Filed 10/1/26 Mary Film v. Aloe CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
MARY FILM, LLC, B346466
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 24SMCV05653)
v.
MARY ALOE et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County, Mark H. Epstein, Judge. Reversed and
remanded.
Richard M. Rosenthal and Valentina Kudryavtseva for
Defendants and Appellants.
Rufus-Isaacs Acland & Grantham and Alexander Rufus-
Isaacs for Plaintiff and Respondent.
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
Defendants and appellants Mary Aloe, Aloe Entertainment
LLC, and Proud Mary Entertainment, Inc. (the Aloe Parties)
appeal from the trial court’s order denying their special motion to
strike plaintiff and respondent Mary Film LLC’s complaint as a
strategic lawsuit against public participation (SLAPP) under
Code of Civil Procedure section 425.16 (section 425.16; the anti-
SLAPP statute).
The parties are film producers and production companies.
In 2014, they entered into a co-production agreement regarding a
film about the Virgin Mary. The co-production effort fell apart,
and in 2018, the parties entered a settlement agreement. When
the Aloe Parties released a new film about the Virgin Mary in
2024, Mary Film sued, arguing the Aloe Parties had breached the
settlement agreement. The Aloe Parties filed an anti-SLAPP
motion, which the trial court denied. On appeal, the Aloe Parties
contend the trial court erred in concluding that Mary Film
established a probability of prevailing on the merits of its
contract claims. We agree and reverse.
FACTUAL AND PROCEDURAL BACKGROUND
2014 Co-Production Agreement and Assignment
Mary Aloe is a film producer. As early as 2009, her
company Aloe Entertainment was developing a project titled
“Mary, Mother of Christ.” Aloe Entertainment described the film
as “an action drama, youth oriented, faith based biopic that
chronicles the epic journey of a young Mary and Joseph, their
escape from the tyranny of King Herod’s reign and their
preparation of young Jesus for his destiny.”
In 2012, Aloe told another producer, Leo Severino, about
her efforts to make the film and her problems financing it. In
June 2014, Aloe’s company, MMOTC Productions LLC (MMOTC),
2
entered into a co-production agreement with Severino’s company,
Cornerstone Media LLC (Cornerstone), “in connection with the
feature-length film project currently entitled ‘Mary’ f/k/a ‘Mary,
Mother of Christ’ (the ‘Picture’).” Cornerstone was responsible
for finalizing the screenplay, securing at least $1 million in initial
financing, and physically producing and distributing the film.
MMOTC represented that it held sole and exclusive ownership of
“all rights of every kind and nature whatsoever, including,
without limitation, the copyright and all rights of copyright, in
and to the Picture and any screenplay thereof (the ‘Rights’).”
Under the agreement, MMOTC assigned the Rights to a new
corporate entity jointly owned by Cornerstone and entities
designated by Aloe and her associate. The new entity later
became Rafael Film Fund LLC (Rafael).
In October 2014, MMOTC formally assigned to Rafael its
rights and ownership interest “in and to a certain feature film
script about the life of the Blessed Virgin Mary (the ‘Script’) and
all ideas, concepts[,] materials, development and formats thereof,
including . . . all elements thereto derived from the Script . . .
(collectively, the ‘Project’).” Included in this assignment of the
Script and Project (collectively referred to as the Property) were
“all copyrights, moral rights and all other intellectual property
and proprietary rights therein; all goodwill associated therewith;
all rights to exhibit, perform, display, change, alter, revise, edit,
dub, add to, subtract from, combine with other material,
distribute, merchandise, market and otherwise exploit any and
all of the Property; and any and all other rights and interests
arising out of, in connection with or in relation to the Property.”
3
2018 Settlement Agreement
In the years that followed, numerous disputes arose
between the parties. In 2018, they reached a resolution and
entered into a settlement agreement.1 The agreement was “made
in connection with the Rafael Parties’ production of the film
concerning the Blessed Virgin Mary and the feature film project
formerly known as ‘Mary’ and ‘Mary Mother of Christ’ (the
‘Picture’) and various agreements entered into between and
among the parties, or any of them, in connection with the Picture
(‘the MMOTC Agreements’).”
