Text of October 19, 2004, e-mail to members:

Literary agent Nancy Ellis (also known as Nancy Ellis-Bell) has settled a suit brought against her by Authors Guild member Raymond Barnett. Mr. Barnett's suit alleged that Ellis had failed to remit to him any of a $7,500 advance payment she'd received from Tarcher/Penguin on his behalf in December 2003.

Ellis paid the full amount due Mr. Barnett from that advance and his court costs. The parties settled shortly after Ellis defaulted in answering the complaint.

Regarding future royalty payments, Ellis's attorney wrote to Mr. Barnett's attorney that "Ms. Ellis advises that she has already instructed Tarcher that all further royalties will be handled on a split accounting basis... In fact, since Ms. Ellis incorporated in May, 2004, all of her accounts use split accounting." Tarcher's director of contracts, however, reported to Mr. Barnett that she was aware of no such instructions from Ellis. Tarcher then got in touch with Ellis, who quickly approved split accounting for Mr. Barnett's title. (In a split accounting, royalty payments and statements go directly to the author and the agent receives only the commission due on each payment.)

Nancy Ellis had been a member of Litwest Group, LLC, but left that agency early this year. In connection with this, Ellis and Litwest Group attempted to make Ellis the agent of record for several clients by sending letters to at least one publisher advising that future correspondence and royalties for those authors should be sent to Ellis instead of Litwest. Under the agency clause in Mr. Barnett's contract, and under many other agency clauses, no such change of the literary agent is effective without the author's written consent.

We have asked both Litwest and Ellis, through their lawyers, to provide documents confirming that split accounting has been set up with the relevant publishers for all of Ellis's clients, but neither has done so.

We recommend that all clients of Nancy Ellis confirm that royalties and royalty statements will be handled on a split accounting basis. We're trying to learn more about the facts surrounding this matter, including whether other clients had experiences similar to those of Raymond Barnett. If you've been a client of Nancy Ellis we'd be interested in hearing from you. Please e-mail us at staff@authorsguild.org or phone (212) 563-5904 and ask for Kay Murray.