Petitioners NBCUniversal Media, LLC, formerly known as NBC Universal, Inc., and Universal Television Network seek a writ of mandate directing the
On December 29, 2011, RPIs filed a complaint for damages against petitioners in Los Angeles County Superior Court, alleging (1) breach of implied contract and (2) breach of confidence. According to RPIs, from 1996 through 2001, they presented ideas and concepts for a television program, entitled Ghost Expeditions: Haunted (referred to as "Concepts"), to petitioners, "consistent with well-established customs and practices of the entertainment industry ...." RPIs' idea was a reality television series where "professional paranormal investigators" would lead a team that included "normal people with regular jobs" to investigate haunted houses throughout the country. After informing RPIs they were not interested, petitioners then teamed up with another company to "misappropriate, use and exploit Plaintiffs' Concepts by producing the hit series Ghost Hunters without Plaintiffs' permission ... and/or without compensating Plaintiffs...."
Petitioners filed an answer, generally denying the allegations. They also asserted 20 affirmative defenses, including the defense that each of the causes of action was barred by the applicable two-year statute of limitations set forth in Code of Civil Procedure section 339.
On December 13, 2012, petitioners filed a motion for summary judgment, asserting (1) that RPIs' claims were time-barred by the applicable two-year
Petitioners also produced evidence that on July 22, 2004, Robyn Lattaker-Johnson, petitioners' director of development for alternative programming at Syfy, sent an e-mail to Eric Mofford, RPIs' producer, informing him about the Ghost Hunters show. The e-mail described the show as a "docu-soap about a group of plumbers-by-day/ghost-hunters-by-night that set out on missions to disprove ghosts or paranormal activity." Mofford immediately forwarded the e-mail to Montz. In his deposition, Montz admitted speaking with Mofford about the e-mail: "I asked him if he had found out if this was our show that was stolen or not, and he replied by saying that Robyn says it's not our show, that it's a docu-soap." Montz stated that he did not know what a "docu-soap" was; he asked Mofford, but was not enlightened. Montz also admitted that at that time it seemed possible that the show Ghost Hunters was an improper use of his idea for a television show. Montz and Mofford continued to discuss Ghost Hunters on two subsequent occasions, and at one point, Mofford told Montz that "he had pitched the show directly to [petitioners], as well as others ..., and it looked like our show had been lifted from us."
Petitioners argued that the statute of limitations on RPIs' claims began to run, at the latest, when the Ghost Hunters series premiered on the Syfy channel on October 6, 2004 (more than two years before RPIs filed suit), and that RPIs were on inquiry notice months before that date.
RPIs opposed the motion for summary judgment, arguing that their claims were not precluded by the statute of limitations, and that there were triable issues of material fact regarding petitioners' independent creation defense. As to the statute of limitations, RPIs contended that they were entitled to delayed accrual of their claims under the discovery rule, as they did not discover their claims until sometime in 2005, when Smoller saw "an episode of the show ... upon which she realized that Ghost Hunters was not a fictional show." They noted that Montz could not recall the exact date "he was made aware of Defendants' Ghost Hunters series when [sic] he believed Plaintiffs'
In support of their opposition, RPIs produced transcript excerpts from the depositions of Montz and Smoller. Montz testified that he "believe[d]" he saw two episodes of Ghost Hunters after the lawsuit was filed. Before the lawsuit was filed, he saw "segments" while he was "changing channels, [when he] stopped on that show for like a minute and a half, and that was it." Montz stated he did not watch more because he was not interested in seeing a show "stolen from me" that "duplicated our treatment." He knew the show had copied his idea from "reading the review or a few of their shows on the Internet and in watching the promos and a few segments." Smoller testified that after she first saw an episode of Ghost Hunters in 2005, she discussed the show with Montz. The substance of their discussion was that the show "apparently ... wasn't a soap opera, and it wasn't portrayed as something fictional, and it seemed shockingly similar to what we had been pitching."