The Rafael Parties agreed to pay the Aloe Parties $92,500
“as a reimbursement of monies expended” and allowed the Aloe
Parties to retain control of the $70,000 remaining from the initial
funding. In exchange, the Aloe Parties agreed to “forego any
further payments or compensation in connection with the Rafael
Parties’ production of the film concerning the Blessed Virgin
Mary, and/or the screenplay entitled ‘Mary.’ ” The Aloe Parties
also agreed to “surrender and resign from all positions with
Rafael and in connection with the Rafael Parties’ production of
the film concerning the Blessed Virgin Mary” and that they “shall
have no further role in that production and shall receive no
further consideration.” MMOTC agreed to transfer its 50 percent
membership interest in Rafael to Cornerstone. The Aloe Parties
1 The parties to the settlement agreement were Rafael and
Metanoia Films LLC (the Rafael Parties); Cornerstone; Aloe,
Proud Mary Entertainment Inc., MMOTC, MMOTCL Productions
LLC, Aloe Entertainment LLC, and Mary Film Project LLC. The
trial court found no evidence that MMOTC, MMOTCL
Productions LLC, and Mary Film Project LLC breached the
settlement agreement and granted the Aloe Parties’ special
motion to strike as to those parties.
4
also assigned certain contractual obligations to the Rafael
Parties.
The settlement agreement included a section titled
“Covenants” (Paragraph 4), which included the following:
“The Aloe Parties covenant that, upon the execution
of this Agreement, neither they nor any of their
members, employees, contractors, affiliates or
assigns, will: (i) make any representation or warranty
regarding or relating to the Picture to any third
party, except upon the express written consent of the
Rafael Parties; (ii) enter or attempt to enter into any
contract, agreement or other arrangement regarding
or relating to the Picture without the express written
consent of the Rafael Parties; or (iii) make any
statements to the press or create any other publicity
regarding or relating to the Picture, except upon the
express written consent of the Rafael Parties.”
In a mutual release of claims, the settlement agreement
stated the “releases granted herein include all contractual
obligations between the parties based on agreements executed
prior to the date of this Agreement, except as provided herein.
This agreement shall supersede all of the MMOTC Agreements
and shall be binding in perpetuity.” A general provision stated:
“This Agreement constitutes the entire, final and binding
understanding between the Parties as to the subject matter
covered. Notwithstanding anything else in this Agreement to the
contrary, the parties acknowledge the Rafael Parties’ ownership
of any copyright previously transferred by the Aloe Parties . . .
pursuant to the Assignment Agreement dated as of October 29,
2014, or otherwise.”
5
Competing Films
After executing the settlement agreement, the Rafael
Parties began working on a feature film titled “Bethlehem.” The
movie was “a drama based on Herod[’s] persecution of Mary and
the Holy Family.”
In 2019, Aloe Entertainment commissioned Timothy
Michael Hayes to write a screenplay “about the early life of
[‘]Mary’ mother of Jesus and other biblical themes” titled “Mary”
(2019 “Mary”). On its website, Aloe summarized the film as “a
coming-of-age story” about Mary, who is “forced into hiding” from
King Herod during his “murderous pursuit” of newborn Jesus.
In April 2024, Severino learned that Aloe was making 2019
“Mary” from an article announcing that she had finished shooting
the film. One of the investors in “Bethlehem” withdrew his
investment as a result. Severino could not secure other financing
for “Bethlehem” and was forced to obtain a loan to fund the
production.2
Complaint
In November 2024, Mary Film sued the Aloe Parties for
breach of contract and breach of the implied covenant of good
faith and fair dealing. Mary Film alleged that Aloe’s new film
shared “many common elements” with the earlier “feature film
project about the biblical character Mary, mother of Jesus Christ,
under working titles such as Mary and Mary, Mother of Christ
2 In February 2024, Rafael, Cornerstone and Metanoia Films
LLC assigned their rights under the co-production agreement,
the 2014 assignment between MMOTC and Rafael, the
settlement agreement, and the 2018 assignment between
MMOTC and Cornerstone, to plaintiff and respondent Mary Film
LLC.
6
(‘Mary Project’).” Mary Film claimed that 2019 “Mary” fell
“within the contractual definition of the ‘Picture’ ” in Paragraph 4
of the settlement agreement. Mary Film thus alleged that the
Aloe Parties breached the settlement agreement by making
representations and warranties about 2019 “Mary,” entering into
a deal with Netflix about the film, and creating publicity for the
movie. The complaint also alleged that the Aloe Parties’ conduct
breached their implied duty “to refrain from doing anything” to
deprive Mary Film “of the benefits of [the settlement] agreement,
namely, to have sole control of the Mary Project, to receive all
income generated by the Mary Picture, and to be able to make
The Mary Picture into a film without interference or competition
from Defendants.”
