Puzo v. Kromolowski CA2/2

Filed 8/28/20 Puzo v. Kromolowski CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
DOROTHY PUZO, B294569, B296204
Plaintiff, Cross-defendant (Los Angeles County
and Respondent, Super. Ct. No. BC523129)
v.
JERZY J. KROMOLOWSKI
et al.,
Defendants, Cross-
complainants and Appellants.
AHASVERUS, INC.,
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC565293)
v.
DOROTHY PUZO,
Defendant and
Respondent.
APPEALS from a judgment of the Superior Court of
Los Angeles County, H. Chester Horn Jr., Judge. Affirmed.
Martin E. Jacobs for Defendants, Cross-complainants and
Appellants, and Plaintiff and Appellant.
Law Offices of Steven J. Horn and Steven J. Horn for
Plaintiff, Cross-defendant and Respondent, and Defendant and
Respondent.
______________________________
Respondent Dorothy Puzo loaned $30,000 to appellants
Jerzy Kromolowski and Mary Olson-Kromolowski. The debt is
memorialized in a promissory note (Note) with a 2012 due date;
appellants’ transmittal letter refers to it as a “loan.” Puzo sued to
recover the debt in 2013 when appellants refused to repay it.
Appellants cross-complained, claiming the Note represents
an advance against profits that were to be generated by the sale
of a screenplay they wrote with Puzo in 2007. Puzo paid
appellants’ corporation $30,000 for the screenplay, apart from the
$30,000 personal loan to appellants. Appellants allege that Puzo
did not market the screenplay, which was adapted from a novel,
depriving them of compensation and profits.
The trial court entered judgment for Puzo on her complaint
to enforce the Note, finding that the debt is clear and the Note
must be enforced as written. The court nonsuited appellants on
their breach of contract claims, finding their damages are purely
speculative absent proof that the owner of the screen rights is
willing to sell them. We affirm.
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FACTS AND PROCEDURAL HISTORY
The Adaptation of Fools Die
Respondent is the daughter of Mario Puzo, author of The
Godfather. Respondent has worked in the entertainment
industry and belongs to the Directors Guild of America
Appellants belong to the Writers Guild of America and have
written over 22 screenplays, as a husband and wife team. The
parties have known each other since the 1970’s.
In 2004, respondent called appellants to discuss a Mario
Puzo novel called Fools Die. She was writing an adaptation and
asked appellants if they might like to work on it with her. She
offered them $25,000 to collaborate with her, plus “two-thirds of
the back end on the screenplay.” The “back end” means “should
our efforts [be] successful and someone paid additional funds for
the screenplay, whatever we were paid, [appellants] would get
two-thirds of it.” The parties did not discuss what respondent
would do with the screenplay.
The parties signed a “Confidential Letter Agreement” dated
October 25, 2004 (the Agreement). It states that respondent will
pay $30,000 to Ahasverus, appellants’ loan-out corporation, for
appellants’ services. The parties agreed to write an adaption of
Fools Die over the course of two years and “Dorothy is to own and
control the disposition of the finished screenplay.” Further, “at
the discretion of Dorothy, the parties hereto agree to apply their
best efforts to the creation of a feature length screenplay and
thereafter to the subsequent production of same into a feature
film.” If the screenplay sold, respondent would recoup her initial
$30,000 investment and each party would receive one-third of
any additional sums.
3
Appellants knew respondent did not own film rights to
Fools Die and had only verbal approval from her family to write a
screenplay. In 2006, respondent obtained from the Estate of
Mario Puzo (Estate) a written option (Option) to purchase film
rights to Fools Die. The Option did not entitle respondent to sell
or assign the film rights without the express written consent of
the Estate, nor does it specify a price for which the Estate would
be willing to sell its rights. Appellants are not parties to the
Option. They agree that while “anyone could write or have
written a screenplay” of Fools Die, one must have a film rights
agreement with the Estate “to sell it, assign it, produce it, or
monetize it in any way.”