Petitioners' reply argued that RPIs had filed their claims more than a month after the statute of limitations had expired. Petitioners asserted that RPIs were not entitled to delayed accrual under the discovery rule. They contended that delayed discovery was inapplicable because the offending work — Ghost Hunters — had been publicly televised. Moreover, even if the discovery rule applied, RPIs were on inquiry notice before the show premiered on Syfy.
In a tentative ruling, the trial court found that RPIs had met their burden to show a triable issue of fact as to whether they should have suspected a factual basis for their claims prior to November 8, 2004. The court noted that RPIs had submitted evidence (1) that they were informed in July 2004 that Ghost Hunters was a "docu-soap," but that they did not know the meaning of the term "docu-soap"; (2) that Montz could not recall the date he was made aware that RPIs' Concepts were being used improperly; and (3) that Smoller did not see an episode of the show until 2005. On July 31, 2013, the trial court denied petitioners' motion for summary judgment. Regarding the statute of limitations, the court ruled: "In this case, Plaintiffs originally filed their action on November 8, 2006, only a month after the two-year statute of limitations would have expired based on the public release date of October 6, 2004. As discussed in the tentative ruling and in Plaintiffs' papers, there is evidence to explain that one-month delay that must be considered by the trier of fact. The cases cited by Defendants generally involved public release of a movie in theaters, which would draw more attention than release of a television series on a cable television network. Those cases also generally involved much longer delays in filing suit after public release of the defendant's work."
On February 13, 2014, RPIs filed a return to the alternative writ. RPIs attempted to distinguish the cases cited in this court's alternative writ and contended that the holdings in Shively and Hebrew Academy addressing the discovery rule were limited to claims governed by the Uniform Single Publication Act (USPA; Civ. Code, § 3425.1); as RPIs' claims were not governed by the USPA, they contended the holdings in those cases did not control. Alternatively, RPIs argued that even if the USPA applied, it would bar only those claims based on episodes of Ghost Hunters broadcast more than two years before the lawsuit was filed. Finally, RPIs contended that under "continuing-wrong principles," the statute of limitations did not bar their claims.
On February 27, 2014, petitioners filed their reply, arguing that RPIs had failed to demonstrate their claims were not time-barred. Petitioners asserted that the Supreme Court's holdings regarding the discovery rule in Shively and Hebrew Academy were not limited to cases governed by the USPA, and that the statute of limitations thus began to run no later than the public disclosure of the material, i.e., the October 6, 2004 broadcast. They further contended that RPIs had forfeited their "continuing wrong" arguments by failing to raise them in the trial court or in RPIs' preliminary response.
A. Standard of Review.
Here, petitioners contend that on the undisputed facts, they are entitled to summary judgment, as RPIs' claims were filed after the statute of limitations had run. For the reasons explained below, we agree.
B. Statute of Limitations.
RPIs' causes of action are governed by the two-year limitations period set forth in section 339. (§ 339, subd. 1 [claims based on a contract, obligation or liability not founded upon an instrument of writing]; Blaustein v. Barton (1970) 9 Cal.App.3d 161, 185 [88 Cal.Rptr. 319] (Blaustein) [breach of implied contract claim governed by two-year limitations period of § 339, subd. 1]; Davies, supra, 14 Cal.3d at p. 511 [assuming action for breach of confidence is valid cause of action, it is governed by two-year limitations period of § 339, subd. 1.)
