Foxcroft Productions v. Universal City Studios ( 2022 )

Filed 4/26/22 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
FOXCROFT PRODUCTIONS, B303161
INC., et al.,
Los Angeles County
Plaintiffs and Appellants, Super. Ct. No. BC683206
v. ORDER MODIFYING
OPINION AND DENYING
UNIVERSAL CITY STUDIOS, PETITION FOR
LLC, REHEARING
Defendant and Appellant. [No change in Judgment]
THE COURT:
IT IS ORDERED the opinion in the above-entitled matter
filed on March 30, 2022, be modified in three ways:
1. On page 16, in the first full paragraph, the sentence “As
Hirsch agreed, episodic photoplays are episodes” shall be
replaced with:
As Hirsch agreed, this meant episodes for a series.
2. On page 19, at the end of section II.B and before the
beginning of section II.C, the following two paragraphs
shall be added:
For the first time on appeal, the writers
raise three new arguments for why the court
should not have granted a new trial. First, they
argue Universal could not deduct standard fees
when it distributed Columbo episodes through
foreign syndication, re-runs, home video, and
other distribution means because these methods
exploit subsidiary rights rather than
photoplays. Second, they claim Universal cannot
deduct standard fees for first-run Columbo
episodes distributed as a “series.” Third, they
assert it is unconscionable to allow Universal to
deduct its distribution fees.
The writers forfeited these arguments by
failing to raise them in the trial court. As to their
first and second new arguments, the writers say
they “consistently emphasized” the difference
between photoplays and “subsidiary rights in the
series,” but that is not the same as stating an
argument. The writers’ appellate briefing made
no attempt to establish they raised the third
argument at trial. The three theories are
new. We decline to consider them.
3. On page 25, after the final sentence, which ends with the
words, “which are now moot,” the following sentence shall
be added:
As the writers stated in their opening brief, “If the
new trial order is affirmed, appeal of other aspects
of the judgment will await entry of judgment after
retrial.”
There is no change in the judgment.
The petition for rehearing is denied.
2
____________________________________________________________
GRIMES, Acting P. J. STRATTON, J. WILEY, J.
3
Filed 3/30/22 (unmodified opn.)
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
FOXCROFT PRODUCTIONS, B303161
INC., et al.,
Los Angeles County
Plaintiffs and Appellants, Super. Ct. No. BC683206
v.
UNIVERSAL CITY STUDIOS
LLC,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Richard J. Burdge, Jr. and David S.
Cunningham III, Judges. Reversed in part and affirmed in part.
Burkhalter Kessler Clement & George, Alton G.
Burkhalter, Daniel J. Kessler, Keith E. Butler; Greines, Martin,
Stein & Richland, Robert A. Olson and Alana H. Rotter for
Plaintiffs and Appellants.
O’Melveny & Myers, Daniel M. Petrocelli, Timothy B.
Heafner; Hueston Hennigan, Robert N. Klieger and Rajan S.
Trehan for Defendant and Appellant.
____________________
We must define a key contract word: “photoplays.” This
word includes television episodes of Columbo, says the studio that
made this long-running television show. The creators of the
Columbo character disagree. They say the word photoplays has
many meanings and is ambiguous—but it cannot mean what the
studio says. The studio, however, is right: photoplays includes
episodes. That resolves the core of this contractual dispute.
The court held a trial without defining photoplays for
jurors, who found the studio breached its contract about
Columbo. After this verdict, however, the court came to agree
with the studio: defining the contract word was an issue for the
court and not the jury, and a photoplay meant “any video recorded
program,” which included episodes of Columbo. The court
granted the studio’s motion for a new trial but denied its motion
for judgment notwithstanding the verdict.
These rulings were right. The interpretive task was for the
court, not the jury. The court’s interpretation of photoplays was
correct, as was its order for a new trial. The trial court also
properly refused to give the studio the judgment outright.
The pretrial summary adjudication of a fraud claim was,
however, in error. We reverse this ruling.
I
Events began in the 1960s, when two writers entered a
decades-long relationship with Universal City Studios, LLC. The
relationship fell into litigation in 2017, when these writers sued
Universal, alleging the studio owed them money from a 1971
contract. The facts span half a century.
2
A
We divide this long story into three little chapters. First
we summarize Columbo’s origin. Next we recount the 1971
contract at issue. Then we sketch later events.
