Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 1 of 8 Page ID #:509
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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` CASE NO. SACV 13-454-JLS (ANx)
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`JON VAN DYKE,
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`Plaintiff,
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`vs.
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`ORDER DENYING MOTION FOR
`JUDGMENT ON THE PLEADINGS
`(Doc. 35)
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`1
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`LIONS GATE ENTERTAINMENT, INC.,
`et al.,
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`Defendants.
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 2 of 8 Page ID #:510
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`Before the Court is Defendant Lions Gate Entertainment, Inc.’s Motion for
`Judgment on the Pleadings. (Mot., Doc. 35.) Plaintiff Jon Van Dyke opposed, and Lions
`Gate replied. (Opp’n, Doc. 39; Reply, Doc. 41). The Court finds this matter appropriate
`for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. R. 7-15. Accordingly,
`the hearing set for March 14, 2014 at 2:30 p.m. is VACATED. For the reasons stated
`below, the Court DENIES the Motion.
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`I.
`
`Background
`In January 2010, Van Dyke was employed as director of the media department of
`the Yorba Linda Friends Church. (Second Am. Compl. (“SAC”) ¶ 13, Doc. 28.) At that
`time, Brent Martz was Van Dyke’s supervisor. (Id. ¶ 14.) On or about January 6, 2010,
`Defendant Friends Media entered into an agreement (“Screenplay Agreement”) with Van
`Dyke and Martz to secure the rights to a screenplay that Van Dyke allegedly wrote. (Id. ¶
`15; see Screenplay Agreement, Ans. Ex. A, Doc. 33-1; Mot. Ex. A.)12 The screenplay was
`titled Not Today. (Screenplay Agreement at 1.) Under the terms of the agreement, Van
`Dyke:
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`1 As Van Dyke’s Second Amended Complaint specifically refers to the Screenplay Agreement,
`Lions Gate provides a declaration authenticating the version of the agreement it included in its
`briefing, and Van Dyke does not dispute its authenticity, the Court will consider the agreement in
`ruling on the Motion. Branch v. Tunnell, 14 F.3d 449, 453-54 (9th Cir. 1994), overruled on other
`grounds in Galbraith v. Cnty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002). The Court does not
`find persuasive Van Dyke’s argument in passing that the agreement is void because the first page
`states it was entered into on January 1, 2009, but Friends Media allegedly came into existence in
`August 2009. (Opp’n at 2 n.1.) The exhibits to the agreement—which contain Van Dyke’s
`notarized signature—have a handwritten date of January 6, 2010 (“09” is crossed out by hand and
`replaced “10”), and Van Dyke repeatedly alleges the agreement was entered into on January 6,
`2010. (SAC ¶¶ 15, 61.)
`2 In a separate Order filed concurrently with this Order, the Court has sealed the filings of the
`Screenplay Agreement and ordered Lion Gate to file redacted copies of the agreement due to
`sensitive information contained therein.
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 3 of 8 Page ID #:511
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`(1) sold, assigned, transferred and granted to Friends Media any and all right, title
`and interest to the screenplay, with minor exceptions (Screenplay Agreement
`¶¶ 3, 8, 9, Ex. C);
`(2) agreed that the results of his services in connection with the screenplay were
`created by him as a “work-made-for-hire” for Friends Media, and Friends Media
`is the sole author and owner of those materials (id. ¶ 8);
`(3) waived the right to rescind the agreement and agreed that any damages caused
`by a breach were not irreparable or otherwise sufficient to entitle him to seek
`injunctive or equitable relief. (Id. ¶ 16.)
`Although Martz and Van Dyke were deemed coauthors under the Screenplay
`Agreement and were to split compensation for their work as writers, (SAC ¶ 15;
`Screenplay Agreement ¶ 2(a)), Martz allegedly did not make any copyrightable or other
`substantive contributions to the screenplay. (SAC ¶ 15.) Van Dyke further alleges that
`Martz was in a position to, and in fact did, exercise undue influence and/or coercion on
`Van Dyke in connection with the execution of the Screenplay Agreement. (Id. ¶ 16.)
`Specifically, Martz told Van Dyke that the Church would fire him if he did not sign the
`Screenplay Agreement. (Id.)
`Thereafter, Van Dyke worked full-time for both the Church and Friends Media for
`roughly two and a half years. (Id. ¶ 17.) During that time, he was employed by Friends
`Media “as writer and director” of a film titled Not Today (“Film”). (Id.) Van Dyke and
`Friends Media attempted to “negotiate a written agreement . . . for the rendition of [Van
`Dyke’s] services as director of the Film,” but no agreement was ever reached, and Van
`Dyke never received compensation for his work as director of the Film. (Id. ¶ 18.)
`Van Dyke alleges that he is entitled to “contingent compensation” in connection
`with the Film. (SAC ¶ 20.) He further alleges that Friends Media fraudulently concealed
`an increase in the Film’s budget from $650,000 to $1.8 million, in a “likely” effort to
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 4 of 8 Page ID #:512
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`mislead Van Dyke into believing his “back end” compensation would be greater than it
`actually was. (Id. ¶¶ 20, 53.)
