SUPERIOR COURT OF CALIFORNI COUNTY OF LOS ANGELES DEPARTMENT 72 TENTATIVE RULING ICON PRODUCTIONS, LLC, a California limited liability company, Case No.: BC670583 vs. VOLTAGE PICTURES, LLC, a California limited liability company, et al. Hearing Date: June 19, 2018 Plaintiff’s motion for summary adjudication is denied. Plaintiff Icon Productions, LLC (“Plaintiff”) moves for summary adjudication of the following issues: (1) The Deal Memo originally entered into March 12, 2015, and amended September 27, 2016, that is the subject of Plaintiff's breach of contract claim in this action imposes a duty on Defendants Voltage Productions, LLC (“Voltage”) and Christchurch Productions DAC (“Christchurch”) to conclude and execute an agreement with Farhad Safinia (“Safinia”) for his directing services; (2) The Deal Memo, originally entered into March 12, 2015, and amended September 27, 2016, that is the subject of Plaintiff's breach of contract claim in this action imposes a duty on Voltage and Christchurch to obtain Plaintiff's approval over the production budget for the picture and any changes to the screenplay and/or shooting locations; and (3) The Deal Memo originally entered into March 12, 2015, and amended September 27, 2016, that is the subject of Plaintiff's breach of contract claim in this action imposes a duty on Voltage and Christchurch to pay Plaintiff 100% of its producer fee on or before September 30, 2018, and 100% of its reimbursable out-of-pocket costs as of September 30, 2018. (Notice of Motion, pg. 1.) Plaintiff also moves for summary adjudication of the 5 COA for declaratory relief. (Notice of Motion, pg. 1.) Voltage, Christchurch, and Defendant Nicolas Chartier’s (“Chartier”) (collectively “Defendants”) 6/5/18 evidentiary objections are overruled as to Nos. 1,2, 3,4, and 10, and sustained as to Nos. 5, 6, 7, 8, 9, 11, 12, and 13. Page 1 of 12Plaintiffs 6/14/18 evidentiary objections are overruled as to Nos. 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36, 37, 38, 40, 41, 42, and 43, and sustained as to Nos. 4, 30, and 39. ‘A. Motion for Summary Adjudication — Issues of Duty Asa preliminary matter, Defendants argue Plaintiff's motion for summary adjudication is procedurally improper. (Opposition, pg. 11.) Defendants argue Plaintiff's motion should be denied because “it does not seek to completely dispose of the substantive area of contractual duty in this case” and Plaintiff “is not actually attempting to obtain rulings on issues of “duty,” but rather trying to obtain rulings on issues of liability, which is not permitted in a motion for summary adjudication.” (Opposition, pg. 12-13.) Flowever, the Court may, on a motion for summary adjudication, “rule whether a defendant owes or does not owe a duty to plaintiff without regard for the dispositive effect of such ruling on other issues in the litigation, except that that ruling must completely dispose of the issue of duty.” (See also Linden Partners v. Wilshire Linden Associates (1998) 62 Cal-App-4th 508, 522.) (See also C.C.P. §4370(f)(1)-) 1. Duty to Conclude and Execute an Agreement with Safinia (Issue No. 1 Plaintiff did not meet its burden of showing Voltage and Christchurch have a contractual duty to execute a writfen director agreement with Safinia. Plaintiff submitted evidence Voltage, Plaintiff, and TW Artist, Inc. (“TW Artist”) entered into a written agreement concerning the production of the Picture (the “Deal Memo”), (Declaration of Christianson {3; Exhibit A.) Plaintiff submitted evidence Christchurch, Voltage, Plaintiff, and TW Artist amended the Deal Memo on September 27, 2016 (the “Amendment”). (Declaration of Christianson $4; Exhibit B.) The Deal Memo provides, in pertinent part, as follows: B-1. Conditions Precedent: ...(d) full execution by Voltage (or its assignee /designee) and Farhad Safinia of a director deal memo or agreement (which shall incorporate the terms of any writing credit bonus payable to Safinia) in connection with the Picture... ee Page 2 of 12B-4. Director; Farhad Safinia is approved (with Voltage and Gibson to have approval over any replacement). Voltage will directly negotiate Safinia’s director agreement on terms suitable to Voltage. (Declaration of Christianson §3; Exhibit A.) The Amendment provides, in pertinent part, as follows: 3. Notwithstanding anything to the contrary contained in the Deal Memo, and provided that neither Voltage nor Christchurch are in material breach of the Deal Memo, as modified by this