1
William Link and Richard Levinson invented the character
of a detective named Columbo. Foxcroft Productions, Inc. is
Link’s company. Fairmount Productions, Inc. is Levinson’s
company. In their work here as writers and producers, Link and
Levinson were a team. For simplicity, we sometimes refer to this
team, or their companies, as “the writers.”
In 1962, the team’s stage play about Columbo toured in 56
cities.
In 1967, Link and Levinson licensed the television and
movie rights to their play to Universal. They also sold Universal
the rights to the Columbo character. Link and Levinson
remained involved with Columbo, however, through several
agreements with Universal. Link and Levinson agreed, for fixed
compensation, to write and to executive produce a television
movie based on their play.
In 1970, a different writer wrote the script for a second
Columbo television movie that served as a pilot. NBC picked up
the show for a television series.
2
A 1971 contract is the linchpin of this case. Link and
Levinson entered this contract with Universal about the right to
produce and distribute their work for up to three years. This
arrangement applied both to their work on Columbo and to their
other projects.
3
Marvin Moss, an agent from a major talent agency, led
negotiations for Link and Levinson. Attorney Barry Hirsch, who
had worked in entertainment law since approximately the early
1960s, also represented them.
The 1971 negotiations culminated in a 17-page contract.
The contract has two parts: a 15-page typed body (the
Memorandum) and a two-page printed attachment (the Rider).
When we use the word “contract,” we are referring to the whole
deal: the Memorandum and the Rider together. We excerpt
these two parts in turn.
a
The Memorandum is typed on Universal letterhead.
Executives at Universal negotiated the Memorandum’s terms
with the writers’ representatives, Moss and Hirsch. A Universal
typist then put the Memorandum on paper.
The Memorandum is not a form contract. Its terms are
personalized to the particulars of the ongoing relationship
between Universal and the team of Link and Levinson.
The Memorandum is long, organized, and detailed, but
contains no section devoted to definitions. It uses the words
photoplay or photoplays more than two dozen times. Sometimes
it uses this noun alone and unmodified: photoplay. Other times
it modifies the noun in five ways: television photoplays,
anthological photoplays, episodic photoplays, pilot photoplay, and
feature-length photoplay.
The Memorandum’s paragraphs display structural logic.
We tour them, pausing where appropriate.
The first paragraph specifies a guaranteed annual payment
to the writers. The second paragraph lists their writing and
producing duties. The third paragraph sets dollar sums of “ ‘per
4
assignment’ compensations” for an array of specified possible jobs
involving executive producing, producing, and writing. This
paragraph has subsections, sub-subsections and so forth.
Covering 11 pages, it is the Memorandum’s longest section. The
guaranteed annual payment subsumes the per assignment
compensation unless the latter exceeds the former, in which case
Universal would pay the writers the greater sum.
The fourth and fifth paragraphs spell out other payments
Universal would make to the writers: script consultant fees,
contractual royalties, sequel royalties, and residuals. For the
most part, these payments would be in addition to the
guaranteed annual payment. These sums are not at issue here.
The sixth paragraph introduces the topic of this case: net
profits. This provision grants the writers a share of net profits
under certain conditions. “The computation of net profits shall be
as per the attached [Rider].” The italics are ours.
b
The Rider is attached to the Memorandum. This two-page
printed form sets out a general formula for calculating and
dividing net profits between Universal and the writers.
The Rider devotes more than half of its text to definitions.
Examples of its nine defined terms are Gross Receipts,
Distribution Expenses, and Production Costs. Photoplay is not a
defined term.
The Rider uses the singular or plural version of the word
photoplay more than 40 times. Most uses are unmodified:
photoplay. The exceptions are references to feature-length
television photoplays and pilot photoplays. There are no
references to anthological photoplays, episodic photoplays, or
other modified uses of the word photoplays.
5
After the definitions, the Rider discusses accountings and
payments. This section requires Universal to provide periodic
accounting statements. Accounting statements would not be
required, however, during periods when the writers were not
entitled to any payments.
For this appeal, the Rider’s crucial provision is its
paragraph C, which authorizes Universal to act as the distributor
of “the Photoplays.” This paragraph allows Universal to treat its
distribution fees as expenses that reduce net profits. Thus, the
larger Universal’s distribution fees, the smaller the net profits
Universal would share with the writers.
Paragraph C includes a cap on the size of Universal’s
distribution fees that is significant in this case. We emphasize
the key words: “such fees and charges shall not exceed those
charged by [Universal] according to its then existing standard
practices, applicable to photoplays owned, financed or distributed
by [Universal], and in all other matters affecting gross receipts,
distribution expenses, and production costs [Universal] shall
adhere to the same practices and procedures according to which it
normally conducts its business at the time in question with
respect to photoplays owned, financed or distributed by
[Universal].”
