The lawsuit filed by former Infinity Ward execs Jason West and Vince Zampella has taken a further step towards a jury trial, as the judge in the case ruled that there were facts to support the allegations.
The $34 million lawsuit was first filed in March 2010, following the pair's dismissal as studio heads at Infinity Ward. Originally it was only concerned with "breach of contracts" over the sacking, but in April 2011 fraud allegations were also added to the list of complaints.
The fraud claims centre on a new contract introduced by Activision after the completion of Call of Duty 4, which promised West and Zampella creative control over future Modern Warfare games (but not necessarily all Call of Duty titles) and an increased budget.
West and Zampella claim that Activision had no intention of following through on these promises and always intended to fire them after the completion of the game.
The ruling by California Superior Court judge Elihu Berle means that it is increasingly likely that these charges will have to be answered in court, with Activision CEO Bobby Kotick potentially being called as a witness.
"That can't be good for Activision. They can't be happy about this," said attorney Robert Schwartz in comments to USA Today.
A trial has still not been confirmed though and may not take place until early next year.
Activision has filed its own $400 million lawsuit against the duo and Electronic Arts. Activision claim that EA, which helped the pair found new studio Respawn Entertainment, encouraged West and Zampella to "hijack" company assets.
The Activision case has already been ruled as having sufficient evidence and is continuing separately.