PRECISE CONTRACT LANGUAGE: “Flashdance”
IVAN HOFFMAN, B.A., J.D.
In 1983, Paramount Pictures released the movie “Flashdance.” It was a huge success, grossing, according to the Ninth Circuit Court of Appeals in Marder vs. Lopez et. al., in excess of $150,000,000.00 in domestic box office rentals. The plaintiff is Maureen Marder who claimed that the story was based on her life and that she had provided details of her life to Paramount and to the screenwriter, Joe Eszterhas. As part of the said transaction, Marder and Paramount entered into a certain “Release” by the terms of which Marder was paid $2,300.00 for her said release in consideration for allowing Paramount to make the film.
In February, 2003, Sony Pictures Corporation released a music video featuring Jennifer Lopez. Marder alleged that contained within that video were re-creations of famous scenes from the film. Sony had entered into a license with Paramount. [Editorial note: as I have always stated, it is much better to obtain a license to use materials that may be claimed by other parties. Even though these “re-creations” apparently did not use the actual footage from the film, in a footnote the Court indicated that Sony obtained that license after Paramount objected to the use of such “re-creations.” Copyright does not protect against only actual, exact copying but against using elements that are substantially similar to the protected materials.]
Marder filed suit claiming rights of copyright and other claims including the right to receive a portion of the proceeds from the above license.
It is the language of the said Release signed by Marder that was the subject of the within appeal and is the subject of this article.
Marder claimed that the release only applied to all matters prior to the date of the release and thus the Sony license was not the subject of that release.
The Court cited the general rules governing contractual interpretation.
Marder made other claims, however.The court must interpret the Release so as to give effect to the parties’ mutual intent as it existed when they contracted. See Cal. Civ. Code § 1636; Bank of the W. v. Superior Court, 833 P.2d 545, 552 (Cal. 1992). The parties’ intent should be inferred from the language of the Release, so long as that language is not ambiguous or uncertain. See Cal. Civ. Code §§ 1638, 1639.
The Release, executed on December 6, 1982, provides that Marder “releases and discharges Paramount Pictures Corporation . . . of and from each and every claim, demand, debt, liability, cost and expense of any kind or character which have arisen or are based in whole or in part on any matters occurring at any time prior to the date of this Release.” The Release also states that “[w]ithout limiting the generality of the foregoing Release,” Marder also releases Paramount from claims “arising out of or in any way connected with, either directly or indirectly, any and all arrangements . . . in connection with the preparation of screenplay material and the production, filming and exploitation of . . . Flashdance.”
The Release’s language is exceptionally broad and we hold that it is fatal to each of Marder’s claims against Paramount. Such a release of “each and every claim” covers all claims within the scope of the language, absent extrinsic evidence to the contrary. Jefferson v. Cal. Dep’t. of Youth Auth., 48 P.3d 423, 426-27 (Cal. 2002). As described in greater detail below, Marder has offered no such extrinsic evidence. Accordingly, “the law imputes to [Marder] an intention corresponding to the reasonable meaning of [her] words and acts.” Id. (quoting Edwards v. Comstock Ins. Co., 252 Cal.Rptr. 807, 810 (1988)). Here, Marder released a broad array of claims relating to any assistance she provided during the creation of a Hollywood movie. Thus, the only reasonable interpretation of the Release is that it encompasses the various copyright claims she asserts in the instant suit. [emphasis added]
The Court responded to each of the said claims.Despite the breadth of the Release, Marder maintains that it does not preclude her causes of action against Paramount because she retained co-ownership and co-authorship rights even after she and Paramount executed the Release. First, she claims that the section of the Release relating to “any matters” occurring prior to the date of the Release only applies to “actionable conduct” occurring before the Release. Second, she claims that the Release’s reference to “arrangements . . . in connection with the preparation of Flashdance” does not include her contributions to the writing of the film’s screenplay. Third, she contends that Paramount’s interpretation of the agreement is impermissibly redundant because that interpretation reads the Release to simultaneously grant Paramount the right to use Marder’s life story while releasing Paramount from any related claims. Finally, Marder claims that Paramount’s actions after the Release’s execution support her belief that she retained rights after the date of the Release.
