Court Opinion

ID: 3050059
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:29:45.155351+00
Date Added: 2024-06-11T12:06:01.815656
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

BEATRICE WELLES,                              No. 05-55742
               Plaintiff-Appellant,
                                                 D.C. No.
               v.
TURNER ENTERTAINMENT COMPANY;               CV-04-03077-JFW
                                              ORDER AND
ENTERTAINMENT ACQUISITION
                                               AMENDED
COMPANY, INC.,
                                                OPINION
            Defendants-Appellees.
                                         
        Appeal from the United States District Court
           for the Central District of California
         John F. Walter, District Judge, Presiding

                    Argued and Submitted
             April 16, 2007—Pasadena, California

                    Filed May 30, 2007
                 Amended September 11, 2007

Before: Jerome Farris and Ronald M. Gould, Circuit Judges,
         and Kevin Thomas Duffy,* District Judge.

                    Opinion by Judge Gould

  *The Honorable Kevin Thomas Duffy, Senior United States District
Judge for the Southern District of New York, sitting by designation.

                              12201
            WELLES v. TURNER ENTERTAINMENT CO.         12205

                        COUNSEL

Steven Ames Brown, San Francisco, California, for plaintiff-
appellant Beatrice Welles.

David W. Quinto, Daryl M. Crone, Quinn Emanuel Urquhart
Oliver & Hedges LLP, Los Angeles, California, for
defendants-appellees Turner Entertainment Co. and Entertain-
ment Acquisition Co.

                          ORDER

  The opinion filed May 30, 2007 is amended as follows:

  On page 6443 of the slip opinion, after the sentence “We
hold that the contract is ambiguous regarding which party
owns the right to exploit the Citizen Kane screenplay on home
video,” insert a footnote containing the following text:

    In so holding, we do not adopt a presumption against
    applying a grant of rights in “motion pictures” to
12206        WELLES v. TURNER ENTERTAINMENT CO.
    new technologies. Instead, we simply interpret the
    written contract of the parties in this case, as our pre-
    cedent instructs. See Maljack Prods., Inc. v. Good-
    Times Home Video Corp., 81 F.3d 881, 885 (9th Cir.
    1996); Cohen, 845 F.2d at 854; see also Boosey &
    Hawkes Music Publishers v. Walt Disney Co., 145
F.3d 481, 487 (2d Cir. 1998) (holding that “new-use
    analysis should rely on neutral principles of contract
    interpretation” and that “the language of the con-
    tract” governs). In some cases, a contract might per-
    mit the licensee to exploit the work in a new medium
    without a future technologies clause. For example, in
    Maljack Productions, we held that a licensee
    obtained the right to exploit certain music in a
    motion picture in a new medium when the license
    had no future technologies clause but granted the
    licensee “any and all worldwide rights under copy-
    right and otherwise . . . to the music and musical
    composition recorded or contained upon the sound
    track of the Picture.” 81 F.3d at 884-85 (alteration in
    original, internal quotation marks omitted). How-
    ever, in this case, the Production Agreement, in addi-
    tion to having no future technologies clause, granted
    RKO only motion picture and television rights in the
    Citizen Kane screenplay while granting Mercury
    broad, residual rights in the screenplay. It is thus not
    clear to us to whom the parties would have intended
    to grant the right to exploit the screenplay in new
    mediums.

  With these amendments, the petition for rehearing is
DENIED. No judge has requested a vote on the petition for
rehearing en banc. The petition for rehearing en banc is
DENIED. No further petitions will be entertained.
               WELLES v. TURNER ENTERTAINMENT CO.                   12207
                              OPINION

GOULD, Circuit Judge:

   Beatrice Welles, the daughter of screenwriter, filmmaker,
and actor Orson Welles, filed suit against Turner Entertain-
ment Co., Entertainment Acquisition Co., and other persons
not parties to this appeal (collectively, “the defendants”),
seeking a declaratory judgment that Beatrice Welles owns the
copyright and home video rights to the motion picture Citizen
Kane and seeking an accounting of the royalties she alleges
she is owed from the profits of the motion picture. The district
court granted summary judgment for the defendants. Because
there are triable issues of fact, we vacate in part and remand.

