If Warner Bros. accidentally sent you $1 mil, would you cash the check?

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If Warner Bros. accidentally sent you $1 mil, would you cash the check?

Wed Mar 10, 2010 @ 12:11PM PST

By Matthew Belloni

Bergstein,david You get a fat check from a major studio that maybe shouldn't be yours. Do you cash it? David Bergstein would. At least that's what's implied in a lawsuit filed Tuesday in Los Angeles Superior Court.

Warner Bros. has sued Intermedia, the European production company with ties to the embattled film impresario, to recover $1.1 million in profit participations from "Terminator 3: Rise of the Machines" that the studio says it accidentally sent to Intermedia instead of the trust account set up to hold funds from the film.

Intermedia, a producer of "Terminator 3," is entitled to a healthy share of revenue from the 2001 film, which Warners distributed domestically. According to the complaint, the agreement between the parties provides that Warners contribute money to an independent trust, which is charged with paying profit participants like star Arnold Schwarzenegger and writer-director Jonathan Mostow before Intermedia. 

But when Intermedia's parent company changed hands in November 2008 (the complaint is silent about Bergstein's exact role in the company except to say that he identified himself in a letter as a "director"; he also sued in August 2008 to take control of the Intermedia library), the CFO and chief legal officer of Bergstein's Capitol Films began asking why Intermedia, which allegedly shared an office with Capitol, had not received accounting statements for the film. 

Terminator3Warners says it then made an "administrative error" and sent three checks to Intermedia instead of the trust.

"First in May 2009 and again in July 2009, Intermedia materially breached the Distribution Agreement by accepting, endorsing and depositing three checks totalling $1,108,330 which stated on their face that they were to be deposited in the Trust Account but which were inadvertently sent to Intermedia," the complaint reads.

Intermedia now won't return the money. Warners says it paid the full amount to the trust last month to honor its contractual obligation and is now suing to recover its loss from Intermedia.

The complaint alleges causes of action for breach of contract and the covenant of good faith and fair dealing, conversion, money had and received, and unjust enrichment. Warners is repped in the case by Christopher Caldwell, Linda Burrow and Eric Pettit of L.A.'s Caldwell Leslie & Proctor.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to [email protected]

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