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$4M Verdict, Oral Contract Upheld for Creator of ‘Flip This House’

Posted Apr 15, 2011 12:16 PM CDT
By Molly McDonough

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A 4th U.S. Circuit Court of Appeals panel has upheld a $4 million jury verdict awarded to a South Carolina real estate broker who created the concept for the A&E reality show Flip This House and had an oral contract to split revenues.

Pleased with the Richmond, Va.-based court's 2-1 opinion (PDF), the lawyer for Richard Davis said his client deserved to be compensated and that A&E had breached its contract and refused to pay money due, the National Law Journal reports.

According to the court, Davis proposed the concept for Flip This House, a show that follows the activities of real estate investors from purchase through rehab and resale, in 2003. He submitted a pilot episode to several networks and found a home with A&E.

He went on to help produce several episodes, all on the basis of an oral contract to equally split the net revenues from the show. Davis sued in 2006 to force A&E and its affiliates to make good on the oral contract. Davis maintained that when he outlined the deal over the phone to Charles Norlander—A&E's director of lifestyle programming—Norlander agreed to his terms when he responded, "OK, OK, I get it."

A jury agreed and awarded him $4 million at trial, half the revenue of the show's first season.

A&E appealed, arguing that Davis lacked evidence that the there was an oral agreement. A divided 4th Circuit panel sided with Davis.

In her dissent, Judge Allyson Duncan agrees that Davis ought to be compensated, but quibbles with the majority's position that a reasonable person would interpret a remark such as the disputed "OK, OK, I get it," as anything more than an acknowledgment that the person understands what's being said.

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