A California appellate court has reversed a $1.4 million award of punitive damages to Starz Entertainment in its suit against a woman who sold the company the homevideo rights to “The Man from U.N.C.L.E.” even though Warner Bros. claimed to own the 1960s series.
The state Court of Appeal did uphold a judgment against Lindsay Dunlap for $1.5 million in compensatory damages, rejecting her argument that a lower court improperly dismissed a contract clause on the selection of a trial venue, along with other errors.
The case has its origins in a 2005 agreement in which Dunlap’s Ember Entertainment licensed rights to “U.N.C.L.E.” to Anchor Bay (later folded in to Starz) for $500,000 plus $125,000 for DVD extras. But Anchor Bay learned in 2006 that Warner Bros. had claim to the rights to the series, and planned its own DVD release. Ember had contended that it acquired the rights to the series, as well as a spinoff “The Girl from U.N.C.L.E.,” by a quitclaim from the production company that owned the series in the 1960s. But the quitclaim to Ember acknowledged that Warner Bros. retained an interest in the show.
Starz sued Dunlap for breach of contract, negligent and intentional misrepresentation and fraud. A jury in August 2010, sided with Starz, and on appeal the company defended the award of punitive damages by noting Dunlap’s purchase in 2004 of a $3 million home in Malibu and her ownership of a $1 million residence in Pacific Palisades. Starz counsel even cited the fact that she “drives a Jaguar. She’s indicated that she ‘hobnobs’ with Steven Spielberg and James Cameron.”
But the appellate court said that there was “insufficient evidence” to show whether Dunlap would be able to pay the $1.4 million in punitive damages, ruling that Starz had failed to show evidence of the “current value of her homes, car, or her other current assets or expenses.”