MGM v. Hill
MGM v. Hill
28 Defendants.
    1 METRO-GOLDWYN-MAYER
      STUDIOS INC., a Delaware
    2
      corporation; AMAZON STUDIOS
    3 LLC, a California limited liability
      company; UNITED ARTISTS
    4 PICTURES INC., a Delaware
    5 corporation,
    6                   Counterclaimants,
    7
                v.
    8
        R. LANCE HILL, an individual; and
    9 LADY AMOS LITERARY WORKS
   10 LTD., a Canadian corporation,
   11                   Counterclaim Defendant
                        and Third-Party
   12
                        Counterclaim Defendant.
   13
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    1 remaining allegations in Paragraph 31, and refer the Court to the 1986 LPA for its
    2 terms.
    3           32.      Defendants deny the allegations in Paragraph 32 of the Complaint,
    4 except admit that Hill, through his counsel Marc Toberoff, served a notice of
    5 termination on UA and MGM (the “LPA Termination Notice”) on or about November
    6 10, 2021 purporting to terminate the rights Defendants acquired from Lady Amos
    7 pursuant to the 1986 LPA, with a putative effective date of November 11, 2023.
    8           33.      Defendants deny the allegations in Paragraph 33 of the Complaint.
    9           34.      Defendants deny that Plaintiff served Defendants with an additional
   10 notice of termination (the “Lady Amos Termination Notice”) purporting to terminate
   11 any alleged grant from Hill to Lady Amos of rights in the 1986 Screenplay.
   12 Defendants lack knowledge or information sufficient to form a belief as to the truth
   13 of the remaining allegations in Paragraph 34 of the Complaint, including whether
   14 Plaintiff served the alleged Lady Amos Termination Notice on Lady Amos, and on
   15 that basis deny them.
   16           35.      Defendants deny the allegations in Paragraph 35 of the Complaint.
   17           36.      Defendants deny the allegations in Paragraph 36 of the Complaint.
   18           37.      Defendants admit that, on December 15, 2021, Defendants’ counsel sent
   19 a letter to Plaintiff’s counsel explaining that the LPA Termination Notice was invalid
   20 because, among other reasons, the 1986 Screenplay had been written as a work made
   21 for hire for Lady Amos, a fact that both Hill and Lady Amos—through Hill, its
   22 President—acknowledged in the 1986 LPA.                  Defendants deny the remaining
   23 allegations in Paragraph 37 of the Complaint, and refer the Court to the December 15,
   24 2021 letter for its contents.
   25           38.      Defendants deny the allegations in Paragraph 38 of the Complaint,
   26 except aver that they lack knowledge or information sufficient to form a belief as to
   27 the truth of the allegations about the practices of “other movie studios” in 1986 and,
   28
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    1 therefore, deny them. Defendants further aver that this allegation is immaterial to the
    2 issues in this action.
    3           39.      Defendants deny the allegations in Paragraph 39 of the Complaint.
    4           40.      Defendants deny the allegations in Paragraph 40 of the Complaint.
    5           41.      Defendants lack knowledge or information sufficient to form a belief as
    6 to the truth of the allegations in Paragraph 41 of the Complaint and therefore deny
    7 them.
    8           42.      Defendants lack knowledge or information sufficient to form a belief as
    9 to the truth of the allegations in Paragraph 42 of the Complaint and therefore deny
   10 them.
   11           43.      Defendants lack knowledge or information sufficient to form a belief as
   12 to the truth of the factual allegations in Paragraph 43 of the Complaint and therefore
   13 deny them. Defendants deny the legal conclusions set forth in Paragraph 43 of the
   14 Complaint, and specifically deny Plaintiff’s self-serving contention that Lady Amos
   15 was Hill’s “alter ego for doing business.” Defendants further aver, upon information
   16 and belief, that Lady Amos is an Ontario business corporation formed in 1976, more
   17 than a decade before it granted rights to UA pursuant to the 1986 LPA.
   18           44.      Defendants lack knowledge or information sufficient to form a belief as
   19 to the truth of the allegations in Paragraph 44 of the Complaint concerning the
   20 circumstances of the preparation of the 1986 Screenplay and, therefore, deny them.
