Judge: Teresa A. Beaudet, Case: 24STCV13238, Date: 2024-10-30 Tentative Ruling

Case Number: 24STCV13238    Hearing Date: October 30, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On May 28, 2024, Plaintiff Inside The Park LLC (“Plaintiff”) filed this action against a number of defendants. On July 24, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants 21 In Right Inc., Luis R. Clemente, Roberto Clemente, Jr., CMG Worldwide, Inc., Mark Roesler, Legendary Pictures Productions, LLC, Teton Ridge Entertainment, LLC, and Tre Dev Co, LLC. The FAC alleges causes of action for (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) fraud, (4) specific performance, and (5) declaratory relief.[1] 

Teton Ridge Entertainment, LLC and Tre Dev Co, LLC (jointly, “Teton”) now demur to the fifth cause of action of the FAC. Legendary Pictures Productions, LLC joins in the demurrer. Plaintiff opposes the demurrer.

Discussion

A.    Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. ((Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” ((C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. ((Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” ((Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

B.    Allegations of the FAC  

In the FAC, Plaintiff alleges that in or about March 2022, Plaintiff communicated with Roberto Clemente, Jr., inquiring about film rights to his father, Roberto Clemente’s life story. (FAC, ¶ 18.) “[I]n or about May 2022, the Clemente Family brought in its business agent CMG Worldwide to negotiate a possible deal with [Plaintiff] for the Rights.” (FAC, ¶ 19.)

“In or about June 2022, [Plaintiff], by and through its principals, Jonah Hirsch and Angel Munoz, met with CMG agent Tina Xu and Mark Roesler in Los Angeles to discuss a possible deal for the Rights. During these and in subsequent negotiations and discussions, Luis R. Clemente, Roberto Clemente Jr., Ms. Xu and Mark Roesler verbally represented that 21 In Right was the unencumbered owner of the Rights and had the ability and authority to convey the option to the Rights and the Rights, themselves, to [Plaintiff] should a formal agreement be reached.” (FAC, ¶ 20.) “In or about January 2023, after nearly a year of discussions, meetings, calls and protracted negotiation, [Plaintiff] and Defendant 21 In Right signed the ITP Option Agreement…” (FAC, ¶ 21.)

“The ITP Option Agreement received widespread press coverage and interest, including without limitation a widely circulated article in Deadline published on March 2, 2023.” (FAC, ¶ 23.) Thereafter, “an attorney named Steve Pena sent an email to Mark Roesler of CMG on behalf of Teton Ridge notifying them that the Rights were held by his client. Neither this email, nor the ultimate fact that [Plaintiff’s] option of the Rights was disputed, was disclosed to [Plaintiff] by CMG or Mark Roesler. With this information being deliberately withheld from [Plaintiff], [Plaintiff] took substantial steps and expended considerable sums to commence development and production of a feature film based on the Rights.” (FAC, ¶ 24.)  

“On or about March 16, 2023, [Plaintiff], by and through Jonah Hirsch and Angel Munoz, participated in Zoom call with an A-list director...The director had his agent reach out to [Plaintiff] upon seeing the March 2, 2023 news release in order to set up the call as he was extremely interested in directing the film…” (FAC, ¶ 26.) “It was discussed and agreed the next step was to set up a follow up call in which the Clemente Family would speak directly to the director as soon as he wrapped shooting on his current film.” (FAC, ¶ 26.)

“In or about April 2023, Angel Munoz traveled to Pittsburgh where he was told by Dwayne Rieder, the head of the local Clemente Museum and close friend of Mr. Tull, that Mr. Tull was also developing a film based on the life of Roberto Clemente.” (FAC, ¶ 27.) Plaintiff alleges that Teton Ridge Entertainment, LLC and Tre Dev Co, LLC are owned and/or controlled by Thomas Tull, the former Chairman and CEO of Legendary Pictures Productions, LLC. (FAC, ¶¶ 12, 13.) “[A]fter a few weeks of very tense back and forth…the Clemente Family finally acknowledged they had indeed received the payment from Legendary and that Legendary was the true owner of the Rights.” (FAC, ¶ 27.) Plaintiff attaches as Exhibit C to the FAC a “copy of the Legendary Option Agreement.” (FAC, ¶ 27.)

