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Jury Verdict on "Flip This House" case

The jury rendered a verdict for the plaintiffs, awarding Davis $4,043,686.71. In early 2004, plaintiff Richard C. Davis and his real estate investment company Trademark Properties Inc. produced a treatment and demo of a reality show about purchasing, renovating and flipping homes. According to Davis, he submitted it to A&E Television Networks, which asked to meet to discuss the production of a series from it. Davis alleged that on June 14, 2004, he had met with an A&E representative and told him he would consider an agreement to work together only if he and his company could be an equal partner, owning half the project and getting half its net revenue. Among the provisions of the agreement they hammered out, said Davis, were that A&E pay all production costs, while Trademark find, refurbish and sell all real estate featured in the show. Trademark and its principals would star and Davis would be credited as a creator in every episode. According to Davis, after A&E explicitly agreed to those terms, he and Trademark let it shoot 13 episodes of the resulting show, "Flip This House," based on the deal. A&E kept promising to prepare and sign a written contract to confirm the partnership terms they had discussed, but the contract never was provided, Davis claimed. According to Davis, he discovered that A&E was repudiating their agreement in or about March 2006, when they were informed that A&E was planning to make a second season of the show, "Flip This House," without their participation. A&E went on to produce several subsequent seasons without Davis. Davis sued for breach of contract, fraud, conversion, misappropriation of trade secrets and unfair competition, among their other claims. They said A&E had absconded with his project with plans to produce and broadcast another season of the show without any help from or compensation to him. Davis claimed that if he had known that he was going to be defrauded and the agreement not honored, he would never have agreed to let A&E shoot 13 episodes. He also would never have disclosed certain confidential proprietary business information and trade secrets. A&E maintained that it had made it clear to Davis that it had final creative authority over the show, owned all legal rights in it and controlled and would keep all revenues from it. Davis had sought no direct compensation for his participation in the show because he considered it a free platform for advertising and expanding his company nationwide, the defense claimed. It said A&E had never promised Davis any revenues for his participation in the first season of the show. Davis had agreed to appear in a second season of the show as on-air talent for per-episode cash compensation without any profit share, A&E said, and he had confirmed his participation by email and phone and through his lawyer. But then he suddenly walked away from the agreement and announced he would go to a competing network. He had even signed a representation to that network acknowledging that A&E had no financial obligation to him, it said. Before trial the court dismissed all of the plaintiffs' claims except for breach of contract and fraud. Departure Films was dismissed on consent and A&E voluntarily dismissed its counterclaims. The court then dismissed the fraud claim at the close of the evidence, leaving only breach of contract to proceed to the jury.

Full post as published by The Trade Secrets Vault on April 10, 2009 (boomark / email).