                                    I

  The district court disposed of this case by summary judg-
ment, so we consider the facts in the light most favorable to
Beatrice Welles. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1986).

                                    A

  Several separate contracts between Orson Welles, Mercury
Productions, Inc. (a production company owned by Orson
Welles), and RKO Radio Pictures, Inc. are integral to this case.1

   On July 22, 1939, Orson Welles, Mercury, and RKO signed
two agreements. The first agreement, between Mercury and
RKO (the “Production Agreement”), provided that “[RKO]
hereby engages [Mercury] to produce, direct and write the
screenplay for the two (2) motion pictures hereinafter
described, which are herein referred to as ‘the Pictures.’ ”
  1
   Beatrice Welles is the sole successor in interest to both Orson Welles
and Mercury. According to Beatrice Welles’s complaint, the defendants
are the successors to the rights of RKO with respect to the contracts rele-
vant to this appeal.
12208       WELLES v. TURNER ENTERTAINMENT CO.
  Section 13 of the Production Agreement determines who
owns the fruits of the RKO-Mercury Production Agreement.
That section begins:

    [RKO] shall own the negative and positive prints of
    each of the Pictures and all rights of every kind and
    nature in and to each Picture, and all parts thereof
    and all material, tangible and intangible, used
    therein, as soon as such rights come into existence,
    including, but not being limited to, the exclusive
    rights of distribution, exploitation, manufacture,
    recordation, broadcasting, televising (other than in
    connection with the advertising or exploitation of a
    commercial product or service), and reproduction by
    any art or method, and the literary, dramatic, musical
    and other works included in such Picture. . . . [Mer-
    cury] agrees that it will have no interest of any kind
    in either of the Pictures, except as in this agreement
    expressly provided.

  Section 13 concludes with what the parties call the “origi-
nal story” provision. The provision states:

    In case of any original story written by [Mercury] or
    any of its employees and used as the basis of either
    Picture, however, [RKO] shall acquire the motion
    picture and television rights in such story for such
    Picture only. [RKO] shall not remake any such Pic-
    ture unless [Mercury] produces or directs the same
    or unless [RKO] buys the remake rights from [Mer-
    cury] at a price satisfactory to both parties. [Mer-
    cury] shall own the publication, radio, dramatic and
    other rights in any such story but shall not use the
    same in any way to compete with or injure the distri-
    bution of the Picture based on such story.

  The second agreement entered into on July 22, 1939,
between Orson Welles and RKO (the “Actor Agreement”),
            WELLES v. TURNER ENTERTAINMENT CO.           12209
provided that Orson Welles would play the leading male role
in the two motion pictures produced pursuant to the Produc-
tion Agreement and that Orson Welles would receive com-
pensation of $30,000 plus a percentage of the net profits of
the two motion pictures.

   On December 26, 1939, Orson Welles and RKO amended
the Actor Agreement by providing that Orson Welles would
act in a third film in addition to the two pictures already
agreed upon. On January 14, 1941, Mercury and RKO entered
into another supplemental agreement, providing that the first
motion picture Orson Welles and Mercury would make for
RKO would be “based upon an original story, tentatively enti-
tled ‘Citizen Kane.’ ”

   RKO released Citizen Kane on May 1, 1941. By December
15, 1944, Citizen Kane had not turned a profit, the second
film produced under the Production Agreement, entitled It’s
All True, was not finished, and production had not com-
menced on the third film described in the supplemental agree-
ment. To end their business relationship, Mercury, Orson
Welles, and RKO entered into an agreement that terminated
the Production and Actor Agreements and their amendments
(the “Exit Agreement”).

   Signed on December 15, 1944, the Exit Agreement first
outlined the prior agreements between the parties. It then
stated:

    All fixed compensation payable to Mercury or
    Welles for services in connection with the first two
    motion pictures has been paid in full. Welles under
    the agreements of the parties is entitled, as contin-
    gent compensation, to twenty per cent (20%) of the
    net profits of the first two pictures as a unit. No net
    profits resulted from the sale and distribution of the
    first picture produced under the title “CITIZEN
12210          WELLES v. TURNER ENTERTAINMENT CO.
      KANE”, and accordingly Welles is entitled to no
      contingent compensation.