After respondent obtained the Option, the parties worked
on the screenplay, which was completed in 2007 and is registered
with the Writers Guild. Appellants believe respondent was “so
ecstatic about it” that she sent them a $5,000 bonus plus $1,000
to cover costs. Respondent disagrees, declaring that appellants
“never delivered a completed screenplay which I had any interest
in developing in any way, shape or form.” She notified appellants
of her disinterest. No film of Fools Die was made.
Appellants’ Breach of Contract Claim
Appellants pursued a cross-complaint when respondent
sued to collect on the Note. They allege that respondent paid
Ahasverus $30,000 under the Agreement. She also gave
appellants $30,000 in “advances” while they were working on the
screenplay for Fools Die. They signed the Note with the
4
understanding that the advances would be repaid by production
of a film or sale of the screenplay.1
In December 2008, appellants entered a “blind script
commitment” with Universal Pictures. Either the studio or
appellants could propose a project that, “if mutually acceptable to
both sides,” would pay appellants for preparing a screenplay plus
a box office bonus and profit participation. Appellants allegedly
asked respondent if they could propose Fools Die to Universal but
she refused. In 2009, multiple parties expressed interest in
investing in a Fools Die project but respondent either refused to
speak to the investors or was abusive and uncooperative if she
did speak to them.
Appellants allege that respondent’s behavior was a breach
of her obligation to promote or sell the screenplay. They were
damaged by not receiving writers’ compensation; net profit
participation; special award bonuses; residuals; foreign royalties;
director’s compensation; compensation for sale of the screenplay;
and other miscellaneous damage.
Summary Judgment Is Denied
Respondent moved for summary judgment on her
complaint to collect on the Note and on appellants’ cross-
complaint. She argued that she had no duty to sell the
screenplay, which she owns and controls. Appellants opposed the
motion.
The court denied the motion. It found that triable issues
exist regarding the scope of respondent’s discretion under the
Agreement, her duty to market the screenplay to develop it into a
1 Ahasverus filed a complaint against Puzo mirroring the
facts in appellants’ cross-complaint. The lawsuits were
consolidated before trial.
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motion picture, the nature of the option she had with the Estate,
and whether the $30,000 debt in the Note was an advance
against profits from the screenplay.
The Motion in Limine and Nonsuit
Respondent filed a motion in limine (MIL) “to exclude
evidence suggesting, opining or speculating about the damages
[the Kromolowskis] allegedly sustained due to a breach of the
[Agreement] on the grounds that any such testimony is pure
speculation.” She requested an order precluding appellants and
their expert “from testifying as to their damages because a
foundation cannot be laid for an opinion that they have sustained
any damages.”
Respondent argued that appellants did not control the
screenplay and the Estate never agreed to allow the screenplay to
be made into a movie. Any testimony about money appellants
would have made if they owned the screenplay and if it were ever
made into a film is speculative and lacks foundation.
Appellants opposed the MIL, contending that it is an
improper motion for summary judgment. They argued that they
own the copyright to the screenplay with respondent, who failed
to use her best efforts to get it produced. Testimony from
appellants and their expert would be based on their expertise and
“enable them to provide well-founded estimates.” The Estate was
supposed to work with respondent to enter good faith
negotiations for an acquisition agreement for a feature length
film.
After hearing argument, the court granted the MIL, saying,
“Any decision about damages in this case requires the jury to
speculate about a whole series of steps that would have been
successfully completed and what people would have done.
6
Because it wasn’t done. That’s the difficulty.” The court noted
that “all the damage calculations require speculation as to the
key element,” i.e., whether a deal would ultimately have been
concluded by the Estate. The court concluded that appellants
cannot “prove injury or damages.”
When the court indicated that it would grant nonsuit,
appellants requested a continuance to depose the Estate’s
executor, Anthony Puzo. Respondent objected that appellants
tried and failed to depose Anthony Puzo in 2014, then did nothing
for four years, and it is too late to engage in discovery during
trial. The court asked appellants’ counsel, “Did you announce
ready for trial?” and “you chose to go forward?” When counsel
replied affirmatively, the court denied his request for a
continuance.