   21 Defendants further aver that any allegations that Lady Amos lacked involvement in
   22 the preparation of the 1986 Screenplay are contradicted by Hill’s own allegation that
   23 Lady Amos was his “alter ego.”
   24           45.      Defendants deny the allegations in Paragraph 45 of the Complaint.
   25 Defendants further aver that the 1986 LPA did not “retroactively convert[]” the 1986
   26 Screenplay into a work made for hire. Rather, as Lady Amos and Hill themselves
   27 attested in the 1986 LPA, the 1986 Screenplay was created as a work made for hire.
   28           46.      Defendants deny the allegations in Paragraph 46 of the Complaint.
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    1           47.      The allegations in Paragraph 47 the Complaint are mere legal argument
    2 and conclusions to which no response is required. To the extent that a response is
    3 required, Defendants deny the allegations in Paragraph 47 of the Complaint.
    4           48.      Defendants deny the allegations in Paragraph 48 of the Complaint.
    5           49.      Defendants deny the allegations in Paragraph 49 of the Complaint.
    6           50.      Defendants deny the allegations in Paragraph 50 of the Complaint,
    7 except admit that final post-production work on the 2024 Film unrelated to the 1986
    8 Screenplay was completed in or around January 2024. Defendants further aver that
    9 principal photography on the 2024 Film was completed before the purported
   10 “effective date” of Plaintiff’s invalid notice of termination.
   11           51.      Defendants deny the allegations in Paragraph 51 of the Complaint, and
   12 further aver that Plaintiff’s compilation of purported “similarities” set forth in Exhibit
   13 1 of the Complaint carries no evidentiary weight or probative value.
   14           52.      Defendants deny Plaintiff’s characterizations of the 1986 Screenplay and
   15 2024 Film in Paragraph 52 of the Complaint, and refer the Court to the 1986
   16 Screenplay and the 2024 Film for their contents.
   17           53.      Defendants deny Plaintiff’s characterizations of the 1986 Screenplay and
   18 2024 Film in Paragraph 53 of the Complaint, and refer the Court to the 1986
   19 Screenplay and the 2024 Film for their contents.
   20           54.      Defendants deny Plaintiff’s characterizations of the 1986 Screenplay and
   21 2024 Film in Paragraph 54 of the Complaint, and refer the Court to the 1986
   22 Screenplay and the 2024 Film for their contents.
   23           55.      Defendants deny Plaintiff’s characterizations of the 1986 Screenplay and
   24 2024 Film in Paragraph 55 of the Complaint, and refer the Court to the 1986
   25 Screenplay and the 2024 Film for their contents.
   26           56.      Defendants deny Plaintiff’s characterizations of the 1986 Screenplay and
   27 2024 Film in Paragraph 56 of the Complaint, and refer the Court to the 1986
   28 Screenplay and the 2024 Film for their contents.
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    1           74.      Defendants deny that Plaintiff is entitled to any of the declaratory relief
    2 described in Paragraph 74(a)-(c) of the Complaint, but admit that Plaintiff seeks such
    3 relief.
    4           75.      The allegations in Paragraph 75 of the Complaint are mere legal
    5 argument and conclusions to which no response is required. To the extent that a
    6 response is required, Defendants deny the allegations in Paragraph 75 of the
    7 Complaint.
    8                         COUNT II: COPYRIGHT INFRINGEMENT
    9           76.      Defendants incorporate by this reference their responses to Paragraphs
   10 1-75 of the Complaint.
   11           77.      Defendants deny the allegations in Paragraph 77 of the Complaint,
   12 except admit that Plaintiff, through his counsel Marc Toberoff, registered his
   13 purported copyright in the 1986 Screenplay on or about January 24, 2024, based on
   14 false information submitted to the U.S. Copyright Office.
   15           78.      Defendants deny the allegations in Paragraph 78 of the Complaint.
   16           79.      Defendants deny the allegations in Paragraph 79 of the Complaint.
   17           80.      Defendants deny the allegations in Paragraph 80 of the Complaint.
   18           81.      Defendants deny the allegations in Paragraph 81 of the Complaint.
   19           82.      Defendants deny the allegations in Paragraph 82 of the Complaint.
   20           83.      Defendants deny the allegations in Paragraph 83 of the Complaint.
   21           84.      Defendants deny the allegations in Paragraph 84 of the Complaint.