3
Columbo was a hit. Universal’s trial counsel called it
“incredibly successful.” Gross receipts for Columbo totaled about
$600 million. NBC broadcast Columbo from 1971 to 1978. Link
and Levinson produced the first season. ABC broadcast a second
cycle of the show from about 1989 to 2003.
Universal financed and paid for the production of both
cycles of Columbo. That is, Universal did the work of making the
6
show, including hiring and paying writers, actors, directors,
camera operators, lighting and sound crews, wardrobe teams,
editors, makeup artists, set designers, and the other personnel.
Universal found the filming locations, supplied studios,
equipment, post-production work, and so on.
Universal also distributed the show. Distribution is the
process of finding licensees and negotiating contracts to license
programs. Universal negotiated agreements with television
networks to air the original broadcast and to license the right to
exhibit Columbo nationally and internationally. When Universal
distributed programs itself, it charged distribution fees as a
percentage of gross receipts. Universal said its distribution fees
totaled about $160 million.
Before the second cycle began, the parties believed the first
cycle of Columbo was not in net profits. In 1988, Link and
Levinson negotiated an amendment to the 1971 contract to
preclude Universal from offsetting losses from the first cycle
against potential profits from the second cycle. The amendment
also modified the definition of net profits to specify how Universal
would account for home video receipts.
According to Universal, it did not send accounting
statements to the writers because it did not believe the show was
in net profits.
In 2013, Link asked for an accounting and an audit of
Universal’s books.
Universal contends it was allowed to cross-collateralize
losses from the second cycle against profits from the first cycle,
but it elected not to do so. According to Universal, this meant the
first cycle of Columbo was in a net profits position.
7
In November 2016 and January 2017, Universal sent
accounting statements and checks of over $2.3 million each to
Foxcroft and Fairmount for their portions of net profits.
Universal later sent statements for the years 2016 and 2017
along with checks that totaled over $200,000 each to Foxcroft and
Fairmount for their portion of net profits in 2016 and 2017.
B
In November 2017, Foxcroft and Fairmount sued
Universal. The writers alleged Universal breached the 1971
contract. The main theory of their complaint was Universal owed
the writers accounting statements and net profit payments, but
Universal had not given the writers the statements and
payments they deserved.
The writers also alleged Universal committed fraud by
entering the 1971 contract and by not sending accounting
statements. They alleged but later dismissed other causes of
action.
In September 2018, Universal moved for summary
judgment based on the statute of limitations. The court granted
summary adjudication of the fraud claim. The court ruled the
writers had suspicions that required them to investigate their
concerns on a timely basis, which they had not done, according to
the court’s analysis. The court denied Universal’s statute of
limitations argument as to the contract claim, which was partly
based on the writers’ challenge to the accuracy of a 2016
accounting statement.
Trial proceeded in three phases: a jury trial with a special
verdict, a bench trial to decide remaining contract issues, and an
accounting referee panel to determine damages.
8
Shortly before trial, the case was assigned to a new judge.
The new judge held a hearing to determine which contract
interpretation issues should go to the jury. The Rider allowed
Universal, when it distributes “photoplays,” to retain distribution
fees according to its standard practice. The writers contended
photoplays could mean many different things, they needed
extrinsic evidence to interpret it, and the jury should interpret
the word. Universal said photoplays in the Rider had a single
meaning that included episodes of Columbo. Universal asked the
court to interpret the 1971 contract and the word photoplays as
matters of law.
The court said it would decide later whether to allow the
jury to make a special verdict finding about the meaning of
photoplays.
The five-day jury trial was in February and March 2019.
The main trial issues were whether Universal could deduct
distribution fees and whether the writers’ contract claims were
within the statute of limitations.
Concerning distribution fees, the writers contended the
word photoplays was ambiguous and the jury should construe it
against Universal, meaning Universal breached the contract by
deducting those fees from the studio’s net profits. The writers
also argued Universal could not subtract any distribution fees
because it failed to negotiate these fees, failed to attach a
distribution fee schedule, and did not prove the fees it took were
its standard practice in 1971.
