Brief Fact Summary. Company 1 was "engaged" by Company 2 to "place a pilot and locate a distributor for a successful television series." Company 1 placed the series with Company 3. Company 2 went bankrupt and assigned its rights and obligations to Company 4. Company one sued Company 3 for certain monies.
Synopsis of Rule of Law. "The mere assignment of a bilateral executory contract may not be interpreted as a promise by the assignee to the assignor to assume the performance of the assignor's duties, so as to have the effect of creating a new liability on the part of the assignee to the other party to the contract assigned."
It is not enough that the defendant received a benefit from the activities of the plaintiff; if services were performed at the behest of someone other than the defendant, the plaintiff must look to that person for recovery.
View Full Point of LawIssue. Can the Plaintiffs recover under a theory of unjust enrichment?
• Doe the assignment by K-Tel to Roach afford the Plaintiffs a basis of recovery?
Held. No. For the Plaintiffs to recover under quasi contract the "[the] plaintiff[s] must demonstrate that services were performed for the defendant resulting in its unjust enrichment." It is irrelevant that the defendant receives a benefit "from the activities of the Plaintiff." If the Plaintiff were to perform services "at the behest of someone other than the defendant, the plaintiff must look to that person for recovery." The court found this case was analogous to [Callano v. Oakwood Park Homes Corp.]. The "Plaintiffs performed services at the request of K-Tel, locating MGM/UA as distributor for the series. K-Tel went bankrupt without making full payment under its contract with plaintiffs, Roach was substituted as producer, and defendant MGM/UA continued distribution of the series. Plaintiffs expected payment from K-Tel and lacked privity of contract with MGM/UA." The Plaintiffs remedy would be to "pursue their claim against K-Tel in the bankruptcy proceeding."
• No. "The mere acquiescence in the assignment by MGM/UA does not imply any obligation to assume duties owed by either the assignee or the assignor under K-Tel's separate agreement with plaintiffs." MGM/UA did not incur any obligation unless it expressly assumed these duties. "The mere assignment of a bilateral executory contract may not be interpreted as a promise by the assignee to the assignor to assume the performance of the assignor's duties, so as to have the effect of creating a new liability on the part of the assignee to the other party to the contract assigned."
Discussion. This case provides another interesting manner by which assignments are construed by courts.