LOS ANGELES – The U.S. District Court for the Central District of California recently denied a motion by the Writers Guild of America West to add Myriad Pictures Inc. as a judgment debtor in the guild's suit against BTG Productions that claimed the production company refused to pay several guild writers for the movie “Breaking the Girls.”
The district court ruling July 3 affirmed previous findings after the 9th U.S. Circuit Court of Appeals mandated that the district court apply the alter ego rule to the case. “Myriad is not an alter ego of BTG and therefore cannot be added as a judgment debtor.” U.S. District Judge Ronald S. Lew wrote the court opinion, stating the guild did not prove that BTG used Myriad “to avoid BTG’s union obligations.”
Guild writers Mark DiStefano and Guinevere Turner claim that BTG Productions, a limited liability company formed to produce the movie, did not pay them for their work on the film in 2012. In 2013, the guild filed a claim for arbitration and sent a notice to BTG.
BTG did not show up for the arbitration hearing in February 2014 and judgment was entered in the guild’s favor. The judgment ordered BTG to pay the guild over $300,000 for breaking the writer contracts. The order states that BTG ”has refused and continues to refuse to comply with the terms of the award.”
The guild filed motions to confirm the arbitration and for default judgment, which were granted by the district court in 2014 and 2015. In October 2015, the guild was denied motions to add Kirk D’Amico, the sole owner of BTG, and Myriad as judgment debtors. The guild appealed the decision to the federal appeals court, which dismissed the motion to add D’Amico in October 2016. In January, the appeals court remanded the case back to the district court regarding the guild’s motion to add Myriad as a judgment debtor, stating that the case requires a federal application of the alter ego test.
Judge Lew pointed to several factors that show BTG and Myriad had common ownership, including D’Amico owning 70 percent of Myriad, BTG and Myriad sharing an office, and the “intertwining” of Myriad’s and BTG’s operations and officers.
The court held that an alter ego theory cannot prevail “simply by showing the union and non-union entities are a single employer.” Lew pointed out that “it is hard to show how BTG could even use Myriad to avoid its union obligations” since Myriad was founded in 1999 while BTG was founded in 2012 to produce the film.
Lew stated that BTG didn’t wholly rely on Myriad. “BTG functioned irrespective of Myriad and Myriad’s finances; there was no commingling of funds, Myriad did not receive the profits of 'Breaking the Girls,' and Myriad was only one piece of the production puzzle, not the primary investor and manager of the production.” Lew stated that the “truth of the matter” was that BTG simply ran out of money and was unable to pay the writers.
Lew said that is “illogical” for the guild to expect Myriad as a “third-party entity that works on a film to be liable for any remaining debts of the single-purpose entity after production of the film ends. This is not the purpose the alter ego doctrine seeks to serve.”
U.S. District Court for the Central District of California, Case Number CV 14-05828 RSWL (AJWx)
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