Joan Collins And Her Production Company's Third Amended Answer To Random House's SecondAmended Complaint


Filed Nov. 30, 1995.

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

RANDOM HOUSE UK LIMITED and RANDOM HOUSE, INC.
Plaintiffs,

-against-

GEMINI STAR PRODUCTIONS LIMITED, JOAN COLLINS
and MARTIN D. SINGER, as Trustee of the Irving P.
And Mary Lazar Trust,

THIRD AMENDED ANSWER TO SECOND AMENDED COMPLAINT,
COUNTERCLAIMS AND CROSS-CLAIMS
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Defendant Gemini Star Productions Ltd. ("Gemini"), by its attorney, Kenneth David Burrows, answering the second amended complaint:

1. ADMITS the allegations of paragraphs 1, 2, 5, 7, 18, and 19 of the second amended complaint.

2. DENIES KNOWLEDGE OR INFORMATION SUFFICIENT TO FORM A BELIEF as to the allegations contained in paragraphs 3, 4, 13 (except that it ADMITS entering into an agreement with Century Hutchinson Publishers), and 15- 17 of the second amended complaint.

3. DENIES each and every allegation contained in paragraphs 6, 8, 10 (except DENIES ON INFORMATION AND BELIEF that Lazar transacted business in New York), 11, 12, 24 (except ADMITS that Random House UK advanced to it a sum of money, and ADMITS ON INFORMATION AND BELIEF that $225,000 of such sum was paid for Lazar's commission), 26, 28, 29 (except ADMITS that the specified sum has not been paid), 40-42, 47, 49, 50 (except ADMITS that the specified sum has not been paid), 56, 58, and 59 (except ADMITS that that the specified sum has not been paid), of the second amended complaint.

4. ADMITS ON INFORMATION AND BELIEF the allegations of paragraph 9 of the second amended complaint.

5. NEITHER ADMITS NOR DENIES the allegations of paragraphs 14, 20, 21, 23, 25, 37, 38 (except that it ADMITS payment of the sum specified), 39, 44-46 (except that it ADMITS payment of the sum specified), and 52-55 (except that it ADMITS payment of the sum specified) of the second amended complaint, and respectfully refers the court to the agreements, notices and decision referred to for the meaning and contents thereof.

6. NEITHER ADMITS NOR DENIES the allegations of paragraphs 22, 30-36, 43, 51, or GO-71 of the second amended complaint.

7. DENIES each and every allegation contained in paragraphs 27, 48, and 57 of the second amended complaint, except that it ADMITS that it received letters and notices from plaintiffs purporting to terminate the Random House UK and the Random House, Inc. agreements.

AS AND FOR A FIRST COMPLETE AFFIRMATIVE COMPLAINT

8. The second amended complaint fails to state a claim or claims upon which relief can be granted against defendant.

AS AND FOR A FIRST COMPLETE AFFIRMATIVE DEFENSE TO THE FIRST CAUSE OF ACTION SET FORTH IN THE COMPLAINT

9. Gemini timely delivered a manuscript of Book #2 ready for press. Plaintiff Random House UK failed to acknowledge delivery of that manuscript or to edit or to publish it.

AS AND FOR A SECOND COMPLETE AFFIRMATIVE DEFENSE TO THE FIRST CAUSE OF ACTION SET FORTH IN THE COMPLAINT

10. The payments provided for at paragraph 10 of the First Random House UK Agreement did not "arrive within ten days after the date due." As a result, therefore, all rights in Book #2 "revert[ed]" to Gemini, and defendant is entitled to retain so much of the advance as therefore had been paid.

AS AND FOR A FIRST COMPLETE AFFIRMATIVE DEFENSE TO THE THIRD CAUSE OF ACTION SET FORTH IN THE COMPLAINT

11. Gemini timely delivered a manuscript of Book #3 ready for press. Random House UK failed to acknowledge delivery of that manuscript or to edit it or to publish it.

AS AND FOR A SECOND COMPLETE AFFIRMATIVE DEFENSE TO THE THIRD CAUSE OF ACTION SET FORTH IN THE COMPLAINT

12. The payments provided for at paragraph 11 of the Second Random House Agreement did not "arrive within ten days after the date due." As a result, therefore, all rights in Book #3 reverted to Gemini, and Gemini is entitled to retain so much of the advance as theretofore had been paid.

