Selman Team Wins Ownership Rights & Nearly $1.7M For Disney Artist Client
Elaine K. Fresch and Mikhail Mdinaradze, attorneys in the Los Angeles office of Selman Breitman LLP, and their co-counsel Stephen Milbrath of Accel IP Law, PLLC, obtained a judgment in their client's favor regarding ownership of derivative artwork as well as monetary damages in the total amount of $1,690,074.39 including $145,272.26 in sanctions for spoliation of evidence. The award was confirmed on December 15.
In 2008, William Silvers/ William Silvers Art, Inc. signed a publishing agreement with Verbata, Inc. (“Acme Archives”) for the reproduction of his art. Subsequently, Mr. Silvers began creating art for Acme Archives to publish the limited-edition art under its license with Disney Companies. Mr. Silvers was to receive royalties from the sale of the artwork and a certain quantity of the Artist Proof prints. Under the agreement, the rights to the artwork would revert back to Mr. Silvers once the artwork goes out of print. On December 31, 2014, Acme Archives lost its contract with Disney to publish the Disney Classic Art images in the United States. Eventually, Mr. Silvers realized that he did not receive his compensation under the agreement. Acme Archives claimed that in 2013 Mr. Silvers signed another Publishing Agreement, which contained adverse terms to Mr. Silvers, including reduced compensation and claiming all rights and authorship of Mr. Silvers’ derivative images created during and prior to his 2008 agreement with Acme Archives, whether or not it was out of print. Since then, Acme Archives used the 2013 Publishing Agreement to claim rights to all of Mr. Silvers' artwork produced while Acme Archives was his publisher. Mr. Silvers did not sign the alleged 2013 Publishing Agreement. In fact, he realized that his signature from another document was copied/pasted onto the alleged 2013 agreement. Mr. Silvers brought an action against Acme Archives and its principals Sean and Lisa McLain for unpaid royalties and conversion of Mr. Silvers’ artist proof prints among other claims.
Acme Archives brought a counter-claim against Mr. Silvers for interfering with its contractual relations with Disney Consumer Products, defamation, breach of contract, and breach of a confidentiality agreement incorporated into the 2013 Publishing Agreement. In essence, the publisher alleged that Mr. Silvers defamed Acme Archives by contending that Acme Archives forged the 2013 Publishing Agreement and did not properly compensate Mr. Silvers for his work. Acme Archives claimed that Mr. Silvers signed the 2013 Publishing Agreement agreeing to reduced compensation, signing off his artwork to Acme Archives as work for hire, and other unfavorable terms. The publisher’s alleged damages were in the seven figures.
The dispute was submitted to a binding arbitration in Los Angeles before JAMS arbitrator Barbara A. Reeves. The arbitration took place over the course of 13 days. Countless motions and submissions were submitted to the Arbitrator. The Arbitrator found that Acme Archives forged Mr. Silvers' signature on the 2013 Publishing Agreement, conspired with Mr. Silvers' agent to defraud Mr. Silvers, and rendered a defense verdict on Acme Archives’ claims. The Arbitrator also found that in the course of the litigation, Acme Archives spoliated Electronically Stored Information (E.S.I. evidence) from QuickBooks (bookkeeping records) and a File Maker database (artwork printing records). The Arbitrator awarded Mr. Silvers $145,272.26 in sanctions as a prevailing party on the spoliation motion and $220,927.85 in costs as a prevailing party defending Acme Archives’ claim. The Arbitrator found that Mr. Silvers was the owner of the derivative work, that he was entitled to his Artist Proofs, and that Mr. Silvers established a fraud conspiracy amongst Acme and the McLains and others, and awarded both compensatory damages, punitive damages and attorneys’ fees.
United States District Court Judge Virginia A. Phillips confirmed in its entirety the Final Award and signed the judgment on December 15, 2021.