age 1 of 20) 1 | BAUTE CROCHETIERE & HARTLEY LLP MARK D. BAUTE (State Bar No. 127329) 2 || mbaute@bautelaw.com SCOTT J. STREET (State Bar No. 258962) FILED ce 3 || sstreet@bautelaw.com Seeraiy at tos Angales 14 [7 South Feuer Stor, suite 4900 's||Los Angeles, California 90017 al) ‘Telephone: (213) 630-5000 van 81 208 SS | Facsimile: (213) 683-1225 Sheen Cater, Exggue OferOlok Depa SE | atomeys forPlainttt Se es TOP KICK PRODUCTIONS, INC. = 7 Gs SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF LOS ANGELES, CENTRAL DISTRICT a BC6 92872 3 11] TOP KICK PRODUCTIONS, INC., a Califomia | Case No. S corporation, §.3 12 COMPLAINT FOR: 3 Plaintiff, 213 (1) BREACH OF CONTRACT; fo (2) BREACH OF THE IMPLIED @ __ || CBS BROADCASTING, INC., a New York COVENANT OF GOOD FAITH 15 || corporation; CBS CORPORATION, a Delaware AND FAIR DEALING; AND 3 || comporation; SONY PICTURES TELEVISION 2 16|/INC., a Delaware corporation; and DOES 1 @) ACCOUNTING. __|[through 10, inclusive, "7 [DEMAND FOR JURY TRIAL] Defendants. 19 20 21 2 oe 2 28 = 26 7 28 rags COMPLAINT oot 4 aged 1 - Doo ID = 1726978211 ~ Doe Type = oman(rage 2 of 20) 1 Plaintiff TOP KICK PRODUCTIONS, INC. (“Top Kick"), alleges as follows: 2 INTRODUCTION 3 1. Walker, Texas Ranger (“Walker”) was one ofthe biggest television hits of the 1990s, 44||Its success was based largely on the popularity of its lead actor and executive producer, Chuck 5|||Norris.' Chuck Norris’ life, image and brand are among the most positive and patriotic in the United 6 States, and are linked to his life of service and accomplishments, beginning with his service in the 7|| US. military in Korea from 1958 to 1962 8 2. After military service, Chuck Norris continued to advance and enhance his skills as a 9}| black belt in karate, with an eventual entertainment career which successfully merged the athletic and 0 | spisitual skitls inherent in martial arts such as karate, with positive ole models and performance artin 11] a large number of films and television appearances and shows. In the late 1960s and early 1970s, 12]] Chuck Norris devoted his professional time to a six-year run as an undefeated middleweight karate 13] world champion. This six consecutive years as world champion was due in part to a willingness to 14) blend the best of multiple martial arts styles and disciplines, called "Chun Kuk Do.” This blended 15] martial arts fighting style was also formerly taught by Chuck Norris at the "Chuck Norris Karate 16] Schools,” which operate today under the United Fighting Arts Federation. The discipline and success 17} in serving his country and as a world champion martial artist also resulted in a positive and goal BAUTE CROCHETIERE & HARTLEY ur 18} oriented approach to life and family, now embodied in the well-known and published Code of Ethics 19] that Chuck Norris has striven to live by. 20 3. Aspartoftransitioning to entertainment, Mr. Norris became even more widely known 21 || for authoring books, training and performing with Bruce Lee, and performing in well-known action 22|| films such as “Lone Wolf McQuade,” “Missing in Action,” “Code of Silence,” “Delta Force” and 2 23 ||“Firewalker,” among others. By 1990, Chuck Norris was the most prominent and widely known black 3 24| beltin the United States, with a history of box office success and a list of athletic, film and television 5 25 jj accomplishments, and a well-known commitment to heath, balance in life, physical exercise, personal ' Mr. Norris’ legal name is “Carlos Norris.” His public image, notoriety and personal brand is 2g || associated with the name “Chuck Nortis.” e341 2 COMPLAINT ook 1 Page# 2 - Doo 1D = 1726973211 - Deo Type = omceage 4 of 2) 1 |] honesty and a commitment fo family. In short, unlike many other film and television actors, Mr. 2.|| Norris served his country in Korea, became a six-time world champion in Karate, an author of several 3|| New York Times best-selling books, a film and television performer, all while remaining stable and 4||committed to health, exercise, family and country, with his mind stable and focused on personal 5|| growth and helping others achieve their goals. By the early 1990s, there were relatively few action stars with bona fide martial arts champion level skills who also had a thirty-year history of service to ‘country and to others, which led to the creation of Walker, a television show that relied almost 8 || exclusively on the athletic, moral and spiritual approach to life that Chuck Norris has adopted, 9 4, CBS was among the networks that were fully aware of Chuck Norris’ success, history, 10 | brand and image, which result in CBS agrecing to become the primary distributor of Walker, and an |] agreement on the part of CBS to pay Chuck Norris (through Mr. Norris’ company, Top Kick) twenty- 12 | three (23) percent of the profits earned from any, and all, exploitation of Walker. 