      It is now the mutual desire of the parties to terminate
      and cancel each and all of the existing agreements
      between [RKO] and Mercury and between [RKO]
      and Welles, and to mutually release and discharge
      each party to each of said agreements from all rights,
      duties, liabilities and obligations thereunder and
      from all claims, demands and causes of action of
      every kind and nature of each party as against the
      other party.

The Exit Agreement also gave Orson Welles the option to
purchase from RKO for $200,000 all of the film recorded for
It’s All True.

                                   B

   Beatrice Welles’s complaint in this case asserted four
claims. The first claim, seeking declaratory relief, alleged that
the Exit Agreement restored to Orson Welles the copyright to
the Citizen Kane2 motion picture and that, even if the Exit
Agreement did not restore all of Orson Welles’s rights to Citi-
zen Kane, the Production Agreement did not provide the
defendants with the right to reproduce and distribute Citizen
Kane on home video. The second claim, also seeking declara-
tory relief, asserted that the Exit Agreement only extinguished
Orson Welles’s past claims against the defendants and did not
extinguish Orson Welles’s right to collect 20% of the profits
from Citizen Kane in the future, and, alternatively, that the
  2
   In the district court, Beatrice Welles claimed ownership of three of
Orson Welles’s motion pictures: Citizen Kane, Journey Into Fear, and The
Magnificent Ambersons. The summary judgment and this appeal, how-
ever, deal only with Beatrice Welles’s claims against Turner Entertain-
ment Co. and Entertainment Acquisition Co. relating to Citizen Kane.
Beatrice Welles settled all of her other claims against all of the other
defendants.
             WELLES v. TURNER ENTERTAINMENT CO.           12211
parties subsequently entered into a new agreement to share
the income from Citizen Kane. The third and fourth claims
sought damages for breach of contract and unfair business
practices, respectively.

   On December 6, 2004, the district court granted the defen-
dants’ motion for summary judgment on Beatrice Welles’s
first, second, and fourth claims, and for partial summary judg-
ment on the third claim. On appeal, Beatrice Welles only
argues that the district court erred in granting summary judg-
ment on her first claim—seeking a declaratory judgment that
she owns the copyright and home video rights to the motion
picture Citizen Kane—and on her second claim—seeking an
accounting.

                               II

   We review de novo the district court’s decision to grant
summary judgment. Olympic Pipe Line Co. v. City of Seattle,
437 F.3d 872, 877 n.11 (9th Cir. 2006). Summary judgment
is appropriate when there are no genuine issues of material
fact and the moving party is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(c). As noted above, in reviewing
a motion for summary judgment, we view the evidence in the
light most favorable to the non-moving party and draw all jus-
tifiable inferences in favor of that party. Anderson, 477 U.S.
at 255.

                              III

   Beatrice Welles first argues that there is a genuine issue of
material fact about who owns the right to distribute Citizen
Kane on home video. Before we address the merits of that
argument, we must first decide whether Beatrice Welles’s
claim of copyright ownership is barred by the statute of limi-
tations.

   [1] A claim for copyright ownership is barred three years
from the “plain and express repudiation” of copyright owner-
12212        WELLES v. TURNER ENTERTAINMENT CO.
ship. Aalmuhammed v. Lee, 202 F.3d 1227, 1231 (9th Cir.
2000); see 17 U.S.C. § 507(b) (“No civil action shall be main-
tained under the provisions of this title unless it is commenced
within three years after the claim accrued.”). The defendants
argue (and the district court agreed) that because Beatrice
Welles knew since 1991 that the defendants were releasing a
home video version of Citizen Kane, her complaint, which she
filed in 2003 and in which she seeks a declaration that she
owns the home video rights to Citizen Kane, is time barred.