   22           85.      Defendants deny the allegations in Paragraph 85 of the Complaint.
   23           Defendants deny that Plaintiff is entitled to any relief whatsoever on his claims,
   24 including, without limitation, any of the relief requested in Paragraphs 1-12 of the
   25 “Prayer for Relief” in the Complaint.
   26                         SEPARATE AND ADDITIONAL DEFENSES
   27           Defendants state the following separate and additional defenses, without
   28 assuming the burden of proof on such defenses that would otherwise rest with
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    1 Plaintiff, and without prejudice to Defendants’ right to assert any and all other
    2 defenses revealed during the course of discovery.
    3                                         FIRST DEFENSE
    4                                      (Failure to State a Claim)
    5           1.       The Complaint fails to state a claim for which relief can be granted.
    6                                       SECOND DEFENSE
    7                         (Lack of Copyright Ownership / Invalid Termination)
    8           2.       Plaintiff’s claims are barred because the 1986 grant of rights is not
    9 subject to termination under 17 U.S.C. § 203, such that Plaintiff does not own a valid
   10 copyright in the 1986 Screenplay.
   11                                        THIRD DEFENSE
   12                                       (Statute of Limitations)
   13           3.       Plaintiff’s claims are barred, in whole or in part, because Plaintiff’s claim
   14 of authorship with respect to the 1986 Screenplay was expressly repudiated no later
   15 than September 16, 1986, such that Plaintiff is time-barred from claiming authorship
   16 or ownership pursuant to the three-year statute of limitations set forth in 17 U.S.C. §
   17 507(b).
   18                                       FOURTH DEFENSE
   19                 (Fraud on the Copyright Office / Invalid Copyright Registration)
   20           4.       Plaintiff’s claims are barred because Plaintiff’s copyright registration to
   21 the 1986 Screenplay was secured through fraudulent statements to the Copyright
   22 Office concerning Plaintiff’s purported authorship and ownership and, therefore, is
   23 invalid.
   24                                         FIFTH DEFENSE
   25                                  (Premature Termination Notices)
   26           5.       Plaintiff’s claims are barred because the 1986 grant of rights to UA
   27 covers the right of publication of the unpublished 1986 Screenplay and, therefore, the
   28 statutory termination window, if any, begins on the earlier of the end of thirty-five
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    1 years from the date of publication of the 1986 Screenplay, or the end of forty years
    2 from the date of execution of the 1986 LPA. See 17 U.S.C. § 203(a)(3). As a result,
    3 Plaintiff’s termination notices were premature and invalid.
    4                                        SIXTH DEFENSE
    5                         (Failure to Serve Lady Amos Termination Notice)
    6           6.       To the extent any grant was made from Plaintiff to Lady Amos,
    7 Plaintiff’s claims are barred because Plaintiff failed to serve any of Defendants with
    8 the Lady Amos Termination Notice.
    9                                      SEVENTH DEFENSE
   10                                   (Derivative Works Exception)
   11           7.       Plaintiff’s claims are barred, in whole or in part, based on the derivative
   12 works exception set forth in 17 U.S.C. § 203(b)(1).
   13                                       EIGHTH DEFENSE
   14                                     (License / Authorization)
   15           8.       Plaintiff’s claims are barred because Defendants have a license and/or
   16 authorization to use the 1986 Screenplay.
   17                                        NINTH DEFENSE
   18                                        (Lack of Standing)
   19           9.       Plaintiff’s claims are barred because Plaintiff lacks standing to pursue
   20 them.
   21                                       TENTH DEFENSE
   22                                             (Estoppel)
   23           10.      Plaintiff’s claims are barred, in whole or in part, by the doctrine of
   24 estoppel, including, without limitation, judicial estoppel and equitable estoppel.
   25                                     ELEVENTH DEFENSE
   26                                              (Waiver)
   27           11.      Plaintiff’s claims are barred, in whole or in part, by the doctrine of
   28 waiver.
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    1                                     TWELFTH DEFENSE
    2                                         (Unclean Hands)
    3           12.      Plaintiff’s claims are barred, in whole or in part, by the doctrine of
    4 unclean hands.
    5                                   THIRTEENTH DEFENSE
    6                                  (Lack of Substantial Similarity)
    7           13.      Plaintiff’s claims are barred, in whole or in part, because the protectable
    8 elements of the 1986 Screenplay are not substantially similar to the protectable
    9 elements of the 2024 Film.