Amendment, the period to satisfy the PPC Submission Requirements shall be extended through December 1, 2016 (the “Outside Date”). + 7. Notwithstanding anything to the contrary contained in Paragraph B- 5 of the Deal Memo, and provided that neither Voltage nor Christchurch are in material breach of the Deal Memo, as modified by this Amendment, the outside date to satisfy the Conditions Precedent shall be deemed extended through and including the Outside Date. In addition, Icon acknowledges and agrees that provided that neither Voltage nor Christchurch are in material breach of the Deal Memo, as modified by this Amendment, Icon shall not be entitled to terminate the Deal Memo, as modified by this Amendment, provided that the Conditions Precedent have been satisfied waived (excluding only the obligation to acquire the rights from PPC, which may not be waived) by Voltage or Christchurch and bona fide principal photography of the Picture (e.g, the Picture is fully financed and consecutive production of the full principal photography schedule, subject to extension for events force majeure) commences on or before the Outside Date... (Declaration of Christianson $4; Exhibit B.) Plaintiff argues Voltage and Christchurch have a contractual duty to execute a written director agreement with Safinia. (Motion, pgs. 4-5.) Plaintiff contends the plain meaning of the term “execution” is that there must be a signed agreement in writing, not merely an oral contract. (Motion, pg. 5.) (See Civil Code §1625 (“The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.”).) Plaintiff also argues Page 3 of 12the Deal Memo uses the term “execution” in several other instances to refer to the signing ofa written agreement. (Motion, pg. 5.) (Declaration of Christianson 3; Exhibit A, Deal Memo 45 (“shall be satisfied no later than six (6) months from execution of this Deal Memo by Icon...”).) However, the provision of the Deal Memo at issue is, at the very least, ambiguous as to whether the agreement with Safinia had to be in writing.’ The Deal Memo requires “full execution by Voltage (or its assignee /designee) and Farhad Safinia of a director deal memo or agreement...” (Emphasis Added.) The term “execution” is not defined in the Deal Memo. The term “execution” has multiple meanings. As argued by Plaintiff, the term “execution” can mean signing an agreement in writing. However, the term “execution” can also mean performing an agreement, including an oral agreement. (See Civil Code §1689(b) (a “contract in writing may be modified by an oral agreement to the extent that the oral agreement is executed by the parties”).) (See also Keeler v. Murphy (1931) 117 Cal.App. 386, 390 (“Appellants attack the reception of this evidence and the making of findings based thereon as error, pointing to section 1698 of the Civil Code, which provides: ‘A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.’ The cases are clear under this section that an oral agreement is not executed within the meaning of the code unless it has been fully performed by both parties, (Citation] Applying this rule it is clear that any subsequent oral agreement to accept the ranch subject to the existing encumbrance was not executed within the meaning of Civil Code, section 1698, and hence evidence thereof was improperly received.”).) (Emphasis Added.) ‘Thus, the Deal Memo does not clearly impose a duty on Voltage and Christchurch to execute a written director agreement with Safinia. ' “The interpretation of a contract involves ‘a two-step process: ‘First the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine ‘ambiguity,’ ie., whether the language is ‘reasonably susceptible” to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step—interpreting the contract. [Citation.]" [Citation] The trial court’s determination of whether an ambiguity exists is a question of law, subject to independent review on appeal. {Citation] The trial court’s resolution of an ambiguity is also a question of law if no parol evidence is admitted or if the parol evidence is not in conflict, However, where the parol evidence is in conflict, the trial court’s resolution of that conflict is a question of fact and must be upheld if supported by substantial evidence. [Citation] Furthermore, ‘[wJhen two equally plausible interpretations of the language of a contract may be made ... parol evidence is admissible to aid in interpreting the agreement, thereby presenting a question of fact which precludes summary judgment if the evidence is contradictory.’ {Citation]” (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351.) Page 4 of 12The Court notes Plaintiff failed to submit admissible evidence suggesting Voltage and Christchurch did not execute an oral director agreement with Safinia and, as set forth below, Defendants submitted evidence suggesting they entered into an oral agreement with Safinia, Safinia performed (at least some) directing duties on the Picture, Safinia was paid for his work, and Safinia did not finish his work due to the demand for additional shoot days to occur in Oxford, England. Defendants submitted evidence Zev Foreman, Voltage Pictures President of Production (at the time) began negotiating with Safinia’s agent, Danny Greenberg, and lawyer, Warren Dern, in or around August 2016, regarding the specific terms of a directing agreement, as well as, a writing agreement. (Declaration of Chartier 8.) Defendants submitted evidence Foreman made an offer to Greenberg, on August 5, 2016, to pay Safinia a total of $200,000.00 for his directing services and for performing a polish on the script. (Declaration of Chartier 8; Exhibit 1.) Defendant submitted evidence Foreman followed up with Dern on September 27, 2016, inquiring about the offer and noting that shooting was set to begin on Friday, September 30, 2016. Defendants submitted evidence Dern responded on September 28, 2016, stating Safinia wanted a fee of $275,000.00. (Declaration of Chartier 8; Exhibit 2.) Defendants submitted evidence Foreman responded on the same day stating, “We are a bit late to get into that now. I’ve been very clear about what we could do and about different options. I only have 200 for him. that’s [sic] it.” (Declaration of Chartier 49; Exhibit 2.) Defendants declared Dern responded, stating “Hmmmmmf{,] Okay. We will chat on our end.” (Declaration of Chartier 49; Exhibit 2.) Defendants submitted evidence Safinia traveled to Dublin, Ireland in August 2016 to begin performing directing services and to prepare for principal photography on the Picture. (Declaration of Chartier 10.) Defendants submitted evidence principal photography on the Picture began in Ireland on September 30, 2016, with Safinia serving as the director of the Picture for 42 days, and then Safinia edited his director’s cut for eight weeks without once mentioning an issue with his compensation to Chartier or any other Voltage employees or executives. Chartier declared, “We believed we had an agreement with Safinia on his directing and writing fees.” (Declaration of Chartier $10.) Chartier also declared, as follows: “Our understanding that we had an agreement with...Safinia was further confirmed by the fact that we arranged to pay for all of...Safinia’s costs he incurred in connection with the Picture, totaling the sum of $56,816, consisting of” expenses for airfare, airport pickups, assistant/driver, accommodations, trailer, and per diem expenses. Chartier declared Safinia never indicated during principal photography Page 5 of 12,that he was refusing to conduct any work on the Picture due to differences in the amount of compensation he was to be paid. (Declaration of Chartier 11.) Defendants submitted evidence it was later agreed with Safinia’s lawyers that of the $200,000.00 total he was to be paid, Safinia would be paid the WGA. minimum for a ‘polish’ on the script, equivalent to a fee of $17,818.00. (Declaration of Chartier 12.) Defendants submitted evidence Christchurch paid the sum of $17,818.00 to Safinia for his polish fee care of his agents and, on November 21, 2016, Christchurch paid Safinia the sum of $163,963.80 through his agent, representing the amount due to him for his directing services. Chartier declared “[they] also exchanged draft long agreements with. ..Safinia’s lawyers which [they] relied upon.” (Declaration of Chartier $12, 14; Exhibits 3-6.) Defendants submitted evidence the production encountered serious problems during principal photography caused by the actions of producers Mel Gibson and Bruce Davey and director Safinia. (Declaration of Chartier 15.) Defendants submitted evidence that, near the close of shooting, Gibson, Davey, and Safinia changed their minds and demanded the production cancel a scene that had been scheduled for over four months to be shot in the Library of Trinity College in Ireland, involving two hundred extras and expensive set dressings because Gibson, Davey, and Safinia now wanted the scene shot in Oxford, England. Chartier