I just received word that the jury came back with a $4,000,000 verdict for Trademark Properties and Richard Davis in their dispute with A&E Television Networks.  

Congratulations, Richard and the Team Trademark! 

EDIT (3:52PM): The Charleston Post and Courier has an update-

A federal jury in Charleston awarded real estate investor Richard C. Davis more than $4 million in damages today in a trial stemming from the “Flip This House” reality television series.

Davis sued cable network A&E, saying he had an oral agreement with A&E to split revenues from the program he created. Davis, of James Island-based Trademark Properties Inc., said he was never paid.

A&E disputed that any agreement existed. Its lawyers declined to provide immediate comment on the ruling, which came after more than five hours of deliberation.

“I’m very pleased with the verdict,” said Mount Pleasant attorney Frank M. Cisa, who represented Davis. “These cases are very tough to prove.”

For more details, see Thursday’s Post and Courier.

Trial Update: Friday and Monday

The Charleston Post and Courier continue their coverage with reports on Friday and Monday.  The case is now in the hands of the jurors.  Because of the holiday, deliberation will resume on Wednesday.  

From “Witness denies any 50/50 deal“: 

For days the jury in a breach of contract trial between local real estate magnate Richard Davis and television network A&E has heard over and over about a man named Charles Norlander.

Davis alleges that he and Norlander hatched the 50/50 profit split for the show “Flip This House” in a verbal agreement at the heart of Davis’ lawsuit.

Friday, a man with a goatee and Harry Potter-styled spectacles took the witness stand and repeatedly denied any such conversation ever took place.

Norlander testified that, though he no longer worked for A&E when Davis began threatening to pull out of the show, he encouraged Davis to resolve his differences with the network before it replaced him. He added that he did not know what, specifically, was bothering Davis.

“In terms of what he was looking for, I had no better idea at the end of that conversation than I had at the beginning of it,” Norlander said.

He testified that he never heard of the 50/50 split until he learned Davis filed a lawsuit.

A series of defense witnesses followed Norlander, nearly all making the same point: that Davis never said anything about a profit-sharing deal, and neither did they.

Max Weissman of Departure Films, the third-party production company which still makes “Flip This House,” testified that he suggested Davis ask for compensation from A&E.

“He kept saying he wasn’t interested, that it was small potatoes,” Weissman said.

But Weissman also testified that Davis wanted to see Departure Films’ contract with A&E, which held a confidentiality clause Weissman was unwilling to breach.

Asked whether Davis had a profit-sharing deal with A&E, Weissman replied, “He complained endlessly that he didn’t.”

During cross-examination, Cisa pointed out that Weissman spent no time on location in South Carolina during production of “Flip This House” and that Departure Films grew exponentially because of the series.

Cisa suggested that Weissman, now in the midst of producing the fourth season of “Flip This House,” learned everything he knows about real estate from Davis.

In court documents, A&E has disclosed that the show generated about $13.7 million in revenue and $5.9 million in expenses its first season.

Davis has testified he was never paid for his efforts toward “Flip This House,” which often demanded 80 hours of his time per week. He also was never reimbursed for an estimated $92,000 in expenses, he said.

From “Attorney: A&E owes $7.5M“:

In closing arguments before a federal jury, attorney Frank Cisa said cable television network A&E owes his client, local real estate investor Richard C. Davis, more than $7.5 million in a profit-sharing arrangement attached to the reality show “Flip This House.”

“He had the pilot (episode) in one hand. He had the Writers Guild registration in the other hand. And they never asked Richard Davis what he wanted for his show?” Cisa said in closing arguments. “They knew he spent $85,000 on the pilot and never asked what he wanted for his show? … I submit to you that’s not credible.”

A&E’s New York-based attorney, Jeremy Feigelson, began his closing remarks the same way the network’s local defense attorney, Richard Farrier, began his opening arguments. “No way,” Feigelson said.

He suggested that Davis and Charles Norlander, the A&E representative with whom Davis claims to have made the verbal deal, were “ships in the night” that never quite reached the same point.

“Can you picture a conversation where Mr. Davis talked on and on, maybe talked at Charles … and he persuaded himself he’s come away with an agreement?” Feigelson said.

He told the jury that Davis never shared with them any specifics from the conversation with A&E that allegedly hatched the deal.