C. Motion for Summary Judgment.
In their motion for summary judgment, petitioners made a prima facie showing that RPIs' causes of action were time-barred as a matter of law. With regard to both RPIs' breach of implied contract and breach of confidence claims, the causes of action accrued no later than the date when the Ghost Hunters show was released to the general public, i.e., October 6, 2004. Thus, RPIs had until October 5, 2006, to file their lawsuit. They did not do so until
D. The Rationales for Applying the Discovery Rule to Delay Accrual
A plaintiff's inability to discover a cause of action may occur "when it is particularly difficult for the plaintiff to observe or understand the breach of duty, or when the injury itself (or its cause) is hidden or beyond what the ordinary person could be expected to understand." (Shively, supra, 31 Cal.4th at p. 1248; accord, April Enterprises, supra, 147 Cal.App.3d at p. 831 ["A common thread seems to run through all the types of actions where courts have applied the discovery rule. The injury or the act causing the injury, or both, have been difficult for the plaintiff to detect."].) For example, where a professional, such as a doctor or a lawyer, breaches a duty of care, "delayed accrual is justified on the basis that the expertise expected of professionals is beyond the ability of laypersons to evaluate, and on the further basis that it
Finally, for "certain, rather unusual breach of contract actions," "the discovery rule may be applied to breaches which can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by plaintiffs until a future time." (April Enterprises, supra, 147 Cal.App.3d at p. 832 [breach of contract claim].)
E. RPIs Have Failed to Show They Are Entitled to Delayed Accrual Under the Discovery Rule.
Here, while RPIs have pled facts showing the time and manner of their discovery of their causes of action (Smoller's viewing of an episode of Ghost Hunters in 2005), they have not pled facts showing an inability to discover their claims earlier despite reasonable diligence. RPIs alleged that the Ghost Hunters series, including its initial episode, constituted an unlawful appropriation of the Concepts they shared in confidence with petitioners. As a matter of law, their causes of action were complete no later than the date of the initial broadcast, October 6, 2004, because on that date, the marketability of the Concepts was destroyed due to its disclosure to the public. (Blaustein, supra, 9 Cal.App.3d at p. 186.) Due to the initial broadcast, petitioners' alleged breach of the implied contract or breach of confidence was no longer "particularly difficult for [RPIs] to observe or understand." (Shively, supra, 31 Cal.4th at p. 1248) Likewise, the injury itself (or its cause) was no longer "hidden or beyond what the ordinary person could be expected to understand." (Ibid.)
RPIs do not contend, nor does the evidence show, that petitioners fraudulently concealed the broadcast from them, or that they lacked a meaningful ability to view it. (Long, supra, 116 Cal.App.4th at p. 875 ["Allowing these plaintiffs to sue years after the broadcasts ceased, without any indication of fraud or a meaningful inability to discover the broadcasts, would violate the principal policy that underlies the [discovery] rule."].) Thus, there were no "circumstances prevent[ing] them from knowing they ha[d] been harmed." (April Enterprises, supra, 147 Cal.App.3d at p. 831; cf. Perez-Encinas v. Amerus Life Ins. Co. (N.D.Cal. 2006) 468 F.Supp.2d 1127, 1136-1137 [declining to apply discovery rule to delay accrual of breach of contract action because alleged breach of contract not difficult to detect, breach was not secretive, and defendant not responsible for circumstances preventing plaintiffs from knowing about alleged breach].)
We reject the trial court's ruling that RPIs are entitled to delayed accrual under the discovery rule because Ghost Hunters was broadcast on the Syfy channel rather than released in theaters. Regardless of whether the trial court was correct in surmising that release in theaters would attract more attention than release of a series on a cable television network, public disclosure to even a limited audience is sufficient to preclude a plaintiff from arguing that the breach and injury were secretive and difficult to detect. (See Hebrew Academy, supra, 42 Cal.4th at pp. 888, 895 [discovery rule inapplicable despite fewer than 10 copies of transcripts containing defamatory statements being published and distributed to a limited audience].)
RPIs' reliance on Nelson v. Indevus Pharmaceuticals, Inc. (2006) 142 Cal.App.4th 1202 [48 Cal.Rptr.3d 668] (Nelson) is misplaced. There, the appellate court rejected the argument that the statute of limitations on a product liability claim began to run when the dangers of the product were publicized in media reports. (Id. at pp. 1205, 1208.) The Nelson court held that inquiry notice could not be imputed based solely on media reports. (Ibid.; accord, Unruh-Haxton v. Regents of University of California (2008) 162 Cal.App.4th 343, 364 [76 Cal.Rptr.3d 146].) As the Nelson court noted, its holding was bolstered by section 340.8, subdivision (c)(2), which expressly provides that: "`Media reports regarding the hazardous material or toxic substance contamination do not, in and of themselves, constitute sufficient facts to put a reasonable person on inquiry notice that the injury or death was caused or contributed to by the wrongful act of another.'" (Nelson, at pp. 1208-1209 [§ 340.8 applies to claims alleging injury from prescription drugs].) As RPIs' claims do not involve hazardous materials or toxic substance contamination and they identify no statute with comparable language applicable to their claims, Nelson is of no assistance to them.