AS AND FOR A FIRST COMPLETE AFFIRMATIVE DEFENSE TO THE FOURTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

13. Gemini delivered the manuscript: of Work #1 prior to March 1, 1992. By the terms of paragraph 27 of the Random House, Inc. Agreement, the $500,000 advance allocable to Work #l was, by reason of such delivery, no longer "repayable."

AS AND FOR A SECOND COMPLETE AFFIRMATIVE DEFENSE TO THE FOURTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

14. Paragraph 28(b) of the Random House, Inc. Agreement provides that if that agreement were terminated pursuant to the provisions of paragraph 28(a)(ii) or 28(a)(iv), Gemini's " . . . obligation to repay the amounts advanced hereunder shall be limited to repayment of the proceeds of the sale or licensing by the [defendant] of rights in the Work of the kind granted to the plaintiff Random House, Inc.] hereunder."

15. Gemini timely delivered a manuscript for Work #1 which was not, in Random House, Inc.'s judgment, satisfactory, and Random House, Inc. subsequently purported to exercise its right to terminate the agreement.

16. There are no proceeds from the sale or licensing by Gemini of rights in Work #1. Therefore, Random House, Inc. is not entitled to repayment of any amounts advanced in respect of Work #1.

AS AND FOR A THIRD COMPLETE AFFIRMATIVE DEFENSE TO THE FOURTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

17. Gemini delivered a complete manuscript for Work #1 in a timely manner, which manuscript did not violate common law or statutory copyright or right of privacy of any person or contain libelous or obscene matter, but which was not acceptable to Random House, Inc. for publication. Pursuant to paragraph 31(a) of the Random House, Inc. Agreement, Random House, Inc. was therefore not entitled to repayment of the advance.

AS AND FOR A FIRST COMPLETE AFFIRMATIVE DEFENSE TO THE FIFTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

18. Gemini delivered the manuscript for Work #2 prior to September 1, 1993. By the terms of paragraph 27 of the Random House, Inc. Agreement, the $500,000 advance allo- cable to Work #2 was, by reason of such delivery, no longer "repayable-"

AS AND FOR A SECOND COMPLETE AFFIRMATIVE DEFENSE TO THE FIFTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

19. Paragraph 28(d) provides that if the Random House, Inc. Agreement is terminated pursuant to the provisions of paragraph 2 8 (c) (ii) or 2 8 (c) (iv) , Gemini's "obligation to repay the amounts advanced hereunder shall be limited to repayment of the proceeds of the sale or licensing by the [defendant] of rights in the Work of the kind granted to the Random House, Inc.] hereunder."

20. Gemini timely delivered a manuscript for Work #2 which was not, in Random House, Inc.'s judgment, satisfactory, and plaintiff subsequently purported to exercise its right to terminate the agreement.

21. There are no proceeds from the sale or licensing by defendant of rights in Work #2. Therefore, Random House, Inc. is not entitled to repayment of any amounts advanced in respect of Work #2.

AS AND FOR A THIRD COMPLETE AFFIRMATIVE DEFENSE TO THE FIFTH CAUSE OF ACTION SET FORTH IN THE COMPLAINT

22. Gemini delivered a complete manuscript for Work #2 in a timely manner, which manuscript did not violate common law or statutory copyright or right of privacy of any person or contain libelous or obscene matter, but which was not acceptable to Random House, Inc. for publication. Pursuant to paragraph 31(b) of the Random House, Inc. Agreement, plaintiff was therefore not entitled to repayment of the advance.

In the alternative, Gemini respectfully alleges as its counterclaims and cross-claims:

AS AND FOR A FIRST COUNTERCLAIM AGAINST RANDOM HOUSE UK

23. At all times hereinafter mentioned, Gemini was and is a corporation organized and existing under the laws of the State of California with a principal place of business in Los Angeles, California.

24. On information and belief, Random House UK is a corporation incorporated under the laws of the United Kingdom, maintaining its principal office and place of business at 20 Vauxhall Bridge Road, London SW1V 2SA, England.

25. In or about April 25, 1988,Gemini and Random House UK entered into an agreement providing for the publication of two untitled novels by Joan Collins (the "First Random House UK Agreement"). In or about May of 1990, defendant delivered the first novel written by Joan Collins pursuant to that agreement, which was successfully published by Random House UK.