Among the trial witnesses were Hirsch, who was Link and
Levinson’s lawyer in 1971, and Arnold Shane, who had worked
for Universal from 1966 through 1990. Shane did not negotiate
the 1971 contract but the contract named Shane as a recipient of
9
a carbon copy of that document. The jury also heard from Link,
from Levinson’s daughter, and from an accountant for the
writers. Universal’s person most knowledgeable about certain
topics was witness Milinda McNeely. McNeely is an attorney
who did not begin at Universal until 2015 but who had
researched old Universal files concerning this case.
By the time of trial, Levinson and the agent, Moss, had
died.
We summarize some trial testimony.
Hirsch testified the words “episodic photoplays” for a series
in the Memorandum meant television episodes for a series. He
also said there are no standard terms for a profit participation
deal with a studio. “Everything’s always negotiable.” He would
negotiate distribution fees in every agreement, “if I can.”
McNeely testified about a schedule of distribution fees that
was Exhibit 9 at trial. This Exhibit 9 is important in this appeal,
so we describe it.
Exhibit 9 is a schedule. This one-page typed document
begins with the words, “Distribution charges shall be the
following percentage of gross receipts.” The schedule then lists
six categories of exhibitions, ranging from “First National
Exhibition” to “Foreign Exhibition,” with assigned percentages
ranging from 10 percent to 50 percent. Exhibit 9 thus lists by
percentages how Universal would calculate its distribution fees.
Universal contended Exhibit 9 was its standard
distribution fee schedule for 1971. Universal’s 1971 contract with
Link and Levinson did not, however, attach Exhibit 9 or any
other distribution fee schedule.
McNeely testified Universal appended Exhibit 9 to some
1971 profit participation deals but not to others. The writers
10
elicited McNeely’s deposition testimony that there were “quite a
few” other contracts where Universal omitted a schedule like
Exhibit 9. McNeely could not explain why some contracts
appended Exhibit 9 but others did not. The writers argued that
this evidence showed Universal in 1971 did not have a standard
distribution fee.
The writers also elicited McNeely’s deposition testimony
that Exhibit 9’s schedule bore no relationship to actual costs or
expenses incurred by Universal.
Shane, the retired Universal employee, said Universal
indeed did have a standard distribution fee practice in 1971. He
recited figures mirroring Exhibit 9.
Before the court submitted the case to the jury, Universal
again asked the court to decide the distribution fee issue rather
than send it to the jury. Universal contended this interpretive
question was purely legal, with no conflicting evidence about the
negotiation, drafting, or intent of the parties.
The court denied this request.
The writers argued to the jury that the word photoplays did
not include episodes of Columbo, and that Universal breached the
contract because Universal had had no standard distribution fees
in 1971. On both points, Universal argued the contrary.
The jury returned special verdicts for the writers. Jurors
concluded the 1971 contract did not allow Universal to deduct a
distribution fee. The verdict form had other questions related to
distribution fees. One of the questions was Question 4, which
asked jurors to determine whether the Rider allowed Universal to
deduct fees in the percentages described by Exhibit 9. The form’s
instructions told the jury to skip the other distribution fee
questions, including Question 4, if it found Universal was not
11
allowed to take its distribution fees. Accordingly, the jury
skipped these questions.
On the statute of limitations, the jury found in the writers’
favor.
Phase two was a bench trial to resolve remaining issues.
The court defined the word photoplays. It said the word was
“intended to apply to any video recorded program” for which the
writers are entitled to profit participations under the 1971
contract, “which includes individual episodes of Columbo.”
The court explained, “I am absolutely convinced that
there’s no ambiguity as to what photo plays are in [the Rider]. . . .
[¶] It’s very clear that [the Rider] was attached to that
agreement with the understanding that it would apply to
‘Columbo,’ and/or anything else that [the writers] produced for
Universal during that period of time. So there may have been a
pilot project. There may have been a movie. And it would have
applied to all of those things. [¶] Which is why [the Rider] isn’t
limited to just one photo play. It’s designed to cover anything
that might be produced by [the writers].”
We pause here to reiterate. The trial court after trial did
what Universal had been urging it to do before trial: it defined
photoplay to mean any video recorded program, including
episodes of Columbo.
The court also ruled the 1988 amendment was based on a
mutual mistake of fact and the writers were entitled to rescind it.
In phase three, the court appointed a panel of accounting
referees to calculate the writers’ damages. Using the panel’s
recommendation, the court entered a judgment of over $70
million for the writers.
12
Universal moved for judgment notwithstanding the verdict
as to both of the jury’s findings. In the alternative, it asked for a
new trial on the distribution fee issue. It also asked the court to
vacate its decision to allow the writers to rescind the 1988
amendment.
