Litigation
Aug. 13, 2002
Disney Owes $14.8 Million From 'Home Improvement'
In just 10 days of trial and two days of jury deliberations, plaintiffs' attorneys Larry R. Feldman and Joel N. Klevens of Santa Monica's Fogel, Feldman, Ostrov, Ringler & Klevens won a $14.8 million verdict from the Walt Disney Co. The verdict was to make up for five seasons of commissions for the hit television show "Home Improvement" for which their client, the Agency for the Performing Arts Inc., was underpaid.
In just 10 days of trial and two days of jury deliberations, plaintiffs' attorneys Larry R. Feldman and Joel N. Klevens of Santa Monica's Fogel, Feldman, Ostrov, Ringler & Klevens won a $14.8 million verdict from the Walt Disney Co. The verdict was to make up for five seasons of commissions for the hit television show "Home Improvement" for which their client, the Agency for the Performing Arts Inc., was underpaid.
On July 24, the jury voted 11-1 in favor of the agency. Agency for the Performing Arts Inc. v. The Walt Disney Co., BC176829 (L.A. Super. Ct., verdict July 24, 2002).
The talent agency represented Matt Williams, creator of the popular television series "Home Improvement," which starred actor Tim Allen and for several seasons featured a young Pamela Anderson Lee. It ran for eight years on ABC, from 1991 to 1999.
According to Feldman, Disney TV agreed to pay a package commission to the agency based on the "base license fee" that Disney received from the ABC Television Network.
Feldman and Klevens contended that the term "base license fee" meant that the agency was entitled to commission on all license fees that the network paid to Disney, excluding costs like bonuses for a show's stars.
"I called Disney people to testify, and ABC people and other agents, to show it had a meaning consistent with our definition," Feldman says. "For good measure I hired an expert - the former president of MGM Television and New World Television - to testify the same. I guess it worked."
For the show's third season through its eighth, ABC was paying license fees that started at $750,000 an episode and ultimately reached $3 million an episode for the seventh and eighth seasons, at the height of the show's popularity.
However, Disney TV, the agency alleged, continued paying a commission based on the original license fee of $410,000 per episode and did not account for rising costs at "Home Improvement" or the success of the show.
Feldman calls the case the "second-hardest case I ever tried."
"I was very concerned during trial until I cross-examined," he says, "and I could tell then that my case did much better, while theirs fell apart."
Disney offered $5 million to settle the case, but Feldman and Klevens say they had demanded $7.1 million and were not prepared to settle for less.
"There was a second lawsuit pending between the same parties, and Disney wanted us to settle both cases with the $5 million they offered," Feldman says. "I wouldn't go for $5 million for our case alone - $7 million was the least I would do."
Diana Greene Gordon, a sole practitioner in Santa Monica, represents the agency in the second suit.
Attorneys Peter E. Moll of Howrey, Simon, Arnold & White's Washington, D.C., headquarters and Charles H. Samel from the firm's Century City office represented Disney in the case but referred calls to Disney's Burbank headquarters.
Disney plans to appeal the verdict, according to Disney spokeswoman Michelle Bergman, but has not yet announced who will serve as appellate counsel.
Disney did not own ABC in 1991 when the deal for commission on the show originally was struck. It acquired the network when it bought ABC in 1996.
Christina Landers
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