26. In or about September 1991, Gemini delivered a manuscript for Book 2 under the First Random House UK Agreement. Random House UK never responded to or acknowledge the delivery of that manuscript, never edited it or provided Gemini or Joan Collins with any editorial comments, assistance or help, and failed to publish it.

27. More than 18 months have passed since the manuscript was delivered to Random House UK.

28. Pursuant to the First Random House UK Agreement, Gemini was to receive additional advances as follows:

*$300,000 on delivery of the completed typescript for Book 2;

*$300,000 on the first publication of Book 2 in hardcover;

*$300,000 on the first mass market publication of Book 2;

*$300,000 six months after mass market publication of Book 2,

which payments total of $1,200,000, no part of which has been paid. No demand has been made for the payment of such sums since, in view of Random House UK's purported cancellation of the First Random House UK Agreement, such demand would have been futile.

29. Gemini has been damaged by Random House UK's failure to pay the sum of $1,200,000.

AS AND FOR A SECOND COUNTERCLAIM AGAINST RANDOM HOUSE UK

30. Defendant repeats and realleges each and every allegation contained in paragraphs 23 through 25 of its first counterclaim against Random House UK.

31. On or about August 28, 1990, Gemini and Random House UK entered into an agreement providing for the publication of an untitled novel by Joan Collins (the "Second Random House UK Agreement").

32. In or about September, 1992, Gemini delivered a manuscript pursuant to that agreement. Random House UK never responded to or acknowledged the delivery of that manuscript, never edited or provided defendant or Joan Collins with any editorial comments, assistance or help, and failed to publish it.

33. Pursuant to the Second Random House UK Agreement, Gemini was to receive additional advances as follows:

* $150,000 on delivery or the complete typescript;

* $150,000 on publication or nine months after delivery;

* $150,000 on publication of the paperback or twelve months after delivery,

which payments total $450,000, no part of which has been paid. No demand has been made for the payment of such sums since, in view of Random House UK's purported cancellation of the Second Random House UK Agreement, such demand would have been futile.

34. Gemini has been damaged by Random House UK's failure to pay the sum of $450,000.

AS AND FOR A FIRST COUNTERCLAIM AGAINST RANDOM HOUSE, INC.

35. On information and belief, defendant Random House Inc. (Random House") was and is a New York corporation with its principal place of business at 201 East 50th Street, New York, New York 10022.

36. On or about June 5, 1990, Random House and Gemini entered into a written agreement (the "Agreement") providing for the publication of two untitled novels ("Work No. 1" and Work No. 2") by Joan Collins.

37. On or before March 1, 1992, the manuscript for Work No. 1 was delivered to Random House by Gemini.

38. Defendant Random House purported to reject the manuscript for Work No. 1 on the ground that it was unsatisfactory within the meaning of paragraph 2 of the Agreement.

39. However, the manuscript for Work No. 1 did not violate common law or statutory copyright or the right of privacy of any person or contained libelous or obscene matter.

40. Paragraph 31(a) of the Agreement provides that in the event that the manuscript for Work No. 1 was not satisfactory, but that it was delivered in a timely manner and did not violate common law or statutory copyright or the right of privacy of any person or contain libelous or obscene matter, then the balance of the advance for Work No. 1 was to be paid in two installments: $500,000 within one year after delivery, and $500,000 within two years after delivery.

41. Random House has failed to pay any portion of the additional advances as provided for in Paragraph 31(a). No demand has been made for such sums since, in view of plaintiff's purported cancellation of the Agreement, such demands would have been futile.

42. Gemini has been damaged by plaintiff's failure to pay such advances in the sum of $1,000,000.

AS AND FOR A SECOND COUNTERCLAIM AGAINST RANDOM HOUSE, INC.

43. Gemini repeats and realleges each and every allegation contained in paragraphs 35 and 36 of its first counterclaim against Random House, Inc.

44. On or before September 1, 1993, the manuscript for Work No. 2 was delivered to Random House by Gemini.

45. Defendant Random House purported to reject the manuscript for Work No. 2 on the ground that it was unsatisfactory within the meaning of paragraph 2 of the Agreement.

