Chip Gaines Settles Lawsuit with Former Partners in Out-of-Court Agreement 6 Years Later

Gaines filed a defamation countersuit against his former Magnolia Real Estate partners in 2019 after they sued him for $1 million in 2017

Chip Gaines' former Magnolia Real Estate partners filed a $1 million lawsuit against him in April 2017 that was dismissed in 2020, and he countersued alleging defamation.

Gaines has reportedly reached an out-of-court settlement with his former partners, John L. Lewis and Richard L. Clark, in regard to his defamation claim, according to KWTX.

According to court documents obtained by PEOPLE, Lewis and Clark initially sued Gaines for $1 million after he allegedly “conspired to eliminate” them from the company, but their claims were dismissed in 2020. Gaines himself filed a countersuit claiming that his former business partners defamed him, and this countersuit was scheduled to go to trial last week.

Lewis and Clark claimed that the Magnolia Network star bought them out after failing to inform them that he made a deal with HGTV to air Fixer Upper, the home renovation show he starred in with his wife Joanna.

Both Chip’s attorneys, Todd Patterson and Kyrie Cameron, and Lewis and Clark’s attorney, John Mabry, did not immediately respond to PEOPLE’s request for comment.

Related: Chip Gaines Had Already Started Filming 'Fixer Upper' Before He 'Conspired to Eliminate' Partners, Lawsuit Alleges

According to the Waco, Texas-based news station, the agreement both parties made “dismisses all claims and appeals in the case, including a potential appeal of 170th State District Judge Jim Meyer’s ruling in February 2020 that threw out Lewis and Clark’s original lawsuit against Gaines.”

Before reaching the confidential agreement, both parties were expected for a jury trial on the defamation countersuit in Waco where Chip and Joanna have built their Magnolia empire. The case never made it to trial after it was allegedly settled.

Related: 'Fixer Upper' 's Chip Gaines Calls Out Former Partners Over Lawsuit: 'No One Called or Emailed?'

When the initial lawsuit was first filed in 2017, one of Lewis and Clark’s attorneys at the time, David Tekell, spoke to PEOPLE about the matter.

He revealed that after Fixer Upper was picked up by HGTV in 2013, “Chip went back to his partners in Magnolia and said, ‘I would like to get rid of this little company and buy you guys out.’ But didn’t tell them that Magnolia realty was about to be fairly famous and would be getting a lot of free advertisements.”

The lawsuit claimed that Chip kept his now-former partners in the dark for nearly a year while he and Joanna worked on a pilot for HGTV together. He reportedly broke the news to them in an email.

Related: Chip Gaines' Former Partner Says Once 'Fixer Upper' Took Off 'I Never Heard from Him Again' After 10-Year Friendship

Chip briefly addressed the legal matter on Twitter shortly after Lewis and Clark, or his “friends” as he refers to them in the tweet, filed the lawsuit — which seemingly came as a shock to him.

“Fyi: Ive had the same cell # 15 yrs.. same email for 20 yrs. No one called or emailed? 4 years later "friends" reach out via lawsuit.. Humm,” he wrote.

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Lewis told PEOPLE that he and Clark had been transparent about the potential lawsuit and that his attorney had reached out to Chip during summer 2016.

“We were doing everything we could in an attempt to resolve this matter privately,” Lewis said. “We waited as long as we could before having to file this lawsuit.”

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