   [2] However, the defendants point to no evidence that,
before this litigation commenced, they plainly and expressly
repudiated Beatrice Welles’s claim to ownership of the home
video rights to Citizen Kane. The evidence the defendants cite
as notice that they were exploiting home video rights in Citi-
zen Kane is correspondence between the attorneys for the
Estate of Orson Welles and the defendants regarding the
inclusion of the Citizen Kane screenplay in a “home video
collector’s edition gift set.” While this might have informed
Beatrice Welles that the defendants were distributing Citizen
Kane on home video, it is not the plain and express repudia-
tion of copyright ownership that our case law requires for the
statute of limitations on a copyright ownership claim to begin
running. See Zuill v. Shanahan, 80 F.3d 1366, 1369 (9th Cir.
1996) (explaining that claims of copyright co-ownership “ac-
crue when plain and express repudiation of co-ownership is
communicated to the claimant”). Beatrice Welles’s claim is
not time barred.

   We next turn to the merits of Beatrice Welles’s claim that
she owns the copyright to Citizen Kane on home video. Her
complaint sought a declaration that she “alone owns all publi-
cation, radio, dramatic, home video and other rights in the
story of Citizen Kane” and “that Mercury did not grant to
RKO any right to exploit through home video devices sold to
the public, the story of Citizen Kane as expressed in the
screenplay and as embodied in the motion picture produced
by Mercury of the same name.” Citizen Kane was an “original
             WELLES v. TURNER ENTERTAINMENT CO.            12213
story” written by Mercury. Thus, whether RKO or Beatrice
Welles owns the home video rights to Citizen Kane turns on
an interpretation of Section 13 of the Production Agreement.

   [3] Because the Production Agreement contains a New
York choice of law provision, we apply New York’s princi-
ples of contract interpretation in deciding this issue. While our
task in a contract case is usually to give effect to terms of the
contract as the parties understood them, see Cromwell Towers
Redevelopment Co. v. City of Yonkers, 359 N.E.2d 333, 337
(N.Y. 1976); Hartford Accident & Indem. Co. v. Wesolowski,
305 N.E.2d 907, 909 (N.Y. 1973); Hopkins v. Conn. Gen. Life
Ins. Co., 121 N.E. 465, 466 (N.Y. 1918), in this case it is
unlikely that, in 1939, Mercury or RKO gave any thought to
who would own the home video rights to Citizen Kane. In
such a case, we look for the meaning that reasonable persons
in the positions of the parties would have attached had they
thought about the matter. See E. Allen Farnsworth, Contracts
465-66 (3d ed. 1999). As one New York court has explained:

    [F]aced with what may be . . . a failure to anticipate
    the future situation which arose, a court is faced not
    so much with the function of interpreting language
    as the parties intended, for their intention was
    incomplete, but of construing the language to accord
    with what would have been the intention and the
    honorable agreement of the parties if their attention
    had been drawn to the possible events as they actu-
    ally were to occur.

Herbert Rosenthal Jewelry Corp. v. St. Paul Fire & Marine
Ins. Co., 249 N.Y.S.2d 208, 214 (N.Y. App. Div. 1st Dep’t
1964); see also Empire Props. Corp. v. Mfrs. Trust Co., 43
N.E.2d 25, 28 (N.Y. 1942) (“The intention of the parties must
be sought for in the language used. To understand the lan-
guage, we may put ourselves in their place and discern if pos-
sible the objects they had in view, and the motives which
12214        WELLES v. TURNER ENTERTAINMENT CO.
dictated their choice of words. A wider meaning may thereby
be disclosed.” (internal quotation omitted)).

   In interpreting the Production Agreement, we first deter-
mine whether its language is ambiguous or reasonably suscep-
tible to more than one interpretation. If the language is
unambiguous, we give effect to its plain meaning. Nichols v.
Nichols, 119 N.E.2d 351, 353 (N.Y. 1954). If the language is
ambiguous, or susceptible to more than one reasonable inter-
pretation, we may consider extrinsic evidence in interpreting
the agreement. Hartford Accident & Indem. Co., 305 N.E.2d
at 909. The interpretation of a contract is a question of law
that we may decide unless the interpretation depends on the
credibility of extrinsic evidence, in which case the interpreta-
tion of the contract is the task of the factfinder. Mallad
Constr. Corp. v. County Fed. Savs. & Loan Ass’n, 298 N.E.2d
96, 99-100 (N.Y. 1973).

   [4] To display publicly or distribute Citizen Kane, the
defendants need two rights: First, the defendants need the
right to display the motion picture. Second, because a motion
picture is derived from its underlying screenplay, the defen-
dants need the right to exploit the screenplay.

