Roddenberry v. Roddenberry

• Decision Date: 16 April 1996
• Docket Number: No. B074848,B074848
• Court: California Court of Appeals Court of Appeals
• Parties: , 96 Cal. Daily Op. Serv. 2682, 96 Daily Journal D.A.R. 4411 Eileen A. RODDENBERRY, Plaintiff and Appellant, v. Majel RODDENBERRY, as Executor, etc., et al., Defendants and Appellants.

Page 907

51 Cal.Rptr.2d 907

44 Cal.App.4th 634, 96 Cal. Daily Op. Serv. 2682,

96 Daily Journal D.A.R. 4411

Eileen A. RODDENBERRY, Plaintiff and Appellant, v. Majel RODDENBERRY, as Executor, etc., et al., Defendants and Appellants.

No. B074848.

Court of Appeal, Second District, Division 2, California.

April 16, 1996.

Rehearing Denied May 3, 1996.

Review Denied July 31, 1996.

Greenberg, Glusker, Fields, Claman & Machtinger, Michael A. Greene, Brian Edwards, Los Angeles, Greines, Martin, Stein & Richland, Kent L. Richland and Barbara W. Ravitz, Beverly Hills, for Defendants and Appellants.

Jones, Day Reavis & Pogue, Elwood Lui, Thomas M. McMahon, Laura A. Matz, Los Angeles, for Plaintiff and Appellant.

ZEBROWSKI, Associate Justice.

The meaning of a term used in a contract is sometimes so obvious to the contracting parties that neither side sees any need for an express definition. Later, after circumstances have changed and new financial incentives have arisen, one side may wish it had a different agreement. Remanufactured memories and new advice then combine to ascribe an updated and previously uncontemplated meaning to the term. This is such a case.

The plaintiff is Eileen Roddenberry ("the first Mrs. Roddenberry"). Until his death shortly before trial, the primary defendant was her former husband, Gene Roddenberry. Gene Roddenberry created the "Star Trek" television series, movies, animations, and other Star Trek properties. Majel Roddenberry ("the second Mrs. Roddenberry") is now a defendant in her capacity as an executor of Gene Roddenberry's estate. Gene Roddenberry's loan-out corporation "Norway" is also a defendant.

The case presents two issues. A rough summary of the first issue is whether certain profits generated by Star Trek projects created after Gene Roddenberry and the first Mrs. Roddenberry divorced (while Gene Roddenberry was married to the second Mrs.

Roddenberry) belong to the second Mrs. Roddenberry and Gene Roddenberry's estate, or to the first Mrs. Roddenberry. The second issue is whether punitive damages for fraud were properly awarded against Norway after Gene Roddenberry's death.

FACTUAL SUMMARY

The original "Star Trek" television series.

In the 1960s, during his marriage to the first Mrs. Roddenberry, Gene Roddenberry developed a television series entitled "Star Trek." Star Trek (hereafter "Star Trek 1") appeared on NBC for three seasons, from 1966 to 1969.

By the time Gene Roddenberry and the first Mrs. Roddenberry divorced in 1969, Star Trek 1 had rated third in its time slot for each of its three seasons, had amassed a multi-million dollar production deficit, was considered a commercial failure, and had been cancelled by NBC. Efforts were underway to syndicate Star Trek 1 for rerun on local television stations. Norway's contract with the Star Trek 1 production company provided that Norway was entitled to several types of income from syndications, including a set payment per rerun and "Profit Participation" payments if reruns ever yielded profits according to the contractual formula. ¹

The divorce settlement agreement and judgment.

In mid-1969, Gene Roddenberry and the first Mrs. Roddenberry agreed to a divorce settlement covering the typical numerous issues and resulting from the typical numerous trade-offs. Among the many community assets distributed was Norway, which held the rerun payment and profit participation rights in "Star Trek." Norway also owned a copyright interest in Star Trek. ² The settlement agreement allocated Norway to Gene Roddenberry; the first Mrs. Roddenberry received other marital property. The settlement agreement thus allocated to Gene Roddenberry all the previous community property rights in Star Trek, including the marital copyright interests, with only one exception: The first Mrs. Roddenberry was allocated a "one-half interest in all future profit participation income from 'Star Trek' to which [the first Mrs. Roddenberry] and/or [Gene Roddenberry] are entitled." ³

The agreement was handwritten (mostly by the first Mrs. Roddenberry's attorney), read into the court record (by the first Mrs. Roddenberry's attorney), and entered as a judgment in 1969. The judgment provided that subject to its provisions, "all future income of each party is that party's separate property." Thus except for whatever was included in the category of "profit participation income from Star Trek," the first Mrs. Roddenberry had bargained away all property interests she might have had in Gene Roddenberry's post-divorce income. ⁴

The terms "profit participation" and "Star Trek" used in the 1969 settlement agreement and resulting judgment were not expressly defined. The current dispute was possible because of this lack of express definition.

