Case 2:17-cv-00308-JAK-AFM Document 114 Filed 04/09/18 Page 1 of 21 Page ID #:5538

1 John Shaeffer (SBN 138331)

jshaeffer@foxrothschild.com
2 Jeff Grant (SBN 218974)
jgrant@foxrothschild.com
3 Amanda Murray (SBN 305018)
amurray@foxrothschild.com
4 FOX ROTHSCHILD LLP
10250 Constellation Blvd., Suite 900
5 Los Angeles, CA 90067-6209
Telephone: 310-598-4150
6 Facsimile: 310-556-9828
7 Attorneys for Defendant and Counterclaimant
8 ANIMAL LOGIC ENTERTAINMENT, LLC,
Incorrectly identified in the complaint as Animal
9 Logic Entertainment US.
Counterclaimants/Third-Party Complainants
10 ANIMAL LOGIC LLC, and ANIMAL LOGIC ENTERTAINMENT PTY LTD.,
11 Defendant ZAREH NALBANDIAN
12 UNITED STATES DISTRICT COURT
13 CENTRAL DISTRICT OF CALIFORNIA
14 JASON LUST, an individual, Case No.: 17-CV-00308-JAK-AFM
15 Plaintiff, Hon. Judge John A. Kronstadt
16 v. REPLY IN SUPPORT OF MOTION
SUMMARY JUDGMENT OR, IN
17 ANIMAL LOGIC ENTERTAINMENT THE ALTERNATIVE, FOR
US, a California limited liability PARTIAL SUMMARY JUDGMENT
18 corporation; ZAREH NALBANDIAN, an
individual; and DOES 1 through 20,
19 inclusive,
20 ** REDACTED ** PUBLIC
Defendants. VERSION
21 ANIMAL LOGIC ENTERTAINMENT,
22 LLC, a California limited liability
corporation; ANIMAL LOGIC LLC, a Date: June 18, 2018
23 California limited liability corporation, and Time: 8:30 a.m.
ANIMAL LOGIC ENTERTAINMENT Place: Courtroom 10B
24 PTY LTD, an Australian company, First Street Courthouse
25 Counterclaimants,
26 v.
27 JASON LUST, an individual,
28 Counterclaim-Defendant.
Continues on next Page

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1 ANIMAL LOGIC ENTERTAINMENT,

LLC, a California limited liability
2 corporation; ANIMAL LOGIC LLC, a
California limited liability corporation, and
3 ANIMAL LOGIC ENTERTAINMENT
4 PTY LTD, an Australian company

5 Third-Party Complainants,

6 v.

7 SAJ PRODUCTIONS, LLC, a California

limited liability company,
8
Third-Party Defendant.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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1 TABLE OF CONTENTS

2
3 I. INTRODUCTION ................................................................................................ 1

4 II. BACKGROUND .................................................................................................. 2

5 A. The SFA ..................................................................................................... 2

6 B. Peter Rabbit ................................................................................................ 3

7 C. Other Project............................................................................................... 5

8 III. DISCUSSION ....................................................................................................... 5

9 A. Summary Judgment Standard..................................................................... 5

10 B. A Reasonable Jury Could Only Find that Lust First Breached

11 the SFA ....................................................................................................... 6

12 C. No Reasonable Jury Could Find for Lust on His Breach of Contract

13 Claims ......................................................................................................... 7

14 D. No Reasonable Jury Could Find for Lust on His Breach of the

15 Covenant of Good Faith and Fair Dealing Claim ...................................... 8

16 E. No Reason Jury Could Find for Lust on His Breach of Fiduciary

17 Duty Claim ................................................................................................. 9

18 F. No Reasonable Jury Could Find for Lust on Any of His

19 Fraud Claim .............................................................................................. 11

20 G. Defendants Declaratory Relief Cause of Action Fails as a

21 Matter of Law ........................................................................................... 14

22 H. Lust Does Not Dispute that His Accounting Claim Fails without

23 Another Viable Cause of Action .............................................................. 15

24 IV. CONCLUSION................................................................................................... 15

25
26
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1 TABLE OF AUTHORITIES
2
Page(s)
3
Federal Cases
4
5 Aalmuhammed v. Lee,
202 F.3d 1227 (9th Cir. 2000) ................................................................................. 14
6
7 Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) ................................................................................................... 6
8
9 California and Hawaii Sugar Co. v. Sun Ship, Inc.
794 F.2d 1440 (9th Cir. 1986) ................................................................................. 12
10
Chou v. University of Chicago,
11
254 F.3d 1347 (Fed. Cir. 2001) ............................................................................... 11
12
JMP Securities LLP v. Altair Nanotechnologies Inc.,
13 880 F.Supp.2d 1029 (N.D. Cal. 2012) ..................................................................... 14
14
L’Garde, Inc. v. Raytheon Space and Airborne Systems,
15 2013 WL 12113998 (C.D. Cal. 2013) ..................................................................... 12
16
Loomis v. Cornish,
17 836 F.3d 991 (9th Cir. 2016) ..................................................................................... 5
18 Estate of Lopez v. Gelhaus,
19 871 F.3d 998 (9th Cir. 2017) ..................................................................................... 7
20 Love v. The Mail on Sunday,
21 489 F.Supp.2d 1100 (C.D. Cal. 2007) ..................................................................... 10
22 Manley v. Rowley,
23 847 F.3d 705 (9th Cir. 2017) ........................................................................... 5, 6, 13

