‘Fifty Shades’ Publisher Owes Teacher Millions

FORT WORTH (CN) - A Texas judge ordered the Australian publisher of "Fifty Shades of Grey" to pay $10.6 million in royalties to a woman who a jury agreed was cheated of her share in it.

State District Judge Susan McCoy on Thursday signed an order awarding the royalties to Jennifer Lynn Pedroza, of Arlington.

McCoy in August last year ordered defendants Amanda M. Hayward and TWCS Operations Pty. Ltd. to set aside more than $10 million after a Tarrant County jury ruled in Pedroza's favor six months earlier.

The jury determined there was a partnership between the women, but declined to set a dollar amount. McCoy also ordered the defendants to pay $1.7 million in attorneys' fees.

Pedroza, a Forth Worth schoolteacher, sued in May 2014, accusing Hayward of "greed and self-dealing" by "conning" her business partners in on online blog and e-publisher that distributed the book in 2011.

The author of the bestselling trilogy, E.L. James, is not a party to the dispute.

"Pedroza and Hayward, along with two others, were partners in The Writers Coffee Shop, which was the original publisher of, and owner of the publishing rights to, the 'Fifty Shades' trilogy," the complaint stated.

"Without consulting her partner Pedroza, and without complying with Texas law, Hayward tried to convert Coffee Shop into TWCS, an Australian sole proprietorship that she, alone, owned. She signed a contract with Random House for the rights to the 'Fifty Shades' trilogy, in exchange for millions in advances and future royalties but, because of her chicanery, all payments flowed to her and not to the partnership."

Hayward told her partners that the partnership needed to be restructured into an entity that only she owned for "tax reasons," Pedroza said.

Pedroza thanked her friends, family and attorneys for their support after the judge's order.

"My family and I feel relieved and vindicated with the outcome of the trial and the judgment signed today," she said in a statement Thursday.

Hayward's attorney, David Keltner with Kelly Hart in Fort Worth, told the Fort Worth Star-Telegram he does not believe state law justifies a partnership "by conduct on these facts."

The judge's order came one day after Pedroza's attorneys criticized a second motion for judgment notwithstanding the verdict, claiming the defendants were merely rehashing earlier arguments.

"Defendants are taking their second bite at the JNOV [Judgment Notwithstanding the Verdict] apple, and their fifth bite at the issue of application of the statute of frauds," the 33-page response stated . "Now, as in the first motion for JNOV, the evidence is legally sufficient to support the jury's findings in this case, including the finding that The Writers' Coffee Shop is a partnership."

Pedroza said there is "legally sufficient evidence" that Hayward fraudulently induced her to enter into a service agreement as part of a scheme "to con Pedroza out of her rightful share of partnership profits."

Follow @davejourno

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