Hemrick is seeking $500,000 in damages, Fox News reported last week.
"My client takes politics very seriously," a lawyer for Hemrick told the Tennesseean newspaper. "And he thought they were going to be partners. But once he advanced the money, he found out that was not the case."
In a statement, Phillips said the lawsuit "has no merit." But Hemrick is hardly the first person to impugn Phillips's integrity. In the lead-up to the convention, a slew of grassroots Tea Partiers raised concerns that Phillips was using the confab -- which charged attendees $549 -- to make a profit and to boost his profile in the Tea Party movement, leading several high-profile sponsors to back out.
Amid those concerns, Phillips announced that he would use any proceeds from the convention into a conservative political action committee. But since then he has offered few details about the committee's planned work.
Phillips is currently planning a second convention for Las Vegas in July.