24 Mazed v. JP Morgan Chase Bank, N.A.,

2014 WL 1364929 (C.D. Cal. 2014) ....................................................................... 12
25
26 McIndoe v. Huntington Ingalls Inc.,
817 F.3d 1170 (9th Cir. 2016) ................................................................................... 5
27
28 MP Nexlevel of California, Inc. v. CVIN, LLC,
2014 WL 5019639 (E.D. Cal. 2014)........................................................................ 10

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1 Nelson v.Pima Community College,

83 F.3d 1075 (9th Cir.1996) ...................................................................................... 5
2
Nigro v. Sears, Roebuck and Co.,
3
784 F.3d 495 (9th Cir. 2015) ..................................................................................... 6
4
PSA Group, LLC v. Nations Transaction Services, Inc.,
5 2010 WL 3001634 (C.D. Cal. 2010) ......................................................................... 6
6
R.W. Beck & Assocs. v. City of Borough of Sitka,
7 27 F.3d 1475 (9th Cir. 1994) ..................................................................................... 5
8
Redgrave v. Boston Symphony Orchestra, Inc.,
9 855 F.2d 888 (1st Cir. 1988) (en banc) ..................................................................... 8
10 Scott v. Harris,
11 550 U.S. 372 (2007) ................................................................................................... 8
12 In re: Shoe Pavilion, Inc.,
13 2013 WL 12113232 (S. D. Cal. 2013) ..................................................................... 10
14 UMG Recordings, Inc. v. Global Eagle Entertainment, Inc.,
15 117 F.Supp.3d 1092 (C.D. Cal. 2015) ............................................................... 13, 14

16 Villiarimo v. Aloha Island Air, Inc.,

281 F.3d 1054 (9th Cir. 2002) ................................................................................... 5
17
18 Watts v. Holland,
153 F.2d 337 (9th Cir. 1946) ................................................................................... 10
19
20 World Surveillance Group, Inc. v. La Jolla Cove Investors, Inc.,
66 F.Supp.3d 1233 (N.D. Cal. 2014) ................................................................. 10, 11
21
22 California Cases
23 Addiego v. Hill,
238 Cal.App.2d 842 (1965) ................................................................................... 6, 7
24
25 Ben-Zvi v. Edmar Co.,
40 Cal.App.4th 468 (1995) .................................................................................... 6, 7
26
27 City of Hope Nat. Medical Center v. Genentech,
43 Cal.4th 375 (2008) .............................................................................................. 11
28

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1 Comm. On Children’s Television, Inc. v. Gen. Foods Corp.,

35 Cal.3d 197 (1983) ............................................................................................... 10
2
Lippman v. Sears Roebuck & Co.,
3
44 Cal.2d 136 (1995) ................................................................................................. 6
4
Locke v. Warner Bros., Inc.,
5 57 Cal.App.4th 354 (1997) ...................................................................................... 13
6
Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit
7 Assoc.,
8 55 Cal.4th 1169 (2013) ............................................................................................ 12
9 Tenzer v. Superscope, Inc.,
10 39 Cal.3d 18 (1985) ................................................................................................. 12

11 Walnut Creek Pipe Distribs. v. Gates Rubber Co. Sales Div.,

228 Cal.App.2d 810 (1964) ....................................................................................... 6
12
13 Westwater v. Rector, etc., of Grace Church,
140 Cal. 339 (1903) ................................................................................................... 8
14
15 Wolf v. Walt Disney Pictures and Television,
107 Cal.App.4th 25 (2003) ...................................................................................... 11
16
17 California Statutes
18 Cal. Corp. Code
§ 16308(a) ................................................................................................................ 10
19
20
21
22
23
24
25
26
27
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1 I. INTRODUCTION
2 Plaintiff and Counterclaim Defendant Jason Lust (“Lust”) offers nothing more
3 than conjecture, allegations unsupported by evidence, and his own inconsistent
4 testimony in response to the facts material to the disposition of this motion. While
5 they may be entertained, no reasonable jury could rule in his favor.
6 First, Lust agrees that he has not signed standard, studio-requested Certificates
7 of Engagement (“COE”) even though his Short Form Agreement (SFA”) with
8 Defendant and Counterclaimant Animal Logic Entertainment, LLC (“ALE”)
9 unconditionally requires him to do so. While he asks that a precondition to his
10
performance be implied, he fails to demonstrate requisite necessity. Further, while
11
Lust claims the time of his refusal is unknown, his unfulfilled obligation accrued no
12
later than September of 2014.
13
Second, Lust concedes that ALE has paid him what he is due under the SFA.
14
He offers no facts to suggest that his material breach of the SFA did not predate any
15
alleged breach by ALE. While he may dream his “attachment” to Peter Rabbit
16
obligated ALE to ensure his active production on the film, Lust’s attorney, expert
17
witness, and Lust himself testified that ALE had no such obligation.
18
Third, Lust concedes that the SFA did not make him a partner in ALE or a
19
business partner of Defendant Zareh Nalbandian (“Nalbandian”). Lust now argues
20
21 that Defendants are estopped from challenging to his claim of partnership. No court
22 anywhere has found a partnership by estoppel in this context. Finally, Lust argues
23 that his relationship with Nalbandian was one in confidence, but concedes that the
24 exploitation of intellectual property in this context does not create a fiduciary
25 relationship.
26 Fourth, Lust does not dispute that, if he is already contractually obligated to
27 sign COEs (he was), Lust could not be fraudulently induced to sign them. Since Lust
28 knew from the outset that the SFA had a two-year term, he could not reasonably rely

