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Abuelhija v. Chappelle

June 29, 2009

MUSTAFA ABUELHIJA, PLAINTIFF,
v.
DAVID CHAPPELLE, AND PILOT BOY PRODUCTIONS, INC. DEFENDANTS.



The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge

OPINION & ORDER

Plaintiff Mustafa Abuelhija ("Abuelhija") brings this breach of contract action against David Chappelle ("Chappelle"), the well known comedian and entertainer, and Chappelle's production company Pilot Boy Productions ("Pilot Boy" and, collectively with Chappelle, "Defendants"). Defendants move for summary judgment pursuant to Fed. R. Civ. P. 56. For the reasons that follow, Defendants' motion is GRANTED.

I. BACKGROUND

Chappelle is a well-known comedian and actor who has starred in his own television show, Chappelle's Show, which aired on Comedy Central, as well as in feature films. Defts. 56.1 Stmt. ¶1. Pilot Boy is a Delaware corporation that produces television shows and other entertainment ventures featuring Chappelle. Id. at ¶2. Plaintiff Abuelhija was once retained by Chappelle as a manager, and the breakdown of that relationship in 2005 ultimately led to this litigation. Id. at ¶3.

The path to the present dispute is marked by an earlier detour through this Courthouse. In December 2005, Abuelhija filed suit in this Court alleging that the Defendants owed him monies promised as payment for his services as a manager and as a producer of the movie Dave Chappelle's Block Party (hereinafter, "Block Party"). See Abuelhija v. Chappelle, No. 05 Civ. 10393 (JGK). Of some relevance here, Abuelhija alleged in his initial complaint that in April 2005, "Chappelle essentially walked away from his contractual obligation [with Comedy Central] having completed only approximately half of the third season episodes of Chappelle's Show." See No. 05 Civ. 10393; (JGK) First Am. Compl. ¶45.

In late 2005 and early 2006, Chappelle and Abuelhija negotiated a settlement of the initial action, which was first reduced to writing in a one-page "term sheet" and ultimately memorialized in a fully integrated settlement agreement dated February 26, 2006 (the "Settlement Agreement"). This case concerns the Defendants' alleged breach of the Settlement Agreement, and thus its terms are critical. Under the Settlement Agreement, the Defendants agreed to pay Abuelhija a lump sum within thirty days, as well as specified percentages of revenues and compensation earned from three entertainment ventures. Specifically, the Settlement Agreement provides that

Pilot Boy shall pay to Abuelhija [a specified percentage] of its future compensation, if any, for Seasons Two, Three and Four of Chappelle's Show under (i) the agreement dated as of July 12, 2004 between Central Productions LLC and Pilot Boy Productions, Inc. f/s/o Dave Chappelle and any renegotiations or restructuring thereof.

Decl. of Ivy Davy, dated December 18, 2008 ("Davy Decl."), at Ex A ("Settlement Agreement"). The payments required to be made pursuant to this provision of the Settlement Agreement are limited to amounts received after December 20, 2005 and are hereinafter referred to as the "Chappelle's Show Payments."*fn1

The Settlement Agreement further provides that Pilot Boy will pay Abuelhija a specified percentage of "any amounts actually received after December 20, 2005 under the agreement dated as of October 21, 2004 between Columbia TriStar Home Entertainment and Dave's Comedy Special, Inc. regarding For What It's Worth" (hereinafter, the "Columbia TriStar Payments"). Id. Finally, the Settlement Agreement provides that Pilot Boy will pay Abuelhija a specified percentage of "any amounts actually received after December 20, 2005, in excess of [its] investment in the Block Party movie" (hereinafter, the "Block Party Payments"). Id. The Settlement Agreement required the Defendants to instruct certain payors of funds related to Chappelle's Show and Block Party to notify Abuelhija, through a letter to his counsel, each time a payment was made to Pilot Boy. Id. The Defendants have provided such notices to the relevant payors, and Abuelhija does not object to the Defendants' compliance with the Settlement Agreement in this regard. See Defts.' 56.1 Stmt. ¶14; Pl's. Reply Stmt. ¶14. Apart from the lump sum payment made shortly after the Settlement Agreement was signed, the Defendants have not made any payments to Abuelhija pursuant to the Settlement Agreement.