2B 5. This 23 percent profit participation has been, and will continue to be, a valuable right, 14 |) because Walker has been lucrative and popular in syndication, generating over $692 million in 15 || revenue to date. CBS has a contractual duty to ensure that Walker and all revenue streams from its 16] exploitation are generated and distributed in a manner which honors and complies with the mandatory 17] 23 percent profit clause (hereafter, “the 23 Percent Profit Clause”). That contractual duty also applies BAUTE CROCHETIERE & HARTLEY Ur 18] to companies that CBS entered into licensing and distribution agreements, such as Sony Pictures 19} Television, Inc. (“Sony”), among others. 20 6. The ongoing popularity and increasing revenue streams from Walker have continued to 21 || tive and succeed because Chuck Norris has continued to perform and to publish in films ranging 22|| from “Dodgeball” in 2004 to the Expendables sequel in 2012 and the well-known internet 2 23|| phenomenon through which generations of younger fans have bonded around the humor and 2 24 |] anecdotes widely known as “Chuck Norris Facts,” which rely on a self-deprecating confidence 5 25 | concerning the “machismo” behavior that most men try to project, but do not genuinely possess or S 26] even understand. This was not a random or organic phenomenon: Chuck Norris has actively 21|| supported, embraced and written on the topic of “Chuck Norris Facts,” because most (not all, but ome 3 ‘COMPLAINT1 || most) of the humor is pursued witha light touch and'a “between the lines” sense of fair play, jest and 2||laughter that brightens the day. 3 7. Many of Chuck Norris’ fans are also now familiar with the personal values and moral 4 |] code that Chuck Norris is committed o, sometimes often referred to as “Twelve Principles for Life,” as well asthe family values that are reflected in his books and his performances in Walker. ‘This has made Walker a somewhat unusual show with heightened longevity, because there are so few successful martial artists who have become television and movie stars who have also remained ‘committed to living a calm, honest and straightforward life. This personal code of ethics isa flexible 9|| and adaptable philosophy, with core values that are outlined with a light touch and in a manner that 10} transcends race, age and gender differences, and an emphasis on trust, honesty, kindness and service 11 |} to others. Chuck Norris expresses this code of personal ethics in plain terms, that are easily understood 12}/and unmistakably clear. ‘This plain spoken and honest manner of expression has created many 13 | millions of Walker fans and Chuck Norris fans, many of whom have decided to selectively apply the 14]] principles and ethical goals that work best for them in their own lives. The emphasis on service to others also resulted in Chuck Nortis visiting American troops in Iraq and his decision to found and 16] support Texas’ well known charity, “Kickstart Kids,” which helps children from disadvantaged re any ose recs 17]] backgrounds have a safe place to learn karate and martial arts, to develop character and a sense of BAUTE CROCHETIERE & HARTLEY ur 18} personal responsibility that will benefit them throughout their entire lives. This commitment to others, 19} and to living a life that matches an aspirational code of ethics, combined with the long-term success 20 |) Chuck Norris has achieved in martial arts, show business, and serving others, has created an adoring 21 public. Put bluntly, the public loves Chuck Norris, because there are few men left who honor country 22 and family and served others and whose public values and ethies match the actual life that one has 23}| chosen to live. Chuck Norris’ life matches his personal code of ethics. As it turns out, that has, 24]| become increasingly rare in modem America: Chuck Norris does not talk much, and when he does, 25 || he means what he says, and people listen and watch, because there is nobody else quite like him. 26 8. The highly positive and widely known Chuck Norris brand and image has prolonged 21] Walker’s ongoing actual and potential syndication revenue stream. Walker ran for eight and a half 28|| seasons, 203 episodes, and has been shown in over 100 countries. Under normal circumstances, the 70881 4 “COMPLAINT Doct 1 Page# § = Doo 1D = 1726973211 - doo type = OME(age 6 of 2) 1 |] 23 Percent Profit Clause would also remain somewhat stable over time and have similar longevity. 