Meyers v. Selznick Company

• Decision Date: 19 December 1966
• Docket Number: Docket 30550.,No. 118,118
• Citation: 373 F.2d 218
• Parties: Jack MEYERS, Plaintiff-Appellant, v. The SELZNICK COMPANY, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

373 F.2d 218 (1966)

Jack MEYERS, Plaintiff-Appellant, v. The SELZNICK COMPANY, Inc., Defendant-Appellee.

No. 118, Docket 30550.

United States Court of Appeals Second Circuit.

Argued November 1, 1966.

Decided December 19, 1966.

Louis A. Tepper, Gainsburg, Gottlieb, Levitan & Cole, New York City (Emanuel Baetich, New York City, of counsel), for plaintiff-appellant.

Barry Brannen, Beverly Hills, Cal., Weissberger & Frosch, New York City (Elliot J. Lefkowitz, New York City, of counsel), for defendant-appellee.

Before FRIENDLY, SMITH and FEINBERG, Circuit Judges.

FRIENDLY, Circuit Judge:

Appellant Meyers, a citizen of New York, brought this action in the District Court for the Southern District of New York against The Selznick Company, Inc., a California corporation, to recover on express contract or in quantum meruit a finder's fee on transactions by the defendant with one Sig Shore or his interests respecting two of defendant's motion pictures, Duel in the Sun and Ruby Gentry, for television broadcasting. The action was tried to a jury but the judge granted a motion by the defendant for a directed verdict and dismissed the complaint.

Early in 1962 Meyers ascertained from the late David O. Selznick, president of the defendant, that it had available for distribution to television stations a library of 19 motion pictures, all but two of which, Duel in the Sun and Ruby Gentry, had been previously shown. According to Meyers, Selznick fixed prices of $20,000 for a three-year and $25,000 for a five-year license on the reissued films and a total of $500,000 for the initial presentations of Duel in the Sun and Ruby Gentry, and authorized Meyers to represent his company on "the usual 10% commission basis." After various unsuccessful efforts at distributing the pictures, Meyers in New York telephoned Selznick in California on July 5; he inquired whether the films were still available, said he had "a very, very good prospect" in Sig Shore of Video Artists, reconfirmed the prices, and elicited from Selznick a promise that "my commission would be 10% of whatever money accrued to him as a result of any deal with Shore." A few days later he wrote Selznick about a meeting with Shore, who was about to go to California to see Selznick; the letter contained a postscript:

"P.S. Confirming our phone conversation that any deal concluded with Shore and or his interests is commissionable to me on the basis of ten per cent of the deal."

After various conversations between Shore and Selznick in California and Shore and Meyers in New York, Selznick telegraphed Meyers on July 27. He said the deal being negotiated with Shore, which was solely for the reissues, was much less advantageous than he had contemplated, and complained of Meyers' having exceeded his authority by offering Duel in the Sun and Ruby Gentry. The telegram continued:

"And in the event that there should be any deal for either or both of these pictures with Shore or anybody else, there will be no commission whatsoever. You have served thus far only to introduce us to each other by long distance. For this service and upon a waiver of all other claims, we are prepared to pay you five thousand dollars if and when this deal is consummated, but of course without paying you anything further on any other deals, if any, with Shore * * *. Please let me hear from you since we have no intention of closing even this deal with Shore, which as far as I am concerned, is a severe disappointment, if there is going to be any nonsense about commissions beyond this amount * * *."

Meyers immediately responded with a telegram offering to cut his commission to 5%; Selznick by reply wire rejected that offer.

That same day Meyers telephoned Selznick. According to his testimony, he protested about Selznick's "endeavoring to write me out of the deal on Duel and Gentry," whereupon Selznick told him to forget about those films since Selznick didn't think he was going to make a deal for them with Shore whose price had not come up to expectations, and urged him to "go along" on the theory that Meyers would "make it up on other deals." Meyers said he would go along "if it is understood we can do that," continuing "We'll make it up on other deals. Maybe you will compromise with Shore and make a deal with him. I'm willing. Maybe I'll get you a different buyer, I'll come up with half a million for the two pictures." Selznick allegedly assented.