Prior to closing arguments, Monday marked the first time in the weeklong trial in which A&E employees acknowledged any mention of a potential 50-50 profit-splitting arrangement prior to the lawsuit.

Cisa produced a copy of an e-mail between Davis and the network with the term “50 percent” handwritten in the margin. But A&E representative Melinda McLaughlin testified she made that note only as the amount Davis proposed he receive on advertising revenue he helped bring for the show, not as an agreed-upon amount.

“I let him know that it would be single digits so he wouldn’t be surprised to see the final (figure),” McLaughlin said.

Below where she marked Davis’ 50 percent suggestion, McLaughlin also made a note to herself: “No way!”

Trial Update: Thursday’s Witnesses

Allyson Bird at the Charleston Post and Courier continues with her reporting:

A&E’s New York-based attorney Jeremy Feigelson worked to disprove Davis’ claim that his Trademark Properties and the network verbally agreed to a 50-50 profit split from the reality series “Flip This House.”

“The agreement we’re talking about is an agreement in your mind?” Feigelson asked.

Davis calmly replied that it was “absolutely an agreement” he had with an A&E representative. Finally, after more than 10 hours of testimony spread over three days, he lost his patience.

Responding to one question, David raised his voice and said, “It’s my possession. You stole it. … You stole my possession.”

While on the stand Davis made several jurors chuckle as he shared his inexperience with the legal system.

“This is the first time I’ve sued. I don’t know how this works,” he said. “This is the last time. This is miserable.”

Cisa called his second and final witness, Trademark Properties Inc. investment coordinator Ginger Alexander, who was often featured on “Flip This House.”

She testified that the firm’s normal business took longer because of the series and that, overall, the company lost money creating episodes of the show because it still holds a few unsold properties.

Feigelson asked if the lack of demand for the unsold properties could be attributed to a downturn in the real estate market and not “Flip This House.”

Alexander said the market spoiled one sale, but she blamed the show for hindering the sale of a home originally listed at $1.8 million.

She said a rodent infestation at the home when Trademark Properties acquired it was exploited during the post-production process, even though the problem had been fixed.

“It’s hard to sell a house after you show a bunch of rats running around,” she said.

Trial Update: Richard Davis on the Stand

Allyson Bird at the Charleston Post and Courier continues with her excellent reporting on the Trademark Trial.  Some excerpts:

Davis claims A&E violated a verbal agreement to split any revenue after expenses from the “Flip This House” TV show that documented Davis’ risk-taking real estate business, Trademark Properties Inc. Davis’ testimony took nearly all of Wednesday, the second day in the jury trial in U.S. District Court.

Davis asserted he was never paid for his efforts toward “Flip This House,” which often demanded 80 hours of his time per week. He also was never reimbursed for an estimated $92,000 in expenses, he said.

He testified that he was told the first episode drew nearly 1 million viewers with no promotion outside of A&E.

But when Davis asked for rough cuts of the show or a copy of a contract from a third-party production company, he encountered roadblocks, he said. By then the person with whom he said he made the verbal agreement for the 50-50 revenue split no longer worked for A&E.

That man, Charles Norlander, called Davis “Crazy Richard” in an e-mail to an A&E representative and offered to speak with Davis after Davis threatened to shut down the show.

“Knowing his ego, he probably really believes that you wouldn’t/couldn’t do the show without him,” Norlander wrote.

In court documents, A&E disclosed that the show generated about $13.7 million in revenue and $5.9 million in expenses its first season; $9.3 million in revenue and $4.6 million in expenses its second season; and $11.8 million in revenue and $9.9 million in expenses its third season.

Trial Update: Day One

Today was slated for jury selection, but the Court moved much more quickly than expected.  I’m informed that witnesses were heard after lunch.  Richard Davis took the stand sometime around 5PM.

Tomorrow, due to elections, the Court will not be in session.  Trial will resume on Wednesday.

The trial picked up some coverage in the Los Angeles Times and the Charleston, SC Post and Courier.

UPDATE (Tuesday, November 4):  The Charleston Post and Courier has coverage of the first day of trial. From the article:

“[Trademark Properties and Richard Davis] did everything we were supposed to do, and Richard Davis was credited as creator of the show,” [Frank Cisa, attorney for Trademark] said.

Cisa said A&E executives “did everything they were supposed to do — except pay.”

He told the 12 jurors that Davis is entitled to a multimillion-dollar award.

