Radio DJ files suit against business partners
This could only be chicken soup for a litigator's soul: Delilah Rene, the Seattle-based inspirational radio host of "Delilah After Dark," is embroiled in a messy lawsuit against business partners in Texas.
The allegations of Rene's suit, filed May 27 in U.S. District Court in Seattle, range from fraudulent maneuvers to siphon the radio star's income and "own" her, to pornographic e-mails and extortion to expose a romantic relationship if she didn't cough up money for a costly buyout deal.
Rene draws 8 million listeners a night to her female-oriented show that airs from 7 p.m. to midnight on "Warm" 106.9 FM and is syndicated on 220 stations in all 50 states, as well as a dozen in Canada. She calls it in court documents "story-telling and sympathetic listening scored to adult contemporary soft rock."
Rene is suing Texas lawyer Brian Hail and his firm, Godwin Gruber LLP; his brother, Kevin Hail; and father, Neal Hail, over allegations that include fraud, professional negligence and a breach of fiduciary trust.
Rene apparently hit it off with Neal Hail and Brian Hail in 2003 during an appearance at a Dallas affiliate, when her contract with Jones Radio Network was about to expire. She claims in the suit that she made a deal with them to look for new business opportunities for her apart from her radio career, with the agreement that the Hails would profit only from the extra non-radio work they generated. According to the suit, they discussed TV specials, magazines, a product line and designer clothing with the "Delilah" logo.
The Hails say they helped broker a deal that released Rene from a yearlong non-competition clause at the end of her contract with Jones, where she had been earning $1 million a year. The new deal with Premiere Radio Networks, according to the Hails, gave her $50 million over eight years, a signing bonus worth several million dollars and the buyout of her various interests with Jones for $2,362,500.
In the process, Rene claims the Hails manipulated the situation so that they controlled her entirely and profited from any revenue she made — particularly her radio show. Brian Hail set up two new entities in which she was the majority interest holder: Delilah Media Group, L.P., a Texas limited partnership, and Delilah Media, L.L.C., a Texas limited liability company. Kevin Hail was appointed CEO of Delilah Media with a salary of more than $100,000 a year.
In their motion to dismiss the suit, the Hails said they "find it difficult to understand why she has turned on them and why she wishes to renege on the promises she made a year ago. They can only speculate that this suit is an attempt by a majority interest holder to oppress and squeeze out the minority interests."
Court papers say Rene got a jolt with her first check from Premiere in the fall of 2004. She got only 60 percent of her pay, and the other 40 percent went to the Hails. She complained to the Hails about this, and about Kevin Hail's "inability or refusal to adequately perform his duties" as CEO of Delilah Media, including Kevin Hail's refusal to move to Seattle.
Neal Hail responded that Rene worked for them as an employee of Delilah Media now, and not the other way around. He told her, the suit says, that "when he dies, his children will 'own' Ms. Rene, and even when his children die, his grandchildren will 'own' Ms. Rene."
According to the lawsuit, Rene says that the Hails told her that they had been called by God to help her. The suit also says they withheld financial information from her and her tax lawyer while at the same time demanding she account in detail for any expenditures she made. At the same time, the Hails' expenditures appeared to include running up large hotel bills on the company's dime.
Rene's suit also alleges that after she complained to the Hails, they threatened to expose a "romantic relationship." Neal Hail suggested she buy them out, telling her it would "be expensive but perhaps in your best interest and your friend's best interest." Brian Hail repeatedly called the man they concluded was her "friend" and threatened to publicly disclose the details of their relationship if Rene didn't reach an accommodation with them.
Things deteriorated even further, according to the suit. Rene claims that Neal Hail sent her flirtatious e-mails that turned "pornographic" and unwelcome. After the business relationship had begun to sour, Rene claims, the Hails tried to pay for personal information from Rene's associates and even a terminated employee — offering the ex-employee money to get Rene's computer, which contained Neal Hail's e-mails.
In their motion to have the suit dismissed on the grounds of improper venue (they claim it should be in Texas, not Washington), Neal Hail and Kevin Hail call Rene "something of a celebrity" with a struggling career boosted by the "near-miracles" of Neal Hail. They say she's suing "the very people who helped her and made her new-found success possible."
Attorney Rick Lentini, of the Seattle firm Ryan Swanson & Cleveland said yesterday: "Our clients, Brian Hail and the Godwin Gruber firm from Texas, were very surprised when the suit was filed. That's the first we learned that Ms. Rene was unhappy and didn't want to continue doing business with them."
Lentini said that Brian Hail and Godwin Gruber returned their interests in her business entities. However, there are still other complaints pending against Brian Hail and Godwin Gruber, as well as against Neal and Kevin Hail.
Rene's attorney, Yale Lewis, said Rene was out of town and unavailable for comment.
"As many athletes and entertainers are, I think she is naive in business ways, and the agreements are complex," Lewis said. "And I think she just didn't understand any of that, just trusted that the defendants were setting up things the way she understood they were setting them up."
Mark Rahner: 206-464-8259