Hal Roach Studios, Inc. v. Richard Feiner and Co., Inc.

• Decision Date: 28 August 1989
• Docket Number: No. 87-6146,87-6146
• Citation: 883 F.2d 1429
• Parties: 1989 Copr.L.Dec. P 26,461, 12 U.S.P.Q.2d 1014, 28 Fed. R. Evid. Serv. 1082 HAL ROACH STUDIOS, INC., a Delaware Corporation, Plaintiff-Appellee, v. RICHARD FEINER AND COMPANY, INC., a New York Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1429

883 F.2d 1429

1989 Copr.L.Dec. P 26,461, 12 U.S.P.Q.2d 1014,

28 Fed. R. Evid. Serv. 1082

HAL ROACH STUDIOS, INC., a Delaware Corporation, Plaintiff-Appellee, v. RICHARD FEINER AND COMPANY, INC., a New York Corporation Defendant-Appellant.

No. 87-6146.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 5, 1988.

Decided Aug. 28, 1989.

Michael L. Robins, P.C., Arthur E. Schwimmer, Los Angeles, Cal., for defendant-appellant.

Brian C. Lysaght, O'Neill & Lysaght, A Partnership Including Professional Corporations, Santa Monica, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before PREGERSON, REINHARDT and NOONAN, Circuit Judges.

REINHARDT, Circuit Judge:

This case involves the worldwide television rights to a number of Laurel and Hardy silent films ("the silent subjects"). Appellee's predecessor in interest, Hal Roach, Inc., and appellant Richard Feiner and Company, Inc. ("Feiner & Co.") entered into a written agreement to license the television rights to certain of the films to Feiner & Co. for a ten year period with an option to renew the license agreement for a second ten year term. Feiner & Co. subsequently exercised the option.

In 1984 appellee Hal Roach Studios, Inc. ("Hal Roach Studios") filed a complaint against Richard Feiner, ¹ individually, and Feiner & Co. seeking a declaration that the licensing agreement would expire on or about September 27, 1986, and that Hal Roach Studios had valid copyrights to the films. Feiner & Co. answered, asserting affirmative defenses, and counterclaimed. Feiner & Co. sought reformation of the contracts based on mutual mistake. The mutual mistake alleged was that the parties had intended the license agreement to continue in effect until the copyrights to the silent subjects had expired and those subjects had entered the public domain. At the time the parties entered into the licensing agreement, the copyrights were due to expire around 1986. However, enactment of the Copyright Act of 1976 extended the duration of the copyrights well beyond that time. See 17 U.S.C. Secs. 301-305 (1977 & Supp.1988). ² Feiner and Co. also sought a declaration that Hal Roach Studios did not own valid copyrights to the silent subjects On May 24, 1985, Judge Stotler dismissed the reformation counterclaim with leave to amend and the copyright counterclaims without leave to amend. ³ On July 16, 1985, on its own motion, the district court dismissed Hal Roach Studios' complaint for lack of jurisdiction and also dismissed the other counts of the counterclaim. ⁴ Hal Roach Studios then filed a first amended complaint, based on diversity jurisdiction, against Feiner & Co. only, and sought a declaration that the film licenses would expire on or about September 27, 1986 in accordance with the terms of the licensing agreement. ⁵ In response, Feiner & Co. filed a first amended answer and a counterclaim. Feiner & Co. denied that Hal Roach Studios had any interest in the films. It also asserted the same affirmative defenses as it had to the initial complaint, as well as a new count alleging that Hal Roach Studios had assigned all its television rights in the film to Feiner & Co. in perpetuity. ⁶

or to numerous other silent films in the Hal Roach library.

Hal Roach Studios moved to dismiss the counterclaim and to strike the affirmative defenses. Judge Letts ⁷ granted the motions. Hal Roach Studios also moved for summary judgment and judgment on the pleadings with respect to its complaint. Although Richard Feiner was no longer a defendant in the action, Hal Roach Studios sought judgment against both Feiner & Co. and Richard Feiner, individually. Feiner & Co. opposed the motion, contending that Richard Feiner was no longer a party to the proceedings and that Hal Roach Studios was not the successor in interest to the license agreement.

Hal Roach Studios filed a reply, including a declaration of attorney Herbert G. Baerwitz and an S-1 Securities Registration Statement, which acording to Hal Roach Studios, established that it was the successor in interest to the original owner of the copyrights to the silent subjects. Baerwitz's declaration stated that his firm currently represented Hal Roach Studios and that the Registration Statement had been filed with the Securities and Exchange Commission by Hal Roach Studios' previous counsel. Feiner & Co. objected to the admissibility of the Baerwitz declaration on a number of grounds, including that the declaration was not made based upon personal knowledge. The district court overruled the objection. Subsequently, Hal Roach Studios, in its response to Feiner & Co.'s Motion for Reconsideration, filed a declaration of Earl A. Glick, who averred that he had personal knowledge of how Hal Roach Studios acquired the copyrights to the silent subjects. Again Feiner & Co. objected.

