'Fixer Upper' star Chip Gaines slapped sued by former Magnolia Realty business partners
By Elizabeth Kwiatkowski, 04/28/2017
Fixer Upper star Chip Gaines is being sued by his two former partners in Magnolia Realty for at least $1 million over a business deal made several years ago, before his HGTV reality series premiered and hit it big.
John L. Lewis and Richard L. Clark are suing Gaines for allegedly defrauding them by choosing to withhold crucial business information about how Magnolia Realty might prosper from Fixer Upper's television debut.
According to a claim in the lawsuit filed Thursday in state district court in Waco by attorney David Takell obtained by The Dallas Morning News, Gaines allegedly bought Lewis and Clark out for only $2,500 each on May 6, 2013, just two days before HGTV announced it had picked up Fixer Upper for its first season.
"With this insider information in hand, Chip Gaines convinced plaintiffs to sell their membership interests in Magnolia Realty quickly to him before a public announcement that Fixer Upper was picked up by HGTV," the suit claims.
Lewis and Clark are reportedly seeking a minimum of $1 million, claiming that if they had been privy to Gaines' ongoing discussions with the television network about the status of Fixer Upper -- which would increase brand promotion for Magnolia Realty and therefore result in growth and financial gain -- the men never would have sold their two-thirds share of the company for a measly $5,000.
"At a time when only the defendants knew that Fixer Upper had been fast-tracked for a one-hour premiere on HGTV and was on the verge of radically changing their lives and business enterprises, Chip Gaines conspired to eliminate his business partners -- notwithstanding their longstanding friendship -- in order to ensure that he alone would profit from Magnolia Realty's association with Fixer Upper," reads the lawsuit.
Gaines, Lewis and Clark founded Magnolia Realty in 2007. When Gaines bought out the two men in early 2013, the company reportedly only had one employee.
Now, Magnolia Realty boasts 93 employees and offices in Waco, Austin, Dallas, Houston, Temple, Belton, and Killeen, reads the lawsuit, which also accuses Gaines of sending an aggressive text message to Lewis when his negotiations with Clark in particular were stalling, according to The Dallas Morning News.
"Without a doubt, Chip has profited from his silence and subsequent acquisition of all membership interests in Magnolia Realty," Lewis and Clark allege in the legal complaint.
In addition to Gaines, Lewis and Clark are also suing Magnolia Realty, HGTV's parent company Scripps Network, and Fixer Upper's High Noon Productions production company.
Meanwhile, Gaines is reportedly being represented by Waco attorney Jordan Mayfield as well as attorney Robert Little.
"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," Mayfield told the Waco Tribune.
Gaines' wife Joanna is currently dealing with drama as well in light of odd rumors -- which she has publicly denied as false -- that she's quitting Fixer Upper and starting a cosmetics company.
Fixer Upper is currently airing its fourth season on HGTV, which premiered in late November 2016.