The Court went on.Marder recognizes that the Release absolves Paramount from claims based “in whole or in part upon any matters occurring at any time prior to the date of the release.” In its motion to dismiss, Paramount stated that this clause encompasses the current copyright claims brought by Marder in connection with Flashdance. Marder contends, however, word “matters” is ambiguous, and that it could reasonably be interpreted more narrowly than Paramount construes it. Marder makes two arguments in support of her claim.. Marder makes two arguments in support of her claim.
First, she says that the Release does not expressly refer to her status as a co-owner of the copyright or to her alleged writing contributions. She notes, additionally, that the Release does not explicitly mention copyright claims at all. Therefore, she claims that the Release does not preclude her from asserting
a co-ownership or copyright interest in the work.
This argument contravenes the plain language of the Release, which states that Marder released Paramount from “each and every claim . . . of any kind or character.” As stated above, Marder knew that she was releasing her rights related to the creation of a movie at the time she signed the Release. Thus, it is reasonable to infer that when Marder signed the agreement, she knew or should have known that copyright claims “would fall within the scope of that broad language.” Jefferson, 48 P.3d at 427. [emphasis added]
Second, Marder claims that the word “matters” is susceptible to a narrower interpretation as “actionable conduct.” According to Marder, the “actionable conduct” here was the alleged infringement by Sony and Lopez in 2003, which occurred long after the date of execution of the Release. Therefore, Marder alleges that her claims are not precluded because the Release only applies to “matters” occurring “prior to the date of [the] Release.”
Admittedly, the word “matter” has a specialized legal definition: “A subject under consideration, [especially]involving a dispute or litigation; case.” Black’s Law Dictionary 992 (7th ed. 1999). But courts should interpret the words of a contract in their “ordinary and popular sense, rather than according to their strict legal meaning,” [emphasis supplied] unless the parties attach a special or technical meaning. Cal. Civ. Code § 1644(emphasis added). As Paramount points out, the common definition of the word “matters” also includes the “events or circumstances of a particular situation.” Webster’s Ninth New Collegiate Dictionary 733 (9th ed. 1991).
We read the Release to suggest that the parties did not intend “matters” to be interpreted in a strictly legal sense. The Release actually encourages a broad reading of “matters,” because it encompasses claims that “are based in whole or in part upon any matters occurring” prior to the date of the Release. Marder’s present copyright claims are rooted in the contributions she made to the screenplay before the execution of the Release. Thus, her claims are based at least “in part” on “matters” that occurred prior to the date of the Release. [emphasis supplied]
The Court added:Next, Marder claims that the release of any claims relating to “any and all arrangements” does not apply to claims relating to her alleged writing contributions. The language at issue immediately follows the release of claims related to “any matters” discussed above, and states, in relevant part:Without limiting the generality of the foregoing Release,[emphasis supplied] Marder hereby releases and discharges [Paramount] from each and every claim . . . heretofore or hereafter arising out of or in any way connected with, either directly or indirectly, any and all arrangements [emphasis supplied] (including but not limited to research, interviews, costumes, photographic sessions, assistance, services and technical advice of any kind) in connection with the preparation of screenplay material and the production, filming and exploitation of the motion picture tentatively entitled “Flashdance”. . . .
(emphasis added). Marder states that this portion of the Release only applies to a specific set of “ancillary services” that she provided during the movie’s creation, including arranging interviews and photo shoots with other dancers. According to Marder, those services did not include any of her writing contributions to the screenplays. Therefore, she alleges that the release of claims relating to “arrangements” cannot include any claims in the instant suit, which are based
solely on her writing contributions.
