July 20, 2012
Ashton Kutcher and Reliance Damages
In his first appearance on ContractsProf blog, Ashton Kutcher was noted for his replacement of Charlie Sheen, famous for violating an alleged morals clause in his contract with the producers of the CBS television series, Two-and-a-Half Men. In this appearance, his company possibly provides a good example of a party seeking reliance damages.
Kutcher's company, Katalyst Media, reportedly had a contract with the California DMV (yes, that DMV) to provide access and content for a reality show about "the variously humorous, emotional, dramatic, moving, humanizing and entertaining situations that arise [at the DMV] on a daily basis." According to the complaint, the DMV later attempted to cancel the arrangement. In addition to other claims, Kutcher claims that the attempted contract cancellation came after his company had spent money in reliance. Specifically, the complaintstates:
"In direct reliance upon DMV's promises and commitments...Plaintiffs entered into an agreement with cable television station TruTV....Also in reliance on DMV's promises and commitments...Plaintiffs spent literally hundreds of thousands of dollars in pre-production for the Series, including with respect to casting, hiring of personnel, preparing budgets, negotiating contracts, and other pre-production activities."
The case is particularly interesting because the facts somewhat parallel those in the case I use to teach reliance, Hollywood Fantasy Corp. v. Gabor. In Gabor, the organizer of fantasy acting camps sued Zsa Zsa Gabor for backing out of one of the camps and allegedly causing all sorts of damages (including, perhaps, the bankrupting of the entire company). The plaintiff, Leonard Saffir, also alleged that he lost anticipated profits from a "bloopers" show he was planning to sell to a television network based on outtakes from the fantasy camps. Although Saffir's damages were too uncertain to recover under a traditional expectation-based lost profits theory, he was able to recoup his expenses (such as brochures, advertisting, etc.) incurred in reliance on Ms. Gabor's promise to appear.
I suppose the modern day equivalent to a bloopers show would be some current reality TV shows, including Kutcher's own prior series, Punk'd. So, from now on, whenever I run across an Ashton Kutcher re-run, I'll automatically think of Leonard Saffir--and reliance.
[Heidi R. Anderson]
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