Trial on Respondent’s Complaint
A bench trial was held to resolve respondent’s breach of
contract claim. Respondent testified that she loaned appellants
$30,000, as evidenced in the Note dated August 1, 2007. It bore
interest at a rate of 3 percent and was due on or before August 1,
2012. Appellants did not tender the debt, even after respondent
demanded payment.
Respondent testified that the loan evidenced in the Note is
not the same $30,000 she paid Ahasverus for appellants’
collaboration on the Fools Die screenplay. Indeed, appellants’
letter accompanying the Note states it “represents our obligation
to repay you the $30,000 you have been generous enough to loan
to us. . . . It is our intention and understanding that we will begin
repayment as soon as our financial situation allows, but in any
event not later than August 1, 2012.”
7
Respondent wrote in October 2006 that appellants could
“defer” $15,000 “to production cost instead of loan when things
come to fruition.” Based on respondent’s message, Jerzy
Kromolowski testified that the Note “was supposed to be repaid
when the film would come to fruition,” but admitted that the
Note does not mention the film. Mary Kromolowski testified that
the checks from respondent were “advances against future
earnings” from the film project. She agreed to the Note to placate
respondent’s family and accountant. She admitted that neither
the Note nor her letter transmitting the Note refer to the loan as
an advance. Mrs. Kromolowski never imagined that the
screenplay would not be sold to generate income to repay the loan
or advances.
Respondent denied any mutual understanding that the
Note would be repaid from proceeds of a film. In any event, the
film did not come to fruition. She never told appellants that they
did not have to repay the $30,000 loan.
The court found the 2007 Note is “clear by its terms” and
cannot be contradicted by any inconsistent writings. Thus, “the
Note is binding as written.” The court entered judgment for
respondent.
DISCUSSION
1. Nonsuit Was Proper
Appellants argue that the court improperly used
respondent’s MIL as a springboard to dismiss their claims
without affording them a trial, treating it as if it were a motion
for summary judgment. We conclude that the ruling fell within
the court’s “inherent power to control litigation and conserve
judicial resources.” (Lucas v. County of Los Angeles (1996) 47
Cal. App. 4th 277, 284 [court granted defendant’s MIL, then gave
8
judgment to the defendant because it would be useless to try the
case]; see Edwards v. Centex Real Estate Corp. (1997) 53
Cal. App. 4th 15, 28 [court’s grant of a MIL “was tantamount to a
nonsuit”]; R & B Auto Center, Inc. v. Farmers Group, Inc. (2006)
140 Cal. App. 4th 327, 358–359.) Nonsuits are subject to de novo
review. (Lucas, supra, at pp. 284–285.)
Appellants challenge the trial court’s methodology. It is
true that nonsuit generally follows presentation of plaintiff’s case
not, as here, before a jury is impaneled. (Code Civ. Proc., § 581c,
subd. (a).)2 Nevertheless, “ ‘we cannot reverse the judgment of
dismissal based on . . . alleged [procedural] error . . . unless we
are convinced that the ruling resulted in a miscarriage of justice
. . . .’ ([Citation]; see Cal. Const., art. VI, § 13.)” (K.C.
Multimedia, Inc. v. Bank of America Technology & Operations,
Inc. (2009) 171 Cal. App. 4th 939, 952 [court granted defendant’s
MIL, then dismissed plaintiff’s claim].)
We must assume, as alleged in the cross-complaint, that
the parties agreed to apply their best efforts to create a
screenplay; respondent was demanding and difficult during the
project; and she did not cooperate with attempts to market the
screenplay. The trial court ruled that appellants cannot prevail,
regardless of respondent’s behavior, because “there are no non-
speculative damages.”
The issue is whether appellants’ experts could prove loss
attributable to respondent’s actions or inaction with credible
evidence. Appellants contend that the facts and circumstances
“compel a conclusion that expectation damages in this case were
not speculative but were sufficient for a trier of fact to have
2Undesignated statutory references in this opinion are to
the Code of Civil Procedure.
