The formation of a business partnership can serve a multitude of purposes and be advantageous to all involved. Primarily, business partners can help to enrich each other with contributions including money, labor, property or skill.
But knowing which type of partnership is best and ensuring that all parties’ interests are protected requires the oversight of one or more experienced business formation attorneys in Boston.
The ongoing case of Queen v. Schultz, recently reviewed by the U.S. District Court for the District of Columbia, reveals what can happen when individuals don’t seek legal counsel from the start. At least for one of those involved, it resulted in a great deal of time, money and effort spent in furtherance of a partnership that may or may not have legally existed.
In 2007, an NBC employee, Michael Queen, cooked up a concept for a television show starring Ed Schultz, who was at the time a radio talk show host in North Dakota. Before the two ever met or discussed anything, Queen pitched the idea to the Washington news bureau chief, who approved it, and began working on a strategy to recruit Schultz.
In early 2008, Schultz came to NBC headquarters in D.C. and met with Schultz to discuss the concept. At the time, Queen asked whether Schultz was working with anyone else to develop a television show, and Schultz said no, “Now you’re it.”
With “specific and enthusiastic approval” from Schultz, Queen says he arranged for numerous guest appearances for Schultz in order to put together a demonstration reel.The two also teamed up with an NBC news director to “partner in the development of the project.”
There were numerous e-mail discussions and phone conversations that pertained to “the partnership” and “ownership percentages,” etc. However, nothing was ever legally formalized or signed.
Negotiations dragged on. The news director backed out, but Queen pushed forward after Schultz sent him an e-mail saying that while he couldn’t provide specifics, he “would not do a television deal without (Queen’s) involvement,” adding, “We are together on this.”
Queen pitched the idea to executives at both NBC and MSNBC. However, both initially turned it down. He continued to push, using his own money to rent a studio to record a pilot series.
Later, though, Schultz struck out on his own and negotiated a contract for his show on MSNBC. The agreement did not include Queen.
Queen sued, seeking a portion of Schultz’s earnings from his new show. But Schultz contended there was never a partnership agreement between the two of them. He had never signed anything.
The lower court initially agreed with Schultz, granting him a summary judgment. However, the D.C. District Court of Appeals reversed and remanded with regard to the claim of breach of partnership duties, finding that a reasonable jury could render a verdict in favor of the non-moving party.
The court found that while there was no written finalization of the agreement or partnership, that wouldn’t necessarily defeat the plaintiff’s claim if there was an oral agreement. In cases where the agreement was written, the court has to make a determination based on evidence of the parties conduct and course of dealing with each other. In this case, whether a partnership existed was a matter of genuine material fact that was for a jury to decide.
The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call 617-489-0817 or contact us online.
Queen v. Schultz, April 4, 2014, U.S. District Court for the District of Columbia
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