Bloomberg News

Paramount Contract With Puzo Can’t Be Terminated, Judge Says

September 27, 2012

Mario Puzo’s heirs can’t terminate a contract he made with Paramount Pictures Corp., the movie studio that produced films based on his “Godfather” novel, a federal judge ruled.

U.S. District Judge Alison Nathan, in a mixed ruling, allowed Puzo’s estate to continue pursuing its claim that the studio breached the contract, according to a filing yesterday in Manhattan. The estate sought to cancel the contract because Paramount’s actions had “repudiated” it, court papers state.

Paramount, a unit of Viacom Inc., (VIAB:US) sued Anthony Puzo, Mario’s son and the executor of his estate, in February to prevent the publication of a new sequel to “The Godfather,” claiming it wasn’t authorized. Puzo countersued in April to cancel the contract. Nathan conducted a hearing in August on Paramount’s motion to dismiss the counterclaims.

“The estate has failed to plead that Paramount refused to perform with respect to the entire contract,” Nathan wrote in her opinion. She also ruled that Paramount’s claim Puzo infringed its copyright didn’t pre-empt Puzo’s breach claim.

Puzo said in his countersuit that Paramount disregarded contractual promises to his father and breached a 1969 agreement with him. The contract between the author, who died in 1999, and the studio gave him certain rights, including book publishing, the estate said in court filings.

Estate’s Claim

“The main part of the case remains to be tried,” Bertram Fields, a lawyer for Puzo, said in an e-mail. He indicated that Puzo would appeal yesterday’s ruling.

“We’re confident that the 2nd Circuit will ultimately uphold the estate’s claim to cancel Paramount’s rights for the breach,” Fields said.

Fields said in August that if the contract was terminated, the heirs might approach other studios about making films based on the sequels.

Paramount said in its complaint that after Puzo died, the company agreed to allow Bertelsmann AG’s Random House to publish a single Godfather sequel, “The Godfather Returns,” which came out in 2004. The estate published another novel, “The Godfather’s Revenge,” in 2006 without Paramount’s approval, the studio said. Paramount sued after the estate announced a plan to publish a third, “The Family Corleone,” this year.

Book’s Proceeds

The sequel, written by Ed Falco, was published in May by Grand Central Publishing, a unit of Paris-based Hachette Livre SA. The terms of an interim settlement agreement between Paramount and Puzo state that proceeds from the book will be put in escrow pending the outcome of the litigation, according to court papers.

Paramount claimed the Puzo estate infringed its copyright with the publication of the novel and infringed its trademark with the design of the book.

Dade Hayes, a spokesman for Paramount, had no immediate comment on the ruling.

In yesterday’s order, Nathan set a Jan. 11 status hearing in Manhattan.

The first “Godfather” film came out in 1972 and won the Academy Awards for best picture and for adapted screenplay, for which Puzo shared the credit. Francis Ford Coppola directed the three “Godfather” movies.

The case is Paramount Pictures v. Puzo, 12-01268, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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