The court denied Universal’s motion for judgment
notwithstanding the verdict but granted the motion for a new
trial on distribution fees.
The court vacated its rescission of the 1988 amendment.
The new trial would determine the propriety of distribution fees,
and the court said about rescission that “we’ll cross that bridge
when we get there.”
The court held the word photoplays included episodes of
Columbo. The court explained, “unfortunately, I think I’m going
to have to say it was my mistake. I should have instructed the
jury that photoplay was intended to include the episodes of
Columbo in the agreement.” The court noted the writers’ theory
about the meaning of photoplay was a major part of their
argument about distribution fees and it likely affected the jury’s
decision.
The court ruled Universal had preserved its argument
about the meaning of photoplays. It likewise determined there
was no extrinsic evidence about the word.
The court declined to grant judgment notwithstanding the
verdict. As to the distribution fee issue, the court reasoned the
jury’s finding could have rested on an independent ground. The
court cited the writers’ theory that Universal could not take
distribution fees because the parties did not negotiate the exact
terms of these fees.
Both sides appealed.
13
II
We analyze this case in six steps. First we validate the
trial court’s definition of “photoplays.” Second, we show why that
ruling meant the trial court was right to order a new trial. Third,
we demonstrate why the trial court properly denied Universal’s
motion for judgment notwithstanding the verdict. Thus we
affirm the orders denying this motion and granting a new trial.
Fourth, we overturn summary adjudication of the writers’ fraud
claim. Fifth, we affirm the trial court’s decision to vacate its
ruling about rescission. Sixth, we note other issues that now are
moot and that we do not reach.
A
The trial court correctly interpreted the word photoplays to
include episodes. In this case of textual interpretation, the trial
court properly interpreted “photoplays” to mean “any video
recorded program,” including Columbo episodes.
Universal did not forfeit the “photoplays” issue. The
writers attempt to frame this issue as a special verdict form
problem that Universal forfeited. The trial court correctly found,
however, the photoplay issue to be an issue of instructional error
that Universal repeatedly raised.
We independently review contract interpretation when
extrinsic evidence is not in conflict. (Gilkyson v. Disney
Enterprises, Inc. (2021) 66 Cal.App.5th 900, 915.) We also
independently review issues of law.
When interpreting any text, including contracts, the vital
thing for lawyers and courts is to pore over the writing. To
discern the parties’ intent, we must read their document, line by
line, over and over. The foundation for valid textual
interpretation is the text. (RMR Equipment Rental, Inc. v.
14
Residential Fund 1347, LLC (2021) 65 Cal.App.5th 383, 395.)
The text is the beginning and the end of our inquiry on this
question, for the trial court found, and the parties agree, there is
no useful or conflicting extrinsic evidence about the meaning of
the word photoplays. The people who negotiated the 1971
contract do not recall the process or have passed away.
This detailed 1971 contract takes care to define many
terms expressly. Yet it does not define the word it uses many
dozens of times: photoplay. This suggests the parties shared an
understanding of the word that eliminated the need for an
express definition. The problem is to recover that shared
understanding from the contract’s usage.
The trial court solved this problem. Its interpretation of
the contract is sound.
The trial court defined photoplay as “any video recorded
program.” That makes sense of every use of this word in the
contract. Thus, a “television photoplay” is a video program
shown on television. A “pilot photoplay” is a video program used
as a pilot. And so on.
This definition eliminates ambiguity from the contract. It
makes the contract into a coherent and logical document. That
fact is powerful textual support for the trial court’s definition,
because the parties obviously toiled to state the meeting of their
minds. Finding a way to make sense of their efforts honors their
labor and their intention. That is the goal of textual
interpretation in contract law: to discover and effectuate the
parties’ intent.
The text offers two further validations.
First, the Memorandum states Columbo “shall be
considered a series” and also refers to “all photoplays of the
15
series.” This usage logically means “photoplays” must include
episodes, for no one in this appeal suggests how the Columbo
series can be broken down other than by episode. The writers do
not engage this “all photoplays of the series” language in their
briefing. Universal stresses these words. The writers make no
reply.
Second, the Memorandum lists types of services Link and
Levinson agreed to perform. One service was writing “episodic
photoplays for series.” As Hirsch agreed, episodic photoplays are
episodes. Hirsch was the lawyer for the writers. His testimony
on this point, however, supported Universal. The word
photoplays thus encompasses episodes of Columbo.
