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Film and Music Cases Result in Different Outcomes for Default Judgment Motions
Non-payment of monies is an all-too-common complaint in the entertainment industry, with frustrated plaintiffs in many cases seeking default judgments against defendants who fail to respond to lawsuits seeking payment. Two new Central District of California federal court decisions illustrate — after the judges sorted through the factors for determining whether to grant a default judgment — how consideration of the amount of money at issue resulted in different outcomes on whether to enter a default judgment.
In Molly Moon Films Ltd. (MMF) v. ARC Entertainment LLC, 2:17-cv-0929 (2019), MMF had completed its motion picture Molly Moon: The Incredible Hypnotist and secured a deal for ARC Entertainment "to license, sub-license, distribute, advertise, promote, market, and publicize the Motion Picture for theaters, home use and digitally" in the United States and Canada. ARC in return agreed to pay MMF an $80,000 advance, a share of net revenues and bonus payments for higher sales of the film.
But MMF ended up filing suit in the U.S. District Court for the Central District of California alleging that ARC and its successor-in-interest OA Investment Holdings failed to pay the promised funds. MMF's complaint charged breach of contract, breach of implied covenant of good faith and fair dealing, and unjust enrichment. OA settled with MMF; ARC didn't defend the suit. As a result, MMF filed a motion for a default judgment for $80,000 against ARC under Rule 55 of the Federal Rules of Civil Procedure, which provides the procedural requirements for obtaining a default judgment.
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