declared these issues caused the production to extend two days past the schedule of forty shooting days and caused additional costs to the production, which was over budget by approximately $1.3 million. (Declaration of Chartier 15.) Defendants submitted evidence that, despite the fact the Picture was over budget and had gone into overtime, Gibson, Davey, and Safinia demanded additional shoot days occur in Oxford England. The additional shoot days in Oxford, England would have caused the production to have to shoot an additional five days of | overtime and would cost an additional approximately $2.5 million when the production was already over budget. (Declaration of Chartier 16.) Defendants submitted evidence Foreman, Rustam, and Chartier met with Safinia and Gibson in December 2016, to discuss finishing the Picture. Safinia and Gibson requested they shoot the “missing” Oxford scenes in January 2017. Chartier declared he informed them that Safinia should finish his director’s cut of the Picture and see what scenes were needed because the Picture had already gone into overtime in scheduling and over budget in Ireland, and the existing cut of the Picture was already two hours and forty-five minutes and still “missing” twenty minutes of scenes that would be shot in Oxford, England. Chartier declared the Picture needed to be cut down to two hours to meet the delivery requirements for Page 6 of 12the film distributors, Chartier declared he stated they should do a cut of the Picture and see what scenes were needed before doing additional costly shooting in Oxford, England. (Declaration of Chartier {]17.) Defendants submitted evidence Safinia delivered a director’s cut of the Picture on or around February 20, 2017, that was two hours and forty minutes long. Chartier declared they were asked to give Safinia more time to deliver a shorter cut of the Picture and, on or around March 10, 2017, Safinia delivered a cut of the Picture at two hours that everyone, including Davey and Gibson, agreed was not a strong cut of the Picture. Chartier declared the Picture’s editor, John Gilbert, also left to go back to his native New Zealand around this time. (Declaration of Chartier 18.) Chartier declared they, thereafter, began good faith plans and discussions to see if the missing scenes in Oxford, England could be shot at a lower cost since they were already out of budget. Chartier declared they hired two highly respected directors, in April 2017, to edit the Pictures since Safinia failed to deliver a director’s cut at its contractual length of time. Chartier declared Safinia was invited, on May 4, 2017, to work with Squyres on the Picture, but Safinia notified he would not do any further work on the Picture until the original editor, Gilbert, was reengaged as editor and a plan to shoot all scenes from Oxford was put in motion. (Declaration of Chartier $19.) Safinia declined another request to work on the editing. (Declaration of Chartier 19.) Chartier declared that, since that time, Safinia, Gibson, and Davey have attempted to pressure Voltage into shooting additional scenes in Oxford, England. Chartier declared they have engaged in good faith discussions to attempt to come toa compromise on shooting in Oxford, but their efforts have been rejected. Chartier declared Safinia, Gibson, and Davey have refused to review the current cut of the Picture or attempt to edit it down. Chartier also declared Safinia wrongfully refused to sign the agreements he negotiated with them. (Declaration of Chartier 420.) Additionally, the Court notes Defendants submitted evidence suggesting the Deal Memo contained several conditions precedent, including the one requiring ‘full execution by Voltage...and...Safinia of a director deal memo or agreement...in connection with the Picture...” that were intended for Defendants’ protection. (Declaration of Chartier 45.) Chartier declared they wanted to ensure that Plaintiff could not force them to commence production of the Picture with Page 7 of 12Safinia as director if they could not reach an agreement with Safinia, (Declaration of Chartier $5.) Based on the foregoing, Plaintiff's motion for summary adjudication of Issue No. 1 is denied. 