Metro-Goldwyn-Mayer, Inc. (MGM) sues Roy Scheider (Scheider), and Roy Scheider Productions, Inc. (Productions), for an injunction enjoining said defendants from entering into agreements which would require Scheider to perform services for any third party at a time when he is obligated to render services to plaintiff, and enjoining Scheider from rendering services to any third party at a time when he is obligated to render services to plaintiff, and for damages for Scheider's refusal to render services to plaintiff.
MGM is a film producer, under agreement with American Broadcasting Company (ABC), pursuant to which MGM has produced a pilot film entitled "Munich Project". A pilot film is a picture produced for a television network as a demonstration picture with the hope that the network will order a television series based upon the pilot film. During the pendency of this action, ABC has exercised its option, requiring MGM to produce and deliver to ABC a television series based upon the pilot film, for broadcast on the ABC network, beginning in September, 1972. On Sunday, April 30, 1972, during the course of the trial, ABC showed the pilot film on its TV stations.
On September 30, 1971, after meetings and telephone conversations among MGM and ABC representatives, Scheider, and Scheider's agent Joan Scott (Scott), it was agreed: (1) Scheider would appear in and be paid $20,000 for making the pilot film; (2) Scheider would be paid, per episode, for his services in any TV series that might result from the pilot: first year, $5,000 per episode; second year, $6,000 per episode; third year, $7,000 per episode; fourth year, $9,500 per episode; fifth year, $11,500 per episode; (3) if the pilot film resulted in a television series, MGM would have a one-year option from the date of completion of the pilot for Scheider's services for such series.
Left unresolved in these conversations was Scheider's billing. At that time Scheider was a relatively unknown actor, who had
On this basis, on or about October 6, 1971, Scheider proceeded to Munich, Germany, where, over a six weeks' period, the pilot was filmed. Between that time and up to on or about February 17, 1972, there were negotiations between Scheider's attorney and the attorneys for MGM. On or about February 15, 1972, MGM's attorneys and Scheider's attorney had agreed on all but one of the terms of the proposed agreement in substance, although the language of some agreed upon provisions remained to be drafted. There was disagreement as to the starting date, the date on which Scheider would be required to report to start filming the series. In the conversations between Scott and the MGM representatives, no starting date had been discussed or fixed and at the beginning of the negotiations there was no such discussion. Sometime in late October or early November, 1971, in a telephone conversation between Frederick C. Houghton (Houghton), MGM's attorney, and Daniel Kossow (Kossow), Scheider's attorney, the question of a starting date was first raised.
Kossow pointed out that MGM's one-year option on Scheider's services might interfere with or prevent Scheider's acceptance of other performing assignments for 12 months. Houghton testified that he told Kossow that, if ABC did not exercise its option for a September, 1972 air date, MGM would not require Scheider to report for filming until November 1, 1972.
Kossow testified that he understood Houghton to say that November 1, 1972, was "an outside date before which Mr. Scheider would not be required to render services." Kossow testified that on this basis he told Houghton, "he had a deal", and that he so advised Scheider some time later. However, it is conceded that in subsequent conversations and correspondence with Houghton during the negotiations there was reference to earlier start dates, so that Scheider would have an opportunity to do other work without jeopardizing MGM's network delivery schedule, should ABC exercise its option for a September,
It is the custom and practice of the industry that when a pilot is filmed in the fall of the year and shown to the network during the winter, the network has the option for a series to be shown beginning in September of the following year. In such event, filming of the series by the producer must begin in the spring, April or May, or at the latest, early June. If the network determines to show the series beginning in January or February of the next year, a so-called midyear showing, filming of the series takes place in the late fall. It is also the custom and practice that the producing company's option entitles it to require the principal actors in the pilot to perform in the series, consistent with the network's option to require the producer to produce and deliver a TV series based upon the pilot.
It is undisputed that all of the parties were aware of these customs and practices, and that the ABC-MGM agreement was consistent therewith.
On or about February 17, 1972, Kossow advised MGM that, since MGM had refused to agree to a November 1, 1972 starting date for Scheider, Scheider would not perform in the series and considered that he had no further obligation to MGM, either to negotiate or perform. No written contract was ever executed.
ABC has exercised its option calling upon MGM to produce a series of eight episodes for air dates commencing September, 1972. MGM has exercised its option requiring Scheider to report on or before June 5, 1972, for filming the series. Scheider has stated that he will not do so.
At issue is whether the terms agreed upon were sufficient to support a finding that the parties made an agreement enforceable under the Statute of Frauds or otherwise.
Whether the terms agreed between Scott and MGM were sufficient to establish a contract, is not free from doubt. There was much testimony on both sides as to the custom and practice of the industry to enter into binding oral arrangements on the basic or essential terms under which a performer will render services in making a pilot film, and for negotiation of a formal contract to continue during the period the actor is performing. There was also testimony as to the custom and practice of embodying
There was disagreement as to what terms are considered basic or essential.