   10                                   FOURTEENTH DEFENSE
   11                                  (Unprotectable Subject Matter)
   12           14.      Plaintiff’s claims are barred, in whole or in part, on the basis that the
   13 elements of the 1986 Screenplay that were allegedly infringed are not subject to
   14 copyright protection.
   15                                    FIFTEENTH DEFENSE
   16                                      (Merger/Scènes-à-Faire)
   17           15.      Plaintiff’s claims are barred, in whole or in part, by the doctrines of
   18 merger and scènes à faire.
   19                                    SIXTEENTH DEFENSE
   20                                    (De Minimis Infringement)
   21           16.      Plaintiff’s claims are barred, in whole or in part, because any
   22 infringement by Defendants was de minimis and not actionable.
   23                                     PRAYER FOR RELIEF
   24           WHEREFORE, Defendants pray for judgment as follows on the Complaint:
   25           a.       Judgment in favor of Defendants on each of Plaintiff’s claims;
   26           b.       An award of all costs, including reasonable attorney’s fees, pursuant to
   27 17 U.S.C. § 505; and
   28           c.       Such other relief as the Court deems proper.
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    1                                       COUNTERCLAIMS
    2           Counterclaimants Metro-Goldwyn-Mayer Studios Inc. (“MGM”), Amazon
    3 Studios LLC (“Amazon Studios”) and United Artists Pictures Inc. (“UA”)
    4 (collectively, “Counterclaimants”), as and for their counterclaims against R. Lance
    5 Hill (“Hill”) and Lady Amos Literary Works, Ltd. (“Lady Amos”), hereby allege as
    6 follows:
    7                                  NATURE OF THE ACTION
    8           1.       Counterclaimants and their affiliated entities are the owners of all rights
    9 to the Road House film franchise, including the 2024 film recently released on
   10 Amazon Prime Video, along with the original 1989 cult classic film that was
   11 developed from the 1986 screenplay Roadhouse that UA acquired from Hill’s
   12 company, Lady Amos, in 1986.               This countersuit is based on Hill’s fraudulent
   13 representation to the U.S. Copyright Office that Hill is the “author” of the 1986
   14 screenplay and holds attendant termination rights—the same false representations
   15 now made in the Complaint to support Hill’s meritless lawsuit.
   16           2.       Two axiomatic and uncontested principles of copyright law dispose of
   17 Hill’s claim. First, as the Complaint concedes, works made for hire are not subject
   18 to termination in the first instance, because the “author” of the work is the party that
   19 hired the individual and not the individual who created the work. See Cmplt. ¶ 21
   20 (works made for hire are an “exemption from the Copyright Act’s termination
   21 provisions”); 17 U.S.C. § 203(a) (termination permitted only in the case of works
   22 “other than a work made for hire”). Second, an “author” recognized as such under
   23 the Copyright Act—which Hill is not—may terminate a grant only where the “grant
   24 was executed by that author.” See 17 U.S.C. § 203(a).
   25           3.       Hill’s attempt at termination fails on both fronts, either one of which is
   26 fatal to his claim.         Like many writers who set up “loan-out” companies, Hill
   27 established Lady Amos as a separate business entity in 1976 for his own business
   28 purposes. Pursuant to a Literary Purchase Agreement entered into with UA more than
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    1           20.      Beginning at least as early as June 1978, both R. Lance Hill and Darlene
    2 Hill served as directors and officers of Lady Amos—an arrangement that lasted at
    3 least through July 1994.
    4           21.      Upon information and belief, Lady Amos remains an active Ontario
    5 business corporation to this day, as reflected on the Ontario Business Registry website
    6 (Ontario Business Registry | ontario.ca):
    7
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   16           22.      Accordingly, Lady Amos has been in existence, as a business
   17 corporation distinct from Hill, from 1976 to 2024—a period of approximately 48
   18 years.
   19                            Lady Amos’s Assignment of All Rights
   20                                  in the 1986 Screenplay to UA
   21           23.      Upon information and belief, Hill wrote a screenplay entitled Roadhouse
   22 in or around July 1986 (the “1986 Screenplay”).