“In or about August 2023, CMG, sensing [Plaintiff] was running out of patience, decided to return its commission on the transaction (approximately $18,000). [Plaintiff] told CMG that, while the gesture was necessary, this was not sufficient to settle the matter and [Plaintiff] was looking for a resolution that would either: (a) clear the Rights so [Plaintiff] can move forward with a feature film as originally intended or (b) compensation sufficient to compensate [Plaintiff] for the two years of work it had put in the project, as well as other damages.” (FAC, ¶ 29.) “In or about October 2023, the Clemente Family returned the remaining portion of fees [Plaintiff] paid totaling $42,000, but nothing else. Immediately after the payment was sent, the Clemente Family blocked Angel Munoz from all communication and refused to engage in any further communication with [Plaintiff] regarding the Rights or the ITP Option Agreement.” (FAC, ¶ 31.)  

C.    Fifth Cause of Action for Declaratory Relief

In the fifth cause of action for declaratory relief, Plaintiff alleges that “an actual controversy has arisen and now exists between [Plaintiff] and Defendants regarding the ownership of the Rights as well as the nature and scope of the rights purportedly optioned to and purchased by Legendary and/or Teton Ridge and whether any of these rights overlap or interfere with the Rights possessed by [Plaintiff] as set forth in the ITP Option Agreement.” (FAC, ¶ 61.)

Plaintiff alleges that “[a] judicial declaration is necessary and appropriate at this time under the circumstances so that [Plaintiff] and Defendants may ascertain their respective rights and obligations and so that [Plaintiff] can move forward with its anticipated film based upon the Rights and in order to avoid a multiplicity of actions and disputes going forward and so that motion pictures created by Defendants and/or other third parties utilizing the Rights do not proceed further and destroy the unique production and development opportunities regarding the Rights bargained and contracted for by [Plaintiff].” (FAC, ¶ 62.)

In the demurrer, Teton asserts that the declaratory relief cause of action fails because “there is no actual controversy.” (Demurrer at p. 12:15.) In Linda Vista Village San Diego Homeowners Assn., Inc. v. Tecolote Investors, LLC (2015) 234 Cal.App.4th 166, 181, cited by Teton, the Court of Appeal noted that “[t]he fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject.” The Linda Vista Court further noted that “[i]n the context of a demurrer, the courts evaluate whether the factual allegations of a complaint for declaratory relief reveal that an actual, ripe controversy exists between the parties. A matter is not justiciable or appropriate for resolution through declaratory relief unless the proper criteria are present, that there is an actual controversy that is currently active, and both standing and ripeness are appropriate criteria in making that determination. In applying the basic criteria, we evaluate the nature of the rights and duties that the plaintiff is asserting, which must follow some recognized or cognizable legal theories that are related to subjects and requests for relief that are properly before the court.” ((Id. at pp. 181-182 [internal quotations and citations omitted].)

Teton asserts that the declaratory relief cause of action “fails as a matter of law for the straightforward reason that [Plaintiff] admits in the FAC (multiple times) that Legendary owns the Rights, and later executed an option agreement with Teton.” (Demurrer at p. 13:2-4.) As noted by Teton, the FAC alleges that “[t]he Clemente Family and its agent, CMG, fraudulently induced [Plaintiff] to purchase an exclusive option to the rights to Roberto Clemente’s life story for development of a feature film but failed to inform and deliberately concealed from [Plaintiff] the fact that the Clemente Family had already optioned and, in fact, sold those very same rights to Legendary Pictures years earlier.” (FAC, ¶ 1, emphasis added.)[2] Teton also notes that the FAC alleges that “in late May 2023, [Plaintiff] discovered the previous option agreement signed by the Clemente Family and Legendary in 2015 had not, in fact, expired…” (FAC, ¶ 3, emphasis in original.) In addition, as discussed, Plaintiff alleges that “the Clemente Family finally acknowledged…that Legendary was the true owner of the Rights.” (FAC, ¶ 27.) Teton asserts that accordingly, “[Plaintiff’s] admissions in the FAC belie its claim that this Court’s intervention is necessary to adjudicate the parties’ respective rights concerning the production of a feature film that would depict Roberto Clemente’s life story.” (Demurrer at p. 13:14-16.)