Special Motion to Strike
The Aloe Parties moved to strike the complaint under
section 425.16, arguing that Mary Film’s complaint arose out of
free speech conduct and that Mary Film could not establish a
probability of success on the merits of its claims. According to
the Aloe Parties, Paragraph 4 of the settlement agreement only
prevented them from creating a film based on the 2013
screenplay Aloe wrote with Barbara Nicolosi. They argued that
neither 2019 “Mary” nor “Bethlehem” implicated the settlement
agreement provisions because both films were based on different
scripts. The Aloe Parties further contended that to the extent
Paragraph 4 was construed as a non-compete clause, it was
invalid under California law. Finally, the Aloe Parties claimed
that Mary Film’s cause of action for breach of the implied
covenant of good faith and fair dealing necessarily failed in the
absence of a viable breach of contract claim.
7
In a supporting declaration, Aloe stated that in 2013, she
and Nicolosi wrote the screenplay that was the subject of the
settlement agreement. Aloe also stated that the parties had
signed a Mutual Confidentiality and Nondisclosure Agreement
(NDA) in 2013 that contained non-circumvention and non-
compete provisions that had since expired. The NDA, which
facilitated the parties’ discussions in advance of the co-production
agreement, provided that neither party would “produce a
competing project on the same biblical subject matter during . . .
their relationship other than the project for which the due
diligence is being provided” for up to five years. Aloe stated that
“[a]t no point in the course of negotiating the Settlement
Agreement[ ] did the Rafael Parties ask that any of the
Defendants agree not to produce a film based on biblical themes
or the story of ‘Mary,’ or that the term of the [NDA] be extended
beyond its five-year term.”
Aloe’s counsel, Richard Rosenthal, also submitted a
supporting declaration. Rosenthal declared that “Bethlehem”
was a “separate script from” the 2013 screenplay, citing attached
copyrights for other screenplays Mary Film had registered in
2023 and 2024. He further stated that in June 2017, the Aloe
Parties had offered the Rafael Parties $1.25 million “for a
reversion of rights” to resolve the parties’ disputes. The Rafael
Parties declined the offer, and the parties instead negotiated the
2018 settlement agreement in which the Rafael Parties “paid
$92,500 to purchase the remaining rights, title and interest in
the Mary Project film.” Rosenthal stated that it was “ludicrous”
to suggest that the Aloe Parties would sell their 50 percent
interest in the film project “for a mere $92,500, and at the same
time agree to an implied non-compete agreement with respect to
8
a biblically themed film.” He maintained that the settlement
agreement’s objective “was to allow the parties to go their
separate ways and do whatever they desired in the motion
picture industry without interference or control from the other
parties.”
Mary Film opposed the anti-SLAPP motion, contending
that the complaint did not arise from protected activity and it
had evidence showing a probability of prevailing on the merits.
As to the breach of contract claim, Mary Film argued the
“Picture” referenced in Paragraph 4 of the settlement agreement
included “both the Mary Project that had been in development
since 2009, including all of the rights, ideas, scripts and other
elements thereof, and the film of the same story that the Rafael
Parties were making.” Citing MMOTC’s broad assignment of
rights to Rafael in 2014, Mary Film argued that the “project”
encompassed more than Aloe and Nicolosi’s 2013 script. Mary
Film maintained that 2019 “Mary” was “identical in most
material respects to” the Mary Project, as it shared the same
subject matter, title, theme, and “plot elements.”
Thus, Mary Film contended, 2019 “Mary” is “part of the
Mary Project” and the Aloe Parties could not have released 2019
“Mary” without “making representations or warranties regarding
or relating to it to third parties,” or without entering into
contracts about 2019 “Mary,” in violation of Paragraph 4. The
Aloe Parties had also created publicity about 2019 “Mary” and
the Rafael Parties alleged that publicity statements and the
release of the film harmed the Rafael Parties’ efforts to make
their own film.
As to the cause of action for breach of the implied covenant
of good faith and fair dealing, Mary Film argued that the
9
settlement agreement implicitly prohibited the Aloe Parties from
making their own version of the Mary Project, and any other
interpretation would frustrate the purpose of the agreement.
