Audrey Lewis v. Hilltop Investment Associates
Published: Jun. 8, 1996 | Result Date: May 6, 1996 | Filing Date: Jan. 1, 1900 |Case number: BC127406 – $5,000,000
Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
Facts
On May 31, 1990, the plaintiff, Audrey Lewis, dba Lewco Productions ("Lewis"), entered into a contract with the defendant, Hilltop Investment Associates ("Hilltop"), whereby Hilltop was to finance and provide (through subcontractors) certain post-production services on Lewis' film, "The Gifted." This was Lewis' first film. To complete the principal photography which was shot in the latter part of the 1980's, Lewis had to sell everything of value she owned. In addition, Lewis borrowed considerable sums of money and obtained the agreement of well-known actors, as well as a film crew to shoot the film on a deferred payment basis. The principal photography for the film was accomplished on a budget of just under $1,000,000 which was completed in early 1990. Lewis had no remaining funds for post-production which included animation special effects and other finishing touches essential to the completion and timely release of the film. Lewis claimed that in 1990, a significant market existed for "black drama," especially for non-exploitative films such as "The Gifted." Lewis shopped around for post-production houses and after some allegedly lopsided negotiations, Lewis entered into a contract with Hilltop on May 31, 1990. Hilltop allegedly took advantage of its negotiating power and drafted a contract which provided that Lewis would pay Hilltop $416,500 within one year of execution of the contract or lose her rights in the film to Hilltop pursuant to a security provision in the contract. The contract price was to compensate Hilltop for its anticipated out-of-pocket expenditures on the film in the amount of $80,000. The contract further provided that all post-production services to be provided by Hilltop would be completed by September 30, 1990. Lewis had eight months until May 31, 1991, to release the film and make enough net profits to pay Hilltop $416,500, or Hilltop would realize its security interest in the film and own all rights to it. The plaintiff claimed that Hilltop intended all along to realize on its security interest and failed to complete post-production in a timely manner. The plaintiff also claimed that Hilltop did not inform one subcontractor, who was performing more than one half of the total post-production work on the film, that there was any deadline for completion of work. As a result, the film was not released in a timely manner or in a completed form that was satisfactory to Lewis. When the film was showed to investors and distributors, Lewis viewed a print of the film at Hilltop's facilities. However, before the first screening for investors, the soundtract of the film was allegedly sabotaged by a Hilltop employee. In another related incident, Lewis was showing the film to a group of Sony executives, and the sound from reel two was with the picture from the reel one. The plaintiff claimed the defendant was responsible. The plaintiff brought this action against the defendant based on fraud, breach of contract and related theories of recovery.
Settlement Discussions
The plaintiff made a settlement demand for $500,000 on the eve of trial. The defendant made no settlement offers.
Damages
The plaintiff claimed $8,000,000 in damages.
Other Information
The verdict was reached approximately one year after the case was filed.
Deliberation
10 hours
Poll
9-3 (Hilltop's fraud induced Lewis to execute the contract on May 31, 1990), 12-0 (Hilltop caused consideration for Lewis' obligations under the contract to become valueless), 11-1 (entitled to damages), 9-3 (compensatory damages), 11-1 (no clear and convincing evidence of fraud)
Length
8 days
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