Warner Bros Wins Arbitration With ‘Conjuring’ Producer

EXCLUSIVE: Sometimes the legal process, like the Lord, works in mysterious ways. Let’s take the case, or cases as it has sometimes been, of Tony DeRosa-Grund and Warner Bros. The extremely litigious producer of The Conjuring has filed lawsuit after lawsuit alleging he is owed money and rights and sometimes more from the 2013 highly successful horror movie and the franchise it has spawned. Today, I’ve learned that DeRosa-Grund has come up very short in his supposedly confidential arbitration with WB and New Line. In fact, the producer has been denied millions in the potential profit participation and fees he sought.

“The arbitrator ruled that because of Plaintiffs’ trademark filings, MPAA registrations, and lack of affording New Line’s right of first negotiation/last refusal, Plaintiffs were to be denied any and all profit participations they were due for the Project (which are now in excess of $3 million) as these were breaches of the agreements,” said the malpractice and fraudulent-concealment complaint (read it here) that the producer filed in yesterday LA Superior Court against his own former attorneys at the LA offices of the very well established Stroock & Stroock & Lavan LLP. “Not only have Plaintiffs suffered the loss of their profit participations because of Defendants’ counsel, Plaintiffs are now in the position of owing damages in excess of $200,000 as part of the arbitration award against them,” the 18-page complaint adds. The February 5 filing also laments that the arbitrator’s partial ruling deprives DeRosa-Grund of seeking any producer credit or payment from New Line on any Conjuring-related pics the studio might release.

Needless to say, Warner Bros and New Line aren’t complaining about the outcome, though they might have preferred to keep it all private as it was supposed to be. “We are very pleased that the arbitrator has affirmed our exclusive rights in The Conjuring property and name, including the right to continue producing sequels to our hit horror film series,” said a spokesman when I contacted the studio today regarding the matter. The arbitration was concluded in mid-January, according to this week’s filing. And, after having to deal with this for almost a year, there certainly must have been a happy dance over in Burbank when the ruling was made.

Long story short — having lost his action against WB and New Line, DeRosa-Grund now is going after Stroock & Stroock & Lavan LLP and lawyers John Gatti and David McGriff over the way they handled his business, or rather what was his business. And there is or was a lot of business to be had. Not only did The Conjuring make more than $318 million globally, but the successful Annabelle spinoff was released in October, and an official sequel called The Conjuring: The Enfield Poltergeist is set to hit the big screen on June 10, 2016.

This particular case arises from when DeRosa-Grund and his Evergreen Media sued WB Entertainment and New Line Productions March 2014 and then again in April for “millions of dollars” in a breach-of-contract suit. The producer also was seeking to battle it out over who owned the rights to sequels to The Conjuring. In October, a federal judge in Texas dismissed the case and put the parties in arbitration.

As for Stroock & Stroock & Lavan and their attorneys Gatti and McGriff — well, DeRosa-Grund is saying their actions and alleged mishandling of his affairs cost him big bucks, and he’s seeking actual and exemplary damages. The producer says he’s out up to $20 million in profit participation from the Conjuring franchise, credits valued at $6 million, trademarks valued at $5 million and $1 million in legal fees to new lawyers.

DeRosa-Grund’s current attorneys are David Lake of the Encino-based Law Offices of David N. Lake and Sandford L. Dow of Houston, Texas.