The court overruled Feiner & Co.'s objections and granted Hal Roach's motions for summary judgment and judgment on the pleadings against Feiner & Co. and Richard Feiner, individually. The court granted the motions on the basis of Hal Roach Studios' Statement of Uncontroverted Facts and Conclusions of Law, which the court incorporated by reference. The court subsequently

entered a declaratory judgment against Richard Feiner and Feiner & Co., stating that the license to the silent subjects was to expire in accordance with its terms on September 27, 1986.

ANALYSIS

I. Richard Feiner

The initial complaint in this action named both Richard Feiner, individually, and Feiner & Co. as defendants. Hal Roach Studios' first amended complaint named only Feiner & Co. However, Hal Roach Studios' memorandum of points and authorities in support of its motions for summary judgment and judgment on the pleadings, as well as its proposed judgment, did include Richard Feiner, individually, as a named defendant. In its opposition to Hal Roach Studios' motions, Feiner and Co. informed the district court that Richard Feiner was no longer a proper defendant in this action. Nevertheless, the district judge signed Hal Roach Studios' proposed judgment without change.

It is well established that an individual is not bound by a judgment in personam resulting from litigation in which he is not named as a party. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S.Ct. 1562, 1569, 23 L.Ed.2d 129 (1969). The fact that a party was named in the original complaint is irrelevant; an amended pleading supersedes the original. Loux v. Rhay, 375 F.2d 55, 57 (9th Cir.1967); Bullen v. De Bretteville, 239 F.2d 824, 833 (9th Cir.1956), cert. denied, 353 U.S. 947, 77 S.Ct. 825, 1 L.Ed.2d 856 (1957); accord, King v. Atiyeh, 814 F.2d 565, 567 (9th Cir.1987). Because Richard Feiner was not named as a party in Hal Roach Studios's first amended complaint, the district court erred in entering judgment against him.

Hal Roach Studios contends that, because Richard Feiner was not a proper party in this action, he lacks standing to appeal the judgment against him. Specifically, Hal Roach Studios argues that Richard Feiner lacks standing because he failed to raise the jurisdictional issue in the district court, intervene pursuant to Federal Rule of Civil Procedure 24, or move for relief from judgment pursuant to Federal Rule of Civil Procedure 60. These contentions are without merit.

The jurisdictional issue regarding whether Richard Feiner is a proper party was raised before the district court in Feiner & Co.'s opposition to Hal Roach Studios' motions for summary judgment and judgment on the pleadings. Furthermore, a non-party against whom judgment is entered has standing without having intervened in the district court action to appeal the district court's exercise of jurisdiction over him. Thompson v. Freeman, 648 F.2d 1144, 1147 n. 5 (8th Cir.1981); Commercial Security Bank v. Walker Bank & Trust Co., 456 F.2d 1352, 1354 (10th Cir.1972); see Zenith Radio Corp., 395 U.S. at 110, 89 S.Ct. at 1569; Brown v. Board of Bar Examiners of State of Nevada, 623 F.2d 605, 608 (9th Cir.1980). If the record discloses that the district court lacked jurisdiction over the party, the appellate court has jurisdiction on appeal to correct the error. Cf. Bender v. Williamsport Area School Dist., 475 U.S. 534, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986).

Finally, since a Rule 60 motion does not toll the time to appeal, Mir v. Fosburg, 646 F.2d 342, 344 (9th Cir.1980), nor does an appeal from a denial of Rule 60 relief bring up the underlying judgment for review, see Browder v. Director, Dept. of Corrections, 434 U.S. 257, 263 n. 7, 98 S.Ct. 556, 560 n. 7, 54 L.Ed.2d 521 (1978), such a motion could not be a procedural prerequisite for Richard Feiner to file this appeal. Thus, Richard Feiner is not procedurally barred from appealing the district court's judgment.

II. The Reformation Counterclaim

Feiner and Co. argues that the district court erred in dismissing the reformation count of its amended counterclaim for failure to state a claim. The district court held that Feiner & Co. had "allege[d] only unilateral mistake, [with] ... no demonstration that Hal Roach Studios was aware of the mistake and permitted it to go forward...." Feiner and Co. contends that the reformation count specifically alleged California Code of Civil Procedure Sec. 338(d) provides for a three year statute of limitations for a cause of action premised upon mistake, including a reformation action based on mutual mistake. ⁸ Bradbury v. Higginson, 167 Cal. 553, 557, 140 P. 254 (1914); Goodfellow v. Barritt, 130 Cal.App. 548, 557, 20 P.2d 740 (1933); Davis Welding & Mfg. Co. v. Advanced Auto Bodyworks, Inc., 38 Cal.App.2d 270, 274, 100 P.2d 1067 (1940). The statute of limitations under Section 338(d) begins to run when "the aggrieved party discovers, or should discover, the existence of the cause of action." Seelenfreund v. Terminix of Northern Cal., Inc., 84 Cal.App.3d 133,...