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1 that it did not. Lust concedes that at the time of contracting no one represented to him
2 that the materially-different long-form agreement he wanted would be forthcoming.
3 Finally, Lust offers no evidence that Defendants, at the time of entering into the SFA,
4 intended to later materially change the SFA.
5 Fifth, Lust’s “producer synopses” filed with the Copyright Office do not create
6 a question of fact as to whether he holds protectable rights in any projects he worked
7 on that are still in development at ALE.
8 Sixth, Lust’s inability to create disputed question of fact with respect to any of
9 his claims precludes Lust from continuing to press his accounting remedy.
10
Rule 56 is a rule of efficiency, removing from the Court’s dockets claims that
11
are not close. While a decision to grant this motion would not end this case – the
12
remedy for Lust’s breach of the SFA, along with the interference claim against him
13
would remain – such a ruling would put this matter in a procedural posture where the
14
parties should be able to resolve their differences on their own.
15
II. BACKGROUND
16
A. The SFA
17
On March 14, 2013, after several months of negotiations, Lust contracted to
18
provide producer services to ALE for an initial two-year term.1 The SFA provides
19
that “[c]opyright[s] and all related IP in the services [Lust provided were] to be
20
21 assigned to” ALE. Dkt. 91-1 at 2-3. In exchange, “Lust was paid an annual salary,”
22 recoupable against his share of any producer fees and profit participation received by
23 ALE on those project “to which Lust was ‘entitled to be attached.’” Opp. at 3:15-16.
24 The SFA defines attachment to include “[a]ll … projects agreed as commencing
25 development after the Commencement, greenlit for production within a five (5) year
26 period from termination.” Dkt. 91-1 at 4. Additionally, with respect to projects “to
27
1
Lust’s Opposition to Motion for Summary Judgment (“Opp.”) at 3:3-8; Nalbandian
28 Deposition at 275:3-15, additional portions of Nalbandian Depo. are attached to the
supplemental declaration of John Shaeffer (“Shaeffer Supp. Decl.”) as Exhibit 39.
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1 which [he is] entitled to be attached[, Lust is also to] be accorded a credit no less than
2 ‘Executive Producer.’” Opp. 3 at 28.
3 Nothing in SFA, nor in the negotiations leading up to its execution, suggest that
4 the parties contemplated Lust performing services after the contract term, other than to
5 ensure the assignment of his intellectual property, as part of his right to receive a share
6 of revenues and credit on projects greenlit during the attachment period.2 To the
7 contrary, Lust expressed some concern that the term “attachment” could adversely
8 impact his right to payment and credit – “I do not understand what you mean by ‘to
9 which you are entitled to be attached[,]’ this could negate all projects because it is
10
ambiguous and undefined.” DSS ¶ 19, Dkt. 91-7. ALE responded “‘to which you are
11
entitled to be attached is clearly defined in the [SFA] under ‘Attachments’ ie 2yr/5yr
12
sunset clause.” Id.
13
The the SFA was not extended, so it expired on January 31, 2015. Dkt. 91-9.
14
B. Peter Rabbit
15
The only project greenlit so far to which Lust is entitled to be attached is Peter
16
Rabbit. Shaeffer Supp. Decl., Ex. 39 at 26:5-13. On February 12, 2014, after
17
Columbia Picture Industries, Inc. (“Columbia”) decided to purchase ALE’s Peter
18
Rabbit pitch, Columbia provided ALE with a first draft of a Producers Agreement.
19
The draft indicated that it was for the services of Nalbandian and Lust as producers.3
20
21 Section 9.1 provided that Columbia had “no obligation either to engage [ALE] or use
22 [Lust’s or Nalbandian’s] … production services ….” Dkt. 103-22 at § 9.1.
23 In an April 8, 2014 email, Lust told Nalbanian that he would sign the Peter

