Bit Parts

Fox Film's Refusal to Return Initial Investment Isn't Breach of Co-Financing Agreement

The California Court of Appeal, Second Appellate District, decided that Twentieth Century Fox Film didn't breach a “Co-Financing/Co-Producing & First Look” agreement by refusing to return an initial payment it received from its deal partner. Smashing Pictures LLC v. Twentieth Century Fox Film Corp., B227872. Smashing Pictures and Fox entered in an agreement covering as many as 20 teen-oriented movies, including four that were already completed and owned by Fox. Though it didn't pay Fox the full $25 million it promised to invest under the agreement, Smashing Pictures sued Fox in Los Angeles Superior Court for breach of contract, seeking return of the $8,618,151 it had paid. The trial court adopted a referee's report in favor of Fox. Affirming, the court of appeal observed in an unpublished opinion that Smashing Pictures argued that because it agreed to get “no interest in the films, then Fox must refund to Smashing the money it has already paid to Fox.” An amendment to the co-financing agreement negotiated after Smashing Pictures failed to pay the full $25 million “appears to address the very question facing the parties,” the court of appeal noted. The court added that the amendment “not only allocated Smashing's partial investment among the Inventory Pictures, but gave Fox 'sole discretion' to reallocate that investment if Smashing failed to provide full funding.”

Oklahoma Federal Court Finds Fraudulent Transfer of Songwriter's Assets

The U.S. District Court for the Northern District of Oklahoma ruled that songwriter Jerry Lynn Williams fraudulently transferred assets to his wife Lorelei via a divorce decree, to avoid financial obligations to Jerry Lynn's former music administrator. Hamstein Cumberland Music Group v. Estate of Jerry Lynn Williams, 06-cv-63. District Judge Gregory K. Frizzell found against the Williams estate and Lorelei Williams under the Oklahoma Uniform Fraudulent Transfer Act. According to the district judge: “The value of the consideration received by Mr. Williams in the consent divorce from Ms. Williams was not reasonably equivalent to the value of the assets transferred to Ms. Williams in the property settlement accomplished in their consent divorce.”

Trading Card Series Is Protected Speech

The U.S. District Court for the Central District of California dismissed a complaint filed by former astronaut Buzz Aldrin over Topps' American Heritage: American Heroes Edition trading cards. Aldrin v. Topps Co. Inc., 10-09939. The American Heroes series contains a Buzz Aldrin card as well as a Gemini VII spacecraft card, which lists Aldrin as a crew member. The American Heroes packaging features a famous Apollo 11 mission moon-landing photograph of Aldrin in a helmet and white space suit. (His face isn't visible and his name on his space outfit is small in the Topps photo reproduction.) Aldrin's complaint included claims for unjust enrichment, violation of Aldrin's statutory and common law right of publicity, and for unfair business practices under California's Business and Professions Code '7200. Topps moved to dismiss under California's anti-SLAPP statute. In granting the motion, District Judge Dean D. Pregerson found that Topps was engaged in protected speech on a public issue: The district judge noted: “[T]he cards use Aldrin's name in the course of conveying information about his historically significant achievements. Furthermore, the cards propose [more than just a] commercial transaction, and are not advertisements for any product, let alone an unrelated product. ' To the extent that the 'Visor Shot' image on the cards' cardboard packaging constitutes an advertisement, it is a 'mere adjunct' to the cards themselves, and is also protected.”

Video Game Developer's Counterclaim Seeking Milestone Payment Avoids Summary Judgment

The U.S. District Court for the Northern District Illinois, Eastern Division, refused to dismiss a breach-of-contract counterclaim by a video game developer that was sued for allegedly failing to meet the full delivery obligations of its development contract with the plaintiff. Mandarin Entertainment Corp. v. Twelve SRL, 09 C 5409. Mandarin (“Detn8 Games”) had paid $254,000 to Twelve SRL under the parties' development agreement, but, citing a contractual termination right, Detn8 claimed to owe no further milestone payments. Twelve SRL counterclaimed that Detn8 Games still owed it an additional $196,000 for deliverables made through October 2008. The development agreement in part stated: “(c) Project Termination. [Detn8] may terminate this Agreement at any time if [Detn8] determines, in its good faith business judgment, that market conditions or other factors warrant cancellation of the project or otherwise make continued development of the Work economically unfeasible. (d) Consequences of Termination Prior to Acceptance of Work. ' Promptly after the effective date of any such termination: (i) [Twelve SRL] shall render a final billing to [Detn8] for only those milestones achieved and accepted through the effective date of any such termination, and [Detn8] shall pay the same in accordance '” Denying Detn8's motion for summary judgment on Twelve SRL's counterclaim, District Judge John F. Grady noted: “Detn8 submits no evidence that it actually did terminate the Agreement (or when) and no evidence supporting its contention that it 'terminated the Agreement due to Twelve's failure to make the required Deliverables.' ' Moreover, Detn8's brief fails to acknowledge or explain subsection (d).”