   [5] In this case, the first paragraph of Section 13 deals with
the first right the defendants need to distribute Citizen Kane
on home video—the right to display the motion picture. Sec-
tion 13 gives RKO “all rights of every kind and nature . . .
including, but not being limited to, the exclusive rights of dis-
tribution, exploitation, manufacture, recordation . . . and
reproduction by any art or method” in the motion pictures
produced under the Production Agreement. This tells us that,
as a general matter, the defendants, as successors to RKO,
have the right to exploit in any manner the motion pictures
produced pursuant to the Production Agreement, including
Citizen Kane.

  [6] However, to distribute Citizen Kane on home video, the
defendants still need the right to exploit the screenplay from
             WELLES v. TURNER ENTERTAINMENT CO.          12215
which the Citizen Kane motion picture was derived. The orig-
inal story provision deals with this issue. As noted above, the
provision states that Mercury retained the rights to any
screenplay written by Mercury or its employees. So, in order
to allow RKO to display motion pictures derived from those
screenplays, the Production Agreement provided RKO with
certain rights in the “original stories” on which those motion
pictures were based. Specifically, RKO acquired “the motion
picture and television rights in such stor[ies] for such Pic-
ture[s] only,” and Mercury reserved ownership of “the publi-
cation, radio, dramatic and other rights” in those original
stories.

   [7] Thus, the question before us is whether the defendants’
“motion picture and television” rights in the Citizen Kane
screenplay encompass the right to distribute the Citizen Kane
screenplay on home video. On one hand, a reasonable argu-
ment can be made that distributing a motion picture on home
video is simply an exploitation of the defendants’ “motion
picture” rights in the Citizen Kane screenplay. On the other
hand, such a broad interpretation would render the additional
grant of “television rights” to the defendants superfluous
because if “motion picture” rights encompassed home video
rights, “motion picture” rights could also be argued to encom-
pass the right to display Citizen Kane on television. Thus, it
seems to us unclear whether the parties would have intended
RKO’s motion picture and television rights in the Citizen
Kane screenplay to include the right to exploit the Citizen
Kane screenplay in home video form.

   We dealt with a similar situation in Cohen v. Paramount
Pictures Corp., 845 F.2d 851 (9th Cir. 1998). In that case, in
1969, a composer granted a license to the producer of a
motion picture to use the composer’s copyrighted music “for:
(a) The exhibition of said motion picture . . . to audiences in
motion picture theatres and other places of public entertain-
ment where motion pictures are customarily exhibited” and
“(b) The exhibition of said motion picture . . . by means of
12216         WELLES v. TURNER ENTERTAINMENT CO.
television . . . , including ‘pay television’, ‘subscription televi-
sion’ and ‘closed circuit into homes’ television.” Id. at 853
(alterations in original, internal quotation omitted). The
license reserved to the composer “all rights and uses in and
to said musical composition, except those herein granted to
the Licensee.” Id. The district court had granted summary
judgment to the producer, concluding that the licence’s grant
of the right to exhibit the picture “by means of television”
included the right to distribute the picture on home video, but
we reversed. Id. at 855. We emphasized that “VCRs for home
use were not invented or known in 1969, when the license
was executed” and noted the dissimilarities between display
of a motion picture on television and distribution of a motion
picture on home video, and we also pointed out that the
license did not directly address which party owned the right
to exploit music in media that had not yet been invented. Id.
at 854.

   [8] This case is similar to Cohen. Home video was not
invented when the parties signed the Production Agreement in
1939, the right to distribute Citizen Kane on home video is
quite different from the right to display Citizen Kane on tele-
vision, and the Production Agreement does not specify who
owns the right to exploit original story screenplays in media
that had not been invented in 1939. Perhaps most importantly,
the rights RKO acquired by license in the Citizen Kane
screenplay were quite narrow, encompassing only motion pic-
ture and television rights, just as the producer in Cohen
obtained the right to use the composer’s music only in the-
aters and on television. Mercury, on the other hand, retained
broad rights in the screenplay: publication, radio, and residual
“other rights,” just as the composer in Cohen retained “all
rights” not granted to the producer. Had Mercury granted
RKO sweeping rights in the screenplay and only retained
minimal rights for itself, we might be able to distinguish
Cohen and conclude that, had RKO and Mercury thought
about the matter of home video rights, they would have vested
those rights in RKO. But, in light of the narrow scope of
                WELLES v. TURNER ENTERTAINMENT CO.                   12217
rights granted to RKO and the broad reservation of rights by
Mercury, we cannot conclude with certainty that the parties
would have given RKO home video rights had they contem-
plated the issue. We hold that the contract is ambiguous
regarding which party owns the right to exploit the Citizen
Kane screenplay on home video.3

