Metro-Goldwyn-Mayer, Inc. v. Scheider

• Decision Date: 12 May 1972
• Docket Number: METRO-GOLDWYN-MAYE,INC
• Citation: 75 Misc.2d 418,347 N.Y.S.2d 755
• Parties: , Plaintiff, v. Roy SCHEIDER and Roy Scheider Productions, Inc., Defendants.
• Court: New York Supreme Court

Page 755

347 N.Y.S.2d 755

75 Misc.2d 418

METRO-GOLDWYN-MAYER, INC., Plaintiff, v. Roy SCHEIDER and Roy Scheider Productions, Inc., Defendants.

Supreme Court, Trial Term, New York County, Part XXIV.

May 12, 1972.

Shea, Gould, Climenko & Kramer, New York City, by Jesse Climenko and Martin Shelton, New York City, for plaintiff.

L. Reyner Samet and Daniel H. Kossow, New York City, for defendants.

ARNOLD L. FEIN, Justice:

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 played a major role in a then unreleased picture, 'The French Connection' for which he has since gained acclaim and a nomination for an Academy Award as Best Supporting Actor. A preview of that film had been seen by ABC and MGM personnel at that time. Within a few days, it was agreed that Scheider would have second star billing in the pilot and first star billing in the series, should there be a series. These understandings were not reduced to writing, it being agreed that further terms would be worked out between Scheider's attorney and the attorneys for MGM.

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 twelve 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, 1972, air date. All parties understood that if ABC exercised its option for a September 1972 air date for the series, filming would have to begin in the spring of 1972. There were similar discussions between Kossow and Thomas J. Robinson (Robinson), another MGM attorney. In these various conversations and communications, the dates discussed were April and May, 1972 dates, and also June 5, 1972.

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 mid-year 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 such terms in a written 'Outline Deal Memo', utilized with respect to Richard Basehart, the other principal actor in the pilot.

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...