The amount awarded to Erik Everhard Entertainment was three times what World Wide Red Light District and RLD Distribution claimed it owed him.
The trial lasted two weeks and a number of adult industry members testified including John LaForme, aka Vince Vouyer, and former RLD President and co-founder Dion Giarusso. Sean Macias represented Hartwell and in-house counsel Ray Tamaddon represented RLD.
Erik Everhard Entertainment filed suit in January 2006 asking for $475,000 in monies owed.
“The charges stem from a breach of contract of a video distribution oral agreement that Erik Everhard entered into with World Wide Red Light,” Macias told XBIZ. We also sued for conversion on two counts.”
Both sides engaged in settlement talks prior to trial Tamaddon told XBIZ with Red Light offering Hartwell $100,000 to avoid litigation, a figure he rejected.
“Once the lawsuit was filed, we entered into a court ordered stipulation that World Wide Red Light wasn’t going to sell Everhard’s product," Macias said. "They agreed to maintain it for an audit and said World Wide wouldn’t sell it. So guess what? Another company under the RLD umbrella, RLD Distribution, which we found out about upon discovery, had started selling [the DVDs]. They started remastering some of our movies so we had to go back into court and added RLD Distribution to the suit because we couldn’t trust them.”
The jury found in favor of Erik Everhard Entertainment on all three of its claims.
In a legal maneuver, Red Light filed a cross complaint prior to trial, which claimed that Hartwell owed them $173,000. The complaint was dropped a day before the trial started when Red Light acknowledged that it actually owed Hartwell $52,000.
“At trial we admitted that we owed Erik $52,000 and the jury wound up awarding him $141,000 which we considered excellent results considering they thought they were owed $650,000,” Tamaddon said. “Red Light has been vindicated, especially in light of all the accusations made during the trial and on gossip sites.”
Tamaddon said that when Hartwell initially filed the suit, Hartwell owed Red Light District money because the company had paid for all his production costs and advanced him royalties. Tamaddon claimed that Red Light had yet to be paid for Everhard’s product on numerous outstanding invoices.
During the course of litigation, Red Light started receiving funds from the sale of Everhard’s product so “the needle moved” and the company owed Hartwell money on the open accounts, which are now being paid.
“Initially, when he filed the complaint, Erik Everhard’s account with RLD was still negative because of all the money Red Light has advanced him so we filed a cross complaint because he owed us money,” Tamaddon said. “During the course of the lawsuit we collected on accounts receivable on behalf of Mr. Everhard and his account turned positive. Once we found we owed him money, we dropped the cross complaint.”
As part of the suit, Hartwell gained full control of the 23 titles he produced and owned when at Red Light. Jules Jordan Video has been distributing Erik Everhard Entertainment since October 2006.
“I’m very pleased the jury saw things the way they did,” Macias said. “[RLD’s] shoddy and suspect accounting was exposed. It sends a message to the industry, I think. My client worked, made movies and wanted to be paid for his efforts. That’s all any businessperson wants, to be paid for their work. Justice was served here.”
Hartwell added: “Thankfully the jury realized how egregious the defendant’s behavior was and acted accordingly. We are thrilled with the outcome.”