## Facts

- Raquel Welch agreed to star in the film *Cannery Row* through Raquel Welch Productions, Inc. (RWP), and evidence showed Welch signed the agreement both individually and as RWP’s president.
- After disputes during production, MGM terminated Welch and replaced her with another actress.
- Welch contended MGM’s stated reasons for firing her (e.g., performance and professionalism-related assertions) were false and used to justify termination.
- MGM’s president, David Begelman, made public statements about Welch’s conduct and performance, including comments published in *Rolling Stone*.
- Welch and RWP sued MGM, related successor entities, and individuals including Begelman and producer Michael Phillips.
- A jury found defendants liable for breach of contract, conspiracy to induce breach of contract, slander, and breach of the implied covenant of good faith and fair dealing, awarding $2 million compensatory damages and more than $8 million punitive damages.
- The trial court granted summary judgment for defendants on an intentional infliction of emotional distress claim; Welch later abandoned any appellate challenge to that ruling.

## Issues

1. Whether Welch, as an individual, had standing to pursue conspiracy and implied-covenant claims if the contract was assertedly between MGM and RWP.
2. Whether MGM and its producer could be found to have conspired to induce breach of MGM’s own contract, including whether the producer’s conduct was privileged as a corporate agent.
3. Whether the trial court properly permitted amendment at the close of Welch’s case to add a “bad faith” implied-covenant claim, and whether tort recovery was available on that theory.
4. Whether substantial evidence supported the verdicts for conspiracy, slander, and bad-faith breach of the implied covenant.
5. Whether defendants were entitled to reversal based on alleged attorney misconduct in closing argument.
6. Whether MGM’s successor corporations could be held liable for MGM’s wrongful acts.
7. Whether compensatory and punitive damages were excessive, duplicative, or otherwise legally erroneous.

## Decision

- The court affirmed the judgment in all material respects.
- It held Welch had standing because she was a contracting party, having executed the agreement both individually and as president of RWP.
- It upheld the conspiracy verdict, concluding the evidence permitted a finding that the producer acted with mixed motives, not solely to further MGM’s interests.
- It affirmed liability for breach of the implied covenant of good faith and fair dealing and held the trial court acted within its discretion by allowing amendment to conform to proof.
- It declined to apply later limits on tort remedies for implied-covenant breach retroactively to this case.
- It upheld the slander verdict, treating the public statements as factual assertions about contractual performance rather than protected opinion, and finding sufficient evidence of falsity and harm.
- It rejected claims of reversible attorney misconduct, upheld successor liability, and sustained the compensatory and punitive damage awards as supported by the record.

## Legal Principles

- A performer may have standing to sue on contract-related tort theories when the evidence shows the performer was an individual party to the contract, even if a production company also signed.
- A corporation may be liable for conspiracy to induce breach of its own contract when it conspires with a third party, including an agent whose conduct is shown to be driven by mixed motives and personal interests rather than solely the corporation’s interests.
- Trial courts have discretion to permit amendments to conform to proof; appellate courts will not reverse absent a showing of prejudicial abuse of discretion.
- Statements presented publicly as verifiable facts about a person’s contractual performance may support defamation liability when found false; labeling a statement as evaluative does not immunize implied factual assertions.
- Punitive damages may be upheld where the evidence supports findings of intentional or malicious wrongdoing, and appellate review gives weight to the jury’s determinations and the trial court’s refusal to disturb the award.
- Successor entities may be held responsible for predecessor wrongdoing under applicable corporate-successor rules when the evidentiary and legal requirements are satisfied.

## Conclusion

The court sustained a jury verdict awarding substantial compensatory and punitive damages to Welch and her production company for wrongful termination-related conduct, including breach of contract, conspiracy, and slander, holding that Welch had standing as a contracting party, that mixed-motive agent conduct could support conspiracy liability, and that public statements implying false factual claims about contractual performance could be actionable defamation.


Welch v. Metro-Goldwyn-Mayer Film Co., 254 Cal. Rptr. 645 (Cal. Ct. App. 1988)