   23        24. By the Literary Purchase Agreement dated August 7, 1986, and fully
   24 executed as of September 16, 1986 (the “1986 LPA”), UA purchased from Lady
   25 Amos all rights to the 1986 Screenplay, as follows (¶ 2):
   26      Owner [i.e. Lady Amos] hereby grants to UA, exclusively, in perpetuity
   27           and throughout the universe, all right, title and interest (including all
   28           copyrights, and renewals and extensions thereof) in and to the Property
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    1           29.      Accordingly, Hill did not individually grant any copyright interest in the
    2 1986 Screenplay to UA pursuant to the 1986 LPA.
    3                  The Contemporaneous Representations and Warranties by
    4          Lady Amos and Hill that Lady Amos Is the 1986 Screenplay’s Author
    5           30.      In the 1986 LPA, Lady Amos represented and warranted that the 1986
    6 Screenplay “was created and written solely by [Hill] as an employee of [Lady Amos]
    7 pursuant to an employment agreement with [Lady Amos], and, accordingly, [Lady
    8 Amos] is the author of the [1986 Screenplay] (which constitutes a work-made-for-
    9 hire) and the owner thereof and entitled to all copyrights therein …” Ex. B ¶ 4(f)
   10 (emphasis added).
   11           31.      The foregoing representation and warranty was true at the time it was
   12 made.
   13           32.      In the same vein, Lady Amos further represented that “[Lady Amos]
   14 owns all of the Rights [to the 1986 Screenplay] free and clear of any liens,
   15 encumbrances and other third party interests of any kind, and free of any claims ....”
   16 Id. ¶ 4(b).
   17           33.      The foregoing representation and warranty was true at the time it was
   18 made.
   19           34.      Additionally, Hill executed an addendum to the 1986 LPA in which he,
   20 guaranteed the truthfulness of Lady Amos’s representations and warranties (id. at 7;
   21 emphases added):
   22           As a material inducement to [UA] to execute the above agreement ... , I
   23           acknowledge that I have read the Agreement and approve the same and
   24           agree to be personally bound by the terms and conditions contained
   25           therein. Without in any way limiting the generality of the foregoing, I
   26           guarantee the truth, effectiveness and performance of all of the
   27           agreements, grant of rights, undertakings, representations, warranties
   28           and indemnities made by [Lady Amos] under the Agreement, in every
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    1 providing as follows (id. at 15; emphasis added), once again attesting that all written
    2 materials prepared in connection with the 1986 Screenplay and/or the 1989 Film
    3 would be done in his capacity as an employee of Lady Amos, as a work made for hire:
    4           I hereby certify that, as an employee of Lady Amos Literary Works,
    5           Ltd. (“Lender”), and in the regular course of my duties of employment I
    6           am engaged in writing a rewrite to a screenplay currently entitled
    7           “Roadhouse” such rewrite and all revisions thereto hereinafter referred
    8           to as the “Work”) based upon an original screenplay written by me
    9           pursuant to an Agreement (“Agreement”) between Lender and United
   10           Artists Pictures, Inc. (“UA”) dated as of August 7, 1986. I further certify
   11           that the Work is being written or shall be written as a work-made-for-
   12           hire within the meaning of U.S. Copyright laws and that, pursuant to the
   13           Agreement, UA as the assignee of Lender, owns all right, title and
   14           interest throughout the world in and to said Work and all of the results
   15           and proceeds of my writing services in accordance therewith as if I had
   16           been an employee of UA.....
   17           39.      Both the 1986 LPA and the 1986 Writer’s Agreement, along with the
   18 representations and warranties contained therein, were executed in September 1986,
   19 approximately two months after Hill alleges that he wrote the 1986 Screenplay.
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    1           40.      Consistent with the 1986 LPA and the 1986 Writer’s Agreement, the
    2 payments made by UA thereunder were made to Lady Amos, not to Hill:
    3
    4
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   16           Hill’s False Claim of Purported Authorship 35 Years After the Fact
   17           41.      On or about November 10, 2021, Toberoff sent UA and MGM a “Notice
   18 of Termination”—on Hill’s behalf—purporting to terminate the rights UA acquired
   19 from Lady Amos pursuant to the 1986 LPA and the Assignment (the “LPA
   20 Termination Notice”), effective as of November 11, 2023. A true and correct copy of
   21 this Notice of Termination is annexed hereto as Exhibit D.