24 Rabbit COE, but wanted to convey his lawyer’s concerns, including that the SFA
25
26 2
Defendants’ Objections and Response to Lust’s Separate Statement of Genuine
27 Issues in Dispute, which is Lust’s response to Defendants’ Separate Statement
(“DSS”) at ¶21.
28 3 Defendants’ Response to Lust Separate Statement of Additional Facts (“DAS”) at ¶¶
28 and 35, Dkt. 109-22.
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1 treated him as an employee, which reduced rights Lust wanted. Dkt. 91-16. While
2 Lust spoke first with Rob Cornish, ALE’s CFO, Cornish told Lust to speak with
3 Nalbandian. Id. Cornish recounted to Nalbandian that, during his call, Lust asked
4 about his long-form agreement and Cornish responded that the existing draft long-
5 form agreement simply memorialized the SFA. Dkt. 110-50. Cornish told Lust that
6 since Lust now wanted changes over the agreed-upon terms in the SFA, Lust needed
7 to reach an understanding with Nalbandian before Cornish would authorize any more
8 work on the long-form agreement. Id.; Dkt. 91-34 at 54:1-55:3, 117:23-118:13.
9 Lust was 100% certain he wanted changes to their arrangement. Dkt. 91-3 at
10
44:8-18. Lust would later outline for Nalbandian ten material changes he expected for
11
their relationship to continue. DAS ¶48, Dkt. 110-8. Significantly, he did not suggest
12
that his right to attachment meant he must be an active producer on any project. Id.
13
After Lust signed his Peter Rabbit COE, Columbia revised the Producers
14
Agreement to identify Lust for the first time as the first priority producer for both pre-
15
production and production. Dkt. 103-12 at 34-103. Columbia and ALE would not
16
exchange further drafts until long after the SFA expired. Dkt. 103-13 at 180:3-7.
17
In October 2015, Columbia applied for a tax incentive available in Australia for
18
projects with significant Australian creative content. Id. at 24:12-23, 26:23-28:11,
19
39:7-9, 181:14-182:5.
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21
22
23
24
25
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1 In May 2016, ALE sent Lust an execution copy of the Peter Rabbit Producers
2 Agreement. DAS ¶58. Lust, however, refused to sign it unless Columbia revised the
3 agreement to guarantee him producer credit and make him an active producer on the
4 project, among other things. Dkt. 91-25. Columbia decided on its own to proceed
5 without Lust’s signatures. DAS ¶59. Even without the requested changes, Lust’s own
6 expert testified that the Peter Rabbit Producers Agreement “attaches” Lust to the
7 project as that term is understood in the entertainment industry. DSS ¶23.
8 C. Other Project
9 By September of 2014, ALE began pursuing Lust’s signature on additional
10
COEs requested by studios. DSS ¶6; Dkt. 110-6. Lust has not executed any of these
11
requested COEs even though they are standard in the industry, and he believes these
12
studios will not pursue the projects without a COE from him. DAS ¶¶7, 9, 10.
13
III. DISCUSSION
14
A. Summary Judgment Standard
15
Lust does not dispute that ALE carried its initial burden. Now, “‘there is no
16
issue for trial unless there is sufficient evidence favoring the nonmoving party for a
17
jury to return a verdict for the party. If the evidence is merely colorable, or is not
18
significantly probative, summary judgment may be granted.’” McIndoe v. Huntington
19
Ingalls Inc., 817 F.3d 1170, 1173 (9th Cir. 2016) (quoting R.W. Beck & Assocs. v.
20
21 City of Borough of Sitka, 27 F.3d 1475, 1480 n.4 (9th Cir. 1994) (internal quotation
22 marks omitted). “‘[M]ere allegations and speculation do not create a factual dispute
23 for purposes of summary judgment.’” Loomis v. Cornish, 836 F.3d 991, 997 (9th Cir.
24 2016) (quoting Nelson v. Pima Community College, 83 F.3d 1075, 1081–82 (9th Cir.
25 1996)). Similarly, the Court can “refuse[] to find a ‘genuine issue’ [as to a material
26 fact] where the only evidence presented is ‘uncorroborated and self-serving’
27 testimony.’” Manley v. Rowley, 847 F.3d 705, 711 (9th Cir. 2017) (quoting Villiarimo
28 v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (additional quotes

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1 omitted)). “‘[T]he mere self-serving nature of testimony permits a court to discount

2 that testimony where it ‘states only conclusions and not facts that would be admissible
3 evidence.’” Id. (quoting Nigro v. Sears, Roebuck and Co., 784 F.3d 495, 497–98 (9th
4 Cir. 2015). Finally, “[o]nly disputes over fact that might affect the outcome of the suit
5 under the governing law will properly preclude the entry of summary judgment.”
6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
7 B. A Reasonable Jury Could Only Find that Lust First Breached the
8 SFA
9 Lust does not dispute that his refusal to sign studio-requested COEs is a breach
10
of the SFA.4 DSS ¶7. He also concedes that SFA does not condition this obligation
11
on him first receiving a long form agreement. DSS ¶11. Instead, he asks the Court to
12
imply such a condition. Opp. at 10:23-25. “The law[, however,] refuses to read into
13
contracts anything by way of implication except upon the grounds of absolute
14
necessity.” Addiego v. Hill, 238 Cal.App.2d 842, 846 (1965). “‘[I]t is not enough to
15
say that without the proposed implied covenant, the contract would be improvident or
16
unwise or would operate unjustly. Parties have the right to make such agreements.
17
The law refuses to read into contracts anything by way of implications except upon
18
grounds of obvious necessity.’” PSA Group, LLC v. Nations Transaction Services,
19
Inc., 2010 WL 3001634, *4 (C.D. Cal. 2010) (quoting Walnut Creek Pipe Distribs. v.
20
21 Gates Rubber Co. Sales Div., 228 Cal.App.2d 810, 815 (1964)).
22 Nothing suggests that conditioning Lust’s assignment obligation on his receipt

