(CN) – Buena Vista Home Entertainment will not – at least for now – have to pay a Korean investor more than $2 million in damages and attorney fees after losing a dispute over the video distribution rights of a Steven Seagal movie.
“The Patriot,” starring Seagal, never made it into theaters, but its afterlife in the home entertainment market has proven particularly lucrative, with Buena Vista earning $13.5 million on its distribution.
The June 2007 distribution agreement provided that Buena Vista’s fee would be a percentage of the distribution proceeds and allowed the company to recoup its expenses before paying the balance proceeds to Last Patriot.
Of the $13.5 million that resulted from the deal, Buena Vista earned fees of $3 million and paid over $4.7 million to the movie’s production company, Last Patriot, and its creditors, including Ilshin.
However, Buena Vista’s contract stated that it needed to seek the consent of the film’s producers before incurring distribution expenses over $900,000.
When it neglected to secure that consent, Ilshin sued Buena Vista and won $4.5 million in lost profits and distribution-cost overruns, and also awarded it $1.49 million in attorney fees.
Dealing with challenges to the trial court’s findings by both parties, the Los Angeles-based Second District California Court of Appeals affirmed the lower court’s imposition of a two-year limitation on the period for which Ilshin could recover damages, but it also said the court erred in refusing to enter a directed verdict against Buena Vista on a conversion claim.
With respect to Buena Vista’s appeal, the appellate reversed the trial court’s damage award in part with respect to the amount of contract damages, and the lost profits damages.
It also set aside the award of attorney fees.
“The law does not authorize the award of attorney fees for a prevailing plaintiff in an independent creditor’s suit,” wrote Justice Victoria Gerrard Chaney, who remanded the case for a redetermination of the awards for contract damages and lost profits.
In “The Patriot,” Seagal plays a Montana immunologist who battles a militia group that has unleashed a deadly virus.
Buena Vista released the DVD in 1999, and Mel Gibson starred in a Revolutionary War movie, also called “The Patriot,” in theaters one year later.