   22           42.      Toberoff and Hill knowingly based the LPA Termination Notice on the
   23 false premise that Hill, not Lady Amos, was the “author” of the 1986 Screenplay—
   24 attempting to disavow the reality to which Hill and Lady Amos had attested 35 years
   25 earlier, and just two months after the 1986 Screenplay was allegedly completed, that
   26 “[Lady Amos] is the author of the [1986 Screenplay] (which constitutes a work-made-
   27 for-hire).” Ex. B ¶ 4(f).
   28
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    1           43.      The LPA Termination Notice was defective for at least two reasons: (1)
    2 because works made for hire are not subject to termination in the first instance (see
    3 17 U.S.C. 203(a)); and (2) because Hill did not grant any copyright interest in the
    4 1986 Screenplay to UA pursuant to the 1986 LPA or the Assignment. See id. (parties
    5 may terminate only a grant that “was executed by that author”).
    6           44.      As alleged in the Complaint, on November 10, 2021, Hill purports to
    7 have sent another termination notice (the “Lady Amos Termination Notice”) to his
    8 purported “alter ego,” Lady Amos, terminating an unidentified “express or implied
    9 grant by Hill to Lady Amos” of Hill’s non-existent rights to the 1986 Screenplay. The
   10 Lady Amos Termination Notice was subsequently recorded with the U.S. Copyright
   11 Office. See Cmplt. ¶¶ 34, 35.
   12           45.      No grant from Hill to Lady Amos has been provided to Counterclaimants
   13 because, upon information and belief, no such grant exists. Nor did Hill or Toberoff
   14 serve the Lady Amos Termination Notice on UA or MGM, the successor in title to all
   15 of Lady Amos’s rights in the 1986 Screenplay.
   16           46.      On or about January 24, 2024, Toberoff, on Hill’s behalf, filed a
   17 copyright application to register the 1986 Screenplay, based again on the knowingly
   18 false representation that the “author” of the 1986 Screenplay was Hill, not Lady
   19 Amos—a proposition that each of Hill, Lady Amos and UA had expressly repudiated
   20 38 years earlier in the plain language of the 1986 LPA.
   21           47.      On or about February 21, 2024, the U.S. Copyright Office issued a
   22 copyright registration certificate to Hill, addressed to Toberoff and his firm, based on
   23 the fraudulent representation by Hill and Toberoff that Hill was the purported author,
   24 and now owner, of the 1986 Screenplay. A true and correct copy of that copyright
   25 registration certificate is annexed hereto as Exhibit E.
   26
   27
   28
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    1                                   FIRST COUNTERCLAIM
    2        (Declaratory Relief as to Invalidity of Plaintiff’s Copyright Registration
    3                 Based on Fraud on the Copyright Office (17 U.S.C. § 411(b))
    4                                          (Against Hill)
    5           48.      Counterclaimants repeat and reallege each and every allegation of the
    6 preceding paragraphs as though fully set forth herein.
    7           49.      On or about January 24, 2024, Hill, though his counsel Toberoff,
    8 submitted a fraudulent application to register the 1986 Screenplay to the U.S.
    9 Copyright Office, identifying Hill as the copyright author and copyright claimant in
   10 the 1986 Screenplay.
   11           50.      These representations were inaccurate, and knowingly false when made.
   12 As Hill and Lady Amos attested in the 1986 LPA, contemporaneously with the
   13 completion of the 1986 Screenplay, Lady Amos is the author of the 1986 Screenplay,
   14 a work made for hire.
   15           51.      Upon information and belief, Hill and Toberoff knew that the application
   16 falsely identified the copyright author and copyright claimant of the 1986 Screenplay
   17 and, accordingly, that the application failed to comply with the requirements of 17
   18 U.S.C. § 409.
   19           52.      These false representations were material to the Copyright Office’s
   20 decision to issue a copyright registration to Hill.
   21           53.      Accordingly, Hill’s copyright in and registration of the 1986 Screenplay
   22 is invalid because Hill, through Toberoff, secured the registration by knowingly
   23 providing inaccurate information to the Copyright Office upon which the Copyright
   24 Office materially relied in its decision to issue a copyright registration to Hill.
   25           54.      UA is thus entitled to a declaration, pursuant to the Declaratory
   26 Judgment Act, 28 U.S.C. § 2201, that Plaintiff’s copyright in, and registration of, the
   27 1986 Screenplay is invalid.