The writers offer no competing definition of photoplays.
Instead, they say the word photoplays is ambiguous and
therefore we must find it does not include episodes of Columbo.
Citing Rebolledo v. Tilly’s, Inc. (2014) 228 Cal.App.4th 900, 913,
the writers say ambiguities are to be construed against the
drafter.
Universal does not contest this rule about ambiguity. (Cf.
Farmers Automobile Ins. Assn. v. St. Paul Mercury Ins. Co. (7th
Cir. 2007) 482 F.3d 976, 977 (opn. of Posner, J.) [the argument for
this rule is “pretty feeble” when made by a sophisticated
commercial actor rather than an individual consumer].) Rather,
Universal accepts the rule but says it does not apply because the
contract is not ambiguous.
The writers’ argument fails because there is no ambiguity.
The Memorandum often uses the word photoplay with modifiers,
like “feature-length photoplay” to refer to a movie or “pilot
photoplay” to refer to a pilot episode. When used alone, the word
photoplay is broad and can mean each of these different terms.
16
The inclusive nature of the word shows it encompasses
many things, including episodes of Columbo. It shows the trial
court was right to define photoplay as any video recorded
program.
An example illustrates the point. Suppose an author
contracts to write books. The contract uses the words “fiction
books,” “fantasy books,” “children’s books,” and “ebooks.” A term
of the contract referring simply to “books” would be broad and
unambiguous. It would include all types of books. The same is
true for “photoplays” in the 1971 contract.
The trial court’s interpretation of “photoplays” fits case law.
In Photoplay Publishing Co. v. La Verne Publishing Co. (3d Cir.
1921) 269 F. 730, 731, the United States Court of Appeals for the
Third Circuit discussed the word’s origin. First published in
1911, “Photoplay Magazine” took its name from “a contest for a
‘new one-word name for a “moving picture show.” ’ ” (Ibid.) The
goal of the contest was “ ‘to select a name which would be
descriptive of the entertainment given in motion picture
theaters.’ ” (Ibid.) The contest judges “selected the word
‘Photoplay’ as being ‘more closely descriptive * * * than any other
of the long list submitted.’ In announcing their decision, the
judges stated that they were influenced in their selection ‘by the
necessity of adopting a term which would be easily remembered,
descriptive in character, simple, and appropriate.’ The judges
recognized in the word ‘Photoplay’ a term ‘more closely
descriptive of the entertainment given in motion picture theaters
* * * than in any other of the long list submitted.’ ” (Ibid.) The
word “denotes the reproduction of a play by means of
photography.” (Id. at p. 732.)
17
This account is from the dawn of movie history, long before
the advent of television. It dovetails with the trial court’s
definition of photoplay as any video recorded program. The fit is
perfect: it leaves no play in the joint.
The court’s definition likewise meshes with California
precedent. California courts have used “photoplay” as a generic
term synonymous with films and television episodes. (E.g., Desny
v. Wilder (1956) 46 Cal.2d 715, 724–725, 749–750 [using
“photoplay” to refer to films]; Martyn v. Leslie (1955) 137
Cal.App.2d 41, 48, 51 [referring interchangeably to “episodes”
and “television photoplays”].)
In sum, a proper grasp of this contract means the Rider
allowed Universal to take distribution fees when it distributed
episodes of Columbo.
As a final note, we observe parties to a different contract
might expressly define the word photoplay to give it a different
meaning. Private contracting allows parties to adjust their
relationship to achieve their particular goals. We have not
defined the word for all seasons.
B
The trial court was right to order a new trial. The court
granted a new trial because errors of law infected the old trial.
On an appeal from an order granting a new trial, the appellate
court will determine as a question of law whether any challenged
ruling was erroneous. Once we find that error, however, we
cannot substitute our judgment for that of the trial court on the
essentially factual question of prejudice. At that point, the issue
is not whether we would find prejudice as an original matter.
Nor is the issue whether the trial court’s explanation supported a
finding of prejudice. Rather, the sole issue is whether the order
18
granting a new trial, viewed in the light of the whole record,
constituted an abuse of discretion. (Treber v. Superior Court
(1968) 68 Cal.2d 128, 132.)
The new trial order was sound because the jury verdict
relied on two legal errors. First, the court allowed the jury to
interpret the contract, which was an error the trial court later
and forthrightly acknowledged and, after the trial, sought to
rectify. Second, the jury may have incorrectly interpreted the
word photoplays to exclude episodes of Columbo. The trial court
rejected that reading of the contract as untenable. On
independent review, we affirm the trial court’s legal analysis on
these points.
