California Suite

(1978)   Tags: Columbia

Herman v. Malamed

Plaintiff is a consultant involved in, among other enterprises, financing and selling limited partnership interests, as tax shelters, in motion picture productions. Defendant is also in the business of providing investment advice regarding tax shelters and other ventures. Following the parties’ meeting in 1978, plaintiff was hired as a consultant on the production and promotion of two movies, “Midnight Express” and “California Suite”, in connection with which two separate partnerships were formed, Express Associates and Suite Associates, respectively named for each film. As outlined in a letter dated October 5, 1978 (modified on October 20, 1978), plaintiff was to receive a base sum plus 7.5% of the “net receipts paid to Seymour H. Malamed as the General Partner’s share of receipts of Express Associates”. Plaintiff subsequently received $32,500 compensation for consulting services which he had rendered to Express Associates.

On December 26, 1978, plaintiff and defendant agreed in writing that plaintiff would be paid $19,000 in full payment of his services to Suite Associates and in consideration thereof, he would “release you and Suite Associates from any and all claims, present and future, known and unknown.” Plaintiff thereafter received two checks from Suite Associates totaling $19,000. On January 23, 1980, plaintiff executed a release in favor of defendant for all claims except for defendant’s obligations under the letter agreement dated October 5, 1978, as amended on October 20, 1978, with respect to the following matters: (1) the payment of $2,687.50 upon defendant’s receipt of $44,125 from Express Associates, and (2) payment of an amount equal to 7.5% of the amount received by defendant in excess of the sum of $44,125 for his share of the cash flow earned from the exploitation of the movie “Midnight Express”. However, other than a payment of $8,500 to plaintiff made contemporaneously with this release, no further monies have been forthcoming, plaintiff asserts, nor has any accounting been rendered. Consequently, the instant action was commenced in December of 1982 seeking an accounting and damages for breach of contract.