23 of a long-form agreement is “‘indispensable to effectuate the expressed intention of

24 the parties.’” Ben-Zvi v. Edmar Co., 40 Cal.app.4th 468, 473 (1995) (quoting
25 Lippman v. Sears Roebuck & Co., 44 Cal.2d 136, 145 (1995). In Ben-Zvi, the court
26 refused to find residency in Israel to be an implied condition of employment with an
27
4
Lust spends a lot of time arguing that ALE cannot now rescind the SFA. This
28 argument is of no import because Lust does not dispute that his material breach of the
SFA alone undermines his breach of contract claim.
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1 Israeli company. Id. In Addiego, upon which Lust relies, the court implied that an
2 owner’s right to acquire another interest in their company on the “same terms,”
3 necessarily included the right to acquire based on the cash equivalent of a third-party’s
4 offer, since the purpose of the provision was to limit ownership in the company. 238
5 Cal.App.2d at 847. Here, like Ben-Zvi and unlike Addiego, Lust offers nothing to
6 suggest how or why his receipt of a long-form agreement must be, by necessity, a
7 condition to his obligation to cause all intellectual property relating to work with ALE
8 be assigned to ALE.
9 ALE agrees with Lust that, at least for copyrights, his assignment is not self-
10
executing. This is precisely why Lust’s refusal to sign studio requested COEs amount
11
to a breach of the SFA. Lust argues that defendants fail to identify a specific date
12
when he refused to sign a COE, but Lust admits that ALE requested he execute COEs
13
during the SFA’s term and he did not honor these requests. DSS ¶¶6-7. Lust
14
similarly does not actually dispute that ALE’s requests predate any claim of breach he
15
makes against ALE. DSS ¶¶8 and 14.
16
C. No Reasonable Jury Could Find for Lust on His Breach of Contract
17
Claims
18
Lust does not dispute that, if he breached the SFA first, his breach of contract
19
causes of action fail as a matter of law. Lust similarly agrees that ALE has paid him
20
21 everything he is currently due under the SFA. DSS ¶¶14-18.
22 Lust’s argument that his “attachment” to Peter Rabbit required ALE to ensure

23 that Columbia actually use his production services fails when his own sworn
24 testimony, along with the testimony of his personal attorney and expert witness, are to
25 the contrary. DSS ¶¶20, 22; Estate of Lopez v. Gelhaus, 871 F.3d 998, 1008 (9th Cir.
26 2017) (“‘[w]hen opposing parties tell two different stories, one of which is blatantly
27 contradicted by the record, so that no reasonable jury could believe it, a court should
28 not adopt that version of the facts for purposes of ruling on a motion for summary

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1 judgment.’” (quoting Scott v. Harris, 550 U.S. 372, 380, (2007)). His argument is
2 particularly insufficient here, where his own expert testified that the executed
3 Producers Agreement “attaches” Lust to Peter Rabbit, as the term would be
4 understood in the industry. DSS ¶23.
5 While Lust may prefer a producer credit, the SFA did not require that he receive
6 such credit. Opp. at 3:24-28; DSS ¶28. Consistent with the terms of the SFA,
7
8
9 .
10
At best, Lust argues that his reputation has suffered because he did not provide
11
active producing services on Peter Rabbit. DSS ¶42. Lust’s inability, however, to
12
identify any specific work he lost because of this alleged reputational harm renders his
13
claim wholly speculative and insufficient to support any claim for recovery.
14
Westwater v. Rector, etc., of Grace Church, 140 Cal. 339 (1903) (“Damages to health,
15
reputation, or feelings are not clearly ascertainable either in their nature or origin.”);
16
Redgrave v. Boston Symphony Orchestra, Inc., 855 F.2d 888, 894 (1st Cir. 1988) (en
17
banc) (limiting award for reputational injury to specific work lost).
18
D. No Reasonable Jury Could Find for Lust on His Breach of the
19
Covenant of Good Faith and Fair Dealing Claim
20
21 Lust concedes that the covenant of good faith and fair dealing cannot impose

22 obligations on ALE beyond those contemplated by the parties at the time of

23 contracting. Thus, to the extent no reasonable interpretation of “attachment” would
24 impose on ALE an obligation to ensure that a studio actually use his production
25 services, the covenant will not impose such a burden. Lust speculates that ALE must
26 have caused Columbia to decide not to use his production services or not to afford him
27 a producer credit, but he cites no evidence that directly, or even circumstantially,
28 could support such a finding. DSS ¶24. To the contrary, Lust agrees that before the