It is undisputed that many of the matters left for negotiation, such as residual rights, commercial fees, etc., would substantially affect Scheider's compensation. Moreover, there was never any specific agreement as to a starting date for Scheider's performance, although implicit in MGM's one-year option was the right to exercise the option within the year.
Although plaintiff did not prove that Scheider and his representatives ever agreed on a particular starting date, the record establishes that Scheider and his representatives knew that if ABC exercised its option for a September, 1972 air date, MGM would be compelled to require Scheider to report for filming in the spring or early summer of 1972. Scheider knew that the MGM option gave it authority to require such a starting date.
It is manifest that many of the essential or basic elements of the contemplated contract were left for future negotiation at the time of the original understanding. Irrespective of any custom or practice of an industry, there is no contract if material financial or time elements involving compensation or other kinds of payment or duration are left undetermined (Willmott v. Giarraputo, 5 N.Y.2d 250; Ansorge v. Kane, 244 N.Y. 395). The court cannot write a contract which the parties have not made (Kusky v. Berger, 33 Misc.2d 564, affd. 20 A.D.2d 851).
However, where the parties have completed their negotiations of what they regard as essential elements, and performance has begun on the good faith understanding that agreement on the unsettled matters will follow, the court will find and enforce a contract even though the parties have expressly left these other elements for future negotiation and agreement, if some objective method of determination is available, independent of either party's mere wish or desire. Such objective criteria may be found in the agreement itself, commercial practice or other usage and custom. If the contract can be rendered certain and complete, by reference to something certain, the court will fill in the gaps (May Metropolitan Corp. v. May Oil Burner Corp., 290 N.Y. 260; Cohen & Sons v. Lurie Woolen Co., 232 N.Y. 112; Varney v. Ditmars, 217 N.Y. 223).
Here, the subsequent agreement of the parties as to all the elements of the contract, except the starting date, provides a basis for finding a complete contract. Although there was no
However, this is not dispositive. There remains the issue whether the agreement as here found is unenforceable because of the Statute of Frauds.
Section 5-701 of the General Obligations Law provides:
A contract, otherwise within the Statute of Frauds because not performable within a year, may be taken out of the operation of the statute if both parties have an option to terminate it within the year. (Blake v. Voigt, 134 N.Y. 69.) Although there is conflict in the cases as to whether an option on one side to terminate within the year avoids the statute, reason and authority compel the conclusion that if the option is exercisable only by the party seeking to enforce the agreement, such option does not take the case out of the statute. (Belfert v. People's Planning Corp. of Amer., 22 Misc.2d 753, affd. 11 A.D.2d 760, affd. 11 N.Y.2d 755; Kastner v. Gover, 19 A.D.2d 480; Harris v. Home Ind. Co., 6 A.D.2d 861.)
Here, Scheider had no option. The option was solely with MGM. Although such option would be exercised by MGM only if ABC first exercised its option to require MGM to produce the series, nonetheless Scheider would have to keep himself at the disposal of MGM for one year after the filming of the pilot which was concluded some time in November of 1971. The contract upon which the plaintiff relies was made on or about September
MGM's reliance on Manufacturing Specialties Co. v. Friedman & Sons (29 A.D.2d 859), Mar-Bond Beverage Corp. v. Dublin Distrs. (9 A.D.2d 951), and Lenz v. World-Wide Automobiles Corp. (9 Misc.2d 32, affd. 5 A.D.2d 1051) is misplaced. As the Appellate Division indicated in Manufacturing Specialties Co. (supra), holding the statute inapplicable, these are distributorship cases in which the licensor or supplier expressly conditioned the duration of the contract upon the continuance of its license or source of supply, terminable by others not within either party's control, which might occur within a year. This was not only within the contemplation of both parties, it also provided for termination within the year, not for the exercise of rights beyond one year.
Here Scheider was at MGM's option for more than a year, albeit subject to the ABC option, also extending for more than one year after making of the Scheider-MGM agreement. Under these circumstances, the contract is unenforceable as against Scheider, because not embodied in a writing signed by him, as required by the statute.
Nor is Scheider estopped to plead the statute. Although it has been held that the statute may not be used to perpetrate a fraud, the cases so holding turn on a finding that the party seeking to plead the statute deliberately acted in such a manner as to cause the other party seriously and irremediably to change his position to his substantial damage. (Walter v. Hoffman, 267 N.Y. 365; Merchant's Line v. Baltimore & Ohio R. R. Co., 222 N.Y. 344; Dunscombe v. Crocker-Wheeler Elec. Mfg. Co., 232 App. Div. 137.) There is no such showing here. The pilot film
The defendant has failed to prove his counterclaim or to establish any damages. His claim for punitive damages is without merit.
Accordingly, the complaint and counterclaim are both dismissed.