Nature of the Case
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Facts
P and D entered into a contract that D would produce a film franchise based on P's novels featuring the character Dirk Pitt. D could exercise an initial option to produce a film based on P's novel Sahara and a second novel to be designated by D. If certain conditions were satisfied, P 'shall pay D the sum of Twenty Million Dollars ($20,000,000) payable in seven equal annual installments over a period of seven (7) years beginning on the date the initial option is exercised. D also had the option of purchasing a third Dirk Pitt novel for a third film. This option could not be exercised unless certain conditions were satisfied. One condition was that D was required to commence 'principal photography' of Sahara within 24 months of the date it exercised its initial option. If D failed to do so, then P in its discretion could elect not to sell the rights to the third novel to D. On November 6, 2001, D exercised its initial option to acquire the rights to Sahara and a second novel. D was required to commence principal photography of the film Sahara on or before November 6, 2003. Before the contract was signed, P approved a screenplay for the film Sahara. As per the contract, D would 'not . . . change the Approved Screenplay . . . without P's written approval exercisable in his sole and absolute discretion.' P could not prevent the director of the film 'from making the type of on-set changes . . . customarily made in the ordinary course of the production of a motion picture. P also could not prohibit the producers of the film from 'making changes required by the exigencies of production' or 'making changes required by the company that issues the completion bond for the picture pursuant to customary provisions contained in completion bonds . . . .' D sought to change the Approved Screenplay. More than two dozen screenplays were presented and Pr did not approve them. D even disapproved of one of them before he ever read it. D urged P to review the document. D read the first 35 pages then threw it in the garbage. At a meeting with D, P flung the screenplay over his head and referred to it as 'crap.' P began writing his own drafts. D did not approve of P's scripts for creative and budgetary reasons. D was also worried about D's contract with the Writer's Guild. Paramount, the film's distributor, opposed P writing the screenplay. P refused to stop. Word got around in Hollywood that P would rewrite screenplays and writers did not want to play the game. D also claimed it had difficulty recruiting actors because the actors did not like P's proposed screenplays. This delayed the production of the film. By April 2003, D refused P's demand to use P's screenplay. P stopped communicating with D for several months. D continued to send screenplays, even after D hired a director and began filming. D simply stopped reading the screenplays. The contract expressly prohibited P and his agents from publicly speaking about the subject matter of the contract without D's approval, which could not be 'unreasonably withheld.' A month before the first scene was filmed, P's publicist Carole Bartholomeaux began a campaign on P's website requesting P's fans to pressure D to use P's screenplay. D began receiving about 20 emails a day from P's fans. In January 2004, P filed this complaint against D. D filed a cross-complaint. On April 8, 2005, the film Sahara was released. D had paid P four of the seven annual payments due for the first two films for a total of about $1,428,571. Prior to the trial, D made the fifth payment in the amount of $2,857,142 and the sixth payment in the amount of $2,857,143 to the court. P claimed breach of contract by D for using a screenplay not approved by P. D alleged that P 'arbitrarily, irrationally, and destructively pursued his consultation and approval rights' in violation of the implied covenant of good faith and fair dealing. It claimed that P's disparaging statements about Sahara breached the implied covenant of the contract. D alleged that P fraudulently promised that he would reasonably approve and support screenplays for Sahara with no intention of keeping that promise. D alleged that P defrauded Crusader by falsely stating that over 100 million copies of his books had been sold. The jury found that D had breached the contract but P was not harmed. It found that P had breached the covenant of good faith and fair dealing and found that D was harmed. The judgment deemed D the prevailing party and awarded $5 million in damages, costs, and prejudgment interest. P appealed.
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