2. Duty to Obtain Plaintiff's Approval Over the Production Budget for the id Any Changes to the Screenplay and/or Shooting Locations Issue Ni Plaintiff did not meet its burden of showing Voltage and Christchurch have a contractual duty to obtain Plaintiff's approval over the production budget for the Picture and before making any material changes to the screenplay and/or shooting locations, Plaintiffs argument is based on §§B-6 and B-19 of the Deal Memo, which state, in pertinent part, as follows: ..Voltage and Gibson shall have mutual approval over the schedule and location(s) of the Picture. ee Gibson and Icon shall have a right of mutual approval with Voltage regarding all major creative matters, elements and individuals (and their replacements) of the Picture including director, script, cast, schedules, key crew, music, locations, and the production budget for the Picture, and Gibson and Icon agree that the approval rights provided hereinabove shall be exercised in a reasonable manner so as not to frustrate, delay or otherwise interfere with Voltage’s development, production, distribution and/or exploitation of the Picture, upon the following conditions: (a) neither Gibson nor Icon are in material uncured breach of any applicable agreements on the Picture; (b) Gibson and Icon actually render and fully perform all material services required under their respective agreement(s); (c) Gibson and/or Icon being available as, when and where reasonably required for the exercise of such rights, and provided that if a specific written objection is not received from Icon or Gibson within 3 business days for material financial terms. ..then Icon’s approval thereof shall be deemed given; (d) such rights are personal to Gibson and Icon, and may not be exercised by any other person(s) or Page 8 of 12entity/entities; and (e) Voltage’s decision shall control and prevail in the event of any dispute or disagreement whatsoever (other than matters regarding material changes to the screenplay..., replacement director, Gibson in the role of JAMES MURRAY, the actor playing the role of WILLIAM MINOR, Gibson’s hait/makeup/wardrobe personnel, the schedule and production budget, and any shooting location(s) other than Romania or the U.K., in which case no party’s decisions shall prevail.)... (Declaration of Christianson 3; Exhibit A.) However, {{]B-6 and B-19 do not impose a duty on Voltage and Christchurch to obtain Plaintiff's approval under all circumstances. The Deal Memo refers to the “right of mutual approval” by Gibson and Plaintiff, but the right of mutual approval has conditions. For example, the right of mutual approval does not apply if Gibson and Plaintiff are in material uncured breach of any applicable agreements on the Picture. Plaintiff did not submit admissible evidence showing the conditions do not apply. ‘The Court notes Defendants submitted evidence suggesting Plaintiff did not exercise the right of mutual approval “in a reasonable manner so as not to frustrate, delay or otherwise interfere with Voltage’s development, production, distribution and/or exploitation of the Picture...” (Declaration of Chartier {f{15-21.) Based on the foregoing, Plaintiff's motion for summary adjudication of Issue No. 2 is denied. 3. Duty to Pay 100% of Plaintiff's Producer Fee On/Before September 30. 2018 and 100% of Plaintiff's Reimbursable Out-Of-Pocket Costs as of September 30, 2018 (Issue No. 3 Plaintiff did not meet its burden of showing Voltage and Christchurch have a duty to pay 100% of Plaintiff's producer fee and costs. Plaintiff argues {B-8 of the Deal Memo obligated Voltage and Christchurch to pay 100% of Plaintiff's producer fee and out-of-pocket costs by September 30, 2016.? ‘The Deal Memo provides, in pertinent part, as follows: Icon shall receive a producing fee equal to Two Hundred Fifty Thousand U.S. Dollars ($250,000), reducible on a dollar-for-dollar basis by the amount of any producer fee payable to Lue Besson...., in 2 {tis undisputed that principal photography began on September 30, 2016. (PRSS No. 25.) Page 9 of 12connection with the Picture to a hard floor of not less than Two Hundred Thousand U.S. Dollars ($200,000) (the “Icon Producer Fee”). The Icon Producer Fee will be paid on/before the start of principal photography. In addition to the Icon Producer Fee, Icon shall be entitled to recoup any and all actual verifiable third party out of pocket expenses in connection with the Picture from an amount equal to Sixty-Eight Thousand U.S. Dollars ($68,000)... -The balance of Icon’s producing terms shall be negotiated between Voltage and Icon in good faith within customary parameters for agreements of this type, taking into account the stature of the parties. (Declaration of Christianson 