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Wine & Canvas to Pay Franchisees Attorney Fees for Forcing Undue Litigation

INDIANAPOLIS - A federal court in Indiana ruled in favor of franchisees, ordering Wine & Canvas to pay $175,882.68 in attorney fees. The judge determined that the franchisor admittedly sued the franchisees just so they would incur excessive legal fees in fighting against the company's failed trademark infringement claims and be forced to close their businesses.

Wine & Canvas, the self-proclaimed "painting class with cocktails" franchise, that promotes a fun, social, group setting, with an artist to guide participants step-by-step in replicating the night's featured painting.  

Wine & Canvas co-founder Anthony Scott filed the lawsuit, Wine & Canvas Development LLC v. Weisser, et al, in December 2011. He alleged that after he had entered into a business venture with franchisees Christopher Muylle and Theodore Weisser, two owners of Wine & Canvas shops in San Francisco, which required the company to license the business model to them, they breached their agreements, appropriated the Wine & Canvas model and proceeded without him being involved in the endeavor. In turn, the franchise owners asserted they did not breach their agreement, but merely parted ways with Scott and the franchisor, and changed their business name to "Art Uncorked." They state that at that time Wine & Canvas insisted they sign new agreements with additional terms that were unfavorable to the franchisor.

In support of the franchisees' petition for attorney fees, the court cited evidence that Wine & Canvas' trademark infringement claims were brought for the admitted purpose of causing the franchisees to incur excessive costs on attorney fees. The court noted the voluminous and repetitive motions to which Weisser and Muylle were forced to respond, and the three separate occasions that Wine & Canvas was sanctioned for discovery violations.

Judge Tanya Walton Pratt observed in her ruling that the court had discretion under the Lanham Act to award the legal fees and costs to the franchisees as it was an "exceptional case" where plaintiff [Wine & Canvas] had engaged in an "abuse of process" when suing.

The Indiana Lawyer journal reported last January, “(Wine & Canvas) Parties’ counsel is well aware that because of electronic filing, one can file in federal court late at night, early in the morning, on weekends, or on legal holidays. Instead of filing a timely response brief after two extensions of time, counsel to WNC Parties ignored the deadline and untimely filed the response brief.”

When its counsel responded to the franchisees' motion to strike, attorney Adam Davis of Davis & Sarbinoff claimed ignorance to the Federal Rules of Civil Procedure and Local Rules of the court, the judge wrote, "Counsel apologizes for his ignorance and disregard of the rule.," But she added that his repeated disregard for and ignorance of the law is no excuse, and an apology does not allow counsel to continue to disregard the rules and court orders."

The franchisees were represented by Ron Waicukauski of Price Waicukauski & Riley.

 

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About Janet Sparks

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Public Profile

Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.