Fox Film's Refusal to Return Initial Investment Isn't Breach of Co-Financing Agreement

The California Court of Appeal, Second Appellate District, decided that Twentieth Century Fox Film didn't breach a “Co-Financing/Co-Producing & First Look” agreement by refusing to return an initial payment it received from its deal partner. Smashing Pictures LLC v. Twentieth Century Fox Film Corp., B227872. Smashing Pictures and Fox entered in an agreement covering as many as 20 teen-oriented movies, including four that were already completed and owned by Fox. Though it didn't pay Fox the full $25 million it promised to invest under the agreement, Smashing Pictures sued Fox in Los Angeles Superior Court for breach of contract, seeking return of the $8,618,151 it had paid. The trial court adopted a referee's report in favor of Fox. Affirming, the court of appeal observed in an unpublished opinion that Smashing Pictures argued that because it agreed to get “no interest in the films, then Fox must refund to Smashing the money it has already paid to Fox.” An amendment to the co-financing agreement negotiated after Smashing Pictures failed to pay the full $25 million “appears to address the very question facing the parties,” the court of appeal noted. The court added that the amendment “not only allocated Smashing's partial investment among the Inventory Pictures, but gave Fox 'sole discretion' to reallocate that investment if Smashing failed to provide full funding.”

Oklahoma Federal Court Finds Fraudulent Transfer of Songwriter's Assets

The U.S. District Court for the Northern District of Oklahoma ruled that songwriter Jerry Lynn Williams fraudulently transferred assets to his wife Lorelei via a divorce decree, to avoid financial obligations to Jerry Lynn's former music administrator. Hamstein Cumberland Music Group v. Estate of Jerry Lynn Williams, 06-cv-63. District Judge Gregory K. Frizzell found against the Williams estate and Lorelei Williams under the Oklahoma Uniform Fraudulent Transfer Act. According to the district judge: “The value of the consideration received by Mr. Williams in the consent divorce from Ms. Williams was not reasonably equivalent to the value of the assets transferred to Ms. Williams in the property settlement accomplished in their consent divorce.”

Trading Card Series Is Protected Speech

The U.S. District Court for the Central District of California dismissed a complaint filed by former astronaut Buzz Aldrin over Topps' American Heritage: American Heroes Edition trading cards. Aldrin v. Topps Co. Inc., 10-09939. The American Heroes series contains a Buzz Aldrin card as well as a Gemini VII spacecraft card, which lists Aldrin as a crew member. The American Heroes packaging features a famous Apollo 11 mission moon-landing photograph of Aldrin in a helmet and white space suit. (His face isn't visible and his name on his space outfit is small in the Topps photo reproduction.) Aldrin's complaint included claims for unjust enrichment, violation of Aldrin's statutory and common law right of publicity, and for unfair business practices under California's Business and Professions Code '7200. Topps moved to dismiss under California's anti-SLAPP statute. In granting the motion, District Judge Dean D. Pregerson found that Topps was engaged in protected speech on a public issue: The district judge noted: “[T]he cards use Aldrin's name in the course of conveying information about his historically significant achievements. Furthermore, the cards propose [more than just a] commercial transaction, and are not advertisements for any product, let alone an unrelated product. ' To the extent that the 'Visor Shot' image on the cards' cardboard packaging constitutes an advertisement, it is a 'mere adjunct' to the cards themselves, and is also protected.”

Video Game Developer's Counterclaim Seeking Milestone Payment Avoids Summary Judgment

The U.S. District Court for the Northern District Illinois, Eastern Division, refused to dismiss a breach-of-contract counterclaim by a video game developer that was sued for allegedly failing to meet the full delivery obligations of its development contract with the plaintiff. Mandarin Entertainment Corp. v. Twelve SRL , 09 C 5409. Mandarin (“Detn8 Games”) had paid $254,000 to Twelve SRL under the parties' development agreement, but, citing a contractual termination right, Detn8 claimed to owe no further milestone payments. Twelve SRL counterclaimed that Detn8 Games still owed it an additional $196,000 for deliverables made through October 2008. The development agreement in part stated: “(c) Project Termination. [Detn8] may terminate this Agreement at any time if [Detn8] determines, in its good faith business judgment, that market conditions or other factors warrant cancellation of the project or otherwise make continued development of the Work economically unfeasible. (d) Consequences of Termination Prior to Acceptance of Work. ' Promptly after the effective date of any such termination: (i) [Twelve SRL] shall render a final billing to [Detn8] for only those milestones achieved and accepted through the effective date of any such termination, and [Detn8] shall pay the same in accordance '” Denying Detn8's motion for summary judgment on Twelve SRL's counterclaim, District Judge John F. Grady noted: “Detn8 submits no evidence that it actually did terminate the Agreement (or when) and no evidence supporting its contention that it 'terminated the Agreement due to Twelve's failure to make the required Deliverables.' ' Moreover, Detn8's brief fails to acknowledge or explain subsection (d).”