Fleischer v. A. A. P., Inc.

222 F. Supp. 40, 1963 U.S. Dist. LEXIS 10158
CourtDistrict Court, S.D. New York
DecidedSeptember 12, 1963
StatusPublished
Cited by8 cases

This text of 222 F. Supp. 40 (Fleischer v. A. A. P., Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fleischer v. A. A. P., Inc., 222 F. Supp. 40, 1963 U.S. Dist. LEXIS 10158 (S.D.N.Y. 1963).

Opinion

RYAN, Chief Judge.

This suit, alleging conspiracy among eleven defendants to destroy plaintiff’s rights under an agreement dated May 24, 1941, seeks to recover damages by way of an accounting and asks for injunctive relief against alleged unfair competition. Five of the defendants have moved for summary judgment on the ground that a prior State Court final determination constitutes res judicata or judicial estop-pel of the claims in suit.

It is urged that res judicata or collateral estoppel arises from a final judgment against this plaintiff rendered in two suits jointly tried in the Supreme Court of the State of New York, namely, Fleischer v. W. P. I. X., Inc., and Fleischer v. N. T. A. Pictures, Inc. Defendants contend that this judgment conclusively disposed of all of the plaintiff’s claims and contentions in the instant suit, and especially since plaintiff’s appeals from this judgment were dismissed.1

Defendants move for summary judgment and dismissal on the additional and independent ground that the suit must be dismissed as a matter of law because the agreement of May 24, 1941, about which this suit revolves, vested in Paramount full and complete rights to exploit and sell the cartoons in suit, without plaintiff’s consent, and that Paramount did not violate any duty under this agreement by selling said cartoons for television; (2) that the plaintiff has no right or standing to maintain this suit because he was neither a party to the agreement nor a third party beneficiary thereof; and (3) that all claims asserted herein have abated under the applicable Florida law. These contentions are pleaded as affirmative defenses and were the defenses pleaded by defendant “NTA” and upheld after trial in the State Court suit.

The complaint as originally filed in October, 1957, and amended in November, 1957 asserted three “Causes of Action”.2 Again in 1960, the complaint was amended following an order striking certain allegations and dismissing the second “Cause of Action”, an antitrust claim, as barred by the statute of limitations (Fleischer v. A. A. P., D.C., 180 F. Supp. 717). We have now a further amended complaint and it is to this that we address ourselves.

Plaintiff, suing individually and as Trustee in dissolution of Fleischer Studios, Incorporated, a Florida corporation,, alleges that it was the producer of motion picture cartoons which were distributed by defendant Paramount under a series of contracts; that, in exchange for a loan from Paramount, there was an assignment of rights in said cartoons which assignment was subject to a license agreement between The King Features, the owner of the copyright in what is known as the “Popeye” cartoons, and plaintiff producer. Plaintiff alleges that, pursuant to this license, plaintiff produced “Popeye” cartoons and created the character “BLUTO” (the heavy or vil-lian in these cartoons), of which it was [42]*42sole proprietor. Plaintiff further alleges that, on May 19, 1941, plaintiff entered into a contract with Paramount (a copy of which is annexed to the original complaint and incorporated by reference, which apparently granted Paramount certain options, which was later super-ceded by an agreement dated May 24, 1941).

It is alleged that, when this contract was executed, plaintiff was indebted to Paramount in the sum of $100,000.00 and that it had been entered into “with an ultimatum that it was either to be signed forthwith or Fleischer Studios, Fla., would be petitioned into bankruptcy or declared insolvent.”

It is also alleged in the complaint that, pursuant to the later agreement of May 24, 1941, plaintiff produced and delivered a series of cartoons referred to as “New Cartoons”; the characters, copyrights and the right to take out copyrights on them were assigned to Paramount in exchange for which plaintiff was to receive 50% of the net receipts from them.