2||Instead, CBS and Sony materially breached the contractual duties they owed to Mr, Norris and his 3||company Top Kick. Specifically, the Defendants have consciously sought to market, sell and 4|| distribute Walker in ways that are designed to collect significant fees and revenues from the ongoing 5 || exploitation of Walker but without having to honor or pay Top Kick, and to instead materially breach 6 | the 23 Percent Profit Clause. 7 9. CBS and Sony have also concealed information about their efforts to exploit Malker on 8 || streaming video on-demand (“S-VOD") services, a technology that qualifies as “exploitation” under 9] the agreements between Top Kick, CBS and Sony (and other third parties), and which must be 10} reported and paid to Walker's participants. Thus, Top Kick does not know how much revenue Walker 11] has generated through the S-VOD services. But, on information and belief, none of that revenue has 12 [been shared with Top Kick and Defendants have not included it when calculating Top Kick’s profits 13 | pursuant to the 23 Percent Profit Clause. 4 10. Top Kick brings this action to recover damages it has suffered from Defendants’ self- 15|| dealing and material breach of their contractual obligations and to disgorge the profits they have 16]junjustly eamed by promoting Walker for their benefit, not for the benefit of all the Walker 17 participants, in breach of the 23 Percent Profit Clause and in breach of the implied covenant of good ‘BAUTE CROCHETIERE & HARTLEY uur 18 | faith and fair dealing. The institutional system for exploiting Walker and follow-up reporting by CBS 19}fis designed to keep Top Kick in the dark, unaware of the precise sources and amount of revenue at 20 issue, and to prevent Top Kick from knowing the various methods and contractual terms through 21 || which the 23 Percent Profit Clause has been diluted, reduced and materially breached. This has left 22] Top Kick in a position in which, until the past year, it did not know, and could not have reasonably 2 23|| known or ascertained, that any breach had occurred or the amount of monetary damages that would be 3 2ftincetroanyschbreach. TheDefendants’ const wasdsignel oan i prevent Top Kick om S 25 || knowing about these breaches of the Defendants’ contractual duties and their effect on the 23 Percent 2 26||Proft clase un 2B rae __S : COMPLAINT Doct 1 Pagel 6 ~ Doo 1 = 3726973231 - bea type = OMEage 7 of 20) 1 PARTIES, JURISDICTION AND VENUE 2 11, Plaintiff Top Kick is a corporation duly formed under the laws of the State of 3|| California. Its principal place of business is in Houston, Texas. 12. Defendant CBS BROADCASTING, INC, is a corporation duly formed under the laws 5] ofthe State of New York. Its principal place of business is in New York, New York. Section 12(b) of, 6| the 1993 Agreement specifically defines CBS to include not just the main broadcasting entity, but to 27|] also include a number of California-based CBS subsidiaries and affiliates, including but not limited to 8 ||/CBS Entertainment, as well as all CBS entities engaged in the business of distributing television 9}| programming. Those additional CBS entities would include but not be limited to, among others, CBS 10) Studios Intemational, @ California-based entity which is focused on distributing television 11 }] programming, All CBS records related to the production and distribution of Walker are maintained in 12 || Los Angeles and all functions performed in the distribution of Walker are performed by CBS and 13 ] Sony in Los Angeles. Thus, for jurisdictional purposes, the CBS defendants are considered citizens of 14]| both New York and California, 15 13. Defendant CBS CORPORATION is a corporation duly formed under the laws of the 16 || Delaware. Its principal place of business is in New York. However, CBS Corporation is the parent 17]| company of CBS Studios Intemational, which, on information and belief, is responsible for BAUTE CROCHETIERE & HARTLEY tur 18 | distributing Walker outside the United States and which falls under the definition of “CBS” in section 19} 12(b) of the 1993 Agreement. CBS Studios International has its principal place of business in Los 20] Angeles. Thus, for jurisdictional purposes, this defendant is considered a citizen of both Delaware and 21 | Catifornic, 2 14, On information and belief, and pursuant to Section 12(b) of the 1993 Agreement, all 23 || CBS entities bear some responsibility for carrying out CBS’ obligations under the agreements between 24|| CBS and Top Kick and thus bear responsibility for the actions set forth in this Complaint. Unless 5 25 | noted otherwise, all CBS entities are referred to collectively in this Complaint as “CBS.” = %6 15. Defendant Sony isa corporation duly formed under the laws of the State of Delaware. 