FOR coum- use ONLY (CITACION JUDICIAL) co??qgg??f; NOTICE TO DEFENDANT: Los imitates 51100001" mum (A VISO AL DEMANDADO): WARNER BROS. ENTERTAINMENT, INC, and DOES 1?20, APR 1 2 20? inclusive, Shem RI Caner. Executive uiticericlerk YOU ARE BEING sueo BY PLAINTIFF: . By Shaunya Bowen, Deputy (LO ESTA DEMANDANDO EL DEMANDANTE): ROGUE MARBLE PRODUCTIONS, INC, a Nevada corporation, You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below. You have 30 CALENDAR DAYS after this summons and legal papers are served on you to ?le a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your case. There may be a court form that you can use for your response. You can ?nd these court forms and more information at the California Courts Online Self-Help Center your county law library. or the courthouse nearest you. If you cannot pay the ?ling fee. ask the court clerk for a fee waiver form. if you do not ?le your response on time. you may lose the case by default, and your wages, money. and property may be taken without further from the court. There are other legal requirements. You may want to call an attorney right away. if you do not know an attorney. you may want to call an attorney referral service. if you cannot afford an attorney. you may be eligible for free legal services from a nonprofit legal services program. You can locate these nonpro?t groups at the California Legal Services Web site the California Courts Online Self-Help Center or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and costs on any settlement or arbitration award of $10.000 or more in a civil case. The court's lien must be paid before the court will dismiss the case. Lo han demandado. Si no responde dentro de 30 dies, la corte puede decidlr en su contra sin escuchar su version. Lea la informaci?n a continuaci?n. Tiene 30 DIAS DE CA LENDARIO despu?s de que le entreguen esta citacion papeles legales para presenter una respuesta por escrito en esta corte hacer que se entregue una copla al demandante. Una carfa una llamada telefdnica no lo protegen. Su respuesta por escrito tiene que ester en fonnato legal correcto si desea que procesen su caso en la corte. Es posible que haya un formulario que usted pueda usar para su respuesta. Puede encontrar estos formularios de la corte mas informacidn en el Centro de Ayuda de las Cortes de California en la bibliofeca de ieyes de su condado 0 en la corte que la quede mas cerca. Si no puede pagaria cuota cle presentacion, pida al secretario de la corte que la d? un formulario de exenclon de page de cuotas. Si no presenta su respuesta a tiempo, puede perder el caso porincumplimiento la corte le padre quitar su sueido. dinero blenes sin mas advertencia. Hay otros requisites legales. Es recomendable que llame a un abogado inmedlatamente. Si no conoce a un abogado, puede llamar a un servicio de remisi?n a abogados. Si no puede pager a un abogado, es poslble qua cumpla con los requisites para obtener servicios legaies gratuitos de un programa de servicios legales sin fines de lucro. Puede enconfrar estos grupos sin ?nes de lucro en el sitio web de California Legal Services, (waawhelpcalifornla.org), en el Centre de Ayuda de las Cortes de California, (ww.sucorte.ca.gov) poniendose en contacto con la corte 0 el colegio de abogedos locales. Parley, la corte tiene derecho a reciamar las cuotas los costos exentos porimponer un gravamen sabre cualquier recuperaci?n de $10,000 a mas de valor reclbida mediante un acuerdo una concesi?n de arbitraje en un caso de derecho civil. Tiene que pager ei gravamen de la corte antes de que la corte pueda desechar el caso. 111 N. Hill St. Los Angeles, 90012 I) n- The name and address of the court is: CASE NUMBER(El nombre direcci?n de la corte es): Stanley Mosk Courthouse (Ndmero dal Caso): The name. address. and telephone number of plaintiffs attorney. or plaintiff without an attorney, is: (El nombre, la direccf?n el namero de tel?fono del abogado del demandante, 0 del demandante que no tiene abogado, es): Neville L. Johnson, 439 N. Canon Dr. Suite 200, Beverly Hills, CA 90210, (310) 975-1080 DATE. APR 1' 2 arisen-11166361651 (Fecha) (For proof of service of this summons, use Proof of Service of Summons (form . Deputy (Adjunto) BUL My (Para prueba de entrega de esta citation use at formulario Proof of Service of Summons. NOTICE TO THE PERSON SERVED: You are served 1. I: as an individual defendant. 2. as the person sued under the fictitious name of (specify): 3_ on behalf of (specify): under: CCP 416.10 (corporation) (3 CCP 416.60 (minor) CI CCP 416.20 (defunct corporation) GOP 416.70 (conservatee) CCP 416.40 (association or partnership) CCP 416.90 (authorized person) other (specify): 4- by personal delivery on (date): Form Adopled for Mandatory Use Judicial Council of California SUM-100 [Rev July 1. 