Severino submitted a declaration in support of Mary Film’s
opposition. He attached a copy of the parties’ 2014 co-production
agreement. According to Severino, the parties amended the co-
production agreement three times to attempt to resolve their
disputes and ultimately “entered into negotiations to end the
relationship,” resulting in the settlement agreement. Mary Film
began working on developing the Mary Project into the feature
film “Bethlehem” “based on [the Rafael Parties’] understanding
that Defendants . . . would neither interfere with our efforts to
make the Mary Film nor make their own version of the same film
because such actions would obviously have a detrimental effect
on our ability to make the Mary Film, and/or on its profitability.”
Severino watched 2019 “Mary,” which was released in
December 2024. While 2019 “Mary” did not have the same
dialogue or scenes as the Mary Project, Severino asserted it had
“the same title, the same theme of the [sic] Mary and the Holy
Family fleeing to escape Herod’s persecution, and many of the
same plot elements.” He listed “some of the most obviously
similar elements, none of which are in the Bible, appearing in
both films or with previous script iterations that Plaintiff or its
assignees purchased or were presented as concepts in pitches.”
Such elements included similar scenes and plot devices, the use
of the same effects and motifs, and similarities in the plot
exposition.
Trial Court’s Ruling
After a hearing in February 2025, the trial court concluded
Paragraph 4 was a non-disparagement clause, not a noncompete
10
clause, and it did not prohibit the Aloe Parties from making a
competing film. However, the trial court construed Mary Film’s
complaint as alleging that 2019 “Mary” used intellectual property
associated with the Mary Project that the Aloe Parties had
transferred to the Rafael Parties in 2018. At the court’s request,
the parties submitted supplemental briefing addressing whether
the films were substantially similar enough to support a claim for
intellectual property infringement. Based on its construction of
the complaint as asserting a breach of contract based on the
infringement of intellectual property rights, rather than the
express terms of Paragraph 4 as alleged in the complaint, the
trial court found that Mary Film met its burden to show that its
claims had minimal merit. The court thus denied the Aloe
Parties’ motion.
The Aloe Parties timely appealed.
DISCUSSION
I. Legal Principles and Standard of Review
California’s anti-SLAPP statute allows defendants to move
to strike causes of action arising from acts taken in furtherance of
the right of petition or free speech in connection with a public
issue. (§ 425.16, subd. (b)(1).)
Section 425.16 outlines “a two-step process for determining
whether an action is a SLAPP. First, the court decides whether
the defendant has made a threshold showing that the challenged
cause of action is one arising from protected activity. (§ 425.16,
subd. (b)(1).) . . . If the court finds that such a showing has been
made, it must then determine whether the plaintiff has
demonstrated a probability of prevailing on the claim. (§ 425.16,
subd. (b)(1); [citation].) [¶] . . . [T]o establish the requisite
probability of prevailing (§ 425.16, subd. (b)(1)), the plaintiff need
11
only have ‘ “stated and substantiated a legally sufficient claim.” ’
[Citations.] ‘Put another way, the plaintiff “must demonstrate
that the complaint is both legally sufficient and supported by a
sufficient prima facie showing of facts to sustain a favorable
judgment if the evidence submitted by the plaintiff is credited.” ’
[Citation.]” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88–89
(Navellier); see Grewal v. Jammu (2011) 191 Cal.App.4th 977,
989 [plaintiff need only show “ ‘minimal merit’ ” to prevail].)
“On appeal, we review the motion de novo and
independently determine whether the parties have met their
respective burdens. [Citations.] In evaluating the motion, we
consider ‘the pleadings, and supporting and opposing affidavits
stating the facts upon which the liability or defense is based.’
(§ 425.16, subd. (b)(2).) However, we do not weigh credibility or
compare the weight of the evidence. [Citation.] Rather, we
accept as true evidence favorable to the plaintiff, determine
whether the plaintiff has made a prima facie showing of facts
necessary to establish its claim at trial, and evaluate the
defendant’s evidence only to determine whether it defeats that
submitted by the plaintiff as a matter of law.” (Tichinin v. City of
Morgan Hill (2009) 177 Cal.App.4th 1049, 1061.)
12
II. Aloe Did Not Demonstrate a Probability of
Prevailing on the Merits of its Breach of Contract
Cause of Action3
On appeal, Mary Film does not challenge the trial court’s
ruling that the complaint’s causes of action arise from the Aloe
Parties’ constitutionally protected free speech activity in
connection with a public issue. The sole issue on appeal is
whether Mary Film met its burden to show a probability of
prevailing on its claims for breach of contract and breach of the
implied covenant of good faith. We conclude it has not.
