RULING IS A VICTORY FOR LEE; JUDGE DECIDES ACTRESS MADE NO BINDING DEAL.

Byline: Anne Burke Daily News Staff Writer

A judge absolved Playboy centerfold and former ``Baywatch'' actress Pamela Anderson Lee of blame Tuesday for pulling out of a movie deal because she objected to sex scenes.

Los Angeles Superior Court Judge David A. Horowitz said he found no evidence that Lee ever personally agreed to perform in the cable television movie ``Hello, She Lied,'' even though her representatives indicated that she had done so.

``Plaintiff has failed to prove by a preponderance of the evidence that Lee consented to an agreement or agreed to be bound by the oral representations of her `representatives,' '' Horowitz wrote in a 16-page ruling.

The Lee case has caused Hollywood to revisit the old question of what constitutes a deal, just as a similar lawsuit against actress Kim Basinger had done a few years earlier.

But several entertainment attorneys predicted that the Lee ruling will prompt no big changes in the deal-making process.

``People go forward based on a simple deal, memo or even a handshake and spend significant sums of money before there is any final documentation,'' said entertainment lawyer Pierce O'Donnell.

``Day in and day out, it works. There are occasional lawsuits . . . but on the whole, the system works,'' O'Donnell said.

Lee's attorney, Major A. Langer, said the actress was ``very pleased.''

``It's a big relief for her. It's obviously been a lot of stress on herself and her family for these last months.''

The Private Movie Co. Inc. sought $4.6 million from Lee in the breach of contract suit, charging that the actress reneged on the deal so that she could work on another project.

Private Movie Co. lawyer Adam Miller told the Associated Press that the firm would ``think about appealing'' the verdict.

Horowitz noted in his ruling that the producers had agreed to abide by Lee's wishes to ``lose the sexual content of her character.'' But when she reviewed a rewritten script a few months later, ``there were several scenes of simulated sex that remained in the script,'' he wrote.

Lee, who wore high heels and mini-skirts to court, opted to have her case decided by a judge rather than a jury. She told Horowitz that even though she liked her character in the movie - for which she would have earned $200,000 - she bowed out because she had been traumatized by an earlier experience filming a movie with high sexual content.

Lee asserted that she was scratched, bruised and thrown around in the low-budget ``Raw Justice,'' co-starring David Keith.

The producers charged that Lee's objections to the sex scenes were a ruse, and that she really dropped out of the picture after becoming aware of an offer to star in a production headed for the big screen - ``Barb Wire.''

At issue was whether Lee ever promised to do the movie.

Some entertainment lawyers boast that they never work with signed contracts, so that they can leave their options open in case something better comes along, said entertainment lawyer Louise Nemschoff.

The Basinger case proved that oral agreements can be as binding as written ones, attorneys said. After backing out of ``Boxing Helena,'' a jury ordered her to pay $8.9 million to the film's producers. That judgment later was overturned on a technicality.

Although oral agreements may not seem to make much sense when tens of millions of dollars are at stake, lawyers said that's the way the system works and it's not likely to change because of the Lee case.

Maybe so, but deal-making parties still could learn lessons from the court battle, lawyers said.

Nemschoff said Lee had two big problems: her agents were making deals on her behalf, rather than merely negotiating for her, and the attorney for the production company was representing Lee in a separate legal matter.

``For actors, I would say, make sure your relationship with your agent is clear,'' Nemschoff said, ``and watch out for dual representation.''

``I think everybody should be watching their tail a lot better than they do,'' added an industry insider, who declined to be named.

Lee would have made $200,000 for ``Hello, She Lied.'' Swimsuit model Kathy Ireland ultimately stepped in, and the movie was aired on Showtime as ``Miami Hustler.''