In the opposition, Plaintiff asserts that “there is an actual controversy supporting Plaintiff’s declaratory relief cause of action.” (Opp’n at p. 8:19-20.) As discussed, paragraph 1 of the FAC alleges that “[t]he Clemente Family and its agent, CMG, fraudulently induced [Plaintiff] to purchase an exclusive option to the rights to Roberto Clemente’s life story for development of a feature film but failed to inform and deliberately concealed from [Plaintiff] the fact that the Clemente Family had already optioned and, in fact, sold those very same rights to Legendary Pictures years earlier.” (FAC, ¶ 1, emphasis added.) Plaintiff contends that this allegation does not establish the lack of a controversy, because “this allegation has nothing to do with the current ownership of Roberto Clemente’s rights…simply because [21 In Right, Inc.] previously optioned Roberto Clemente’s rights does not mean that Legendary exercised that option and/or that Legendary or Teton currently owns the rights…” (Opp’n at pp. 10:26-11:1, emphasis omitted.) However, Plaintiff does not appear to point to any allegations of the FAC stating that Teton or Legendary do not own the subject rights.

As discussed above, Plaintiff also alleges that “[u]pon further investigation and questioning by [Plaintiff] over the next few weeks, in late May 2023, [Plaintiff] discovered the previous option agreement signed by the Clemente Family and Legendary in 2015 had not, in fact, expired as repeatedly and falsely represented by 21 In Right, Luis R. Clemente, Roberto Clemente Jr. and CMG.” (FAC, ¶ 3, emphasis added.) Plaintiff argues that this allegation also does not establish the lack of a controversy. Plaintiff asserts that it “was provided with an email wherein Steve Pena, one of Teton’s attorneys, wrote to CMG asserting that Teton still owned the rights to Roberto Clemente. But simply because Steve Pena and Thomas Tull made representations to Plaintiff that Teton owns the rights does not make it true.” (Opp’n at p. 11:14-17.) But again, Plaintiff does not cite to allegations of the FAC stating that although “the previous option agreement signed by the Clemente Family and Legendary in 2015 had not, in fact, expired,” (FAC, ¶ 3), Teton and/or Legendary still purportedly do not own the subject rights. As noted by Teton in the reply, Plaintiff does not appear to allege “that Legendary/Teton do not own the exclusive rights, nor that the rights did not vest.” (Reply at p. 9:27-28.)

The Court agrees with Teton that Plaintiff does not appear to allege facts demonstrating a dispute regarding ownership of the subject rights.

Plaintiff also argues that “the agreements themselves contemplate two different productions and there is a dispute as to whether and/or where there is any overlap between the two option agreements. Specifically, Plaintiff’s agreement contemplates production of a ‘first class feature film’ based on the book ‘Clemente – The True Legacy of an Undying Hero’ (see FAC, Ex. A ¶ 3), while Legendary’s agreement contemplates production of a theatrical motion picture based on certain life rights (see FAC, Ex. C at 1).” (Opp’n at p. 12:7-12.) But the FAC does not appear to contain any specific allegations discussing such a dispute, and Plaintiff does not point to any. Moreover, as noted by Teton, “[w]hile inconsistent theories of recovery are permitted, a pleader cannot blow hot and cold as to the facts positively stated.” (Brown v. City of Fremont (1977) 75 Cal.App.3d 141, 146 [emphasis in original, reference to [citation] omitted].)

As discussed, Plaintiff pleads that “[t]he Clemente Family and its agent, CMG, fraudulently induced [Plaintiff] to purchase an exclusive option to the rights to Roberto Clemente’s life story for development of a feature film but failed to inform and deliberately concealed from [Plaintiff] the fact that the Clemente Family had already optioned and, in fact, sold those very same rights to Legendary Pictures years earlier.” (FAC, ¶ 1, emphasis added.) As noted by Teton, Plaintiff appears to assert that “the Clemente Family and 21 In Right previously sold the rights to produce a film based on the life of Roberto Clemente to someone other than [Plaintiff], and in the same breath, asserts that [Plaintiff] is not sure whether it owns these rights.” (Reply at p. 14:3-5.)

            Based on the foregoing, the Court sustains Teton’s demurrer to the fifth cause of action of the FAC, with leave to amend.

Conclusion

Based on the foregoing, Teton’s demurrer to the fifth cause of action of the FAC is sustained, with leave to amend. The Court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of the date of this Order. If no amended complaint is filed within 20 days of this Order, the Court orders Teton to file and serve a proposed judgment of dismissal within 30 days of the date of this Order.¿¿Teton is ordered to give notice of this Order.  

DATED:  October 30, 2024                           ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court