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Happy Days Lawsuit

By Scott Zamost

(CNN) — A Hollywood showdown over merchandising payments between some cast members of the hit television show “Happy Days” and CBS has ended with a settlement in which the actors will receive an undisclosed amount of money.

The settlement was reached with CBS, which owns the show, and Paramount Pictures, which produced the show when it was on the air and is now part of CBS. There were no details about the amount the actors will receive for merchandise they claimed they were owed under their contracts.

Jon Pfeiffer, the attorney for the actors, said in a statement, “We have settled our lawsuit with CBS and Paramount. The terms of the settlement are confidential, but we are satisfied with the outcome. We will continue to receive all of the merchandising royalties promised to us in our contracts.”

The case had been scheduled to go on trial on July 17 in Los Angeles.

The settlement followed a ruling in June by Los Angeles Superior Court Judge Elizabeth Allen that the actors may be entitled to revenues from the sale of DVDs with their images on them.

“I’m very satisfied with the settlement. And that’s all I can say,” cast member Anson Williams, who played “Potsie,” told CNN.

A CBS spokesperson said the network has “never refused to pay the members of the ‘Happy Days’ cast any of the money they are owed under their contracts, and we’ll continue to honor those obligations.”

When the lawsuit was filed in April 2011, CBS had said it agreed “that funds are owed to the actors and have been working with them for quite some time to resolve the issue.”

Four members of the cast, Williams, Marion Ross, Don Most, and Erin Moran, along with the widow of Tom Bosley, sued CBS, claiming they have not been been paid what they’re owed for the worldwide sale of “Happy Days” merchandise. The series was on the air from 1974 to 1984. Bosley died in 2010.

Under their contracts, the actors were supposed to receive 5% of net proceeds, or 2.5% if their images were used in a group, the lawsuit states.

The lawsuit originally asked for $10 million.

Of the cast members, Moran stands to benefit most from the settlement. She has been the subject of tabloid reports that she and her husband have been living in a trailer in Indiana since losing her home to foreclosure in California. While Most, Williams and Ross continue to act or direct, acting work dried up for Moran, who did not return a call from CNN.

In interviews with CNN last year, the actors claimed they were cut out of the merchandising bonanza from the show. Those products include comic books, T-shirts, scrapbooks, trading cards, games, lunch boxes, dolls, toy cars, magnets, greeting cards and DVDs where their images appear on the box covers.

The actors claim they never received revenue statements related to merchandising, and that CBS intentionally never intended to pay them anyway. A fraud claim had previously been dismissed by the court.

In asking the court to dismiss the case, CBS said in an earlier court filing that it had paid the actors everything they were owed for merchandise and that sale of the DVDs are covered under the Screen Actors Guild agreement.

It said that agreement allows CBS to “reuse photography from ‘Happy Days’ to exploit the television series without making additional payments to the plaintiffs,” CBS attorney Keri E. Campbell wrote in papers filed with the court. “It is undisputed that plaintiffs have received all of the residual payments for DVDs to which they are entitled.”

While the actors claimed they had not been paid for all merchandise related to the show, the proceeds from the DVDs was the only remaining major issue in the case. Revenue from “Happy Days” slot machines featuring images of the actors was not as high as originally believed, Pfeiffer said earlier this year. It was the actors’ discovery of those slot machines several years ago that led to the lawsuit.

Since the case was filed, Pfeiffer had said that CBS sent the actors checks totaling about $10,000 each for owed merchandising payments. The checks have been held by Pfeiffer’s law firm pending the outcome of the case.

Last year, in other papers filed with the court, CBS claimed the actors “are attempting to generate a lucrative litigation windfall by riddling their complaint with unsupported and overreaching causes of action” for fraud and breach of good faith. The company said this was “all done in a transparent attempt to introduce the specter of punitive damages” in the case.

CBS said the case was “a garden-variety breach of contract action, nothing more.”

The actors accused CBS of “despicable conduct,” saying “although defendants routinely rebrand their corporate images, they should not be permitted to rebrand the truth.”

One of the major issues in the case was a fraud claim by the actors, which the judge threw out last year. That decision meant the actors could not receive punitive damages at the trial, and the remaining issue was a contract dispute.

The actors originally thought there would be a significant amount of money from the use of their images on “Happy Days” slot machines. But Pfeiffer said it turned out there wasn’t as much as expected from the slots, which have been in various casinos around the country.

Neither Ron Howard, the Oscar-winning director who played Richie Cunningham, nor Henry Winkler, who played The Fonz, were part of the lawsuit.

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