Tuesday, October 2, 2012
C.A. Upholds Actor’s Award of ‘Nash Bridges’ Profits
Divided Panel Distinguishes Agreement Tolling of Statute of Limitations From Waiver
From Staff and Wire Service Reports
In this Sept. 27 file photo, Don Johnson arrives at the Los Angeles Philharmonic’s 2012 Opening Night Gala.
An agreement to toll the statute of limitations in an effort to settle a dispute is not a waiver and is thus not subject to a statute requiring that such waivers be renewed in writing every four years, the Court of Appeal for this district ruled yesterday.
The 2-1 ruling by Div. Five upheld actor Don Johnson’s multimillion dollar jury award over profits from the series “Nash Bridges” but cut its amount by more than $8 million. A Los Angeles Superior Court jury awarded Johnson $23.2 million, to which Los Angeles Superior Court Judge Michael Stern added nearly $6 million in prejudgment interest.
Presiding Justice Paul A. Turner, writing for the Court of Appeal, wrote in an unpublished portion of the opinion that the verdict was excessive because declarations filed in connection with the defendants’ new trial motion established that $8.2 million of the damage award was actually intended as prejudgment interest. The amount of the judgment will have to be recalculated as $15 million plus prejudgment interest from the date of the July 2010 verdict, the court said.
Turner also rejected the argument by the series’ producers and financiers, Rysher Entertainment, 2929 Entertainment and Qualia Capital, that the statute of limitations barred the action. They acknowledged that the claims accrued on March 17, 1998, and that the applicable statute was tolled by an agreement dated May 14, 2002, which by its terms was to expire 30 days after the defendants rescinded it.
Suit was filed in February 2009, which was within the rescission period. But the defendants argued that the action was barred by Code of Civil Procedure Sec. 360.5, which states:
“No waiver shall bar a defense to any action that the action was not commenced within the time limited by this title unless the waiver is in writing and signed by the person obligated. No waiver executed prior to the expiration of the time limited for the commencement of the action by this title shall be effective for a period exceeding four years from the date of expiration of the time limited for commencement of the action by this title and no waiver executed after the expiration of such time shall be effective for a period exceeding four years from the date thereof, but any such waiver may be renewed for a further period of not exceeding four years from the expiration of the immediately preceding waiver. Such waivers may be made successively….”
Turner, in the published part of the opinion, distinguished between waivers and tolling agreements. Citing the legislative history of the section, he reasoned that when the section was written in 1951, and rewritten in 1953, there was no intent to apply it to tolling agreements, which were not common at the time.
A tolling agreement differs from a waiver of the statute, the presiding justice said, because the defendant who enters into the agreement does not give up a potential defense based on the statute, but merely allows the tolling period to be added to the limitations period.
Los Angeles Superior Court Judge Edward Ferns, sitting on assignment, concurred in the opinion. Justice Richard Mosk dissented.
“The apparent purpose of section 360.5 was to prevent creditors from extracting perpetual waivers of the statute of limitations and thereby emasculating the defense of the statute of limitations,” Mosk wrote….Moreover, such agreements would be contrary to the public interest in preventing stale claims….The same policy principles apply to agreements whether labeled as waivers of, or as tolling of, the statute of limitations.”
“Nash Bridges” aired for six seasons on CBS.
“Nash Bridges’ has been my baby since its inception and I’ve fought for years for my interest under our contractual agreement,” Johnson wrote in a statement, adding that he was gratified that the appeals court ruled in his favor. Defense attorneys handling the case were not immediately available for comment.
They argued at trial that the series was costly to produce and that was why Johnson hadn’t been paid more.
Johnson was awarded half of the show’s copyrights at trial, which made him eligible to receive continued profits from the show as long as it remains in syndication. His attorney Mark Holscher of Kirkland & Ellis also praised the ruling, and a news release from his firm stated that the series is expected to earn more than $50 million in the coming years.
Law firms representing the defendants were Horvitz & Levy and Munger Tolles & Olson for Rysher Entertainment, LLC; Gibson, Dunn & Crutcher for 2929 Entertainment, LP; and O’Melveny & Myers for Qualia Capital, LLC.
The case is Don Johnson Productions, Inc. v. Rysher Entertainment, 12 S.O.S. 4924.
Copyright 2012, Metropolitan News Company