A pair of original co-founders in the Magnolia Real Estate Company have sprung a Fixer Upper lawsuit on Chip and Joanna Gaines–but the most shocking thing about the suit so far might be the fact that Chip himself offered a public rebuke via Twitter way past his bedtime. The Waco Tribune reports that John L. Lewis and Richard L. Clark, attorneys in the city and friends of Chip and Joanna since 1999, are claiming that Chip committed fraud by buying them out of their Magnolia shares for a relative pittance immediately before Fixer Upper premiered in the spring of 2013. They’re seeking $1 million in damages.
In turn, one of Chip’s attorneys–Joanna is not mentioned in the Fixer Upper lawsuit–say that Lewis and Clark’s claims are unfounded. “We…haven’t had a chance to study [the petition] in detail,” Jordan Mayfield told the Tribune. “But we are generally aware of the story that Mr. Lewis and Mr. Clark are telling. We are confident that these claims will be found to be meritless, and it is disappointing to see people try to take advantage of the hard work and success of Chip and Joanna Gaines.”
“Disappointing” is probably the word that best summed up Chip’s 1 AM response to the news:
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
Of course, as Jezebel pointed out, Chip was keenly aware that middle-of-the-night tweets are not his usual thing:
@mtrozzo Don't tell jo I'm up
— Chip Gaines (@chippergaines) April 29, 2017
In addition to statutory fraud and fraud by nondisclosure, Lewis and Clark “[assert] claims of conspiracy liability” and “breach of fiduciary duty.” Basically, as the Tribune puts it, the Fixer Upper lawsuit “accuses Gaines…of insider trading, or having knowledge and withholding information from his partners that affected the financial well-being of the business.”
The timing of Chip’s alleged actions in the lawsuit are the cornerstone of its contentions. According to the two plaintiffs, Lewis met Chip in 1999; he occasionally provided free legal services for Chip in exchange for free home repairs. They first discussed going into the real estate business together in 2006; Lewis brought Clark in as well, and Magnolia Realty Company was founded.
Then, on April 26, 2013, Chip began talking about buying out his two partners–allegedly because Scripps Networks (which owns HGTV) and High Noon Entertainment (which produces Fixer Upper) “decided to fast-track Fixer Upper.” (Though a full season of the show hadn’t yet been ordered, the pilot episode debuted on May 23 of that year.) On May 6th, Chip paid Lewis and Clark $2,500 each for their shares. But it wasn’t until May 8th, the attorneys say, Chip announced that the pilot would be shown nationwide.
However, there seems to be some confusion on this point–the Fixer Upper lawsuit also cites an e-mail Chip sent that “stated…the decision by…Scripps Networks and High Noon [to air the pilot nationwide] had been made three weeks earlier.” Given such an admission, it’s unclear whether Lewis and Clark are tacitly admitting that they had more notice about the network’s–and Chip’s–intentions than they let on.
Regardless, the legal matter comes approximately one week after a pseudo-prophecy in Joanna Gaines’ most recent viral blog post. In that post, she seemed to suggest that Fixer Upper‘s success has brought out the worst of the rumor mills–”Don’t believe everything you read,” Joanna cautioned–something that’s sure to continue, now that Chip is the defendant in a high profile lawsuit.
(Photo credits: Fixer Upper lawsuit via Instagram)