`Lions Gate is the distributor of the Film. (Id. ¶ 23.) Van Dyke alleges that pursuant
`to an agreement with Friends Media (“Acquisition Agreement”), Lions Gate “has acquired
`an interest in the Film,” is exploiting it, and has “entered into either a written joint venture
`agreement and/or an exclusive licensing or exclusive distribution agreement” with Friends
`Media, to exploit the Film. (Id. ¶¶ 23-24.) Lions Gate attached the Acquisition Agreement
`to its Answer and Motion. (Acquisition Agreement, Ans. Ex. B; Mot. Ex. B.) Pursuant to
`the agreement, Friends Media broadly granted to Lions Gate “all Home Video and
`Television Rights of each and every kind, nature and character whatsoever in and to the
`Picture and all elements thereof,” including the “exclusive” right to reproduce, distribute,
`sell, and “otherwise exploit the Picture in all media whether now known . . . or hereafter
`devised.” (Acquisition Agreement ¶¶ 2-4; see also Acquisition Agreement Schedule A.)3
`After the Film’s release on April 12, 2013, Van Dyke again raised the issue of his
`compensation as director, and he requested an accounting. (SAC ¶¶ 19, 22.) Shortly
`thereafter, the Church “unceremoniously terminated” him. (Id. ¶ 22.)
`On the basis of these allegations, Van Dyke asserts two claims against Lions Gate,
`for declaratory relief and an accounting.
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`Legal Standard
`“After the pleadings are closed—but early enough not to delay trial—a party may
`move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). Motions for judgment on the
`pleadings are governed by the same standards applicable to Rule 12(b)(6) motions to
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`II.
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`3 As Van Dyke’s Second Amended Complaint specifically refers to the Acquisition Agreement,
`Lions Gate provides a declaration authenticating the version of the agreement it included in its
`briefing, and Van Dyke does not offer any specific objection to its authenticity, the Court will
`consider the agreement in ruling on the Motion. Branch, 14 F.3d at 453-54.
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 5 of 8 Page ID #:513
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`dismiss. Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1054 n. 4 (9th
`Cir. 2011). “For purposes of the motion, the allegations of the non-moving party must be
`accepted as true, while the allegations of the moving party which have been denied are
`assumed to be false.” Hal Roach Studios v. Richard Feiner & Co., Inc., 896 F.2d 1542,
`1550 (9th Cir. 1989) (citation omitted). “Judgment on the pleadings is proper when the
`moving party clearly establishes on the face of the pleadings that no material issue of fact
`remains to be resolved and that it is entitled to judgment as a matter of law.” Id. (citation
`omitted). “However, judgment on the pleadings is improper when the district court goes
`beyond the pleadings to resolve an issue; such a proceeding must properly be treated as a
`motion for summary judgment.” Id. (citations omitted).
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`III. Discussion
`Lions Gate’s Motion seeks judgment on the pleadings as to Van Dyke’s claims
`against it for declaratory relief and an accounting. The Court finds that judgment on the
`pleadings is not proper as to either claim.
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`A.
`Declaratory Relief Claim
`The Court previously found that a determination of Van Dyke’s rights may affect
`Lions Gate’s rights, and therefore Van Dyke had stated a claim for declaratory relief
`against Lions Gate. (Lions Gate MTD Order at 5, Doc. 27.) Lions Gate has since
`answered the Second Amended Complaint, attaching the Screenplay Agreement and
`Acquisition Agreement. (Ans.)
`Lions Gate argues that pursuant to the Screenplay Agreement, Van Dyke has no
`ownership interest in the Film’s copyright, and as a result Van Dyke has no claim against
`Lions Gate. (Mem. at 2-3, 8-10.) Lions Gate recognizes that Van Dyke has brought a
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 6 of 8 Page ID #:514
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`claim against Friends Media to rescind the Screenplay Agreement,4 but argues that Van
`Dyke is precluded from rescinding the agreement because (1) Van Dyke waived any right
`to do so by the terms of the contract and by his actions, (id. at 13-15); (2) Van Dyke is
`estopped from seeking rescission, (id. at 15-16; Reply at 15-16); and (3) Van Dyke’s
`alleged delay in seeking rescission has substantially prejudiced Lions Gate. (Reply at 14-
`15.)
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`Lions Gate’s waiver argument implicates factual issues that cannot be resolved at
`this stage. Waiver is a question of fact for the trial court, and waiver of a legally conferred
`right must be voluntary, knowing and done with adequate awareness of the relevant
`circumstances and likely consequences. B.W. v. Bd. Of Med. Quality Assurance, 169 Cal.
`App. 3d 219, 233 (1985); Gould v. Corinthian Colleges, Inc., 192 Cal. App. 4th 1176,
`1179 (2011). As Van Dyke pleads that he entered the agreement under duress, and given
`the factual issues presented by certain of Lions Gate’s waiver arguments, at this stage the
`Court cannot find as a matter of law that Van Dyke waived any right to rescind. (See
`Friends Media MTD Order at 10-11.)