2009] Page 1 ol' 1 Code of Civil Procedure 412 20, 465 ca gov Neville L. Johnson (SEN 66329) Douglas L. Johnson (SBN 209216) James T. Ryan (SBN 210515) JOHNSON JOHNSON LLP 439 North Canon Drive, Suite 200 Beverly Hills, California 90210 Telephone: (310) 975-1080 Facsimile: (310) 975-1095 Email: Attorneys for Plaintiff, 1 l. NFORMILD L01 C0 0F ORIGINAL FRIED 1.05 Aneoles Cur? APR 12 2111! Sherri Fl. Caner, UTIICBIIGIBI .. By Shaunya Bolden, Deputv ROGUE MARBLE PRODUCTIONS, INC. SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES BC557271 ROGUE MARBLE CASE NO. PRODUCTIONS, INC., a Nevada corporation, COMPLAINT FOR: Plaintiff, 1. BREACH OF WRITTEN 2. vs. 3. MONEY DUE ON OPEN BOOK WARNER BROS. 4. AND ENTERTAINMENT, INC., and 5. UNFAIR BUSINESS PRACTICES. DOES 1-20, inclusive, DEMAND FOR JURY TRIAL Defendants. 1 COPY COMPLAINT Plaintiff Rogue Marble Productions, Inc., by and through its undersigned attorneys, believes and alleges upon knowledge as to itself and its own acts, and as to all other matters upon information and belief of its undersigned attorneys, brings this Complaint against Defendants. With respect to the facts that are speci?cally alleged herein on information and belief, Plaintiff and its undersigned attorneys are informed and believe that those facts are likely to have evidentiary supportafter a reasonable opportunity for further investigation or discovery, because, among other reasons,~the evidence to support those facts is exclusively in Defendants? possession. PLAINTIFF 1. Plaintiff Rogue Marble Productions, Inc. (?Rogue Marble?) is a corporation organized under the laws of the Nevada whose principal place of business is located in the County of Los Angeles. Rogue Marble is the loan?out company for the services of Sylvester Stallone Stallone?). DEFENDANTS 2. Defendant Warner Bros. Entertainment, Inc. on information and belief, is, and at all relevant times was, a Delaware corporation whose principal place of business is loCated in the County of Los Angeles. On information and belief Warner Bros. Entertainment, Inc. acquired the rights and obligations of Warner Bros. Inc., including the rights and obligations with respect to the ?lm at issue herein. 3. Defendants, Does 1 through 20, are sued herein by ?ctitious names for the reaSonthat their true names are unknown to Plaintiff. Plaintiff will seek leave 7? to amend this complaint to allege the true names and capacities of these Defendants when the same have been ascertained. Plaintiff is informed and believes and based thereon alleges that these ?ctitiously named'Defendants are responsible in some manner for the actions and damages alleged?herein. 2 COMPLAINT 4. Plaintiff is further informed and believes and based thereon alleges that Defendants at all times herein alleged were the agents, employees, servants, joint venturers and/or co-conspirators of each of the other remaining Defendants, and that in doing the things herein alleged were acting in the course and scope of such agency, employment, joint venture and/or conspiracy. ALLEGATIONS COMMON TO ALL CAUSES OF ACTION Background 5. Mr. Stallone is one of the greatest American talents of the last and present century. He is an actor, ?lmmaker, producer, director and screenwriter, well-known for his Hollywood action roles, including boxer Rocky Balboa, the title character of the Rocky series? seven ?lms from 1976 to 2015; soldier John Rambo from the four Rambo ?lms, released between 1982 and 2.008; and Barney Ross in the three The Expendables ?lms from 2010 to 2014. He- wrote or co?wrote most of the 14 ?lms in all three franchises, and directed many of the ?lms, He has been nominated for three Academy Awards. 0 6. ?Demolition Man? is a 1993 American science ?ction action ?lm and stars Mr. Stallone, Wesley Snipes and Sandra Bullock (the ?Film?). The Film was theatrically released in the United States on October 8, 1993. WB released it on VHS in March 1994, on DVD in October'1997 and 2014, and on Blu-ray in August 2011. 