27] Sony's principal place of business is in Culver City, California, and thus it is considered a citizen of 28 | California for jurisdictional purposes. 0m 6 ‘COMPLAINT Doct 1 aged 7 ~ Doo 20 = 1726973211 - Dos Type = omRage 9 of 21) 1 16. Top Kick does not know the true names and capacities, whether individual, corporate, 2 | association or otherwise, of defendant DOES | through 10, inclusive. Such fictitious defendants are 3 | sued pursuant to California Code of Civil Procedure section 474. Top Kick is informed and believes, {|| and based thereon alleges, that each ficttiously named defendant was in some way responsible for, ']| participated in or contributed to the matters and things of which Top Kick complains herein and thus 6|| has legal responsibility for them, Top Kick will seek to amend this Complaint with the identity of 7|| these fictitious defendants and the basis for their lability when they are discovered. 8 17. CBS, Sony and DOES | through 10 are referred to collectively as “Defendants.” 9 18 Venue is proper in this Court because at least one of the Defendants resides in Los 10} Angeles County and because all parties do business here. Furthermore, the contracts at issue in this 11 ||case were made and executed in Los Angeles County. 2 FACTUAL BACKGROUND 13 19. Walker was conceived, and originally produced, by Top Kick and Cannon Television, 14) nc. ("Cannon"). CBS aired, distributed and produced the show after Cannon went out of business ¥ i 15 20. _ CBS assumed the obligations from Cannon’s agreement with Top Kick pursuant to a 16 | formal assignment of contractual rights. Further, and consistent with that assignment, on July 27, 17] 1993, CBS executed its own agreement with Top Kick (the “1993 Agreement”). BAUTE CROCHETIERE & HARTLEY ut 18 21, Specifically, in the 1993 Agreement, CBS agreed to pay Top Kick a percentage of the 19]] profits from Waker. According to the 1993 Agreement, this profit participation was “equal to twenty- 20 | three (23) of the fifty ($0) profit points (‘Profits’) received by Cannon from the exploitation of all 21||Series programs.” The 1993 Agreement defined the show's gross receipts to mean “ll monies 2|| received by CBS from the broadcasting, distribution, exhibition and marketing” of Walker. This, = 23] included all fees paid by third parties, to which CBS licensed or assigned distribution rights, plus an > 24 |) imputed license fee for any episodes of Walker broadcast on CBS, and a percentage of royalties 25 || received from music, publishing and video sales. There are no time limitations inthe 1993 Agreement. 26 22, The 1993 Agreement also defined how Walker's net profits would be calculated, It 21|| prohibited CBS from deducting certain expenses, such as overhead costs, aoe 1 : ‘COMPLAINT oot 1 Pagel @ = Doc ID = 1726973211 - Doo type = oTdl 23. The 1993 Agreement was amended by a February 2, 1999 letter agreement executed by CBS, on the one hand, and Norris, his brother and their respective production companies, on the other hhand (the “1999 Agreement”) 24. The 1999 Agreement increased the episodic license fee for Watker. Otherwise, it did not change the terms of the 1993 Agreement or the 23 Percent Profit Clause. 25. In 2001, Walker's network run ended. CBS praised the show, calling it the “unsung hero” of its TV lineup. But Walker's success was just starting. Walker has now generated more than $8692 million in revenue. That revenue was ultimately reported to and collected by CBS, and CBS 9 || used it to calculate the profit participation for Top Kick and other participants. 10 26. But, on information and belief, as technology changed and improved, the Defendants 11] focused less on marketing Walker to television stations and DVD viewers and more on promoting the 12] show on S-VOD services, some of which they owned or co-owned. 