`Lions Gate’s equitable estoppel argument—which depends on whether Van Dyke
`reasonably led Friends Media to believe he would not seek to rescind the Screenplay
`Agreement—cannot be resolved on the pleadings either. For example, while Lions Gate
`argues that Van Dyke led Friends Media to reasonably rely on the enforceability of the
`Screenplay Agreement, (Reply at 16), Van Dyke alleges that he repeatedly sought but did
`not receive compensation for his related services as director. (SAC ¶¶ 18, 22.) Van Dyke
`also alleges he requested an accounting with respect to the Film’s budget, as an increase in
`the budget allegedly could have reduced his “back end” compensation. (Id. ¶¶ 22, 53-55.)
`The Court finds that determining whether any reliance by Friends Media was reasonable
`presents factual questions that the Court will not resolve on this Motion. See Superior
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`4 The Court previously held that Van Dyke plausibly alleged a claim for rescission against Friends
`Media. (See Friends Media MTD Order at 10-11, Doc. 23.)
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 7 of 8 Page ID #:515
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`Dispatch, Inc. v. Ins. Corp. of New York, 181 Cal. App. 4th 175, 186-87 (2010) (reasonable
`reliance element of equitable estoppel is ordinarily a question of fact) (citation omitted).
`Lions Gate’s argument as to substantial prejudice is based in part on the claim that
`it has entered into sub-licensees with third parties. (Reply at 15.) However, no such
`allegations are before the Court, and the Court declines to consider matters outside the
`pleadings on this Motion.5 Thus, at this stage, the Court will not find a claim for rescission
`is barred based on alleged substantial prejudice to Lions Gate.
`Lions Gate further argues that, even absent the Screenplay Agreement, Friends
`Media would have joint ownership with Van Dyke of the Film’s copyright due to Friends
`Media’s role in making the Film. (Mem. at 10-12; Reply at 7-11.) In support of its
`argument, Lions Gate claims that Friends Media entirely financed the Film and hired
`numerous other third parties that made copyrightable contributions to the Film. (Mem. at
`6, 8-9.) However, this is not alleged in the pleadings, nor does Lions Gate provide
`supporting evidence. Regardless, even if it were not plausible that Van Dyke were the sole
`owner of the Film’s copyright, a determination of Lions Gate’s rights under the
`Acquisition Agreement would still be required. A co-owner of a copyright cannot grant an
`exclusive right in the use of a copyright. Sybersound Records, Inc. v. UAV Corp., 517
`F.3d 1137, 1145 (9th Cir. 2008). Here, the terms of the Acquisition Agreement purport to
`grant “exclusive” rights to Lions Gate, and Lions Gate’s Answer merely denies it was
`granted “all” exclusive rights. (See Acquisition Agreement ¶ 3, Schedule A; Ans. ¶ 24; see
`also SAC ¶ 24.) While Lions Gate claims that any exclusive license granted by one joint
`owner “would, by operation of law, simply be non-exclusive,” (Mem. at 11), Lions Gate
`ignores the fact that this would require a judicial determination of its rights under the
`agreement. (See Lions Gate MTD Order at 5.)
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`5 Even if the Court were to consider matters outside the pleadings, Lions Gate provides no
`evidence of any sub-licenses.
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`Case 8:13-cv-00454-JLS-AN Document 42 Filed 03/11/14 Page 8 of 8 Page ID #:516
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`Accordingly, the Motion is DENIED as to this claim.
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`B.
`Accounting Claim
`Van Dyke’s second claim against Lion’s Gate is for an accounting. The Court
`previously found that Van Dyke adequately pleaded an accounting claim, “because a
`copyright ‘transferee [such as an exclusive licensee] has an absolute duty to account to all
`of the joint owners.’” (Id. at 7 (quoting 1-6 MELVILLE B. NIMMER & DAVID NIMMER,
`NIMMER ON COPYRIGHT § 6.12[c][3]).) (alteration in original). As Van Dyke’s ownership
`rights in the Film’s copyright have not been determined, and Lions Gate’s purportedly
`“exclusive” license has not been declared non-exclusive (in the event Van Dyke and
`Friends Media are joint owners of the Film’s copyright), the Court will not dismiss the
`accounting claim.6
`Accordingly, the Motion is DENIED as to this claim.
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`IV. Conclusion
`For the foregoing reasons, the Motion is DENIED.
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`DATED: March 11, 2014
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`JOSEPHINE L. STATON
`_________________________________________
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`JOSEPHINE L. STATON
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`UNITED STATES DISTRICT JUDGE
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`6 Lions Gate argues that it is not a “transferee” because the Acquisition Agreement covers limited
`rights, for a limited time and territory. (Reply at 13.) However, as the agreement purports to
`grant some “exclusive” rights, it could be considered a “transfer of copyright ownership.” See 17
`U.S.C. § 101; see also 3-10 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT
`§ 10.02[A] (exclusive license only to publish a hard-cover edition of book is a “transfer,” as is an
`exclusive license limited to a particular geographic area and for a particular period of time).
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