In a written judgment, Judge David Horowitz said the filmmakers, The Private Movie Co, failed to prove "by a preponderance of evidence" that Lee entered into a contract to make Hello, She Lied - a cable television movie.
In his ruling in favour of the actress, the judge said there was no binding agreement, despite the producer's claim that she had made an oral agreement to make the film. During the non-jury trial, however, lawyers for the plaintiffs acknowledged that a written agreement with Lee had never been executed.
The company had claimed the actress broke a contract because she was offered a better deal to make Barb Wire, a feature film which turned out to be a box-office flop. The actress, who is married to rock drummer Tommy Lee of Motley Crue, said during testimony this month that she pulled out of the project because she objected to sex scenes in the proposed film.
The moviemakers, who claimed to have lost millions of dollars as a result of Lee backing out, later made the film as Miami Hustler with model Kathy Ireland in the lead role. Ireland had a no-nudity clause in her contract.
The Canadian-born Lee, who attended every day of the trial, told the court during her testimony that although she was not opposed to nudity, she objected to certain graphic scenes involving simulated sex.