LOS ANGELES (CN) – A California appeals court has reversed a judgment finding that the producers of the 1990s TV hit "Home Improvement" waited too long to file claims against Disney for their share of profits in the sitcom.
In a February 2013 lawsuit filed in Los Angeles County Superior Court, “Home Improvement” creator-producers Matt Williams, Carmen Finestra and David McFadzean accused Walt Disney Pictures of using accounting tricks and other delays to avoid paying them a share of millions of dollars in revenue.
Under agreements dating back to 1992, the producers said they should receive 75 percent of net profits from the series, which ended in 1999. Disney avoided paying them by charging expenses and distribution fees to the series and failing to report cable retransmission royalties and merchandising and music publishing revenue, they claimed.
In early 2015, Judge William Highberger agreed the producers' claims were untimely under a two-year limitations period in the parties' contract, and granted summary adjudication to Disney.
But this past Friday, the Second Appellate District in Los Angeles ruled the producers had created “triable issues of material fact” because Disney's audits had forced the producers to make claims outside the 24-month limitations period.
“The evidence submitted by the producers showed that, in addition to failing to timely respond to requests for information and documents, Disney had a practice of allowing only one audit to proceed at a time, and of requiring the producers to wait in an audit queue for long periods of time before permitting their audits to begin," Judge Laurie Zelon wrote for the three-judge panel.
Zelon said a clause in the parties' contract required the producers to object in “'specific detail'” within two years.
“In the absence of a timely and thorough audit, the producers could not submit detailed objections to the summary statements issued by Disney, and thus, could not satisfy the time limitations in the incontestability clause,” Zelon wrote in the 41-page opinion. “The cumulative effect of Disney’s delays was that the producers were precluded from complying with their obligations under the parties’ agreement.”
Disney and its affiliates failed to adequately account for revenue from the series, which the producers said in their lawsuit was syndicated for more than $1.5 billion in profits.
Presiding Judge Dennis Perluss and Judge Michael Small joined Zelon's opinion.
Over its 204-episode run, “Home Improvement” remained a juggernaut in ABC’s schedule for nearly the entire 1990s and peaked at number 2 on the Nielsen viewership ratings during the 1993-1994 season.
Based on the standup comedy routine of its star Tim Allen, the show catapulted Allen to fame and nabbed several Emmy and Golden Globe nominations.
It ended its eight-season run in 1999, still ranked at number 10 in the ratings.
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