Ventura v. Titan Sports, Inc.
65 F.3d 725 (1995)
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Rule of Law:
A party may recover in quantum meruit for a benefit conferred upon another, despite an express contract, if either (1) the contract is silent on the specific subject matter for which recovery is sought, or (2) the contract covering the subject matter was induced by fraud and is therefore subject to rescission.
Facts:
- In 1984, Jesse Ventura began working for Titan Sports, Inc. (operator of the WWF) as a wrestler and later as a commentator under oral agreements.
- The oral agreements paid Ventura a flat weekly rate for his commentary services but made no mention of royalties for videotape sales.
- During this period, Titan entered into multiple licensing agreements to produce and sell videotapes and other merchandise featuring WWF performances, including those with Ventura's commentary.
- In the fall of 1987, Ventura hired agent Barry Bloom to negotiate on his behalf with Titan.
- Titan's Vice-President, Dick Glover, represented to Bloom that Titan's firm policy was to pay royalties only to 'feature' performers on videotapes.
- Relying on this representation, Ventura entered into a new contract that included a waiver of royalties for videotape sales unless he was the featured performer.
- From 1987 to 1990, Ventura continued to work under contracts containing this waiver, which were renewed annually based on the same representation about Titan's royalty policy.
- In reality, during this time, Titan was making numerous royalty payments to non-featured performers, contrary to the policy it represented to Ventura and his agent.
Procedural Posture:
- Jesse Ventura filed an action in Minnesota state court against Titan Sports, Inc., alleging fraud, misappropriation of publicity rights, and quantum meruit.
- Titan removed the case to the U.S. District Court for the District of Minnesota based on diversity jurisdiction.
- The case was tried before a jury, which was only asked to rule on the quantum meruit claim but was given a special verdict form concerning misrepresentation.
- The jury found that Titan had defrauded Ventura and awarded him $801,333.06 for videotape exploitation and $8,625.60 for other merchandise.
- After the verdict, the district court concluded Ventura was not entitled to a jury trial on his quantum meruit claim, vacated the jury verdict, and entered its own findings of fact and conclusions of law that were consistent with the verdict.
- The district court denied Ventura’s request for prefiling interest but granted prejudgment interest from the date the suit was filed.
- Titan appealed the judgment to the U.S. Court of Appeals for the Eighth Circuit, and Ventura cross-appealed the denial of prefiling interest.
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Issue:
Does the doctrine of quantum meruit permit a performer to recover royalties for the videotape exploitation of his performances when (1) an existing oral contract for those performances is silent on the subject of videotape royalties, and (2) a subsequent written contract waiving such royalties was induced by fraud?
Opinions:
Majority - Magill, Circuit Judge.
Yes, quantum meruit is available in both situations. For the period before 1987 (the pre-Bloom period), recovery is permitted because the express oral contract for commentary services was silent on the subject of videotape royalties. While an express contract normally bars quantum meruit recovery, it only does so for the same subject matter. The court predicted that Minnesota would recognize a right of publicity, making Titan's use of Ventura's likeness without compensation unjust. Since the contract did not address videotape rights, Ventura could recover their reasonable value under quantum meruit. For the period from 1987-1990 (the post-Bloom period), the express contract waiving royalties was induced by Titan's fraudulent misrepresentation of its royalty policy. This fraud allows the contract to be rescinded, opening the door for Ventura to recover the reasonable value of the royalties in quantum meruit.
Dissenting - Morris Sheppard Arnold, Circuit Judge
No, Ventura should not be allowed recovery for the pre-Bloom period. The majority incorrectly predicts that Minnesota would recognize a right of publicity, as Minnesota courts have explicitly rejected the related tort of invasion of privacy. Without a violation of a recognized legal right, Titan's enrichment was not unjust. Ventura was paid the agreed-upon weekly sum for his services; allowing him to recover more now is simply rewriting an unfavorable bargain. Titan, as the entrepreneur who took the financial risks, is entitled to the profits from the videotapes it created. Ventura's contract was to 'broadcast wrestling,' which should reasonably be interpreted to include the sale of videotapes containing that broadcast.
Analysis:
This decision is significant for contract and intellectual property law, particularly concerning celebrity rights. It establishes that a general employment contract may not automatically grant an employer all rights to exploit a performer's work in every medium, especially in new or unaddressed formats like home video. The case reinforces the principle that quantum meruit can act as a gap-filler when a contract is silent on a key benefit. Furthermore, it affirms that fraudulent inducement, even concerning a company's internal 'policy,' can be grounds to rescind a contract, preventing companies from using deceit to secure valuable rights waivers from performers.
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