## Facts

- Richard C. Davis, a real-estate broker, developed and pitched a reality television concept titled *Flip This House* based on buying, renovating, and reselling properties.
- After viewing Davis’s pilot, an A&E executive discussed terms with Davis in a June 3, 2004 phone call.
- Davis testified that the call involved negotiation of material terms, including Davis bearing the financial risk of property transactions and an equal split of the show’s net revenues, plus production-related terms.
- Davis testified that when he insisted on an equal revenue split, the A&E executive responded, “Okay, okay I get it,” which Davis understood as acceptance, subject only to internal approval to proceed with development.
- A&E then arranged a multi-party call during which Davis stated he reaffirmed the agreed terms, and set up a meeting with production company Departure Films.
- After A&E communicated that internal approval had been obtained, Davis and Departure Films proceeded to film thirteen episodes for season one without a written contract; the season was commercially successful.
- Later compensation talks failed; A&E proposed an appearance fee and a 5% share of incremental revenue, which Davis rejected.
- A&E produced additional seasons without Davis and did not pay him net revenues; A&E maintained no binding agreement existed and that any discussions were preliminary and dependent on a later written contract.
- Davis and Trademark Properties sued for breach of an oral contract; after a jury verdict for plaintiffs and an award of a little over $4 million, the district court denied defendants’ post-trial motions for judgment as a matter of law and for a new trial.

## Issues

1. Whether the evidence was sufficient under New York law for a reasonable jury to find an enforceable oral contract to split net revenues equally.
2. Whether the evidence required a finding that the parties intended not to be bound absent a later written agreement.
3. Whether alleged errors in jury instructions or evidentiary rulings required a new trial.

## Decision

- The Fourth Circuit affirmed the judgment for Davis and Trademark Properties.
- The court held that the record provided a legally sufficient basis for the jury to find an enforceable oral contract under New York law.
- The court held the evidence permitted a finding that the parties did not intend to postpone contractual obligation until execution of a written agreement.
- The court rejected the request for a new trial, concluding challenged instructions and evidentiary rulings did not warrant relief.

## Legal Principles

- Under New York law, parties may form a binding oral contract even if they anticipate a later writing; the controlling question is intent to be bound before the writing.
- Mutual assent may be inferred from the parties’ words, the negotiation of material terms, and subsequent conduct consistent with an agreement.
- A jury may find assent where the plaintiff genuinely believed an executive’s statement constituted acceptance and that belief was reasonable in context.
- On review of a denial of judgment as a matter of law, the appellate court asks whether a reasonable jury had a legally sufficient evidentiary basis to find for the prevailing party, viewing the evidence in that party’s favor.
- Motions for a new trial based on jury instructions or evidentiary rulings are reviewed for prejudicial error, with substantial deference to trial-court discretion.

## Conclusion

The Fourth Circuit let stand a jury verdict enforcing an alleged oral profit-splitting deal for a television series because evidence of negotiated material terms and performance consistent with agreement supported a reasonable finding of mutual assent and no requirement that a signed writing precede contractual liability.


Trademark Props. Inc. v. A & E Television Networks, 422 F. App'x 199 (4th Cir. 2011)