7. The motion picture studios are notoriously greedy. This one involves outright and obviously intentional dishonesty perpetrated against an international iconic talent. Here, WB decided it just wasn?t going to account to Rogue Marble on the Film. WB just sat on the money owed to Rogue Marble for years and told itself, without any justi?cation, that Rogue Marble was not owed any pro?ts. When a representative of Rogue Marble asked for an accounting, WB balked and then sent a bogus letter asserting the Film was $66,926,628 unrecouped. When challenged about this false accounting, it made a double-talk excuse, then prepared 3 COMPLAINT v?t l?d r?t'ractual pro?t participation statement'for the same reporting period, and sent a check for $2,820,000 because the Film had in fact recouped its de?cit. 8. Mr. Stallone is entitled to, among other things, a full accounting, an explanation of how this practice came to be, interest, damages, and an end to this practice for all talent who expect to be paid by WB for the fruits of their labor. Overview of Agreement Between Plaintiff and WB 9. Rogue Marble and WB entered into an Artist Loanout Agreement dated as of February 25, 1992 with respect to the services of Mr. Stallone for the Film (the ?Artist Loanout Agreement?). - 10. AcCording to Paragraph 3(g) of the Artist Loanout Agreement, WB ?shall? pay Rogue Marble ?a sum equal to 15% of 100% of the De?ned Gross of the Picture, (computed, determined, and payable in accordance with Exhibit attached hereto and incorporated herein by this reference) from and after the point at which the De?ned Gross of the Picture exceeds $125 million; escalating to 17.5% of 100% of De?ned Gross from and after the point at which the De?ned GrOss exceeds $200 million; and ?lrther escalating to 20% of 100% of De?ned Gross from and after the point at which De?ned Gross exceeds $250 million.? 11. The term ?De?ned Gross? is de?ned in Paragraph 2 of Exhibit of the Artist Loanout Agreement. I 12. Because ?Demolition Man? achieved at least $125 million in De?ned Gross, Rogue Marble is entitled to at least 15% of the De?ned Gross. WB Has Continuously Received Revenue 'On the Film But Did Not Bother to Issue a Statement I 13. WE has continuously received revenue generated by the Film. Notwithstanding, WB did not send Rogue Marble a pro?t participation statement after the period ending December 31, 1997 until recently. 4 COMPLAINT r?A r?t i?A b?t i?t r?d b?t 14. On'May 12, 2014, Rogue Marble, thorough it agent, reached out to WB to determine whether WB was preparing pro?t participation statements for the Film. WB responded that pro?t participation statements would only be sent on request and offered to prepare a statement for the period ending September 30, 2014., Rogue Marble accepted the offer and waited for the statement. 15. On or about January 30, 2015, Rogue Marble received, through its 1 attorney, a letter that provided a short summary of activity on the Film for the period ending September 30, 2015. It stated that the Film had a $66,926,628 de?cit. also stated: 1?No payment is due as of September 30,2014 as there was insuf?cient activity in the period to recoup the de?cit.? I 16. Rogue Marble, though its agent, contacted WB following receipt of the letter and questioned the validity of the numbers presented in the summary because they did not make any sense. Rogue Marble?s agent-was told by WB that the letter should not have gone out and that WB would look into it further. 17. On or after April 28, 2015, Rogue Marble received a cumulative pro?t participation statement for the period ending September 30, 20.14 and a check for $2,820,3 56. The pro?t participation statement was one page and did not contain any detail for the ?gures presented, nor did it contain any detail covering the reporting period since the last statement. 18. Rogue Marble alleges on information and belief that it is owed additiOnal? contingent compensation on the Film. FIRST CAUSE OF ACTION BREACH OF WRITTEN CONTRACT (Against All Defendants) 19. All previous allegations are realleged and incorporated herein by reference, as though fully set forth herein. 1 I 20. Defendants have breached Paragraph 3(g) of the Artist Loanout Agreement by not paying contingent compensation owed to Rogue Marble. 5 COMPLAINT UJ-N 21. Rogue Marble is not presently aware of the exact amounts of damages resulting from Defendants? breaches. The amount of Such damages will be according to proof at trial. 22. Plaintiff has performed all of its obligations under the Agreement, or has been excused from performance as a result of Defendants? material breaches and/or perfOrmance would require excessive and unreasonable expense. 23. As a proximate result of Defendants? breaches, Plaintiff has been damaged ,in'an amount, that is believed to be inexcess of the minimum jurisdiction of the Superior Court and is entitled to pre-judgment interest. 1 I 24. Plaintiff also prays for the Court to impose a conStructive trust on all monies wrongfully withheld by Defendants, in accordance with common law and California Civil Code ??2223 -2224, for the bene?t of Plaintiff and Plaintiffs interests. . I SECOND CAUSE OF ACTION ACCOUNTING (Against All Defendants) 25. All previous allegations are realleged and incorporated herein by reference, as though fully set forth herein.? I 26. A relationship exists between Plaintiff on the one hand and WB on the other hand for which an accounting of books and records is appropriate. 