12:27pm PT by Ashley Cullins
'Days of Our Lives' Profits Lawsuit Against Sony Mostly Shot Down by Court
Sony Pictures Television has canceled several claims from the producers of Days of Our Lives, and will face a significantly trimmed lineup of allegations moving forward.
Corday Productions in February sued Sony claiming it isn't trying hard enough to distribute the long-running series, is miscalculating profits and is deflating the licensing fee to NBC — all in the interest of promoting its “wholly-owned daytime drama, The Young and the Restless.”
Retired federal judge Gary Feess, who is handling the matter as a judicial referee, largely sided with Sony and granted the studio's demurrer on several claims.
Feess found Corday's breach of fiduciary duty claim fails because the relationship between the producer and distributor is a commercial relationship not a fiduciary relationship, and isn't a joint venture.
Feess also sustained without leave to amend Sony's demurrer to certain alleged breaches of contract. Corday claimed Sony refused to negotiate more favorable terms after the series expanded to one-hour episodes, which the distributor notes happened four decades ago, and claimed it was forced to pay for production overages, which Sony says a 2009 contract amendment made clear was Corday's responsibility. Feess axed both alleged breaches from the complaint.
Sony also beat Corday's claim for unfair competition because the relevant statute "is not designed to remedy private disputes between private businesses" but rather to quell "business practices that threaten to deceive the public." (Read the full complaint below.)
Sony's demurrer to the fraud and concealment claims were sustained with leave to amend, with a skeptical Feess giving Corday one more shot. He found Corday doesn't allege it was deceived by false statements or engaged in detrimental conduct based on them and doesn't adequately describe what information was concealed, who was responsible for concealing it and how the concealment caused damage.
"At the hearing, Corday’s counsel indicated that it could plead fraud with greater particularity," writes Feess. "While that seems unlikely, given the nature of the relationship between the parties, the timing of the alleged misrepresentations, and the unlikelihood that Corday can ever plead reliance, Corday will be given another chance to plead this claim."
It wasn't a total victory for Sony, though, as a few of Corday's claims did survive this round. Feess found Corday has alleged a reasonable interpretation of their agreement with respect to its claims that Sony breached its obligation to adequately market the series and to share marketing costs.The claim for breach of the covenant of good faith and fair dealing will also move forward, with Feess finding that Corday's allegations are more than a mere regurgitation of the breach of contract claim.
Feess found it is premature to decide at this stage whether an accounting should be ordered and whether declaratory relief may be appropriate.