   28
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    1                                SECOND COUNTERCLAIM
    2               (Breach of Contract – In the Alternative to First Counterclaim)
    3                                (Against Hill and Lady Amos)
    4           55.      Counterclaimants repeat and reallege each and every allegation of the
    5 preceding paragraphs as though fully set forth herein.
    6           56.      UA and Lady Amos are parties to the 1986 LPA.
    7           57.      UA has at all times performed the terms of the 1986 LPA in the manner
    8 specified therein.
    9           58.      In the 1986 LPA, Lady Amos represented and warranted that the 1986
   10 Screenplay “was created and written solely by [Hill] as an employee of [Lady Amos]
   11 pursuant to an employment agreement with [Lady Amos], and, accordingly, [Lady
   12 Amos] is the author of the [1986 Screenplay] (which constitutes a work-made-for-
   13 hire) and the owner thereof and entitled to all copyrights therein …”
   14           59.      Hill executed an addendum to the 1986 LPA in which he “guarantee[d]
   15 the truth, effectiveness and performance of all of the agreements, grant of rights,
   16 undertakings, representations, warranties and indemnities made by [Lady Amos]
   17 under the Agreement, in every respect as if I were Lady Amos and agree[d] to be
   18 liable directly to UA for any breach thereof as I were a direct party to the Agreement.”
   19           60.      In the 1986 LPA, Lady Amos—and Hill, pursuant to the foregoing
   20 guarantee—agreed to indemnify UA and, inter alia, its parents, subsidiaries,
   21 affiliates, licensees, and assigns from “any liability, claim, cost, damage, or expense
   22 (including costs and reasonable attorneys’ fees, whether or not in connection with
   23 litigation) arising out of or in connection with a breach or alleged breach by [Lady
   24 Amos] or [Hill] of any warranties, representations, undertakings, covenants or
   25 agreements contained in this Agreement.”
   26           61.      MGM Studios and Amazon Studios are third-party beneficiaries of Lady
   27 Amos’s and Hill’s indemnification obligations under the 1986 LPA.
   28           62.      If the LPA Termination Notice and/or Lady Amos Termination Notice
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    1 are deemed effective, and Hill’s claim of authorship and ownership of the 1986
    2 Screenplay is deemed valid, Hill and Lady Amos necessarily will have materially
    3 breached their representations and warranties in the 1986 LPA.
    4           63.      If the LPA Termination Notice and/or Lady Amos Termination Notice
    5 are deemed effective, and Hill’s claim of authorship and ownership of the 1986
    6 Screenplay is deemed valid, then Hill’s and Lady Amos’s breach will have caused,
    7 and will continue to cause, damages and expense to Counterclaimants for which Hill
    8 and Lady Amos are liable pursuant to the 1986 LPA and the indemnification
    9 provisions contained therein, including, without limitation, damages from
   10 Counterclaimants’ investment in the Road House franchise and the loss of future
   11 revenue from the exploitation of derivative works based on the 1986 Screenplay.
   12                                     PRAYER FOR RELIEF
   13           WHEREFORE, Counterclaimants pray for judgment as follows on their
   14 counterclaims:
   15           a.       On the First Counterclaim:
   16                    i.     For a declaration that Hill’s copyright in, and registration of, the
   17                           1986 Screenplay is invalid;
   18                    ii.    An order directing the Copyright Office to cancel Hill’s
   19                           registration of the 1986 Screenplay; and
   20                    iii.   An award of all costs, including reasonable attorney’s fees,
   21                           pursuant to 17 U.S.C. § 505.
   22           b.       On the Second Counterclaim (in the alternative to the relief prayed for
   23                    on the First Counterclaim):
   24                    i.     For compensatory damages from Hill and Lady Amos, subject to
   25                           proof, and for prejudgment interest according to law; and
   26                    ii.    An award of attorney’s fees and costs as damages pursuant to the
   27                           1986 LPA’s indemnification provision;
   28           c.       Such other relief as the Court deems proper.
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        SMRH:4892-0291-1675                       DEFENDANTS’ ANSWER AND COUNTERCLAIMS