Chip Gaines, who was sued last week for fraud by two of his former friends, has fired the second salvo via his Twitter account in this fight between the “Fixer Upper” star and his former Magnolia Realty partners.
The day after the lawsuit became public, Gaines, who stars with his wife, Joanna, on the popular HGTV show, seemed to imply by tweet that he was unaware of any conflict with his former partners until they filed the lawsuit seeking more than $1 million.
Gaines tweeted at 10:13 p.m. Friday: “Fyi: Ive had the same cell # 15 yrs. . same email for 20 yrs. No one called or emailed? 4 years later ‘friends’ reach out via lawsuit. . humm.”
Gaines’ former partners, John L. Lewis and Richard L. Clark, got off a few counterpunches through their attorney, David Tekell, who said if Gaines is trying to imply that he had no prior notice of the lawsuit, he has a faulty memory or he is mistaken.
“A copy of the lawsuit was sent to him at that email address in August of 2016,” said Tekell, who replaced another attorney who was representing Lewis and Clark at that time.
“In response to that correspondence, he referred it to (attorney) Jordan Mayfield, and Jordan Mayfield has been his spokesman and representing him since then. If the suggestion is he didn’t have advance notice of this lawsuit in a private communication in an attempt to resolve this quietly and privately, then that is wrong.”
Fyi: Ive had the same cell # 15 yrs.. same email for 20 yrs. No one called or emailed? 4 years later "friends" reach out via lawsuit.. humm— Chip Gaines (@chippergaines) April 29, 2017
The suit, filed in Waco’s 170th State District Court, also names as defendants Magnolia Realty; Scripps Networks, which owns HGTV; and High Noon Productions, which produces “Fixer Upper.” Joanna Gaines is not named as a defendant.
Lewis and Clark, both Waco attorneys, allege they founded Magnolia Real Estate Co. with Gaines and that he pressured them to sell their interests in the company for $2,500 each. Two days later, Gaines publicly announced that HGTV had fast-tracked his television show for broadcast nationwide.
The suit alleges conspiracy liability, breach of fiduciary duty, fraud by nondisclosure and statutory fraud. The suit charges that Gaines withheld information from his business partners, knowing the Gaineses and Magnolia Realty would gain national exposure and possibly increase business at the real estate company.
The suit asserts the company, which employed only one real estate agent at the time, took off after the Gaineses built the Magnolia name into “an empire” and now has offices in Waco, Austin, Dallas, Houston, Temple, Belton and Killeen with 93 total agents.
Mayfield, Gaines’ attorney, reiterated that he thinks the claims have no merit.
“We did not force Mr. Lewis and Mr. Clark to file this lawsuit,” Mayfield said. “They chose to file these meritless claims, and now they have to try to prove that what appear to be two experienced attorneys, with almost 40 combined years of experience in the law, one of whom holds himself out to be skilled in the areas of business mergers, acquisitions, contractual acquisitions, and real estate law, and both of whom have experience in the Waco real estate market, were duped or misled into making a business deal.
“As we’ve previously stated, no matter how many quotes they give to the media, we are confident that Mr. Lewis and Mr. Clark’s claims will be found to be without merit.”
Lewis said that despite the implication in Gaines’ tweet, Gaines was aware of the dispute and lawsuit threat long before it was filed.
“It was my hope to get this resolved privately, and I thought we took every step possible to allow that to happen,” Lewis said. “Other than my complaint about my interest in the real estate company, I am happy for the success Chip has had and the positive impact that success has had on Waco. If Chip’s legal team will give me permission to talk to him, I’ll be happy to call him to try and work this out.”
Tekell said he also contacted Mayfield on April 21 and told him the statute of limitations to file the suit would expire in the coming week.
“I reached out to Jordan and said, ‘We have to file this by Wednesday, do you want to work with me on an agreement to hold the statute of limitations so we don’t have to file it and continue negotiations privately and not have to make a public filing?’ ” Tekell said. “Jordan said he would talk to his client, and after talking to his client, he said, ‘Go ahead and file it.’ ”
Tekell said he presented Mayfield an offer for which Lewis and Clark would settle the dispute. He declined to reveal the amount.
Mayfield acknowledged the settlement attempt but called the offer “outrageous” and said Tekell did not give him enough time.
“The events described in Mr. Lewis and Mr. Clark’s lawsuit supposedly happened in the spring of 2013,” Mayfield said. “Yet, the first time that Chip Gaines heard about these issues was in July 2016, when he received a demand letter, with a draft of a threatened lawsuit attached, from a lawyer in Dallas, who, for whatever reason, is no longer working on the case.
“The fact is that for over three years, Chip heard nothing from Mr. Lewis or Mr. Clark about these issues, and the first time he did hear from them was in the form of a demand letter from a lawyer threatening a lawsuit.”
Tekell responded, saying “facts are hard to swallow.”
“So now, Chip’s lawyer admits Chip’s midnight Twitter rant was not true,” Tekell said. “We will let the jury decide whether their strategy of blaming the victims for their failure to discover Chip’s deceit until later will justify his treatment of them.”