Attorney sanctioned $500 for ‘frivolous and misleading motion’

The most recent development in copyright litigation challenging the use of a retired attorney’s copyrighted photo of the Indianapolis skyline has resulted in another Indianapolis attorney being sanctioned in federal court for filing a frivolous and misleading motion.

Paul Overhauser, an intellectual property attorney at Overhauser Law, received a $500 sanction Wednesday from Indiana Southern District Judge William T. Lawrence, who wrote Overhauser had intentionally misled the court when he filed a motion for an award of costs and attorney fees in Richard N. Bell v. Vacuforce, LLC, 1:16-cv-1257. Overhauser represented Vacuforce against Bell’s claim of copyright infringement for using Bell’s photo of the Indianapolis skyline on its website without first obtaining a license.

Bell eventually filed an unopposed motion to dismiss after the case was settled, which Lawrence granted in July 2016. One month later, Judge Tanya Walton Pratt ordered Bell to pay $22,000 in a separate lawsuit to defendant Charles Lantz, whom Bell wrongly sued for copyright infringement. The suit was among hundreds Bell has filed against individuals and entities who used his skyline photo online without first paying him a licensing fee.

As in the Lantz case, Overhauser moved in July 2016 for costs and attorney fees against Bell, asserting the situation in the Vacuforce case was identical to the Lantz case. Lawrence, however, disagreed and noted Bell had voluntarily dismissed his claim against Lantz after discovery revealed the case had no merit. Further, according to the Wednesday entry of a sanction, Overhauser asserted in his motion for fees that Vacuforce was the prevailing party, a claim Lawrence wrote was untrue because the case was settled.

The district judge ordered Overhauser to show cause as to why he should not be sanctioned, then rejected each of his arguments in response to the show cause order. The judge first rejected Overhauser’s argument that because Vacuforce’s insurer paid money to Bell, rather than Vacuforce actually paying, the company could not be considered to have paid a settlement to him.

“The Court cannot fathom why Overhauser finds it relevant that the insurance company, rather than the Defendant, funded the settlement; the relevant fact is that the settlement was paid to the Plaintiff on the Defendant’s behalf in order to secure the dismissal of this case,” Lawrence wrote.

“Also wholly irrelevant is whether the Plaintiff’s case had a factual basis, which is what Overhauser spends the bulk of his response discussing,” Lawrence continued. “… If the Defendant believed the Plaintiff’s claims to be without merit, it had every right to continue litigating those claims until it either won on the merits, or, as in Lantz, convinced the Plaintiff that voluntary dismissal was the appropriate course of action. It did not choose that path in this case; it chose instead to settle.”

Overhauser’s next argument was that under Federal Rule of Evidence 408, he was barred from disclosing that a settlement had led to the voluntary dismissal of the case. That rule, however, applies only when the admissibility of evidence of a settlement is used to prove the validity or amount of a disputed claim, which was not relevant here, Lawrence said.

Further, under Rule 11(b)(2), Overhauser’s signature on the motion for costs was meant to signify that the legal contentions in the motion were nonfrivolous, Lawrence said.

“Overhauser’s legal contention that his client was the prevailing party in this case is not warranted by existing law, and because he did not truthfully identify the circumstances that led to the dismissal of this case, there is no way that he could be said to have been making a nonfrivolous argument regarding what the law ought to be under those circumstances,” he said.

Overhauser’s final argument was that public policy supported the award of attorney’s fees to Vacuforce, which Lawrence also rejected on the grounds that public policy questions were not relevant to the main question at issue in the case: whether one party or another prevailed.

Overhauser told IL Thursday he was unable to comment on Lawrence’s sanction because he had not yet read through the order. According to the entry of sanction, Overhauser has 14 days from Dec. 13 to pay the $500.