1B 27. CBS did not include revenue from S-VOD services in the participation statements it 14]} sent to Top Kick between 2004 and the present. CBS has refused to show Sony's participation 15 | statements (or statements from any third-party distributors) to Top Kick. Thus, Top Kick does not 16 |) know, and could not have known, how much revenue Walker has generated from the S-VOD services. BAUTE CROCHETIERE & HARTLEY tx 17} In fact, Top Kick did not suspect, and had no reason to suspect, that the Defendants were withholding 18||S-VOD revenue from it until the past year, when, as described in more detail below, Sony rejected a 19] lucrative licensing offer for Walker soit could grant an exclusive license to its own fledgling network. 20 28. But, on information and belief, CBS has not paid any portion of the S-VOD revenue to 21 || Walker's participants. Defendants’ apparent position is that they do not have to share this revenue 22|| with the participants or Top Kick 2 B 29. Defendants have also failed to actin good faith when dealing with Top Kick and with third parties who wish to license Walker. For example, since July 2016, The Bradford Exchange has na 25 | been asking CBS for a license to produce Walker-related memorabilia (the company produces and ate 26 | sells collectibles in shops and online). CBS dragged its feet, delayed in responding to Bradford's 27] request and inserted terms that benefitted CBS only inthe proposed license. To date, CBS still has not se 8 COMPLAINT Doct 4 Pages 9 ~ Doo 20 = 1726973241 - Dos Type = OnEage 10 of 20) 1 approved the license request from The Bradford Exchange, costing Top Kick tens of thousands of 2|| doliars in unnecessary expenses and hundreds of thousands of dollars in potential royalties 3 30, Similarly, in recent years, Defendants have rejected, and largely ignored, syndication 4] deals with third parties who were willing to pay a premium for Walker, and instead chose to engage in 5 || self dealing transactions to benefit only themselves, tothe detriment of the show’s other participants 6 || and Top Kick in breach ofthe 23 Percent Profit Clause and in breach ofthe 1993 Agreement and the || implied covenant of good faith and fair dealing 8 31, For example, Katz Broadcasting currently has a license to show Walker on its Grit 9] network. It pays a fee of $24,686 per episode. In early 2017, Katz contacted Sony to extend that 10|]ticense for an additional four years, fora total of $5 million. Sony ignored the Katz offer. Instead, 11 || Sony intentionally allowed Grits license to lapse and gave away Walker to getTV, a fledgling, low- ® 12) tier cable network owned by Sony. Sony did not disclose the terms of the getTV deal to Katz but, on 15 || information and belief, it was designed to (a) breach the 23 Percent Profit Clause, but (b) still enable 14] all revenue from exploitation of Walker to remain with and be paid only to Sony and CBS. 18, 32. _ Katzalso offered to double its license fee for Walker to $50,000 per episode — which 16 || would be more than $10.1 million over four years. Sony ignored that offer as well. 7 33. Oninformation and belief, Sony ignored Katz's offer because Sony wishes to keep all BAUTE CROCHETIERE & HARTLEY utr 18 || revenue without honoring the 23 Percent Profit Clause, or without sharing license fees with the show's 19] other participants, by licensing Walker to its own network. Indeed, Walker is worth millions of dollars 20 || to Sony because it wil easily be the most popular show on getTV, which has a unique business model 21] Consumers can find getTV on some cable and satellite providers, The network also has affiliation 22_|{ agreements with 92 television stations in 87 media markets across the United States. It pays the 23 || affiliates a monthly license fee to carry its shows and it handles all advertising when the shows air. 24 || This generates significant revenue for Sony — revenue it does not pass to the show's participants 25 ll despite Sony's knowledge that Top Kick is entitled to 23 percent of the profits. 6 34. This is @ particularly lucrative source of revenue for Sony as getTV transitions from 27]| showing classic films, its focus when founded in 2013, to showing a combination of classic films and 28 || classic television programs like Walker. On information and belief, Sony intends to build getTV on onset 9 COMPLAINT ‘eo 1 aged 10 - Doc XD = 1726975211 - Doc Fype = OTHER(age 1 or 219 1 | the backs of Walker and the other classic television shows thatit distributes. Sony will earn substantial 2 || revenue from this effort but, because ofthe sweetheart licensing deals it negotiated with itself, it will 8 || keep most ofthat money for itself, and neither Sony nor CBS will pay the required sums to the show's 4 other participants. s 35. Although Top Kick has received quarterly participation statements