The Defendants argue principally that because they have received no revenues covered by the Settlement Agreement, they have neither incurred nor breached any obligation to make payment to Abuelhija. With respect to the Block Party Payments, Abuelhija concedes that the Defendants have not received funds in excess of their initial investment in the Block Party movie, but he now argues that Chappelle should be ordered to "take steps" to collect the amounts the Defendants are owed from one of the film's producers. Pl.'s 56.1 Reply Stmt. at ¶ 33; Pl.'s Mem. in Opp'n. at 12. The Defendants also contend, and Abuelhija admits, that they have received no payments relating to the Showtime television special For What It's Worth. Defts.' 56.1 Stmt. at ¶35; Pls. Reply Stmt. at ¶35.

The facts pertaining to the Chappelle's Show Payments are not as straightforward. They implicate Chappelle's two contracts with Comedy Central that governed the development and production of Chappelle's Show, Chappelle's departure from the show in the middle of the production of Season 3, and the ensuing circumstances in which the show was left, in Chappelle's words, "in a state of limbo." Tr. of Chappelle Dep. at 102:17. The Defendants' written agreements with Comedy Central are dated March 6, 2002 (the "2002 Agreement") and July 12, 2004 (the "2004 Agreement").*fn2 The 2002 Agreement governed production of the pilot for Chappelle's Show and, upon Comedy Central's option, the production of Seasons One and Two of the program. Davy Decl., at Ex A. In addition to providing for per-episode payments, the 2002 Agreement affords to Pilot Boy rights to a percentage of the profits from Chappelle's Show. As an "advance" against Pilot Boy's profit participation, Comedy Central agreed to pay Pilot Boy one specified percentage of the total Adjusted Gross Receipts ("AGR") for merchandising of the show and another, lower percentage of the AGR for all other means of exploitation of the show (such percentages, the "2002 AGR Percentages"). Abuelhija acknowledges that he did not have a role in negotiating the 2002 Agreement. Pls.' 56.1 Reply Stmt. at ¶18.

Following the considerable success of the first two seasons of Chappelle's Show,Pilot Boy entered into the 2004 Agreement, which was to govern the production of Seasons 3 and 4 of the program. Defts. 56.1 Stmt. at ¶21. Commensurate with the success of the first two seasons, the 2004 Agreement considerably increased both the per-episode compensation and profit participation percentages to which the Defendants were entitled. Section 3.1 of the 2004 Agreement provides that so long as Chappelle "fully performs all of [his] material obligations" under the agreement, Comedy Central will pay Pilot Boy a specified, and substantially higher, percentage of AGR received by Comedy Central "from exploitation of ancillary uses... of the Series and all elements thereof retroactive to the 2003 and 2004 seasons of the series."*fn3 Abuelhija contends that he played a significant role in negotiation of the 2004 Agreement. Defts. 56.1 Stmt. at ¶22.

Chappelle allows that after he left the set, the status of Chappelle's Show was "uncertain" Tr. of Chappelle Dep. at 102:18. Although Comedy Central has asserted that Chappelle breached the 2004 Agreement, the current status of Chappelle's relationship with Comedy Central is unclear. See Decl. of Richard Mattiaccio, dated April 15, 2009, ("Mattiaccio Decl."), Ex. 2. Abuelhija alleges that Chappelle has received two payments from Comedy Central that constitute revenues derived from exploitation of Seasons One and Two of Chappelle's Show, and that the Settlement Agreement entitles him to a percentage of each payment to the extent it is derived from exploitation of Season Two. The first payment covers the period ending December 31, 2006 and, according to the "Participation Statement" which accompanied it, the sum was calculated by applying percentages to "Net Receipts" and AGR that precisely matched the 2002 AGR Percentages. Kreppein Aff., Ex. F. The second payment at issue covers the period ending June 30, 2007 and was accompanied by a similar "Participation Statement" that also used the 2002 AGR Percentages to calculate the amounts owed to Pilot Boy. In a letter dated December 8, 2008, Comedy Central ...


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