Nor was there an abuse of discretion. The trial court had a
sound grasp of the case. As an edifice, the verdict rested on a
faulty foundation. The trial court found the fault, fixed it, and
was fully entitled to rebuild anew.
C
The trial court correctly denied Universal’s motion for
judgment notwithstanding the verdict.
On appeal from the denial of a motion for judgment
notwithstanding the verdict, we determine if any substantial
evidence, whether contradicted or not, supports the jury’s verdict.
(Sweatman v. Dept. of Veterans Affairs (2001) 25 Cal.4th 62, 68.)
If there is, we must affirm the denial of the motion. If the appeal
challenging the denial of the motion raises purely legal questions,
however, our review is independent. (Wolf v. Walt Disney
Pictures & Television (2008) 162 Cal.App.4th 1107, 1138.)
We proceed under a deferential standard because
Universal’s appeal is factual, not legal. Universal says no
evidence supports any of the writers’ alternative justifications.
19
This is incorrect. We see this by examining just one of the
writers’ alternate theories.
One of the writers’ theories was that the contract did not
allow Universal to deduct distribution fees in the percentages
described in Exhibit 9, which we already have described. We also
already have decided the contract gave Universal the right to
deduct distribution fees. But how was Universal to calculate
these fees? The Rider said, with our emphasis, these fees “shall
not exceed those charged by [Universal] according to its then
existing standard practices . . . .” What were those? Universal
said Exhibit 9 set out its “standard practices.” The writers
disagreed, saying Exhibit 9 was not attached to their 1971
contract and Universal could not explain why, which proved
Universal had no “standard” practices.
The verdict form addressed this very issue. It asked jurors
to determine whether the Rider allowed Universal to deduct fees
in the percentages described by Exhibit 9. This was Question 4
on the verdict form.
But jurors never answered Question 4, because the form
told them to skip the question if they found the contract barred
Universal from deducting any distribution fees. The jury made
that finding, which the trial court and we have decided was
incorrect as a matter of law.
The unanswered Question 4 thus poses a crucial issue in
this appeal.
Universal’s opening brief does not explain why Universal
must prevail on Question 4 as a matter of law. This brief quotes
Question 4 but does not do the work of demolishing this issue,
which is essential to its effort to gain judgment notwithstanding
the verdict.
20
The evidence on the proper answer to Question 4 is in
conflict. Hirsch testified there were no standard terms. Shane
testified to the contrary. The jury could have believed Hirsch and
rejected Shane entirely. Resolving this conflict is a question for a
fact finder. It is not a reason to enter judgment notwithstanding
the verdict.
As an alternative attack on this same ruling, Universal
points to the statute of limitations. It says it is entitled to
outright victory because the jury was wrong to let the writers
past this statute.
There was, however, substantial evidence to back this jury
finding. We cannot overturn the trial court’s ruling on this
ground.
To review this statute of limitations issue, the jury found
the writers did not discover facts before November 14, 2013, that
caused them, or would have caused a reasonable person, to
suspect Universal had failed to pay them or to render required
accounting statements. The jury made a separate finding for
Link’s company and for Levinson’s company.
Evidence supports the jury’s finding about the statute of
limitations. We summarize it, first for Link and then for
Levinson.
There was proof of Link’s sincere trust. Link trusted
Universal to pay him if the studio owed him money. He had
worked with Universal for decades. “I had a long relationship
with them, and I knew all the big people there, and I trusted
them.” When Universal sent him a check in 2016 for Columbo,
that surprised Link. A reasonable inference was this tardy and
surprising payment suggested something had been amiss at
21
Universal for a long time, something that unsettled Link’s
longstanding trust.
There is also evidence to support the finding based on
Universal’s conduct before that payment. By not sending
accounting statements, Universal’s omission represented to the
writers that the show was not profitable. It would be logical to
infer the writers understood the absence of accounting
statements to mean Universal did not owe them money. In the
end, however, Universal admitted it did owe them money, and
sent checks for millions.
Universal also made direct representations. Link asked
someone in finance at Universal why there were no profits. That
person told Link, “I guess that there wasn’t any money,” and “He
didn’t have an answer.” Link did not recall the date of that
conversation. Alan Levine, an attorney who worked with Hirsch
and represented Link and Levinson some time after the 1971
deal, said Shane told him in 1988 that the first cycle of Columbo
was a long way from net profit. Levine interpreted this to mean
the show was in a “deep hole.” Being told there was not any
money and the first cycle was in a deep hole would tend to make
Link and Levinson believe Universal did not owe them money.