A. Anti-SLAPP and contract claims
“[T]he anti-SLAPP statute can apply to a breach of contract
claim, but the statute ‘preserves appropriate remedies for
breaches of contracts involving speech’ since ‘a defendant who in
fact has validly contracted not to speak or petition has in effect
“waived” the right to the anti-SLAPP statute’s protection in the
event he or she later breaches that contract.’ ” (Olson v. Doe
(2022) 12 Cal.5th 669, 679 (Olson), quoting Navellier, supra, 29
Cal.4th at p. 94.)
Mary Film’s breach of contract claim turns on the meaning
of terms and provisions of the settlement agreement. Thus, to
evaluate Mary Film’s second-step showing, we apply well-settled
principles of contract interpretation. “In interpreting a contract,
the mutual intention of the parties at the time the contract was
3 Our review is de novo, therefore we “analyze the issues
independent of the trial court’s reasoning” and affirm “ ‘[i]f the
trial court’s decision is correct on any theory . . . regardless of the
correctness of the grounds on which the lower court reached its
conclusion.’ [Citation.]” (Gaynor v. Bulen (2018) 19 Cal.App.5th
864, 876.)
13
formed governs. (Civ. Code, § 1636; Moss Dev. Co. v. Geary
(1974) 41 Cal.App.3d 1, 9.) We ascertain that intention solely
from the words used, but we also consider the circumstances
under which the contract was made and the matter to which it
relates. (Civ. Code, §§ 1639, 1647; Moss Dev. Co., supra, at p. 9.)”
(Arriagarazo v. BMW of North America, LLC (2021) 64
Cal.App.5th 742, 748.) “We begin by analyzing the agreed-upon
language, focusing on its plain meaning as much as possible and
referencing the extrinsic evidence to ascertain whether it
supports an interpretation to which the agreement is reasonably
susceptible.” (Hewlett-Packard Co. v. Oracle Corp. (2021) 65
Cal.App.5th 506, 532 (Hewlett-Packard).) If the credibility of
extrinsic evidence is not at issue, “interpretation is a question of
law, and we will independently determine the agreement’s
meaning.” (People v. Doolin (2009) 45 Cal.4th 390, 413, fn. 17
(Doolin).)
B. Breach of contract
The complaint alleges that the Aloe Parties’ production of
2019 “Mary” breached the covenants in Paragraph 4 prohibiting
the Aloe Parties from making representations or warranties,
entering into contracts, or creating publicity “regarding or
relating to the Picture” without Mary Film’s consent. Mary Film
argues that “the Picture” includes both the film “that the Rafael
Parties were in the process of producing in 2018” and all ideas,
themes, subject matter, and other “elements” of the film that the
Aloe Parties were developing between 2009 and 2018, which
Mary Film refers to collectively as the “Mary Project.” The Aloe
Parties, however, argue that no term in the settlement
agreement prevented them from making a film about the Virgin
Mary, even if in competition with the Rafael Parties. The Aloe
14
Parties also contend “the Picture” and other terms in the
agreement referred only to the 2013 screenplay and the
production arising from it, not the underlying concepts, themes,
or subject matter.
We determine that although the plain language of
Paragraph 4 is ambiguous, the entirety of the agreement and the
extrinsic evidence the parties have proffered demonstrate that
the agreement is not reasonably susceptible to the interpretation
urged by Mary Film.
1. Plain language
“When a contract is reduced to writing, the intention of the
parties is to be ascertained from the writing alone, if possible.”
(Civ. Code, § 1639.) “The ‘clear and explicit’ meaning of [the
written provisions of a contract], interpreted in their ‘ordinary
and popular sense,’ unless ‘used by the parties in a technical
sense or a special meaning is given to them by usage’ (id.,
§ 1644), controls judicial interpretation. (Id., § 1638.) Thus, if
the meaning a layperson would ascribe to contract language is
not ambiguous, we apply that meaning.” (AIU Ins. Co. v.
Superior Court (1990) 51 Cal.3d 807, 822.) We also “glean the
meaning of the words from the context and usage of the words in
the contract itself.” (Mirpad, LLC v. California Ins. Guarantee
Assn. (2005) 132 Cal.App.4th 1058, 1069 (Mirpad).)
An opening recital of the settlement agreement contains
the first use of the term “Picture.” The agreement states that it
is “made in connection with the Rafael Parties’ production of the
film concerning the Blessed Virgin Mary and the feature film
project formerly known as ‘Mary’ and ‘Mary Mother of Christ’
(the ‘Picture’) and various agreements entered into between and
15
among the parties, or any of them, in connection with the Picture
(‘the MMOTC Agreements’).”
