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The looming trial between Frank Darabont and AMC over his share of profits from The Walking Dead has been narrowed by a New York appeals court.
The dispute, which is set for a trial in April 2022, began in 2013 when Darabont and CAA sued AMC claiming it had used shady accounting to short them on profits. The fight largely centers on the definition of “modified adjusted gross receipts” (MAGR), and whether a season two amendment to Darabont’s original contract redefined the MAGR calculations.
In December, Judge Joel M. Cohen dismissed Darabont’s breach of contract claim in relation to product integration revenue, finding there’s no interpretation of their agreements that would entitle him to a share of that money, but denied the rest of AMC’s motion for summary judgment. (The order replaced an April 2020 decision.)
On Tuesday, the appellate panel unanimously reversed Cohen’s decision and granted AMC’s motion, which means another of Darabont’s claims won’t move forward to trial.
“Plaintiffs’ claim that AMC breached the implied covenant of good faith and fair dealing by crafting the formula for MAGR arbitrarily, irrationally, or in bad faith was improperly asserted for the first time in opposition to defendants’ motion for summary judgment,” states the order, which is embedded below. “There are no allegations in the complaint that AMC engaged in misconduct by formulating the MAGR definition in such a manner as to deprive plaintiffs of contractual benefits. In addition, it would be prejudicial to require AMC to defend against a theory of liability asserted only after discovery had concluded.”
Further, while Cohen had found the issue of whether AMC acted arbitrarily, irrationally, or in bad faith in its MAGR definition to be a question of fact fit for trial, the appeals court disagrees, holding that “improperly seeks to impose obligations on AMC beyond the express terms of the parties’ agreement.”
Darabont’s lawyer Jerry Bernstein on Tuesday sent The Hollywood Reporter this statement in response to the decision: “All of Plaintiffs’ most significant claims for breach of contract, which carry the most significant damages, remain to be tried by jury. Today’s decision by the Appellate Division removes only relatively insignificant claims with minimal financial impact.”
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