Marder’s reading of the release relating to “arrangements” is strained. Here, “arrangements” is followed by an explanatory parenthetical that lists examples [emphasis supplied] of services Marder might have performed, “including but not limited to research, interviews, costumes, photographic sessions, assistance, services and technical advice of any kind.” Marder released Paramount from claims relating to services including but not limited to [emphasis supplied] those listed in the parenthetical. Thus, we believe that any “writing contributions” she made in connection with the screenplay were included in the category of “arrangements.” More importantly, the language of the Release states that Paramount is released from “any and all arrangements. . . in connection with the preparation of screenplay material.” (emphasis added) [emphasis supplied]. A plain construction of “preparation of screenplay material” necessarily includes any of Marder’s alleged writing contributions to the screenplay. We therefore hold that the release of claims relating to “any and all arrangements” necessarily includes Marder’s writing contributions.
The Court discussed other issues about an unmade sequel but because that sequel was never made, the Court did not consider those issues relevant to the determination as to the validity of the release.Paramount construes the language of the Release to preclude all of Marder’s claims against Paramount while simultaneously granting Paramount the right to use Marder’s life story in Flashdance. Marder contends that this construction of the Release is untenable because if the agreement truly released Paramount from all claims by Marder, it would be redundant for Paramount to secure a specific grant of rights to use her life story. In support of her claim, she quotes the general proposition that a contract “must be interpreted as a whole, with each clause aiding the interpretation in the attempt to give purpose to every part, and the interpretation should, where possible, give effect to every part so that no clause is redundant.” Super 7 Motel Assocs. v. Wang, 20 Cal. Rptr. 2d 193, 197 (Ct. App. 1993). Thus, according to Marder, we should not construe the Release to permit such a redundancy.
Marder’s contention on this point also lacks merit. It is not impermissibly redundant to secure a waiver of claims and a grant of rights in the same document. As Paramount points out, it is generally recommended that a party seeking to acquire life story rights for use in a motion picture include both clauses in such an agreement. See Jay S. Kenoff, 1-5 Entm’t Indus. Contracts Form 5-1 ¶¶ 1-2 (Donald C. Farber ed., Matthew Bender & Co., Inc. 2004). Furthermore, a release from claims and a grant of rights together are not redundant. A release extinguishes claims against the released party. See Skrbina, 53 Cal. Rptr. 2d at 489. By contrast, a grant is an agreement that creates a right. See Black’s Law Dictionary 707 (7th ed. 1999). Parties may include both provisions in a contract without undermining the effect of either the grant or the release.
Here, Paramount secured a release from claims relating to Marder’s involvement with the creation of Flashdance. By the same document, Marder granted Paramount the right to use her life story in connection with Flashdance. These two clauses do not negate each other and each may be considered without concern for impermissible redundancy.
The release in this case was well drafted and was a legally valid bar to the claims of Marder.
Precision in language is always important, in real life as well as in business life (the latter of which may not always seem real, though it is). The use of hand crafted, do-it-yourself or copied- from-other-equally-unknowing-parties legal documents is foolish in the extreme. (Read “The Do It Yourself Publishing Lawyer.” The same principles apply to any business.)
Keep in mind that in the business of intellectual property rights, legally appropriate contracts are not add-ons to your business, not something you do if you have any money left over; legally appropriate contracts are your business. Without a thorough and valid contract, what you have is nothing but an illusion and a house of cards. It only appears you are in business but in reality you are not since given a controversy between you and the other party (and there is almost always a controversy), the house of cards can collapse and you risk losing your rights and the money that goes along with those rights. Further, you may put yourself in a lose-lose situation: if your project is a failure, you lose. But if your project is a success (or even if it is not), you may find that the other party, not you, ends up making all the money or you may open yourself up for more claims than you can even imagine and in which event, you lose because you pay all your profits to lawyers and/or damages to the offended parties. What kind of a way is that to run a business? It seems self-evidently self-defeating.
And for those who continue to believe in the other illusion—“Well I’ve been doing this for years and nothing has happened yet”—consider this: “It never matters…until it matters…and then it matters!”
Read “Precise Contract Language” and “Precise Contract Language-Again.”
Copyright © 2006 Ivan Hoffman. All Rights Reserved.