Entertainment & Sports
Jul. 20, 2002
Independent Movie Maker Wins $30 Million
LOS ANGELES - A Los Angeles arbitrator has ordered movie company Village Roadshow Pictures Inc. to pay $30.5 million to two independent movie producers for failing to co-produce their low-budget motion pictures.
The arbitrator found that Village Roadshow Pictures, which produced such films as "Ocean's Eleven," "The Matrix" and "Miss Congeniality," had committed fraud in failing to live up to the terms of a 1996 settlement agreement with the independent producers, Lance Hool and Charles Meeker. Hool v. Village Roadshow Pictures Inc., BC199951 (L.A. Super. Ct., filed Oct. 30, 1998).
Under the settlement agreement, which resolved an earlier 1994 lawsuit, Village Roadshow was supposed to produce at least two movies with Hool and Meeker. The budget for each was to be at least $6 million. Hool and Meeker would pitch projects to Village Roadshow, and if the company rejected all of their projects, it would provide two movie scripts for Hool and Meeker to produce.
But after turning down Hool and Meeker's projects, Village Roadshow never provided them with alternative movies to make, according to the arbitrator's decision.
And in 1998, Village Roadshow sent a letter to the two producers telling them that it had made a production deal with Warner Brothers and was no longer in the business of producing "low-budget" films like the ones set forth in the settlement agreement, according to the decision.
With Warner Brothers, Village Roadshow went on to make big-ticket blockbusters like "Ocean's 11."
Village Roadshow offered to pay Hool and Meeker producer fees totaling $650,000 for the two pictures that never were made. Hool and Meeker rejected the offer and filed a second lawsuit against Village Roadshow in October 1998.
In making the fraud finding, arbitrator George E. Marshall Jr. said that he thought that Gregory Coote, Village Roadshow's chief executive officer, who signed the 1996 agreement, knew at the time that the company was negotiating the Warner Brothers deal and had no intention of making lower-budget movies like the ones Hool and Meeker wanted to produce.
"The arbitrator believes Coote was aware of the discussions and of VRL's plans to make big budget pictures and that VRP would not have pictures in development to which they could assign plaintiffs," Marshall wrote in his statement of decision.
"I expected a victory because I thought the facts were on our side and the law was on our side," said Patrick Cathcart, counsel for Hool and Meeker at Hancock Rothert & Bunshoft. "The agreement was for the production of pictures, and they didn't permit us to produce a picture. It was not a pay-or-play agreement, under which they would either produce or simply be paid a small producer's fee."
"Our next step is to confirm the award in the Superior Court action and then proceed in that action against the parent company, Village Roadshow Limited," Cathcart said.
Village Roadshow Limited, an Australian company, was not part of the arbitration but was added to the producers' Los Angeles Superior Court suit in 2000.
The subsidiary was represented by Samuel Pryor at Alschuler Grossman Stein & Kahan, who referred calls to Marc Marmaro of Jeffer Mangels Butler & Marmaro.
"We obviously disagree with the award, and we're looking at all options, and we will take all steps to attempt to have the award vacated," Marmaro said.
Village Roadshow Limited managing director Graham Burke released a statement calling the award "incomprehensible" and "illogical."
"Obviously, we endorse VRP USA's total opposition to the claim," Burke said.
The first lawsuit Hool and Meeker filed against Village Roadshow, which resulted in the 1996 settlement, charged the company with misappropriating one of their movie projects and causing them to lose a five-year distribution deal with Orion. Silver Lion Films v. Flock, SCO33012 (L.A. Super. Ct., filed Oct. 4, 1994).
Katherine Gaidos
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