The complaint continuing alleges that the agreement of May 24, 1941 was not assignable by Paramount except as to the provisions of Article Seventeenth (g) and (h). Those provisions, quoted in the complaint, gave Paramount full rights “to use, sell, license, distribute and exploit” the “New Cartoons” in every medium, including television. It is further alleged that the right given Paramount by the 1941 agreement “to obtain copyrights on said ‘new cartoons’ * * * was held by the defendant Paramount Pictures, Inc., nevertheless in trust to secure to it the repayment of advances made to it as in the agreement of May 24, 1941 set forth” (although the agreement itself contains no such provision).

There follows an allegation that plaintiff corporation was dissolved by the State of Florida for non-payment of taxes, at which time Dave Fleischer and defendant Max Fleischer were sole directors; that the Florida statutes permit the corporation to continue for three pears for the purpose of liquidation and that its directors became its trustees for that purpose.

There are also allegations of some unrelated charges that in a Government suit filed against defendant Paramount, it was found guilty of antitrust violations and that the provisions of the 1941 agreement are violative of this decree and unenforceable as in restraint of trade. Interspersed, too, we read unrelated and disconnected allegations of alleged antitrust violations by Paramount in that it has engaged in “block-booking” through the 1941 contract and the sales made thereunder, all in alleged violation of the decree entered against it.

It is alleged further that Paramount in violation of its duty as “pledgee” of the copyright on the new cartoons conspired with the other defendants “to cheat, defraud and destroy the contractual and property rights of plaintiff” in that defendant parted with plaintiff’s property in some of the “Popeye” cartoons and “The Raven” under a purported release from Dave Fleischer and that defendant and The King Features sold all the new “Popeye” cartoons to defendants A. A. P., Inc., and Associated Artists Productions, Inc., without accounting to plaintiff for the profits from this “exploitation”. The complaint also alleges that, through its subsidiary, Paramount unlawfully sold the cartoon “Mr. Bug Goes to Town” to a “strange corporation” in violation of plaintiff’s right to participate in the proceeds of the exploitation of the cartoon and in violation of its “trust relationship” and permitted a sale of these rights to defendant AAP, Inc., and Associated Artists Productions, Inc., U. M. & M. TV CORP., and Flamingo Films, Inc. The complaint also alleges that these defendants and W. P. I. X. have authorized television stations to use these cartoons commercially with plaintiff’s name as director without the consent of plaintiff and without paying plaintiff 50% of the money earned from this commercial use. The complaint also charges that defendant UM and MTV Corp. has in furtherance of the conspiracy purchased the [43]*43two-reel cartoon film entitled “The Raven” and Dumont has broadcast it with knowledge of plaintiff’s rights in said cartoon; and it is alleged that unless restrained defendants will continue to violate and destroy plaintiff’s rights.

The relief prayed for is an injunction directed against all defendants, restraining them from further sale, disposition or use of the New Cartoons; a judgment directing delivery of the New Cartoons; an accounting; damages for unfair trade practice, unfair competition and breach of the contract, dated May 24, 1941.

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Related

Fleischer Studios, Inc. v. A.V.E.L.A., Inc.
772 F. Supp. 2d 1135 (C.D. California, 2008)
Saxe, Bacon & Bolan, P.C. v. Martindale-Hubbell, Inc.
521 F. Supp. 1046 (S.D. New York, 1981)
Haitian Ventures, Inc. v. Wisniewski
376 So. 2d 424 (District Court of Appeal of Florida, 1979)
Krause v. Meredith
29 Fla. Supp. 88 (Miami-Dade County Circuit Court, 1967)
Fleischer v. A.A.P. Inc.
36 F.R.D. 31 (S.D. New York, 1964)
United States v. Doughty
14 C.M.A. 540 (United States Court of Military Appeals, 1964)
Fleischer v. Paramount
329 F.2d 424 (Second Circuit, 1964)
Fleischer v. Paramount Pictures Corp.
329 F.2d 424 (Second Circuit, 1964)

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Bluebook (online)
222 F. Supp. 40, 1963 U.S. Dist. LEXIS 10158, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fleischer-v-a-a-p-inc-nysd-1963.