Judge Trims Producer's Lawsuit Over David O. Russell Film

2012-12 FEA Tutor David Bergstein H

Ron Tutor and David Bergstein were once highflying business partners. They also were close friends. Neither is the case any longer.

In the annals of Hollywood, few film productions have become as notorious as Accidental Love, a political satire based on a screenplay by former Vice President Al Gore's daughter Kristen and directed by David O. Russell until he disowned it. The political satire starring Jake Gyllenhaal, Jessica Biel and other top names is currently credited to "Stephen Greene." 

All the way back in 2008, the film then titled Nailed was experiencing hiccups. A report in Politico that year discussed "inconvenient funding problems," and while the troubled film was finally completed and quietly released last year through Millennium Entertainment, Julius Nasso, a producer who lent money for the movie, is currently in court claiming fraud and misrepresentations against film investor David Bergstein and others.

On Monday, Nasso — Steven Seagal's former business partner — was handed a setback in his lawsuit.

According to Nasso's complaint filed last November in California federal court, he was approached in 2012 about investing in the movie. He was allegedly told that Accidental Love was almost complete, although Russell resigned after being paid $6 million. (Russell's reps tell THR that this $6 million figure is way off. They say he was paid $1.5 million for it.) Nasso says it was represented that a final bridge loan of $600,000 was required to film an opening scene that would finish the movie.

The lawsuit further claims that Nasso was promised that his investment would be secured by the film's copyright, that he would receive first monies earned from the film and there would be a theatrical release. Bergstein is alleged to have encouraged his investment, and after Nasso put up the money, another individual who worked on the film named Eugene Scher is said to have expressed thanks to Nasso for "saving the film."

Later, Nasso claims that he learned that contrary to representations made to him, the film had been previously encumbered by substantial prior loans, that defendants didn't own the right to distribute the picture and that he would not be paid on a last-in-first-out basis. In 2013, the loan became due, but Nasso couldn't obtain repayment.

The defendants aimed an initial motion to dismiss at certain Nasso claims.

U.S. District Judge Dolly M. Gee rejects a fraud claim against Scher because the only allegation against him pertains to a meeting and statements after Nasso's investment was made.

For now, Bergstein also beats a breach-of-contract and breach-of-guaranty claim because he wasn't a signatory to loan agreements. Nasso has been asserting that Bergstein is an alter ego of the corporate shell that dealt with Nasso's loan, but the judge rules that "conclusory allegations of 'alter ego' status are insufficient to state a claim," pointing in support to the reason why author Tess Gerritsen's lawsuit against Warner Bros. over Gravity failed.

The judge also rejects a claim under California's Unfair Competition Law upon Nasso's failure to show how defendants' business practices are likely to deceive members of the public as well as throws out Nasso's claim against Bergstein and Scher for civil conspiracy. "The conclusory allegation that Defendants conspired to defraud Plaintiff is insufficient to state a claim for civil conspiracy," writes Gee.

Nasso is given opportunity to amend these claims in the next 21 days.

UPDATED: Added that Russell's reps say he was paid $1.5 million for film.