McLeod v. Zero Gravity Management

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 22, 2025
• Docket: 24-3266
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 22 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

KURT MCLEOD, an individual, No. 24-3266 D.C. No. Plaintiff - Appellant, 2:22-cv-01547-FWS-AGR v. MEMORANDUM* ZERO GRAVITY MANAGEMENT, an unknown business entity; MARK WILLIAMS, an individual; ERIC WILLIAMS, an individual,

Defendants - Appellees.

Appeal from the United States District Court for the Central District of California Fred W. Slaughter, District Judge, Presiding

Argued and Submitted May 13, 2025 Pasadena, California

Before: OWENS, BENNETT, and H.A. THOMAS, Circuit Judges.

Plaintiff Kurt McLeod appeals the district court’s judgment in favor of

Defendants Zero Gravity Management, Mark Williams, and Eric Williams.

McLeod, a screenwriter, argues that Mark and Eric Williams were his personal

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. managers under an oral representation agreement, that the Williamses breached

their contractual and fiduciary duties to him under California law, and that he

suffered damages as a result. We have jurisdiction under 28 U.S.C. § 1291. “We

review an order granting summary judgment de novo, ‘viewing the evidence in the

light most favorable to the non-moving party and drawing all reasonable inferences

in its favor.’” Schrader Cellars, LLC v. Roach, 129 F.4th 1115, 1122 (9th Cir.

2025) (quoting Bell v. Wilmott Storage Servs., LLC, 12 F.4th 1065, 1068 (9th Cir.

2021)). We affirm in part, vacate in part, and remand.

1. Although we agree with the district court that Mark and Eric Williams

were not parties to the 2011 written representation agreement between McLeod

and Zero Gravity Management, we hold that the district court erred by concluding

as a matter of law that the Williamses were not parties to the oral representation

agreement that followed. McLeod presented evidence from which a reasonable

jury could find that the Williamses were parties to the oral agreement and served as

McLeod’s personal managers under the terms of that agreement. This evidence

included McLeod’s testimony that Mark Williams told him that he was his

manager, McLeod’s testimony that he and Mark Williams discussed Mark

Williams’s dual role as manager and producer, Mark Williams’s listing as a

manager on the Writers Guild of America website, and evidence that Mark

Williams conducted himself as a manager. On this record, summary judgment was

2 24-3266 inappropriate. See SEC v. M & A W., Inc., 538 F.3d 1043, 1055 (9th Cir. 2008)

(“[S]ummary judgment is singularly inappropriate where credibility is at issue.

Only after an evidentiary hearing or a full trial can these credibility issues be

appropriately resolved.” (quoting SEC v. Koracorp Indus., Inc., 575 F.2d 692, 699

(9th Cir. 1978))).

2. The district court also erred by concluding as a matter of law that

McLeod could not prove the fact of damage. It is undisputed that Defendants failed

to inform either McLeod or his attorney, Matthew Sugarman, that the budget to

produce McLeod’s screenplay increased from an estimated range of $2 million to

$10 million to over $43.5 million. McLeod’s expert, David Ginsburg, testified that

Defendants should have disclosed these increases, used the leverage created by the

last-minute chain of title issue to renegotiate McLeod’s compensation, placed

McLeod’s interests ahead of their own, and tapped into their own producer fees, if

necessary, to ensure that McLeod was fairly compensated.1 He estimated that these

efforts could have earned McLeod several hundred thousand dollars in additional

compensation. Sugarman also believed that McLeod’s compensation was “below

market.” We recognize the possibility that McLeod would not have sought or

1 McLeod contends that defense expert Alan Gasmer’s deposition testimony corroborates Ginsburg’s testimony, but Gasmer’s testimony is not part of the summary judgment record, and “[o]ur review is limited to the record presented to the district court at the time of summary judgment.” Lippi v. City Bank, 955 F.2d 599, 604 (9th Cir. 1992).

3 24-3266 obtained additional compensation even had he known of the increased budget, but

when ruling on a motion for summary judgment “all justifiable inferences are to be

drawn in [the non-moving party’s] favor.” In re Oracle Corp. Sec. Litig., 627 F.3d

376, 387 (9th Cir. 2010).

McLeod’s evidence that he suffered damage was also sufficient as a matter

of California law. Although “[a] plaintiff cannot recover damages based upon

speculation or even a mere possibility that the wrongful conduct of the defendant

caused the harm,” the evidence is sufficient where, as here, it “rise[s] to the level

of a reasonable probability based upon competent testimony.” Service Emps. Int’l

Union, Loc. 250 v. Colcord, 72 Cal. Rptr. 3d 763, 772 (Ct. App. 2008) (quoting

Williams v. Wraxall, 39 Cal. Rptr. 2d 658, 665 (Ct. App. 1995)).

3. We reject Defendants’ argument that the terms of the oral

representation agreement were too indefinite to be enforced. Where, as here, “the

actions of the parties . . . show conclusively that they have intended to conclude a

binding agreement, even though one or more terms are missing or are left to be

agreed upon[,] . . . courts endeavor, if possible, to attach a sufficiently definite

meaning to the bargain.” Restatement (Second) of Contracts § 33 cmt. a (Am. L.

Inst. 1981); accord Moncada v. W. Coast Quartz Corp., 164 Cal. Rptr. 3d 601, 608

(Ct. App. 2013). Where an oral representation agreement is concerned, missing

4 24-3266 terms may be supplied by “entertainment industry custom and usage.” Howard

Ent., Inc. v. Kudrow, 146 Cal. Rptr. 3d 154, 164 (Ct. App. 2012).

4. The district court properly granted summary judgment to Defendants

on McLeod’s fraud claims arising from the chain of title issue. McLeod points to

no evidence suggesting that Mark Williams raised the chain of title issue. There

was nothing false or improper about Mark Williams obtaining shared “story by”

credit for the screenplay. And McLeod points to no evidence to suggest that Eric

Williams misrepresented the financial consequences of the credit-sharing

agreement.

5. We deny McLeod’s request for judicial notice, Docket No. 34,

because it is unnecessary to take judicial notice of documents that are part of the

district court record. See Japanese Vill., LLC v. Fed. Transit Admin., 843 F.3d 445,

454 (9th Cir. 2016). We instead construe McLeod’s motion for judicial notice as a

submission of further excerpts of record, and the documents are deemed filed on

that basis. See 9th Cir. R. 30-1.2(c).

6. We deny Defendants’ motion to strike, Docket No. 37, because

Defendants’ contention that McLeod has presented new arguments on appeal is

without merit. Our review of the record shows that McLeod has consistently

argued that the oral representation agreement was separate from, rather than a

continuation of, the written representation agreement. Indeed, Defendants

5 24-3266 expressly conceded this point at the summary judgment hearing. Similarly,

McLeod has consistently maintained that the terms of the oral agreement were

supplied by entertainment industry custom and practice.

To conclude, we hold that the district court properly granted summary

judgment to Defendants on McLeod’s fraud claims arising from the chain of title

issue but erred by granting summary judgment on McLeod’s claims for breach of

contract, breach of fiduciary duty, and breach of the implied covenant of good faith

and fair dealing.

AFFIRMED IN PART, VACATED IN PART, and REMANDED.2,3

2 Defendants shall bear the costs associated with this appeal. See Fed. R. App. P. 39(a)(4). 3 The motions at Docket No. 34 and Docket No. 37 are DENIED for the reasons stated above.

6 24-3266