9
concluded that the . . . breaches of contract by Dorothy Puzo
caused expectation damages.”
Courts have “a substantial ‘gatekeeping’ responsibility” to
exclude unreliable expert testimony. (Sargon Enterprises, Inc. v.
University of Southern California (2012) 55 Cal. 4th 747, 769
(Sargon).) In Sargon, the trial court excluded “speculative”
testimony. The Supreme Court agreed. “Lost profits need not be
proven with mathematical precision, but they must also not be
unduly speculative. Here, the court acted within its discretion
when it excluded opinion testimony that [Sargon] would have
become extraordinarily successful had the university completed
the clinical testing.” (Id. at p. 753.) Testimony cannot be based
on assumptions of fact lacking evidentiary support. (Id. at
p. 770.) We review the exclusion of testimony for an abuse of
discretion. (Id. at p. 773.)
At the hearing on the MIL, appellants argued “there is no
question but that [Estate executor] Anthony Puzo would have
allowed” respondent’s project to go forward. Anthony Puzo was
not deposed or designated as a trial witness. Under the Option,
he had “sole discretion” to agree to a feature film. Any notion
that he would have allowed the project to go forward as written—
and at what price—was pure speculation based on an assumption
of fact lacking evidentiary support. The trier of fact would have
to guess whether Puzo would disapprove of the screenplay or
demand an exorbitant price no producer would accept. No jury
could find it “certain or reasonably certain that the rights would
have been gotten” just because respondent is one of the heirs to
the Estate, sister to the executor, or has health issues that elicit
family sympathy.
10
Appellants’ witnesses would have testified that they were
“ready, willing and able to go on this deal.” This begs the
question of whether the Estate was willing to make a deal to sell
the parties’ screenplay. Appellants’ expert declared that any
project he might finance was “contingent upon securing the film
rights from the Estate.” If the Estate would not sell, it matters
not if an agent, producer or director liked the screenplay. Any
expert opinion that a film would go forward and would generate
income for appellants would be “based on a leap of logic or
conjecture.” (Sargon, supra, 55 Cal.4th at p. 772.) Respondent
would be prejudiced by having to defend against a damage claim
that lacks foundation.
The jury could not infer any agreement on the part of the
Estate. The only testimony about the Estate would come from its
literary rights attorney, Bertram Fields, who stated in deposition
that he would not allow the project to go forward: He would
refuse the film rights to respondent or appellants because their
screenplay was substandard; their proposed budget was too low;
the rights to a novel by a famous author command a maximum
price; and Jerzy Kromolowski was unacceptable as the film’s
director.3 As appellants write in their brief, the Estate always
follows Fields’s recommendations.
3 Fields’s 2005 letters to other people are not relevant to
his opinion in 2018 about the prospects of this screenplay by
these parties. Appellants did not dispute the substance of
Fields’s deposition testimony at the hearing on the MIL or in
their motion for reconsideration. If respondent misrepresented
what Fields said, appellants could have sought a new trial or
relief from the judgment based on mistake, inadvertence,
surprise, or excusable neglect. (§ 473.) They cannot challenge
respondent’s summary of the Fields deposition or say the
11
Performing its role as a gatekeeper to exclude testimony
based on conjecture and speculation, the court did not abuse its
discretion here. The court stated that the Option “gives sole
discretion to Anthony Puzo . . . as to what will be acceptable
terms . . . including terms regarding a fixed money compensation
as to the amount of the exploitation rights for any future use of
the film should it be sold.” The court observed that “without an
agreement to transfer the film rights to Fools Die to somebody so
that this screenplay could be, in fact, converted to a film, there
are no damages.” In short, the court said, “[A]ll of this requires
both the witnesses and the jury to basically speculate” as to a
possible deal and the money that might flow from it. The court’s
reasoning was not so irrational or arbitrary that no reasonable
person could agree with it. (Sargon, supra, 55 Cal.4th at p. 773.)
Its decision falls well within the bounds of reason and conforms
to legal principles; there was no miscarriage of justice.