46. However, the manuscript for Work No. 2 did not violate common law or statutory copyright or the right of privacy of any person or contained libelous or obscene matter.

47. Paragraph 31(b) of the Agreement provides that in the event that the manuscript for Work No. 2 was not satisfactory, but that it was delivered in a timely manner and did not violate common law or statutory copyright or the right of privacy of any person or contain libelous or obscene matter, then the balance of the advance for Work No. 2 was to be paid in two installments: $500,000 within one year after delivery, and $500,000 within two years after delivery.

48. Random House has failed to pay any portion of the additional advances as provided for in Paragraph 31(b). No demand has been made for such sums since, in view of plaintiff's purported cancellation of the Agreement, such demands would have been futile.

49. Gemini has been damaged by plaintiff's failure to pay such advances in the sum of $1,000,000.

AS AND FOR A FIRST CROSS-CLAIM

50. Gemini repeats and realleges each and every allegation contained in paragraphs 26-32 and 34-37 of its counterclaims.

51. On information and belief, Lazar acted as an agent or broker in connection with the execution of both Random House UK Agreements.

52. A portion of the advance paid to defendant Gemini in respect of that agreement was paid to and retained by Lazar, to wit: the sum of $225,000 in respect of Book #2 under the First Random House UK Agreement.

53. In the event that Gemini is required to repay to plaintiffs any sums attributable to the Lazar commissions, it is entitled to receive the amount thus paid from defendant Singer, as the successor to Lazar.

AS AND FOR A SECOND CROSS-CLAIM

54. Defendant Gemini repeats and realleges each and every allegation contained in paragraphs 26-32 and 34-37 of its counterclaims and paragraphs 39-41 of its first cross- claim.

55. Lazar never took any steps to document the submission of Work #2 or Work #3 to Random House UK, or to place plaintiff on notice of the fact that defendant Gemini. by such delivery, considered its obligations under the Random House UK Agreements to be complete. Lazar also failed or omitted to demand payment from Random House UK of the balance of the advances due under Gemini's respective contracts with plaintiffs.

56. As Gemini's agent, Lazar was Gemini's fiduciary and owed it a duty of care.

57. Lazar's failure to act as aforesaid represented a deviation from and a breach of its duty of care.

58. Defendant has been injured by such breach and deviation in the sum of $1,650,000.

AS AND FOR A THIRD CROSS-CLAIM

59. Lazar acted as Gemini's agent in connection with a work known as Prime Time. On or about March 31, 1989, Lazar received a payment from Simon & Schuster in the sum of $347,149.84, from which sum it deducted $34,714.98 before paying the balance to Gemini. That deduction was improper and unwarranted, and has not been repaid although duly demanded.

AS AND FOR A FOURTH CROSS-CLAIM

60. Lazar acted as Gemini's agent in connection with a work known as Love & Desire & Hate. On or about September 30, 1992, Lazar received a payment from Simon & Schuster in the sum of $234,011.19, from which sum it deducted $23,401.19 before paying the balance to Gemini. That deduction was improper and unwarranted, and has not been repaid although duly demanded.

WHEREFORE, defendant Gemini Star Productions Ltd. demands judgment:

1. Dismissing the complaint on the merits, and that plaintiffs take nothing thereby; and

2. On its first counterclaim in the sum of $1,200,000 against plaintiff Random House UK Limited;

3. On its second counterclaim in the sum of $450,000 against plaintiff Random House UK Limited;

4. On its third counterclaim in the sum of $1,000,000 against plaintiff Random House, Inc.;

5. On its fourth counterclaim in the sum of $1,000,000 against plaintiff Random House, Inc.;

6. On its first cross-claim against defendant Singer in the sum of $225,000;

7. On its second cross-claim against defendant Singer in the sum of $1,650,000; and

8. On its third cross-claim against defendant Singer in the sum of $34,714.98, together with interest from March 31, 1989; and

9. On its fourth cross-claim against defendant Singer in the sum of $23,401.19, together with interest from September 30, 1992; and

10. The costs and disbursements of this action.

Dated: New York, New York
November 28, 1995

KENNETH DAVID BURROWS
Attorney for Defendant Gemini Star Productions Ltd.
425 Park Avenue
New York, New York 10022
(212) 980-6922

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