Court ruling Intertains arbitration
AFMA panel should resolve dispute, jurist sez
At oral argument, U.S. District Judge Carl Moreno of Los Angeles said his tentative ruling was that an arbitration clause governs Intertainment's claims against the bank, and they would be sent to an American Film Marketing Assn. panel for resolution.
"I'd like to send this whole action to arbitration, but I don't think I can compel that," Moreno said.
Franchise, Intertainment and Imperial Bank have been warring since late December when Franchise sued Intertainment in L.A. Superior Court, charging that the once high-flying German entertainment company had breached its output deal.
That suit was withdrawn, but when settlement talks failed, Intertainment sued in federal court, claiming that Franchise had inflated budgets on the numerous films it produced for Intertainment, including "Get Carter," "The Pledge," "The Art of War," "3000 Miles to Graceland" and "Battlefield Earth."
Intertainment also sued Imperial Bank, Franchise's primary lender, claiming it knew the budgets were padded.
On Monday, Intertainment attorney Scott Edelman argued at length against arbitration, claiming it would create a legal quagmire because at least a portion of the case would still need to be tried by Moreno following the arbitration, which is estimated to take three to six months.
"I would really like to try this case to a jury," Edelman told Daily Variety after the hearing. Neither a jury nor punitive damages are available in arbitration. In addition, the media would not have a right to be present.
Franchise took no position on Imperial's arbitration motion other than to proclaim its right to participate in the arbitration to the extent it affects the company's rights once the action is back in federal court.
Franchise attorney Larry Stein also urged the court to address its motion to dismiss Intertainment's complaint, which the court said it would put off because of the arbitration.
"This is a simple contract dispute, but Intertainment wrote a complaint for the media that alleges corruption and violations of the racketeering laws," Stein said. "We'd like to clean this up and not have these claims sitting here in federal court."
Moreno said he would issue a written opinion in the next few days.