Post-divorce Star Trek projects.

After these events, Gene Roddenberry devoted the remaining twenty-one years of his life to various Star Trek projects. He married the second Mrs. Roddenberry within days of his divorce and remained married to her until his death in 1991. The second Mrs. Roddenberry assisted in his post-divorce Star Trek efforts.

These post-divorce efforts gradually bore fruit. From 1973 to 1975, a Star Trek animation series was broadcast on NBC. It won an Emmy and was rerun in syndication. In 1979, "Star Trek: The Motion Picture" was released. Five sequels followed. A new Star Trek television series, "Star Trek: The Next Generation" (hereafter "Star Trek 2") appeared in 1987. Additional projects included television specials, merchandising, music, etc. In January 1993, after Gene Roddenberry's death, a spin-off television series entitled "Star Trek: Deep Space Nine" (hereafter "Star Trek 3") began.

Star Trek 1 goes into profits, suit is filed.

By 1984, 15 years after its cancellation as a financial failure, Star Trek 1 had recouped its production deficit, and Norway began to receive "profit participation" payments. Norway began making payments to the first Mrs. Roddenberry.

Near the end of 1987, the first Mrs. Roddenberry filed suit claiming--correctly, it was later determined--to have been shorted. Initially, she claimed only half of Norway's profit participation in Star Trek 1. Later, she expanded her claim to half of all income from all of Gene Roddenberry's post-divorce Star Trek efforts. ⁵ She also sued Norway and Gene Roddenberry for fraud in connection with Norway's handling of payments to her.

THE TRIAL COURT JUDGMENT

After trial in part to the court and in part to a jury, and subject to adjustments and qualifications not necessary to detail here, the trial court entered a multi-part judgment.

The Star Trek 1 "profit participation" interest.

The trial court found that the first Mrs. Roddenberry was entitled to half the profit participation payments from Star Trek 1. Offsets claimed by Norway and the estate were disallowed. (This portion of the judgment has not been appealed, and would be affirmed in any event.) ⁶

The fraud claim.

The trial court also entered judgment on a jury verdict against Norway for $900,000 in punitive damages for fraud in Norway's handling of profit participation payments to the first Mrs. Roddenberry.

The post-divorce Star Trek projects.

On the first Mrs. Roddenberry's claim to half of all income generated by Gene Roddenberry's post-divorce Star Trek projects, the trial court rendered a split and inconsistent decision.

Preliminarily, the trial court simply ignored the first Mrs. Roddenberry's testimony that she was entitled to half of all post-divorce Star Trek income. This testimony was contrary to the express language of the settlement agreement and resulting judgment, and was inconsistent with all other evidence. The trial court properly ignored it and focused on the issue of profit participation.

In evaluating the profit participation issue, the trial court identified six categories of Star Trek projects, five of which (all except Star Trek 1) post-dated the 1969 divorce: (1) Star Trek 1, (2) the Star Trek animations in 1973 through 1975, (3) the six motion pictures from 1979 to 1991, (4) the Star Trek 2 television series beginning in 1987, (5) the Star Trek 3 television series beginning in 1993, and (6) various merchandising ventures on an ongoing basis.

With regard to the post-divorce projects designated as (2) the Star Trek animations, (3) the six Star Trek movies, and (6) the merchandising ventures, the trial court employed a traditional contractual intent analysis. Based on this analysis, the trial court found no contractual intent that the first Mrs. Roddenberry would receive any profits generated by these post-divorce projects.

As to animations, movies and merchandising, judgment was therefore for defendants.

With regard to Star Trek 2 and 3, the trial court employed a markedly different analysis. Instead of applying the same traditional contractual intent analysis which resulted in a defense verdict on animations, movies and merchandising, the court instead inquired whether Star Trek 2 and 3 were "continuations" of Star Trek 1. Finding that both Star Trek 2 and 3 were "continuations" of Star Trek 1, the trial court awarded the first Mrs. Roddenberry half the profits from Star Trek 2 and 3. ⁷

THIS APPEAL

The first Mrs. Roddenberry appeals the ruling that she is not entitled to profits from the animations, movies, and merchandising, on the grounds that this ruling is not supported by substantial evidence.

Norway and the estate appeal the award of half the Star Trek 2 and 3 profits to the first Mrs. Roddenberry on the grounds that this award is not supported by substantial evidence. Norway also appeals the punitive damage award on several grounds.

DISPOSITION ON APPEAL

That part of the judgment which denies the first Mrs. Roddenberry profits from the post-divorce animations, movies and merchandising is affirmed. That part of the judgment which awards the first Mrs. Roddenberry $900,000 in punitive damages against Norway for fraud is also affirmed....