   Because we cannot discern, from the Production Agree-
ment alone, what the parties in this case would have agreed
upon had they known that some day Citizen Kane would be
distributed on home video, we turn to extrinsic evidence to
aid our interpretation of the contract. See Hartford Accident
& Indem. Co., 305 N.E.2d at 909.

   [9] Beatrice Welles offers an expert declaration stating that

      [a]s of 1939, the term ‘motion picture and television
      rights’ was a term of art used in motion picture con-
  3
    In so holding, we do not adopt a presumption against applying a grant
of rights in “motion pictures” to new technologies. Instead, we simply
interpret the written contract of the parties in this case, as our precedent
instructs. See Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81
F.3d 881, 885 (9th Cir. 1996); Cohen, 845 F.2d at 854; see also Boosey
& Hawkes Music Publishers v. Walt Disney Co., 145 F.3d 481, 487 (2d
Cir. 1998) (holding that “new-use analysis should rely on neutral princi-
ples of contract interpretation” and that “the language of the contract”
governs). In some cases, a contract might permit the licensee to exploit the
work in a new medium without a future technologies clause. For example,
in Maljack Productions, we held that a licensee obtained the right to
exploit certain music in a motion picture in a new medium when the
license had no future technologies clause but granted the licensee “any and
all worldwide rights under copyright and otherwise . . . to the music and
musical composition recorded or contained upon the sound track of the
Picture.” 81 F.3d at 884-85 (alteration in original, internal quotation marks
omitted). However, in this case, the Production Agreement, in addition to
having no future technologies clause, granted RKO only motion picture
and television rights in the Citizen Kane screenplay while granting Mer-
cury broad, residual rights in the screenplay. It is thus not clear to us to
whom the parties would have intended to grant the right to exploit the
screenplay in new mediums.
12218          WELLES v. TURNER ENTERTAINMENT CO.
      tracts. At that time this term meant the exhibition of
      a motion picture in theatres and contemplated broad-
      cast by television, although at that time television
      was not yet a viable commercial market. In 1939 the
      use of the term ‘motion picture and television rights’
      did not include a grant of the right to make copies of
      a motion picture, embody such copies in home video
      devices, and to sell such copies to the public.

We cannot judge the credibility of this declaration on an
appeal of summary judgment. See Mallad Constr. Corp., 298
N.E.2d at 99. Because there is a genuine issue of fact about
whether the parties intended the Production Agreement’s
grant of “motion picture and television rights” to RKO to
allow RKO and its successors to distribute Citizen Kane on
home video, and because the contract’s interpretation may
turn on the credibility of extrinsic evidence, we vacate the dis-
trict court’s summary judgment on Beatrice Welles’s claim
for a declaration of home video rights and remand for further
proceedings.4

                                    IV

   Beatrice Welles next argues that the Exit Agreement, which
“cancelled and terminated” the Production Agreement,
returned the Citizen Kane motion picture copyright to Mer-
cury. In other words, Beatrice Welles argues that the Exit
Agreement rescinded the Production Agreement.

 [10] Before addressing the merits of this argument, we
must first confront a choice-of-law issue raised by the parties.
  4
    Beatrice Welles has requested that we take judicial notice of a certifi-
cate of recordation filed with the United States Copyright Office. The cer-
tificate indicates that Entertainment Acquisition Co. quitclaimed to
Beatrice Welles any interest it had in the Citizen Kane screenplay.
Because we remand this case to the district court to determine as a factual
matter, who owns the right to exploit the Citizen Kane screenplay on home
video, we DENY the request.
             WELLES v. TURNER ENTERTAINMENT CO.           12219
Unlike the Production Agreement, which contains a New
York choice-of-law clause, the Exit Agreement has no choice-
of-law provision. Beatrice Welles argues that we should apply
New York law to interpret the Exit Agreement; the defendants
encourage us to apply California law.