Charleston attorney Richard Farrier, who represents A&E, began his opening arguments with the phrase, “No way.”

He said Davis was asked if he had any “deals” with A&E when Davis began working with a competing network, TLC.

“He, in writing, confirmed he had no deals,” Farrier said.

He said A&E would never agree to such an arrangement, that even superstar comedienne Tina Fey couldn’t swing a 50-50 split.

“We would never make that deal. The suggestion we would is, frankly, absurd,” Farrier said. “It’s preposterous.”

He asked the jury why someone would appear on national television for free and then answered his own question. Davis, Farrier said, “in effect, got an hour-long infomercial.”

He told jurors that their job is much like the A&E program, “CSI: Miami.”

“What we’re doing today is CSI: Charleston,” he said. “And CSI: Charleston is about contract scene investigation.”

Trademark v A&E Trial Begins November 5

According to the most recent information on the docketing system, jury selection and trial in Trademark v. A&E is expected to begin on Wednesday, November 5, 2008.  You are cordially invited to attend.  The Charleston Federal Courthouse is located at 85 Broad Street in Charleston, South Carolina 29401.  For more information, the Clerk’s phone number is (843) 579-1401.  Arrive before 8:30 to get a good seat.

The Honorable C. Weston Houck will preside over the trial.  There are still a number of dispositive motions which were improperly sealed by A&E in order to prevent the public from viewing them, but some new documents have been filed since the last trial update.  The most important of these are A&E’s motion in limine to prevent Trademark from using their damages expert, Mark Halloran, at trial.  Mr. Halloran initially represented Trademark’s damages as 50% of the net revenues that A&E has earned from the television show “Flip This House”.  At a later date, after receiving discovery materials that A&E failed to produce until after his deposition, he did some research to determine that if a show like “Flip This House” makes it four seasons on TV, it will make it for fifteen.  This would, of course, significantly increase the amount of money owed to Trademark if, in fact, the Jury finds in their favor.  The Judge has determined that the jury should not hear Mr. Halloran’s opinions.

The parties seem to be in general agreement over the net revenues from the show, and the main dispute at this point is whether there was an actual agreement between Trademark and A&E that Trademark would receive 50% of the net revenues.  The jury will decide this and several other questions after reviewing the evidence at trial.

For those curious about the excluded witness, you may wish to review the transcript of the October 16, 2008 hearing and the Order GRANTING A&E’s Motion.  There are also various documents relating to Jury selection and instruction.

  • Docket as of October 30, 2008
  • 09/11/2008 #95 NOTICE of Bar Meeting: set for 10/14/2008 10:00 AM in Charleston Courtroom #4, U. S. Court House, 85 Broad St, Charleston before Honorable C Weston Houck.
  • 10/22/2008 #108 OFFICIAL TRANSCRIPT of Proceedings Motion hearing held on 10-16-08, before Judge C. Weston Houck. Court Reporter/Transcriber Debra Potocki, Telephone number 843-723-####. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Parties have 7 calendar days from the filing of the transcript to file with the court a Notice of Intent to Request Redaction.. Redaction Request due 11/12/2008. Redacted Transcript Deadline set for 11/24/2008. Release of Transcript Restriction set for 1/20/2009.
  • 10/24/2008 #110 STIPULATION Dismissing Plaintiffs’ Promissory Estoppel Claim by Trademark Properties Inc, Richard C Davis, A&E Television Networks.
  • 10/24/2008 #112 Defendant’s Deposition Designations RULE 26(a)(3)PRETRIAL DISCLOSURES by A&E Television Networks. Objections to PreTrial Disclosures due by 11/10/2008.
  • 10/27/2008 #113 Proposed Voir Dire by A&E Television Networks.
  • 10/27/2008 #114 Proposed Jury Instructions by A&E Television Networks
  • 10/28/2008 #116 ORDER granting 98 Sealed Motion Signed by Honorable C Weston Houck on October 28, 2008.
  • 10/29/2008 #117 Proposed Jury Instructions by A&E Television Networks.

While I will be attempting to get copies of the trial transcripts, I will be unable to attend the trial.  Several of our regular visitors, however, have promised to share updates with me as the trial progresses.  I also have not had the time necessary to intervene and request that the Court unseal those documents which were inappropriately restricted. 

Good luck to everyone involved.