A surreal legal battle unfolded last month in a courtroom in West Palm Beach, Fla., where a retired accountant faced off against a distributor of cult horror DVDs over ownership of a 1981 slasher film.
The distributor, David DeFalco, goes by “The Demon” and taunted the accountant in a series of unhinged livestream videos, calling him and his lawyers “fucking maggots.”
“We’ve got to defeat these scummy bastards,” DeFalco told his fans. “They’ve put huge damage to physical media.”
That the case went to trial at all is unusual, and a testament to both sides’ commitment to principle regardless of legal costs. For the accountant, Vlado Hreljanovic, it was about reclaiming title to a movie he had made with his father, a Yugoslav producer who helped bring Milos Forman to the U.S.
Hreljanovic was young man when he put together financing for “Just Before Dawn,” a low-budget horror film set in the Oregon wilderness and starring George Kennedy. The film, which has grown in esteem over the years, was called “one of the most underrated slasher flicks of all time” by Horrornews.net and appeared on Variety‘s list of The 15 Scariest Films You’ve Never Seen.
The rights have remained in the family, so Hreljanovic was startled to find, a few years ago, that the film was streaming on Shudder, the horror site, and that DVDs were selling on Amazon.
“I never sold any of this to any of them,” he says.
That discovery led to four years of litigation that culminated on Oct. 20, when a six-person jury found that DeFalco had infringed on Hreljanovic’s copyright.
DeFalco is a former wrestler and director of “Chaos,” a 2005 film that he calls “the most violent film ever made” (and which Roger Ebert called “ugly, nihilistic and cruel — a film I regret having seen.”) For DeFalco, the fight was about protecting the beleaguered cult DVD ecosystem from nefarious “copyright trolls.”
Hreljanovic, now 79, spent most of his career in other businesses and is now retired. In 2012, he was approached by Bill “Banana Man” Olsen, who ran Code Red DVD and wanted to license “Just Before Dawn.” Hreljanovic agreed to a six-year deal, but was unhappy with having to chase him down for statements and decided to let it lapse in 2018.
DeFalco was a partner of Olsen’s, and had launched his own horror DVD business, Dark Force Entertainment. By 2022 — four years after the contract had expired — Olsen was ailing and DeFalco was trying to scrape together money to pay for Olsen’s caregiver.
“He gives me the title,” DeFalco says. “He says go license it to Shudder for two years.”
Olsen had hundreds of such titles.
“These things don’t do huge numbers,” DeFalco tells Variety, saying the “Just Before Dawn” deal reaped $10,000. “You have to put out tons of them. Do you think any of these old B-movies have a huge value in the marketplace?”
Olsen died before the suit was filed, so Hreljanovic went after his estate and after his brother, Walt, who ran Scorpion Releasing. He also named AMC Networks, which owns Shudder, as well as Kino Lorber, Amazon, Target, Best Buy and Walmart. Walt Olsen died a few months later, and the other defendants reached out-of-court settlements — all except DeFalco.
DeFalco took it personally that Hreljanovic would come after him and after the Olsens, his mentors in the DVD business.
“I’m willing to destroy myself to get at you guys,” he said on a livestream. “This is going to be the war of the century.”
DeFalco hyped up the dispute for his online fanbase. Wearing a white tank top and long black braids, he unleashed expletive-filled rants against Hreljanovic and his lawyers, calling them “fucking maggots.”
“Why would you mess with the Demon?” DeFalco asked in one video, brandishing a blade. “I carve you to pieces with this!”
Behind him, a man in a skull mask could be seen racking a shotgun. “This dude is a killer,” DeFalco said. “You want to fuck with us?! You really think that’s a good idea?”
DeFalco’s legal argument was that Hreljanovic could not establish a chain of title to “Just Before Dawn.”
“I don’t really know who the fuck owns it at this point, but I can tell you one person that don’t own it, and that’s fucking Vlado,” he said in a video. He also called the movie a “little shitbag, piece-of-garbage movie that his garbage-ass father made.”
Hreljanovic had never met DeFalco and didn’t know quite what to make of it.
“His language is very rosy,” Hreljanovic says. “He threatened me that he’s going to bankrupt me… He slandered my sister. I’ve never known this guy. I have no idea where he came from.”
DeFalco ran up bills of about $200,000 on his legal defense. By the time of the trial, he was representing himself. He was not sure he would be able to do it, but he relied heavily on AI to draft his briefs — even winning a favorable pretrial ruling.
He showed up to court with his braids, black shirt, and black shoes with flames on the side. It caught the eye of the courtroom staff and of the opposing side.
“It was entertaining,” Hreljanovic said.
At the trial, Hreljanovic’s lawyers sought to introduce the videos of DeFalco taunting their client — but the judge didn’t allow it.
“I can’t even remember doing this,” DeFalco says. “I was going on and on. I was calling him every name in the book. They edit it in such a way to make it look like I was threatening them. I never threatened these guys.”
Hreljanovic’s lawyers said that a key document — purportedly assigning the rights from Olsen to DeFalco — had been forged. And they also showed documents establishing that Hreljanovic still owns the copyright.
“We proved the chain of title going back 45 years,” said Eric Lee, Hreljanovic’s lead trial attorney. “That was the most important issue to my client.”
After two days of testimony and a day of deliberations, the jury found in Hreljanovic’s favor and awarded $46,000 — less than the maximum $150,000 — in statutory damages.
DeFalco has no plans to pay, and is preparing to ask for a new trial. “There’s certain things the AI is putting together to file the motion,” he says, adding that he still plans to beat Hreljanovic “into submission.” But as he turns his attention to a new streaming venture, he is done with DVDs.
“I’m getting rid of Dark Force,” he says, saying his “nice little lifestyle business” had been dealt a setback by the litigation. “I’ve had it with physical media.”
Hreljanovic is happy that “Just Before Dawn” still has a cult following, and says he plans to bring out a 4K restoration next year. He says the trial was “an expensive exercise” and is relieved it’s over.
“I’ll have more time to golf.”
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