   [11] As a federal court exercising diversity jurisdiction, we
apply California’s choice-of-law principles to determine the
body of substantive law that applies to our interpretation of
the Exit Agreement. See Klaxon Co. v. Stentor Elec. Mfg. Co.,
313 U.S. 487, 496 (1941). Absent an express choice of appli-
cable law by the parties, “[a] contract is to be interpreted
according to the law and usage of the place where it is to be
performed; or, if it does not indicate a place of performance,
according to the law and usage of the place where it is made.”
Cal. Civ. Code § 1646. When the contract does not expressly
specify a place of performance, as is the case with the Exit
Agreement, the place of performance is the jurisdiction in
which the circumstances indicate the parties expected or
intended the contract to be performed. Burr v. W. States Life
Ins. Co., 296 P. 273, 275 (Cal. 1931). The Exit Agreement
concerned the rights in motion pictures made by Orson
Welles and Mercury at RKO’s studio in California. We apply
California law.

   [12] As noted above, the Exit Agreement stated that it was
“the mutual desire of the parties to terminate and cancel” their
prior agreements. Beatrice Welles argues that this language
rescinded the parties’ prior agreements and thus returned any
right Orson Welles and Mercury had in the Citizen Kane
motion picture to them. However, under California law, it
seems that “terminate” and “cancel” mean something differ-
ent from “rescind”:

    The words ‘terminate,’ ‘revoke’ and ‘cancel,’ . . . all
    have the same meaning, namely, the abrogation of so
    much of the contract as might remain executory at
    the time notice is given, and must be sharply distin-
12220        WELLES v. TURNER ENTERTAINMENT CO.
    guished from the word ‘rescind,’ . . . which conveys
    a retroactive effect, meaning to restore the parties to
    their former position.

Grant v. Aerodraulics Co., 204 P.2d 683, 686 (Cal. Dist. Ct.
App. 1949). Thus, under California law, the Exit Agreement
prospectively terminated and cancelled Orson Welles’s right
to royalties, but did not retroactively rescind RKO’s copyright
in the Citizen Kane motion picture unless RKO’s copyright
remained executory at the time of the Exit Agreement.

   Beatrice Welles points to language in the Exit Agreement
providing that the parties “mutually release and discharge
each party to each of said agreements from all rights, duties,
liabilities and obligations thereunder.” Beatrice Welles argues
that, pursuant to this provision, RKO “released” its “right” to
the Citizen Kane motion picture. Because Beatrice Welles
does not offer any extrinsic evidence in support of her favored
interpretation, the contract’s interpretation is a question of law
that can be decided by this court. See LaCount v. Henzel
Phelps Constr. Co., 79 Cal. App. 3d 754, 770 (Cal. Ct. App.
1978).

   [13] As noted above, under California law, a termination or
cancellation of a contract abrogates only executory rights held
under the terminated and cancelled contract. In this case,
RKO owned the Citizen Kane motion picture copyright as
soon as the motion picture was created. The Production
Agreement states that RKO “shall own the negative and posi-
tive prints of each of the Pictures and all rights of every kind
and nature in and to each Picture . . . as soon as such rights
come into existence.” RKO, not Orson Welles or Mercury,
initially registered the copyright to the Citizen Kane motion
picture. Under the parties’ agreements, RKO had always
owned the motion picture copyright, and it had no executory
right in the motion picture to release at the time the parties
signed the Exit Agreement.
             WELLES v. TURNER ENTERTAINMENT CO.           12221
   [14] As a further argument that the Exit Agreement retroac-
tively rescinded the copyright RKO owned pursuant to the
Production Agreement, Beatrice Welles cites cases holding
that a second contract between the same parties “completely
covering the same subject matter . . . so that the two [con-
tracts] cannot stand together” rescinds the prior contract. See
Harrison W. Corp. v. United States, 792 F.2d 1391, 1393 (9th
Cir. 1986); Housekeeper Publ’g Co. v. Swift, 97 F. 290, 294
(8th Cir. 1899). However, that doctrine only applies when the
two contracts seek the same performance on different terms
and, hence, the contracts “cannot stand together.” See Harri-
son, 792 F.2d at 1393 (holding that a second contract to com-
plete an irrigation project rescinded the original contract to
construct the project); Housekeeper, 97 F. at 294 (resolving
conflict between “two contracts between the same parties for
the sale of the same property”). Here, the two contracts are
not in irreconcilable conflict. Rather, the second contract sim-
ply and explicitly cancels and terminates the first.