Universal relies on Link’s 2018 statement that he “form[ed]
a suspicion” he was “owed monies.” He formed this suspicion “a
long time ago,” “maybe” at least 20 years ago.
This brief testimony is vague. In the context of this record,
the jury had a sufficient factual basis for its finding.
Now we turn to Levinson. Universal’s argument about
Levinson is weaker than for Link. This evidence comes from
Levinson’s daughter, Christine Levinson. Before she received a
22
check from Universal in January 2017, she had “no idea” whether
Columbo was profitable. This is insubstantial.
Universal ineffectively points to other testimony. Link told
Christine Levinson about the potential of a lawsuit sometime
before 2013, but this does not mean she shared the concern. The
record is silent about the content of the conversation. Christine
Levinson also testified Link was the “king of complainers” and he
complained about everything. The jury could have concluded she
did not take Link seriously.
We make inferences in favor of the judgment. To infer
Christine Levinson shared Link’s suspicions on this basis would
be an improper inference against the jury’s finding.
Finally, Universal points to statements Christine Levinson
made about conversations with her mother, but the source of
these statements is deposition testimony that was not included at
trial. If we were to consider these statements, they were about
the mother expressing frustration about a lack of profits from
Columbo in spite of the show playing for many years.
Frustration is not suspicion. Employees for instance may be
frustrated by low salaries, but not suspect their employer has
breached their employment contract. The writers also offered
evidence that a show can be successful in a popular sense but not
be profitable due to high production costs. A show’s popular
success, alone, would not necessarily make a reasonable person
suspicious in this context. This does not overcome the other
evidence that supports the jury’s findings.
In short, the trial court correctly denied Universal’s motion
for judgment notwithstanding the verdict.
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D
We reverse summary adjudication of the fraud claim
because disputed fact questions plagued the statute of limitations
issue.
In finding the statute of limitations barred the writers’
fraud claim, the court relied on three facts: Link had vague
suspicions; Link told Christine Levinson about the possibility of
suing Universal; and Christine Levinson’s mother’s frustration.
This evidence was contested, as we just have shown. Link’s
supposed statement of suspicion was brief and vague. Other
evidence gave a competing picture: Link had a long relationship
with Universal, he trusted Universal would pay him, Universal
represented there were no profits by failing to send accounting
statements, and Universal employees said there was no money
and the first run would never be profitable. The court said
Christine Levinson “shared Link’s belief,” but this was at best an
inference from the testimony and not something Levinson said.
Disputed fact issues precluded summary adjudication of the
fraud claim.
E
The court properly vacated its rescission of the 1988
amendment. Rescission is an equitable remedy. (Cameron v.
Evans Securities Corp. (1931) 119 Cal.App. 164, 172.) We review
an order granting rescission for an abuse of discretion. (Orozco v.
WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 401.) The parties
do not offer authority on the standard of review for vacating
rescission, nor have we found any. Given the court’s considerable
discretion in granting rescission, we apply a similarly deferential
standard for vacating rescission.
24
The writers say the court should not have vacated the
rescission, but their argument wrongly presupposes the new trial
order was incorrect. This is the writers’ only argument attacking
the order vacating rescission. The trial court based its rescission
order on the jury’s distribution fee finding, which the trial court
abrogated. The court did not abuse its discretion by vacating the
rescission order.
On the other hand, Universal asks us to rule the rescission
itself was improper. This issue is not ripe. The propriety of
rescission turns on Universal’s right to take distribution fees, and
if so, the amount of the fees. A new trial will lend focus to these
issues. The trial court then may revisit the question of equitable
remedies in due course. (Cf. Pacific Legal Foundation v.
California Coastal Com. (1982) 33 Cal.3d 158, 170–172 [a
controversy is not ripe until the facts have sufficiently congealed
to permit an intelligent and useful decision to be made].)
In sum, the court did not abuse its discretion.
F
We do not reach issues about damages and a trial
continuance, which are now moot.
25
DISPOSITION
We affirm the orders granting a new trial and denying
judgment notwithstanding the verdict. We reverse the summary
adjudication of the fraud cause of action. All parties shall bear
their own costs on appeal.
WILEY, J.
We concur:
GRIMES, Acting P. J.
STRATTON, J.
26