Kevin Spacey Whittles $31M Owed To ‘House Of Cards’ Producer Down To $1M, Turns Witness Against Insurance Companies – Update

Dominic Patten, Tom Tapp and Ted Johnson
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UPDATE, 8:25 PM: It is the kind of deal Frank Underwood would look to the camera and gloat over.

After years of Kevin Spacey battling House of Cards producer MRC over contract breaches arising from sexual misconduct allegations during his stint as the fictional politician and POTUS on the Netflix series, the Oscar winner and the studio and it’s successor MRC II have come to a payoff agreement. Adding to the strange bedfellows of it all, Spacey and MRC II have also joined forces for the latter to take on some of the country’s biggest insurance companies in getting a payout of its own over the 2018 demise of HoC after six seasons and the actor’s sex scandals and legal woes that started in 2017.

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Under a settlement worked out in late last year and approved soon afterwards by a LA Superior Court judge, Spacey will now pay MRC II $1 million over the collapse of House of Cards. That payment of $1 million will occur in installments. Now, a million dollars is still a million dollars, but that’s quite the drop from the more than $31 million plus interest Spacey was originally on the hook for after an arbitrator’s decision in late 2020 and confirmed by a judge in 2021.

Full points to Spacey’s attorneys at Larson LLP for that.

Additionally, Spacey, who has won most of the sexual misconduct suits against him over the past several years or seen them shuttered due to deaths and more, will serve as a witness for the Kinsella Holley Iser Kump Steinsapir LLP represented MRC II in its attempts to claim millions from their insurance companies. The actor will also provide detailed medical records and will sit for examinations from designated doctors.

Now claiming that Spacey wasn’t able to work on HoC because of mental health issues, MRC II filed an an amended complaint last month against Fireman’s Insurance. Needless to say, as much as this all sound like a HoC subplot, Fireman’s weren’t impressed and have called the shift “absurd” in a recent filing of their own in LASC.

Puck were first to report the Spacey/MRC II deal.

PREVIOUSLY, AUG 4, 2022 PM: Kevin Spacey must pay House of Cards producer MRC nearly $31 million for alleged sexual misconduct behind the scenes of the Netflix show, a judge ruled today, saying it was not even a “close case.”

Spacey, now 63, played Frank Underwood on House of Cards and was cut from the series after allegations surfaced he sexually preyed on young men. The accusations, which included the alleged groping of a production assistant, caused MRC to conduct an investigation and ultimately terminate his acting and producing contracts.

Los Angeles Superior Court Judge Mel Red Recana today confirmed an award handed down previously by an arbitrator in October 2020 in MRC’s favor consisting of some $29.5 million in damages and the remainder in costs and fees. The arbitrator found that Spacey’s conduct constituted a material breach of his acting and executive producing agreements.

Even in a close case, the arbitrator’s award must stand, Judge Recana wrote in his 14-page ruling.

“Here, [Spacey] fails to demonstrate that this is even a close case,” the judge said.

The judge noted that a November 2017 article on CNN.com contained allegations that Spacey engaged in a pattern of sexually predatory behavior directed at young crew members on the set of House of Cards and that once MRC became aware of the accusations, it suspended the actor, investigated, wrote Spacey out of the show’s final season and ended his acting and executive producing contracts.

“We are pleased with the court’s ruling,” said MRC’s counsel Michael J. Kump of Kinsella Weitzman Iser Kump Holley LLP in a statement to Deadline.

Spacey attorney Jonathan E. Phillips argued that the award should be vacated, alleging the arbitrator exceeded the scope of his powers when he considered external evidence in deciding damages.

The arbitrator concluded that Spacey breached the agreements through his interactions with five specific crew members, who only came forward as part of MRC’s solicitation of allegations against Spacey, including the internal investigation MRC initiated only after Netflix made the decision to exclude Spacey from season six, Phillips and Spacey’s other attorneys further alleged in their new court papers.

While Spacey disagrees with the arbitrator’s factual findings and maintains that he did not sexually harass anyone, he understands and accepts that the arbitrator’s findings on that issue “are entitled to deference,” Spacey’s lawyers stated in their court papers.

“However, because the arbitrator committed — namely, the damages awarded to [MRC] are not rationally related to the specific breaches found by the arbitrator — [Spacey] is entitled to an order from this court vacating the award,” Spacey’s attorneys said in court papers.

But Judge Recana wrote that he was “not compelled to infer that the arbitrator’s award was not based on the breach of the parties’ agreements or that it was based on an [external] source.”

PREVIOUSLY in November: An arbitrator has ruled in favor of MRC, the production company behind House of Cards, in its case against Kevin Spacey over his firing from the show as he faced allegations of sexual misconduct.

The ruling, first reported by The Wall Street Journal, awarded MRC $29.5 million in damages and $1.4 million in attorneys fees and costs. MRC had sought the damages for lost revenue due to Spacey’s exit.

Arbitrator Bruce Friedman’s 46-page ruling was made final in October of 2020 and remains confidential, but its results became public on Monday when MRC filed a motion in Los Angeles Superior Court seeking to confirm the award. (Read it here) A three-judge arbitration panel also rejected an appeal from Spacey and his production entities, Profitt Productions and Trigger Street Productions.

In a statement, MRC said, “The safety of our employees, sets and work environments is of paramount importance to MRC and why we set out to push for accountability.”

In MRC’s motion, it said that Friedman “found that Spacey—as a result of certain conduct in connection with several crew members in each of the five seasons that he starred in and executive produced House of Cards— had repeatedly breached his contractual obligations to provide his services ‘in a professional manner’ and ‘consistent with [MRC’s] reasonable directions, practices, and policies,’ including MRC’s Harassment Policy—all without the knowledge of MRC.”

MRC’s attorney, Michael Kump of Kinsella Weitzman Iser Kump Holley LLP, said, “It was a privilege representing MRC in this matter. MRC stood its ground, pursued this case doggedly, and obtained the right result in the end.”

An attorney for Spacey did not immediately return a request for comment.

House of Cards was one of Netflix’s early breakout hits, establishing the streamer’s strategy of dropping all episodes at once and making Spacey almost indelibly linked to his Machiavellian character Frank Underwood. He was set to do season six of the series, but that those plans were derailed as sexual misconduct allegations against him came to light.

In October, 2017, Anthony Rapp accused Spacey of making unwanted sexual advances when Rapp was 14. Spacey apologized, and in a statement on Twitter and said that he was “beyond horrified to hear his story.” “I want to deal with this honestly and openly, and that starts with examining my own behavior,” he wrote.

But CNN also published a report with allegations from eight anonymous crew members, complaining of harassment, groping, MRC suspended production to conduct an investigation. Based on the findings of a workplace investigator, MRC concluded that Spacey breached his acting and producing agreements “that set standards for his workplace conduct, including by breaching MRC’s Harassment Policy,” according to MRC’s filing.

The series went for one more season with Robin Wright in the lead, but MRC pursued a claim against Spacey in 2019, contending that it lost money by forcing rewrites of the entirety season six and truncating it from 13 episodes to just eight.

According to MRC, the arbitration hearing included 8 days of live testimony and 20 hours of videotaped deposition testimony.

“With one exception, the Arbitrator found the third party witnesses to be credible, and found the allegations against Spacey to be true,” according to MRC’s filing.

Spacey  also filed a counterclaim, alleging that he was owed money after he was dropped from the series and that he did not breach the contract. But that claim also was rejected in the arbitration. In recent years, Spacey has taped a series of Christmas Eve messages that he has posted on social media.

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