December 29, 2011 5:03pm PT by Eriq Gardner
Paramount Asks Judge to Toss John Singleton's Fraud Claim in 'Hustle and Flow' Lawsuit
Paramount is looking to trim a $20 million lawsuit brought by director John Singleton for allegedly reneging on a promise to back two films as part of a 2005 deal to acquire the breakout hit Hustle and Flow.
In response to Singleton's lawsuit in October, the studio filed a demurrer earlier this month that aims to show that even if the facts as laid out in the plaintiff's complaint are true, it won't support the allegation that any fraud was committed.
Hustle and Flow was a breakout hit at the 2005 Sundance Film Festival. Singleton claims that he passed on a higher advance offered by another studio to accept Paramount's $9 million offer because the studio promised to “put” two additional features as long as their budgets didn’t exceed $3.5 million each and his producing fee wasn’t higher than 7.5 percent.
The director says that Paramount reneged on that deal by concocting new conditions on the "puts." In his lawsuit, Singleton said he needed to make sure he was not taken advantage of and that his rights were protected.
In response, Paramount points out alleged flaws in the lawsuit prepared by Singleton's attorney, Marty Singer:
"Plaintiffs' fraud claim fails because it is not supported by a single fact -- much less one with the required level of specificity for fraud claims -- showing that Paramount or MTV harbored an intention not to perform the put provision at the time of the HAF Agreement's formation."
Paramount says that Singleton can't simply rely upon the alleged contractual non-performance to show the studio intended to deceive him, and as such, Paramount requests that a Los Angeles Superior Court judge dismiss the fraud claim.
Similarly, Paramount also wants to get rid of a rescission claim because it partly relies upon the same fraud theory and partly because its contract with Singleton's company, Crunk Pictures, limits remedies for a breach of contract to monetary damages. (In the lawsuit, Singleton wants money from the exploitation of Hustle and Flow plus a reversion of rights in the picture.)
Finally, Paramount is also seeking to dismiss a claim for unjust enrichment because Paramount says there is no cause of action for this claim in California.
If a judge accepts these arguments, that would leave the dispute turning on a question of how to interpret the main contract between the parties.
From the papers and public comments about the dispute, it appears that Paramount is prepared to argue that Singleton never produced and delivered two pictures by a Jan. 22, 2010 deadline.
But Singleton suggests that development work on those films was already underway and that there wasn't any express contractual obligations that the work be completed by that date. According to the original complaint:
"When plaintiffs attempted to exercise their right to 'put' the two pictures to Paramount, Paramount for the first time informed Plaintiffs that...the Put Pictures had to be fully completed films rather than films in production, and that the Put Pictures had to be scripted full-length theatrical or direct-to-video motion pictures."
Absent the fraud claim, the lawsuit becomes a "What came first -- the chicken or the egg" controversy. Did Singleton have to complete the two films to get Paramount's distribution guarantee? Or did Paramount have to guarantee distribution to get Singleton to complete the two films?