Article Title: Jury awards real estate investor $4 million

Excerpt: There is still money to be made in house flipping. On Wednesday, a federal jury in South Carolina awarded $4 million to a real estate investor for his role in creating the popular show "Flip This House" for A&E Networks. That amount represents half of the profit generated by the first season of the show, when real estate broker Richard C. Davis and others from his firm, Trademark Properties Inc., were featured buying properties, fixing them and selling some for a tidy profit. Davis sued A&E two years ago, alleging that executives at the A&E cable channel reneged on their promise to pay him half the revenue produced by the program, which debuted in 2005. A&E, in court filings, denied that it ever made such a promise. There was no written contract. The network is owned by Hearst Corp., Walt Disney Co.'s ABC and NBC Universal. "We are deeply disappointed in the jury's decision, and we will follow the appropriate steps to have the verdict reversed," said Michael Feeney, A&E's spokesman. Davis had sought as much as $30 million. The case hinged on whether the oral discussions between Davis and network executives amounted to a contract. "This case reaffirms the enforceability of oral contracts in the television industry," said Brian Wolf, an attorney with Lavely & Singer in Los Angeles, a firm that represents Davis. "If you use someone's idea or concept for a television show, then you need to pay them for it."

Article Title: A&E told to pay Davis

Excerpt: Cable network A&E sought to portray local real estate investor Richard C. Davis as someone who came to believe wrongly that he and the network had an oral agreement to split the profits from the reality television show "Flip This House." But a federal jury didn't buy it, saying Davis' interpretation of the business relationship wasn't so far-fetched. The 12-member panel unanimously awarded Davis and his James Island-based Trademark Properties Inc. more than $4 million in damages in the breach of contract trial that wrapped up this week. The jurors spent at least five hours in deliberations before reaching their verdict Wednesday afternoon in a downtown Charleston courtroom. Davis put his right hand over his eyes and sobbed from his chair upon hearing the decision. His employees and reality TV co-stars Ginger Alexander and Dawn Nosal cried together from the second row behind him Davis' attorney, Frank Cisa, argued in his closing remarks that his client should receive more than $7.5 million in damages from three seasons of "Flip This House." Only the show's first season, in which Davis was credited as a creator, featured him and his Trademark Properties team. After splitting with A&E, the crew joined competing network TLC for the series "The Real Deal." Before dismissing them, U.S. District Court Judge C. Weston Houck asked the jurors to itemize the damages they awarded Davis. "To give us just a little idea of how you arrived at that figure," Houck said. Minutes later they returned with a breakdown: more than $3.9 million, or half the net profit from the first season; and nearly $108,000 in international revenue. Davis would not comment immediately following the verdict and could not be reached later in the day. Cisa made only brief statements after the trial concluded. "I'm very pleased with the verdict," Cisa said. "It was a tough case. It's very tough to prove you had an oral contract with a major network." Attorneys for A&E declined to comment, but a network spokesman said the case is not over. "We're deeply disappointed in the jury's decision, and we plan to follow the appropriate steps to get the verdict reversed," said Michael Feeney, senior vice president of corporate communications. The trial began Nov. 3, and jury deliberations began late Monday. Federal court was closed Tuesday for Veterans Day, and deliberations resumed Wednesday. A&E's attorneys asked Houck to dismiss the case early on, which could conceivably be the basis for a request to reverse the verdict, said Charleston School of Law professor Gerald Finkel. A&E could argue that Houck should have granted the dismissal at the close of Cisa's evidence, before the case was allowed to go to the jury, Finkel said. He said the defense has ten days to make such a filing, which is a precursor to an appeal.