4 27.2 Rogue Marble objects to the pro?t participation statement dated April 28, 2015 for reasons, including but not limited to the fact that sufficient detail was not provided with the statement in order to acceSs, at least in part, the calculations- provided on the statement. In addition, Rogue Marble objects to each and every calculation on the pro?t participation statements dated April .28, 2015, April 6, 2016, andFebruary 27, 2017 as being inaccurate for reasons that can be determined through an accounting. 6 COMPLAINT r?-l r?i?v?t i?a r?A r?A r?t i?t 28. Plaintiff does not know the precise amount of monies received by Defendants and owing to Plaintiff but such monies can be determined by an accounting of books and records. 29. Plaintiff also prays for the Court to impose a constructive trust on all monies wrongfully withheld by Defendants, in accordance with common law and California Civil Code ??2223 -2224, for the bene?t of Plaintiff and Plaintiff interests. THIRD CAUSE OF ACTION MONEY DUE ON OPEN BOOK ACCOUNT (Against All Defendants) 30. All previous allegations are realleged'and incorporated herein by reference, as though fully set forth herein. 31. WE maintains a separate detailed statement of transactions between it and Rogue Marble, for the Film as de?ned by California Code of Civil Procedure 337a, which constitutes the principal record of their dealings in accordance with the Artist Loanout Agreement. The detailed statement of transactions maintained by WB is similar to a general ledger in that it re?ects revenues generated from various sources, fees taken, expenses and costs incurred and interest accumulated. The detailed statement of transactions is kept current and in a reasonably permanent form and manner. This detailed statement is ?open? in that WB is continually seeking to exploit the Film and, therefore, it is anticipated that there will be future transactions affecting the financial relationship between Plaintiff and WB on the Film. 32. On information and belief, Defendants are indebted'to Plaintiff in an amount to be determined discovery of information that is exclusively in the possession of Defendants that is believed to be in excess of the minimum jurisdiction of the Superior Court. Plaintiff seeks monies owing following an accounting. 7 COMPLAINT 33. In addition, Plaintiff requests that a constructive trust be imposed on all monies wrongfully withheld by Defendants, in accordance with common law and California Civil Code ??2223 -2224, for the bene?t of Plaintiff and Plaintiff?s interests. I 4 FOURTH CAUSE OF ACTION FRAUD (Against All Defendants) 34. All previous allegations are realleged and incorporated herein by (reference, as though fully set forth herein. 35. Defendants have committed at least two variations of fraud. Common Law Misrepresentation 36. WE did not send Rogue Marble a pro?t participation statement for reporting periods between December 31, 1997' and September 30, 2014 even though WB owed Rogue Marble contingent compensation. 37. According to Paragraph 6 of Exhibit of the Artist Loanout Agreement: ?No statements need be rendered for any accounting period during which no receipts are received.? Thus, by not providing Rogue Marble with statements since 1997, WB was af?rmatively representing that Rogue Marble was not entitled to any contingent compensation. In addition, by letter dated January 30, 2015, WB stated that Rogue Marble was not entitled to any contingent compensation. 38. Rogue Marble actually and justi?ably relied on the representation that no payments were due for the periods that pro?t participation statements were not provided because Defendants have a contractual duty to properly account to Rogue Marble for the revenue it Was receiving and to act in good faith in the computation of De?ned Gross. 8 COMPLAINT H-O Concealment per Cal. Civil Code 55 1572 1710 39. WE concealed and/or suppressed facts from Rogue Marble, including: i that contingent compensation is owing to Rogue Marble in connection with the Film, and any prior representations about the inability of the Film to recoup the de?cit were no longer true due to a change in circumstances, namely that suf?cient revenue had been earnedto not only cover the de?cits but also to achieve positive pro?ts. 40. WE was under a duty to disclose those facts to Rogue Marble because WB had exclusive knowledge of the foregoing material facts, which WB knew were not known or readily available to Rogue Marble because WB did not provide pro?t participation statements (re?ecting accounting), and the Artist Loanout Agreement requires WB to provide accountings and pay contingent compensation to Rogue Marble when money is owed. i A I A .41. WE intentionally concealed or suppressed the material facts with'the intent to defraud Rogue Marble because, by cOncealing or suppressing the facts, WB was able to maintain control over a signi?cant amount of money for its own bene?t. 42. Rogue Marble was completely unaware of the material facts and would not have acted as it did if it had known of the material facts. 