Cinema Law: The Importance of Finalizing Contracts

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Q: A screenwriter and I signed a non-disclosure/non-circumvent agreement in late 2007 with the intention to make a movie together, myself serving as producer and bringing $6 million for the budget.

I found an overseas investor, the writer got paid WGA scale ($125,000 plus 14 percent) and as soon as the writer signed the deal with the investor, they conspired to leave me out and started production. But as the writer—a first-time writer-director—was so incompetent, the investor pulled his money out after only one-and-a-half weeks of shooting.

In the meantime, they left me hanging with no compensation. I had an old attorney friend write a demand letter, but they still ignored me, even after I told them I wouldn’t be serving as producer. At that point I was simply asking for a finder’s fee. Yet still nothing, and since I didn’t get compensated, I’m unable to file a complaint at the moment.

Suggestions?

A: Being squeezed out is an all-too-common problem which proves the importance of finalizing contracts before you do the work.

In your case, depending on the terms of your agreement, you may have a claim against the screenwriter for breach of contract. (I’m assuming from your use of the term “non-circumvent agreement” that the writer agreed not to cut you out of any deal for the film.) It is unclear from your question whether your attorney friend sent a demand letter to the screenwriter or just the investor. If you have not made a claim against the screenwriter, you may want to do so.

Be careful in making any announcements that you will not serve as producer, since such statements can be used as an excuse for not paying you. Under California law, another party’s breach excuses your obligation to perform. This legal tenet applies to both sides. Thus, if part of your deal was that you would produce, the writer or investor can claim that you refused to perform as an excuse to not pay you. By the same token, their prior refusal to pay may excuse your obligation to perform.

Unfortunately, there is no easy way to seek redress and it is likely that you will have to file a lawsuit to recover. Ask your attorney friend if he/she can recommend a contingent-fee lawyer who has experience in entertainment matters. If your friend does not have a recommendation, the Beverly Hills Bar Association (www.bhba.org) has a lawyer referral service that may be of help.

Good luck.

Patricia Millett is a Partner at Kinsella Weitzman Iser Kump & Aldisert, a high-profile, L.A.-based entertainment litigation firm, and specializes in commercial and entertainment litigation. She has successfully represented studios, record companies, real estate developers, producers and artists in disputes involving copyrights, rights of publicity, unfair competition, business torts and contractual disputes. In the areas of motion pictures and television, Ms. Millett has advised and litigated cases on behalf of writers, directors, personal managers and motion picture studios.

The answers to legal questions provided by the lawyers of Kinsella Weitzman Iser Kump & Aldisert, LLP (“KWIKA”) are for general education and information purposes only, and are not legal advice or legal opinions. The information provided in the articles is not intended to create a lawyer-client relationship between KWIKA and you. The opinions expressed in the postings are the opinions of the authors and do not reflect the opinions of KWIKA, its employees or agents.

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