Paragraph 4 restricts the Aloe Parties from engaging in
conduct “regarding or relating to the Picture,” but does not
otherwise define “the Picture” or “the feature film project
formerly known as ‘Mary’ and ‘Mary Mother of Christ.’ ” The
term “Picture” appears only once more in the settlement
agreement’s section on remedies, which prohibits either party
from “enjoin[ing], restrain[ing,] or interfer[ing] with the
development, production, distribution and/or expiration of the
Picture.” Other provisions discuss the parties’ obligations
without using the term “Picture” at all, instead referring to “the
project” or “the Mary film.”
“Picture” thus appears to refer, in part, to the parties’ co-
production, which the agreement intended to dissolve by
eliminating the Aloe Parties’ involvement in this specific
moviemaking effort. However, the meaning of “feature film
project formerly known as ‘Mary’ and ‘Mary Mother of Christ’ ” is
less clear from the plain language. The settlement agreement
does not indicate what specific elements constitute the “feature
film project.” Critically, it does not specify whether the term
encompasses both tangible materials (e.g., scripts, screenplays)
and intangible work product (e.g., stories, themes, and subject
matter) derived from or related to the project. The parties did
not submit evidence regarding the industry-specific meaning, if
any, of the phrase “feature film project.” No other provisions of
the settlement agreement use the term “feature film project” to
shed light on its intended scope. (Mirpad, supra, 132
Cal.App.4th at p. 1069.)
16
The plain language is therefore ambiguous as to whether
the “Picture” extends broadly to incorporate all “ideas and
elements” underlying the original “Mary”/“Mary Mother of
Christ” proposed film.
2. Entire Agreement
While the contract does not define the scope of “Picture” or
“feature film project,” the agreement taken as a whole is focused
on unwinding the parties’ collaboration and ending the Aloe
Parties’ involvement in what was, up to that point, a joint
filmmaking effort.
For example, a provision regarding consideration states:
“The Aloe Parties shall forego any further payments or
compensation in connection with the Rafael Parties’ production of
the film concerning the Blessed Virgin Mary, and/or the
screenplay entitled ‘Mary’ which is subject to the Assignment
Agreement dated as of October 29, 2014, other than as expressly
provided herein.”
The agreement further required the Aloe Parties to
“surrender and resign from all positions with Rafael and in
connection with the Rafael Parties’ production of the film
concerning the Blessed Virgin Mary. . . . Other than as provided
in this Agreement, the Aloe Parties shall have no further role in
that production and shall receive no further consideration.”
In the same section, the agreement provided that Mary
Aloe would “continue to be designated as an Executive Producer
on the project until and unless principal photography is
commenced on the project,” after which point she “shall no longer
describe herself as and will no longer be designated as an
Executive Producer on the project.” The agreement set forth the
17
parties’ respective obligations, including indemnification, as to
contracts attached in separate schedules.
The section on releases expressly indicated the settlement
agreement would supersede all MMOTC agreements, and all
contractual obligations between the parties based on prior
agreements were released, except as otherwise provided.
Elsewhere, the agreement referenced the 2014 assignment, only
to indicate that the parties “acknowledge[d] the Rafael Parties’
ownership of any copyright previously transferred by the Aloe
Parties, or any of them, pursuant to” the assignment agreement.
Only one provision of the settlement agreement explicitly
referenced intangible work product related to the parties’ joint
production. General provision 7(d) stated: “Nothing in this
Agreement shall be construed as an admission or evidence that
any film produced by the Rafael Parties or any related entity
based on the life of the Blessed Virgin Mary is derived from or
connected with any prior proposed or actual script, production, or
story idea.”
Paragraph 4 must be understood in connection with the
settlement agreement as a whole. (Olson, supra, 12 Cal.5th at
p. 680, citing Doolin, supra, 45 Cal.4th at p. 413, fn. 17 [“Our
interpretation of the agreement is guided by the basic principle
that ‘[a]ny contract must be construed as a whole, with the
various individual provisions interpreted together so as to give
effect to all, if reasonably possible or practicable.’ ”].) As a whole,
the settlement agreement does not concern itself with the
ownership or use of story ideas, themes, or concepts underlying
the film “Mary”/“Mary Mother of Christ.” Instead, it sets the
terms for the unwinding of the parties’ joint production of the
film and compensation and attribution rights for what is
18
described as “the film concerning the Blessed Virgin Mary, and/or
the screenplay entitled ‘Mary’ which is subject to the Assignment
Agreement dated as of October 29, 2014.” The settlement
agreement did not disturb the rights conveyed in the 2014
assignment agreement, but it also did not expressly incorporate
the assignment agreement, refer to the assignment agreement in
Paragraph 4, or set forth an additional remedy for conduct of the
parties that might breach or violate the assignment agreement.