43. As a direct and proximate result of Defendants? fraud, Rogue Marble has suffered damages inan amount that is in excess of the minimum jurisdiction of the superior Court. A 44. Defendants? conduct as described herein was done with a Conscious disregard of the rights of Rogue Marble, with the intent to vex, annoy, and/or harass Rogue Marble and to unjustly pro?t at Rogue Marble?s expense. Such Conduct was unauthorized and-constitutes oppression, fraud, and/or malice under California Civil Code ?3294, entitling Rogue Marble to an award of punitive damages in an amount appropriate to punish or set an example of the Defendants in an amount to be 9 COMPLAINT determined at trial. 45. Rogue Marble may elect to rescind contractual provisions in lieu of seeking damages for fraud. Plaintiff will make an election of remedies at trial. FIFTH CAUSE OF ACTION UNF AIR BUSINESS PRACTICES Bus. Prof. 17200 et. seq.] (Against All Defendants) 46. A All previous allegations are realleged and incorporated herein by reference, as though fully set forth herein. 47. Defendants have engaged in unfair, unlawful and fraudulent business practices as described in California Business Professions Code 17200 et seq. for many years with respect to the calculation of contingent compensation. 48. Defendants? actions constitute unfair business practices because, among other things, Defendants? accounting practices are devised in such a way to hide income oWed to pro?t participants. The bene?ts of Defendants? accounting praCtices do not outweigh the harm caused to Rogue Marble. Defendants? conduct is unscrupulous?, unethical and offensive, and causes substantial injury to consumers. Defendants? conduct also signi?cantly threatens or harms competition because other studios (that compete with WB) have their own agreements with pro?t participants and account using their ownaccounting methods. WB believes that its accOunting methods, including the ones employed with respect to Plaintiff, are proprietary and con?dential. WB attempts to keep its accounting methods hidden from competitors and the public at large because revealing such methods will have an impact on competition. 49. Defendants? actions constitute unlaw?il business practices because, among other things, their actions constitute a breach of contract, money due on an open account, and fraud. 10 .. COMPLAINT 00 Ul A 00 \1 DJ 50. Defendants? actions constitute fraudulent business practices as described above. Members of the public, including other pro?t participants who have agreements with WB for contingent compensation, are likely to be deceived by Defendants? fraudulent actions. 51. According to Business& Professions Code ?17204, a claim may be maintained ?by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.? Rogue Marble has suffered injury in fact and has lost money in Which Rogue Marble had a vested interest as a result of Defendants? unfair, unlawful and fraudulent business practices. On information and belief, contingent compensation is due to Rogue Marble as described above but has not been paid to Rogue Marble. Defendants continue to hold money that should be paid to Rogue Marble. 52. Defendants have been unjustly enriched at the expense of Rogue Marble. Accordingly, Rogue Marble seeks restitution of all sums owed to it plus interest. I I 53,. In addition, Rogue Marble seeks injunctive relief to stop the unfair, unlawful and fraudulent business practices. PRAYER FOR RELIEF Wherefore, Plaintiff prays for judgment against the Defendants, and each of them, as follows: i I 1. For damages; For pre-judgment interest pursuant to Civil Code ??3287, 3288; For costs of suit; 2 3 4. For restitution; 5 For injunctive relief; 6 For disgorgement of contingent compensation wrongfully withheld; 7 For the Court toimposie a constructive trust on the monies wrongfully 1 1 COMPLAINT Withheld; 8. 9. For punitive damages on the Fourth Cause of Action; and For such other, further, and different relief as the Court deems proper under the circumstances. Dated: Aprillj?, 2017 JOH ON JOHNSON LLP By /7 Ville L. J'hnson ouglas L. son mes T. Ry Plaintiff, ROGUE MARBI: PRODUCTIONS, INC. I DEMAND FOR JURY TRIAL Plaintiff hereby demands a trial by jury. Dated: April M2017 ON JOHNSON LLP OH 1 2 COMPLAINT