Circuit Affirms Judgment for Malmsteen Against Business Managers

The U.S. Court of Appeals for the Second Circuit affirmed a jury verdict in favor of guitarist Yngwie Malmsteen in his suit against his former business managers over income allegedly embezzled by the artist's personal manager. Malmsteen v. Berdon LLP, 09-2987. The jury found breach of contract and breach of fiduciary duty and awarded Malmsteen $450,000 on the latter claim against business managers Berdon LLP and Berdon's Michael Mitnick. The U.S. District Court for the Southern District of New York then declined to grant the Berdon defendants a judgment as a matter of law or a new trial. As they had done in the district court, the Berdon defendants argued on appeal that Malmsteen's claims were time barred under New York's three-year statute of limitations for accounting malpractice claims. (The contract and fiduciary breach claims were subject to six-year limitations periods.) But the Second Circuit explained in its unpublished opinion that business managers “need not be licensed or trained in any particular way, nor are business managers regulated by a code of conduct or disciplinary system. A business manager, then, is not a professional and may not be sued in malpractice. The breaches alleged here arise from Defendants' failure to collect and monitor Plaintiff's income, a function of a business manager rather than an accountant.” The Berdon defendants also argued that determination of the damages award had been too speculative. The appeals court noted, though: “Defendants argue that some of the money deposited into [Malmsteen former personal manager and suit co-defendant James Lewis's] account and retained by him, though admittedly from sources with whom Malmsteen had a business relationship, was attributable to clients other than Malmsteen. The defense proffered no specifics as to which or how much income in the account was attributable to these other clients, however, nor was the jury required to find Lewis credible on that score.” (Lewis escaped Malmsteen's bid for a default ruling as to him when the district court ruled that it lacked personal jurisdiction over Lewis, who has been based in Connecticut or California.)

No Implied Covenant Breach in Cussler's Rejection of Screenplays

The California Court of Appeal, Second District, ruled that best-selling novelist Clive Cussler didn't breach an implied covenant of good faith and fair dealing when he rejected a series of screenplays developed for a movie based on his novel Sahara. Cussler v. Crusader Entertainment LLC, B208738. The litigation arose out of a $20 million option agreement that allowed Crusader Entertainment to produce films based on several Cussler novels. A Los Angeles Superior Court jury turned down claims that Cussler filed against the production company over his vehement dislike of the Sahara screenplays. The jury also declined Cussler's request to obtain payment from Crusader of remaining installments under the option deal. But the jury awarded Crusader $5 million on an implied covenant claim. California law inserts an implied covenant of good faith and fair dealing into contracts. Affirming all aspects of the case but this latter issue, the Court of Appeals noted in its unpublished opinion: “The implied covenant cannot be imposed on a subject that is completely covered by the contract's express terms.” The court continued: “The bargain struck by Crusader and Cussler did not require Cussler to act reasonably or in good faith in approving screenplays. Rather, the agreement expressly gave Cussler the right to approve screenplays 'in his sole and absolute discretion.' The parties were free to grant Cussler by express terms such discretion even if such discretion would otherwise be forbidden by the implied covenant. ' We cannot rewrite the contract simply because Crusader believes, with hindsight, that using the Approved Screenplay or giving Cussler unfettered discretion to reject other screenplays was not a commercially wise endeavor.”

No Copyright Infringement Found in God of War Video Game

The U.S. District Court for the Northern District of California ruled on summary judgment that there was no substantial similarity between the plaintiffs' works and the defendants' video game God of War. Bissoon-Dath v. Sony Computer Entertainment America Inc., C 08-1235 MHP. Plaintiffs Jonathan Bissoon-Dath and Jennifer Dath's copyrights consisted of two screenplay treatments, two screenplays and an illustrated map, all depicting similar tales. As District Judge Marilyn Hall Patel observed: “Plaintiffs' works and God of War both involve a mortal human questing at the behest of a Greek god.” Judge Patel first denied the plaintiffs' motion for further discovery by emphasizing: “Notably, the requested additional depositions each pertain to the question of access. Even if access could be proved, plaintiffs' copyright infringement claim can be readily adjudicated based on the lack of substantial similarity; accordingly, it would waste the litigants' resources to allow further discovery relating to the access prong.” The district judge then concluded: “An examination of articulable similarities between the plot, themes, dialogue, mood, settings, pace, characters and sequence of events of God of War and plaintiffs' works reveals far less similarity than would be required to overcome summary judgment ' [V]irtually all of the elements comprising plaintiffs' works are stock elements that have been used in literary and artistic works for years, if not millennia.”

Second Circuit Affirms Judgment for Malmsteen Against Business Managers

The U.S. Court of Appeals for the Second Circuit affirmed a jury verdict in favor of guitarist Yngwie Malmsteen in his suit against his former business managers over income allegedly embezzled by the artist's personal manager. Malmsteen v. Berdon LLP, 09-2987. The jury found breach of contract and breach of fiduciary duty and awarded Malmsteen $450,000 on the latter claim against business managers Berdon LLP and Berdon's Michael Mitnick. The U.S. District Court for the Southern District of New York then declined to grant the Berdon defendants a judgment as a matter of law or a new trial. As they had done in the district court, the Berdon defendants argued on appeal that Malmsteen's claims were time barred under New York's three-year statute of limitations for accounting malpractice claims. (The contract and fiduciary breach claims were subject to six-year limitations periods.) But the Second Circuit explained in its unpublished opinion that business managers “need not be licensed or trained in any particular way, nor are business managers regulated by a code of conduct or disciplinary system. A business manager, then, is not a professional and may not be sued in malpractice. The breaches alleged here arise from Defendants' failure to collect and monitor Plaintiff's income, a function of a business manager rather than an accountant.” The Berdon defendants also argued that determination of the damages award had been too speculative. The appeals court noted, though: “Defendants argue that some of the money deposited into [Malmsteen former personal manager and suit co-defendant James Lewis's] account and retained by him, though admittedly from sources with whom Malmsteen had a business relationship, was attributable to clients other than Malmsteen. The defense proffered no specifics as to which or how much income in the account was attributable to these other clients, however, nor was the jury required to find Lewis credible on that score.” (Lewis escaped Malmsteen's bid for a default ruling as to him when the district court ruled that it lacked personal jurisdiction over Lewis, who has been based in Connecticut or California.)