2. Ahasverus’s Complaint
Appellants argue that the court could not grant nonsuit
against Ahasverus because the MIL did not address Ahasverus’s
complaint. This issue was waived at the hearing. Appellants’
counsel asked if the court is “nonsuiting us” on the cross-
complaint and “just so the record is clear, we would also be
nonsuited in the consolidated action on the Ahasverus complaint,
which is essentially the same thing.” The court replied, “I think
that has to be. I don’t think they are any different.” Appellants’
counsel agreed that the cases are the “same thing” and said
“okay.” After counsel invited the court to grant nonsuit on the
Ahasverus lawsuit, appellants cannot complain that the court
testimony “in fact does not exist” for the first time in their reply
brief on appeal.
12
erred by doing exactly what their attorney suggested. In any
event, appellants forfeited the issue by failing to object that the
MIL was defective because it did not include Ahasverus.
3. New Reliance Damages Theory
After the court granted nonsuit, appellants moved for
reconsideration, arguing that they suffered reliance damages by
working on the screenplay. Counsel said he was previously
unaware his clients could claim reliance damages for a breach of
contract. At the hearing on the motion for reconsideration,
appellants admitted they never raised the issue of reliance
damages. The court said, “When you have a trial, you’re
supposed to present all your theories at the time of trial, and you
didn’t.” It denied the motion, writing that appellants “never
argued that they should be allowed to recover any ‘reliance
damages.’ [T]heir effort to do so now does not constitute new
evidence or law.”
Appellants continue to pursue their new theory of reliance
damages on appeal, as an alternative to the expectation damages
alleged in their pleading. They contend they are entitled to the
reasonable value of the services they performed, which is not
dependent on the film rights being acquired or a movie being
made. In support of their motion, appellants declared that the
value of their services is $400,000 to $650,000.
A party may seek reconsideration “based upon new or
different facts, circumstances, or law.” (§ 1008, subd. (a).) “[A]
moving party must give a satisfactory explanation for the
previous failure to present the allegedly new or different
evidence.” (Kerns v. CSE Ins. Group (2003) 106 Cal. App. 4th 368,
383; Blue Mountain Development Co. v. Carville (1982) 132
Cal. App. 3d 1005, 1012–1013 [public policy requires parties to
13
justify reopening previously decided cases based on newly
discovered evidence that could not, with reasonable diligence,
have been discovered and produced at trial].)
Known facts or evidence not presented to the court do not
qualify as “new.” Without a showing of diligence, “[t]he miserable
result would be to . . . remove an important incentive for parties
to efficiently marshal their evidence.” (Garcia v. Hejmadi (1997)
58 Cal. App. 4th 674, 688–689; Even Zohar Construction &
Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal. 4th
830, 833, 839.)
The court did not abuse its discretion by denying the
motion for reconsideration because appellants did not show
diligence about raising their reliance damages claim before the
court considered the MIL and granted nonsuit. (Glade v. Glade
(1995) 38 Cal. App. 4th 1441, 1457 [abuse of discretion standard].)
Appellants assert that they raised the issue in their pleadings
and in argument. Neither the pleadings nor the reporter’s
transcript support their argument. Telling the court appellants
“have done a lot of work on the screenplay” is not asking for
reliance damages. The value of their services is not new
evidence; it was easily ascertainable but was not raised until the
motion for reconsideration.
Appellants maintain that they can make “a new legal
argument based on undisputed facts . . . for the first time on
appeal.” However, they do not identify which facts are
undisputed or why they are dispositive.
The issue is not susceptible to a purely legal analysis.
Reliance damages consist of the plaintiff’s reasonable outlay or
expenditure toward performance of the contract. (Agam v. Gavra
(2015) 236 Cal. App. 4th 91, 105.) “[T]he burden is on the plaintiff
14
to establish ‘the amount which he has been induced to expend.’
[Citation.] The burden then shifts to the defendant to show the
nonbreaching party’s expenses were unnecessary, such that his
or her recovery of reliance damages should be reduced.” (Id. at
p. 106.) None of the facts needed to determine reliance damages
are undisputed or contained in the record in this case.