F. Continuing-wrong Accrual Principles
In their return to the alternative writ, RPIs argued for the first time that under continuing-wrong accrual principles, a new cause of action accrued for each new episode of Ghost Hunters using their ideas without compensation. (See Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197-1198 [151 Cal.Rptr.3d 827, 292 P.3d 871] (Aryeh) [explaining continuing-wrong accrual principles].) RPIs concede they did not raise this issue in their opposition to the motion for summary judgment. Nor did they
It is ordered that a peremptory writ of mandate issue commanding respondent superior court to set aside and vacate its order denying motion for summary judgment signed and filed July 31, 2013, and to enter an order granting summary judgment as prayed for in petitioners' notice of motion filed December 13, 2012.
Petitioners shall have their costs on appeal.
Willhite, Acting P. J., and Edmon, J.,
As to the theory of continuous accrual, the statute of limitations runs from each breach of a continuous or recurring obligation. (Aryeh, supra, 55 Cal.4th at p. 1199.) However, RPIs alleged that petitioners exploited their idea for a reality television series. Thus, each broadcast of a new episode of the Ghost Hunters series is part of a single breach. Each broadcast of Ghost Hunters would constitute not a new breach, but rather additional harm. (See Blair v. Nevada Landing Partnership (2006) 369 Ill.App.3d 318 [307 Ill.Dec. 511, 859 N.E.2d 1188, 1193] [misappropriation of likeness for use in advertising campaign from 1995 to 2004 not a continuing violation, as it constituted a single overt act with continuing ill effects; "To hold otherwise would cause an attendant problem of an endless tolling of the statute of limitations...."]; see also Kourtis v. Cameron (9th Cir. 2005) 419 F.3d 989, 1000-1001 [in case alleging breach of implied contract for uncompensated use of plaintiffs' concept in a film, court declined to apply continuing-wrong theory to delay accrual of claim beyond date of film's public release, despite later release of film on DVD and use of same concept in sequel], abrogated on other grounds in Taylor v. Sturgell (2008) 553 U.S. 880 [171 L.Ed.2d 155, 128 S.Ct. 2161]; cf. Christoff, supra, 47 Cal.4th at p. 478, 482 [declining to address continuing-wrong argument and remanding for development of factual record whether use of likeness in advertising campaign constituted single publication under USPA].)
The situation is analogous to a case where there has been an injury but the amount of resulting harm is uncertain. There, the statute of limitations runs from the infliction of "appreciable and actual harm." (Davies, supra, 14 Cal.3d at p. 514.) In Davies, the plaintiff suffered appreciable and actual harm when the defendant first disclosed the writer's confidential idea in 1955 and destroyed the marketability of the idea, though the defendant earned no profits from the disclosure until 1958. (Id. at p. 511; see Pooshs v. Philip Morris USA, Inc., supra, 51 Cal.4th at p. 797 ["Must the plaintiff sue even if doing so will require the jury to speculate regarding prospective damages? Or can the plaintiff delay suit until a more accurate assessment of damages becomes possible? Generally, we have answered those questions in favor of prompt litigation, even when the extent of damages remains speculative."].) Similarly, here, RPIs suffered appreciable and actual harm at the latest, by October 6, 2004, when the Ghost Hunters show premiered on Syfy, and destroyed any marketability for their idea of a paranormal investigation reality television series. Thus, under continuing-wrong accrual principles, the two-year statute of limitations began running on October 6, 2004. Because RPIs' claims were filed more than two years later, they are time-barred.