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JILLCY FILM ENTERPRISES v. HOME BOX OFFICE

March 1, 1984

Jillcy Film Enterprises, Inc., Plaintiff, against Home Box Office, Inc., Defendant.


The opinion of the court was delivered by: MOTLEY

MOTLEY, Ch.J.

Plaintiff, Jillcy Film Enterprises, Inc., is a Canadian corporation that was formed for the purpose of producing the film documentary in question in this case. Defendant, Home Box Office, Inc. (HBO), is a New York corporation which operates a cable television network in the United States. Jillcy has sued HBO for breach of contract and HBO has moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(c) and 56.

 BACKGROUND

 HBO and a Canadian corporation not a party to this suit had made arrangements for a feature-length film entitled "The Terry Fox Story" to be made and broadcast on HBO's nationwide pay-television network. The principals of the then-unformed Jillcy Film Enterprises, Inc., approached HBO with a proposal to make a film documentary of the making of "The Terry Fox Story."

 Jillcy was formed and executed a letter agreement with HBO on July 21, 1982. *fn1" The relevant terms of the letter agreement were:

 a. HBO have Jillcy the right to film a documentary of the filming of "The Terry Fox Story."

 b. Within six weeks after the commencement of the film, Jillcy was to submit some rough footage of the documentary that had been filmed up to that point.

 c. For a period of up to 90 days after the delivery of that rough footage, the parties agreed to "negotiate exclusively and in good faith with respect to the terms and provisions relating to the distribution, exhibition or other exploitation of the documentary."

 d. Finally, the parties agreed that "in the event that you and we do not reach agreement," Jillcy would not use the documentary in the United States for the duration of the copyright in the documentary.

 On October 5, 1982, both parties executed another letter agreement extending the delivery date of the first assemblage of rough footage until November 5, 1982. *fn2" The rough footage was delivered on November 4, 1982. Negotiations took place for some time, although it is not clear when they began, with respect to a long term production and licensing agreement.

 On December 1, 1982, a handwritten memo appeared on a page from a note pad with the name "Meg Louis" printed in the top. *fn3" The memo was neither signed not addressed to anyone. On it appears the date and the words "deal closed" and notes concerning some terms.

 Mr. Spivak, Jillcy's counsel, sent a letter dated December 27, 1982, to Margret Louis, HBO's associate director of business affairs, containing 67 proposed changes in a draft production and licensing agreement. *fn4" Among them was included one proposal that Jillcy receive its initial payment regardless of whether or not the Agreement was executed. The letter closed with a request that Louis call Spivak "so that we may expeditiously consummate the Agreement."

 Jillcy contends that on January 7, 1983, an oral agreement was reached, the terms of which were embodied in the Production and License Agreement. *fn5" HBO denies this contention, but assumes it to be true only for the purpose of its motion and argument based on the statute of frauds.

 On January 17, 1983, another handwritten memo appeared on a page from the note pad of "Meg Louis." *fn6" To it was attached a copy of the unexecuted agreement. The memo was signed "Meg" and addressed to "Janet" directing her to "make payment . . . as soon as possible" pursuant to a specified provision of the Agreement which provided for payment upon "approval by HBO of selected footage." On the bottom of the memo appears another handwritten notation, "1/18 Meg says don't pay -- deal being pulled." (Emphasis in original). This notation is neither signed not initialed and its author is therefore unidentified.

 Louis sent a letter dated January 18, 1983 to Mr. Saperia, another counsel for Jillcy, in which she indicated she was enclosing three unexecuted copies of the agreement with revisions pursuant to recent conversations. *fn7" She requested their prompt signature by Jillcy and return to HBO, "after which I will forward a fully executed copy. . . ." The agreement did not contain Jillcy's proposal referred to in its December 27, 1982, letter but rather provided that Jillcy's initial payment be made no more than 10 days after execution and delivery of the agreement to HBO. *fn8" That same day, Jillcy delivered more rough footage to HBO where it was screened but received an unfavorable review by HBO employees.

 The next day, on January 19, 1983, an HBO employee called one of Jillcy's attorneys and told him that the deal was off. This oral notice to Jillcy apparently was given prior to the receipt by Jillcy of the January 18, 1983, transmittal letter and execution copies of the agreement which had been sent by Louis. Approximately two weeks after the receipt by Jillcy of the oral notice and the unexecuted agreement, ...


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