Arbitrator rules against Michael Ovitz

Cathy Schulman claimed wrongful termination

An arbitrator has ruled in favor of producer Cathy Schulman in her ongoing legal battle with Michael Ovitz and Studio Canal, according to sources close to the case.

Schulman was president of Ovitz's film company, a joint venture between his Artists Production Group and Studio Canal, for two years before resigning in January 2002.

Soon after, the two companies accused her of breaching a binding settlement agreement and claimed she attempted to harm Ovitz's company.

The producer, who won a best picture Oscar for "Crash," sued the two companies that October, claiming wrongful termination. Schulman claimed Ovitz fired her for disclosing that APG was allegedly stealing from Studio Canal's parent Vivendi by using personnel records and resources not related to their joint venture.

The case was sent to arbitration. There, arbitrator Campbell Lucas ruled against Schulman, ordering her to pay a $3.6 million judgment to APG and Studio Canal.

A Los Angeles Superior Court judge, however, dismissed the judgment because Lucas had not disclosed he had previously been hired as a rep to arbitrate an unrelated case for Ovitz's attorneys.

The case worked through the appeals court system until July 2007, when a three-justice appellate panel ruled in favor of Schulman awarding her more than $150,000 in attorneys fees and ordering the case back to arbitration.

Though the arbitration proceedings are confidential, a source close to the case said a new arbitrator ruled this week in Schulman's favor, awarding her $300,000 in attorneys fees and costs.

Schulman and her attorney Mark Geragos declined to comment.

Ovitz's attorney, Andrew Pauly, said in an e-mail, "The matter is still pending before the arbitrator and subject to a confidentiality agreement."