from CBS since 66|| 2004, those statements did not provide any details about the revenue CBS received for Walker and 17|| they did not provide any details about the revenue third-party distributors, such as Sony, received for 8|| Walker. That information was concealed from Top Kick. Moreover, it was only during the past year 9|| that Top Kick leamed about, or had reason to suspect, the self-dealing licensing transactions the 10)]] Defendants engaged in, It was also not until the last year, when it discovered the self-dealing Sony 11] transaction, that Top Kick had reason to suspect that Defendants had failed to pay Top Kick an 17]| Complaint as though set forth fully herein 3 ag © 12 |} appropriate share of Walker's profits, including its appropriate share of “bundling” and S-VOD deals. Ba Zig: FIRST CAUSE OF ACTION ast a (Breach of Contract) 538 15 (Against CBS) 3438 SEE 16 36. Top Kick repeats and re-alleges the preceding and subsequent paragraphs of this 18 37. Top Kick and CBS ‘are parties to the 1993 Agreement and the 1999 Agreement (the 19}}“Agreements"). Those agreements are valid and can be enforced by Top Kick. 20 38. The Agreements require that CBS pay Top Kick a profit participation equal to 23, 21 | percent ofthe net profits earned “from the exploitation of all [Walker] Program(s) produced under and 22|| during the term of the Agreement ....” This includes the exploitation of Walker by CBS and all its 4 | sttiated entities and by third-party distibutors, such as Sony, o whom CBS assigned distribution 24] rights. And it includes all manner of exploitation, including revenue eamed by CBS and Sony (and 25] other third parties) from showing Walker on S-VOD services. There are no time limits in the 26|| Agreements. 7 39. Before 1998 and between 2004 and the present, CBS breached the Agreements by 28 || zaling to pay Top Kick an accurate profit participation based on money earned from the exploitation 08 10 2 COMPLAINT oot 1 Paget 11 - Doc 30 = 1726972288 - Doo type = ont(age 12 of 2 1 |] of Walker, including revenue received from showing Walker on S-VOD services, and by concealing, 2 and failing to report this revenue to Top Kick. 3 40. The Agreements also impose certain restrictions on CBS, such as preventing CBS from. 44]| deducting overhead costs, “paper” expenses and expenses that did not relate to Walker. 5 41, Before 1998 and between 2004 and the present, CBS breached the Agreements by, 6 | among other things, inflating expenses and deducting expenses that it did not actually incur and which 7}| did not relate to Watker. CBS has also breached the Agreements by failing to accurately allocate and 8 || report income to Top Kick, such as income from deals in which CBS sold Walker as part of a bundle 9] of programming to third parties. 10 42. Top Kick has performed its obligations under the Agreements or was excused from 11 || doing so by CBS’ prior breaches of the Agreements. 2 43. As a direct and proximate result of CBS’ actions, Top Kick has suffered damages 13 || exceeding $30 million, plus prejudgment interest at the rate authorized by law. 4 SECOND CAUSE OF ACTION 15 (Breach of the Implied Covenant of Good Faith and Fair Dealing) 16 (Against all Defendants) "7 44, Top Kick repeats and re-alleges the preceding and subsequent paragraphs of this BAUTE CROCHETIERE & HARTLEY ur 18 || Complaint as though set forth fully herein, 19 45. Top Kick and CBS are parties to the Agreements. The Agreements are valid and can be 20|| enforced by Top Kick. a 46. Since entering into the Agreements, CBS has entered into agreements with third 22.|| partes, including Sony, through which it assigned its obligations to distribute Walker and to report c= 23 || revenue from the exploitation of Walker (the “Third-Party Distributor Agreements"). CBS has refused [5 24:0 show Top Kick copies of those agreements. But, on information and belief, the Third-Party 25 || Distributor Agreements referred to the Agreements and required thatthe third-party distributors report 26 || revenue and expenses related to Walker accurately, so that CBS could report that information to Top 27|| Kick and pay it aproper profit participation. These terms were included intentionally by the parties to 28 |] benefit Top Kick and to ensure that CBS carried out its obligations when paying Top Kick pursuant to oe ul COMPLAINT Doct t paged 12 ~ Doo 3D = 1726872001 - Doc Type = OnEwage 13 or 21) I |fthe 23 Percent Profit Clause, Thus, Top Kick was an intended beneficiary of the Third-Party 2|| Distributor Agreements and can enforce them even though it was nota signatory to those agreements. 