   [15] The district court properly granted summary judgment
to the defendants on the issue of ownership of the copyright
to the Citizen Kane motion picture.

                               V

   [16] Beatrice Welles also seeks an accounting for the com-
pensation she alleges she is entitled to under the Actor Agree-
ment signed by Orson Welles. The Actor Agreement provided
Orson Welles compensation of $30,000 plus 20% of the net
profits of Citizen Kane. In 1944, the parties signed the Exit
Agreement, which noted that Orson Welles was not entitled
to any contingent compensation and further stated the parties’
desire to terminate and cancel all of their existing agreements,
including the Actor Agreement. The parties do not dispute on
appeal that this language from the Exit Agreement prospec-
tively ended Orson Welles’s right to contingent compensation
under the Actor Agreement.
12222        WELLES v. TURNER ENTERTAINMENT CO.
   Beatrice Welles, however, argues that there is conflicting
evidence about whether Orson Welles and RKO entered into
another agreement, after the Exit Agreement, to share the
profits of Citizen Kane. Beatrice Welles notes that, after 1944,
RKO and Orson Welles jointly contracted to license the publi-
cation rights to the Citizen Kane screenplay to Bantam Books,
Inc. Beatrice Welles also points out that, in 1989, the defen-
dants licensed the stage rights to the Citizen Kane screenplay
to Fifth Avenue Productions, Inc. Beatrice Welles argues that
the defendants’ right to license the Citizen Kane screenplay is
evidence of a quid pro quo—that is, in exchange for the right
to license the screenplay, Beatrice Welles urges us to infer
that the defendants granted Orson Welles the right to share in
the profits of Citizen Kane in some as-yet-unidentified agree-
ment. Because this is a “justifiable inference[ ],” we make it
on summary judgment. Anderson, 477 U.S. at 255. This infer-
ence is supported by the fact that Orson Welles’s name
appears on RKO’s post-1944 schedules of persons who had
royalty rights in Citizen Kane.

   The defendants argue that the “hypothesized” existence of
a post-1944 agreement is irrelevant because Beatrice Welles’s
second amended complaint only sought a declaration that she
was entitled to profit participation under the Actor Agree-
ment. However, the second amended complaint alleges that
“the parties subsequently [i.e., after 1944] entered into a new
agreement to share their rights and income.” Beatrice Welles
thus adequately pled her claim for an accounting.

   [17] The defendants also point out that the post-1944 con-
duct of the parties indicates that Orson Welles had no profit
interest in Citizen Kane. Specifically, the defendants point out
that Orson Welles’s attorneys had twice written RKO asking
for an accounting of the profits generated by Citizen Kane,
and RKO had twice told Orson Welles’s attorneys that the
Actor Agreement had been terminated. On the first occasion,
Orson Welles’s attorney responded by stating that he had
overlooked the Exit Agreement and that his inquiry was
             WELLES v. TURNER ENTERTAINMENT CO.           12223
“completely answered,” and, on the second occasion, Orson
Welles’s attorney did not respond. While this is evidence that
Orson Welles had no profit interest in Citizen Kane at the
time those letters were exchanged, it is not conclusive evi-
dence that Orson Welles never had a post-1944 profit interest,
and must be weighed by the trier of fact against all other rele-
vant evidence in assessing whether there was a subsequent
agreement to share the profits of Citizen Kane.

   [18] We vacate the district court’s summary judgment on
Beatrice Welles’s claim for profit participation and remand
the claim for further proceedings. Each party shall bear its
own costs on appeal.

 AFFIRMED IN PART, VACATED IN PART, AND
REMANDED.