Arp Films, Inc. v. Marvel Entertainment Group, Inc.

• Decision Date: 19 June 1990
• Docket Number: D,1043,Nos. 1042,s. 1042
• Citation: 905 F.2d 687
• Parties: ARP FILMS, INC., Amerex Films, Inc., and Claude S. Hill, Plaintiffs-Appellants, Cross-Appellees, v. MARVEL ENTERTAINMENT GROUP, INC., Defendant-Appellee,Cross-Appellant. ockets 89-7905, 89-9061.
• Court: U.S. Court of Appeals — Second Circuit

Page 687

905 F.2d 687

ARP FILMS, INC., Amerex Films, Inc., and Claude S. Hill Plaintiffs-Appellants, Cross-Appellees, v. MARVEL ENTERTAINMENT GROUP, INC., Defendant-Appellee,Cross-Appellant.

Nos. 1042, 1043, Dockets 89-7905, 89-9061.

United States Court of Appeals Second Circuit.

Argued April 9, 1990.

Decided June 19, 1990.

Jared Stamell (Joseph J. Tabacco, Jr., Stamell, Tabacco & Schager, E. Allan Farnsworth, New York City, of counsel), for plaintiffs-appellants, cross-appellees.

Gideon Cashman (Stephen F. Huff, Jamie M. Brickell, Charles B. McKenna, Pryor, Cashman, Sherman & Flynn, New York City, of counsel), for defendant-appellee, cross-appellant.

Before KAUFMAN, FRIEDMAN ^* and MAHONEY, Circuit Judges.

PER CURIAM:

Plaintiffs-appellants, cross-appellees Arp Films, Inc. ("Arp"), Amerex Films, Inc. ("Amerex") and Claude S. Hill ("Hill") (collectively "plaintiffs") appeal, and defendant-appellee, cross-appellant Marvel Entertainment Group, Inc. ("Marvel") cross-appeals, from a judgment of the United States District Court for the Southern District of New York, Kenneth Conboy, Judge, entered July 27, 1989. Because the judgment from which the parties appeal is not a "final decision" within the meaning of 28 U.S.C. Sec. 1291 (1982), the appeal is dismissed for want of appellate jurisdiction.

This case involves a long and complicated contract dispute embracing numerous issues. Given our determination to dismiss, we develop only minimally the events leading to this appeal.

The parties entered into the agreement at issue ("the Agreement") in September, 1976. Under its terms, a new company, Amerex, was formed to distribute certain cartoon films ("the Films") the rights to which were owned by Marvel. Arp was to own the stock of Amerex (half of which, however, would be held in escrow by Marvel); Hill, the president of Arp, was to undertake "the operational distribution responsibilities" of Amerex; and Amerex's revenues were to be divided on an agreed basis between Arp and Marvel.

One purpose of the Agreement was to resolve litigation then pending between the parties. Further disputes developed, however, and eventuated in the instant litigation. In July, 1986, Arp sued Marvel, claiming that Marvel had licensed films to third parties in violation of the Agreement. Marvel counterclaimed, and also brought a separate action that was consolidated with the prior action, against Arp, Amerex and Hill, contending, inter alia, that they had breached the Agreement by failing to account properly and make the required payments to Marvel thereunder, and seeking a declaration that their rights under the Agreement had terminated.

Thereafter, on November 12, 1986, Marvel sent Hill a letter purporting to terminate the Agreement. Plaintiffs nonetheless continued to exploit their rights under the Agreement, but, in or about March, 1987, ceased paying Marvel its share of the distribution receipts and ceased accounting therefor as required by the Agreement. On September 2, 1987, Marvel wrote a letter to Hill asserting, without prejudice to Marvel's prior position that plaintiffs had no continuing rights under the Agreement, that all such rights were in any event terminated for failure to account and make payments to Marvel since March, 1987.

In a memorandum opinion dated May 24, 1988 and order dated October 25, 1988, the district court granted partial summary judgment to Marvel, ruling that plaintiffs had materially breached the Agreement by electing to continue to exercise their rights thereunder while refusing, since March, 1987, to make the required reports and payments, and that the Agreement accordingly terminated on September 2, 1987.

A six-week jury trial and a number of post-trial motions followed, after which a judgment was entered on July 27, 1989 in accordance with the court's pretrial summary judgment ruling and the jury's verdict:

a) terminating the Agreement and requiring plaintiffs to account to Marvel for plaintiffs' exploitation of the Films "for the period from the date upon which [plaintiffs] ceased paying and reporting to Marvel for the exploitation of Marvel's film properties ... through and including the present," as well as for all exploitation of the Films pursuant to the Agreement;

b) requiring Marvel to pay plaintiffs the separate sums of $293,480, and $1,220,000 plus prejudgment interest, and Arp to pay Marvel $137,000 plus prejudgment interest, in each instance (i) "subject to and following the completion of the accounting mandated by the judgment," and (ii) allowing a variation to "such lesser net amount, if any, shown to be due ... by such accounting," in accordance with jury verdicts on various contractual issues;

c) requiring Arp and Marvel to make additional payments to each other in accordance with formulae provided by the Agreement, in some instances only "following the completion of such accounting;" and

d) directing that "the accounting mandated by this Judgment shall be referred to a Magistrate for purposes of assuring compliance with this Judgment," and that the district court would retain continuing jurisdiction over the parties.

The accounting was then referred to Magistrate Leonard A. Bernikow on August 1, 1989. In a subsequent order entered September 25, 1989, the court directed, inter alia, that:

The parties shall submit a Consent Stipulation to this Court by September 22, 1989 setting forth the precise manner in which plaintiffs shall...