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Happy Days actors accuse CBS of 'despicable conduct'

By Scott Zamost, CNN Special Investigations Unit
Anson Williams, Don Most, Marion Ross and Erin Moran are suing CBS for $10 million.
Anson Williams, Don Most, Marion Ross and Erin Moran are suing CBS for $10 million.
  • "Happy Days" actors suing CBS over merchandising revenues
  • Four members of cast from hit show say they haven't been paid their share
  • CBS has no immediate comment on the latest court filing
  • Since the lawsuit was filed, network has sent checks totaling $43,403

Editor's note: "Hollywood Hustle," a story about celebrity merchandising controversies, will be part of a "CNN Presents" hour on August 7 at 8 p.m. ET/PT.

Los Angeles (CNN) -- Cast members of the hit television show "Happy Days," who are suing CBS, accused the company of "despicable conduct" for not paying them for merchandising revenues.

The comment was made in court papers filed by the actors' attorney in response to a claim by CBS that the case had no merit.

"In this lawsuit, plaintiffs seek their share of the money collected by defendants as a result of the use of the actors' names and likenesses in connection with merchandising," the document, filed by attorney Jon Pfeiffer in Los Angeles Superior Court, said. "Plaintiffs also want the jury to punish defendants for their despicable conduct."

Four members of the cast -- Marion Ross, Don Most, Anson Williams and Erin Moran -- along with the widow of Tom Bosley, sued CBS in April, claiming they have not been paid what they're owed for the worldwide sale of "Happy Days" merchandise. "Happy Days" was originally on the air from 1974 to 1984. Bosley died in October.

Williams: "Unfortunately, now 'Happy Days' also represents the worst of America."

Under their contracts, the actors were supposed to receive 5% of net proceeds, or 2½% if their images were used in a group.

In interviews with CNN earlier this year, the four cast members said they decided to move forward after discovering "Happy Days" slot machines were popping up in casinos around the country in 2008.

"This is one of the most heavily merchandised shows ever," Most said. "People loved 'Happy Days,' and it's been on everything from bedsheets to lunch boxes."

The suit asks for $10 million in damages.

CNN Money: 'Happy Days' actors claim fraud, money owed for merchandising

The latest court filing follows a response by CBS to the suit last month. The company, which owns the show, said 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. CBS said this was "all done in a transparent attempt to introduce the specter of punitive damages" in the case.

Here's one show and we're putting one of the biggest corporations in the world on the line to do the right thing.
--Anson Williams

CBS called the case "a garden-variety breach of contract action, nothing more."

But the actors fired back, saying "although defendants routinely rebrand their corporate images, they should not be permitted to rebrand the truth."

They pointed out that they have not "sought damages for speculative profits they had hoped to make on a risky business deal" or for a "windfall of money from conduct that did not harm them."

The company disputed that it "concealed" its obligation to pay merchandising revenues. Instead, it said the actors "were simply ignorant of, or slept upon their own rights. That cannot serve as a basis for a fraud claim."

But, in the latest court filing, the actors said CBS "should not be rewarded for concealing the money they made and not paying the actors."

"It would place a tremendous burden on studios and production companies if every actor in the entertainment industry were required to call each company they ever worked for to inquire whether merchandising had occurred, and if so, whether any money is due," the court filing said.

"In order to remove that burden and standardize the process, the customary practice in the entertainment industry is to provide periodic statements to actors when money has been generated in connection with merchandise."

In 2002 and 2003, Moran contacted CBS about merchandising revenues but was told nothing was owed, the filing states. Since the lawsuit was filed, CBS has sent checks totaling $43,403 in merchandising proceeds to the four actors and Bosley's widow, Patricia. Pfeiffer told CNN he was holding onto the checks because CBS could argue the case had been settled if they were cashed.

In a statement issued before the lawsuit was filed, CBS said it agreed that the actors "are owed royalties from the merchandising of 'Happy Days' and have, in fact, been working with their representatives for some time to see that they are paid what they are due."

The company did not immediately respond to a CNN request for further comment about the court filing.

The actors said CBS claimed it did not pay them for the "Happy Days" slot machine proceeds due "to oversight." However, the actors point out that Henry Winkler, who played The Fonz on the show, was paid for the use of his image on the slots. Neither Winkler nor Ron Howard, who played Richie Cunningham on the show, are part of the lawsuit.

In addition, from 2008 to January 2011, CBS issued news releases announcing licensing agreements with 14 companies that include gift items, clothing, glassware and bar accessories, the court filing said. But in revenue statements sent to Pfeiffer after the lawsuit was filed, CBS did not include any revenue from four of those companies.

Williams told CNN this week that the case is "like 'Happy Days' versus Goliath. Here's one show and we're putting one of the biggest corporations in the world on the line to do the right thing. I'm hoping this case gives visibility to not only help us, but to help thousands of other individuals in the entertainment business."