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1 Producers Agreement was entered, ALE told Columbia that Lust wanted a producer
2 credit and to be an active producer on the project. Dkt. 91-25. Columbia on its own
3 decided not to agree to Lust’s terms. DAS ¶59.
4 Even though there is no dispute that from its first draft, the Peter Rabbit
5 Producers Agreement gave Columbia the discretion not to use Lust’s production
6 services – as is typical in the industry – Lust focuses on changes made to ALE’s
7 obligation to make him and Nalbandian available to Columbia. Opp. 8:11-15. He
8 contends that changes to this obligation would violate custom and practice, which,
9 according to Lust, precludes such changes after talent signs a COE. DAS ¶53. This
10
argument fails first because it is based on a written opinion from Lust’s expert witness
11
that was explicitly disavowed during that expert’s deposition. Id. Second, and
12
contrary to Lust’s suggestion, he was first identified to provide first priority
13
production services to Peter Rabbit after he signed his COE. Dkt. 103-12 at 34-103.
14
Finally, the changes made to ALE obligations to make Lust’s services available to
15
Columbia ultimately reflect reality – ALE could not compel Lust to work after the
16
term of the SFA. Nothing in the executed Producers Agreement, nor anything else,
17
supports Lust’s speculation that ALE did something to prevent Columbia from using
18
Lust’s production services on Peter Rabbit. DSS ¶24.
19
E. No Reason Jury Could Find for Lust on His Breach of Fiduciary
20
21 Duty Claim

22 Lust concedes that if a reasonable jury could not rule in his favor on his breach

23 of contract claim, his fiduciary duty claim similarly fails. He also now agrees that the
24 SFA did not create any partnership. Opp. at 17 (“the SFA may not expressly provide
25 for the creation of a general partnership”).
26 There is no merit to Lust’s argument that ALE must be estopped from
27 challenging his claim of partnership. Opp. at 18. A defendant can be estopped from
28 challenging a third-party’s claim that the third party believe he was dealing with a

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1 partnership. Cal. Corp. Code § 16308(a). No court anywhere, however, has extended
2 the doctrine of partnership by estoppel to allow an individual to become a member in
3 a partnership, as Lust asserts. MP Nexlevel of California, Inc. v. CVIN, LLC, 2014
4 WL 5019639 (E.D. Cal. 2014) (“the Court cannot find any authority holding that two
5 parties publicly describing themselves as 'partners’ or describing their relationship as a
6 ‘partnership’ is sufficient, without more, to establish a legal partnership”).
7 Lust is correct that parol evidence can be admitted to establish a partnership.
8 The only parol evidence he offers, however, is his and Nalbandian’s colloquial
9 reference to each other as partners, which is legally insufficient. Id.; Watts v. Holland,
10
153 F.2d 337, 339 (9th Cir. 1946) (“in the cattle raising trade those associated, the
11
owners and cowboys alike, often refer to their relationship as partners and Holland
12
claims he referred to his relationship with Watts in this colloquial sense and that Watts
13
so understood it.”) Love v. The Mail on Sunday, 489 F.Supp.2d 1100, 1107 (C.D. Cal.
14
2007) (“there is no evidence that the ‘partnership’ between Plaintiff and Defendant
15
was anything other than that they were songwriting collaborators”); In re: Shoe
16
Pavilion, Inc., 2013 WL 12113232, *3 n. 2 (S. D. Cal. 2013) (“To the extent some of
17
the evidence presented on summary judgment refers to a ‘partnership’ between
18
Plaintiffs and Shoe Pavilion, these references appear to have been made in the
19
colloquial sense indicating cooperation and do not support the existence of a legal
20
21 partnership pursuant to California law.”).
22 Recognizing the weakness of his partnership claim, Lust now argues that he had

23 a confidential relationship with Defendants that warrants the imposition of fiduciary

24 duties. Opp. at 16. In this context, “[a] fiduciary relationship is a special
25 circumstance in which the fiduciary ‘assumes duties beyond those of mere fairness
26 and honesty;’ and ‘must undertake to act behalf of the beneficiary, giving priority to
27 the best interest of the beneficiary.’” World Surveillance Group, Inc. v. La Jolla Cove
28 Investors, Inc., 66 F.Supp.3d 1233, 1235 (N.D. Cal. 2014) (quoting Comm. On