4. The Judgment on Respondent’s Complaint
Appellants argue that the court’s exclusion of their damage
evidence deprived them of an offset against respondent’s claim to
recover $30,000 plus interest on the Note. They point to
respondent’s statements that repayment could come from monies
generated by a film should it “come to fruition.”
The court determined that the Note was clear and the debt
had to be repaid, regardless of whether the Estate approved the
sale of film rights. The idea appellants could have tapped income
from a film project to repay their debt did not affect the court’s
determination. The Note does not refer to the money as an
“advance” against future compensation from the sale of a
screenplay. Instead, it states that the debt is due and payable on
or before August 1, 2012.
Respondent’s oral or written statements about repaying the
loan when a film came to fruition cannot be used to contradict the
Note. Parol evidence may be used to explain ambiguities in a
contract if the terms are reasonably susceptible of that meaning,
but cannot be used to contradict the contract or add new terms.
A written agreement “may not be contradicted by prior or
contemporaneous agreements. [This] necessarily bars
consideration of extrinsic evidence of prior or contemporaneous
negotiations or agreements at variance with the written
agreement. ‘[A]s a matter of substantive law such evidence
15
cannot serve to create or alter the obligations under the
instrument.’ ” (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal. 4th
336, 344; Civ. Code, § 1625; Code Civ. Proc., § 1856, subd. (a).)
The courts cannot rewrite the Note to add new terms limiting
appellants’ repayment obligation to the sale of a screenplay or
production of a film when the Note says the debt is due on a
specified date.
5. Costs Award
The court awarded respondent expert witness fees of
$12,150. The award was based on respondent’s statutory offers
to compromise.4 A prevailing party may recover the cost of
witness fees if she obtained a more favorable judgment at trial
than a pretrial statutory offer she made to the opposing party.
(§ 998.)
Respondent offered in 2015 to settle her complaint for
$25,000 and to settle appellants’ cross-complaint by paying them
$5,000. Appellants told the court that Puzo’s offer to compromise
was “nominal” and she “could not reasonably have expected
[them] to accept.” Appellants asked the court to exercise its
discretion and deny witness fees.
The court found the offer was made in good faith, rejecting
appellants’ argument that a $5,000 offer on the cross-complaint
was nominal. Appellants challenge these findings. We review
the court’s determination on the validity and reasonableness of a
settlement offer for an abuse of discretion. (Mesa Forest Prods. v.
St. Paul Mercury Ins. Co. (1999) 73 Cal. App. 4th 324, 329.)
4 Respondent sought $18,550 in expert fees; the court
reduced the request by $6,400 because some fees were incurred
before the offer to compromise.
16
Section 998 is designed to encourage pretrial settlement.
(T. M. Cobb Co. v. Superior Court (1984) 36 Cal. 3d 273, 280.) An
offer to compromise must be made in good faith and carry some
reasonable prospect of acceptance. (Essex Ins. Co. v. Heck (2010)
186 Cal. App. 4th 1513, 1528.) A party making a modest offer may
do so in good faith based on a reasonable expectation of
prevailing at trial. (Culbertson v. R. D. Werner, Co., Inc. (1987)
190 Cal. App. 3d 704, 710–711.)
Respondent believed she would prevail because she controls
the disposition of the screenplay under the Agreement and did
not wish to create a film because she disliked the screenplay.
Also, she knew appellants lacked proof that the Estate would sell
its film rights. Respondent prevailed, which is prima facie
evidence her modest offer was reasonable. (Santantonio v.
Westinghouse Broadcasting Co. (1994) 25 Cal. App. 4th 102, 117.)
Under the circumstances, the court did not abuse its discretion by
awarding expert fees.
17
DISPOSITION
The judgment is affirmed. Respondent is entitled to
recover her costs on appeal.
NOT TO BE PUBLISHED.
LUI, P.J.
We concur:
CHAVEZ, J.
HOFFSTADT, J.
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