The talk was swiftly followed by a telegram from Selznick, also on July 27, "to confirm your telephonic agreement on the limitation of your commission to five thousand dollars, as dealt with in my previous two telegrams." Receiving no answer Selznick telegraphed six days later:

"Deal almost concluded. Wire immediately your confirmation of commission arrangement as dealt with in my previous telegrams."

To this Meyers responded:

"Pursuant to our telephonic and telegraphic agreements I confirm our understanding my commissions to be Five Thousand Dollars."

Selznick's company thereupon entered into a license agreement with Harbor Productions, Inc., one of Shore's interests, relating to the 17 reissued pictures; in this Selznick agreed to pay Meyers "for service in connection with the licensing of the pictures hereunder * * * an agent's commission of $5,000.00, and no more." On September 17, in response to a request from Meyers, the company sent a check for $5,000, which Meyers later collected, containing an endorsement that:

"Endorser acknowledges payment in full of all commissions due him by payor."

Meyers telephoned Selznick in October as to the continued availability of Duel and Gentry, found that Selznick was still asking $500,000 for them, and introduced Selznick on the phone to an executive of Seven Arts Films. This led to a telegram from Selznick making clear that he was under no obligation to accept an offer from Seven Arts and that "there are many things unresolved, including your commission." Meanwhile Selznick had been negotiating as to the two pictures with Shore who, at his request, had made contacts with television stations and had furnished Selznick with estimates that the pictures could gross more than the $500,000 Selznick had sought for a license. On November 2 Selznick wired Meyers that the two pictures were no longer available for TV in the United States or Canada.

Later, Selznick's company entered into an agreement, dated December 4, engaging Shore as its representative for eleven months to negotiate for the distribution of the two pictures on television at prices comparable to those Shore had estimated in October, the company reserving the right to approve or reject any licensing contract submitted. Shore was to pay most of the sales expenses and was to be compensated on a sliding scale — 3% if net receipts equalled $350,000, 5% if they equalled $400,000, and 10% if they exceeded $450,000. A month later The Selznick Company and Shore modified their arrangements, the primary motive apparently being an attempt to throw income for The Selznick Company into 1962. By an agreement dated back to December 27, 1962, The Selznick Company granted Video Artists, Inc., a company operated by Shore, a license for the two pictures with the right to sublicense to television stations in designated markets until April 1, 1963 or until the sublicenses provided fees of $132,500, whichever was earlier. For this Video Artists, Inc. delivered a note for $120,000, payable only to the extent of the sublicense fees, and additionally agreed to pay The Selznick Company half of any sums payable under the sublicenses in excess of $120,000. At the same time The Selznick Company and Shore agreed that only payments on the $120,000 note should be considered as net receipts for computing Shore's compensation under the earlier agreement, and the company gave Shore a $10,500 advance.

As soon as Meyers learned that an arrangement in regard to the two pictures had been made between The Selznick Company and Shore, he wrote Selznick that he had been anticipating advice on that subject and payment of "an equitable brokerage and or finder's fee." When Selznick did not answer, Meyers wrote him again. Selznick then answered in an angry letter making the points that Meyers "had nothing whatsoever * * * to do with our employing Shore" as selling agent, that only this had been done, and that Meyers had argued against it. Further correspondence resulted only in repitition of this position by The Selznick Company's attorney. The Company's receipts from the television licensing of the two films fell somewhat short of $350,000.

The defenses to this action for a commission were that the arrangements with Shore and his company concerning the two pictures were not licenses and thus did not come within the understanding between Meyers and Selznick, and that in any event, by accepting the $5,000 payment on the initial Shore transaction on the terms stated, Meyers had released any claim for payment on the subsequent one. In response to the first defense Meyers pointed to the breadth of the language he claimed Selznick had used, viz., "whatever money accrued to him as a result of any deal with Shore," adduced evidence as to the wide variety of forms used by motion picture producers to obtain revenues from distributing films, and relied on Shore's testimony that his work with respect to the two films was that of a distributor. In answer to the second he stressed the telephone conversation of July 27 that had preceded the Selznick wire of that date and was incorporated by reference in...