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Disney Escapes Roger Rabbit Suit with Minor Damage

The jury in the 15-week Los Angeles Superior Court trial pitting ROGER RABBIT creator Gary Wolf against the Walt Disney Co. has ruled that Disney must pay Wolf at least $180,000 in underreported royalties, but ruled against Wolfs claim that he deserved a share of gross receipts on non-cash promotional deals, according to THE HOLLYWOOD REPORTER. The ruling will award Wolf nearly $400,000 in damages, but not the $8 million he had sought by alleging his 5% royalty should include tie-ins with McDonald's and other outlets.

Before the trial, attorneys for Disney, led by Marty Katz of Sheppard, Mullin, Richter & Hampton, had shot down another claim that Disney owed Wolf a "fiduciary duty" over the reporting and payment of royalties, which would have made Disney liable for punitive damages in addition to any alleged underpayment.

A separate appeals court decision ruled that Wolf could go to trial over the contract's definition of "gross receipts" and its reference to both cash paid to Disney and "all other considerations."

At the beginning of the trial in March, Wolf's attorneys, including J. Larson Jaenicke and Michael Garfinkel of Rintala Smoot Jaenicke & Rees, also alleged that Disney underreported ROGER RABBIT-related sales made by Disney and certain third parties. Disney countered with the claim that it had committed an accounting error by overpaying Wolf nearly $500,000-$1 million, which it demanded back.

The jury ruled in favor of Disney's interpretation of gross receipts as well as Wolfs claims that Disney had committed a breach of implied covenant and that he was owed a 5% royalty when his character was licensed to a manufacturer and again on the retail sales of those products at Disney's parks and stores.

Wolf only won on the accounting claims, which gave him $180,000 plus another potential $220,000, which Disney withheld paying because of its overpayment claims.

Wolf created Roger Rabbit and related characters in a 1981 novel and then licensed the merchandising, motion picture/television and other rights to Disney. The agreement was modified in 1989 after a disagreement arose over auditing rights, the use of the characters at theme parks and other issues.

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