On Contract Language, Film Stars and Charlie's Angels
Most of you who are lawyers or business people (or both) would think that the trick to writing a contract that would stay out of litigation and not be subject to conflicting interpretations would be to use clear, plain, unambiguous language. And in most of the world, you would be correct.
But not in California – you’re not surprised by this are you? In California, we had a case called Pacific Gas & Electric Company v. G.W. Thomas Drayage & Rigging Company decided by our Supreme Court in 1968. The case seems to inject uncertainty into every contract.
Happy to say that a recent twist on the case gives me the opportunity to blog about contract litigation, Charlie's Angels, Robert Wagner and Natalie Wood all at the same time. (For those readers born after about 1970, Charlie's Angels = cheesy cop show from the 1970's; Robert Wagner = film and TV actor from the 1970's and, to some extent, up to now, married to the late Natalie Wood = child star of the late forties, film star in fifties and sixties.)
More after the jump.
In the Pacific Gas & Electric case, the court held, in language that has always amazed me:
"A rule that would limit the determination of the meaning of a written instrument to its four-corners merely because it seems to the court to be clear and unambiguous, would either deny the relevance of the intention of the parties or presuppose a degree of verbal precision and stability our language has not attained."
In other words, no need to worry about exactly what those pesky words and phrases mean objectively -- we can always suss out what the parties were talking about later on. Everything is subject to interpretation so long as the interpretation doesn’t flat out contradict the contract language.
Ever since 1968, trial and appellate courts have seemed to be looking for ways out of this “anything goes” approach to contract interpretation, and the latest example comes from a decision in a case called Robert Wagner (yes, it’s that Robert Wagner) v. Columbia Pictures. For a case involving Hollywood stars, a long-running TV series and a made-for-TV movie called “Love Song” this is an incredibly ponderous decision. But I read it, so you don’t have to.
Let’s see if I can summarize in 250 words or less:
The Wagners contracted to make “Love Song,” and were to be paid half the net profits from its exhibition and "exploitation of all ancillary, music and subsidiary rights in connection with it." Related to that, and with a contract having identical language, the Wagner’s proposed the Charlie’s Angels television show, and Columbia’s predecessor developed it.
Years later, Columbia bought the motion picture rights for Charlie’s Angels, and produced and distributed two movies. I haven’t seen them, so can’t give you a review. Wagner claimed that under the Charlie’s Angels contract, he was entitled to 50% of the net profits because
the movie rights were “subsidiary rights.” To bolster his claim, he brought in the lawyer who had represented Columbia’s predecessor during the Love Song negotiations, who testified that the parties intended the contract to cover income “from all sources” without limitation as to source or time.
No dice said the court of appeal. While it’s true you can bring in evidence of what the parties thought, meant and said to interpret contract language, you can’t use that evidence to contradict the contract language. The court concluded that a right to profits which were “subsidiary” or “ancillary” to the Charlie’s Angels television show did not include profits from all sources for all time. Therefore, Wagner was out of court and out of luck.
The moral of the story: while it looks as if contracts in this state can say one thing and mean something else again, that’s not necessarily so. There’s still plenty of room to talk about plain meaning.
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