Hollywood Fantasy Corp (HF)
Make a movie
with a celebrity
Hollywood Fantasy Corporation was briefly in the business of providing
"fantasy vacation" packages that would allow participants to
"make a movie" with a Hollywood personality and imagine
themselves movie stars, for one week, for a fee.
Hollywood Fantasy arranged to have Zsa Zsa Gabor as one of two
celebrities at the event.
Two weeks before the fantasy vacation event, Ms. Gabor
cancelled her appearance.
Hollywood Fantasy Cancelled
A short time later, Hollywood Fantasy cancelled the vacation event, to
which it had sold only two tickets.
Hollywood Goes Out of business
A short time after that, Hollywood Fantasy
went out of business.
Hollywood - Sued
Hollywood Fantasy sued Ms. Gabor for breach of contract and fraud.
Found that Ms. Gabor and Hollywood Fantasy had reached a contract,
Found that Ms. Gabor had breached that contract.
$100,000 for the breach, as well as $100,000 for fraud.
Set aside the jury's fraud verdict for lack of evidence.
$100,000 on the breach of contract, plus attorneys' fees and
Ms. Gabor appealed.
Affirm the district court's judgment as to liability;
Reverse the district court's damages award;
Render judgment for a lesser amount of damages.
between Hollywood Fantasy and Zsa Zsa
14 paragraph letter confirming agreement.
Zsa Zsa responded with three changes.
Contract contained an out clause.
She wrote she was involved with preproduction and promotional film work
for a movie she was going to appear in.
Response Zsa Zsas Termination
There was a contract. The trial court was justified in finding Gabor
breached the contract.
Concluded Gabor did not have a significant opportunity.
Only a 14-second cameo.
Did not preproduction work and the second movie was never made.
It is a general rule that the victim of a breach of contract
should be restored to the
position he would have been in had the contract been performed.
However, an injured party may, if he so chooses, ignore the element of
profits and recover as damages his expenditures in reliance.
Hollywood Fantasy lost $ 250,000 in profits from future fantasy
$1,000,000 in future profits the bloopers/outtakes television series
Lost Profit must be proved with Reasonable Certainty.
The $ 100,000 damages award cannot be
supported as the recovery of lost profits.
Although recovery of lost profits does not require that the loss be
susceptible to exact calculation, lost profits must be
proved with "reasonable
Future Profits amount to $250K
This was based on his estimate that HF would make a $ 25,000 profit
from each of ten future events.
However, there was only one previous venture that lost money and the
employees did not get paid.
Also, he had no future commitments.
No evidence that HF had been a successful enterprise or a prior
Rule Speculative, Uncertain Conditions
Profits which are largely speculative, as from an activity
dependent on uncertain or
changing market conditions, or on chancy business
opportunities, or on the success of a new and unproven
enterprise, cannot be recovered.
The mere hope for success of an
untried enterprise, even when that hope is realistic,
is not enough for recovery of lost
The Inquiry is
about the Activity and not
The relevant "enterprise" in the lost profits inquiry is not the
business entity, but the activity which is alleged to have been
Loss of Television Revenue
There were no object facts, figures, or data to substantiate the
estimate of lost profits.
Lost $200K in Good Will
The lost of good will or business reputation is not recoverable in a
breach of contract.
- $200K Lost Investment in the Corporation
It is pure speculation but for Ms. Gabors breach that HF would not
have gone out of business.
Rule - Foreseeable Damages
Actual damages may be
loss is the natural, probable,
and foreseeable consequence of the defendant's conduct.
The record must contain evidence that permits the jury to assess
with reasonable certainty the
degree of causation of the damage by the breach or
interference relative to other factors.
Out Of Pocket Expenses
Did present sufficient evidence.
(1) $ 8,500 in printing costs; (2) $ 12,000 in marketing costs; (3) $
22,000 in personnel and miscellaneous expenses, including air
fares, staff accommodations, script-writing costs, telephone
calls, and logo t-shirts; (4) $ 9,000 in travel expenses; and
(5) $ 6,000 in expenses relating to preparations to film the San
Antonio event for a possible television pilot. These expenses
total $ 57,500.
Mr. Saffir's testimony as to HFs out-of-pocket expenses is sufficient
to support an award of $ 57,500 for breach of contract, but not
to support an award of $ 100,000.
The award of $ 100,000 is reversed in part on the basis that the
evidence disclosed in the record does not support compensatory
damages beyond $ 57,500.