3 47. California law implies a covenant of good faith and fair dealing in all contracts. This 4|| duty was implied in the Agrcements and in the Third-Party Distributor Agreements. Among other | things, it required that Defendants license Walker ina manner that would maximize and share revenue among all parties, including Top Kick, and it prohibited Defendants from engaging in self-dealing, , 48 Defendants breached this implied covenant of good feith and fair dealing by, among 8 | other things, failing to account for and failing to pay Top Kick’s required revenue. In addition, the 9 || Defendants have rejected, ignored and failed to consider offers from third parties who were willing to 10||pay a premium ticense fee for Walker, because Defendants preferred to self-deal by negotiating IIL] special ticensing deals, with minimal fees, with their own networks. This has cost Top Kick millions 12] of dollars in past and future license fees. Furthermore, on information and belief, Defendants have 13 |] used, and will continue to use, Walker to generate other revenue, such as advertising revenue, that 14} they have not reported or paid to Top Kick, in breach of the implied covenant of good-faith and fair 15 || dealing, 16 49. The covenant of good feith and fair dealing also requires that Defendants cooperate 17] with Top Kick and act reasonably, and in good faith, in responding to Top Kick’s efforts to market BAUTE CROCHETIERE & HARTLEY tur 18 || Walker to third parties. Defendants have violated that obligation by ignoring licensing requests from 19]| Top Kick and third parties, such as The Bradford Exchange, or by delaying for an unreasonable 20|| amount of time in responding to the requests. 2 50. Top Kick performed its contractual obligations or was excused from performing them, 22.|| by Defendants’ prior breaches of contract, 2 3B 51. As a direct and proximate result of Defendants’ actions, Top Kick has suffered S—24|} damages exceeding $30 milion, plus prejudgment interest a the rate authorized by law So = 2 28 12 = COMPLAINT oot 1 page 13 ~ Doo 1D = 2726079211 - pee Type = OTMER@age'le of 20) 1 ‘THIRD CAUSE OF ACTION 2 (Accounting) 3 (Against all Defendants) 4 52. Top Kick repeats and re-alleges the preceding and subsequent paragraphs of the 5 {| Complaint as though set forth fully herein 6 53. Top Kick has an interest in determining how Walker's revenues and expenses are 17|| calculated. This interest is based on the Agreements and on Top Kick’s interest as an intended 8} beneficiary ofthe Third-Party Distributor Agreements 9 54, Inparticular, Top Kick has an interest in knowing how much revenue the Defendants 10] generated from Walker, where that revenue comes from (e.., license fees or advertising) and which 11 | revenue sources Defendants share with Top Kick and other participants. This information appears in 12] the participation statements thatthe third-party distributors provide to CBS, pursuant to the Third- 13 |] Party Distributor Agreements 4 55. Top Kick has asked CBS for documents to substantiate the revenues and expenses 15 ]| reported to Top Kick in profit participation statements for 2004 to the present. CBS has failed o 16 ]| refused to provide that information. Top Kick has also asked CBS for copies of documents and 17] information provided to CBS by Sony and other third-party distributors, including Sony's BAUTECROCHETIERE & HARTLEY tir 18 || participation statements. CBS has refused to show Top Kick those documents and has concealed 19] information about the third-party contracts from Top Kick. 20 56. Thus, Top Kick is entitled to an accounting to determine the total amount of revenues. 21 generated by the exploitation of Walker before 1998 and since 2004, including an accounting of all 2 | revenue and expenses related to S-VOD services that show Walker. 2B PRAYER FOR RELIEF 4 WHEREFORE, Top Kick prays for judgment as follows: 25 1. For monetary damages exceeding $30 million, the exact amount to be proven at 26 trial; an 2. For prejudgment interest as authorized by law; 28 3. Forareasonable amount of costs; and 038 13 COMPLAINT oot 1 Pages 14 ~ Doe 19 = 1726973211 - Doc type = OmERrage 25 of 2! BAUTE CROCHETIERE & HARTLEY we 4, Forsuch other relief the Court deems proper. SURY DEMAND. ‘Top Kick hereby demands a trial by jury onal issues so triable. DATED: January 31, 2018 BAUTE CROCHETIERE & HARTLEY Lu? By: AUT scott STREET Attomeys for Plaintiff TOP KICK PRODUCTIONS, INC. 88s a COMPLAINT oot 1 Page# 15 - Doo 29 = 72691; = boc type = one