The opinion of the court was delivered by: TYLER
Defendant seeks an injunction pendente lite to prevent plaintiff (hereinafter sometimes referred to as "DDLC") and its agents and all persons acting "in active concert" with them from exhibiting or causing the exhibition of the film, "The Bible", in "hard ticket reserved seat releases" in the United States, Canada and Europe, unless such exhibition is in the D-150 process wherever economically and physically practicable.
It is said or implied in support of the motion that, absent temporary injunctive relief, DDLC will "cause" release of "The Bible" on or about September 28, 1966 in 30 major cities in this country and Canada and 24 principal cities in Europe without usage of the wide-screen process known as D-150 and thus in flagrant breach of DDLC's contractual commitments to defendant. The D-150 process which is central to this dispute can be described fairly as a new screen "dimension" or process, assertedly developed and owned by defendant, which permits projection of a movie film upon a large "wall-to-wall" screen with a curvature of about 150 degrees.
The history and present posture of this litigation is sufficiently unusual to warrant a brief summary. DDLC commenced this action in the Supreme Court of New York, New York County, in November, 1964, seeking a declaratory judgment of the existence of a contract between the parties and an injunction against an alleged threatened breach of this contract by the defendant. Four months later, in March, 1965, and apparently upon information that DDLC had then shifted or was about to shift its original position in this suit and abjure the existence of a binding contract, defendant brought on a motion for a temorary injunction substantially similar to the one at bar. At the same time, defendant sought leave to file a supplemental answer asserting various counterclaims, including one for permanent injunctive relief. On May 6, 1965, Madame Justice Amsterdam filed a memorandum denying defendant's application for injunctive relief pendente lite but granting leave to defendant to file an amended answer as prayed.
In the fall of 1965, ostensibly as a result of an application by defendant, Mr. Justice McCaffrey of the Supreme Court of New York granted a preference for trial. Nevertheless, two days after this preference was granted, defendant caused this action to be removed to this court upon allegations of diversity of citizenship. In fairness to defendant, it appears that this was the first opportunity for defendant to remove because it was on October 27, 1965 that plaintiff stipulated to discontinue this action against the codefendant, Todd-AO Corp., which is a New York corporation, thereby creating complete diversity between the remaining parties.
There then ensued protracted depositions, various practice motions and similar activity in this court until March, 1965 when a formal pre-trial order was entered and the case placed on the ready non-jury calendar. Since the pre-trial order was entered, defendant has made several applications for an immediate trial of this action. Necessarily, however, these various applications were denied by the Chief Judge of this court because of the prevailing shortage of judicial manpower in this district.
On June 28, 1966, Judge MacMahon of this court granted defendant's General Rule 9(l) application for leave to make its present motion.
As this history suggests, the parties and their respective positions have substantially "turned about" since suit was filed by DDLC some twenty months ago; defendant now invokes most heavily the contract it originally was claimed to have breached, whereas plaintiff defends by repudiating the existence of such a contract.
At the hearing of this motion, no testimony was taken. Many exhibits marked during the pre-trial depositions were handed up to the court, however, and, in addition, the voluminous deposition transcripts were also submitted for consideration upon this motion. Both parties agreed that no further oral testimony was necessary, and upon my evaluation of the rather bulky record before me, I agree that all the necessary facts are before the court for resolution of this application.
It is the defendant's essential position here that the parties entered into a binding contract on May 8, 1964 and that this contract imposed upon DDLC the obligation to cause the exhibition of the film, "The Bible", with the D-150 process in road show exhibitions in key cities in the United States, Canada and Europe.
Conversely, it is DDLC's position that there was no binding contract at all between the parties, but if there were such an agreement, it imposed no such obligation upon the plaintiff. Further, DDLC urges that it does not own the film nor does it have any control over the exhibition of "The Bible"; that the defendant has not and cannot show irreparable harm under the circumstances here, especially since it has an adequate remedy in damages; and that defendant has slept on its rights for at least a year and a half.
For the purposes of resolution of this motion, it will suffice to set forth hereinafter a brief chronology of the contract negotiations between the parties in 1964 and other significant events which took place in that year, largely as seen from the viewpoint of the moving defendant. In January, 1964, preliminary negotiations between the parties for a licensing arrangement involving the D-150 process for "The Bible" commenced between Mr. Ralph Serpe, the American representative of DDLC, and Messrs. Marshall Naify and Salah M. Hassanein, representatives of the defendant. Naify was and is president of defendant corporation and of its parent firm, United Artists Theatre Circuit, Inc. Hassanein was and is executive vice president of the latter corporation. These negotiations were resumed in March, 1964 in Los Angeles and were from time to time attended by the three men mentioned above and other representatives of the parties. Concurrently, separate negotiations were being conducted between DDLC and an affiliate of defendant known as Magna Pictures Corp. for an agreement for financing and distribution of the film "The Bible".
During the early months of 1964, it was apparently contemplated by DDLC that filming of "The Bible" on location in Italy would begin on or about May 11, 1964. In the first days of May, however, an impasse was reached respecting the negotiations between Magna and DDLC for a financing and distribution agreement. Despite the breakdown of the Magna-DDLC discussions, the parties in this suit continued to be desirous of reaching a firm agreement whereby DDLC would be licensed by defendant to use the latter's D-150 techniques, material and equipment for immediate filming of "The Bible". Accordingly, in early May, DDLC's president, Mr. Dino DeLaurentiis, assigned a Mr. Borgognoni, DDLC's Italian counsel, the task of negotiating with defendant a license arrangement. Borgognoni thereupon May 7 cabled Harold Berkowitz, DDLC's lawyer in the United States, certain instructions incident to obtaining a firm contract for use by DDLC of the D-150 equipment, independent of any financing or distribution deal.
As a result of the May 7 cable, Berkowitz and Serpe on behalf of DDLC and Naify on behalf of the defendant reopened negotiations for a license arrangement. On the following day, May 8, Serpe and Naify on behalf of their respective principals prepared, signed and transmitted to Borgognoni a cablegram. According to defendant, this cablegram constitutes a binding contract between the parties - and, more important for present purposes, the principal fulcrum ...