A federal appeals court ruled on Friday that a lawsuit accusing MSNBC host Ed Schultz of fraud can proceed to trial, the Washington Post reported.

The suit by former NBC employee Michael Queen accuses Schultz of reneging on a verbal agreement to work together on developing a television program. At the time, Schultz was a talk-radio host in Fargo, North Dakota. Schultz, who subsequently signed with MSNBC, has denied any such agreement was in place.

Queen's suit states that in 2007 -- before he ever met Schultz -- he pitched the concept of Schultz hosting his own show on the network to then-NBC Washington D.C. bureau head Tim Russert. After Queen and Schultz met in 2008, Queen allegedly brought ex-NBC News director Max Schindler into the project, and agreed to a deal in which Schultz would receive 50 percent of any profits from the show, with Queen and Schindler getting 25 percent apiece.

In an April 2008 email, Schultz wrote Queen an email stating, "Any TV deal will obviously involve you. I will not do a TV deal without your involvement and that includes a financial involvement. Rest assured, we are together on this. I hope this works for you at this point."

However, the suit states, Schultz signed with MSNBC after negotiating directly with network president Phil Griffin, without including Queen or Schultz, while Queen was arranging a deal with WUSA-TV, a CBS affiliate.

The suit also states that Queen was forced to pay $11,000 in June 2008 for the rental of a studio used to prepare a pilot episode for the show.

Judge Sri Srinivasan wrote in the court's decision (PDF) that, though a 2012 ruling saying Schultz did not commit breach of contract was correct, that "a reasonable jury could interpret that assurance as an indication that Schultz and Queen intended to associate as co-owners for profit."

[Image via MSNBC]