Court Declares Draw in Flap Over Flop 'Sahara'
(CN) - A California appeals panel has effectively declared a draw in the longstanding contract battle between author Clive Cussler and the producers who turned his novel "Sahara" into a box office flop starring Matthew McConaughey.
In May 2001, Cussler and Crusader Entertainment -- now known as Bristol Bay Productions - entered into an agreement granting the movie company an option to purchase the film rights to "Sahara," a second novel designated by Crusader, as well as the right to purchase additional Cussler novels.
Crusader exercised its initial option the following November, but shortly thereafter, the relationship between the parties soured.
As recounted by Justice Patti S. Kitching of California's 2nd Appellate District, "Cussler contends Crusader made unacceptable changes to the approved screenplay. Crusader contends Cussler unreasonably withheld his approval of changes to the screenplay. Crusader also claims that Cussler breached the contract by making derogatory statements to the press about the film."
Nevertheless, the producer paid Cussler four of the seven annual $2.8 million payments due under the contract for the first two films.
But the author was still not satisfied with the movie company and commenced a lawsuit against it in January 2004, seeking $100 million in compensatory damages for breach of contract, punitive damages and a declaration.
The dispute concerned whether Crusader was obligated to pay Cussler the balance he said he was owed, $8.6 million.
Shortly thereafter, the movie "Sahara" was released, and was not a commercial success. Crusader chose not to make a second Cussler film.
Crusader filed a counter-claim, charging Cussler "Arbitrarily, irrationally, and destructively pursued his consultation and approval rights" relating to the Sahara screenplay in violation of the implied covenant of good faith and fair dealing."
The producer also alleged disparaging comments about "Sahara" attributed to Cussler breached express provisions of the contract, and that the author defrauded it by "falsely stating that over 100 million copies of his book had been sold."
Crusader sought $65 million in compensatory damages, punitive damages and a declaration relieving it up any obligation to make payments related to the rights to a second film.
In 2007, a jury returned a special verdict, finding that both parties breached the contract, but that neither sustained any damages as a result. The jury also rejected the fraud claims asserted by both sides. However, the jury found Cussler did breach the implied covenant of good faith and fair dealing and, as a result, Crusader incurred $5 million in damages.
But the dispute between the parties was far from over. In July 2007, Cussler filed two motions relating to his claim for $8.6 million. Both were denied by the trial court. In May 2008, the trial court entered a judgment stating Cussler would get nothing from Crusader, and that the film company was entitled to recover the $5 million in damages awarded by the jury, prejudgment interest, and court costs.
Both parties appealed the judgment on numerous grounds, filing motions that were ultimately tossed by the California Supreme Court.
While these actions were still pending, Cussler found he was unable to raise sufficient funds to post a bond to stay the judgment - which was growing all the time as a result of mounting attorneys' fees.
As a result, in July 2009, Crusader collection $20.9 million from Cussler, an amount representing $5 million in damages and $13.9 million in attorneys' fees; three months later, the trial court awarded Crusader another $150,000 in attorneys' fees, an award Cussler appealed.
By now, the parties were engaged in at least three different lawsuits. After the appellate granted Cussler's motion for a summary reversal of the fee orders, both parties filed motions in the trial court, seeking to be declared the prevailing parties in the case for the purposes of attorney fees and costs. Both sides were seeking to recover $5.7 million, which Crusader had deposited with the Superior Court early in the litigation. The trial court ruled neither side was the prevailing party.
Justice Kitching, joined by Justices Richard Aldrich and Walter Croskey, denied Crusader's assertion that it was the "prevailing party" in the contract clash and could thereby collect millions in attorney fees from Cussler.
"Here, in their pleadings, at trial and on appeal, both Cussler and Crusader sought to recover millions of dollars from each other on their contract claims," Kitching wrote. "Crusader's contract claims consisted of causes of action for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing. But after years of litigation both sides recovered nothing - not one dime of damages and no declaratory relief. The trial court therefore acted well within its discretion when it ruled that neither side was the prevailing party."
The panel also rejected Crusader's contention that "the trial court abused its discretion by awarding an interest rate of 7 percent, which it contends is excessive."
Crusader had sought to lower the rate of the reward to 1.4 percent.
"Crusader argues that Cussler received a 'windfall' because the 7 percent interest rate is far greater than a 'reasonable market rate.' There are, however, countless 'markets,' ranging from treasury bills to far riskier investments. The trial court thus had no way of determining which 'market' to examine, much less whether the rate was 'reasonable,'" Kitching wrote.
The panel deemed Cussler wrong in his attempt to recoup $500,000 in costs because he, like Crusader, could not prove that he came out on top in court.
"Cussler contends that it obtained its litigation objective - the termination of Crusader's option rights to a third novel - through 'legal process' and thus obtained non-monetary relief. This argument ignores the independent reason Crusader conceded the issue. Cussler did not obtain non-monetary relief for purposes of determining the prevailing party under Code of Civil Procedure section 1032, subdivision (a)(4)."