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1 Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal.3d 197, 222 (1983). “This
2 obligation to put the interests of the other party first is why a fiduciary relationship
3 generally does not arise out of ordinary arms-length business dealing.” Id. Lust
4 cannot reference anything unique here to avoid the norm, which requires more than
5 “one party entrust[ing] valuable intellectual property to another for commercial
6 development in exchange for compensation contingent on commercial success.” City
7 of Hope Nat. Medical Center v. Genentech, 43 Cal.4th 375, 391 (2008) (trial court
8 erred in instructing jury that fiduciary duty was created by entrusting idea for share of
9 profits); Wolf v. Walt Disney Pictures and Television, 107 Cal.App.4th 25, 33 (2003).
10
Lust reaches for support to a Federal Circuit opinion decided under Illinois law.
11
Chou v. University of Chicago, 254 F.3d 1347 (Fed. Cir. 2001) (finding allegations
12
that a professor exploited an invention of his student and research assistant sufficient
13
to plead a fiduciary breach). Overturning the trial court’s dismissal, the Federal
14
Circuit recognized “[t]he relevant factors in determining whether [a] fiduciary
15
relationship exists include the disparity in age, education, and business experience
16
between the parties, and the extent to which the ‘servient’ party entrusts the handling
17
of affairs to the ‘dominant’ party and places trust and confidence in that party.” Id. at
18
1362. If anything, Lust viewed himself as the “dominant” party here, citing to his
19
“superior experience” in the entertainment industry. DAS ¶¶1-4, DSS ¶37. No
20
21 reasonable jury would rule in Lust’s favor on his breach of fiduciary duty claim.
22 F. No Reasonable Jury Could Find for Lust on Any of His Fraud Claim

23 Lust agrees that his constructive fraud claim depends on his breach of fiduciary

24 duty claim. Opp. 20:7-15. Since no reasonable jury could rule in his favor on his
25 breach of fiduciary duty claim, his constructive fraud claim also fails.
26 Lust concedes he could not be fraudulently induced to sign the Peter Rabbit
27 COE if he was already contractually obligated to sign it. Opp. 20:22-28. Lust instead
28 argues that he was motivated to sign the Peter Rabbit COE because of his review of

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1 drafts of the Peter Rabbit Producers Agreement and comments that he would be kept
2 informed. Opp at 21. Whether Lust may have had additional motivation to sign this
3 COE is irrelevant as he was contractually obligated to perform this task. California
4 and Hawaii Sugar Co. v. Sun Ship, Inc. 794 F.2d 1440, 1443 (9th Cir. 1986).
5 Lust is correct that the parol evidence rule does not absolutely foreclose a claim
6 of fraud based on oral promises inconsistent with express terms of a written contract.
7 Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assoc., 55
8 Cal.4th 1169, 1183 (2013). “[P]romissory fraud, like all forms of fraud[, however,
9 still] requires a showing of [fraudulent intent and] justifiable reliance.” Id.; L'Garde,
10
Inc. v. Raytheon Space and Airborne Systems, 2013 WL 12113998, *17 (C.D. Cal.
11
2013) (“It has been noted by a number of California courts that a plaintiff in a fraud in
12
the inducement lawsuit cannot rely on a promise or alleged representation that a
13
contract effectively rejects.”). Fraudulent intent can be inferred from circumstantial
14
evidence. Opp. at 23 (citing Tenzer v. Superscope, Inc., 39 Cal.3d 18, 31 (1985)).
15
Both the Riverisland and Tenzer Courts, however, “stress that the intent element of
16
promissory fraud entails more than proof of an unkept promise or mere failure of
17
performance.” Riverisland, 55 Cal.4th at 1183. “[I]f, ‘[a] plaintiff adduces no further
18
evidence of fraudulent intent than proof of nonperformance of an oral promise, he will
19
never reach a jury.’” Id. (quoting Tenzer, 39 Cal.3d at 31 (1985); Mazed v. JP
20
21 Morgan Chase Bank, N.A., 2014 WL 1364929, *6 (C.D. Cal. 2014) (granting
22 summary judgment where the evidence at best demonstrated non-performance)).
23 Lust agrees that his fraud claims are limited to: (1) defendants concealing an

24 intent to change Lust’s share of Net Revenues from a project to which he is entitled to
25 be attached; (2) defendants supposed concealing an intent to change the meaning of
26 attachment; (3) defendants never intended to extend its relationship with Lust for more
27 than two years; and (4) defendants never intending to provide him with a long form
28 agreement. DSS ¶¶ 32-33.

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1 The sum total of Lust’s “evidence” of any fraudulent intent is the following:
2 “There are facts under which a trier of fact could conclude, by Defendants’ hasty
3 repudiation of their promises, their failure to even attempt performance, and the
4 assurances they would perform, that Defendants all along intended to defraud Lust.”
5 Opp. at 22. Not only is the allegation that “facts exists” insufficient, the undisputed
6 record undermines the veracity of the allegation itself. Manley, 847 F.3d at 711.
7 First, Lust admits ALE has paid him what he is due under the SFA. DSS ¶¶15-18.
8 Second, since Lust maintains that defendants did not know what “attachment” meant
9 when ALE entered the SFA, Lust can have no evidence that at this same time
10
defendants intended to later change its meaning. DAS ¶15 Third, rather than “hastily
11
repudiate any promise” to extend his relationship with ALE beyond its two-year term,
12
Lust argues that in August 2014, 18 months into the relationship, he believed
13
Nalbandian had acceded to Lust’s demands for material changes to their present and
14
future relationship. DAS ¶49. Fourth, rather than not preparing a long-form
15
agreement at all, the undisputed record shows that ALE prepared a long-form
16
agreement, but decided not to provide it to Lust after Lust expressed his expectation
17
that it should include materially-different terms. DAS ¶49; Dkt. 91-34 at 54:1-55:3,
18
117:23-118:13. Lust offers no facts to support his allegation that defendants intended
19
to defraud Lust or that he reasonably relied on any purported misrepresentation such
20
21 that a reasonable jury could return a verdict in his favor on his fraud claims. Compare
22 Locke v. Warner Bros., Inc., 57 Cal.App.4th 354, 386 (1997) (“because Warner had
23 expressed an absolute unwillingness to work with Locke, a trier of fact reasonably
24 could infer Warner never intended to give Locke's proposals a good faith evaluation”).
25 Lust’s fraud allegations amount to nothing more than the contention that ALE
26 failed to live up to his perception of its contractual promises. UMG Recordings, Inc.
27 v. Global Eagle Entertainment, Inc., 117 F.Supp.3d 1092, 1104 (C.D. Cal. 2015)
28 (“Like other species of fraud claims, however, promissory fraud claims are subject to