Article Title: Jury awards SC man $4M in dispute over A&E show

Excerpt: CHARLESTON, S.C. (AP) — A federal jury awarded a South Carolina real estate investor more than $4 million Wednesday in a dispute over profits from the reality television show "Flip This House." Charleston jurors deliberated five hours before awarding the money to Richard C. Davis, who created the show and appeared on its first season, the Post and Courier reported. Davis, who runs the Trademark Properties Inc. real estate firm on James Island, sued after he said the cable network broke an oral agreement to split profits from the show. Attorneys for A&E have said the network had no such agreement. Frank Cisa, Davis' attorney, said the award represents half of the show's first-season profits and a third of international profits from the first three seasons. Cisa said his client had sought half of the net profits from all three seasons but was pleased with the verdict. "It was a difficult case," Cisa said. His client did not appear in the second and third seasons. A spokesman said the network was disappointed and would take further action. "We are deeply disappointed in the jury's decision and will follow up the appropriate steps to have the verdict reversed," A&E spokesman Michael Feeney said Wednesday.

Article Title: Attorney: A&E owes $7.5M

Excerpt: 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." The multimillion dollar figure includes three seasons of "Flip This House," even though only the first season chronicled Davis' James Island company, Trademark Properties Inc. Cisa said that's because Davis created the show about buying and selling real estate and was "ready, willing and able" to continue with the program if compensated. 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. "We saw him grope and struggle and fail to answer the most important question of all: What did A&E say to you?" Feigelson said. Before concluding, Feigelson said the jury, in order to rule in favor of Davis, would have to believe that A&E changed its business model to cut a deal with him and that every witness had lied under oath during the trial. The jury began deliberations late Monday afternoon and will resume Wednesday morning. 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!"

Article Title: Witness denies any 50/50 deal

Excerpt: 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 described key differences between "Flip This House" and the series Davis originally proposed to him, which included spending $100 million over a year buying and renovating property and featured a host. Norlander testified that those elements were turnoffs in the proposal but that Davis and other members of his Trademark Properties crew have personalities that "pop on the screen" and could carry a show. "To this day, I think he's the only person who's flown up in his own helicopter to meet me," Norlander said. He testified that he and Davis became so chummy that Davis offered to fly Norlander and his adoptive daughter over the Mount Pleasant hospital where she was born. 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. "It's really hurts when someone you consider a friend makes those kinds of allegations against you," Norlander said. Then adding his professional reaction, he said, "Nothing like this (50/50 deal) exists in the business." Upon cross-examination, Davis' attorney Frank Cisa focused on the fact that Norlander, a consultant with A&E and not a full-fledged employee, never asked Davis what he wanted from "Flip This House." Cisa also pointed out that Davis, in an e-mail, had been the one to suggest focusing more on personalities than process. During Cisa's questioning, Norlander testified that A&E was already working on developing a show similar to "Flip This House" before Davis approached the network. 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. The defense produced e-mails sent from Davis to Weissman in which Davis complained about episodes in which other people seem to steal the show. In one e-mail, Davis griped that a contractor who is "awesome as a court jester" had been portrayed as a "serious business guy," making it seem like "any nimrod" could do Davis' job. In an e-mail about another episode, Davis wrote, "I really have no patience for one episode making it look like one person's expertise is welcome or influential in another segment, except me, of course." 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.

Article Title: Trial testimony becomes testy

Excerpt: A federal breach of contract trial pitting local real estate investor Richard C. Davis against major television network A&E turned personal Thursday. 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." By then Feigelson had pointed out that Davis attributed any discussion about the profit-sharing deal to himself and not to A&E representatives; that Davis' being credited as the show's creator held no monetary value, and that Davis never discussed how to handle advertising revenue from clients already doing business with A&E and not attributed directly to "Flip This House." Judge C. Weston Houck several times told Feigelson to move on as he belabored questions Davis already had answered. "Every time he says something you don't like, you move to strike," Houck said at one point. "Continue your cross-examination, and let's step it up a bit." Feigelson asked why, in 300 e-mails exchanged with people affiliated with "Flip This House," Davis never mentioned the 50-50 revenue split, when in deposition he said he likes e-mails because of the trail they leave. "I'm in real estate, and the buyer puts the deal in writing," Davis answered. Questioned again, he said, "In hindsight, that sounds really easy." 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." His attorney, Frank Cisa, produced a certificate from The Writers Guild of America West naming Davis as writer of "Worst to First," the original name of "Flip This House." Houck cautioned the jury that the document gives Davis no legal right in the same sense as a copyright on a product. 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 worked to undermine Alexander's accounting, because she did not track expenses as they were incurred. He also produced an e-mail to a third-party production company in which Alexander said she was "used to getting thrown under the bus by Richard." She explained that sometimes Davis doesn't give his team warning about new projects until they're under way. 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.