Consideration of the entire agreement as a whole does not
support Mary Film’s argument that the agreement was intended
to delineate or further protect the Rafael Parties’ exclusive rights
to use the story ideas, themes, or concepts underlying the jointly
produced “Mary”/“Mary Mother of Christ” film. Read in context,
Paragraph 4’s provisions prohibiting the Aloe Parties from,
unilaterally and without the Rafael Parties’ consent, making “any
representation or warranty regarding or relating to the Picture to
any third party,” entering or attempting to enter “into any
contract, agreement or other arrangement regarding or relating
to the Picture,” or making “any statements to the press or
creat[ing] any other publicity regarding or relating to the
Picture,” appear to relate to the specific co-production, based on
the 2013 screenplay, not an amorphous set of intellectual
property rights.
Instead, Paragraph 4 is consistent with the rest of the
agreement’s clear purpose of terminating the relationship
between the parties and removing the Aloe Parties from any
further involvement in the previously jointly produced
“Mary”/“Mary Mother of Christ” film.
19
3. Extrinsic evidence
We further consider the parties’ extrinsic evidence to aid
our interpretation of the meaning of paragraph 4. (Epic
Communications, Inc. v. Richwave Technology, Inc. (2015) 237
Cal.App.4th 1342, 1354 [proper to consult extrinsic evidence to
determine parties’ intent when contractual language is
ambiguous].) “[C]ourts may consider extrinsic evidence insofar as
it sheds light on a meaning to which the contract is reasonably
susceptible.” (Hewlett-Packard, supra, 65 Cal.App.5th at p. 538.)
Extrinsic evidence must reflect on the parties’ objective, rather
than subjective, intent at the time of contracting. (Winet v. Price
(1992) 4 Cal.App.4th 1159, 1166 & fn. 3 [outward expressions of
assent, not undisclosed subjective intent, are relevant to
determining meaning of contract language].) Extrinsic evidence
may include evidence of the objective circumstances under which
the parties negotiated or entered into the contract or “the parties’
past practices and long-standing course of dealing.”4 (Hewlett-
Packard, at p. 545; Wolf v. Superior Court (2004) 114 Cal.App.4th
1343, 1356; see also Civ. Code, § 1647.)
The evidence does not render the contractual language
reasonably susceptible to Mary Film’s interpretation of
Paragraph 4 as prohibiting the Aloe Parties from using the story
ideas, themes, or concepts underlying the “Mary”/“Mary Mother
of Christ” film. Take, for example, the parties’ 2013 NDA. The
4 Most of the parties’ extrinsic evidence consists of articles,
press releases, legal opinions, and copyrights that, while
potentially germane to the issue of breach, are not relevant to
proving the parties’ objective intent at the time of entering the
settlement agreement.
20
agreement contained a “non-circumvention” provision in which
the parties agreed that neither would
“produce a competing project on the same biblical
subject matter during of [sic] their relationship other
than the project for which the due diligence is being
provided, during or after the term of this Agreement,
enter into any agreement, association or partnership
with the [sic] any party or other entity or individual
listed in the attached Exhibit A for the purpose of
developing any business opportunities, without the
express written permission of the disclosing party.”
The NDA’s non-circumvention clause indicates that in their
previous course of dealing, the parties knew how to express their
intention to broadly prohibit the production of films based on the
same general conceit as their co-production. Neither Paragraph 4
nor the remainder of the settlement agreement contains
comparable language. Instead, the parties specifically defined
the “Picture” as the “Mary”/“Mary Mother of Christ” film and the
“feature film project” and imposed constraints on the Aloe Parties
as to that limited definition.
Evidence of the parties’ negotiations also fails to support
Mary Film’s interpretation. In her declaration, Aloe stated that
“[a]t no point in the course of negotiating” did the Rafael Parties
request that the Aloe Parties agree not to produce a film based on
the same themes or story or request to extend the non-
circumvention provision in the NDA. Mary Film does not dispute
this fact.
Mary Film contends that broader language in the parties’
2014 co-production agreement and the 2014 assignment provide
“guidance” as to the meaning of “Picture” in the settlement
agreement. However, Mary Film fails to provide any basis to
21
conclude that the parties intended to incorporate the terms and
definitions in these prior contracts into the settlement
agreement.
