Adam Carolla Sued for Allegedly Breaking Partnership Agreement (Exclusive)
1:37 PM PST 1/17/2013 by Eriq Gardner
Donny Misraje says his long-time friend behaved "dictatorial" and forced him and two others out of a growing podcast business.
Adam Carolla, host of the most downloaded podcast in the world and a recent addition to the Fox News Channel, is being sued by his former producer Donny Misraje for allegedly breaking their partnership agreement without cause.
The lawsuit was filed on Thursday in LA Superior Court and alleges that Misraje, his wife Kathee, and Sandy Ganz, a technology expert with a 10 percent ownership interest in the partnership, have not been paid for their "sweat equity" to make Carolla's podcast enterprise work.
According to the complaint asserting breach of partnership agreement, breach of fiduciary duty, conversion and more, "Though Carolla has repeatedly acknowledged the partnership agreement between himself (60%), Mr. Misraje (30%) and Mr. Ganz (10%)...he has since wrongfully 'kicked' Plaintiffs out of the business and seeks to exclude them from their share of the Partnership profits, all while he continues to reap the benefits of the business that Plaintiffs conceived of and developed."
Misraje says he has been a very close friend of Carolla for 30 years and was the individual responsible for convincing Carolla to try the podcast format when in February 2009, Carolla hit a "professional crossroad due to the abrupt cancelation of his syndicated radio talk show, [on CBS Radio]" according to the lawsuit.
The Adam Carolla Show was launched that year, and Misraje and Carolla allegedly entered into a partnership to execute Misraje's "vision to build a 'multi-media podcasting network.'"
Misraje says he left a job in the entertainment business that paid $231,000 a year to work full time on the new venture. His wife says she likewise left her work to devote herself to the new business. They say that during this time, they contributed $10,000 in capital to the venture, exhausted their accrued health insurance hours earned through a trade union, and they "forewent any compensation for over a year and lived off a home equity line of credit in exchange for the promise of deferred partnership contributions."
By 2010, the partnership was said to have generated significant profits. The following year, profits rose by 75 percent. During the build-up, Carolla is said to have "himself suffered no detriment to his lifestyle" thanks to continued pay-outs from his CBS contract and that he allegedly assured them that they would "all get rich" and be "sending [their] kids to an expensive college."
"We are taking this gamble together and it will pay off ten-fold in the end," Carolla told them, according to the complaint.
The relationship is said to have gone sour in 2011 when the plaintiffs sought to enforce their rights to equal decision making. The complaint paints Carolla as "increasingly dictatorial and threatening" and at one point, Carolla ordered his producer to cease traveling to the live show, putting him on a three-month probation and threatening to exclude live show revenue from the partnership income.
By September, 2011, Carolla fired them.
"Since unilaterally ousting Mr. Misraje and Mr. Ganz from the Partnership, Carolla has attempted to paint a picture for the public that Mr. Misraje was insubordinate, unable to 'get along' with anyone, unproductive and simply not 'up to the job.'" says the complaint. "Such statements represent disingenuous rhetoric."
The plaintiffs are represented by Gregory Doll at Doll Amir & Eley.
Carolla's representatives have been contacted and if we get a response, we will add it.