Michael Keaton Loses Preliminary Round In Contract Case

Michael Keaton Loses Preliminary Round In Contract Case

by Jerry Glover
August 19, 2013

Actor/director Michael Keaton recently lost a preliminary round in a dispute over whether a release between a motion picture production company and Keaton was secured under duress. Merry Gentleman, LLC v. George and Leona Productions, Inc., No. 13 C 2690 (N.D. Ill. August 14, 2013).

The plaintiff, Merry Gentleman, was formed to produce a film by the same name. Keaton, through his loan out company, George and Leona Productions, was hired to act in and direct the film. Filming ended in April 2007. The director services agreement was the only agreement relevant to this case. That agreement gave Keaton what is known as a director’s “first cut” which meant that Keaton had the first opportunity to edit the film into Keaton’s conception of the finished film. Keaton finished this cut behind schedule. Neither Merry Gentleman nor Keaton was satisfied with this cut but Keaton convinced the company to give him another chance. The company agreed to do so but, without Keaton’s knowledge, completed its own cut of the film.

In November 2007, the company elected to submit its cut of the film, rather than Keaton’s second attempt, to the Sundance Film Festival. The Festival accepted the film for a prestigious showing and wanted Keaton to attend the premiere. Keaton told the Festival, that he would not attend unless the Festival screened his cut of the film. The Festival told the producers that it would not screen the film unless Keaton attended.

In a Settlement and Release Agreement (the Release) executed in December 2007, the parties agreed that Keaton’s version of the film would be screened at Sundance. The agreement also included provision whereby Merry Gentleman and Keaton release each other from “any and all claims … arising from or relating to any [c]ontracts in respect of or relating to the Picture, the provision or performance of directing … by [Keaton]” as of the date of the agreement. The release stated that it would be construed in accordance with Illinois law.

Keaton did further work on the film in anticipation of its commercial release including selecting music for the film. But those music selections exceeded the music budget for the film. Keaton refused to change the music and also refused to work with members of the film’s production and marketing teams. The film was finally released to theatres in May 2009. It received some critical acclaim but only made $350,000 at the U.S. box office. At the beginning of the film’s release Keaton made a promotional appearance on Good Morning America. During the interview, he claimed not to remember much about the film’s plot because, he claimed, it had been awhile since he had seen the film. When the show ran a clip from the film, Keaton put on sunglasses and turned away from the screen.

The production company finally filed a lawsuit against Keaton’s company four years later alleging breach of the director’s agreement. Keaton moved to dismiss the lawsuit claiming that the Release the parties signed prohibited the plaintiff from alleging breach for acts occurring before the Release’s effective date and that the breaches claimed after the date of the release did not amount to a breach of the director’s agreement. Keaton also claimed that the company did not provide him with notice of his alleged breach as required by the contract that would have allowed him to cure the breach and, therefore, the company could not now claim breach of contract.

Merry Gentleman claimed that the Release was invalid because it was obtained under duress. The court noted that Illinois defines duress as a “condition where one is induced by a wrongful act or threat of another to make a contract under circumstances which deprive him of the exercise of his free will.” Id. at 5 quoting Rissman v. Rissman, 213 F.3d 381, 386 (7th Cir. 2000 (Rissman). The court added that duress is not merely consent obtained “through hard bargaining positions or financial pressures.” Id. at 6 quoting Krlich v. American national Bank & Trust Co. of Chicago, 778 N.E.2d 1153, 1162 (Ill. App. 2002).

The plaintiff claimed that Keaton’s threat not to appear at the Sundance Film Festival unless his cut of the film was the one premiered left it was no choice but to sign the Release Keaton insisted upon. The Festival was in January. Keaton’s threat occurred in December. Thus, there was no time for Merry Gentleman to file a breach of contract lawsuit against Keaton and to have it resolved in time for the Festival. The court agreed with the plaintiff that “a remote possibility of litigation as an alternative to settlement does not always scot [] a claim of duress.” Id. quoting Rissman at 386. The court also agreed that the threats Keaton made coupled with the prestige of getting a Sundance premiere gave plaintiff no choice but to sign the Release. Thus, the Release was a product of duress and invalid.

As to those Keaton’s actions after the date of the Release, the plaintiff claimed Keaton failed to prepare the film for screening and refused to work with production/marketing personnel. Keaton claimed he only had a right of first cut and that it was Merry Gentleman’s job to prepare the final cut for audiences. But the court noted that Keaton’s director contract required him to provide all “usual and customary services rendered by individual directors of first-class motion pictures in the motion picture industry, and such other directing services as a reasonably required by [plaintiff] until completion and delivery of [the] first cut.” Keaton also had to deliver his cut of the film according to an approved post-production schedule. The film also had to be complemented according to all approved delivery schedule requirement. The plaintiff’s claims that Keaton gave no assistance in the final cut were sufficient to allege breach of contract.

Keaton also claimed that going over budget as a result of his music selections was not a breach of contract. He noted the contract required the parties to mutually approve music selections and, if agreement could not be reached, the plaintiff’s view would prevail. The court noted, however, that the director contract required Keaton to select music within the predetermined budget and to obtain prior approval from Merry Gentleman. Since the plaintiff’s complaint alleged that Keaton did neither of these things, a breach of contract was sufficiently alleged.

The plaintiff had also alleged that Keaton did not provide reasonable publicity and promotional services as required by the director agreement. The court agreed with the complaint that Keaton’s television appearance was bizarre and could be viewed as an attempt to sabotage the film’s marketing.

Finally, Keaton argued that the director agreement required Merry Gentleman to provide him with notice if and when he breached the agreement and to provide him seventy-two hours to cure that default. In the event of Keaton’s default, his employment and compensation was automatically suspended. But Keaton’s work and salary were never suspended so, the court noted, the plaintiff had no reason to follow the notice and cure provision.

The plaintiffs had reason to believe shortly after completion of principal photography for the film that Keaton might be a problem. Keaton refused an editor’s services to prepare his first cut and did not use editing facilities the plaintiff had set up in California. Instead he went fly-fishing for several weeks. Merry Gentleman went so far as to set up editing facilities where Keaton was fishing which Keaton used only periodically. Keaton also left the selection and editing of the best scenes to others.

Producers always have to be careful when dealing with star talent. Disagreements are often leaked to the press leading to bad publicity for a film which producers can ill afford. But the disregard or lack of enthusiasm Keaton seemed to display after filming should have led the producers to demand immediate action by Keaton. If he failed to act responsibly, the producers should have alleged breach, suspended any money he was being paid and, absent Keaton’s cure, sued for breach. Litigation would not be good for the film but at least it would have put the film back in the hands of the producer. And it would have saved those producers many sleepless nights.

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