The settlement agreement expressly defined “the Picture”
without reference to any terms used in the prior agreements.
The settlement agreement does not incorporate the co-production
or assignment agreement terms into the settlement agreement.
(See DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009)
176 Cal.App.4th 697, 713 [terms in extrinsic document may be
incorporated by reference in contract if, among other things,
“reference is clear and unequivocal” and the parties were aware
of and consented to the incorporation].) Indeed, the settlement
agreement specifically stated that it was the final expression of
the parties and “supersede[d]” the parties’ previous “various
agreements.” However, that the parties’ prior agreements
included more robust definitions confirms, as the NDA did, that
Mary Film was capable of articulating a more comprehensive
definition of the work product it sought to protect and chose not
to do so in the settlement agreement.
Accordingly, we conclude the language of Paragraph 4 is
not reasonably susceptible to the interpretation urged by Mary
Film as prohibiting the Aloe Parties from making a new film
based on similar ideas, themes, or concepts as the “Mary”/“Mary
Mother of Christ” film. Mary Film failed to show a probability of
prevailing on the breach of contract cause of action. (See Dore v.
Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 393 [in a dispute
over the meaning of contract language, if language is not
reasonably susceptible to interpretation urged, “ ‘the case is
over’ ”].)
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C. Breach of the implied covenant of good faith
and fair dealing
Mary Film’s second cause of action for breach of the implied
covenant of good faith and fair dealing alleges that by “producing
another film about Mary . . . which would compete with the Mary
Project,” the Aloe Parties violated the implied duty to refrain
from depriving Mary Film of the benefit of the settlement
agreement, “namely, to have sole control of the Mary Project, to
receive all income generated by” their production of the film
based on the Mary Project, “without interference or competition
from Defendants.”
“Although breach of a specific provision of the contract is
not a necessary prerequisite to a claim of breach of the implied
covenant, ‘[i]t is universally recognized the scope of conduct
prohibited by the covenant of good faith is circumscribed by the
purposes and express terms of the contract.’ ” (Avidity Partners,
LLC v. State of California (2013) 221 Cal.App.4th 1180, 1204,
quoting Carma Developers (Cal.), Inc. v. Marathon Development
California, Inc. (1992) 2 Cal.4th 342, 373.) “The implied covenant
prevents one side from unfairly frustrating the other’s right to
receive the benefits of the agreement actually made. [Citations.]
The covenant does not impose substantive terms beyond those of
the contract.” (Cordoba Corp. v. City of Industry (2023) 87
Cal.App.5th 145, 156.) “[T]he implied covenant is limited to
assuring compliance with the express terms of the contract, and
cannot be extended to create obligations not contemplated in the
contract.” (Racine & Laramie, Ltd. v. Department of Parks &
Recreation (1992) 11 Cal.App.4th 1026, 1032.)
Paragraph 4 of the settlement agreement did not prevent
the Aloe Parties from creating a competing film based on the
23
same subject, themes, and narrative as the Mary Project. Thus,
the settlement agreement did not entitle Mary Film to the right
to receive the benefit of noncompetition. In the absence of any
express contractual obligation to this effect in the settlement
agreement, Mary Film cannot maintain its cause of action based
on the implied covenant of good faith and fair dealing. (Waller v.
Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36 [absent a
contractual right, “the implied covenant has nothing upon which
to act as a supplement, and ‘should not be endowed with an
existence independent of its contractual underpinnings’ ”].)
We do not decide whether other agreements between the
parties may have contractually prohibited the Aloe Parties from
making a film similar to “Mary”/“Mary Mother of Christ,” or in
competition with a film by the Rafael Parties based on similar
themes or ideas. Further, we do not decide whether the Aloe
Parties’ alleged conduct may have formed the basis of a valid
statutory or tort claim. The sole issue before us is whether Mary
Film established a probability of prevailing on its complaint as
pled. The complaint alleged only claims based on Paragraph 4 of
the settlement agreement. Mary Film’s failure to establish a
probability of prevailing on those claims ends the analysis.
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DISPOSITION
The trial court’s order denying appellants’ special motion to
strike under section 425.16 is reversed and remanded with
directions to enter a new order granting the motion. Appellants
are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
ADAMS, P. J.
We concur:
HANASONO, J.
KARNOW, J.*
* Retired Judge of the San Francisco Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.
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