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Grosso v. Miramax Film Corp., California Court of Appeal

The California Court of Appeal affirmed summary judgment for defendant movie producers and screenwriters in implied-in-fact contract claim by a plaintiff involving his script “The Shell Game” and the Miramax film “Rounders”. The court held that plaintiff’s expectations of payment were not sufficient to show an implied-in-fact agreement – there was no evidence that the defendants accepted the plaintiff’s ideas with an understanding that he would be paid if his ideas were used.

The plaintiff mailed his script to Gotham Entertainment Group in 1996 because a screenwriter’s guide suggested that Gotham accepted unsolicited scripts. During this time, Gotham had a first look deal with Miramax by which it was obligated to submit to Miramax any property in which it obtained an interest. The plaintiff received no reply from Gotham or Miramax, and there were no other communications between the plaintiff and Gotham or the plaintiff and Miramax. A producer at Gotham did not recall receiving or reading plaintiff’s screenplay and Gotham did not submit the plaintiff’s screenplay to Miramax pursuant to its first look deal with Miramax.

Miramax released the movie “Rounders” in 1998, and the plaintiff filed suit against Miramax and Spanky Pictures in 1999. A federal district court granted summary judgment to the defendants on plaintiff’s claim for copyright infringement, but the Ninth Circuit held that the plaintiff had sufficiently alleged a state law claim for breach of implied contract. See Grosso v. Miramax Film Corp., 383 F.3d 965 (9th Cir. 2004).

The plaintiff subsequently filed an amended complaint in state court for breach of implied contract. The plaintiff argued that he submitted his script with a reasonable expectation, understood by the defendants, that he would be paid if the script, or any part of it, was used. California courts have held that a plaintiff can prevail on an implied-in-fact contract claim when a person has clearly conditioned the disclosure of his ideas upon an obligation to pay, and the person receiving the idea, with knowledge of the duty to pay, has voluntarily accepted the idea and uses the idea. However, California courts have also held that “[t]he law will not imply a promise to pay for an idea from the mere facts that the idea has been conveyed, is valuable, and has been used for profit; this is true even though the conveyance has been made with the hope or expectation that some obligation will ensue.” Desny v. Wilder, 46 Cal. 2d 715, 738-739 (Cal. 1956).

The court in this case rejected the plaintiff’s argument that there was an implied-in-fact contract. The court noted that Gotham and the “Rounders” screenwriters had no contact with the plaintiff; that a producer at Gotham had no recollection of receiving or reading the plaintiff’s screenplay; that Gotham never acquired an interest in the plaintiff’s screenplay and never submitted it to Miramax or anyone else; and Miramax’s database contained no evidence that the plaintiff’s screenplay had been submitted to it.

The court also noted that there was no evidence that the plaintiff conditioned his disclosure on any obligation to pay for his ideas if used. “There is no evidence Gotham or any defendant accepted plaintiff’s script with knowledge it was conditionally offered. . . . Plaintiff simply mailed his script to Gotham. Plaintiff’s expectation of payment does not establish an implied agreement to do so.” The court also ruled that, because there was no evidence of an implied-in-fact agreement, it did not need to consider the plaintiff’s argument that Gotham was acting as Miramax’s agent and that he had an implied-in-fact agreement with Miramax.

The court also rejected the plaintiff’s argument that Gotham invited the public to submit screenplays because a screenwriter’s guide included an unidentified quote that said, “We produce only feature films. We need big action scripts. We have a deal with Miramax films on our productions. Call us.” The court said this language could not reasonably be inferred to mean that the writer’s guide “was a solicitation by Gotham accompanied by a promise to compensate.”