43; Exhibit A.) However, Plaintiff did not discuss the impact the Amendment had on §B-8 of the Deal Memo, specifically {13 of the Amendment, which states: Christchurch and Icon acknowledge and agree that Icon has agreed to contribute the producing fee payable to Icon for the producing services of Bruce Davey in the amount of $200,000, which shall be deemed an investment in the Picture (the “Icon Investment”). Christchurch shall pay Icon the Icon Investment from the budget of the Picture, and Icon shall contribute the Icon Investment within 7 business days from the date of payment. Provided that Icon has timely provided the Icon Investment as provided in the prior sentence, then Icon shall: (a) be paid the Icon Investment plus 15% thereon, out of the first priority deferment pool specified in the AGR definition in Exhibit A prior to the payment of AGR of the Picture, and immediately after Voltage has received its equity investment in the Picture plus 15% and (b) receive an amount equal to 1% of 100% of the Financier’s Share of AGR. The Icon Investment plus 15% there shall be paid on a pro-rata pari passu basis with the approved deferment payable to Simon Winchester of $150,000. (Declaration of Christianson {4; Exhibit B.) Moreover, {B-8 of the Deal Memo does not state a date when Plaintiff can recoup its out-of-pocket expenses. ‘The Court notes Defendants submitted evidence suggesting they paid Plaintiff 50% of its producer fee on the start of principal photography, with the remaining 50% to be paid at a later date resting on the delivery of the Picture. (Declaration of Chartier 421.) Page 10 of 12Based on the foregoing, Plaintiff's motion for summary adjudication of Issue No. 3 is denied. B. Motion for Summary Adjudication ~ Declaratory Relief COA A cause of action for declaratory relief requires the following elements: (1) person interested under a written instrument or a contract; or (2) a declaration of his or her rights or duties (a) with respect to another or (b) in respect to, in, over or upon property; and (3) an actual controversy. (C.C.P. §1060.) In the third amended complaint, Plaintiff alleged the Deal Memo gives it the right to terminate the agreement under certain circumstances, including Defendants’ failure to conclude and execute an agreement with Safinia for his directing services in connection with the Picture prior to December 1, 2016. (TAC 474.) Plaintiff alleged an actual controversy exists, as a result of Defendants’ failure to perform their obligation under the agreement, conceming whether Plaintiff can exercise its termination right and revert all rights to the Picture to Plaintiff. (TAC $75.) Plaintiff seeks a judicial declaration that it may exercise the right to terminate the Deal Memo and regain all rights in the Picture. (TAC 76.) Plaintiff failed to meet its burden of proving every element of the declaratory relief cause of action. Plaintiff did not submit admissible evidence showing the existence of an actual controversy with Defendants. Plaintiff argues the Deal Memo requires the “full execution by Voltage (or its assignee/designee) and Farhad Safinia of a director deal memo or agreement (which shall incorporate the terms of any writing credit bonus payable to Safinia) in connection with the Picture.” (Motion, pg. 7.) Plaintiff argues “this means Defendants must have executed a written director agreement with Safinia in connection with the Picture” and, Defendants’ failure to do so, gives Plaintiff the right to terminate the Deal Memo and regain all rights to the Picture. (Motion, pgs. 7-8.) However, as discussed above, the Deal Memo does not clearly impose a duty on Voltage dnd Christchurch to execute a written director agreement with Safinia. ‘Additionally, as discussed above, Plaintiff failed to submit admissible evidence suggesting Voltage and Christchurch did not execute an oral director agreement with Safinia and Defendants submitted evidence suggesting they entered into an oral agreement with Safinia, Safinia performed (at least some) directing duties on the Picture, Safinia was paid for his work, and Safinia did not Page 11 of 12finish his work due to the demand for additional shoot days to occur in Oxford, England. Based on the foregoing, Plaintiff's motion for summary adjudication of the declaratory relief cause of action is denied. C. Conclusion Plaintiff's motion for summary adjudication is denied. Dated: June 2018 Hon. Judge Ruth A. Kwan Judge of the Superior Court Page 12 of 12