Animation Firm Sues App Developer for Breach of Contract

Utopia Games agreed to develop MovieZu’s mobile app for iOS and Android operating systems, letting users create and sell “Hollywood-quality” animated movies. However, Utopia hasn’t delivered as promised, a fraud complaint alleged (docket 1:24-cv-03804) Thursday in U.S. District Court for Southern New York.

“To the extent that Utopia has developed anything, what it developed is unusable, unsuitable for MovieZu’s requirements and otherwise does not comply” with the parties’ July 15, 2022, agreement, the complaint said. That agreement says Utopia “proposes to designate a team and build an app as specified by MovieZu," the complaint said. “Utopia may also make recommendations on strategy and software features,” the agreement states.

MovieZu wanted native Android and iOS versions of its app developed because they would provide performance benefits, said the complaint. The agreement provided that Utopia would “follow MovieZu’s directions and instructions as to the design and functionality of the MovieZu app,” which included developing native Android and iOS versions, it said. Native apps are optimized for a particular OS and perform better on the system than a cross-platform app, the complaint said. They can also take full advantage of features available on a certain OS, it said.

Once the app was developed, Utopia was to place it in Android and Apple app stores, and MovieZu would pay Utopia $146,283 per month for its development services, the complaint said. A provision said Utopia would be paid for costs it incurred for code repository, hosting fees, and development tools in connection with performing its services, with MovieZu’s approval.

On Feb. 8, MovieZu learned for the first time that Utopia hadn’t developed the product as a native app for each operating system. Instead, it was developing it using a cross-platform tool, Apache Cordova, the complaint said.

The complaint said Utopia claimed a MovieZu representative informed it on Sept. 28 that MovieZu didn’t want to deploy native Android and iOS versions of its app. However, the complaint denies MovieZu gave that direction. In addition, the complaint said Utopia made no effort to confirm “what would have been a substantial change in the nature of the project.” Moreover, Utopia didn’t request a meeting to discuss how development would proceed “as a result of this change” or seek additional funds or ask for more time to complete development, it said.

In “numerous and frequent” meetings from Sept. 28 to Feb. 8, Utopia “did not once advise MovieZu that it was no longer developing native app versions of the MovieZu app,” nor did it say it was developing the app with Apache Cordova, the complaint alleged. Utopia “certainly did not obtain permission from MovieZu to develop the app using Apache Cordova,” it said.

Changing the MovieZu app from what should have been native Android and iOS versions to an Apache Cordova version would have required “substantial changes" and taken more time, "causing significant delays in developing the app,” alleged the complaint. “But Utopia does not appear to have made any such changes” after Sept. 28, and it “never indicated there would be any delays in development of the app,” the complaint said.

MovieZu claims breach of contract and seeks compensatory and consequential damages of not less than $20 million, and pre- and post-judgment interest. Utopia didn’t comment.