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1 the economic loss rule.”). Lust’s inability to articulate more than a simple breach of a
2 perceived contractual promise dooms his claim based on application of the economic
3 loss rule. Id. (dismissing fraud claim that effectively sought “to take ‘allegations
4 underpinning a straightforward claim for breach of a commercial contract and recast
5 them as torts,’ which ‘consist of nothing more than [defendants'] alleged failure to
6 make good on its contractual promises.’” (quoting JMP Securities LLP v. Altair
7 Nanotechnologies Inc., 880 F. Supp.2d 1029, 1041 (N.D. Cal. 2012)).
8 G. Defendants Declaratory Relief Cause of Action Fails as a Matter of
9 Law
10
Contrary to Lust’s contention, defendants do not dispute that Lust has a
11
copyright in the producer synopses he filed with the Copyright Office. Instead, at
12
issue is whether Lust holds any protectable interest in any of the projects he worked
13
on at ALE that are still in development.
14
The dispute is whether Lust’s “synopses” – whether filed with the Copyright
15
Office or not – amount to anything more than producer’s notes. Dkt. 19 at ¶ 124 (“An
16
actual controversy now exists between Lust, on the one hand, and Defendants, on the
17
other hand, with regard to ownership of certain intellectual property rights in ….
18
Fortunately the Milk.”). Lust concedes that producer’s notes are not works of an
19
author for copyright purposes that would be in relevant to a motion picture based on
20
21 an underlying property. Aalmuhammed v. Lee, 202 F. 3d 1227, 1233 (9th Cir. 2000)
22 (“A creative contribution does not suffice to establish authorship of the movie.”)
23 For example, Fortunately the Milk is a book authored by Neil Gaiman. Dkt.

24 102 at 3. Lust’s Producer Synopsis includes a single paragraph entitled “My revised
25 vision.” Id. Lust’s idea “begins at the end of Neils’ story where we open with the
26 question of do the kids believe Dad or not? … Professor Steg bursts in. It seems the
27 Space Time Continuum was not fixed and Steg and Dad must now journey through
28 space and time again to·put all back together again. One of the books fatal flaws is

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1 that the kids remain passive for the entire story, so this opens up the possibility of
2 taking the kids along for the ride.” Dkt. 102 at 3. Lust fails to offer facts tending to
3 show that his synopsis amounts to anything more than direction for a screenwriter to
4 create copyrightable expression. This is precisely the type of contribution to a motion
5 picture project – whether registered or not – that the Ninth Circuit has held is not the
6 work of an author on a motion picture.
7 Lust offers no evidence that the use of his ideas – which may now be found in
8 what he deposited with the Copyright Office – amounts to a dispute of “ownership of
9 certain intellectual property rights in” the projects Lust worked on during the term of
10
his contract with ALE. He simply fails to offer any evidence from which a reasonable
11
jury could find that Lust has protectable expression in projects he worked on during
12
the term of the SFA that are currently still being developed by ALE.
13
H. Lust Does Not Dispute that His Accounting Claim Fails without
14
Another Viable Cause of Action
15
Lust agrees that an accounting is a remedy dependent upon the viability of his
16
other claims. Since no reasonable jury could find for him on either claim, or on any of
17
the claims he asserts, his accounting claim fails as well.
18
IV. CONCLUSION
19
For the foregoing reasons, the Defendants, Counterclaimants, and Third-Party
20
21 Complainants respectfully request that the Court grant them summary judgment or
22 partial summary judgment.
23 Dated: April 9, 2018 FOX ROTHSCHILD LLP

24 By /s/ John Shaeffer

John Shaeffer
25 Attorneys for Defendant and Counterclaimant
ANIMAL LOGIC ENTERTAINMENT, LLC,
26 Counterclaimants/Third-Party Complainants
ANIMAL LOGIC LLC, and ANIMAL
27 LOGIC ENTERTAINMENT PTY LTD., and
Defendant ZAREH NALBANDIAN
28

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