June 03, 2014 2:36pm PT by Eriq Gardner
'Godzilla' Studio Looks to Throw Out Producers' Fraud Claim
Godzilla looks to be a hit, amassing about $375 million in worldwide box office since being released nearly three weeks ago. But the more money it makes, the larger the stakes of a lawsuit that pits Legendary Pictures against Dan Lin, Roy Lee and Doug Davison -- producers who were dumped from the project.
The three say they were responsible for bringing the Godzilla project to Legendary amid a rights bidding war and that the studio orally agreed to a $25,000 developmental fee, fixed compensation of $1.3 million and 3 percent of the first-dollar gross receipts of the film. The three also are seeking punitive damages "to make an example of Legendary so that it and no other studio will in the future treat their producers in this outrageous manner."
Now that it's been determined that the dispute won't be resolved in arbitration, Legendary's lawyers are attempting to defeat the lawsuit. The studio has just delivered a demurrer motion that aims to cripple the producers' fraud claims.
The Godzilla lawsuit is being closely followed because of the industry custom toward including producers who generate material for studios. In its motion, Legendary lightly knocks the efforts of Lin, Lee and Davison, saying that in 2009, it was vying with "numerous other film producers" to acquire Godzilla rights from Toho Co.
Lin and Lee allege they contacted the studio in April 2009, helped the studio acquire the rights and were assured by Legendary's chief creative executive Jon Jashni in an email that "you and your partners will be well-treated throughout."
Legendary notes that the terms of the oral producer agreement allegedly happened "just as" the studio finalized its agreement to acquire Godzilla rights. But the studio, represented by attorneys at Kinsella Weitzman, doubts there is any supported case for fraud.
Lin, Lee and Davison weren't removed from the film until late 2012 and early 2013, nearly three years after the Godzilla rights were secured and the producers allegedly made their oral deals. If the theory is that Jashni told the producers they would be well-treated to fraudulently induce them to assist Legendary in obtaining Godzilla rights, Legendary wants to know why it wasn't until after the oral agreement that Jashni supposedly "concocted a plan" to remove them. "Of course, if Legendary and Jashni's Machiavellian plan were not hatched until after they made promises," says the studio. "That is not fraud."
According to the original lawsuit from Legendary, the studio eventually determined the producing team did little to justify being included on the project. "There can be no inference of fraud when Legendary's claimed failure to perform did not occur until almost three years after the promises at issue were made, and when [Lin, Lee and Davison] were involved in the Film up until then."
As for Jashni's "well-treated" email -- which could be potentially damaging evidence if ever presented to a jury -- Legendary says it can't be used. "In disputes such as this, whether a Hollywood film producer has been 'well-treated' is overly subjective, it is a matter of opinion, and it cannot serve as a basis for a promissory fraud claim," states Legendary's motion. "A jury would have no rational basis for concluding whether [Lin, Lee and Davison] were 'well-treated.' Permitting a fraud claim to proceed on such a nebulous and indefinable representation would open the floodgates to promissory fraud claims in an industry known for differing -- and often clashing -- opinions on quality, contribution, and appreciation."
Larry Stein, attorney for the producers, says the "e-mail is just proof that they were trying to seduce these guys," and that discovery will reveal how Legendary "never had any intention" of living up to its promise of giving them first-dollar gross and credit. He believes he's got enough circumstantial evidence concerning the studio's later excuses to advance the claim and pry into such things as Legendary's communication with Warner Bros. at the time of the Godzilla deal-making.