Article Title: Davis ripped in court

Excerpt: In a matter of 20 minutes, an attorney for cable television network A&E began deconstructing the small-town James Island persona that Richard C. Davis sought to project, casting him instead as a shrewd businessman who knew exactly what he was getting himself into. 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. Court began late, with a few jurors delayed by a fuel spill in North Charleston. Then it moved at a snail's pace as Davis revealed seemingly irrelevant details, including the shape of a table at a business meeting, in answering questions posed by his attorney, Frank Cisa. Judge C. Weston Houck intervened several times. "The way we do this is the lawyer asks a question and the witness answers it," Houck said. "He doesn't make a speech." 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. A&E attorney Jeremy Feigelson began his cross-examination of Davis at about 5 p.m., first attempting to show discrepancies in Davis' timeline for negotiations with TLC, the cable network that later showcased his firm. Then Feigelson showed a letter Trademark Properties sent to potential investors to illustrate what Davis believed he stood to gain from "Flip This House" while he was involved in the show. The letter said the "national audience associated with the program will accelerate Trademark's growth." Shortly afterward, Davis spilled water on his binder of court exhibits and Houck called a recess until today.

Article Title: Charleston, SC Latest Business News: Deal at heart of lawsuit

Excerpt: Davis, the 45-year-old owner of Trademark Properties, insists he and A&E representatives had a verbal agreement to split any revenue from the show. Attorneys for both sides gave opening arguments Monday in a federal court trial to determine the validity of that claim. Mount Pleasant attorney Frank Cisa, who represents Davis, said the two parties agreed to share whatever revenue remained after each had been reimbursed for expenses. Cisa said "the only way" Davis would hand over his project to A&E was in a partnership, not a sale. When the season ended, Davis was not duly compensated, according to Cisa. "We did everything we were supposed to do, and Richard Davis was credited as creator of the show," he said. Cisa said A&E executives "did everything they were supposed to do %u2014 except pay."

Excerpt: 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."

Article Title: Trial over 'Flip This House' to begin

Excerpt: A jury trial in Charleston, S.C., begins today to determine whether cable programmer A&E Television Networks must pay a South Carolina real estate broker as much as $30 million for creating the popular get-rich-through-real-estate show "Flip This House."

Excerpt: Davis, who had no background in television, spent $85,000 of his own money to produce a pilot. The A&E cable channel bought the show and launched "Flip This House" in 2005. The so-called docu-soap, which featured Davis and his assistant Ginger, fast became a hit.

Excerpt: According to court documents, Davis spent $6 million buying and renovating houses in the Charleston area that were featured in the show's first season. Davis said he was never paid for his appearances on "Flip This House" nor was he reimbursed for his expenses. A&E said that Davis initially did not seek compensation because he saw the show "as a powerful form of advertising" for his real estate business, Trademark Properties Inc., "which he hoped to expand or franchise on a national basis."

Excerpt: After only 13 episodes, A&E and Davis had a falling out when the two sides attempted to negotiate his participation in a second season. The cable channel drafted a contract for Davis to appear as "on-air talent." He refused to sign and subsequently filed the lawsuit. A&E switched to a new team of real estate brokers and continued production. "Flip This House" now runs on the weekends.